Allowed

T.C.Noushad, v. Kerala State Electricity Board

Kerala HC21 Mar 2024WP(C)/257/2016

Case brief

AI extract

What is this about?

The High Court allowed a writ petition challenging electricity demand charges. The petitioner argued that despite selling bakery items from the ground floor, the presence of a manufacturing unit on the rooftop entitled the entire premises to the lower industrial tariff (LT IV) under the tariff order.

What did the court decide?

Exhibits P4, P8 and P9 quashed. Amounts paid towards demands shall be refunded or adjusted against future liabilities, without interest.

T.C.Noushad, Vs Kerala State Electricity Board — Property and Title | Kerala HC (2024)

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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 GOPINATH P.

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THURSDAY, THE 21^ST DAY OF MARCH 2024 / 1ST CHAITHRA, 1946

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WP(C) NO. 257 OF 2016

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PETITIONER/S:

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T.C.NOUSHAD, AGED 48 YEARS S/O LATE IBRAHIMKUTTY, PROPREITOR, M/S ROYAL FOOD COURT, A.M. ROAD, PERUMBAVOOR BY ADV SARITHA DAVID CHUNKATH

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RESPONDENT/S:

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1 KERALA STATE ELECTRICITY BOARD, REPRESENTED BY ITS SECRETARY, VYDYUTI BHAVANPATTAM, THIRUVANANTHAPURAM-695 004

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2 KERALA STATE ELECTRICITY APPELLATE AUTHORITY, CC 51/52, NEAR 110 KV SUB STATION, VYTTILA, KOCHI-682 019.

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3 THE DEPUTY CHIEF ENGINEER, ELECTRICAL CIRCLE, PERUMBAVOOR-683 542.

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4 THE ASSISATNT ENGINEER, ELECTRICAL SECTION, PERUMBAVOOR-683 542.

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BY ADVS. SMT.P.K.RADHIKA-KSEB NIRMAL.S, STANDING COUNSEL SRI.N.RAPHY RAJ, SC, KERALA STATE ELECTRICITY BOARD LIMITED, SC,

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C)No.257 of 2016

J U D G M E N T

The petitioner has approached this Court challenging

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the demands raised on the petitioner on the ground that an electricity connection granted to the petitioner under LT IV tariff is being misused by the petitioner for commercial activity (running of a bakery). Ext.P4 is the demand raised on the petitioner in proceedings under Section 126 of the Electricity Act, 2003 confirming the demand for payment of Rs.5,26,845/- (Rupees Five lakh Twenty Six Thousand Eight Hundred and Forty Five only) on account of the alleged illegal use of electricity by the petitioner. The petitioner preferred an appeal before the Appellate Authority by paying 50% of the amount demanded. The Appellate Authority by Ext.P8 order confirmed the demand. The petitioner is thus before this Court.

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The brief facts of the case are as follows:

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The petitioner is the proprietor of M/s.Royal Food

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Court functioning in building No.XVII-1940, 1941 and 1942 of Perumbavoor Municipality. The said building is stated to be a three

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WP(C)No.257 of 2016

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storied building having the following five electricity connections with distinct consumer numbers. The tariff under which the connections were obtained and the purpose of which connection was obtained, are also indicated below :-

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Sl. No.	Consumer No.	Floor	Purpose	Tariff
1.	22748	Rooftop	Manufacturing unit of the bakery	LT IV
2	23881	2^ndFloor	Staff residence	LT VII A
3.	22695	1^stFloor	Restaurant	LT VII A
4.	22696	Ground Floor	Bakery	LT VII A
5.	22747	Ground Floor	Manufacturing unit to the bakery	LT IV

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Ext.P1 mahazar and the proceedings of the officials of the Board indicate that the dispute between the petitioner and the Board was relating to Consumer No.22747 which is a connection granted with LT-IV tariff applicable to industrial units. According to the Board, the entire ground floor of the building was being used for the sale of bakery products and for sale of juices etc. and there was no manufacturing activity on the ground floor. It is thus that the demand for payment of charges at commercial rates

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WP(C)No.257 of 2016

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for the electricity connection bearing Consumer No.22747 together with penalty was raised on the petitioner. It is not disputed that, for the portion of the ground floor where, bakery products were being sold by the petitioner., the connection bearing Consumer No.22696 was availed and the tariff in respect of that connection was commercial tariff (LT VII A).

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The learned counsel appearing for the petitioner would submit that the finding in Ext.P1 mahazar that there is no manufacturing activity on the ground floor is completely wrong. It is submitted that the mixies, grinders etc. which were found at the time of inspection, are actually used for the manufacture of bakery items and were not intended to be used for the purposes of sale of juices etc. as is now sought to be established by the Board. It is submitted that, going by the provisions of the tariff order applicable at the relevant time, bakery manufacturing units where, sale of bakery items are also conducted, were entitled to the lower tariff (LT IV). It is submitted that there is no dispute whatsoever that there was a bakery manufacturing unit on the rooftop of the building having Consumer No.22748 and the tariff for that

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WP(C)No.257 of 2016

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connection was under LT IV. It is submitted that there is no allegation of any theft of electricity and the only reason for the demand is that the petitioner had no manufacturing activities on the ground floor of the building. It is pointed out, with reference to the tariff order that, even if this contention were to be accepted, the petitioner was still entitled to LT IV tariff, as there is a manufacturing unit on the top floor of the building and the place where, the bakery items were sold, was situated on the ground floor of the same premises. It is submitted that, in such circumstances, it would also have been open to the petitioner to claim that the entirety of the ground floor should also have been granted electricity connection at LT IV tariff. It is submitted that the entire building is now used for the same business in a different format and therefore, all the connections referred to above are now with commercial tariff. It is submitted that the word ‘premises’ in the tariff order (Ext.P5) indicates that, when there is a manufacturing unit and a place selling bakery items in the same premises, the petitioner is clearly entitled to the lower rate of tariff namely LT IV.

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WP(C)No.257 of 2016

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The learned Standing Counsel appearing for the Kerala State Electricity Board would, however, contend with reference to Ext.P1 mahazar, Ext.P4 proceedings of the original authority and Ext.P8 proceedings of the Appellate Authority that, when the petitioner had no manufacturing activities on the ground floor of the building and in the area where electricity was supplied at LT-IV tariff and in respect of Consumer No.22747, the petitioner was liable to pay the higher tariff (LT VII A) especially when the petitioner was himself paying higher tariff for the portion of the ground floor which he was admittedly using as a place for sale of bakery products. It is pointed out that the tariff order for the relevant period clearly indicates that when there are bakeries without manufacturing units, the applicable tariff is the commercial tariff namely LT VII A and not the industrial tariff namely LT IV. It is pointed out that paragraph No.5 of Ext.P6 judgment in the earlier round of litigation between the petitioner and the Board clearly shows that this Court had taken the view that whether the petitioner is entitled to LT IV tariff will depend on the nature of the use and therefore, it is not open to the petitioner to

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WP(C)No.257 of 2016

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now contend that since admittedly there is a manufacturing unit on the rooftop of the building, the petitioner is entitled to industrial tariff for the ground floor also. It is pointed out, with reference to the judgment of the Supreme Court in K.C.Ninan Vs. Kerala State Electricity Board and Others ; [2023 (3) KLT 646] and in particular with reference to paragraph No.50 of the aforesaid judgment that supply of electricity is always to a consumer and the fact that there is a manufacturing unit on the rooftop of the building in question is no ground to hold that the petitioner was entitled to LT IV tariff for the ground floor as well. The learned Standing Counsel also placed reliance on the Division Bench judgment of this Court in Classic Colour Lab Vs. Assistant Engineer, Electrical Section Central ; [2014 (3) KLT 57] to contend that where the electricity supplied under industrial tariff was misused for commercial activity, the petitioner is liable for penalty. It is pointed out that, in the light of the law laid down in Classic Colour Lab (supra), the demands raised on the petitioner are liable to be sustained.

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WP(C)No.257 of 2016

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6. Having heard the learned counsel for the

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petitioner and the learned Standing Counsel appearing for the Kerala State Electricity Board, I am of the opinion that the petitioner is entitled to succeed. The facts of the case as discussed above indicate that the petitioner was carrying on business in a three storied building having five distinct electric connections under different consumer numbers. Two of these electric connections namely, Consumer Nos.22748 and 22747 were under LT IV tariff applicable to industrial units. The other three connections with consumers Nos.23881, 22695 and 22696 were admittedly under commercial tariff. As already noticed, the dispute between the petitioner and the Board rests on the question as to whether the petitioner is entitled to industrial tariff for the portion of the building on the ground floor where, the petitioner claims to be running a manufacturing unit for manufacturing bakery items. The Board would assert that the said portion of the ground floor to which, electricity was supplied under Consumer No.22747 was not being used for any manufacturing activity and was in fact part of the bakery where, sale of bakery items was

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WP(C)No.257 of 2016

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carried out. The tariff order for the relevant period which is on record as Ext.P5 to the extent it applies to the categories of activities which are entitled to LT IV tariff reads as follows;

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“LOW TENSION IV (LT-IV)-INDUSTRY

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Tariff for general purpose industrial loads (single or 3 phase) viz, grinding Mills, Flour Mills, Oil Mills, Rice Mills, Saw Mills. 'Ice Factories with or without cold storage, rubber smoke houses, Prawn peeling Units, floriculture activities, type vulcanizing/retrading units. workshop using power mainly for production and/ or repair, pumping water for Non- Agricultural purpose Public water works, Sewage Pumping, Power laundries. Hatcheries, Screen Printing of glassware or ceramic, Printing Press, Milk Chilling Plant, Freezing Plant, Cold Storage, Bakers (where manufacturing process and sales are carried out in the same premises) , Stone Crushing Units, Diamond-Cutting, Book binding and allied activities, Garment making, Electric crematorium, Pyrolators Installed by local bodies, Mushroom farms, Shrimp farms, SSI Units engaged in computerized colour photo printing, computer consultancy services with SSI registration engaged in Software services and data processing activities and Desk Top Printing, Audio/ Video Cassette recording/ Duplication, CD recording / duplication software development for recording/duplication purpose, manufacture of audio/ Video cassets, Software Technology information

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Technology. Dairy farms Agriculture Nurseries (without sale) marble cutting and tissue culture shall be.”

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It is thus clear that where manufacturing activities of bakery products and a place for sale of bakery products are functioning in the same premises, the said activity will be entitled to connection under LT IV category notwithstanding the fact sale of bakery items independently without any manufacturing activity would attract tariff under LT VII A. While the learned counsel appearing for the State Electricity Board would be right in contending on the basis of the ratio of the judgment of the Supreme Court in K.C.Ninan (supra) that connection is granted to a consumer and not to the premises, I cannot lose sight of the fact that the tariff order specifically refers to premises and not to a consumer. In other words, Ext.P5 tariff order which has been extracted above (to the extent relevant) indicates that where a unit for manufacturing bakery items and a bakery are functioning in the same premises, the entire activity is entitled to supply of electricity at LT IV tariff.

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In the facts of this case, even the Board has no dispute that there was a bakery manufacturing unit on the rooftop of

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the building. Therefore, even if the case of the Electricity Board that there was no manufacturing activities on the ground floor is accepted, going by the terms of the tariff order, the petitioner was entitled to supply of electricity at LT IV tariff. It is not disputed that for the portion of the ground floor which was admittedly used as a place for sale of bakery items, the petitioner was actually paying tariff at commercial rates.

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In that view of the matter, the petitioner cannot be proceeded against on the basis that the portion of the building on the ground floor where, he was supplied electricity under Consumer No.22747 under LT IV tariff was actually being used as a bakery as going by the terms of the tariff order, even if that was the case, the petitioner is entitled to LT IV tariff, as there was a manufacturing unit on the top floor of the building. The fact that different consumer numbers were allotted to the petitioner does not mean that the petitioner is not entitled to the aforesaid benefit under the tariff order. The judgment of the Division Bench of this Court in Classic Colour Lab (supra) is distinguishable on facts. The portions of the tariff order which applied to that case did not indicate that the commercial activity other than the processing of

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photographs (for which, supply at rates applicable to industries was permitted) could also be supplied at rates applicable to industrial units, if both activities were carried out in the same premises. In the facts of the present case at the sake of reiteration, it may be stated that the terms of the tariff order indicate beyond doubt that where, the bakery manufacturing unit and a bakery operate in the same premises, the petitioner is entitled to tariff at the rates applicable to industrial units (LT IV).

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Therefore, this writ petition is allowed. Exts.P4, P8 and P9 are quashed. Any amounts paid by the petitioner either at the appellate stage or thereafter, towards the demands raised on the petitioner on the basis of Exts.P4, P8 and P9 shall be refunded or adjusted against future liabilities. However, the petitioner shall not be entitled to any interest on the said amount.

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Sd/- GOPINATH P., JUDGE

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APPENDIX OF WP(C) 257/2016

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PETITIO	NER EXHIB	ITS
EXHIBIT	P1:	TRUE 27/7/	COP 2011	Y OF	THE SITE MAHAZAR DT.
EXHIBIT	P2:	TRUE	COPY	OF THE	BILL DT. 07/9/2011
EXHIBIT	P3:	TRUE	COP	Y OF	THE OBJECTION BY DT.
		24/8/	2011	FILED B	Y THE PETITIONER
EXHIBIT	P4:	TRUE	COPY	OF THE	ORDER DT. 13/9/2011
EXHIBIT	P5:	TRUE	COPY	OF THE	EXTRACT OF THE TARIFF
EXHIBIT	P6:	TRUE IN WP	COPY C 264	OF TH 36/2011	E JUDGMENT DT. 10/7/2015
EXHIBIT	P7:	TRUE	COPY	OF APPE	AL DT 7/8/2015
EXHIBIT	P8:	TRUE THE A	COPY PPEAL	OF THE	ORDER DT. 04/12/2015 IN
EXHIBIT	P9:	TRUE	COPY	OF BILL	FOR RS.6,39,893/-
EXHIBIT	P10:	TRUE JUICE	COPY	OF THE	RECIPE USING FRESG FRUIT
EXHIBIT	P11:	TRUE CREAM	COPY CAKE	OF THE	RECIPE AND NOTE IN ICE
EXHIBIT	P12:	TRUE	COPY	OF THE	RECIPE ON CHICKEN PUFFS

T.C.Noushad, v. Kerala State Electricity Board

Case brief

What is this about?

What did the court decide?

T.C.Noushad, v. Kerala State Electricity Board

Case brief

What is this about?

What did the court decide?

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