BEFORE THE GUJARAT ELECTRICITY REGULATORY COMMISSION AT GANDHINAGAR

PETITION NO. 1642 OF 2017

In the matter of:

Petition under Section 62 (6) , 86 (1) and 94 (1) (g) of the Electricity Act, 2003 read with the provisions of the GERC the (Electricity Supply Code and related matters) Regulations, Tariff Regulations and Tariff Orders passed by the Commission, challenging the illegal merger notice and arbitrary levy of 11.1% charges on the total consumed units of HT connections by the distribution licensee PGVCL and for violation of the Electricity Act, 2003 and Regulations framed under it by the Commission.

Petitioner : M/s T. T. Limited Unit: Gopeshwar Spinning Mill Survey no. 89, Rajula – Mahuva National Highway Near Reliance Petrol Pump, Village: Kadiyali, Tal: Rajula Dist: Amreli – 365560

Represented by : Advocate Ms. Shilpi Jain Sharma

V/s.

Respondent No. 1 : Paschim Gujarat Vij Company Limited Registered & Corporate Office, "Paschim Gujarat Vij Seva Sadan", Off. Nana Mava Main Road, Laxminagar, Rajkot - 360004.

Represented by : Advocate Ms. Ranjitha Ramachandran along with Shri J. J. Gandhi

Respondent No. 2 : Office of the Electricity Ombudsman Barrack No. 3, Polytechnic, Ambawadi, Ahmedabad- 380015.

Represented by : Nobody was present

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CORAM: Shri Anand Kumar, Chairman Shri K. M. Shringarpure, Member Shri P. J. Thakkar, Member

Date:09/09/2019

ORDER

1. The present petition is filed by M/s T. T. Limited (hereinafter referred to as ‘the Petitioner’) under Section 62 (6) , 86 (1) and 94 (1) (g) of the Electricity Act, 2003 read with the provisions of the GERC (Electricity Supply Code and related matters) Regulations, Tariff Regulations and Tariff Orders passed by the Commission, challenging the illegal merger notice and arbitrary levy of 11.1% charges on the total consumed units of HT connections by the distribution licensee PGVCL and for violation of the Electricity Act, 2003 and Regulations framed thereunder by the Commission.

2. A brief background and the facts as mentioned in the petition are as under:

2.1. The Petitioner, a company registered under the provisions of the Companies Act, having Head Office in Delhi, is engaged in the business of manufacturing of yarn and related textile products. The Petitioner is having yarn manufacturing plants at Village Kadiyali, near Rajula, Dist. Amreli. The Petitioner is a consumer of Paschim Gujarat Vij Company Limited (PGVCL) (hereinafter referred to as ‘Respondent’ or ‘Respondent No. 1’). The Petitioner’s unit, M/s Gopeshwar Spinning Mill, is HT consumer with PGVCL Savarkundla Division having connection No. 43133 and contract demand of 2450 kVA under HTP-I tariff which was released on 23.07.2009. Connection to another unit of the Petitioner, M/s Rajula Spinning Mill, in adjacent Survey No. of same village was released by the Respondent on 06.07.2013 with contract demand of 2400 kVA and connection No. 43149. The connections were released by the Respondent as per contemporary rules and regulations. During the whole procedure, the documents submitted by the Petitioner were scrutinized by competent authorities of the Respondent and no query was raised regarding legality of the documents. On the promise of giving electric supply to the units at 11 kV and as separate entity, the Petitioner had spent more than Rs. 100 Crore on new manufacturing units and accordingly power supply was released. Both the connections are different entity and cater supply in different survey nos. having separate VAT Certificates and separate factory registration numbers.

2.2. On 08.06.2015, the Petitioner received a notice from the Respondent for merging the above two connections, i.e. after 2 years of releasing the connection of M/s Rajula Spinning Mill.

2.3. The Petitioner had replied to the above cited notice on 15.06.2015 which was rejected by the Respondent vide their letter dated 06.07.2015 and started billing from July, 2015 by considering the two connections as one and by adding the contract demands and units consumed in both the connections. An additional loss of 11.1% was added in total

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units consumed and a new combined bill was issued in the name of M/s Gopeshwar Spinning Mill by the Respondent.

2.4. The Petitioner had no choice but to agree with the illegal demand of merger since large amount is invested in the plants and machineries and hundreds of labours are dependent for their livelihood on the factories. The Petitioner applied for load extension at 66 kV voltage level, which was released by the Respondent in February, 2017.

2.5. The levy of 11.1% continued till release of 66 kV connection in the name of M/s Gopeshwar Spinning Mill. Nearly, Rs. 4.37 Crore has been collected from the Petitioner by the Respondent on this account.

2.6. Against the issuance of merger notice and collection of 11.1 % additional losses on total units consumed, by the Respondent, the Petitioner had filed its grievances in the Consumer Grievances Redressal Forum (CGRF) of PGVCL at Bhavnagar, against the Executive Engineer (Savarkundla) under the provisions of Gujarat Electricity Regulatory Commission (Consumer Grievances Redressal Forum and Ombudsman) Regulations, 2011.

The CGRF - Bhavnagar, vide its Order dated 22.08.2016, decided as under:

a) As the applicant had accepted merger, CGRF need not interfere in the matter.

b) As the Respondent incurred high losses in supplying power at 11 kV, the infrastructure can be used for other consumers and loss level of 10 % is defined in GERC tariff order; the 11.1% additional charges collected by Respondent is in order.

2.7. Against the CGRF’s Order, the Petitioner filed an appeal with the Ombudsman. The Ombudsman, vide its Order dated 09.12.2016, observed as under:

a) The issue of merger of both connections and interpretation of clause 4.1.17 of GERC Supply Code is sub judice and pending with the High Court in other cases.

b) The issue of recovery of 11.1% additional charges on monthly energy charges by the Respondent falls within the jurisdiction of the Commission.

2.8. The Petitioner filed a review petition against the Order of the Ombudsman which was denied by the Ombudsman vide letter dated 10.01.2017. Consequently, as per the directives of the Ombudsman, the Petitioner filed the present petition.

2.9. The Petitioner submitted that the merger notice is served by the Respondent to selected parties only. Many industrial units having HT or LT connections owned by the same owner and located in adjacent premises are not served with merger notice and in many cases where merger notice is served, the billing is not merged. Such actions of

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preferential selection for issuing merger notice and combined billing by the Respondent are in violation of the Petitioner’s fundamental rights as a consumer of the Respondent.

2.10. In the present petition the issue involved is about interpretation of the GERC (Electricity Supply Code and related matters) Regulations, 2005, Tariff Order dated 17.04.2015 passed in Petition No. 1466 of 2014 and Tariff Order dated 31.03.2016 passed in Petition No. 1550 of 2015. The recovery of additional 11.1% charges over and above regular energy bill by the Respondent is not allowed in any of the above Tariff Order.

2.11. It is further mentioned that Section 62 (6) of the Electricity Act 2003, states as under:

“If any licensee or a generating company recovers a price or charge exceeding the tariff determined under this section, the excess amount shall be recoverable by the person who has paid such price or charge along with interest equivalent to the bank rate without prejudice to any other liability incurred by the licensee.”

In the present case, the Respondent has recovered rates exceeding the tariff by combining the consumption of two separate connections and by addition of 11.1% as loss on it. The Petitioner has sought refund of the said amount along with interest and take action against the Respondent under Section 86 of the Electricity Act, 2003.

2.12. The Petitioner has prayed as under:

A. To admit the present petition.

B. To quash the CGRF Order as the same is not in line with the Regulations and to issue directions to Ombudsman and CGRF in such cases.

C. To quash the merger notice of existing connections issued to the Petitioner which is not legal and valid under the existing law.

D. The recovery of 11.1% monthly energy charges Rs. 4,37,20,691.27 in addition to regular bill amount for actual energy consumption to be refunded by the Respondent along with interest at the rate of 18%.

E. The service charges paid by the Petitioner for securing 11 kV connection should be refunded as the line is erected for 11 kV connection, as asked by PGVCL and now the same is the property of PGVCL.

3. The Commission held hearings on 03.04.2017, 20.06.2017, 16.09.2017, 13.10.2017, 25.01.2019 and 18.05.2019.

4. The Commission vide its Daily Order dated 24.04.2017 admitted the petition and noted that the Petitioner has made the Electricity Ombudsman as a party Respondent No. 2 and also prayed for quashing and setting aside the CGRF order as the same is not in

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line with the Regulations. Further, the Petitioner has prayed for issuing directions to the Ombudsman and CGRF in such cases. The Commission clarified that CGRF and Electricity Ombudsman are the statutory bodies constituted under the Electricity Act, 2003. The order of CGRF is appealable before the Electricity Ombudsman and the Electricity Ombudsman’s order is challengeable before the Hon’ble High Court only and not before the Commission. Hence, the Commission directed the Petitioner to decide as to whether the prayer sought against the order of CGRF and Ombudsman be continued or otherwise, and whether the Petitioner desires the Electricity Ombudsman to be continued as a party Respondent or not, so that the Commission may decide these issues in accordance with law.

5. The Petitioner, in its submissions and replies dated 19.08.2017, has stated that the present petition is filed in line with the order of the Ombudsman and there is no question of filing petition in the Commission against the order of the Ombudsman. Also, the Commission in its Daily Order dated 24.04.2017 noted that the order of CGRF is appealable before the Ombudsman and the Ombudsman’s order is challengeable before the Hon’ble High Court only and not before the Commission. The Commission had also directed the Petitioner to decide as to whether the Ombudsman is a proper and necessary party for the adjudication of the issue in the present case. It was also stated that the Ombudsman and CGRF are the statutory bodies constituted under the Electricity Act, 2003.

In view of the above, the Petitioner submitted that the presence of the Ombudsman is not required for the adjudication of the present case before the Commission and therefore the Commission may permit the Petitioner to delete the Respondent No. 2, the Electricity Ombudsman as party Respondent from the cause title of the present petition.

6. The Respondent filed its replies as under:

6.1. Regarding merger of the HT connections of the Petitioner, the Petitioner has already accepted the requirement of merger of its separate connections on 31.08.2015, with application dated 12.10.2015, filed on 15.10.2015 and paid the registration charges on 04.11.2015. The merger has also been effected. Having agreed for the merger, it is not open to the Petitioner to now seek to challenge the merger of the connections or seek quashing of the notice of the merger.

6.1.1. The contention of the Petitioner that it had no alternative is misconceived. The Petitioner did not challenge the letters of the Respondent at the relevant time. The Petitioner filed the petition before CGRF on 30.05.2016, i.e. 9 months after agreeing for merger. The Petitioner had vaguely stated that it had no alternative but to agree to merger without any specific pleadings or proof to conclusively establish the same.

6.1.2. The action of the Respondent in directing the merger of the separate connections is in accordance with law. The Petitioner has two different HT Connections being No. 43133 and 43149 for the same legal entity and for the same premises. Mere existence of

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different survey numbers for the land comprised in the premises does not mean that they are separate premises for the purpose of the Supply Code. The Petitioner has not submitted any evidence to demonstrate that the premises is separated by any public road or private premises.

6.1.3. The Respondent submitted that the GERC Supply Code, 2005 provides as under:

“4.1.17 The Distribution Licensee will not provide more than one connection / meter for one premises. The consumers opting for second meter will have to produce separate legal entity such as documents of separate Income Tax No. / Sales Tax No. ration card and rent or lease agreement.”

Further, in GERC (Electricity Supply Code and Related Matters) Regulations, 2015 (hereinafter referred to as ‘Supply Code, 2015’), the Commission has stipulated that even for adjoining or contiguous premises, separate connection cannot be granted to the same owner:

“4.28 The Distribution Licensee will not provide more than one connection for one premise or in adjoining / contiguous premises belonging to same owner if these are not separated by a public road or by private premises. The consumers opting for second connection will have to produce separate legal entity documents such as separate Income Tax No. / Sales Tax No., ration card and rent or lease agreement.”

The Respondent has stated that the reason for the above requirement to have only one connection is because a single entity cannot, by way of multiple electricity connections, seek separate contract demand for each connection. This would result in loss to the distribution licensee not only for payment of demand and energy charges but also in terms of distribution loss as the supply of power would be under lower voltage than what would be required if the contract demand had been merged.

6.1.4. The above principle of one connection for one premises / contiguous premises used by the same entity applies whether the connection was granted before the Supply Code or after the Supply Code.

6.1.5. Despite being aware of the law, the Petitioner deliberately applied for the second connection under a different name without disclosing that it is a division of the T.T. Limited which has an existing connection. If the Petitioner had properly disclosed the above fact, the Respondent would not have issued the connection. The Petitioner cannot take advantage of its own default and concealment to claim that the connection had been granted by the Respondent. It is well settled principle that a person cannot take advantage of its own wrong.

6.1.6. It is submitted that merely because the additional connection was released would not render the provisions of the Supply Code to be inapplicable. The connection would be

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required to be modified or changed to comply with the Supply Code. The Respondent is permitted to take correct action in case of an erroneous classification which has also been recognized by the Hon’ble High Court.

6.1.7. The Petitioner cannot claim continued enjoyment of connections despite the same being contrary to the law in force. This is also clear from Regulation 3.5.1 of the Supply Code, 2005, which states as under:

“3.5.1 If it is found that a consumer has been classified in a particular category erroneously, or the purpose of supply as mentioned in the distribution service Agreement has changed or the consumption of power has exceeded the limit of that category or any order of reduction or enhancement of Contract Demand has been obtained, the Distribution Licensee may reclassify him under appropriate category after issuing notice (with minimum notice period of 30 days) to him to execute a fresh Agreement on the basis of the altered classification or modified Contract Demand. If the Consumer does not take steps within the time indicated in the notice to execute a fresh Agreement, the Distribution Licensee may, subject to the provisions of the Acts, Rules and Regulations for the time being in force, after issuing a clear 21 days show cause notice and after considering his explanation, if any, disconnect the supply of power. Further, the Distribution Licensee shall dispose of all such applications for change of tariff class by a Consumer within maximum period of seven days after receipt of such application regarding the change of tariff class or communicate the reasons for not changing the tariff class, as applicable. In case of any dispute, the matter shall be referred to Forum for redressal of consumer grievances.”

The above provision clearly provides that even if the classification is made erroneously, the distribution licensee is empowered to reclassify such consumer under appropriate category in pursuance of the said Regulation.

The Supply Code, 2015 now specifically provides that a single entity can get a single connection for adjoining premises unless it is separated by public road or private premises i.e. the Commission has clearly stipulated that even for adjoining or contiguous premises, separate connections cannot be granted to the same owner.

6.2. The Hon’ble High Court of Gujarat in Lakhani Filaments Pvt. Ltd. v. Dakshin Gujarat Vij Company Ltd. and Another dated 08.04.2015 in SCA No. 15105 of 2012 has held that Regulation 4.1.17 is applicable even to the connections granted prior to the Supply Code, 2005. In that case, the Hon’ble High Court has upheld the notice of merger for connections granted both prior to the Supply Code as well as connection granted after the Supply Code. Further, the Hon’ble High Court has held that it is the duty of the Respondent to take corrective measures and reclassify the consumer. The relevant portion of the said judgment is reproduced below:

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“14.1 Though, it is true that the factual aspects i.e. the first HT connection came to be granted and released in favour of the petitioner in July-1998 and second HT connection granted and released in favour of the petitioner in June-2003 and third HT Connection came to be granted and released in favour of the petitioner in July-2006 is not disputed even by the respondents, it is equally true that since the dates on which the said connections come to be released and granted, the petitioner is enjoying the said connections and even on the date of which the communication / notice dated 07.10.2010 come to be issued, the petitioner was operating said three Electricity Supply Connections. …………….

15.8 In tight of the scope and effect of said provisions and in view of the object of said provision and clear language and intent of said two clauses, there is no room to claim and contend that the respondents have tried to give retrospective effect to the said two clauses though the Rules do not provide for retrospective operation. The said clause clearly postulate that even in the cases where the classification has been made and / or more than one connections / meters are provided to single consumer not having separate legal entities, then appropriate corrective measures must be taken and reclassification should be done. In light of the said clauses it cannot be said that the respondent has retrospectively enforced the Rules. ……………….

17. Besides this, when the HT Connections granted by the respondent Company are still in operation, then the existing three connections would stand covered by Electricity Supply Code and merely because it was granted and released earlier, it will not take the said connections out of the reach of the Act and the purview of the Electricity Supply Code, which came into force on the Notification No. 11/05. ……………….

23.2 Actually, in present case, the said provisions empower and enable, rather oblige, the respondent Electricity Company to take appropriate actions i.e. corrective measures, so as to reclassify the consumer in whose favour more than one supply connection (contrary to the provisions contained under clause No. 4.1.17 read with 3.5.1) is granted. The electricity company / licencee under the Act is obliged by the said provision to take corrective measures in those cases where more than one supply connections are granted to the one consumer though the units / undertakings (in respect of which such additional connections are granted) of said consumer are not, and cannot be treated as, independent legal entities. The respondent Company has taken the

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impugned action in view of the requirements prescribed by said two clauses...... ”

Similarly, in the present case, after Supply Code, 2015 came into force, the Petitioner is not entitled to maintain two separate connections for adjoining premises. It is submitted that the application for merger of connection was made by the Petitioner after the Supply Code, 2015 and the merger of connections was therefore valid.

6.3. The Respondent submitted that the Petitioner has relied on the interim order of the Division Bench of the Hon’ble High Court of Gujarat in Aarvee Denim. The observations recorded are a prima facie view and the matter has not been finally disposed of. It is a well settled principle that there is no law laid down in the interlocutory stage. To substantiate this argument, the Respondent relied upon the following judgements:

(i) State of Assam v/s. Barak Upatyaka D.U. Karmachari Sanstha (2009) 5 SCC 694 – (Supreme Court)

(ii) Pijush Kanti Chowdhary v/s. State of West Bengal and Ors. (2007) 2 CAL LT 577 (Calcutta High Court)

(iii) Jayshree and Ors. v/s The State of Maharashtra and Ors. 2017 (3) ALL MR 555 (Bombay High Court)

(iv) Judgement of Hon’ble APTEL dated 04.07.2017 in Appeal No. 32 of 2015

6.3.1. Further, the Single Bench of the Hon’ble High Court had upheld the actions of the distribution licensee even though the consumer had adjoining premises. Though the order of the Single Bench has been stayed, this would not render the order non est. To substantiate this argument, the Respondent relied upon the judgement of the Hon’ble Supreme Court in Shree Chamundi Mopeds Ltd. v/s Church of South India Trust Association (1992) 3 SCC.

6.4. Regarding the issue of separate legal entity, the Respondent submitted that the Petitioner itself has admitted that Gopeshwar Spinning Mill and Rajula Spinning Mill are units of M/s T.T. Limited who is the Petitioner. From the description in the petition itself, it is clear that the Petitioner is a single legal entity and had sought separate connections for its units / divisions. This is also clear from the fact that the Petitioner has filed the present petition through M/s T.T. Limited and not through Gopeshwar Spinning Mill or Rajula Spinning Mill. It was also admitted by the Petitioner during arguments that only M/s T.T. Limited can take legal action. There is no separate legal entity of the units which can sue in its own name. The Electricity Act, 2003 under Section 2 (49) recognizes a person as a company or body corporate which in this case is only T.T. Limited and not Gopeshwar Spinning Mill or Rajula Spinning Mill. It is

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not the contention of the Petitioner that the Gopeshwar Spinning Mill or Rajula Spinning Mill are a company or body corporate by themselves.

6.4.1. Merely because the Petitioner choses to create units or divisions within the same company does not give separate legal entity status to each of these units or divisions. Merely because they have separate VAT certificates or factory registration numbers does not entitle them to a different identity. If the contention of the Petitioner is correct, then the Petitioner ought to have filed the Petition in the name of the respective units and not T.T. Limited.

6.4.2. The Respondent has cited following judgement in support of his argument against separate legal entity:

(i) The Hon’ble Andhra Pradesh High Court in KCP Limited v/s. State of Andhra Pradesh [1993] 88 STC 374 has held that two divisions or units of a company do not mean separate legal entities, the relevant portion of which is reproduced below:

“15. The company may have several units or divisions located at different places engaged either in the same line of manufacture or trading or in different manufacturing or trading activities. Normally, the units or divisions will have no separate identity of their own, much less a distinct legal entity. There may be separate establishments, separate planning and separate management, but these aspects by themselves do not detract from the basic characteristic of communion with the corporate body that had created these units or divisions. They can claim no independent existence apart from the company itself. The property of these units or divisions is legally held by the company. The profits generated by the units form part of the company’s income and will go to the benefit of general body of shareholders of the company. So also, the liabilities or losses incurred by the individual units, in ultimate analysis, will have to be borne by the company. It is the company (the K.C.P. Ltd.) that can sue for the recovery of property or dues or be sued for the outstandings due on account of dealings of the units...... ”

(ii) Similarly, Hon’ble High Court of Bombay in S.B. Patole and Ors. v/s. Fujitsu ICIM Ltd. and Ors. 2011(1) ALL MR 81 has held as under:

“6. With these preliminaries out of the way, I will now consider the third issue i.e. whether it is necessary to club all the Divisions of the Company together for the purposes of ascertaining if there were 100 or more workmen employed in the Company on the date the notice of closure was issued. It has been contended on behalf of the Company that each Division of the Company is an independent Unit and has no functional

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integrality with the other Divisions. It is further submitted that while deciding whether the closure of the MSD was legal and proper, the number of employees working in the MSD must be considered and not those in the other Divisions. It is axiomatic that when the functional integrality between two Units is to be ascertained, those Units must appear to be separate or distinguishable and have an independent existence. The registration of such Units would therefore have to be distinct. But where two Divisions or Departments or Sections of one Company are working under the umbrella of the Company which is registered under the Companies Act, 1956, the question of considering the functional integrality between such Divisions or Departments or Sections does not arise. They exist together, functioning as one Company, as a whole. The necessity of considering the functional integrality in such a situation does not arise. Therefore, while ascertaining whether there are 100 or more employees working in a Company of which a Division or Department or Section is to be closed, it would be necessary to consider the number of employees working in the entire Company.” (Emphasis Supplied)

6.4.3. The Petitioner has not submitted any proof for the separate identities of its two units. In fact, the Petitioner has admitted that both the units are part of the same company and have the same corporate identity. The Petitioner has produced only authorisations for land for bona fide purposes as well as Factory licences. The authorisation for land has been issued in the name of T.T. Limited i.e. the land has been procured and utilised by T.T. Limited and not the respective divisions of the T.T. Limited. Therefore, the premises is owned by T.T. Limited and not by the divisions.

6.4.4. Further, the Respondent has submitted that merely because some licences are issued in favour of the units does not mean the units have a separate legal entity. In this regard, the Hon’ble High Court of Gujarat in order dated 12.08.2013 in Modern Denim Limited vs. Uttar Gujarat Vij Company Limited in SCA No. 15262 of 2012 and 15263 of 2012 has held as under:

“5. It is therefore contended that M/s Modern Denim is a unit of the petitioner firm, but having a separate excise license, factory license and all other functional separations. Even the employees who are working in M/s. Modern Denim and the petitioner Company namely M/s. Modern Denim Limited are having separate entry and exit and enjoy separate functional autonomy.”

Rejecting the above contention, the Hon’ble High Court held as under:

“14. If the above definition of ‘consumer’ is considered, alongwith Section 2(49) about definition of a person which includes any Company or Body

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Incorporate or Association or Body of individuals whether incorporated or not or artificial Juridical person and the definition of Section 2.(51) about ‘premises’ which includes any land, building or structure, the above definitions if considered conjointly would establish that electricity is to be supplied no doubt to premise, but such premise is to be owned and occupied by a person, who is also a consumer and having a separate legal identity.

The above definitions are considered with the object and purpose of the Act and other provisions of the Act including determination of tariffs, functions and duties cast upon GERC would mean that alongwith protection of interests of consumers of electricity, distribution licensees and other such licenses, functioning of licensees are also to be kept in mind, viz. Cost-effectiveness, competitive profit and efficiency etc. If a consumer like the petitioners are allowed to have different meters and supply of electricity, it would certainly have effect on the distribution of electricity and contracted demand and also will have bearing on fixation of tariff and consumption charges. The above fact is correctly demonstrated by the illustrative example of demand and consumption charges in case of single meter and of two meters by one legal entity. ……………….

15. Thus, upon overall consideration of provisions of the Act, 2003, Rules and Regulations made therein and Clause No. 4.1.17 of the Code, it certainly envisages two meters in a case of consumer using electricity facility shall have to satisfy conditions enumerated therein which may not only include separate Income Tax No., PAN Card No., Sales Tax No. but also about legal entities so defined in the definition of person and consumer under Section 2.(15) and 2.(49) of the Act.

16. Thus, contentions raised by learned Senior Counsel for the petitioners about furnishing the documents in the form of Licenses issued under Excise or Factory Act or similar Act, have no bearing towards supply of electricity and the duty cast upon distribution companies under Section 42 of the Act. That Audit Report by the Comptroller and Auditor General of India was a reminder to the distributing licensees about practices followed by such a licensee which was contrary to law and provisions of the Act, 2003 and the action taken in this regard rejecting the application of the petitioners for extra and/or extension and/or separate meter cannot be said to be in any manner contrary to law. That order produced and passed by GERC in which none of the above provisions was taken care of and conclusions were drawn on the basis of separate premises and entitlement of consumer to have open access by misreading the provisions of the Act, 2003 and the Regulations, 2011.”

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6.4.5. The above decision has been upheld by the Division Bench of the Hon’ble High Court of Gujarat in Appeal on 17.09.2013 wherein it has observed as under:

“2. A judicial notice can be taken of the fact that Public Sector Undertakings (PSUs) are working through their employees, who are human beings and any decision of such employees / persons cannot bind the PSUs, more particularly, when it is damaging to its economic interests.”

Thus merely because the connection was granted by the Respondent after Supply Code, 2005 does not mean that the Petitioner can seek to enjoy the multiple connections contrary to the law.

6.5. Regarding the issue of the same / adjacent premises, the Respondent submitted that the premises of the Petitioner is to be considered as one premises. Mere existence of different survey numbers for the land comprised in the premises does not mean that they are separate premises for the purpose of Supply Code. The Petitioner has not submitted any evidence to demonstrate that the premises is separated by any public road or private premises. The issue of premises is to be considered as per the definition in the Electricity Act, 2003 in Section 2 (51) which states as under:

““premises” includes any land, building or structure”

Street is defined in Section 2 (68) as under:

““street” includes any way, road, lane, square, court, alley, passage or open space, whether a thoroughfare or not, over which the public have a right of way, and also the roadway and footway over any public bridge or causeway;”

6.5.1. In this regard, the concept of “premises” was considered by the Hon’ble Tribunal in Paschim Gujarat Vij Company Limited v/s. Rolex Appeal No. 48 of 2013 dated 25.04.2014 in the context of use of electricity in continuous premises as per the Tariff Schedule in the Order passed by the Commission. The Tariff Schedule read as under:

“The energy supplied under these tariffs can be utilized only within the compact area of the premises not intervened by any area / road belonging to any authority other than the consumer”

6.5.2. In the said case, the premises were adjoining to each other with different survey numbers. The facts as stated by the Hon’ble Tribunal are as under:

“3. The short facts are as follows: ………. (b) Rolex Rings Private Limited, the Respondent has a manufacturing facility on an industrial land bearing Revenue Survey No. 210 of village Kotharia, District Rajkot, Gujarat.

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(c) Rolex Rings Private Limited, being the consumer of the Appellant has an existing 66 kV EHV connection from the Appellant Distribution Licensee. The consumer also owns other lands in the same village in the Revenue Survey No. 206/1 as well as in Revenue Survey Nos. 172 and 174.

(d) The premises ‘A’ is situated in Revenue Survey No. 210, premises ‘B’ is situated in Revenue Survey No. 206/1 and premises ‘C’ is situated in Revenue Survey Nos. 172 & 174”

6.5.3. The Hon’ble Tribunal held as under:

“40. The term “Premises” is not defined in an exhaustive manner but only provides that the premises would include any land, building or structure. The ‘street’ has been defined under the Act to include any road, lane, square, court, alley, passage or open space, whether a thoroughfare or not over which the public have a right of way, etc. Thus, if there is a private road within the premises of a consumer owned by the consumer in which supply is directly obtained from the distribution licensee, it would be considered as the same premises and the consumer can lay wires across the private road to extend power supply from one part of the premises to the other part of the premises across the private road. However, if the two parcels of land owned by the consumer are separated by a pubic road or street, these have to be considered as two separate premises. In such a case, the consumer cannot extend the power supply obtained from the Distribution licensee in one premises to another premises as these are two different premises even though owned by the same person and used for running the same business. ………………..

46. The term ‘Premises’ is only defined to include land, building or structure. Public road cannot be taken as a part of ‘premises’ since the term ‘Street’ has been separately defined. Therefore, the Public road cannot be taken to mean as part of ‘premises’.”

6.5.4. However, in the said case, the premises were separated by public road and therefore the Hon’ble Tribunal held that the different survey numbers cannot be considered as same premises:

“41. In the present case, the premises ‘A’ & ‘B’ and ‘A’ & ‘C’; are separated by public road or street. Thus, the consumer is not authorized to lay down electric supply line across the public road or street in order to extend power supply from premises ‘A’ to ‘B’ and ‘A’ to ‘C’. Only the

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Distribution licensee is authorized to lay down electric supply line across the public road or street from premises ‘A’ to ‘B’ and ‘A’ to ‘C’.

42. The State Commission while interpreting the term “Premises” has held that the term “Premises” would include any two parcels of adjoining land owned by the consumer even if intervened by a public road and consumers can utilize the power taken from the distribution licensee at one parcel of land by drawing electric lines to extend the power to the other premises by laying down the cables across the intervening public road with the permission of the owner of the road, approval of the Chief Electrical Inspector and no objection of the Distribution Licensee.”

In reply to the Petitioner’s submission that two separate connections were released as per Gujarat Urja Vikas Nigam Limited (GUVNL) guidelines dated 15.09.2010, the Respondent submitted that the above-mentioned decision of the Hon’ble Tribunal was in 2014 prior to the issuance of the notice by the Respondent and any circulars / guidelines issued by GUVNL prior to 2014 on the issue of separate premises are not relevant for the consideration.

6.5.5. If the contention of the Petitioner is correct, namely that different survey numbers meant separate premises irrespective of whether they are separated by public road or not, then the Hon’ble Tribunal need not have gone into the question at all and the very fact that the premises of the consumer had different survey numbers would mean that they cannot be the same premises.

6.5.6. It is submitted that in view of the above decision, when there are continuous parcels of land not divided by any public road, they are part of the same premises under the Electricity Act, 2003.

6.5.7. It is submitted that the term premises cannot be interpreted in two different manner. If the premises are considered separate, then the consumer cannot be permitted to consume power in both premises from the same connection. On the other hand, if a consumer is permitted to draw power and consume it in the continuous premises, then the natural corollary is that it is considered the same premises and that consumer cannot have two separate connections for the continuous premises.

6.5.8. The Respondent suffers a loss due to the maintenance of two connections as against one connection. The fact of the revenue loss was pointed out by the Comptroller and Auditor General and this has been noted by the Hon’ble High Court while upholding the corrective action taken by the Respondent.

6.6. The Respondent submitted that the maintenance of two separate connections results in loss to the Respondent. The Respondent incurs revenue loss because of telescopic demand charges and energy charge on the basis of billing demand and higher level losses in the present situation in supplying two different demands at lower voltage level

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i.e. 11 kV which otherwise would have been supplied at higher voltage level i.e. at 66 kV level and also the infrastructure installed by the Respondent could have been utilized for supplying power to other consumers besides increase in available margin in the Power Transformers.

6.6.1. The levy of 11.11% is consistent with the provisions of the GERC (Electricity Supply Code and Related Matters) Regulations, 2005 and 2015, notified by the Commission as the statutory regulations in terms of Section 50 read with Section 181 of the Electricity Act, 2003. The loss level of 10% for energy input at 11 kV level and energy drawal at 11 kV level has been specified by the Commission in its Tariff Orders issued from time to time which works out to 11.11% if applied on energy measured at the consumer end.

6.6.2. It is submitted that had there been only one connection, the Respondent would have given supply from 66 kV transmission line considering the contracted load and thus would have saved on the distribution loss. Since the Respondent was required to provide supply from 11 kV line, it is incurring higher distribution losses. In order to recoup these losses, after serving several notices to the Petitioner for implementation of the merger of two connections, the Respondent started recovery of energy bill as if merged connection and the said levy of 11.11%. It is submitted that otherwise, the increased distribution loss due to the actions of the Petitioner would affect the efficiency of the Respondent and would be passed on to the consumers at large.

6.6.3. If the Petitioner is not held liable for the consequences despite seeking connection by concealment of true facts, then this would not only result in a continued loss to the distribution company but would also allow the Petitioner to take advantage of its own wrong. The Petitioner despite the issuance of notice by the Respondent, failed to take action at the appropriate time. It is a well settled principle that the Petitioner cannot take advantage of its own wrong. To substantiate its arguments, the Respondent relied upon the following judgements:

(i) Adani Power Limited v/s. GERC and Ors Appeal No. 184 of 2010 Order dated 07.09.2011 at Para 110;

(ii) Union of India v/s. Major General Madan Lal Yadav [1996 (4) SCC Page 127;]

(iii) B.M. Malani v/s. Commissioner of Income Tax and Anr. 2008 (10) SCC Page 617;

(iv) Eureka Forbes v/s. Allahabad Bank (2010) 6 SCC 193

(v) Ashok Kapil v/s. Sana Ullah (1996) 6 SCC 342

6.7. Regarding the allegations by the Petitioner about discrimination against him, the Respondent denied that it has discriminately issued the Notice of Merger to the Petitioner. The Respondent has issued notices to the consumers with separate connections for the same person at the same premises on the basis of verification of

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their status. The Petitioner itself has referred to another consumer’s petition before the Commission as well as before the Hon’ble High Court. There are many consumers of the Respondent and it is not possible that all the connections can be verified at the same time. However, the Respondent intends to issue and is in the process of issuing notices to all such consumers.

6.8. The Respondent submitted that there is no merit in the petition and the Petitioner is not entitled to any relief.

6.9. The Respondent further submitted that the Petitioner is now belatedly raising issues about its investment, employees, etc. which have no bearing on the present issue. There is no reason given for not challenging the notice and agreeing to the merger of connections. Since the Petitioner had already accepted and applied for the merger of connections prior to approaching the CGRF, CGRF had correctly held that it cannot interfere in the matter.

6.10. The Respondent submitted that it is not seeking any relief prior to the issuance of the letters for merger of the connection nor seeking any adjustment in tariff or loss levels for such period.

7. The Petitioner, in its submissions and replies, has stated as under:

7.1. The Respondent is the sole supplier of electricity and having monopoly in providing electric power and heavy financial loss due to merged bill with 11.1% levy had left the Petitioner with no option except to succumb to the demand of the Respondent by accepting merger and applied for connection at 66 kV voltage level.

The Respondent being in a dominant position and threatening the Petitioner for disconnection of electricity supply, the Petitioner agreed with the demand of the Respondent. Under the circumstances it should not be construed as agreeing with the demand of the Respondent about merger of the two connections is Petitioner’s wilful agreement. The Respondent is trying to prove that any encroachment cannot be challenged after forceful occupation of the legal rights of the party. In fact, it is general principle of law that, ‘consent’ must be ‘free’ i.e. must not be caused by coercion, undue influence, fraud, misrepresentation or mistake for valid contract. A consent is said to be induced by ‘undue influence’ where the relations subsisting between the parties are such that, one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. The Respondent is not replying as to under which section or sub section of the Electricity Act, 2003 and GERC Notification, the merger Notice is issued.

7.2. The Respondent in its reply had argued that mere existence of the different survey nos. for the land comprised in the premises does not mean that they are separate premises for the purpose of Supply Code. This statement is the Respondent’s own version of the

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definition of premises. The definition of the premises as per the GERC Supply Code, 2005 says as under:

“Includes any land, building or structure”

There is no mention of survey nos. in the definition. Also, the Hon’ble High Court of Gujarat had stayed the order of single judge in case of M/s Aarvee Denim Limited v/s UGVCL in SCA No. 464 of 2013 and LPA No. 1483 of 2013 in its order dated 06.01.2014 and had mentioned that:

“Prima facie, it appears to us that both the premises are different though the consumer is one and, therefore, in our prima facie opinion, the view taken by the learned Single Judge that since the consumer is one, the adjoining premise has to be clubbed as one premise, appears to be erroneous. In this view of the matter, the appellant is entitled for the interim relief. Hence, the appeal is admitted. Until further orders of the Court, the effect and operation of the judgment dated 12.8.2013 passed by the learned Single Judge in Special Civil Application No. 464 of 2013 shall remain stayed.”

Considering above, the definition of premises is not finalized.

7.3. Regulation 4.1.17 of the Supply Code, 2005 states that:

“4.1.17 The Distribution Licensee will not provide more than one connection/ meter for one premises. The consumers opting for second meter will have to produce separate legal entity such as documents of separate Income Tax No/ Sales Tax No. ration card and rent or lease agreement.”

7.3.1. The above Regulation had provided direction to the Distribution licensee regarding providing more than one connection / meter for one premises. In other words there is no direction for the consumer. The connections of M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mill were released by the Respondent. If there is any violation of the condition, the Respondent is responsible for the same. The Commission may confirm if any violation is made by the Respondent in the present petition.

7.3.2. The Petitioner submitted that the interpretation of definition of one premises according to the above Regulation is to be decided by the Commission. Regulation 4.28 of the GERC Supply Code, 2015, states as under:

“4.28 The Distribution Licensee will not provide more than one connection for one premise or in adjoining / contiguous premises belonging to same owner if these are not separated by a public road or by private premises. The consumers opting for second connection will have to produce separate legal entity documents such as separate Income Tax No. / Sales Tax No., ration card and rent or lease agreement.”

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So, the condition is changed as far as the definition of premises is concerned. Yet, the second connection is allowed similar to Supply Code, 2005. In the Supply Code, 2005 there is no mention of adjoining premises. In the Petitioner’s case the premises are not same but adjoining, so by virtue of Supply Code, 2015 it can be concluded that the premises are different. The merger notice is issued well before the Supply Code, 2015 came in to the force. The definition of Supply Code, 2005 should prevail in the present petition.

7.3.3. The Respondent had in its reply stated that the consumer opting for second meter will have to produce separate legal entity. The definition of legal entity is to be decided by the Commission. Some exemplary documents are mentioned in the Regulations. One of them is separate Sales Tax No. In the Petitioner’s case the Sales Tax No. for M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mill is different.

7.3.4. Regulation 4.4.17 of the Supply Code, 2005 is a directive to the distribution licensee for releasing the connection in one premises. No remedial measures are mentioned in the condition if it is violated by the distribution licensee. There is no directive in the condition which leads to merger of the connections released by the distribution licensee in violation of the condition 4.1.17. The actions taken by the Respondent with the Petitioner are not supported by any legal rules and directives and so the same should be declared illegal.

7.4. The Respondent, in its reply, had mentioned some provisions of the GERC Supply Code, 2015. The merger notice is issued before this Regulation came into force. Therefore, the section mentioned by the Respondent is irrelevant for the present petition.

7.5. The Respondent’s claim that the principle of one connection for one premises / contiguous premises used by the same entity applies whether the connection was granted before the code or after the supply code, is misguiding. How a condition of one Supply Code is applicable before the code came into force and how the same is applicable after the same is superseded by new Supply Code needs to be justified by the Respondent.

7.6. The Petitioner submitted that it objects the representation made by the Respondent that despite being aware of the law, the Petitioner deliberately applied for the second connection under a different name without disclosing that it is a division of the T.T. Limited which has an existing connection. The Petitioner had submitted all the documents as per the contemporary rules and regulations of the Respondent. The same were scrutinized and audited by the different competent authorities of the Respondent and after completion of all formalities; the connections were released by the Respondent. In fact, the New Connection Application duly mentioned about the M/s Rajula Spinning Mill (A unit of T.T. Ltd.) and the Respondent issued receipt in favour of M/s Rajula Spinning Mill mentioning– a unit of T.T. Ltd. Moreover, the Respondent,

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vide letter dated 07.03.2013, claimed security deposit amount for supply of power from existing unit situated at Survey No. 88 to proposed unit.

7.6.1. As per Regulation 4.1.17 of the Supply Code, 2005, the consumer can opt for second meter if it can produce some document which proves that the proposed connection is a separate legal entity. One of such documents as mentioned in the said Regulation is different Sales Tax No. The Sales Tax No. of both the connections namely, M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mill are different which proved separate legal entity of both the companies so connections were granted.

7.6.2. The electric connection of M/s Gopeshwar Spinning Mill was released in 2009 while that of M/s Rajula Spinning Mill was released in 2013. GUVNL had issued Guidelines No. 1568 dated 15.09.2010 titled “Guidelines for releasing connection in same name in adjoining premises” for releasing second meter, the relevant portion of which states as under:

“In this regard, it is to convey that as per the provisions of the supply code there is no restriction for releasing second connection in the same name / same owner in two separate premises. Therefore, two connections can be released by DISCOM in same name / same owner provided the conditions of being separate premises are fulfilled and there should be clear cut physical demarcation, since separate connection in separate premises may be required for various reasons i.e. separate profit centers with different products, one unit is EOU whereas other unit is not EOU, maintenance of separate book of accounts may be requirement of some acts etc. For deciding the separate premises the requirements under Commercial Circular No. 769 has to be followed.

In view of above, it may be clarified that separate connections in same name / same owner can be released in case of two separate premises having clear cut physical demarcation and fulfills the criteria of separate premises provided under Commercial Circular No. 769 dated 28.01.2005.”

The circular is self-explanatory regarding the circumstances under which the connection of M/s Rajula Spinning Mill is released in 2013. The Respondent had released the connection with all clarity regarding the matter.

7.7. The Respondent, in its reply, had submitted that it is permitted to take corrective action in case of an erroneous classification. In this regard it is submitted that merely release of the connection would not render the provisions of Supply Code. The Petitioner had never argued that the Supply Code is not applicable to him. In fact, the Petitioner is asking for application of Supply Code only in this case. It is not clear as to which Supply Code the Respondent is mentioning.

The Petitioner submitted that it agrees with the contention that the Respondent should be permitted to take corrective action in case of erroneous classification. Regarding the

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present petition, the Petitioner requested the Commission that before discussing the contention in detail, the Respondent should be directed to clarify as to under which category, the Petitioner’s connections viz., M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mill are classified erroneously and in which category they should be reclassified which is appropriate category for them.

7.8. Further, the Respondent in its reply has stated that the Distribution Licensee is empowered to reclassify such consumers. The Petitioner submitted that it is not mentioned whether Regulation 3.5.1 of the Supply Code, 2005 is applicable in the Petitioner’s case or not. Simply mentioning of regulations without any link with the petition, the Petitioner is trying to create confusion.

Regulation 3.4.1 of the Supply Code, 2005 states as under:

“Distribution Licensee may classify and reclassify consumers into various Tariff Categories from time to time as may be approved by the GERC and announce the different Tariffs for different classes of Consumers with the approval of GERC. No additional category other than those approved by GERC shall be created by the Distribution Licensee.”

While, Regulation 3.5.1 of Supply Code, 2005 provides following conditions for reclassification:

“1. If it is found that a Consumer has been classified in a particular category erroneously, or 2. The purpose of supply as mentioned in the distribution service Agreement has changed or 3. The consumption of power has exceeded the limit of that category or 4. Any order of reduction or enhancement of Contract Demand has been obtained.”

The Petitioner submitted that none of above conditions is applicable in the present matter. Rather, subject matter is about interpretation of Clause 4.1.17 of the Supply Code, 2005 which provides that the Distribution Licensee shall not provide more than one connection / meter for one premises. Where subsequently, if the consumer purchases another premises which is adjacent to it, whether it can be termed as one premises or two different premises, though earlier, the Distribution Licensee has provided two different electric connections to both the premises. Moreover, while both the premises have separate survey number, separate firm with separate sales tax number and license as well.

7.9. The Respondent had avoided the simple and basic question regarding merger notice as summarised below:

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• Under which section of the Electricity Act, 2003 or provisions of Supply Code, 2005 or any other regulations of the Commission, the merger notice is issued to the Petitioner.

• Regulation 4.1.17 is regarding Distribution Licensee for providing second meter in one premises. Whether the Respondent had violated the said Regulation in the case of the Petitioner or not.

• Is Regulation 3.5.1 of Supply Code, 2005 applicable in this case or not? Is the connection of the Petitioner falling under erroneous category? If yes, then what is the appropriate category for the Petitioner? In case the Regulation is applicable, then the procedure under the Regulations is followed by the Respondent or not?

7.10. The Respondent had quoted Order of Hon’ble High Court of Gujarat dated 08.04.2015 in SCA No. 15105 of 2012 in Lakhani Filament Pvt. Ltd. v/s Dakshin Gujarat Vij Company Limited and others. The order is regarding merger of 3 HT connections in the name of M/s Lakhani Filament Pvt. Ltd. in the area of DGVCL. The para 4 at page 3 of the said order reads as under:

“Before proceeding further, it is relevant and necessary to mention that even on record of present petition, the petitioner has failed to place any material on record to establish that there are three separate entities and that respondent have sought to club three separate entities into one establishment.”

The Petitioner has submitted that it had clearly mentioned in the petition that:

“As per section 4.1.17 of contemporary supply code, we are separate legal entity as • the survey nos. are different • Sales tax (VAT) registration is different • Factory License No. is different”

7.10.1. As per business directory, Entity is “A person, partnership, organization, or business that has a legal and separately identifiable existence.”

As per Cambridge Directory, Entity is “something that exists apart from other things, having its own independent existence”.

As per Black’s Law Directory a Legal Entity is “A lawful or legally standing association, corporation, partnership, proprietorship, trust, or individual. Has legal capacity to (1) enter into agreements or contracts, (2) assume obligations, (3) incur and pay debts, (4) sue and be sued in its own right, and (5) to be accountable for illegal activities.

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Considering above, the order of the Hon’ble High Court of Gujarat in SCA No. 15105 of 2012 is not applicable to the present petition.

Regulation 4.1.17 had given a list of exemplary documents to establish separate entity which is required to have second connection in single premises. One of such documents mentioned in the Regulation is separate Sales Tax No.

7.11. The Order of the Hon’ble High Court of Andhra Pradesh in KCP Limited v/s State of Andhra Pradesh [1993] 88 STC 374 is also not relevant in the present petition. The observation made by the Hon’ble High Court is regarding separate units with separate establishment, separate planning and separate management. It is not mentioned regarding separate units with separate land survey nos., separate VAT (Sales Tax) registration no. and separate Factory License. The said order is, therefore, not related to the units with separate legal entities of a parent company and accordingly, is not relevant to the present petition.

7.12. The Order dated 25.04.2014 in the case of M/s Rolex Ind. v/s PGVCL in Appeal No. 48 of 2013 before the Hon’ble APTEL is also not applicable to the present petition as the same is limited to definition of premises with respect to street. In that particular case M/s Rolex Industries had not claimed any separate entity for their connection. In the present petition the matter is direction to the Distribution Companies to release the connection in single premises with second meter to a consumer and the conditions to be fulfilled by the consumer asking for second meter in same premises.

7.13. The contentions of the Respondent that when there are continuous parcels of land not divided by any public road, they are part of the same premises under the Electricity Act, 2003, is vague and misdirecting. It is said in the Hon’ble APTEL’s Order in Appeal No. 48 of 2013 that “The public road cannot be taken as part of the premises” which simply cannot be concluded as “when there are continuous parcels of land not divided by any public road they are part of the same premises under the Electricity Act, 2003”. No such conclusion is found in the said order of the Hon’ble APTEL and hence, this order is also not applicable in the present petition.

7.14. The loss to the Respondent or to the consumer is not a matter of this petition. The CAG Report cannot be considered to be reason for change in related Act and Regulations. The work is to be carried out as per the rules and regulations.

7.15. The principle of estoppels is violated in issuing merger notice. The connections were released in line with the contemporary rules, regulations and guidelines followed by the Respondent. The Petitioner had paid huge amount for electric connection as separate service lines are erected at the cost of the Petitioner to cater power supply to the Petitioner. The whole procedure is carried as per various related Regulations of the Supply Code, 2005. There is no change in Supply Code Regulations between the release of connection and issue of merger notice. It is never said that what change in rules / regulations had initiated the procedure of merger.

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In case the Respondent wants to have corrective action regarding such connections, he should have approached the Commission and should have asked for remedial measures if the content of the Respondent is supported by the regulatory authorities.

Regulation 4.1.17 is directive for the Distribution Licensee and the consumer cannot be held responsible for any lapse by the Distribution Licensee as the same is against the principle of natural justice. The expense of connection is paid by the Petitioner and now again line charges for 66 kV line and sub-station is paid by the Petitioner. As per Regulations the 11 kV line erected at the Petitioner’s cost is now the property of PGVCL. So it is sort of a trap where consumer paid for 11 kV line and after that they again pay for 66 kV line for no mistake of consumer.

7.16. The Respondent has stated in its reply that it incurs revenue loss in supplying two different demands at lower voltage. The Petitioner submitted that as per Regulation 3.1.2 of the Supply Code, 2005:

“In case of existing consumers drawing power at lower voltage, if due to the additional requirement they cross the threshold limit of load, in such cases the licensee may, as far as possible, make commercially viable offer to the consumers so that he opt for the next higher voltage of supply. The commercial offer may be framed taking in to consideration the following-

(a) Likely reduction in Transmission and Distribution Losses; (b) Load reduction on transformers of licensee’s system and their availability for meeting new requirements.

However supply to existing consumers at lower voltage than the limit specified above, should continue and in case their load requirement increases, the above specified load limit will be applicable.”

Thus, as per above, until the remedial measures are taken, the supply to existing consumer should continue. In case of the Petitioner since the load of the connection is not increased, the supply should be continued at 11 kV as per the existing arrangement. The Regulations does not ask for merger of connections and bill the consumer considering merging of connections.

7.16.1. Further, the Respondent has also submitted that the infrastructure installed by it could have been utilized for supplying power to other consumers besides increase in available margin in the power transformers. The Petitioner submitted that there is no infrastructure erected by the Respondent at its own cost to cater power supply to the Petitioner. The line is erected under ND scheme and the expense is totally paid by the Petitioner.

Regarding available margin in power transformer, it is submitted that the Petitioner had not cancelled its connection. Only power is to be catered at 66 kV voltage level in place

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of 11 kV voltage level. The load will remain same on the power transformer so there is no increase in available margin in power transformer.

7.17. The Respondent has said that the recovery is made under Section 50 read with Section 181 of the Electricity Act, 2003. Section 50 of the Act is regarding supply code while Section 181 is regarding power of State Commission to make regulations. So, there is no specific section in the Act on which the Respondent has relied upon to levy 11.1% on total units consumed by both the entities of the Petitioner. The Petitioner submitted that the Respondent had not mentioned the exact regulation or part of the tariff order under which the loss of 11.1% is calculated. Until the precise notification or section of tariff order is not furnished, it is difficult to consider the application of the same in this case.

7.18. In Chapter 7 “Wheeling Charges and Cross Subsidy Surcharges” of the Tariff Order for FY 2016-17 issued by the Commission, which is applicable to distribution wires business i.e. open access power procured by any consumer other than power from Distribution Licensee; the distribution losses are shown as under:

“Distribution losses

Applicable distribution loss depending upon point of injection and delivery at 11 kV and 400 V during FY 2016-17 are given below:

Point of energy delivered Point of Injection 11 kV 400 Volts 11 kV, 22 kV and 33 kV 10% 15.98% 400 Volts 9.55%

The losses in HT and LT network are 10% and 9.55% respectively, with respect to energy input to the segment of the system. In case injection at 11 kV levels and drawal at LT level involved use of both the networks i.e. 11 kV and LT, the combined loss works out to 15.98% of the energy injection at 11 kV network.

The above wheeling charges payable shall be uniform for all the four distribution companies viz. DGVCL, MGVCL, PGVCL and UGVCL.”

From the above, it is clear that 10% losses are applicable to wheeling of power only and cannot be applied to embedded consumer of Distribution Licensee of Gujarat State.

It is submitted that the 10% loss is also not based on calculation but traditionally taken by the Distribution Licensee. The figure is also a non-viable figure as the total loss inclusive HT, LT and commercial loss of some Distribution Licensees in Gujarat State is less than or very near to 10%.

7.19. The Respondent in its reply had explained the loss mechanism. In this regard it is submitted that the connection is granted by the Respondent at appropriate voltage level

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as per the Supply Code. The consumer cannot be held responsible for the decision which was not in his hand. As per the Supply Code, the proposal should be commercially viable. The Respondent has submitted that, “the increased distribution loss due to the action of Petitioner would affect the efficiency of the Respondent and would be passed on to consumer at large”. It is not understood as to why the Respondent is asking for the assumed loss without any calculation when exact loss due to supply at 11 kV is available. The feeder loss of the feeder catering the Petitioner’s unit is the actual loss at 11 kV voltage level.

7.20. The Respondent has stated that the Petitioner had taken connection by concealment of true facts. In this regard, it is submitted that the statement is far from the truth and without any logical supporting documents. What is concealed by the Petitioner is not mentioned. All the documents were provided as per the rules and regulations of the Respondent and after due scrutiny and audit of the file, the connection was released.

7.21. The Order in Appeal No. 184 of 2010, as referred by the Respondent, and the matter regarding taking advantage of own wrong by the Petitioner is irrelevant in the present case. The connections were released by the Respondent after due scrutiny of documents and site condition. As per Regulation 4.1.17 of the Supply Code, 2005, the distribution licensee should release the second connection in single premises after confirming separate entity. For the sake of argument, if it is considered that any wrong is done, then the Respondent is the only party which can be held responsible for that wrong deed and well settled principle that the person should not take advantage of its own wrong is applied directly as the wrong is done by the Respondent and they collected unlawful amount from the Petitioner under disguise of so called loss which has not occurred at all.

7.22. The Respondent had denied that he had issued merger notice discriminately. The Petitioner had requested the Respondent to confirm that merger notice is issued to all HT and LT consumers who are having more than one connection on same name or same owner in one premises or adjacent premises. The Respondent has stated that there are many consumers of the Respondent and it is not possible that all the connections can be verified at the same time. The Petitioner submitted that in this era of computer programming and application of e-Urja programme the Respondent can have the list of connections with same name by a click of the mouse. If the Respondent is denying any discrimination, then by now the so called merger notice should have been issued to all consumers as stated above.

7.23. In view of these facts, the reply filed by the Respondent is vague in nature and it failed to establish legality of the merger notice and 11.1% levy on combined bill. So, the merger Notice and the combined bills of M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mills with additional levy of 11.1%, are required to be quashed and the amount so collected should be refunded to the Petitioner with interest.

7.24. The Petitioner submitted that :

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a. both the connections have been obtained by the Petitioner for separate survey no. and on separate dates.

b. consumer may be same by virtue of proprietorship firm owned by T.T. Limited but having separate Sale Tax / CST / Factory License no. in view of Regulation 4.1.17 of Supply Code, 2005.

7.25. The Petitioner pointed out the following relevant issues for decision in the present petition:

(a) Whether Regulation 4.1.17 of Supply Code, 2005 would be applicable for “one premises” or “Separate / Adjacent Premises”?

(b) Whether separate Sales Tax / CST / Factory License for separate Legal Entity has no meaning in terms of Regulation 4.1.17 of Supply Code, 2005?

(c) Whether Distribution Licensee can impose 11.11% Additional charge on Consumer on account of merger and under what provision of law?

(d) Under which section of Electricity Act, 2003 or provision of Supply Code, 2005 or any other regulations of the Commission, the merger notice is issued to the Petitioner?

(e) Regulation 4.1.17 of Supply Code, 2005 is regarding Distribution Licensee for providing second meter in “One Premises”. Whether the Respondent had violated the said Regulation in the case of Petitioner or not?

(f) Is Regulation 3.5.1 of Supply Code, 2005 applicable in the present case or not? Is the Petitioner’s connection falling under erroneous category, if yes then what is the appropriate category for the Petitioner. In case the Regulation is applicable, then the procedure under the Regulations is followed by the Respondent or not?

7.26. The Petitioner submitted that the Respondent has made two statements before the Commission as stated below, to support the levy of 11.11% additional charges:

(i) “The Petitioner despite being aware of the law, deliberately applied for the second connection under a different name without disclosing the fact that it is a division of the T.T. Limited which has an existing connection. If the Petitioner had properly disclosed the above fact, the Respondent would not have issued the connection.”

(ii) “The maintenance of two separate connections results in loss to the Respondent. The Respondent incurs revenue loss because of telescopic demand charges and energy charge on basis of billing demand and higher level losses in the present situation in supplying two different demands at lower voltage level i.e. 11 kV which otherwise would have been supplied at higher voltage level i.e. at 66 kV level and

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also the infrastructure installed by the Respondent could have been utilized for supplying power to other consumers besides increase in available margin in the Power Transformers.”

The Petitioner submitted that this is a white wash statement hiding the facts. There is no infrastructure erected by the Respondent at its own cost to cater power supply to the Petitioner. The line is erected under ND scheme and the expense is totally paid by the Petitioner. Regarding available margin in power transformer, the Petitioner had not cancelled its connection. Only power is to be catered at 66 kV voltage level in place of l1 kV voltage level. The load will remain same on the power transformer so there is no increase in available margin in power transformer. Further, it is submitted that, bare perusal of all demands and letters issued by the Respondent while applying for second connection in 2013 shows that the Petitioner never concealed its identity and in fact, the Respondent itself issued Receipt in favour of M/s. Rajula Spinning Mill, a Unit of T.T. Limited.

7.27. The contention of the Respondent that merger of two separate connections of the Petitioner would have benefited the Respondent by way of reduction in T&D losses is not true as there was no technical system change at all for the purpose of merger, it was simply consolidation of two supply bills into one. The Respondent’s record will confirm that there is no change in T&D losses before or after merger. Moreover, if merger has yielded some T&D benefits to the Respondent, then why and on what ground 11.1% penalty is justified?

7.28. The Respondent had relied upon the judgment dated 08.04.2015 of the Hon’ble High Court of Gujarat in the matter of Lakhani Filament Pvt. Ltd. vs. Dakshin Gujarat Vij Co. Ltd. (SCA No. 15105 of 2002) thereby saying that, it would be applicable in present matter. In this regard, it is submitted that the Lakhani case is entirely different and irrelevant to refer in the present case. Lakhani perhaps did not submit proper documents or could not place their contentions properly. The Lakhani issue is about retrospective application of combined or clubbed tariff. In the present case the issue of retrospective applicability of tariff is not there. Moreover, in the present case the dispute is about subsequent period or post-merger billing and seeking refund of irrelevant wrongful penalty for consumption beyond 4000 kVA during transaction period from clubbing till 66 kV system became operational.

7.28.1. Regulation 4.1.17 of the Supply Code, 2005 had given list of exemplary documents to establish separate entity which is required to have two connections in “one premises”. The above stated case neither talks about Adjoining Premises nor imposing of 11.11% penalty by Distribution Licensee nor about separate Legal Entity by virtue of separate Sales Tax / CST / Factory License as in favour of the Petitioner in the present case.

In the case of Lakhani Filament Pvt Ltd. vs. Dakshin Gujarat Vij Co. Ltd., the Petitioner (Lakhani) did not challenge the supplementary bill before the Ombudsman or before any other Forum and nor even in the Hon’ble High Court of Gujarat.

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7.28.2. In the present case, during pre-merger period the Petitioner had two independent set of feeders installed at the Petitioner’s cost. Subsequent to merger, technically HT 66 kV feeder was required which was provided after usual official delays and at the Petitioner’s cost exceeding Rs. 3.5 Crore.

7.28.3. The facts in Lakhani case were entirely different and judgement passed is mainly due to lack of proper submissions. In any case, circumstances and material facts being different, parallels cannot be drawn.

7.29. The Order of the Hon’ble High Court of Andhra Pradesh in KCP Limited V/s State of Andhra Pradesh (1993) 88 STC 374, the Order dated 25.04.2014 of the Hon’ble APTEL in appeal No. 48 of 2013 in case of M/s Rolex ind. V/s PGVCL and the Order in Modern Denim Ltd Vs. Uttar Gujarat Vij Company Limited in SCA No. 15262 of 2012 and 15263 of 2012 are also not applicable in the present case.

7.30. Regulation 4.1.17 is directive for Distribution Licensee and the consumer cannot be held responsible for any lapse by the Distribution Licensee as the same is against the Principle of Natural Justice. The expense for connection is paid by the Petitioner and now again line charges of 66 kV line and Substation is paid by the Petitioner. As per regulations the 11 kV line erected at the Petitioner’s cost is now the property of the Respondent. It is sort of a trap where consumer paid for 1l kV line and after that they again pay for 66 kV line for no mistake of consumer.

The Respondent has, thus, failed to establish legality of the merger notice and 11.1% levy on combined bill. The combined bills of M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mill with additional levy of 11.1%, are required to be quashed and the amount so collected should be refunded to the Petitioner with interest @ 18% till its actual realization.

8. We have carefully considered the submissions made by the Petitioner and the Respondent. The present petition is filed by the Petitioner who for its two units had two HT connections; (i) M/s Gopeshwar Spinning Mill, Connection No. 43133 with contract demand of 2450 kVA released on 23.07.2009, and (ii) M/s Rajula Spinning Mill, Connection No. 43149 with contract demand 2400 kVA released on 06.07.2013. Both these connections are on the land adjacent to each other. These connections are released by the Respondent after obtaining the required documents at relevant point of time.

8.1. The Petitioner received a notice from the Respondent on 08.06 2015 requiring the merger of the connections since both the connections are owned by the same owner i.e. M/s T.T. Limited and both these connections are on adjacent land survey numbers. The Petitioner on 15.06.2015 replied to the Respondent on the above notice. The Petitioner was once again informed vide letter dated 06.07.2015 to merge the connections failing which, from July, 2015, billing of both the connections will be started as a single connection.

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8.2. The Respondent started billing of both the connections as a single connection from July, 2015 and also added 11.11% on the total units consumed by both the connections. The Petitioner accepted the requirement of merger of two separate HT connections on 31.08.2015, applied for the same on 12.10.2015 and paid registration charges on 04.11.2015. Both the connections were physically merged in February, 2017. Thus, the Respondent issued the bill as a single connection after adding 11.11% on the total units consumed by the two connections from July, 2015 to February, 2017.

8.3. Aggrieved by the action of the Respondent, the Petitioner filed its grievance with the CGRF of the Respondent. The CGRF upheld the actions taken by the Respondent. Aggrieved by the Order of the CGRF, the Petitioner approached the Ombudsman. The Ombudsman opined that the matter raised by the Petitioner involves interpretation of Regulations and Tariff Orders passed by the Commission. Hence, the appeal filed by the Petitioner was not entertained by the Ombudsman and was advised to approach the Commission. The Petitioner filed a review petition before the Ombudsman against this Order but the same was not allowed by the Ombudsman.

8.4. The Petitioner, along with other prayers, requested the Commission to set aside the orders of CGRF and the Ombudsman. Subsequently, these prayers and name of Ombudsman as Respondent No. 2 of the present petition is withdrawn by the Petitioner in light of the fact that CGRF and the Ombudsman are the statutory bodies under Electricity Act, 2003 and the order of CGRF is appealable before the Ombudsman and the Ombudsman’s order is challengeable before the Hon’ble High Court only, and not before the Commission.

8.5. The present petition is filed by the Petitioner to quash the merger notice of the existing connections issued by the Respondent, refund the amount collected by the Respondent as additional 11.11% on the total consumption along with interest @ 18% and refund the service charges paid by the Petitioner for availing 11 kV connections.

8.6. In the present petition following six issues arise before the Commission for decision:

(i) Whether issuance of merger notice and merging of connections of the Petitioner by the Respondent is legal and valid or not? (ii) Whether levy of additional 11.11% by the Respondent from the Petitioner on the total consumption of the two connections of the Petitioner is legal and valid or not? If so, to what extent? (iii) Whether demand of the Petitioner for interest charges on the illegally recovered amount, if any, by the Petitioner is valid or not? (iv) Whether the demand of the Petitioner for refund of service connection charge paid by them while availing connection at 11 kV voltage is valid or not? (v) Whether the contention of the Petitioner about not providing commercially viable proposal for switching over to higher voltage by the Respondent is valid or not?

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(vi) Whether the Respondent discriminated against the Petitioner while issuing merger notice?

8.6.1. Now we first deal with the legality of the merger notice issued by the Respondent to the Petitioner and merger of the connections.

8.6.1.1. Regarding merger of the connections, the Respondent stated that the merger notice was issued in accordance with the law. The Petitioner had two different HT connections owned by the same legal entity and for the same premises. Mere existence of different survey numbers of land comprised in the premises does not mean that they are separate premises for the purpose of the Supply Code. It is also mentioned that the Petitioner has not submitted any evidence that the premises is separated by any public road or private premises. The Respondent also submitted that separate VAT certificate or factory registration number does not entitle the Petitioner to be a separate legal entity. The Respondent has submitted that the present petition is filed by M/s T.T. Limited, a proprietorship firm and owner of their two units is the legal entity which can sue or be sued in the eyes of law and not M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mill, the names on which two connections were obtained. It is contented by the Respondent that they are obliged to reclassify the consumers as per Regulation 3.5.1 of the Supply Code, 2005 at any point of time irrespective of whether the connections were released prior to enactment of the applicable Regulations or afterwards. In support of their argument, the Respondent relied upon the following judgements / orders:

(i) Judgement dated 08.04.2015 of the Hon’ble High Court of Gujarat in Lakhani Filaments v/s Dakshin Gujarat Vij Company Ltd. and Anr. in SCA No. 15105 of 2012 (ii) Judgement of the Hon’ble High Court of Andhra Pradesh in KCP Limited v/s State of Andhra Pradesh [1993] 88 STC 374 (iii) Hon’ble High Court of Bombay in S.B. Patole and Ors. v/s Fujitsu ICIM Ltd. and Ors. 2011(1) ALL MR 81 (iv) Order dated 12.08.2013 of the Hon’ble High Court of Gujarat in Modern Denim Limited v/s Uttar Gujarat Vij Company Limited in SCA No. 15262 of 2012 and 15263 of 2012 and upheld by Division Bench in Appeal on 17.09.2013 (v) Order dated 25.04.2014 passed by the Hon’ble APTEL in Paschim Gujarat Vij Company Ltd. v/s Rolex in Appeal No. 48 of 2013

The Respondent stated that the guidelines dated 15.09.2010 issued by GUVNL which the Petitioner has quoted to justify the two separate connections based on separate VAT certificate and factory licenses is not relevant as the said guidelines was issued in 2010 as the Hon’ble APTEL has decided to consider adjoining premises as one premises if they are not separated by a public road or private premises.

8.6.1.2. The Petitioner stated that the Hon’ble High Court of Gujarat has issued a stay order in the identical matter of merger of connection, on the order of single judge in the case of

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M/s Aarvee Denim Ltd. v/s UGVCL in SCA No. 464 of 2013 and LPA No. 1483 of 2013. The Petitioner also argued that the Respondent failed to implement Regulation 4.1.17 of the Supply Code, 2005 while releasing the connections of M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mill. Under the circumstances, the Respondent is responsible for violation and the Petitioner should not be penalised. It is also argued that Regulation 4.28 of the GERC Supply Code, 2015 cannot be made applicable before it came into force. The Petitioner also stated that both the connections were released by the Respondent after obtaining the documents required as per the contemporary rules and regulations. At the time of seeking new connections separate VAT certificate and factory licenses were submitted to the Respondent as per the requirement of contemporary rules.

8.6.1.3. The issue of merger notice and physical merger of connection has been well settled by different judgements of the Hon’ble High Court. The Petitioner has argued that the judgment in the case of Lakhani Filaments Pvt. Ltd. v/s DGVCL is not applicable in the present petition. In the matter of Lakhani, the Hon’ble High Court has upheld the merger notice issued by the Licensee in accordance with the Supply Code, 2005, merging all connections released both, prior to Supply Code, 2005 as well as connections released after the Supply Code, 2005. The details of the said judgment are already narrated in para 6.2 of this order. Hon’ble High Court has also held that it is the duty of the Respondent to take corrective measures and reclassify the consumer. Hence, the contention of the Petitioner about the non-applicability of the judgment in the case of Lakhani Filament Pvt. Ltd. V/s DGVCL to the present petition is not correct.

The Petitioner has contended that the judgment in the case of KCP Limited V/s State of Andhra Pradesh is also not applicable in the present case as the Hon’ble Andhra Pradesh High Court has not mentioned regarding separate units with separate land survey numbers, separate VAT Registration numbers (Sales Tax) and separate Factory Licence. In this regard, it is essential to refer the said judgment which is reproduced at para 6.4.2 of this order. It is categorically mentioned in the said judgment that the units or divisions will have no separate identity of their own and is much less a distinct legal entity. They can claim no independent existence apart from the company itself. The property of these units or divisions is legally held by the company. In this case, the Petitioner itself admitted that it is the sole proprietor of the two divisions viz. M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mill and being a sole proprietor of these two divisions, the Petitioner is solely responsible and liable for all the acts and deeds of it’s division. As per the definition of legal entity, the sole proprietor viz. M/s T.T. Limited only can sue or be sued in its own right and be accountable for all the activities and not M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mill individually. These two units have no separate legal existence in the eyes of law. Thus, the contention of the Petitioner is not correct and the same is rejected.

The Petitioner has also contended that judgment of the Hon’ble Gujarat High Court in case of Modern Denim v/s UGVCL is not applicable to the present case. The contention of the Petitioner cannot be accepted since a parallel can be drawn of the present case with the case of Modern Denim v/s UGVCL. Relevant portion of the said judgment is mentioned in this order at para 6.4.4 of this order and hence it is not reproduced here for the sake of brevity. In the case of Modern Denim v/s UGVCL, the Hon’ble High

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Court has held that consumers requiring two separate meters need to satisfy conditions enumerated in the relevant Regulations which may not only include separate Income Tax No, Pan Card No./Sales Tax No. but also about legal entities so defined in the definition of person and consumer under Section 2 (15) and 2 (49) of the Electricity Act, 2003. It is also held by the Hon’ble High Court that documents in the form of Licences issued under the Excise or Factory Act or similar Act, have no bearings towards supply of electricity and duty cast upon Distribution Companies under the Act and purview of the Electricity Supply Code which came into force at a later date.

It is contended by the Petitioner that the Hon’ble High Court of Gujarat has stayed the order of single judge in the case of M/s Aarvee Denim v/s UGVCL, hence, the merger notice and merger of connections in the present case is illegal. It is to clarify that recently on 21.06.2019, the Hon’ble High Court passed a judgement in SCA No. 464 of 2013 and LPA No. 1483 of 2013 in the case of Aarvee Denim and Exports Ltd. v/s UGVCL. In the said judgement, the Division Bench of the Hon’ble High Court upheld the judgement of the learned single judge in which the issue of merger of two connections owned by the same entity, as in the present case, has been upheld.

It is contended by the Petitioner that CAG report cannot be considered to be the reason for change in related Act and Regulations. In this regard, it is to mention that the Hon’ble High Court in the case of Modern Denim v/s UGVCL has observed that the Audit Report by the Comptroller and Auditor General of India was a reminder to the distribution licensees about the practices followed by a licensee which was contrary to law and provisions of the Act, 2003, leading to actions taken by a Licensee in that particular case. The contention of the Petitioner is therefore, not correct and is not accepted.

The Petitioner has contended that the Order dated 25.04.2014 in the case of PGVCL V/s M/s Rollex is not applicable in the present petition as the Hon’ble APTEL has limited itself to the definition of premises with respect to street and has not dealt with the issue of separate entity. The relevant part of the said APTEL order is narrated at para 6.5.2 to 6.5.4 of this order. The contention of the Petitioner is not correct as in the said case the premises were separated by a public road and therefore, the Hon’ble APTEL held that different survey numbers cannot be considered as same premises. The term premises cannot be interpreted in two different manners. If a consumer is drawing power and consuming it in continuous premises, it is considered as same premises and that consumer cannot have two separate connections for the same premises.

In view of the above, we are of the firm opinion that the merger notice issued by the Respondent to the Petitioner for merger of the two connections and subsequent action of merger of two connections is legal and valid.

In the present case, one connection was released on 23.07.2009 and second connection was released on 06.07.2013. At that point of time, applicable Supply Code mentions

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that contract demand above 4000 kVA/kW to be catered at 33 kV and above. Thus, the consumers viz. M/s Gopeshwar Spinning Mill and M/s Rajula Spinning Mill whose total contract demand is 4850 kVA becomes entitled for supply voltage of 33 kV and above. Therefore, as per Clause 3.5.1 of Supply Code, 2005 reclassification of these connections is justified and valid.

8.6.2. Now we deal with the levy of additional 11.11% by the Respondent on the total consumption of the two connections of the Petitioner.

8.6.2.1. The Respondent submitted that due to maintenance of two separate connections they incurred losses on account of telescopic demand charges and energy charges on the basis of billing demand and higher level of losses in supplying two different demands at voltage level lower than that of the prescribed voltage level in the Regulations for the merged contract demand of the Petitioner. The value of losses in terms of percentage is worked out by the Respondent based on the Tariff Orders issued by the Commission from time to time. It is also contended by the Respondent that if the Petitioner would have asked the supply of both the units as a single connection at appropriate voltage level, the spare capacity of the power transformer could have been used for supplying to other consumers.

8.6.2.2. The Petitioner submitted that levy of 11.11% on the total units consumed is not supported by Regulations or Tariff Orders. It is also submitted that the reference to Chapter 7 of the Tariff Order for FY 2016-17 made by the Respondent provides for levy of losses in kind for wheeling of electricity from Open Access consumers only and cannot be applied to the embedded consumers of the Respondent. It is submitted by the Petitioner that value of 10% losses is also not a viable figure as total losses inclusive HT, LT and commercial losses, of some distribution licensees in the State of Gujarat is very less or near to 10%. The Petitioner submitted that since they have not surrendered their connection, the contention of the Respondent about utilization of the spare capacity of power transformer is misplaced.

8.6.2.3. To deliberate on the issue of levy of additional 11.11% on the total units consumed by the Petitioner, it is necessary to refer various provisions of the Supply Code which are reproduced below:

Clause 3.1.2 of GERC Supply Code, 2005:

“………….. 11 kV, 22kV and 33 kV Three Phase • For all installations with Contract Demand exceeding 100 KVA and upto 2500 KVA for GEB and TPSL ……………..”

These stipulations were amended vide GERC (Electricity Supply Code and Related Matters) (Second Amendment) Regulations, 2006 notified on 25.09.2006, as under:

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“………………. 11 kV, 22kV and 33 kV Three Phase • All installations with Contracted Load and Contract Demand exceeding 100 KVA and upto 4000 KVA for unbundled Distribution Licensees of erstwhile GEB and TPSL. …………….”

Vide GERC (Electricity Supply Code and Related Matters) (Fourth Amendment) Regulations, 2012 notified on 20.06.2012, voltage level for contract demand exceeding 100 KVA / KW was amended as under:

“………………………. (c) 11 kV and 22 kV – Three phase For all installations with Contract Demand exceeding 100 kVA / KW and up to 4000 kVA / KW...... (d) At 33 KV and above - Three phase All installations with Contract Demand exceeding 4000 kVA / kW”

GERC Supply Code, 2015 notified on 24.09.2015

“………. 3.2 The rated voltage of the AC supply should be as follows:

Category System of Supply …………. …………. For all installation with Contract Demand 11 kV and 22 kV - Three Phase exceeding 100 kVA/kW and upto 4000 kVA/kW. However, for the existing 22 kV consumer, the Contact Demand limit shall be extended upto 8000 kVA/kW subject to undertaking from consumer for reverting back to 4000 kVA/kW limit in case of change of system to 11 kV under system conversion scheme. All installation with Contract Demand At 33 kV and above- Three Phase exceeding 4000 kVA/kW. ……………..”

From the above, it is clear that load up to 2500 kVA can be catered on 11 kV supply voltage level. This is subsequently amended in 2006 and 2012 and load was increased up to 4000 kVA for 11 kV supply voltage level and for load exceeding 4000 kVA, the supply shall be at 33 kV or above. Thus, it is now mandatory that as and when any

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person desires electricity supply of more than 4000 kVA, supply voltage has to be 33 kV or above.

8.6.2.4. In the present case, as recorded earlier, the Petitioner was having two separate connections with Consumer No. 43133 from 23.07.2009 for contract demand 2450 kVA and No. 43149 from 06.07.2013 for contract demand 2400 kVA. Both the connections were getting supply from the Respondent at 11 kV. It is pointed out by the Respondent that the Petitioner availed second connection concealing the facts about ownership of both the units by a single legal entity. Had the Petitioner revealed to the Respondent that owner of both the units is the same, the second connection which was released on 06.07.2013 would not have been released and the existing connection released on 23.07.2009 would have been given load extension to cater the additional demand of the Petitioner. It is clear from the provisions of the prevalent Regulations that the total demand of the Petitioner from a single connection i.e. 4850 kVAwould have been released at 66 kV voltage level. Thus, the Respondent suffered losses by supplying at lower voltage level to the Petitioner. It also reveals from the submissions of the Respondent that the Petitioner applied for merger of the connections only after the Respondent started issuing a single bill for both the connections and started levy of additional, 11.11% on the total consumed units to recoup the losses they suffered. It is submitted by the Respondent that they are not seeking any relief prior to the issuance of letters for merger of the connections nor seeking any adjustment in tariff or loss levels for such period.

The Respondent contended that due to drawal of power by the Petitioner at the voltage level lower than that prescribed in the Regulations, they incurred losses of 11.11%. The Respondent also stated that the value of loss percentage is worked out based on the Commission’s Tariff Order. Since the period of dispute on the energy bill amount between the Petitioner and the Respondent is from July, 2015 to February, 2017, it is necessary to refer the Tariff Orders of the Commission for FY 2015-16 and FY 2016- 17. The Commission in its Tariff Orders in Petition No. 1466 of 2014 for FY 2015-16 and Petition No. 1550 of 2015 for FY 2016-17 has dealt with the wheeling charges and losses for Open Access and prescribed 10% wheeling loss to be paid by Open Access consumers if they draw power at 11 kV. The Commission has allowed the DISCOMs to charge wheeling loss of 10% from Open Access consumers taking power from other sources using DISCOM’s 11 kV network. It means that the DISCOMs are being compensated for incurring losses in 11 kV network. Now, in the present case also, the Respondent is incurring losses because the Petitioner’s connection of above 4000 kVA was to be given at 66 kV instead of 11 kV. Therefore, the Commission finds it appropriate to consider the prescribed figure of 10% loss for using 11 kV network of the Respondent as decided for Open Access consumers in the Tariff Order. When these wheeling losses are to be measured at consumption point, which is the case in the present Petition, the value of 10% is required to be grossed up by 10%. Thus, the effective wheeling loss that the Respondent suffered works out to 11.11% (i.e. 10% addition on 10%).

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In view of the above, the value of percentage losses i.e. 11.11% worked out by the Respondent is proper and valid. Since the Respondent Distribution Licensee suffered the losses by providing supply at lower voltage level instead of providing it at higher voltage level, the levy of 11.11% on the Petitioner is found to be legal and valid.

8.6.2.5. Now we deal with the approach adopted by the Respondent to levy additional 11.11% from the Petitioner. As narrated earlier, on merger of two connections, the arithmetic sum of contract demands became 4850 kVA (2450 kVA of Connection No. 43133 + 2400 kVA of Connection No. 43149). Prior to merger, both the connections with contract demand of 2450 kVA and 2400 kVA were entitled to draw power at 11 kV voltage level as per as per the provisions of the GERC (Electricity Supply Code and Related Matters) Regulations, 2005, it’s amendment dated 25.09.2006 and 18.06.2012. With the merger of these two connections, the Petitioner would have received power supply at voltage higher than 11 kV as per the provisions of the GERC Supply Code and its amendments. In the present matter, the Respondent has charged the Petitioner with 11.11% additional charge on the arithmetic sum of billing quantities of both the connections. Since, the Petitioner is entitled to receive power supply at 11 kV voltage level up to contract demand of 4000 kVA as per the prevailing Regulations, the Commission does not agree with the approach of the Respondent to charge additional 11.11% on billing quantities of the entire contract demand of 4850 kVA but decides that contract demand above 4000 kVA should only be charged with additional 11.11%. Therefore, the Respondent is entitled to charge 11.11% proportionately for all the billing quantities on the contract demand in excess of 4000 kVA i.e. on 850 kVA. Accordingly, the Respondent shall revise the bills and refund the excess amount to the Petitioner .

8.6.3. Now we deal with the demand of the Petitioner about interest charges from the Respondent. As explained earlier at para 8.2 above, the Petitioner obtained the second connection and agreed for the merger only after the Respondent started levying additional 11.11% on the total consumption of both the connections. The Commission also notes that the Respondent is not seeking relief prior to the period of issuance of merger notice and issued the bills after adding the loss they suffered. In view of the above, the Commission does not find it appropriate to allow the request of the Petitioner for interest payment on refund of additional amount recovered by the Respondent.

8.6.4. The Petitioner sought refund of service connection charges paid by them while availing connections at 11 kV voltage level. In this regard, it is to state that the Petitioner themselves have demanded two separate connections in spite of being aware about the rules and regulations in force at the relevant point of time. Under the circumstances, the request of the Petitioner for refund of service connection charges is not justified and accordingly, the same is rejected.

8.6.5. The Petitioner also contended that the Respondent have not provided commercially viable proposal for switching over to higher voltage level in compliance to Clause 3.1.2. of the Supply Code, 2005. The Commission does not find any substance in the

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argument of the Petitioner since the Petitioner agreed to switch to higher voltage level only after the Respondent issued merger notice and started levying additional 11.11% on the total consumed units as mentioned above. In view of this, the contention of the Petitioner is not accepted.

8.6.6. The Commission does not find any merit in the contentions of the Petitioner about discrimination by the Respondent in issuance of merger notice and additional bills as the same is not substantiated with any documentary evidence.

9. We order accordingly.

10. With this order, the present petition is disposed of.

Sd/- Sd/- Sd/- (P. J. THAKKAR) (K. M. SHRINGARPURE) (ANAND KUMAR) MEMBER MEMBER CHAIRMAN

Place: Gandhinagar Date: 09/09/2019

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