Dismissed

M/S Petronet Lng Ltd. v. Kerala State Electricity Board Ltd.

Kerala HC29 Aug 2022WA/942/2022

Case brief

AI extract

What is this about?

The Court dismissed the appeals filed by Petronet LNG Ltd. against a Single Judge's order. The lower court directed the Electricity Board to issue a fresh notice under Regulation 97 of the KSEB Supply Code before reclassifying the appellant's tariff, finding a violation of the 30-day notice requirement. The higher court upheld this direction.

What did the court decide?

The licensee is directed to issue a fresh notice under Regulation 97 of the Supply Code, decide the tariff within five months, and refund any excess amount remitted by the appellant within four weeks

M/S Petronet Lng Ltd. Vs Kerala State Electricity Board… — Banking and Recovery | Kerala HC (2022)

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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 S.V.BHATTI

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THE HONOURABLE MR.JUSTICE BASANT BALAJI

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MONDAY, THE 29^TH DAY OF AUGUST 2022 / 7TH BHADRA, 1944

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WA NO. 942 OF 2022

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WP(C) 5537/2016 OF HIGH COURT OF KERALA

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APPELLANT/S:

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M/S PETRONET LNG LTD.,A PUBLIC LIMITED COMPANY REGISTERED UNDER THE COMPANIES ACT, HAVING ITS REGISTERED OFFICE AT WORLD TRADE CENTRE, FIRST FLOOR, BABAR ROAD, BARAKHAMBA LANE, NEW DELHI, PIN-110001 AND UNIT AT SURVEY NO. 347, PUTHUVYPU P.O., KERALA, KOCHI, PIN-682508, REPRESENTED BY ITS CHIEF GENERAL MANAGER & VICE PRESIDENT AND PLANT HEAD, MR. YOGANANDA REDDY VADDAMANI, PIN - 682508

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BY ADV THOMAS M.JACOB

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RESPONDENT/S:

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1 KERALA STATE ELECTRICITY BOARD LTD. HAVING ITS REGISTERED OFFICE AT VYDHYUDHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM, PIN-695004, REPRESENTED BY ITS SECRETARY, PIN - 695004

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2 THE SPECIAL OFFICER (REVENUE),OFFICE OF THE SPECIAL OFFICER (REVENUE), VYDHYUDHI BHAVANAM, KERALA STATE ELECTRICITY BOARD LTD., THIRUVANANTHAPURAM, PIN-695004., PIN - 695004

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3 THE DEPUTY CHIEF ENGINEER,KERALA STATE ELECTRICITY BOARD, ELECTRICAL CIRCLE, POWER HOUSE ROAD, KOMBARA, ERNAKULAM., PIN - 682018

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4 THE EXECUTIVE ENGINEER,ELECTRICAL DIVISION, KSEB, MATTANCHERY, PIN- 682 002, PIN - 682002

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WA 958/22 and 942/22

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-2-

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5 THE ASSISTANT EXECUTIVE ENGINEER ELECTRICAL SUB DIVISION, KSEB, VYPIN, PIN - 682511

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6 THE ASSISTANT ENGINEER ELECTRICAL SECTION, KSEB, VYPIN., PIN - 682511 BY ADV C.JOSEPH ANTONY

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OTHER PRESENT:

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Sr Adv. S. Sreekumar

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 29.08.2022, ALONG WITH WA 958/22, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WA 958/22 and 942/22

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-3-

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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 S.V.BHATTI

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THE HONOURABLE MR.JUSTICE BASANT BALAJI

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MONDAY, THE 29^TH DAY OF AUGUST 2022 / 7TH BHADRA, 1944

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WA NO. 958 OF 2022

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WP(C) 15161/2019 OF HIGH COURT OF KERALA

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APPELLANT/S:

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M/S PETRONET LNG LTD.

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A PUBLIC LIMITED COMPANY REGISTERED UNDER THE COMPANIES ACT, HAVING ITS REGISTERED OFFICE AT WORLD TRADE CENTRE, FIRST FLOOR, BABAR ROAD, BARAKHAMBA LANE, NEW DELHI, PIN-110001 AND UNIT AT SURVEY NO. 347, PUTHUVYPU P.O., KERALA, KOCHI, PIN-682508, REPRESENTED BY ITS CHIEF GENERAL MANAGER & VICE PRESIDENT AND PLANT HEAD, MR. YOGANANDA REDDY VADDAMANI., PIN - 682508

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BY ADV THOMAS M.JACOB

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RESPONDENT/S:

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1 DEPUTY CHIEF ENGINEER, KERALA STATE ELECTRICITY BOARD LTD. ERNAKULAM CIRCLE, POWER HOUSE ROAD, KOMBARA, ERNAKULAM., PIN - 682018

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2 THE SPECIAL OFFICER (REVENUE) OFFICE OF THE SPECIAL OFFICER (REVENUE), VYDHYUDHI BHAVANAM, KERALA STATE ELECTRICITY BOARD LTD., THIRUVANANTHAPURAM., PIN - 695004

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WA 958/22 and 942/22

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-4-

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3 THE CONSUMER GRIEVANCE REDRESSAL FORUM (CONSTITUTED UNDER SECTION 42(5) OF THE ELECTRICITY ACT, 2003), CENTRAL REGION, POWER HOUSE BUILDING, CEMETERY JUNCTION, COCHIN, PIN682018., PIN - 682018

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BY ADVS. C.JOSEPH ANTONY JOHN MANJOORAN

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OTHER PRESENT:

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SR. ADV. S. Sreekumar

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 29.08.2022, ALONG WITH WA 942/22. THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WA 958/22 and 942/22

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-5-

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S.V.BHATTI

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& BASANT BALAJI, JJ.

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Writ Appeal Nos.958 of 2022 and 942 of 2022

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JUDGMENT

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(Dated this the 29^th day of August 2022)

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Basant Balaji J.,

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These two writ appeals are filed by M/s/ Petronet LNG

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ltd against the judgment dated 24.5.2022 in W.P.(C) No.15161 of 2019 and W.P.(C) No 5537 of 2016. W.P.(C) No. 5537 of 2016 was filed by the appellant herein against the Kerala State Electricity Board and others with the following reliefs:

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“I. Issue a Writ of Mandamus or such other Writ, direction or order commanding the respondents to comply with Exhibit P7 order and to reassign industrial tariff HT-I(A) to the petitioner and repay the excess amounts paid by the petitioner together with interest at the

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WA 958/22 and 942/22

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-6-

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rate of 9% per annum from date of remittance of the excess amount by the petitioner till repayment, within a time frame fixed by this Honourable Court.

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II. Allow the petitioner to set off the amounts due to it including interest as against the electricity bills issued to it in future by the respondents

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II. Pass such other writ order or direction that this Honourable Court may deem fit and proper in the facts and circumstances of the above case.

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IV. Direct the respondents to pay costs of this proceeding to the petitioner.”

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The first respondent Kerala State Electricity Board

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(for short ‘KSEB’) has filed Writ Petition No:15161 of 2019 challenging Exgt.P5 order passed by the Consumer Grievance Redressal Forum, KSEB (for short ‘CGRF) and to declare the same as illegal, unjust and ultravires Ext.P1

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tariff order and Regulation 97 of the Kerala Electricity

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WA 958/22 and 942/22 -7-

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Supply Code 2014 and for a declaration that the 2^nd

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respondent is liable to be charged under the Tariff category HT IV Commercial considering the nature of activities carried out by the 2^nd respondent. The learned Single Judge considered both the Writ Petitions together and relegated the issue to the licensee to take a call on the reclassification by issuing a fresh notice under regulation 97(2) of the Electricity Supply Code, 2014 and to take decision within 5 months.

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The appellant has filed W.P.(C) 15161 of 2019 for implementation of Ext.P5 whereby the CGRF, by order dated 29.10.15 cancelled the demand notice dated 7.3.2015 of the Special Revenue Officer to the tune of Rs.3,17,70,460/- and directed the respondents to reassign

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the industrial tariff to the appellant and to refund all the

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WA 958/22 and 942/22

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amount remitted out of the issue from the date of receipt of

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the order.

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Essentially the question that came up for consideration before the learned Single Judge challenging the order of CGRF is whether the licensee has strictly followed the Regulation 1997 of the Kerala State Electricity Supply Code 2014 or not. The learned Single Judge, on an evaluation of the pleadings in the Writ Petition as well as the counter affidavit filed on behalf of the respondents and taking note of the Regulation 1997 came to the definite finding that sufficient opportunity was not given to the consumer as detailed in Regulation 1997 that a notice period of 30 days has to be given to file objection before suo motu re-classification of the consumer

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category by the licensee.

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WA 958/22 and 942/22

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-9-

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Brief facts of the statement of facts for the disposal

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of the writ appeals are necessary, hence stated as follows:

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The appellant is engaged in the industrial activities of import, storage and re-gasification of Liquified Natural Gas (for short 'LNG'). LNG is converted to gas by heating it from minus 61 centigrade to ambient temperature. Regasification of LNG is the process involving evacuating LNG from the LNG storage tanks, compression of boil off gases, recovery of boil off gases in Re-condenser with the help of LNG received from the storage tank and then again pumping of LNG to high pressure for vaporization of LNG to gas at high pressure through ‘shell and tube” and “submerged combustion” vaporizers before sending it through pipe line. As per the agreement dated 6.5.2013 for supply of HT Energy with KSEB, a tariff which was

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WA 958/22 and 942/22

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allotted to the appellant was industrial tariff HT-1 industrial. Thereafter, on 20.5.2014, the appellant received a notice issued by the KSEB unilaterally changing the tariff from HT-1 industrial to HT-IV commercial with effect from the date of connection. Though Ext.P3 reply dated 7.6.2014 was submitted before the Special Officer Revenue, KSEB no opportunity was granted to the appellant. On 7.3.2015 the appellant was served with another letter directing him to remit an amount of Rs.3,17,70,460/- on or before 25.3.2013 to avoid disconnection. The appellant challenged the order of the Board before the CGRF and documents were produced and after hearing the appellant as well as the Board, passed the order dated 29.10.2015 cancelling the demand notice dated 7.3.2015 issued by the Board and directed the respondents

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WA 958/22 and 942/22

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to reassign industrial tariff and to refund all the amount

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remitted. The finding of the CGRF is that on the premises that the respondents/Board has not mentioned any section or regulation of the act or code to charge for the consumer the huge amount. It was also mentioned that no reclassification under the supply code 20003 was not quoted to establish their claim for reclassification. Even though there was dissenting note by one of the member, CGRF held that the reclassification by the licensee is unilateral and the demand notice was cancelled. It is challenging this order of CGRF that W.P.(C) No.15161 of 2010 was field by the Deputy Chief Engineer, KSEB.

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The learned single Judge after perusing the Regulation 1997 of Electricity supply Code and the documents produced from both sides, held that sufficient

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WA 958/22 and 942/22

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opportunity was not given to the consumer as stated in Sub clause 97(2) and (3) of the Regulations and hence, the lincesee was directed to issue fresh notice under

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Regularisation 1992 and to pass fresh orders after hearing the consumer within five months.

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Ext.P2 letter produced in W.P.(C) No.15167 of

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2019 dated 20.5.2014 shows that a decision was also taken

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to change the tariff from H1 to HIV Industrial connection with effect from the date of connection by the Special Officer Revenue of the Board. The order is extracted below

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“Accordingly, the tariff of M/s. Petronet LNG Ltd., Con.code 21/6539 has been changed from HT-1 Industrial to HT-IV Commercial tariff with effect from the date of connection. Therefore, the previous, invoices issued to M/s. Petronet LNG Ltd. from 05/13 to 05/14 under HT-1 tariff and the Security Deposit realized under HT-1 tariff will be

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WA 958/22 and 942/22

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revised under commercial tariff. Arrear notices on account of the same will be issued in due course.”

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Though after receipt of Ext.P2, Ext.P3 letter was sent by the appellant on 7.2.2014 clarifying the nature of activities undertaken by the premises of the appellant and that the tariff application is that of industrial, no action was taken on Ext.P3. Thereafter Ext.P4 letter dated 7.3.2015 was issued directing the appellant to remit the amount of

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Rs.3,17,70,460/- or before 20.3.2015 to avoid

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disconnection.

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Sub Regulation (2) of 1997 of the KSEB Supply Code clearly states that the consumer shall be informed the proposed reclassification through a notice period of 30 days to file objection if any and sub clause (3) reads that

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WA 958/22 and 942/22

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the licensee after due consideration of the reply of the consumer if any may reclassify the appropriately.

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The learned Single Judge, on going through the relevant Regulation, came to the definite finding that an opportunity as stated in Sub Regulation (2) Rule was not given to the appellant and so the question of reclassification has to be done afresh by the licensee.

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Violation of principles of natural justice goes to the very root of the issue and once it is established that there is a violation of natural justice, this court is justified in interfering with matters, even when there is alternate remedy or there is substantial injustice caused to any party. Admittedly the Board does not have a case that sufficient opportunity was given to the appellant to substantiate their case regarding the allotment of industrial

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WA 958/22 and 942/22

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tariff and no reasoning is forthcoming on the reply submitted by the appellant. Hence, the learned Single Judge was justified in accepting the case of the appellant and directing reconsideration of the same within five months after due compliance of Regulation 1997 of KSEB Supply Code. We do not find any ground to interfere with the finding of the learned Single Judge and the Writ Appeals are dismissed . We are of the view that the appeals can be dismissed, but we make it clear that though the matter is relegated to the licensee on the question of reclassification by issuing fresh notice under Rule 97 of KSEB Supply Code, the licensee shall, without adverting to any of the findings/observations made by the CGRF take a decision independently with an open mind within a period of five months from the date of receipt of a certified copy

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WA 958/22 and 942/22

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of the judgment. Needless to state that we have not gone to

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merits of the case and the issue is fully left open to be decided by the licensee as directed by the learned Single Judge.

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The counsel for the appellant submits that the demand raised by the Electricity Board has already been remitted by them, and hence the same may be directed to be

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paid back since the issue has to be decided afresh. We are afraid the said request be allowed with little modification viz., the appellant has since remitted the demand raised by

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the Board, we deem it appropriate that following directions can be issued:

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(i) The licensee/Electricity Board shall issue a fresh notice under Regulation 97 of KSEB Supply Code to the consumer and if the consumer makes a

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WA 958/22 and 942/22

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reply with any supporting documents, fresh decision shall be taken in accordance with law, taking into consideration the activities undertaken by the consumer and decide the tariff applicable whether it be industrial or commercial.

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(ii) Once a decision is taken, the amount already remitted by the appellant shall be adjusted according to the tariff fixed by the licensee and if excess amount is left, the excess amount shall be paid back to the consumer within a period of four weeks thereafter.

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S.V.BHATTI, JUDGE

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SD BASANT BALAJI, JUDGE

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dl/

M/S Petronet Lng Ltd. v. Kerala State Electricity Board Ltd.

Case brief

What is this about?

What did the court decide?

M/S Petronet Lng Ltd. v. Kerala State Electricity Board Ltd.

Case brief

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What did the court decide?

What the court decided

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