Kerala High Court
Zerone Consulting Pvt Ltd vs K.S.E.B on 3 January, 2022
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN
MONDAY, THE 3RD DAY OF JANUARY 2022 / 13TH POUSHA, 1943
WP(C) NO. 19554 OF 2013
PETITIONER:
M/S.ZERONE CONSULTING PVT LTD
FIRST FLOOR, GCDA COMPLEX, JOURNALIST COLONY ROAD,
KALOOR, KOCHI - 17., REP. BY ITS DIRECTOR, ASHIQ AL
JHAN.
BY ADVS.
S.ANANTHAKRISHNAN
N.K.SUBRAMANIAN
RESPONDENTS:
1 KERALA STATE ELECTRICITY BOARD
REP. BY ITS SECRETARY, VYDHYUTHIBHAVAN, TRIVANDRUM -
695 001.
2 THE SUB-ENGINEER
KSEB, ELECTRICAL SECTION, KALOOR, KOCHI - 682 017.
3 ASSISTANT ENGINEER
KSEB, ELECTRICAL SECTION, KALOOR, KOCHI - 682 017.
4 DEPUTY CHIEF ENGINEER
KSEB, ELECTRICAL CIRCLE, POWER HOUSE ROAD, KOCHI -
682 018.
SMT.NAZEEBA.O.H.,SC, KERALA STATE ELECTRICITY BOARD
SRI.B.PREMOD, SC,KERALA STATE ELECTRICITY BOARD
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
05.10.2021, THE COURT ON 03.01.2022 DELIVERED THE FOLLOWING:
W.P.(C) 19554/2013 2
JUDGMENT
The petitioner is a company engaged in the development of
software and related services and certified to be so by the Software
Technology Parks of India (STPI). The petitioner's premises are private
bonded warehouses and the Commissioner of Customs has approved the
premises as 100% Export Oriented Units (EOU) by Ext.P3 license.
According to the petitioner, due to paucity of space, petitioner has taken
on lease additional space of 1761 Sq. Ft. for monthly rent at Door No.
36/2214C of the Corporation of Cochin and the said space is also
utilized for software development and the same has been certified and
recognized by the Director of STPI and approved as a private bonded
warehouse and 100% EOU by the Commissioner of Customs in Ext. P3
license. Out of this total area of 1761 Sq. Ft., an extent of 500 Sq. Ft.
was used by the petitioner for training its employees and prospective
employees under the trade name 'EazyLearn', as part of software
development activity. According to the petitioner, the cost of the training
is usually charged to the prospective employees and the cost is refunded
if the prospective employees are not absorbed by the Company after the
training.
2.The petitioner applied for electricity connection to the additional
space taken on lease under LT-IV tariff as the petitioner is engaged in
the software development business in the said premises. The petitioner
was provided electricity connection under LT-IV tariff by the Board.
3. While so, the 2nd respondent, the Sub-Engineer inspected the
said premises and issued Ext. P7 site mahazar stating that the petitioner
is also engaged in training activity and recommended to change the
tariff to the Training Center's tariff. In Ext. P7, it is also stated that the
petitioner has exceeded the sanctioned connected load. The petitioner
filed Ext. P8 explanation objecting to the findings in the mahazar and
requested for a joint inspection. However, without reference to Ext. P8
explanation, the petitioner was issued with Ext. P9 provisional short
assessment bill for Rs. 84,685/-. According to the petitioner, while the
recommendation in Ext. P7 site mahazar was only to change the tariff to
Training Center's tariff viz; LT-VI(B), the tariff was changed from LT-IV
to LT-VII (A) (Commercial tariff).
4. Challenging Ext. P7 site mahazar, Ext. P9 provisional short
assessment bill and the tariff category change, the petitioner filed an
appeal before the Assistant Engineer, the 3rd respondent. However, the
3rd respondent rejected the appeal by Ext. P10 order. The petitioner,
therefore, preferred Ext. P11 appeal before the Deputy Chief Engineer,
the 4th respondent. As per Ext. P13 order, the 4th respondent rejected the
appeal. According to the petitioner, no plausible reasons have been
stated in Ext. P13 to justify the change in tariff and the calculation of
connected load therein is incorrect and vitiated by errors apparent on the
face of the record.
5. The petitioner challenged the action of the respondents before
the Consumer Disputes Redressal Forum and the said Forum partly
allowed the complaint holding that the petitioner has to be charged
under LT VI (B), ie. Training centers' tariff. However, the State
Commission reversed the said order and dismissed the complaint
holding that the Forum lacks jurisdiction to entertain the complaint.
Accordingly, the petitioner has preferred this writ petition challenging
Ext. P7 site mahazar, Ext. P9 bill, Ext. P10 and Ext. P13 orders and the
change of tariff to LT-VII(A) and the bills issued thereunder.
6. A counter affidavit is filed on behalf of the respondents resisting
the averments in the writ petition. It is stated therein that an electric
connection bearing Consumer No.8296 was given to the petitioner on
13.10.2006 under LT-IV tariff having a connected load of 32960 Watts.
However, on an inspection conducted on 09.05.2007 by the officials of
the Board, it was found that the petitioner is running a firm in the same
premises in the name 'Easy Learn Training Project and Placement'. It is
further stated that the said firm is a training center, for IT and other
professionals and providing placement in various companies and the
same was displayed in the display board of the Company and thus there
is misuse of energy by taking electric connection in a considerably
lower tariff and using for higher tariff purpose. As per the Board rules,
whenever a consumer is using a single connection for different purposes
covering under different tariffs, the consumer should be assessed totally
in higher tariff. It is also stated that before passing Ext. P13 order, the
Deputy Chief Engineer visited the premises and came to a conclusion
that the training conducted by the firm is not part of the procedure of
production line for software development which can be billed under LT-
IV tariff and that the firm is engaged in multiple activities and therefore,
the activity for which higher tariff is applicable is to be considered for
the whole installation and the decision to apply LT-VII (A) tariff is right.
With regard to the contentions of the petitioner regarding the calculation
of connected load, the counter affidavit states that the calculation is
correct and the same was verified by the appellate authority.
7.The petitioner has filed a reply affidavit reiterating the
contentions in the writ petition and traversing the averments of the
respondents in the counter affidavit. The petitioner has also filed an
interlocutory application dated 17.12.2020 in the writ petition stating
that in view of Covid-19 pandemic, the petitioner has surrendered the
building to which the connection was obtained to the landlord and for
direction to the respondents to consider their request dated 29.07.2020
to dismantle the connection given in the name of the petitioner.
8.I have heard Sri. S. Ananthakrishnan, the learned counsel for the
petitioner and Sri. B.Premod, the learned standing counsel for the
Kerala State Electricity Board.
9.According to Sri. Ananthakrishnan, training imparted to
employees and prospective employees under the trade name 'EazyLearn'
is integral part of petitioner's software development activity and
therefore, the tariff applicable to the petitioner is LT-IV. The learned
counsel submits that the Deputy Chief Engineer has misconstrued
'EazyLearn' as a 'firm', whereas the same is part of petitioner's software
development company. Even if it is assumed that the petitioner is
engaged in training activity, the higher tariff applicable for the whole
installation can only be LT-VI(B), the one applicable to training centers
and not LT-VII(A). According to the learned counsel, the reasons stated
in Ext. P13 order by the Deputy Chief Engineer to apply LT-VII(A)
tariff is not based on materials but on conjunctures and surmises. Sri.
Ananthakrishnan also contends that the finding regarding Connected
Load is also factually incorrect and there are errors apparent on the face
of the record in Ext.P13 order. The learned counsel took me through
Ext.P11 appeal memorandum filed before the Deputy Chief Engineer
wherein it is averred that the total load of the air conditioners comes to
18.3 tons (8.3+5.5+2.5+2) and that of the UPS comes to 7.5 KVA. In
Ext. P13, the Deputy Chief Engineer has taken the total tonnage of the
air conditioners as 25.8 tons (18.3 + 7.5) and calculated the total load of
air conditioners as 32.64 KW and further added 7.5 KVA towards power
rating of UPS. The learned counsel contends that if this error is rectified,
the connected load of the petitioner will be well below the sanctioned
load. Sri. Ananthakrishnan submits that the respondents have not
rebutted the contentions of the petitioner regarding the calculation of
connected load.
10. Per contra, Sri. Premod would contend that the Deputy Chief
Engineer after inspecting the premises of the petitioner found that the
training conducted by the petitioner is not part of software development
activity which can be billed under LT-IV tariff meant for industrial
purpose and that since the firm is engaged in multiple activities, the
activity for which higher tariff is applicable is to be considered for the
whole installation and therefore the decision to apply LT-VII (A) tariff
cannot be faulted. Sri. Premod also submits that power plugs wrongly
included in the assessment in Ext. P7 site mahazar have been excluded
by the appellate authority while assessing the connected load in Ext. P13
and the tonnage of air conditioners was calculated as per the statement
of the petitioner in Ext. P11 and there are no errors in the calculation of
connected load.
11. I have considered the rival submissions. So far as the
contentions of Sri. Ananthakrishnan with regard to change of tariff from
LT-IV to LT-VII(A), it will be apposite to extract the findings of the
appellate authority in Ext. P13 as hereunder:-
"In the circumstances, I need verify and find out whether the
training being conducted as admitted by the appellant is a part of
the procedure or production line for software development which
can be billed under LT IV tariff. I visited the firm and the
appellant was present at site. The lady Manager at the reception
desk and the appellant informed that the trainees undergoing
training at the center will not be fully absorbed in the company.
Also it is not being done as a part of appointment but as a
commercial training package accepting a consolidate fee. On
completion if vacancy exists they will be given job in the firm
where they are doing software development also. So, this can be
considered as a firm with multiple activity and hence the one for
which the higher tariff is applicable is to be considered for the
whole installation and hence the action of applying LT VII A
tariff is correct."
The contention of the petitioner is that training imparted to employees
and prospective employees in the training center for its software export
needs is integral part of the petitioner's software development activity.
This contention was rejected by the appellate authority stating that the
trainees undergoing training at the center will be given job in the
company only if vacancy exists. This cannot be a cogent reason to arrive
at a finding that the training imparted at the center is not part of the
petitioner's software development activity. Further, there is no mention
in Ext. P13 regarding the training said to be imparted to the employees
of the company. The reasons that weighed with the appellate authority to
consider the petitioner as a firm with multiple activities are not plausible
and are based only on inferences.
12.According to the respondents, the petitioner is engaged in
multiple activities and therefore, the activity for which higher tariff is
applicable is to be considered for the whole installation. Multiple
activities of the petitioner according to the respondents are (i) software
development and (ii) training. In Ext. P7, the 2nd respondent has
recommended to change the tariff as applicable to training centers. The
tariff applicable to training centers is LT-IV (B). The activity of the
petitioner for which higher tariff is applicable is training. Being so, there
is no justifiable reason in Ext. P13 order as to why commercial tariff
under LT-VII(A) has been made applicable to the petitioner.
13.The learned counsel for the petitioner was able to demonstrate
from Ext. P11 appeal memorandum and Ext. P13 order that the finding
regarding Connected Load is factually incorrect and there is error
apparent on the face of the record in Ext.P13 order. The total tonnage of
the air conditioners was assessed by the 4th respondent inclusive of the
power load of UPS. This depicts non-application of mind on the part of
the appellate authority, the 4th respondent, in passing Ext.P13 order on a
statutory appeal.
14.Accordingly, I set aside Ext.P13 order. The 4th respondent is
directed to consider Ext.P11 appeal afresh after hearing the petitioner
through virtual or physical mode and pass appropriate orders in
accordance with law with regard to the tariff applicable to the petitioner
and the assessment of connected load. The 4th respondent shall decide
the appeal within two months from the date of receipt of a copy of this
judgment. All coercive steps against the petitioner pursuant to Ext. P9
shall stand deferred till the 4th respondent decides the appeal. Nothing
stated above shall be construed as an expression of any opinion on the
merits of the appeal. The request of the petitioner dated 29.07.2020 to
dismantle the connection given in the name of the petitioner may also be
considered appropriately, if not already done.
The writ petition is disposed of with the above directions.
Sd/-
MURALI PURUSHOTHAMAN
JUDGE
APPENDIX OF WP(C) 19554/2013
PETITIONER's EXHIBITS
EXT.P1: TRUE COPY OF LICENSE RENEWAL LETTER DT. 15/4/2010.
EXT.P2: TRUE COPY OF THE GREEN CARD ISSUED TO THE PETITIONER.
EXT.P3: TRUE COPY OF THE CUSTOMS BONDED HOUSE LICENSE.
EXT.P4: TRUE COPY OF THE LETTER DT. 27/7/2006 OF STPI
APPROVING THE NEW PREMISES.
EXT.P5: TRUE COPY OF THE TRADEMARK APPLICATION DT. 13/9/2005.
EXT.P6: TRUE COPY OF THE RELEVANT PAGES OF THE TARIFF ORDER.
EXT.P7: TRUE COPY OF SITE MAHAZER DT. 9/5/2007.
EXT.P8: TRUE COPY OF THE LETTER DT. 22/5/07 OF THE PETITIONER.
EXT.P9:TRUE COPY OF THE BILL DT. 22/5/07.
EXT.P10: TRUE COPY OF THE ORDER OF 3RD RESPONDENT DT.
30/06/2007.
EXT.P11: TRUE COPY OF THE MEMORANDUM OF APPEAL DT.18/08/2007.
EXT.P12: TRUE COPY OF THE NOTES OF ARGUMENTS DT. 18/8/2007.
EXT.P13: TRUE COPY OF THE ORDER OF 4TH RESPONDENT DT.
2/01/2008.
EXT.P14: TRUE COPY OF THE RELEVANT PAGES OF IT POLICY OF 2007
& 2012.
EXT.P15: TRUE COPY OF THE RELEVANT PAGES OF THE TARIFF ORDER.
EXT.P16: TRUE COPY OF BILL DT. 29/8/2006.
EXT.P17: TRUE COPY OF THE CERTIFICATE DT. 8/10/2010 OF THE
MANUFACTURER.
EXT.P18: TRUE COPY OF THE RELEVANT PAGES OF TERMS & CONDITIONS
OF SUPPLY 2005.
EXT.P19: TRUE COPY OF THE ORDER OF THE CONSUMER FORUM,
ERNAKULAM.
EXT.P20: TRUE COPY OF THE ORDER OF THE CONSUMER STATE
COMMISSION.
spc/
