IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 03.03.2011 CORAM: THE HONOURABLE MR.JUSTICE VINOD K.SHARMA W.P.No.6980 of 2009 The Madras Aluminium Company Ltd P.B.No.4, Mettur Dam 636 402 Salem District, rep. by Mr. Rajiv Choubey .. Petitioner Vs. 1.The Tamil Nadu Electricity Board Anna Salai, Chennai 600 002 rep. by its Chairman 2.The Superintending Engineer Tamil Nadu Electricity Board Mettur Electricity Distribution Circle Mettur Dam 636 401 3.The Accounts Officer Tamil Nadu Electricity Board Mettur Electricity Distribution Circle Mettur Dam 636 401 ... respondents Prayer: Writ petition filed under Article 226 of Constitution of India for the issuance of writ of certiorarified mandamus calling for the records of the respondents leading to the communication/order bearing No. Lr No.SEM/DFC/AOR/HT/A.4/F.Malco/PR.195-2/08 dated 12.12.2008 passed by the 2nd respondent and quash the same and direct the respondents to fix the date of reduction in the maximum contracted demand from 67000 KVA to 23000 KVA as 21.2.1999 and consequently direct the respondents to refund to the petitioner the sum of Rs.1,58,48,257/- illegally demanded and collected towards demand charges on the basis of the maximum demand of 67000 KVA for the period 21.2.1999 and 3.5.1999 together with interest at 18% p.a. from the date when the payments were unlawfully collected from the petitioner. For Petitioner : Mr.S.Raghunathan For Respondents : Mr.J.Ravindran ***** O R D E R
Petitioner, a company registered under the Companies Act has invoked the writ jurisdiction of this court with a prayer to quash the order dated 12.12.2008, rejecting the representation filed by the petitioner for waiving of the demand charges and for the refund of the amount deposited under protest. The impugned order reads as under:
TAMILNADU ELECTRICITY BOARD
From To
Er.R.SUNDARESAN, B.E.,MIE., M/s.Malco Limited,
Superintending Engineer P.Box.No.04,
Mettur Elecy. Distn. Circle Mettur Dam
Mettur Dam -1.
Lr.No.SEM/DFC/AOR/HT/A.4/F.Malco/PR.195-2/08,dt.12.12.08.
Sir, Sub: Elecy-Mettur EDC-HT SC No.20, M/s.Malco Reduction of demand from 67000 KVA to 23000 KVA Demand charges collected Refund requested Regarding. Ref: 1. Your representation dt.10.11.08 received on 11.11.08. 2. Judgement of W.P.9893/1999 *******
Adverting to the representation cited, it is hereby informed that the reduction of demand from 67000 KVA to 23000 KVA has been effected on 04.05.1999, since you had been executed an agreement with T.N.E.B only on 03.05.1999 for the reduction and the Revised Test Report obtained on 04.05.1999.
Hence the demand raised and collection made for demand charges upto 27.04.1999 for an amount of Rs.1,43,08,257/- and Rs.15,40,000/- for demand charges upto 03.05.1999 is in order as per the T.N.E.B. orders inforce. Hence the refund of the above charges is does not arise.”
2. Petitioner the manufacturer of Aluminium, was sanctioned electricity connection with maximum contract demand of 67000 KVA. The company was declared a sick company and to restructure the reliefs and concessions were given by BIFR on account of which it restarted functioning. One of the concession given to the petitioner was that it was to be supplied electricity for the period of 4 years, at the rate of Rs.1 per kwh.
3. The case of the petitioner, is that before the expiry period of 4 years, keeping in view the cost of electricity and the costs to run the unit at normal rate of supply it decided to set up their own captive power plant. Petitioner also made a request to the respondents to reduce the maximum contract demand from 67000 KVA to 23000 KVA.
4. The case of the petitioner is that the request of the petitioner was accepted by the 3rd respondent, i.e. Tamilnadu Electricity Board. The Mettur Electricity Distribution Circle conveyed the acceptance of request vide letter dated 15.02.1999. Inspite of the request having been accepted, the bill was raised at the maximum contract demand of 67000 KVA. The case of the petitioner is that being a intensive power unit, it has paid the amount under protest, and further requested the respondents to refund the amount by raising the bill at maximum demand of 23000 KVA.
5. The respondents insisted on charging the bills at maximum contract demand of 67000 KVA, which forced the petitioner to file W.P.No.9893 of 1999. The writ was disposed off by this court by observing as under:
“6.It is found from the affidavit filed in support of the writ petition as well as the documents produced in the typed set of papers that for the purpose of making the project economically viable and feasible, the petitioner took steps for establishment of captive power plant at the cost of Rs.264 crores. After installing the captive power plant, the petitioner made an application to the second respondent on 12.01.1999 for reducing the contract demand from 67000 KVA to 23000 KVA w.e.f. 21.02.1999. From the subsequent letter dated 02.02.1999 of the petitioner addressed to the Member Distribution of the TNEB, it is found that the proforma of application for reducing the contract demand has been duly filled up and submitted to the second respondent and copies of the said application along with the annexure were submitted to the Member Distribution as per the said letter. Subsequently, the Member Distribution sent a letter to the petitioner dated 15.02.1999 with the following information:-
“Your request regarding reduction in demand in respect of HT SC No.20 in Mettur Electricity Distribution Circle has been considered and necessary orders issued.
You are requested to contact the Superintending Engineer/Mettur Electricity Distribution Circle further in this regard.”
7.Subsequently, the third respondent as per their proceedings dated 19.02.1999 directed the petitioner to pay the Development Charges before executing the work for providing separate E.H.T. metering arrangement for start up power for a demand of 3750 KVA and the amount required for the same has been paid by the petitioner immediately, as evident by the letter dated 19.02.1999. The letter dated 15.02.1999 of the Member Distribution clearly shows that the application for reduction in demand has been considered and orders were issued and since there was no reference in the said communication that the application filed by the petitioner was rejected, naturally, the petitioner was under the bona fide impression that the application was approved by the Board. It was long after on 03.05.1999 that the second respondent has forwarded a copy of the agreement executed for reduction of demand from 67000 KVA to 23000 KVA. Non execution of the agreement before the said date for reducing the load from 67000 KVA to 23000 KVA appears to be the reason for the demand made by the respondents from the petitioner for maximum demand of 67000 KVA instead of 23000 KVA as requested by the petitioner.
8.The Electricity Board being a State within the meaning of Article 12 of the Constitution of India, was expected to act in a rational manner and they cannot keep the matter pending with them indefinitely. The respondents should have either rejected the request made by the petitioner to reduce the load from 67000 KVA to 23000 KVA immediately, or they should have got the agreement executed for the reduced load immediately. Since the petitioner industry is a power intensive industry and their main raw material being power, even a single day delay would make much difference. The respondents have granted concession with regard to the reduced load w.e.f. 03.05.1999, the date on which the agreement executed has been forwarded to the petitioner. Even though the letter of the Member Distribution shows that the request made by the petitioner for reducing the load from 67000 KVA to 23000 KVA has been considered and necessary orders issued, while raising the bill, the respondents appear to have not considered the said fact and on the other hand, the date on which the duly signed agreement was forwarded to the petitioner was taken as the date on which the benefit of reduced load has been given. When there was an application for reduction of load submitted by the consumer, especially a power intensive industry, the respondents should have taken immediate action either to sanction the same or to reject the request and they cannot keep the consumer guessing. Even as per the terms and conditions of the supply of electricity, maximum demand is permissible for the Board in case of reduction in demand is a one time payment of twice the demand charges at the notified rate per KVA or for each KVA demand reduced. In the present case, the respondents kept the matter pending from 12.01.1999 till 03.05.1999 for the purpose of taking a decision in the matter of reduction of maximum demand. In any case, the representation given by the petitioner against such a claim on the basis of the original demand of 67000 KVA has not been considered by the respondents.
9.Even though no time limit has been prescribed in the relevant regulations for the purpose of disposal of an application for reducing the maximum demand, such application should have been considered and disposed of by the respondents within a reasonable time. What is a reasonable time depends upon the facts of a particular case. Industry of the petitioner being a power intensive industry, where raw material itself is power, each day’s bill runs to many lakhs and it was only for the purpose of reducing the Electricity Bill that the petitioner appears to have installed the captive power plant at a cost of Rs.264 crores. The impugned bill shows that the energy charges were fixed on the basis of the maximum demand of 67000 KVA and the amount has been paid by the petitioner under protest as found from the communication.
10.It is also found from the materials available on record that the petitioners have represented to the respondents to reconsider the bill raised for the maximum demand of 67,000 KVA and no serious attempt appears to have been made by the respondents to consider the same. The impugned demand has already been satisfied by the petitioner by making payment even though the same was under protest. In any case, I am of the view that the matter requires to be looked into by the respondents taking into consideration the application submitted by the petitioner to reduce the demand from 67000 KVA to 23000 KVA and the communication sent by the Member Distribution on 15.02.1999 indicating that orders have already been issued with respect to the request for reduction in demand.
12.In the result, the writ petition is disposed of by granting liberty to the petitioner to make an application before the third respondent within a period of four weeks from the date of receipt of a copy of this order and in case of receipt of such representation, the second respondent shall consider the same on merits and as per law taking into consideration the communication issued by the Member Distribution on 15.02.1999, as expeditiously as possible and in any case within a period of 12 weeks from the date of receipt of such representation. No costs.”
In pursuant to the direction issued by this court, the petitioner filed a detailed representation, which has been disposed of vide impugned order.
6. The learned counsel for the petitioner, challenged the impugned order, by contending that the impugned order on the face of it is arbitrary and thus not sustainable in law as the respondents have failed to comply with the direction issued by this court.
7. It is also the contention of the the learned counsel for the petitioner that reading of the order shows non application of mind, as the authority deciding the representation, has not even chosen to note the facts, especially the order dated 15.02.1999, issued by the Member Distribution circle to the petitioner.
8. Learned counsel for the respondents, on the other hand contended that the impugned order cannot be faulted with in as much as the petitioner cannot claim the benefit of reduced contract demand even before the execution of agreement, to reduce the demand from 67000 KVA to 23000 KVA.
9. The contention of the learned counsel for the respondents is that the petitioner has already given the benefit of reduced maximum demand, from the date of execution of agreement. The petitioner is not entitled to the benefits, prior to the date of execution of power agreement.
10. On consideration, I find force in the contention raised by the learned counsel for the petitioner, that the impugned order on the face of it is arbitrary and outcome of non application of mind. The reading of the order passed by this court in W.P.No.9893/199 would show, that this court had directed the respondents to take a final decision on the representation keeping in view of the order dated 15.02.1999. The respondents therefore were under obligation to record a finding as to the effect of the decision taken in accepting the request of the petitioner for reduction of maximum contract demand by the competent authority. The respondents were also to consider, about the right and obligations, on account of delay in execution of agreement after acceptance of the request of the petitioner.
11. The impugned order is therefore out come of non application of mind, and non compliance of specific direction by this court. The impugned order being arbitrary is thus hit by article 14 of the Constitution of India.
12. Consequently, the writ petition is allowed, and the impugned order is quashed. The matter is remitted back to 2nd respondent for deciding the representation filed by the petitioner taking into consideration the observation made by this court in W.P.No.9893 of 1999. The 2nd respondent is directed to pass detailed speaking order, meeting all contentions raised by the petitioner in the representation within one month of the receipt of the certified copy of this order. No costs.
kpr
To
1.The Chairman
The Tamil Nadu Electricity Board
Anna Salai, Chennai 600 002
2.The Superintending Engineer
Tamil Nadu Electricity Board
Mettur Electricity Distribution Circle
Mettur Dam 636 401
3.The Accounts Officer
Tamil Nadu Electricity Board
Mettur Electricity Distribution Circle
Mettur Dam 636 401