ITC BHADRACHALAM PAPERBOARDS LIMITED Vs. APSEB HYDERABAD

JUDGEMENT

(1.) THE petitioner is a public limited company carrying on the business of manufacturing paper and paper boards. It is one of the high tension consumer of electricity from the Respondents -Electricity Board. The petitioner is contesting the proceedings of the Board levying additional charge in respect of the consumption deposit. The petitioner company questioned the action of the Board in demanding three months consumption deposit by filing W.P. No. 11475 of 1988. According to the petitioner it need not pay consumption deposit over and above two months average consumption charges. Hence sought for a writ of mandamus restraining the Respondent - Electricity Board from collecting the consumption deposit for the third month. An interim order was passed on 13 -12 -1988, as per which the respondent -Board was directed to adjust out of the amount lying with it towards two months consumption deposit and the balance was directed to be adjusted against the future bills. The petitioner was also directed to furnish a bank guarantee for the consumption deposit equal to one month. In pursuance of the said order, the petitioner submitted bank guarantee for a total amount of Rs. 87,61,516/ - representing one month average consumption charges. Finally the said writ petition was dismissed on 21 -3 -1996 and the bank guarantee was encashed by the respondent -Board. Later the second respondent issued proceedings dated 20 -8 - 1996 directing the petitioner to pay additional charges to a tune of Rs. 1,02,97,900/ - for the belated payment of the deposit. The additional charges are calculated at the rate of 1.5% per month from the due date for payment of additional consumption deposit as per the notice till the date of encashment of the bank guarantee i.e., 19 -7 -1996. This demand is being contested by the petitioner.

(2.) THE learned counsel for the petitioner contended that the consumption deposit is to secure proper payment of consumption charges. As the petitioner was promptly paying all the outstanding consumption bills as and when they are due no prejudice has been caused for not making additional cash deposit of one more month's charges; that it is not open to the Board to levy interest, which is termed as sur -charge; that the purpose of the consumption deposit was to secure the proper payment of the consumption charges and as the petitioner had provided a bank guarantee which is almost identical to the deposit, there was no justification for the Board to levy additional charges. According to the petitioner as there was stay of the operation of the Board proceedings during the pendency of the writ petition and immediately after the disposal of the writ petition the respondents have encashed the bank guarantee, it is not open to the Board to levy and collect additional charges during the pendency of the proceedings before the Court in the light of the various judgments of the Supreme Court to which the respondent -Board is also a party. The learned counsel also contended that unless there is a specific direction in terms of the interim order to pay interest or additional charges the petitioner is not under an obligation to pay and the respondents have no right to charge such additional charges in the light of the decision of the Supreme Court in the case of South Eastern Coalfields Ltd. v. Century Textile and Industries Ltd., (1991) 53 ELT 522. It is stated that the levy of the additional charge has no rational or proximate nexus with charges for the consumption of energy by the consumer and in fact it is in the nature of penalty for default. It is stated that there is no express provision empowering the respondent -Board to impose additional charge on the consumers. Further it is stated that even assuming that the Board has got the power to levy, but under the circumstances, it is not the case to attract any liability to pay any amount as and by way of additional charge. The learned counsel referred to various observations made by the Supreme Court in the case of Ferro Alloys Corporation Limited v. A.P.S.E.B., AIR 1993 SC 2005 and contended that the question of payment of interest also would not arise in the present case. The learned counsel also distinguished the cases relied upon by the Board stating that in those cases the issue was relating to the non -payment or belated payment of consumption charges; whereas in the present case it is only the case of additional consumption deposit. The learned counsel also contended that as the respondents have collected the third month's consumption deposit as soon as the writ petition is dismissed by way of encashment of bank guarantee and as there is no stipulation to pay interest in terms of the interim order, the petitioner is not under an obligation to pay the additional charge and the respondent is not entitled to demand and collect the same.

(3.) THE learned counsel also contended that a similar issue was considered by a Division Bench of this Court in the case of M/s. Rayalaseema Roller Flour Mills v. A.P.S.E.B., Hyderabad, AIR 1998 Andh Pra 118, where the levy of additional charge was upheld, though in respect of the consumption charges. The learned counsel also contended that there is no difference between the consumption charges and consumption deposit as both are payable by the consumer under terms and conditions of supply. The learned counsel also contended that as per the interim orders in the present writ petition the petitioner paid only 1/3rd of the demanded additional charges and the balance of 2/3rd has not been paid till date though the demand was raised as long back as on 16 -10 -1996. The learned counsel also contended that the demand raised towards additional charge is in terms of clause 28.6 which contemplates the levy of surcharge at the rate of 1.50% per month for the delay in payment. It is therefore contended that the writ petition is liable to be dismissed as it is squarely covered by the decisions of this Court.