w w w . L a w y e r S e r v i c e s . i n

Jayaswal Neco Industries Limited (formerly known as M/s. Nagpur Engineering Company Private Limited) v/s Superintending Engineer, Maharashtra State Electricity Distribution Company Limited

Company & Directors' Information:- JAYASWAL NECO INDUSTRIES LIMITED [Active] CIN = L28920MH1972PLC016154

Company & Directors' Information:- D P ENGINEERING INDUSTRIES LIMITED [Active] CIN = U27310DL2008PLC176856

Company & Directors' Information:- A K ENGINEERING INDUSTRIES (INDIA) PRIVATE LIMITED [Active] CIN = U25206DL1997PTC085204

Company & Directors' Information:- NECO INDUSTRIES LIMITED [Active] CIN = U65191MH1991PLC060014

Company & Directors' Information:- G L ENGINEERING INDUSTRIES PRIVATE LIMITED [Active] CIN = U28920MH1981PTC023662

Company & Directors' Information:- B V M ENGINEERING INDUSTRIES LIMITED [Active] CIN = U28111DL1972PLC005983

Company & Directors' Information:- R R R ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74899DL1993PTC055069

Company & Directors' Information:- A. V. ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U99999DL1974PTC007360

Company & Directors' Information:- NECO PRIVATE LIMITED [Strike Off] CIN = U29299KL1996PTC010347

Company & Directors' Information:- G D R ENGINEERING INDUSTRIES PVT LTD [Strike Off] CIN = U27109UP1971PTC003388

Company & Directors' Information:- L S ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74899DL1977PTC008484

Company & Directors' Information:- I B I ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U45202PB1974PTC003422

Company & Directors' Information:- A H B ENGINEERING INDUSTRIES PVT LTD [Strike Off] CIN = U35999WB1988PTC044786

Company & Directors' Information:- O K ENGINEERING INDUSTRIES PRIVATE LTD [Active] CIN = U74899DL1987PTC027660

Company & Directors' Information:- R P ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U99999DL1973PTC006781

Company & Directors' Information:- S V ENGINEERING INDUSTRIES PVT LTD [Under Liquidation] CIN = U74210TG1981PTC003174

    WRIT PETITION NO.3398 OF 2009

    Decided On, 07 April 2011

    At, In the High Court of Bombay at Nagpur


    For the Petitioner: Anil Mardikar, Advocate. For the Respondent: S.V. Purohit, Advocate.

Judgment Text

S.B. Deshmukh, J.

Heard learned counsel for respective parties.

2. Rule. Rule made returnable forthwith. Heard finally by consent of parties.

3. Petitioner, in this petition, filed under Article 226 of the Constitution of India, seeks a writ for quashing and setting aside communication (Annexure P-1), annexed to the petition. A Writ is also sought against the respondent, retraining the respondent from issuance of further assessment bill till disposal of Appeal No.173/2009, filed by the petitioner, pending before the Appellate Authority Chief Engineer (Electrical), Public Works Department, Government of Maharashtra, M.S.E.D.C.L., Mumbai. Alternately, petitioner seeks permission of this Court to file an appeal without payment of 50 % of the amount of bill because that amount has already been paid in the fresh appeal. Along with these prayers interim - ad-interim relief is also sought by the petitioner. This writ petition is filed by the petitioner on 11th of August 2009.

4. The petitioner is a company registered under the Indian Companies Act, 1956. The petitioner states in para 1 that petitioner is doing production of caste iron items (pipes and fittings etc.) and has an industrial unit at M.I.D.C. Hingna, Nagpur. The petitioner had requested on 19th of July 1999 for supply of 319 KVA to the then M.S.E.B. The Chief Engineer, Urban Zone, Nagpur, M.S.E.B. had reduced the demand of the petitioner of 319 KVA and granted 200 KVA on 3rd of January 2003. The petitioner was thus a consumer of the respondent since 1999. Bills of electricity consumed, were served to the petitioner and according to petitioner, payments were also made to respondent/M.S.E.B. regularly.

5. According to the petitioner, controversy arose amongst the parties, somewhere in the year 2006. It was a bill for the period 4/6/2006 till 4/8/2008, served to the petitioner by the respondent. Copy of said bill, Annexure P-2 is on record. This bill is dated 04/07/2006. Due date of this bill was 18th of July 2006. This bill is in the name of M/s. Nagpur Engineering company Private Limited. Petitioner has clarified in cause title of the writ petition itself that formerly the petitioner was known as M/s. Nagpur Engineering Company Private Limited. In this bill (Annexure P-2) other details have been mentioned by the respondent. Suffice to notice that total bill amount (rounded) was shown as Rs.1,62,890/-. If payment is delayed, delayed payment charges were shown as Rs.3539.52/-. The amount payable after 18th of July 2006 (rounded) was shown as Rs.1,66,430/-. The petitioner states that this bill has been paid. We have seen stamp of respondent dated 15/07/2006 in token of receipt of Rs.1,62,890/- (Rs. One Lac Sixty Two Thousand Eight Hundred Ninety Only). This bill was for the period from 4th of June 2006 till 4th of August 2008 and according to the petitioner has been paid. This bill (Annexure P-2) shows separate consumption of units for type of consumption i.e. Industrial and Commercial. Rates for such user of electricity were differently levelled. Rates are obviously per unit of such Industrial and Commercial use. There was no serious dispute amongst the parties, up till issuance and payment of bill (Annexure P-2). It is contended in para 2 that in past also petitioner was charged separately for commercial use in their factory unit however, those bills were also paid and cleared by the petitioner. Some of the copies of bills (Annexure P-3) collectively are placed on record. In para 3 of the petition a statement is made that at M.I.D.C. Nagpur i.e. factory site, the petitioner is not indulged in any other activity except administrative building from where the petitioner's staff manages the industrial unit. In other words, the activity of the petitioner is running an industrial unit at M.I.D.C., Nagpur. For running this industrial unit staff of the petitioner has occupied a building from where industrial unit in the same premises is being managed. According to petitioner administrative building/office is part and parcel of the factory unit. There is no separate commercial activity in administrative building, done by the petitioner.

6. Dispute amongst the parties started somewhere in the month of August 2007, when a bill issued on 22nd of August 2007 (Annexure P-4) was served on the petitioner. This bill, according to the respondent, was for the period August 2006 to July 2007. This bill is Annexure P-4. This bill, shows an amount recoverable of Rs.29,52,337/- (Rs. Twenty Nine Lac Fifty Two Thousand Three Hundred thirty Seven Only). This bill contains an endorsement which reads "Executive Engineer Flying Squad report dated 4th of August 2007 for the period from August 2006 to July 2007. Tariff applicable subject to approval of C.E. Commercial". Along with this bill (Annexure P-4), Schedule or Chart, is accompanied, it is titled as assessment as per Dy. E.E. Flying Squad, Nagpur report dated 4/8/2007 for the period of August 2006 to July 2007, below that name of the present petitioner with his address is mentioned. Consumer number of the petitioner is also mentioned as 410019001583. Thus an amount of Rs.29,52,337/- was said to be recoverable from the petitioner, by this bill Annexure P-4.

7. This bill Annexure P-4 was provisional bill issued on 22nd of August 2007 by the respondent to the petitioner. The petitioner in response to this provisional bill (Annexure P-4), represented to the respondent by communication on 30th of August 2007 that provisional bill (Annexure P-4) was arbitrary and illegal. Copy of said communication (Annexure P-5) is on record. The grievance is raised that though copy of bill (Annexure P-4) was served to the petitioner, copy of report of Flying Squad was not given to the petitioner nor was made available to the petitioner or its authorized representative. It is contended by petitioner in para 6 that petitioner had been paying the commercial charges as and when demanded in the bills. There was no change in user by the petitioner from industrial use of electricity to commercial use. According to petitioner there was no power, authority and reason for respondent to impose penalty on petitioner for alleged wrongful use. The communication (Annexure P-5), according to petitioner, was purported to be an objection within the meaning of section 126(3) of the Electricity Act.

The respondent on receipt of the communication (Annexure P-5), addressed a letter on 21st of September 2007 to the petitioner, asking the petitioner to appear before respondent on 25th of September 2007. A copy of said communication (Annexure P-6) is annexed to the petition by the petitioner. There was change in date and ultimately there was meeting in the office of respondent amongst petitioner and officials of the respondent. The petitioner, in that meeting allegedly contended that use of the electricity by the petitioner was for industrial purpose alone. He also disputed figures mentioned in the bill and denied commercial activity in the factory. He requested for withdrawal of notice dated 22nd of August 2007 and bill (Annexure P-4). It is contended by petitioner that meeting scheduled on 29th September 2007 amongst the petitioner and respondent was in fact an hearing and petitioner has submitted evidence in support of his plea that bill (Annexure P-4) was arbitrary, wrong and illegal. Petitioner claims that matter is subjudice. According to petitioner inadvertently bill which was received at the office of petitioner at Hingna was paid by Cheque No.038998. It was cheque dated 29th of September 2009 for the amount of Rs. 30,98,610/- drawn on State Bank of Travancore in favour of respondent. This bill of Rs.30,98,610/- by cheque according to the petitioner, was paid due to oversight and ignorance. Manual receipt was issued by the respondent was bearing No.0621851 dated 1st October 2007 to the petitioner. Computerized receipt No.SR-06-D/ C-08-036598 0621852 was also issued to the petitioner.

8. It is the contention of petitioner in para 8 of the petition that aforesaid bill of Rs.30,98,610/- was paid through oversight and ignorance. Further contention is that instructions to stop payment of such cheque was given by the petitioner to his banker. Annexure P-8 is the communication of the petitioner dated 1st of October 2007 referred in para 8 of the petition. We have seen this communication (Annexure P-8) and noticed all these details regarding cheque, amount for which cheque was drawn, date of the cheque, receipt numbers etc. In the concluding para the petitioner has also pleaded that an amount of Rs.1,46,273/- was paid towards current bill which was issued and payable by the petitioner. This cheque for the amount of Rs.1,46,273/- , according to petitioner, was not accepted by the respondent. The petitioner, therefore, was constrained to send said cheque for Rs.1,46,273/- by R.P.A.D. along with communication dated 1st October 2007. The petitioner has contended in para 9 that this cheque for Rs.1,46,273/- was in respect of electricity charges for the month of September 2007. Said communication is Annexure P-9, annexed to the petition. Despite this fact, said cheque was returned by the respondent. Said exercise, was done by petitioner twice.

9. In para 10 of the writ petition it is contended that petitioner was served with notice for the alleged offence under section 138 of the Negotiable Instruments Act as also Section 420 of the Indian Penal Code and further was directed to make the payment of Rs.30,98,610/- within 15 days of the receipt of the notice. The action of disconnection of electricity supply was also threatened. Said notice is annexed as Annexure P-10. This notice has been replied by the petitioner on 23rd of October 2007. Said reply annexed as Annexure P-11 to the petition. According to petitioner interim relief was granted by this Court in that writ petition and final order was passed by this Court on 26th February 2009 quashing communication dated 16/11/2007. Further, it was directed by this Court that petitioner should be heard in terms of section 126 of the Electricity Act.

Initially, hearing was slated on 7th March 2009 but could not be conducted, was postponed to 17th March 2009 and on behalf of petitioner, oral as well as written submissions were made during that hearing. Copy of the written submissions is Annexure P-13. It is contended by the petitioner in para 12 that inspection of the site was suggested by the respondent, agreed to by the petitioner and accordingly premises in question was inspected on same day i.e. 17th march 2009 at 13.30 Hrs. A report was submitted to the respondent. Petitioner thereafter was served with final bill dated 1st of April 2009 for the payment of Rs.29,52,336.98/-. It was alleged by the respondent that there was change in user of the electricity by the petitioner during the period from August 2006 to July 2007. Petitioner contends in para 12 that he had filed an appeal before the Appellate Authority i.e. Chief Engineer (Electrical), Public Works Department, Government of Maharashtra, Mumbai on 25th of April 2009. Annexure P-14is the copy of the appeal. According to the petitioner 50 % amount of the bill of Rs.29,52,336.98/- i.e. Rs.14,76,170/- was deposited in the office of respondent by the petitioner. Petitioner also had deposited Rs.10,000/- towards fees. The Appellate Authority passed an order (Annexure P-15) is the copy of the order passed by the Appellate Authority. Petitioner has made a statement in para 13 that respondent sent another provisional bill of Rs.23,85,933.45/- along with working sheet bearing No.NUZ/AB/HT/158-3/3233, dated 1st of June 2009 in addition to the earlier penalty bill of Rs.29,52,836.98/- dated 1st April 2009.

The petitioner again approached to the Appellate Authority and informed about the new provisional bill sent to petitioner by respondent. The copy of the application dated 1st July 2009, is Annexure P-16. The Appellate Authority heard the parties and passed an order on 3rd of July 2009, Annexure P-17 is the order of the Appellate Authority. In para 14 grievance is raised that petitioner was called for hearing on 21st of July 2009, the date on which hearing was postponed to July 22, 2009. Reasons for postponement was strike of the employees of the M.S.E.D.C.L. The petitioner states in para 14 that petitioner had submitted his say in writing on 21st of July 2009 (Annexure P18) annexed to the petition. According to the petitioner there was no hearing given to the petitioner by the respondent on 22nd of July 2009 or thereafter. Without hearing the present petitioner, in an arbitrary manner respondent has passed an order on 31st of July 2009. By this order petitioner was called upon to make payment of 23,85,933.45/- (Rs. Twenty Three Lac Eighty Five Thousand Nine Hundred Thirty Three and Forty Five Paise Only). This order is Annexure-P17, annexed to the petition. Page 22 is the communication dated 31st of July 2009 addressed by respondent to the petitioner. Subject mentioned in this communication is issue of order passed against the petitioner on 22nd of July 2009. This communication contains a statement that order was passed on 31st of July 2009 against the hearing dated 22nd of July 2009 before Superintending Engineer, M.S.E.D.C.L., Nagpur, Urban Circle. Along with Annexure P1, at page 23 a copy of the order passed by Superintending Engineer, M.S.E.D.C.L., Nagpur Urban Circle, has been accompanied. It is at page 23 of the compilation. It is this order in which a reference is shown as Hearing:Ref:- SENUC/ Take 158/3278/dt. 03 June 2009, Case number is mentioned on this copy is Case:- NUC/ Take 158/3278/Dated 03/06/09. We have seen this order in its entirety. Operative part of this order is at page 28.

10. On behalf of the respondent written submissions have been filed (page 133 of the compilation). It is the contention of respondent that initially electricity connection on or about 26/8/1981, with connection load 180KW and Contract Demand of 319 KVA was granted. The tariff Code/Category under which the petitioner was HT-Industrial Non-Continuous. In the year 1999, on application of the petitioner for reduction from 319 KVA to 200 KVA with load 180KW, reduction of load as applied by petitioner was done. On 13th of July 2007, an inspection was carried out by Executive Engineer, M.I.D.C. Division, M.S.E.D.C.L., Nagpur. An inspection report was prepared, copy thereof was given to the petitioner company's representative, Shri S.D. Oza. During the inspection, it was found that total connected load is being used for commercial purpose only instead of industrial purpose. Spot Inspection Report dated 4th of August 2007, was submitted by the Deputy Executive Engineer of the Flying Squad. This report, had suggested that difference of Tariff to one industrial HT-IN and Tariff Rate and commercial activity Tariff rate for past period under section 126 of the Electricity Act, 2003, be recovered. Reason was that respondent found the meter being used not for industrial purpose but utilization entirely was for commercial activity/purpose of head office of NECO Group. It is pointed out in para 4 of this affidavit that it was a case of unauthorized use of electricity from industrial HTIN Tariff to commercial office activity.

According to respondent in pursuance of the spot inspection report provisionally assessment bill of Rs.29,52,337/- on 22nd of August 2007 was prepared under section 126 of the Electricity Act. This was against alleged unauthorized use of electricity presuming that the same is continuing for a period of 12 months immediately preceding the date of inspection. Accordingly this bill was issued and served on the petitioner along with covering letter. Petitioner was also called upon to submit objections, if any, to this provisional bill. Petitioner was further informed that if he fails in submitting objections, final order of assessment could be passed against him. Certain objections of the petitioner to the provisional assessment bill were received. Petitioner was requested to remain present for Hearing and it was changed to 29th of September 2007. It is further stated in para 5 of the reply that petitioner's representative was/were present and representative of M.S.E.D.C.L. was also present for said hearing. According to respondent as per the energy bill for the month of September 2007, the demand had become of Rs.30,98,610/-. It is further stated that petitioner/consumer had given up its objections, raised against the provisional bill, and issued an A/c. Payee cheque bearing No.038998, dated 29/9/2007 drawn on State Bank of India Travencore, Itwari, Nagpur. Receipt against said cheque was issued by the respondent. The respondent did present said cheque to its banker. Said cheque was dishonoured. Upon dishonour of the cheque, respondent had issued appropriate notice under section 138 of the Negotiable Instruments Act and also filed a relevant criminal case against the petitioner company.

11. Respondent in para 6 admits filing of Writ Petition No.5450/2007 on behalf of petitioner and order of the High Court passed on 26th of February 2009 in that writ petition. It is accepted by respondent that this Court by said order had set aside the notice of disconnection and further directed respondent to hear the present petitioner and pass an appropriate order within a period of four weeks. Petitioner was directed to appear for hearing on 7/3/2009, on that day at the request of petitioner hearing was postponed to 17th of March 2009, the day on which final hearing was concluded. In para 6, it is further stated by respondent that final order contemplated under section 126 of the Electricity Act was passed on 21st of March 2009. This was in connection with the hearing conducted on 17/3/2009 against the provisional bill. Copy of the said order is Annexure R-1 to this reply of respondent. It is conceded by respondent in para 6 of reply that final order was challenged by filing an appeal under section 127 of the Electricity Act after depositing 50 % of the amount before the Appellate Authority. The Appellate Authority had granted interim order is a fact, also accepted by the respondent. There was some ancillary directions given by the Appellate Authority. Said appeal is pending.

12. Respondent states that on 17/3/2009 it was agreed mutually amongst them to carry out an inspection on 17/3/2009 in presence of the parties. According to the affiant this mutual agreement/joint inspection was done and it was found that petitioner consumer was using major portion of the load for commercial purpose i.e. about 67.23%. An Inspection Report was prepared and according to affiant it was also signed by representative of the petitioner company. According to this Inspection Report dated 17/3/2009, a provisional bill of Rs.23,85,933.45/- was issued under section 126 of the Electricity Act and thereafter only final assessment order was passed on 31st of July 2009 regarding the inspection done on 17/3/2009 and provisional assessment dated 3rd of June 2009. In para 8 respondent states that final assessment order has been passed under section 126 of the Electricity Act against which an appeal was filed before the Appellate Authority under section 127 of the Electricity Act, 2003. It is further stated that an alternate remedy is available to the petitioner which is very much known to the petitioner and in spite of availing the said remedy petitioner has directly approached to this Court by filing this writ petition. Respondent, therefore, seeks dismissal of the petition vide concluding para 8 of the affidavit.

In para 9, order dated 31st of July 2009 passed under section 126(3) of the Electricity Act, 2003 is supported with a contention that it is passed after following due process of law such as inspection, issuance of a provisional bill and affording reasonable opportunity of hearing before passing the final assessment order. According to respondent it is the statutory obligation, on the part of the petitioner, to deposit the 50% amount of the final assessment as per section 127 of the Electricity Act, 2003, read with Rules of 2004 and Government Notifications. Affiant states in para 9 that the petitioner cannot directly approach this Court by-passing the appellate remedy provided under section 127 of the Electricity Act, 2003. It is also contended in para 9 that provisional assessment bill and the final assessment bill/order have been issued in the case in hand, for subsequent unauthorized use of electricity under section 126 of the Electricity Act, 2003, found at the time of inspection, on petitioner's/consumer's request dated 17/3/2009. Said provisional and final order of assessment are made in pursuance to the inspection done on 17/3/2009 and have no concern with the earlier assessment as the petitioner/consumer cannot be allowed to repeat the offence under section 126 of the Electricity Act.

A statement is made in this para 9 of the reply of written submission that the Corporate office/registered office of NECO SCHUBERT and SALZER LIMITED, ASHUTOSH CASTINGS LIMITED AND JAISWAL NECO INDUSTRIES LIMITED, are in the same premises. It is further stated that the petitioner/consumer use plot No.F-8, M.I.D.C. Hingna Road, Nagpur for running of administrative office of these different companies and the petitioner is therefore, obviously liable to be charged for commercial tariff. It is contended that respondent has found that from August 2006 to July 2009, the petitioner/ consumer has utilized maximum consumption only during the period between 6 a.m. and 6 p.m. In para 10 of the petition it is contended that petition is merit-less and be dismissed.

13. We have given due consideration to the submissions advanced on behalf of the learned counsel for respective parties. Mr. A.S. Mardikar, learned counsel for the petitioner, in support of his submissions relied on the judgment of the Hon'ble Supreme Court in the matter of New Delhi Municipal Council Vs. Sohan Lal Sachdev (dead) represented by Mrs. Hirinder Sachdev w/o late Sohan Lal Sachdev reported in (2000) 2 Supreme Court Cas

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es 494. We have noticed the facts listed by the Hon'ble Supreme court in para 3 and 4 of the judgment. In that case landlord filed a suit i.e. Suit No.230/1982, seeking a decree of injunction against N.D.M.C. restraining it from raising demand on the basis of commercial user of the premises on the ground as noted above. Therein the Hon'ble Supreme Court has mainly considered two terms "domestic use" and "commercial use" on the background of the pleadings and material brought on record. 14. We have considered the facts of the present case and ratio of the judgment of the Hon'ble Supreme Court cited at Bar. In our considered opinion, facts in the case of hand are distinguishable. 15. In the case at hand there are disputed questions of fact requiring leading of evidence by parties. Such an exercise, in the facts of the present case, we are not inclined to undertake in an extraordinary jurisdiction under Article 226 of the Constitution of India. Apart from this, in our opinion, efficacious alternate remedy, has been made available under section 127 of the Electricity Act, 2003. Petitioner is aware of availability of the appellate remedy. We are making this observation because petitioner, in prayer (iii) seeks permission to file an appeal however, without payment of 50% amount of bill, as the 50 % amount already been paid in the fresh appeal. We agree with the contention of respondent that appeal under section 127 of the Electricity Act, 2003 is an alternate remedy available to the petitioner and we have referred to alternate prayer made by the petitioner however, we are not inclined to agree with the prayer of the petitioner that petitioner be permitted to file appeal without payment of 50 % of the amount of the bill as the appeal has to be within the parameters of section 127 of the Electricity Act, 2003. 16. Writ Petition stands dismissed with no order as to costs. Interim relief granted, if any, stands vacated. We make it clear that we have referred to pleadings of the petitioner and respondent however, we have restrained ourselves from recording findings thereon. We have kept open all contentions to be raised before the Appellate Authority by the present petitioner and respondent. Appellate Authority after hearing the parties may pass an appropriate order according to law, in case petitioner chooses to file an appeal under section 127 of the Electricity Act, 2003. Rule discharged. No order as to costs.