Dakshin Gujarat Vij Company Limited vs Land Mark Corporation and 1 Another

Rajesh H. Shukla, J.—The present petition has been filed by the Petitioner-Dakshin Gujarat Vij Company Limited ("DGVCL") under Articles 14, 226 and 227 of the Constitution of India as well as under the Electricity Act, 2003 read with the Gujarat Electricity Regulatory Commission (Electricity Supply Code and Related Matters) Regulations, 2005 for the prayer inter alia that appropriate writ, order or direction may be issued quashing and setting aside the order passed by the Electricity Ombudsman, Gujarat State, Ahmedabad in Case No. 82 of 2011 dated 9.1.2012, on the grounds stated in the petition and also for consequential orders, on the grounds stated in the petition. The facts of the case briefly summarized are that the Respondent No. 1 made two applications to the Petitioner-DGVCL dated 10.3.11 for supply of electricity in the two buildings known as Landmark Empires Building ''A'' and ''B'' developed by Respondent No. 1-M/s. Land Mark Corporation. Therefore, on the basis of such application, the estimate for necessary infrastructure for installing the transformers was given. It is the case of the Petitioner that it was for creating a lighting infrastructure and it was not an application for individual units by the individual parties, but it was made by Respondent No. 1 for the infrastructure in building ''A'' and ''B'' constructed by Respondent No. 1. Therefore, relying upon the provisions of the Electricity Act and the Rules, particularly Rule 50(A), the payment has been demanded, which has lead to the proceedings before the Electricity Ombudsman under the Act. The Electricity Ombudsman passed an order directing the Petitioner to make necessary arrangement for supply of electricity to the occupants of the building constructed by Respondent No. 1 based on the applications as per the impugned order, which has lead to filing of the present petition.

Heard learned Counsel Ms. Lilu K. Bhaya for the Petitioner-DGVCL and learned Counsel Mrs. Ketty A. Mehta appearing with learned Advocate Ms. Sonal D. Vyas for Respondent No. 1.

Learned Counsel Ms. Lilu K. Bhaya for the Petitioner-DGVCL referred to the papers particularly the impugned order passed by the Electricity Ombudsman, Gujarat State and also referred to the application/communication dated 10.3.2011 at Annexure-B and submitted that as stated by the Respondent in its own communication that the supply is for the infrastructure. She therefore submitted that, as stated by the Petitioner, it was the infrastructure, for which the estimate is given for the entire infrastructure, which is stated in detail at Annexure-D. She further submitted that as a developer required for the purpose as stated, then the cost of infrastructure of electrification towards high tension and low tension line and transformer center has to be borne by the developer. Learned Counsel Ms. Bhaya also submitted that the load is equally important and she pointedly referred to the papers to emphasize that the demand for load is 1312.31 KW, and therefore, it cannot be by an individual consumer. She therefore submitted that it was a demand for electrification for the purpose of two towers constructed by the developer, and when the developer desires to have such infrastructure or the necessary infrastructure, the expenses have to be borne by the developer. She referred to Rule 50(A) of the Rules. She has also referred to the affidavit-in-reply and other papers, including Annexure-R-1 and R-2 with the affidavit in reply. She pointedly referred to the Notification No. 9/2005 produced at R-15 dated 31.3.2005 issued in purported exercise of power u/s 181 read with Section 41 and 45 of the Electricity Act known as Gujarat Electricity Regulatory Commission (GERC) Licencee''s Power to Recover Expenditure Incurred in Providing Supply And Other Miscellaneous Charges. She has referred to the same in detail and submitted that the same has to be considered according to the tariff for supply of electricity, which has a reference to the load capacity. She pointedly referred to this aspect to emphasize that as the load increases, the rate would also increase, and therefore, it has been submitted that the Gujarat Electricity Commission would be the authority. However, the Electricity Ombudsman has passed an order to supply such infrastructural facility to the developer though the cost and expenses are required to be borne by the petitioner.

Learned Counsel Mr. Bhaya referred to the communication by GUVNL-Parent Company dated 11.5.2011 addressed to the Petitioner and emphasized:

Further, in case of infrastructure development if developer has asked only for electrification and not for any new connection then full cost of electrification shall be recovered from the subsequent applicants for such developed network. However, in case individual applicants applies for new connection(s). the charges mentioned above shall be recovered and no any charge for electrification be recovered and only electrification to the extent of releasing new connection be carried out.

Learned Counsel Mrs. Ketty Mehta appearing with learned Advocate Ms. Sonal D. Vyas for Respondent No. 1 referred to the affidavit in reply as well as the additional affidavit in reply at length and submitted that there is thorough misconception with regard to the basic facts, for which, she referred to the proceedings and the order of the Electricity Ombudsman in detail and submitted that the emphasis on the aspect of load or the demand by the developer and not by the consumer as such a load could not be required by the consumer, is misconceived. She pointedly referred to the communication dated 10.3.2011 and submitted that it has been specifically stated that the building has total 180 units with 9 lifts, and therefore, the bifurcation has been done for the purpose of total estimate and the demand is for the consumers, who are the occupants of the respective units whether it is a flat or the shop. She pointedly referred to this aspect and submitted that the Petitioner is under an obligation to supply electricity and cannot sit tight in such a manner for extracting the payment. Learned Counsel Mrs. Mehta submitted that the Gujarat Urja Nigam Limited ("GUVNL") by a communication dated 11.5.2011 at Annexure-E has made it clear that the recovery of charges from the prospective consumer would be in line with the Torrent Power Limited. She further submitted that, as stated, it has been emphasized by the Petitioner-DGVCL that when the individual applications are made, the charges have to be recovered as provided therein, and what has been referred to, is the cost of electrification, which has to be recovered from the developer. She therefore submitted that, to ask for the charges, when the electric supply is given during the construction work is one thing, and after the construction work is over and the demand is made for supply of electricity, it cannot be claimed that the demand is made by one individual or the developer as a whole unit or the building, but it is a demand for electricity by the respective buyer/consumer for the respective units in the building. Learned Counsel Mrs. Mehta submitted that in fact Gujarat Electricity Regulatory Commission ("GERC") vide communication dated 30.3.2012 has made it clear to the Petitioner that they have to apply rates as approved and no discretion is available to the utility like the Petitioner. Learned Counsel Mrs. Mehta pointedly emphasized this letter and submitted that the GERC has therefore also advised to strictly follow the rates fixed by the Commission with a specific clarification that if there is any dispute with regard to the actual expenditure, they can seek a fresh approval from the GERC. Learned Counsel Mrs. Mehta therefore submitted that it clearly provides that the Petitioner-DGVCL has no business to make any such claim, and therefore, the order passed by the Electricity Ombudsman in detail referring to every technical aspect, cannot be questioned, and the present petition may not be entertained. She pointedly referred to the order of Electricity Ombudsman and emphasized the observations in the order:

It is noted that cost recovery towards "infrastructure" from new applicants for LT supply connection, is not mentioned in Chapter-III and Chapter-IV of GERC Notification No. 9 of 2005. The Respondent is directed to recover only KW based recovery from individual applicant as approved by Hon''ble Commission as per Para No 4.1 The excess recovery of estimate of Para 2.3 is to be refunded to the Appellant within 30 days on receipt of this order Interest is not allowed on refund amount.

Learned Counsel Mrs. Mehta therefore submitted that in light of this clear findings, the contentions, which have been raised are misconceived and the present petition may not be entertained. She referred to the circular from GERC dated 21.1.2011 produced at Annexure-D with the affidavit in reply addressed to the Petitioner-DGVCL with regard to the charges to be recovered towards the service lines and transformer centers. She emphasized that it has been clearly provided that when the Petitioner has been requested to recover the fixed charges on per KW basis from the prospective consumers in accordance with the GERC approval dated 30.12.2010, the same has to be followed. She has also referred to a further communication with regard to the same charges which provide for the clarification. Learned Counsel Mrs. Mehta referred to the circular dated 30.12.2010 and submitted that if new connection has to be given, it could be charged on the basis of per KW. Learned Counsel Mrs. Mehta therefore submitted that this correspondence and details provide about the methodology to recover the service connection or the charges. Learned Counsel Mrs. Mehta has also referred to the Notification No. 9/2005 dated 31.5.2005, by which these regulations have been made and, submitted that Chapter-IV referred to the provisions for low tension supply and she emphasized that it has been specifically provided:

The average cost incurred (according to the latest cost data as published by the Distribution Licensee) shall be used as the yard stick for determining the per KW cost of these categories of consumers.

Therefore, learned Counsel Mrs. Mehta submitted that the relevant communication dated 21.1.2011 has not been deliberately produced with the affidavit in reply giving the clarifications, and therefore, the present petition deserves to be dismissed on that ground also. Learned Counsel Mrs. Mehta also referred to the Electricity Regulatory Commission Act and pointedly referred to Sections 22 and 29 in support of her submissions.

Learned Counsel Mrs. Mehta also referred to the judgment of the Hon''ble Apex Court reported in U.P. Power Corporation Ltd. Vs. National Thermal Power Corporation Ltd. and Others, and emphasized the observations made in paragraphs 12 and 13. Learned Counsel Mrs. Mehta has also referred to and relied upon the judgment of the Hon''ble Apex Court reported in Shree Sidhbali Steels Ltd. and Others Vs. State of U.P. and Others, in support of her submissions. Learned Counsel Mrs. Mehta also referred to the communication by the Petitioner-DGVCL dated 9.1.2012 and submitted that as could be seen from the same, the necessary clarification has been made. She pointedly referred to the additional affidavit in reply.

In view of the rival submissions, it is required to be considered whether the present petition can be entertained or not.

The controversy involved is referring to the application at Annexure-B which has been emphasized by learned Counsel Mrs. Lilu K. Bhaya that it was a demand for infrastructural development as it is not a demand for electricity by the individual consumer. However, the impugned order at Annexure-A, which has dealt with this aspect in detail, has referred to the demand for power supply with technical aspects. When it has been stated referring to the correspondence including a letter dated 12.1.2011 discussing about the aspect of infrastructural development and, it has been made clear that if the Petitioner-DGVCL or the DISCOM desires to charge at the higher rate, it has to be justified and approved by the Commission. The reference is made to the instructions by GUVNL letter No. 1067 dated 11.5.2011 wherein, it has been specifically observed:

If DISCOM observes short recovery against actual expenditure during implementation of KW based method, the separate petition may be filed by DISCOM preview of charges/method.

The letter of GUVNL dated 1.4.2011 and communication dated 21.1.2011 making the position clear that the charges are required to be recovered as per the circular of the GERC. In fact the communication dated 11.5.2011 from GUVNL for recovery of the charges from the consumer is in line with Torrent Power Limited, which has been considered. Therefore, the moot question which is required to be considered is whether the petitioner can recover the charges in the name of infrastructure from Respondent No. 1 that it is a demand by the developer and he has to bear the expenses. Again, whether it is a infrastructural cost or whether it is a cost for electrification in respect of the premises occupied in a building by the individual consumers separately, is the aspect, which is required to be noted. The Petitioner-DGVCL has proceeded on the assumption that it is the Respondent No. 1 who has constructed the building and the entire building is of the Respondent No. 1 as a developer, who is claiming the supply of electricity, and therefore, liable to be charged for the development of infrastructure for supply of electricity. However, the developer may have put up the construction of the building but the supply of electricity qua the respective consumer, who would be the occupant of the units in the entire building, can also have a right to make a demand for the electricity from the DISCOM like the Petitioner-DGVCL, who are the licensee under the Act. They cannot be permitted to shirk from their responsibility of providing electricity to the individual in the guise of raising such demand nor they can be permitted to make demand from the developer like Respondent No. 1, which is not permissible. The letter dated 8.7.2011 clearly suggest that the Petitioner-DGVCL should implement the directive of GERC and, the GUVNL has also clearly communicated to follow the directive of GERC. The communication/fax dated 21.1.2011 from GUVNL to the Petitioner-DGVCL with regard to the charges to be recovered towards the Service Lines Transformer Centers has dealt with this aspect. Further, the communication dated 1.4.2011 refers to the method of the calculation of charges and the clarifications have been made. Further, the Notification No. 9/2005 dated 31.3.20905 issued in purported exercise of powers u/s 181 read with Sections 45 and 46 of the Electricity Act referred to the various aspects, including duty of the distribution licensee to supply electricity on request and recovery of expenditure. There is a specific reference to the obligation by virtue of the provisions of the Act to supply the electricity to the premises of the consumers. Chapter-IV referred to the provisions which has been specifically mentioned:

The average cost incurred (according to the latest cost data as published by the Distribution Licensee) shall be used as the yard stick for determining the per KW cost of these categories of consumers.

Therefore, the point, which is required to be considered is whether the Respondent No. 1 as a developer is required to pay the charges as claimed by the Petitioner-DGVCL or whether the calculation of charges has to be as per the circular and the guidelines made by the GUVNL and GERC, which is a body empowered to guide and lay down the guidelines on appreciation of all technical aspects.

A useful reference can be made to the judgment of the Hon''ble Apex Court reported in U.P. Power Corporation Ltd. Vs. National Thermal Power Corporation Ltd. and Others, wherein it has been observed:

Looking to the observations made by this Court to the effect that the Central Commission constituted u/s 3 of the Act is an expert body which has been entrusted with the task of determination of tariff and as determination of tariff involves highly technical procedure requiring not only working knowledge of law but also of engineering, finance, commerce, economics and management, this Court was firmly of the view that the issues with regard to determination of tariff should be left to the said expert body and ordinarily the High Court and even this Court should not interfere with the determination of tariff.

The clarification by both-GUVNL and the GERC clearly suggest that the demand is for the electrification and not for infrastructure. The circular referred to in the affidavit in reply clearly suggests;

In case of infrastructure development, if the developer has asked only for electrification and not for any new connection then full cost of electrification shall be recovered from the developer and charges above shall be recovered from the subsequent applicants from such developed network. However, in case of individual applicant applies for new connections the charges mentioned above shall be recovered and no charge for electrification be recovered and only electrification to the extent of releasing new connection be carried out.

In other words, it has a reference to the supply of electricity by the licensee and the connection which is given to the consumer. Moreover, the Annexure which includes the form produced at R-2 referred to individual aspect of the demand like every individual unit, and therefore, the submission made by learned Counsel Ms. Lilu K. Bhaya that it is a building constructed by the developer and it is a demand for electrification by the developer himself for the entire building, is thoroughly misconceived.

The charges should be limited for the purpose of electrical supply to the buildings from the sub station or the other places and, after a particular point, when the electricity, like the sub-station or the meters are installed in the premises, the further expenses of the electrical line in respect of each individual unit, whether a shop or a flat, is required to be borne by the individual consumer. Therefore what could be claimed is the charges for the electrification, when the society or the occupants of the flats, which is a unit in the entire building can claim the supply of electricity and, the Petitioner-DGVCL cannot claim the higher amount in the name of infrastructure facility despite the clarification by the GUVNL, which is a parent Company as well as by GERC. As could be seen from the impugned order passed in detail by the Ombudsman at Annexure-A, the petition cannot be entertained. In fact inspite of the clarification by GUVNL and GERC, such a stand, which is adopted by the Petitioner-DGVCL, is required to be rejected.

Therefore, in view of the observations made by the Hon''ble Apex Court in a judgment in case of Uttar Pradesh Power Corporation Limited v. National Thermal Power Corporation Limited and Others (supra) the UGVNL and the GERC, which are the competent authority having the knowledge about the technical aspects, have issued the clarifications and guidelines and there is no justification for the Petitioner-DGVCL, which is one of the distributing Company, to take a contrary stand. Further, there is a specific guidelines in the communication dated 11.5.2011 by GUVNL. There is no justification for adopting such a rigid stand by the Petitioner-DGVCL to get involved in such kind of litigation at the cost of public exchequer. Therefore the present petition deserves to be dismissed and accordingly stands dismissed. Rule is discharged. No order as to costs. Interim relief, if any, shall stand vacated.