A power distribution company challenged a Consumer Grievance Redressal Forum order granting remission of demand charges to an industrial consumer whose power supply was restricted due to a transformer outage. The High Court held the Forum's reasoned order was correct and confirmed it.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.15623 of 2014
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The South Bihar Power Distribution Company Ltd., through its Law Officer, having its head office at Vidyut Bhawan, Bailey Road, Patna - 800001
... ... Petitioner/s
Versus
... ... Respondent/s
| =================== Appearance : For the Petitioner/s : |
=================================== M/s Anand Kumar Ojha, Sr. Advocate Prakash Kumar, Advocate |
|---|---|
| For the State : |
Ms. Neelam Kumar, AC to SC 3 |
| Fro the Respondent No.2: | M/s Suraj Samdarshi, Vijay Shankar Tiwari Avinash Shekhar, Abhilasha Jha, Simran Kumari, Advocates |
CORAM: HONOURABLE JUSTICE SMT. G. ANUPAMA CHAKRAVARTHY ORAL JUDGMENT
Date : 25-03-2025
quashing the order dated 26.02.2014 passed by the Consumer Grievance Redressal Forum, Patna (hereinafter referred to as ‘the ’Consumer Grievance Redressal Forum’) in Registered Case No. 83 of 2013 (M/s Dina Metal Ltd. Vs. The South Bihar Power Distribution Co. Ltd. & Ors) and to grant any other
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relief / reliefs for which the petitioner is found entitled in law.
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the contract demand was further enhanced to 4500 KVA, and on 07.08.1995 it was further enhanced to 6000 KVA due to enhancement in the capacity of furnaces.
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the Excise Department, the furnace capacities were 17.38 MT and 14.5 MT, respectively. Consequently, the petitioner issued a show cause notice to the respondent No. 2 regarding the furnace's capacity. The respondent No. 2 disputed the claim and requested a neutral body to verify the capacity. Meanwhile, the respondent No. 2 agreed to provisional billing at 14.5 MT until the verification was completed. The measurement, was subsequently carried out by I.I.T. Kanpur which calculated the capacity of the furnace to be 16.4 MT. Based on this verified capacity, the petitioner requested the respondent No. 2 through a Letter dated 09.12.1999, to sign a new agreement by 11.12.1999, reflecting a contract demand of 9600 KVA, effective from 01.09.1999. The new agreement was eventually signed on 15.02.2000.
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Notification No. COM/TAR-1F- 903/2000/166/2000 dated 28.05.2001. The Clause 3 of the revised Tariff Notification dated 28.05.2001 included a demand charge of Rs 700 per KVA per month and an energy charge of 120 paise per unit for HTSS consumers. Clause 4 of the said tariff also prescribed a minimum monthly charge of Rs 1012 per KVA of contract demand, payable on a monthly basis, with a guaranteed minimum supply of 630 hours per month. If the actual supply hours were lower, the monthly charges were adjusted, based on the actual hours of consumption. As per clause 5 of the said revised tariff, the demand charge as per clause-3 was to be levied on actual maximum demand recorded in the meter during the month or 100% of the contract demand whichever is higher. It is contended by the petitioner that in the light of the revised tariff, the petitioner along with all similarly situated consumers including Respondent No. 2 are bound to pay the energy bill as per the HTSS tariff prepared in accordance with clauses 2, 3, 4 & 5 of the HTSS tariff as revised effective from 01.04.2001.
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that it is the case of the respondent-consumer that although the contract demand was enhanced from 6000 KVA to 9600 KVA, still the actual maximum demand of the respondent-consumer did not undergo change in the past several years. However, the petitioner-erstwhile-Board continued to bill on the basis of minimum monthly charges instead of actual meter readings taken every month by the Board officers. As such in this way, the respondent was forced to pay 30% more than its actual demand charge every month. It is further the case of the respondent consumer that during the months of April and May 2002, the petitioner as per official announcement imposed heavy load restriction on the petitioner’s factory continuously from 14.04.2002 to 23.05.2002, but the energy bills for the month of April and May 2002 were served on the basis of minimum monthly charge based on 9600 KVA.
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cum-Chief Engineer, Patna Electric Supply Undertaking. It was stated therein that regular power supply was not possible due to the outage of a 100 MVA transformer at the Fatwa grid sub-station from 22.04.2002 to 17.05.2002. As a result, the power supply to the respondent was severely restricted, with the available power dropping from the required 20-25 MVA to only 11.5 to 13.5 MVA. M/s Dina Metal Ltd.'s supply was limited to 1.5 to 3.5 MVA, against their contract demand of 9.6 MVA. The Letter No. 4633 dated 14.11.2002 also referred Clause 4 of the HTSS tariff, which stipulates that minimum monthly charges are subject to minimum assured hours of supply of 630 hours per month. The Clause had the provision for allowing proportionate relief to the consumers if power supply is less than 630 hrs in a month. However, the total hours of supply in the month of April and May 2002 were 691.5 and 681.5 hours, respectively, exceeding the minimum stipulated hours. It is submitted that this clause does not allow relief for restricted power supply or to unmeet full load requirements.
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Nevertheless, the GM-cum-Chief Engineer, Patna Electric Supply Undertaking considered one part of the tariff notification and suggested that the respondent’s claim for relief during this period might be justified, without fully applying the tariff provisions.
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under Section 42 (5) of the Electricity Act, 2003 who was directed to decide the matter in accordance with law, without being prejudiced or influenced by the order dated 27.06.2012. Accordingly, the the respondent No. 2 moved before the Consumer Grievance Redressal Forum.
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Kumar Ojha for the petitioner submitted that the Consumer Grievance Redressal Forum has not considered Clause-4 of the Tariff Notification dated 28.05.2001, which states that a minimum monthly charge has to be levied in terms of the contract demand as reflected in Clause-4 of the notification and the Board is justified in raising demand at 9600 KVA from the respondent. It is further contended on behalf of the petitioner that the respondent No. 2 has also entered into an agreement making a commitment to pay the minimum contracted demand as well as monthly charges which is provided for not only in the tariff notified, but also in the obligation created under the agreement.
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below the minimum supply hours agreed between the parties, but since in the present case there is no provisions of remission for supplies made above 630 minimum hours, there is no escape for the respondent from paying the liability created in the terms of the demand for the bills raised.
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9600 KVA, for which an agreement which was executed on 15.2.2000 (Annexure-4). It is contended on behalf of the respondent No. 2 that according to Clause 1(a) of the agreement, the licensee - petitioner was required to provide a constant supply of electrical energy at the specified contract demand. The applicable HTSS tariff mandates charges for both energy consumption and demand, based on the contract demand (Annexure-5).
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allocated to the respondent No. 2 was restricted from 1.5-3.5 MVA. It is contended that this fact is evident from Annexure-5 to the Writ application, specifically in the Letter dated 14.11.2002 issued by the General Manager-cum-Chief Engineer to the Financial Controller (Revenue), requesting for consideration of the respondent's case for proportionate remission in demand charges.
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Redressal Forum, the Writ application was disposed of with a clear observation that the Forum constituted under Section 42(5) of the Electricity Act, 2003 will decide the matter in accordance with law without being prejudiced or influenced by the impugned judgment and order dated 27.6.2012. The appeal was disposed of as withdrawn, with the aforesaid liberty.
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Electricity Board (2001 (1) SCC 534, paragraph 21) and Tata Iron & Steel Company vs. Bihar State Electricity Board (AIR 1989 Patna 119, paragraph 12) . The order passed by the Forum, which is under challenge, is contained in Annexure-1 of the Writ application.
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energy in accordance with the agreement. The very purpose of the agreement, which was to run the industry, would be defeated. Furthermore, the tariff clearly states that demand charges are levied at Rs. 700 per KVA, in addition to the energy charge at the prescribed rates. More importantly, Rs. 700 per KVA is to be applied for the actual consumption of 100% of the contracted demand, whichever is higher. Therefore, the tariff assumes that energy will be supplied to the extent of 100% and even if the consumer fails to avail energy at the contracted load, the charges would be levied for 100%.
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consumer's liability to pay charges is subject to the minimum contract demand applicable for each category, thus, the charges payable under the "demand charge" category are contingent upon the licensee supplying the agreed contract demand. Furthermore, the submission in paragraph 24 of the Writ application, which claims there is no provision for remission, is therefore misconceived. The Forum has addressed this issue in detail, relying on the decisions of both the Hon'ble Apex Court and this Hon'ble Court. Hence, the Writ petition is liable to be dismissed on this ground alone, affirming the order of the Consumer Grievance Redressal Forum.
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17.05.2002. During this intervening period, the power supply to the petitioner was severely restricted, ranging from 1.5 MVA to 3.5 MVA, against the contracted demand of 9.6 MVA. This restriction occurred due to the outage of the 100 MVA transformer unit installed at the 220/132/33 KV Fatuwaha Grid Power Substation, through which the 33 KV Katra Meena Bazar feeder, supplying power to respondent No. 2, emanates. The respondentconsumer’s feeder depends on the said Fatuwaha Grid Substation.
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electrical energy at the contracted demand.
Limited (supra ) observed in paragraph 21 as follows:
“21 . So far as the cases under consideration and the liability of the consumers relating to minimum guarantee are concerned, the relevant clause relating to minimum guarantee charges as well as the tariff notification relied upon, would go to show that what was guaranteed was not the payment of a flat sum or amount of money to be calculated with reference to a particular number or percentage of units, dehors the quantum of electrical energy distributed and supplied by the Board. In other words, the guarantee was of “… such minimum consumption as when calculated at the tariff…” will yield a particular monthly/annual sum to the Board. Even going by the tariff notification which prescribes also a minimum entitling the Board to collect it [vide clause 21(b)] it merely casts liability on the consumer to “guarantee a minimum monthly consumption equivalent to 40% load factor of the contract demand”. Consequently, for the consumer to honour his/its commitment so undertaken to give a minimum consumption there should essentially be corresponding
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supply by the Board at least to that extent, without which the consumption of the agreed minimum is rendered impossible by the very lapse of the Board. The minimum guarantee, thus, appears to be not in terms of any fixed or stipulated amount but in terms of merely the energy to be consumed. The right, therefore, of the Board to demand the minimum guaranteed charges, by the very terms of the language in the contract as well as the one used in the tariff notification is made enforceable depending upon a corresponding duty, impliedly undertaken to supply electrical energy at least to that extent, and not otherwise. It is for this and only reason we find that the ultimate conclusion arrived at by the Full Bench of the High Court does not call for any interference in these appeals.”
Tata Iron & Steel Company (supra ) observed in paragraph 12 as follows:
“ 12. The words ‘constant supply of electrical energy’ must mean that continuous supply of electrical energy. That to us appears to be the plain meaning of the words used. In the modern context where even our day to day life is so much dependent upon supply of
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electricity, it is not too much to expect that the Board should supply electrical energy throughout the 24 hours. However, having regard to the fact that annual charges are payable by consumers who generally require electrical energy in larger quantities than any ordinary domestic consumer for carrying on his business or establishment, the annual charges payable by him have a direct relationship with the supply of electrical energy to him at a time when he can consume the supply. The minimum guaranteed consumption itself implies that the energy is supplied when it can be consumed. No doubt, even beyond his normal working hours, such a consumer requires electrical energy for other purposes, such as security lighting etc. However, the consumption for such purposes is so small as compared to the main purpose for which electrical energy is taken, that it may be ignored in the matter of determining the liability for annual charges. So viewed, ‘constant supply’ in the context of annual charges must mean continuous supply during the normal working hours of the consumer when the supply can be consumed. This to us appears to be a fair interpretation of the agreement having regard to its purpose, commercial nature and preacticability. We are of the view that when the Board wants a guarantee from the consumer about minimum
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units it would consume, any prudent businessman would agree to pay that amount only if the Board fulfils its obligation. If in fact it is found that there had not been constant suppy of electricity at the contract demand during the period the factory of the petitioner was expected to work, the petitioner can certainly claim that it is entitled to a reduction in annual charges proportionate to the period for which there was no supply of electrical energy or supply as per the contract demand. The case of TISCO is that its units at Adityapur complex work 24 hours and electrical energy at the contract demand is required for all 24 hours. It was urged that in this case, constant supply must, therefore, mean constant supply for 24 hours. On behalf of the Board it was not stated that TISCO's units at Adityapur complex do not work for 24 hours.”
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stated above, this Court is of the considered view that there is no merit in the case of the petitioner. The Court does not find any error in the order dated 26.02.2014 (Annexure-1) passed by the Consumer Grievance Redressal Forum. Therefore, the order of the Consumer Grievance Redressal Forum, dated 26.02.2014, is hereby confirmed.
Spd/-
(G. Anupama Chakravarthy, J)
| AFR/NAFR | NAFR |
|---|---|
| CAV DATE | NA |
| Uploading Date | 16.04.2025 |
| Transmission Date |
2 issues framed by the court
Whether a licensee can levy demand charges on full contract demand when supply was severely restricted below contracted levels during April-May 2002.
Whether the Consumer Grievance Redressal Forum's order granting remission despite supply exceeding 630 minimum hours was sustainable.
Colour shows how this judgement treated each authority
Raymond Limited vs. Madhya Pradesh Electricity BoardFollowed¶24
2001 (1) SCC 534 · Who else cites this
Tata Iron & Steel Company vs. Bihar State Electricity BoardFollowed¶25
AIR 1989 Patna 119 · Who else cites this
3 provisions across 3 enactments
The South Bihar Power Distribution Company Ltd.
The State of Bihar, Deptt. of Energy
M/s Dina Metals Ltd.
G. Anupama Chakravarthy
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
