Dhbvn v. Electricity Ombudsman Haryana and Anr

VINOD S. BHARDWAJ, J.

Arising from a common order dated 20.09.2012 passed by the Electricity  Ombudsman,  both  these  writ  petitions  are  being  decided  by

CWP-2386-2013 (O &M) and  CWP-19607-2013         -2-

common judgment. For the facility of reference, facts are however being referred  to  from  CWP-2386-2013  titled  as  "DHBVN  versus  Electricity Ombudsman Haryana and another". FACTS:-

2.    The  respondent  No.2-M/s  RICO  Industries  Ltd.,  hereinafter referred to as "RICO" had been released a sanctioned load of 9000 KW i.e. 9 MW  with  a  contract  demand  of  10000  KVA  i.e.  10  MW.  The  'RICO' requested for the sanction of an extension of load from 9000 KW to 18000 KW i.e. 18 MW with a contract demand enhancement from 10000 KVA to 20000 KVA whereupon the sanctioned load of the company was enhanced. However, the sanctioned contract demand could not be released from 66 KV, Sub Station, Mehrauli Road, Gurgaon, hence, the contract demand of 18000 KVA equal to 18 MW was sanctioned, as a temporary arrangement, from the above said Sub Station. The applied contract demand of 20000 KVA equal to 20 MW was to be later supplied from the new 66 KV, Sub Station,  Sector-38,  Gurgaon,  which  was  then  under  construction.  The Construction of "Bay" at the 66 KV Sub Station, Sector-38, Gurgaon and erection  and  laying  of  66  KV  line  from  Sector-38  Sub  Station  to  the premises  of  the  company  was  to  be  undertaken  before  supply  could  be released from the said Sub Station. The cost of the construction of the Bay and  the  Service  Line,  for  the  direct  supply  of  electricity  from  the  Sub Station, Sector-38, Gurgaon was to be borne by RICO. It was at liberty to get the Bay constructed at his own costs or to deposit the cost with the petitioner-distribution licensee. It is alleged that no Bay or the transmission

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Line had been constructed, at the instance of RICO to avail supply of the contract demand of 20000 KVA due to which only the contract demand of 18000 KVA equal to 18 MW was sanctioned from the 66 KV Sub Station at Mehrauli Road Gurgaon as a temporary arrangement.

3.    It is further averred that to avoid misuse of electric supply by the  industry,  consumption  of  the  electricity  by  the  industrial  concern  is recorded through HT-Trivector electric meters. The main feature of the said electric meter is that it records the real time quantity of electricity supplied to the  respective  industry  every  15  minutes.  The  data  regarding  the said supply remains stored in the electric meter for a certain duration. The above said  HT-Trivector  electric  meters, popularly  called as  'Consumer  Energy Meter' (CEM) is an all electronic, solid state poly-phase energy meter which accurately measures all parameters of the supply, voltage, current, power factor, active load, reactive load, apparent load etc. in addition to active, reactive and apparent energies.

4.    In order to check electricity supply to the industrial units, the distribution  licensee  has  constituted  a  "Metering  &  Protection  Team (hereinafter  referred to  as  the  'M&P  Teams').  The  said teams  check the consumption, its accuracy and other energy parameters as recorded in the CEM installed in the industrial unit apart from the monthly consumption reading  taken  by  the  office  of  the  Sub  Divisional  Officer  of  the  area. Whenever the M & P Team visits the industrial concern, a representative of the  industrial  concern  is  associated  with  the  checking  and  the  same  is conducted in his presence. The proceedings thereof are recorded at the spot

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and are to be signed by the representative so that no later dispute can be raised by the consumer. The results of the checking regarding accuracy and other energy parameters of the electricity connection are verified to ascertain whether the same are within the sanctioned load or reflect an excess load. The Sub Divisional Officer is also informed of the findings by the M & P Team for further necessary action.

5.    It is stated that the record of the respective industrial concerns regarding their sanctioned load, in the office of the Sub Divisional Officer was being maintained manually and during the carry forward of the entry in the new register in the new ledger account of RICO, the contract demand in July, 2008 was inadvertently recorded as 20 MW instead of the actually sanctioned  contract  demand  of  18  MW.  It  is  further  stated  that  in  the meanwhile, to deal with the key consumers under the HT category a separate Key Consumer Group Division (KCG) was established in September-2009. The case of RICO company was transferred from the Sub Division to the said new KCG Division. Even though the reports of checking on 28.01.2010 were forwarded by the M & P Team to the office of KCG division, however, the  bills  continued  to  be  issued  regarding  consumption  of  electricity considering the contract demand as 20 MW, as had been recorded in the ledger.

6.     When  the  said  fact  came  to  the  notice  of  the  distribution licensee that the sanctioned contract demand was actually 18 MW and not 20 MW, the correction was accordingly made to the ledger account of the company.  It  then  transpired  that  there  was  recording  of  excess  load  on

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23.01.2010 at 9:30 A.M., when inspection of the premises was conducted in the presence of representative of the company and proceedings were duly recorded. Accordingly, a notice dated 06.05.2011, for assessment on account of  Maximum  Demand  Indicator  (MDI)  penalty  was  sent  to  the  RICO company specifying that in the month of July, 2008, the contract demand was inadvertently mentioned as 20,000 KVA instead of 18,000 KVA and that  after  the  same,  the  consumption  of  electricity  exceeded  the  contract demand since January, 2010 and the penalty on account of increase of MDI was accordingly conveyed from the month of January, 2010 to April, 2011 on increase of MDI and Peak Load Exemption Charges (PLEC) which is tabulated as under:- MDI Penalty  Rs. 56028471.00 Difference of PLEC  Rs. 1436000.00 Less fixed charges charged extra   Rs. 1440000.00 Total Amount   Rs. 56024471.00

7.    The  RICO  company  was  asked  to  pay  the  amount  of Rs. 5,60,24,471/- and liberty was granted to raise objections, if any, to the demand so raised.

8.    A  reply  dated  25.05.2011  was  sent  by  the  RICO  Company claiming that it had already applied for extension of load from 9,000 KVA to 18,000 KVA with an enhancement in contract demand from 10000 KVA  to 20000 KVA on 21.10.2005 which was also sanctioned on 24.02.2006. It was

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also claimed that the temporary arrangement of electricity from the 66 KV Sub Station, Mehrauli Road, Gurgaon continued till completion of 66 KV Bay  at  66  KV  Sub  Station,  Sector-38,  Gurgaon  and  the  connecting transmission line. It was claimed by RICO Company that the entire cost for construction of Sub Station and Line had been deposited by it in November, 2008 with the distribution licensee and the extension of the sanctioned load of 18000 KVA equal to 18 MW was shifted to the 66 KV Sub Station, Sector-38,  Gurgaon  in  the  month  of  November,  2008  and  thereafter  a tripartite agreement was also executed on 03.08.2009.  The bills were also being issued to the RICO company on the sanctioned load as 20,000 KVA and thus the sudden reduction of sanctioned load from 20 MW to 18 MW by the distribution licensee was arbitrary. The assessment was thus claimed to be illogical and unjustified and the demand was asserted or being liable to be set aside.

9.    On the consideration of the reply, the order of assessment was affirmed and the objections were dismissed.  The RICO company was asked to deposit the sum of Rs. 5,60,24,471/- vide order dated 10.06.2011. An appeal was also preferred against the said order of assessment which was also dismissed on 26.08.2011.

10.    Aggrieved, the RICO company filed Civil Suit No. 328 dated

14.10.2011 in the Court of Civil Judge (Senior Division), Gurgaon claiming a declaration alongwith consequential relief of permanent injunction to the effect that the demand raised vide notice dated 06.05.2011 and 10.06.2011 is unjust  and  illegal.  The  said  Civil  Suit  was  contested  by  the  petitioner-

CWP-2386-2013 (O &M) and  CWP-19607-2013         -7-

distribution licensee by raising specific plea that the Director, Operation, Hisar had only sanctioned the extension of load from 9000 KVA to 18000 KVA  but  the  sanctioned  contract  demand  was  inadvertently  recorded  as 20000 KVA instead of 18000 KVA. The load used by the company had been unauthorizedly exceeded against the contract demand by more than 5% limit of the sanctioned contract demand, therefore, a notice for assessment of loss caused to the petitioner distribution licensee was served upon the company. An objection to the jurisdiction of the Civil Court to entertain the suit was also raised. Issues were framed in the said Civil Suit on 21.10.2011.

11.    Alongwith the plaint, an application under Order 39 Rule 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908 had also been filed by the RICO Company seeking an interim relief, which was decided by the Civil Court vide order dated 21.10.2011. It was noticed in Para No.8 of the said interim order passed by the Civil Court that service sanction order dated 29.05.2006 regarding the extension of load from 9000 KVA to 18000 KVA with contract demand of 10000 KVA to 18000 KVA was approved. The  Civil  Court  observed  that  interest  of  justice  would  be  met  if  the petitioner-Distribution  Licensee  would  reconsider  the  reply  filed  by  the respondent-  RICO  Company  to  the  demand  notice  dated  06.05.2011  and then  pass  a  fresh  final  order  of  assessment,  on  merits,  after  granting  of opportunity  of  hearing.  The  application  for  temporary  injunction  was accordingly disposed of with the above direction. In compliance thereto, the respondent-RICO company was granted an opportunity to submit a detailed response  and  personal  hearing  was  also  granted.  The  record  of  the

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department including the test report  and the summary job order for release of extension of load from 9000 KVA  to 18000 KVA with contract demand from 10000 KVA to 18000 KVA was got verified. It was also noticed that during  the  month  of  July,  2008,  due  to  some  clerical  mistake,  contract demand was mentioned as 20000 KVA instead of 18000 KVA in the manual ledger maintained by the Sub Divisional Officer. Even on the date of release of extension of load on 22.06.2006, the contract demand of 18000 KVA was mentioned clearly in the record. The M & P reports about consumption was being  prepared  in  presence  of  representatives  of  RICO  and  the  contract demand of 18000 KVA was mentioned very clearly. Hence, the respondent No.2-RICO was well aware of release of contract demand of 18000 KVA only. It was also noticed that respondent No.2 had exceeded the contract demand, in the month of January, 2010 i.e. on 23.01.2010 at 9:30 A.M. After recording of exceeded consumption beyond Contract Demand, the premises was inspected by expert wing of DHBVN on 28.01.2010. The violation thus was duly recorded and conveyed to the RICO-Company for the period from January, 2010 to February, 2011 on the basis of load survey taken from the CEM  Meter  for  an  interval  of  15  minutes.  The  violations/excess consumption  beyond  the  contract  demand  was  noticed  for  a  period  of 07  months  on  the  basis  whereof  the  demand  of  Rs.  5,60,24,471/-  was assessed.  The  order  dated  09.12.2011  was  accordingly  passed.  The respondent No.2 was accordingly directed to deposit the amount within a period of 07 days vide order dated 25.11.2011 conveyed vide letter dated

09.12.2011.

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12.    The  respondent  No.2-  RICO  Company  thereafter  filed  an application  under  Section  86  (1)(a)(e)  read  with  Section  94  (1)(f) of  the Electricity  Act,  2003  read  with  Regulation  78  of  HERC  (Conduct  of Business) Regulations, 2004 seeking to quash the order dated 25.11.2011. The said application was registered as case No. 33 of 2011 and was heard on several occasions. The Civil Suit, preferred earlier by the respondent No.2-RICO  Company,  was  withdrawn  on  16.01.2012  to  pursue  the  other remedies.  The Haryana Electricity Regulatory Commission finally held that the petition under Section 86 (1) (a) of the Electricity Act, 2003 was not maintainable as the same pertains to the power of Commission to determine the tariff while sub Section (e) of Sub Section 1 of Section 86 dealt with promotion  of  co-generation  and  generation  of  electricity.  It  was  also observed that Section 91 (4)(f) of the Act read with Regulation 78 of  the Regulations of 2004 dealt with the power of Commission to review which was not applicable. The petition was accordingly dismissed vide order dated

06.03.2012.

13.    Respondent  No.2-RICO  Company  thereafter  filed  a  petition before  the  Consumer  Grievance  Redressal  Forum,  Hisar  which  was registered as case No. 546 of 2012 on 12.03.2012 seeking the following relief :- i.   Notice for short assessment raised by XEN, KCG Divn.  DHBVN  Gurgaon  for  Rs.  5,60,24,471/-  on account of   MDI penalty be quashed. ii.   Even if it is concluded that the petitioner exceeded VISHAL SHARMA   the sanctioned contract demand in any month, it

should be reckoned from the month when notice of assessment was issued for exceeding the contract demand and MDI was reset to zero and not from any previous date. iii. The Nigam be restrained from disconnecting the electricity connection and/ or recovering these unlawful and illegal charges on a wrong pretext and save the petitioner company from this unnecessary financial burden. 1G.    Ttie  %1>3i%%i !%  +'-+!.e'  !  ttie  +> -e,  >2  ttie  "e%& !'e!t N .2* RI$O $ 3&+!2 +"e %133+"iIe' 0e"ei!+4te" >e: /)* i. Revised sanctioned letter was not issued, showing reduced contract demand of 18 KVA. ii. No action was taken on the M&P reports of January & April, 2010. Had the notice been issued in Jan., 2010, the petitioner would have restricted its power drawl within the restricted contract demand till the matter was settled or used captive generators. iii. The MDI was not reset to zero at each instance and assessment orders issued. No mention of exceeding MDI in M&P report of July, 2010. Monthly energy bills issued with fixed charges on CD taken as 20000 KVA. In tripartite agreement dated

03.08.2009 the CD was mentioned as 20000 KVA and mentioned the same in open access permission and approval of special dispensation during peak

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15.    The Consumer Grievance Redressal Forum considered the rival submissions advanced on behalf of the parties and observed in its order that during the month of January, 2010, the contract demand reached at 19300 KVA which was more than 5% of the allowed limit of sanctioned KVA. Even on 28.01.2010, a similar phenomenon occurred. The report was duly witnessed by the Company representative and due to wrong entry in the ledger  of  the  contract  demand  of  20000  KVA,  the  amount  could  not  be charged in the monthly bill of January, 2010 and on subsequent occasions when it exceed due to the mistake in the ledger. Accordingly, a penalty of 25% SOP was imposed upon the respondent No2- RICO company. It was also recorded that the respondent No.2-Company had been fully aware of the contract demand being of 18000 KVA since it had applied for extension of contract  demand  from  18000  to  25000  KVA  on  05.09.2008  which  was sanctioned by the Chief Engineer/Operations Delhi on 27.01.2009. Hence, the  respondent  No.2-  RICO  Company  cannot  thus  claim  that  a  contract demand of 20000 KVA had been sanctioned in its favour in the year 2006 since had that been the case there was no occasion for the respondent-RICO company to refer to increase in the contract demand from 18000 KVA to 25000  KVA  in  the  year,  2008.  It  was  further  recorded  that  under  the voluntary disclosure scheme, the respondent No.2- RICO Company again declared its contract demand on 12.12.2011 as 18000 KVA. It was, on the abovesaid findings that the petition was dismissed by the Consumer Court after holding that case was one of unauthorized extension of load and in violation of the sale Circular No. D-43 of 2005, para (I) (C), as amended

CWP-2386-2013 (O &M) and  CWP-19607-2013         -12-

vide Sale Circular No. D-37 of 2007. It was also held that the Forum did not have the jurisdiction to entertain the claim under the Haryana Electricity Regulatory Commission regulations.

16.    Hence,  the  RICO  Company  preferred  an  appeal  against  the order of assessment before the Electricity Ombudsman. The said appeal was party  allowed  by  the  Electricity  Ombudsman  and  it  was  held  that  the Distribution licensee was entitled to charge penalty against the respondent-company on account of exceeded MDI only for the month of January, 2010 and was further directed to refund the penalty amount charged against the respondent-Company  on account  of exceeded  MDI beyond the period  of January, 2010 to May, 2011. The surcharge on the disputed amount was also waived  off.  The  operative  part  of  the  order  passed  by  the  Electricity Ombudsman, Haryana is extracted as under:- From  the  contents  of  the  appeal  filed  by  the appellant,  reply  submitted  by  the  respondent,  examinations, cross examinations, discussions held during the hearings and the rejoinder submitted by the appellant the following facts are established: 1)   That  the  respondent  sanctioned  extended  load  of 18000  KW  and  extended  contract  demand  of 20000 KVA to the appellant in February, 2006. 2)   That partial demand of 18000 KVA was allowed in June,  2006  vide  SJO  No.  85  dated  29.05.2006 keeping in view the constraints on the Badshahpur Mehrauli Road Line.

3) That after the sanction of partial demand of 18000 KVA, due entry of extended load and extended contract demand should have been made in the ledger by the concerned SDO so that monthly bills to the consumer could be issued in line with the extended load and extended contract demand. In the present case the extended contract demand of the appellant has been recorded is 20000 KVA in the ledger instead of 18000 KVA which was actually released during June, 2006. This non recording of actual released contract demand of 18000 KVA in the ledger is a gross negligency and deficiency in service on the part of the concerned SDO who is responsible for upkeep and maintenance of proper record of HT consumers and specially this consumer who is having a load to the tune of 20 MVA. 4) The monthly readings of the HT consumers are recorded by the concerned SDO and the bill to the consumers are issued on the spot on the date of reading itself on the basis of the consumption recorded and other para meters related with the bill. If the MDI exceeds the permissible limit, then the penalty on account of exceeding MDI is to be levied and the penalty amount is to be indicated and included in the bill to be issued to the consumer. The MDI is to be reset to zero. 5) In the present case the MDI at the consumer's premises exceeded more than 5% of the permissible limit on 23.01.2010. The meter installed at the premises of the appellant was

checked on dated 28.01.2010 by the officers and the staff of the M&P Division, DHBVNL, Gurgaon. The observations made by M&P Division during checking on 28.01.2010 are as under: Contract Demand as per Bill 20,000 KVA Contract Demand as per M&P record 18,000 KVA MDI 19.02 MVA MDI (Cumm.) 19.07 MVA Accuracy of the meter checked and found working within permissible limit. Temper data taken in MRI 'D( )#u"! e*cee!e!& +cti#" may  e ta,e" as -er Ni.am/s rules& The copies of this checking report was sent to

¶1SDO/JE (Op) DHBVNL

2. ΧΕΝ (OP) DHBVNL

¶3SE (OP) DHBVNL, Gurgaon

¶4SE (M&P) DHBVNL, Gurgaon

¶5Chief Auditor, DHBVNL, Hisar No copy of the checking report was given or sent to the appellant. The MDI was not reset to zero by the concerned SDO after the checking which was mandatory on the part of the SDO. 6) The subsequent checking was made by M&P Wing in April, 2010 and July, 2010. The observations made by M&P Wing during these checkings are as under:)

+-rilti 2010 Contract Demand as per Bill 20,000 KVA Contract Demand as per M&P record 18,000 KVA MDI 19.02 MVA MDI (Cumm.) 19.07 MVA Visited the site for periodical checking and the accuracy of the meter checked and found working within permissible limit. Load survey taken in CMRI 'D( )#u"! e*cee!e!& 1# am#u"t t#  e c$ar.e! as -er Ni.am/s rules& 2ulyti 2010 Contract Demand as per M&P 18,000 KVA MDI 19.07 MVA MDI (Cumm.) 19.01 MVA Checked the accuracy of the meter and found within limit. Load survey taken in CMRI. (Nothing was mentioned by the M&P wing in this report about MDI having been exceeded) 7) The copies of the checking reports conducted by M&P Wing during April, 2010 and July, 2010 were sent to SDO/JE (Op) DHBVNL, XEN (OP) DHBVNL, SE (OP) DHBVNL, Gurgaon, SE (M&P) DHBVNL, Gurgaon and Chief Auditor, DHBVNL, Hisar. No copy of report was given and sent to the appellant. Proper action was required to be taken on the checking reports of M&P wing

by Operation Officer's but none bothered to take action as per Nigam's Rules on the report of M&P Wing. Even the Chief Auditor, DHBVNL, Hisar to whom the copies of M&P report had been sent did not bother to ensure that the amount recoverable if any was actually charged by the field officers to the consumer or not. This clearly indicates pure apathy and inaction of the officers of the respondents) Nigam.

(8) Non Complying with the repeated observations of the M&P wing about taking action on MDI found exceeded in January, 2010 and then in April, 2010 as per Nigam's rules, charging amount as per Nigam's rules and non resetting the MDI to Zero when the MDI was found exceeded, was the severest gross negligency on the part of the concerned officers/officials of the Nigam and deserve to be suitably punished. 9) Not charging the penalty for exceeding MDI during January, 2010 and thereafter till May, 2011 on the exceeded MDI and not informing the consumer about MDI having been found exceeded on the very first defauit is the severe most negligency on the part of respondents. Having committed these repeated serious gross mistakes, the respondents cannot justify their inaction and then try to call these as correct. 10) The consumer/ appellant cannot be held responsible for repeated mistakes/ inaction of the DHBVNL officers/staff and to panelize the consumer to cover up their own mistake is not in

order at all. Rather it is a financial harassment and mental torture to the appellant. 11) The payment/demand raised by the respondents in May, 2011 for the exceeded MDI w.e.f January, 2010 to May, 2011 is purely an afterthought to cover up their own earlier mistakes and not based on actual facts. The actual fact is that the MDI should have been reset to zero in January, 2010 and penalty for exceeding MDI should have been levied in the bill of January, 2010 itself. If the appellant/consumer exceeded his contract demand more than the permissible limit after January, 2010 after levying of penalty on account of exceeded MDI and resetting the MDI to zero, he was liable to pay the penalty on account of exceeded MDI for every period in which the MDI exceeded. After conveying of the exceeding MDI to the appellant by the respondent in May, 2011. there has not been even a single instance when the appellant exceeded his MDI beyond 18000 KVA. 12) The appellant has got 100% backup of captive D.G sets having capacity of 20 MVA which are used in case of demand being higher than the sanctioned contract demand. Had the respondent been prompt in taking action against the appellant for exceeded MDI on the very first instance in January, 2010, the appellant would not have allowed MDI to exceed beyond permissible limit thereafter. There is no justification on the part of the respondents for not having taken action for a long period right from January, 2010 to May, 2011.

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17.    Aggrieved  of  the  said  order  dated  20.09.2012  passed  by  the Electricity  Ombudsman  reducing  the  demand  for  a  period  of  one  month only,  the petitioner-Distribution licensee  as  well as  the  respondent  No.2-Company are before this Court in these two writ petitions.

18.    Written statement had been filed on behalf of respondent No.2-RICO Company wherein it is claimed that conversion factor 0.9 is used for changing KVA to KW. Hence, a connected load of 9000 KW of a consumer would  equal  to  10000  KVA.  It  is  stated  that  vide  sanction  letter  dated

24.02.2006,  the  sanctioned  load  and  contract  demand  of  the  respondent No.2- RICO Company was approved as 18 MW and 20 MVA respectively with a rider that the same was to be made available after commission of new 66  KV  substation,  Sector-38,  Gurgaon  and  upon  transfer  of  load  of  the RICO Company to the said Sub Station. The said sanctioned load and the contract  demand  was  repeatedly  mentioned  in  the  monthly  bill  issued  in July,  2006  and  subsequently  upto  the  month  of  May,  2011.  Hence,  the distribution licensee was fully aware of all facts and it was not  a  mistake as claimed.  It  was  further  averred  that  the  petitioner-distribution  licensee cannot claim benefit of its own lapse more so when it was in the knowledge of all the facts and acknowledged the same on different occasions. The same are extracted as under:-

i)   At  the  time  of  execution  of  tripartite  agreement dated  03.08.09  with  HVPN,  which  owned  the power  network  at  66  KV  voltage  level,  the sanctioned connected load /contract demand of the

respondent was mentioned as 18 MW and 20 MVA respectively.

ii). At the time of conveying approval for Special Dispensation during Peak Load Hours on 17. 09. 2010. It was mentioned similarly.

iii). Except for report January 2010 and April 2010, the exceeding of MRI was not mentioned in M & P report 25.07.2010 and, thereafter. It can be concluded that all the concerned officers of the petitioner accepted the authenticity of the connected load /contract demand.

iv). That the respondent cannot be penalised for repeated in) action/non)action by the officers of the petitioner and made to suffer an unjustified demand of the more than Rs.5 crores. It needs mention that the respondent has a Captive Generating Capacity of 20 MW and the respondent had been making use of the same as and when there is no power supply from the petitioner for different reasons. It is also worth noting that the respondent has remained within the sanctioned contract demand when the petitioner raised the dispute in May 2011. It is natural to presume that had the petitioner raised the point in January 2010 immediately after the report by M & P team, the demand and consequent litigation would never have arisen. v. while conveying the approval for Open Access in the Transmission and Distribution system of the

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state  on  11.04.2011,  the  sanctioned  load  was mentioned as 18 MW.

19.    It was admitted by the RICO Company that it had a sanctioned connected load of 9000 KW and contract demand of 10000 KVA prior to February, 2006. It had applied for extension load in November, 2005 from 9000 KW to 18000 KW and sanctioned contract demand from 10000 KVA to 20000 KVA which was duly sanctioned by the distribution licensee vide its  sanction  letter  dated  24.02.2006  with  a  rider  to  allow  the  release  of sanctioned load, after the establishment of 66 KV Sub Station in Sector-38, Gurgaon, and to grant temporary connection till then from the existing 66 KV Mehrauli road sub station. The cost of the Bay as conveyed, was also deposited  by  RICO  Company  and  no  further  act  was  required  to  be discharged  but  it.  It  is  claimed  that  the  new  Sub  Station  was  also commissioned in November, 2007 and power supply to the industrial unit of the RICO Company commenced from the said Sector-38, Sub Station in November, 2008. Hence, the line constraint mentioned in the said letter was removed. It was averred that the contention of the distribution licensee that the Bay had not been constructed was wrong since it was in existence in the year 2009 and the increased power supply was being released to the RICO company from the said Sector 38, Sub Station, Gurgaon since November, 2008. It was also averred that even though a junior level employee of the company  was  available  at  the  time  of  M  &  P  Checking,  however,  no inspection  report  had  been  handed  over  to  the  said  employee.  That averments  contained  in  the  writ  petition  were  also  denied  and  it  was

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submitted that the Sub Divisional Officer of the petitioner Corporation was required  to  take  various  steps  on  detection  of  the  violation  of  the  MDI (Maximum Demand Indicator) which he did not. The required steps to be taken and which he has failed to do are extracted as under"-

i)   To re-set the MDI to "zero" so that next instance of exceeding of MDI is recorded thereafter.

ii)  To  issue  a  notice  of  exceeding  the  MDI  to  the defaulting consumer.

iii)   To charge penalty @ 25% of the monthly bill in case the MDI exceeds beyond 5% of the Sanctioned Contract Demand.

20.    It was thus submitted that the writ petition filed by distribution licensee was liable to be dismissed and the CWP-19607-2013 titled as "M/s Rico  Auto  Industries  Ltd.  versus  Electricity  Ombudsman  Haryana  and another" filed by the respondent No.2-Company, deserved to be allowed as the  demand  of  the  distribution  licensee  for  allegedly  exceeded  MDI  for January, 2010 i.e. even for one month has also been wrongly allowed.

21.    Replication to the written statement was filed on behalf of the distribution licensee controverting the averments. ARGUMENTS ON BEHALF OF THE PETITIONER

22.    Learned  Counsel  for  the  petitioner  has  argued  that  the Electricity  Ombudsman,  Haryana  fell  in  an  error  in  partly  allowing  the appeal and set aside the assessment and restricted it for a period of one month only for the reasons mentioned in Para 27 of the order by recording alleged lapses on the part of the distribution licensee notwithstanding that in

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the subsequent para of the order the Ombudsman specifically recorded that the distribution licensee did not dispute the enhancement of contract demand of 20000 KVA till May, 2011 and it was only after the above said error was detected that the need for carrying out the correction arose. Hence, the lapses up  to  May,  2011  are  inconsequential  and  could  not  be  countenanced  as reasons  to  set  aside  a  decision  of  the  assessing  officer  since  the  earlier actions  and  bills  raised  were  based  on  a  presumption  of  the  sanctioned contract  demand  of  20000  KVA.  It  is  also  argued  that  the  Electricity Ombudsman was also in an error in directing the distribution licensee to charge the penalty on account of exceeded MDI only for one month i.e. January,  2010  and  waiving  of  the  penalty  for  the  subsequent  period alongwith surcharge which amounts to giving a premium to a violator. It was emphatically argued that when the new ledger of the Account of respondent No.2-Company was prepared in July, 2008, the sanctioned contract demand was  inadvertently  recorded  as  20000  KVA  and  that  the  above  said inadvertent mistake continued to reflect as such. On the said mistake in the billing system being detected, the demand had been rightly raised and that the Ombudsman erred in not accepting the genuine mistake on the part of the distribution licensee. ARGUMENTS BY RESPONDENT No.2-RICO

23.    Counsel for the respondent No.2- RICO Company on the other hand,  has  vehemently  argued  that  the  RICO-Company  had  initially  been released a sanctioned load of 9000 KW with a contract demand of 10000 KVA and in its application,  the sanctioned load was increased from 9000

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KW to 18000 KW and the contract demand was increased from 10000 KVA to 20000 KVA on 24.02.2006, subject to certain conditions detailed out in the said sanction letter, which also included demand of statutory charges and expenses. As a stop gap arrangement, the supply was made through the 66 KV, Mehrauli Road, Sub Station and that the supply of electricity was to be eventually  released  from  the  66  KV  Sub  Station  at  Sector-38,  Gurgaon, which was then under construction and was completed later. The requisite statutory charges and expenses were duly deposited by the RICO Company its load was shifted to the said Sector-38, Sub Station in November, 2008, after its completion. He contends that even though, the contract demand was sanctioned at 20000 KVA in favour of the company as per the letter dated

24.02.2006, yet, the release of load was limited to a contract demand of 18000  KVA,  as  an  interim  arrangement  and  on  account  of  the  limited capacity of 66 KV Sub Station, Mehrauli Road, Gurgaon. The extension of the contract demand was thus scaled down to the extent of capacity of the existing system. It was thus not a case of the contract demand having been sanctioned to 18000 KVA but only its temporary usage was limited to 18000 KVA so long as the demand was being met from the 66 KV Sub Station, Mehrauli Road, Gurgaon and that upon shifting of the load of the RICO Company from the above said Sub Station to Sector-38, Gurgaon, the said restriction  on  the  contract  demand  ceased  to  exist  and  by  necessary implication, the contract demand was to be deemed as 20000 KVA in terms of the approval letter dated 24.02.2006. He further submits that the RICO company had deposited a sum of Rs.37.486 lakhs towards creation of a new

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66  KV  Bay  for  the  66  KV  Sub  Station,  Sector-38,  Gurgaon.  The  Chief Engineer planning and Commission of the distribution licensee confirmed vide letter dated 19.06.2006 that the ultimate contract demand of the  RICP Company was to be 20000 KVA on connecting the premises to be 66 KV Sub Station at Sector-38, Gurgaon. After completion of the said Sub Station, the RICO Company requested the SE/T&S, HVPN, Gurgaon for shifting its supply from Mehrauli Road Sub-Station to Sector-38, Gurgaon Sub-Station which  was  eventually  done  in  November,  2008  and  as  such,  the  system constraint  limiting  the  sanctioned  contract  demand  ceased  to  exist.  The RICO Company was thereafter entitled and free to utilize its total sanctioned contract load of 18000 KW and contract demand of 20000 KVA instead of 18000 KVA. He further submits that before shifting of its load to Sector-38 Sub  Station,  the  RICO  company  was  required  to  enter  into  tripartite agreement with the State transmission licensee as well as the distribution licensee  which  was  duly  executed  on  03.08.2009  and  there  is  a  specific reference to the contract demand of 20000 KVA therein as well.  He further argues that Superintending Engineer/Operations of the distribution licensee allowed dispensation of 40% sanctioned contract demand i.e. 8000KVA as special dispensation during peak load hours/load restriction for a period of one year i.e. up to 16.09.2011 which show that in the year 2010 itself the officers  of  the  distribution  licensee  admitted  the  contract  demand  of  the company as 20000 KVA.  Regular monthly bills from 2010 to May, 2011 were being sent reflecting the contract demand of the petitioner as 20000 KVA and payments were made accordingly without raising any dispute. If

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the contract demand was 18000 KVA then the special dispensation of load during peak look hours would have been 7.2 MV instead of 8000 MVA, as sanctioned by the authorities themselves. It is also contended that the RICO-company had also been charged by the distribution licensee for fixed charges corresponding to the contract demand of 20000 KVA since October, 2010 and  till  introduction  of  the  new  traffic.  Hence,  the  distribution  licensee benefited itself by leveling the tariff charge on the contract demand of 20000 KVA alongwith the fixed charges and said aspect is now being sought to be disputed and that the same cannot be permitted.

24.    No other arguments have been raised by the parties.

25.    I  have  heard  learned  Counsel  appearing  on  behalf  of  the respective parties and have gone through the documents appended alongwith the present petition.

26.    Before proceeding further into the matter, it would be essential to refer to the sanction letter dated 24.02.2006 whereby the sanction was granted for extension of load from 9000 KW to 18000 KW with a contract demand of 10000 KVA to 20000 KVA. The relevant extract of the said reads thus:- From GM/Commercial, DHBVNL Hissar. To The Executive Engineer, City Division, DHBVN, Gurgaon.

Memo No Dated: 24.02.2006 Subject: Sanction for extension of load 9000 KW to 18,000 KW with Contract Demand 10,000 to 20,000 KVA on 66 KV Side to Rico Industries Ltd Delhi ) Jaipur Highway Gurgaon. Sanction for extension of load 9000 KW to 18,000 KW with contract demand 10,000 kVA to 20,000 kVA on 66 KV side to Rico Industries Ltd Delhi ))Jaipur Highway Gurgaon under industrial subdivision DHBVN, Gurgaon is hereby accorded as per approval accorded by Director /Operation DHBVNL, at NP 4 in file No. SE/Commercial No. 342/05 subject to the following conditions: )

¶1In view of Chief engineer/Planning and Commercial HVPN Panchkula memo number 339/CH.120/406/K 130 dated 3.2.2006, the additional load for the time being is hereby allowed from 66 KV substation Maruti Road Gurgaon as a temporary arrangement.

¶2As a final arrangement, the load will be supplied from 66 KV substation sector 38 where, one circuit of 66 KV sector 38 Rico B. C. Line will be dedicated to the load of the consumer while the other sector shall be used by HVPNL at his discretion, as and when the load demands.

¶3Construction of 66 KV S/C line on D/C towers from 66 KV substation sector 38 Gurgaon to M/S Rico Auto Industries Ltd with 0/.2 sq. ACSR by the firm (M/S Rico Auto Industries Ltd). The path route of proposed 66 AKV NINE, SECTOR 38 Gurgaon to to M/S Rico Auto Industries Ltd shall have to argument present feeding arrangement on single rail pole to power structure from

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0.2sq  ACSR  from  T  point  (connectivity  from  sector  38 substation up to firms premises.)

4.   Creation of one number 66 KV bay at 66 KV substation sector  38  Gurgaon  for  accommodating  above  line  as deposit work of to M/S Rico Auto Industries Ltd.

5.   The above approved works shall be executed by the firm matching  with  the  commissioning  of  66  KV  substation Sector 38 Gurgaon, targeted in June 2006.

6.   Before execution of works M/S Rico Auto Industries Ltd shall  sign  the  agreement  among  DHVBNL  firm  and HVPN  Re:  commercial  aspects,  involving  security, contract  demand,  deposit  work  post,  ACD  revenue collection,  joint  meter  reading  on  regular  basis, maximum/minimum  load  on  feeder,  extent  of  user system/feeder at present or in future."

27.    It is evident from perusal of the above that an extension of the contract  demand  had  been  approved  from  10000  KVA  to  20000  KVA alongwith  sanctioned  load  of  9000  KW  to  18000  KW  and  that  as  a temporary  measure  the  supply  was  being  released  from  the  66  KV  Sub Station, Mehrauli Road, Gurgaon and as a final arrangement to be supplied from the 66 KV Sub Station, Sector-38, Gurgaon where one circuit was to be dedicated for the RICO-company. It is also not disputed that the Sector-38, Sub  Station  was  commissioned  in  November,  2007  and  that  electricity supply of the RICO Company was shifted to Sector-38 Sub Station, Gurgaon in November, 2008. The tripartite agreement, reflecting the contract demand of  20000  KVA  was  also  mentioned  in  the  tripartite  agreement  dated VISHAL SH0A3RM.0A8.2009.  The  claim  of  the  petitioner  that  all  statutory  charges  and

CWP-2386-2013 (O &M) and  CWP-19607-2013         -28-

advanced consumption deposit was made by the respondent-Company has also not been disputed by the distribution licensee. It is further evident from a  perusal  of  memo  No.  CH-17/SE/Commercial/342/05  dated  12.05.2006 issued  by  the  Director,  Operations/UHBNL,  Hisar  to  the  Chief Engineer/Operations, HVPNL, Delhi that due to capacity limitations of 66 KV Sub Station, Mehrauli Road, Gurgaon, the extension in the load of RICO company was scaled down to the extent of the existing system could service. Hence, additionally the contract demand load upto 8 MVA equal to 8000 KVA was held to be safely fit from the existing system, hence, the release of an additional 08 MVA contract demand was accorded. The said letter is extracted as under:- "From The Director/operations, DHBVNL, Hisar.

To The Chief Engineer/Op DHBVNL, Delhi

Memo No. CH-17/SE/comm. /342/05 dated 12/05/06 Sub:  Release  of  an  additional  load  of  9000  Kw  of industrial load on 66 kv with contract demand of 20,000 KVA M/s Rico Auto Industries Ltd. Delhi Jaipur highway Gurgaon. Ref:   T/O consent No. C1-9/cool/342/05 dated 24-2-06. This has reference to your no. CH-90/W-DRW-611 Gurgaon dated 22. 11. 2005 vide which the request of M/S Rico auto for extension of load from 10 MVA to 20

MVA with corresponding increase in the maximum demand was forwarded to this office for sanction. The matter was taken with HVPNL to examine the system para meters to take on this additional demand whereupon the HVPNL responded by saying that the load for the time being can be met from the 66 KV Mehrauli Road though they would eventually like to shift the road to a new 66 KV substation under construction in sector 38. They also proposed certain investment by M/S Rico Auto for catering to their load from the new substation i.e. the sector )38. M/S Rico thereupon requested that the extension in their load be scaled down to the extent the existing system can service. A perusal of documents furnished with the application indicate that a load up to8 MVA can safely be fed from the existing system without any augmentation. As such, approval for the release of additional 8 MVA is hereby accorded. Director/operations DHBVNL, Hissar

26.    Ttie %+i' 'e.i%i ! %t+!' "eite"+te' i! ttie :ette" >e+"i!, Me3 N .  $H(133(G07(K*130  '+te'  18.07.2007  %e!t  >2  ttie  $0ie4  #!,i!ee" (P:+!!i!,  H  $ 33e".i+:)  t   ttie  S1&e"i!te!'i!,  #!,i!ee",  HVPNL.  Ttie "e:e-+!t eEt"+.t  4 ttie %+3e "e+'% t01%)* "Subject: Extension in load of M/S Rico Auto from 9000 KW with corresponding increase in the contract demand to 20,000 kVA.

CWP-2386-2013 (O &M) and  CWP-19607-2013         -30-

This  office  had  approved  supply  of  increased demand  in  power  to  M/S  Rico  Auto  from  under construction  substation,  sector  38  Gurgaon  as  a  long-term  arrangement,  but  as  a  temporary  measure.  They were allowed to continue to draw their demand through existing arrangement i.e. Mehrauli Road over the single rail pole line. Subsequently, DHBVN allowed additional eight MVA load to M/S Rico Auto on the existing line itself vide letter No. CH-17/SE/commercial/342/05 dated

12.  05.  2006  at  confirmed  through  their  letter  No. CH17/SE/commercial/342/05  dated  12.  05.  2006  at confirmed  through  their  letter  no.  CH-18/SE/commercial/342/05 dated 12.05.2006."

29.    The claim of the RICO company about having deposited the monthly minimum charges and all other statutory dues and expenses on a contract demand of 20000 KVA since 2006 have remained uncontroverted.

30.    In the said background, it stands established that the claim of the distribution licensee that only a contract demand of 18000 KVA was sanctioned vide letter dated 24.02.2006 is factually incorrect. Invariably, the said contention has been raised by the distribution licensee by a mis-applied interpretation of the letter dated 12.05.2006 whereby the RICO-Company accepted the request to scale down its contract demand so as to prevent any damage to the existing infrastructure of 66 KV Sub Station, Mehrauli Road, Gurgaon. Such an act cannot be construed as an alteration of the sanctioned load and contract demand of 20000 KVA respectively to 18000 KVA. I am further  strengthened  in  the  above  said  view  by  the  reason  that  the respondent-Company continued to pay all statutory charges as per the tariff

CWP-2386-2013 (O &M) and  CWP-19607-2013         -31-

approved by the appropriate Commission and as applicable against contract demand of 20000 KVA even though it was using a scaled down contract demand.

31.    Further, a perusal of the sanction letter also clearly shows that the said sanction, while approving the contract demand to 20000 KVA and sanctioned load of 18000 KW agreed to provide the sanctioned load from the existing infrastructure till the regular Sub Station was commissioned in Sector-38, Gurgaon and that the scale down of the contract demand to 18000 KVA  was  only  as  a  temporary  measure.  It  is  further  evident  from  the correspondence  dated  12.05.2006  sent  by  the  Director  (Operations), DHBVNL to the Chief Engineer, DHBVNL that the RICO Company had proposed investment for catering to their load from the new Sub Station in Sector 38, Gurgaon and that upon transfer of the electricity supply of the respondent-company to the 66 KV Sub Station in Sector-38, Gurgaon, all the terms and conditions, as contained in the sanction letter dated 24.02.2006, stood complied with. It is not the case of the distribution licensee that any of the other conditions set out in the letter granting sanction to an extension of load and contract demand on 24.02.2006 had not been met or fulfilled.  It also needs to be kept in  mind that the standard  conversion formula  is  a multiplication of .9 while converting a load from KVA to KW. It would be inherently absurd and contradictory on the part of the distribution licensee to contend that even though the sanctioned load was 18000 KW but its contract demand  was  also  18000  KVA.  The  corresponding  contract  demand  to  a sanctioned  load  of  18000  KW  has  to  be  20000  KVA.  The  undisputed

CWP-2386-2013 (O &M) and  CWP-19607-2013         -32-

documents of the distribution licensee rather correspond to the explanation put-forth  by  the  respondent-Company  of  having  scaled  down  its consumption within the augmentation limits of the 66 KV Mehrauli Road, Sub Station till transfer of its load to the 66 KV Sub Station at Sector-38, Gurugram.

32.     Once the abovesaid aspect is accepted, the order passed by the Electricity Ombudsman partly allowing in the claim of the RICO-Company and upholding levy for a period of one month becomes liable to be set aside since the assessment has been made on a consumption of 19300 KVA which was stated to be more than 5% of the allowed limit of sanctioned load and the same had been derived by treating the sanctioned contract demand at 18000 KVA in January, 2010. However, in case, the entire chronology is seeing from the sanction granted on 24.02.2006 followed by the letter of

12.05.2006  whereby  the  respondent-Company  limited  its  consumption  to 18000 KVA taking into consideration the capacity of the 66 KV Sub Station and then followed by the commissioning of 66 KV Sub Station, Sector-38, Gurgaon in November, 2007 and eventual transfer of load of the respondent Company  to  the  said  Sub  Station  in  November,  2008  followed  by  the execution of the tripartite agreement in the year 2009 and all charges be demanded by the distribution licensee by treating the contract demand at 20000 KVA, it has to be accepted that the respondent-Company was entitled to the contract demand and consume its contracted capacity of 20000 KVA, as  sanctioned  by  the  competent  authority  and  as  agreed  in  the  tripartite agreement. Hence, the consumption of 19300 KVA noticed on 23.01.2010,

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which is being construed being beyond 5% of the contract demand computed at 18000 KVA, is in fact fallacious since the contract demand  has to be deemed as 20000 KVA after the transfer of load to the 66 KV Sub Station, Sector-38, Gurgaon.

33.    The above said understanding between the parties was clearly reflected  in  their  contemporary  conduct  and  correspondence  and  that  it cannot be presumed to be a mere mistake in the ledger to mention that the contract demand was 20000 KVA rather, it was a correct incorporation of the contract demand in the ledger.  Once the contract demand is perceived as 20000 KVA, the consumption of 19000 KVA cannot be held to be in excess of the contract demand.

34.    I am thus of the view that the Electricity Ombudsman fell in an error in not appreciating the entire contemporary correspondence in its true perspective. The CWP-19607-2013 titled as "M/s Rico Auto Industries Ltd. versus  Electricity  Ombudsman  Haryana  and  another"  is  accordingly allowed  and  the  order  dated  20.09.2012  passed  by  the  Electricity Ombudsman allowing the DHBVNL to demand the MDI one month i.e. for  January,  2010  is  set  aside.  Consequently,  the  assessed  demand conveyed by the DHBVNL vide the impugned short assessment is also set aside. The CWP-2386 of 2013 titled as "Dakshin Haryana Bijli Vitran Nigam (DHBVN), Gurgaon versus Electricity Ombudsman Haryana and another" filed by the distribution licensee is accordingly dismissed.

35.    The distribution licensee is further directed to adjust the amount deposited  by  the  respondent-Company  against  the  above  said  short

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assessment under the threat of disconnection or pursuant to any interim order passed by the Court against the bills of the respondent No.2-RICO-Company within a period of four months of receipt of certified copy of this order. Ordered accordingly.

(VINOD S. BHARDWAJ) OCTOBER 23, 2024               JUDGE Vishal Sharma

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Judgment reserved on : 16.10.2024 Judgment pronounced on: 23.10.2024 (1) CWP-2386-2013 (O &M) DAKSHIN HARYANA BIJLI VITRAN NIGAM (DHBVN), GURGAON ......Petitioner VERSUS ELECTRICITY OMBUDSMAN HARYANA AND ANOTHER .......Respondents (2) CWP-19607-2013 M/S RICO AUTO INDUSTRIES LTD. ......Petitioner VERSUS ELECTRICITY OMBUDSMAN HARYANA AND ANOTHER .......Respondents CORAM : HON'BLE MR. JUSTICE VINOD S. BHARDWAJ 00000 Present: - Mr. M.L. Sagggar, Senior Advocate with Mr. Sunny Saggar and Ms. Armaan Saggar, Advocates for the petitioner in CWP-2386-2013 and for respondent No.2 in CWP-19607-2013. Mr. Kamal Sehgal, Advocate and Mr. Ravinder Pankaj, Advocate for the petitioner in CWP-19607-2013 and for respondent No. 2 in CWP-2386-2013. *****