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Saturday, January 26, 2013

whether the reasons given in the demand notice dated 01.06.1993 of the Sub-Divisional Officer of the respondent no.1 for the unauthorized load of the TG Set are legal. =Clause 8-b of the Schedule of Tariff that if the connected load of a consumer exceeds the sanctioned connected load, the excess load shall be unauthorized load and such excess connected load shall be charged at additional rate of Rs.1000/- per KW for each subsequent default. If, therefore, any load is sanctioned by the appropriate authority of respondent no.1-Board, such load cannot be held to be unauthorized load or excess load liable to surcharge at the rate of Rs.1000/- per KW. As we have already found, on 08.12.1992, the Chief Engineer, Commercial, has sanctioned or permitted or regularized the installation of two TG Sets and hence the load of 3187.500 KW of the TG Set detected on 19.12.1992 was a sanctioned load and was not an unauthorized load for which the appellant can be charged load surcharge at the rate of Rs.1000/- per KW under Clause 8-b of the Schedule of Tariff.- On 09.12.1992, however, the Flying Squad, Jalandhar of the respondent no.1 visited the sugar mill of the appellant and checked the electricity connection at the sugar mill. Pursuant to the report submitted by the Flying Squad, the Sub- Divisional Officer (Suburban), Phagwara of the respondent no.1 issued a demand notice dated 10.12.1992 to the appellant stating inter alia that the TG Set and stand-by load had not been sanctioned by the respondent no.1 and the appellant was liable for an excess unsanctioned load of 4904.127 KW for load surcharge at the rate of Rs.1,000/- per KW, which worked out to Rs.49,04,127/-.= neither in the first demand notice dated 10.12.1992 nor in the second demand notice dated 01.06.1993 of the Sub-Divisional Officer of the respondent no.1 raising the demand for unauthorized load for the TG Set, there is any mention that the demand for unauthorized load was being raised because the appellant had not fulfilled the conditions mentioned in the memo dated 08.12.1992 of the Chief Engineer, Commercial of the respondent no.1. In the demand notice dated 10.12.1992 of the Sub- Divisional Officer of the respondent no.1, the only reason given for raising the demand for unauthorized load was that the TG Set load “has not yet been sanctioned by the Board”. After the High Court quashed the first demand notice dated 10.12.1992 in CWP No.370 of 1993, leaving it to the respondent no.1 to pass afresh an appropriate order, the Sub-Divisional Officer issued the second demand notice dated 01.06.1993, but in this lengthy second demand notice also it has not been stated that the demand for unauthorized load for the TG Set was being made because the appellant has not fulfilled the conditions mentioned in the memo dated 08.12.1992 of the Chief Engineer, Commercial of the respondent no.1. In fact, in the two demand notices dated 10.12.192 and 01.06.1993 no reference at all has been made to the memo dated 08.12.1002 of the Chief Engineer, Commercial of the respondent no.1.- In the result, these appeals are allowed. The impugned orders of the learned Single Judge and the Division Bench of the High Court are set aside and the demand raised against the appellant in the demand notice dated 01.06.1993 and the demand notice dated 12.06.2009 for unauthorized load of the TG Set is quashed. The parties shall bear their own costs.


                                                                  Reportable

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                      CIVIL APPEAL NOs.  662-663  2013
            (Arising out of S. L. P. (C) Nos. 32975-32976 of 2009)


Ms. Oswal Agro Mills Ltd.                                  … Appellant


                                   Versus


Punjab State Electricity Board and Others.   … Respondents






                                  JUDGEMENT

A. K. PATNAIK, J.


      Leave granted.

   2. The facts very briefly are  that  the
 appellant  owns  a  sugar  mill
      situated at Phagwara,  and  the  respondent  no.1-Board  is  supplying
      electricity to the sugar mill.
 In 1989, the appellant installed a  TG
      Set of 3187.500 KW capacity to meet some of its electricity demand and
      applied for approval of its TG Set to the  respondent  no.1.  By  memo
      dated 08.12.1992, the Chief Engineer,  Commercial  of  the  respondent
      no.1 granted permission to the appellant for installation of 2 No.  TG
      Sets subject to some conditions.
On 09.12.1992, however,  the  Flying
      Squad, Jalandhar of the respondent no.1 visited the sugar mill of  the
      appellant and checked the electricity connection at  the  sugar  mill.
      Pursuant to the  report  submitted  by  the  Flying  Squad,  the  Sub-
      Divisional Officer (Suburban), Phagwara of the respondent no.1  issued
      a demand notice dated 10.12.1992 to the appellant stating  inter  alia
      that the TG Set and stand-by load  had  not  been  sanctioned  by  the
      respondent  no.1  and  the  appellant  was  liable   for   an   excess
      unsanctioned load of 4904.127 KW for load surcharge  at  the  rate  of
      Rs.1,000/- per KW, which worked out to Rs.49,04,127/-.

   3. The appellant made a  representation  to  the  Sub-Divisional  Officer
      (Suburban),  Phagwara,  and  to  the  Chief  Engineer,  Commercial  of
      respondent no.1 against the demand of load surcharge of Rs.49,04,127/-
      .   When there was no response from the aforesaid two  authorities  of
      the respondent no.1, the appellant filed a Writ Petition CWP No.370 of
      1993 before the  High  Court  of  Punjab  and  Haryana  at  Chandigarh
      challenging the demand  of  load  surcharge  of  Rs.49,04,127/-.  
The
      Division Bench of the High Court held in its  order  dated  30.03.1993
      that the respondent no.1 could charge for the excess load which was to
      be the sum of  the  rated  capacities  of  all  the  energy  consuming
      apparatus in the consumer’s installation, but from the order  impugned
      by the High Court or from the documents filed by the  respondent  no.1
      before the High Court along with its written reply, there  is  nothing
      to show that the TG Set having the capacity of 3187.5 KW was an energy
      consuming apparatus.
The Division Bench further  held  in  its  order
      dated 30.03.1993 that for the purpose of charging for the excess load,
      the load of the stand-by machinery was to be excluded and,  therefore,
      the load to the extent of 2226.330 KW of the stand-by apparatus in the
      order impugned before the High Court could not be included.  
For  the
      aforesaid reasons, the Division  Bench  quashed  the  demand  of  load
      surcharge of Rs.49,04,127/- leaving it to the respondent no.1 to  pass
      afresh appropriate order, if so advised, with liberty to the appellant
      to challenge the same, if required.

   4. Thereafter, by a  fresh  demand  notice  dated  01.06.1993,  the  Sub-
      Divisional Officer (Distribution),  Suburban  Sub-Division,  Phagwara,
      raised the very same demand of Rs.49,04,127/- for the unauthorized  TG
      Set load of 3187.500 KW and stand-by load of 2226.330 KW totalling  to
      6520.155 KW at the rate of Rs.1,000/- per KW.
The appellant  filed  a
      second Writ Petition CWP No.7299 of  1993  challenging  the  aforesaid
      demand.  The learned Single Judge, who heard and disposed of the  writ
      petition, held in his order dated 01.04.2009 that the finding  of  the
      Division Bench of the High Court in earlier Writ Petition  CWP  No.370
      of 1993 that the stand-by load of 2226.330 KW could not be included in
      the demand for excess load was binding  on  the  respondent  no.1  and
      hence the demand of excess load on account of the stand-by load  could
      not be raised again by the respondent no.1.  Regarding  the  connected
      load of the TG Set,  the  learned  Single  Judge  of  the  High  Court
      referred to the earlier order dated 21.08.2008 of the  learned  Single
      Judge in which it was  recorded  that  the  learned  counsel  for  the
      appellant had very fairly stated that he would accept the decision  of
      the Dispute Settlement Committee of the respondent  no.1  and  as  the
      Dispute Settlement  Committee  had  decided  the  matter  against  the
      appellant, the addition on account of the load connected on the TG Set
      could not be faulted with.  Aggrieved,  the  appellant  filed  Letters
      Patent Appeal No.304 of 2009 before the Division  Bench  of  the  High
      Court, but by the impugned order dated 01.05.2009 the  Division  Bench
      dismissed the appeal after holding that there was no infirmity in  the
      findings returned by the learned Single Judge  on  the  basis  of  the
      statement made by  the  counsel  for  the  appellant  and  the  report
      submitted by the Dispute Settlement Committee.  The appellant filed  a
      Review Application RA No.6 of 2009 before the Division Bench,  but  by
      the impugned order dated 31.07.2009 the Division Bench  dismissed  the
      Review Application.  Aggrieved, the appellant has filed this appeal by
      way of special leave under Article 136 of the Constitution challenging
      the orders of the Division Bench of the  High  Court  in  the  Letters
      Patent Appeal and the Review Application.

   5. Learned counsel for the appellant submitted that the  only  ground  on
      which the learned Single Judge in CWP  No.7299  of  1993  declined  to
      quash the demand for the excess connected load of the TG Set was  that
      the learned counsel for the appellant had agreed  before  the  learned
      Single Judge on 21.08.2008 that he would accept the  decision  of  the
      Dispute Settlement Committee of the respondent no.1 on this aspect  of
      the matter.  He submitted that a reading of the order dated 21.08.2008
      of the learned Single Judge would show that the  learned  counsel  for
      the appellant had only agreed to accept the decision  of  the  Dispute
      Settlement Committee of the respondent no.1 on  the  question
whether
with the aid of a device called a bus  coupler,  inter-transferability of load could be effected between the TG Set of the appellant and  the energy supplied by the respondent no.1. 
 He submitted that the learned
      counsel for the  appellant,  therefore,  had  not  agreed  before  the
      learned Single Judge on 21.08.2008  to  accept  the  decision  of  the
      Dispute Settlement Committee of the respondent no.1 with regard to the
      legality of the demand for the excess load on account of the  TG  Set.
      He further submitted that  it  will  be  clear  from  the  memo  dated
      08.12.1992  issued  by  the  Chief  Engineer,  Commercial,  that   the
      respondent no.1 had permitted installation of the two TG Sets  subject
      to certain conditions and, therefore, the load of the TG Set had  been
      permitted/sanctioned by the competent authority of the respondent no.1-
      Board and the appellant could not be charged any load surcharge at the
      additional rate of Rs.1,000/- per KW for 3187.500 KW connected load of
      the TG Set under the Commercial Circular No.12 of 1989.

   6. Learned counsel appearing for the  respondents,  on  the  other  hand,
      submitted that the  memo  dated  08.12.1992  of  the  Chief  Engineer,
      Commercial of the respondent no.1 would show that  the  appellant  was
      permitted installation of 2 No. TG Sets subject to certain  conditions
      which were to be complied with by the appellant and if the  conditions
      were to be complied with, the appellant  was  liable  for  prosecution
      under Section 58 read with Section 43 of the Indian  Electricity  Act,
      1910 and the unauthorized TG Sets were to be disconnected after giving
      24 hours notice and were not allowed to be run till  its  sanction  is
      obtained from the competent authority  of  the  respondent  no.1.   He
      submitted that the permission was only given for  installation  of  TG
      Set and not for the bus coupler and yet on 09.12.1992 when the  Flying
      Squad of the respondent no.1 entered the sugar mill of the  appellant,
      they found that the TG Turbo Bus and the supply of the respondent no.1
      were electrically connected through LT Bus Coupler and there was inter-
      transferability of load.  He submitted that, therefore, the TG Set  of
      the appellant was found as unauthorized load for which  the  appellant
      was liable for load surcharge at the additional rate of Rs.1,000/- per
      KW.  He submitted that the learned Single Judge and the Division Bench
      of the High Court were, therefore, right in rejecting the challenge of
      the appellant to the demand of Rs.26,77,797/- towards  load  surcharge
      for the TG Set at the rate of Rs.1,000/- per KW.

   7. The first question that we have to decide is whether on 21.08.2008 the
      learned counsel for the appellant had agreed before the learned Single
      Judge to accept the decision of the Dispute  Settlement  Committee  of
      the respondent no.1 on the legality of the demand of the  unauthorized
      load of the TG Set and, therefore, the learned Single  Judge  and  the
      Division Bench of the High Court were right in taking a view that  the
      appellant was not entitled to challenge the demand of  load  surcharge
      for the authorized load in respect of the TG  Set.   The  order  dated
      21.08.2008 of the learned Single Judge in CWP No.7299 of  1993,  which
      records the submission of the learned counsel  of  the  appellant,  is
      extracted hereinbelow:


      “Present: Mr. Rahul Sharma, Advocate
                     For the petitioner.


                 Mr. H.S. Riar, Advocate
                    with Mr. DPS Kahlon, Advocate
                  for the Respondents.


           Arguments in part heard.




           The dispute in this petition primarily relates to the  question,
      whether with the  aid  of  a  device  called  a  bus  coupler,  inter-
      transferability  of  load  could  be  effected  between  the   captive
      generation apparatus of the petitioner and the energy supplied by  the
      respondent-board.  This is a disputed question of fact.




            At this stage learned counsel for the petitioner has very fairly
      stated that he would accept the decision  of  the  Dispute  Settlement
      Committee of the respondent-board on this aspect of the  matter.   Let
      the  Dispute  Settlement  Committee  of  the  respondent-board,  after
      hearing both the parties, give an opinion on the question
whether  the
      bus  coupler  installed  by  the  petitioner   would   permit   inter-
      transferability of the load between the Turbo  Generator  Set  of  the
      petitioner and the PSEB. 
 Let  representatives  of  both  the  parties
      appear before the Dispute  Settlement  Committee  in  this  regard  on
      28.08.2008.




           The matter is adjourned for two weeks i.e.  8.9.2008.   Copy  of
      this order be given to both the learned counsel under  the  signatures
      of the Reader of this Court.


                                                  Sd/-
                                                                Ajay Tewari
                                                Judge
      August 21, 2008.”

   8.  It will be clear from the aforesaid order dated 21.08.2008  that  the
      learned Single Judge was of the opinion that the dispute  between  the
      parties was on the question whether with the aid of a device called  a
      bus coupler, inter-transferability of load could be  effected  between
      the captive generation apparatus  of  the  appellant  and  the  energy
      supplied by the respondent no.1 and he was also of  the  opinion  that
      this dispute was on a question of fact and accordingly learned counsel
      for the appellant had stated very fairly  that  he  would  accept  the
      decision of the Dispute Settlement Committee of the respondent no.1 on
      this aspect of the matter.  Hence, learned counsel for  the  appellant
      had not agreed before the learned Single Judge of the High Court  that
      he would accept the decision of the Dispute  Settlement  Committee  of
      the respondent no.1 on the legality of the demand for the  extra  load
      on account of the TG Set.  In fact, we find from  the  proceedings  of
      the Dispute Settlement Committee that
  the Dispute Settlement Committee
      has also not decided on the legality of the demand for the extra  load
      on account of the TG Set,
but has only decided that with the aid of  a
      device called a bus coupler, inter-transferability of  load  could  be
      effected between the captive generation apparatus of the appellant and
      the energy  supplied  by  the  respondent  no.1.  
In  our  considered
      opinion, therefore, the legality of the demand for the extra  load  on
      account of the TG Set should have been decided by the  learned  Single
      Judge or the Division Bench after taking into account the  finding  of
      the Dispute Settlement Committee that with the aid of a device  called
      a bus coupler, inter-transferability of load can be  effected  between
      the TG Set of the appellant and the energy supplied by the  respondent
      no.1.

   9. The next question that we have to decide is
whether the  appellant  is
      liable for the demand of load surcharge for the unauthorized  load  in
      the notice dated 01.06.1993 issued by the  Sub-Divisional  Officer  of
      the respondent no.1  keeping  in  view  the  finding  of  the  Dispute
      Settlement Committee of the respondent No.1 that with the aid  of  bus
      coupler, inter-transferability of load can  be  effected  between  the
      captive generation apparatus of the appellant and the energy  supplied
      by the respondent no.1 board.
The justification of the demand made by
      the respondent no.1 is given in the demand notice dated 01.06.1993  of
      the Sub-Divisional Officer of the respondent no.1 in which demand  for
      load surcharge has been raised.  
Relevant  extract  from  the  demand
      notice dated 01.06.1993 containing the justification of the demand  is
      extracted hereinbelow:




      “1. Total load running on PSEB System as checked by enforcement  staff
      on 9.12.92: 1106.325 KW.


      2. As agreed by your representative Sh. Ramesh Chand who  was  present
      at the time of spot checking, the TG Set load which also includes  the
      running stand bye load which was taken on the basis of details of load
      given to the Board as per A/A form along with test  reports  submitted
      earlier and not on the basis of R.C. Set Capacity: 3187.500 KW


      Stand by Load on T.G. Set: 2226.330 KW


      Total: 6520.155 KW


      In addition to above, as per checking of enforcement staff  on  9.2.92
      and your representative Sh. Ramesh Chander Sharma present at the  time
      of checking the total load was accepted so this load is  unauthorized.
      It is also made  clear  that  under  PSEB  Circular  No.12/89  General
      Condition 14 and as per 8.. of Tariff Schedule, the standby load until
      sanctioned by the Board is unauthorized.  Your attention is invited to
      your  registered  letter  No.2922  dt.  26.8.89  addressed  to  Member
      Commercial, PSEB, Patiala in which you had mentioned that new schedule
      of tariff for Sugar Mills would tend to increase difficulties and also
      admitted  that  keeping  this  in  view  approximately  Rs.35/40  lacs
      required to be deposited for running the 4434 KW on T.G. Set, expenses
      of which are not bearable.  Keeping this in view the Board has  issued
      Special instruction to the sugar mills vide Circular No.CC23/90  along
      with some condition, the compliance of which is not fulfilled by  you.
      As a result of this a load of 4904.127 KW  was  declared  unauthorized
      after checking by the XEN Enforcement on 9.12.92.  Keeping in view the
      unauthorized load you are requested to deposit Rs.49,04,127/-  as  per
      Board Circular No. CC 12/89 clause No.2 C 23/90 @  Rs.1000/-  per  KW.
      Since it is your 2nd default you have already deposited Rs.33,347/- on
      23.5.91 towards first default.”



  10.   It is apparent from what has been extracted from the  demand  notice
      dated 01.06.1993 of the Sub-Divisional Officer of the respondent  no.1
      that the unauthorized load comprised the TG Set load 3187.500  KW  and
      the standby load of 2226.330 KW.   
So  far  as  the  standby  load  of
      2226.330 KW is concerned, the demand for unauthorized  load  has  been
      set aside by the learned Single Judge by the order dated 01.04.2009 in
      CWP No.7299 of 1993 and  the  order  dated  01.04.2009  has  not  been
      challenged by the respondents either before the Division Bench of  the
      High Court or before this Court.
In  fact,  we  find  that  the  Sub-
      Divisional Officer of the respondent no.1 has issued  a  fresh  demand
      notice dated 12.06.2009 to the appellant pursuant to the  order  dated
      01.04.2009 of  the  learned  Single  Judge  in  CWP  No.7299  of  1993
      restricting the demand of Rs.26,77,797/- for the unauthorized load  on
      account of the TG Set.
Hence, we are to examine 
whether  the  reasons
      given in the demand notice  dated  01.06.1993  of  the  Sub-Divisional Officer of the respondent no.1 for the unauthorized load of the TG Set are legal.

11.  From the aforesaid extract of the demand  notice  dated  01.06.1993  of
the Sub-Divisional Officer of the respondent no.1, we find that  the  reason
for the demand for unauthorized load for the TG Set is that respondent No.1-
  Board  has  issued  special  instruction  to  sugar  mills  vide  Circular
No.CC23/90 along with some conditions, compliance of  which  have  not  been
fulfilled by the appellant and as a result the load on  account  of  TG  Set
was declared unauthorized after checking by XEN Enforcement  on  09.12.1992.
We have examined the Circular No.CC 23/90 and  we  find  that  by  the  said
Circular issued by the Chief Engineer, Commercial of  the  respondent  No.1,
all concerned were informed that respondent no.1 has decided  to  regularize
the load of the sugar mills fed from TG Sets  after  recovering  ACD  worked
out according to the capacity of TG Sets.  In para 3 of  the  Circular,  the
working details for regularizing load of sugar  mills  from  the  supply  of
respondent no.1-Board and TG Sets have been given and  at  the  end  of  the
Circular it is mentioned that necessary action for regularizing  total  load
of the  sugar  mills  may  be  taken  accordingly.   Pursuant  to  the  said
Circular, the appellant applied for regularization of load of  two  TG  Sets
and by memo dated 08.12.1992 issued by the  Chief  Engineer,  Commercial  of
the respondent no.1, the appellant was permitted  to  install  two  TG  Sets
subject to certain conditions.
The memo  dated  08.12.1992  issued  by  the
Chief Engineer, Commercial of the respondent no.1 is extracted  hereinbelow:



                       “PUNJAB STATE ELECTRICTY BOARD


      From


            The Chief Engineer / Commercial,
            Tariff & Billing Directorate, PSEB,
            The Mall, Patiala 147001




      To,
            M/s Oswal Agro Mills Ltd.
            Sugar Divn. G.T. Road,
            Phagwara (Pb.)


            Memo No.64192/Com/54/Indl./Jall.
            Dated 8.12.92


      Sub: Permission for installation of 2 no. TG Sets of
           3730 KVA & 500 KVA capacity.


      Reference your letter regarding permission for installation of  2  No.
      TG Sets.


      You are hereby permitted to install 2 No. TG sets of 3750 KVA Capacity
      of make Jyoti Vadodars, 420 Volts of 1500 RPM KVA Tg Set  of  Crompton
      make 400 volts & 375 RPM, subject to the following conditions:-


        i. All relevant  provisions  of  the  I.E.  Rules,  1956  shall  be
           complied with by you and test report of the  installation  shall
           be furnished.


       ii. That the Generating set will be operated whenever called upon to
           do so by the Pb. State Elecy. Board for meeting your  demand  or
           for giving suitable relief to the Board’s system by meeting  the
           demand  of  the  other  consumers  also,  depending   upon   the
           prevailing situation.




      iii. Full proof arrangements to be approved by SE/DS concerned  shall
           be provided to avoid mixing of Board’s supply with  that  to  be
           generated by the generating sets.  It shall be ensured that  the
           nature of the PSEB supply is isolated ruing change  over  to  TG
           sets supply.


       iv. That after obtaining receipts of this permission you  will  give
           notice not less than 7 (seven) days to  the  concerned  District
           Magistrate in terms of Section 30 of the Indian Elecy. Act, 1910
           intimating the nature and purpose of supply.


        v. That the separate notice of not less than 7 (days) shall also be
           given to Chief Electrical Inspector to Govt. Punjab as laid down
           in Section 30 of the Indian Electricity Act, 1910.  Notice shall
           also be accompanied by the following documents:-


              a.  Particulars  of  the  Electrical  installation  and   plan
                 thereof.


              b. A copy of the notice sent to the District Magistrate.


              c. An attested copy of the consent received  from  the  Punjab
                 State Electy. Board.



              d. Original Challan of the prescribed inspection fee under the
                 following Head of Account;


                 -043 – Taxes and Duties on Electricity fee under the Indian
                 Electricity Rules.”


              e. Test report from Licensed Wiring Contractor  in  token  of
              his having carried out the job and  tested  the  installation
              for safety.




              f.   A single line key diagram indicating the arrangement  of
              connecting  the  generator  installation  to   the   existing
              electrical installation.




       vi.  That suitable energy meter shall be installed  to  comply  with
           the requirement of Rule-6 of Punjab Electricity Duty Rules 1958.
            The meter shall be got tested from the nearest PSEB laboratory.




      vii. That in case you fail to comply with  the  above  provision  you
           shall make yourself liable for prosecution under Section 58 read
           with  Section  43  of  Indian  Electricity   Act,   1910.    The
           unauthorized T.G. Sets shall be  disconnected  after  giving  24
           hours notice and shall not be allowed to run till  its  sanction
           is obtained from the competent authority.  In case  you  do  not
           disconnect the TG Sets or apply for regularization  of  TG  Sets
           your connection shall be  disconnected  after  giving  24  hours
           notice in writing for contravening the provisions  of  the  said
           Act and Clause 19 of the PSEB, abridged  conditions  of  supply.
           Supply in such cases shall not be restored unless you disconnect
           the TG Sets  and  furnish  test  report  for  sanction  electric
           installation or comply with the above provisions.”




Thus, on 09.12.1992 when the Flying Squad,  Jalandhar,  of  respondent  no.1
visited the sugar mill of the appellant, the Chief Engineer,  Commercial  of
respondent no.1 had already permitted installation of TG Sets in  the  sugar
mill of the appellant.  If the appellant had  refused  to  comply  with  the
conditions mentioned in the Circular No.CC 23/90 for regularization  of  the
load  of  the  sugar  mill  fed  from  the  TG  Sets,  the  Chief  Engineer,
Commercial, would not  have  granted  such  permission  in  the  memo  dated
08.12.1992.  Alternatively, even if the  appellant  had  refused  to  comply
with some conditions in  the  Circular  No.CC  23/90,  the  Chief  Engineer,
Commercial did not consider such refusal to  disentitle  the  appellant  for
regularization  of  the  installation  of  the  TG  Set  and  permitted  the
installation of the TG Sets by the memo dated 08.12.1992.

12.   We further find from the aforesaid  extract  from  the  demand  notice
dated 01.06.1993 that for the unauthorized load, a demand has been  made  at
the rate of Rs.1,000/- per KW in accordance with Clause 8-b of the  Schedule
of Tariff applicable to the sugar mill of the appellant as notified  in  the
Commercial Circular No.12/89.  Clause 8-b  of  the  Schedule  of  Tariff  as
notified in the Commercial Circular no.12/89 is extracted hereinbelow:


      “SCHEDULE OF TARIFF:


      i.  Schedule L.S. – Large Industrial Power Supply 1 to 7.


      8.    ……………..


      ‘8-b.  If the connected load of  a  consumer  exceeds  the  sanctioned
      connected load, the excess load  shall  be  unauthorized  load.   Such
      excess of the connected load shall be charged  load  surcharge  at  an
      additional rate of Rs.1000/- per KW for each subsequent default.”




It will be clear from Clause 8-b of the  Schedule  of  Tariff  that  if  the
connected load of a consumer exceeds  the  sanctioned  connected  load,  the
excess load shall be unauthorized load and such excess connected load  shall
be charged at additional rate  of  Rs.1000/-  per  KW  for  each  subsequent
default.   
If,  therefore,  any  load  is  sanctioned  by  the   appropriate
authority  of  respondent  no.1-Board,  such  load  cannot  be  held  to  be unauthorized load or  excess  load  liable  to  surcharge  at  the  rate  of Rs.1000/- per KW.  
As we  have  already  found,  on  08.12.1992,  the  Chief
Engineer,  Commercial,  has  sanctioned  or  permitted  or  regularized  the
installation of two TG Sets and hence the load of 3187.500 KW of the TG  Set
detected on 19.12.1992 was a sanctioned load and  was  not  an  unauthorized
load for which the appellant can be charged load surcharge at  the  rate  of
Rs.1000/- per KW under Clause 8-b of the Schedule of Tariff.

13.     Once we hold that the  load  of  the  TG  Sets  was  sanctioned  and
authorized, the appellant could not be held liable for load surcharge  under
clause 8-b of the Schedule of Tariff for the load of the TG Set, even if  by
the aid of bus coupler, inter-transferability  of  load  could  be  effected
between the TG  Set  of  the  appellant  and  the  energy  supplied  by  the
respondent no.1-Board.
For the consumption of energy  from  the  supply  of
the respondent no.1, the appellant was  liable  for  every  unit  of  energy
consumed to the respondent no.1.
 For demand of energy, the appellant  being
a sugar mill was also  liable  for  demand  charges  with  minimum  contract
demand of not less than the  capacity  of  the  distribution  transformer(s)
installed by the appellant and not 60% of the connected load  as  stated  in
the Commercial Circular Nos.12/89 and 23/90.
What the learned  Single  Judge
and Division Bench of the High  Court  failed  to  appreciate  is  that  the
appellant was separately liable for energy charges  and  demand  charges  to
the  respondent  no.1  for  consumption  of  energy  and  demand  of  energy
respectively under the Schedule of Tariff and the levy of load surcharge  at
the additional rate of Rs.1000/- per KW was only meant for  a  load  of  the
consumer which was unauthorized or not sanctioned and if a  particular  load
of a consumer is sanctioned or  authorized,  load  surcharge  at  additional
rate of Rs.1000/- per KW could  not  be  levied  under  Clause  8-b  of  the
Schedule of Tariff.

14.   Learned counsel for the  respondents  vehemently  submitted  that  the
permission to install the TG Sets granted by the memo  dated  08.12.1992  by
the Chief Engineer,  Commercial  of  the  respondent  no.1  was  subject  to
various  conditions  mentioned  in  the  memo  dated  08.12.1992  and  these
conditions have not been fulfilled by the appellant.
 Learned  counsel  for
the respondents is right that since the permission to install  the  TG  Sets
was granted by the memo dated 08.12.1992 subject to various conditions,  the
load of the TG Sets  installed  could  not  be  said  to  be  sanctioned  or
authorized  if  the  conditions  in  the  memo  dated  08.12.1992  were  not
fulfilled.
It was, therefore, open to the respondents to treat the load  of
the TG Set as unauthorized on the ground that the  conditions  in  the  memo
dated 08.12.1992 permitting  the  installation  of  the  TG  Sets  were  not
fulfilled.
But neither in the first demand notice dated 10.12.1992  nor  in
the second demand notice dated 01.06.1993 of the Sub-Divisional  Officer  of
the respondent no.1 raising the demand for  unauthorized  load  for  the  TG
Set, there is any mention that the demand for unauthorized  load  was  being
raised because the appellant had not fulfilled the conditions  mentioned  in
the  memo  dated  08.12.1992  of  the  Chief  Engineer,  Commercial  of  the
respondent no.1.   
In  the  demand  notice  dated  10.12.1992  of  the  Sub-
Divisional Officer of  the  respondent  no.1,  the  only  reason  given  for
raising the demand for unauthorized load was that the TG Set load  “has  not
yet been sanctioned by the Board”.  After the High Court quashed  the  first
demand notice dated 10.12.1992 in CWP No.370 of  1993,  leaving  it  to  the
respondent no.1 to pass afresh  an  appropriate  order,  the  Sub-Divisional
Officer issued the second  demand  notice  dated  01.06.1993,  but  in  this
lengthy second demand notice also it has not been  stated  that  the  demand
for unauthorized load for the TG Set was being made  because  the  appellant
has not fulfilled the conditions mentioned in the memo dated  08.12.1992  of
the Chief Engineer, Commercial of the respondent no.1.  In fact, in the  two
demand notices dated 10.12.192 and 01.06.1993 no reference at all  has  been
made to the memo dated 08.12.1002 of the Chief Engineer, Commercial  of  the
respondent no.1.

15.   In the result, these appeals are allowed.  
The impugned orders of  the
learned Single Judge and the Division Bench of the High Court are set  aside
and the demand raised against the  appellant  in  the  
demand  notice  dated
01.06.1993 and the demand notice dated 12.06.2009 for unauthorized  load  of the TG Set is quashed.  
The parties shall bear their own costs.






                                                       ..……………..……………………….J.
                                        (A. K. Patnaik)






                                 ...…………..………………………..J.
                                     (Sudhansu Jyoti Mukhopadhaya)

 New Delhi,
January 23, 2013.


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