CONSUMER GRIEVANCE REDRESSAL FORUM MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LTD. NASHIK ZONE

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1 CONSUMER GRIEVANCE REDRESSAL FORUM MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LTD. NASHIK ZONE (Established under the section 42 (5) of the Electricity Act, 2003) Phone: Fax: Office of the Consumer Grievance Redressal Forum Kharbanda Park, 1 st Floor, Room N Dwarka, NASHIK No. / CGRF /Nashik/NUC/384/22-13/ 162 Date: 21/08/2013 (BY R.P.A.D.) To. 1. Dirk India Pvt. Ltd., Behind NTPS, Eklahare, Nashik (Con.No ) Date of Submission of the case : 05/08/2013 Date of Decision : 21/08/2013 Appellant 2. Nodal Officer, Maharashtra State Elect. Distribution Co. Ltd., Urban Circle office, Nashik Distribution Licensee (Respondent) DECISION M/S Dirk India Pvt. Ltd., Nashik (hereafter referred as the Appellant) is an HT industrial consumer of the Maharashtra State Electricity Distribution Company Ltd. (hereafter referred as the Respondent) has the complaint regarding notice of disconnection of electricity supply. The Appellant has submitted a representation directly to the Consumer Grievance Redressal Forum in Schedule A with a request of directing the Respondent not to disconnect the supply. The Forum in its meeting on 06/08/2013, decided to admit this case for urgent hearing on 13/08/2013 at am in the office of the forum. But as the respondent has threatened the appellant to immediately disconnect the electricity connection by its notice dated 03/08/2013,the Forum under section 8.3 of the MERC (Consumer Grievance Redressal Forum & Electricity Ombudsman) Regulations, 2006, passed an interim order on the request of the consumer, directing the respondent not to disconnect the electricity supply till the final decision on the Grievance by the Forum. This interim order was passed without giving the opposite party an opportunity of being heard, because the object of passing the interim order would have been be defeated by delay as the notice was for immediate disconnection. A notice dated 06/08/2013 was sent to the appellant and the concerned officer of the Respondent for hearing on 13/08/2013. A copy of the grievance was also forwarded with this notice to the Nodal Officer, MSEDCL, Urban,Circle Office Nashik, for submitting para-wise comments to the Forum on the grievance by 12/08/2013 under intimation to the consumer. The copy of this notice was also endorsed to the Chief Engineer, Nashik Zone and the Superintending Engineer, Urban Circle Office Nashik. Case No Page No.1 of 7

2 Shri C.C. Humane, Nodal Officer, MSEDCL, Urban Circle Office, Nashik, Smt. Nital Varpe, Jr. Law Officer, Urban Circle represented the Respondent. Shri T.N. Agrawal Shri P.J. Jawale and Shri Ranjit Varma appeared on behalf of the consumer Consumer s Representation in brief : 1. As per the agreement with MSPGCL, the land for the unit is provided by NTPS outside the boundary wall of its plant. The area of the plant is totally different from the location of NTPS and its access is also totally in their control. 2. Their contractual dispute with NTPS is pending with Supreme Court for Special Leave to Appeal (Civil) No(s), 13688/2013, next date of hearing is scheduled on 21/08/2013 (Case order & Status attached). 3. The owner of premises i.e. NTPS vide its letter dt. 01/08/2013 advised to CE (Nashik Zone) MSEDCL to disconnect the power supply of the plant. Accordingly MSEDCL had acted on the letter of NTPS and they have been intimated by SE Office through a letter dt. 03/08/2013 for immediate disconnection of supply without any further notice due to the following reasons. Termination of their agreement with MSPGCL, Eklahare. Utilizing land of NTPS Eklahare. 4. They agree with both the above points; however disconnection of supply of any occupant can t be made by the DISCOM merely on the advice of the land owner. Such kind of disconnection was held illegal by various courts. Some court decisions of the similar issues are quoted below where the distribution company was asked to provide electricity connection even to illegal occupants or without NOC from land lord. Case No. 1: The Hon ble Allahabad High Court in writ petition No.38285/11 dt.14/07/2011 in a case Devendra Sharma V/s Uttar Pradesh State Electricity Board (U.S.E.B.), observed. Action of electricity department for disconnecting the electricity on the ground of dispute with landlord was wholly illegal arbitrary and malafide. In view of the law laid down by Hon ble Alahabad High court, it was held illegal to issue mandatory injunction for disconnection of electricity supply of two tenants. Case No. 2: In a case of Abhimanyu Muzumdar versus Superintending Engineer of Elect. Dist. Co (W.P. no.423 of 2010 decided on 11th February, 2011), Full bench of Hon ble High Court of Calcutta held that a person in settled possession of a property, be it unauthorized occupier, encroacher of any premises and squatters of any premises is free to apply for supply of electricity, without consent of owner and is entitled to get electricity and enjoy the same until he is evicted by due process of law. Case No. 3: As per Sec. 29 (7) (b) of the Maharashtra Rent Control Act-1999, a tenant who desires to have at his own cost other essential supply or services for the premises in his occupation, the tenant may apply to the concerned authority for supply of essential service and it shall be lawful for that authority to grant permission for supply of such essential supply, or service applied for without insisting on production of No objection certificate from the landlord by such tenant. Case No. 4: A recent judgment passed by CGRF, Pune vide Case No. 36/2012 Date- 29/01/2013 in matter Complainant Shri Shankar Tulshiram Thorat and respondent MSEDCL for disconnection of supply of his two tenants. In this case also CGRF, Pune held that supply of essential service ( i.e. electricity) can t be discontinued on the request of land lord after arising dispute with tenants, copy of case order is attached for ready reference. Case No. 5: Maharashtra Ombudsman case No. 87/2012: Even though dispute between land lords and Tenant was in the court of law, the electricity ombudsman passed the order not to disconnect the supply of occupier on the request of Land lord, copy of order is attached. 5. In this case also dispute is raised with land lord (NTPS) and hence due to one sided termination of agreement, it has advised the DISCOM to disconnect the supply. The land is still in their possession where men and machines are operating round the clock to produce the goods. In the event of sudden illegal disconnection of electric power will lead to stoppage of manufacturing activities resulting the following nature of losses. Case No Page No.2 of 7

3 Scraping of material in process due to incomplete process. Blockage of material in running plant lead to damage to the machines. Accident may occur leading to risk for working men and machines. Heavy financial loss to the company. National loss due to generation of scrap from process material and damage to the machines. 6. As per section 56 of Electricity act., 2003, MSEDCL can disconnect the supply only due to default in payment by giving 15 days notice. As per this electricity act, there is no other provision for disconnection of supply unless it is held by any court of law. In view of the above it is clear that the land of NTPS is in their possession and still manufacturing activities are going on. No court of law has ordered for vacation of land. Hence they are lawfully holding possession of premises. Further based upon the cases mentioned above, it will be held illegal if power supply to their premises is disconnected by MSEDCL on the unlawful instructions of NTPS. In such situation of illegal disconnection, any loss to men, material and machine occurs, it shall be responsibility of the DISCOM to compensate for the same and bear the consequences thereof. 7. The case in High Court Mumbai for finalisation under section 34 of Arbitration is still pending. As per the High Court Arb. Petition No. 361/2011 and 695/2011 both the petitions have been admitted and are under process in the court. Till this time no order has been issued under Arb. Petition of both the parties. 8. If the previous order passed by High court for Appeal No. 114 of 2013 is seen, the court has not issued any specific order for winding up of our manufacturing activities and vacating the land. Further as per common law, there are options to file appeal against the judgment and accordingly decision of HC u/s 34 id Ab. Act is awaited. It may also be noted that no issue pertains to disconnection of essential services like water & electricity supply etc. is addressed in the order. 9. In case if the court passes the order to vacate the land, from that time onwards the Appellant will be requiring about 4 months time period for winding up of activities as per the agreement entered with NTPS. Further during this period of 4 months, power will be essential till complete evacuation of land. 10. Till final decision of High Court on the matter of section 34 is finalised, the agreement with NTPS is in force. Accordingly the consumer has been getting fly ash from them time to time. Latest copies of Inv. Nos , 39, 40 all dt for total qty. of 10, MT of fly ash lifted from NTPS, Eklahare are submitted. This shows that the agreement with NTPS is still operative and accordingly they are conducting Pozzocrete manufacturing activities. 11. In view of this, it is requested not to rely on the incorrect information being given by NTPS regarding discontinuation of agreement. The provisions of The Electricity Act 2003 on the other hand enables a consumer to continue as the consumer of the DISCOM so long as the consumer is willing to pay the charges prescribed and comply with the terms and conditions as stipulated under section 43 of The Electricity Act Section 43 mandates that the area licensee shall supply power as long as the consumer remits the charges prescribed as per Tariff Notification and as provided in Section 45 of The Electricity Act Further attention is invited to the letter No. CE/Comm//16647 dt of CE (Comm.), MSEDCL on the matter of continuing power supply to the occupants. As stated in the letter, under the universal service obligation and as per section 43 of EA, 2003, MSEDCL is under the legal duty to give supply with the prima facie evidence of occupancy of the structure/ building. As long as occupants are residing in the premises, mere disconnection of supply would be harassment to such persons. It will also amounts to illegal disconnection as the legal contract of supply of electricity can t be terminated without observing the legal norms by which the contract of supply of electricity is governed. The supply should be maintained by DISCOM till the occupant is staying and building/ structure remains intact. Even in the unauthorised occupancy, electric supply has to be maintained till the time demolition of building/ structure begins. Demand of the Consumer: The DISCOM may please be advised to withdraw disconnection notice dt and maintain our power supply without any interruption. Further no such intimation in future from NTPS should be entertained by DISCOM. Case No Page No.3 of 7

4 Arguments from the Distribution Company: The Distribution Company has submitted a letter dated 12/08/2013 from the Nodal Officer, MSEDCL, Nashik Urban Circle to the Forum and other relevant correspondence in this case. Putting forth the arguments on the points raised in the grievance the representatives of the Distribution Company stated that: 1. The Chief Engineer, Nashik Thermal Power Station (NTPS) has directed M/S Dirk India Pvt. Ltd. vide letter dated 19/03/2013 to remove their men and machinery in view of rejection of their appeal by the High Court. The Chief Engineer,NTPS informed the Chief Engineer, MSEDCL, Nashik, Zone vide letter dated 01/08/2013 to disconnect the supply. 2. Accordingly the Nashik Urban Circle office informed M/S Dirk India Pvt. Ltd. by a letter dated 03/08/2013 that their electricity supply is being disconnected. 3. But the Forum has issued Interim Order dated 06/08/2013 for not disconnecting the supply in view of the grievance submitted on 05/08/ It was essential for M/S Dirk India Pvt. Ltd. to submit the complaint first to the IGRC. But they have submitted the application to the CGRF. Hence it is not eligible to be admitted by the Forum. The Forum should cancel the interim order. Observations by the Forum: 1. The Appellant submitted a letter to the Forum requesting to postpone the date of hearing. It stated that they had anticipated hearing date after about 20 days time from submission of grievance. As their Directors Mr. George Dirk and Mr. Saji Pillai left the country for official assignments, they are now expected by 26 th Aug Hence it was requested by the Appellant to give next hearing date after 26 th Aug But the Forum declined the request and explained to the representative of the Appellant that in view of the nature of grievance and the interim order passed the matter needed urgent hearing. The Forum does not require presence of their Directors and the hearing can be conducted in presence of the representative nominated in the Schedule A based on the documents submitted. 2. The Nodal officer has argued that the grievance is not eligible to be admitted by the Forum as it was essential for M/S Dirk India Pvt. Ltd. to submit the complaint first to the IGRC instead of submitting the application directly to the CGRF and stated further that the Forum should cancel the interim order. But it was clarified by the Forum that as the grievance was regarding the immediate disconnection of the supply by a notice issued by the same office, the Appellant directly approached the Forum for remedy which was acted upon by the Forum in view of the section 8.3 of the regulations. 3. The letter dated 01/08/2013 by CE,NTPS addressed to the CE,MSEDCL, Nashik Zone stated as under: As per the agreement with MSPGCL (Former MSEB) in year 2000 it was mandatory for M/S DIPL to lift 3000 MT/day fly ash for next 30 years. Approximately 2 acres land of Nashik TPS was given to M/S DIPL for erection of its pulverized fly ash handling plant for production of 'Pozzocrete'. Also water and electricity was provided. But due to non performance, MSPGCL terminated agreement in year 2006.Then M/S DIPL challenged this in Hon ble High Court, Mumbai. The legal matter is pending in Hon ble Supreme Court of India,Delhi and Hon ble High Court, Mumbai. On dated 19/03/2013 Hon ble High Court, Mumbai order fly ash supply to M/S DIPL has been stopped. M/S DIPL filed petition for Special Leave to Appeal (Civil) CC 7476 and now it is of 2013 in Hon ble Supreme Court of India,Delhi challenging the Mumbai High Court, order dated 19/03/2013. As per the order dated 17/07/2013 the Supreme Court has declined to grant any interim order to M/S DIPL. The order copy is attached. The electric supply to M/S DIPL is provided from Samangaon feeder 11 KA line to Waste water Recovery Pump of Nashik TPS for manufacture of its product 'Pozzocrete' from fly ash of Nashik TPS. Hence requested to cut the electric supply of M/S DIPL as the land is of Nashik TPS 4. Scrutiny of the documents on record in this case reveal the following facts: a. An agreement was entered into on 4 October 2000 for 30 years or till its termination between Maharashtra State Electricity Board (MSEB) and Dirk India Private Limited (DIPL) i.e. the Appellant.The agreement envisaged that Pulverized Fly Ash (PFA) Case No Page No.4 of 7

5 generated from MSEB's Thermal Power Station at Nasik would be transported by DIPL at site. DIPL was to utilise PFA for the manufacture of POZZOCRETE concrete. The agreement provided grant of the lease of the land of site by MSEB to DIPL at monthly rent of Rs.100/-. b. Later dispute arose between two parties regarding contractual obligations. These were referred to a three-member arbitral tribunal. The arbitral tribunal rendered its award on 31 st March 2011 by which it dismissed the claim of DIPL as well as the counter claim of the Maharashtra State Electricity Generation Company Limited (MSPGCL), the successor-in-interest of the erstwhile State Electricity Board. c. DIPL filed a petition against this Award to the High Court,Bombay. But according to the order by (APPEAL NO.114 OF 2013 in ARBITRATION PETITION NO.355 OF 2011) on 19/03/2013 the Hon ble High Court,Bombay refused the prayer for stay. Based on this decision, CE, NTPS directed M/S DIPL vide letter dated 19/03/2013 to remove their men and machinery from Nashik Thermal Power Station and stop collection and lifting of fly ash (PFA) with immediate effect. d. But DIPL has filed a petition to the Hon ble Supreme Court [Special Leave to Appeal (Civil) No(s).13688/2013 from the judgment and order dated 18/03/2013 in Appeal No. 114 of 2013 arising out of Lodging No.333/2012 of The HIGH COURT OF BOMBAY]. The Hon ble Supreme Court has directed on 17/07/2013 as under: By our order dated 2nd April, 2013, we had requested the High Court to take a final decision on the petitions filed by the petitioner as well as the respondent under Section 34 of the Arbitration and Conciliation Act, 1996 within a period of two months. We are informed that although the matter is on the Board of the concerned Bench, there is little likelihood of the same being taken up for hearing in the near future. We again request the High Court to finally decide the petitions under Section 34, as noticed above, within a period of one month from today, especially in view of the fact that we have declined to grant any interim relief. List the matter after four weeks on a non miscellaneous day for final disposal. As informed by the Appellant this case is scheduled on 21/08/2013 for Final Disposal. 5. Based on this record the Forum comes to the conclusion that the dispute between the Appellant and NTPS (landowner) is still not fully settled. The Hon ble Supreme Court has scheduled date of 21/08/2013 for Final Disposal. 6. The scrutiny of the above referred letter dated 01/08/2013 by CE, NTPS reveals following discrepancies/contradictions: NTPS agrees that The legal matter is pending in Hon ble Supreme Court of India,Delhi and Hon ble High Court, Mumbai. But advises MSEDCL to disconnect the supply. NTPS states that Also water and electricity was provided. But the electricity is not provided by NTPS. The connection stands in the name of Appellant. NTPS states that On dated 19/03/2013 Hon ble High Court, Mumbai order fly ash supply to M/S DIPL has been stopped.. On the contrary NTPS is still giving them fly ash as seen from the copy of invoice dt submitted by M/S DIPL. 7. Under the notice dated 19/03/2013 CE,NTPS had directed DIPL to remove their men and machinery from Nashik Thermal Power Station and stop collection and lifting of fly ash (PFA) with immediate effect. But there is no report regarding removal of men & machinery or stoppage of lifting of PFA. The land is still in possession of the Appellant and operations going on even after 5 months of giving notice dated 19/03/ Here the question arises whether the electricity supply can be disconnected/withheld/denied on the basis of the request of the land owner when the consumer continues to be occupier of the premises and pays the electricity bills regularly? The answer is No. There have been similar cases decided by the Hon ble Ombudsman, Mumbai and Hon ble High Courts as quoted by the Appellant. 9. In this case the landlord i.e. NTPS has not provided the electricity but the same has been procured separately by the Appellant in their own name on the basis of the Agreement which Case No Page No.5 of 7

6 provides the land on lease and the supply should continue throughout the tenure of the lease, subject to the agreement for supply between the consumer and the Respondent. Even if the connections would have been obtained in the name of the owner of the premises, it does not give a legal right to the land owner get the connections cancelled when the lessee/occupier is still occupying the premises. If there is any issue with the lessee/agreement it is to be sorted it out through the due process of law. NTPS can not ask MSEDCL to disconnect the supply so long as the land is in possession of M/S DIPL. 10. The Appellant has quoted a letter dated no dated 12/06/2013 issued by the Chief Engineer Commercial), MSEDCL, Mumbai on the subject of the Disconnection of energy supply given to the unauthorized structures/ buildings. The following excerpts from this letter clearly give the underlying principles for disconnections in the event of occupiers of the disputed premises :..Under the Universal Service Obligation and as per section 43 of Electricity Act- 2003, MSEDCL is under legal duty to give supply to the human beings, who are under the shelter with the prima facie evidence of the occupancy of the said structure. MSEDCL has no means to adjudicate upon the perfect legal title or right of occupancy. Therefore, in the circumstances; MSEDCL cannot refuse to give supply to the occupants who are ready to fulfill all the requirements as contemplated under Electricity Act, rules & regulations framed there under....it will also amount to illegal disconnection as the legal contract of supply of electricity cannot be terminated without observing the legal norms by which the contract of supply of electricity is governed.in the event of order by any Court or Forum (like status quo, stay or with specific directions) is pointed out by such occupant or consumer and if it is necessary to continue the supply, the field officers not below the rank of Executive Engineer should take decision to that effect in accordance with the court's order only. As per electricity rules being a safety measure, we can discontinue the supply of electricity when the work of actual demolition of unauthorized constructions or eviction of occupants is started. 11. The order dated 10/12/2012 by the Hon ble Ombudsman, Mumbai (Representation No. 87 Of 2012 in the matter of disconnection of supply given to the disputed premises ) in case of Mr. Haresh T. Bhatia V/s MSEDCL is also clear in such issues. In this case the Appellant sought the direction to the Respondent to disconnect supply of the new connection to a flat where ownership dispute has arisen which is pending in the court. In this case the Hon ble Ombudsman has given the order as under: As no final order is passed, in respect of legal ownership of the suit flat property, it felt that the issue of disconnection of electricity supply, given to Shri. Shailesh Vinod Palan, is decided only after receipt of the final decision of the court in the matter. Appellant s Representation, seeking disconnection of supply of electricity given to Shri Shailesh Vinod Palan, at this stage, is therefore, liable to be and is hereby rejected. 12. In a case of Abhimanyu Muzumdar versus Superintending Engineer and Anr. (W.P. no. 423 of 2010 decided on 11 th February, 2011), full bench of honorable High Court of Calcutta held that:. a person in settled possession of a property, be it unauthorized occupier, encroacher of any premises and squatters of any premises is free to apply for supply of electricity, without consent of owner and is entitled to get electricity and enjoy the same until he is evicted by due process of law. In the present case, the Appellant is in settled possession of the land. As no final order is passed, in respect of the dispute, it is felt that the issue of disconnection of electricity supply, given to M/S DIPL, should be decided only after receipt of the final decision of the court in the matter. 13. The MERC (Electricity Supply Code and Other Conditions of Supply) Regulations, 2005 do not envisage consent/noc of the landowner for getting electricity supply. Only documents pertaining to occupation of premises are necessary as per section 4 of the said regulations. Case No Page No.6 of 7

7 This implies that continuation of the supply would not require the consent/noc of the landowner till the occupier is dispossessed/evicted of the premises through a legal process. 14. The Forum also pointed out that the action of restraining from disconnection till the final resolution of the dispute, will not cause any financial loss to the Respondent so long as the Appellant is regularly paying the bills and does not violate provisions under the Electricity Act 2003 with amendment in 2007 and MERC (Electricity Supply Code and Other Conditions of Supply) Regulations, 2005 After considering the grievance submitted by the consumer, comments and arguments by the Distribution Licensee, all other records available, the following order is passed by the Forum for implementation: ORDER 1. The Respondent s notice for disconnection of supply of electricity given to M/S DIPL, at this stage, is therefore, liable to be and is hereby set aside till the final decision of the court in the matter and till the land given by NTPS is in legal possession of M/S DIPL. 2. As per regulation 8.7 of of the MERC (Consumer Grievance Redressal Forum & Electricity Ombudsman) Regulations, 2006, order passed or direction issued by the Forum in this order shall be implemented by the Distribution Licensee within the time frame stipulated and the concerned Nodal Officer shall furnish intimation of such compliance to the Forum within one month from the date of this order. 3. As per regulation 22 of the above mentioned regulations, non-compliance of the orders/directions in this order by the Distribution Licensee in any manner whatsoever shall be deemed to be a contravention of the provisions of these Regulations and the Maharashtra Electricity Regulatory Commission can initiate proceedings suo motu or on a complaint filed by any person to impose penalty or prosecution proceeding under Sections 142 and 149 of the Electricity Act, If aggrieved by the non-redressal of his Grievance by the Forum, the appellant may make a representation to the Electricity Ombudsman, 606, KESHAVA, Bandra Kurla Complex, Bandra (East), Mumbai within sixty (60) days from the date of this order under regulation 17.2 of the MERC (Consumer Grievance Redressal Forum & Electricity Ombudsman) Regulations, (Rajan S. Kulkarni ) Member (Ramesh V.Shivdas ) Member-Secretary & Executive Engineer Consumer Grievance Redressal Forum Nashik Zone (Suresh P.Wagh) Chairman Copy for information and necessary action to: 1. Chief Engineer, Nashik Zone, Maharashtra State Electricity Distribution Company Ltd., Vidyut Bhavan, Nashik Road Superintending Engineer, Maharashtra State Electricity Distribution Company Ltd., Urban Circle office.nashik Case No Page No.7 of 7