Order Supported by Reasoning, Documents and Facts: Not Arbitrary

National Engineering Industries Ltd Vs State of Rajasthan (Rajasthan High Court)

Conclusion: The Rajasthan High Court upheld the order of the Electricity Ombudsman, which allowed the recovery of transformation losses and pro-rata transformer cost from large industrial consumers. The court reasoned that an order supported by factual findings and necessary documents cannot be considered arbitrary. The petitioner argued that the recovery was unauthorized, but the court found that the supply voltage was communicated to the consumer, and the change in voltage was only permissible under exceptional circumstances. The court also noted that the additional infrastructure costs for such consumers should be reflected in the tariff approved by the regulatory commission. Since the Ombudsman’s finding on transformation losses was based on expert analysis, the court considered it binding and dismissed the writ petition.

Facts: The present writ petition was filed by the petitioner-consumer assailing the impugned award/order dated 16.07.2019 passed by the Electricity Ombudsman, Rajasthan (for short “EO”) in Case No. EOR 457/2019 titled as ‘M/s NEI Ltd. vs. Jaipur Vidyut Vitran Nigam Limited’. The issue before the EO was whether the Discom-Jaipur Vidyut Vitran Nigam Limited had authority to recover transformation losses (at 3%) and pro-rata cost of Transformer, from the consumers who were falling under the category of ‘Large Industries’, on allowing increase in contract demand at lower voltage than the prescribed level of supply of voltage according to their contract demand. The petitioner-consumer was a large industrial consumers of electricity who were receiving voltage supply at-least one stage lower than the prescribed load after their application for extension of contract demand was accepted. Since the supply was on one stage lower, which was only permissible in exceptional circumstances, the Discom was levying a charge of 3% as transformation losses and pro rata cost of the transformer. The said levy was challenged by the petitioner-consumer and the EO held the same to be valid and legal vide impugned award/order dated 16.07.2019. Aggrieved by the impugned award/order of the EO, the present writ petition was filed.

The Petitioner submitted that the levy of transformation losses and pro rate cost of transformer are without authority of law as the levy of transformation loss and pro rata cost of transformer was not approved/sanctioned by the RERC for the relevant period, the discom could not have, by law, recovered such amount from any consumer. In this regard, learned counsel for the petitioner has relied upon provision of Section 45 (Power to recover charges) and Section 46 (Power to recover expenditure) of the Act of 2003 which specifically state, in clear and unambiguous terms, that discoms are only allowed to recover such charges/expenditures as fixed by the Commission.

The Respondent submitted that the prescribed voltage level was communicated to the petitioner-consumer from time to time and the petitioner-consumer was well aware about the entitled supply voltage of their CD and a bare perusal of their communication letter dated 27.07.2005 would conclusively establish the same. It was further submitted that the logic behind prescribing certain voltage level according to load category for each consumer is the wastage/loss of electricity in the form of line losses which occurs in delivering certain power from one point to other through any conducting material/wire. In the case of large consumers having concentrated load, power can be supplied at any voltage level but if supplied at low voltage then line losses will increase exponentially in comparison to, if power supply is given at high voltage and who may bear the losses, as it is the national loss of electricity. Lastly, it was submitted that since the EO considered the entire evidence on record, and being the expert body held that the levy was valid and legal to cover the transformation losses, no interference of this Court is warranted as there is no perversity in the order of the EO.

After considering submissions from both sides, it was observed that the limited issue to be decided was whether the levy and recovery of transformation losses and pro rata transformer cost was lawful or not. It was held that the supply at one stage lower or one stage higher is only permissible in exceptional circumstances. Since the phrase ‘exceptional circumstances’ is used, it must necessarily mean that the change in supply voltage is not to be done in regular course and it must also necessarily connote that the change in supply voltage would only be permissible on satisfaction of additional terms and conditions.

Further, it was held that in addition to the loss of energy, the discom will have to create additional infrastructure/facility for such consumers and cost of the same will reflect in the tariff and all other electricity consumers will have to bear this burden in their electricity bills. However, the conditions so imposed cannot be arbitrary and without statutory backing and must also be in consonance to the charges and tariffs as approved by the Appropriate Commission.

It was further held that the EO, after due consideration, gave its finding of the transformation losses. The issue of transformation losses is essentially a finding of fact, which has been decided by the expert body-EO, and such factual finding is bindings even on this Court. If additional load is being released on lower voltage supply line, then seeking additional payment provisionally to account for line loss cannot be said to be arbitrary or illegal.

Accordingly, the writ petition was dismissed.

FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT

1. The present writ petition was filed by the petitioner-consumer assailing the impugned award/order dated 16.07.2019 passed by the Electricity Ombudsman, Rajasthan (for short “EO”) in Case No. EOR 457/2019 titled as ‘M/s NEI Ltd. vs. Jaipur Vidyut Vitran Nigam Limited’. The issue before the EO was whether the Discom-Jaipur Vidyut Vitran Nigam Limited (for short “JVVNL”) had authority to recover transformation losses (at 3%) and pro-rata cost of Transformer, from the consumers who were falling under the category of ‘Large Industries’, on allowing increase in contract demand at lower voltage than the prescribed level of supply of voltage according to their contract demand. For reference, the prescribed voltage level for various categories of load is reproduced as under:

“Note:

…

(v) The Nigam may allow supply to a consumer at a voltage level one stage higher or lower in exceptional circumstances.”

2. Admittedly, petitioner-consumer was a large industrial consumers of electricity who were receiving voltage supply at-least one stage lower than the prescribed load after their application for extension of contract demand was accepted. Since the supply was on one stage lower, which was only permissible in exceptional circumstances, the Discom was levying a charge of 3% as transformation losses and pro rata cost of the transformer. The said levy was challenged by the petitioner-consumer and the EO held the same to be valid and legal vide impugned award/order dated 16.07.2019. Aggrieved by the impugned award/order of the EO, the present writ petition was filed.

FACTS

3. This case has a long chequered history and involves some disputed questions of facts. Bereft of any unnecessary details, the relevant and necessary facts for the just adjudication of the case are as follows:

a) The petitioner-consumer is a HT consumer having an electric connection with a contract demand (for short “CD”) of 9000 KVA and was in existence of 11KV supply voltage since the year 1978. The 9000KVA CD was availed by the petitioner upto 06.12.2001 and from 07.12.2001, on the request of the petitioner-consumer, the CD was reduced from 9000 KVA to 5700 KVA.

b) In 2005, beginning from 04.05.2005, petitioner-consumer requested the respondent-discom to increase the CD to 7500 KVA. After multiple back and forth communication, and the petitioner-consumer having shown his willingness to install the necessary infrastructure, the CD of the petitioner-consumer was increased from 5700 KVA to 7500 KVA on 11 KV supply voltage, instead of the prescribed 132KV supply voltage, vide sanction letter 06.10.2005.

c) Thereafter, on 28.11.2007, a letter was sent by respondent-discom to petitioner-consumer alleging that no action was taken by the petitioner-consumer to create new grid for taking connection at 132KV level. The petitioner-consumer replied to the letter dated 28.11.2007 inter-alia praying respondent-discom to honour their decision and continue the power supply with requisite voltage without any levy or penalty in future.

d) The petitioner-consumer again requested for enhancement of CD from 7500 KVA to 10000 KVA vide letter dated 21.08.2008. The CD was accordingly increased form 7500 KVA to 8000 KVA on 31.03.2009 on the condition that the petitioner-consumer will develop the requisite infrastructure within a span of 18 months of finalization of feasibility report. After examination of the issue by the respondent-discom, it was concluded that due to non-availability of space and Right of Way (for short “ROW”) problems, it was not feasible to draw 132KV line up to the premise of the petitioner-consumer. Therefore, vide letter dated 20.05.2009, the respondent-discom notified the petitioner-consumer that to accommodate the demanded CD, 132KV underground cable had to be laid, for which petitioner-consumer would have to obtain ROW from railway, military and other local authorities; or in the alternative the petitioner-consumer had to provide 5000 square meters of land for construction of 220 KV GSS.

e) In response to the above, the petitioner-consumer submitted, via letter dated 05.02.2010, that it would not be possible for them to either obtain necessary permissions from railway/military, nor could they bear the cost of 132KV cable alone and therefore requested for enhancement of CD from 8,000 KVA to 10,000 KVA at 33 KV only.

f) In the bill of April 2010, 92530 units were charged towards 3% transformation losses as the prescribed supply voltage for CD above 5000 KVA was 132 KV, whereas the petitioner-consumer was allowed supply at lower voltage of 11 KV. The petitioner-consumer disputed the levy of such charges, though paid the bill under protest. The subsequent bills also added the 3% transformation losses and in the month of July 2010, claim amounting to Rs. 2,14,83,255 was also raised against 3% transformation losses for the period from August 2004 to March 2010 (from the date Terms and Conditions for Supply of Electricity-2004 (for short “TCOS-2004”) was made applicable).

g) The petitioner-consumer challenged the said demand in SBCWP No. 10258/2010 and vide interim order dated 11.08.2010, the recovery was stayed provided that the petitioner-consumer shall pay 50% of the impugned demand and the rest 50% be kept as bank guarantee. However, since the levy of 3% transformation losses was not stayed, the respondent-department kept charging the said amount in all subsequent bills and the petitioner-company kept on paying under protest.

h) Thereafter, vide letter dated 30.08.2010, the petitioner-consumer again requested enhancement of CD to 10,000KVA. As the connection was sought on 33 KV only, it was made clear by the respondent-discom that provisions/conditions mentioned in Nigam Order No. JPR5-404 dated 14.07.2004 shall be adhered to. After the requisites were done by the petitioner-consumer, the CD was extended to 10,000 KAV at 33 KV voltage on 10.05.2012 and transformation losses @3% were added from the bill for the month of May, 2012 and henceforth. The respondent-discom also sought to charge a sum of Rs. 41,97,979/- towards Transformer cost on pro-rata basis. The said levy was again challenged by the petitioner-consumer in SBCWP No. 9161/2012. However, since there was no interim order, the respondent-discom kept charging the transformation losses and the petitioner-consumer kept paying the bills under protest.

i) The Petitioner-consumer filed a complaint before Corporate Level Redressal Committee (for short “CLRC”) on 02.09.2015 but the CLRC did not intervene. Then petitioner-company filed a representation before Electricity Ombudsman which was registered as EOR 369/2016, but the same was also dismissed vide order dated 25.11.2016 on the ground that similar reliefs are prayed by the petitioner-company before Writ Court also.

j) The petitioner-company assailed the order dated 25.11.2016 in SBCWP No. 7884/2017. Thereafter, all the writ petitions filed by the petitioner-consumer were disposed of vide order dated 03.08.2018 with liberty to approach the Settlement Committee as provided under Section 42(5) of Electricity Act, 2003 (for short “Act of 2003”).

k) The petitioner-company then approached CLRC again and again the prayer of the petitioner-company was rejected. Thereafter, petitioner approached the EO and the EO also passed the impugned order against the petitioner-consumer and in favour of the respondent-discom.

SUBMISSIONS OF PETITIONER

4. The primary contention of learned counsel for the petitioner-consumer is that the levy of transformation losses and pro rate cost of transformer are without authority of law. In support of this contention, learned counsel for the petitioner-consumer submits the following:

4.1) That under the Act of 2003, discoms have no authority to levy any charge from the consumer, unless the same is prescribed by the Commission, which in this case is the Rajasthan Electricity Regulatory Commission (for short “RERC”). It is contended that since the levy of transformation loss and pro rata cost of transformer was not approved/sanctioned by the RERC for the relevant period, the discom could not have, by law, recovered such amount from any consumer. In this regard, learned counsel for the petitioner has relied upon provision of Section 45 (Power to recover charges) and Section 46 (Power to recover expenditure) of the Act of 2003 which specifically state, in clear and unambiguous terms, that discoms are only allowed to recover such charges/expenditures as fixed by the Commission;

4.2) That the order/circular of the respondents dated 14.07.2004 and 09.07.2007, based on which the charge is levied, neither had any statutory basis nor were they ever notified. It is contended that those were internal circulars having no authority in law and could not be said to be binding upon any consumer. Reliance in this regard is placed on Apex Court judgments of State of West Bengal and Ors. vs. Vishnunarayan and Associates (P) Ltd. and Ors.: (2002) 4 SCC 134, Bishan Das and Ors. vs. The State of Punjab and Ors.: AIR 1961 SC 1570, Harla vs. The State of Rajasthan: AIR 1951 SC 467, and State of Punjab vs. Amar Singh Haruka: AIR 1966 SC 1313;

4.3) That the RERC amended the Rajasthan Electricity Regulatory Commission (Electricity Supply Code and Connected Matters) Regulations, 2004 (for short “Supply Code-2004”) on 09.08.2017 vide Rajasthan Electricity Regulatory Commission in Electricity Supply Code and Connected Matters (Eleventh Amendments) Regulations, 2017 (for short “Amended Regulations”), and only thereafter approved/sanctioned the levy of transformation loss and pro rata cost of transformer. However, the said amendment is prospective in nature and cannot be applied retrospectively to take away the vested right of the petitioner-consumer. It is submitted that sub-ordinate legislation can neither be made nor applied with retrospective effect to adversely affect concluded transactions. Reliance in this regard is placed on Apex Court judgments of The District Exhibitors Association, Muzaffarnagar and Ors. vs. Union of India (UOI) and Ors.: (1991) 3 SCC 119, and Bakul Cashew Co. and Ors. vs. Sales Tax Officer Quilon and Ors.: (1986) 2 SCC 365.

4.4) That the EO failed to abide by its earlier orders (in EOR 76/2013, EOR 77/2013, EOR 147/2014 and EOR 148/2014) wherein it was specifically held that the impugned levy was without authority of law. It is contended that in the present case, EO has sought to justify non adherence to EO’s previous orders on the specious and erroneous premise that the Regulation in question had been subsequently amended, whereas the Amended Regulations were strictly prospective in nature;

4.5) That the reliance placed on ‘Note’ contained in Tariff Schedule LP/HT-5 under “Tariff For Supply Of Electricity-2004” is also erroneous because the metering equipment is not installed on the low voltage side;

4.6) That the CD on 11 KV supply was extended twice, once by sanction dated 06.10.2005 from 5700 KVA to 7500 KVA and then by sanction dated 18.02.2009 from 7500 KVA to 8000 KVA. However, nothing was mentioned in these sanctions regarding transformation losses;

4.7) That impugned recovery of pro-rata transformer cost is wholly illegal as the cost of transformer is already included in the ‘Plant cost’ and therefore charging it again would mean double levy on the same thing;

4.8) That the petitioner-consumer never demanded supply to be made in any particular line and was always willing to develop the necessary infrastructure to accommodate the enhanced CD, but it was the respondent-discom that were unable to provide the means to achieve the same on the issue of non-viability and non-feasibility.

SUBMISSIONS OF RESPONDENTS

5. Per contra, in support of the concurrent findings arrived at by the expert bodies in the impugned order(s), it is strenuously contended by learned counsel for the respondents-discom that there is no illegality nor there exists any infirmity in the impugned order passed by the Ombudsman and in the absence of the same, the present writ petition is not maintainable and the petitioner-consumer is not entitled for any relief from this Court under Article 226 of the Constitution of India. It is further contended that the finding of fact recorded by the respondents, as confirmed by the learned Ombudsman, cannot be disturbed under Article 226 of the Constitution of India in the absence of any perversity. The additional submissions of learned counsel for the respondent-discom are as follows:

5.1) It is submitted that the prescribed voltage level was communicated to the petitioner-consumer from time to time and the petitioner-consumer was well aware about the entitled supply voltage of their CD and a bare perusal of their communication letter dated 27.07.2005 (Annexure R-2) would conclusively establish the same.

5.2) It is undisputed that the petitioner-consumer was having CD above 5000 KVA for which the prescribed voltage is 132 KV, but the petitioner was receiving supply at lower than prescribed voltage of 11 KV or 33KV. As per TCOS-2004, the supply voltage for CD more than 5000 KVA is 132 KV. However, as per clause 2 note (V) of TCOS-2004, the discom may allow supply to the consumer at a voltage level one stage higher or lower in exception circumstances. After considering the request of the petitioner-consumer dated 05.02.2010, the respondent-discom allowed extension of contract demand from 8,000 KVA to 10,000 KVA on 33 KV voltage level (one lower than prescribed supply voltage). Here it is worthwhile to mention that the petitioner-consumer requested to allow extension of demand from 8,000 KVA to 10,000 KVA at 33 KV supply voltage because if the petitioner-consumer was allowed supply on 132 kV level, they had to bear the cost of 132 cable and cost of 132 kV/11 kV transformer along with 132 kV switchyard. Apart from this they had to space about 3000 Sq. meter land also for 132 kV switchyard. As CD was extended on request of petitioner-customer, so pro-rata cost of EHV transformer had been charged from them in compliance to orders dated 14.07.2004 & 09.07.07, which were issued in reference to provision of Tariff For Supply Of Electricity-2004, to elaborate the provisions for allowing supply at lower voltage level than what was actually applicable as per TCOS- As the supply voltage for 10,000 KVA is 132 KV and metering is being done on lower voltage side (33 KV), so transformation losses @ 3% are chargeable from the petitioner-consumer.

5.3) It is further submitted that the logic behind prescribing certain voltage level according to load category for each consumer is the wastage/loss of electricity in the form of line losses which occurs in delivering certain power from one point to other through any conducting material/wire. In the case of large consumers having concentrated load, power can be supplied at any voltage level but if supplied at low voltage then line losses will increase exponentially in comparison to, if power supply is given at high voltage and who may bear the losses, as it is the national loss of electricity.

5.4) As per the Act of 2003, the Electricity Regulatory Commission is authorized to specify the charges and tariff to be recovered by the Licensee and Licensee cannot recover the charges/tariff contrary to it. But sometime situation is such that for certain things the regulations are found silent as was in this case. To implement the same and to provide guidelines for day to day functioning, commercial circulars are issued by the Discoms. The intention of legislation, by Amended Regulation, for charging pro-rata cost of transformer and transformation losses is same, i.e. before the amendment in Supply Code, the Discoms on the basis of commercial circulars were charging pro-rata cost of entitled voltage power transformer for the exceeded demand only and transformation losses @3% on the consumption proportionate to exceeded demand to total demand. After 2017, through amendment in supply code, more stiff conditions were specified and it was clearly authorized by the Commission to recover the cost of HV/EHV transformer on pro-rata basis for entire demand and transformation and line losses @3% on the consumption.

5.5) It is further submitted that it is wrong to say that the circulars/orders dated 14.07.2004 and 09.07.2007 have no statutory backing as the foundation for those circulars was the ‘note’ that finds its place in ‘(V) Large Industrial Services (Schediule LP/HT-5) of ‘Tariff Structure Part-II’ which deals with H.T. Tariff in the “Tariff For Supply Of Electricity-2004”. The said note is reproduced as under:

“(d) Minimum Billing:

…

Note:

The Jaipur Discom may at its discretion, provide metering equipments on low voltage side of consumer’s transformer and in such a case 3% (three percent) shall be added to the recorded energy consumption & demand, to cover transformation losses.”

Relying on the above, learned counsel for the respondent-discom contends that as the petitioner-consumer was receiving supply at low voltage side, therefore, to give effect to the above said note, the circulars dated 14.07.2004 and 09.07.2007 were issued and the respondent-discom rightly levied charges to cover transformation losses.

5.6) Lastly, it is submitted that since the EO considered the entire evidence on record, and being the expert body held that the levy was valid and legal to cover the transformation losses, no interference of this Court is warranted as there is no perversity in the order of the EO.

ANALYSIS

6. Heard the arguments advanced by both the sides, scanned the record of the writ petition and considered the judgments cited at Bar.

7. Before proceedings to the merits of the case, it is required to be noted that Division Bench of this Court, in D.B. Special Appeal (Writ) No. 800/2022 titled as ‘Jaipur Vidyut Vitran Nigam Limited vs. Electricity Ombudsman & Anr’; decided on 07.09.2022 (Neutral citation: 2022/RJJP/002289), has held that writ petition challenging order of Ombudsman is maintainable.

8. The limited issue that is to be decided by this Court is whether the levy and recovery of transformation losses and pro rata transformer cost was lawful or not.

9. The petitioner-consumer admittedly falls under the category of ‘Large Industrial’ consumer who had the CD of above 5000 KVA and for whom the prescribed voltage supply was EHT 132 KV or 220 KV. However, the said supply was made to the petitioner, at relevant times, at either 11 KV or 33 KV. The supply at one stage lower or one stage higher is only permissible in exceptional circumstances. Since the phrase ‘exceptional circumstances’ is used, it must necessarily mean that the change in supply voltage is not to be done in regular course and it must also necessarily connote that the change in supply voltage would only be permissible on satisfaction of additional terms and conditions. Because if certain additional conditions are not imposed on such consumers, as rightly observed by the EO, then why anyone will incur huge cost for creating required high voltage level supply infrastructure and on one or other pretext everyone will try to avail supply at lower voltage. In that case, in addition to the loss of energy, the discom will have to create additional infrastructure/facility for such consumers and cost of the same will reflect in the tariff and all other electricity consumers will have to bear this burden in their electricity bills. However, the conditions so imposed cannot be arbitrary and without statutory backing and must also be in consonance to the charges and tariffs as approved by the Appropriate Commission.

10. In the case in hand, such conditions were specified in the order/circular dated 14.07.2004 and 09.07.2007. In the order/circular dated 14.07.2004 – which was issued with the approval of the Coordination Committee constituted by Govt. of Rajasthan for power sector companies i.e. RRVPN, RRUN, Discoms – certain conditions were specified for the consumers who were having contract demand below 5000 KVA and supply at 33 KV supply voltage but later on insist for extension of contract demand more than 5000 KVA on existing 33 KV supply voltage. The conditions were:

(i) The consumer shall be required to bear the cost of strengthening of existing 33 KV line if any, for meeting enhanced contract demand.

(ii) The consumer shall be required to bear the pro-rata cost of EHV transformer for contract demand above 5 MVA.

(iii) The consumer shall also be required to bear the transformation losses @ 3 % of the recorded consumption for the ratio of the consumption corresponding to MVA above 5 MVA.

(iv) The voltage rebate @ 0.75 % of billed amount as available to consumers for taking supply on 33 KV shall be allowed to such consumers.

Later on order/circular dated 09.07.2007 was issued for consumers who were having contract demand below 1500 KVA and supply at 11kv voltage but insisting for enhancement of contract demand above 1500 KVA on 11kv supply voltage with similar conditions.

11. The EO discussed the necessity of these circulars and the terms imposed therein in great detail and held that:

“In this case the Appellant did not install 132/33/11 kV transformer & allied infrastructure and the supply was allowed at 11kV two stage lower voltage and metering was done on 11 kV voltage supply and the transformation losses in transformation of 132kV voltage in to 11 kV voltage was not accounted in the meter of the Appellant as the metering was done at lower voltage. Meaning thereby these transformation losses were born by the Discom and public at large.

From the above it emerges that as per Supply Code & Connected Matters, Regulations, 2004 in exceptional circumstances supply to a consumer can be given at a voltage one stage lower than it‟s entitlement. In that case logically, he will have to bear the cost of HV/EHV transformer on pro-rata basis and transformation losses @3% as per note specified in tariff and conditions prescribed in commercial circulars JPR5-214 dated 14.07.2004 & JPR5-404 dated 09.07.2007 before the amendment in supply code regulations and after that according to amended regulations.”

The EO, after due consideration, gave its finding of the transformation losses. The issue of transformation losses is essentially a finding of fact, which has been decided by the expert body-EO, and such factual finding is bindings even on this Court.

If additional load is being released on lower voltage supply line, then seeking additional payment provisionally to account for line loss cannot be said to be arbitrary or illegal. The petitioner-consumer cannot be allowed to thrown its burden on the shoulder of others. Therefore, in view of the above, it cannot be said that the conditions mentioned in the order/circulars dated 14.07.2004 and 09.07.2007 are arbitrary, especially considering such conditions have been subsequently incorporated in the Amended Regulations also by the Appropriate Commission.

12. The next question that is to be decided is whether the order/circulars dated 14.07.2004 and 09.07.2007 had any statutory backing, making them enforceable in law? To answer this, we must resort to the ‘Tariff for Supply Of Electricity-2004’ issued by RERC under the powers conferred under Section 62 and Section 64 of the Act of 2003, specifically to the note contained in Tariff Structure Part-II (H.T. Tariff) under Clause (V) which deals with Large Industrial Services (Schedule LP/HT-5), which provides that if the metering equipment is at the low voltage side of consumer’s transformer, then 3% shall be added to the recorded energy consumption & demand, to cover transformation losses. At the cost of repetition, the said note is again reproduced as under:

“The Jaipur Discom may at its discretion, provide metering equipments on low voltage side of consumer’s transformer and in such a case 3% (three percent) shall be added to the recorded energy consumption & demand, to cover transformation losses.”

In this regard also, the EO, being the expert body, held as under:

“In their representation the Appellant has stated that “the additional charges towards “Transformation losses” as per Tariff for Supply of Electricity-2004 are to be levied only when the metering equipment is installed on Lower voltage side while the supply is on higher voltage. If however the Respondent due to any reason is unable to install meter on HT side, meter on LT side of the transformer is installed. In this situation certain changes in billing procedure are required as the reading recorded by LT meter is less than what it would be in case the meter was installed on HT side. This difference or margin which is normally to the tune of 3% (approximately) forms the basis of transformation losses”

According to above the Appellant has accepted that 3 % transformation losses are applicable if meter is installed on lower voltage side of the transformer installed by the consumer but in the Appellant’s case they have not installed the required 132/11 kV transformer as per their entitlement. If the required rating transformer would have been installed then High voltage side of the transformer would be 132 kV voltage and low voltage side of the transformer would be 11 kV voltage. In their case the supply itself was allowed on low voltage 11 kV and thus transformation losses and cost of the transformer has to be borne by the Appellant. For this it may be seen from the comparison of two similar situated consumers. One consumer has taken the connection for 10,000 kVA at 132 kV supply voltage as per his entitlement and installed 132/11 kV transformer at his premises/works. Due to some reason the metering was provided on 11 kV side of the transformer, in that case he has to bear the transformation losses @ 3%. Another consumer did not install the required transformer and has taken the connection for 10,000 kVA at 11 kV supply voltage. In this case also metering has been provided on 11 kV voltage but this consumer is protesting that he is getting 11kV HT supply and metering is also on 11 kV, so the transformation losses are not applicable in his case. The first consumer who incurred heavy expenses in taking EHT supply will bear the transformation losses and second consumer who saved the cost by not installing EHV infrastructure is saying that these charges are not applicable on him is not tenable.

The Appellant stated that as section 43 of the Electricity Act and in compliance of supply code regulations, the Respondent can only charge the expenses as specified in schedule attached with the Supply Code Regulations not beyond that. The statement of Appellant would have been correct if the Appellant would have taken the connection as per their entitlement i.e. supply at 132kV voltage. On the one hand they did not create the necessary infrastructure to take supply at 132 kV voltage and saved the cost as well as transformation losses and on the other hand did not want to pay anything for the infrastructure created for them by the Respondent

The Appellant stated that the order issued by the Respondent JPR5-214 no. JPD/DY.CE(C&P)/XEN/C.I/F.4(210)/Pt.VI/D.745 dated 14.07.2004 to levy in respect of transformation losses is not applicable in this case as the order is for consumers having contract demand above 5000 KVA at 33kv supply voltage and but in their case their supply voltage is at 11kv and their contract demand always remained above 5000 KVA is not tenable. The Appellant’s entitlement was for 132kv supply and they were using supply at much lower voltage 11kv and the Respondent has to bear more transformation losses in comparison to the consumers having similar contract demand and using supply at 33kv voltage level. It is not justified that some consumers having same contract demand above 5000 KVA and are using supply at 33kv voltage will pay transformation losses and pro-rata cost of transformer but who are using supply at 11kv voltage with same contract demand above 5000 KVA will not pay the transformation losses and pro-rata cost of transformer for whom the Licensee has to bear more losses and cost of transformer. The charges levied/recovered would be illegal if the Appellant would have taken the connection at the voltage level as per it‟s entitlement but in exceptional circumstances on their request they were allowed to use supply at lower voltage then they have to satisfy the conditions prescribed in the commercial circular JPR5-214 date14.07.2004 for it. In view of above pro-rata cost of transformer and transformation losses as per circular dated 14.07.2004 are payable by the Appellant.

The Respondent has recovered the pro-rata cost of the EHV transformer for the exceeded demand and recovered/debited transformation losses as per commercial circular JPR5-214 dated 14.07.2004 till the amendment in supply code regulations and after that as per amended regulations as such the contention of the Appellant for refund of pro-rata cost of the transformer and to refund/stop recovery of the transformation losses is not acceptable”

Here again, the EO has given its finding on fact that transformation loss occurring as a result of the setup used by the petitioner-consumer was leading to enormous transformation losses, which the discom had authority to recover by adding 3% of recorded energy consumption, as per note contained in Tariff Structure Part-II (H.T. Tariff) under Clause (V) which deals with Large Industrial Services (Schedule LP/HT-5) of the ‘Tariff For Supply Of Electricity-2004’.

13. On conjoint reading of the aforesaid note contained in ‘Tariff For Supply Of Electricity-2004’ along with order/circulars dated 14.07.2004 and 09.07.2007, and the Amended Regulations, the only logical conclusion which can be drawn is that the order/circulars dated 14.07.2004 and 09.07.2007 are administrative circulars brought into force to give full effect to the provision of note of the Tariff Schedule for Large Industrial Services (Schedule LP/HT-5) under the ‘Tariff For Supply Of Electricity-2004’. It is not the case here that the discom are levying charges based on the circulars which are not approved by the Appropriate Commission, rather the circulars are only clarificatory in nature and in actuality, the impugned levy is based on the note contained in Tariff For Supply Of Electricity-2004, which is passed by the Appropriate Commission under Section 62 and 64 of the Act of 2003 and is legally enforceable. Apart from the above, Clause No. 39 (A)(2) of the ‘Terms and Conditions for Supply of Electricity-2004’ is also noteworthy which allows the discom to recover any cost incurred by it from the consumer on account of any alteration necessitated due to increase or decrease in load/demand, except the cost of discom’s sub-station. The said clause 39(A)(2) of the ‘Terms and Conditions for Supply of Electricity-2004’ is reproduced as under:

“39. Increase, decrease and alteration of load/demand

(A) General

(1)…

(2) In case of increase in connected load/demand, the Nigam may require the consumer to pay reasonable expenses which he is authorised to recover for such load/demand under the schedule for the character of service and the category of consumer.

Any cost incurred by the Nigam on account of any alterations necessitated due to increase or decrease in load/damage shall be borne by the consumer except the cost of Nigam’s sub-station”

14. The contention of the petitioner-consumer that the EO gave retrospective effect to the Amended Regulations brought into effect in 2017 is also not correct. The EO merely used the Amended Regulations as one of the grounds to distinguish the earlier order on the subject. The levy and recovery was held to be on the basis of orders/circulars dated 14.07.2004 and 09.07.2007, which, as held above, were clarificatory in nature and issued to give effect to the note contained in ‘Tariff for Supply Of Electricity-2004’.

15. The contention of the petitioner-consumer that they never demanded supply on a particular line and that were ready to develop the infrastructure is also contrary to the material on record. The option was given to the petitioner-consumer to develop the infrastructure for taking supply on 132 KV line. However, considering the enormous cost that would be incurred by the petitioner-consumer in developing the necessary infrastructure, the petitioner-consumer chose not to develop the said infrastructure vide their letter dated 05.02.2010. By not developing the infrastructure, the petitioner-consumer had two alternatives; either request and accept supply of enhanced CD at lower stage with attached conditions or not request for enhanced CD. The petitioner-consumer consciously accepted supply on lower stage. After availing the option of getting supply at lower stage and after availing the benefit of not incurring necessary infrastructure cost, and having availed the fruits of its own doing, the petitioner-consumer is estopped to seek refund of the dues paid, even if paid under protest.

16. In view of the foregoing analysis, in the opinion of this Court, the EO has passed a well-reasoned speaking order and after consideration of material aspects, arrived at the only logical conclusion. This Court is in complete agreement with the reasoning adopted by the EO. There is no violation of principles of natural justice and no palpable error has crept in the order of the EO. The order impugned does not cause any prejudice to the petitioner, as the petitioner, being a large scale industry, must have passed on the burden to its consumers and interfering with the order of EO would essentially amount to the petitioner gaining unjust enrichment.

RESULT

17. Accordingly, the writ petition is dismissed. Pending application(s), if any, shall stand disposed of.