Allowed

Suguna Agro Products P Ltd. v. the Chairman

Madras HC4 Feb 2019WP/33386/2004

Case brief

AI extract

What is this about?

This writ petition challenged an order demanding an electricity charges shortfall based on audit objections without a prior show cause notice. The High Court held that such a demand violated principles of natural justice and set aside the impugned order, granting liberty to the respondent to issue a proper notice.

What did the court decide?

The impugned order dated 19.10.2004 demanding shortfall was set aside. Liberty granted to the Second Respondent to issue appropriate notice. Petitioner entitled to pay charges under existing Tariff II

Suguna Agro Products P Ltd. Vs the Chairman — Writ and Judicial Review | Madras HC (2019)

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IN THE HIGH COURT OF JUDICATURE OF MADRAS

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DATED: 04.02.2019

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CORAM:

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THE HONOURABLE MR. JUSTICE M.S. RAMESH

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WP.No.33386 of 2004 and WP.MP.No.40352 of 2004

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Suguna Agro Products (P) Ltd., Silk Division, Rep. by its Authorised Officer, V.Velumani, 3/25, Ganapathipalayam, Udumalpet - 642122. ...Petitioner Vs 1. The Chairman, Tamil Nadu Electricity Board, No.800, Anna Salai, Chennai - 600002. 2. The Junior Engineer (O&M), Tamil Nadu Electricity Board, Bagalur. ...Respondent PRAYER: Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus or any other appropriate Writ or order or direction in the nature of a Writ calling for the records of 2nd respondent in Ka.No.JE/Sic/Bagalur/NW/A.Autid/Sic/04 dated 19.10.2004 and quash the same and direct the respondents and their servants/subordinates to continue to treat the petitioner service connection LTSC.No.426 Jeemangalam, Hosur under Tariff III-A.

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For Petitioner : Mr.M.Kamalanathan

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For Respondents : Mr.M.Varum Kumar, Standing Counsel

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https://hcservices.ecourts.gov.in/hcservices/

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O R D E R

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The petitioner herein is engaged in the business of Sericulture and has availed electricity service connection under Tariff III-A under Tamil Nadu Revision of Tariff Rates on Supply of Electrical Energy Act, 1978. In view of certain audit objections, the respondents had issued a letter dated 19.10.2004, demanding shortfall of Rs.66,692 towards the electricity service charges by revising the Tariff.

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The learned counsel for the petitioner submits that no opportunity was given to the petitioner while the impugned order dated 19.10.2004 was passed and as such, it is in violation of principles of natural justice. Hence, the learned counsel would submit that the impugned order itself is liable to be set aside.

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The learned Standing Counsel for the respondents on the other hand, would submit that in view of audit objections, they were constrained to revise the Tariff and as such, the petitioner is bound to pay the shortfall in the electricity charges and thereby sought for dismissal of the petition.

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It is not in dispute that a Show Cause Notice was not issued to the petitioner herein before the demand was made. A perusal of the impugned order also does not reveal that the petitioner was put on notice, prior to passing of the same. When the respondents have chosen to revise the Tariff and make a demand based on certain audit objections, it would be appropriate for them to issue a notice, since the demand might cause serious prejudice to the petitioner herein also. This Court in a decision in WP.(MD)Nos.7808 & 7809 of 2009 dated 08.09.2009, had an occasion to deal with an identical situation and the observation made therein is as follows:

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6.It is not in dispute that prior to passing of the impugned order, no show cause notices were issued to the petitioners and they were not afforded an opportunity to submit their contentions. The impugned orders are a result of change of tariff. The consequences of change of tariff is a waiving in the amount payable as consumption charges and denial of every benefits, which a consumer shall be enjoyed under a particular tariff. Therefore, the change of tariff is bound to result in civil consequences for a person or an industry, which has been enjoying a concession. As rightly pointed out by the learned counsel for the petitioners that the notification dated 14.09.2007 came to be issued in 2007 itself, but is now sought to be implemented on the petitioners during 2009 and therefore, he would

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https://hcservices.ecourts.gov.in/hcservices/

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submit that the question of payment of arrears from 2007 onwards does not arise. A perusal of the notification would show that it has been brought to the notice of the Board that tariff IIIA(2) is being adopted for grant of the industrial units engaged in the process of braiding instead of adopting the tariff IIIA(1). The braiding process has been defined in the said notification which reads as follows: In "Braiding Process" that viscose filament Rayon yarn with higher denier or Cotton Yarn (wound on cones) or both is wound on small bobbies in a machine frame. The Bobbins are put together with another machine frame and yarns are braided to get decorade bands such as waiste strings, wrist bands, hair bands, radil turning cords, shoe laces, neck laces, file strings, file tags, decorative tags for gift packages and Mangala Sutra Strings etc. Therefore the notification proceeds to state that the products mentioned above are not related to activities of power looms and hence these categories of activities should be categorized under Tariff IIIA1 only subject to a maximum contracted/connected load of 10 HP.

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6.Under the very same notification of the Superintending Engineer and the electricity distribution circle were requested to identify "Braiding Process" industrial units in their circle and ascertain the tariff being adopted and if so required necessary tariff revision may be immediately duly revising the bills already rendered under LT Tariff IIIA(2). The short fall in assessment was directed to ascertain and collected from the consumer. Thus, the applicability of this notification to a particular consumer is a question of fact. The consumer should carry on the activity of braiding process as defined under the notification and this question of fact is liable of being rebutted by the consumer. Therefore, there cannot be a summary decision in this matter without a proper opportunity being afforded to the consumer to put forth his contentions.

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It is well settled proposition that in the absence of any Show Cause Notice, any demand made will literally amount to violation of principles of natural justice. As such, the respondents may not be justified in sustaining the notice.

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https://hcservices.ecourts.gov.in/hcservices/

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In the light of the above observations, the impugned order dated 19.10.2004 passed in Ka.No.JE/Sic/Bagalur/NW/A.Autid/Sic/04, issued by the second respondent herein is set aside. However, the second respondent is granted liberty to issue appropriate notice to the petitioner, calling upon them to give their explanation, as to why the demand could not be a consequential demand to be made for the relevant period. Until a final decision is arrived at, the petitioner is entitled to pay consumption charges under Tariff III-A.

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Accordingly, the present Writ Petition stands ordered. No costs. Consequently, connected Writ Miscellaneous Petition is closed.

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Sd/-
Assistant Registrar(CS-III)
//True copy//
Sub Assistant Registrar
hvk
To
1. The Chairman,
Tamil Nadu Electricity Board,
No.800, Anna Salai,
Chennai - 600002.
2. The Junior Engineer (O&M),
Tamil Nadu Electricity Board,
Bagalur.
+1cc to Mr.M.Kamalnathan, Advocate SR.No.9310

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+1cc to Mr.M.Varunkumar, Advocate SR.No.9223

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WP.No.33386 of 2004 and WP.MP.No.40352 of 2004

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KJ(CO) GMY(05/03/2019)

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https://hcservices.ecourts.gov.in/hcservices/

Suguna Agro Products P Ltd. v. the Chairman

Case brief

What is this about?

What did the court decide?

Suguna Agro Products P Ltd. v. the Chairman

Case brief

What is this about?

What did the court decide?

What the court decided

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