BEFORE

THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION 

LUCKNOW.  

Petition No:  

Present:  

1.        Shri J.L. Bajaj, Chairman

2.        Shri S.C. Dhingra, Member

3.        Shri Arun Sarkar, Member

In the matter of:

Obligation of M/s Baidyanath enterprises Ltd. regarding its payment of Minimum Consumption Guarantee to UP Power Corporation Ltd.

And

In the Matter of:

UP Power Corporation Ltd through Executive Engineer, Electricity Distribution Division-1, Civil Lines, Jhansi.

------Appellant

And

1.        M/s Baidyanath Enterprises, 172, Gusainpura, Jhansi

2.        The Director, Electrical Safety, Gomti Nagar, Lucknow.

----Respondents

ORDER

1. This appeal has been filed by the U.P. Power Corporation Ltd (hereinafter referred to as the “Appellant” which also includes its predecessor UPSEB) u/s 35 of the Uttar Pradesh Electricity Reforms Act.1999, against the order dated 14.3.2001 of the Electrical inspector, U.P (hereinafter referred to as “Electrical Inspector” as per the provision of the Indian Electricity Act, 1910) in statutory reference no.12/99-2000 decided under clause VI (3) of the Schedule to the Indian Electricity Act, 1910 (hereinafter referred to as “the Schedule”).
2. The Electrical Inspector, vide his order, has held that the 33 KV Hansari-Spinning Mill feeder (hereinafter referred to as “the Spinning Mill feeder”) through which supply was given to M/s Baidyanath Enterprises Limited (hereinafter referred to as the Respondent) was technically incapable of supplying the sanctioned load of 3000KVA. Although, the respondent had made a prayer before the Electrical Inspector to disallow the demand of MCG by the appellant, he did not pass any order on this issue on the ground that he lacked jurisdiction to adjudicate the issue relating to the payment of MCG.
3. Aggrieved by the order of the Electrical Inspector regarding the determination of the technical capability of the feeder, appellant has preferred this appeal on the ground that the Electrical Inspector lacked jurisdiction to adjudicate the issue relating to the technical capability of the electrical system under Clause VI (3) of the Schedule. In the alternative, they have argued that even if it is assumed that the Electrical Inspector had the jurisdiction, the findings of the Electrical Inspector were contrary to the facts and circumstances of the case. The Appellant has prayed that the impugned order be set aside. The appeal has been contested by the respondent.
4. It would be useful to briefly recount the facts of the case. The respondent requested the appellant for sanction of 3000KVA of load for their factory Baidyanath compound Gwalior Road, Jhansi on 6.8.96 that was sanctioned on 10.10.96. The meter was installed and energized on 31.3.97 in the presence of the respondent’s representative. From 26.4.96 bills were raised for payment of Minimum Consumption Guarantee (MCG). The respondent paid the bills for MCG for period April 97 to June 97. However, they have not paid the bills for the subsequet months.In the meanwhile, the appellant removed the meter due to non-payment of MCG and supply was disconnected in the month of October 97. The respondent approached the Chairman of the appellant Company for arbitration as per the provisions in the agreement between the parties. However, this request was not proceeded with as the respondent failed to first pay the amount due which was required to be done as per the agreement. The respondent then filed a petition with Monopolies and Restrictive Trade Practices Commission (MRTPC).  This case is still pending with the MRTPC. However, MRTPC, vide its order dated 30.11.99, rejected the prayer for Interim Relief. Subsequent to this Respondent filed a reference before the Electrical inspector, Government of U.P. u/s VI (3) of the Schedule. It is noted that the respondent also approached the Hon’ble High court for interim relief. However, the Hon’ble court dismissed the petition vide its order dated 4.11.2000 on the ground that the statutory reference was pending with the Electrical Inspector. As mentioned earlier, the Electrical Inspector has held that the electrical system was incapable of supplying the contracted load to the factory of the respondent and it is against this order that the present appeal has been filed.
5. It is the case of the appellant that the Clause VI (3) of the Schedule does not give jurisdiction to the Electrical Inspector to decide about the technical capability, or otherwise, of the electrical system and therefore, the order is liable to be set aside for want of jurisdiction. In the alternative they have averred that the contention of the respondent that the system was technically incapable to supply the contracted load is incorrect and they have given facts in support of their case. On the other hand, it is the case of the respondent that the spinning mill feeder was already overloaded and the officers of the appellant company had themselves admitted this fact in several correspondence. As such, the system could not have supplied them the contracted load. They have further argued that the fact that the appellant company had itself initiated a project for constructing a new feeder between 132 kV substation Hansari and 33 kV Substation Nanadanpur goes to prove that the existing feeder through which they were given the connection was insufficient to meet the requirements of their factory. They have, therefore, argued that in view of the inadequate technical incapability of the feeder, they are not liable to pay the MCG charges. It is also their case that the Electrical Inspector is authorized under the relevant provisions of law to adjudicate on this issue and accordingly, they have prayed that the appeal be not allowed.
6. After considering the facts of the case and the pleas made by the parties following issues need to be deliberated upon to decide the appeal:

(a)   Whether the Electrical Inspector had jurisdiction to adjudicate regarding the technical capability of the Electrical System under Clause VI (3) of the schedule? If no, what are its implications?

(b)   Whether the appellant company fulfilled its part of the contract to make available the supply to the respondent?

(c)    Whether MCG charges are payable by the respondent?

Our findings on these issues are given in subsequent paragraphs.

Jurisdiction of Electrical Inspector under Clause VI(3) of the Schedule

7. The clause VI (3) of the Schedule is reproduced below:

“Where any difference or dispute arises as to the amount of energy to be taken or guaranteed as aforesaid, or as to the cost of any service-line or as to the sufficiency of the security offered by any owner or occupier (or as to the position of the meter board) or as to the improper use of energy, or as to any alleged defect in any wires, fittings, works or apparatus, or as to the amount of the expenses incurred under the third proviso to sub-clause (1), the matter shall be referred to an Electrical Inspector and then decided by him.”

8. The reference “amount of energy to be taken or guaranteed as aforesaid” in this clause is to the subsection (a) of the first proviso to clause VI (1) of the Schedule. As per the scheme of Clause VI, the distribution licensee is obliged to supply electricity to owners or occupier living in the vicinity of any area where distribution main has been constructed. However the first proviso lays down that before such supply is given, the consumer has to execute an agreement with sufficient security binding himself to take the supply of energy for a period not less than two years of such amount of energy as will assure to the licensee, at the current rates charged by him, an annual revenue not exceeding 15% of the cost of the service line. It is in this context that the clause VI (3) of the Schedule provides that if there is a dispute as to the sufficiency of the security so required under clause VI(1) of the Schedule or the minimum amount of energy to be taken or guaranteed then such dispute shall be referred to the adjudication of the electrical Inspector. The key issue here is that the dispute that may be referred to the Electrical Inspector, and one that he may decide, is regarding the quantum of security demanded by the licensee and the minimum amount of consumption of energy that is to be guaranteed by the consumer to meet the revenue requirement of the licensee.  There is no reference in clause VI (3) of the Schedule whereby Electrical Inspector can adjudicate whether the licensee’s electrical system feeding the consumer’s premises was capable or not of supplying the contracted load. Obviously, such a dispute would arise before the agreement is signed and the load is released. It is undisputed that in the instant case an agreement had already been entered into between the appellant and the respondent and the system had been energized in the premises of the respondent in his presence. In view of this clear provision of law we conclude that the Electrical Inspector exceeded his jurisdiction in determining the technical capability of the feeder and the impugned order is liable to be set-aside on this ground alone. The first issue is accordingly decided.

9.  Having decided the jurisdictional issue as above, the Commission deliberated whether it is for the Commission to adjudicate upon dispute between a licensee and its consumers where the avenues of redressal have not been established. A reference to the provisions of the Electricity Reforms Act, 1999 is in order. It is noted that section 10(k) of the Act enjoins upon the Commission to “ensure a fair deal to the consumers”. Further, section 34 of the said Act authorizes the Commission to arbitrate in disputes between the licensee and the consumers arising out of the regulations regarding consumer rights prescribed under section 30(1) of the Act. Thus, there is no legal bar on the Commission in adjudicating upon disputes between the licensee and its consumers. However, in the matter of consumer grievances the Commission would like to define its role as one of a watchdog to ensure that the systems for dealing with the consumer grievances are laid down and adhered to rather than to adjudicate on each grievance. Thus, a consumer may approach the Commission only after the process within the licensee system is exhausted and not otherwise.

10.  In the instant case although this process has not been followed, the Commission is of the view that it is a fit case for the intervention of the Commission as the dispute is continuing since long and in different fora. The licensee has already taken a stand in the matter and now it is unrealistic to presume that the respondent would get a fair hearing if the dispute is referred back to the licensee. In these circumstances the Commission has proceeded further with the matter.

Whether the Supply was made available to the respondent as per the agreement?

11.  It is undisputed that the line was extended up to the premises of the respondent and the meter was installed.  It is the case of the respondent that the spinning mill feeder was overloaded and therefore incapable of meeting the contracted demand.  On the other hand, the appellant’s case is that the spinning mill feeder was capable to deliver the contracted load and it was the respondent who failed to install its plant and machinery. The question of inadequacy of the feeder could arise only after the load was connected. In the absence of connected load, the respondent’s case is based upon a hypothesis and cannot be relied up on. 

12. The key issues involved here are (i) whether the feeder was capable of supplying the contracted load and (ii) whether conclusion regarding the fact of supply may be reached with reference to the theoretical computation of the line capability or on the basis of failure in actual supply?

13.  It is evident from the record that the respondent did not install its plant and machinery because of some technical problem that had nothing to do with the appellant.  This is brought out clearly in the letters of respondent dated 10-7-97 and 1-8-97 to the Chief Engineer (Commercial) and the Chief Minister of the State respectively. The relevant extracts are given below: 

“Since our plant is imported, consisting of Machinery from Germany and Italy, we are undergoing major modifications. There are complex technical difficulties arising out of the fact that this plant is based on 200V, 60 Hz. There are major electronic control devices incorporated in it. If we run the plant on 50 Hz, we lose up to 25 % in motor efficiency. Since it is well known, that Spinning Unit have to work at over 95 % efficiency level in order to be profitable, therefore, without complete overhaul of motors, pulleys, gears and electronic devices we are unable to run our unit.

We, very humbly request you to kindly allow temporary suspension of our connection for a period of 5 to 6 months. We need this time to import certain parts and to replace them in our unit. …Since you are aware that to import equipment we need at least 3 months of shipping time-------We assure you that we will not use your power during this period and meter reading will remain same”.

14.   It is noted that this letter was written on 1/08/97 while respondent has made out a case that he had been writing to the appellant since April’97 that the feeder capacity was inadequate. This fact has not been denied by the respondent and it proves that as of August’ 97 the plant of the respondent was not installed. When even the plant was not installed it is farcical for respondent to claim that adequate supply was not available.

15.   The respondent has taken another plea to establish that the supply was not available by submitting that had it been the case, the transformer would have recorded at least “No load losses” even if his plant and machinery were not available. The argument of the respondent does not seem to be correct, as he himself was responsible for the operation and maintenance of 33 KV isolator. The effect of transformer charging could have reflected on the 33 KV meter only if the isolator was closed, which was an operation to be carried by the respondent himself. Further, taking cognizance of the fact that the circuit CT installed at the 33 KV metering apparatus was having a CT ratio of 150/1 with a multiplying factor of 150, we agree with the submission of the appellant that it was almost improbable for the meter to record any change as the meter would have recorded one unit against an actual consumption of 150 units, which was not possible with the transformer heating alone.

16.   In view of the above facts we come to the conclusion that the line was installed up to the factory premises of the respondent and it was up to the respondent to utilize the supply.  In our opinion whether supply was available or not has to be determined with reference to actual fact of the respondent having been unable to run its plant due to lack of supply. In the absence of any connecting load, which was clearly the responsibility of the respondent, the respondent cannot complain about the inadequacy of supply.

17.   Even though our view is clear that it is for the consumer to establish that it was unable to run its connected load due to inadequate supply and that such issues cannot be decided on the basis of a theoretical consideration of the system capability, we have nonetheless examined the issue of the technical capability as raised by the respondent.  The respondent has contended that a load of 315 Amp was already connected to the concerned feeder before the load was sanctioned to him. Thus, total load on the feeder would have been 367.5 amp if their load was also connected to the feeder. They have argued that the DOG (ACSR) conductors, which were used for supplying the electricity, were incapable of carrying current in excess of 300 Amp. It is, therefore, their case that the spinning mill feeder could not have supplied them the contracted load.  They have also argued that the fact of technical incapability of the feeder is corroborated by the admission of the officers of the appellant company made while sanctioning the load that proper supply could be given only after a new feeder is constructed between 132 kV substation Hansari and 33kV substation Nanadanpur and subsequent steps taken by the appellant to initiate a project for construction of a new feeder.

18.   The current carrying capacity of the DOG (ACSR) conductor is at the center of the dispute. The commission verified the same from various sources like Central Electricity Authority and few manufacturers’ manual and found out that the current carrying capacity of the said conductor is 320 amps at 40 degree C.  The maximum operating load, achieved on the said feeder during the entire disputed duration (from 31-3-97 to 26-10-97), was 250 amps. Even if the load of M/s Baidyanath is added to the feeder and it is assumed that M/s Baidyanath would have utilized up to its full load capacity, the load on the feeder would have been, at the most, 303 amps, which is less than the current carrying capacity of the Dog ACSR conductor i.e. 320 amps at 40 degree C. The Commission, therefore, does not agree with the respondent that the total load on the feeder was higher than the current carrying capacity of the Dog conductor. Further, appellant has been able to show that above feeder has successfully carried a load of 360 amps in the month of July 2001, which proves that there was hardly any problem with the current carrying capacity of the conductor.  The Commission also does not agree with the calculation of the respondent regarding various technical parameters such as MW-KM and V_R. Even if we consider the load on the conductor as the maximum operating load i.e. 300 amps, the corresponding voltage regulation at M/s Baidyanath Enterprises Limited would have been 8.77%. This figure of voltage regulation has been arrived at taking the distances, of 132 KV S/s Hansari to 33 KV S/s Nandan pur - 9 Kms, 33 KV S/s Nandan pur to 33 KV S/s Spinning Mill - 5 Kms and 33 KV S/s Spinning Mill to the S/s of M/s Baidyanath Enterprises-0.45 Km, as submitted by the appellant. The voltage regulation, so calculated, is less than the statutory 9% as given in the Rule 54 of the Indian Electricity Rules, 1956. The Commission further agrees with the appellant that any voltage drop, at the M/s Baidyanath Enterprises end could have been compensated within the permissible limits by using the Tap Changer available at the transformer. Again, MW-KM parameter is a direct function of voltage regulation therefore, if percentage voltage regulation is within the permissible limit, there is no question of the said parameter exceeding the permissible limit.

19.   In view of the fact that ambient temperature has a direct impact on the current carrying capacity of the feeder, the Commission, in its hearing dated 4-7-2001, directed both the parties to furnish the temperature profile of Bundelkhand region and vintage of the Spinning Mill feeder. As far as temperature profile of Bundelkhand region is concerned, appellant submitted a monthly average temperature chart of Jhansi region for various months of year 2000 showing monthly average maximum temperature, monthly average minimum temperature and average of maximum and minimum temperature. In response to this, the respondent submitted the daily temperature chart of Jhansi indicating maximum temperature on each day for the various months of year 1996, 1997, 1998 & 1999. It is noted that the maximum temperature in the Bundelkhand region exceeds 40 degree C and on certain days goes up to 45 degree C in the months of May and June and at this temperature the current carrying capacity of Dog ACSR conductor may reduce to 250-255 amp. However, there are two issues involved here. Firstly, this would happen only if the temperature and load peak at the same time. However, the Commission has noted that a feeder like the one in dispute achieves its electrical load peak between 6 to 10 pm, (which is also recognized as peak hours during the summer) while the temperature peak occurs at around 1:00 pm to 2:00 pm, when load of any mixed feeder during the summer reduces by at least 40%. Therefore, it is not proved that the feeder could not have supplied the contracted load. Secondly the average temperature even during May and June was between 30 and 35 degrees and at these temperatures the current carrying capacity of the Dog Conductor is 340 amps, which is much more than the connected load including that of the respondent. The capacity during remaining month should not be in question as even the maximum temperature in those months is much less than 40 degree C. On the basis of the above analysis the Commission concludes that the electric system was capable to supply the contracted load to the respondent within the prescribed tolerances.

20.   Another argument offered by the respondent is that the appellant company had itself proposed to construct a new feeder and this showed that the existing feeder was incapable of meeting the contracted demand.  Respondent has relied upon several letters written by the officers of the appellant company and has also referred the sanction order for construction of a new feeder. This has not been denied by the appellant. However, the appellant has argued that system up-gradation is a continuous exercise and this is done to plan for future increases in demand. However, it does not prove that the appellant failed to supply power to respondent as per agreement. Respondent has also relied upon the judgments in N.I.I & S.Co. Vs. State of Haryana (1976), M/s Raymond Vs. MPEB and M/s Dhanwat Rice and Oil Mills Vs. Bihar SEB (1989).  In these cases it has been held that if the supplier fails to meet the contractual supply, it would be bound to make appropriate reduction in the MCG.  However, we do not agree that the facts of the present case are similar to these cases. In the present case it is undisputed that the respondent did not connect its load to the system and therefore question of supplier failing to meet the requirement of contracted quantity of the supply could not have arisen. On this ground also the respondent has failed to prove that the appellant did not meet its contractual obligations.

Whether the respondent is liable to pay the MCG charges?

21.   In view of the fact that the respondent has failed to prove that the appellant failed to supply electricity as per agreement, it remains liable to pay the MCG charges as per rules.

22.   The Appeal is, accordingly, allowed. The order dated 14-3-2000 of the Electrical inspector is set aside and the respondent is directed to pay the MCG charges to the licensee as per rules. However, in view of the fact that it is the respondent who had incurred the major cost for laying the line and it has already suffered on account of this in fructuous investment, the appellant would consider sympathetically the request of the respondent, if any made, for reduction /remission of these charges, if permissible, under rules.

(Arun Sarkar)                (SC Dhingra)             (J L Bajaj)

    Member                      Member                   Chairman

Place: Lucknow

Date:   30^th October 2001

 

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