Punjab State Power Corporation Limited v. Poonam Chatrath

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

PUNJAB, CHANDIGARH.

Misc. Application No.1587 of 2022 In/and

First Appeal No.1014 of 2022 Date of institution : 23.11.2022 Date of decision : 18.01.2023 Punjab State Power Corporation Limited, through the SDO (Commercial), East Sub Division, Batala Road, Amritsar. ….Appellant/Opposite Party

Versus

Poonam Chatrath, Prop. of M/s R.P. Woolen Mill, Tirath Nagar, Batala Road, Amritsar, 94176-27012.

….Respondent/Complainant

First Appeal against the order dated

06.09.2021 passed by the District Consumer

Disputes Redressal Commission, Amritsar.

Quorum:-

Hon'ble Mrs. Justice Daya Chaudhary, President

Ms. Simarjot Kaur, Member

1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No

2) To be referred to the Reporters or not? Yes/No

3) Whether judgment should be reported in the Digest? Yes/No

Present:-

For the appellant : Sh. Sunpreet Singh, Advocate for Sh. Sehaj Bir Singh, Advocate

JUSTICE DAYA CHAUDHARY, PRESIDENT

By this common order of ours, five First Appeals i.e. First Appeal No.1014 of 2022, First Appeal No.1015 of 2022, First Appeal No.1016 of 2022, First Appeal No.1017 of 2022 and First Appeal No.1040 of 2022 shall be disposed of as common questions of law and facts are involved in all the appeals. The appellant(s) in all the appeals

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are aggrieved by the similar/same orders passed by the District Commission. However, the facts are being extracted from First Appeal No.1014 of 2022. In some of the appeals, some additional facts and issues have been mentioned but the same have not been discussed in the present appeal i.e. F.A. No.1014 of 2022 as the relevancy of those facts/issues would be dealt separately. First Appeal No.1014 of 2022

2. Appellant/opposite party i.e. Punjab State Power Corporation Limited (in short, "PSPCL"), through its SDO (Commercial), East Sub Division, Batala Road, Amritsar has filed the present appeal being aggrieved by the order dated 06.09.2021 passed by the District Consumer Disputes Redressal Commission, Amritsar (in short, "the District Commission"), whereby the complaint filed by the respondent/complainant namely Poonam Chatrath was allowed.

3. It would be apposite to mention here that hereinafter the parties will be referred, as have been arrayed before the District Commission.

4. Briefly, the facts of the case as made out by the complainant in the complaint filed before the District Commission are that the complainant obtained an electricity connection bearing Account No.3002875958 under Small Power (SP) category and she was using the said connection with the help of two employees for earning her livelihood by way of self-employment. It was further

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mentioned in the complaint that she was regularly paying the consumption charges as per the bills issued to her from time to time. The meter was installed outside her premises and monthly reading was used to be recorded by the Technical Officer of the opposite party. The complainant received Memo No.5446 dated 31.07.2018 of an amount of ₹1,43,780/- from the opposite party. The complainant contacted the opposite party by showing the electricity bills and receipts thereof. The complainant was informed by the opposite party that the said memo was issued due to defective shunt capacitor installed at her business premises. The complainant requested the opposite party a number of times to withdraw the same but without any result.

5. The complaint was filed with the prayer to withdraw the impugned memo dated 31.07.2018 and to pay compensation of ₹10,000/- as well as litigation expenses of ₹11,000/-.

6. In the said complaint, notice was issued to the opposite party, who contested the complaint by filing written reply. Certain preliminary objections were raised stating therein that no cause of action arose to the complainant to file the complaint, as the amount was rightly mentioned as per the Rules and Regulations of the department. The other averments made/mentioned in the complaint were specifically denied and were stated to be contrary to the provisions/Regulations.

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7. On perusal of contents of the complaint and reply thereof filed by the opposite party and also on hearing the arguments raised by the counsel representing both the parties and evidence available on the file, the complaint was decided in favour of the complainant vide order dated 06.09.2021. The impugned Memo dated 31.07.2018 of an amount of ₹1,43,780/- was set aside. The opposite party was directed to refund 35% of the impugned demand raised vide Memo dated 31.07.2018 as deposited by the complainant as per order passed by the District Commission. The opposite party was also held liable to pay compensation to the tune of ₹10,000/- out of which an amount of ₹3,000/- was ordered to be deposited in the Consumer Legal Aid Account of the District Commission and the remaining amount of ₹7,000/- was ordered to be paid to the complainant plus ₹3,000/- as litigation expenses. The compliance of the order was to be made within a period of 30 days from the date of receipt of copy of the order.

8. The impugned order dated 06.09.2021 passed by the District Commission has been challenged by the appellant/opposite party by way of filing the present appeal by raising a number of arguments.

9. Along with the appeal, Misc. Application No.1587 of 2022 was filed for condonation of delay of 390 days in filing of the appeal. Said application was supported by an affidavit.

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10. Mr. Sunpreet Singh, proxy for Mr. Sehaj Bir Singh, learned counsel for the appellant has submitted that the certified copy of the impugned order dated 06.09.2021 was received by the appellant on 14.09.2021. The limitation to file any suit, appeal, application or any other proceedings was extended in view of order No.95 of 2021 dated 29.09.2021 passed by the Hon'ble National Commission in view of the order dated 23.09.2021 passed by the Hon'ble Supreme Court in M.A. No.665 of 2021 in Suo Moto Writ Petition (Civil) No.3 of 2020 titled as

"In Re: Cognizance For Extension of Limitation". Further vide order dated 10.01.2022 passed in the said case, the Hon'ble Supreme Court had further extended the period of limitation to file such cases till 01.03.2022. Further it was mentioned in the application that the delay after 01.03.2022 had occurred due to the administrative reasons as the time was spent in taking legal opinion and processing the case file and in handing over the relevant documents to the counsel for the purpose of filing the appeal. Therefore, the delay in filing the appeal is liable to be condoned.

11. On merits, learned counsel for the appellant has submitted that the impugned order was passed by the District Commission without proper appreciation of the evidence available on the record. The District Commission has wrongly held that there was no report of any official of PSPCL to show that the shunt capacitor was defective/damaged or missing. It was not the case of PSPCL that the

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amount was levied due to defective/damaged or missing shunt capacitor. The amount was levied due to non-maintenance of the power factor. The District Commission has wrongly held that that PSPCL was not permitted to levy any amount as sundry charges in the subsequent bill. The PSPCL has followed its regulations and provisions of Clause 93 of the ESIM. Learned counsel has further submitted that the District Commission has allowed the complaint only on the ground that the appellant-Corporation did not issue 15 days' notice before issuing the Memo dated 01.03.2018 and the same was in violation of Regulations as provided in the ESIM. Learned counsel has also submitted that a wrong interpretation of the Regulations of the appellant-Corporation has been made while passing the impugned order and the findings recorded by the District Commission are not only contrary to facts but contrary to law as well. The District Commission has based its decision while passing the impugned order that the amount so levied was because of capacitor surcharge and issuance of 15 days' notice was mandatory. The findings recorded by the District Commission are contrary to facts as it is clear from the Memo dated 01.03.2018 that the amount so levied was for the capacitor surcharge but actual amount levied was for power factor surcharge. Learned counsel has further submitted that for levying of power factor surcharge, no notice was required to be issued, whereas for capacitor surcharge, requirement of 15 days' notice is mandatory.

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12. Learned counsel has also submitted that the findings recorded by the District Commission to this effect are liable to be set aside. Learned counsel has further submitted that the District Commission has held that the appellant-Corporation was not to levy any amount as sundry charges and by doing so, it has violated its own Regulations. However, as per Clause 93 of Section VI of ESIM, the amount so levied on the basis of report of the Internal Auditor was charged and was reflected in the subsequent bills as dues.

13. Learned counsel has further submitted that the District Commission while allowing the complaint has relied upon the Accounts Circular No.10/2009 by holding that the appellant-Corporation could not charge the sum, so levied vide Memo dated 01.03.2018 whereas the Circular No.10/2009 was related to unauthorized use of electricity and it was not relating to the power factor. Wrong findings have been recorded by the District Commission by relying upon the Circular which was not applicable in the present context. The findings recorded by the District Commission to this effect are liable to be set aside. At the end, learned counsel submits that the judgments relied upon by the District Commission while deciding the complaint are distinguishable on facts and law and the same are not applicable keeping in view the facts and circumstances of the case.

14. Heard the arguments of learned counsel for the appellant/opposite party. Notice of appeal was issued/sent to the

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respondent/complainant but it was received back with report 'incomplete address'. However, the learned counsel for the appellant has submitted that a bunch of similar matters has been disposed of by this Commission vide order dated 17.01.2023 and the present appeal along with connected appeals may be disposed of accordingly in the same terms.

15. In view of this submission of the learned counsel for the appellant, there is no need to issue any fresh notice to the respondent/complainant and we think it proper to proceed to decide the present appeal along with connected appeals on merits in view of the order dated 17.01.2023 passed by this Commission in First Appeal No.170 of 2022 (Punjab State Power Corporation Limited v. Shri Ram Nath alias Ram Lubhaya), which was decided along with bunch of 84 other similar appeals.

16. We have carefully perused the impugned order passed by the District Commission, averments as made in the complaint and reply thereof as well as all other documents available on the file including the documents/evidence produced before the District Commission.

17. Firstly, we will deal with the Misc. Application No.1587 of 2022 filed by the appellant seeking condonation of delay of 390 days in filing the present appeal. In other cases also, there is delay of more than 300 days in filing the appeals.

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18. Admittedly, the limitation to file any suit, appeal, application or any other proceedings was extended in view of order No.95 of 2021 dated 29.09.2021 passed by the Hon'ble National Commission in pursuance of the order dated 23.09.2021 passed by the Hon'ble Supreme Court in M.A. No.665 of 2021 in Suo Moto Writ Petition (Civil) No.3 of 2020 titled as "In Re: Cognizance For Extension of Limitation". Further vide order dated 10.01.2022 passed in the said case, the Hon'ble Supreme Court has further extended the period of limitation to file such cases till 01.03.2022. In view of the orders passed by the Hon'ble Supreme Court, the Hon'ble National Commission vide Office Order No.7 of 2022 dated 14.01.2022 had issued following directions:

"II. Computation of delay in such matters in which Limitation expires between 15.03.2020 and 28.02.2022:

The delay in filing the matters, i.e., Revision Petitions, First Appeals, Consumer Complaints, Written Statements, Applications, etc., where limitation is expiring between 15.03.2020 and 28.02.2022, shall be computed in the following manner:

(i) The period from 15.03.2020 to 28.02.2022 shall be excluded for computing limitation.

(ii) Limitation shall be further extended by 90 days from 01.03.2022, i.e. till 29.05.2022.

Since 29.05.2022 is Sunday, the matters filed on 30.05.2022 will be considered to have been filed within limitation. However, if matters are filed on 31.05.2022 or thereafter, then delay shall be computed from 30.05.2022 onwards.

(iii) The matters in which the limitation (provided in the Consumer Protection Act, 1986 or the Consumer Protection Act, 2019, as may be applicable) is expiring during the period from 15.03.2020 to 28.02.2022 (i.e., before 01.03.2022) and such a matter is filed during the same period (i.e., from 15.03.2020 to 28.02.2022) with some delay, such matter shall be treated as having been filed within the limitation.

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3. The directions given by the Hon'ble Supreme Court shall not apply to the matters filed/instituted against such orders which shall be passed by the State Commissions on or after 01.03.2022. In such an event, the standard procedure for computation of limitation shall apply."

19. As per the aforesaid directions issued by the Hon'ble National Commission and the orders passed by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No.3 of 2020 from time to time, the limitation period from 15.03.2022 to 28.02.2022 was excluded. The Limitation was further extended by 90 days from 01.03.2022 i.e. till 29.05.2022. The present appeal was filed on 23.11.2022 i.e. after a period of about 6 months therefrom. No sufficient and reasonable explanation has been furnished by the appellant for condonation of delay of about 6 months. The ground of administrative procedure for filing the cases is not a ground to condone the delay. The Hon'ble Supreme Court of India in the case of

"Office of the Chief Post Master General & others Vs. Living Media India Limited & another" Civil Appeal No.2474-2475 of 2012 decided on 24.02.2012 has held as under:-

"13) In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bonafide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red-tape in the process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few. Considering the fact that there was no proper explanation offered by the Department for the delay except mentioning of various dates, according to us, the Department has

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miserably failed to give any acceptable and cogent reasons sufficient to condone such a huge delay.

Accordingly, the appeals are liable to be dismissed on the ground of delay."

20. In view of above discussion and the law as laid down by the Hon'ble Supreme Court in case as referred above, the delay in filing the appeal cannot be condoned.

21. So far as the merits of the case are concerned, facts of the case regarding filing of the complaint by the complainant before the District Commission, reply thereto filed by the appellant/opposite party, allowing of said complaint and thereafter filing of the present appeal by the appellant/opposite party are not in dispute.

22. As per the contention of the appellant/opposite party, the complainant does not fall under the definition of 'consumer', on the ground that he was using the electric connection for commercial purpose whereas the complainant has specifically averred that she was using the Small Power (SP) electric connection with the help of only two employees for earning her livelihood by way of self- employment. The opposite party has not produced any evidence on record to prove that the complainant was using the connection for any commercial purpose at large scale with the help of a number of employees. In the absence of any cogent and convincing evidence, mere bald statement/plea of the opposite party cannot be accepted. The Hon'ble Supreme Court of India has held in the case of M/s

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Paramount Digital Color Lab & Ors. v. M/s Agfa India Pvt. Ltd. & Ors. 2018 (3) CPR 1 (SC) in Paras-12 to 14 as under:

"12. In the case of Madan Kumar Singh v. Distt. Magistrate, Sultanpur, (2009) 9 SCC 79 , the appellant therein had bought a truck in an auction-sale for a consideration which was paid by him. It was bought to be used exclusively for the purposes of earning his livelihood by means of self-employment. However, there was inordinate delay in delivering possession of the truck and relevant documents to the appellant therein and in confirming the auction in his favour. Possession of the truck was ultimately delivered to him during the pendency of his complaint before the District Forum. This Court held that the purchase of the truck by the appellant therein would be covered by the Explanation to Section 2(1)(d) of the Act. In the said matter, the appellant emphatically stated that he had bought the said truck to be used exclusively by him for the purposes of earning his livelihood by means of self-employment. It was categorically observed by this Court that even if he was to employ a driver for running the truck, it would not have changed the matter in any case, as even then the appellant would have continued to earn his livelihood from it and of course, by means of self-employment.

13. Thus, in our considered opinion, each case ought to be judged based on the peculiar facts and circumstance of that case. Whether the assistance of someone is required to handle the machine, is a question of fact and necessity? Ultimately, if it is purely for a "commercial purpose" and not for "self-employment", the complainant may not get the benefit of the Explanation to Section 2 (1)(d) of the Act. The buyers of the goods or commodities for "self-consumption" in economic activities in which they are engaged would be "consumers" as defined in the Act. Furthermore, there is nothing on record to show that the appellants wanted to use the machine in question for purposes other than "self-employment".

Therefore, the point to be considered is whether the appellants have purchased the machine in question for "commercial purpose" or exclusively for the purposes of earning their livelihood by means of

"self-employment". There cannot be any dispute that the initial burden is on the appellants to prove that they fall within the definition of

"consumer". It is pertinent to mention that respondent No. 4, who is a contesting party, did not choose to file a counter affidavit before the State Commission. In other words, he did not deny any of the claims made by the appellants. None of the parties have led their evidence. Based on the material on record before the State Commission, it proceeded to decide on merits. As the litigation is being fought since 2006 in different Forums, we do not wish to remand the matter, particularly, when there is sufficient material available on record for arriving at the conclusion.

14. The word "purchaser" means and includes members of his family also. The machine in question was purchased by two partners; both were unemployed graduates. They started a firm namely M/s. Paramount Digital Color Lab at Varanasi, U.P. afresh. The appellants have specified that they are unemployed graduates; they planned to start a business of photography for self-employment and for their

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livelihood, for which they contacted respondent Nos. 2 & 4, which means that they had not planned to start their business of photography till they planned to purchase the machine in question. Having felt the need of the machine in question, they contacted respondent No. 1 and enquired about the salient features and performance of the "Agfa Minilab D-Lab.1 Allrounder" machine. Being impressed by the advice and suggestion made by respondent Nos. 2 & 4, appellants borrowed a loan from the Union Bank of India on 12.07.2004 and placed an order for the purchase of the said machine and paid by draft an amount of Rs.62,00,000/- towards the cost of the machine along with freight and collateral charges. It is the case of the appellants that they purchased the machine with the fond hope and belief that it would give good results and that they would earn a handsome amount by which their basic needs of livelihood would be fulfilled and that the family of the appellants will survive smoothly. They might have started the business with the help of one operator and helper. Of course, in Paragraph 14 of the complaint, the appellants have used the words "Operators and Helpers". This portion of the complaint has been highlighted by the National Commission to conclude that the appellants were using the machine with the help of third parties for commercial purposes inasmuch as they themselves were not using the machine personally. Such averment by the appellants in the complaint appears to be an exaggerated version with a view to get more compensation. One such stray sentence will not tilt the balance against the appellants. The material needs to be seen in its entirety and not in isolation. Since there is nothing on record to show that they wanted the machine to be installed for a commercial purpose and not exclusively for the purposes of earning their livelihood by means of self-employment, the National Commission was not justified in concluding that the appellants have utilised the services of an operator or a helper to run a commercial venture. One machine does not need many operators or helpers to complete the work entrusted. Since the appellants were two partners, they must have been doing the work on their own, of course, may be with the aid of a helper or an operator. The machine would not have been used in a large-scale profit-making activity but, on the contrary, the appellants purchased the machine for their own utility, personal handling and for their small venture which they had embarked upon to make a livelihood. The same is distinct from large-scale manufacturing or processing activity carried on for huge profits. There is no close nexus between the transaction of purchase of the machine and the alleged large-scale activity carried on for earning profit. Since the appellants had got no employment and they were unemployed graduates, that too without finances, it is but natural for them to raise a loan to start the business of photography on a small scale for earning their livelihood.

15. The material discloses that respondent no. 1 company was dissolved in the year 2005. Prior to this dissolution, respondent no. 2 was the Managing Director of respondent No. 1 and respondent no. 4 was the General Manager of respondent No. 1. The respondent Nos. 2 and 4 collectively talked with the appellants and finalised the agreement along with the assurance that the machine is up to the marked standard and that repairs, if any, would be rectified free of cost, apart from other things assured. Respondent No. 3 is the subsequent company which has taken over from respondent No. 1 in the year 2005. The said

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company also did not come to the aid of the appellants either by replacing the machine or by rectifying the major defects, consequent upon which the appellants have suffered huge losses. Anybody can visualise the loss sustained by the appellants inasmuch as they had obtained a loan with the promise to pay interest to respondent No. 5 bank for purchasing the machine. Therefore, respondent Nos. 2, 3 and 4 are collectively liable to make good the loss of the appellants.

16. In view of the same, it cannot be said that the appellants do not fall within the definition of the term "consumer", as envisaged under Section 2(1)(d) of the Act. Hence, the impugned judgment and order dated 09.02.2015 passed by the National Commission is liable to be set aside and the judgment dated 21.02.2011 passed by the State Commission is restored, with the clarification that respondent Nos. 2 to 4 are jointly and severally liable to make good the loss, as directed by the State Commission. The appeals are allowed accordingly."

23. In view of the ratio of law laid down by the Hon'ble Supreme Court in the above noted case, the complainant has been availing the services of the opposite party for earning her livelihood by way of self employment and has been paying the power bills regularly and as such it has been proved that he falls under the definition of 'consumer' as defined in the Consumer Protection Act.

24. Admittedly, the District Commission has allowed the complaint filed by the complainant on the ground that a 15 days' notice was required to be issued to the complainant before raising the demand but it was not issued. However, as per the case of the appellant/opposite party, the amount was levied for power factor surcharge. As per ESIM Regulations of the appellant-Corporation, there are two types of surcharge (i) for power factor surcharge and (ii) for capacitor surcharge. As per stand of the opposite party, in case of power factor surcharge, no notice was required to be issued or it can be said that the issuance of notice is not mandatory requirement. In

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case of capacitor surcharge, issuance of notice of 15 days is the mandatory requirement.

25. A finding has been recorded by the District Commission that there is no report of any official of the Corporation to show that the shunt capacitor was defective or damaged or even missing and as such the imposition of any penalty/amount for that purpose as has been done vide memo dated 31.07.2018 is not permissible. Nothing has been proved by any document or evidence before the District Commission as well as before this Commission that the amount so levied was due to a defective/damaged or missing shunt capacitor. On perusal of reply filed by the appellant/opposite party before the District Commission, it has been specifically mentioned that the amount was levied owing to non-maintenance of power factor and not for defective/damaged or missing shunt capacitor. However, the District Commission while passing the impugned order has held that the amount was levied for defective shunt capacitor and on the basis of that reason, the complaint was allowed.

26. It is also relevant to mention here that PSPCL has issued Commercial Circular No.26/2016 dated 29.07.2016. Vide that Circular, Schedule of Tariff (FY-2016-17) was issued and the opposite party- Corporation for the first time imposed power factor on SP category connections. Rule SIII.8 is relevant in the present context, which is reproduced as under:

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"SIII.8 Capacitor Surcharge:

SP consumers existing as on 08.09.2009 were given option either to opt for installation of meter/metering equipment to measure the monthly average power factor where after the surcharge/incentive would become applicable as specified in para SIII.7 above or continue under the provisions as detailed below:

Consumers who did not opt for new provisions for measurement of monthly average power factor under this clause shall also be covered under clause SIII.7 after six months from the date of issue of this Tariff Order and provision of Capacitor Surcharge shall stand deleted from the effective date. All such consumers shall be served with a notice of atleast three months within 15 days of the issue of this tariff Order.

Consumers who did not opt for new provisions for measurement of monthly average power factor shall be required to install ISI Mark shunt capacitors.

In case Shunt Capacitor(s) is/are found to be missing or inoperative or damaged, a 15 days' notice shall be issued to the consumer for rectification of the defect and setting right the same. If the defective capacitor(s) is/are not replaced/rectified within 15 days of the issue of notice, a surcharge @ 20% on bill amount shall be levied for the preceding two months and it shall continue to be levied till the defective capacitor(s) is/are replaced/rectified to the satisfaction of the distribution licensee. In case the capacitor(s) is/are found to be of inadequate rating, the capacitor surcharge shall be levied on pro-rata basis."

27. As per said Rule as reproduced as above, the Corporation was asked for the first time to impose power factor on SP category consumers. However, before implementing said Circular, the Corporation was asked to issue a notice to SP category consumers within a period of 15 days of issuance of said Circular, asking them to maintain the power factor within a period of three months from the date of issuance of such notice.

28. Although a letter dated 03.05.2018 was issued to the complainant regarding implementation of CD system and KVAH tariff but the same was for the NRS, SP and other electric connections, whose load was beyond 20 kw up to 50 kw. The PSPCL had also

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issued another Commercial Circular No.27/2018 dated 24.04.2018 regarding introduction of CD system and kVAh tariff for the Non- Residential Supply (NRS) consumers with load exceeding 20 kW and up to 50 kW, all Small Power Industrial Supply (SP) consumers and other consumers with load exceeding 20 kW (except Domestic Supply consumers with load up to 50 kW, Public Lighting, AP & AP High Technology/High Density Farming). Said Circular is reproduced as under:

"Hon'ble Commission vide its order dated 19.04.2018 i.e. Tariff order for FY 2018-19 has decided to extend the kvAh Tariff and contract Demand system for the Non-Residential Supply (NRS) consumers with load exceeding 20 kW and upto 50 kW, all Small Power Industrial Supply (SP) consumers and other consumers with load exceeding 20 kW (except Domestic supply consumers with load upto 50 kW, Public Lighting, AP & AP High Technology/High Density Farming) as under:

i) Issue notice to all such consumers within one month of issue of Commission's order dated 19.04.2018 and consumers shall declare their contract demand within two months of the issue of notice. It may also be mentioned in the notice that if a consumer fails to declare his contract demand within the specified period, his sanctioned load shall be converted into sanctioned contract demand in kVA by using 0.90 power factor, subject to a maximum of 20 kVA in case of SP consumers.

ii) The kVAh tariff and Contract Demand system for the Non- Residential Supply (NRS) consumers with load exceeding 20 kW and upto 50 kW, all Small Power Industrial Supply (SP) consumers shall be applicable with effect from 01.08.2018. However, it is advised to continue to record energy consumption in kWh for the purpose of Energy Balance and Energy Audit purpose and for any other purpose for which energy consumption data in kWh is required'

iii) In case, if any of the subject cited consumers are not provided with kVAh meters, it is directed to provide the kVAh meters within two months of issue of Tariff order for FY 2018-19 dated 19.04.2018. However, consumers shall be at liberty to arrange their own compatible meters and get these installed from PSPCL before this date, as per the laid down procedure'

iv) Henceforth, no power Factor Surcharge and/or load Surcharge shall be leviable from consumers covered under kVA/kVAh Tariff. These consumers shall have flexibility in installation of additional equipments/toad, provided they keep their demand within the sanctioned limits. The Fixed charges shall be levied as per Condition 9 of General Conditions of Tariff.

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Meticulous compliance of this circular be ensured. This circular can be downloaded from PSPCL website www.pspcl.in

This issues with the approval of competent authority.

29. As per the electricity bill Ex.C-10, the total load of the electricity connection of the complainant was 19.170 KW. The appellant-PSPCL has failed to explain as to how the penalty was leviable upon the complainant when her total load was less than

20 KW keeping in view the contents of the aforesaid Circular.

30. In Para-24 of the order passed in the case of Shri Ram Nath alias Ram Lubhaya (supra), this Commission has held as under:

"However, there is no evidence on record that any such notice was issued to SP consumers to maintain power factor within a period of three months of the issuance of such notice. This fact is evident from letter dated 06.04.2019 (Ex.C-5) issued by Assistant Accounts, Civil Lines Division, Amritsar to Assistant Executive Engineer (Commercial), Civil Lines Division, Amritsar. It is crystal clear from this letter that the PSPCL has not complied with the aforesaid Circular as no 15 days' prior notice was issued to SP consumers to maintain the power factor as stated above. Due to non- issuing/sending of required notice, the power factor surcharge could not be imposed on the consumers due to fault of employees of the PSPCL. Since the complainant was not given any prior notice to maintain power factor, so the demand so raised for not maintaining power factor is not legal and valid."

31. Learned counsel for the appellant has also relied upon Instruction No.93.1 of the Electricity Supply Instructions Manual, which is reproduced as under:

"93. PAYMENT OF ARREARS NOT ORIGINALLY BILLED:

93.1: There may be certain cases where the consumer is billed for some of the dues relating to previous months/years or otherwise as arrears on account of under assessment/unauthorized use of electricity or demand / load surcharge pointed out by Internal Auditor/ detected by the authorized officers either owing to negligence of the PSPCL employees or due to some defect in the metering equipment

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or due to application of wrong tariff/multiplication factor or due to mistake in connection or other irregularities/malpractices etc. In all such cases, separate bills shall be issued giving complete details of the charges levied. Such charges shall be shown as arrears in the subsequent electricity bills regularly till the payment is made. Supplementary bills shall be issued separately giving complete details of the charges in regard to theft cases, slowness of meters, wrong connections of the meter and unauthorized of use electricity etc. In such cases the copy of relevant instructions under which the charges have been levied shall also be supplied to the consumer for facilitating the quick disposal of cases by consumer forums if approached by the consumer."

32. However, it is relevant to mention that PSPCL issued another Commercial Circular No.59 of 2014 was issued by the PSPCL on 30.12.2014 regarding instructions about punitive action for violation of commercial instructions. Said Circular is reproduced as under:

"As per orders of Hon'ble Punjab & Haryana High Court dated 26.9.2013 and subsequently as per commercial circular no.53/2013 dated 27.11.2013, instructions have been issued that in order to have enforceable action against any consumer, notices are to be issued as per the provision of the Act or Supply Code or the regulations under section 1.81 of the Act. It has been pointed out by the Hon'ble PSERC that field offices are initiating various punitive actions against consumers for violations of commercial instructions or some clauses of ESIM without referring to the relevant provisions of the Supply Code or Section of the Act or Orders of the Commission. Since some provisions of the ESIM are not consistent with the Supply Code, this leads to unnecessary disputes. The Commission has notified the Supply Code 2014 and PSPCL is also in the process of updating the ESIM to bring provisions of ESIM in line with the new Supply Code. All the field offices are directed to ensure that while initiating proceedings against any consumer, the competent authority of PSPCL must quote the relevant regulations of the Supply Code or any other regulations framed by the competent authority under the Electricity Act. 2003 or orders of the Commission till such time the ESIM is updated and got approved from the Commission.

Strict compliance of above instructions be ensured."

33. As per the Circular of PSPCL issued vide Memo No.3914/4555/DB-100L dated 12.01.2007 as well as Accounts Circular No.10/2009, the opposite party-Corporation cannot add any amount of

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arrears in the bill except the current consumption charges without issuing prior notice with complete details

34. Before adding sundry charges in electricity bills of the complainant or issuing any Memo raising the demand, not only show- cause notice is required to be issued to the consumer before imposing any penalty but the provisional assessment made on the basis of audit report was also required to be served upon the consumer/complainant, as has been observed in Uttar Haryana Bijli Vitran Nigam Limited & Ors. v. Dinesh Sharma 2016 (2) CLT 429, which is reproduced as under:

"7. This argument is of no use. The appellants have failed to show any notice issued to the complainant before imposing the penalty. Our Hon'ble High Court has also opined in Punjab State Electricity Board & Anr. v. Ashwani Kumar 1993 (2) PLR 447 that notice is required before imposing the penalty and an order about recovery should be passed after giving reasonable opportunity of hearing to the person who was likely to be affected thereby. In the present case, the appellants-O.Ps. have miserably failed to show that provisional assessment made on the basis of audit report was ever served upon the complainant. In this way, they did not act as per provisions contained in the Electricity Act and it is deficiency in service. Consumer can ask the service provider to give him the details on basis of which the demand is made, which is not in the present case."

35. As per the case of the appellant/opposite party, it was the duty of the complainant/consumer to inform the opposite party in case the power factor was wrongly recorded. Even in case there was any fault of any sort in the shunt capacitor, the complainant/consumer should have brought this fact to the notice of the authorities. The respondent/complainant had failed to rectify and maintain the power factor and for that purpose, she was liable to pay the arrears of electricity bills as mentioned in the Memo dated 31.07.2018. This

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argument is also contrary to the provisions and the case law. It was the duty of the Corporation itself to inform the complainant in case there was any irregularity in the power factor or shunt capacitor as the officers/officials of the Corporation visit the premises of the consumers periodically to note down/check the reading/apparatus of the electric connection/meters etc. The opposite party has also failed to show any provision that no notice was required to be issued for raising the demand in the case of power factor. In such circumstances, an adverse inference is drawn against the Corporation.

36. Even no audit report vide which the said amount was allegedly found to be recoverable from the complainant has been annexed with the Memo dated 31.07.2018 nor it has been proved on record that the same was ever supplied to the complainant. As a legal parlance, the basis of imposing any kind of penalty is required to be disclosed/explained before raising any such demand.

37. As per the stand of the opposite party, the amount was levied due to non-maintenance of power factor surcharge and not for defective/damaged or missing shunt capacitor. The complainant was informed about non-maintenance of power factor but nothing has been proved on record that any such notice/intimation was sent to the complainant to maintain the power factor or to remove the defect in the shunt capacitor. It has been proved on record that neither any

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separate notice for removal of defective shunt capacitor was issued nor it was received by the complainant at any point of time.

38. In Para-31 of the order passed in the case of Shri Ram Nath alias Ram Lubhaya (supra), this Commission has held as under:

"The complainant came to know later on from the Association that a written representation (Ex.C-3) was made to the Chief Engineer, Border Zone, PSPCL, Amritsar regarding this fact and it was marked to the SDO, Civil Lines, Amritsar. SDO, Civil Lines, Amritsar also, who sent the letter dated 28.03.2018 (Ex.C-4) to the Assistant Accounts Officer (AAO) with the request to reconsider the earlier position as it was beyond the purview of ESIM. However, the AAO did not accept the said request."

39. Moreover, in any circumstances, in case any penalty is required to be imposed, a notice is required to be issued to the affected party which is paramount requirement of the law. For that, a proper procedure is required to be followed before imposing the penalty. In the present case, no such notice was issued to the complainant and no opportunity of being heard was given to her. The audit objection was raised by the Audit Party and it was the bounden duty of the appellant/opposite party to inform the affected party by way of giving proper notice or by asking her to submit her explanation but no such opportunity was ever given. In case, the audit objection was raised, such objection could not be said to be a direction to justify the raised demand or to ask for the amount, as it was an internal communication in the department/office or between the concerned

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parties. It cannot be said to be a substitution of the requirement of the notice.

40. It has been held in a number of judgments that the Audit Party can only give the opinion and it is for the concerned authority to consider the opinion of the Audit Party or not. Meaning thereby the opposite party had admitted its fault by sending above said letter to the AAO. Judgment of case M/s Kundan Mills Board & Paper Mills & Anr. v. Punjab State Electricity Board Patiala & Ors. 2014 (2) Civil Court Cases 44 of the Hon'ble Punjab and Haryana High Court has rightly been relied upon by the District Commission.

41. Thereafter, the PSPCL had also issued another CC No.63/2018 dated 13.12.2018 with regard to implementation of kVAh tariff and contract demand system for Small Power Industrial consumers w.e.f. 01.01.2019. It was mentioned therein that the applicability of kVAh tariff and contract demand system for SP consumers was deferred from 01.08.2018 to 01.01.2019. All the concerned AEEs/AEs(DS) were directed to send 15 days notice to all SP consumers in this regard.

42. In the present case, admittedly the appellant has not issued any such notice before raising the alleged demand, which amounts to violation on the part of the PSPCL of its own CC No.59 of 2014. It is also apparent that PSPCL is not following/complying its own

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Circular issued from time to time and it also amounts to 'unfair trade practice'.

43. Even the 'principle of natural justice' also demands that before imposing any penalty upon a person/consumer, the prior notice is required to be served upon him/her, explaining all the details/basis of the demand so raised. The Hon'ble Supreme Court in the case of Municipal Committee, Hoshiarpur v. Punjab State Electricity Board & Ors. Civil Appeal No.9651 of 2003 decided on 19.10.2020 has also held as under:

"26. The principles of natural justice cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case. Thus, they cannot be put in a strait-jacket formula. "Natural justice is not an unruly horse, no lurking landmine, nor a judicial cure-all. If fairness is shown by the decision-maker to the man proceeded against, the form, features and the fundamentals of such essential procedural propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of." The two rules of natural justice, namely, nemo judex in causa sua, and audi alteram partem now have a definite meaning and connotation in law and their contents and implications are well understood and firmly established; they are nonetheless non-statutory. The court has to determine whether the observance of the principles of natural justice was necessary for a just decision in the facts of the particular case.

………………

28. However, there may be cases where the non-observance of natural justice is itself prejudice to a person and proof of prejudice is not required at all. In A.R. Antulay v. R.S. Nayak & Anr., (1988) 2 SCC 602, this Court held as under:

"....No prejudice need be proved for enforcing the fundamental rights. Violation of a fundamental right itself renders the impugned action void. So also the violation of the principles of natural justice renders the act a nullity."

29. Similarly, in S.L. Kapoor (supra), this Court held:

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"The non-observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary. It ill comes from a person who has denied justice that the person who has been denied justice is not prejudiced."

30. In view of the above, in case there is a non-compliance of a statutory requirement of law or the principles of natural justice have been violated under some circumstances, non-compliance of the aforesaid may itself be prejudicial to a party and in such an eventuality, it is not required that a party has to satisfy the court that his cause has been prejudiced for non-compliance of the statutory requirement or principles of natural justice."

44. Hon'ble Punjab & Haryana High Court also in the case of Tarsem Singh v. Punjab State Electricity Board CWP No.16762 of 2001 decided on 01.04.2002 has held as under:

"In our opinion, the procedure contained in the above referred Circulars must be treated as mandatory because the same is intended to protect the consumer against arbitrary exercise of power by the authorities of the Board and ordinarily, the demand created in violation thereof would be liable to be invalidated. The petitioner has, as mentioned above, come forward with the plea that the meter was removed from his premises and got tested without complying with the procedure contained in Commercial Circular No. 8/99. He has categorically averred that before removing the meter and getting it tested, the concerned authority did not give him the required notice. This has not been controverted by the respondents. Therefore, there is no escape from the conclusion that the impugned demand is violative of the instructions issued by the Board and the principles of natural justice and is liable to be quashed on that ground alone.

7. We are further of the view that the decision of the Zonal Level Dispute Settlement Committee is liable to be quashed not only on the ground that the Committee has proved a patently illegal demand created by the Assistance Executive Engineer, but also because it does not satisfy the requirement of a speaking order indicated in the decisions of the Supreme Court in Harinagar Sugar Mills Limited v. Shyam Sunder Jhunjhunwala, A.I.R. 1961 S.C. 1669; Bhagat Raja v. Union Of India & Others. A.I.R. 1967 S.C. 1606; Travancore Rayon Ltd.

v. Union of India A.I.R. 197! S.C. 862; Mahabir Prasad Santosh Kumar

v. State of U.P., A.I.R. 1970 S.C. 1302; Woolcombers of India Limited v, Woolcombers Workers Union, A.I.R. 1973 S.C.2758; Ajantha Industries and Ors. v. Central Board of Direct Taxes, New Delhi and Ors., A.I.R. 1976 S.C. 437; Siemens Engineering and Manufacturing Company of India Limited v. Union of India A.I.R. 1976 S.C.1785; S.N Mukherjee v. Union Of India ., A.I.R. 1990 S.C. 1984; Shanti Prasad Agarwalla v. Union of India, A.I.R. 1991 S.C. 814, Krishna Swami v. Union of India, A.I.R. 1993 S.C. 1407 and M.L Jaggi v. Mahanagar Telephones Ni-gam Ltd., A.I.R. 1996 S.C. 2476.

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45. In another case of Ram Singh v. Punjab State Power Corporation & Ors. 2014 (2) R.C.R. (Civil) 246, the Hon'ble Punjab and Haryana High Court has also held in Paras-10 to 12 as under:

"10. The argument raised by the learned counsel for the respondents that no prejudice has been caused to the petitioner has no legs to stand for the reason that the provisions of Section 126(3) of the Act are mandatory in nature. Once the statute puts an obligation on the authority to do a particular thing in a particular manner, the authority would be duty bound to comply with the provisions of the Act in letter and spirit. Any other interpretation of the provisions of Section 126(3) of the Act would defeat the object of the Act. Appellate authority also fell in serious error of law while passing the impugned appellate order. In this view of the matter, the impugned orders are not sustainable in law.

11. The view taken by this Court also finds support from the Full Judgment of this Court in Kashmiri Lal v. The State of Punjab, 1984 AIR (Punjab) 87. The relevant observations made by the Full Bench, which can be gainfully followed in the present case, read as under:-

"13 ......A close perusal of the judgment on this point would show that the conclusion turned wholly on the ground that no prejudice would arise to the persons affected by the acquisition because limitation for filing objections runs from the date of the publication in the gazette and not from the date of notice in the locality. With the greatest deference, it would appear to me that this line of reasoning is not tenable in view of the categoric observations in Narindrajit Singh and others v. State of U.P. and others, 1973 R.L.R. 140. Therein, it was held that the provisions of Section 4 of the Act were so mandatory in nature that the question of any prejudice being caused or otherwise was wholly extraneous. It was attempted to be argued before their Lordships of the Supreme Court in the said case that since in cases of urgency under Section 17 of the Act, no objections could be filed against the acquisition, consequently no prejudice would arise to the persons affected by the lack of any public notice in the locality. This contention was sternly rejected by holding that the provisions of Section 4 (1) of the Act were mandatory in all situations irrespective of any prejudice to the parties and it was concluded as under:--

"........In our opinion Section 4 (1) has to he read as an integrated provision which contains two conditions; the first is that the notification in the official gazette must be published and the second is that the Collector has to cause public notice of the substance of such notification Saluja Mukesh Kumar CWP NO.1635 of 2013 6 2013.11.26 10:37 I attest to the accuracy and integrity of this document to be given.

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These two conditions must be satisfied for the purpose of compliance with the provisions of Section 4(1)."

The aforesaid observations would again indicate the sequence of the publication and the locality notice and it would appear that the notification in the official gazette must precede the public notice of the substance of such notification in the locality and not vice versa. The same result flows from the Ful1 Bench decision of this Court in Rattan Singh & another v. The State of Punjab and others, 1976 R.L.R. 379 which inevitably had followed the final court."

12. Recapitulating the facts of the present case, since the opportunity of being heard was admittedly not granted to the petitioner, the impugned orders have resulted in miscarriage of justice. Valuable right of the petitioner was taken away and principles of natural justice as well as mandatory provisions of law contained in Section 126(3) of the Act stood violated. Under these circumstances, the impugned orders cannot be sustained."

46. In one more case of Dakshin Haryana Bijli Vitran Nigam Ltd. & Ors. v. Permanent Lok Adalat Public Utility Services & Anr. CWP No.2644 of 2016 (O&M) decided on 11.01.2017, the Hon'ble Punjab and Haryana High Court has held in Para No.10 (relevant portion) as under:

"The rule of hearing and the rule of fairness in State action which form part of the concept of rule of law imposes an obligation on the State and its agencies/instrumentalities to give notice and opportunity of hearing and also to disclose reason for their actions which may adversely affect the rights of a person or which may visit such person with evil consequences. The rule that no man can be condemned unheard has been treated as an integral part of the concept of rule of law which permeates the scheme of our Constitution. The thin line of distinction between purely administrative actions and quasi judicial actions has been completely obliterated by the judicial verdicts. More than 30 years ago, their Lordships of the Supreme Court in State of Orissa v. Dr. (Miss) Binapani Dei and Others, AIR 1967 Supreme Court 1269 ruled that even administrative decisions may be invalidated on the ground of violation of the principles of natural justice."

47. In view of the facts and circumstances as mentioned above as well as by considering the ratio of law as laid down in the above noted cases/authorities, it is clear that a prior notice explaining all the

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details/reasons of raising the demand should have been served upon the complainant before raising the demand in question but no such notice was ever issued.

48. In First Appeal No.1015 of 2022, the appellant-PSPCL has raised an objection that the electric connection is not in the name of the complainant but the same is in the name of one Manoj Kumar. Similar issue is therein in First Appeal No.1016 of 2022. In this regard, it is relevant to mention that the complainant has specifically averred in Para-1 of the complaint that she took the property on rent along with a pre-installed electric connection bearing Account No.3002875997. The opposite party has also not denied this fact and also that complainant has been paying the consumption charges of said connection. Moreover, as per definition of 'consumer', his case is also covered under Section 2 (1) (d) of the Consumer Protection Act, 1986 (now Section 2 (7) of the Consumer Protection Act, 2019), which reads as under:

"(7) "consumer" means any person who— (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned

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person, but does not include a person who avails of such service for any commercial purpose.

49. From perusal of definition of 'consumer' as given above, the beneficiary of any such service availed by such person also comes under the category of consumer. Therefore, even if the complainant being tenant has not transferred the electric connection in her name, then also she falls under the definition of 'consumer', being the beneficiary of the services so provided by the PSPCL.

50. Keeping in view the detailed discussion as well as the relevant provisions and the case law as reproduced above, we do not find any merit in the contentions raised by learned counsel for the appellant(s) and no interference is required in the impugned order(s).

51. Accordingly, we find no merit in the submissions raised by the appellant and we dismiss all the five (5) appeals (as mentioned in first para of this order) on merits as well as on limitation also. Accordingly, the Miscellaneous Applications for condonation of delay are also dismissed.

52. Since the main cases have been disposed of, so other pending Miscellaneous Applications, if any, are accordingly disposed of.

53. The amount(s) deposited by the appellant(s) in the appeals at the time of filing thereof, along with interest which has accrued thereon, if any, shall be remitted by the Registry to the District Commission forthwith separately in each appeal. The

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respondent(s)/complainant(s) may approach the District Commission for the release of the amount as per the impugned order(s) and the District Commission may pass appropriate order(s) in this regard in accordance with law.

(JUSTICE DAYA CHAUDHARY)

PRESIDENT

(SIMARJOT KAUR)

MEMBER

January 18, 2023. (Gurmeet S)