Tamilnadu Electricity Board, rep. by its Chairman, Anna Salai, Chennai-2 v. The Chief Engineer/Distribution, TNEB, Anna Salai, Chennai-2

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 3.7.2009CORAM:THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR.JUSTICE RAJA ELANGOWrit Appeal No.2503 of 20011. 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. .. Appellantsvs.M/s.Guindy Machine Tools Ltd.,Pallikaranai, Chennai-601 302,Rep. by its Managing DirectorSri.K.G.Subramaniam. .. RespondentWrit Appeal against the order dated 8.10.2001 passed by thelearned single Judge in W.P.No.15681 of 2001 on the file of thisCourt.W.P.NO.15681/2001:This Petition filed under Article 226 of the Constitution ofIndia to issue a Writ of Certiorarified Mandamus calling for therecords of the respondents leading upto the 2nd respondent orderdated 17.8.2001 under reference No.Letter No.CE/D/CNR/EET/T- https://hcservices.ecourts.gov.in/hcservices/ 2/F.Guindy Machine Tools/South/D/913.2001 and to quash the same asillegal and invalid and direct the 2nd respondent pass orders afreshas per law after considering and taking into account the variousgrounds raised in the petitioner's appeal dated 3.8.2000. For appellants : Mr.A.Selvendran for TNEBFor respondent : Mr.Ashok Menon for M/s.Menon and GoklaneyJUDGMENT(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 'therespondent-Consumer Company'), the appellants-Tamil Nadu ElectricityBoard (hereinafter referred to as 'the TNEB') and its officialsraised energy bill for Rs.4,86,365/-. On appeal preferred by therespondent-Consumer Company, the appellate authority reduced thecharges from Rs.4,86,365/- to Rs.3,55,102/- by restricting the periodof violation from 14.3.1998 to 28.7.1998. The said order having beenreversed by the learned single Judge at the instance of therespondent-writ petitioner-Consumer Company, the present Writ Appealhas been preferred by the TNEB and its officials.2. As the case can be disposed of on short point, it is notnecessary to discuss all the facts, except the relevant one, asmentioned hereunder.3. The respondent-Consumer Company applied for addition ofmachineries in its unit. The Chief Electrical Inspector, by letterdated 28.7.1997, recommended the same for approval by the TNEB. Therespondent-Consumer Company awaited inspection of machineries. On7.4.1998, the Assistant Electrical Inspector, Kancheepuram Division,inspected the installations. On 28.7.1998, at about 2.30 p.m., theAssistant Executive Engineer, Anti-Power Theft Squad of the TNEB,Chingleput (fifth appellant herein), conducted a surprise check ofthe respondent-Consumer Company. It was noticed that the respondent-Consumer Company was using seven machineries installed withoutsecuring Safety Certificate in respect of those seven machineries. 4. The Anti-Power Theft Squad, after going through the plan forthe proposed machineries and other facts, reported violation ofClause 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 andMaintenance) of the TNEB, Tambaram West, Chennai (fourth appellantherein) issued a show cause notice to the respondent-Consumer Company https://hcservices.ecourts.gov.in/hcservices/ on 4.8.1998 and informed that it has taken unauthorised electricityconnection load of 66.9 KVA over and above the sanctioned load of 250KVA as was detected during the inspection and the surprise check madeby the Anti-Power Theft Squad. 6. A detailed reply was submitted by the respondent-ConsumerCompany on 11.8.1998 and also requested to furnish the details of theamendment, dated 25.9.1997. A notice was also served on therespondent-Consumer Company for its appearance on 8.9.1998 before thethird appellant-Superintending Engineer, TNEB, K.K.Nagar, Chennai-78.But, according to the respondent-Consumer Company, the saidauthority was not present. The further case of the respondent-Consumer Company was that the third appellant-Superintending Engineersubsequently informed over phone that he has decided to send thematter to the Anti-Power Theft Squad for further check on the basisof the details furnished to the respondent-Consumer Company. 7. Subsequently, the respondent-Consumer Company received anorder dated 7.6.2000, whereby, the third appellant-SuperintendingEngineer levied compensation charges of Rs.4,86,365/- and therespondent-Consumer Company was permitted to pay the amount inmonthly instalments as calculated therein.8. At that stage, the respondent-Consumer Company moved beforethis Court in Writ Petition No.11481 of 2000, but this Court orderedthe said Writ Petition with liberty to the respondent-ConsumerCompany to move before the appellate authority.9. The appellate authority enquired into the matter on 18.9.2000and taking into consideration the records and other facts, passed theimpugned order dated 17.8.2001, reducing the compensation chargesfrom Rs.4,86,365/- to Rs.3,55,102/-, restricting the period ofviolation from 14.3.1998 to 28.7.1998, i.e. from the date ChiefElectrical Inspector General's (CEIG's) inspection to the date ofAnti-Power Theft Squad inspection and for the back period of sixmonths, no such compensation charge was levied.10. Before the learned single Judge, the respondent-ConsumerCompany took a plea that no new plant or machinery had been connectedor energised, but simple machineries had been added to the existingmachineries and kept ready for inspection after obtaining priorpermission of the Chief Electrical Inspector. While inspection reportwas alleged to be illegal being not based on proper inspection, andnot giving opportunity to the respondent-Consumer Company, reliancewas 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 loadsconnected in the existing service in the same building in the samepremises for the same purpose, need not be considered as "expansion"and hence, levy of compensation charges as per Clause 31.02 of the https://hcservices.ecourts.gov.in/hcservices/ Terms and Conditions of Supply of Electricity, will not arise. 11. The learned single Judge noticed the rival contentions ofthe parties and taking into consideration the fact that certainamendments were introduced by the Board's Proceedings/Circular in(Per).B.P.(FB).No.80, dated 26.4.2000 and that the impugned order waspassed thereafter on 7.6.2000 and the appellate order was passed on17.8.2001, held that the amendment introduced to the Terms andConditions of Supply of Electricity, has been lost sight of by theauthorities and thereby, allowed the Writ Petition.12. At this stage, it has to be noticed that the TNEB, by itsproceedings 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 andConditions of Supply of Electricity, which amendment came into forcewith effect from 27.1.2000 and the relevant portion of the same readsthus:"AMENDMENTS........5. A new sub-clause 3.02 to clause 37 schedulepart-1 of the Terms and conditions of Supply ofElectricity, will be added with the followingsentences:-"Compensation charges need not be levied forthose consumers who have officially recordedtheir readiness for availing additional loadsin Board's register as directed by the officerconcerned, if they are found to run themachines before sanctioning such additionalloads and/or before taking Revised Test Report.However a notice will be issued to stop theusage of such loads until regularisation ofadditional loads......" 13. The learned single Judge further held that even otherwise,there was inordinate delay in passing the impugned order, dated7.6.2000 by the third appellant-Superintending Engineer.14. Learned Standing Counsel appearing for the appellants-TNEBsubmitted that the newly introduced Sub-Clause 3.02 to Clause 37 ofthe 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-ConsumerCompany. The compensation charges in the present case relate to theearlier period. Learned Standing Counsel for the appellants-TNEB also https://hcservices.ecourts.gov.in/hcservices/ placed reliance on an unreported decision of a Division Bench of thisCourt in the case of "The Chief Engineer/Distribution, TamilnaduElectricity 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 partiesand perused the records.16. It is not in dispute that the respondent-Consumer Companyadded number of machineries for its own expansion. Such expansion wasmade without the approval of the TNEB. In such circumstances, theonly question that arises for consideration is as to whether suchaddition of machineries in the existing plant of the respondent-Consumer Company amounts to unauthorised expansion and attracts penalcharges of compensation. 17. It appears that the Full Board of the TNEB issued the Termsand Conditions of the Supply of Electricity in exercise of the powersconferred by Section 49 of the Electricity (Supply) Act, 1948(Central Act 54 of 1948), notified in BP.Ms.(FB).No.61, dated24.12.1988, published in Part VI Section 3(b) of the Tamil NaduGovernment Gazette No.7, dated 21.2.1996, and as amendedsubsequently. The Full Board of the TNEB, vide their proceedings inPermanent B.P(F.B).No.110, dated 29.5.1997, amended Clause 31.02 ofthe Terms and Conditions of the Supply of Electricity, relevantportion of which reads as follows:"AMENDMENT No.10TAMIL NADU ELECTRICITY BOARDABSTRACTElectricity-Unauthorised extension of supply to thepurpose other than the purpose for which the supply wasgiven within the premises-Treated as violation-Amendmentto Clause 31.02 of Terms and Conditions of supply ofElectricity-Issued.------------------------------------------------TECHNICAL BRANCHPermanent B.P.(F.B)No.110 Dated: 29.5.97 Vaigasi:15 Easwara Tiruvalluvar Aandu 2029. https://hcservices.ecourts.gov.in/hcservices/ 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 duringinspections that HT/EHT consumers extend supply from theirHT/EHT services availed for specific industrial purpose toloads used for construction purpose also while expandingtheir existing plant or putting up new plants. This wasconsidered as misuse of tariff with reference to Clauses13.02 and 25.01 and action were taken by the fieldEngineers under Clause 37 (Violation and theft of energy)of Terms and Conditions of Supply of Electricity based onthe report of APTS. Instructions were issued in memo.No.IEMC/E1/AEE/D.528/96 dt.19.4.96 that in order to recordthe energy used for such construction activities in thepremises of HT consumer a separate L.T. energy meter hasto be provided in the premises of the HT Consumers andenergy recorded in this meter shall be charged at therates applicable for L.T. temporary services.On failure on the part of the consumer to adopt theabove procedure, the extension of supply for constructionactivities from their HT supply system will be treated asviolation and necessary compensation charges are to belevied.The main Clause 31 referred to in Clause 2.04 (II) ofmain Clause 37 states only unauthorised supply of energyby the consumer to any other person as violation. It doesnot specifically mention that using energy for a differentpurpose by the consumer for his own works (such asconstruction activities as discussed above) as aviolation, though the consumer's action in extendingsupply for a different purpose violates Clauses 13.02 and25.01. It is considered to include this aspect of purposealso in Clause 31.02.Accordingly, in exercise of the powers conferred bySection 49 of the Electricity (Supply) Act, 1948 (CentralAct LIV of 1948), the T.N.E.B. issues the followingamendment to Terms and Conditions of Supply of Electricity https://hcservices.ecourts.gov.in/hcservices/ notified in B.P.Ms.(F.B.).No.61, dt. 24.12.88 andpublished in Part VI Section 3(b) of Tamil Nadu GovernmentGazette No.7, dated 21.2.96 and as amended subsequently.AMENDMENTAfter modification, the Clause 31.02 will read as:"If a consumer is detected to be supplying energyunauthorisedly at any time, he shall be liable to paycompensation charges and supply shall be disconnectedwithin 24 hours. For the purpose of this condition, theunauthorised supply of energy shall mean the supply ofenergy by consumers to any other person or for any purposeother than the purpose for which supply was sanctionedfrom the energy drawn by him from the Board irrespectiveof whether supply is charged in any form or not. The supply drawn by LT/HT consumers, from theexisting service for the purpose of construction andtesting of their own expansion/new plant without theapproval of the Board is also considered as violation andaction will be taken as provided under main clause 37,Schedule Part I of Terms and Conditions of supply ofElectricity.However, the supply of energy by the owner of abuilding to his tenants or by any establishment or personto lessees, employees and/or to the area used for thewelfare/amenities of employees shall not be considered asunauthorised 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 aforesaidproceedings in (Per).B.P(F.B).No.110, dated 29.5.1997, by way ofclarification, in the proceedings in (Per).B.P(Ch).No.203, dated https://hcservices.ecourts.gov.in/hcservices/

23.10.1998, relevant portion of which had been quoted by the learnedsingle 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 dated10.12.2008, held that, "... any clarification can be made even by acompetent authority properly explaining the decision if taken by thesuperior authority. Therefore, it was open for the Chairman of theTNEB to clarify any decision of the Full Board of the TNEB, as he isalso a member of the said Full Board. But such clarification shouldbe in consonance with the decision of the original authority andcannot 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 dated10.12.2008, further held that B.P(Ch).No.203, dated 23.10.1998 beingcontrary 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 eyeof law. Therefore, the respondent-Consumer Company cannot derive theadvantage of the proceedings (Per).B.P(Ch).No.203, dated 23.10.1998.21. It has been noticed in this case that the violation relatedto the period from 14.3.1998 to 28.7.1998. The action was taken bythe appellants-TNEB immediately by issuing notice on 4.8.1998, towhich, the respondent-Consumer Company replied on 11.8.1998. In viewof the objection, another inspection was made, but this time, by theAnti-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 theauthorities and the period being that of the earlier period, thequestion of giving any finding based on the amended Board Proceedingscontained 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 beingbased on the subsequent Board's proceedings, dated 26.4.2000, whichis not applicable to the case of the respondent-Consumer Company andas we have noticed that there was no delay on the part of theappellants-TNEB in taking action against the respondent-ConsumerCompany, the impugned order passed by the learned single Judge cannotbe upheld.23. This apart, the respondent-Consumer Company having installedadditional machineries without prior approval of the TNEB, we are ofthe view that the respondent-Consumer Company is entitled for penalaction in terms of the amended Clause 31.02 of the Terms andConditions of Supply of Electricity (amendment vide (Per).B.P.(FB).No.110, dated 29.5.1997), which was in vogue while such addition ofmachineries was made. https://hcservices.ecourts.gov.in/hcservices/

24. For the reasons aforesaid, we set aside the impugned orderdated 8.10.2001 passed by the learned single Judge in W.P.No.15681 of2001, with liberty to the appellants-TNEB to recover the amount(s),if not yet recovered. The Writ Appeal is allowed, but there shall beno order as to costs. Sd/Asst.Registrar/true copy/Sub Asst.RegistrarcsTo1. The Chairman, Tamilnadu Electricity Board, 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. 2 cc To M/s.Menon and Goklaney, Advocate, SR.28549Writ Appeal No.2503 of 2001SGL(CO)PMK.20.7.2009.