Orissa High Court
The Executive Engineer vs M/S. Modern Zipfasto Pvt. Ltd. & ... on 18 May, 2023
IN THE HIGH COURT OF ORISSA, CUTTACK
W.P.(C) No. 5352 of 2020
In the matter of an application under Articles 226 and 227 of
the Constitution of India.
---------------------
The Executive Engineer, Electrical
(TPNODL), Bhadrak North Electrical
Division, Bhadrak ........ Petitioner
-Versus-
M/s. Modern Zipfasto Pvt. Ltd. & others
........ Opp. Parties
For Petitioner : Mr. S.C. Dash, Advocate
For Opp. Parties : None
------------------
P R E S E N T:
THE HONOURABLE SHRI JUSTICE BISWANATH RATH
AND
THE HONOURABLE SHRI JUSTICE M.S. SAHOO
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Date of hearing: 05.05.2023 Date of Judgment : 18.05.2023
------------------------------------------------------------------------------------------
M.S.SAHOO, J
Introduction
The petitioner in the writ petition has stepped into the
shoes of distribution licensee in place of the earlier licensee
(NESCO Utility), which had filed the writ petition challenging
the order dated 29.03.2019 passed in Consumer
Representation (CR) Case No.OM(II)(N)-02 of 2018 by the
Ombudsman-II, Orissa Electricity Regulatory Commission,
// 2 //
Bhubaneswar vide Annexure-8 as well as the order dated
08.12.2017 passed by the Grievance Redressal Forum,
Balasore in G.R.F.CC No.189 of 2017 vide Annexure-5.
Brief Facts
2. The predecessor of distribution licensee executed
an agreement with the opposite party no.1-consumer on
09.05.1989 for a contract demand of 78KVA. Prior to such
agreement the required electrical transformer for supply of
electricity was installed by then Orissa State Electricity
Board. It is alleged by the consumer that against his wishes,
he was compelled to construct the electricity supply line and
substation for the petitioner-distribution licensee in terms of
a scheme known as Peoples Participation Scheme (PPS). It is
further alleged that at the initial stage the transformer loss
was added to the bills of the consumer as 730 units per
month, which was opposed by the consumer and all on a
sudden a bill was raised adding extra 365 units per month
from January,1990 to July, 1997 as transformer loss in
addition to the previous 730 units per month. Such a bill
amounting to Rs.43,408.65 was served on the consumer.
Earlier writ petition before this Court
and proceeding before GRF
3. Consumer-opp.party no.1 objected the revised bill vide
his letter dated 21.04.1998, the imposition of meter rent was
also objected by the consumer-opposite party no.1 by earlier
letter dated 15.01.1998. Objection was filed by the petitioner
vide letter dated 21.04.1998 objecting the demand for
transformer loss. Then the opposite party no.1-Consumer
approached this Court by filing OJC No.19456 of 1998. This
Court by order dated 10.08.1998 directed the Consumer-
opposite party no.1 for payment of Rs.20,000/-, as an interim
// 3 //
measure, which was paid by the petitioner on 17.08.1998,
this Court vide order dated 22.06.2017 finally observed that
the petitioner may approach the statutory forum, i.e., GRF.
Following the direction of this Hon'ble Court, GRF Complaint
Case No.189 of 2017 was filed before the GRF, NESCO,
Balasore under Regulation-4 of OERC (Grievance Redressal
Forum and Ombudsman) Regulation 2004 (herein after, in
short 'Regulation 2004') contained the following prayers :
"A) Withdraw transformer loss from the account
of the petitioner.
(B) Refund excess meter rent collected from the
petitioner.
(C) Revised bills up to 08/1994 by extending 5%
relief on the energy bill to the petitioner."
4. The distribution licensee filed their counter before the
GRF giving detailed reply to the facts stated and contentions
raised by the consumer.
The GRF by a detailed order dated 08.12.2017 passed
in Complaint Case No.189 of 2017 analyzed the technical
aspects in terms of the statute and definition particularly
energy loss in transformer. The GRF relied on the provisions
as indicated herein :
"Regulation 54(3) read with Regulation 93(9) of the OERC
Distribution Code states that in case of High Tension
supply, if HT metering set cannot be readily provided and
installed, LT metering shall be provided and connected on
the LT side of the consumer's transformer, the reading of
such metering units shall be added with the average losses
in the transformer."
5. As final order, the GRF directed the following :
"In the above facts and circumstances, we are
inclined to direct the respondent to provide relief of 5%
rebate on energy charges in terms of provisions of the
applicable tariff order.
The respondent is directed to implement the order
within 30 days from the date of receipt of it.
// 4 //
Proceeding before Ombudsman of OERC
6. Being aggrieved by the order passed by the GRF, the
consumer moved the Ombudsman-II, OERC, Bhubaneswar by
filing C.R. Case No.OM(II)(N)-2 of 2018 under Section 42(5) of
the Electricity Act, 2003 read with Odisha Electricity
Regulatory Commission, Distribution (conditions of supply)
Code, 2004 (herein after in short, 'Code, 2004') with the
following prayer :
"(a) To withdraw Tr. Loss units since 1/1990 to date of
installation of HT meter, i.e., 01.04.2006
(b) To refund the excess meter rent after deducting the
landing cost of meter.
(c) To provide 5% relief to comply the order of learned
GRF, NESCO, Balasore."
7. Before the Ombudsman, the then distribution licensee
filed their counter dated 06.03.2018 and additional reply-
objection dated 07.05.2018. The Ombudsman delved into all
the relevant aspects like pleadings of the parties, relied on the
relevant notification : Orissa State Electricity Board
Notification of 1992 and Regulation 54(3) read with
Regulation 93(9) of OERC Distribution Code, 2004.
The Ombudsman, after analyzing the order and
reasoning given by the GRF, gave the following finding ; that
the GRF has not given the supporting facts and reason as to
how they have come to the conclusion that the consumer was
availing High Tension supply from the distribution licensee.
Hence, the issue of supply voltage, whether High Tension or
Low Tension needs to be examined in detail by the
Ombudsman. Only after the issue of supply voltage is settled
by the Ombudsman then the Ombudsman can go into the
issue of transformer loss or otherwise.
After a detail scrutiny and reasoning, the Ombudsman
has observed the following :
// 5 //
"The transformer loss arises only when the supply is at HT
and it is billed under HT tariff whereas the meter is
installed on the LT side. By addition transformer loss to the
energy measured by the LT meter, one can arrive at the
energy flowing at the supply point on HT side of the
transformer, and by multiplying that total energy quantity to
the HT supply tariff rate, the energy consumption charges to
be collected from the HT consumer can be calculated. Thus,
the energy consumption quantity and the tariff/rate
applicable thereon, both of these are to be considered at the
same point of sale/supply. Hence, energy is to be
measured/quantified at the same point where the tariff rate
is charges and/or being made applicable. If the consumer is
being charged at LT tariff rate, then the supply is at LT and
transformer loss cannot be added to the energy being
measured by the LT meter, and only LT tariff rate is to be
multiplied by energy measured in LT meter to arrive at the
energy consumption charges to be collected from the LT
consumer. In this regard, the argument of the Respondent
referring Regulation 54 (3) and 93(9) of the O.E.R.C.
Distribution (Conditions of Supply) Code 2004, is not
appropriate, since this clause is applicable for HT supply
consumers. Further, the argument of the respondent relying
on their permission letter dated 13.03.1989 in paragraph-6
of the then Executive Engineer, BED, Bhadrak, is also not
appropriate since this is in violation of the prevailing rules
and regulations and also against the subsequently executed
agreement dtd. 09.05.1989, which clearly states the supply
to be at LT and rightly does not speak of any addition of
transformer loss. Hence, the finding of GRF in this matter is
over-ruled. Now, it needs to be examined as to when the
petitioner consumer under MI category got convert from LT
to HT supply, especially when there is no subsequent
explicit written agreement executed by the parties in this
respect.
Therefore, in consideration of the above facts and
reasons, as regards reclassification of consumer from MI
(LT) to MI (HT) category, both the parties are directed to
execute a supplementary agreement for HT supply in
accordance to Regulation 82 of OERC Supply Code 2004
with retrospective effect from May, 2004, in order to
formalize the unwritten agreement continuing since then by
treating the consumer as HT category consumer. Other
requirements of Regulation 82 in this respect are deemed to
have been complied with and prior to the month of May
2004. Further, since the consumer os treated to be under
MI (HT) category since May 2004, when the metering is
continuing on LT side till December, 2005, hence
transformer loss can be kept added during the above period
for calculation of electricity/energy consumption bill.
// 6 //
Accordingly, the order of the learned GRF in this matter is
set aside."
8. Regarding revision of excess rent collected by the
licensee towards meter after deducting the landing cost of the
meter, Ombudsman has observed the following :
"From the aforesaid arguments of both the parties
and after going through the observation of the learned
GRF, it has been observed that the Hon'ble OERC in their
RST order for FY 2013-14 at its Note (ii) allowed the
respondent to collect meter rent for 60 months from the
existing and new consumers, and the same order is
continuing till date. As the petitioner is now claiming for
refund of excess meter rent, this Authority is of opinion
that the aforesaid Tariff Order is applicable to the present
petitioner. Hence the respondent is allowed to
collect/retain meter rent from the petitioner for 60 months
since its installation/replacement by the respondent
through monthly energy bills and not to collect meter rent
any further after lapse of 60 months. It is seen from the
submission of the parties that the respondent licensee has
installed it's LT meter replacing the original LT meter
belonging to the consumer on 20.10.1997. Hence, excess
meter rent collected from the petitioner beyond 60 months,
(i.e., from November 1997) by the respondent is to be
refunded to the petitioner through adjustment in the
subsequent monthly energy bills of the petitioner.
Accordingly, the order of the learned GRF in this respect is
set aside.
9. Regarding the prayer to provide 5% rebate on energy bill
by the licensee to comply the order of GRF, Balasore, the
Ombudsman has observed the following :
"From the aforesaid arguments of both the parties, it is
seen that the petitioner has prayed before this Authority to
allow 5% rebate during the aforesaid period (i.e. in effect
treating himself as taking supply on HT), whereas
simultaneously and surprisingly he has also prayed for
revision of bills withdrawing transformer loss since he
demands to be considered as LT consumer during the said
period. Both these prayers of the petitioner appear to be
contradictory in nature. This Authority, in its above
observations, has already concluded that the petitioner is
a LT consumer till 04/2004, and accordingly have set
aside the order of the learned GRF in this respect. Only in
case of HT consumer, 5% rebate is allowed to the
consumers, which is as per the then rules and regulations
// 7 //
in force and accordingly the learned GRF has ordered for
providing 5% rebate to the consumer. Since now it has
clearly been established that the petitioner is a LT
consumer during the relevant period, relief regarding 5%
rebate is not allowed to the present petitioner. In this
regard, the order dated 08.12.2017 in Case No.189 of
2017 of the learned GRF, Balasore is set aside.
10. The operative portion of order passed by the
Ombudsman is reproduced herein :
"In view of the above facts and circumstances, this
Authority pronounces the following :
1. The respondent is directed to revise the bills of the
petitioner by treating him as LT consumer and
withdrawing the transformer loss units from the account of
the petitioner from the month of initial power till April,
2004, and as HT consumer including transformer loss from
May 2004 till December, 2005.
2. The respondent is directed to retain 60 months meter
rent from the petitioner w.e.f. the month of 11/1997 with
prevailing rate of meter rent as applicable during that
period in accordance to rules and regulations in force, and
refund the excess meter rent collected beyond 60 months
to the petitioner through adjustment in the subsequent
monthly energy bills on account of the petitioner.
3. The DPS amount on excess billing needs to be
accordingly withdrawn/adjusted and the revised bill is to
comply with the provisions of Regulation 92 of OERC
Supply Code 2004, read with other applicable statutory
provisions in force."
Submission and contentions raised on behalf of the petitioner
11. Heard Mr. S.C. Dash, learned counsel for the
Distribution Licensee.
Since the notice have not yet been issued and the
matter is pending since 2020, in view of the conclusions of
this Court as would subsequently follow that the matter does
not involve any substantial question of law, no notice were
issued to the opposite parties as the matter is dealt with and
disposed of based on the pleadings of the parties already on
record before GRF and the Ombudsman. It be made clear
// 8 //
that the case at hand has been decided at the stage of fresh
admission.
12. Learned counsel for the petitioner with all vehemence at
his command submitted that both the GRF and Ombudsman
have exceeded their respective statutory power and
jurisdiction to entertain the complaints which are barred by
time and the claim raised by the consumer are fake, vague
and baseless. The Ombudsman's calculation on transformer
loss is based on wrong adoption of method of calculation. It is
further contended that the direction of the Ombudsman to
refund the excess rent collected as meter rent by the licensee,
is contrary to the Regulations of Orissa State Electricity Board
(General Conditions of Supply) Regulations, 1981.
13. Learned counsel for the petitioner-licensee further relies
on paragraph-23 of an order passed by a Division Bench of
this Court dated 26.08.2022 in W.P.(C) No.12735 of 2019
(The Executive Engineer, Electrical (NESCO Utility)
Baripada Electrical Divn., Baripada, Dist. Mayurbhanj v.
M/s. Kamadhenu Agro based Ind.(P) Ltd., Mayurbhanj)
which is quoted herein :
"23.In this regard, we may refer to Regulation 54(3) of the
Code, 2004 which provides that in the case of all new
high-tension supplies, HT metering units shall be provided
and installed. In case where LT metering unit is provided
at L.T. side, all L.T. metering units shall be converted to
H.T. metering units. For existing L.T. metering units
connected on the L.T. side of consumer's transformers, the
reading of such metering units, shall be added with the
average loss in the transformers calculated in terms of the
formula given thereunder. As such, the opinion that no
transformer loss can be charged on the consumer if it is
below 70 KVA is without any tangible basis. Even it has
not been demonstrated that the consumer had asked for
reassessment of terminating the conditions of supply."
// 9 //
Analysis and Conclusion
14. Having heard learned counsel for the petitioner and
having gone through the pleadings before the GRF as well as
Ombudsman, this Court is of the view that there is no error
apparent on the face of the record in the order passed by the
Ombudsman as the statutory authority has dealt with the
rival contentions of the consumer-opposite party no.2 herein
and the supplier of the electricity/distribution
licensee/petitioner herein. The relevant factual aspects have
been noted in detail and the provisions of law have also been
referred to.
15. A careful scrutiny of the pleadings of the erstwhile
distribution licensee would show that the objection regarding
the claims being barred by time, were raised before the GRF,
but the GRF went on to adjudicate the matter on merit
thereby rejecting the plea of the limitations by the licensee,
and the order passed by the GRF to a large extent was in
favour of the licensee.
It has also to be noticed, the bill was raised by the
licensee for the period from January, 1990 to July, 1997 on
10th December, 1997 and the consumer objected the said bill
on 21.02.1998, i.e., within two months the consumer issued a
letter in objection thereafter on 21.04.1998 approached this
Court by filing OJC No.10456 of 1998 which was disposed of
by order dated 22.06.2017 directing the petitioner to
approach GRF.
16. Considering the above sequence of representation and
litigation, the plea of petitioner before the GRF and the
Consumer Representation Case before the Ombudsman
being barred by limitation which was rejected by both the
forums, is also rejected by this Court. It has also to be noted
// 10 //
that after disposal of the writ petition on 22.06.2017,
directing the consumer to approach the statutory forum
'GRF', the Consumer Complaint case was filed before the GRF
on 21.08.2017.
17. The following has been stated at paragraph-18 of the
writ petition to assail the order passed by the Ombudsman.
The averments are reproduced herein :
"18. For that the learned Ombudsman while deciding the
2nd issue/claim for refund of excess meter rent as alleged
to have been collected w.e.f. the month of 11/1997 has
based his finding on the RST Order of OERC for the FY.
013-14 which speaks for collection of meter rent for 60
months only where cost of the meter to be realized from
the consumer is not ascertained. The above tariff order of
OERC has no retrospective application for the past periods
from 1997 being contrary to Regulation-22 (a) of the OSEB
(General Conditions of supply) Regulations, 1981 as was
prevalent then. Since the meter was supplied by the
Board, the Consumer was liable to pay the meter rent so
long the meter functions 'OK'. Hence the impugned Order
vide Annexure-8 being contrary to the aforesaid
Regulation is not sustainable in law & as such liable to be
quashed."
Evidently, such plea as contained in para-18 of the writ
petition was not raised by the licensee in their counter dated
06.03.2018 and additional reply-objection dated 07.05.2018
(Annexure-7 series) before the Ombudsman.
Further, the finding by the Ombudsman regarding
tariff order of the Financial Year 2004-05 and onwards,
issued by the Orissa Electricity Regulatory Commission
clarifying about the meter rent, i.e., no meter rent should be
collected by the licensee after recovery of the landing cost of the
meter, has not been denied by the petitioner-licensee.
18. On going through the order relied on by the petitioner-
licensee dated 26.08.2022 passed by a Division Bench of this
Court in WPC No.12735 of 2019, particularly paragraph-23,
it has to be held that the said decision is of no avail to the
// 11 //
distribution licensee as in the case at hand, the Ombudsman
in its award has directed that the consumer is to be treated as
LT consumer from the date of initial power supply till April,
2004 and as HT consumer from May, 2004 till December,
2005. Once the consumer is treated to be as LT consumer as
per the existing agreement, the principle followed
in :Kamadhenu Agro (supra) will not apply. Further if the
petitioner is treated as HT consumer, the principles of
Kamadhenu Agro (supra) would also not apply inasmuch as
the order in Kamadhenu Agro (supra) was rendered in the
peculiar facts of that case where the HT meter unit could not
be provided by the licensee and instead LT metering unit was
provided though the consumer was treated as HT consumer
as per the agreement.
In the present case, the consumer is treated as a LT
consumer as per the agreement between the consumer and
the licensee for a certain period up to April, 2004 and
thereafter it is directed to be treated as HT consumer from
April, 2004 till December, 2005.
Scope of Judicial Review by this Court of the findings by the
statutory bodies like GRF and Ombudsman of OERC
19. It would be apt to refer to the decisions rendered by the
Hon'ble Supreme Court. In the case of Reliance
Infrastructure Limited v. State of Maharashtra [(2019) 3
SCC 352], the Hon'ble Supreme Court observed regarding the
scope of judicial review of the findings of an expert body like
Electricity Regulatory Commissioin. It was held at
paragraphs 38 & 39 of SCC :
"38. MERC is an expert body which is entrusted with
the duty and function to frame regulations, including
the terms and conditions for the determination of
tariff. The Court, while exercising its power of judicial
// 12 //
review, can step in where a case of manifest
unreasonableness or arbitrariness is made out.
Similarly, where the delegate of the legislature has
failed to follow statutory procedures or to take into
account factors which it is mandated by the statute to
consider or has founded its determination of tariffs on
extraneous considerations, the Court in the exercise of
its power of judicial review will ensure that the statute
is not breached. However, it is no part of the function
of the Court to substitute its own determination for a
determination which was made by an expert body
after due consideration of material circumstances.
39. In Assn. of Industrial Electricity Users v. State of
A.P. [Assn. of Industrial Electricity Users v. State
of A.P., (2002) 3 SCC 711] b three-Judge Bench of
this Court dealt with the fixation of tariffs and held
thus : (SCC p. 717, para 11) "11. We also agree with
the High Court [S. Bharat Kumar v. State of A.P., 2000
SCC OnLine AP 565 : (2000) 6 ALD 217] that the
judicial review in a matter with regard to fixation of
tariff has not to be as that of an appellate authority in
exercise of its jurisdiction under Article 226 of the
Constitution.
All that the High Court has to be satisfied with is that
the Commission has followed the proper procedure
and unless it can be demonstrated that its decision is
on the face of it arbitrary or illegal or contrary to the
Act, the court will not interfere. Fixing a tariff and
providing for cross-subsidy is essentially a matter of
policy and normally a court would refrain from
interfering with a policy decision unless the power
exercised is arbitrary or ex facie bad in law."
xxx xxx xxx
20. Recently, the Constitution Bench of the Hon'ble
Supreme Court in the case of Vivek Narayan Sharma v.
Union of India [2023 SCC OnLine SC 1] has held that the
Courts should be slow in interfering with the decisions taken
by the experts in the field and unless it is found that the
expert bodies have failed to take into consideration the
mandatory statutory provisions or the decisions taken are
// 13 //
based on extraneous considerations or they are ex facie
arbitrary and illegal, it will not be appropriate for this Court
to substitute its views with that of the expert bodies."
21. Relying in the above judgments, the Hon'ble Supreme
Court in Civil Appeal No. 11095 of 2018 (GMR WARORA
Energy Limited v. Central Electricity Regultory
Commission (CERC) & others) : decided on 20.04.2023
has held :
130. As is indicated in the aforesaid judgments, this
Court should be slow in interfering with the concurrent
findings of fact unless they are found to be perverse,
arbitrary and either in ignorance of or contrary to the
statutory provisions.
[Emphasis supplied]
22. By applying the principles laid down in MSEDCL v. APML
& Others : 2023 SCC Online 233, we hold that this Court
has to be slow in interfering with the findings given by an
expert body like Ombudsman-II, OERC. As has been held in
Association of Industrial Electricity users v. State of A.P.
(2002) 3 SCC 711, all that this Court has to be satisfied is
that the Ombudsman has followed the proper procedure.
Unless it can be demonstrated that the decision is on the face
of it arbitrary or illegal or contrary to the Act, this Court would
not interfere.
23. Following the principle laid down in the decision rendered
by the Constitution Bench of the Hon'ble Supreme Court in
Vivek Narayan Sharma v. Union of India (supra), it is held
that this Court should be slow in interfering the decision taken
by expert in the field, i.e., Ombudsman of OERC and unless it
is found that the expert body has failed to take into
consideration the mandatory statutory provision or the
// 14 //
decisions taken is, based on extraneous considerations or it is
ex-facie arbitrary and illegal. It would not be appropriate for
this Court to substitute its views with that of the expert body.
24. To sum up, applying the principles discussed above to
the present case, it has to be held that the petitioner has failed
to bring to the notice of this Court that any of the mandatory
statutory provisions have not been considered by the
Ombudsman. The petitioner has also failed to show that the
decision of the Ombudsman is based on extraneous
consideration. To reiterate the principles laid down in Vivek
Narayan Sharma (supra), this Court should be slow in
interfering with the findings of the fact unless they are found to
be perverse, arbitrary and in ignorance or contrary to the
statutory provisions.
Further, in considered opinion of this Court no case has
been made out by the petitioner-licensee to interfere with the
findings of the Ombudsman being the competent authority
technically to analyze the technical aspect of the pleadings of
the parties. Therefore, it is held that this Court cannot
substitute the findings of the Ombudsman without any
material being brought to dislodge the findings.
25. In view of the above discussions, the writ petition fails.
The order passed by the Ombudsman be complied with
forthwith. In the facts and circumstances of the case, there
shall be no order as to costs.
.......................... .......................
Biswanath Rath, J.
Signature Not Verified M.S.Sahoo, J.
Digitally Signed
Signed by: AJIT KUMAR DUTTA
Designation: Secretary
Reason: AuthenticationOrissa High Court, Cuttack
Location: ohc
The 18th May, 2023/dutta
Date: 23-May-2023 14:07:51
