JUST DIAL LIMITED v. MR. MOHAMMED IQBAL

Judgment

1. JUST DIAL LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 HAVING ITS OFFICE AT NO.29, S R T STREET, CUNNINGHAM ROAD, BENGALURU-560052 REPRESENTED BY ITS AUTHORIZED SIGNATORY MR. AJIT .S.

2. MR. MOHAMMED IQBAL S/O LATE MAQSOOD AHMED, AGED ABOUT 55 YEARS, R/AT NO.20, CUNNINGHAM ROAD, BENGALURU-560052. ALSO AT R/AT NO.16, DR. OMER SHARIEFF ROAD, BASAVANAGUDI, BENGALURU-560004.

3. MR. MOHAMMED MUNAWWAR ALAM S/O MR. MOHAMMED YUSUF, AGED ABOUT 45 YEARS, R/A NO.20, CUNNINGHAM ROAD, BENGALURU-560052 ALSO AT R/AT NO.178, C.M.H. ROAD, OPP. M.K. RETAIL, INDIRANAGAR, BENGALURU-560038. MAHALAKSHMI B M Location: HIGH COURT OF KARNATAKA (BY MS. NALINA MAYEGOWDA, SENIOR ADVOCATE FOR SMT. VIDYAVATI M. KOTTUR SHETTAR, ADVOCATE) …PETITIONERS - 2 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR AND:

1. BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED (BESCOM) K.R. CIRCLE, BENGALURU-560001 THROUGH ITS MANAGING DIRECTOR.

2. ASST. EXECUTIVE ENGINEER(ELECTRICAL) E-2 SUB DIVISION, BESCOM NO.43, BAMBOO BAZAAR, SULTAN JI GUNTA ROAD, BENGALURU-560051. …RESPONDENTS (BY SRI H.V. DEVARAJU, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT QUASHING THE IMPUGNED NO.SKNE(V)/E-2/SL/24-25/659 ORDER DATED 16.07.2024 ISSUED BY RESPONDENT NO.2 (ANNEXURE-A); DIRECT TO ISSUE REVISED BILLS BY REMOVING BACK BILLING CHARGES FOR METERS BEARING RR NO. 2EHT21 AND RR NO. 2EHT113. THIS PETITION COMING ON FOR ORDER, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MRS. JUSTICE K.S. HEMALEKHA ORAL ORDER The petitioners have approached this Court calling in question the legality and correctness of the order dated

16.07.2024, passed by respondent No.2, whereby the petitioners have been held liable for alleged misuse of electricity and consequent back billing charges, along with - 3 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR reclassification of tariff from HT2(a) to (HT2(b)) in respect of the installation bearing RR Nos.2EHT21 and 2EHT113.

Brief facts:

2. Petitioner No.1 is a company, engaged in providing Information Technology Enabled Services (ITES) and is duly certified by the competent authorities of the Government of Karnataka. Petitioners Nos.2 and 3 are the consumers/owners of the premises where petitioner No.1 carries on its business. The installation is in question bearing RR Nos.2EHT21 and 2EHT113 were sanctioned power supply under HT2(a) tariff, applicable to the industrial/ITES establishment. It is the case of the petitioners, that based on the inspection conducted by the vigilance wing of the respondent-BESCOM, proceedings were initiated alleging misuse of electricity on the ground that the petitioner No.1 was engaged in commercial activity in the nature of call centre operation, attracting HT2(b) tariff. Consequently, demand notices were issued raising substantial back billing charges. Aggrieved by the - 4 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR said action, the petitioner had earlier approached this Court in W.P.No.9276/2019, wherein this Court, while setting aside the earlier demand notices had directed the respondent-authorities to conduct a limited enquiry confined to examining “whether petitioner No.1 is certified as an enterprise engaged in IT enabled services from the year 2010 and to consider consequential reliefs in accordance with law.” Pursuant thereto, respondent No.2 conducted an enquiry and passed an impugned order dated 16.07.2024, once again holding that the petitioner has misused the tariff by carrying on “call centre activities”, reclassifying the tariff under HT2(b) and raising back billing charges. Being aggrieved by the same, the present writ petition is filed.

3. Ms. Nalina Mayagowda, learned Senior counsel for the petitioners draws the attention to paragraph No.6 of the order in W.P.No.9276/2019 and submits that the respondents themselves had not disputed that even if the petitioner is engaged in a call centre activity, the petitioner - 5 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR would still be entitled to HT2(a) tariff provided it is certified as an “ITES company”. It is further submitted that the respondent has earlier admitted that the petitioner No.1 is a certified IT Enabled Services (ITES) company and as per the amended registration certificate, such entities are eligible for HT2(a) tariff.

4. Learned Senior counsel further submits that while disposing W.P.No.9276/2019, this Court permitted the authorities only to verify certification status of the petitioner as an ITES Enterprise from 2010 along with the issue of consequential refund in terms of the earlier directions in W.P.No.57324-325/2015. Therefore, the enquiry was restricted in scope, and not a classification in exercise. On the contrary to the order passed in W.P.No.9276/2019 and the contention of the authority, the impugned order though classifies the petitioner's activities as a “call centre”, but applies HT2(b) commercial tariff, which is beyond the limited enquiry - 6 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR provided by this Court and in utter violation of the earlier binding direction.

5. Learned Senior counsel also relies on the certificate from Directorate of Industries and Commerce (Annexure-C), certification by Department of IT and Biotechnology (Annexure-D). Further Directorate of IT and Biotechnology department certification (Annexure-E), and submits that these documents consistently establish that the petitioner is recognized as an “IT enabled enterprise”. Further reliance is placed on the affidavit filed by the Department of Information Technology and Biotechnology in the case of Bangalore Electricity Supply Company Ltd. Vs. Talisma Corporation Private Limited and Others1 (Talisma Corporation Private Limited), wherein it has been clarified that ITES includes a wide spectrum of activities and specifically includes “call centres”. Thus the core submission of the learned Senior counsel for the petitioners is that once petitioner No.1 is certified as an 1 W.A.Nos.4-5/2018 c/w W.A.No.1202-03/2012 - 7 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR ITES company, then nature of activity including “call centre” is irrelevant squarely falls under HT2(a) tariff and that a call centre is a subsect of ITES and impugned order violates earlier direction and the admitted position.

6. Per contra, learned counsel appearing for the respondent-authorities submits that the impugned order passed is under Section 126 of the Electricity Act, 2003 (‘Act’ for short). It is appealable under Section 127 of the Act. Hence, the petitioners have effective alternative statutory remedy, without exhausting the same the writ petition is not maintainable. It is submitted that the BESCOM is a statutory distribution licence under the Act and the subject installations falls within the territorial jurisdiction. It is submitted that the petitioners were supplied power under HT2(a) industrial tariff. On inspection, it was found that the premises were being used for call centres activities. Such activities fall under HT2(b) commercial tariff. Hence, there is unauthorized use and misuse of electricity. It is submitted that the tariff - 8 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR classification is justified as per the tariff schedule, HT2(a) applies to industrial ITES software development activities and HT2(b) applies to commercial establishment including “call centres/BPOs”. Therefore usage by petitioner No.1 squarely attracts commercial tariff. Further, it is contended that under clause 42.02 of supply conditions read with Section 123, authority can assert unauthorized use of electricity, can levy back billing charges and accordingly, the back billing has been legally imposed. It is submitted that earlier W.P.No.9276/2019, matter was remitted for fresh consideration and the present impugned order is passed after holding enquiry and affording opportunity, and in compliance with the said directions.

7. It is further submitted that the petitioners have failed to produce records showing industrial and software activity and actual usage is called “call centre operation” and the assessment is based on facts and inspection reports, that the writ petition is devoid of merits and liable to be dismissed. - 9 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR

8. This Court has carefully considered submissions and perused the material on record. The point that arises for consideration is: “Whether impugned

16.07.2024, passed by respondent No.2 classifying the petitioner No.1’s activity under HT2(b) tariff and demanding back billing charges on allegation of misuse of electricity, is sustainable in in view of the order of this Court W.P.No.9276/2019, the admitted position of the respondents, and the material evidencing that the petitioner No.1 is certified as a IT Enabled Services (ITES) enterprise?”

9. It is not in dispute that the petitioners had earlier approached this Court in W.P.No.9276/2019, challenging the proceedings initiated by respondent No.2 alleging misuse of the electricity in respect of the installations and consequent demand for back billing charges on the premise that the petitioners, though availing tariff applicable to IT enabled industries was engaged in commercial activity attracting higher tariff. In - 10 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR the said proceedings, the learned counsel for the respondents has categorically stated at paragraph No.6 as under: “6. Sri H V Devaraju, the learned counsel for the contesting respondents, does not dispute that even if the first petitioner were to be considered as an 'enterprise' engaged in the business as a 'Call Centre', with the clarification by way of affidavit in the pending writ appeal, the first petitioner would be entitled to HT2[a] tariff. Further, he does not dispute the Amended Registration Certificate prevails, the petitioner a certified IT enables services company will be entitled to HT2[a] tariff, but he contends that the second respondent must have an opportunity verify the same in an enquiry because the petitioner has not availed such concession until the year 2017 though the Registration Certificate is issued in the year 2010 at the first instance.” Emphasis supplied

10. Learned counsel for the contesting respondents had categorically not disputed that even if the petitioner No.1 was to be considered as engaged in “call centre’, the petitioner would be entitled to HT2(a) tariff and further - 11 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR if the amended registration certificate prevails petitioner No.1, being a certified ITES company would be entitled to the said tariff. The only reservation expressed was that respondent No.2 be afforded an opportunity to verify same. This Court while disposing W.P.No.9276/2019 has held at paragraph No.8 as under: “8. This Court, to ensure that there is complete adjudication without precipitation, reiterate that the enquiry pursuant to the notices dated 18.12.2018, in the light of the submissions before this Court must be confined to examining whether the first petitioner has been certified as an enterprise engaged in IT Enabled Services from the year 2010 and the question of consequential refund light of the directions issued W.P.Nos.57324-325/2015 and connected matters, and nothing beyond. Hence, the writ petition stands disposed of by the following: ORDER [a] The writ petition is allowed in part, and the second respondent's impugned order dated 24.01.2019 [Annexure-V] and the consequential Demand Notice dated - 12 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR

02.02.2019 [Annexures-Y and Z] are quashed, and the proceedings in terms of the Notices dated 18.12.2018 [Annexures P and R] are restored for consideration on the limited aspect as aforesaid. [b] If the second respondent proposes to proceed on such notice, there shall be fresh notice to the petitioners and the decision taken after due opportunity as would be required under Section 126 of the Electricity Act, 2003.” Emphasis supplied

11. This Court clearly circumscribed the scope of enquiry, holding that the consideration by the authority shall be confined by examining whether the petitioner has been certified as an enterprise engaged in “IT Enabled Services” from the year 2010 and issue of consequential refund in terms of earlier direction. Thus, the scope of enquiry stood limited and defined by judicial direction. However, a perusal of the impugned order discloses that respondent No.2 has traveled beyond the limited scope and, and proceeded to reclassify the petitioner No.1's - 13 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR activity as a “call centre” work and consequently applied HT2(b) tariff, treating the same as a “commercial usage”. Such an approach is clearly contrary to the binding directions issued by this Court, in the earlier round of litigation.

12. On examining the material placed on record particularly Annexure-C certificate issued by Directorate of Industries and Commerce, Annexure-D certificate issued by the Department of Information Technology and Biotechnology and the other relevant certificates, it is evident that petitioner No.1 has been consistently recognized and certified as an IT Enabled Services (ITES) enterprise. Once such certification exists and in view of the earlier order of this Court, the enquiry ought to have been confined only to verifying the existence and validity of such certificate. Upon such verification, the entitlement to HT2(a) tariff necessarily follows. Further, the affidavit filed by the Department of Information Technology and Biotechnology in the case of - 14 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR Talisma Corporation Private Limited at paragraph No.6 of the affidavit it has been stated as under: “6. Under the 2020-25 Policy Information Technology (IT) is defined as the technology involving the development, maintenance and use of computer systems, hardware, software and networks for the processing and distribution of data. IT enabled Services (ITeS) is defined as information technology that enables the business by improving the quality of service is IT enabled services. IT enabled services covers the entire spectrum of operations which exploit information technology for improving efficiency of an organisation. This will include: a. Call centres; b. Medical transcriptions; c. Back office operations/Business Process Outsourcing (BPO)/ Knowledge Process Outsourcing (KPO); Cloud service providers; Data processing; Engineering and design; Remote maintenance; Legal and other database; d. e. f. g. h. - 15 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR i. Website development and maintenance services; J. k. Geographic Information system services; Revenue Accounting and other ancillary operators; l. Insurance Claim processing; m. Web/Digital content development/computer graphics/ animation/ ERP/ Software and application processing services; Financial and Accounting processing; Human Resource and payroll processing n. o. services; p. IT Enabled Banking, non-banking services including insurance, pension, management and market related services; and q. Depository and security registration and dematerialization services; knowledge- based industries.”

13. In aforesaid paragraph, the department specifically clarifies that “IT Enabled Services” cover the entire spectrum of operations including “call centres”. Therefore, even assuming that petitioner No.1 is engaged in the call centre operations, the same would fall within - 16 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR the ambit of IT enabled services and would not justify reclassification under HT2(b) tariff. In view of the above: i. ii. The impugned order is in direct contravention of the earlier order of this Court. It ignores the admitted position of department. iii. It fails to consider the binding certifications issued competent authorities (Annexures-C, D and L). iv. It proceeds on an erroneous premise that, a “call centre” is outside ITES which is contrary to the material on record.

14. Accordingly, the action of respondent No.2 in reclassifying the petitioner's tariff from HT2(a) to HT2(b) and in raising back billing demands, is unsustainable in law. The petitioner being certified as IT Enabled Service (ITES) enterprise is entitled to HT2(a) tariff and the question of reclassification as HT2(b) does not arise. - 17 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR Accordingly, the point framed for consideration answered and this Court pass the following: i. ii. ORDER The Writ Petition is allowed. The impugned order dated 16.07.2024 passed by respondent No.2 is hereby quashed. iii. The consequential demand notices, bills raised towards back billing charges in respect of RR Nos.2EHT21 and 2EHT113 are also set aside. iv. It is declared that petitioner No.1 being certified as an IT Enabled Services (ITES) Enterprise is entitled to be governed by HT2(a) tariff and the question of reclassification under HT2(b) does not arise. v. The respondents are directed to revise the electricity bills of the petitioners in terms of HT2(a) tariff and remove all the back billings - 18 - NC: 2026:KHC:23800 WP No. 26938 of 2024 HC-KAR within a period of eight (8) weeks from the date of receipt of the certified copy of this order. vi. The respondents shall not take any coercive steps including disconnection of supply in respect of the petitioners’ installation on the ground that the petitioners are governed by HT2(b) to the installations. vii. If any amount has already been recovered from the petitioners pursuant to the impugned action, the same shall be adjusted in future bills or refunded, as the case may be. Sd/- _____________________ JUSTICE K.S. HEMALEKHA AT List No.: 1 Sl No.: 70