Madras High Court
Infosys Limited vs The Superintending Engineer on 23 May, 2024
Author: G.K.Ilanthiraiyan
Bench: G.K.Ilanthiraiyan
W.P.No.1839 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 04.04.2024
PRONOUNCED ON : 23.05.2024
CORAM:
THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN
W.P.No.1839 of 2021
and W.M.P.No.2075 of 2021
Infosys Limited,
#44, Infosys Avenue,
Electronic City, Hosur Road,
Bangalore – 560 100, India.
Also at Techno Park SEZ,
Mahindra World Cirty,
Chengalpattu,
Kancheepuram District – 603 004,
India. ...Petitioner
-Vs-
The Superintending Engineer,
TANGEDCO,
Chengalpattu. ... Respondent
Prayer: Writ Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorarified Mandamus, to call for the records
resulting in the Respondent's proceedings in Lr.No.SE/
TANGEDCO/CGL/DFC/AO/REV/AAO-HT/AS2/F.BOAB Audit/D/
1226/20, dated 07.11.2020 and HT Bill dated 08.01.2021 for the month
of December 2020 demanding of the petitioner to pay Rs.6,76,09,540.12
(Rupees six crore seventy six lakh nine thousand five hundred and forty
and paise twelve only) as Shortfall Amount/Adjustment charges and
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Page 1 of 17
W.P.No.1839 of 2021
consequently quash the same for being arbitrary and illegal and in gross
violation of the Electricity Act, 2003 and to direct the Respondent to
charge only Industrial Tariff(HT-IA).
For Petitioner : Mr.Jose John
For M/s.King & Partridge
For Respondent : Mr.P.Wilson, Senior Counsel
For Mr.L.Jaivenkatesh,
Standing Counsel
ORDER
This writ petition has been filed challenging the order
passed by the respondent dated 08.01.2021, thereby demanding the
petitioner to pay a sum of Rs.6,72,95,384/- as shortfall amount and also
ordered to bill under the commercial tariff (HT-TF III).
2. The case of the petitioner is that the petitioner has software
development facility across the globe and in India. One such facility
situated at Mahindra World City, Chengalpattu. The operation of the
petitioner involves only software development. It provides facilities like
food courts, gymnasiums, shopping outlets, banking facilities etc., as
welfare service to its 16,000 employees working out of its campus. These
facilities are not open to public and outsourced service providers offer
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services only to the employees on behalf of the petitioner. No rent is
collected from any of the service providers. Further, the petitioner does
not even charge electricity or water expenses from the service providers
who provide those facilities for the welfare of its employees. Therefore,
there is no commercial operation in the facility. The petitioner was
granted high tension service on 08.08.2005 in service connection No.447.
The tariff was fixed for the petitioner under HR tariff I-Industry.
Accordingly the petitioner has been regularly remitted the electricity
consumption charges to the respondent.
3. While being so, the petitioner received notice dated
19.07.2012 on the file of the Additional Chief Engineer, TANGEDCO
stating that the audit by the Board Office Audit Branch has pointed out
the short assessment of current consumption bill on account of incorrect
application of tariff and the petitioner was called upon to pay a sum of
Rs.6,72,95,384/-. As per the Audit Slip dated 28.12.2022, which was also
enclosed along with notice, it was claimed that the petitioner also
operates Information Technology Enabled Service and hence it should be
charged under HT Tariff III (Commercial) for the period April 2009 to
November, 2011.
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4. In response, the petitioner submitted explanation dated
25.07.2012 stating that, it was engaged only in software development and
that the industrial tariff was correctly applied. Further, the office of the
Development Commissioner, MEPZ has certified that the petitioner was
engaged in software development only in the facility. After explanation
the matter was put to rest. Therefore, the petitioner understood that the
petitioner's explanation was accepted and the claim of tariff under HT
Tariff-III was dropped. After more than eight years, on 19.10.2020, once
again the respondent made demand for the period April 2009 to
November, 2011 by the show cause notice dated 19.10.2020. It was
raised after the petitioner approached the respondent for no objection
certificate for green power. Once again, the petitioner submitted
explanation dated 28.10.2020, reiterating the facts that it was engaged
only in software development and also submitted SOFTEX returns in
support of its statement. In pursuant to the same, the respondent raised
high tension bill dated 08.01.2021 for the month of December, 2020 and
added a amount of Rs.6,76,09,540.12 as adjustment charges pursuant to
the impugned proceedings.
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5. Mr.Jose John, learned counsel appearing for the petitioner
submitted that the claim itself bared by limitation and it is illegal and
barred by law and facts. The respondent made demand as early as on
19.07.2012 and on receipt of the reply from the petitioner dated
25.07.2012, the proceeding of the demand was stopped and dropped by
the respondent. Therefore, the petitioner had paid the electricity
consumption under industrial tariff HT-IA for the period of eight years.
Now the respondent raised demand and as such the claim itself barred by
limitation of time in terms of Section 56 of the Electricity Act, 2003.
5.1. He further submitted that due to the presence of utilization
for commercial activities, the assessment of consumptions of the past and
future should be billed under commercial tariff until segregation of such
commercial activities based on Tamil Nadu Electricity Regulatory
Commission's order dated 11.08.2017 is erroneous as well as arbitrary.
The petitioner never leased out any part of its premises to any branded
service providers in its food court which is solely for its employee's
welfare and has no commercial intent. The petitioner does not even
charge any water and electricity charges supplied to the service provider.
Though the service providers are running in their brand name, it doesn't
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mean that they are running for profit. Therefore, the commercial tariff
would not apply for the service providers of the petitioner. The service
providers in turn provide services to the employees of the petitioner at
subsidized rates and hence there is no revenue for the petitioner from the
sale of foodstuff etc. The welfare activity has no commercial intent.
Therefore, the petitioner is not carried out any Information Technology
Enabled Service and it cannot be classified under commercial tariff. In
fact, the certificate issued by the Development Commissioner, MEPZ and
the SOFTEX forms are confirmed that the petitioner is carrying only
software development and does not carry any commercial activities. That
apart, the consumption of electricity power for these service providers do
not involve more than 4% of the energy consumed by them.
6. The respondent filed counter and Mr.P.Wilson, learned
Senior Counsel appearing for the respondent submitted that Section 56 of
the Electricity Act relates to disconnection of supply in default of
payment of current consumption charges. Section 56 of the Electricity
Act, has two limbs and two actions are permissible. The first one is to
recover the charge of electricity bill by filing suit and other one is to
disconnect the electricity supply till the payment of electricity charges.
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The disconnection requires 15 days notice. Clause 2 of the Section 56 of
the Electricity Act, states that there can neither be recovery nor the
electricity supply be cut-off two years after the amount became due.
However, the balance sum due must be shown as continuously as
recoverable as arrears of charges. When the demand is made, it becomes
a sum due and the non-payment every month becomes a continuing cause
of action. The said amount due is continuously shown as recoverable
from the petitioner. Therefore, the petitioner cannot rely upon sub clause
2 of the Section 56 of the Electricity Act, to non-suit the respondent.
6.1. Further, the proceeding of the respondent dated 07.11.2020
revealed that it demands to pay a sum of Rs.6,76,09,540.12 and to bill the
consumption under the commercial tariff until segregation of commercial
activities. Further, there are different activities claimed to be for staff
welfare like food court, shopping outlets, gymnasium, auditorium etc., in
different blocks in the petitioner campus. But there is no segregation or
separate connection and they are not billed separately. The Tamil Nadu
Electricity Regulatory Commission of the year 2017, mandates that
supply used for creating facilities for the compliance of Acts/Laws or for
the facilities incidental to the main purpose of the establishment of the
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consumer, such as facilities extended to their employee/students/patients/
residents as the case may be, the premises of the consumer, shall be
considered to be bonafide purpose, irrespective of whether there are
outsourced to a third party of provided by the consumer himself.
6.2. However, if such facilities extended to the public, or if
part/full premises are leased/rented out to a service provider like food
outlets present in food court, which provide service in their own name,
the energy consumption to such facilities shall be metered by the license
separately and only the energy charges under appropriate LT tariff. Such
metered energy consumption shall be deducted from the total energy
consumption registered in the main meter of the HT/EHT supply for
billing. Accordingly, if the facilities are extended to the public or the
premises are leased out to service provider which provides service in their
own name or rent is collected, then the energy consumption must be
metered separately.
6.3. Admittedly, the petitioner licensed its premises to its service
providers on the agreement and collecting certain amounts from the
service providers. Hence, the respondent will take decision after
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inspection. Therefore, the respondent cannot be precluded from deciding
the applicability of the tariff on the basis of the facts available. After
inspection the decision will be taken on the basis and also on the follow
up action will be taken.
7. Heard the learned counsel appearing on either side and
perused the material placed before this Court.
8. On perusal of the license agreement filed by the respondent
between the petitioner and its service provider revealed that the service
providers are not paying any rent for the premises which is provided to
them and also for the electricity charges, water charges for their portion.
However, the petitioner collected license fee from its service providers.
Though the service providers of the petitioner are not paying any rent or
electricity charges and water charges for their portion, which is provided
to them to run their business, the service providers are running their
business to the petitioner's employees with profit. No service provider is
running their respective business on subsidized rate to the employees of
the petitioner.
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9. Further all the service providers are running their business in
their brand name viz., Murugan Idly Shop, Apollo Pharmacies Limited,
ICICI Bank etc., which is very familiar to the general public. For example
no bank would operate on subsidized rate such as for low interest. No
food provider would sell the food without any profit that too, all the food
providers are running their business in their own brand name.
10. Insofar as the contention raised by the learned counsel
appearing for the petitioner regarding limitation, the learned Senior
Counsel appearing for the respondent relied upon the judgment of the
Hon'ble Supreme Court of India reported in (2022) 2 SCC 25 in the case
of Union of India and ors Vs. N.Murugesan and ors, which held as
follows :-
"27.2. State of Punjab v. Dhanjit Singh Sandhu: (SCC
pp. 153-54, paras 22-23 & 25-26)
"22. The doctrine of "approbate and reprobate" is
only a species of estoppel, it implies only to the conduct of
parties. As in the case of estoppel it cannot operate against
the provisions of a statue. (Vide CIT v. MR. P. Firm Muar.)
23. It is settled proposition of law that once an order
has been passed, it is complied with, accepted by the other
party and derived the benefit out of it, he cannot challenge
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it on any ground. (Vide Maharashtra SRTC v. Balwant
Regular Motor Service.) In R.N. Gosain v. Yashpal Dhir
this Court has observed as under: (R.N. Gosain case, SCC
pp. 687-88, para 10)
"10. Law does not permit a person to both approbate
and reprobate. This principle is based on the doctrine of
election which postulates that no party can accept and
reject the same instrument and that a person cannot say at
one time that a transaction is valid and thereby obtain some
advantage, to which he could only be entitled on the footing
that it is valid, and then turn round and say it is void for the
purpose of securing some other advantage"
11. Thus, the doctrine of election is based on the rule of estoppel
- the principal that one cannot approbate and reprobate is inherent in it.
The doctrine of estoppel by election is one among the species of law and
the person may be precluded by way of his actions or conduct, or silence
when it is his duty to speak, from asserting a right which he would have
otherwise had. Thus, a party cannot be permitted to blow hot-blow cold,
fast and loose or approbate and reprobate. Where one knowingly accepts
the benefits of a contract or conveyance, or of an order, the person is
estopped from denying the validity of or the binding effect of such
contract or conveyance or order upon himself. This rule is applied to
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ensure equity, however, it must not be applied in such a manner so as to
violate the principles of what is right and of good conscience.
12. The above dictum has been relied upon by the petitioner that
once the respondent accepted the explanation submitted by the petitioner
for the show cause notice dated 19.07.2012 as if the petitioner is engaged
only in software development and industrial tariff was rightly applied to
the petitioner and thereafter after the period of eight years once again
issued notice dated 19.10.2020, stating that the petitioner is also operated
and engaged in information technology enabled services along with
commercial activities.
13. Further, the petitioner's premises was inspected on
04.12.2020. The service connection is being under tariff HT-IA industrial
tariff, from the date of service connection. The load details of available
industrial and commercial establishment such as food court, shopping
outlets, food catering, gymnasium, auditorium, mini theater, hospital
facilities have also been taken into consideration. On inspection,
following load utilized by the service providers of the petitioner as
follows :-
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A. Food Courts:-
Sl.No Name of the private vendors Load in KW
1 Murugan Idly shop 15.35
2 Kannan coffee 36.61
3 Carnival 103.0
4 Dhal Roti 9.0
5 Clay over 6.0
6 Frootz 3.0
7 Sri Yoga Hayagriver 8.2
8 Sandheepa 20.5
9 Tulsi Shop 65.0
10 Chair Brother 8.0
Total 274.66 or 275
B. Shopping complex :-
Sl.No Name Load in KW
1 ICICI Bank 8.0
2 Future Lifestyle Fashion Limited 3.5
(Indigo Nation)
3 Aditya Birla Retail Limited (MORE) 6.0
4 PRISM Corporation Pvt. Ltd. 3.5
(ODYSSEY)
Total 21.0
C. Club House & Hospital Facilities (First Aid Center):-
Sl.No Name Load in KW
1 Lifetime Wellness RX International 15.0
Ltd., (APOLLO) & APOLLO
Pharmacy
Total 90
Out of total load availed by the petitioner viz., 9550 KVA, the petitioner's
service providers used the electricity power for commercial purpose to
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the extent of 386 KW. As per the Board Memo No.77 dated 02.02.2008
and as per the Tamil Nadu Electricity Regulatory Commission's tariff
order dated 15.03.2003, the basic service providers and IT enabled
services are to be charged under HT tariff III for HT services and LT
tariff V for LT services. The information technology enabled services
including the business process outsourcing.
14. On perusal of audit enquiry report dated 20.05.2009 revealed
that the petitioner is engaged in the activities of software development
and also information technology enabled services as certified by MEPZ,
Chennai. Based on the Board circular dated 02.02.2008, all the
companies engaged in the activities of Information Technology Enabled
Services should be billed under the commercial tariff. No separate means
was adopted to ascertain the activity of the company and as such the bills
were rendered under HT Tariff I Industry based on the certificate issued
by MEPZ, Chennai. Hence, in as much as the certificate provides proof of
the petitioner being engaged in both software development and
Information Technology Enabled Service, within the same premises, and
it is appropriate to adopt higher tariff which is the norms, in the case of
services engaged in two types of activities, within the same premises.
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Therefore, the respondent ought to have adopted commercial tariff for the
petitioner. Non-adoption of the same has resulted in loss of revenue to the
extent of Rs.4,50,18,325/-. Further on perusal of subsequent demand, it
was clearly mentioned about the amount due from the petitioner for the
amount calculated under the commercial tariff in respect of these service
providers. Therefore, the judgment cited by the learned counsel appearing
for the petitioner is not applicable to the case on hand.
15. Further, it also cannot be said that the demand made by the
respondent barred by limitation as per Sub Clause 2 of Section 56 of the
Electricity Act. As per the Tamil Nadu Electricity Regulatory
Commission's order No.3 of 2010 dated 31.07.2010, Clause 9.10.4.8, the
HT/LT services of information technology enabled services or private
communication providers will be charged under HT tariff III or LT tariff
V. Accordingly, the different to be collected from the petitioner from
April, 2009 to August, 2010 is Rs.2,34,85,411/- under the HT tariff III.
For the period from August, 2017 to February, 2024, the different amount
to be collected from the petitioner is to the tune of Rs.7,12,51,028/- under
HT Tariff III.
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16. In view of the above discussions, this Court finds no
infirmity or illegality in the proceeding issued by the respondent and the
writ petition is devoid of merits and liable to be dismissed. Accordingly,
the Writ Petition stands dismissed. Consequently, connected
miscellaneous petition is closed. There shall be no order as to costs.
25.03.2024
Index : Yes/No
Speaking/Non Speaking order
Neutral Citation : Yes/No
rts
To
The Superintending Engineer,
TANGEDCO,
Chengalpattu.
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G.K.ILANTHIRAIYAN. J,
rts
ORDER IN
23.05.2024
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