Himshila Ferro Alloys Pvt. Ltd. ... vs Damodar Valley Corporationand ...
2023 Latest Caselaw 5106 Cal

                     In the High Court at Calcutta
                    Constitutional Writ Jurisdiction
                             Appellate Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                           WPA No. 7644 of 2023

              Himshila Ferro Alloys Pvt. Ltd. and another
                                  Vs.
                Damodar Valley Corporationand others

     For the petitioners           :    Mr. Subir Sanyal,
                                        Mr. Siddhartha Banerjee,
                                        Mr. Debasish Karmakar,
                                        Mr. Arya Nandi,
                                        Mr. Parikshit Lakhotia

     For the DVC                    :   Mr. Joydip Kar,
                                        Mr. Prasun Mukherjee,
                                        Mr. Deepak Agarwal

     Hearing concluded on          :    09.08.2023

     Judgment on                   :    17.08.2023



     Sabyasachi Bhattacharyya, J:-



1.   The conspectus of the challenge is very short. The petitioner no.1-

     Company, of which the petitioner no.2 is a director, was a consumer

     of electricity from the respondent no.1-Damodar Valley Corporation

(DVC). However, due to non-payment of electricity charges, the

connection of the petitioner no.1 was severed. Subsequently, the

petitioners sought restoration of the connection upon payment of the

dues.

2. The DVC raised a bill, inter alia, stipulating a particular amount

payable as security deposit. The present challenge has been thrown

by the petitioners only against the quantum and basis of calculation

of the security deposit.

3. As a brief aside, a challenge, being WPA No.169 of 2023, was preferred

in connection with the alleged previous dues, which came up for an

interlocutory order before a co-ordinate Bench. Certain directions of

payment were passed therein. However, those issues are not gone

into now since the parties do not agitate those herein.

4. Learned counsel for the petitioner argues that there is disparity in the

amount of security charges claimed by the DVC at different points of

time. Whereas, when the petitioner no.1 was enjoying electricity

previously, with a contract demand of 0.9 MVA, the security deposit

charged by the DVC was Rs.23,49,000/-. However, although the

contract demand at present is 0.5 MVA, which is about half the

previous contract demand, the security deposit charged is about

double, to the tune of Rs.43,23,000/-. Ex facie, such claim is

exorbitant, it is argued.

5. Learned counsel for the petitioner next contends that the DVC is

taking a contradictory stand, once insisting that the connection to be

given to the petitioners would be a reconnection, thereby implying that

the old connection is subsisting, and, in other places, while assessing

security deposit, proceeding on the premise that it will be a new

connection.

6. Apart from such contradiction, the petitioners also argue that the DVC

ought to give credit to and adjust the security deposit still lying with

the DVC in connection with the previous deposits made by the

petitioners.

7. Lastly, learned counsel for the petitioners submits that the load factor

of 0.65, taken by the DVC as the basis of calculation of the security

deposit is without any reasonable basis whatsoever. Such whimsical

assessment by the DVC has unnecessarily raised the security deposit,

it is argued.

8. Learned senior counsel appearing for the DVC submits that there has

been no contradiction in the stand of the DVC. Whereas the petitioner

was a consumer previously, the said jural relationship between the

petitioner and the DVC was snapped after 180 days from the

disconnection of electricity, in terms of the relevant clause of the

agreement between the parties as well as the extant WBERC

Regulations.

9. It is argued that there are different variables for calculating the

security deposit. The load factor is roughly equivalent to the contract

demand divided by the gross energy. It is submitted that the gross

energy consumed by the petitioner on previous occasions varied from

time to time, which led to the calculation of security deposit on such

occasions.

10. It is further argued that there have been two tariff revisions since the

previous calculations, which also contributed to the increase of the

security deposit. Learned senior counsel places reliance on the copies

of such tariff revision orders, which have been annexed to the

affidavit-in-opposition of the DVC.

11. Learned senior counsel reiterates that the contract between the

parties ended after 180 days from disconnection and the fresh

connection is to be treated as a new connection.

12. Thus, the basis of calculation of the security deposit, including the

load factor, is the demand of the petitioner. It is, in any event, subject

to adjustment after twelve months, based on the actual consumption

by the consumer, as per the relevant clause in the agreement between

the parties and the prevailing Regulations of the WBERC. It is

submitted that the previous balance of security deposit amount has

already been adjusted, as reflected in the communication by the DVC

dated January 4, 2023.

13. Upon hearing learned counsel for the parties, it is clearly revealed

from the communication of the DVC dated January 4, 2023, that the

DVC calculated the security deposit to be paid by the petitioner on the

contract demand of 0.5 MVA to be Rs.43,23,000/-.

14. In the same breath, the DVC has clarified that the security deposit

available after invocation of bank guarantee of Rs.23.49 lakh was

Rs.8,56,442/. After adjusting necessary payables, the said remaining

balance has been deducted from the total amount of security deposit

of Rs.43,23,000/-, arriving at the figure of Rs.34,66.558/- which is

the amount claimed by the DVC from the petitioner at present.

15. Insofar as the alleged contradiction in stands of the DVC is concerned,

the said argument cannot be accepted. The expression "reconnection"

is used, wherever it is, obviously since the petitioner had been

enjoying electricity from the DVC in the recent past, and need not per

se connote that the previous contract is subsisting.

16. Clause 23 of the Power Supply Agreement between the parties

stipulates that if the power supply to any consumer remains

disconnected continuously for a period of 180 days, where the

disconnection has been effected in compliance with any of the

provisions of the Electricity Act, 2003 and clauses of the agreement,

the agreement with the consumer shall be deemed to have been

terminated with consequential effect on expiry of the said period of

180 days.

17. Apart from that, Clause 4.6.1 of Regulation 55 of the WBERC, the

„Electricity Supply Code‟, also contains the same stipulation. Since,

admittedly, 180 days have passed after the previous disconnection, for

all practical purposes, the agreement between the parties has

terminated by operation of the said provision and the connection now

sought by the petitioner would be a new connection for all practical

purposes.

18. Clause 16 of the agreement between the parties provides for the

charging of security deposit. In case of a new applicant, the estimated

consumption based on its declared load shall be treated as an

advance for the consumer, which shall be appropriately adjusted with

the amount of security deposit that would eventually be determined

on the basis of its first 12 months‟ consumption when the latter time-

period is over. The provision as to existing consumers is not required

to be looked into, since the present application is to be treated is one

for new connection, as discussed above.

19. Hence, in any event, the challenge preferred in the present writ

petition is premature, since the assessment made is merely on the

basis of an estimate, arrived at on the basis of the declared load of the

petitioner, and shall be appropriately adjusted, by being treated to be

an advance, after the first 12 months‟ consumption.

20. The petitioners also allege disproportionate variation between load

factor and security deposit as opposed to previous periods when the

earlier contract was subsisting. However, the said argument is not

tenable. The bill dated April 2, 2020, annexed by the petitioners to

the writ petition, shows the load factor to be 4.93 and the gross energy

consumed, in KWH, is 20,320, whereas in the bill dated May 2, 2020,

that is, for the very next month, the load factor percentage is 0.36

whereas the gross energy in KWH is only 510. Again, in the bill dated

July 1, 2020, the load factor percentage is 3.49 and the gross energy

is 11,960. Thus, a perusal of the previous bills shows that the load

factor varied hugely over a period of only a few months, being tied up

with the gross energy consumed by the petitioner no. 1 during the

said period vis-à-vis the contract demand, although the contract

demand remained 0.9 MVA all along. Hence, the load factor is not the

only determinant of security deposit. At this juncture, when a new

connection is to be given, only a reasonable estimate can be made by

the licensee, which has precisely been done by the DVC.

21. In fact, if an average of the load factor for the said period is taken, it

would much exceed 0.65, which has been estimated as load factor in

the present case by the DVC.

22. Thus, the average load factor of 0.65, calculated by the DVC as the

basis of arriving at the figure of security deposit, cannot be faulted in

any manner whatsoever.

23. The challenge of the petitioner to the break-up of calculation for the

security deposit revolves primarily around the average load factor.

Insofar as the other factors are concerned, no specific challenge has

been thrown. Hence, those are not gone into.

24. Hence, on a comprehensive perusal of the materials on record and the

relevant law and the provisions of the contract between the parties,

the calculation of the DVC in respect of the security deposit payable

by the petitioner for the connection-in-question, to the tune of

Rs.43,23,000/-, is not exorbitant or arbitrary.

25. Moreover, the DVC has given due credit to the current amount lying

with it. After adjusting current dues and invocation of bank

guarantee of Rs.23.49 lakh, the remaining amount has been deducted

from the security deposit calculated, after which, the claim of DVC is

to the tune of Rs.34,66,558/-, which is fully justified.

26. Hence, there is no necessity to interfere with the impugned

assessment of security deposit in any manner whatsoever.

27. Accordingly, WPA No.7644 of 2023 is dismissed on contest without,

however, any order as to costs.

28. Urgent certified server copies, if applied for, be issued to the parties

upon compliance of due formalities.

( Sabyasachi Bhattacharyya, J. )