VIDYUT OMBUDSMAN
4th Floor, Singareni Bhavan,
Red Hills, Hyderabad –500 004.
K.Rajagopala Reddy, Director (Law) and
Vidyut Ombudsman
Between
Indian Oil Corporation Limited,
Marketing Division, Indane Bottling Plant,
Cherlapally, Hyderabad – 500 051. …Appellant
(rep.by Sri. S.Sekhar, Senior Plant Manager)
2. Chief General Manager /Expenditure / APCPDCL / Corp. Office / Hyd
3. General Manager /Customer Service/ APCPDCL / Corp. Office / Hyd
... Respondents
The representation dated 07.12.2006 of the Appellant has come up for final settlement before the Vidyut Ombudsman on 05.12.2007 in the presence of the representatives of the appellant and respondents and stood over for consideration till this day, the Vidyut Ombudsman passed/issued the following:
AWARD
Aggrieved by the order dated 23.10.2006 of the Forum for the Redressal of Consumers Grievances of APCPDCL (for shot Forum) in C.G.No.29/2006-07/ R.R.(North) Circle, the appellant herein filed representation (appeal) requesting the Ombudsman to intervene and direct the respondents to charge Industrial tariff instead of Commercial tariff for its Bottling Plant. Earlier, the Forum after considering the complaint dated 07.09.2006 filed before it by the appellant herein, disposed off the same stating that the said complaint does not fall under the jurisdiction of the Forum as there is neither deficiency in supply nor in service. Further, the Forum in its order mentioned supra also stated that it shall not adjudicate any matter shown pending consideration before any Court, Tribunal or Arbitrator or any other Forum.
2. On 28.03.2007, the appellant submitted copy of National Industrial Classification (All Economic Activities), 1998 published by Central Statistical Organization, Department of Statistics, Ministry of Planning and Programme Implementation, GoI to state that LPG Bottling Plant has been classified as ‘Industry’ as per sub-clause 23203 (Page-33).
3. On behalf of the appellant herein, written arguments dated 05.04.2007, is filed requesting the Ombudsman to quash the decision of the Forum, to re-categorize the tariff of the appellant under the Category-I with retrospective effect from March, 2004 and to direct the respondents to refund excess amount collected from the appellant, together with the interest. In the said written arguments it is stated that :-
a) The bottling plant of the appellant is in operation from the year 1999 and is one of the major customers of the respondents organization. The said plant is presently charged under Category-II and several representations were made during last two years to revise the tariff to Category-I.
b) The Hon’ble High Court of Kerala in W.P. No. 34322 / 2003 held that after enactment of the Electricity Act, 2003 the Board does not have power to decide whether one industry is coming under Industrial tariff or Commercial tariff and the Regulatory Commission alone has power to decide such categorization. A copy of the judgment reported in ILR 2006 1 KER 162 is filed. In the light of the above it is contended that re-categorization by the respondents company is illegal and is liable to be set-a-side.
c) It is the cardinal rule of law that one party to an agreement cannot unilaterally change the terms and conditions of an agreement and any change made is null and void. The appellant herein entered into an agreement with the predecessor of the respondents company herein at the time of taking electric connection, as per which the former is classified under Industrial tariff. The act of respondents company changing the terms unilaterally is illegal and is liable to be quashed.
d) The activities in a bottling plant fall under industrial activity. The appellant is an ‘industry’ coming under Industrial Disputes Act and ‘factory’ under the Factories Act, but is not a shop or establishment under Shops and Establishment Act. The appellant is issued different licenses by various statutory authorities evidencing that its bottling plant is an industrial concern. Similarly, Central Government also classified LPG bottling plants as falling under definition of industry. It is a cardinal rule of law that the provisions in different Acts should be harmoniously construed. Once Central Government has classified LPG bottling plant as an industry, the State Government cannot take a narrow interpretation and classified it under ‘Commercial’ establishment. Any interpretation in conflict with the classification made by Central Government hence liable to be quashed by the competent courts.
e) As per definition of ‘Industry’ in the Factories Act, “Industrial purpose shall mean manufacturing, processing and / or preserving goods for sale” and therefore, the appellant is entitled to be classified under ‘industrial’ category.
f) The appellant is a public sector organization involved in receipt of bulk LPG from refineries, storing in pressure vessel, bottling in cylinders and distributing to market through distributors, the appellant being a Central Government undertaking is eligible to get the benefit of ‘industrial’ tariff.
g) Tamilnadu Electricity Regulatory Commission classified LPG bottling plant at Chennai as falling under Category-I. Same is the case in other States like Karnataka.
4. Heard arguments of the representatives of the appellant as well as the respondents.
5. The short point that falls for consideration before the Ombudsman is “whether the order dated 23.10.2006 passed by the Forum below is in order or suffers from any defect.”
6. As seen from the order dated 23.10.2006, the Forum framed three issues. Issue No.1 that fell for consideration before it is ‘whether the subject issue falls within the jurisdiction of the Forum?’. While addressing the said issue, the Forum concluded that the subject issue does not fall under its purview as there is no deficiency in service or supply as per Clause 2 (d) of APERC (Establishment of Forum and Vidyut Ombudsman for redressal of grievances of the consumers) Regulation, 2004 (for short, ‘Regulation No. 1 of 2004).
7. Clause 2 (d) of Regulation No. 1 of 2004 reads as follows:
“Complaint” means the letter or application filed with the Forum seeking redressal of grievances concerning the supply of electricity or the services rendered by the license”
8. The Forum below did not state as to how in the subject matter of the complaint dated 07.09.2006 filed before it, there is no deficiency of service or supply as per Clause 2 (d) of Regulation No. 1, but in one sentence concluded that the subject issue does not fall under its purview. When the appellant herein (complainant before the Forum), in its complaint dated 07.09.2006 stated that an unilateral decision is taken by the respondents to revise category from I to II, explained as to how its Bottling plant would have been charged under Category-I, etc., it amounts to seeking redressal of grievance concerning supply of electricity or the services rendered by the respondents herein. Therefore, the finding of the Forum below on Issue No.1 is devoid of merits and the same is set aside as not sustainable.
9. Issue No. 2 and Issue No. 3 framed by the Forum are ‘whether the complaint (dated 07.09.2006) is tenable?’ and ‘Is the classification / categorization of the HT Service No. RRN-826 under Category-II in order?’ respectively. The Forum below dealt these issues together and stated that since the complainant therein filed petition before APERC for consideration of re-categorization of tariff under HT-I and that the matter is sub-judice, the complaint is not tenable before the Forum.
10. In the complaint filed before the Forum, it is stated that the appellant herein submitted representations to the Andhra Pradesh Electricity Regulatory Commission (APERC) and in reply, the Secretary of APERC advised the appellant to appeal before the Commission in response to the public noticed by Distribution Companies in tariff proposals for the year 2006-07. Simply because the appellant participated in the public hearing conducted by the Commission on 22.04.2006 at Kurnool and also submitted representations to the Commission in course of tariff fixation for the distribution licensees, it cannot be stated that the matter sought to be agitated by the appellant herein (complainant before the Forum) is sub-judice and should not be adjudicated by the Forum.
11. One of the functions of APERC is to determine the tariff for supply, transmission, wheeling and retail sale of electricity. While determining such tariff, it is mandatory for APERC to follow certain procedure, including publishing application(s) filed by licensee(s) for determination of tariff and consider suggestions and objections received from the public. Suggestions and objections (representations) of different stakeholders, including the consumers, submitted to APERC during the process of determination will be examined in the context of determination of tariff and for arriving at Annual Revenue Requirement of licensees concerned. While doing so, the Commission may take into consideration, suggestions and objections of consumers of electricity relating to categorization, which may have a bearing on determination of tariff. Such proceedings relating to determination of tariff by the Commission is not an appropriate forum for redressal of individual grievances concerning supply of electricity or the services rendered by (distribution) licensees. Thus the Forum below is not correct in stating that it shall not adjudicate any matter shown pending consideration before any Court, Tribunal or Arbitrator or any other Forum. The reasoning given by the Forum below for arriving at decision on Issue Nos.2 and 3 are not correct. Redressal of specific and individual grievances concerning supply of electricity or the services rendered by the licensee, Forum for Redressal of Grievances of Consumers established under Regulation No. 1 of 2004, including the Forum below, are only competent to decide.
12. As the matter sought to be agitated by the appellant herein relates to categorization of supply of electricity by distribution licensees, including the respondent company herein, based on tariff orders passed by APERC from year to year, the Ombudsman is of the opinion that remanding the matter to the Forum below for re-examination of the grievance sought to be agitated by the appellant herein in the light of the observations made above is not necessary. Instead, the Ombudsman is also of the opinion that interest of justice would be met if it proceeds to examine the merits of the representation (appeal) filed by the appellant to settle its grievance.
13. As per the different Tariff Orders passed by APERC, especially for FY 2003-04 and for subsequent years, HT category-I tariff is applicable for supply of electricity to all HT Industrial consumers, and it is further clarified that industrial purpose shall mean manufacturing, process and/or preserving goods for sale, but shall not include shops, Business Houses, Offices, Public Buildings, Hospitals, Hotels, Hostels, Choultries, Restaurants, Clubs, Theatres, Cinemas, Railway Stations and other similar premises not withstanding any manufacturing, processing or preserving goods for sale. HT Category-II tariff is applicable to all HT consumers other than those covered under other HT categories.
It is the contention of the respondents that the order dated 23.08.2005 of Tamilnadu Electricity Regulatory Commission is not applicable in this case as categorisation done by A.P.Electricity Regulatory Commission is mandatory for APCPDCL.
14. In response to the inviting suggestion/objection of determination of retail supply tariff for the year 2007-2008 for the distribution licensees, including that of respondent company, the appellant herein represented by Sri S.Sekhar, participated in person, in the tariff determination process as indicated in Annexure-J (page 252) appended to the Tariff Order passed by the Commission on n20.03.2007 for the FY 2007-08. On behalf of the appellant herein and other similarly placed units as that of appellant, it was represented before the Commission that classification of oil depots and bottling plants should be converted from HT Category-II to HT Category-I as they are licensed under Factories Act, 1948 as mentioned at page 27 of the above said Tariff Order. The Commission after carefully analysing the different issues that came up before it, during the process of determination of retail supply tariff including classification of oil depots and bottling plants as stated above, came to the conclusion that “ the electricity consumer classification and categorisation for the purpose of levy of electricity charges are made on the basis of the purpose of the use of the electricity, and are not related to the classification made by various governments for some other purpose. Thus, as earlier also stated by the Commission in para 305 of its Tariff Order for 2005-06, the electricity consumer classification and categorization for the purpose of electricity charges are made on the basis of the purpose of use of the electricity, and are not related to the classification made by different departments of State Government or Central Government for some other purpose. Thus the classification followed either in State Government, or in other States is not a guiding principle for fixation of tariff for any particular class of consumers. The Commission, however, recognizes the cardinal principle that any reasonable classification should have a rationale that has nexus to the objective sought to be achieved by such classification. From this point of view, the Commission believes that activities of all the above classes of consumers have to be treated only as commercial activities and be classified as such.” (Para 220 at pages 89 & 90 of Tariff Order on Retail Supply Business for the year FY 2007-08 dated 20.03.2007 of APCPDCL, APEPDCL, APNPDCL and APSPDCL issued by APERC).
15. The judgment relied upon by the appellant will not help its cause for the simple reason that the categorization for purposes of tariff is being done by APERC. In terms of such classification done by the Commission, respondents have interpreted that the service connection of the appellant falls under HT category-II. Categorization as such is not done by respondents. In view of the above, the further contention of the appellant that unilateral amendment to the terms and conditions in the agreement / contract for supply of electricity is illegal is not correct.
16. The next contention of the appellant that bottling plant comes under definition of industry under all statutes, is also not correct. As per the own admission of the appellant herein itself is ‘industry’ coming under Industrial Disputes Act and ‘factory’ under the Factories Act. The definition of the words ‘industry’ and ‘factory’ as defined in the enactments concerned referred to above are applicable to the enactments concerned under which they are defined. By any stretch of imagination, it cannot be said that definition of industry applies universally to different legislations.
17. The Contention of the applicant is that one party to an agreement cannot unilaterally change the terms and conditions of an agreement and that any change made is null and void. Agreements/contracts relating to supply of electricity entered by Distribution Licensees with consumers of electricity are take or leave contracts and uniformly apply to all the consumers of one particular category. As mentioned above, categorization of different types of consumers is being done by A.P.E.R.C. Further, the contention that once Central Govt has classified LPG bottling plant as industry, the State Govt. cannot take a narrow interpretation and classified consumers like the applicant herein under ‘commercial’ establishment is not correct. For the simple reason that the power of categorization of electricity consumers is not within the perview of State Government. In fact it is within the perview of A.P.Electricity Regulatory Commission.
18. For all these reasons, the Ombudsman is of the opinion that there are no merits in the above contentions raised by the appellant and for that reason direction cannot be given to respondents to charge the appellant under ‘Industrial’ tariff instead of ‘Commercial’ tariff for its bottling plant. Hence the representation (appeal) preferred by the appellant herein is dismissed.
This order is corrected and signed on 12th day of December, 2007.
Sd/-
VIDYUT OMBUDSMAN