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2024 Supreme(Bom) 458

IN THE HIGH COURT OF BOMBAY
Sharmila U. Deshmukh, J.
Maharashtra State Electricity - Appellant
Vs.
M/s. Jindal Polyfilms Ltd. - Respondent
Writ Petition No. 7152, 7198, 7199 of 2019 with Interim Application No. 270 Of 2020 with Interim Application No. 13109 and 12491 of 2023 Writ Petition No. 9554 of 2021
Decided On : 16-07-2024

Advocate Appeared:
For the Appellant : Mr. Harvinder Toor a/w. Mr. Kiran Gandhi a/w. Mr.Akash Kothari, i/by Little and Co.
For the Respondent:Mr. Abhishek Karnik i/by Mr. Siddharth Varma, Mr. Varad Kilor i/by Mr.Siddharth Verma, Ms.Meeran Patel i/by Mr.Amol Doijode, Ms. Deepa Chawan a/w. Ms.Dipali Sheth, Ms.Ruchi Patil, Ms. Akanksha Kothari and Mr.Harsh Shah i/by Eternity Legal Advocates and Solicitor for Respondent i.e. Jindal Poly-films Ltd.

MSEDCL's recovery of excess AEC and FAC charges violated MERC orders, necessitating refunds with interest under the Electricity Act.

Headnote:(A) Electricity Act, 2003 - Sections 42(5), 62, and 181 - Maharashtra Electricity Regulatory Commission (Consumers Grievance Redressal Forum and Electricity Ombudsman) Regulation, 2006 - Refund of excess charges - The Consumer Grievance Redressal Forum (CGRF) directed the Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) to refund excess Additional Energy Charges (AEC) and Fuel Adjustment Charges (FAC) collected in violation of MERC orders. The CGRF found that MSEDCL had charged AEC and FAC beyond the permitted periods and failed to provide necessary refunds. (Paras 33, 46, 49, 73)

(B) Limitation - The CGRF's order was held to be within the limitation period as the cause of action arose from the MERC's clarification in 2017. MSEDCL's claims of limitation were rejected as they did not substantiate their assertions. (Paras 61, 64)

(C) Interest - The CGRF granted interest on refunds due to MSEDCL's non-compliance with MERC orders, emphasizing that interest under Section 62(6) of the Electricity Act is mandatory. (Paras 52, 73)

Facts of the case:
The petitions arose from CGRF orders regarding MSEDCL's non-compliance with MERC directives, leading to excess charges on consumers. The CGRF ordered refunds for excess AEC and FAC charged from August 2013 to December 2014.

Findings of Court:
The CGRF's findings were upheld, confirming MSEDCL's liability to refund excess charges with interest.

Issues: The main issues included the validity of MSEDCL's charges, the applicability of limitation, and the entitlement to interest on refunds.

Ratio Decidendi: The court affirmed that MSEDCL's failure to comply with MERC orders warranted refunds and interest, and that the limitation period was not applicable as claimed.

Result: Petitions dismissed.

JUDGMENT :

Sharmila U. Deshmukh, J.

1. Rule. Rule made returnable forthwith and taken up for final hearing with the consent of the parties.

2. These group of petitions arises out of orders passed by the Consumer Grievance Redressal Forum (CGRF) in individual complaints. As common issues arises, with consent of the learned counsel for the parties, the petitions were taken up for hearing together and are being disposed of by this common judgment. By consent Writ Petition No.7152 of 2019 is taken as lead Petition and the facts of the said Petition are referred in the judgment.

FACTUAL MATRIX:

3. As various orders passed by the Maharashtra Electricity Regulatory Commission (MERC) form the background of the present controversy in as much as the applications made to the Consumer Grievance Redressal Forum (CGRF) alleged non-compliances by the petitioners-herein i.e. Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) of the orders of MERC, for ease of reference the orders of MERC as discerned from the record are set out in tabular form as under:

3rd September, 2013

MERC in Case No.28 of 2013 filed by Maharashtra State Power Generation Company Limited (MSPGCL) seeking implementation of judgment of Appellate Tribunal for Electricity (ATE) passed an order allowing MSPGCL to recover a total amount of Rs.106.44 Crore (including carrying cost) on account of impact of ATE Judgment in Appeal No.34 of 2012 from MSEDCL in six equal monthly installments starting from October, 2013. MERC also allowed MSPGCL to recover the total amount of Rs.628.90 Crores (including carrying cost) on account of impact of ATE judgment in Appeal No.47 of 2012 from MSEDCL in six equal monthly installments starting from October, 2013.

 

MERC permitted MSEDCL to recover the variation in energy charge component of the amount billed by MSPGCL to MSEDCL from the consumers through Fuel Adjustment Charge (FAC) mechanism and also allowed MSEDCL to recover the variation in fixed charge component of the amount billed by MSPGCL to MSEDCL from the consumer in proportion to billing average rate of respective consumer categories.

4th September, 2013

MERC in Case No.48 of 2013 permitted MSPGCL to recover the under-recovered fuel cost of Rs.28.05 Crores for infirm power supplied to MSEDCL in three monthly installments, after issuance of the order and also permitted MSEDCL to recover this amount through FAC mechanism. MERC permitted MSPGCL to recover the difference in revenue recoverable in accordance with the Tariff approved in the order vis-a-vis the Provisional Tariff charged by MSPGCL in 6 equal monthly installments from October, 2013 onwards and to recover the fixed cost and energy charges as per the tariff approved till tariff for FY 2013-2014 is approved.

MERC permitted MSEDCL to recover variation in energy charge from consumers through FAC mechanism and to recover the variation in fixed charge component in proportion to average billing rate of respective consumer categories.

5th September, 2013

MERC in Case No.95 of 2013 in respect of suomotu determination of supplemental charges of MSEDCL to give effect of other orders, directed MSEDCL to recover two additional charges from its consumers in the form of additional energy charge in the following manner :

"a. To recover the accumulated under-recovery of Rs. 2037.78 Crore accrued till the month of August 2013, which shall be levied by MSEDCL for a period of six (6) months with effect from the month of September 2013 till the month of February 2014. Category wise Additional Energy Charge (AEC-1) to be levied to all consumer categories in the proportion to the approved Average Billing Rate of respective consumer categories, under intimation to the Commission.

b. To recover monthly fixed expense of Rs. 235.39 Crore. This shall be levied by MSEDCL from the month of

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