BEFORE THE VIDYUT OMBUDSMAN
Present
K.Rajagopala Reddy, Director (Law) and
Vidyut Ombudsman
Dated: 25-09-2008
The Principal,
Little Flower Junior
College,
Uppal, Hyderabad –
500 039. … Appellant
1. The Asst. Accounts Officer/ ERO/APCPDCL / Habsiguda / Hyd
2. The Assistant Divisional Engineer/Operation/APCPDCL/ Uppal /
Hyd
3. The Divisional Engineer/Operation/ APCPDCL / Habsiguda /
APCPDCL / Hyd
4. The Superintending Engineer/Operation/RR North Circle /
APCPDCL/Sec’bad
5. The General Manager / Customer Services / APCPDCL / Corp.
Office / Hyd
… Respondents
The ‘Memorandum of Appeal’ dated 21.02.2008 filed by the
appellant has come up for final hearing before the Vidyut Ombudsman on
16.09.2008 in the presence of the appellant, Sri L.Ravichandran, counsel for
the appellant and Sri. K.S. Harish Chandra Sekhar (Respondent No. 1) and having
stood over for consideration till this day, the Vidyut Ombudsman passed /
issued the following:
Aggrieved by the order passed by the Forum for Redressal of
Consumer Grievances of APCPDCL (for short the “Forum”) in C.G. No. 30 / 2007-08
of Hyderabad West (R.R.North) Circle dated 25.01.2008, the appellant filed the
‘Memorandum of Appeal’ mentioned above, inter-alia, on the following grounds.
(i) the impugned order is contrary to law;
(ii) the impugned order imposes unspecified conditions for the purpose of eligibility for being in category-VII. The same is without the authority of law;
(iii) the impugned order failed to see that in the Tariff orders issued by Andhra Pradesh Electricity Regulatory Commission (APERC or Commission), LT-Cat-VII applies to Educational Institution run by “Charitable Institution”. There is no power in any Authority under the Electricity Act to define a Charitable Institution and as such the definition under the General Law will apply;
(iv) the reasoning in the impugned order that the Complainant (appellant herein) could not produce any evidence that students were imparted education on charity is no body’s case and is a clear case of non-application of mind;
(v) the impugned order erred in requiring the appellant to impart education without collection of fees. The findings in the impugned order that since the educational institution is collecting tuition fees, there is no element of charity in imparting education is perverse;
(vi) the reasoning in the impugned order is arbitrary, illegal and unjust.
(vii) It is, therefore, prayed that the Hon’ble Vidyut Ombudsman may be pleased to set aside the order dated 25-01-2008 of the Forum in C.G.No.30/2007-08 / Hyderabad West (R.R.North) Circle and declare that the appellant educational institution is entitled to be treated as Category-VII instead of Category-II w.e.f. 28.06.2007 and to pass such other order or orders as deemed fit in the circumstances of the case.
2. In terms of Clauses 8(1)(c) and 11 (1) of the “APERC Establishment of Forum and Vidyut Ombudsman for Redressal of Grievances of Consumers Regulation, 2004” (for short “Regulation No.1 of 2004”) the Vidyut Ombudsman is required to promote settlement by mutual agreement between the parties. However, inspite of best efforts made by the Vidyut Ombudsman on 05.05.2008, parties could not arrive at settlement by mutual agreement between them. Therefore, on the date of reconciliation, Vidyut Ombudsman directed the respondent No. 1 to file written submissions.
3. On 26.05.2008, respondent No.1 submitted in writing that he sought certain clarifications from respondent No.4 with regard to request of the appellant for change of category from II to VII in respect of Service Connection Nos. 1402-3598, 0701-1921, 0701-3599 and 1402-10639 of the appellant’s institution and soon after receipt of required clarification from respondent No.4, the matter will be examined and reported. A copy of the said letter of respondent No.1 is forwarded to appellant on 30.05.2008 for information.
4. On 10.07.2008, respondent No.1 submitted another letter dated 09.07.2008 stating that as per the orders of the Forum dated 25.01.2008, the appellant is not entitled for change of category from II to VII as the above mentioned four service connections are used by M/s. Little Flower Junior college for the purpose of teaching, coaching and guiding students as paid service. As the appellant is collecting tuition fee, the element of charity is missing. For that reason, the appellant is not entitled for change of category from II to VII in respect of the said service connections. A copy of the said letter was sent to the appellant on 16.07.2008 for information.
5. Heard arguments of the counsel for the appellant and that of respondent No.1 on 16.09.2008.
6. The point that arises for consideration is whether “the service connections of the appellant’s educational institutions are entitled to be treated under category-VII instead of category-II and, if so, from what date”.
7. Perused the record. The Forum in its order at page-4 referred to Tariff Order of APERC for the year 2005-06 at paragraph 305 and also that of the year 2007-08 at paragraph 220. As seen from the Tariff Order FY 2005-06, the observations of APERC at paragraph 305 therein relates to “Categorisation of hotels, restaurants, film industry units and BSNL as industries”. Similarly, observation by APERC at paragraph 220 in its Tariff Order FY 2007-08 relates to “Classification of Telephone Exchanges, Oil Depots / Bottling Plants”. Thus, reference to the said paragraphs by the Forum at page-4 of its order dated 25.01.2008 is out of context.
8. Whatever it may be, in paragraphs 305 and 220 mentioned above, APERC stated that consumer classification and categorisation for the purpose of levying electricity charges by it are made on the basis of purpose of use of electricity. Such categorisation is not related to classification made by any other department of State Government or Central Government for some other purpose. In other words, classification and categorisation made by the Commission, which is the competent authority for that purpose from time to time for collection of electricity charges, is based on the criteria adopted by it viz., ‘purpose of use of electricity’ and the eligible consumers under different categories are mentioned against each category in detail by APERC. Therefore, the licensees have to find out under which category prescribed by the Commission, a particular consumer falls and accordingly fix categorisation. There is no choice left for licensees (APCPDCL in the present case), expect to strictly follow the categorisation made by APERC and pass-on the benefit of tariff fixed by it to all the eligible consumers falling under a particular category mentioned therein.
9. Therefore, the observation of the Forum at page-5 of its order dated 25.01.2008 that “running an activity on no-profit basis cannot be a sufficient ground for imparting the charitable character to an institution” is beyond the scope of the Forum and the same is not sustainable under law. Further the extended meaning given by the Forum to the word ‘charitable’ (means “generous in giving without expecting any return”) is uncalled for. For the said reason, the observation of the Forum that “any consumer using supply for extending services for beneficiaries without the element of charity / generosity does not fall under LT Cat-VII - General Purpose” can not stand legal scrutiny.
10. As seen from the record, the institution of appellant is a unit of Brothers of St.Gabriel Educational Society and it is a charitable society, registered under Andhra Pradesh (Telengana Area) Public Societies Registration Act and carrying on activities for education purpose, without profit. The said Society is also registered u/s 12 A of Income Tax Act, 1961 by the IT department as Charitable Institution. Therefore, it is clear that the educational institution of the appellant is eligible for supply of electricity under LT Cat-VII as per the categorization made by APERC in its Tariff Order for the purpose of collecting charges for supply of electricity.
11. When it is clear that educational institution of the appellant falls under LT Cat-VII for the purpose of paying electricity charges as prescribed by APERC, the contention of the respondent No.1, as mentioned in his letter dated 09.07.2008 referred in paragraph-4 supra, that the service connections of the appellant are not entitled to be changed to category VII from category-II as the nature of supply used is for purpose of teaching, coaching and guiding students as paid service is immaterial. Similarly, the further contention of respondent No.1 that by collecting tuition fees, element of charity is missing and therefore, the appellant is not entitled for change of category-VII from category- II, is not correct and is liable to be rejected.
12. In support of the claim of the appellant that its institution is a ‘charitable institution’, notwithstanding collection of fee and the impugned order dated 25.01.2008 of the Forum imposes unspecified conditions for the purpose of eligibility for being in category-VII , the counsel for the appellant relied on several judgments of the Hon’ble Supreme Court of India, including the following. In the case of Director of Income Tax Vs Bharat Diamond Bourse reported in (2003) 1 SCC 741 it is held by the Hon’ble Supreme Court that the criteria for treating an institution for charitable purpose is its predominant purpose and the objectives. In the case of Victoria Technical Institute Vs Commissioner of Income Tax (Additional), Madras and Another reported in 1991 Supp (2) SCC 389, it is held by the Hon’ble Supreme Court that where “the purpose of a trust or institution is relief of the poor, education or medical relief, the requirement of the definition of “charitable purpose” would be fully satisfied, even if an activity for profit is carried on in the course of the actual carrying out of the primary purpose of the trust or institution”. In the case of P.C.Raja Ratnam Institution Vs Municipal Corporation of Delhi and Others and another connected cases reported in 1990 (Supp) SCC 97, the Hon’ble Supreme Court observed that the fact some fee is charged from students is also not decisive in the test of ‘charitable purpose’, which is satisfied by the proof of any of the three conditions, namely, relief of the poor, education or medical relief. In the case of T.M.A.Pai Foundation and Others Vs. State of Karnataka and Others reported in (2002) 8 SCC 481, it is held that imparting education is essentially charitable in nature and is a kind of service to the community. Thus, it is clear that the educational institution run by the appellant is ‘charitable institution’ as prescribed by APERC under LT-VII notwithstanding collection of fees.
13. For the reasons mentioned above, Ombudsman is of the opinion that S. C. Nos. 1402-3598, 0701-1921, 0701-3599 and 1402-10639 of the appellant’s institution are entitled to be categorized under LT Category-VII and accordingly, the said issue is answered in favour of the appellant.
14. Having answered the issue that the four service connections of the appellant’s institution are entitled to be categorized under LT-VII Category as mentioned supra, the further question that falls for consideration of the Ombudsman is the date from which the appellant is entitled for such relief. In the ‘Memorandum of Appeal’ the appellant sought a declaration that its service connections are entitled to be treated as LT-VII Category w.e.f. 28-6-2007, the date on which it submitted application to respondent No.2 for change of category. Except stating that the appellant is not entitled for change of category from II to VII in respect of its four service connections, the respondents have not disputed submission of the application by the appellant for change of category.
15. Whatever it may be, Ombudsman is of the opinion that delay with regard to change of category from LT-II to LT-VII by the respondents is due to bonfide belief that the appellant is using the supply for the purpose of teaching as a paid service and the element of charity is missing. As there is no extraneous consideration in not taking action on the part of respondents with regard to change of category, Ombudsman is of the opinion that interest of justice will be met if the respondents are directed to collect CC charges in respect of above mentioned four service connections of the appellant under LT-VII category from the billing month of October, 2008.
16. Accordingly, the Vidyut Ombudsman directs the respondents to categorise S. C. Nos. 1402-3598, 0701-1921, 0701-3599 and 1402-10639 of the appellant’s institution under LT –VII Category and collect CC charges in respect of such service connections as per the tariff applicable to LT-VII category from the billing month of October, 2008.
17. If the above mentioned award (in paragraph 15) is acceptable to the appellant herein, it is required to send a ‘Letter of Acceptance’ to respondent No. 1 herein (with a copy to respondent No.4) stating that the award is in full and final settlement of it’s claim, within one month as required under sub-clause 6 of clause 12 of Regulation 1 of 2004. After receipt of such ‘Letter of Acceptance’ from the appellant, the respondents are directed to comply the award within 15 days from the date of receipt of such letter from the appellant and intimate compliance of the award to the Vidyut Ombudsman
18. Accordingly, the order dated 25-01-2008 passed by the Forum in C.G.No. 30 / 2007-08 / Hyderabad West (R.R.North) Circle is set aside and the appeal is allowed partly to the extent mentioned in paragraph-16.