Ashok B. Hinchigeri, J.
1. The petitioner has called into question the Orders, dated 4.7.2009 (Annexure-J) and 27.42011 (Annexure-A) passed by the respondent Nos.2 and 3 respectively.
2. The facts of the case in brief are that the petitioner owns 60 apartments in the multistoried building complex known as Adarsh Gardens situated in Jayanagar, Bangalore. The tariff for the said installations is being charged as per Tariff Schedule LT-2(a). Based on the inspection conducted by the vigilance squad, the respondent No.2 vide his Order, dated 19.12.2003 (Annexure-F), held that the applicable tariff is LT-3 meant for the private guest-houses and demanded the payment of back billing charges. This order was challenged by the petitioner by filing an appeal before the Appellate Authority. The General Manager, by his Order, dated 26.9.2006 (Annexure-G) confirmed the levying of the commercial tariff to the petitioner’s installations in question. The petitioner challenged the orders passed by the original authority and the Appellate Authority by filing W.P.No.8416/2007. This Court by its Order, dated 31.1.2009 (Annexure-H) quashed both the orders and remitted the matter. Pursuant thereto, the second respondent passed the Order, dated 4.7.2009 (Annexure-J) holding that the petitioner’s installations attracts the commercial tariff and directing the petitioner to pay the back billing charges. He also made it clear that if the petitioner defaults in making the payments, the installations would be disconnected. He directed the petitioner to furnish the individual agreement for all the 60 installations by paying the admissible fee for tariff conversion. This order was challenged by the petitioner by filing W.P.Nos.21633/2009 and 21909-969/2009. This Court, by its Order, dated 20.11.2009 (Annexure-K) rejected the said petitions reserving the liberty to the petitioner to avail of the remedy of filing the appeal before the Appellate Authority.
3. The petitioner filed appeal before the respondent No.3, who by its Order, dated 27.4.2011 (Annexure-A) dismissed the appeal.
4. Sri Dhyan Channappa, the Learned Counsel appearing for M/s.Crest Law Partners for the petitioner submits that the petitioner has purchased 60 apartments in 1994 for housing its employees for temporary period. There is no commercial activity whatsoever in the apartments. The petitioner’s employees can stay there for a limited period. The purpose for which the apartments are being used is strictly residential.
5. He brings to my notice that the Tariff Schedule LT-2(a) is applicable for the installations of the hostels also. At the most or at the worst, the use of the apartments in question by the petitioner’s employees can only be compared/equated with the purpose for which the hostels are being used. He submits that the respondents appear to have gone only by the nomenclature. Just because a board is put on the entrance to the apartments, the utility inside does not undergo the change. The installations attracting Tariff Schedule LT-3 are in respect of the nursing homes, private hospitals, clinics, cinemas, choultries, etc. Going by the purpose for which the apartments in question are being utilized, LT-3 is not attracted. Drawing support from the Apex Court’s judgment in the case of LOKMAT NEWSPAPERS PVT. LTD. vs. SHANKARPRASAD (1999) 6 SCC 275., the Learned Counsel would contend that the meaning of a word is to be judged by the company it keeps. It is a legitimate rule of construction to construe the words in a statute with reference to the words found in immediate connection with them. He would contend that the prefix ‘private’ to the guest-house and a Government guest-house. On the other hand, the prefix ‘private’ is used to distinguish private guest-house from a public guest-house. The apartments in question are not being utilized for housing the guests or strangers. The employees of the petitioner’s Company cannot be treated as the guests or strangers.
6. To advance the submission that unless a place is intended to be used by a complete stranger or outside, it cannot be called a guest-house, he relies on the Division Bench judgment of Madras High Court in the case of COMMISSIONER OF INCOME TAX, TAMIL NADU-III vs. ARUNASUGARS LTD, (1980) 123 ITR 619. He read out the following potions of the said decision:
'The assessee tried to get over this difficulty by contending that it is not a guest house at all and that, therefore, it does not come within the scope of S.37(3). We have, therefore, it examine as to what a guest house is. The term has not been defined in the Act. The dictionary meaning of 'gust house' is 'an inn, a home separate from a main dwelling for the use of guest'. In the Shorter Oxford Dictionary, 3rd Edn., the meaning of 'guesthouse' is given as 'an inn – A house or apartment for the reception of strangers or guests'. From the language of R.6C it appears that the rule-making authority considered that even the employees of a company would be guests because provision is made for the category of employees who would use the guest house in places other than the principal place of business of the assessee of the factory premises of the assessee. In such cases, as already seen the guest house must be maintained exclusively for the benefit of the employees (See Cl.(d) of R.6C). However, with reference to the factory premises as in this case, there is no restriction on the category of persons who alone could stay in it. This stands to reason, as in a case like this, where the factory is located away from any urban locality and where the normal facilities available for food or accommodation cannot be had, it is necessary in the interest of the business of the company to maintain a guest house. As is sometimes graphically put, a company has nobody to the kicked or soul to be damned and, therefore, the company has no function only through its directors and its employees. In a case where the assessee maintains a guest house exclusively for the directors and other employees, through whom alone it can carry on business, it cannot be stated that these personnel can be taken to be outsiders so as to be called guests. Thus, in our opinion, where the guest house is maintained, either in the principal place of business or in a place where the factory is located, for the directors and other employees of the company who have to visit it for the purpose of the company’s business, then any expenditure incurred for the maintenance of such accommodation cannot be brought within the scope of S.37(3). Further, in such a case, an occasional stay by a person who visits the factory for the purpose of its business cannot also be called a guest. Any official visiting the factory for the purpose of enforcing the laws applicable to the factory cannot also be described as an outsider so that any accommodation used by him in connection with the company’s work, can be treated as accommodation in the nature of a guest house. It is only with reference to the other categories, like strangers, that the accommodation, which is maintained can be correctly called a guesthouse. In other words, the meaning of the term 'guest house' as a place for the reception of strangers appears to have been accepted by the rule-making authority as the rules envisage employees staying in these premises. If employees were considered to be strangers such a provision would not have been made. It is necessary to bear in mind the legal position that the rule-making authority cannot expand the concept of the word 'guest' so as to include employees if the word did not comprehend such employees. Thus, employees are not strangers so as to be guests. The result is that unless the guest house is intend for use by a complete stranger, it cannot be called a guest house which falls within the scope of S.37(3).'
7. The Learned Counsel relied on the Madras High Court’s decision in the case of R.RAJU vs. THE GOVERNMENT OF TAMIL NADU REP. BY COMMISSIONER AND SECRETARY, HOUSING AND URBAN DEVELOPMENT, MADRAS AND ANOTHER 1999-2-L.W. 15, wherein it is held that the tariff applicable for domestic use of the residential flats leased to public sector undertakings for their officers visiting the place during the season would be tariff 1 and not tariff 8 (commercial). He read out paras 8, 10 11 of the said decision which are extracted hereinbelow:
'8. The point to be decided in this writ petition is whether the respondents are entitled to claim electricity consumption charges, under Tariff VIII when the premises in question were used by the undertakings of the Government of India viz., the Neyveli Lignite Corporation and Bharath Petroleum Corporation. According to the petitioner, the flats/premises in question were leased out to Neyveli Lignite Corporation as well as the Bharath Petroleum Corporation for occupation of their staff as and when they visit Kodaikanal. It is also the definite case of the petitioner that those premises/flats were used only for residential purposes. It is also specifically stated that there is no mess, canteen or any office is run by the said tenants viz., Neyveli Lignite Corporation and Bharath Petroleum Corporation. It is seen from the letter from the Superintending Engineer, Anna Electricity Distribution Circle, Dindigul addressed to the petitioner, it is mentioned the Service No.163 W 166 W Kodaikanal standing in your name were inspected by Anti Power Theft Squad, Madurai on 27.4.1988. During inspection, it was found that there was no bonafide activity in the above premises and they were used as Rest House for the employees of the Neyveli Lignite Corporation and Bharath Petroleum Corporation on tour. As such the appropriate Tariff applicable is only Tariff VIII and therefore the necessary compensation charges had to be levied. The above factual position supports the case of the petitioner that the said premises were let out only to the Neyveli Lignite Corporation and Bharath Petroleum Corporation for their use whenever they come to Kodaikanal. In other words, even after inspection, the only activity as found by themselves was letting out to the two Government of India Undertakings. It is not the case of the respondents that other domestic activities are being engaged in the said premises. It is also not their case that any mess, canteen or any office is being run by the said tenants.
9. … … … . … …. …..
10. I have already referred to the categorical statement that the flats in question were being used by the Neyveli Lignite Corporation and Bharath Petroleum Corporation for residential purposes. I have also referred to the report of the Superintending Engineer after inspection of the premises in question. In the light of the factual position stated above and in the absence of any specific reference to the revision of Tariff effective from 1.1.1987 I am unable to accept the arguments of the learned counsel for the respondents.
11. In this regard it is relevant to mention the word 'Guest' is explained in Oxford Advanced Dictionary as persons staying or paying a visit to another’s house or being entertained at a meal. In Dictionary of Law by L.B.Curzon, the word 'Residence' is explained, as a place where a person abides viz., where he has his home. Likewise in the Oxford Advanced Dictionary for the word 'Residence' it is stated that living in the house officially provided for him – place where one resides. In the light iof the meanings referred to above, according to the respondents those premises/flats were being used only as 'rest House'. If that is so, the relevant Tariff would be only Tariff-I. It is also clear that except for residence those flats/premises have not been used for any other purposes. In such circumstances, the petitioner is justified in claiming that the proper Tariff would be only Tariff-I and not Tariff VIII as contended by the respondents. Accordingly, the relief prayed for in item No.1 and 2 has to be granted in favour of the petitioner.'
8. Sri Rangaraju, the Learned Counsel appearing for the respondent Nos.1 and 2 submits that on vigilance-inspection, it was found that the supply of electricity sanctioned for the residential purpose is being used for a different purpose. There is misuse of electricity, as it is being unauthorizedly used for the guest-house purpose. He submits that as per Regulation No.42.02 of the Conditions of Supply of Electricity of Distribution Licenses in the State of Karnataka, the respondents Nos.1 and 2 have demanded the back-billing charges.
9. The Learned Counsel for the respondent Nos.1 and 2 read out the relevant portions of the second respondent’s impugned Order, dated 04.07.2009 (Annexure-J) as to show how the objections filed by the petitioner are considered.
'5. In averment 4(2) has admitted that it is providing accommodation to its employees who are visiting Bengaluru to secure training in its company, which is crystal clear that temporary lodging facility has been provided it its own employees, attracts different tariff LT3.
6. The further contention that the Vigilance Officer Sri M.N. Rajashekar has purportedly inspected and back bill the installation treating as Guest house and he has unilaterally concluded is not correct. During his inspection he has noticed that the apartments in question are used for lodging purpose by the consumer, employees who came from outside to have training, each house is having telephone facility on a common point, which was available in the reception hall. In the entrance itself there is a board displaced as 'm/s. Infosys Guest House'.
10. In the objection at 4(2) (D) (I) & (J) the consumer has clearly admitted that it is providing residential accommodation during their employment as a prerequisite of employment and tenure to reside in the premises is only during training period. It is also intimated that none of the employees were entitled to remain or inside in the apartment for a longer period. These two statements clearly show that the apartments belongs to you is a facility to give accommodation to employees during their visit to Bangalore is nothing but a lodging facility extended to them. The word commercial establishment and the meaning commercial is that there should be business or sale proceeding. As approved by Honourable KERC, the following installations attracts commercial tariff which are as below.'
10. Sri Rangaraju also read out a part of 4.3 of the Appellate Authority’s order, which reads as follows:
'During inspection it was noticed that there are 60 installations of different R.R.Nos. and separate meters. No family is residing. All installations attached with 1 Gaizer, 1 AC, 4 Fans, 1 Refrigerator, 1 Iron Box, 1 Toaster, 1 Air Cooler. Hence on the basis of prima facie evidence, it is used for lodging.'
11. The Learned Counsel submits that the employees of the petitioner Company keep coming to the guest-house to stay. Their short stay indicates that nobody resides there permanently. The electrical appliances, with which each of the apartments is provided, also show that the purpose for which they are being used is only commercial.
12. Sri N.K.Gupta, the Learned Counsel appearing for the respondent No.3 submits that what the petitioner has done amounts to unauthorized use of electricity. The petitioner’s predecessor got the power sanctioned for the residential purpose but the petitioner has been using the electricity for running a private guest house. He brings to my notice, the provisions contained in explanation (b) (iv) to Section 126 of the Electricity Act, 2003 (‘the said Act’ for short).
'126. Assessment: … … …
Explanation: (a) … … …
(b) 'Unauthorized use of electricity' means the usage of electricity-
(i) … … …
(ii) … … …
(iii) … … …
(iv) for the purpose other than for which the usage of electricity was authorized.'
13. For the unauthorized use of electricity, the electricity charges are assessed as per the provisions contained in Section 126 of the said Act, so submits Sri Gupta.
14. The private guest-house attracts the imposition of commercial tariff. He submits that the tariff is determined by the Karnataka Electricity Regulatory Commission in exercise of the power conferred by and following the procedure prescribed in Sections 61 to 64 of the said Act. The tariff determining order has the statutory force. Both as per the Electric Power Tariff 2003 and 2005, the Tariff Schedule LT-3 is applicable for the private guest-house. As the validity of the inclusion of the private guest-house in Tariff Schedule LT-3 itself is not challenged, the petitioner is not justified in seeking the interpretation of the expression ‘private guest-house’ in suit its convenience.
15. He also brought to my notice that as per the Electric Power Tariff 2003, the LT-2(a) Tariff Schedule is applicable to the Guest Houses/Travellers Bungalows run in Government buildings or by State/Central Government/Religious/Charitable institutions. He read out para 5 of the second respondent’s impugned Order, dated 04.07.2009 (Annexure-J) to show that, that the petitioner is running a private guest-house is not in dispute at all. It reads as follows:
'In averment 4(2) has admitted that it is providing accommodation to its employees who are visiting Bengaluru to secure training in its company, which is crystal clear that temporary lodging facility has been provided to its own employees, attracts different tariff LT3.'
16. He submits that the authorities relied upon by the petitioner’s side have no application for the facts of this case. In the case of COMMISSIONER OF INCOME TAX (supra), the question was whether the claim for deduction of the expenditure made on the guest-house is allowable. He submits that in the case of R.RAJU (supra), there was no tariff determination for the guest-house or rest-house.
17. On hearing the Learned Advocates, the question that falls for my consideration is whether the petitioner’s installation attracts the Tariff Schedule LT-3. To answer this question, it is necessary to refer to Tariff Schedule LT-3, which reads as follows:
'Applicable to Commercial Lighting, Hearing and Motive Power installations of Nursing Homes, private Hospitals, Clinics, Diagnostic Centres, X Ray units, Shops, Stores, Hotels/Restaurants/Boarding and Lodging Homes, Bars, Private Guest Houses, Mess, Clubs, Kalyan Mantaps/Choultry. Permanent Cinemas/Semi Permanent Cinemas, Theatres, Petrol Bunks, Petrol, Diesel and oil Storage Plants, Service Stations/Garages, Banks, Telephone Exchanges, T.V. Stations, Microwave Stations, All India Radio, Dish Antenna, Public Telephone Booths/STD, ISD, FAX Communication Centres, Stud Farms, Race Course, Ice Cream Parlous, Computer Centres, Photo Studio/Colour Laboratory, Xerox Copiers, Railway Installation excepting Railway Workshop, KSRTC Bus Stations excepting Workshop, All offices, Police Stations, Commercial Complexes, Lifts of Commercial Complexes, Battery Charging units, Tyre Vulcanizing Centres, Post Offices, Bakery Shops, Tailoring Shops, Beauty Parlours, Stadiums other than those maintained by Government. And Local Bodies, Private Advertising Posts/Sign boards in the interest of public such as Police Canopy Direction Boards, and other sign boards sponsored by the Private Advertising Agencies. It is also applicable to water supply pumps and street lights not covered under LT-6, Cyber Cafes, Internet Surfing Cafes, Call Centres, Bus Shelters with Advertising boards, Information Technology (IT) enabled services, I.T. based medical transcription centres.'.
(emphasis self supplied)
18. A plaint reading of the above-extracted schedule reveals that the private guest-houses are included in LT-3 category. So it cannot be disputed that the consumer of electricity in a private guest-house is liable to pay the tariff, as prescribed by Tariff Schedule LT-3. But this position begs the question as to what is a private guest-house. The expression ‘private guest-house’ is not defined in the Electric Power Tariff – 2003.
19. Then, does it mean that if somebody puts the board ‘private guest-house’ for his building, he automatically and menchanically becomes liable to pay the charges, as per Tariff Schedule LT-3? The words used in statute or the regulations framed thereunder cannot be understood loosely or inexactly. I therefore find it necessary to ascertain the meaning of the three words, ‘private’ ‘guest’ and ‘guest-house’ from the neutral sources.
20. The Cambridge Advanced Learners’ Dictionary gives the meaning of the word ‘private’ as 'only for one person or group and not for everyone'.
21. P.Ramanatha Aiyar’s Advanced Law Lexicon gives the meaning of the word ‘private’ as follows:
'Private. Not public; not official; belonging or concerning one or more individuals.
Mr. WEBSTER says that, in general, 'public' expresses something common to mankind at large, to a nation, state, city or town, and is opposed to 'private: which denotes that which belongs to an individual, to a family, to a company or a corporation. (Milit.) A soldier.
Describing a person or institution that is independent of the public or government sector. (Banking)
As opposed to public, apart from the State; not in public office; not open to public; [S.75, Indian Evidence Act ( 1 of 1872)]; own, peculiar to oneself; belonging to or concerning an individual person or company; relating to personal affairs [S.17,ill.(d), Indian Contract Act (9 of 1872)].'
22. The New lexicon Webster’s Dictionary gives the meaning of the word ‘private’ as follows:
'Private (praivit) 1. Adj. belonging to a particular person or group and not shared with others in any way, private property; not holding public office, private citizen; having nothing to do with one’s official or public character; private life; secret, hidden from others, private thoughts; not available to or not supported by the general public, a private library 2. N. a soldier in the U.S. army one grade above a new or recent recruit; (Br.) a private soldier in private not openly, without witnesses (fr.L.privatus, not holding public office).'
23. The Compact Oxford Reference Dictionary gives the meaning of the word ‘private’ as follows:
'Private: (adj.) 1. For a belonging to a particular person or group only: his private plance.2. (of thoughts, feelings, etc.) not to be made known.3. not sharing thoughts and feelings with others. 4. (of a service or industry) provided by an individual or commercial company rather than the state. 5. (of a person) working for oneself rather than for the state or an organization 6. Not connected with a person’s work or official role: rumours about his private life. 7. Where one will not be disturbed; scheduled. n. (also private soldier) a soldier of the lowest rank in the army.'
24. The perusal of these descriptions of the meaning of the word ‘private’ reveals that, that which is for a person or a group of persons is private. It is not shared with others. The other meaning is that whatever is private is non-governmental and non-official. If these meanings of the word ‘private’ are considered in the context of the use of the apartments in question for the employees of the petitioner Company, whether it attracts the imposition of commercial tariff or residential tariff has to be examined.
25. Now let me see the meaning of the word ‘guest’. The Cambridge Advanced Learners’ Dictionary gives the meaning of the word ‘guest’ as 'A person who is staying with you or a person whom you have invited to social occasion such as a party or meal.'
26. The New Lexicon Webster’s Dictionary gives the meaning of ‘guest’ as 'someone who receives hospitality; a person staying at a hotel'.
27. P.Ramanatha Aiyar’s Advanced Law Lexicon gives the meaning of the word ‘guest’ as follows:
'Guest: 'In the term 'Guest' are included a traveler; passenger, wayfarer and such like person, who, by himself, or his beast, has been however temporarily, accepted to, and remains under; hospitality within an inn or its curtilage.'
28. Black’s Law Dictionary defines the word ‘guest’ as follows:
'Guest: (13c.) 1. A person who is entertained or to whom hospitality is extended.
2. A person who pays for services at an establishment, esp. a hotel or restaurant.
3. a nonpaying passenger in a motor vehicle.'
29. The Compact Oxford Reference Dictionary gives the meaning of the word ‘guest’ as follows:
'Guest: n. 1. A person invited to visit someone’s home or take part in an event. 2. A visiting performer invited to take pat in an entertainment. 3. a person staying at a hotel or boarding house.'
30. The perusal of the meanings taken from these sources shows that the guest may be the one, who pays for the hospitality that he gets or the one who enjoys the hospitality without paying any amounts therefor. Therefore, the payment or non-payment of the hospitality charges, be it towards the accommodation or food, cannot be a test for deciding as to whether one is a guest or not. The question that remains to be answered is who can be called as a guest? As held by the Division Bench of Madras High Court in the case of COMMISSIONER OF INCOME TAX (supra), an employee who visits another place and makes occasional stay for the purpose of business cannot be called as a guest. The horizon of the word ‘guest’ cannot be expanded so as to include its employees within its fold. The employees cannot be considered as guests or strangers or outsiders or wayfarers.
31. Now, let me put the two words ‘guest’ and ‘house’ into the composite term ‘guest-house’ and ascertain its meaning Cambridge Advanced Learners’ Dictionary gives the meaning of the guest-house as 'a small cheap hotel.'
32. The New Lexicon Webster’s Dictionary defines the term ‘guest-house’ as a boarding house, esp. one of some standing.
33. P.Ramanatha Aiyar’s Advanced Law Lexicon defines ‘guest house’
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as follows: 'guest-house: Guest-house is a building, separate from a main house or establishment, for the housing of guests. (Random House Dictionary). A house intended for use, in the case of a company, only by its directors, or, in the case of a firm, only by its partners, etc., is a residential accommodation but not a guest-house. CIT v. Aruna Sugars Ltd., (1980) 123 ITS 619 (Mad.).' 34. The Compact Oxford Reference Dictionary gives the meaning of guest-house as 'a private house offering accommodation to paying guests.' 35. These neutral sources indicate that, more often than not, the accommodation and boarding facilities are given to the guests in the guest-houses on payment basis; but the guest-houses are less expensive. Instead of using the term 'lodge' the term 'guest-house' is used to attract the passengers, travelers, etc. offering lower accommodation charges. 36. The word 'private guest-house' means in the first place that the Government has no control over it. It is not meant for the public at large. A house intended for the temporary use of a company’s employees can only be treated as a residential accommodation and not a guest-house. ‘Guest-house’, in the normal parlance, means a place for the reception of strangers. Unless, the place is intended to be used by complete strangers, it can not be called as a guest-house. In taking this view, I am fortified by the Division Bench judgment in the case of COMMISSIONER OF INCOME TAX (supra). 37. As held by the Madras High Court in the case of R.RAJU (supra), unless it is shown that the mess, canteen or office is being run by the occupants or tenants in the premises, the commercial tariff structure cannot be applied. 38. The respondents’ reasoning that nobody resides in the apartments on permanent basis or that the apartments are provided with the electronic gadgets can not be the factors for making the petitioner liable to pay the electricity charges at the rate prescribed in Tariff Schedule LT-3. 39. In the result, I allow this petition by quashing the impugned orders. The matter is remanded to the second respondent for determining the factual controversies as to (a) whether the apartments are also being thrown open to the use of the outsiders (non-employees of the petitioner Company); (b) whether any payment is being collected from outsiders, if they are using it; (c) whether any canteen, mess, office activities are being carried on by the occupants of the premises, etc. For delivering the findings on these issues, an enquiry is required to be held by affording opportunities to the parties to place their evidence on record. 40. Liberty is also reserved to the respondent No.1 to move the Karnataka Electricity Regulatory Commission for the purpose of including the temporary residential accommodation for the employees of a company in Tariff Schedule LT-3. 41. No order as to costs.