Maharashtra State Electricity ... vs B. G. Shirke Construction ...
2021 Latest Caselaw 3337 Bom

                                                        Writ Petition No.10669/2016
                                          :: 1 ::



           IN THE HIGH COURT OF JUDICATURE OF BOMBAY
                               BENCH AT AURANGABAD


                     WRIT PETITION NO.10669 OF 2016



 Maharashtra State Electricity
 Distribution Company Ltd. & another                        ...PETITIONERS

          VERSUS

 B.G. Shirke Construction
 Technology Pvt. Ltd.                                       ...RESPONDENT

                              .......
 Shri S.V. Mundhe, Advocate with
 Shri Avishkar S. Shelke, Advocate for petitioners
 Shri K.C. Sant, Advocate for respondent
                              .......

                                  CORAM :           R. G. AVACHAT, J.

                  Date of reserving order : 31st January, 2021
                  Date of pronouncing order : 23rd February, 2021


 ORDER :

The challenge in this Writ Petition is to the order

dated 13/5/2016, passed by the appellate authority in appeal

(No.1/2015) under Section 127 of the Electricity Act, 2003.

By the impugned order, the final assessment bill of

Rs.36,04,292/- dated 14/5/2015 has been quashed and set

aside with a direction to issue a fresh bill comprising of

difference between LT-VB Industrial and LT-II B commercial

without any penalty interest. It has further been directed to

Writ Petition No.10669/2016 :: 2 ::

adjust the amount of Rs.18,02,146/- paid by the appellant

therein (respondent herein) on 16/6/2015 against the fresh

bill to be issued.

2. The petitioner No.1 is Maharashtra State

Electricity Distribution Company Ltd. (MSEDCL) and petitioner

No.2 is its official. The sole respondent is a private limited

Company, engaged in the business of building and

construction.

3. The MSEDCL provided the respondent Company

electricity supply under 'industrial' category on 5/5/2013. The

flying squad of the MSEDCL paid a surprise visit to the

premises of the respondent Company on 5/9/2014 and

checked the installation of electricity supply. It was found

that, electricity supplied for industrial purpose was being

utilised for commercial activities, namely construction of

apartments of Maharashtra Housing and Area Development

Authority (MHADA). The tariff for industrial supply is lesser

than the tariff for commercial supply. The flying squad

prepared spot inspection report in the presence of a

representative of the respondent Company. A copy of the

inspection report was given to him. The electricity charges

Writ Petition No.10669/2016 :: 3 ::

paid by the respondent Company came to be assessed. The

provisional assessment bill amounting to Rs.36,04,291/- was

served upon the respondent Company. The provisional

assessment bill was objected to on the ground of having not

been in accordance with the rules. After giving the

respondent Company a reasonable opportunity of hearing

against the provisional assessment bill, a final assessment bill

came to be issued in terms of the provisional assessment bill

itself. The respondent Company, therefore, preferred appeal

under Section 127 of the Electricity Act. The appellate

authority allowed the appeal, setting aside the final

assessment bill. Aggrieved thereby, the MSEDCL has

preferred this Writ Petition.

4. Mr. S.V. Mundhe, learned counsel for the

petitioners MSEDCL would submit that, the respondent

company had withdrawn its claim of being industry before the

appellate Court. As such, it has admitted that, electricity was

being used for commercial purpose. No serious objections

were raised against the provisional assessment bill. The

respondent Company, therefore, could not have been allowed

to take exception to the final bill on other grounds. The

learned counsel would further submit that, the order passed

Writ Petition No.10669/2016 :: 4 ::

by the appellate authority is illegal per-se and, therefore,

liable to be set aside.

5. Mr. K.C. Sant, learned counsel for the respondent

Company would, on the other hand, submit that the appellate

authority has not committed any mistake in passing the

impugned order. The petition is not maintainable since the

questions of facts were only involved in the proceedings

before the appellate authority. The appellate authority was

none other than an officer of the MSEDCL. The electricity was

supplied for industrial activities. The respondent Company

though engaged in construction activity, it manufactures

bricks, columns, Chhajas. The electricity was utilised for

industrial activities only. The respondent Company holds a

certificate issued by District Industrial Centre. The

respondent Company had obtained another connection for

supply of electricity for commercial purchase. It was

Consumer No.490110107649. It was subsequently

discontinued. The provisional assessment bill was issued

without giving sufficient particulars. The bill could have been

issued at the most for a period of not more than 12 months

preceding the date of inspection. The bill has, however, been

issued for the entire period i.e. from the date of installation of

Writ Petition No.10669/2016 :: 5 ::

the meter to the date of surprise visit by the flying squad. It

was bonafide mistake on the part of the respondent Company

to ask for the change of a tariff from Rs.10.91 to Rs.8.44 per

unit. The final bill ought to have been issued within 30 days

of issuance of provisional assessment bill. There is breach of

provisions of Section 126 of the Electricity Act. The bill has

not been issued in a prescribed format. The appellate

authority was, therefore, justified in setting aside the final bill.

The respondent Company had agreed to settle the matter

without payment of penalty and interest. It was ready to pay

the difference between industrial and commercial tariff.

Reliance has been placed on Commercial Circular No.200

dated 5/7/2013 to submit that the provisional assessment bill

ought to have been served not later than seven days from the

date of inspection. A copy of the appeal memo has also been

placed on record to submit that the final assessment bill had

been taken exception to on several grounds. The learned

counsel has relied on the following authorities :

(1) Maharashtra State Electricity Distribution company Limited, Pune Vs. Mahindra Life Space Developers Limited, Pune [2018 AIR CC 3197 (Bom.) ]

(2) Executive Engineer and anr. Vs. M/s Sri Seetaram Rice Mill [ 2012 AIR SW 616 ]

Writ Petition No.10669/2016 :: 6 ::

6. Section 126 of the Electricity Act reads thus :

126: (Assessment): ---

(1) If on an inspection of any place or premises or after inspection of the equipments, gadgets, machines, devices found connected or used, or after inspection of records maintained by any person, the assessing officer comes to the conclusion that such person is indulging in unauthorized use of electricity, he shall provisionally assess to the best of his judgement the electricity charges payable by such person or by any other person benefited by such use.

(2) The order of provisional assessment shall be served upon the person in occupation or possession or in charge of the place or premises in such manner as may be prescribed.

(3) The person, on whom an order has been served under sub- section (2) shall be entitled to file objections, if any, against the provisional assessment before the assessing officer, who shall, after affording a reasonable opportunity of hearing to such person, pass a final order of assessment within thirty days from the date of service of such order of provisional assessment of the electricity charges payable by such person.

(4) ..........

(5) If the assessing officer reaches to the conclusion that unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorized use of electricity has taken place and if, however, the period during which such unauthorised use of electricity has taken place cannot be ascertained, such period shall be limited to a period of twelve months immediately preceding the date of inspection.

(6) The assessment under this section shall be made at a rate equal to twice the tariff rates applicable for the relevant category of services

Writ Petition No.10669/2016 :: 7 ::

specified in sub-section (5).

Explanation.- For the purposes of this section,-

(a) ........

(b) "unauthorised use of electricity" means the usage of electricity -

           (i)      ..........

           (ii)     ...........

           (iii)    ...........

(iv) for the purpose other than for which the usage of electricity was authorised; or

(v) ............

7. The respondent Company had been supplied

electricity for industrial purpose on 5/5/2013. The flying

squad of the MSEDCL paid surprise visit to the construction

site of MHADA and found that the electricity supply to the

respondent Company was being used for construction activity.

An inspection report was drawn on the spot. A copy thereof

was admittedly served to a representative of the respondent

Company. The application moved by the respondent

Company for supply of electricity is on record. It had asked

for 51 KVA supply. The application was accompanied by

proposed connected load list. It was of 51 KVA. The flying

squad also found that the connected load was 51.88 KVA. A

Writ Petition No.10669/2016 :: 8 ::

provisional assessment bill for the period from installation of

the connection to the date of the surprise visit was supplied to

the respondent Company. It did not raise objection to the

said bail on the ground of having not been issued in a

prescribed format, with break-up and within seven days of the

spot inspection. The respondent Company could not,

therefore, be allowed to raise these grounds in this petition.

Reliance on the judgment of Mahindra Life Space Developers

(supra) would, therefore, be of no assistance to the

respondent Company.

8. On receipt of the provisional assessment bill, the

respondent Company made a communication dated

23/1/2015 taking exception thereto on the ground of the bill

having been issued for the entire period. According to the

respondent Company, the provisional assessment bill ought to

have been for a period not more than six months next before

the day of flying squad visit. In the second communication

dated 31/1/2015, it claimed that the load at the site was less

than 50 KVA and, therefore, the rate should have been

Rs.8.44 instead of Rs.10.91 per unit. The respondent

Company was given an opportunity of hearing against the

provisional assessment bill. The provisional assessment bill

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was dated 26/12/2014. The respondent Company, vide its

communication dated 23/1/2015 and 31/1/2015, had raised

objections to the provisional assessment bill. The final

assessment bill, therefore, could not be issued within 30 days

from the date of service of provisional assessment bill.

9. Since the respondent Company raised objection to

the provisional assessment bill only on the grounds of its

period and per unit charges, the final assessment bill came to

be issued in conformity with the provisional assessment. The

respondent Company challenged the final assessment bill in

appeal before the appellate authority. The bill was challenged

on number of grounds. The provisional assessment bill has

not been taken exception to on the ground of the electricity

being used for industrial activity. Before the appellate

authority, the respondent Company had raised said ground,

but withdrew the same. As such, it could not be heard to say

that the electricity was being used for industrial purpose. The

MSEDCL was, therefore, justified in issuing the bill from the

dye one of the electricity supply to the date of spot inspection.

(i.e. for about 20 months).

10. So far as regards claim in respect of the

Writ Petition No.10669/2016 :: 10 ::

connected load being less than 51 KVA, it has to be stated

that the respondent Company itself had applied for 51 KVA

load. It gave the details of proposed connected load. The

flying squad found the connected load to have been little over

51 KVA. The MSEDCL was, therefore, justified in issuing the

final assessment bill for the period from the date of supply of

electricity to the date of detection of unauthorized user along

with necessary penalty, interest and double the rate/ tariff.

The appellate authority ought not to have allowed the appeal

setting aside the final assessment bill on the ground of the

provisional and final assessment bills having not been issued

in format. The appellate authority had concluded that there

was no dispute about the meter and assessed units. It

further found the MSEDCL to have failed to process/ verify

and sanction the new service connection in correct manner.

The appellate authority had in fact a very little or no scope to

interfere with the final assessment bill since the respondent

Company had withdrawn its claim being industry. It had been

supplied with 51 KVA load of electricity on its demand. As

such, the order of the appellate authority is found to be

perverse one. The impugned order, therefore, deserves to be

set aside in exercise of jurisdiction under Article 227 of the

Constitution of India.

Writ Petition No.10669/2016 :: 11 ::

11. The writ petition, therefore, succeeds. The

impugned order is set aside. The respondent Company shall

be liable to pay the MSEDCL the amount under the final

assessment bill.

( R. G. AVACHAT ) JUDGE

fmp/-