Tamilnadu Electricity Board vs M/S.Guindy Machine Tools Ltd on 3 July, 2009

Madras High Court
Tamilnadu Electricity Board vs M/S.Guindy Machine Tools Ltd on 3 July, 2009
       

  

  

 
 
 IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 3.7.2009

CORAM:

THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYA
AND
THE HONOURABLE MR.JUSTICE RAJA ELANGO

Writ Appeal No.2503 of 2001

1. Tamilnadu Electricity Board,
   rep. by its Chairman,
   Anna Salai, Chennai-2.

2. The Chief Engineer/Distribution,
   TNEB, Anna Salai, Chennai-2.

3. The Superintending Engineer,
   TNEB, 110-DV/CEDC/South,
   K.K.Nagar, SS Complex,
   K.K.Nagar, Chennai-78.

4. The Executive Engineer/O & M,
   TNEB/11, Shanmugham Road,
   Tambaram West, Chennai-45.

5. The Assistant Executive Engineer,
   TNEB/Anti Power Theft Squad, Chingleput.    .. Appellants
						vs.
M/s.Guindy Machine Tools Ltd.,
Pallikaranai, Chennai-601 302,
Rep. by its Managing Director
Sri.K.G.Subramaniam.					  .. Respondent

	Writ Appeal against the order dated 8.10.2001 passed by the learned single Judge in W.P.No.15681 of 2001 on the file of this Court.			

			For appellants : Mr.A.Selvendran for TNEB
			For respondent : Mr.Ashok Menon for 
						  M/s.Menon and Goklaney



JUDGMENT

(Judgment of the Court was delivered by S.J.Mukhopadhaya,J)
For unauthorised drawal of electrical energy by the respondent-M/s.Guindy Machine Tools Limited (hereinafter referred to as ‘the respondent-Consumer Company’), the appellants-Tamil Nadu Electricity Board (hereinafter referred to as ‘the TNEB’) and its officials raised energy bill for Rs.4,86,365/-. On appeal preferred by the respondent-Consumer Company, the appellate authority reduced the charges from Rs.4,86,365/- to Rs.3,55,102/- by restricting the period of violation from 14.3.1998 to 28.7.1998. The said order having been reversed by the learned single Judge at the instance of the respondent-writ petitioner-Consumer Company, the present Writ Appeal has been preferred by the TNEB and its officials.

2. As the case can be disposed of on short point, it is not necessary to discuss all the facts, except the relevant one, as mentioned hereunder.

3. The respondent-Consumer Company applied for addition of machineries in its unit. The Chief Electrical Inspector, by letter dated 28.7.1997, recommended the same for approval by the TNEB. The respondent-Consumer Company awaited inspection of machineries. On 7.4.1998, the Assistant Electrical Inspector, Kancheepuram Division, inspected the installations. On 28.7.1998, at about 2.30 p.m., the Assistant Executive Engineer, Anti-Power Theft Squad of the TNEB, Chingleput (fifth appellant herein), conducted a surprise check of the respondent-Consumer Company. It was noticed that the respondent-Consumer Company was using seven machineries installed without securing Safety Certificate in respect of those seven machineries.

4. The Anti-Power Theft Squad, after going through the plan for the proposed machineries and other facts, reported violation of Clause 31.02 of the Terms and Conditions of Supply of Electricity (Amendment received-vide (Per).B.P(F.B).No.110, dated 29.5.1997).

5. In view of such report, the Executive Engineer (Operation and Maintenance) of the TNEB, Tambaram West, Chennai (fourth appellant herein) issued a show cause notice to the respondent-Consumer Company on 4.8.1998 and informed that it has taken unauthorised electricity connection load of 66.9 KVA over and above the sanctioned load of 250 KVA as was detected during the inspection and the surprise check made by the Anti-Power Theft Squad.

6. A detailed reply was submitted by the respondent-Consumer Company on 11.8.1998 and also requested to furnish the details of the amendment, dated 25.9.1997. A notice was also served on the respondent-Consumer Company for its appearance on 8.9.1998 before the third appellant-Superintending Engineer, TNEB, K.K.Nagar, Chennai-78. But, according to the respondent-Consumer Company, the said authority was not present. The further case of the respondent-Consumer Company was that the third appellant-Superintending Engineer subsequently informed over phone that he has decided to send the matter to the Anti-Power Theft Squad for further check on the basis of the details furnished to the respondent-Consumer Company.

7. Subsequently, the respondent-Consumer Company received an order dated 7.6.2000, whereby, the third appellant-Superintending Engineer levied compensation charges of Rs.4,86,365/- and the respondent-Consumer Company was permitted to pay the amount in monthly instalments as calculated therein.

8. At that stage, the respondent-Consumer Company moved before this Court in Writ Petition No.11481 of 2000, but this Court ordered the said Writ Petition with liberty to the respondent-Consumer Company to move before the appellate authority.

9. The appellate authority enquired into the matter on 18.9.2000 and taking into consideration the records and other facts, passed the impugned order dated 17.8.2001, reducing the compensation charges from Rs.4,86,365/- to Rs.3,55,102/-, restricting the period of violation from 14.3.1998 to 28.7.1998, i.e. from the date Chief Electrical Inspector General’s (CEIG’s) inspection to the date of Anti-Power Theft Squad inspection and for the back period of six months, no such compensation charge was levied.

10. Before the learned single Judge, the respondent-Consumer Company took a plea that no new plant or machinery had been connected or energised, but simple machineries had been added to the existing machineries and kept ready for inspection after obtaining prior permission of the Chief Electrical Inspector. While inspection report was alleged to be illegal being not based on proper inspection, and not giving opportunity to the respondent-Consumer Company, reliance was also placed on the TNEB’s proceedings in (Per).B.P(Ch).No.203, dated 23.10.1998, wherein it was clarified that the additional loads connected in the existing service in the same building in the same premises for the same purpose, need not be considered as “expansion” and hence, levy of compensation charges as per Clause 31.02 of the Terms and Conditions of Supply of Electricity, will not arise.

11. The learned single Judge noticed the rival contentions of the parties and taking into consideration the fact that certain amendments were introduced by the Board’s Proceedings/Circular in (Per).B.P.(FB).No.80, dated 26.4.2000 and that the impugned order was passed thereafter on 7.6.2000 and the appellate order was passed on 17.8.2001, held that the amendment introduced to the Terms and Conditions of Supply of Electricity, has been lost sight of by the authorities and thereby, allowed the Writ Petition.

12. At this stage, it has to be noticed that the TNEB, by its proceedings contained in (Per) B.P(F.B).No.80, dated 26.4.2000, amended Sub-Clauses in Clause 37, Schedule Part-I of the Terms and Conditions of Supply of Electricity, which amendment came into force with effect from 27.1.2000 and the relevant portion of the same reads thus:

“AMENDMENTS
….

….

5. A new sub-clause 3.02 to clause 37 schedule part-1 of the Terms and conditions of Supply of Electricity, will be added with the following sentences:-

“Compensation charges need not be levied for those consumers who have officially recorded their readiness for availing additional loads in Board’s register as directed by the officer concerned, if they are found to run the machines before sanctioning such additional loads and/or before taking Revised Test Report. However a notice will be issued to stop the usage of such loads until regularisation of additional loads.

….. ”

13. The learned single Judge further held that even otherwise, there was inordinate delay in passing the impugned order, dated 7.6.2000 by the third appellant-Superintending Engineer.

14. Learned Standing Counsel appearing for the appellants-TNEB submitted that the newly introduced Sub-Clause 3.02 to Clause 37 of the Terms and Conditions of the Supply of Electricity, Schedule Part-I, which was issued vide Board’s Proceedings in (Per).B.P.(FB).No.80, 26.4.2000, is not applicable to the case of the respondent-Consumer Company. The compensation charges in the present case relate to the earlier period. Learned Standing Counsel for the appellants-TNEB also placed reliance on an unreported decision of a Division Bench of this Court in the case of “The Chief Engineer/Distribution, Tamilnadu Electricity Board, Coimbatore Region, P.B.No.2940, Tatabad, Coimbatore-12 and another vs. M/s.Venkatalakshmi Textiles (P) Ltd.”, decided on 10.12.2008 in W.A.No.3020 of 2001, in support of his claim.

15. We have heard the learned counsel appearing for the parties and perused the records.

16. It is not in dispute that the respondent-Consumer Company added number of machineries for its own expansion. Such expansion was made without the approval of the TNEB. In such circumstances, the only question that arises for consideration is as to whether such addition of machineries in the existing plant of the respondent-Consumer Company amounts to unauthorised expansion and attracts penal charges of compensation.

17. It appears that the Full Board of the TNEB issued the Terms and Conditions of the Supply of Electricity in exercise of the powers conferred by Section 49 of the Electricity (Supply) Act, 1948 (Central Act 54 of 1948), notified in BP.Ms.(FB).No.61, dated 24.12.1988, published in Part VI Section 3(b) of the Tamil Nadu Government Gazette No.7, dated 21.2.1996, and as amended subsequently. The Full Board of the TNEB, vide their proceedings in Permanent B.P(F.B).No.110, dated 29.5.1997, amended Clause 31.02 of the Terms and Conditions of the Supply of Electricity, relevant portion of which reads as follows:

“AMENDMENT No.10
TAMIL NADU ELECTRICITY BOARD
ABSTRACT
Electricity-Unauthorised extension of supply to the purpose other than the purpose for which the supply was given within the premises-Treated as violation-Amendment to Clause 31.02 of Terms and Conditions of supply of Electricity-Issued.

————————————————

TECHNICAL BRANCH
Permanent B.P.(F.B)No.110        Dated: 29.5.97
						   Vaigasi:15
				 		   Easwara
				   		  Tiruvalluvar  					          Aandu 2029.

						   Read:
  1. B.P.Ms.(F.B.)No.61 dt.24.12.88
  2. Minutes of the 768th Meeting of T.N.E.B.
	held on 15.5.97 (Item No.38).
...
PROCEEDINGS:

It has come to the notice of the APTS during inspections that HT/EHT consumers extend supply from their HT/EHT services availed for specific industrial purpose to loads used for construction purpose also while expanding their existing plant or putting up new plants. This was considered as misuse of tariff with reference to Clauses 13.02 and 25.01 and action were taken by the field Engineers under Clause 37 (Violation and theft of energy) of Terms and Conditions of Supply of Electricity based on the report of APTS. Instructions were issued in memo. No.IEMC/E1/AEE/D.528/96 dt.19.4.96 that in order to record the energy used for such construction activities in the premises of HT consumer a separate L.T. energy meter has to be provided in the premises of the HT Consumers and energy recorded in this meter shall be charged at the rates applicable for L.T. temporary services.

On failure on the part of the consumer to adopt the above procedure, the extension of supply for construction activities from their HT supply system will be treated as violation and necessary compensation charges are to be levied.

The main Clause 31 referred to in Clause 2.04 (II) of main Clause 37 states only unauthorised supply of energy by the consumer to any other person as violation. It does not specifically mention that using energy for a different purpose by the consumer for his own works (such as construction activities as discussed above) as a violation, though the consumer’s action in extending supply for a different purpose violates Clauses 13.02 and 25.01.

It is considered to include this aspect of purpose also in Clause 31.02.

Accordingly, in exercise of the powers conferred by Section 49 of the Electricity (Supply) Act, 1948 (Central Act LIV of 1948), the T.N.E.B. issues the following amendment to Terms and Conditions of Supply of Electricity notified in B.P.Ms.(F.B.).No.61, dt. 24.12.88 and published in Part VI Section 3(b) of Tamil Nadu Government Gazette No.7, dated 21.2.96 and as amended subsequently.

AMENDMENT

After modification, the Clause 31.02 will read as:

“If a consumer is detected to be supplying energy unauthorisedly at any time, he shall be liable to pay compensation charges and supply shall be disconnected within 24 hours. For the purpose of this condition, the unauthorised supply of energy shall mean the supply of energy by consumers to any other person or for any purpose other than the purpose for which supply was sanctioned from the energy drawn by him from the Board irrespective of whether supply is charged in any form or not.

The supply drawn by LT/HT consumers, from the existing service for the purpose of construction and testing of their own expansion/new plant without the approval of the Board is also considered as violation and action will be taken as provided under main clause 37, Schedule Part I of Terms and Conditions of supply of Electricity.

However, the supply of energy by the owner of a building to his tenants or by any establishment or person to lessees, employees and/or to the area used for the welfare/amenities of employees shall not be considered as unauthorised supply of energy.”

(BY ORDER OF THE BOARD)

K.VARADHARAJAN
MEMBER (DISTRIBUTION).

To
….

Copy to
….

::FORWARDED BY ORDER::

(D.SELVARAJ)
EXECUTIVE ENGINEER:IEMC.”

18. The Chairman of the TNEB tried to dilute the aforesaid proceedings in (Per).B.P(F.B).No.110, dated 29.5.1997, by way of clarification, in the proceedings in (Per).B.P(Ch).No.203, dated 23.10.1998, relevant portion of which had been quoted by the learned single Judge in the impugned order.

19. The Division Bench of this Court, in the said case of “M/s.Venkatalakshmi Taxtiles (P) Ltd.,” (supra), by judgment dated 10.12.2008, held that, “… any clarification can be made even by a competent authority properly explaining the decision if taken by the superior authority. Therefore, it was open for the Chairman of the TNEB to clarify any decision of the Full Board of the TNEB, as he is also a member of the said Full Board. But such clarification should be in consonance with the decision of the original authority and cannot be contrary to the decision of the original authority.”

20. The Division Bench of this Court in the said case of “M/s.Venkatalakshmi Taxtiles (P) Ltd.,” (supra), by judgment dated 10.12.2008, further held that B.P(Ch).No.203, dated 23.10.1998 being contrary to the decision of the Full Board of the TNEB, taken in (Per).B.P(FB).No.110, dated 29.5.1997, is illegal and void in the eye of law. Therefore, the respondent-Consumer Company cannot derive the advantage of the proceedings (Per).B.P(Ch).No.203, dated 23.10.1998.

21. It has been noticed in this case that the violation related to the period from 14.3.1998 to 28.7.1998. The action was taken by the appellants-TNEB immediately by issuing notice on 4.8.1998, to which, the respondent-Consumer Company replied on 11.8.1998. In view of the objection, another inspection was made, but this time, by the Anti-Power Theft Squad and an order was passed on 7.6.2000, thereby, it will be evident that there was no delay on the part of the authorities and the period being that of the earlier period, the question of giving any finding based on the amended Board Proceedings contained in (Per).B.P(F.B).No.80, dated 26.4.2000, does not arise, having come into effect from 27.1.2000.

22. The impugned order passed by the learned single Judge being based on the subsequent Board’s proceedings, dated 26.4.2000, which is not applicable to the case of the respondent-Consumer Company and as we have noticed that there was no delay on the part of the appellants-TNEB in taking action against the respondent-Consumer Company, the impugned order passed by the learned single Judge cannot be upheld.

23. This apart, the respondent-Consumer Company having installed additional machineries without prior approval of the TNEB, we are of the view that the respondent-Consumer Company is entitled for penal action in terms of the amended Clause 31.02 of the Terms and Conditions of Supply of Electricity (amendment vide (Per).B.P.(FB).No.110, dated 29.5.1997), which was in vogue while such addition of machineries was made.

24. For the reasons aforesaid, we set aside the impugned order dated 8.10.2001 passed by the learned single Judge in W.P.No.15681 of 2001, with liberty to the appellants-TNEB to recover the amount(s), if not yet recovered. The Writ Appeal is allowed, but there shall be no order as to costs.

cs

To

1. Tamilnadu Electricity Board,
rep. by its Chairman,
Anna Salai, Chennai-2.

2. The Chief Engineer/Distribution,
TNEB, Anna Salai, Chennai-2.

3. The Superintending Engineer,
TNEB, 110-DV/CEDC/South,
K.K.Nagar, SS Complex,
K.K.Nagar, Chennai-78.

4. The Executive Engineer/O & M,
TNEB/11, Shanmugham Road,
Tambaram West, Chennai-45.

5. The Assistant Executive Engineer,
TNEB/Anti Power Theft Squad,
Chingleput

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