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Agahr Group Co. Op. Cotton Sale Ginning & Pressing Soc. Ltd. v/s Uttar Gujarat Vij Company Ltd.

    Special Civil Application No. 3331 of 2004

    Decided On, 12 June 2017

    At, High Court of Gujarat At Ahmedabad


    For the Appellant: Tanvish Bhatt for M/s. Wadiaghandy & Co., Advocates. For the Respondent: R1, Lilu K. Bhaya, Advocate.

Judgment Text

1. In this petition filed by the petitioner under Article 226 of the Constitution, the challenge is directed against notice of demand dated 09th March, 2004 as well as notice of demand dated 25th February, 2004 issued by respondent-electricity company whereby the petitioner is asked to pay energy bill of Rs. 10,76,690/-, failing which the petitioner threatened disconnection. The said two demand notices are prayed to be set aside. The notices were under section 24(1) of the Indian Electricity Act, 1910.

2. The petitioner is a co-operative society having 550 members, which was previously known as Ashoknagar Group Co-operative Cotton Sale Ginning & Pressing Society Limited. The main object of the petitioner society was ginning and pressing the cotton produced by the local farmers and to provide better market facilities to them. The petitioner was a consumer of erstwhile Gujarat Electricity Board, now converted into respondent-electricity company.

3. The petitioner had applied to be treated as a seasonal customer. According to the petitioner, it had not applied for such status for the year 2002 and not for the subsequent year 2003. On 26th February, 2004, the respondent No. 2-authority of the electricity company, issued to the petitioner electricity bill for the month of February, 2004 in which it was mentioned that outstanding arrears was Rs. 10,76,690/-. The aforesaid bill was sent treating the petitioner as seasonal customer charging such rates even for subsequent year. The petitioner made a representation dated 05th March, 2004 to the first respondent stating that it had not applied for seasonal status for the period in respect of which the bill was sought to be raised.

3.1. In the affidavit-in-reply, respondent company denied that the petitioner was to be charged as seasonal consumer only for the year 2002 and not for the subsequent years. It was submitted that since the petitioner required to pay more on the bill amount for the subsequent years, the petitioner turned around and contended otherwise. It was submitted that petitioner was required to pay Rs. 3.3 lakhs more than it was actually charged and thus wanted to take advantage of remaining as a seasonal consumer by paying less amount by Rs. 3.3 lakhs towards the electricity dues. It is the case of the respondent that status once granted to a consumer remains unchanged till the consumer applies for discontinuation of the status and that he will be liable to pay at the rate of seasonal consumer irrespective of anything.

4. Heard learned advocate Mr. Tanvish Bhatt for the petitioner and learned advocate Ms. Lilu Bhayat for the respondent-Uttar Gujarat Vij Company Limited and its authority.

5. As could be noticed from the facts and the contentions, the issue involved is about the charging the petitioner for electricity consumption. It is the say of the petitioner that it opted to be a seasonal consumer for a particular year, whereas the case of the respondent-electricity company is that once it chose for seasonal status in a particular year, he will be charged on such basis. According to the respondent, as submitted by learned advocate for the respondent, the petitioner was HT consumer, to be charged at a particular rate of tariff and upon his application for being charged as a seasonal consumer for the year 2002, the petitioner was accorded status as seasonal consumer under Rule 10.14.1. The respondent-electricity company continued to treat the petitioner as seasonal consumer and charge at seasonal rates even for the subsequent years raising the bill accordingly. This gave rise to the dispute and the same is the issue involved in this petition.

5.1. The relevant tariff Regulation No. 10.14 may be looked at which deal with seasonal consumer.

"10.14. Seasonal Consumers taking HT Supply

10.14.1. The expression, "Seasonal Consumer", shall mean a consumer who takes and uses power supply for ice factory, ice-candy machines, ginning and pressing factory, oil mill, rice mill, salt industry, sugar factory, khandsari, cold storage plants (including such plants in fishery industry), tapioca industries manufacturing starch, pumping load for irrigation, etc.

10.14.2. A consumer, who desires to be billed for minimum charges on annual basis, shall intimate in writing in advance about the off-season during which the energy consumption, if any, shall be mainly for overhauling of the plant and machinery. The off-season period at any time shall be full calendar month/months. The total period of off-season so declared and observed shall be not less than three calendar months in a calendar year.

10.14.3. The total minimum amount under the head "Demand and Energy Charges" payable by a seasonal consumer satisfying the eligibility criteria under sub clause 10.14.1 above and complying with provisions stipulated under sub clauses 10.14.2 above shall be Rs. 4000/- per annum per KVA of the billing demand.

10.14.4. The billing demand shall be the highest of the following:

(a) The highest of the actual maximum demand registered during the calendar year.

(b) Eighty-five percent of the arithmetic average of contract demand during the year.

(c) One hundred KVA

10.14.5. Units consumed during the off-season period shall be charged for at the flat rate of 415 Paise per Unit.

10.14.6. Electricity bills paid during off-season period shall not be taken into account towards the amount payable against the annual minimum bill. The amount paid by the consumer towards the electricity bills for seasonal period only under the heads "Demand Charges" and "Energy Charges" shall be taken into account while determining the amount payable towards the annual minimum bill."

5.2. The aforesaid Rules make it clear that certain categories of industries of a particular kind are allowed the benefit of seasonal rates and these consumers are treated as seasonal consumer on application. By this set of Rules, a class of seasonal consumer is carved out for special treatment. The seasonal consumer is a consumer which by its very nature of business runs its factory or industry only for a particular period and the remaining period in a year would be a period of off-season. Such consumer takes advantage of special tariff rates by seeking the status as a seasonal consumer.

5.3. Regulation No. 10.14.2 contemplates the electrical charges on annual basis. Even otherwise, the concept of seasonal is always to be understood on annual basis. The Rule further provides that total period of off-season shall be declared by the consumer in respect of a particular year which shall not be less than three calendar months in a calendar year. Rule 10.14.3 contemplates total minimum amount towards the charges payable by the seasonal consumer during the billing period. The billing period would necessarily be the period during which electricity consumed when the industry or factory has worked. What is contemplated under the aforesaid Rules which have a conjoint operation, is the seasonal status for the consumer concerned and billing annually and for that, season with off-season period is to be indicated.

5.4. Reverting to the factual features of this case, copy of application dated 25th December, 2001 (Page 17 of the compilation of the petition) made by the petitioner for getting seasonal connection clearly mentions the off-season months to be July, August, September, October, November and December, 2002 and for such period of that particular year, seasonal status is applied for. The other correspondence which forms part of the record of the petition, making particular reference to communication dated 18th December, 2001 of the Divisional Office of erstwhile Gujarat Electricity Board to the petitioner unequivocally mentions about sending the seasonal consumer form for the particular year 2002 and the contents of the letter further mentions that the form is sent for availing benefits of seasonal rates for the particular period of year 2002 and that such form shall have to be submitted before 31st December, 2001 to be entitled to avail the seasonal rates for the year 2002. From the factual aspects discernible from the afore-stated documentary material, there is no gainsaying that petitioner's application to avail seasonal status was for particular year 2001.

6. A Law or rule in its operation, would necessarily conceive principles of reasonableness, rationality and non-arbitrariness to be of pervasive application-whether it is administrative or executive action whether it is a case of discharge of statutory function. This equally holds true also in respect of application of any regulation or rule, and even where a provision or rule is to be interpreted and applied. These principles are in-built and have broad-based application. The concept of 'reasonableness' in the administrative law is the essence of Lord Green's dictum familiar as Wednesbury Principle which found its exposition in Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1947(2) All ER 680].

6.1. The doctrine of Wednusbary reasonableness is well-known to the field of law, and is largely advocated to be applied in the administrative area. The Wednusbary principle applies for ironing out arbitrariness in action. The Wednesbury Principle highlights the standards of fairness and reasonableness. When it is the principle which disapproves irrationality and arbitrariness, then there is no reason why the 'wednesbury approach' may be cultivated to be applied in principle to a rule or regulation to any situation to which it is to be applied so as to make the end-result reasonable rational, non-arbitrary and true to the spirit of the purpose.

6.2. In Delhi Science Forum v. Union of India [(1996) 2 SCC 405], the Apex Court addressed the power of central government to grant licence to different non-government companies to establish and maintain telecommunication systems in the country and the validity of procedure adopted by the central government. While considering the said issue with reference to section 4(1) of the Telegraph Act, 1885, the Apex Court adverting to the principles of Wednesbury reasonableness observed that the authority has to apply relevant considerations and should not act to promote a purpose alien to the spirit of the provision.

6.3. If the Rules are to be applied reasonably and rationally, they must take an intake of the aspect that seasonal character does not go with the permanent application. Seasonal status has to be considered with reference to a particular year and such status cannot be applied de hors a particular year. It was a thoroughly misconceived contention that seasonal status granted to a consumer will remain unchanged. The principle 'once declared seasonal is always

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a seasonal' does not have place either in the working of the Rules. 6.4. Thus the aforementioned Rules 10.14.1, 10.14.2 and 10.14.3 could be properly applied by embracing the Wednesbury approach of rationality. Reading them together and reading them with reference to the object with which they are engrafted, the seasonal status of consumer contemplated thereunder is to be understood on year-to-year basis only. What is granted under the Rule is seasonal status to be applied for charging rates by electricity seasonally. 7. For the foregoing reasons, the petition deserves to be allowed. Resultantly, notices of demand dated 09th March, 2004 and dated 25th February, 2004 (Annexure-D and Annexure-B in the petition respectively) issued by respondent No. 1 electricity company are hereby quashed and set aside. 8. It is clarified and directed that if the petitioner has deposited any amount pursuant to the demand notice as condition of the ad-interim relief, the respondent company shall not be required to refund the same pursuant to this order, but it shall adjust the same in the future bills to be paid by the petitioner. 9. Rule is made absolute in the aforesaid terms.