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



The Maharashtra State Electricity Distribution Company Ltd. v/s M/s Suryalaxmi Cotton Mills Ltd. & Another


Company & Directors' Information:- P A S COTTON MILLS PRIVATE LIMITED [Active] CIN = U17111TN2005PTC058104

Company & Directors' Information:- V R A COTTON MILLS PRIVATE LIMITED [Active] CIN = U15311PB1997PTC020061

Company & Directors' Information:- C A V COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1987PTC002014

Company & Directors' Information:- V K S M COTTON MILLS LIMITED [Active] CIN = U17111TZ1998PLC008682

Company & Directors' Information:- P K COTTON MILLS PRIVATE LIMITED [Active] CIN = U17111DL2004PTC130281

Company & Directors' Information:- K P G COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1993PTC004509

Company & Directors' Information:- D B V COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1982PTC001145

Company & Directors' Information:- S S COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115PB1997PTC019918

Company & Directors' Information:- J R COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TN1996PTC034302

Company & Directors' Information:- D C H COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ1997PTC008130

Company & Directors' Information:- L D COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17291MH2014PTC256832

Company & Directors' Information:- A D COTTON MILLS PVT LTD [Active] CIN = U99999MH1970PTC014837

Company & Directors' Information:- V P K COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ2000PTC009530

    Writ Petition No.5206 of 2008

    Decided On, 01 December 2009

    At, In the High Court of Bombay at Nagpur

    By, THE HONOURABLE MR. JUSTICE B.P. DHARMADHIKARI

    For the Petitioner: K.H. Deshpande, Senior Advocate with R.E. Moharir, Advocate. For the Respondents: R1, A.S. Jaiswal with N.A. Padhye, Advocates.



Judgment Text

Oral Judgment:


1. By this Writ Petition filed under Articles 226 and 227 of the Constitution of India petitioner a Distribution Licensee under the Electricity Act, 2003 is challenging the order dated 25.09.2008 passed by respondent no.2 Consumer Grievance Redressal Forum, Nagpur Urban Zone, Nagpur whereby voltage surcharge levied by the petitioner on supply to respondent no.1 has been found to be void ab-initio and the petitioners have been directed to refund the excess amount recovered by them on that account with interest at Bank rate as per Section 62[6] of that Act. This Court has ordered status quo in the matter on 10.12.2008 and that order continue to operate till date. However, Shri Jaiswal, learned counsel appearing for respondent no.1 has stated that petitioners on their own have discontinued levy of surcharge after the adjudication by respondent no.2 Forum.


2. The facts are not much in dispute. Present respondent no.1 was already having electric supply to its Industrial establishment and wanted additional load and had moved application for that purpose. That request was granted by the petitioners on 31.08.2006. It appears that, his earlier request for same purpose was rejected and after reconsideration, the proposal was sanctioned. The existing contract demand of respondent no.1 was 4000 KVA and he had sought additional power supply of 3000 KVA, but while sanctioning this additional contract demand of 3000 KVA, petitioners imposed a condition where by respondent no.1 was to be charged additional 2% extra unit on average units consumed by its plant per month. This 2% extra unit surcharge [hereinafter referred as ?surcharge? for short], was to continue till MERC determined surcharge for said purpose. The petitioner demanded written acceptance of terms and conditions including this condition from respondent no.1 and an undertaking on stamp paper of Rs. 200/- for this purpose. According to petitioners, respondent no.1 gave written acceptance and also an undertaking.


3. Respondent no.1 however, thereafter moved respondent no.2 Forum which is an Internal Grievance Consumer Redressal Cell, in this respect and sought refund of Rs. 67,09,582/- along with interest pointing out various legal provisions and basically raising a contention that such surcharge was not sanctioned or authorised by the appropriate Commission i.e. MERC, as required by Section 43 and 45, and hence was recoverable under section 62 [6] of the Electricity Act, 2003.


4. The application was opposed by the present petitioners, who pointed out a special arrangement made for respondent no.1 and also the legal provision. Their stand before respondent no.2 Forum and even before this Court is that the respondent no.1 was already availing power supply of 33 KV level with existing contract demand of 4000 KVA. They pointed out that respondent no.1 stated that, it was not in a position to spend huge amount required to upgrade the line for circulation of power demand above 5000 KVA and requested to treat it as a special case. CE [Commissioner], did not approve this proposal because as per the MERC Standard for Performances (SOP), load above 5000 KVA or 5 MVA could be sanctioned of AHV level only. The 33 KV level could be used to supply load upto to 5 MVA. They contended that in view of the difficulties and considering the loss in putting extra load of 33 KV level, the surcharge at 2% was asked for and voluntarily accepted by respondent no.1. The respondent no.1 has also contended that two other units namely M/s. Sadguru Casting Limited and M/s. Sanjivan Rolling and Industries Limited, were sanctioned such load without any surcharge and petitioners stated that at the time of sanction of such load to these two establishments, the proposal of surcharge did not exist, and at the time when the case of respondent no.1 was considered, the proposal for surcharge was already submitted to MERC. In view of this difference, the petitioners sought rejection of application filed by the respondent no.1 before respondent no.2.


5. Respondent no.2 Consumer Grievance Redressal Cell/Forum has passed the impugned order after hearing both the sides. Perusal of the said order dated 25.09.2008 reveals that the Executive Engineer and Member Secretary recorded a finding and upheld 2% surcharge observing that, it should be continued till MERC either approves or rejects it. He also observed that in case the Forum was inclined to order refund, the same should be without interest. The other two members of the Forum i.e. Chairman and Member, however, noticed that such surcharge was not approved by MERC and therefore, could not have been legally claimed. With the result, by majority the respondent no.2 Forum has passed the impugned order.


6. In this background I have heard Shri K.H. Deshpande, learned Senior Advocate and Shri R.E. Moharir, learned counsel for petitioner ? licensee and Shri A.S. Jaiswal with Shri A.Padhye, learned Counsel for respondent no.1. No body has appeared for respondent no.2 Forum.


7. After mentioning the facts, learned Senior Advocate has contended that the additional load was sanctioned to respondent no.1, was previously rejected but was sanctioned later on as a special case indicating that, the surcharge will be required to be determined by MERC. He states that a concession was thus shown to respondent no. 1 by permitting supply at existing 33 KV level and only because respondent no.1 accepted it by submitting written acceptance and also by giving an undertaking, the petitioners actually released supply and charged 2% extra unit as per agreement. He invites attention to the provisions of Section 43 of the Electricity Act, 2003 to urge that the premises of respondent no.1 already had supply and when there was no infrastructure to have supply about 5000 KVA, it was not incumbent upon the petitioners to supply such additional contract load of 3000 KVA. He points out that respondent no.1 already had sanction contract demand of 4000 KVA and his total sanctioned contract demand thereafter became 7000 KVA. He states that in such circumstances, when respondent no.1 accepted that MERC could have determined the surcharge, if any, payable in the matter, the recovery as ordered by respondent no.2 Forum is uncalled for and without jurisdiction. He has pointed out that as per clause 5.3 [F] of Maharashtra Electricity Regulatory Commission (Standards of Performance of Distribution Licensees, Period for Giving Supply and Determination of Compensation) Regulations, 2005, the contract demand above 5000 KVA require 3 phase 50 cycles and extra high voltage. According to him respondent no.1 was otherwise required to switch to 132 KV level by changing infrastructure, which required huge expenditure. Respondent no.1 gave his consent and had accepted 2% surcharge and thus, he could not have therefore turned back in such circumstances. According to the learned Counsel, the very facts considered by respondent no.2 Forum show that proposals of petitioners for such surcharge were pending before the MERC and they were not rejected. He has therefore, argued that in this background the surcharge as levied and recovered cannot be said to be unjustified or unwarranted.


8. He has placed reliance upon the judgment of Hon?ble Apex Court reported at 2008 [3] SCC 128 (LML Ltd. .vrs. State of Uttar Pradesh and others) to urge that the doctrine of promissory estoppel is applicable not only against the petitioner, but it applies against respondent no.1 also. He states that had respondent no.1 then refused to give his acceptance in writing or to submit an undertaking, the petitioners had option not to supply him the additional load. Having submitted such written acceptance and undertaking and secured such additional load on existing 33 KV line, the respondent no.1 cannot be permitted to turn around and back out from its acceptance or undertaking.


9. He has further stated that facts on record clearly show that when the additional load was similarly sanctioned to other two establishments, the proposal to levy surcharge was not even in existence and hence at that time surcharge was not asked for. In view of this proposal before MERC, the agreement with respondent no.1 or order dated 31.08.2006 in his favour expressly stipulates that levy of surcharge at 2%, as provisional and subject to determining the issue by MERC. Learned Senior Counsel therefore, contends that the view taken by respondent no.2 Forum is perverse and unsustainable.


10. Shri Jaiswal, learned counsel for respondent no.1 has contended that Section 43[1], obliges petitioners to supply power to it and as there is monopoly in favour of petitioners, respondent no.1 had no option but to get its case sanctioned as a special case. He contends that the judgment of Hon?ble Apex Court in case of LML Ltd [supra], is on account of Local Act namely Uttar Pradesh State Electricity Reforms Act, 1999. He states that, that act gave power to local licensee to modify tariff and add certain aspects and because of that power with it, the Hon?ble Apex has applied promissory estoppel.


11. He has invited attention to provisions of Sections 43, 45 and 46 to urge that here petitioner does not have any such power and the tariff to be charged by them must be determined by appropriate Commission i.e. MERC. He contends that unless and until there is such previous recognition, the demand for surcharge could not have been made. He has pointed out the constituents of tariffs and also urged that as there was no method of charging surcharge approved by the MERC and there was no publication of such method, the demand of surcharge at 2% extra units by petitioner was without jurisdiction. He points out that, Section 46 also requires distribution licensee to charge expenses reasonably incurred in providing any electrical line or electrical plant as per regulations of MERC. He has also invited attention to provisions of Section 61, which deal with tariff regulations and point out the role of MERC in the matter and also to provisions of Section 62[1][3] in this respect. He has pointed out that Section 45[4], does not permit any discrimination by petitioner and section 62 [3] also prohibits MERC from practicing any discrimination.


12. In this background, he has invited attention to the provisions of Maharashtra Electricity Regulatory Commission (Electricity Supply Act and other Conditions for supply) Regulations, 2005 to show that the charges to be recovered by the petitioners must be as per the Act, Rules or Regulations and it is entitle to recover only that tariff which has been specified. He has invited attention to the Maharashtra Electricity Regulatory Commission (General Conditions of Distribution Licensee) Regulations, 2006 to show that the distribution licensee has to comply with the provisions of the Act, Rules and Regulations as also orders, directions issued by the MERC from time to time. He states that the impugned order as passed by majority, therefore, has taken stock of legal position and does not require any interference. In support of his contentions he has relied upon the judgment reported at 2004 [1] SCC 195 (BSES Ltd. .vrs. Tata Power Co. Ltd and others) and 2006 [13] SCC 719 (Oswal Woolen Mills Ltd. .vrs. Punjab State Electricity Board and another).


13. Section 43 of the Electricity Act, 2003, subsection [1] cast obligation upon the petitioner to supply of electricity within one month after the receipt of application requiring such supply. First proviso thereto contemplates the compliance with extension of distribution mains or commissioning of new substations and in that contingency the supply is to be made after such extension or commissioning or within such period as may be specified by appropriate Commission. As per proviso to subsection 2 a person is not entitled to demand from distribution licensee electric supply for any premises having separate supply unless he has agreed with licensee to pay to it such price as determined by appropriate Commission. Under subsection 3 of Section 43, distribution licensee can be penalized for Rs.1000/- per day of default if electricity supply is not made within specified period. The scheme, therefore, is apparent and entitlement under Section 43 is dependent upon availability of necessary infrastructure. AS per clause 5.3 of the Maharashtra Electricity Regulatory Commission (Standards of Performance of Distribution Licensees, Period for Giving Supply and Determination of Compensation) Regulations, 2005, the requirement for above 5000 KVA contract supply demand is 3 phase, 50 cycles and the same is available at 132 KV level. It is admitted position before me that present respondent does not fulfill this requirement. The respondent, therefore, approached the petitioner with a request to provide it supply on available 33 KV level and as a special case and that supply has been sanctioned as per order dated 31st August, 2006, subject to special conditions stipulated therein.


14. The provisions of Section 45 deal with power of distribution licensee to recover charges for such supply and those charges must be in accordance with such tariff fixed from time to time and conditions of his license, subsection 3 thereof given the components, which form part of charge for electricity supply. As per its subsection 2, sub-clause 2(a) those charges are required to be fixed in accordance with the methods and the principles as may be specified by the State Commission, here, MERC. Under sub-clause 2(b), charges are required to be published so as to give it adequate publicity. Under subsection (3), it states that fixed charge in addition for actual electricity supplied, the rent or other charges in respect of any electricity meter or electrical plant provided by the distribution licensee can be the components of charge for electric supply. Subsection (5) further mandates that such charge has to be in accordance with the provisions of the Electricity Act, 2003 and Regulations made in that behalf by MERC. Section 46 authorizes petitioner to demand any expenses reasonably incurred in providing any electric line or electrical plant used for the purpose of giving supply as per regulations of MERC. Section 47 subsection (1) empowers petitioner to ask for reasonable security as may be determined by the regulations and that security is for payment to it of all money which may become due in respect of electricity supply to such person or in respect of expenses for provision of any electric line, electric plant or electric meter. Section 48 deals with additional terms of supply. The other relevant provision is contained in Part VII of the Electricity Act, 2003, which deals with tariff. Section 61 deals with tariff regulation and it lays down the circumstances to be taken into account by MERC while determining the tariff. Section 62 deals with determination of tariff and subsection 1 clause (d) states that MERC has to determine tariff in accordance with Electricity Act, 2003 for retail sale of electricity. Section 62 subsection (5) enables Commission to call upon distribution licensee to comply with such procedure as may be specified for calculating the expected revenue from the tariff and charges which he or it is permitted to recover. Subsection (6) states that if any licensee like petitioner has recovered a price or charge exceeding the tariff determined under Section 61, the excess amount is recoverable by the consumer who has paid such price or charge along with interest at bank rate and it is without prejudice to any other liability incurred by the licensee on account of such excess recovery. Section 45 subsection (4) states that in fixing charges and in recovering charges under Section 45, petitioner cannot show undue preference to any person or class of persons or discriminate against any person or class of persons. The said clause is subject to provisions of Section 62 and Section 62 subsection 3 also imposes similar obligation upon MERC. Clause 3 of Maharashtra Electricity Regulatory Commission (Electricity Supply Code and Other Conditions of Supply) Regulations, 2005 contemplates that the distribution licensee like petitioner recovers charges for supply in accordance with the provisions of the Act and said Regulation. Clause 3.4 deals with charges for electricity supply and it permits petitioner to recover charges for electricity supplied in accordance with tariff fixed from time to time by MERC. Clause 3.4.4 states that such charge for electricity may include a fixed charge in addition to a charge for actual electricity supplied in accordance with terms and conditions of tariff as may be specified. Thus, these Regulations show that the petitioners can recover tariff only at the rate fixed by MERC. Clause 8.2 of the Maharashtra Electricity Supply Regulatory Commission (General Conditions of Distribution Licensee) Regulations, 2006 requires distribution licensee to comply with all provisions of the Act, Rules, Regulations, Orders, directions issued by MERC from time to time as also the provisions of all other applicable laws. The judgments cited by the parties need to be considered in this background.


15. The respondent has placed reliance upon the judgment of Hon?ble Apex Court reported in case of Oswal Woolen Mills Ltd. (supra), particularly paragraph 16. this judgment in paragraph 14 notes that the Board (distribution licensee) is constituted under Section 5 of the Electricity (Supply) Act, 1948 and then other provisions thereof are looked into and it has been found that surcharge by way of additional rate or penalty can be levied only in terms of tariff notification. It has been further found that such a power, therefore, can be exercised by the Board only in exercise of statutory power and not by reason of executive power. In paragraph 16, it has again noted that the board being a statutory authority, its power to issue bills for consumption of electricity would be governed solely by the tariff notification and it being statutory authority, it must act within four corners of the statute. It is in this background that the judgment of High Court referred to in paragraph 11 concluding that levy of surcharge by notification dated 21/1/1991 and 03/5/1991 was never superseded, was found to be wrong by Hon?ble Apex Court in paragraph 17. The said notifications are also mentioned in earlier paragraphs and it is apparent that the surcharge or penalty considered there, is of entirely different nature. It was as existing or current liability and was not as advance or security contingent upon decision of SRC.


16. The other judgment relied upon by learned Advocate Shri Jaiswal is BSES Ltd.?s case (supra). In said judgment, in paragraph 16, the Hon?ble Apex Court has noticed that the term ?tariff? was not defined in the Electricity Regulatory Commissions Act, 1998. However, while considering the scheme, it has been noticed by the Hon?ble Apex Court that distribution licensee like petitioner have to first approach the Commission for approval of their tariff whether for generation, transmission, distribution or supply and for terms and conditions of supply. They can charge from their customers only such tariffs which have been approved by the Commission. Charging of tariff not approved by the Commission was found to be an offence punishable under Section 45 of the said Act of 1998. In paragraphs 17 and 18, the logic behind making such provision and requiring the generating companies to get tariff approved first, has been explained. It has been found that the electricity is not a commodity, which may be stored or kept in reserve and in absence of such regulatory mechanism, the consumer will have no option but to fall pray to the arbitrary demands of generating companies. This judgment is also considered by the Hon?ble Apex Court in its judgment reported in the case of LML Ltd. ..vs.. State of Uttar Pradesh and others (supra), on which the petitioner has placed reliance.


17. The LML Ltd.?s case (supra) shows that there, the licensee was authorized under the State Act to alter or modify tariff fixed by the State Electricity Regulatory Commission. The distribution licensee had provided exemption from surcharge levied for guaranteed uninterrupted power supply and consumer had acted in pursuant to said notification. The question of promissory estoppel arose in that background. This alteration by prescribing surcharge exemption was found bad by the High Court and hence, the distribution licensee issued bills in terms of tariffs framed by the Commission retrospectively. The tariff fixed by the Commission provided for 15% surcharge on demand and it was subject to condition that consumer would get assured supply of 500 hours in a month. The rebate was also provided in case of shortfall. By subsequent circulation, distribution licensee gave an option of not availing said guaranteed supply and exempted consumers of said category in that event from payment of 15% surcharge. The appellant before Hon?ble Apex Court M/s LML Ltd. exercised that option. This circular of exemption was held to be illegal by the High Court on the premise that distribution licensee had no jurisdiction to make said modification in tariff and hence, the bills therefor with retrospective effect were served on appellants. In this background, the Hon?ble Apex Court has considered the arguments that Section 24(6) of 1999 Act (U.P. State Act) permitted distribution licensee to modify the tariff and additional contention of doctrine of Promissory Estoppel. The judgment also considers the long pendency of request of alternation in tariff made by the distribution licensee before the State Regulatory Commission. In paragraph 38, in this background, the Hon?ble Apex Court has noticed that one of the objections of the Commission was to ensure uninterrupted supply of electrical energy and it was for distribution licensee itself to assess its own capacity therefor. The surcharge may or may not be a part of tariff and even if it was part of tariff in respect thereof levy was conditional. If the supplier was not itself in a position to fulfill the condition, the question of insisting on implementation of said provision was found not to arise by Hon?ble Apex Court. The observation in paragraphs 39 and 40 are in this background and then in paragraphs 41 and 42, the doctrine of Promissory Estoppel has been looked into. In paragraph 43, the Hon?ble Apex Court has observed as under:


43. We may also notice that the Commission did not take any decision despite repeated communications by the Power Corporation. If in a situation of this nature where the licensee wanted some alteration in the tariff, it was expected of it to take a decision forthwith. It should not have whiled away the time and allowed the Power Corporation to proceed with its proposal. Such a conduct on the part of the Commission may invite the doctrine of acceptance sub silentio. The statute provides for a consultation and not a concurrence. It does not provide for the consequence of any alteration of tariff applicable to a particular category of consumer. It merely, as indicated herein before, brings about the situation where a licensee found itself unable to supply electrical energy uninterruptedly to the consumer.


18. Perusal of impugned order in this petition, shows that on 31/8/2006, there was no approval by MERC to charging of voltage surcharge, the majority consisting of learned Chairman of the Forum and its Member have found that the silence of MERC on petitioner?s proposal to levy of voltage surcharge cannot be considered as deemed permission and on the contrary it constituted a non-consideration of said proposals and therefore, tantamounted to disapproval. It has also noted that the petitioner had submitted its proposal for levy of voltage surcharge on consumers, who wanted power at the voltage level lower than one prescribed under the S.O.P. Regulations and such proposal was dated 14/10/2005. On 06/1/2006, MERC had informed the petitioner that though different voltages based on load were prescribed in SOP regulations, in certain circumstances, due to technical constraints, the petitioner may not be in a position to supply at the voltage prescribed under SOP regulations and it may apply for exemption from standards prescribed thereunder while submitting information of the matters covered under Section 59 of the Electricity Act, 2003. However, such exemption can be sought only in short term and in time bound manner. The licensee (petitioner) has to develop required infrastructure taking into account SOP. The petitioner was advised to incorporate its proposal for levying voltage surcharge in their application for Annual Revenue Requirement (ARR) or tariff determination. The order itself mentions that this was done in tariff proposals submitted for year 2007-08 on 05/2/2007. The proposal was again submitted on 12/2/2008 and it is not in dispute that till today, the MERC has not taken any decision in the matter. These facts apparent from order of respondent No.2 forum, itself shows the need for such surcharge or additional recovery. The order dated 31/8/2006 sanctioning additional Contract Supply Demand to respondent No.1 needs to be viewed accordingly.


19. The respondent No.1 was not in a position to incur necessary expenditure to take supply at 132 KV level and it wanted additional contract demand of 3000 KVA on same 33 KV level. Because of this, load of 33 KV level was being increased to 7000 KVA and the same was, therefore, not in accordance with clause 5.3(f) of the Maharashtra Electricity Regulatory Commission (Standards of Performance of Distribution Licensees, Period for Giving Supply and Determination of Compensation) Regulations, 2005. It appears that as a special case after initial rejection, for such additional load of 3000 KVA, contract demand was sanctioned to respondent No.1. The impugned order mentions the observations of MERC in respect of such additional load on existing network. The petitioner, therefore, wanted an undertaking from respondent NO.1 before release of additional load and written acceptance of all terms and conditions. The material condition was charging of additional 2% extra units on energy units consumed by respondent No.1. In view of the discussion above, it is apparent that the petitioners were moving MERC for enabling it to levy surcharge in such circumstances and hence, in said condition they mentioned that said additional 2% extra units would be till the time MERC determine the surcharge. The respondent No.1 has accepted this condition unequivocally.


20. The supply of additional contract demand commenced after 31/8/2006 as per the said order and thus, the petitioner was releasing more load, but was not in a position to demand any tariff or charge in absence of its specification by MERC. The respondent No.1 has continued to receive such additional load and it is not the argument of respondent NO.1 before respondent No.2 forum or before this Court that it cannot be required to pay more for such load. Infact at one stage, the learned counsel for respondent No.1 stated that if such surcharge is determined by the MERC, it may apply prospectively. There was also an answer to a query from Court that respondent No.1 alone will not be required to pay T & D loss. If special treatment extended to respondent no.1 is continued indefinitely by parties, and said treatment is adding to T & D loss, as more load is relaxed on existing 33 KV lever contrary to SOP, petitioner and respondent No.1 cannot force those losses on general public. Both ought to have taken steps to force MERC to discharge its statutory obligations. Moreover, if in this situation, respondent no.1 accepts 2% surcharge provisionally it is neither illegal nor contrary to any tariff. Thus, keeping in mind the fact that it was releasing something more to respondent No.1 for which it was not in a position to charge, the undertaking has been obtained from respondent No.1 and as a part of said contract and commercial transaction, respondent no.1 also agreed to it. Respondent No.1 has obtained a special favour and it cannot be held that it had no bargaining power. Even when viewed from point of view of general public, there is nothing unconscionable in the arrangement between the parties. Respondent no.2 Forum has overlooked this aspect totally. Respondent No.1 has definitely obtained an otherwise not available benefit for itself & has also added to its business/profit thereby. Respondent No.1 never complained that legally such surcharge could not have been demanded from it. The petitioner as also respondent No.1 were & are aware that such surcharge is subject to determination by MERC and if ultimately MERC decides surcharge at some other rates and finds the petitioner not entitled to charge it, the respondent No.1 can recover it. The provisions of Section 62(6) mandates that if there is any excess recovery, the petitioner has to refund that amount to respondent No.1 with interest at bank rate and such repayment is without prejudice to any other liability incurred by recovering such excess amount by the distribution licensee. Whether the amount of Rs.67,09,582/- directed to be refunded by respondent No.2 board is in excess or not is yet to be determined. The respondent No.2 forum has considered the prevailing tariff and applied it to the arrangement between the parties for which as yet no tariff or surcharge has been fixed by MERC. I, therefore, find that the impugned order insofar as recovery is concerned, is unsustainable.


21. The learned counsel for respondent No.1 has pointed out that two other establishments in the region have been given the similar supply, without any surcharge. Infact during oral arguments, it was contended that several such units have been given additional load on existing KV level without any surcharge. It is apparent that the circumstances in which those arrangements have been made are not on rec

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ord and in any case, if additional load is being released, seeking additional payment provisionally therefore, cannot be said to be illegal. The respondent No.1 cannot be allowed to thrown its burden on the shoulder of others. Petitioner also cannot by permitting such arrangements for such long time or indefinitely cater to favoured few and add deficit to its ARR to charge more to ordinary consumer. The facts tend to give impression that petitioner is in fact colluding with respondent No.1. Why should technical body like MERC take such long time is also not understood. Nothing more can be said against MERC as it is not party before this Court. But, then the undue long pendency before it may justify an inference in line with observations of Hon?ble Apex Court in paragraph no.43 in the case of M/s. LML Ltd (supra). If MERC can decide the proposal of petitioner fast, it will result in regularization of supplies to all units including respondent No.1 herein as then discontinuation of such special favours by it which are continuing indefinitely or permanently to the prejudice to law abiding consumers. 22. Respondent No.1 during argument has urged that if there is any transmission and distribution loss, the same is supposed to be shared by all the consumers as they form part of ARR. In view of this stand, it is apparent that petitioners have tried to see that any extra expenditure on account of special favour shown to respondent No.1 is shouldered by said respondent only and hence, they have sought the surcharge at 2% extra units on consumption of electric supply. The decision is definitely in public interest. As it is subject to final decision of MERC in the matter, I do not find anything wrong or illegal in it. Knowing all these facts, the respondent No.1 gave consent to it and accordingly petitioners have released the additional load. The respondent no.1 is enjoying special favour for more than three years now. 23. After the adverse decision by the forum, the petitioners have discontinued the levy of surcharge from respondent No.1. In these circumstances, it will be appropriate for the petitioner as also respondent No.1 to move MERC for expeditious decision on the question of surcharge before the petitioner again starting levy of surcharge on respondent No.1. 24. No mandatory directions in this respect can be issued in this petition to MERC, as MERC is not party before this Court. 25. The petitioner as also respondent No.1 are directed to make appropriate application/proposal to MERC in this respect within a period of one month from today and if such proposals are received by MERC, the MERC shall attempt to take decision upon it as early as possible and in any case by 31st March, 2010. MERC shall note observations of Hon?ble Apex Court in paragraph no.43 in the case of M/s. LML Ltd. (supra). If as per said decision respondent No.1 becomes entitled to any refund, the petitioner shall refund that amount to respondent No.1 in accordance with law. 26. Writ Petition is thus partly allowed. Rule accordingly. However, in the circumstances of the case, there shall be no order as to costs. 27. Registry to forward copy of this judgment to MERC at the cost of petitioner. Petitioner shall in addition serve its copy by RPAD on MERC.
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