Remanded

Zerone Consulting Pvt. Ltd. v. K.S.E.B

Kerala HC3 Jan 2022WP(C)/19554/2013

Case brief

AI extract

What is this about?

The High Court found errors in the calculation of connected load in the appellate authority's order regarding a disputed electricity tariff. The court set aside the order directing a fresh hearing on tariff applicability and connected load, and deferred coercive steps.

What did the court decide?

Ext.P13 order set aside; directions to Deputy Chief Engineer to decide appeal afresh within two months on tariff and connected load; coercive steps deferred.

Zerone Consulting Pvt. Ltd. Vs K.S.E.B — Service and Employment | 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 MURALI PURUSHOTHAMAN

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MONDAY, THE 3^RD DAY OF JANUARY 2022 / 13TH POUSHA, 1943

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WP(C) NO. 19554 OF 2013

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PETITIONER:

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M/S.ZERONE CONSULTING PVT LTD

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FIRST FLOOR, GCDA COMPLEX, JOURNALIST COLONY ROAD,

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KALOOR, KOCHI - 17., REP. BY ITS DIRECTOR, ASHIQ AL JHAN.

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BY ADVS.

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S.ANANTHAKRISHNAN

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N.K.SUBRAMANIAN

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RESPONDENTS:

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1 KERALA STATE ELECTRICITY BOARD

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REP. BY ITS SECRETARY, VYDHYUTHIBHAVAN, TRIVANDRUM - 695 001.

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2 THE SUB-ENGINEER

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KSEB, ELECTRICAL SECTION, KALOOR, KOCHI - 682 017.

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3 ASSISTANT ENGINEER

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KSEB, ELECTRICAL SECTION, KALOOR, KOCHI - 682 017.

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4 DEPUTY CHIEF ENGINEER

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KSEB, ELECTRICAL CIRCLE, POWER HOUSE ROAD, KOCHI - 682 018.

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SMT.NAZEEBA.O.H.,SC, KERALA STATE ELECTRICITY BOARD

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SRI.B.PREMOD, SC,KERALA STATE ELECTRICITY BOARD

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05.10.2021, THE COURT ON 03.01.2022 DELIVERED THE FOLLOWING:

JUDGMENT

The petitioner is a company engaged in the development of

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software and related services and certified to be so by the Software Technology Parks of India (STPI). The petitioner's premises are private bonded warehouses and the Commissioner of Customs has approved the premises as 100% Export Oriented Units (EOU) by Ext.P3 license. According to the petitioner, due to paucity of space, petitioner has taken on lease additional space of 1761 Sq. Ft. for monthly rent at Door No. 36/2214C of the Corporation of Cochin and the said space is also utilized for software development and the same has been certified and recognized by the Director of STPI and approved as a private bonded warehouse and 100% EOU by the Commissioner of Customs in Ext. P3 license. Out of this total area of 1761 Sq. Ft., an extent of 500 Sq. Ft. was used by the petitioner for training its employees and prospective employees under the trade name 'EazyLearn', as part of software development activity. According to the petitioner, the cost of the training is usually charged to the prospective employees and the cost is refunded

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if the prospective employees are not absorbed by the Company after the training.

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2.The petitioner applied for electricity connection to the additional space taken on lease under LT-IV tariff as the petitioner is engaged in the software development business in the said premises. The petitioner

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was provided electricity connection under LT-IV tariff by the Board.

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While so, the 2^nd respondent, the Sub-Engineer inspected the said premises and issued Ext. P7 site mahazar stating that the petitioner is also engaged in training activity and recommended to change the tariff to the Training Center's tariff. In Ext. P7, it is also stated that the petitioner has exceeded the sanctioned connected load. The petitioner filed Ext. P8 explanation objecting to the findings in the mahazar and requested for a joint inspection. However, without reference to Ext. P8 explanation, the petitioner was issued with Ext. P9 provisional short assessment bill for Rs. 84,685/-. According to the petitioner, while the recommendation in Ext. P7 site mahazar was only to change the tariff to Training Center's tariff viz; LT-VI(B), the tariff was changed from LT-IV

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to LT-VII (A) (Commercial tariff).

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Challenging Ext. P7 site mahazar, Ext. P9 provisional short

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assessment bill and the tariff category change, the petitioner filed an appeal before the Assistant Engineer, the 3^rd respondent. However, the 3^rd respondent rejected the appeal by Ext. P10 order. The petitioner, therefore, preferred Ext. P11 appeal before the Deputy Chief Engineer, the 4^th respondent. As per Ext. P13 order, the 4^th respondent rejected the appeal. According to the petitioner, no plausible reasons have been stated in Ext. P13 to justify the change in tariff and the calculation of connected load therein is incorrect and vitiated by errors apparent on the face of the record.

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The petitioner challenged the action of the respondents before the Consumer Disputes Redressal Forum and the said Forum partly allowed the complaint holding that the petitioner has to be charged under LT VI (B), ie. Training centers' tariff. However, the State Commission reversed the said order and dismissed the complaint holding that the Forum lacks jurisdiction to entertain the complaint.

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Accordingly, the petitioner has preferred this writ petition challenging Ext. P7 site mahazar, Ext. P9 bill, Ext. P10 and Ext. P13 orders and the change of tariff to LT-VII(A) and the bills issued thereunder.

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A counter affidavit is filed on behalf of the respondents resisting the averments in the writ petition. It is stated therein that an electric connection bearing Consumer No.8296 was given to the petitioner on 13.10.2006 under LT-IV tariff having a connected load of 32960 Watts. However, on an inspection conducted on 09.05.2007 by the officials of the Board, it was found that the petitioner is running a firm in the same premises in the name 'Easy Learn Training Project and Placement'. It is further stated that the said firm is a training center, for IT and other professionals and providing placement in various companies and the same was displayed in the display board of the Company and thus there is misuse of energy by taking electric connection in a considerably lower tariff and using for higher tariff purpose. As per the Board rules, whenever a consumer is using a single connection for different purposes covering under different tariffs, the consumer should be assessed totally

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in higher tariff. It is also stated that before passing Ext. P13 order, the

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Deputy Chief Engineer visited the premises and came to a conclusion that the training conducted by the firm is not part of the procedure of production line for software development which can be billed under LTIV tariff and that the firm is engaged in multiple activities and therefore, the activity for which higher tariff is applicable is to be considered for the whole installation and the decision to apply LT-VII (A) tariff is right. With regard to the contentions of the petitioner regarding the calculation of connected load, the counter affidavit states that the calculation is correct and the same was verified by the appellate authority.

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7.The petitioner has filed a reply affidavit reiterating the contentions in the writ petition and traversing the averments of the respondents in the counter affidavit. The petitioner has also filed an interlocutory application dated 17.12.2020 in the writ petition stating that in view of Covid-19 pandemic, the petitioner has surrendered the building to which the connection was obtained to the landlord and for direction to the respondents to consider their request dated 29.07.2020

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to dismantle the connection given in the name of the petitioner.

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8.I have heard Sri. S. Ananthakrishnan, the learned counsel for the petitioner and Sri. B.Premod, the learned standing counsel for the Kerala State Electricity Board.

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9.According to Sri. Ananthakrishnan, training imparted to employees and prospective employees under the trade name 'EazyLearn' is integral part of petitioner's software development activity and therefore, the tariff applicable to the petitioner is LT-IV. The learned counsel submits that the Deputy Chief Engineer has misconstrued 'EazyLearn' as a 'firm', whereas the same is part of petitioner's software development company. Even if it is assumed that the petitioner is engaged in training activity, the higher tariff applicable for the whole installation can only be LT-VI(B), the one applicable to training centers and not LT-VII(A). According to the learned counsel, the reasons stated in Ext. P13 order by the Deputy Chief Engineer to apply LT-VII(A) tariff is not based on materials but on conjunctures and surmises. Sri. Ananthakrishnan also contends that the finding regarding Connected

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Load is also factually incorrect and there are errors apparent on the face of the record in Ext.P13 order. The learned counsel took me through Ext.P11 appeal memorandum filed before the Deputy Chief Engineer wherein it is averred that the total load of the air conditioners comes to 18.3 tons (8.3+5.5+2.5+2) and that of the UPS comes to 7.5 KVA. In Ext. P13, the Deputy Chief Engineer has taken the total tonnage of the air conditioners as 25.8 tons (18.3 + 7.5) and calculated the total load of air conditioners as 32.64 KW and further added 7.5 KVA towards power rating of UPS. The learned counsel contends that if this error is rectified, the connected load of the petitioner will be well below the sanctioned load. Sri. Ananthakrishnan submits that the respondents have not rebutted the contentions of the petitioner regarding the calculation of connected load.

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Per contra, Sri. Premod would contend that the Deputy Chief Engineer after inspecting the premises of the petitioner found that the training conducted by the petitioner is not part of software development activity which can be billed under LT-IV tariff meant for industrial

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purpose and that since the firm is engaged in multiple activities, the activity for which higher tariff is applicable is to be considered for the whole installation and therefore the decision to apply LT-VII (A) tariff cannot be faulted. Sri. Premod also submits that power plugs wrongly included in the assessment in Ext. P7 site mahazar have been excluded by the appellate authority while assessing the connected load in Ext. P13 and the tonnage of air conditioners was calculated as per the statement of the petitioner in Ext. P11 and there are no errors in the calculation of connected load.

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I have considered the rival submissions. So far as the contentions of Sri. Ananthakrishnan with regard to change of tariff from LT-IV to LT-VII(A), it will be apposite to extract the findings of the appellate authority in Ext. P13 as hereunder:-

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“In the circumstances, I need verify and find out whether the training being conducted as admitted by the appellant is a part of the procedure or production line for software development which can be billed under LT IV tariff. I visited the firm and the appellant was present at site. The lady Manager at the reception desk and the appellant informed that the trainees undergoing training at the center will not be fully absorbed in the company. Also it is not being done as a part of appointment but as a

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commercial training package accepting a consolidate fee. On completion if vacancy exists they will be given job in the firm where they are doing software development also. So, this can be considered as a firm with multiple activity and hence the one for which the higher tariff is applicable is to be considered for the whole installation and hence the action of applying LT VII A tariff is correct.”

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The contention of the petitioner is that training imparted to employees and prospective employees in the training center for its software export needs is integral part of the petitioner's software development activity. This contention was rejected by the appellate authority stating that the trainees undergoing training at the center will be given job in the company only if vacancy exists. This cannot be a cogent reason to arrive at a finding that the training imparted at the center is not part of the petitioner's software development activity. Further, there is no mention in Ext. P13 regarding the training said to be imparted to the employees of the company. The reasons that weighed with the appellate authority to consider the petitioner as a firm with multiple activities are not plausible and are based only on inferences.

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12.According to the respondents, the petitioner is engaged in

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multiple activities and therefore , the activity for which higher tariff is applicable is to be considered for the whole installation. Multiple activities of the petitioner according to the respondents are (i) software development and (ii) training. In Ext. P7, the 2^nd respondent has recommended to change the tariff as applicable to training centers. The tariff applicable to training centers is LT-IV (B). The activity of the petitioner for which higher tariff is applicable is training. Being so, there is no justifiable reason in Ext. P13 order as to why commercial tariff under LT-VII(A) has been made applicable to the petitioner.

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13.The learned counsel for the petitioner was able to demonstrate from Ext. P11 appeal memorandum and Ext. P13 order that the finding regarding Connected Load is factually incorrect and there is error apparent on the face of the record in Ext.P13 order. The total tonnage of the air conditioners was assessed by the 4^th respondent inclusive of the power load of UPS. This depicts non-application of mind on the part of the appellate authority, the 4^th respondent, in passing Ext.P13 order on a statutory appeal.

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14.Accordingly, I set aside Ext.P13 order. The 4^th respondent is

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directed to consider Ext.P11 appeal afresh after hearing the petitioner through virtual or physical mode and pass appropriate orders in accordance with law with regard to the tariff applicable to the petitioner and the assessment of connected load. The 4^th respondent shall decide the appeal within two months from the date of receipt of a copy of this judgment. All coercive steps against the petitioner pursuant to Ext. P9 shall stand deferred till the 4^th respondent decides the appeal. Nothing stated above shall be construed as an expression of any opinion on the merits of the appeal. The request of the petitioner dated 29.07.2020 to dismantle the connection given in the name of the petitioner may also be considered appropriately, if not already done.

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The writ petition is disposed of with the above directions.

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Sd/-

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MURALI PURUSHOTHAMAN JUDGE

PETITIONER's EXHIBITS

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EXT.P1: TRUE COPY OF LICENSE RENEWAL LETTER DT. 15/4/2010. EXT.P2: TRUE COPY OF THE GREEN CARD ISSUED TO THE PETITIONER. EXT.P3: TRUE COPY OF THE CUSTOMS BONDED HOUSE LICENSE.

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EXT.P4: TRUE COPY OF THE LETTER DT. 27/7/2006 OF STPI APPROVING THE NEW PREMISES.

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EXT.P5: TRUE COPY OF THE TRADEMARK APPLICATION DT. 13/9/2005.

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EXT.P6: TRUE COPY OF THE RELEVANT PAGES OF THE TARIFF ORDER. EXT.P7: TRUE COPY OF SITE MAHAZER DT. 9/5/2007.

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EXT.P8: TRUE COPY OF THE LETTER DT. 22/5/07 OF THE PETITIONER. EXT.P9:TRUE COPY OF THE BILL DT. 22/5/07.

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EXT.P10: TRUE COPY OF THE ORDER OF 3RD RESPONDENT DT. 30/06/2007.

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EXT.P11: TRUE COPY OF THE MEMORANDUM OF APPEAL DT.18/08/2007.

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EXT.P12: TRUE COPY OF THE NOTES OF ARGUMENTS DT. 18/8/2007.

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EXT.P13: TRUE COPY OF THE ORDER OF 4TH RESPONDENT DT. 2/01/2008.

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EXT.P14: TRUE COPY OF THE RELEVANT PAGES OF IT POLICY OF 2007 & 2012.

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EXT.P15: TRUE COPY OF THE RELEVANT PAGES OF THE TARIFF ORDER.

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EXT.P16: TRUE COPY OF BILL DT. 29/8/2006.

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EXT.P17: TRUE COPY OF THE CERTIFICATE DT. 8/10/2010 OF THE MANUFACTURER.

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EXT.P18: TRUE COPY OF THE RELEVANT PAGES OF TERMS & CONDITIONS OF SUPPLY 2005.

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EXT.P19: TRUE COPY OF THE ORDER OF THE CONSUMER FORUM, ERNAKULAM.

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EXT.P20: TRUE COPY OF THE ORDER OF THE CONSUMER STATE COMMISSION.

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spc/

Zerone Consulting Pvt. Ltd. v. K.S.E.B

Case brief

What is this about?

What did the court decide?

Zerone Consulting Pvt. Ltd. v. K.S.E.B

Case brief

What is this about?

What did the court decide?

What the court decided

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