23 January 2013
Supreme Court
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M/S. OSWAL AGRO MILLS LTD. Vs PUNJAB STATE ELECTY BOARD .

Bench: A.K. PATNAIK,SUDHANSU JYOTI MUKHOPADHAYA
Case number: C.A. No.-000662-000663 / 2013
Diary number: 34040 / 2009
Advocates: ABHIJAT P. MEDH Vs DHARMENDRA KUMAR SINHA


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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

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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  

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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  

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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  

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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.  

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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  

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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.   

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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  

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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  

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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.  

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 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  

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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  

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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

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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-

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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.

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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  

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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  

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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.

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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  

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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.

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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  

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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  

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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  

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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  

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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  

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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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