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:
