IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 32337 of 2007(Y)
1. M/S.THANIKKUDAM BAGAWATI MILLS LIMITED,
... Petitioner
Vs
1. KERALA STATE ELECTRICITY BOARD,
... Respondent
2. KERALA STATE ELECTRICITY REGULATORY
3. THE ASSISTANT ENGINEER,
For Petitioner :SRI.DEVAN RAMACHANDRAN
For Respondent :SRI.P.P.THAJUDEEN, SC, K.S.E.B
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :12/08/2009
O R D E R
ANTONY DOMINIC, J.
================
W.P.(C) NOs. 32337 OF 2007
& 15835 OF 2008
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Dated this the 12th day of August, 2009
J U D G M E N T
The petitioners in these writ petitions are High Tension
Consumers availing of supply of electrical energy from the 1st
respondent to meet the requirements of their industrial
establishments.
2. In so far as the petitioner in WP(C) No.32337/07 is
concerned, he has been a defaulter from the year 2000-01
onwards. Similarly, in so far as the petitioner in WP(C)
No.15835/08 is concerned, it is stated that they have committed
default for the period from July 2004 to May 2005. The prayer
made by the petitioner in WP(C) No.32337/07 is to reduce the
rate of interest claimed from 24% to 12%. In fact pursuant to an
order passed by this Court, the claim raised by the petitioner in
this writ petition was considered and was turned down by Ext.R1
(a) order which is also sought to be quashed.
3. In so far as the petitioner in WP(C) No.15835/08 is
concerned, what is under challenge is Ext.P1, the revenue
recovery proceedings initiated for recovering the amounts
WPC 32337/07
& 15835/08
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including the interest at 24% from the petitioner. According to
the petitioner herein, they have already paid the energy charges
along with interest at 12% and the dispute is only regarding the
claim for interest at 24%.
4. The contention raised by the petitioners are the
following.
5. According to them, prior to the implementation of the
Kerala State Electricity Supply Code, 2005 w.e.f. 2/3/05, parties
were governed by the provisions of the Conditions of Electrical
Energy framed by the Electricity Board under Section 79(j) of the
Electricity (Supply) Act, 1948. It is stated that under Clause 32(e)
of the Conditions of Supply of Electrical Energy, defaulters were
liable to pay interest at 24%. It was while so that the Supply
Code, 2005 was implemented and as per Clause 23 thereof, it was
ordered that in case of belated payments, penal interest at twice
the Bank rate based on actual number of days of delay from the
due date has to be charged by the licencee. The contention raised
is that in the worst scenario, liability to pay interest in terms of
Clause 32(e) of the Conditions of Supply could extend only till the
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& 15835/08
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introduction of Supply Code viz., till 2/3/05 and any demand for
interest for the period subsequent there to, should only be in
terms of the provisions contained in Clause 23 of the Supply
Code, 2005.
6. This contention of the petitioners is sought to be
contradicted by the counsel for the Electricity Board. According to
the Board, the liability to pay the energy charges was incurred by
the respective petitioners for periods including the period prior to
2.3.05. It is stated that liability for interest is a consequence on
the default to discharge the liability and therefore the rate of
interest that is applicable on the date of default, irrespective of
the introduction of the Supply Code, is the rate as provided under
Clause 32(e) of the Conditions of Supply of Electrical Energy,
which is at 24% per annum. On this basis, it is contended that for
defaults prior to 2/3/2005, rate of interest applicable is 24%.
7. Having considered the submissions made by the
respective counselon either side, I am inclined to agree with the
counsel for the petitioners.
8. As already stated the Conditions of Supply of Electrical
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& 15835/08
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Energy framed under Section 79(j) of the Electrical (Supply) Act,
1948 governed the relationship between the parties until
2/3/2005 and therefore the liability for payment of interest
provided under Clause 32(e), also continued to apply to the
parties so long as Conditions of Supply of Electrical Energy was in
force. The Supply Code, 2005 admittedly came into force w.e.f.
2/3/2005 and therefore liability for interest since then has to be in
terms of Clause 23 of the Supply Code, 2005. There is nothing in
the Supply Code, 2005 which provides that any liability incurred
prior to the introduction of the Supply Code will remain unaffected
by the Supply Code, in which event, justifiably the Board could
have contended that irrespective of the introduction of the Supply
Code, 2005, interest at 24% as provided under Clause 32(e) of
the Conditions of Supply should be paid by the defaulters as and
when the liability is settled. In the absence of such a saving
provision, in my view for the period subsequent to 2/3/2005
irrespective of whether the liability was already accrued at the
time when the new Code was implemented, defaulters can be
levied only at the rate as provided under Clause 23 of the Supply
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& 15835/08
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Code, 2005. If that be so, necessarily the demands made on the
petitioners will have to be revised applying Clause 23 of the
Supply Code, 2005 or the period subsequent to 2/3/2005.
9. Accordingly, Ext.R1(a) in WP(C) No.32337/07 and
Ext.P1 in WP(C) No.15835/08 will stand quashed. It is directed
that the respondents shall rework the liability of the petitioners
applying interest as per Clause 32(e) of the Conditions of Supply
for the period till 2/3/2005 and thereafter, as per Clause 23 of the
Supply Code, 2005. Thereafter it will be open to the respondents
to call upon the petitioners to discharge the liability due from
them.
Writ petitions are disposed of as above.
ANTONY DOMINIC, JUDGE
Rp