General Manager vs Chief Managing Director (Cmd)
2022 Latest Caselaw 2972 Patna

          IN THE HIGH COURT OF JUDICATURE AT PATNA
                  Civil Writ Jurisdiction Case No.5659 of 2021
     ======================================================

1. General Manager East Central Railway, Hajipur.

2. Chief Electrical Engineer East Central Railway, Hajipur.

3. Chief Electrical Engineer (Distribution) East Central Railway, Hajipur.

4. Senior Divisional Electrical Engineer, (TR-D) East Central Railway, Dhanbad.

5. Divisional Electrical Engineer, (TR-D) East Central Railway, Dhanbad.

... ... Petitioners Versus

1. Chief Managing Director (CMD) Bihar State Power Holding Company Limited (BSPHCL) Vidhut Bhawan Bailey Road, Patna.

2. Electrical Superintending Engineer (E.S.E.) (H.T. Cell) South Bihar Power Distribution Co. Ltd. (SBPDCL) Vidhut Bhawan Bailey Road, Patna.

3. Chief Engineer (Commercial) South Bihar Power Distribution Co. Ltd.

(SBPDCL) Vidhut Bhawan Bailey Road, Patna.

4. Electrical Superintending Engineer (Electric Supply Circle), Gaya.

5. Electrical Executive Engineer (E.E.E.) (H.T. Cell) South Bihar Power Distribution Co. Ltd. (SBPDCL) Vidhut Bhawan Bailey Road, Patna.

6. Chairman Consumer Grievance Redressal Form Gaya.

7. Electricity Ombudsman Bihar Electricity Regulatory Commission Vidyut Bhawan, Patna.

... ... Respondents ====================================================== Appearance :

For the Petitioners : Mr. D. K. Sinha, Sr. Adv. with Mr. Abhinay Raj, Adv.

     For the respondent
     South Bihar Power
     Distribution Company
     Limited                :     Mr. Vinay Kirti Singh, Sr. Adv.

====================================================== CORAM: HONOURABLE MR. JUSTICE CHAKRADHARI SHARAN SINGH and HONOURABLE MR. JUSTICE MADHURESH PRASAD CAV JUDGMENT (Per: HONOURABLE MR. JUSTICE MADHURESH PRASAD) Date : 19-05-2022 The instant writ petition has been filed by the East Central

Railway being aggrieved by certain bills raised in connection with

the electricity consumption for the period April 1994 to July 1994. Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

2. For ensuring constant running of trains, the petitioners

purchased High Tension (HT) power from various Power

Distribution Companies. The electrical feed for running of the

trains is provided through Traction Sub- Station ('TSS' for short)

which are located beside the Railway tracks. The same derive

power from the Grid Sub Station ('GSS' for short) of the

Distribution Company.

3. There is one GSS located at Paharpur in Dhanbad

division of the Railway, which receives power from Bihar State

Power Holding Company Limited (' BSPHCL' for short) and its

subsidiaries, in this case from South Bihar Power Distribution

Company Limited based on an agreement dated 10-06-1992

between the erstwhile Bihar State Electricity Board and the

petitioners. Under the agreement, the respondent-company, being

the successor in interest of the Bihar State Electricity Board, is

under an obligation to ensure a constant supply of electrical

energy at the pressure of 132 KV subject to the terms and

conditions of the agreement. The petitioners (consumers) were

under a corresponding obligation to take the supply, as per the

agreement, failing which, they were liable to certain charges of an

amount being the minimum guarantee charges. The respondent

-company, as per the agreement, was to provide and erect Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

switchgears and meters as considered necessary for ensuring

control by the Board over the supply of electricity and to measure

the supply being made.

4. The transformers switchgears and the equipments

directly connected to the feeder by the consumer were to be as per

the specification and design and maintenance of the same to the

satisfaction of the respondent-company and subject to the Board's

approval. This Court has taken note of the above noted brief terms

and conditions of the Contract to which the parties are Ad idem in

view of the nature of controversy arising in the instant writ

proceedings.

5. During the course of electrical consumption, power

factor surcharge was raised by the respondent company for the

period April 1994 to July 1994 on account of low power factor.

The total amount being Rs. 54,75,461/- which, as per the

petitioners' own averment, in paragraph 11 of the writ petition,

was duly paid by the petitioners in July 1994 itself. It is only six

months later that the petitioners have alleged erroneous

calculation of power factor for the period April 1994 to July 1994

under their communication dated 25.01.1995 to the then General

Manager-cum- Chief Electrical Engineer, Bihar State Electricity

Board, Transmission Zone, Gaya. The petitioners, under the said Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

communication, have requested for relooking into the penal

charges for lower power factor, which was paid by the petitioners,

for the period April 1994 to July 1994 and, for rectifying the bill

accordingly. In their communication, the petitioners have raised

an apprehension that calculation of power factor during the period

in question (April 1994 to July 1994) appears to be erroneous and

it appears that loading KVAR has been added to the loading

KVAR (as recorded by your meter) arithmetically making the

power factor inferior, leading to imposition of heavy penalty on

the petitioners. The petitioners have stated that both these KVARs

(Kilovolts Ampere Reactive) are vector quantities and, therefore,

were required to be added as a vector- sum and not simple

arithmetical-sum.

6. Pursuant to the said communication, a meeting was held

between the Senior Divisional Electrical Engineer (TR) Eastern

Railway and Electrical Superintending Engineer, Gaya on

02.02.1995. It is, in this meeting that, for the first time, the issue

regarding a defective meter has been discussed and assurance has

been given by the representative of the respondent that remedial

measures would be taken by checking the power factor, arranging

for installation of another meter; and that after checking, the

necessary adjustments against the excess payment would be Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

made. The minutes record that he has assured to discuss the

subject with the Chief Engineer, Commercial and other Board

officials on his return to Patna and that he would advise the

outcome and further course of action to be taken. A new meter

was, thereafter, installed in July, 1995. The petitioners alleged

that thereafter the power factor improved and increased above

0.85.

7. Nearly three years after the period in question i.e. by

communications issued between January to April 1997, the

petitioners have sought adjustment of earlier payment made

towards low power factor surcharge levied for the period in-

question. The relevant communications are Annexure-8 series to

the writ petition. The petitioners have unilaterally adjusted the

amount of Rs. 54,75,461/- earlier paid by them in July 1994 on

account of low power factor charge; from the bill of fuel

surcharge for the period 01.07.1993 to 31.03.1997. Accordingly,

they have made payment of an amount of Rs. 15,08,077/- against

the amount of Rs. 69,83,538/- being the admitted dues for fuel

surcharge. This has occasioned the non-payment of fuel surcharge

for the period 01.07.1993 to 31.03.1997 of an amount (69,83,538-

15,08,077=54,75,461/-). The respondents, therefore, started

charging the prescribed penalty @ 2% per month on this unpaid Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

fuel surcharge amounts w.e.f. 25.04.1997.

8. On the advise of their own Chief Engineer, the

petitioners have deducted the sum of Rs. 54,75,461/- from the

arrear bill of fuel surcharge for the period 01.07.1993 to

31.03.1997 of Rs.69,83,538/- which dues along with the

prescribed interest is being claimed by the respondent w.e.f.

25.04.1997. The petitioners deny this liability. It is their case that

they have adjusted/deducted the amount (Rs. 54,75,461/-) which

they had paid towards Low Power Factor charge in July 1994,

which they were not liable to pay.

9. The petitioners earlier had approached this Court by

filing a writ petition in respect of the same grievance that they are

not liable for paying the amount of low power factor charge for

the same period in question. The writ petition was registered as

CWJC No. 1540 of 2014. This Court, vide order dated

12.03.2015, was not inclined to entertain the petitioners' writ

petition due to passage of time as the dispute was being raised in

connection with bill raised for the period April 1994 to July 1994.

The writ petition was disposed of with liberty to the petitioners to

take recourse to other remedy that may be available to them in

law. The petitioners, under the circumstances, approached the

Consumer Grievance Redressal Forum ('CGRF' for short) Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

constituted under Section 42(5) of the Electricity Act, 2003. The

CGRF, under its order dated 11.10.2017 (Annexure-16), has held

the petitioners liable to pay the impugned bill along with the

arrears which were to be paid within 15 days.

10. The order of CGRF dated 11.10.2017 was assailed by

the petitioners before the Electricity Ombudsman which also has

found the petitioners to be liable for the charge on account of low

power factor for the period in question. The order passed by the

Ombudsman in Appeal Case No. 18 of 2017 is dated 25.11.2020.

11. In the instant writ proceedings the petitioners have

sought quashing of the order dated 11.10.2017 passed by the

CGRF as well as the order dated 25.11.2020 passed by the

Electricity Ombudsman in Appeal Case No. 18 of 2017.

12. The stand of the respondent company is that the

petitioners have installed and commissioned shunt capacitor

Banks at Paharpur TSS in the month of April 1994 whereafter

their power factor became much lower than the agreed power

factor by 0.85. The meter was never faulty and that the formula

for calculation of the power factor was as per Clause 16.6 of the

1993 tariff which read as follows:-

"16.6. Power factor surcharge and installation of shunt capacitors- (a) No consumer shall allow the average power factor of the supply taken by him to fall- below 0.85 in any month, in the event Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

of the average power factor falling below 0.85 a surcharge at the rate of 1 percent for every fall of power factor of 0.01 will be leviable on the demand and energy charges including operational surcharge in case of H.T. service, Extra High Tension service and Railway Traction service. The fall in the power factor will be computed correct upto two places of decimal. The power factor will be calculated on the basis of KWH and KUAH readings:- Formula PF= KWH/KVAH.

(b) No new connection above 5 HP shall be given unless shunt capacitors of appropriate ratings are installed to the entire satisfaction of the Board. The consume shall install shunt capacitors manufactured by the standard manufacturers and duly marked by ISI specifications.

(c) It will be obligatory on the part of the consumer to maintain the capacitors in healthy conditions and in the event of its becoming burnt/damaged, he shall have to inform the concerned Assistant Engineer immediately in writing. He shall also get the defect rectified within a maximum period of one month from the date the capacitor has gone defective and he shall give intimation in this regard also to the concerned Assistant Engineer.

(d) In case it is found that the capacitor has not been repaired/replaced within one month of its becoming defective, the consumer shall be charged a surcharge of 5 per cent on the billed amount per month, thereafter, till the same is got repaired/replaced by a healthy capacitor and got checked/ inspected by the concerned Assistant Engineer of the Board.

(e) In the case it is found on inspection that the capacitor has not been installed by the consumer and if installed are of not adequate capacity or not maintained in good and healthy condition, the consumer shall be charged a surcharge of 5 per cent of the billed amount per month commencing from the month of such inspection till such time the consumer installs the capacitors of adequate Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

capacity in good and healthy condition.

(f) For the existing consumers where the capacitors of adequate capacity in good and healthy condition have either been not installed or not being maintained, they shall also be charged a surcharge 5 per cent of the billed amount after the expiry of six months and shall continue to be charged till such time the consumers install the capacitors as stated above.

(g) The Board will have the right to take any other suitable action, including disconnection of supply even after the payment of said surcharge by the consumer in case the shunt capacitor of adequate rating is not maintained in healthy condition by the consumer for continuously six months.

(h) The amount of surcharge charge from the consumers as stated above shall not be accounted for towards the minimum/ flat rate charges."

13. Mr. Vinay Kirti Singh, learned senior counsel appearing

on behalf of the respondent company has also argued that the

relief claimed in respect of the low power factor surcharge is

barred by acquiescence waiver and estoppel. It is also submitted

that the petitioners have been taking oscillating stand to deny the

amount of low factor surcharge for the period in question after

having paid the same without any demur in July 1994.

14. In between January-April 1997, for the first time, they

have raised a dispute regarding the said amount and unilaterally

deducted the same from the admitted dues towards fuel surcharge

for the period 01.07.1993 to 31.03.1997. In this connection, it is

also worth noting that for denying the amount of low power factor Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

surcharge for the period in question they have stated in their

communications (Annexure-8 series) that the low power factor

surcharge was undue being based on reading from a defective

meter which had been installed by the respondent company. The

moment the new meter was installed, the power factor improved

above 0.85 and, therefore, the petitioners could not be saddled

with any liability on account of low power factor below 0.85 for

the period in question being April 1994 to July 1994.

15. Such stand of the petitioners is inherently unsustainable

due to the admitted fact that the meter was replaced in July 1995

on being found defective which is nearly one year after the period

during which low power factor surcharge was levied on the

petitioners, which they had paid in July 1994.

16. Prior thereto, the respondents in their communication

dated 25.1.1995 (Annexure-5) had raised a dispute regarding error

in calculation of low power factor surchrge for the period in

question by alleging that loading KVAR had been added to the

loading KVAR, (as recorded by your meter) arithmetic and thus,

making the overall power factor inferior giving rise to lower

power factor surcharge being levied on the petitioners. They

alleged that both the KVARs were vector quantities and therefore,

addition was required to be vector sum and not simple arithmetic Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

sum.

17. In the instant writ proceeding, the petitioners have

assailed the imposition of low power factor surcharge again

alleging that the same was occasioned on account of a faulty

meter and defective meter reading.

18. It is submitted by learned senior counsel appearing for

the respondent company that before the CGRF the petitioners

admitted that they had commissioned the shunt capacitor in April

1994 and removed the shunt capacitor in July 1994. It is

considered significant by this Court to note that the undisputed

position is that from August 1994, after removal of the shunt

capacitor, the power factor had improved and increased above

0.85. No dispute has been raised by the petitioners to any bill

raised from August, 1994 onwards.

19. Having considered the rival submissions, this Court

would find that when the bill was raised for low power factor

charge for the period in question in July 1994, the petitioners had

paid the amount without any demur. For the first time in 1995,

they have raised an issue regarding discrepancy in billing by

raising an apprehension in their letter dated 25.01.1995, which

reads as follows:-

" In fact, calculation of power factor during the months of April, May, June and July 1994 Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

appears to be erroneous and it appears that loading AVAR has been added to the loading AVAR (as recorded by your meter) arithmetically and thus making the overall power factor inferior and forcing on heavy penalty on the Railways. Both these AVARs are vector quantities and therefore, addition should be vector-sum and not simple, arithmetical-sum.

May I, therefore, request you to kindly look into the matter and arrange for rectification in billing on traction sub-station, Paharpur."

20. In April 1997, based on unilateral objection raised by

the petitioners' own Chief Engineer, they have deducted the

amount of low power factor charge, which had been levied for the

period in question and paid by the petitioners way back in July

1994. This time they have alleged that the charge was undue and

had arisen because of a faulty meter. Such stand of the

respondents is based on the assertion that after change of the

meter low power factor increased above 0.85 whereas the issue

regarding faulty meter leading to replacement of the meter

occurred in between 02.02.1995 to July 1995, much later in time

after the period in question (April 1994 to July 1994) for which,

low power factor charge has been levied and paid by the

petitioners. This fact has been considered by the CGRF in its

impugned order dated 11.10.2017. The order of the CGRF is

correct to the extent that it records in para 12 that replacement of

the meter in July 1995 cannot be the basis of a presumption that Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

the meter was defective during the period in question being April

1994 to July 1994.

21. The CGRF has also taken note of the case of the

petitioners stated in para 4 of their petition filed before the CGRF

that shunt capacitor was installed in April 1994 and it has also

recorded submission of the petitioners' counsel that the shunt

capacitor was removed in the end of July 1994. It is also an

admitted position that from August 1994 onwards there is no

dispute by the railway regarding the bills/charges raised by the

respondent company for electricity supply to them. These

admitted facts have been viewed with the stand of the respondent

company in the background that the low power factor was on

account of commissioning of shunt capacitor by the petitioners

themselves in April 1994; without consent and information to the

board/authority, as required under the terms of the agreement

dated 10-06-1992, for which, the petitioners can only be held

liable.

22. The CGRF has also taken note of the fact that the

petitioners had the option of proceeding for testing of the

accuracy of the meter as per Clause 6 of the agreement, however,

without raising any issue, they have themselves, in July 1994 paid

the dues on account of low power factor charge for the period in Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

question . Before the CGRF the petitioners did not raise any issue

other than the faulty meter for denying the liability towards the

low power factor surcharge for the period in question. The

findings of the CGRF in relation to petitioners' allegation that

faulty meter was installed by the respondent company, so as to

justify the petitioners' unilateral adjustment of the amount earlier

paid as charge for low power factor, for the period in question are

thus found to be after due consideration, based on materials and

cogent reasons and, therefore, do not require any interference by

this Court exercising jurisdiction under Article 226 of the

Constitution of India.

23. This Court, therefore, has no hesitation in observing

that the concurrent findings in this regard by the Electricity

Ombudsman in its order dated 25.11.2020, passed in Appeal Case

No. 18 of 2017, as also in the decision of the CGRF requires no

interference. The Electricity Ombudsman has affirmed the

decision of the CGRF by a reasoned and speaking order. The

Appellate Authority has also rightly rejected the claim of the

petitioners for calculation of the low power factor charge by a

formula/methodology of calculation, different from the revised

tariff framed under Section 49 of the Electricity (Supply) Act,

1948 and notified in the Bihar Gazette Extraordinary dated June, Patna High Court CWJC No.5659 of 2021 dt.19-05-2022

23, 1993.

24. This Court, therefore, does not find any infirmity in

the order dated 11.10.2017 passed by the CGRF and the order

dated 25.11.2020 passed by the Electricity Ombudsman.

25. The writ petition is, therefore, devoid of merit and the

same is dismissed.

( Madhuresh Prasad, J) I agree Chakradhari Sharan Singh, J:-

(Chakradhari Sharan Singh, J)

shyambihari/-

AFR/NAFR                NAFR
CAV DATE                27-01-2022
Uploading Date          19-05-2022
Transmission Date