PUNJAB STATE ELECTRICITY REGULATORY COMMISSION

SCO NO. 220-221, SECTOR 34-A, CHANDIGARH

 

 

                                             Petition No.22 of  2009

                                                   Date of hearing: 13.1.2010

                                                 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, Chandigarh in R.A.No.323 of 2009 in CWP No.7643 of 2008

 

AND

 

    In the matter of:      M/s JMP  Ltd., 9th Mile Stone, Pathankot Road, Jalandhar

                                                            VERSUS

Punjab State Electricity Board, The Mall, Patiala

(now Powercom) and others.

 

 

Present:                       Shri Jai Singh Gill, Chairman

                                     Shri Satpal Singh Pall, Member    

                

 For the petitioner:      Shri Punit Jindal, Advocate                                    

 

For Respondents :    Shri Karan Sethi, Advocate

Shri J.P.Singh, Dy.C.E.

                                                Shri Parminder Singh, Addl.S.E. (East Division Jallandhar)

 

 

ORDER

 

 

1.         This petition has been filed by M/s JMP  Ltd challenging the voltage surcharge levied upon it.  The petitioner has sought  directions to the Punjab State Electricity Board (Board now PSPCL) to recover the 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 the PSPCL in its letter issued in April 2007 levied surcharge on the petitioner on the basis of Tariff Order of 2004-05, 2005-06 and 2006-07 and General Conditions of Tariff approved by the Commission.  Subsequently the Board issued CC No.66/2007 dated 28.11.2007 in which it was stated  that this charge had already been levied w.e.f. 11.4.2007 and the arrear of the same has to be recovered from 1.4.2004 to 13.4.2007 in the manner  narrated therein. Thereafter the petitioner filed Civil Writ Petition No.7643 of 2008 in the Hon’ble High Court of Punjab and Haryana against the levy of surcharge with the following prayers:-

 

i)                    An appropriate writ, order or direction especially in the nature of quashing the letter dated 28.4.2008, whereby arrears of alleged voltage surcharge from April 2004 till March 10, 2007 have been imposed against petitioner presumably on the basis of instructions/ CC 66/2007 dated 28.11.2007  being totally illegal, arbitrary;

ii)                  Writ in the nature of certiorari quashing the order/proceedings dated 24.9.2007 of the Zonal Dispute Settlement Committee communicated to Petitioner vide letter dated 16.11.2007, whereby levy of voltage surcharge for the electricity consumption bill dated 3.5.2007 has been upheld and suitable direction to refund the amount got deposited from the Petitioner as voltage surcharge @ 10% for the month of April 2007.

iii)                Writ in the nature of Mandamus directing the respondents to refund/adjust the amounts of voltage surcharge wrongly got recovered/paid by the petitioner from the month of April 2007 till June 2007.

 

3.         The writ petition alongwith other petitions  was dismissed by the Hon’ble High Court in its  Order dated 27.4.2009 wherein validity of CC 66 of 2007  was 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 25,00 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.323 of 2009 before the Hon’ble High Court which was dismissed on 9.9.2009 with the following observations:-

 

            “Having heard ld. 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 can not  be given effect and that the PSEB’s sale circular issued later on, can not 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. It is stated  therein  that the petitioner is an old consumer of the Board who had  enhanced contract demand from 1415 KVA to 3400 KVA at 11 KV voltage supply on 17.11.1992. Subsequently, however, contract demand was first reduced to 3068 KVA and further to 2480 KVA. It is prayed in the petition that CC No.66/2007 dated 28.11.2007 may be declared  as illegal, ineffective and any recovery made on the basis of the said circular in excess of  the amount payable as per  ESR 4.2.1 be ordered to be refunded to the petitioner with interest @ 18%.

 

6.            The petition was heard on 13.1.2010. 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. The counsel for the petitioner has finally submitted that 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.

 

 7.        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. Shri Sethi also  argued that the contention raised by the petitioner that  in view of CC No.52 of 2004 and ESR 4.2.1., the petitioner ought to be charged on prorate basis for the load utilized in excess of  2500 KVA,  is not tenable.

 

8.         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 2004-05 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.

 

9.         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 ?

 

10.     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.

 

           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: Chandigarh

Date:  September 10, 2010