tamil nadu electricity ombudsman · 2011, passed in w.p. no.23166 of 2010, the learned judge of...
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TAMIL NADU ELECTRICITY OMBUDSMAN
19- A, Rukmini Lakshmipathy Salai, (Marshal Road), Egmore, Chennai - 600 008.
Phone: ++91-044-2841 1376/2841 1378/2841 1379 Fax: ++91-044-2841 1377 Email: [email protected] Web site: www.tnerc.gov.in
BEFORE THE TAMIL NADU ELECTRICITY OMBUDSMAN, CHENNAI
Present: Thiru. S. Devarajan Electricity Ombudsman
Appeal Petition No. 32 of 2018
M/s Amaravathi Spinning Mills, 9D/5, Ramakrishnapuram, Karur – 639 001. . .... Appellant (Rep by Thiru. K. Murthy)
Vs The Superintending Engineer,
Karur Electricity Distribution Circle,
TANGEDCO,
No.3, Covai Road,
Karur – 639 002 . . .... Respondent (Rep by Tmty. K. Malathy, Asst. Exe. Engineer/West/Karur & Thiru. V. Ganesh, Asst. Exe. Engineer/Lines/230 KV SS, Pugalur)
Date of hearing : 18.9.2018
Date of Order : 04.02.2019
The Petition dt. 26.6.2018 filed by M/s.Amaravathi Spinning Mills, 9D/5,
Ramakrishnapuram, Karur – 639 001 was registered as Appeal Petition No.32 of
2018. The above appeal petition came up for hearing before the Electricity
Ombudsman on 18.9.2018. Upon perusing the appeal petition, counter affidavit
and after hearing both sides, the Electricity Ombudsman passes the following order.
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ORDER
1. Prayer of the Appellant:
1. Prayed for refund of a sum of Rs.20,04,323/- collected without any sanction of
law from the Appellant as monthly charges from February’2016 to July’2016..
2. Brief History of the case:
2.1 M/s.Amaravathy Spinning Mills, HTSC No.19, have informed that during
June’2010, they sold two wind mills each of capacity 750KVA among the three wind
mills owned by them. Hence vide letter dated 02.07.2011, they requested the
SE/Karur to refix the quota in view of reduction of wind generating capacity from
2250 KVA to 750KVA. They have received a letter dated 25.07.2011 from SE/Karur
directing them to pay an amount of Rs.38,89,059/- due to revision of bills from
Sep’2010 to June 2011. Then, the appellant filed a writ petition in the Madurai
bench of Hon’ble High Court.
2.2 Further the Apellant informed that their spinning mills came under closure
and sold all the machineries and hence they requested to reduce the MD from
800KVA to 30 KVA on 12.01.2016. But no action was taken by the respondent. In
the meanwhile, they stopped their production activities and applied for permanent
termination of HTSC No.19 on 27.01.2016. In the letter dated 17.02.2016, the
Tangedco has stated that the request of the appellant will be considered only after
the payment of all pending dues.
2.3 Tangedco has collected a sum of Rs.20,04.323/- out of which a sum of
Rs.15.12,000/- was collected as penalty for non utilization of MD. Therefore, the
appellant requested to refund the amount collected. Since no action was taken by
the respondent, they have approached the CGRF of Karur EDC. CGRF of Karur
EDC issued its order on 22.05.2018.
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3. Order of the CGRF :
3.1 The CGRF of Karur Electricity Distribution Circle have issued its order on
22.05.2018. The relevant portion of the order is extracted below:-
“FINDINGS AND ORDER OF THE FORUM:
On hearing all the above, and observing the TNERC regulations and
passed orders of the court case, the forum concluded that the consumer HT SC
No.19, M/s. Sri Amaravathy Spinning Mill, Karur had requested for reduction of
load from 800 KVA to 30 KVA initially on 12.01.2016 and the request of the
petitioner for reduction of demand from 800 KVA to 30 KVA was under process in
the office of the SE Karur EDC. (It is noted that the competent authority to give
approval for reduction of demand for service connections with demand above 500
KVA is the Chief Engineer/ Distribution. Therefore it requires time for completion of
the process in the SE and CE offices).
It is found that even as the Petitioners request dates 13/01/2016, for
reduction of demand from 800 KVA to 30 KVA was under process, they had
furnished a fresh request on 27/1/2016 to effect Permanent Disconnection of their
HT service connection No. 19. Therefore the latest request had superseded their
earlier request for reduction of demand and hence the earlier process had been
stopped. Further the request of the petitioner for permanent disconnection of the
HTSC no 19 was not feasible when arrears were pending as per the guidelines of
TNERC supply code 17, “the consumer shall be liable to pay arrears of
current consumption charges or any other sum due to the licensee on the
date of disconnection and meter rent if any, upto the date of termination
of the agreement and “Belated payment surcharge" (BPSC) upto the date
of payment". This was informed to the petitioner vide SE/Karur EDC's letter dated
17/2/2016.
The instructions issued in the CE/Commercial memo dated 23.01.2014,
are found to be not specific to allow PDC of a HTSC when huge arrears are
pending and when there is order of stay from the Court to collect such arrears.
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Further verification of the documents reveals that the arrears pending to
TANGEDCO was about Rs.92 lakhs whereas the deposits in the HTSC account of
the petitioner was about Rs.44 lakhs only. So, if PDC is allowed by the
Superintending Engineer/Karur EDC and if the Court judgement is in favour of the
Board it would be tough to collect the entire arrears from the petitioner.
It is found that the SE/Karur EDC had not allowed disconnection of the
HTSC due to the above conditions and duly Informed the petitioner. But the
petitioner was at liberty to apply for reduction of maximum demand immediately
after knowing that PDC is not possible without paying arrears.
Subsequently judgement was delivered on 22/02/2016 in the case relating
to the case of quota fixing for energy and max demand in WP number 8572/2011.
Based on the judgement, clarification was sought by SE Karur EDC on 23/3/2016
from the TANGEDCO headquarters regarding levy of penalty charges in the quota
case. The TANGEDCO headquarters is dealing with several such specific cases
arising out of the R&C measures of the Board and issuing clarification. (R&C :
Restriction and Control, a new measure implemented during 2008 for a short
period to manage the severe power crisis). The clarification for this case was
issued by the TANGEDCO headquarters on 25.7.2016. Based on that demand
notice for penalty charges with BPSC was issued to the consumer on 26.07.2016
which was remitted by the consumer.
Incidentally after the petitioner had received information regarding non-
feasibility to do permanent disconnection from the SE/ Karur EDC vide letter dated
17/02/2016, the petitioner had never furnished any fresh request towards reduction
of demand. The request already given by them on 12/1/2016 had become invalid
due to the PDC request dated 27/1/2016.
The HT bill for the SC No.19 for the month of 2/2016 was raised by the
office of the SE Karur EDC and paid by the petitioner. Similarly the bills for the
months of 3/2016, 4/2016 were also paid. No objection had been raised by the
company till 6/2016 regarding the demand charges which was being raised for the
demand of 800 KVA. The consumer had furnished a letter to the SE Karur EDC
only on 06.06.2016 raising objection against the max demand charges being levied
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for 800 KVA. Subsequently they had filed a writ petition also in the Madurai bench
of the Honorable High Court of Madras in 6/2016 on this matter.
The TANGEDCO/Chennai had issued clarification to the SE's letter dated
23/3/2016 on 23/07/2016. Based on the letter, the demand notice was issued for
the charges with BPSC of Rs.11,75,093/- was paid by the consumer. The petitioner
had furnished a fresh application for PDC of HTSC No. 19 on 29.07.2016. They had
also withdrawn the case filed towards reduction of demand. The PDC was effected by
following routine procedures. Review of the HT bills pertaining to the HT SC No 19 for
the months from 02/2016 to 06/2016 reveals that the bills comprise usage charges,
demand charges and penalty for low power factor. There was no penalty levied for
unutilized demand as being claimed by the petitioner in their claim. After the
permanent disconnection and closure of accounts of HTSC No.19, in the
month of 01/2017 they had raised the issue of refund of max demand charges for 800
KVA paid by them for the period from 03/2016 to 7/2016 in the CGRF/
TANGEDCO/Karur.
After hearing, the CGRF/TANGEDCO/Karur had held that the request to
refund the charges collected vide HT bills during the month from 03/2016 to 7/2016 is
not feasible of compliance. Now, after the hearing and verification of related documents
as per the direction of the Madurai Bench of the Honourable High Court of Madras, this
order is issued.
After the issue of letter dated 17/02/2016 by the SE Karur EDC wherein it was
informed that the PDC of HTSC 19 was not feasible when arrears were pending, there was
no fresh request from the consumer for reduction of demand from 800 KVA to 30 KVA and
there was no approval from the competent authority for the reduction of demand and no HT
Agreement executed. The petitioner had failed to furnish a fresh request for reduction of
demand at least after receipt of the HT bill for the month of 2/2016. After being silent for
many months and after closing of accounts and Permanent disconnection of the HT SC, it
is not in order to insist to effect reduction of demand from 800 KVA to 30 KVA without
following any official procedure with retrospective effect and to refund the demand charges
which was already paid for the sanctioned demand of 800 KVA. There is no provision in the
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rules to do so.
Hence it is concluded that the request of the petitioner is not feasible of
compliance and this CGRF petition is disposed off.”
4. Arguments of the Appellant furnished in the Appeal Petition :
4.1. During June 2010, our spinning unit, M/s. Sri Amaravathi Spinning
Mills sold two wind mills each of capacity 750 KVA from among the three
windmills owned by us. By our letter dated 02-07-2011, we requested SE,
KEDC to re-fix our quota accordingly, since we would be coming out of wheeling
arrangement.
4.2 Already, in respect of a case similar in nature, in the order dated 28-02-
2011, passed in W.P. No.23166 of 2010, the learned judge of Madurai bench of
Hon'ble Madras High Court had directed TNEB that orders could be passed in
tune with the Tamil Nadu Electricity Regulatory Commission in DRP No. 19 of
2011 and L.A. No.1 of 2011 in DRP No.19 of 2011. The case was in respect of
re-fixing the quota after a consumer's captive power generation was drastically
reduced, resulting in the consumer coming out of the wheeling arrangement. A
fixed formula has been provided in line with the above TNERC order and only
fixing the base energy quota and demand quota would vary from case to case.
The court order in the WP No. 23166 of 2010 could be made applicable to all
cases of similar nature.
4.3 We received a letter dated 25-07-2011, from the Superintending
Engineer, KEDC, Karur, directing us to pay a huge sum of Rs.38,89,059/- which
supposedly became outstanding due to revision of bills from September 2010 to
June 2011. The demand was based on erroneous calculation in arriving at the
figures for base energy quota and base demand quota.
4.4. Aggrieved by the baseless and arbitrary demand from TANGEDCO, we
filed a writ petition No.W.P (MD) 8572 of 2011, in the Madurai Bench of Hon'ble
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Madras High Court. The Hon'ble High Court was pleased to grant interim injunction
till 17-08-2011.
4.5 By our letter dated 12-01-2016, we sought reduction of our demand quota
from 800 KVA to 30KVA stating that due to various reasons the mill production had
been stopped. Noticing that the office of the SE, KEDC, Karur did not take any
action, we also followed up the same by our letter dated 20-01-2016, quoting the
contents of Chief Engineer, Commercial memo No. CE/Comml/EET/AEE.2/
F.Consumers with arrears/ D.28/13 dated 23-01-2014.
4.6 Notwithstanding the request in the above letter, TANGEDCO preferred
to keep silent and did not take any action for the reduction of the
Maximum demand from 800 KVA to 30 KVA. Paragraph No.(iii) of the Memo No.
CE/COM/EET/AEE.2/F consumers with arrears /D.28/13 dated 23-01-2014, issued
by the Chief Engineer, Commercial clearly states as follows: "When the consumers
having outstanding dues approach TANGEDCO for their various requests, and if
there is an order of stay or injunction granted by the Court, restraining the
TANGEDCO from collecting such outstanding dues, the consumers should not be
insisted to remit such outstanding dues, covered by stay as a condition precedent to
process/allow their requests. Such requests of the consumers should be processed
------." The memo clearly states that only in cases like new, additional demand,
dedicated feeder etc. And if there is no order of stay against collection of
outstanding amount from the consumers, action may be taken to realise the
pending amount from the consumer before processing their request." This has
been circulated to all EDC Superintending Engineers only to enable them to take
decisions. That is why we state that for reduction of MD from 800 KVA to 30 KVA,
office of the Superintending Engineer, Karur EDC should not have taken 15 days
time. Especially, when a consumer is desperate not to incur a huge demand
charges penalty month after month, when there is no use in keeping such a large
MD, without any activity in the production front. When the consumer is suffering, a
lukewarm response in carrying out things is absolutely deplorable.
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4.7 In the findings and order of the learned Forum, it is mentioned, that
our request for reduction of MD from 800 KVA to 30 KVA was superseded by our
request for PDC. We had never withdrawn our letter for reduction of MD. That
request was still alive in the office of the Superintending Engineer. They knew that
reduction of MD was important for us as much as PDC request. When they
informed us that PDC was going to be cumbersome, they could have as well acted
upon our request on reduction of MD, instead of saying that we did not re-apply for
reduction of MD. Please also note that our letter for PDC was only in addition to our
request for reduction of MD from 800 KVA to 30 KVA. How did the office of the SE,
KEDC assume that our second letter superseded the first one?
4.8 The respondent also contends that the total amount payable to TANGEDCO
was Rs.97.22, consisting of Rs.52.05 as excess demand charges and Rs.45.17
lakhs as BPSC. This figure is preposterous and was derived erroneously and
without proper application of guidelines. As things proved subsequently, the excess
demand charges and BPSC put together amounted to only Rs.11 lakhs. This one
incident has vindicated our stand sufficiently that at every step TANGEDCO erred
and erred thereby putting us to avoidable financial loss for which they should take
up entire responsibility.
4.9 In our case, while granting stay for our writ petition, Madurai bench
of Hon'ble Madras High Court restrained TANGEDCO from collecting any amount
till a final order was passed. Hence as per the above stated Memo No.
CE/COMl/EET/AEE.2/F.Consumers with arrears/D.28/13 dated 23-01-2014, issued
by the Chief Engineer/Commercial, our request for reduction of MD should have
been carried out by TANGEDCO without any loss of time. We again approached
them by our letter dated 12-01-2016. TANGEDCO failed to reduce the MD from
800KVA to 30 KVA. Had they done this at the appropriate time, our sanctioned MD
would have been 30 KVA and we would not have paid such a huge amount as
BPSC month after month.
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4.10 In the meanwhile, our Spinning Mill stopped total production activities and we
applied to the superintending Engineer, TANGEDCO, Karur Distribution Circle for
permanent termination of HTSC No. 19, by our letter dated 27-01--2016. As a reply
to this request of termination of HTSC, by their letter dated 05-02-2016,
Superintending Engineer, TANGEDCO, Karur Distribution Circle stated that our
request would be considered subject to existing rules in force.
4.11 We received a letter from Superintending Engineer, TANGEDCO, Karur
Distribution Circle stating inter alia, 'your request for permanent disconnection of
HTSC No.19, M/s. Amaravathi Spinning Mills, Karur will be considered only after
the payment of all dues pending to be payable to TANGEDCO.
4.12 The Madurai Bench of the Madras High Court issued final order on our writ
petition No. 8572 of 2011 on 22-02-2016. The order said, " Comparing the case as
similar to the one where the consumer has opted out of the wheeling arrangement
after the base period, pro rata energy may be fixed for item B in the circular dated
17-11-2008 and the same may be taken for item C. i.e C = {A-(1.35/5.72) B}
4.13. In view of the same the impugned order passed by the third respondent in his
letter No. SE/KEDC/KRR/DFC/AS/HT/F.19 C. Case /2011 dated 25-11-2011 is set
aside, by giving liberty to the Authorities concerned to pass orders in tune with the
order passed by the Tamil Nadu Electricity Regulatory Commission in DRP No. 19
of 2011 and L.A. No.1 of 2011 in DRP No.19 of 2011 dated 22-03-2012.
Accordingly connected M.P. (RD) Nos. 1& 2 of 2011 are closed.
4.14 The Superintending Engineer, Karur Electricity Distribution Circle, forwarded
the papers to the Chennai Head Office in view of the Court Order. On our part, the
error in computing the quota on the basis of wrong data was pointed out to the HO.
TANGEDCO took a long time to interpret the court order, inorder to fix our
outstanding payment for the period September 2010 to July 2011. The file was
perused by the Head Office for too long. Finally the office of the Superintending
Engineer, Karur Distribution Circle, by his letter dated 26-07-2016 requested us to
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remit a sum of Rs.1175093/ after fixing revised quota. The court order was
delivered on 22-02-2016 and the TANGEDCO authorities communicated to us the
final amount to be remitted, on 26-07-2016. For over five months time, TANGEDCO
could not arrive at the exact amount to be collected from a consumer, as directed
by the Court Order.
4.15 The TANGEDCO authorities neither took steps for the reduction of MD from
800 KVA to 30 KVA. Nor did they act quickly to terminate the HT supply No. 19
belonging to us. If disconnection was to be effected after all the dues were collected
from the consumer, the authorities have completely disregarded the fact that the
unit's deposit of Rs.44,85,501/- was lying with the TANCEDCO.
4.16 Month after month, we were billed for MD charges, penalty thereof, despite
the fact that the court order was in our favour and the demand raised by
Superintending Engineer, TANGEDCO, Karur Distribution Circle was arbitrary and
erroneous. The following payments were made by the unit only because
TANGEDCO failed to reduce the base demand from 800 KVA to 30 KVA
TABLE-A
Sl. Billing Month Bill Amount in Rs. Remarks
No.
01 February, 2016 325568.00
02 March, 2016 322498.00
03 April, 2016 326724.00
04 May, 2016 322483.00
05 June. 2016 390152.00
06 July, 2016 316898.00
07 20,04,323.00
4.17 When the unit applied for reduction of MD from 750 KVA to 30 KVA, the
office of the Superintending Engineer, Karur Electricity Circle could have acceded to
our request in a day or two, since they were well aware of the contents of the Memo
No.CE/COM/EET/AEE.2/F.Consumers with arrears /D.28/13 dated 23-01-2014,
issued by the Chief Engineer, Commercial. It is clearly specified in the memo that
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TANGEDCO can carry out such jobs requested by the consumer, notwithstanding
the fact that a court case is pending to be decided.
4.18 When clear-cut guidelines exist and a court order on a similar case of opting
out of the wheeling arrangement exists as a precedent, it is preposterous that the
office of the SE, KEDC should give us a demand notice to pay a huge amount of
Rs.38,89,059/-. This calculation error from the office of the SE, KEDC, has triggered
a series of processes including demand for payment of BPSC for six months.
4.19 In the above circumstances, we request this Hon 'ble appellate court to
deliver us justice in this matter and pass an order on TANGEDCO to refund the sum
of Rs.20,04,323/-, which was collected without any sanction of law. It was an
exercise by TANGEDCO in making an innocent consumer a victim for the delays
and mistakes committed by TANGEDCO themselves.
5.0 Arguments of Respondent furnished in counter :
5.1 Initially, the HT SC No.19, M/s. Sri Amaravathi Spinning Mills, Karur had owned 3
Nos. wind generator with total capacity of 2.25 MW (WF.SC.No.456, 457, 458) and
wheeling agreement to HT SC No.19. Subsequently on 23.06.2010
M/s. Sri Amaravathi Spinning Mills had sold 2 Nos. wind generators WFSC No.456 & 457 to
M/s. Gamma Green Power Ltd., Chennai. Therefore, the capacity of wind generator owned
by M/s. Sri Amaravathi Spinning Mills got reduced to 0.75 MW.
5.2 The consumer of HT SC No.19, M/s.Sri Amaravathi Spinning Mills had filed
case WP No.12547 of 2010 in Hon'ble High Court of Madras, Madurai Bench
against quota fixing. The Hon'ble High Court by order dated 15.03.2011, in WP No.
23166 of 2010 and etc. batch cases had disposed writ petitions. Accordingly the
TANGEDCO (Technical Branch) issued instruction in Memo No.CE/Comml /EE/
DSM/AEE1/F.Power cut/D.243/11, DT 20.06.2011 for quota fixing. Hence, as per
Head quarters instruction, the revised quota had been fixed by this office after
getting option from the consumer for calculating quota.
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5.3 According to the instruction in Memo. No.CE /Comml /EE/DSM/AEE1/
F.Power cut/ D.243/11, DT. 20.06.2011, the bills for the prior period
from 09/2010 to 06/2011 were revised by this office and intimated vide
Lr.No.SE/KEDC/KRR/DFC/AS/HT/F.19 C.Case/2011, Dt.25.07.2011 to pay the total
excess demand charges of Rs.38,89,059/-
5.4 But, the consumer filed case in Hon'ble High Court, Chennai,
Madurai Bench W.P.(MD) No.8572 of 2011 against TANGEDCO for paying excess
demand charges of Rs.38,89,059/- and got interim stay. After the stay the
consumer exceeded the revised quota demand during 11/2011 to 02/2012 and the
total amount of excess demand charges is Rs.52.05 Lakhs and the BPSC upto
12/2015 is Rs.45.17 Lakhs. Hence, the total amount payable to TANGEDCO is
Rs.97.22 Lakhs upto 12/2015.
5.5 Meanwhile, the consumer HT SC No.19, M/s. Sri Amaravathy
Spinning Mills, Karur had requested for reduction of load from 800 KVA to 30 KVA
on 12.01.2016 and the request of the petitioner for reduction of demand from 800
KV A to 30 KV A was under process in the office of the SE/Karur EDC. (It is to be
noted that the competent authority to give approval for reduction of demand for
service connections with demand above 500 KVA is the Chief Engineer/
Distribution/Trichy. Therefore, it requires time for completion of the process in the
SE and CE Offices).
5.6 As per CE/Commercial, Memo. No.CE/CommI/EET/AEE.2/F.Consurners
with Arrears/ D.28/13, Dt. 23.01.2014, the HT applicant's request for new, additional
demand, dedicated feeder could be processed if there is stay by court for collecting
the pending arrears. But the consumer M/s. Sri Amaravathy Spinning Mills had
requested for reduction of demand from 800 KVA to 30 KVA. Hence, Clarification
was requested from the Chief Engineer/Distribution/Trichy and the Chief
Engineer/Commercial /Chennai vide letter dated 25.01.2016 for processing the HT
reduction of demand application from 800 KVA to 30 KVA of HT SC No.19, M/s. Sri
Amaravathi Spinning Mills, Karur.
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5.7 It is stated that even as the Petitioner's request dated 13/01/2016, for
reduction of demand from 800 KVA to 30 KVA was under process, they had
furnished a fresh request on 27/01/2016 to effect Permanent Disconnection of their
HT service connection No.19. Therefore, the latest request had superseded their
earlier request for reduction of demand and hence the earlier process had been
stopped. Further, the request of the petitioner for permanent disconnection of the
HTSC No.19 was not feasible when arrears were pending as per the guidelines of
TNERC supply code 17, ''the consumer shall be liable to pay arrears of current
consumption charges or any other sum due to the licensee on the date of
disconnection and meter rent if any, upto the date of termination of the agreement
and "Belated payment surcharge" (BPSC) upto the date of payment'. This was
informed to the petitioner vide SE/Karur EDC's letter dated 17.02.2016.
5.8 The petitioner's claim that their request for PDC was in addition to their
request for reduction of MD from 800KVA to 30KVA is unacceptable. Because their
above request are quite opposite in nature ie. The first request was for continuance
of the SC and the second request for disconnection of the SC. They had not
requested to do whichever is possible without paying the due charges demanded by
TANGEDCO. Further, they had paid the subsequent monthly bills with 800 KVA
demand.
5.9 The excess demand charges of Rs.52.05 Lakhs has been levied based on
the instruction issued by TANGEDCO (Technical Branch) in Memo.No. CE/ Comml
/EE /DSM/AEE1/F.Power cut/D.243/11 DT.20.06.2011 for quota fixing. Later this
demand charges had been revised to Rs.11,75,093/- based on the Judgement in
W.P.(MD), No.8572 of 2011 by Hon'ble High Court, Chennai, Madurai Bench
against quota fixing and paid by the consumer.
5.10 The instructions issued in the CE/Commercial memo dated
23.01.2014, are found to be not specific to allow PDC of a HT SC when huge
arrears are pending and when there is order of stay from the Court to collect such
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arrears. Further verification of the documents reveals that the arrears pending to
TANGEDCO was about Rs.92 Lakhs whereas the deposits in the HT SC account of
the petitioner was about Rs.44 Lakhs only. So, if PDC is allowed by the
Superintending Engineer/Karur EDC and if the Court Judgement is in favour of the
Board it would be tough to collect the entire arrears from the petitioner.
5.11 Thereafter M/s. Amarvathi Spinning Mills, HT SC. No.19 had never applied
for reduction of demand. After paying the arrears of Rs.11,75,093/-, the petitioner
had furnished a fresh application for PDC of HT SC No.19 on 29.07.2016. They had
also withdrawn the case filed towards reduction of demand. The PDC was effected
by following routine procedures.
5.12 Incidentally after the petitioner had received information regarding non-
feasibility to do permanent disconnection from the SE/Karur EDC vide letter dated
17.02.2016, the petitioner had never furnished any fresh request towards reduction
of demand. The request already given by them on 12.01.2016 had become invalid
due to the PDC request dated 27.01.2016. The company could have given a fresh
request for reduction of demand at least after receiving the bill with 800 KVA for the
month of 02/2016 onwards.
5.13 Subsequently judgment was delivered on 22.02.2016 in the case relating to
the case of quota fixing for energy and max demand in WP No.8572/2011 with
direction to fix the quota based on a judgment delivered early by TNERC in a
similar case. Based on the judgment, clarification was sought by SE/Karur EDC on
23.03.2016 from the TANGEDCO headquarters regarding levy of penalty charges
in the quota case, specific to the petitioner's case.
5.14 Based on the judgment in WP No.8572/2011, clarification was sought by
SE/Karur EDC on 23.03.2016 from the TANGEDCO headquarters regarding levy of
penalty charges in the quota case. The clarification for this case was issued by the
TANGEDCO headquarters on 25.07.2016. Based on that demand notice for
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penalty charges with BPSC for Rs.11,75,093/- was issued to the consumer on
26.07.2016 which was remitted by the consumer on 27.07.2016.
5.15 As per CE/Commercial Memo. No.CE/Comml/EET/AEE.2/F.Consumers with
Arrears/D.28/13, Dt.23.01.2014, it is instructed that the HT applicant's request for
new, additional demand, dedicated feeder request could be processed if there is
stay by court for collecting the pending arrears. But the consumer M/s. Sri
Amaravathy Spinning Mills had requested for conversion of HT to LT by reduction
of demand from 800 KVA to 30 KVA. Hence, Clarification was requested from the
Chief Engineer/ Distribution/ Trichy and the Chief Engineer/Commercial/Chennai
vide letter dated 25.01.2016 for processing the H.T reduction of demand
application from 800 KVA to 30 KVA of HT SC No.19, Sri Amaravathi Spinning
Mills, Karur.
5.16 Review of the HT bills pertaining to the HT SC No.19 for the months from
02/2016 to 06/2016 reveals that the bills comprise usage charges, demand charges
and penalty for low power factor. There was no penalty levied for unutilized
demand as being claimed by the petitioner in their letters. The consumer thereafter
never applied for reduction of demand and have applied for PDC on 27.07.2016
after payment of arrears and HT SC was permanently disconnected on 26.08.2016.
6. Written Arguments filed by the Appellant on 17.08.2018 :
6.1 As a result of TNERC order dated 22-03-2012, in respect of D.R.P. No.19 of
2011 and I.A. No.1 of 2011 in D.R.P. No.19 of 2011, in respect of those consumers
who had opted out of the wheeling arrangement after the base period, the
derivation of CPP 'B' - component of energy, three months average) was redefined.
Notwithstanding the fact that our case was to be treated as one who had opted out
of the wheeling arrangement and that TNERC order was applicable to us too, the
SE, Karur EDC, in utter disregard of the said TNERC order, states in the above
paragraph, "the BPSC up to 12/2015 is Rs.45.17 lakhs. Hence the total amount
payable to TANGEDCO is Rs.97.22 lakhs up to 12/2015."
16
6.2 In the order dated 22-02-2016 on our writ petition W.P.No.8572 of 2011, the
Hon'ble judge of the Madurai Bench of the Madras High Court. clearly states in
Paragraph (2) as follows:
"Today, when the matter is taken up for hearing, the learned counsel for the
respondent Tamil Nadu Electricity Board brought to the notice of the court that in
similar circumstances, the Tamil Nadu Electricity Regulatory Commission has
passed orders which are also applicable to the facts of the case. She also admitted
that in tune with the orders passed, similar order can be passed. Relevant portion
of the said order is extracted as follows:"
6.3 The respected members of this appellate court will notice, that after
processing of our papers after the court order on our W.P. No. 8572 of 2011, the
final outstanding amount payable by us was reduced to Rs. 11,75,093/ by
TANGEDCO, as compared to the whopping Rs.97.22 lakhs as quoted by the
Superintending Engineer, Karur EDC. We submit to the respected Appellate court
that the final figure of Rs. 11,75,093/ was arrived at after applying the provisions of
the TNERC order dated 22-03-2012 in respect of D.R.P. No. 10 of 2011 and IA
No.1 of 2011 in D.R.P. No.19 of 2011. This order of TNERC is obviously referred to
by the learned counsel for the respondent Tamil Nadu Electricity Board in the above
quoted paragraph.
6.4 The TNERC order dated 22-03-2012 was applicable to all HT consumers,
who had come out of the wheeling arrangement and whose wind mill generating
capacity was reduced due to sale of the wind mills. Was not the TNERC order
dated 22-03-2012 circulated to the Superintending Engineers of all circles so that it
could be applied to similar consumers who had opted out of the wheeling
arrangement and had reduction in capacity of wind energy? It becomes obvious
that TANGEDCO would address the problems of the consumers only if the
consumer goes to a court of law and wait for the outcome, no matter how long it
takes.
6.5 In the counter to our appeal petition, the Superintending Engineer,
TANGEDCO, KDC, inter alia, states in paragraph (e,f,g) as follows: "as per
CE/Commercial, Memo No. CE/CommI/EET/AEE-2/F. Consumers with arrears/
D.2B/13,Dt.23-01-2014, the HT applicant's request for new, additional demand, and
dedicated feeder could be processed if there is stay by court for collecting the
17
pending arrears. But the consumer M/s. Sri Amaravathi Spinning Mills had
requested for reduction of demand from 800 KVA to 30 KVA. Hence clarification
was required from the Chief Engineer/Distribution Trichy and the Chief Engineer/
Commercial Chennai vide letter dated 25-01-2016 for processing the HT reduction
of demand application from 800 KVA to 30 KVA of HTSC No.19, M/s. Sri
Amaravathi Spinning Mills, Karur."
6.6 The Superintending Engineer, TANGEDCO, Karur Distribution Circle,
shockingly has not applied his mind to a department memo. Paragraph (iii) is about
consumers who have Court orders restraining TANGEDCO from collecting
outstanding dues and therefore was applicable for us. In this paragraph, there is no
restrictive clause regarding consumers' requests. The paragraph clearly goes to
mean that any request from the consumer should be processed without insisting the
consumer to remit the outstanding dues. Requests for new, additional demand,
dedicated feeder are not exhaustive as far as consumers' requests concerned but
include other requests as reduction of MD and PDC also.
6.7 The non feasibility for PDC was conveyed to us by TANGEDCO letter dated
17-02-2016. After four days, the order on our writ petition was pronounced. We had
calculated internally that we would have to pay around Rs. 10-12 lakhs towards
demand charges. We firmly believed that the process of PDC would be completed
in the next 10-15 days. We never imagined that the process would take 5-6 months.
6.8 We would like to quote from the judgement dated 01-08-2012 delivered by
the Hon'ble Madras High Court in setting aside a batch of writ petitions wherein the
Hon'ble Judge remarked, "The doctrine of legitimate expectation is one of the
most important principles that an individual will expect out of an executive action ----
" Our legitimate expectation that the PDC would be completed was belied
by the lukewarm executive action by TANGEDCO officials by taking more than four
months to arrive at our dues to TANGEDCO. Earlier our legitimate expectation was
belied by the TANGEDCO by delaying our request for the reduction of demand from
800 KVA to 30 KVA.
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7. Hearing held by the Electricity Ombudsman:
7.1 To enable the Appellant and the Respondent to put forth their arguments in
person a hearing was conducted on 18.9.2018.
7.2 Thiru. K. Murthy attended the hearing on behalf of the appellant and put forth
his arguments.
7.3 Tmty. K. Malathy, AEE /O&M/West, Karur & Thiru. V. Ganesh, AEE/Lines/
230 KV Pugalur have attended the hearing and put forth their arguments.
8.0 Arguments putforth by the Appellant on the hearing date :
8.1 Appellant’s representative’s Thiru. K. Murthy reiterated the contents of the
Appeal petition.
8.2 The appellant has argued that they have requested reduction of demand from
800 KVA to 30KVA as the mill production had been stopped due to various
reasons. But TANGEDCO did not take any action for the reduction of the Maximum
demand from 800 KVA to 30 KVA which should have been done within 15 days
time.
8.3 In the meanwhile, Spinning Mill stopped total production activities and the
Appellant had applied to the superintending Engineer, TANGEDCO, Karur
Distribution Circle for permanent termination of HTSC No.19, by their letter dated
27-01-2016. As a reply to this request of termination of HTSC, the Appellant have
received a letter from Superintending Engineer, TANGEDCO, Karur Distribution
Circle stating inter alia that their request for permanent disconnection of HT SC
NO.19 will be considered only after the payment of all dues pending to be payable
to TANGEDCO.
8.4 The appellant further stated that they had never withdrawn their letter for
reduction of MD. That request was still alive in the office of the Superintending
Engineer. Respondent knew that reduction of MD was important for them as much
as PDC request. If the PDC request was going to be cumbersome, respondent
19
could have acted upon their request on reduction of MD. The Appellant’s letter for
PDC was only in addition to the request for reduction of MD from 800 KVA to 30
KVA. The respondent cannot assume on their own that the second letter
superseded the first one?
8.5 Further the appellant stated that the Madurai bench of Hon 'ble Madras High
Court has restrained TANGEDCO from collecting any amount till a final order was
passed and hence as per the Memo dated 23-01-2014, issued by the Chief
Engineer, Commercial, the request for reduction of MD should have been carried
out by TANGEDCO without any loss of time. Had they done this at the appropriate
time, the sanctioned MD would have been reduced to 30 KVA and the Appellant
would not have paid such a huge amount as BPSC month after month.
8.6 The Madurai Bench of the Madras High Court issued final order on the
Appellant’s writ petition No. 8572 of 2011 on 22-02-2016. After 5 months, the
Superintending Engineer, Karur Distribution Circle, by his letter dated 26-07-2016
requested to remit a sum of Rs.1175093/ after fixing revised quota. For over five
month time, TANGEDCO could not arrive at the exact amount to be collected from
a consumer, as directed by the Court Order.
8.7 When the unit applied for reduction of MD from 800 KVA to 30 KVA, the SE,
Karur Electricity Circle could have acceded to the request in a day or two, since the
respondent were well aware of the contents of the Memo dated 23-01-2014, issued
by the Chief Engineer, Commercial. It is clearly specified in the memo that
TANGEDCO can carry out such jobs requested by the consumer, notwithstanding
the fact that a court case is pending to be decided.
8.8 Stating the above circumstances, the Appellant requested to pass an order
on TANGEDCO to refund the sum of Rs.20,04,323/-, which was collected without
any sanction of law. It was an exercise by TANGEDCO in making an innocent
consumer a victim for the delays and mistakes committed by TANGEDCO
themselves. The Appellant therefore request this appellate court to give us justice
20
and pass orders on TANGEDCO to refund the sum of Rs.20,04,323/-.
9.0 Arguments putforth by the Respondent on the hearing date :
9.1 Respondent’s representatives have reiterated the contents of the Counter
affidavit.
9.2 The respondent has argued that the consumer of HT SC No.19, M/s.Sri
Amaravathy Spinning Mills, Karur had requested for reduction of load from 800 KVA
to 30 KVA on 12.01.2016. As per CE/Commercial memo dated 23.01.2014, the HT
applicant's request for new, additional demand, and dedicated feeder could be
processed if there is stay by court for collecting the pending arrears. But the
consumer M/s.Sri Amaravathy Spinning Mills had requested for reduction of
demand from 800 KVA to 30 KVA. Hence, Clarification was sought for vide letter
dated 25.01.2016 for processing the HT reduction of demand application from 800
KVA to 30 KVA of HT SC No.19.
9.3 Further the respondent has stated that when the Petitioner's request for
reduction of demand from 800 KVA to 30 KVA was under process, they had
furnished a fresh request on 27/01/2016 to effect Permanent Disconnection of their
HT service connection No.19. Therefore, the latest request had superseded their
earlier request for reduction of demand and hence the earlier process had been
stopped. Further, the request of the petitioner for permanent disconnection of the
HTSC No.19 was not feasible when arrears were pending as per regulation 17 of
TNERC Supply Code.
9.4 Further after receiving information regarding non-feasibility to do permanent
disconnection from the SE/Karur EDC vide letter dated 17.02.2016, the petitioner
had never furnished any fresh request towards reduction of demand. The request
already given by them on 12.01.2016 had become invalid due to the PDC request
dated 27.01.2016. The company could have given a fresh request for reduction of
demand at least after receiving the bill with 800 KVA for the month of 02/2016
21
onwards.
9.5 Based on the judgment in WP No.8572/2011, clarification was sought by
SE/Karur EDC on 23.03.2016 from the TANGEDCO headquarters regarding levy of
penalty charges in the quota case. The clarification for this case was issued by the
TANGEDCO headquarters on 25.07.2016. Based on that demand notice for
penalty charges with BPSC for Rs.11,75,093/- was issued to the consumer on
26.07.2016 which was remitted by the consumer on 27.07.2016.
9.6 Review of the HT bills pertaining to the HT SC No.19 for the months from
02/2016 to 06/2016 reveals that the bills comprise usage charges, demand charges
and penalty for low power factor. The consumer thereafter never applied for
reduction of demand and have applied for PDC on 27.07.2016 after payment of
arrears and HT SC was permanently disconnected on 26.08.2016.
10. Findings of the Electricity Ombudsman:
10.1 On a careful consideration of the arguments put forth by the appellant and
the respondent, the findings of the Ombudsman on the appellant’s prayer are given
below:
10.2 The main prayer of the appellant is to order refund of Rs.20,04,323/- which
were collected as monthly charges from February’2016 to July’2016. On scrutiny, it
is noted that the said amount is pertaining to regular monthly bills which comprises
of energy charges, demand charges and PF compensation charges etc. for the
period from February’2016 to July’2016 in respect of HT SC No.19 of M/s.Sri
Amaravathi Spinning Mills. The contention of the appellant is if the reduction of
demand from 800 KVA to 30 KVA as per the appellant’s letter dated 12.01.2016 has
been done in stipulated time, their demand charges would have been limited to 30
KVA. Therefore, the crux of the issue is whether the reduction of demand quota
from 800 KVA to 30 KVA is effected within the stipulated time by the respondents?
22
10.3 The appellant has stated that initially they have requested reduction of
demand from 800 KVA to 30KVA on 12.01.2016. Since the mill production had
been stopped completely they have given another letter on 27.01.2016 for
termination of HT SC No.19. At the same time they have not withdrawn the first
request of reduction of demand.
10.4 The respondent has stated that when the Petitioner's request for reduction of
demand from 800 KVA to 30 KVA was under process, the Appellant had furnished
a fresh request on 27/01/2016 to effect Permanent Disconnection of their HT
service connection No.19. Therefore, the latest request had superseded their earlier
request for reduction of demand and hence the earlier process had been
stopped, the respondent contended.
10.5 But the appellant has argued that they had never withdrawn their letter for
reduction of MD and reduction of MD was important as much as PDC request. If
the PDC request was going to be cumbersome, respondent could have acted upon
their request on reduction of MD. Further argued that their letter for PDC was only
in addition to the request for reduction of MD from 800 KVA to 30 KVA.
10.6 The respondent has argued that the consumer of HT SC No.19, M/s.Sri
Amaravathy Spinning Mills, Karur had requested for reduction of demand from 800
KVA to 30 KVA on 12.01.2016. As per CE/Commercial memo dated 23.01.2014,
the HT applicant's request for new, additional demand and dedicated feeder could
be processed if there is stay by court for collecting the pending arrears. But the
consumer M/s.Sri Amaravathy Spinning Mills had requested for reduction of
demand from 800 KVA to 30 KVA. Hence, clarification was sought for, vide letter
dated 25.01.2016 for processing the HT reduction of demand from 800 KVA to 30
KVA of HT SC No.19.
10.7 The respondents have stated that the reduction of demand from 800 KVA to
30 KVA of HT SC No.19 was under process but the appellant has outstanding
dues. Appellant argued that there are no dues as the Hon’ble court granted stay.
23
In this connection I would like to refer Regulation 5(2)(III)(iv) of TNE Supply code
which is reproduced below:
” 5. Miscellaneous charges (1) **** (2) Excess demand charge: *** (III) *** (iv) No addition or reduction of load in case of LT service and no addition or
reduction of demand in case of HT service, may be sanctioned unless the
outstanding dues in the same service connection had been paid.”
10.8 On a careful reading of the above, it is noted that for the existing consumer,
no addition or reduction of load in case of LT service and no addition or reduction of
demand in case of HT service may be sanctioned unless the outstanding dues in
the same service connection had been paid.
10.9 In the case on hand, when the appellant requested reduction of demand
there is an outstanding due of Rs.38,89,059/- as per SE/Karur EDC demand notice
dated 25.07.2011. The demand was based on erroneous calculation in arriving at
the figures for base energy quota and base demand quota. Aggrieved by the
demand from the appellant filed a writ petition No.W.P (MD) 8572 of 2011, in the
Madurai Bench of Hon'ble Madras High Court. The Hon'ble High Court was pleased
to grant interim injunction till 17-08-2011 and thereafter the Madurai Bench of the
Madras High Court issued final order on 22-02-2016.
10.10 On a careful consideration of the fore going paras, the issue before me is
whether the reduction of demand can be considered when the applicant has
outstanding dues. In this connection I would like to refer the Chief
Engineer/Commercial/TANGEDCO memorandum issued vide Memo.No.CE/Comml
/EET/AEE.2/F.Consumers with Arrears/ D.28/13, (Tech.Br), dated 23.01.2014
which is reproduced below:
24
"Memo.No.CE/Comml /EET/AEE.2/F.Consumers with Arrears/ D.28/13, (Tech.Br), dated
23.01.2014
*****
In continuation to the instructions already issued vide reference (i) to (iv)
cited above, the following instructions are hereby issued:
(i) Whenever any order of stay, injunction, etc. is granted by the Court, immediate
action should be taken to vacate such order of stay, injunction, etc. so as to realise the
outstanding dues, if any from the consumers.
(ii) When the consumers having outstanding dues approach TANGEDCO for their
various requests such as new, additional demand, dedicated feeder, etc. and if there is
no order of stay by Court against collection of outstanding amount from the consumers,
action may be taken to realise the pending amount from the consumer before
processing their request.
(iii) When the consumers having outstanding dues approach TANGEDCO for their
various requests and if there is an order of stay, injunction etc. granted by the Court
restraining the TANGEDCO from collecting such outstanding dues, the consumers
should not be insisted to remit such outstanding dues covered by stay as a condition
precedent -to process/allow their requests. Such request of the consumers shall be
processed and thereafter, a report is to be sent duly stating the full and complete
details of the case such as brief history of case, actual date of filing of a counter
affidavit together with vacate stay/injunction petition, number assigned by the registry
of the Court on such vacate stay/injunction petition and the action taken to list such
vacate stay/injunction petition for early hearing in consultation with the Standing
Counsel/Government Pleader/Advocate on behalf of the TANGEDCO and subsequent
developments that took place in such cases, etc., with connected records."
On a careful reading of the above letter it is clear that as long as the demand
is stayed, it should be deemed that there are no arrears. The above letter also
restrains the TANGEDCO officials from collecting outstanding dues covered by stay
as a condition precedent to process/allow their requests. As there is no due, the
25
Regulation 5(2)(III)(iv) of TNE Supply code is not applicable to the present case.
Hence, it is held that there is no bar in effecting reduction of demand from 800 KVA
to 30 KVA of HT SC No.19.
10.11 Further, there is no time frame fixed for effecting the reduction of demand as
per TNERC regulation. In this connection I would like to state that even though
there is no time frame specified in the distribution standards of performance, the
time frame for effecting new service connection involving no extension or
improvement work can be taken i.e. preferably within a week but not exceeding 30
days.
10.12 On a careful consideration of the foregoing paras, I am of considered opinion
that there is no bar for effecting reduction of demand for the appellant’s HT SC
No.19 since it should be deemed that there are no arrears as on the date of
application i.e. 12.01.2016. Further the reduction of demand should have been
effected within 30 days from the date of application. In the present case, the
application was submitted on 12.01.2016, and the same was not approved by the
Respondent till permanent dismantling of the HT SC 19.
10.13 Further, the appellant has prayed to order refund Rs.20,04,323/-. On
scrutiny it is noted that the said amount is pertaining to regular monthly bills which
comprises of energy charges, demand charges and PF compensation charges etc.
for the period from February’2016 to July’2016 in respect of HT SC No.19. Since
the said HT service has been utilized by the appellant till the date of permanent
dismantling, the appellant is liable to pay the regular CC and other misc charges as
per the regulation inforce only based on the deemed demand of 30 KVA and not for
800 KVA. The bill has to be revised accordingly considering deemed demand of 30
KVA only.
10.14 Therefore, as per findings in para 10.12 and 10.13 above, the respondents
are directed to give effect the reduction of demand from 800 KVA to 30 KVA on
expiry of 30 days from the date of application (Date of Application 12.01.2016) and
26
refund the excess amount collected from the Appellant’s HT SC No.19 after due
revision of bills considering the demand of 30 KVA.
11. Conclusion :
11.1 In view of my findings in para 10 above, the respondents are directed to give
effect the reduction of demand from 800 KVA to 30 KVA on the date immediate on
expiry of 30 days from the date of application (Date of Application 12.01.2016) and
refund the excess amount collected from the HTSC No.19 after due revision of bills
considering the demand of 30 KVA.
11.2 A compliance report in this regard shall be furnished within 45 days from the
date of receipt of this order.
11.3 With the above findings the AP. No.32 of 2018 is finally disposed of by the
Electricity Ombudsman. No Costs.
(S. Devarajan) Electricity Ombudsman
To 1) M/s Amaravathi Spinning Mills, 9D/5, Ramakrishnapuram, Karur – 639 001. 2) The Superintending Engineer,
Karur Electricity Distribution Circle,
TANGEDCO,
No.3, Covai Road,
Karur – 639 002 . 3) The Chairman, (The Superintending Engineer), Consumer Grievance Redressal Forum,
Karur Electricity Distribution Circle, TANGEDCO, 3,Kovai Road, Karur-639002
27
4) The Chairman & Managing Director,
TANGEDCO, NPKRR Maaligai, 144, Anna Salai, Chennai -600 002. 5) The Secretary, Tamil Nadu Electricity Regulatory Commission, 19-A, Rukmini Lakshmipathy Salai, Egmore, Chennai – 600 008. 6) The Assistant Director (Computer) – For Hosting in the TNEO Website Tamil Nadu Electricity Regulatory Commission, 19-A, Rukmini Lakshmipathy Salai, Egmore, Chennai – 600 008.