SCO
NO. 220-221, SECTOR 34-A,
Petition No. 21 of 2009
Date of Order : 10.09.2010
In the matter of: Petition as per orders dated 9.9.2009
passed by Hon’ble
Punjab & Haryana High Court,
AND
In
the matter of: M/s Supreme Tex
Mart Ltd.
VERSUS
(Now PSPCL) and others
Present : Shri Jai Singh Gill,
Chairman
Shri Satpal Singh Pall, Member
For the petitioner: Shri Puneet Jindal, Advocate
For Respondents: Shri Karan Sethi, Advocate
Shri J.P.Singh, Dy.C.E.
ORDER
1. This
petition has been filed by M/s Supreme Tex Mart Ltd. challenging the voltage
surcharge levied upon it. The petitioner has sought directions to the Punjab
State Electricity Board (Board, now PSPCL) to recover charges from the
petitioner only as per Tariff Orders of 2004-05, 2005-06, 2006-07 and Reg.
4.2.1 of Electricity Supply Regulations (ESR 4.2.1) and for setting aside CC
No. 66/2007 dated 28.11.2007 issued by the Board and further to refund the
amount recovered from the petitioner by way of surcharge.
2. The
facts giving rise to the present petition are that PSPCL levied voltage
surcharge on the petitioner with effect from 14.8.2008 on the basis of the General
Conditions of Tariff approved by the Commission and Commercial Circular (CC)
No. 66 of 2007 dated 28.11.2007 issued to give effect to them. The petitioner
filed Civil Writ Petition No. 1826 of 2009 in the Hon’ble High Court of Punjab
and Haryana with the following prayers:
(i) Appropriate writ, order or direction
especially in the nature of certiorari quashing the Bills issued from 1.8.2008
onwards imposing voltage surcharge @ 10% against the petitioner and also
quashing Instructions/CC No.66/2007 dated 28.11.2007 (Annexure P-10) being
totally illegal and arbitrary;
(ii) Writ in the nature of prohibition
restraining the respondent No. 1 & 3 from imposing and levying voltage
surcharge in violation of Feasibility Clearance granted by the Chief
Engineer/Commercial read with para 4.2.1 of Electricity Supply Regulations;
(iii) Writ in the nature of Mandamus directing
the respondents to refund/ adjust the amounts of voltage surcharge
recovered/paid by the petitioner under protest.
3. The
writ petition along with others was dismissed by Hon’ble High Court in its
order dated 27.4.2009 wherein the validity of CC 66 of 2007 was also upheld.
The Hon’ble High Court further held that the petitioners are liable to levy of
voltage surcharge. In para 34 of that order, it has been observed :-
“Tariff
Order for the year 2004-05 came to be issued on 30.11.2004. Circular No. 52/2004 was issued a few days
prior thereto, i.e. on 11.10.2004
whereby on the demand of the Industries Association that the 10% additional billing was causing
hardship to them, it was clarified that
the consumption (KWH) recorded at 11 KV corresponding to the demand recorded over and above 2500
KVA shall be increased by 10% in the
total average consumption. Since this exemption was not reflected by the Board in the ARR or in its proposal for the
General Conditions of Tariff, the
same was inadmissible as soon as the Tariff Order
for the year 2004-05 came into force. The subsequent circular dated 28.11.2007 merely reiterates the levy of
10% surcharge on the consumption
charges leviable with effect from 1.4.2004, as approved by the State Regulatory Commission in its Tariff Orders for the
year 2004 to 2007 for the reason that
the previous administrative circular dated
11.10.2004 of the Board had become defunct and inoperative after the Tariff Order for the year 2004-05
came to be issued on 30.11.2004.
The subsequent circular has only rectified the error and has, at the best, withdrawn an erroneously
drawn concession which was not
admissible to the petitioners after 30.11.2004”.
4. The
petitioner filed Review Application No. 319 of 2009 before the Hon’ble High
Court which was dismissed on 9.9.2009 with the following observations :-
“Having
heard learned counsel for the review-applicants, suffice it to say that in my order under review upholds the
supremacy of power of the
“Regulatory Commission” to determine the yearly tariff and the authority of the PSEB’s sale circulars
has been annulled. That being so,
nothing precludes the review-applicants to approach the “Regulatory Commission” in order to establish that the
PSEB’s sale circular dated 28.11.2007 runs
contrary to the Tariff Order dated 30.11.2004
of the “Regulatory Commission” for the year 2004-05 and cannot be given effect and that the PSEB’s sale circular issued
later on, cannot take away the
benefits/exemption, if any, granted and/or protected
by the “Regulatory Commission” vide its order dated 30.11.2004, referred to above. With this clarification,
the review applications are
dismissed.”
5. Thereafter, the present petition was filed
before the Commission. The parties
submitted their pleadings and the case was fixed for arguments on 13.01.2010.
The learned counsel for the petitioner has referred in detail to the entire
background in which the question of voltage surcharge has been dealt with by
the then Board since the early 1990s. He has indicated that through CC No.25/99
issued in 1999, no voltage surcharge was to be applicable in case of LS
consumers existing before 1995. Even in
respect of others, CC No.52 of 2004 provided for levying surcharge to the
extent of 10% only on that portion of the consumption that exceeded 2500
KVA. However, the policy of the Board
with regard to the levy of surcharge was abruptly changed in the General
Conditions of Tariff that were issued in 2006 and in the subsequent CC/66 of
2007 whereby surcharge was imposed w.e.f. 1.4.2004 and was to be
retrospectively recovered. The learned
counsel has urged that both the General Conditions of Tariff as well as CC/66
of 2007 have been issued without the explicit approval of the Commission and no
proper notice in this respect has been given to the consumers at large. The learned counsel has further urged that
the Board cannot take the plea that the levy of surcharge has been approved by
the Commission in the Tariff Order of 2004-05 and reiterated in the subsequent
Tariff Orders of 2005-06 and 2006-07. In this regard, it is clarified that the
Public Notice issued when the ARR of 2004-05 was submitted made no mention of
any proposal to levy a voltage surcharge. Thus, any tacit approval of levy of
surcharge in the Tariff Order of 2004-05 cannot be legally sustained. In so far
as the subsequent Tariff Orders are concerned, the learned counsel has pointed
out that these merely reiterated the position as in the Tariff Order of
2004-05. Referring to the arbitrary nature of the surcharge being levied, the
learned counsel has pointed out that no details have ever been provided as to
the actual line and transformation losses incurred while effecting supply at 11
KV and thus the levy of a surcharge at 10% is completely unjustified. Moreover,
it is also contended that as per Section 86 of the Electricity Act, 2003,
surcharge can only be levied under Section 42 which is applicable in the case
of Open Access consumers which the petitioner clearly is not. In the particular
case of the petitioner, it is also pointed out that the connection was released
under an industrial policy of the State Government whereby a package of
concessions was made available to large industrial units being established in
the State. There was no mention in the State Government’s policy as to levy of
any surcharge nor was there any mention thereof in the feasibility clearance
granted in the case of the petitioner. Thus, surcharge cannot at a later stage
be imposed when no prior notice to that effect was given to the petitioner. The
counsel for the petitioner has finally submitted that the electric connection
with a contract demand of 4000 KVA was released to the petitioner on
14.08.2008, but, actual utilization by the petitioner never exceeded 2500 KVA.
Accordingly, in terms of para 4.2.1 of the Electricity Supply Regulations of
the Board and CC No. 52 of 2004, there was no liability on the petitioner to
pay any surcharge.
6. Shri Karan Sethi appearing for PSPCL
sought time for filing written arguments which were submitted on 21.01.2010. He
has urged that the Tariff Orders of the Commission for the years 2004-05,
2005-06 and 2006-07, the General Conditions of Tariff and CC/66 of 2007 have
all been properly issued after observing the requisite procedure therefor.
Moreover, the similar arguments were preferred before the Hon’ble High Court
and after consideration thereof, the Court has upheld the validity both of the
General Conditions of Tariff and CC No.66 of 2007. In addition, a similar view
has been taken by the Commission in Petitions No. 19 and 20 of 2009 where
similar issues had been raised. As regards the contention that the petitioner
was not informed as to the proposal to levy surcharge when his application for
release of connection was being processed, the learned counsel has clarified
that the A&A Form signed on 1.3.2007 clearly indicates that the petitioner
has agreed to abide by the General Conditions of Tariff and that the liability
of payment of surcharge has been clearly stipulated as one of the conditions in
the A&A Form which has been duly signed by the petitioner.
7. The
Commission has given due consideration to the submissions of the learned
counsel for the parties. On behalf of the petitioner, considerable stress has
been laid on the imposition of the surcharge being a violation of the earlier
policy of the Board as laid down in CC No. 25 of 1999 and CC No.52 of 2004. It
has also been contended that the change of policy in this respect as
incorporated in the Tariff Order of 2004-05 and reiterated in the subsequent
Tariff Orders cannot be accepted as the proposal to impose the surcharge was
neither explicitly brought to the notice of the Commission nor did it form a
part of the public notice that was issued before finalizing the order. It has
also been urged that the General Conditions of Tariff even if they are
considered as approved by the Commission are unsustainable as proper procedure
under Section 181 of the Electricity Act, 2003 has not been followed.
Similarly, imposition of surcharge and its proposed retrospective recovery
suffers from the shortcoming that the circular has been issued without any
approval of the Commission in this respect. The Commission notes, on the other
hand, that these issues amongst others were also raised before the Hon’ble High
Court which in its order dated 27.4.2009 found no infirmity in the Tariff Orders
issued by the Commission and upheld both the General Conditions of Tariff as
well as CC No.66 of 2007. In the light of these findings of the hon’ble court,
these issues need no further examination or comment. The petitioner filed a
review application which was dismissed by the Hon’ble High Court with the observation
that nothing precludes the review applicant in approaching the Commission to
establish that CC No. 66 of 2007 was contrary to the Tariff Order of 2004 and
that a circular issued later on cannot take away the benefits/exemption, if
any, granted and/or protected by the Commission in the Tariff Order of 2004-05.
8. Taking into account the order passed by the Hon’ble High Court in
the review the only issues which are open for consideration of the Commission
are :
(i) Whether
sale circular No. 66 of 2007 is contrary to the Tariff Order of 2004-05?
(ii) Whether
CC 66 of 2007 cannot take away the benefits/exemption, if any, granted and/or
protected by the Commission in the Tariff Order of 2004-05 ?
9. As regards the first issue, it cannot be
said that CC 66 of 2007 was in any way contrary to the Tariff Order of 2004-05
as it only reiterated the levy of surcharge approved by the Commission in that
Order. The second issue is not relevant in the instant case as the proposal for
levy of surcharge of 10% & 17.5% as applicable to different categories of
consumers was considered by the Commission and discussed in para 9.11 of the
Tariff Order of 2004-05 wherein the proposed levy of surcharge was approved.
The petitioner has not been able to substantiate that any benefit/exemption
granted under the Tariff Order of 2004-05 has been taken away by CC No. 66 of
2007. The contention that imposition of surcharge is in contravention of CC No.
52 of 2004 and of para 4.2.1 of the Electricity Supply Regulations is not
helpful to the petitioner as CC No.52 of 2004 on the basis of which ESR 4.2.1
was issued, has been held by the Hon’ble High Court to be defunct and
inoperative once the Tariff Order for the year 2004-05 came to be issued. In
these circumstances, the Commission
inescapably concludes that the order passed by the Hon’ble High Court in the
review application provides no relief to the petitioner.
10. The
final plea of the petitioner that no notice for the levy of surcharge was given
to him when the application for grant of connection was being processed has to
be examined in the context of the conclusion drawn in the foregoing paras. The
petitioner admittedly applied for the connection after approval of the General
Conditions of Tariff which had been circulated through CC No. 36 of 2006 and came
into effect from 1.4.2006. The Board had subsequently issued CC No. 66 of 2007
to clarify certain aspects of the General Conditions of Tariff as well as the
Tariff Order of 2004-05. It was stated therein that the surcharge has already
been levied w.e.f. 11.4.2007 and that arrears from 1.4.2004 are to be recovered
in the manner prescribed. The condition of levy of surcharge in accordance with
CC No. 36 of 2006 is clearly mentioned in the A&A Form which has been
signed by the petitioners. A perusal of the General Conditions of Tariff also
indicates that surcharge is attracted in a case where approved contract demand
exceeds 2500 KVA irrespective of the fact whether the maximum recorded demand
exceeds that limit or not. In this situation, where the A&A Form that indicated
the likelihood of levy of surcharge has been signed by the petitioner, the
Commission is unable to accept the plea that due notice was not given for the
levy of surcharge upon the petitioner.
In
the light of the above conclusions, there is no merit in this petition which is
dismissed.
Sd/- Sd/-
(Satpal
Singh Pall) (Jai
Singh Gill)
Member Chairman
Place:
Date: