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IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P.A. No. 466 of 2010
with
L.P.A. No. 465 of 2010
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1.Jharkhand State Electricity Board
2.The General Manager cum Chief Manager,
Hazaribagh Electric Supply Area
3.The Electrical Superintending Engineer,
Hazaribagh Electric Supply Area,
4.The Electrical Executive Engineer,
Hazaribagh Electric Supply Area.... Appellants in both cases
Versus
1.M/s. Laxmi Business & Cement Co. Pvt. Ltd.
2.Jharkhand State Electricity Regulatory Commission.... ......
Respondents (In L.P.A 466/2010)
1.M/s Laxmi Ispat Udyog
2.Jharkhand State Electricity Regulatory Commission.... ...
Respondents (In L.P.A 465/2010)
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CORAM: HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE P.P. BHATT
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For the Appellants : M/s Anil Kr. Sinha, V.P. Singh, Sr. Adv
R. Shankar, V.K. Prasad, D. Kumar,
A. Prakash, P.K. Singh.
For the Res.No. 1 : M/s M.S. Mit tal, Sr. Adv.
A. Kumar, N.K. Pasari
For the Res. No. 2 : S. Srivastava.
Reportable Dated 05th July, 2011
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By Court Heard learned counsel for the parties.
2. The appellant-Jharkhand State Electricity Board, Ranchi, is
aggrieved against the oder passed by the learned Single Judge
dated 17th September, 2010 in W.P.(C) No. 2613 of 2010 and
W.P.(C)2626 of 2010, by which both the writ petitions were
allowed, holding that after coming into force of the new tariff as
prescribed by the Jharkhand State Electricity Regulatory
Commission, the appellant-Board cannot fall back upon either
tariff of the year 1993 and insertion of Schedule to the tariff in
they year 1999 or upon the contract on the basis of which the
appellant-Board used to charge "Demand Charge" from the
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respondent-consumer obviously under the tariff of 1993 as well
as by virtue of the condition in the contract.
3. Brief facts of the case are that before coming into force of
the Electricity Act, 2003, there was Indian Electricity Act, 1910
and Electricity Supply Act, 1948 and the parties were governed
by the Act of 1910 and 1948. The respondent-consumers entered
into a contract with the appellant-Electricity Board and agreed
that they would be liable to pay the "monthly minimum demand
charge on the basis of the actual minimum demand of the month
or 75 % of the contract demand, whichever is higher and energy
charges based on load factor of 25%, 30 %, 50 % etc." That
condition is incorporated in the tariff of the year 1993 in Column
15.2. and in consonance with that condition, the same condition
was incorporated in the agreement executed by the respondent-
Jharkhand State Electricity Regulatory Commission in Clause
4(C ).
4. The condition 4(C) is that "maximum Demand Charges for
supply in any month will be based on the maximum KVA demand
for the month or 75 % of the contract demand, whichever is
higher subject to provisions of Clause 13. For the twelve months'
service, the maximum Demand Charges for any month will
however be based on the actual monthly maximum demand for
that month." The respondents were paying the Demand Charges
according to the tariff of the year 1993 as well as under the
terms of the contract referred above.
5. The new Electricity Act, 2003 came into force from
10.06.2003
and as per Section 85 of the Act of 2003 the State
Regulatory Commission in the State of Jharkhand was also
constituted and by invoking the provision of Section 86 of the Act
of 2003, the new electric Tariff Order was issued and was made
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effective form 1st January, 2004. The contention of the
respondent-writ petitioner in the writ petition was that after
coming into force of the new Tariff Order 2003-04, the appellant-
Electricity Board can charge any amount from the respondent
which is provided in the Tariff Order of 2003-04 and not as per
tariff order/Schedule of 1993 or under the agreement executed
between the Board and consumer.
6. The contention of the Electricity Board was that the all
acts done and contract executed between the parties prior to
coming into force of the Act of 2003 have been saved by Section
85 of the Act of 2003, therefore, the respondent is bound by the
terms of contract which has been executed under the provisions
of the Electricity Act, 1993 as well as Electricity Supply Act, 1948
and the condition contained in that contract has not been
challenged by the respondents. It is also submitted that not only
that, but the Jharkhand State Electricity Regulatory Commission
itself was fully conscious of the fact that some of the issues have
been left by the Commission while giving out the Tariff Order of
2003-04 and it has been made clear in the last column i.e.,
column no. 1.4 in the Tariff Order 2003-04 itself, it was made
clear specifically that “all other terms and conditions in respect
of Meter Rent, Supply at Lower Voltage, Capacitor Charge,
Circuit-Breaker Charge, Electricity Duty, rebate, security deposit,
surcharge for exceeding contract demand etc. shall remain the
same as existing in the State”. Therefore, by clause 1.4 referred
above, the Commission declared that the issues which have not
been dealt with and decided by the tariff 2003-04 are made to
continue as they were prevailing prior to Tariff Order 2003-2004
as they were existing in the State. It is submitted that the
Jharkhand State Electricity Regulatory Commission has not
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decided and deleted the condition of the payment of the
Demand Charges in the manner as given in Clause 5.2 of the
Tariff Order/Schedule 1993 as well as the contract entered into
between the parties. It is also submitted that the learned Single
Judge has wrongly held that the Clause 4(C) of the agreement
cannot operate in view of Clause 11 of the agreement which
provides that the agreement shall be construed in consonance
with the amendment made in law in future and, therefore, after
coming into force of Act of 2003 and the Tariff Order of 2003-04,
the appellant cannot take benefit of Clause 4(C) or the condition
contained in Clause 15.2. of the Tariff Order of 1993.
7. Learned counsel for the Board also submitted that the
learned Single Judge wrongly relied upon the earlier judgment of
this Court delivered in W.P.(C) No. 5150 of 2007, Jharkhand State
Electricity Board Vs. M/s KumarDhubi Steels Pvt. Ltd decided on
17th April, 2009 and dismissal of the S.L.P against the said
judgment dated 17th April, 2009 is of no consequence as the
judgment of this Court has not been upheld by the Hon’ble
Supreme Court on merit and only S.L.P has been dismissed. It is
submitted that in the said case, M/s KumarDhubi Steels Pvt. Ltd,
the issue was with respect to the dispute about the charging of
the amount at different rates for initial first twelve months and
the said judgment had not laid down the law on this issue that
the Electricity Board cannot charge the amount which has not
been prescribed as such in the said Tariff Order and which has
not been denied specifically by the Electricity Regulatory
Commission in such order.
8. We have considered the submissions of the learned
counsel for the parties and perused the facts of the case. It is
true that the Electricity Regulatory Commission in the Tariff
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Order of 2003-04 at page 84 observed that, the difference
between fixed charge and minimum charges is that while fixed
charges are charged from consumers irrespective of
consumption, minimum charges are levied only when the bill of
the consumer is less than a pre-specified amount. And thereafter
the Commission considered the question of levying of
fixed/Demand Charges and observed as follows:
“Ideally, the fixed, Demand Charge should
be levied in proportion to the demand placed by
an individual consumer on the system. This is so
because it facilitates the utilitity in designing an
appropriate system to cater to the supply needs
of the consumer and is, therefore, a just and fair
mechanism for recovering fixed costs of the
system. Thus, the fixed/Demand Charge should be
proportionally related to the load of the category.
In the existing tariff structure, all consumer
categories are paying a fixed charge on the basis
of their load except the domestic consumers and
unmetered commercial consumers who are paying
a fixed charge on a part connection basis. The
Commission has not change the basis for levying
fixed charge on this category in this Tariff Order
as the information and database of the Board is
not adequate. The Commission, however, intends
to move in this direction in future and directs that
the Board should made efforts to update its
existing database on connected load.”
9. The Electricity Board submitted proposal for prescribing the
tariff which is incorporated at page 111 and in the column in the
form of Table 5.27, in which there is a reference of Demand
Charge and it has been stated that the existing Demand Charge
is Rs. 125/- per KVA per month and the Electricity Board
proposed to increase it to Rs. 200/- from Rs. 125/-. In the said
proposal as mentioned in Table 5.27, there is one more
component I.e. “Annual minimum guarantee (AMG) charge”. In
the Table 5.27 under the heading “AMG” charges in column no. 2
there is mention as to how this amount is being charged, which
is the similar mode of calculating of charge as of Demand Charge
but there is no confusion to us because annual minimum
guarantee “AMG” charge is separate and distinct than the
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Demand Charge and the AMG has been abolished by the specific
Tariff Order of 2003-04 as ordered by the Commission in the
Tariff Order 2003-04 at page No. 119.
10. We are concerned with the Demand Charge only, rather to
say not concerned with the Demand Charge itself but the manner
in which the Demand Charge can be calculated for the purpose of
raising demand against the consumer charging of the Demand
Charge “has been allowed in Tariff Order 2003-04 @ Rs. 140/- as
mentioned at page 141 of the Tariff Order. As we have already
noticed that a formula was given in Clause 15.2 in the tariff of
1993 as well as in the contract on the basis of which the Board
was charging the Demand Charge on the basis of the actual
consumed units but was charging the said amount irrespective of
the consumption of the units of electricity. Now the contention of
the respondent-writ petitioner is that they are liable only
according to the units consumed by them and not according to
the formula. We found from Board’s proposal contained in Table
5.27 that the Electricity Board consciously (or may
inadvertently) submitted its proposal only to the effect that
existing annual Demand Charge is Rs. 125/- per KVA per month
and the Board wants to increase it to Rs. 200/- per KVA per
month. This proposal of the Board was considered and ultimately
the Demand Charge was allowed by the Tariff Order of 2003-04
which is mentioned at page 141 by which only it has been
approved that the Electricity Board shall be entitled to charge Rs.
140/- per KVA per month. It appears that so far quantum is
concerned, instead of increasing it from Rs. 125/- to Rs. 200/- per
KVA per month as proposed by the Board, the Tariff Order of
2003-04 increased it to Rs. 140/- only.
11. In view of the above reasons, we cannot hold that
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Electricity Regulatory Commission has not considered the
proposal of the Electricity Board with respect to their claim for
Demand Charge and the manner in which it will be charged. At
this juncture, we may observe here that the Electricity Board
repeatedly approached the Electricity Regulatory Commission
and every time it was made clear to the Board by the
Commission that the Commission has not allowed the Electricity
Board to charge beyond what has been given in the Tariff Order
of 2003-04 and that fact has been taken note of by the Single
Bench of this Court earlier in the case of M/s KumarDhubi Steels
Pvt. Ltd then again in the impugned judgment passed by the
learned Single Judge. It is also clear that even then during
pendency of the writ petition before Single Bench, the Electricity
Board approached the Electricity Regulatory Commission again
by submitting a representation to the Commission to give
clarification in this regard and it is not in dispute that the
representation of the electricity Board has been rejected again
by the Regulatory Commission.
12. In view of the above facts, we are of the considered
opinion that the appellant-Board cannot take help of Clause 5.1.
wherein Electricity Regulatory Commission wherein it has been
observed that some of the matters have not been dealt with and
they shall continue to be the same as they were in existence in
the State because of the reason that there is a specific proposal
made by the Electricity Board for the Demand Charge as well as
the manner in which it will be charged and this proposal was
considered by the Electricity Regulatory Commission and
thereafter Tariff Order has been issued. Even if it was an
inadvertent mistake on the part of the Electricity Board in
submitting its proposal of non-disclosure of the manner, in which
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Board wanted to charge Demand Charge from the consumer,
then that mistake must have come to the knowledge of the
Board long back when the dispute arose for the first time;
therefore, they had opportunity to challenge the Tariff Order by
preferring an appeal which remedy admittedly they have not
availed and the Tariff Order of 2003-04 has attained its finality.
At this juncture, we may also observe that in the Tariff Order
2003-04 all financial aspects have been considered by the
Electricity Regulatory Commission and specifically it has been
mentioned at many places what would be the loss to the Board
and how it stands compensated. Therefore, the Electricity
Regulatory Commission must have taken into consideration the
revenue which the Electricity Board would receive by charging
Rs. 140/- per KVA per month on account of Demand Charge and
we cannot presume that this amount has not been calculated
while issuing Tariff Order of 2003-04.
13. The order of the Hon’ble Supreme Court in the case of
BSES Ltd. Vs. Tata Power Co. Ltd. & Ors reported in (2004) 1
S.C.C 195 laid down that the Electricity Board can charge only
such tariff which has been approved by the Commission and
charging of a tariff which has not been approved by the
Commission is an offence which is punishable under Section 45
of the Act and the provisions of the Act and Regulations show
that the Commission has the exclusive power to determine the
tariff and that the tariff approved by the Commission is final and
binding and it is not permissible for the licensee, utility or any
one else to charge a different tariff.
14. Therefore, after the Act of 2003 and constitution of the
Electricity Regulatory Commission and issuing Tariff Order by the
said Commission, the Electricity Board has no jurisdiction to
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charge as per the earlier Tariff Order of 1993 or the contract
which has been made a live contract by Clause 11 and contains
not only stagnant conditions and those terms and conditions
mentioned in the contract in consonance of Tariff Order/Schedule
stand automatically changed and modified in accordance with
the amendment in Tariff Order. The clauses like Clause 11 are
made in the contract so that upon change in law or bylaw, the
parties need not to execute fresh contract again and again.
15. It would be worthwhile to mention here that in view of
provisions of Section 61 and 62 of the Electricity Act, the
jurisdiction to prescribe tariff has been exclusively given to the
Electricity Regulatory Commission and in view of the laws laid
down by the Hon’ble Supreme Court in BSES Ltd. Vs. Tata Power
Co. Ltd. & Ors (supra), the Electricity Board has no jurisdiction to
charge beyond the Tariff Order of 203-04.
16. In view of the above reasons, so far merit in the L.P.As is
concerned, we find none.
17. Learned counsel for the Board submitted that the award
of interest cannot be justified in the matter where the consumer
paid the Demand Charges as demanded by the Electricity Board
and has raised dispute by filing writ petition in the year 2010. We
find some force in the submission of the learned counsel on this
count because of the simple reasons that the respondents
approached this Court by preferring writ petitions in the year
2010 only and, therefore, the respondents cannot be held
entitled to interest for all the amount which they have already
paid to the appellants whenever they received the electricity
bills. In view of the above reasons, we are of the considered
opinion that the respondents shall be entitled to the interest over
the excess recovery made by the appellants from 17th
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September, 2010 i.e, from the date of the order passed by the
learned Single Judge. The award of the cost is also quashed.
18 Hence, the L.P.As are partly allowed to the extent of
revision in interest in the terms aforesaid.
(Prakash Tatia, A.C J)
(P.P. Bhatt, J)
Dey/-Alankar/-