Jharkhand Ispat Private Limited Through One Of Its Director Ram Chandra Rungta vs. Damodar Valley Corporation Through Its Chairman

Held

The Court held that the impugned order dated 16.07.2022, passed by the Superintendent Engineer (E), Damodar Valley Corporation, under Section 126 of the Electricity Act, 2003, was passed in excess of jurisdiction and quashed it. The Court found that the DVC failed to comply with the Electric Supply Code Regulations, 2005, which have the force of law. Specifically, the Court noted the non-preparation of an inspection report, the imposition of demand charges and fuel surcharge, and raising demand based on a check meter at the sub-station, which were violations of statutory provisions. The Court reasoned that the Electric Supply Code Regulations, promulgated under Section 50 of the Electricity Act, are binding on electricity companies. The Court also noted that the Fuel Surcharge had been deleted from the DVC's tariff by the State Electricity Regulatory Commission from 01.04.2007. Therefore, the imposition of demand charges and fuel surcharge was illegal. The Court directed a fresh provisional assessment, to be served with calculations for the period from meter installation to the alleged FIR date, allowing the petitioner to file objections. It explicitly stated that there shall be no levy of Maximum Demand Charges or Fuel Surcharge. The initial deposit of ₹1.50 crores made by the petitioner shall be adjusted accordingly. The matter was remitted back to the Superintendent Engineer (E), DVC, for fresh assessment.

Facts

Jharkhand Ispat Private Limited (Petitioner) challenged an order dated 16.07.2022 passed by the Superintendent Engineer (E), Damodar Valley Corporation (DVC), under Section 126 of the Electricity Act, 2003. The dispute originated from an FIR registered on 01.01.2008 alleging theft of electricity, leading to the disconnection of the petitioner's electrical connection. The petitioner had previously filed W.P.(C) No. 95 of 2008, where an interim order directed restoration of connection upon deposit of ₹1.50 crores. A subsequent order on 07.04.2022 by this Court directed a fresh assessment. The DVC issued a provisional assessment of ₹9.18 crores on 20.05.2022, which was enhanced to ₹12.54 crores in the final assessment order dated 16.07.2022, the subject of the present writ petition. The petitioner contended that the assessment was illegal due to non-compliance with regulations and improper calculation of charges.

Key Issues

1. Whether the final assessment order dated 16.07.2022, passed by the Superintendent Engineer (E), DVC, under Section 126 of the Electricity Act, 2003, is vitiated by excess of jurisdiction and lack of jurisdiction, particularly concerning the imposition of demand charges and fuel surcharge, and the method of calculation of energy charges? (Question of law and mixed fact and law, turning on Section 126 of the Electricity Act, 2003, and the Electric Supply Code Regulations). Petitioner's arguments: The petitioner argued that the assessment was illegal because no inspection report was prepared, which is fatal to the licensee's case under Section 126. They contended that assessment should only be for Energy Charges, following the prescribed formula in the Supply Code Regulations, and that the levy of Demand Charges and Fuel Surcharge is illegal. Alternatively, they argued the assessment period should be confined from the meter replacement date (16.10.2007) to the alleged inspection date. They also relied on the Jharkhand State Electricity Regulatory Commission's tariff orders and the Electric Supply Code Regulations, 2005, which they claim are binding and do not permit demand charges or fuel surcharge. Revenue/State's arguments: The judgment does not record specific arguments made by the respondents (DVC) in response to the petitioner's contentions regarding the illegality of demand charges and fuel surcharge, or the method of calculation, beyond what was presented in earlier proceedings and counter-affidavits.