Allowed

M/S.Prince Alloys Private Limited & Anr. v. K.S.E.Regulatory Commission and Others

Kerala HC23 Sept 2016WP(C)/10106/2008

Case brief

AI extract

What is this about?

The Kerala High Court held that imposing a higher energy charge on power-intensive industries allotted power after 17.12.1996 compared to those allotted earlier was discriminatory. The statutory tariff fixing was challenged as it created an arbitrary distinction. The Court quashed the discriminatory rate and directed the utility to levy charges at the lower uniform rate until a revised tariff was

What did the court decide?

Demand for energy charge at Rs.3.50 per KWH set aside; energy charges to be collected only at Rs.3 per KWH until revised tariff fixed; revised bill to be issued.

M/S.Prince Alloys Private Limited & Anr. Vs… — Service and Employment | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

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FRIDAY, THE 23RD DAY OF SEPTEMBER 2016/1ST ASWINA, 1938

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WP(C).No. 10106 of 2008 (C)

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PETITIONER(S) :

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M/S.PRINCE ALLOYS PRIVATE LIMITED, ANAPPURAMKADU, KINASSERY (P.O), PALAKKAD DISTRICT, PIN - 678 707, REP. BY ITS MANAGING DIRECTOR, SHRI.T.K.ABDUL KARIM, S/O.T.S.KUNJUMOHAMMED.

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M/S.PRINCE ROLLINGS PRIVATE LIMITED, ANAPPURAMKADU, KINASSERY (P.O), PALAKKAD DISTRICT, PIN - 678 707, REP. BY ITS MANAGING DIRECTOR, SRI.T.K.ABDUL KARIM, S/O.T.S.KUNJUMOHAMMED.

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BY ADVS. SRI.S.ANANTHAKRISHNAN SRI.S.RAMESH BABU

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SRI.N.K.SUBRAMANIAN

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RESPONDENT(S) :

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1. THE KERALA STATE ELECTRICITY REGULATORY COMMISSION, REP. BY ITS SECRETARY, VAZHUTHAKAD, THIRUVANANTHAPURAM.

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2. THE KERALA STATE ELECTRICITY BOARD, REP. BY ITS SECRETARY, VAIDHYUTHI BHAVAN, PATTAM (P.O), THIRUVANANTHAPURAM.

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3. THE SPECIAL OFFICER (REVENUE), KERALA STATE ELECTRICITY BOARD, VAIDHYUTHI BHAVAN, PATTAM (P.O), THIRUVANANTHAPURAM.

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R1 BY ADV. SRI.T.K.KUNHABDULLA, S.C R2 & R3 BY SRI.P.SANTHALINGAM (SENIOR ADVOCATE)

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18-07-2016, THE COURT ON 23-09-2016 DELIVERED THE FOLLOWING:

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Msd.

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WP(C).No. 10106 of 2008 (C)

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APPENDIX

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PETITIONER(S)' EXHIBITS :

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EXHIBIT P1: COPY OF POWER ALLOCATION LETTER OF THE CHIEF ENGINEER, TO THE 1ST PETITIONER DATED 03.06.1996.

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EXHIBIT P2: COPY OF POWER ALLOCATION LETTER OF THE CHIEF ENGINEER, TO THE 2ND PETITIONER DATED 03.06.1996.

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EXHIBIT P3: COPY OF THE COMMON LETTER OF THE OFFICE OF THE DY. CHIEF ENGINEER, ELECTRICAL CIRCLE, PALAKKAD, DATED 04.04.2002.

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EXHIBIT P4: COPY OF THE LETTER OF THE DY. CHIEF ENGINEER, ELECTRICAL CIRCLE, PALAKKAD, DATED 09.07.2002.

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EXHIBIT P5: COPY OF THE POWER ALLOCATION OF 1ST PETITIONER DATED 21.04.2003.

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EXHIBIT P6: COPY OF THE POWER ALLOCATION OF 2ND PETITIONER DATED 21.04.2003.

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EXHIBIT P7: COPY OF THE COMMON JUDGMENT OF THIS HON'BLE COURT IN W.P(C).NO. 845 & 906/2004 DATED 08.03.2004.

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EXHIBIT P8: COPY OF LETTER OF POWER ALLOCATION ISSUED BY THE CHIEF ENGINEER, TO 1ST PETITIONER.

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EXHIBIT P9: COPY OF LETTER OF POWER ALLOCATION ISSUED BY THE CHIEF ENGINEER, TO 2ND PETITIONER.

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EXHIBIT P10: COPY OF MONTHLY BILL OF THE 1ST PETITIONER FOR THE MONTH OF NOVEMBER 2007.

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EXHIBIT P11: COPY OF MONTHLY BILL OF THE 2ND PETITIONER FOR THE MONTH OF NOVEMBER 2007.

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EXHIBIT P12: COPY OF REVISED SCHEDULE OF TARIFF PUBLISHED IN THE KERALA GAZETTE DATED 27.11.2007.

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EXHIBIT P13: COPY OF MONTHLY BILL OF THE 1ST PETITIONERS FOR THE MONTH OF NOVEMBER 2007.

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EXHIBIT P13(A): COPY OF MONTHLY BILL OF THE 1ST PETITIONERS FOR THE MONTH JANUARY 2008.

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EXHIBIT P13(B): COPY OF MONTHLY BILL OF THE 1ST PETITIONERS FOR THE MONTH FEBRUARY 2008.

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EXHIBIT P14: COPY OF MONTHLY BILL ISSUED TO THE 2ND PETITIONER FOR THE MONTH DECEMBER 2007.

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WP(C).No. 10106 of 2008 (C)

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EXHIBIT P14(A): COPY OF MONTHLY BILL ISSUED TO THE 2ND PETITIONER FOR THE MONTH JANUARY 2008.

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EXHIBIT P14(B): COPY OF MONTHLY BILL ISSUED TO THE 2ND PETITIONER FOR THE MONTH FEBRUARY 2008.

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EXHIBIT P15: COPY OF OBJECTION SUBMITTED BY THE 1ST PETITIONER BEFORE THE 3RD RESPONDENT, DATED 07.02.2008.

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EXHIBIT P16: COPY OF OBJECTION SUBMITTED BY THE 2ND PETITIONER BEFORE THE 3RD RESPONDENT, DATED 07.02.2008.

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EXHIBIT P17: TRUE COPY OF THE BOARD ORDER DATED 17.12.1996.

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EXHIBIT P18: TRUE COPY OF RELEVANT PAGES OF THE TARIFF ORDER DATED 26.11.2007.

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EXHIBIT P19: TRUE COPY OF RELEVANT PAGES OF THE TARIFF ORDER DATED 25.07.2012.

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RESPONDENT(S)' EXHIBITS :

NIL

//TRUE COPY//

P.A.TO JUDGE.

Msd.

**A.M.SHAFFIQUE, J * * * * * * * * * * * *** W.P.C.No.10106 of 2008

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Dated this the 23^rd day of September 2016

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J U D G M E N T

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This writ petition has been filed challenging Ext.P12 by which the Kerala State Electricity Regulatory Commission (hereinafter referred to as 'the Commission') had issued a Schedule of Tariff and Terms and Conditions for Retail Supply by the Kerala State Electricity Board (for short 'KSEB') with effect from 01/12/2007 to the extent it imposes a higher rate of energy charges under HT-1 Category for power intensive industries which are allotted with power on or after 17/12/1996. Petitioners also seek for a direction to respondents 2 and 3 to treat the petitioners' industry in the category of industries having power allocation before 17/12/1996 and to levy energy charges at the rate of Rs.3/- per KWH.

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The issue involved in the present writ petition would disclose the following:

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Petitioners are companies involved in the production of steel ingots by remelting of scrap steels, established in the year 1996

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W.P.C.No.10106/2008

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and according to them they started commercial production on 24/12/1996. Petitioner companies were classified as power intensive industries. The consumer code number of the 1^st petitioner was 27/3252 and that of the 2^nd petitioner was 27/3251. During March 2002, the petitioners sought for disconnection of electric supply since they intended to close down the industrial unit with effect from 08/06/2002. Petitioners were informed that the power connection had to be dismantled and as per the conditions of contract, dismantling can take place after three months of registration of the request. Ext.P3 is the letter dated 04/04/2002 issued by the Deputy Chief Engineer. Petitioners submit that their power connection was dismantled on 27^th and 28^th of June 2002. Later, on the request of the petitioners, the power allocation was restored as per Exts.P8 and P9 orders dated 11/06/2004 of the Chief Engineer.

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Petitioners submit that till December 2007, energy charges were levied from consumers like the petitioners included under HT-1 category at Rs.3/- per KWH and demand charge was levied at Rs.2.70/-. It is stated that, by Ext.P12, the Commission had revised the schedule of tariff with effect from 01/12/2007 by which certain changes had been made in respect of industries

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W.P.C.No.10106/2008

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included under HT-1 (industrial) tariff and demand charges. Industries engaged in melting of metals are classified as power intensive industries. However, in respect of power intensive industries which were allotted power on or after 17/12/1996, the rate of energy charges is enhanced to Rs.3.50/- per KWH. Petitioners challenge the above classification inter alia contending that it is highly illegal and erroneous. According to the petitioner, power intensive industries has to be charged at a single rate irrespective of the date on which the power connection had been granted. There is no relevance to the date 17/12/1996 and increasing the rate to such units which had started functioning after 17/12/1996.

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During the pendency of the writ petition, petitioners also submitted Ext.P19, a copy of the tariff order dated 25/07/2012 in which the tariff for industrial consumers under HT-1 has been enhanced to Rs.410/- It is submitted that the Commission had taken note of the error committed by them in the earlier classification which has been corrected in Ext.P19. In Ext.P19, it is mentioned that “according to KSEB there is no rationale for having such distinction based on the year in which connection was availed. The commission decided to accept the

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W.P.C.No.10106/2008

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proposal to remove the above distinction based on date of connection.” It is therefore submitted that the classification made and the bills issued pursuant to the same are liable to be set aside.

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During the pendency of the writ petition, an interim order was passed directing the petitioners to execute a simple bond without sureties to satisfy the demands in terms of Ext.P12 tariff order.

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Statement has been filed on behalf of respondents 2 and 3 supporting the stand taken in the matter. According to them, petitioners having entered into such agreements based on Exts.P5 and P6, it is not open for the petitioners to take different contentions.

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The short question to be considered in the writ petition is whether the petitioners are entitled to challenge the tariff fixed by the Commission with reference to the High Tension industrial consumers and that too, in regard to power intensive units. In Ext.P12, in respect of High Tension (HT-1 industrial), it is indicated as under:

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“ HIGH TENSION (HT-1) INDUSTRIAL

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Tariff applicable to Printing Presses (including

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W.P.C.No.10106/2008

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presses engaged in printing dailies), plantations, granite crushing units, industrial consumers, dairy farms, hatcheries, software development units, all nonagricultural pumping, drinking water pumping for public by Kerala Water Authority, Corporation, Municipalities and Panchayats.

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Normal Rates

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Demand charges (Rs./kVA of Billing	..
Demand/Month		270
Energy Charge (Paise/kWh)	..	300
Energy Charge (applicable to Power Intensive	..
Industries which are allotted power on or after 17-12- 1996 (Paise/kWh)		350

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The above tariff is made applicable effective from 01/12/2007. Power intensive units which are allotted power on or after 17/12/1996 is treated differently and is liable to pay at Rs.3.50/KWH. As already indicated, in Ext.P19, the tariff order dated 25/07/2012, a uniform rate has been fixed for all power intensive units. Therefore, there is an apparent mistake in the classification made in Ext.P12 order. Why should there be two rates for the same power that is being supplied to separate units. What exactly is the reason for granting a rate lesser than the rate applicable to the units which started functioning after 17/12/1996 is not explained. Though the Commission is a party to the writ

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W.P.C.No.10106/2008

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petition, no counter affidavit is seen filed. Therefore, it has to be assumed that the said rate had been fixed without any basis.

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The question is whether this Court should interfere in such fixation of tariff by the Commission. Respondent Board relies upon the power allocation agreements based on which power had been allotted to the petitioners after it was dismantled earlier. It is contended that once the agreement is executed, it is not open for the petitioners to take a different view and challenge the demand. It is also stated that new agreements were executed between the Board and the petitioners on 05/07/2004 and the services were energized on 12/07/2004. It is contended that as per paragraph 5 of Part A of Ext.P12 order, a decision has been taken treating power intensive industries which are allocated power on or after 17/12/1996 different from other consumers.

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But it is apparent that such contentions cannot wipe out the discrimination that is pointed out by the petitioners in the matter relating to fixation of tariff. Hence it has to be held that fixing a different tariff for industries set up after 17/12/1996 is discriminatory and liable to be quashed. But in so far as the challenge is made only by the petitioners, it would suffice that the demand made against them alone be set aside.

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W.P.C.No.10106/2008

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In the result, this writ petition is allowed as under:

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(i) The demand made against the petitioners for energy charge at Rs.3.50/- per KWH is set aside and it is declared that, from 01/12/2007 onwards until the tariff had been refixed as per Ext.P19, the energy charges shall be collected only at the rate of Rs.3/- per KWH

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(ii) Revised bill shall be issued in this regard within a period of two months from the date of receipt of a copy of the judgment and a further demand shall be made, if there is any arrears.

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(iii) In the event of any excess payment, the same shall be adjusted towards future bills/demand.

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(sd/-)

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(A.M.SHAFFIQUE, JUDGE)

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jsr

M/S.Prince Alloys Private Limited & Anr. v. K.S.E.Regulatory Commission and Others

Case brief

What is this about?

What did the court decide?

M/S.Prince Alloys Private Limited & Anr. v. K.S.E.Regulatory Commission and Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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