1. A commercial entity challenged the imposition of penal electricity charges levied by the utility provider, asserting the levy was illegal and without jurisdiction. (Para 2 , 3 )
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2024 Supreme(Telangana) 1279
IN THE HIGH COURT OF TELANGANA AT HYDERABAD
SUREPALLI NANDA, J.
M/s. Mahavir Ferroalloys - Petitioner
Versus
Central Power Distribution Company of A.P.Ltd., & others - Respondents
Writ Petition No.21052 of 2011
Decided On : 30-09-2024
Important Points
An administrative authority is legally bound to consider a consumer's representation against penal charges in accordance with the principles of natural justice, including granting a personal hearing, before concluding the matter.
Subject
Administrative Law - Electricity Law
Headnote
(A) Electricity Supply - Tariff Order for High Tension (HT) Supply - Clause 5 - Penal charges for exceeding Contracted Maximum Demand (CMD) - When the Recorded Maximum Demand (RMD) exceeds 120% of the CMD, penal energy charges are levied as per the prescribed tariff order. (Paras 3, 6)
(B) Administrative Law - Consideration of representations - Authority is bound to consider grievances and pleas raised by a consumer in a representation in accordance with the law and the principles of natural justice, including the provision of an opportunity for a personal hearing. (Paras 9, 10)
Facts of the case:
An industrial consumer challenged the levy of penal energy charges imposed for a specific billing month. The power distribution company asserted that the recorded maximum demand exceeded the contracted maximum demand by more than 120%, thereby attracting penal charges under Clause 5 of the General Conditions of HT supply. The consumer filed multiple representations, asserting that for their specific category of industry, such penal charges were not applicable and that the recorded demand did not justify the penalty. While initial representations were replied to, the final representation remained unaddressed, leading the consumer to seek a writ of mandamus.
Findings of Court:
The Court noted that the counter-affidavit filed by the respondents did not demonstrate that the specific pleas raised in the petitioner's final representation had been considered or adjudicated. (Para 9)
Issues: Whether the respondent authority is obligated to consider and decide upon the specific pleas raised in a consumer's representation regarding the legality of penal charges before proceeding with the demand or disconnection.
Ratio Decidendi: The administrative authority is bound to consider the grievances of a party and address the pleas put forth in their representation in accordance with the law and the principles of natural justice. (Para 9)
Result: Writ Petition disposed of directing the respondent to consider the representation in accordance with law and the principles of natural justice, providing a personal hearing within six weeks, and maintaining the interim stay until the conclusion of this exercise.
(B) Administrative Law - Consideration of representations - Authority is bound to consider grievances and pleas raised by a consumer in a representation in accordance with the law and the principles of natural justice, including the provision of an opportunity for a personal hearing. (Paras 9, 10)
Facts of the case:
An industrial consumer challenged the levy of penal energy charges imposed for a specific billing month. The power distribution company asserted that the recorded maximum demand exceeded the contracted maximum demand by more than 120%, thereby attracting penal charges under Clause 5 of the General Conditions of HT supply. The consumer filed multiple representations, asserting that for their specific category of industry, such penal charges were not applicable and that the recorded demand did not justify the penalty. While initial representations were replied to, the final representation remained unaddressed, leading the consumer to seek a writ of mandamus.
Findings of Court:
The Court noted that the counter-affidavit filed by the respondents did not demonstrate that the specific pleas raised in the petitioner's final representation had been considered or adjudicated. (Para 9)
Issues: Whether the respondent authority is obligated to consider and decide upon the specific pleas raised in a consumer's representation regarding the legality of penal charges before proceeding with the demand or disconnection.
Ratio Decidendi: The administrative authority is bound to consider the grievances of a party and address the pleas put forth in their representation in accordance with the law and the principles of natural justice. (Para 9)
Result: Writ Petition disposed of directing the respondent to consider the representation in accordance with law and the principles of natural justice, providing a personal hearing within six weeks, and maintaining the interim stay until the conclusion of this exercise.
Legal Category Hierarchy
Advocates Appeared:
For the Petitioner: Sri M.P.Chandramouli, learned senior designated counsel
for the Respondents: Sri R.Vinod Reddy, learned standing counsel
For the Petitioner: Sri M.P.Chandramouli, learned senior designated counsel
for the Respondents: Sri R.Vinod Reddy, learned standing counsel
Table of Contents
2. The petitioner contended that penal charges were inapplicable to their industrial category, while the respondent argued that the charges were valid as the recorded maximum demand exceeded contractual limits. (Para 3 , 6 )
3. The court observed that the utility provider failed to address the petitioner's representations regarding the legality of the imposed penalties, necessitating a formal consideration. (Para 7 , 8 , 9 )
4. Utility providers are mandated to consider and adjudicate upon consumer grievances and representations regarding billing disputes in accordance with principles of natural justice. (Para 9 , 10 )
5. The court directed the utility provider to evaluate the petitioner's pending representation within six weeks and extended the interim stay on the disputed demand until the decision is communicated. (Para 10 )
6. Is an electricity utility provider obligated to formally consider a consumer's objection to a penal bill?
Yes, a utility provider is legally obligated to consider the consumer's grievances or representations filed against a bill, ensuring the process complies with the principles of natural justice and provides the consumer an opportunity for a personal hearing. (Para 9 , 10 )
7. What is the consequence of a utility provider failing to address substantive consumer representations regarding billing?
The court may intervene in administrative actions by directing the utility provider to exercise its statutory duty to adjudicate the representation, and it may maintain an interim stay on the disputed demand to prevent irreparable harm until such adjudication is finalized. (Para 8 , 9 , 10 )
ORDER :
SUREPALLI NANDA, J.
WRI T PETI TI ON No.21052 OF 2011
Heard Sri M.P.Chandramouli, learned senior designated counsel appearing on behalf of the petitioner and Sri R.Vinod Reddy, learned standing counsel appearing on behalf of the respondents.
2. The petitioner approached the Court seeking prayer as under:
“........to issue a writ in the nature of Writ of Mandamus or any other appropriate writ direction or order declaring the action of the respondents in Levying and Demanding Penal Charges from the petitioner for the billing month June 2011 relying on Clause-5 of the Tariff Order for the FY 2011-2012 and as illegal without jurisdiction and void and pass…..”
3. The case of the petitioner, in brief, as per the averments made by the petitioner in the affidavit filed by the petitioner in support of the present w rit petition, is as under:
a) It is the case of petitioner that, the petitioner is FerroAlloy Industry and the Tariff applicable is under H.T.I.B. As per Clause 5 of the Tariff Order for HT.I Category, it is evident that in any month if the recorded maximum demand (RMD) of the consumer exceeds his contracted maximum demand (CMD), depending upon the percentage of excess RDM the consumer if liable has to pay the penal charges as prescribed. Moreover, if the RMD is 100 to 120 % over CMD the demand charges are levied 2 times the normal charges and there is no penal levy on energy charges. However, as the petitioner is a ferro alloy unit there is no demand charges and when there is no demand charges there cannot be any penal charges.
b) However, the respondents, for the billing month of June 2011 levied penal charges on the full energy at 1.15 times of normal charges i.e., on 42,39,326 units and levied a sum of Rs.16,85,132.08 ps. This levy is in addition to the usual levy of Rs.1,12,34,213.90. The petitioner herein had paid the normal demand charges but had not paid the penal charges. Aggrieved by the said excess charges the petitioner filed representations dated 28.06.2011 and dated 04.07.2011. In reply to the same, the 2nd respondent vide reply dated 16.07.2011 stated that the RMD for the month of 06/2011 is 6506.4 KVA which exceeded CMD 5400 KVA by 1106.4 KVA and this excess KVA is more than 120% of CMD as such 15% extra of normal rate i.e., R 0.40 ps for unit is levied as penal charges.
c) Subsequently, the petitioner sent another representation dated 20.07.2011, stating that there was already penalty stipulated in condition number- I for the ferro alloy units, that when there are no demand charges and penalty, there cannot be any penalty on the energy and that the RMD is not more than 20% and therefore the penal charges as per condition No:5 cannot be invoked. However, the said representation was not considered and the field staffs threatened disconnection of power supply. Aggrieved by the said action of the respondents, the present Writ Petition is filed.
4. The interim prayer sought for by the petitioner in W.P.M.P.No.25622 of 2011 in the present Writ Petition is extracted hereunder:-
“ …pleased to stay the demand of Rs.16,85,132.08 ps as penal charges levied in the C,C,bill dated 26.06.2011 and pass such other and further orders..”
5. This Court on 27.07.2011 in W.P.M.P.No.25622 of 2011 in W.P.No. 21052 of 2011 passed orders in favour of the petitioner observing as under:-
There shall be interim stay as prayed for Post the WPMP after four weeks.
6. PERUSED THE RECORD :
A. The specific averments of the petitioner at para No.5 of the affidavit filed by the petitioner in support of the present Writ Petition are extracted hereunder:-
5. I submit that referring to my representation dated 04.07.2011, the 2nd respondent gave a reply dated 16.07.2011 stating that the RMD for the month of 06/2011 is 6506.4 KVA which exceeded CMD 5400 KVA by 1160.4 KVA and this excess KVA is more than 120% of CMD as such 15% extra of normal rate i.e., R 0.40 ps for unit is levied as penal charges. On receipt of the said reply, I filed further representati
