ANIL K.NARENDRAN J.
The appellant is the petitioner in W.P.(C)No.1224/2006. The said Writ Petition was filed seeking a writ of certiorari to quash Exhibit P7 order passed by the 3rd respondent and Exhibit P8 reassessment bill issued by the 1st respondent and for other consequential reliefs. The learned Single Judge by judgment dated 20.1.2014 dismissed the said Writ Petition and it is aggrieved by that judgment the appellant is before us in this Writ Appeal.
2. The appellant is an SSI unit having a Colour Photo Processing Lab and Studio. The appellant’s industrial unit has two electric connections. Electric connection to the Colour Photo Processing Lab with Consumer No.9923 is an industrial connection under the industrial tariff LT-IV and that to the Studio with Consumer No.12467 is a commercial connection under the commercial tariff LT-VIIA. In the industrial connection with Consumer No.9923, there is a power meter as well as a light meter.
3. On 3.3.2005, the appellant's premises was inspected by the Anti-Power Theft Squad (APTS for short). As evident from Exhibit P1 site mahazar, in the inspection conducted by the APTS, it was found that, the power supply through the light meter was being used for the neon lights and air conditioners in the studio, which are covered under the commercial connection under the tariff LT-VIIA. The finding in Exhibit P1 site mahazar is to the effect that, the appellant was misusing electricity for industrial purpose under the tariff LT-IV for commercial use, attracting higher tariff under LT-VIIA. In such circumstances, the appellant was issued with Exhibit P2 demand for `10,80,282/-, demanding energy charges at LT- VIIA tariff for the period from 22.11.2003, less the amount already paid under LT-IV tariff.
4. Exhibit P2 was followed by Exhibit P3 communication of the 1st respondent, furnishing the details of the assessment made in Exhibit P2. It is stated in Exhibit P3 that, in the inspection conducted by the APTS, it was found that the energy supplied under industrial tariff for the Colour Lab Processing unit was being utilised by the appellant for purposes other than Computerised Colour Processing. A major portion of the energy under industrial tariff was utilised for commercial purpose in the sales counter attached and hence, re-assessment was made from the date of order, at commercial tariff.
5. Aggrieved by Exhibits P2 and P3, the appellant submitted Exhibit P4 representation before the 2nd and 3rd respondents. Thereafter, the appellant challenged the demand made in Exhibit P2 in W.P.(C)No.10683/2005 and the said Writ Petition was disposed of, directing the 1st respondent to treat Exhibit P3 as a provisional order and to consider Exhibit P4 objections submitted by the appellant and pass appropriate orders thereon. Pursuant to the said direction, the 1st respondent issued Exhibit P5 order, by which the appellant was reassessed by billing in LT-VIIA tariff for a period of 6 months immediately preceding the date of inspection. The 1st respondent assessed the appellant under Section 126(6) of the Electricity Act, 2003, at a rate equal to one and a half times the tariff applicable for the relevant category of service, for 6 months and demanded the balance amount of `7,61,240/-. It was also made clear that, the appellant will be billed under the tariff LT-VIIA, until he removes the connected load which is being used for commercial purpose at its premises.
6. Exhibit P5 order issued by the 1st respondent was under challenge in W.P.(C)No.19734/2005 and this Court by Exhibit P6 judgment relegated the appellant to the alternate remedy by filing an appeal before the 3rd respondent. The said appeal filed before the 3rd respondent was disposed of vide Exhibit P7 order and the appellant was issued with Exhibit P8 bill of the 1st respondent for `14,87,016/-, demanding a sum of `6,22,587/-, after deducting the payment already made by him. As can be seen from Exhibit P7 order, the 3rd respondent, with a view to settle the dispute, revised Exhibit P5 order of the 1st respondent, by applying LT-VIIA tariff retrospectively for 6 months till the date of segregation instead of charging 1.5 times. The appellant has also produced Exhibits P9 and P10 bills in support of its contention that there is no difficulty in finding out the consumption of power of the power meter. The appellant challenged Exhibits P7 and P8 in the Writ Petition.
7. A counter affidavit has been filed on behalf of the 1st respondent, contending that, the appellant is having a Photo Processing Lab with a Photo Studio and Sales Counter. The Photo Processing Lab has SSI registration and as per tariff notification dated 24.10.2002, SSI Units are eligible for concessional LT-IV tariff. In the inspection conducted by the APTS, on 3.3.2005, it was found that power for the Sales Counter and neon display lights were taken from the subsidised industrial connection with Consumer No.9923, which the appellant availed for the purpose of Computerised Colour Photo Printing. After the inspection, the tariff has been changed from LT-IV to LT-VIIA with effect from 22.11.2003. The higher tariff of LT-VIIA was applied, as per the provisions of Conditions of Supply of Electrical Energy, as there was unauthorised use of electricity for commercial purpose. Exhibit P2 demand was later revised by the 1st respondent in Exhibit P5. Later, based on Exhibit P7 order of the 3rd respondent, Exhibit P8 revised demand was made for `6,22,587/-, strictly in accordance with law. On 27.10.2005, the appellant segregated the commercial load in the industrial connection. The service connection under commercial tariff was having a connected load of 5 KW before segregation, which has been increased to 28KW thereafter. Similarly, the connected load in the industrial connection was 88KW before segregation which has been reduced to 44KW thereafter. Based on Exhibit P8 the higher tariff was made applicable only for a period of six months prior to the date of inspection and the revised demand now made is strictly in accordance with the existing Rules, the Conditions of Supply and the provisions of the Electricity Act. Therefore, according to the 1st respondent the Writ Petition is liable to be dismissed.
8. The learned Single Judge by the impugned judgment dismissed the Writ petition holding that, the appellate order and the assessment made are in accordance with the existing rules, Conditions of Supply and also the provisions of the Electricity Act. It is aggrieved by the said judgment, the appellant is before us in this Writ Appeal.
9. We heard arguments of the learned Senior Counsel for the appellant and the learned Standing Counsel for the respondent-Board. The learned Senior Counsel for the appellant has relied on the judgment of this Court in J.D.T. Islam Orphanage Committee v. Assistant Engineer, KSEB (2007 (3) KLT 388) and the judgment of the Calcutta High Court in Sk. Jafar Ali v. West Bengal State Electricity Distribution Company Limited (AIR 2010 Calcutta 84). We have considered the rival submissions made at the Bar.
10. As borne out from Exhibit P1 site mahazar, in the inspection conducted by the APTS on 3.3.2005, in the appellant’s premises, it was found that power from service connection bearing Consumer No.9923 under industrial tariff was being used for commercial purpose, i.e., for a purpose other than for which the usage of electricity was authorised. The appellant used energy supplied under the concessional industrial tariff for the Colour Photo Processing unit, under LT-IV tariff, for other purposes attracting the higher commercial tariff and a major portion of such electricity was used for the sales counter attached. On 27.10.2005, the appellant segregated the commercial load in the industrial connection. After segregation, the connected load of service connection under commercial tariff was enhanced from 5KW to 28KW. Similarly, after segregation the connected load of service connection under industrial tariff was reduced from 88KW to 44KW. Such a change in the connected load after segregation of the commercial load in the industrial connection makes it abundantly clear that the appellant was indulging in unauthorised use electricity at the time of the inspection conducted by the APTS. This alone is sufficient to hold that, the finding of the 1st and 3rd respondents that, the appellant had indulged in unauthorised use of electricity, attracting penal assessment under Section 126(6) of the Electricity Act, is perfectly legal and valid and we find no valid reasons to interfere with that finding.
11. Assessment of unauthorised use of electricity is made under Section 126 of the Electricity Act. Sub-sections (1), (5) and (6) of Section 126 of the Electricity Act, 2003, as it stood prior to the Amendment Act 26 of 2007, read thus;
126. Assessment.- (1) If on an inspection of any place or premises or after inspection of the equipments, gadgets, machines, devices found connected or used, or after inspection of records maintained by any person, the assessing officer comes to the conclusion that such person is indulging in unauthorised use of electricity, he shall provisionally assess to the best of his judgment the electricity charges payable by such person or by any other person benefited by such use.
xxxx xxxx xxxx
(5) If the assessing officer reaches to the conclusion that unauthorised use of electricity has taken place, it shall be presumed that such unauthorised use of electricity was continuing for a period of three months immediately preceding the date of inspection in cases of domestic and agricultural services, and for a period of six months immediately preceding the date of inspection for all other categories of services, unless the onus is rebutted by the person, occupier or possessor of such premises or place.
(6) The assessment under this section shall be made at a rate equal to one and half times the tariff applicable for the relevant category of services specified in sub-section (5).”
Going by the Explanation to Section 126, ‘unauthorised use of electricity’ means, among other things enumerated in Sub-clause (i) to (iii) and (v) of Clause (b), the usage of electricity for the purpose other than for which usage of electricity was authorised. Once it is found that, the appellant had indulged in unauthorised use of electricity, as detected by the APTS on 3.3.2005, the penal assessment contemplated under Section 126 of the Act has to follow. As per Sub-section (6) of Section 126, as it stood prior to the Amendment Act 26 of 2007, assessment under Section 126 shall be made at a rate equal to one and half times the tariff applicable for the relevant category of services specified in Sub- section (5).
12. When APTS inspected the appellant’s premises and detected unauthorised use of electricity, the Conditions of Supply of Electrical Energy issued by the KSEB in exercise of its powers under Section 79(j) of Electricity (Supply) Act, 1948, was in force. Going by Regulation 42(d) of Conditions of Supply, which was in force during the relevant time, if energy supplied for a specific purpose under a particular tariff is used without the Board’s knowledge and approval for a different purpose not contemplated in the contract for supply and for which higher tariff is applicable, such misuse of energy will be billed at three times the rate applicable to the respective tariff for the previous six months from the date of detection of misuse unless there are convincing reasons for adopting different periods. But, in KSEB v. Najeeb (2005 (1) KLT 406) a Division Bench of this Court held as follows;
“Regulation 42(d) stipulates that misuse of energy will be billed at three times the rate applicable to the respective tariff for the previous six months from the date of detection of misuse. Section 126(6) stipulates that the assessment under this section shall be made at a rate equal to one and half times the tariff applicable for the relevant category of services specified in sub-section (5). Section 126(5) stipulates that if the Assessing Officer reaches the conclusion that unauthorised use of electricity has taken place, it shall be presumed that such unauthorised use of electricity was continuing for a period of three months immediately preceding the date of inspection in case of domestic and agricultural services and for a period of six months immediately preceding the date of inspection for all other categories of services. Provisions of Regulation 42(d) and section 126(6) to that extent is inconsistent and provision of section 126 would prevail.”
Therefore, once the 1st respondent assessing authority reaches the conclusion that, unauthorised use of electricity had taken place in the appellant’s premises, the assessment for such unauthorised use under Section 126(6) has to be made at a rate equal to one and half times the tariff applicable for the relevant category of services specified in Sub-section (5) of Section 126.
13. According to the learned Senior Counsel for the petitioner, such assessment should be made at a rate equal to one and a half times the tariff applicable for industrial connection. Per contra, according to the learned Standing Counsel for the KSEB, such assessment should be made at a rate equal to one and a half times the tariff applicable for commercial connection, for which a higher tariff is applicable.
14. Electricity Act, 2003, was enacted as the Parliament felt the necessity for a comprehensive legislation in the matter of generation, transmission and distribution of electrical energy in the country, and the new enactment repealed the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948, etc. Section 126 of the Electricity Act deals with assessment of unauthorised use of electricity. In Executive Engineer,
Southern Electricity Supply Company of Orissa Ltd.
(SOUTHCO) and another v. Sri. Seetaram Rice Mill (2012
(2) SCC 108), the Apex Court held that, Section 126 has a purpose to achieve, i.e., to put an implied restriction on unauthorised consumption of electricity. In the event of default, it also provides for the consequences that a consumer is likely to face. It embodies complete process for assessment, determination and passing of a demand order. This defined legislative purpose cannot be permitted to be frustrated by interpreting the provision in a manner not intended in law. The Court would have to apply the principle of purposive interpretation in preference to textual interpretation of the provisions of Section 126 of the Act. The Apex Court has also observed that, the additional provisions introduced in the 2003 Act in relation to misuse of power and punishment for malpractices such as over consumption of sanctioned electric load which are not covered by the provisions relating to theft; all of which had significant bearing upon the revenue focus intended by the Legislature. Paragraphs 16 to 19 of the judgment reads thus;
16. First and foremost, we have to examine how provisions like Section 126 of the 2003 Act should be construed. From the objects and reasons stated by us in the beginning of this judgment, it is clear that 'revenue focus' was one of the principal considerations that weighed with the Legislature while enacting this law. The regulatory regime under the 2003 Act empowers the Commission to frame the tariff, which shall be the very basis for raising a demand upon a consumer, depending upon the category to which such consumer belongs and the purpose for which the power is sanctioned to such consumer. We are not prepared to accept the contention on behalf of the respondent that the provisions of Section 126 of the 2003 Act have to be given a strict and textual construction to the extent that they have to be read exhaustively in absolute terms.
17. This is a legislation which establishes a regulatory regime for the generation and distribution of power, as well as deals with serious fiscal repercussions of this entire regime. In our considered view, the two maxims which should be applied for interpretation of such statutes are ex visceribus actus (construction of the act as a whole) and ut res magis valeat quam pereat (it is better to validate a thing than to invalidate it). It is a settled cannon of interpretative jurisprudence that the statute should be read as a whole. In other words, its different provisions may have to be construed together to make consistent construction of the whole statute relating to the subject matter. A construction which will improve the workability of the statute, to be more effective and purposive, should be preferred to any other interpretation which may lead to undesirable results.
18. It is true that fiscal and penal laws are normally construed strictly but this rule is not free of exceptions. In given situations, this Court may, even in relation to penal statutes, decide that any narrow and pedantic, literal and lexical construction may not be given effect to, as the law would have to be interpreted having regard to the subject matter of the offence and the object that the law seeks to achieve. The provisions of Section 126, read with Section 127 of the 2003 Act, in fact, becomes a code in themselves. Right from the initiation of the proceedings by conducting an inspection, to the right to file an appeal before the appellate authority, all matters are squarely covered under these provisions. It specifically provides the method of computation of the amount that a consumer would be liable to pay for excessive consumption of the electricity and for the manner of conducting assessment proceedings. In other words, Section 126 of the 2003 Act has a purpose to achieve, i.e., to put an implied restriction on such unauthorized consumption of electricity.
19. The provisions of the 2003 Act, applicable Regulations and the Agreement executed between the parties at the time of sanction of the load prohibit consumption of electricity in excess of maximum sanctioned/installed load. In the event of default, it also provides for the consequences that a consumer is likely to face. It embodies complete process for assessment, determination and passing of a demand order. This defined legislative purpose cannot be permitted to be frustrated by interpreting a provision in a manner not intended in law. This Court would have to apply the principle of purposive interpretation in preference to textual interpretation of the provisions of Section 126 of the 2003 Act. We shall shortly discuss the meaning and scope of the expressions used by the Legislature under these provisions. At this stage, suffice it to note that this Court would prefer to adopt purposive interpretation so as to ensure attainment of the object and purpose of the 2003 Act, particularly, of the provisions of Section 126 in question.
As held by the Apex Court in Southern Electricity Supply Company’s case (supra), while interpreting the provisions of Section 126, this Court would have to apply the principle of purposive interpretation in preference to textual interpretation, keeping in mind the purpose to be achieved by that Section, i.e., to put an implied restriction on unauthorised use of electricity. A construction which will improve the workability of the statute, to be more effective and purposive, would have to be preferred to any other interpretation which may lead to undesirable results.
15. On 3.3.2005, the appellant’s premises was inspected by the APTS. As evident from Exhibit P1 site mahazar, the APTS found that, the power supply through the light meter under industrial tariff LT-IV was being used for the neon lights and air conditioners in the studio, which are under commercial tariff LT- VIIA. The finding in Exhibit P1 site mahazar is to the effect that, the appellant was indulging in unauthorised use of electricity for industrial purpose under the tariff LT-IV for commercial purpose, attracting a higher tariff under LT-VIIA. As the appellant used the electricity supplied for industrial use under LT-IV tariff for commercial use under LT-VIIA tariff it amounts to ‘unauthorised use of electricity’ falling under Clause (b) to the Explanation to Section 126. For such unauthorised use the appellant is liable to be assessed under Section 126(6), as it stood prior to the Amendment Act 26 of 2007, at a rate equal to one and half times the tariff applicable for the relevant category of service. On 27.10.2005, the appellant segregated the commercial load in the industrial connection and thereafter, the connected load of service connection under commercial tariff was enhanced from 5KW to 28KW and the connected load of service connection under industrial tariff was reduced from 88KW to 44KW. This makes it abundantly clear that, the appellant was indulging in unauthorised use electricity, thereby using a major portion of the electricity supplied under industrial tariff for commercial use. Once it is found that, the appellant had indulged in unauthorised use of the electricity supplied under industrial tariff the entire consumption in that service connection will have to be assessed under Section 126(6). Therefore, the contention of the appellant that the consumption through the light meter alone should have been charged under LT-VIIA is absolutely untenable.
16. The KSEB is supplying electricity for industrial purpose, under LT-IV tariff, at a subsidised rate, whereas, supply of electricity for commercial purpose, under LT-VIIA tariff attracts a higher rate. As evident from the calculations made in Exhibit P5 demand, the commercial tariff under LT-VIIA during the relevant period was `8.25 per unit. As pointed out by the learned Standing Counsel for the KSEB, the industrial tariff under LT-IV during the relevant period was only `4.25 per unit. Therefore, if the appellant is assessed under Section 126(6) for the unauthorised use of electricity, taking LT-IV industrial tariff @ `4.25 per unit as the basis for calculating the rate equal to one and half times the tariff applicable for the relevant category of service, then the appellant need pay only `6.37 per unit for unauthorised use of electricity for commercial purpose, as against the prevailing rate of `8.25 per unit applicable for the commercial tariff under LT-VIIA. If such an interpretation is given, it would defeat the very purpose that Section 126 has to achieve, i.e., to put an implied restriction on unauthorised consumption of electricity. On the other hand, if the appellant is assessed for the unauthorised use of electricity, taking LT-VIIA industrial tariff @ `8.25 per unit as the basis for calculating the rate equal to one and half times the tariff applicable for the relevant category of service, the appellant has to pay only `12.37 per unit for unauthorised use of electricity for commercial purpose, as against the prevailing rate of `8.25 per unit applicable for the commercial tariff under LT-VIIA. Therefore, the only interpretation that can be given to Section 126(6) of the Electricity Act, 2003, is that, in an assessment under Section 126 for unauthorised use of electricity, assessment shall be made at a rate equal to one and half times (two times with effect from 15.6.2007) the tariff applicable for the relevant category of service attracting higher tariff for which the electricity supplied was unauthorisedly used and not the relevant category of service to which the consumer belongs, and we hold so.
17. The judgment of this Court, relied on by the learned Senior Counsel for the appellant in J.D.T. Islam Orphanage Committee’s case (supra) is a case under the Electricity Act, 1910, in which an orphanage under LT-VI tariff was assessed for unauthorised extension, by levying LT-VIII tariff applicable to temporary extension. It is not a case in which electricity supplied under LT-VI tariff was used by the consumer for any other purpose attracting higher tariff. That decision was rendered on an entirely different set of facts and it does not in any way support the case of the appellant. Sk.Jafar Ali’s case (supra) relied on by the learned Senior Counsel for the appellant is a case in which electricity supplied under domestic tariff was used for commercial purpose attracting a higher tariff and the Court has also found that the meter used for commercial purpose situated in the consumer’s premises has not been tampered with and it is the meter relating to domestic consumption that has been tampered with. Paragraphs 12 and 13 of the judgment read thus;
12. After hearing the learned counsel for the parties and after going through the materials on record, we find substance in the contention of the learned advocate for the appellants that the appropriate authority erred in law in calculating the amount at the rate equal to twice the tariff applicable to commercial rate notwithstanding the fact that the meter used for commercial purpose situated in the said building has not been tampered with and it is the meter relating to domestic consumption that has been tampered.
13. We are unable to accept the contention of Mr. Panja that the assessment should be made at the rate equal to twice the tariff applicable to the category of service for which the electricity was allegedly used and not the relevant category of service provided by the Electric Company. At this stage, it may be mentioned here that the highest rate applicable for commercial purpose is `5.70/- per unit whereas the maximum amount of rate per unit for domestic purpose is `3.67/-. It appears from the report of the inspection that the writ petitioners tried to illegally utilise electricity for commercial purpose at a cheaper rate of `3.67/- instead of `5.70/-. By the aforesaid provision of the Act after amendment, the respondent authority is entitled to assess at the rate double the rate applicable to domestic category meaning thereby at the rate of `3.67/- x 2 = `7.34/- which is more than the rate applicable for commercial purpose and, at the same time, for a period of one year because the respondent itself could not arrive at any definite period of unauthorised consumption.
The learned Judges of the Calcutta High Court, interpreting Section 126(6) of the Electricity Act, held that, the phrase "applicable for the relevant category of the services specified in sub-section (5)" appearing in sub-section (6) should be reasonably construed as the rate "applicable for the relevant category of the services to which the consumer belongs". This judgment does support the view as propounded by the learned Senior Counsel for the appellant, but we are respectfully not in agreement with the view taken therein. If the above interpretation is accepted, a consumer under LT-V Agriculture tariff at the rate of around `1/- per unit need pay only `1.50 per unit for unauthorised use of electricity for commercial purpose, as against the prevailing rate of `8.25 per unit applicable for the commercial tariff under LT-VIIA.
18. In view of our finding that, in an assessment under Section 126(6) of the Electricity Act for unauthorised use of electricity, assessment shall be made at a rate equal to one and half times (two times with effect from 15.6.2007) the tariff applicable for the relevant category of service attracting higher tariff for which the electricity supplied was unauthorisedly used and not the relevant category of service to which the consumer belongs, we find absolutely no illegality or irregularity in Exhibits P7 order passed by the 3rd respondent and Exhibit P8 bill issued by the 1st respondent. As can be seen from Exhibit P7 order, the 3rd respondent, with a view to settle the dispute, revised Exhibit P5 order of the 1st respondent, by applying LT-VIIA tariff retrospectively for 6 months till the date of segregation instead of charging 1.5 times. In such circumstances, the learned Single Judge rightly rejected the challenge made by the appellant against Exhibits P7 and P8 and dismissed the Writ Petition.
In the result, this Writ Appeal is dismissed. No order as to costs.
SD/-
ANTONY DOMINIC, JUDGE SD/-
ANIL K.NARENDRAN, JUDGE dsn