Bombay High Court
M/S Maharashtra State Electricity ... vs M/S Ankur Seeds Private Limited, Nagpur ... on 4 December, 2023
Author: Avinash G. Gharote
Bench: Avinash G. Gharote
2023:BHC-NAG:16721
WP 2054 of 2017.odt
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
WRIT PETITION NO.2054/2017
5
PETITIONER M/s. Maharashtra State Electricity
Distribution Company Limited- Through The
Nodal Officer, Superintending Engineer
(D/F), MSEDCL, Nagpur Urban Circle,
Nagpur.
...VERSUS...
RESPONDENTS 1. M/s. Ankur Seeds Private Limited,
Plot No.27, New Cotton Market, Opposite
Bus Stand, Nagpur 440 018.
2. Electricity Ombudsman, Plot No.12,
"SHRIKRUPA", Vijay Nagar, Chhaoni,
Nagpur - 440 013.
Mr. S.V. Purohit, Advocate for petitioner
Mr. A.A. Naik, and Abhishekh Bhoot, Advocates for respondent no.1
WITH
WRIT PETITION NO.5377/2018 10
PETITIONER M/s Ankur Seeds Private Limited,
Plot No.27, New Cotton Market Layout,
Opposite Bus Stand, Nagpur - 440001,
through its authorized representative
Shri Vishal Balwantrao Umalkar.
...VERSUS...
RESPONDENTS 1. Maharashtra State Electricity
Distribution Company Limited
(Nodal Officer), through Superintending
Engineer (NUC), Prakash Bhawan,
Link Road, Sadar, Nagpur- 440 001.
WP 2054 of 2017.odt
2
2. Maharashtra State Electricity
Distribution Company Limited, through
Chief Engineer (NUZ), Prakash Bhawan,
Link Road, Sadar, Nagpur - 440 001.
Mr. A.A. Naik, & Abhishekh Bhoot petitioner
Mr. S.V. Purohit, Advocate for respondents
CORAM : AVINASH G. GHAROTE, J.
Date of reserving the judgment : 04/08/2023
Date of pronouncing the judgment : 04/12/2023 5
JUDGMENT
1. Heard. Rule. Rule made returnable forthwith. Heard
finally with the consent of the learned Counsels for the rival 10
parties.
2. The parties shall be referred to in their status which
they possess in Writ Petition No.2054/2017, in which the
Maharashtra State Electricity Distribution Company Limited 15
(MSEDCL) is the petitioner and M/s Ankur Seeds Private Ltd., is
the respondent no.1.
3. The respondent No.1 is a consumer, who has been
granted an electric connection for the purpose of Biotech 20
Research Laboratory under which the respondent no.1 treats and
WP 2054 of 2017.odt
processes seeds and sells it commercially to the consumers. In the
initial stage the electricity supply to the respondent no.1 was
categorized as industrial. An application came to be filed by the
respondent no.1, contending that the supply to the establishment
of the respondent no.1 be categorized as agricultural, as 5
agriculture activity was being done.
4. In view of the tariff categorization by the
Maharashtra Electricity Regulatory Commission [MERC] by its
order dated 16/08/2012 (pg.60), the supply to the respondent 10
no.1 was categorized as commercial, as a result of which, a
supplementary bill was raised in 2016. This categorization and
the bill was challenged by the respondent no.1 before the
Consumer Grievance Redressal Forum [CGRF]. The CGRF by the
aforesaid judgment dated 10/08/2016 dismissed the complaint 15
by the respondent no.1. In a representation before the Electricity
Ombudsman, by the impugned order, though the categorization
of the supply to the respondent no.1 has been maintained as
commercial, the recovery sought to be effected from 2012 to
2016, has been interdicted by holding that the petitioners are not 20
entitled to claim the arrears. It is this direction which is sought to
WP 2054 of 2017.odt
be challenged in Writ Petition No.2054/2017 which is by the
MSEDCL.
5. Writ Petition No.5377/2018 is by Ankur Seeds
Private Ltd., which has challenged the order dated 10/08/2016 5
by the CGRF and the order dated 30/11/2016 by the Electricity
Ombudsman and seeking categorization as HT-II, Commercial to
HT-V and correction of the electricity bills accordingly.
6. The factual position availing from the record is as 10
under :
6.1. The respondent no.1 claims to undertake a research
and development activity in agricultural seeds which is then put
into a green house, developed for a period of time and then
planted in open fields the produce out of which, is ultimately sold 15
commercially. As indicated above, this research and development
activity of the respondent no.1 was imposed industrial electricity
tariff, as a result of which, by application dated 14/05/2015, a
request for change of categorization from industrial to
agricultural was made (pg. 45). A report was called regarding 20
the nature of the activity of the petitioner in pursuance to which,
WP 2054 of 2017.odt
the Deputy Executive Engineer of the petitioner on 18/06/2015
submitted a report stating that the usage of the electricity at the
research and development site of the respondent no.1 was for
extensive research work in the field of agriculture, under various
laboratories, including tissue culture laboratory. There were also 5
4 to 5 green houses where various crops were grown for research
activity. There are two number of conference/meeting halls,
which were used by the company staff. Thus, the main usage was
HI - Tech Agricultural Research Work (pg. 47).
6.2. This position was again found to be correct by the 10
Executive Engineer as is indicated from communication
22/06/2015 addressed to the Superintending Engineer (pg. 48).
The Superintending Engineer by his communication dated
21/07/2015 asked the respondent no.1 to submit a
confirmation/certification of High-Tech crop cultivation activities 15
from the District Superintending Agriculture Officer, Nagpur so
that proposal for change in tariff to HT-V : HT- Agriculture could
be processed to the Competent Authority (pg.49). The report of
the District Superintending Officer dated 30/07/2015 thereafter
(pg. 52) indicates that there were various laboratories including 20
tissue culture laboratory; 4 to 5 green houses in which research,
WP 2054 of 2017.odt
development, production of various crops were undergoing
(pg.52). This report was duly submitted to the petitioner
authorities, whereupon the Superintending Engineer by his
communication dated 01/08/2015 (pg.53) addressed to the
Chief Engineer (Commercial) MSEDCL requested for issuance of 5
necessary guidelines for change of tariff from HT-IC (HT-
Industrial Express Feeder) to HT-V (HT-Agriculture). Reminders
in that regard where sent on 09/09/2015 31/10/2015. On
31/10/2015, the Chief Engineer (Commercial) issued a
communication to Superintending Engineer, MSEDCL (pg. 56) 10
asking him again to verify the purpose as per the MERC
provisions as to whether the predominant use of the power
supply in the premises was for high tech agricultural and
research. The MERC tariff order dated 26/06/2015, according to
the said communication, defined applicability of agricultural 15
tariff to High Tech Agriculture as follows :
"For High Tech Agricultural (i.e. Tissue Culture, Green
House, Mushroom activities), provided the power supply is
exclusively utilized by such Hi-Tech Agriculture Consumers
for purpose directly concerned with crop cultivation process 20
and further provided that the power is not utilized for any
engineering or industrial process."
6.3. By the communication dated 29/12/2015 a joint
inspection was proposed to be conducted to verify the 25
WP 2054 of 2017.odt
predominant use of power supply (pg. 57). It is contended that
though a joint inspection was done, a copy of the report was
never supplied to the respondent no.1 and an application made
for a copy of the same was turned down by the communication
6.4. By the communication dated 05/03/2016 (pg. 60),
the request for change of tariff was turned down on the ground
that the MERC tariff orders dated 16/08/2012 and 26/06/2015
indicate that if the research and development units are situated
outside the industrial premises then they are to be categorized as 10
HT - II (HT commercial) tariff category, though it was found that
the main purpose of electric supply was for Hi-tech agriculture
Research and Development Laboratories and allied activities
(pg. 60).
6.5. A representation by the respondent no.1 dated 15
19/03/2016 seeking to clarify the position had no effect (pg. 62)
and by the order dated 28/03/2016 (pg. 65) the existing tariff
category HT-IC (HT Industrial Express Feeder) was changed to
HT-II (HT Commercial Express Feeder) and this change was to be
effected from 01/08/2012 and accordingly bill was to be sent. 20
WP 2054 of 2017.odt
6.6. Proceedings initiated before the Internal Grievance
Redressal Cell [IGRC] was rejected by the order dated
13/06/2016. An appeal before the CGRF was also turned down
by the order 10/08/2016 (page 106). A representation before the
Ombudsman resulted in modification of the orders of the IGRC 5
and CGRF by doing away with the recovery on account of change
in tariff, prior to passing of the order. The change of tariff was
continued to be maintained.
7. Mr. Purohit, learned counsel for the petitioner 10
submits that though research and development activity in
agriculture is being carried out by the respondent no.1, however,
since that activity was not situated inside the industry, tariff as
contemplated under clause (n) of the order dated 16/08/2012 by
the MERC in Case No.19/2012 was permissible and the tariff 15
leviable was commercial (pg.31). The learned counsel also relies
upon certain portions of the MERC order to support his
contention.
7.1. Mr. Purohit, learned counsel for the petitioner
vehemently contends that the activity of the respondent no.1 is 20
not a research and development but is a commercial/industrial
WP 2054 of 2017.odt
activity inasmuch as by use of the electricity in the laboratory,
seeds are being prepared which are then mass produced which
are being then sold in the open market and therefore the tariff
plan applied considering the activity as a commercial/industrial
one is correct. He submits that, citing an example of the cement 5
industry that if there is a research and development unit in the
factory premises itself then the tariff applied is not commercial or
industrial but if the research and development activity is being
carried out outside the factory premises it has then to be
necessarily considered as a commercial/industrial activity and 10
the according tariff plan is applicable, which in the present case
has rightly been so done. He, therefore, justifies the tariff plan
applied to the respondent no.1. In support of his contentions, he
relies upon Maharashtra State Electricity Distribution Co. Ltd., O
& M Division, through its Executive Engineer, Gondia Vs. M/s 15
Gupta Rice Industries at Tumkheda Tahsil Goregaon, District
Gondia, through its Proprietor (Writ Petition No.872/2018,
decided on 10/08/2022) ; Assistant Engineer (D1) Ajmer Vidyut
Vitran Nigam Limited and another Vs. Rahamatullah Khan Alias
Rahamjulla (2020) 4 SCC 650 and Prem Cottex Vs. Uttar 20
WP 2054 of 2017.odt
Haryana Bijli Vitran Nigam Ltd. and others 2021 SCC OnLine SC
870.
8. Mr. Naik, learned counsel for the respondent no.1
submits that the inspection reports as indicated from the 5
communications dated 18/06/2015 (pg.47), 22/06/2015
(pg.48), 21/07/2015 (pg.49); inspection report dated
30/07/2015 (pg.52), communications dated 01/08/2015
(pg.53), 09/09/2015 (pg.54) and 31/10/2015 (pg. 55), all
indicated the activity which is done by the petitioner was a 10
research and development activity and therefore was entitled to
HT - V: HT Agriculture, on account of the activity of the
respondent no.1 falling under criterion (iii) for applicability
thereof for which he places reliance upon MERC order
16/08/2012 in Case No.19/2012 (pg. 34). Even as per the earlier 15
order dated 17/08/2009 in Case No. 116/2008, the activity of
the petitioner, according to him, fell in High Tech Agriculture
Activity (pg.23 and 24) and therefore was liable to be billed
accordingly.
8.1. It is also contended that in reference to the MERC 20
order dated 16/08/2012 for the applicability of HT-II : HT
WP 2054 of 2017.odt
commercial tariff as per clause (n) a research and development
unit situated outside the industrial premises is liable for
commercial tariff, however, for the applicability of the same, it is
necessary for such research and development unit to be related to
the industry, which is not the case in the present matter (pg. 32). 5
8.2. The subsequent commercial circular dated
09/07/2005, the orders dated 26/06/2015 in Case No.121/2014
of MERC and the commercial circular dated 03/07/2015 (pg. 45,
47 and 49) according to him, does not change the situation
regarding the activity of the respondent no.1 and therefore, the 10
agricultural tariff was required to be applied. It is further
contended that the imposition of tariff is based upon the activity
and not the location. He, therefore, submits that considering the
activity of research was being done by the respondent no.1
merely because the end result of production of high quality seeds 15
which was commercially exploited that would not entail the
imposition of a commercial tariff upon research and development
activity on account of which the impugned orders were liable to
be quashed and set aside and tariff imposition by the petitioner
was liable to be changed to HT -V : HT Agriculture. 20
WP 2054 of 2017.odt
8.3. It is the contention of the respondent no.1 that the
activity which is been carried out by the respondent no.1 is of
research and development, and therefore, cannot be categorized
as industrial or commercial and the tariff plan/billing ought to
have been accordingly. It is also submitted that what was being 5
done by use of the electricity was in fact research and
development and not any commercial/industrial or other activity
has been observed, verified and attested to, by the officials of the
petitioner which is reflected from the inspection reports, in spite
of which, the respondent no.1 has been billed as a 10
commercial/industrial activity which is not sustainable according
to them.
9. Having heard the learned counsels for the parties
and having perused the record with their assistance, the moot 15
question which arises for determination is whether the activity
conducted by the respondent no.1 can be categorized into a
commercial activity or an activity of research so as to apply the
appropriate tariff plan for the purpose of billing of the electricity
consumed by the respondent no.1 in such activity. 20
WP 2054 of 2017.odt
10. Admittedly, the various reports obtained by the
petitioner through its various inspections as indicated by the
communications dated 18/06/2015 (pg.47), 22/6/2015 (pg. 48),
21/7/2015 (pg.49); inspection report dated 30/07/2015 (pg.
52), the communications dated 01/08/2015 (pg. 53), 5
09/09/2015 (pg.54) and 31/10/2015 (pg.55), all demonstrate
the activity which is done by the respondent no.1 was a research
and development activity and therefore was entitled to HT - V:
HT Agriculture, which is so for the reason that the activity carried
on by the respondent no.1 in the premises in question where the 10
tariff plan imposed has been questioned, is a research and
development activity, where research on the seeds is being
carried out. These seeds are then planted in the attached
agricultural field to test their effectiveness, consequent to its
modifications in the research laboratory and in case found to be 15
effective are then grown in large scale so as to market them.
Thus, the activity carried out in the laboratory is clearly one of
research and development and not a commercial/industrial or
other activity.
WP 2054 of 2017.odt
11. The contention of Mr. Purohit, learned counsel for
the petitioner that since the activity of growing the seeds for their
testing is outside the laboratory and therefore the activity ought
to be considered as a commercial/industrial one, according to
me, is clearly misconceived for the reason that the activity of 5
growing the seeds in the field cannot be segregated from the
processing done on them in the laboratory since such growing is
for the purpose of testing their efficacy pursuant to the
processing activity done in the laboratory and thus would be a
part of the process of research and development. No research and 10
development can be completed without it being tested actually in
the field and thus there cannot be any segregation as is being
suggested.
12. So also the contention that if the research and 15
development activity is being carried out in the factory it would
be so and not one if outside also does not appeal to me as what is
material is the activity of research and development and not the
place where it is carried out.
WP 2054 of 2017.odt
13. A perusal of the various circulars would indicate that
there is a separate tariff plan to be made applicable for research
and development activities as that is obviously with a view to
promote such activities by granting them a lower tariff plan. The
petitioner thus while making a tariff plan applicable cannot 5
indulge into discrimination on the basis of the place where the
activity is being carried out, as that has no nexus with the
purpose sought to be achieved which is of promoting research
and development. The petitioner, therefore, has to adopt a more
pragmatic and relief oriented approach when it comes to 10
applying the various tariff plans to different activities so that such
activities are promoted and not to adopt an approach so as to
defeat the purpose.
14. There is also no reason discernible from the material 15
on record as to why and when the various inspection reports
classified the activities of the respondent no.1 as that of research
and development, ultimately what has been applied is a
commercial/industrial tariff to the research and development
activity carried out by the respondent no.1 in its laboratory. 20
WP 2054 of 2017.odt
15. It is also material to note that the nature of activities
being carried out by the respondent no.1 in the premises where
the tariff plan has been applied is not disputed by the petitioner,
which admittedly is a laboratory.
16. Commercial Circular No.175 dated 05/09/2012 as
well as Commercial Circular No.243 dated 03/07/2015 also in
respect of the Category HT V: HT-Agricultural vide Item No.iii
holds that it is applicable to High Tech Agricultural use such as
Tissue Culture, Green House, Mushroom activities, provided the 10
power supply is exclusively utilized by such Hi-Tech Agriculture
Consumers for purpose directly concerned with crop cultivation
process and further provided that the power is not utilized for
any engineering or industrial purpose. Similar is the position as is
spelt out from the orders of the MERC in Case No.116/2008 15
decided on 17/08/2009; Case No.19/2012, decided on
16/08/2012 and Case No.121/2014 decided on 26/06/2015.
17. It would be also material to note that the order
dated 26/04/2013 by the Electricity Ombudsman in 20
Representation No.26/2013, in the matter of agricultural tariff
WP 2054 of 2017.odt
and load shedding considering the use of electricity for Tissue
Culture laboratory in para 8 thereof notes the Maharashtra
Biotechnology Policy, 2001 and the notification dated
29/01/2001 issued by the Industry, Energy and Labour
department and specifically item no.4.13 therein which stipulates 5
that High Tech Agricultural Biotechnology Industries shall be
charged agricultural tariff. Similar is the position as recorded in
the order of the Electricity Ombudsman dated 26/04/2013 in
Representation No.27/2013. This would clearly substantiate the
position that since the activity of the respondent no.1 is 10
admittedly covered under the expression "High Tech Agricultural
Activity", it would be categorized as HT-V: HT-Agricultural and
would therefore entitled to according tariff plan.
18. The contention that HT-II: HT-Commercial Item-n 15
would be applicable, is clearly misconceived for the reason that
the activity being performed by the respondent no.1 is clearly not
an industrial activity.
19. Maharashtra State Electricity Distribution Co. Ltd. 20
Vs. M/s Gupta Rice Industries (Writ Petition No.872/2018
WP 2054 of 2017.odt
decided on 10/08/2022; Rahamatullah Khan and Prem Cottex
(supra) relied upon by Mr. Purohit, learned counsel for the
petitioner do not consider the proposition as canvassed above,
regarding categorization and the applicability of the appropriate
tariff on that count and are therefore of no assistance. 5
20. In view of the above discussion, it will have to be
held that the activity carried out by the respondent no.1 being of
High Tech Agricultural activity of research and development, the
tariff plan applicable would be HT-V : HT Agriculture. The 10
petitioner in consequence of the above will have to take
appropriate steps and grant necessary adjustments to the
respondent no.1. The impugned orders, which take a contrary
view, are therefore liable to be quashed and set aside and are
hereby quashed and set aside. Writ Petition No.5377/2018 is 15
allowed in the above terms and Writ Petition No.2054/2017 is
dismissed accordingly.
21. Rule accordingly. No order as to costs.
(AVINASH G. GHAROTE, J.)
Wadkar
Signed by: S.S. Wadkar (SSW)
Designation: PS To Honourable Judge
Date: 04/12/2023 17:52:27
