High Court Kerala High Court

M/S.Thanikkudam Bagawati Mills … vs Kerala State Electricity Board on 12 August, 2009

Kerala High Court
M/S.Thanikkudam Bagawati Mills … vs Kerala State Electricity Board on 12 August, 2009
       

  

  

 
 
  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
              ========================

           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
:2 :

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

WPC 32337/07
& 15835/08
:3 :

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

WPC 32337/07
& 15835/08
:4 :

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

WPC 32337/07
& 15835/08
:5 :

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