Calcutta High Court
Jaishree Steels Pvt. Ltd. And Anr vs West Bengal State Electricity ... on 17 November, 2021
1
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
PRESENT:
HON'BLE JUSTICE SUBRATA TALUKDAR
AND
HON'BLE JUSTICE KESANG DOMA BHUTIA
A.P.O.T. No. 117 of 2021
With
W.P.O. No. 260 of 2021
Jaishree Steels Pvt. Ltd. and Anr.
-Vs.-
West Bengal State Electricity Distribution Company Ltd. and Ors.
For the Appellant : Mr. Ratnanko Banerji
Mr. Ratnesh Rai
Mr. D.N. Sharma
Mr. AnkurRai
Ms. Vipra Garg
For the Respondents : Mr. SrijanNayak
Mr. Sujit Sankar Koley
Heard on : 24/09/2021
Judgment on : 17/11/2021
Subrata Talukdar, J:
The short point which arises for consideration in this appeal is
whether the appellants and, specifically the appellant No.1/ the Company,
were liable to suffer sudden disconnection of electricity supply by the
respondents/ the Distribution Company/ WBSEDCL/ the Licencee.
The appellants contend that previously they were under a licensing
agreement for supply of electricity for the contracted demand supplied by
the Durgapur Projects Limited (DPL). The contracted demand level being
upwardly revised upon mutual agreement of the parties, DPL started raising
incorrect bills qua the upward revision.
The escalation of the tariff demand became the subject of stiff
negotiation between the parties. While the appellants insisted on waiver of
the escalated bill amounts, DPL sought fulfilment of the demand on the
basis of instalments.
DPL thereafter merged with the Licensee/ WBSEDCL on and from 1 st
January 2019. The appellants further contend that consequent to the
merger, WBSEDCL failed to appreciate the basis of the transactions with
DPL leading up to the enhanced tariff demand. The appellants submit that
the notice of disconnection dated 8 th July 2021, if at all the same can be
treated to be one, is not in conformity with Section 56(1) of the Electricity
Act, 2003 (for short the 2003 Act). The appellants also contend that in the
alternate no disconnection could have been effected by the Licencee since
the purported enhanced tariff demand failed the limitation test of two years
as provided by Section 56 (2) of the 2003 Act.
The appellants submit that there are no current outstandings payable
to the Licencee and Late Payment Surcharge (LPSC) have been
surreptitiously introduced by the Licencee to pad up the current bills. In any
even stage LPSCs have lost their validity to be enforced having regard to the
restriction imposed by Section 56(2) of the 2003 Act (supra). From a
compilation of bills raised by the Licencee and claimed to be paid by the
appellants, it is sought to be demonstrated that out of the last outstanding
shown prior to disconnection, corresponding to the period of the amount of
Rs. 10.4 Crores approximately, the appellants have paid approximately
above Rs. 13 Crores, inclusive of current consumption charges. The
appellants dispute the add-on LPSCs and maintain that the disconnection is
thoroughly illegal. It is submitted that due to the sudden disconnection, the
factory has been left idle, the workers with their dependants have been left
without livelihood and, equally important, the appellants would have to
incur huge costs to re-fire the furnace.
Mr. Mukherjee, Learned Senior Counsel appearing for the appellants,
strongly relies on the reported decision in 2020) 4 SCC 650 to make the
point that in the event limitation in terms of Section 56(2) (supra) expires
qua any demand proposed to be raised by the Licencee, the result cannot be
disconnection of electricity supply. It may be arguably open to a Licencee to
raise the demand by way of an additional supplementary charge, which
however does not apply to the present facts.
Learned Senior Counsel submits that the Hon'ble Single Bench fell
into deep error by comprehending the dispute between the parties to be in
the nature of a complex arithmetical analysis which should be best left for a
decision by the Central Grievance Redressal Officer (for short the CGRO) as
provided by the 2003 Act.
Per contra, the Licencee, on the basis of a subsequent affidavit
directed to be filed by the order of the Hon'ble Single Bench dated 23 rd July
2021 has argued that with the migration of the billing process to WBSEDCL,
the outstanding dues of the appellants stood at around Rs. 8.81 Crores as
in the first quarter of 2019. Throughout 2019 the appellants were granted
payment by instalments which, however, was not maintained by them.
The failure to honour the instalments continued throughout 2020.
Such failure, in addition to raising the consumption charges, also led to
imposition of LPSCs. The current payments being made by the appellants
were therefore required to be adjusted against previous outstanding dues.
At Paragraphs 11,12 and 13 of the said subsequent affidavit (below)
the following is pleaded on behalf of the Licencee. The pleadings are sought
to be supported by a Chart disclosing the outstanding dues of the appellant
No.1/ the Company for the billing months December 2020 to June 2021.
The aforesaid paragraphs read as follows:
"11) In this way for Bill month June 2021: Total OSD was
Rs. 9231931426, out of which Amount for the said month
was Rs. 12130967.89 for consumption period of 01.06.21
to 01.07.21. The accrued LPSC was Rs. 994130.45 and
the payable after due date amount is Rs. 10,44,50,283/-.
The petitioner paid Rs. 1,932,866/- on 8 th June, 2021 and
Rs. 14,131,551.00/- on 14th June, 2021 whereas the
actual date of the entire payment was scheduled on 14 th
December, 2020 and 13th January 2021 respectively. The
outstanding amount in the said bill was meant for the
month of December 2020, January 2021, February 2021,
March 2021, April 2021 and May 2021.
12) In the meanwhile disconnection notice was sent to
consumer every month on expiry of due date. Last notice
was served vide our memo no. C/BC/BUR/DPL/22/290
dated 19.04.21 for the outstanding due up to March 2021.
Disconnection was not effected on sympathetic ground due
to pandemic. Finally disconnection was effected on
08.07.21.
13) Present OSD as on date amounting Rs.
10,44,50,282.16 includes OSD of bill month December
2020 (partially) to June 2021. A Table showing details of
current consumption charges along with outstanding dues
for the period mentioned in the bills and payment made
therein and accrued Late Payment Surcharge, amount
adjusted against outstanding dues are as follows:-
A B C D E F G H
Bill Normal OSD Amt. LPSC Amt. LPSC Amt. Actual due Payment Amt. Payment
Mont Due Date during this cropped due date of during the Date
h bill to delay payment month
payment was
Dec- 13.01.202 4,842,682.86
20 1
Jan- 15.02.202 17,947,166.7 1,170,900.8 13.07.202 15,000,000.0 04.01.202
8 307,919.84 4,218,080.00 05.01.202
792,534.56 10,000,000.0 28.01.202
243,584.81 4,512,015.00 30.01.202
Feb- 15.03.202 14,617,457.3 523,244.07 13.10.202 10,000,000.0 03.02.202
5 291,000.00 13.10.202 6,000,000.00 17.02.202
279,759.69 13.10.202 5,432,227.00 23.02.202
470,935.59 12.11.202 10,000,000.0 26.02.202
Mar- 13.04.202 15,669,954.8 594,517.94 594,517.94 12.11.202 12,806,012.0 15.03.202
Apr- 17.05.202 23,305,001.0 289,866.00 12.11.202 5,000,000.00 07.04.202
633,468.71 12.11.202 10,384,738.0 13.04.202
May- 14.06.202 15,937,051.4 1,533,761.7 1,533,761.7 14.12.202 22,381,667.0 27.05.202
Jun- 15.07.202 12,130,967.8 994,130.45 132,769.17 14.12.202 22,381,667.0 27.05.202
861,361.28 13.01.202 14,131,551.0 14.06.202
Total 104,450,282.16 8,125,624.2 8,125,624.2 131,799,151.00
For more explanation, it may be stated that for
example the billing month of February 2021, Total
OSD was Rs. 103795229/-, out of which Amount ofr
the said month was Rs. 1,46,17,457.32 for
consumption period of 01.02.2021 to 01.03.2021.
The accrued LPSC was Rs. 15,64,939.35 due to
delayed payment of (Rs. 1,00,00,000/- on
03.02.2021 Rs. 60,00,000/- on 17.02.2021 Rs.
54,32,227.00 on 23.02.2021 and Rs. 1,00,00,000/-
on 26.02.2021). For these payments the LPSC
accrued during this month (Rs. 523244.07 +
291000+279759.69+470935159 = Rs. 1564939.35)
which has been claimed through energy bill of
February 2021. The Outstanding Amount of Rs.
24,278.62 in the said bill was meant for the month
of October 2020, November 2020, December 2020
and January 2021.
15) This affidavit is being done only to the extent of
explanation of the dues of Rs. 104,450,282.16/-
which include LPSC accrued therein "
By way of reply, the appellants point out that there was no imposition
of LPSCs by DPL between 2016 to 2019. For the first time pertaining to the
monthly cycle of February 2019 the alleged outstanding of Rs. 8.81 Crores
was shown by WBSEDCL against the regular account of the appellants. The
appellants rely on bank statements for confirmation of the fact that for the
entire period between February 2019 till date, all current bills have been
paid. The appellants argue that LPSCs have been imposed to the extent of
Rs. 9.12 Crores from September 2019 till June 2021. Such LPSCs have no
relation whatsoever to payment of the regular monthly consumption bills by
the appellants but have been exclusively imposed for the so-called delay in
paying the supplementary bills. As a measure of the net bill imposed
towards consumption charges by the appellants between August 2019 to
June 2021, the appellants also produce a chart showing break-up of the net
bill amount into two parts, viz. actual outstanding bills and LPSC charge.
MONTH NET BILL AMOUNT OUTSTANDING LPSC CHARGED
(Excluding BILL INCLUDED (in Rs.)
outstanding (in Rs.)
Amount) (in Rs.)
Aug'19 8,10,81,955.00 86,50,066.00 2,64,757.00
Sept'19 2,53,79,676.00 7,39,01,406.00 1,36,08,974.00
Oct'19 2,42,05,325.00 0 1,04,87,695.00
Jan'20 2,66,81,621.00 8,48,80,156.00 1,23,87,775.00
Feb'20 2,78,83,374.00 9,75,43,143.00 1,39,26,971.00
Jun'20 2,21,14,509.00 10,60,23,055.00 82,23,511.00
Jul'20 2,26,71,179.00 10,96,57,648.00 85,37,011.00
Aug'20 1,71,43,929.00 2,26,71,178.00 21,48,219.00
Oct'20 3,40,09,278.00 11,82,24,153.00 64,14,185.00
Nov'20 21,87,55,895.00 13,39,37,188.00 26,57,815.00
Dec'20 1,95,29,571.00 11,71,08,663.00 20,17,556.00
Jan'20 1,79,47,167.00 10,29,09,339.00 25,14,940.00
Feb'20 1,43,70,951.00 8,94,24,278.00 15,64,939.00
Apr'20 2,33,05,001.00 9,15,23,346.00 9,23,334.00
May'20 9,24,46,680.00 1,56,65,313.00 15,33,761.00
Jun'21 1,21,30,969.00 9,23,19,314.00 9,94,130.00
TOTAL 9,12,05,573.00
The appellants allege that it is not on account of outstanding
consumption charges but purely on account of the LPSC amount, that the
disconnection was effected on 8th July 2021. Such disconnection being also
contrary to the statute, is utterly capricious.
Having heard the parties and closely examined the materials placed,
this Court is unable to come to a conclusion pari materia with that of the
Hon'ble Single Bench that the problem posed in this appeal can only be
remedied by experts. In this connection it would be useful to refer to certain
portions of the discussion made by the Hon'ble Single Bench in three of its
orders passed while hearing and ultimately deciding the writ petition. The
observations in the first order dated 23rd July 2021 read as follows:
"The writ petitioner is aggrieved by a disconnection
of electricity supply for omission of payment of
what the petitioner calls 'late payment surcharge'
for the year 2015-16. At the relevant time electricity
was being supplied to
the petitioners by one Durgapur Projects Ltd. (DPL).
The supply operations of the said DPL have since
been taken over by and merged into, the West
Bengal State Electricity DistributionCompany
Limited (WBSEDCL).
It is submitted by Mr. S.N. Mookherji, learned
Senior counsel for the petitioner that the principal
amount of dues for the said period as claimed, have
been paid. At no point of time was late payment
surcharge claimed by either DPL or WBSEDCL. It is
submitted that in the year 2019, for the first time,
WBSEDCL has claimed about a sum of about
₹10.45 crores towards the purported Late Payment
Surcharge.
Mr. S. S. Koley, learned counsel appearing for the
WBSEDCL submits that his client is surprised to
note the reasons attributed by the petitioner behind
the demand of the said sum of ₹10.45 crores. It is
submitted that the demand arose out of arrears of
electricity dues for the period from December, 2020
till June, 2021. Given the divergence of facts, this
Court directs the WBSEDCL to file an affidavit
justifying its contention that the
dues of ₹ 10.45 crores arose for the aforesaid
period i.e., 2020- 3 21. It shall also be indicated as
to whether the said sum of ₹ 10.45 crores includes
any amount towards any late payment surcharge
and to what extent. The licencee may also produce
any document or evidence to show that the demand
for late payment surcharge of ₹9 lacs towards late
payment charges, has been continuous since 2015-
16 till the year 2020.
Let such affidavit be filed within a period of ten
days from date; reply thereto, if any, be filed within
a day thereafter. List this matter in the same
position as 'motion' eleven days hence."
The observations in the second order dated 3 rdAugust2021 read as
follows:
"Affidavit-in-opposition and the affidavit-inreply,
filed in Court today, are taken on record.
Having heard learned counsel for the parties, let
this
matter stand adjourned until tomorrow to consider
passing of
interim orders."
The observations in the third order dated 4 th August 2021 read as
follows:
"WBSEDCL has filed affidavit explaining the
current dues to
the extent of Rs.10,44,50,282.16. These dues,
according to WBSEDCL, have
arisen out of current consumption from December,
2020 to June, 2021. It is
explained that the payment amount during the
month against Column-G at
page 7 of Rs.13,17,99,151/- is the payment made
against bills on dates later
than the due date.
Therefore, the accumulated past dues including
LPSC during this
current period have been mentioned at the bottom
of the bills annexed to the
rejoinder.
Mr. S.K. Kapur, learned Senior Counsel appearing
for the petitioner,
would counter the argument of the WBSEDCL by
submitting that there are no
current dues that could be outstanding. It is also
submitted that if any amount
of dues was there during the period from January
to June, 2021, disconnection
would have been effected much earlier. It is also
argued that the sum of
Rs.10,44,50,282.16, now explained as current
dues for the period from
December 2020 to June 2021, is an afterthought
and actually represent late
payment charges for amounts that accrued
sometime in the year 2015.
There is prima facie evidence before this Court that
all sums against bills
raised have not been paid within the due dates. In
fact, payments against some
bills have been made in instalments from time to
time, after the due date.
Having considered the entire facts, this Court is of
the view that a large
number of disputed questions of fact emerge which
cannot be gone into by a
writ court. The Electricity Act, 2003 provides for a
Central Grievance Redressal
Officer (CGRO) under Section 42 of the Act.
The dispute between the parties is referred to the
Central Grievance
Redressal Officer (CGRO)."
The observations in the fourth order dated 9 thAugust 2021 read as
follows:
"The matter is taken up for further hearingpursuant
to this Court's order dated 4th August, 2021. On
thatday, detailed arguments of the parties were
recorded and this
Court expressed views that the Central Grievance
Redressal Officer(CGRO) shall receive pleadings
from the petitioner as well asWBSEDCL and
dispose of the issue raised in the writ
applicationwithin a period of one month.At the
request of Mr. S.K. Kapoor, learned SeniorCounsel,
this Court had adjourned the matter today to
enable thepetitioner to cite judgments on the
question of alternative remedy
and disputed question of fact. Opening his
submission today, Mr.
Kapoor relied upon the chart set out by WBSEDCL
at page 7 of their
affidavit. Mr. Kapoor tried to demonstrate before
this Court that
even a plain reading of column D and column H
would indicate that
his client had, at all times, made payment of
monthly bills albeit
with some delay.He, therefore, submits that there
are no disputedquestions of fact and this Court can
entertain the writ
application and test propriety of the entire claims of
therespondent against the petitioner.Reference is
also made to Section 56 of the Electricity
Act, 2003 and it is submitted that no notice of
disconnection, as
stipulated thereunder, has been issued by the
WBSEDCL.
...........
Having carefully considered the submissions of
Mr.Kapoor, this Court notes that the table, set out in
paragraph may be simple for a chartered
accountant or a person regularlydealing with the
bills, payments and late payment thereof. A writ
Court does not even have the expertise to see
though any improper
demand of WBSEDCL or any lawful claim of the
petitioner. The
parties are at each other's throats on the figures,
numbers and
facts. There are therefore absolutely no admitted
facts herein."
To the best of the mind of this Court in the event the two charts
respectively relied upon by the appellants and the Licencee are placed next
to each other, it would require not too much effort to decipher that at the
bottom of the rival contentions lies the LPSC figures. There is no dispute
raised by the Licencee connected to payment of current consumption
charges. The LPSCs have been a source of friction between both the parties
stemming from the migratory phase of billing from the first quarter of 2019
following the merger of DPL with the Licencee. Whether such LPSCs should
be at all allowed to remain in their present form in the bills in issue or, only
their quantum requires to be reassessed by an expert in the nature of a
CGRO, is one issue.
The other issue which a Writ Court is competent to decide is whether
the presence of the LPSCs should automatically result in disconnection of
electricity supply de hors the statute. This Court is unable to accept the
single line contention of the Licencee in its affidavit filed pursuant to the
order dated 23rd July 2021 of the Hon'ble Single Bench that the appellants
are habitual defaulters.
From the affidavit of the Licencee it has been, inter alia, pleaded that
the monthly billing period commencing from December 2020 to June 2021
grew in size due to the add-on factor of the LPSCs.
Nowhere from the Charts relied upon by both the parties it could be
shown to this Court that the current outstandings were not paid by the
appellants. Therefore to permit a disconnection to stand when on the face of
the record the appellants are far from being characterised as habitual
defaulters would be ill-fitted to sound reason and equity. To permit a factory
to remain closed only for the CGRO to compute whether the LPSCs were
there to stay and, if at all, to what extent in the face of a statutory limitation
and zero current consumption outstandings, will defeat the balance of
convenience which lies in favour of the appellants.
In the backdrop of the above discussion, it would be appropriate for
this Court to turn around the conclusion arrived at by the Hon'ble Single
Bench.
The CGRO would therefore decide the dispute connected to imposition
of the LPSCs qua their validity and proportionality. The CGRO shall take a
decision within a period of three months from the date of communication of
this order upon affording the parties an opportunity of hearing and
presenting materials in support of their stand. The Licencee/ the
WBSEDCL shall reconnect the electricity supply to the Appellant No.1/ the
Company within 48 Hours of receiving notice of this order and upon
compliance of the necessary formalities.
The notice of the disconnection dated 8 th July, 2021 stands thus set
aside.
Needless to add, the appellants shall continue to pay the regular
consumption charges upon reconnection being effected.
A.P.O.T. 117 of 2021 with W.P.O. No. 260 of 2021 stand
accordingly disposed of.
There will be no order as to costs.
Parties shall be entitled to act on the basis of a server copy of the
order placed on the official website of the Court.
Urgent Xerox certified photocopies of this judgment, if applied for, be
given to the parties upon compliance of the requisite formalities.
I agree.
(Kesang Doma Bhutia, J.) (Subrata Talukdar, J.)
