Partly allowed

M/s Khabri Exports, v. a.P.Central Power Distribution Company Ltd. (Apcpdcl)

Telangana HC12 Jun 2012WP/19897/2011

Case brief

AI extract

What is this about?

The High Court of Andhra Pradesh held that the petitioner was liable to pay minimum electricity charges for two years from the supply commencement based on the 120 KVA revised sanction. However, any claim for further periods was barred under Section 56(2) of the A.P. Electricity Act, and the petitioner was entitled to credit for payments already made.

What did the court decide?

The petitioner is liable to pay minimum charges for CMD of 120 KVA for the period of two years from June 2007 to May 2009. Claims for further periods are barred by Section 56(2). Amounts already paid

M/s Khabri Exports, Vs a.P.Central Power… — Contract and Commercial Disputes | Telangana HC (2012)

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IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH : HYDERABAD

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THURSDAY, THE SEVENTH (7^TH ) DAY OF JUNE,

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TWO THOUSAND AND TWELVE

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Present:

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HON’BLE SRI JUSTICE G.V.SEETHAPATHY

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Writ Petition No.11372 of 2012

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Between:

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M/s Khabri Exports, rep. by its

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Propritrix, Smt. Barkha Rani Kanodia

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… Petitioner

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And:

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A.P.Central Power Distribution Company Ltd. (APCPDCL)

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Hyderabad, rep. by its Director (Finance) & others

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… Respondents

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HON’BLE SRI JUSTICE G.V.SEETHAPATHY

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Writ Petition No.19897 of 2011

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ORDER:

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This writ petition is filed seeking writ of Mandamus declaring the action of the respondents in not supplying the electricity to the petitioner unit as arbitrary and illegal and to further declare that the demand of electricity charges from 01.03.2008 onwards till the date of reconnection is illegal.

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2. Heard the learned counsel for the petitioner and the learned standing counsel for the respondents. Perused the record.

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3. The petitioner started garment manufacturing unit in Plot No.52, Apparel Export Park, Gundlapochampally, Ranga Reddy district in March 2006 with the work force of 12 workers and applied for electricity connection in June 2006. The load required

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for the unit was less than 35 KVA. After payment of the required deposits and charges, service connection was given for 52 KVA on 19.06.2007 and LT agreement was executed for connecting load not exceeding 145 HP subject to a contracted maximum demand of 120 KVA in phased manner i.e., 52 KVA in April 2006 and balance 68 KVA after one year. The agreement was executed in June 2007. For the first month itself i.e., June 2007, 3^rd respondent issued bill for Rs.29,350/- for 120 KVA as minimum charges. The petitioner addressed a letter dated 18.09.2007 stating that they can be charged only for 52 KVA and paid Rs.12,835/- towards minimum charges for 52 KVA. Every month the department was raising bills for 120 KVA and the petitioner has been paying the minimum charges for 52 KVA and the same was being accepted. On 01.10.2007, The Assistant Divisional Engineer wrote a letter asking the petitioner to execute a new agreement for release of 120 KVA without phased manner. The petitioner gave reply on 11.10.2007 stating that they have taken electricity supply in a phased manner and executed the agreement accordingly and the test report registered also shows that the meter was tested for 52 KVA. The Superintending Engineer addressed a letter dated 22.10.2007 stating that the revised sanction was given for 120 KVA for getting load of 145 HP under LT Category III-B and the ADE Operation would release the supply. The petitioner addressed another letter dated 25.10.2007 seeking to resolve the dispute, but the Additional Assistant Engineer by his letter dated 29.10.2007 demanded payment of Rs.47,438/- towards outstanding dues. The respondents insisting that the petitioner should execute LT Agreement under Category II B for a CMD of 120 KVA with connecting load of 145 HP to avoid disconnection stating that the previous LT agreement does not hold good. However, the

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department disconnected the supply on 28.02.2008, as a result of which, the manufacturing of garments was stopped. The petitioner received a final notice dated 11.03.2010 from 3^rd respondent indicating arrears of Rs.9,44,619/- from 01.03.2008 to 28.02.2010. The petitioner addressed a letter dated 28.04.2010 stating that the supply was disconnected on 28.02.2008 causing loss of three crores to the petitioner. Since there is no fresh agreement, the question of any payment subsequent to 24.12.2007 does not arise. In the absence of any such agreement, the petitioner would be liable to pay the charges towards actual consumption of electricity. The petitioner addressed letter dated 16.04.2011 to the respondents stating that as against the consumption of 11094.5 units, the cost of which comes to Rs.48,350/-, the petitioner has paid Rs.89,845/- and they are entitled for refund of Rs.41,494/-. Inspite of repeated requests, supply has not been restored. The 4^th respondent addressed a letter dated 04.07.2011 stating that appropriate arrears to a tune of Rs.17,34,074/-. The act of disconnection of the electricity on the ground that the petitioner failed to execute the agreement and on the other hand demanding minimum charges for the period from 01.03.2008 to 30.7.2011 for 120 KVA is wholly arbitrary.

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4. The respondents filed counter, contending in brief as follows:

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The petitioner made an application for release of the supply of 145 HP LT Industrial load with a CMD of 52 KVA under Category III-B and sought enhancement of the contracted maximum demand from 52 KVA to 120 KVA and the petitioner executed LT agreement and therefore, he was required to execute fresh agreement for 120 KVA, but he has not executed the same.

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The petitioner paid development and security deposits for 120 KVA and also signed on the test report for a CMD of 120 KVA on 19.06.2007. There is no provision for phased demand as far as LT load are concerned. The petitioner is liable to pay minimum charges for 120 KVA and the bills were raised taking the CMD as 120 KVA. As the petitioner failed to pay the arrears of Rs.9,44,619/- for the period from 01.03.2008 to 28.02.2010, a notice was also issued on 28.2.2010 and power supply was disconnected. The petitioner has been willfully avoiding execution of the revised agreement with a CMD as 120 KVA. The metering equipment was tested for 200 KVA, but not for 52 KVA. The petitioner has been intentionally paying the minimum charges as per his will i.e., only for 52 KVA instead of 120 KVA. The petitioner is bound to pay minimum charges even if service connection is under disconnection or the consumer is not availing supply as per the GTCS vide 5.9.3.1 and 5.9.4.1. No where it was mentioned that the agreement was terminated and the consumer has availed supply even after 24.12.2007. The supply was disconnected for non payment of electricity dues amounting to Rs.9,44,619/- as on 28.02.2010 and not due to termination of the contract.

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5. The petitioner filed reply-affidavit alleging that as the petitioner was not willing to comply with certain illegal demands made by some officers of the department, the then ADE forcibly entered in to the petitioner’s factory on 16.10.2007 and made a overwriting on 52 KVA as 120 KVA and also written outside the box as 120 KVA and the matter was reported to the CMD, APCPDCL, and to all other concerned on 16.10.2007 itself. The petitioner reiterated that the supply meter installed in the factory was tested for 52 KVA and it was prominently written as such on the meter. The forcible change with 120 KVA was accepted by the

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Superintending Engineer, Operation vide his letter dated 22.10.2007. The alleged arrears are not towards consumption charges but towards minimum charges for 120 KVA, for which no agreement was executed by the petitioner. In the absence of such agreement, the respondents are not entitled to claim minimum consumption charges. The petitioner further contended that the demand for payment of arrears of minimum charges for the period 01.03.2008 to 28.02.2010 is illegal and contrary to GTCS and the same was barred by limitation.

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6. This court by order dated 15.07.2011 in WP MP No.24091 of 2001 granted interim direction for restoration of the supply of electricity subject to condition of the petitioner depositing Rs.7,00,000/-. It is stated that subsequently, the service was transferred in favour of M/s Farmako Packing Pvt. Ltd., and third party affidavit sworn by Smt. D. Haindavi Arunajyothi, the proposed transferee Farmako Packing Pvt. Ltd., is filed stating that they along with the petitioner’s unit applied for transfer of service connection No.01837 in their favour and the transferee along with the petitioner would undertake to discharge/pay the arrears of electricity charges if any jointly and severally consequent to the orders that may be passed in this writ petition and also to pay the electricity consumption charges as per the bills raised by the department from time to time.

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7. It is not disputed that the petitioner applied for LT service connection for running a garment manufacturing unit and the LT agreement was executed for contracted load for not exceeding 145 HP subject to a contracted maximum demand of 120 KVA in a phased manner i.e., 52 KVA in April 2007 and balance 68 KVA to be released after one year from the date of release of supply of

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first phase. The said agreement was executed in June 2007. It is also not disputed that 3^rd respondent however raised a bill in the month of June 2007 in a sum of Rs.29,350/- towards minimum charges for 120 KVA. According to the petitioner, as they have applied only for 52 KVA and executed an agreement for the same, they are liable to be charged only on that basis but not for 120 KVA. The petitioner has been paying Rs.12,835/- towards minimum charges per month for 52 KVA and taking up the issue with the concerned authorities of the respondents, as can be seen from the huge correspondence between the petitioner and the respondents which has been filed as part of the material papers. The respondents on the other hand would contend that the petitioner initially applied for CMD of 52 KVA, which was later increased to 120 KVA as per the request of the petitioner and revised sanction was accorded by proceedings dated 02.11.2006 by superseding the earlier sanction estimate dated 06.10.2006 and the petitioner was required by letter dated 20.06.2007 to execute revised LT agreement for 120 KVA, but the petitioner has failed to comply with the same. According to the respondents, the consumer executed LT agreement for release of LT Category III B service for a connected load of 145 HP and CMD of 120 KVA in a phased manner i.e., 52 KVA in April 2007 and balance 68 KVA after one year after release of first phase and as it was not in order, as there was no system for releasing LT industrial in the phased manner, the consumer was directed to execute fresh LT agreement for 120 KVA. The fact, however remains that the respondents have earlier sanctioned the supply of power in a phased manner for 120 KVA with initial CMD of 52 KVA and balance 68 KVA to be released one year later. The fact also remains that there has been no fresh agreement executed between

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the parties for revised sanction of 120 KVA. The respondents have however been demanding payment of the minimum charges on the basis of 120 KVA and the arrears from 19.06.2007 the date of commencement of the supply till 28.02.2010, came to Rs.9,44,619/-. It is not disputed that the supply commenced from 19.06.2007. When the respondents have intimated the petitioner that the earlier sanction of 52 KVA was not in order and the earlier agreement executed was not in accordance with GTCS and the provisions of the A.P. Electricity Act (for short ‘the Act’) and that the revised agreement was required to be executed for 120 KVA, as there was no provision for release of the supply of LT industrial load in a phased manner, the petitioner ought to have complied with the same by executing a fresh agreement as required and contemplated under the provisions of the Act and GTCS, instead the petitioner is avoiding execution of the revised agreement even after being repeatedly informed of necessity to execute the same in due compliance with the procedure. Having failed to comply with the procedural requirement in the matter of execution of the valid agreement for supply of CMD of 120 KVA for his LT industrial connection, the petitioner cannot seek to assail the demand made on the basis of the CMD of 120 KVA.

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8. According to the petitioner, the meter was tested for 52 KVA, which factum is disputed by the respondents, who stated that the metering equipment was tested as per the equipment rated capacities which in this case is 200 KVA and the question of testing it for 52 KVA does not arise. The petitioner alleges that as he failed to comply with the illegal demands of some officers of the department, the then ADE forcibly entered into the factory on 16.10.2007 and made a over writing altering 52 KVA as 120 KVA on the meter and also out side box and the Superintending

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Engineer in his letter dated 22.10.2007 has also admitted the said fact.

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9. A perusal of the said letter dated 22.10.2007 addressed by the Superintending Engineer (Operation) to the petitioner shows that no where it contains any admission of effecting any forcible changes on the meter from 52 KVA to 120 KVA and in the said letter it is stated that as requested by the petitioner, the estimate was revised for CMD of 120 KVA with connected load of 145 HP on the Category III-B vide sanction letter dated 22.10.2007, duly superseding the sanction earlier by memo dated 06.10.2006. It was however stated that as requested by the Zonal Manager, APIIC, the petitioner was granted exemption from payment of development charges for CMD of 120 KVA by letter dated 17.04.2007. The said letter also discloses that the ADE, Operation, by his letter dated 03.07.2007 furnished copy of the test report duly signed by the consumer for enhancement of the supply for CMD of 120 KVA with a contacted load of 145 HP under Category III-B. The said letter therefore states that in view of the revised sanction accorded to the petitioner with a CMD of 120 KVA with contracted load of 145 HP under Category III-B and as per the test report signed by the petitioner’s representative, supply was released accordingly. Towards the end of the said letter, it is stated that the Assistant Divisional Engineer, (Operation) who is competent authority to release the supply and signed test report, has noticed the wrongly written CMD on meter box and corrected the same as per the sanction. When the earlier sanction was superseded by a revised sanction for 120 KVA and that too at the request of the petitioner and the test report for 120 KVA was also duly singed by the representative of the petitioner and the supply was accordingly released, there was nothing wrong on the part of

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the competent authority to correct the CMD as 120 KVA on the meter box as per the revised sanction. The allegation of the petitioner that the said correction was made forcibly, for extraneous reasons remain, totally unsubstantiated. When the revised sanction was effected at the request of the petitioner for 120 KVA and the supply was released accordingly, the petitioner cannot legitimately avoid the execution of revised agreement as required. The petitioner cannot resist demand for payment of minimum charges levied on the basis of the revised sanction for 120 KVA on the ground that there was no agreement executed for the CMD of 120 KVA. The petitioner cannot be permitted to take advantage of his own laches or default.

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10. The next contention of the petitioner is that as the supply was disconnected in February 2008, he is not liable to pay the minimum charges subsequent thereto. According to the petitioner, he availed supply from June 2007 to February 2008 with consumption of 11095.5 units and the applicable rate, total charges payable would come to Rs.48,350/-, but the petitioner has in fact paid Rs.89,845/- at the rate of Rs.12,835/- per month for 52 KVA and thus, he is entitled for refund of Rs.41,494/-. The payment of minimum charges at the rate of Rs.12,835/- per month for 52 KVA by the petitioner is unilateral act on his part as against demand for Rs.29,350/- towards minimum charges for 120 KVA. The petitioner has been paying Rs.12,835/- as per his own choice treating the CMD as 52 KVA, which is impermissible. According to the respondents, as the petitioner failed to pay minimum charges as demanded for 120 KVA, the supply was disconnected for non supply of the arrears in a sum of Rs.9,44,619/- as on 28.02.2010. As per clause 5.9.3.1 the minimum period of LT agreement for supply of power at low tension shall be two years from the date of

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commencement of supply and even after expiry of initial period of two years, the LT agreement shall continue to be in force, unless it is terminated by the consumer or company as provided in Clause 5.9.4.1. Even in case the LT agreement exists, the minimum period of such agreement would be only two years from the date of commencement of supply, but the same shall continue to be in force unless it is terminated as per Clause 5.9.4.1.

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11. That the final notice dated 11.03.2010, which is impugned, the Divisional Engineer, while stating that even after disconnection of the service with 28.02.2008 for non payment of electricity charges, the petitioner has not paid arrears in a sum of Rs.9,44,619/- due as on February 2010, has informed the petitioner that one month’s notice was being given for termination of agreement in terms of Clause 5.9.4.3 of GTCS. Clause 5.9.4.1 contemplates termination of LT agreement after expiry of the minimum period by giving not less than one month’s notice by either side. Clause 5.9.4.3 states that where any consumer whose supply is disconnected for non payment of any amount due to the Company and on any account, fails to pay such dues and regularize his account within three months from the date of disconnection, the Company shall after completion of 3 months period, issue one month notice for termination of the LT or HT agreement, as the case may be. If the consumer still fails to regularize the account, the company shall terminate the agreement with effect from the date of expiry of the said one month notice and such termination shall be without prejudice to the rights and obligations incurred or accrued prior to such termination. Admittedly, the petitioner has not paid arrears nor sought to regularize the service connection even after receiving the final notice. Even the original agreement, which was required to be

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revised but not in fact revised by the petitioner, therefore stood terminated in terms of Clause 5.9.4.3.

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12. The question which then arises for consideration is for what period the respondents would be entitled to recover the amount towards minimum charges. The petitioner would contend that the demand for arrears of minimum charges for the period from 01.03.2008 to 01.07.2011 is barred by limitation and contrary to GTCS. Learned counsel for the petitioner would contend that under Section 56(2) of the A.P. Electricity Act 2003, the scheme for the period beyond two years of the date, the same became is barred. Learned standing counsel for the respondents on the other hand would contend that Section 56(2) has no application. Section 56(2) of the Act states that notwithstanding anything contained in any other law for the time being in force, no sum due from any consumer, under this section shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been shown continuously as recoverable as arrear of charges for electricity supplied and the licensee shall not cut off the supply of the electricity.

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13. In the present case the supply commenced in June 2007. The demand for minimum charges was made on the CMD of 120 KVA from June 2008. Though the supply was disconnected on 28.02.2008, the respondents are entitled for recovery of minimum charges for the period of two years from June 2007. As there has been a default from the first month itself, the petitioner paying only part of the amount demanded, the petitioner is therefore liable to pay minimum charges for a CMD of 120 KVA for the period of two years from June 2007 till May 2009 in terms of Section 56(2) of the Act. The circumstances under which the application of such

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provision is excluded do not exist in the present case. Notwithstanding the disconnection of the power supply on 28.02.2008, the petitioner is liable to pay minimum charges for a CMD of 120 KVA for the above said period for two years and the claim of the respondents for remaining period is barred under Section 56(2) of the Act.

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14. It is stated that the petitioner has paid a sum of Rs.89,845/- at the rate of Rs.12,835/- towards minimum charges prior to filing of the writ petition. As per the interim order dated 15.07.2011, the petitioner was directed to deposit a sum of Rs.7,00,000/-. In the event of the petitioner having complied with the same, the amount already paid or deposited by the petitioner shall be given credit to against demand for payment of the minimum charges for the above said period of two years. The balance amount if any found due shall be recovered from the petitioner and the transferee of the petitioner’s unit in terms of the undertaking affidavit filed by the transferee, jointly and severally. In the event of any amount being paid in excess by the petitioner, such excess amount shall be refunded by way of adjustment against future bills pertaining to the said service connection.

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15. In the result, the writ petition is accordingly disposed of. No order as to costs. Miscellaneous petitions if any shall be closed.

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G.V.SEETHAPATHY, J

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Date: 12.06.2012

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bss

M/s Khabri Exports, v. a.P.Central Power Distribution Company Ltd. (Apcpdcl)

Case brief

What is this about?

What did the court decide?

M/s Khabri Exports, v. a.P.Central Power Distribution Company Ltd. (Apcpdcl)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Statutes considered

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