BEFORE THE VIDYUT OMBUDSMAN
Present
K.Rajagopala Reddy, Director (Law) and
Vidyut Ombudsman
Dated : 30-08-2008
Sri.C.Srinivasa Rao,
Prop.M/s.Jagadeeswari
Ice Factory,
Vijayagoplapuram,
Nellore … Appellant
1. The Assistant Accounts Officer/ERO /
APSPDCL / Nellore Town.
2. The
Divisional Engineer/ Operation/APSPDCL/Nellore.
3. The Accounts Officer / Revenue,C.O /
APSPDCL / Nellore
4. The Superintendent Engineer/Operation /
APSPDCL / Nellore
… Respondents
The ‘Memorandum of Appeal’ dated ‘nil’ filed by the
appellant (received on 07.03.2008) has come up for final hearing before the
Vidyut Ombudsman on 11.08.2008 in the presence of the appellant and Sri
B.Srinivasan, Advocate for appellant and Sri.B.Krishna Reddy, AAO / ERO / T /
NLR, Sri.N.V.S.Subba Raju, DE / O / NLR, Sri.P.V.Ramana Reddy, i/c AO / R / CO
/ NLR and Sri.V.A.Narayana Rao, SE / O / NLR 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 APSPDCL (for short the “Forum”) in C.G. No. 46 / 2007-08
/ Nellor Circle dated 30.01.2008, the appellant filed ‘Memorandum of Appeal’
mentioned supra stating that: .
(i) the appellant is the proprietor of a
registered partnership firm under name and style of M/s.Jagadeeswari Ice
Factory and the firm applied for rebate of 25% of Power tariff based on the
certificate issued by the District Industries Office, Nellore.
(ii) Upon verifying the certificates and on
scrutiny of all the documents, respondent No.4 issued proceedings
S.E.O/NLR/AO/RJAO/DT/02/D.No.1741/96; dt: 24.06.1996 stating that the appellant
is entitled to 25% rebate on monthly energy charges, for three years with
effect from 01.04.1996 to 31.03.1999, which is as per the Government Orders
issued from time to time.
(iii) However, respondent No.4 without any
prior notice to the appellant herein issued proceedings in L.R.No.S.E.(O) / NLR
/ 2358 / 97, dt. 01.09.1997 stating that as per B.P.Ms.No. 51 24.05.1993 and
read with Board Memo dated 27.09.1995 rebate is admissible for certain selected
new industries for a period of three years from the date of commencement of
production or from the date of supply whichever is earlier. Further, it is
stated that as S.C.No.39060 is released on 25.03.1988 for oil rotary and
subsequently changed into manufacturing ice blocks w.e.f.01.04.1996, that three
years period from the date of supply is over by 24.03.1991 and accordingly, the
oil rotary is not eligible for 25% rebate. Therefore, respondent No.4 cancelled
the rebate sanctioned to the appellant, which is contrary to the G.O.Ms.No.11
dt:16.01.1997 issued by the Government of Andhra Pradesh.
(iv) Aggrieved by the said order, the
appellant herein filed W.P.No.23493/1997 before the Hon’ble High Court of A.P.
wherein the Hon’ble Court was pleased to suspend the above mentioned order on
imposing some conditions and the same were complied by the appellant and the
supply was restored. The said Writ Petition was finally disposed off on
31.01.2007 with a direction by setting aside the order dt.01.09.1997 passed by
the Respondent No.4 and remitted the matter back for fresh consideration to the
Respondent No.4, who was further directed to consider the objections to be
submitted by the appellant in this regard.
(v) Even though explanation was submitted on
24.02.2007, Respondent No.4 has not passed any order for a long period. Then all of a sudden the appellant herein
received a letter from respondent No.1 vide A.A.O./E.R.O./Town/NLR/JAO/NS/BS/
D.No.939/2007;dt:17.07.2007 stating that “as the industry is not new one and
only the nature of industry changed and as there is no sale of property,
extension of 25% rebate to the Industry does not arise” and requested the
appellant to arrange for closing
balance amount. Thereafter, another letter dated 26.10.2007 was received from
respondent No.4 reiterating that 25% rebate cannot be waived. The above mentioned
proceedings were issued unilaterally by diverting the issue and to evade the
eligibility of the appellant for rebate.
(vi) When the appellant obtained the
information under Right to Information Act, he came to know that respondent No.
4 admitted transfer of title and formation of new industry and requested the
Corporate Office to clarify the accounting procedure for granting 25% rebate as
the said scheme is not in existence at present. The Corporate Office, instead
of clarifying the position, raised a new plea which is not known to the appellant.
(vii) the appellant submits that right from the
beginning his case is that he started industry after obtaining SSI Certificate
from the District Industries Department. Based on such certificate, respondent
No.4 as long ago as on 14.06.1996 sanctioned 25% rebate, but cancelled the same
by proceedings dated 01.09.1997. Eventhough, the Hon’ble High Court of A.P.,
while setting aside the above mentioned proceedings, directed respondent No.4
to receive the objections of the appellant and consider the matter afresh, the
said respondent No.4 issued final proceedings dated 26.10.2007 without
considering the SSI certificate, which is not cancelled. The said proceedings
issued by respondent No.4 is not a speaking order and it does not contain the
points raised by the appellant.
(viii) in the light of the above factual position, the appellant challenges the order of the Forum below dated 30.01.2008 on the grounds that (a) the same is contrary to law, weight of evidence and probabilities of the case; (b) the Forum wrongly rejected the claim of the appellant and did not apply judicial mind in scrutinizing and understanding the G.O’s and other material papers; (c) the Chairperson and the 2nd Member of the Forum only kept the interest of the department of the respondents in their mind, but not the welfare of the consumer and failed to extend the eligibility provided by the Government.
(ix) Moreover, the respondent No. 4 did not follow the orders of the Hon’ble High Court and failed to pass a detailed speaking order and rejected the claim of the appellant without assigning any reasons.
(x) Hence, it is prayed that this Hon’ble Vidyut Ombudsman may be pleased to (a) set aside the order of the Forum dt: 30.01.2008 passed by it in C.G.No.46/2007-08 / Nellore as well as that of the respondent No. 4 by allowing the appeal and pass consequential relief of sanctioning eligibility of concessional tariff of 25% as per G.O.Ms.No. 11, dated 16.01.1997 and (b) to pass such other relief as deemed fit and proper in the circumstances of the case.
3. 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. In
pursuance of the same, respondents were intimated of the filing of the appeal /
representation by notice dated 10.03.2008.
4. In pursuance of the notice referred to above, respondent No.1 filed para-wise reply dated 11.03.2008 stating that:.
(i) Previously S.C.No. 39060 pertains to Rajarajeswari Oil Rotary. The industry of the appellant manufactures ice block, but it is not a ice cold storage plant.
(ii) In his proceedings dated 24.06.1996, respondent No.1 granted 25% rebate to M/s Jagadeswari Ice Factory, S.C.Nos.39060 N2 on the condition that “the rebate now granted is liable for cancellation / modification if admissible at a later date”. Hence, respondent No.1 is empowered to cancel the said rebate. Sanction of loan facility to the industry by the bank is un-connected to the company of the respondents.
(iii) As per proceedings vice CE/Comml/PO2/25% Rebate/1770/75 dated 27.07.1995, 25% power rebate is applicable for new industry for a period of 3 years from the date of going into regular production or from the date of supply whichever is earlier. S.C.No. 39060 was released on 25.03.1988 and the three years period from the date of supply was over by 24.03.1991 and hence, the appellant is not eligible for such rebate.
(iv) In view of the above, cancellation of rebate is valid and as per law. The appellant is not entitled to question the same. As per the interim order of the Hon’ble High Court, 50% of the 25% rebate was paid by the consumer and supply was restored. Further, as per the directions of the court, the objection of the appellant was considered, but the same was not considered by the department of the respondents. Consequently, final order dated 17.07.2007 was passed.
(v) The company of the respondents came to the conclusion that the industry of the appellant is not a new one and hence not eligible for 25% power rebate. As per B.P.Ms.No.51, dated 24.04.1993, 25% rebate is admissible for new industries.
(vi) the appellant represented for waival of surcharge and the Forum below in C.G.No. 71/07-08, which ordered that “the surcharge on the cancellation amount shall be collected from 26.11.2007 only as per the judgment of the Hon’ble High Court”. Accordingly, the surcharge levied is withdrawn.
5. In response to the para-wise remarks of respondent No. 1, the appellant submitted a reply dated 02.05.2008 reiterating the various contention mentioned ‘Memorandum of Appeal’ referred to above and further stating that
(i) Rajarajeswari Oil Rotary became defunct
and the appellant changed the line of activity and applied for change of load
to start ice factory and submitted application. Respondents sanctioned the same
service connection which was given to the said Rotary to M/s.Jagadeeswari Ice
Factory under new agreement. So the said Factory is a new industry which is
registered as a SSI unit. Thus, Jagadeeswari Ice Factory is a new industry. It
is only respondents who gave S.C.No.39060 to the said Factory.
(ii) General subsidy was also released by the
State Government to the appellant industry, which clearly shows that it is a
new industry. It is also certified as a new industry by the District Industries
Manager in his certificate dated 15.05.1996. Hence, the appellant is eligible
for 25% rebate. Thus the conclusion arrived at by the company of the
respondents that the industry is not new industry is against law.
(iii) It is true that the appellant herein
approached the Forum below in C.G.No.71 / 2007-08 as stated by respondent No.1
in his para-wise remarks. The respondents claimed entire subsidy amount of 25%
rebate, which belong to the appellant, from the State Government. Again the
respondents collected the same from the appellant, eventhough, they have not
given subsidy to the appellant. Thus the company of the appellant is having
amount collected from the Government as well as from the appellant.
6. Inspite of the best efforts made by the
Ombudsman, the matter could not be settled by mutual agreement between the
parties. A copy of the reply dated 02.05.2008 referred to above submitted by
the appellant was sent to the respondents for information. Along with letter
dated 23.05.2008, the appellant submitted a copy of (a) judgment delivered by
the Hon’ble High Court of A.P. reported in 2008 (2) L.S.61 and (b)
G.O.Ms.No.108 Industries & Commerce (IP) Department, dated 20.05.1996
7. The appellant as well as his council,
Sri.B.Srinivasan, respondent Nos. 1 to 4 were present during the hearing on
11.08.2008. Heard the arguments of both the parties. During the hearing, the
appellant submitted written submissions reiterating various contentions
referred in detail above.
8. The point that arises for consideration
is whether “the order dated 30.01.2008 passed by the Forum below dismissing the
complaint of the appellant in C.G.No. 46 / 2007-08 / Nellor Circle is
sustainable under law ?”.
9. Perused the record and after
considering the arguments of the parties concerned, the Ombudsman is of the
opinion, that the entire issue revolves around the fact whether M/s
Jagadeeswari Ice Factory set up by the appellant is a new industry and as such
it is eligible for 25% rebate as vehemently contented by the appellant or that
it is not a new one and as such it is not eligible for any rebate as equally
opposed by the respondents. It is an admitted fact that in the first place, the
appellant set up Oil Rotary in the name of Raja Rajeswari Oil Rotary, which
subsequently became defunct and the appellant changed line of activity and set
up an ice factory, viz., M/s Jagadeeswari Ice Factory. Consequently, the
appellant applied for change of load, entered into a new agreement for supply
of electricity to the said ice factory with the company of the respondents,
which sanctioned old S.C.Number of the oil rotary to the new ice factory.
10. In this connection it is necessary to
refer to the judgment of the Hon’ble High Court of A.P. in the case of M/s
Ashwin Agro Tech (P) Ltd., vs. Govt of A.P. relied upon by the appellant. There
is a fundamental difference between the above mentioned case and that of the appellant
herein. Ms/ Ashwin Agro Tech (P) Ltd purchased a sick unit from APIDC in an
auction and took steps for establishing an industry of its own and availed
power supply after paying necessary charges. But when the said company applied
for grant of rebate after availing eligibility certificate, the power utility
concerned rejected the said request on the ground that a new owner is not
eligible for sanction of 25% on power tariff stating that the M/s Ashwin Agro
Tech (P) Ltd., is set up in an old industry. In the case on hand, an Oil Rotary
industry was established in the premises under a partnership firm and
subsequently, the appellant changed line of activity and established ice
factory replacing oil rotary and applied for change of industry and contracted
load.
11. Notwithstanding such difference, the
judgment delivered by the Hon’ble High Court in the above mentioned case
squarely applies to the case of the appellant herein. In this connection it is
necessary to refer to paragraph -10 of the judgment reported in 2008 (2) L.S.
61 wherein it is stated that “I am of the
considered opinion that merely because new industry is established in a
premises in which another industry was run therein earlier, it would not become
an old industry. If the petitioners started the same business by making use of
the same machinery in the premises purchased by them, it can be said that the
industries set up are not new industries. Petitioners in both these cases claim that they, after purchase
of the premises, dismantled the earlier machinery and established new machinery
after obtaining loans and started new industries. So, for all practical
purposes they are newly established industries. For determining whether an
industry is a new industry for being entitled to the benefit of G.O.Ms.No. 108,
it is not necessary that it should be established in a newly constructed
building. Just like an old industry shifted into a new building would not
become a new industry, a new industry set up in an old building does not become
on old industry”.
12. Admittedly, the appellant altogether
changed line of business. In other words, the appellant did not start same
business after Oil Rotary industry became defunct, but set up an ice factory in
the same premises. Therefore, such ice factory is a new industry, as observed
by the Hon’ble High Court of A.P. Moreover, the appellant got registered the
industry as a Small Scale Unit vide SSI No. 011607455 and the Industries
Department issued eligibility certificate for 25% rebate vide L.Dis. No. 2006 /
B3 / 1996 dated 15.05.1996. For the said reason, the contention of the
appellant that the ice factory, which was registered as a SSI unit under
certificate issued by the District Industries Office, is a new industry, is
accepted by the Ombudsman.
13. For the said reason, this appeal is
allowed by setting aside the order dated 30.01.2008 passed by the Forum in
C.G.No. 46 / 2007-08 / Nellore Circle. Further, the proceedings of respondent
No. 4 canceling the rebate of 25% tariff earlier granted to the appellant for
his ice factory, is also set aside. The respondent(s) are directed to grant the
benefit 25% rebate for a period of three years from the date of establishment
of ice factory and the payments already made by the appellant, if any, shall be
adjusted in the future bills to be paid by the appellant.