Bombay High Court
M/S Pioneer Estate Corporation vs Maharashtra State Elecytricity ... on 24 September, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:37814
wp 14216-23 & 8467-23.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 14216 OF 2023
M/s. Pioneer Estate Corporation, ]
A partnership Firm having its ]
registered office at 198, ]
Khetwadi Main Road, Mumbai - 400 004 ]
and its Correspondence address at S. No. ]
133/134, Western India Steel Compound, ]
Pakhran Road No.2, Thane - 400 601. ] ...Petitioner.
Versus
Maharashtra State Electricity Distribution ]
Co., Ltd Through Office of ]
Executive Engineer, Thane II Division, ]
New Administrative Building, 3rd Floor, ]
Wagle Estate, Thane (W), ]
Maharashtra - 400004. ] ...Respondent.
WITH
WRIT PETITION NO. 8467 OF 2023
Maharashtra State Electricity Distribution ]
Co., Ltd Through Office of ]
Executive Engineer, Thane II Division, ]
Administrative Office Building, ]
Road No. 16, Opposite Old Passport Office, ]
Wagle Estate, Thane (W), ]
Maharashtra - 400004. ]
Email id :- [email protected] ] ...Petitioner.
Versus
M/s. Pioneer Estate Corporation, ]
133/134,Majiwada, Behind paper products, ]
Thane (West). ] ...Respondent.
------------
Mr. Joaquim Reis, Senior Advocate along with Mr. Raj Patel, Ms.Deeksha Jani,
Mr. Niket Jani and Parikh for the Petitioner in WP 14216 of 2023 and for the
Respondent in WP 8467 of 2023.
Mr. Rahul Sinha, Mr. Soham B. i/b DSK Legal for the Respondent in WP 14216 of
2023 and for the Petitioner in WP 8467 of 2023.
------------
Patil-SR (ch) 1 of 15
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Coram : Sharmila U. Deshmukh, J.
Reserved on : September 10, 2024.
Pronounced on : September 24, 2024.
Judgment :
1. Rule. Rule made returnable forthwith and by consent of learned
counsel appearing for the respective parties, taken up for final
disposal.
2. These two petitions challenge the order dated 4 th October 2022
passed by the Appellate Authority under the Electricity Act, 2003 in
Appeal No.7 of 2015. Writ Petition No. 14216 of 2023 has been filed by
the consumer being aggrieved by the impugned order to the extent
that it does not grant interest to the Petitioner on the deposited
amount of Rs.49,08,150/-. Writ Petition No.8467 of 2023 has been filed
by the electricity distribution company aggrieved by the order by which
the final assessment order dated 29th April 2024 has been set aside by
the Appellate Authority and seeks liberty to recover the dues as per
the original supplementary bill and energy bill dated 28 th August 2014
for an amount of Rs.98,16,300/- for the period from 1 st May 2009 to
30th August 2014. Common submissions were advanced and both
petitions are being disposed of by this common judgment.
FACTUAL MATRIX:
3. For sake of convenience, parties are referred to by their status in
Patil-SR (ch) 2 of 15
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Writ Petition No. 14216 of 2023. On 31st January, 1997, the Petitioner
was granted 3 phase low-tension power connection with tariff category
as industrial purpose. By an agreement dated 3 rd December 2009 the
premises were given by the Petitioner to one M/s. S.C. Auto
Corporation on leave and licence basis for the purpose of carrying out
the activity of repairing and rebuilding of damaged vehicles, painting,
denting and allied services in the said premises, which activity was
classified as industrial activity as per Government Resolution dated 7 th
November 1998. On 21st September 2013, the Deputy Executive
Engineer of Respondent visited the Petitioner's premises and initiated
proceedings under Section 126 of the Electricity Act, 2003 alleging
unauthorised use of electricity as the activity carried out was
commercial activity in view of the fresh classification vide MERC order
in Case No.19 of 2012 which was effective from 1 st August 2012. The
provisional assessment bill dated 25 th September 2013 was issued by
the Respondent for the period 1st August 2012 to September 2013.
Upon objection by the Petitioner, the Deputy Executive Engineer
revised the provisional assessment Bill and passed Final assessment
order dated 28th August 2013 stating that the re- categorization does
not amount to unauthorised use of electricity. Consequently, the
provisional assessment bill amounting to Rs 23,21,970/ was quashed,
the Petitioner was billed on commercial tariff from the date of
Patil-SR (ch) 3 of 15
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inspection, i.e. 11th September 2013 and the tariff difference of
Rs.78,560 for the September 2013 would stand recoverable. Appeal
No.14 of 2014 was filed by the Petitioner before the Appellate
Authority against the order dated 28th October 2013 which came to be
dismissed upholding the Final Assessment Order and accordingly the
Petitioner paid an amount of Rs.78,560 as per the final assessment
order.
4. Subsequent to September 2013, the Petitioner's connection was
changed to commercial tariff with effect from the date of inspection
i.e. 11th September 2013. A provisional assessment bill dated 28 th
August 2014 was issued by the Executive Engineer of Respondent-
Company under section 126(6)(b) of the Electricity Act, 2003 alleging
unauthorised use of electricity for the period 1st May 2009 to 30th
August 2013 levying a sum of Rs.98,16,300/-. The final assessment
order was passed by the Executive Engineer dated 29 th September
2014 upholding the levy of Rs.98,16,300/- and the final electricity bill
dated 29th September 2014 was raised based on the Final Assessment
Order.
5. The final assessment order dated 29 th September 2014 was
challenged by the Petitioner under Section 127 of the Electricity Act,
2003 by Appeal No. 7 of 2014 before the Appellate Authority. As per
Section 127(2) of the Electricity Act, 2003 the Petitioner deposited the
Patil-SR (ch) 4 of 15
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amount equivalent to 50% of the final assessment bill, i.e.
Rs.49,08,150/- under protest with the Respondent-Company. Vide
order dated 5th October 2017 the Appellate Authority allowed the
appeal quashing the final assessment order dated 29 th September 2014
and directing the refund of 50% amount deposited by the Petitioner
along with interest at the rate of 16% thereon from the date of
payment till the date of refund and to refund a sum of Rs.50,099/-
which was interest levied by the executive engineer on the balance
50% amount charged to the Petitioner as per final assessment during
the pendency of appeal.
6. The Respondent-Company preferred Writ Petition No.71 of 2019
challenging the order dated 5th October 2017. Vide order dated 5 th
February 2020 this Court remanded the matter to the Appellate
Authority for fresh decision while holding that the user of electricity
for automobile garage purpose was changed from industrial category
to commercial category from 1st August 2012 and therefore at least
from 1st August 2012 the consumer was liable to pay the electricity
tariff as commercial consumer. This Court further held that imposing
interest on the electricity distribution company on the statutory
deposit made by the consumer directed to be refunded at the rate of
16% interest appears to be not justified and that the provision for
payment of interest by the defaulting consumer cannot be invoked
Patil-SR (ch) 5 of 15
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while directing the refund of statutory deposit by the licensee when
appeal is allowed.
7. Upon remand, the Appellate Authority vide order dated 4 th
October 2022 allowed the appeal setting aside the final assessment
order dated 29th September 2014 and directed the Respondent-
Company to refund the 50% amount deposited by the Petitioner
immediately. It further directed the Respondent-Company to refund
the interest amount of Rs.50,099/- charged to the Petitioner on the
disputed amount and directed the order to be implemented within a
period of 30 days from the date of order.
8. The Petitioner in Writ Petition No.14216 of 2023 is aggrieved by
the order of Appellate Authority as it does not grant any interest on
the deposited amount of Rs.49,08,150/- and the electricity distribution
company is aggrieved as the final assessment orders of the
Respondent-Company are cancelled.
SUBMISSIONS:
9. Mr. Reis, learned Senior Advocate appearing for the Petitioner
would submit that by order dated 28th October 2013 the tariff
difference of Rs.78,560/- for the month of September 2013 was held
recoverable which had been paid. He submits that the final
assessment order was for the period from 1 st August 2012 to 30th
September 2013 and once the final assessment order for the period 1 st
Patil-SR (ch) 6 of 15
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August 2012 to 30th September 2013 crystallizes the tariff difference at
Rs.78,560/-, which has been duly paid, no further amount for the period
1st August 2012 to 30th September 2013 could be levied. He submits
that final assessment order dated 28th October 2013 was not
challenged by the Respondent-Company and therefore the same
attained finality. He would further submit that the impugned order
dated 4th October 2022 arises out of the final assessment order dated
29th September, 2014 passed in respect of the period 1 st May 2009 to
31st August 2013 which included the previous period of 1 st August 2012
to 30th September 2013 which was already decided by order dated 28 th
October 2013 and the tariff difference was paid. He would submit that
the Appellate Authority has rightly held that even if the Appellant's
commercial category comes from 1st August 2012 as survey was
conducted for the first time on 11 th September 2013 the value
assessment done for the period 1 st August 2012 to 31st August 2013 is
wrong. He submits that the Appellate Authority ought to have granted
interest on the amount deposited by the Petitioner in view of Section
62(6) of the Electricity Act, 2003 which has been refused by the
Appellate Authority by holding that 50% of the amount deposited is
not recovery of dues or charged amount and hence section 62(2) of the
Electricity Act, 2003 is not applicable in this case. He would submit that
considering the decision of this Court dated 5 th February 2020 even if it
Patil-SR (ch) 7 of 15
wp 14216-23 & 8467-23.doc
is held that the refund of security deposit will not be liable to carry
interest as the order was directed to be implemented within a period
of 30 days and as the same has not been implemented, the Petitioner is
entitled to interest after the expiry of said period of 30 days.
10. Per contra Mr. Sinha, learned counsel appearing for the
Respondent would submit that as far as the interest aspect is
concerned, this Court by order dated 5th February 2020 has held that
imposing interest on the statutory deposit since directed to be
refunded appears to be not justified and that provision for deposit of
interest cannot be invoked while directing refund of statutory deposit
by the licensee when the appeal is allowed. He would further submit
that by the said decision this Court had specifically held that at least
from 1st August 2012 the consumer was liable to pay electricity tariff as
a commercial consumer and therefore the impugned judgment
quashing the final assessment orders is required to be quashed and set
aside.
REASONS AND ANALYSIS :
11. The final assessment order dated 29th September 2014 was for
the period 1st May 2009 to 31st August 2013 levying Rs 98,16,300/ on
the Petitioner. It is not disputed that there was previous provisional
assessment bill dated 25th September 2013 issued by the Executive
engineer of Respondent-Company for the period 1 st August, 2012 to
Patil-SR (ch) 8 of 15
wp 14216-23 & 8467-23.doc
September, 2013 which came to be revised by final assessment order
dated 28th October 2013 holding that the re-categorization does not
amount to unauthorised use of electricity. The official of the
Respondent held that consumer is to be billed on commercial tariff
from date of inspection i.e. 11 th September, 2013 and that the tariff
difference was of Rs.78,560/- for the month of September 2013. The
Appeal against the same filed by the Petitioner was dismissed by the
Appellate Authority on 23rd April, 2015 upholding the order dated 28 th
October, 2013. The order of the Appellate Authority was not
challenged by the Respondent-Company and thus the said order has
attained finality. Thus the levy was finalised at the tariff difference of
Rs 78,560/ which was payable from date of inspection i.e. 11 th
September, 2013.
12. Despite the earlier final assessment order of the year 2013
covered the period from 1st August 2012 to September 2013, once
again the Respondent-Company issued provisional assessment bill
dated 28th August 2014 alleging unauthorised use of electricity for the
period 1st May 2009 to 30th August 2013. The period which was covered
in the subsequent provisional assessment bill was already covered in
the earlier provisional assessment bill of 25 th September 2013 and had
culminated in the final assessment order dated 28 th October 2013 and
the order of the Appellate Authority dated 23 rd April, 2015. Not having
Patil-SR (ch) 9 of 15
wp 14216-23 & 8467-23.doc
challenged the final assessment order, the Respondent-Company was
bound by the final assessment order dated 28 th October, 2013 issued
by its own official and upheld by the Appellate Authority. Thus the
issue stood concluded as regards the period i.e. from date of
inspection of 11th September, 2013 and the amount i.e. Rs 78,560/-.
13. The finality of the said assessment is sought to be disturbed by
the Respondent by placing reliance on the order dated 5 th February
2020 passed by this Court in Writ Petition No.71 of 2019. Upon a
reading of the order of 5 th February 2020, it is clear that this Court was
considering the subsequent assessment order of 29 th September 2014
and the previous final assessment order of 28 th October 2013 and the
order of the Appellate Authority dated 23rd April, 2015 was not
brought to the notice of this Court. This Court had therefore
considered the assessment period covered by the final assessment
order dated 29th September 2014 and held that as the user of
electricity for automobile garage purpose was changed from industrial
category to commercial category from 1st August 2012, therefore at
least from 1st August 2012 the Petitioner was liable to pay electricity
tariff as commercial consumer. The order dated 5th February, 2020
passed by this Court cannot affect the finality of the final assessment
order dated 28th October, 2013 and the Appellate Authority's order
dated 23rd April, 2015 especially since these two orders were not
Patil-SR (ch) 10 of 15
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placed for consideration in the Writ Petition and I am unable to
subscribe to the view that the order dated 5 th February, 2020 gave
liberty to the Respondent to levy electricity tariff from 1 st August,
2012. The principles of res judicata would bar the Respondent from
seeking to recover the electricity charges for the period 1st August
2012 to September 2013 covered by the final assessment order dated
28th October 2013 and order dated 23rd April, 2015.
14. Apart from the above, the impugned order further notes that
even if the Petitioner's connection is categorised as commercial from
1st August, 2012, the survey was conducted for the first time on 11 th
September 2013 and therefore the action regarding changing the
Petitioner's classification into commercial from 1 st September 2013 is
proper. The Appellate Authority has also rightly held that Appellant's
electricity use has been changed to commercial classification from
September 2013 and therefore the value assessment for the period 1 st
May 2009 to 31st August 2013 is unreasonable. I find no reason to
interfere with the conclusion arrived at by the Appellate Authority.
15. As far as the aspect of levying of interest on the refund directed
by order dated 4th October 2022 is concerned, the Appellate Authority
has held that the amount deposited is not recovery of dues or charged
amount and hence Section 62(6) of the Electricity Act, 2003 is not
applicable. Section 62 of the Electricity Act, 2003 deals with the
Patil-SR (ch) 11 of 15
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determination of tariff and Sub-Section (6) of Section 62 of the
Electricity Act, 2003 provides that if any licensee or a generating
company recovers a price or charge exceeding the tariff determined
under this Section, the excess amount shall be recoverable by the
person who has paid such price or charge along with interest
equivalent to the bank rate without prejudice to any other liability
incurred by the licensee.
16. The amount deposited by the Petitioner was a statutory deposit
under Section 127(2) of the Electricity Act, 2003 which provides that
for the purpose of maintaining an appeal, amount equivalent to half of
the assessed amount is required to be deposited with the licensee and
the documentary evidence of such deposit is required to be enclosed
with the appeal. The amount of 50% has been deposited which is a
statutory deposit as a precondition to entertaining of appeal. This
Court in Writ Petition No.71 of 2019 by order dated 5 th February 2020,
in the earlier round of litigation where the Appellate Authority had
directed the refund of statutory deposit along with interest at the rate
of 16% was held to be unjustified had held that the provision for
payment of interest on the assessment amount by the defaulting
consumer cannot be invoked while directing the refund of security
deposit by the licensee when the appeal is allowed. In the earlier round
of litigation, refund of statutory deposit along with interest at the rate
Patil-SR (ch) 12 of 15
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of 16% was allowed by wrongly invoking Section 127(6) of the
Electricity Act, 2003 which is a provision of imposing interest at the
rate of 16% where the consumer defaults in making payment of
assessed amount. The said provision was clearly inapplicable to a case
where the refund of the statutory deposit is directed upon the appeal
succeeding.
17. The issue as regards the payment of interest on the statutory
deposit at the rate of 16% stood concluded by order of this Court
dated 5th February 2020 which was not challenged by either of the
parties. The Petitioner-consumer is seeking a direction to the
Respondent-Company to pay interest at the rate of 16% per annum on
the deposited amount of Rs.49,08,150/- calculated from the date of
deposit i.e. 16th October 2014 till the date of refund / realisation. As
this Court has already held that imposing interest on the statutory
deposit by the Respondent is not justified and has also held
inapplicable the provisions of Section 127(6) of the Electricity Act,
2003, the prayer clause (b) which seeks the same relief which has been
held to be inapplicable by this Court in the earlier round of litigation
cannot be granted.
18. What was held not to be justified by the order dated 5 th
February, 2020 was the interest on the statutory deposit upon Appeal
succeeding by invoking Section 127(6) of the Electricity Act, 2003 which
Patil-SR (ch) 13 of 15
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apply to a defaulter of payment of assessed amount. However, in the
present case the appellate authority by order dated 4 th October 2022
has passed the final order, which reads thus :
"(1) Appellant's appeal is granted.
(2) The final assessment orders given by the Respondent are
cancelled.
(3) The 50% amount paid by the Appellant should be refunded
by the Respondent to the Appellant immediately.
(4) The Respondent should refund the interest amount of
Rs.50,499/- charged by the Respondent to the Appellant on the
disputed amount.
(5) The order to be implemented within 30 days from the date
of receipt of order.
(6) The appeal is disposed off."
19. Clause (5) of the order of Appellate Authority directed the order
to be implemented within a period of 30 days from the receipt of
order. The period of 30 days expired on 3 rd November, 2022. Despite
the order passed by the Appellate Authority, Respondent-Company did
not refund the amount and has preferred the present proceedings.
Even in this Court it is not demonstrated that the amount of statutory
deposit was deposited in this Court and therefore Clause (5) of the
order remained unimplemented by the Respondent-Company. Once
the appeal succeeds and the Appellate Authority directs the
Respondent-Company to refund the amount of statutory deposit and
the interest amount charged on the disputed amount within a period
Patil-SR (ch) 14 of 15
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of 30 days, after the expiry of period of 30 days the statutory deposit
loses its character as a statutory deposit and becomes an amount due
and payable by the Respondent-Company to the Petitioner-consumer
which will attract the provisions of Section 62(6) of the Electricity Act,
2003 which reads thus :
"62. Determination of tariff-- (1)....
(2)....
(3)....
(4)...
(5)....
(6) If any licensee or a generating company recovers
a price or charge exceeding the tariff determined under this
section, the excess amount shall be recoverable by the person
who has paid such price or charge along with interest
equivalent to the bank rate without prejudice to any other
liability incurred by the licensee."
20. The amount being an amount which was directed to be paid and
not having been paid, is liable to carry interest equivalent to the
banking rate. As the order was not implemented, 50% amount
deposited by the Petitioner-consumer with the Respondent-Company
and the interest amount of Rs.50,099/- charged by the Respondent-
Company on the disputed amount to carry interest at the rate of 6%
per annum from 3rd November, 2022 till payment or realisation.
21. In the light of above Writ Petition No.14216 of 2013 is allowed in
above terms and Rule is made absolute accordingly. Writ Petition No.
8467 of 2013 is dismissed and Rule stands discharged.
[Sharmila U. Deshmukh, J.]
Patil-SR (ch) 15 of 15
Signed by: Sachin R. Patil
Designation: PS To Honourable Judge
Date: 24/09/2024 19:54:15
