ANDHRA PRADESH
ELECTRICITY REGULATORY COMMISSION
HYDERABAD
Sri.K.Swaminathan, Chairman
Sri. Surinder Pal, Member
O.P. No. 22 of 2005
Between
South
Central Railway,
Rail
Nilayam, Secunderabad,
Rep
by its Chief electrical Engineer …
Petitioner
1.
Transmission Corporation of Andhra Pradesh Ltd,
2.
Eastern Power Distribution Company of A. P. Ltd,
3.
Central Power Distribution Company of A. P. Ltd,
4.
Northern Power Distribution Company of A. P. Ltd.
5. Eastern Power Distribution Company of A. P. Ltd … Respondents
This petition coming on for hearing on 01.04.2006 in
the presence of Sri R.P.Prajapati, Deputy Chief Electrical Engineer, for the
Petitioner and Sri. P.Shiva Rao, Advocate, for the Respondents and having stood
over for consideration to this day, the Commission delivered the following:
O R D E R
This is a petition praying the Commission to direct
the Respondents No.2 to 5 to exempt the petitioner from payment of Security
Deposit or, alternatively, accept post-dated cheques as reasonable security in
lieu of Security Deposit.
2. The petitioner did not mention the
provision of law under which it has filed the petition herein. The brief
averments mentioned in the petition filed by the petitioner are as follows:
(i) The petitioner is a bulk consumer of
electricity transmitted by Transmission Corporation of Andhra Pradesh Limited
(for short, ‘APTRANSCO’) and
distributed by the distribution licensees of Andhra Pradesh (for short,
‘DISCOMs’), the Respondents herein, at 132 KV at 27 traction sub-stations of
the petitioner for working trains hauled by electric locomotives. The petitioner contributes substantial
portion of its revenue towards electric supply. It draws consistent load
throughout the year and never defaulted in payments.
(ii)
Petitioner was exempted by the
Government of Andhra Pradesh (for short,
‘GoAP’) from maintaining Consumption Deposit as security for the
Vijayawada-Madras section of the railways vide G.O.Ms. No. 379, dated
16.09.1980 u/s 78 (A) of the Electricity (Supply) Act, 1948.
(iii) The erstwhile Andhra Pradesh State
Electricity Board (for short, ‘APSEB’)
continued to exempt the petitioner from payment of Consumption Deposit for
traction sub-stations in Vijayawada – Balharshah section vide B.P. Ms. No. 242
dated 28.03.1988 in lieu of APSEB availing “weight only system” of booking of
coal. Similar exemption was also granted by APSEB for traction and non-traction
loads of petitioner in future, subject to the petitioner exempting APSEB from
payment of security or other deposits for availing “weight only booking coal”
vide B.P.Ms.No. 977 dated 11.09.1989.
(iv) After formation of DISCOMs, however, they
are not honouring the earlier commitments of their predecessor-in-title, viz.,
APSEB and the Respondents No.2 to 5 have issued several demand notices to the
petitioner for payment of Consumption Deposit.
(v) It is implied in Section 47 of the
Electricity Act, 2003, that a long-standing consumer who has never defaulted in
payment can be exempted from payment of Security Deposit. The Petitioner’s
proposal to issue post-dated cheques in favour of respective DISCOMs for
amounts equal to 90% of the previous months’ actual consumption as “reasonable security” was not accepted by
Respondent No.1, the nodal agency. The Director (RA&C) of Respondent No.1,
in his letter dated 23.02.2005, citing that Terms & Conditions of Supply
required the Petitioner to make payment equivalent to 2 months’ current
consumption charges in advance towards Consumption Deposit, requested the
Petitioner to co-operate with the Respondents and make payment of Consumption
Deposit as per the prevailing terms and conditions of supply.
(vi) The Petitioner, being a Central
Government Department, and all arrangements being on behalf of the President of
India, advance payment in cash is not necessary. The petitioner is promptly
paying energy bills within stipulated time without any single case of
default. It is in the subsidizing
category of consumers and is paying about Rs.170 crores towards cross-subsidy.
The demand for Additional Consumption Deposit aggregating to Rs.90 crores is an
extra financial burden to the petitioner.
(vii) Therefore, it is requested that the
Commission may modify its Regulation No. 6 of 2004 (on Security Deposit to be
paid by consumers to the Distribution Licensee for the Energy Supplied and for
providing of Electric Line / Electrical Plant / Electric Meter) and exempt the
petitioner from maintaining the Security Deposit. Alternatively, it is prayed
that the Respondent No.2 to 5 may be directed to accept post-dated cheques as
reasonable security within the discretion of respective DISCOMs.
3. Respondents No.2 to 5 filed individual
counters / replies opposing the petition. Broadly, their contentions are as
follows:
(i) Exemption from payment of Consumption
Deposit extended to the Petitioner by the erstwhile APSEB was based on certain
mutual commercial arrangements between them and in consideration of orders
issued by the GoAP vide G.O.Ms.No. 379 dated 16.09.1980. Consequent to
unbundling of the power sector, however, as per the Andhra Pradesh Electricity
Reform Act, 1998, functionally distinct entities like Generation Corporation of
Andhra Pradesh (for short, ‘APGENCO’),
APTRANSCO and DISCOMs which are responsible for undertaking specific functions
like generation, transmission and distribution of electricity, respectively, were
formed. They have independent balance sheets and are bound to comply with the
accounting practices as per the Companies Act, 1960.
(ii) The Petitioner submitted a proposal to
Respondent No.1 to enter into a tripartite agreement with APGENCO on “Weight
Only System” and after thorough examination of the issue, it has been concluded
that Consumption Deposit and Additional Consumption Deposit should be collected
from the Petitioner because APGENCO, APTRANSCO and DISCOMs are different
entities and that inter-corporate financial adjustment of deposits with the
deposit required for booking of coal under the ‘Weight Only System’ is neither
possible nor permissible.
(iii) As a uniform policy, demand is raised
towards Consumption Deposit against all HT consumers including State Government
services, Central Government services, etc. which had been previously exempted
by the erstwhile APSEB from maintaining Consumption Deposit.
(iv) DISCOMs have appreciation for consumers
who pay electricity bills promptly, but any deviation from the uniform
procedure of demanding Security Deposit and Additional Security Deposit would
burden the licensees adversely keeping in view the large number of consumers
who make payments promptly.
(v) The periodicity of the billing with respect
to the Petitioner is 30 days. The due date for payment of bills expires after
15 days from the date of bill and the notice period of disconnection expires
after 15 days from the due date of payment as per Regulation No.5 of 2004
(Electricity Supply Code) issued by the Commission. Therefore, keeping in view
the material value of the supply of electricity, the requirement of keeping two
months’ consumption charges as Security Deposit with the licensee is reasonable
and fair.
(vi) Accordingly, the petition filed by the
petitioner is devoid of merits and it is prayed that the same may be dismissed.
4. On the date of hearing, i.e., on
01.04.2006, the Deputy Chief Electrical Engineer who represented the petitioner
reiterated the averments made in the petition and further stated that:
(i) Long
prior to the mutual agreement between the petitioner and the erstwhile APSEB,
the GoAP exercising power u/s 78(A) of the Electricity(Supply) Act, 1948,
had directed APSEB not to collect
energy consumption deposited from the petitioner for the works pertaining to
energisation of Vijayawada – Madras Section vide G.O.Ms.No.379 dated
16.09.1980. As seen from the G.O., such facility was granted by GoAP in the
larger interest of the State.
Thereafter, APSEB exempted the petitioner from payment of Consumption
Deposit and Additional Consumption Deposit in respect of 7 traction
sub-stations between Vijayawada – Balharsha Section, vide B.P.Ms.Nos.242 and
513 dated 28.03.1989 and 25.05.1989 respectively. In the same year, viz., 1989, APSEB issued orders for waiver of
collection of Consumption Deposit and Additional Consumption Deposit for
traction and non-traction loads of the petitioner, subject to the petitioner
exempting APSEB from payment of
Security or other deposits for availing
‘Weight only Booking of Coal’ for the then existing as well as any future
demand of coal for the existing as well as for all future Thermal Stations and
also Security Deposit for availing of Credit Note facility and any other such
Security Deposit in future, vide B.P.Ms.No.977 dated 11.09.1989 issued by
APSEB.
(ii) As
seen from the above, the mutual consideration between the petitioner and the
erstwhile APSEB came into vogue long after GoAP directed the erstwhile APSEB not
to collect Consumption Deposit from the Petitioner without any favour in return
by the Petitioner to APSEB. The GoAP in
its order dated 16.09.1980 referred to above had stated that Consumption
Deposit is primarily intended as a safeguard against consumers who default or
delay in making current consumption charges. As the petitioner never defaulted
in paying consumption charges at any time and in the larger interest of the
State, GoAP thought it fit to exempt the petitioner from payment of Consumption
Deposit.
(iii) As
on date also, the petitioner has never defaulted in payment of consumption
charges. Therefore, the petitioner may be exempted from maintaining Security
Deposit with Respondents No.2 to 5.
Moreover, the petitioner is represented by the President of India and
liquidity is never a problem with the sovereign power of Union of India. Alternatively, the petitioner is prepared to
give post-dated cheques for 90% of the consumption.
(iv) For
all these reasons and the reasons mentioned in the petition, it is prayed that
Respondents No.2 to 5 may be directed to exempt the petitioner from payment of
Security Deposit or alternatively to accept post-dated cheques in lieu of
payment of Security Deposit in cash.
5. In
response, the counsel for the Respondents reiterated the averments made in the
replies submitted by Respondents No.2 to 5 individually and stated further
that:
(i) It
is a fact that earlier, the GoAP, exercising powers under the Electricity
(supply) Act issued directions to erstwhile APSEB not to collect Consumption
Deposit from the petitioner for works relating Vijayawada-Madras Section of
railways. However, consequent to
enactment of the Electricity Act, 2003, GoAP is no longer vested with powers to
direct DISCOMs not to collect Consumption Deposit from the petitioner.
(ii) None
of the Respondents is willing to grant such facility to the Petitioner. Simply
because prompt payments are being received by the Respondents, does not entitle
the petitioner to claim exemption from payment of Security Deposit. Moreover, Regulation No.6 of 2004 issued by
the Commission does not provide for the grant of exemption from payment of
Security Deposit in favour of any consumer.
(iii) For all these reasons and the reasons
mentioned in the counters / replies filed by the Respondents, it is prayed that
the petition is devoid of merit and may be dismissed.
6. Thus
the issue that arises for consideration is:
“Whether the Respondents No.2 to 5 can be directed to exempt the petitioner from payment of Consumption Deposit and Additional Consumption Deposit or to accept post-dated cheques as reasonable security in lieu of payment of Consumption Deposit and Additional Consumption Deposit as prayed for.”
7. It is not denied by the Respondents
that GoAP, exercising powers then vested in it under Section 78 (A) of the
Electricity (Supply) Act, 1948, had directed erstwhile APSEB not to collect
consumption deposit from the petitioner for the works pertaining to
energisation of Vijayawada-Madras section of the railways. Nevertheless, there
is force in the contention of the respondents that consequent upon enactment of
Electricity Act, 2003, the GoAP is divested of such power and therefore, the
Respondents No.2 to 5 though successors-in-interest of APSEB are not bound by
the directions contained in GoAP G.O.Ms.No. 379 dated 16.09.1980, issued under
the Electricity (Supply) Act, 1948, which stands repealed by the Electricity
Act, 2003.
8. Similarly, it is not denied that
subsequent to issuance of G.O. mentioned above, APSEB extended the facility of
exemption from payment of Security Deposit to other sections or that it issued
proceedings waiving collection of Consumption Deposit and Additional
Consumption Deposit for traction as well as non-traction loads of the petitioner,
subject to the petitioner exempting APSEB from payment of Security or other
deposits for availing ‘Weight only Booking of Coal’ as admitted by the counsel
for the respondents.
9. However, consequent upon unbundling of
APSEB into functionally separate and independent entities, the Respondents No.2
to 5 are entrusted with the responsibility to supply electricity to various
categories of consumers, including the petitioner herein, being distribution
licensees in their respective areas in the State of Andhra Pradesh. In discharge of such statutory duty to
supply electricity, the Respondents No.2 to 5 are empowered under sub-section
(1) of Section 47 of the Electricity Act, 2003 to demand reasonable security,
as may be determined by regulations, for payment of all the amounts due to each
of them, the relevant provision of law being as under:
“47. Power
to require security.- (1) Subject to the provisions of this section, a
distribution licensee may require any person, who requires a supply of
electricity in pursuance of section 43, to give him reasonable security, as may
be determined by regulations, for the payment to him of all monies which may
become due to him –
(a) in respect of the electricity supplied to such person;
or
(b) where any electric
line or electrical plant or electric meter is to be provided for supplying
electricity to such person, in respect of the provision of such line or plant
or meter,
and if
that person fails to give such security, the distribution licensee may, if he
thinks fit, refuse to give the supply of electricity or to provide the line or
plant or meter for the period during which the failure continues.”
xxxx xxxx xxxx xxxx xxxx
10. In exercise of powers vested in it under
Section 181 read with sub-sections (1) and (4) of Section 47 of the Electricity
Act, 2003, this Commission issued Regulation No.6 of 2004 on Security Deposit
to be provided by consumers and matters incidental thereto and the said
Regulation came into force after three months from the date of its publication
in the Andhra Pradesh Gazette on 17.05.2004.
11. Clause 3 of the said Regulation No.6 of
2004, which is just a re-iteration of sub-section (1) of Section 47 of the
Electricity Act, 2003, reads as under:
“3. Power to require security.-
(1) The
distribution licensee may require from any person, who requires a supply of
electricity to his premises in pursuance of Section 43 of the Act, to give
security as provided in clause 4 herein, for the payment of all monies, which
may become due to the licensee
(a) in respect of the electricity supplied to such person; and / or
(b) where any
electric line or electrical plant or electric meter is to be provided for
supplying electricity to such person, in respect of the provision of such line
or plant or meter,
(2) If such person fails to give such security under sub-clause (1), the Distribution Licensee may refuse to give the supply of electricity or to provide the line or plant or meter for the period during which the failure continues.”
12. It is, therefore clear that distribution
licensee has got power to require security.
13. It is evident from the record that the
issue of exemption from payment of Security Deposit by the petitioner was discussed
with Respondent No.1, the predecessor-in-interest of Respondents No.2 to 5 and
for the reasons mentioned in the letter dated 03.12.2003, the Joint Managing
Director (HRD, Comml, IPC & Reforms) of Respondent No.1 informed the
General Manager of the petitioner-organization to pay Security Deposit and
Additional Security Deposit to respective DISCOMs. Thereafter, the Respondents
No.2 to 5 have been demanding payment of such deposits to each of them by
individual demand notices.
14. It is also borne out by record that the
proposal of the petitioner to deposit one month’s current consumption charges
in advance by post-dated cheques towards consumption deposit for traction
services is also not acceptable to the Respondents.
15. Under these circumstances, the Commission
finds that it is unable to interfere in the matter and direct the Respondents
No. 2 to 5 to exempt the petitioner from payment of Security Deposit or
Additional Security Deposit or to accept post-dated cheques in lieu of payment
of Security Deposit or Additional Security Deposit. The requirement of the
licensees that Security Deposit should be paid by the petitioner is neither
unreasonable nor unfair. Moreover, the
reasons mentioned by the Respondents No.2 to 5 for their inability to accept
the request of the petitioner are neither whimsical nor unjust, warranting
interference by the Commission.
16. For all these reasons, the Commission
finds that it is not a fit case for it to interfere and direct the Respondents
No.2 to 5 to exempt the petitioner from payment of Security Deposit and
Additional Security Deposit which they are entitled to demand and obtain under
the provisions of the Electricity Act, 2003, and the Regulations made
thereunder. For the same reasons, the Commission is also unable to direct the
Respondents No.2 to 5 to accept post-dated cheques in lieu of payment of
Security Deposit and Additional Security Deposit and, accordingly, the petition
is dismissed.
This Order is corrected and
signed this 15th day of April 2006.
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Sd/- |
Sd/- |
Sd/- |
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Surinder Pal |
K.Sreerama Murthy |
K.Swaminathan |
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MEMBER |
MEMBER |
MEMBER |