# Suman Engineering & Chem. Pvt. Ltd v. U.P.P.C.L. & Ors

- **Citation:** (2023) 11 ILRA 603
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-11-21
- **Case number:** Writ-C No. 6072 of 2016
- **Bench:** Manoj Kumar Gupta, Manish Kumar Nigam
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/suman-engineering-chem-pvt-ltd-v-u-p-p-c-l-ors-49379
- **Pages:** 15

## Headnote

C.S.C.,
Sri
Anadi
Krishna
Narayana,
Sri
AwadheshKumar Saxena, Sri Krishna Agarwal,
Sri Narendra Kumar Tiwari, Ms. Vishakha, Sri
Shambhu Chopra (Sr. Advocate)

Civil Law - U.P. Electricity Supply Code,
2005 - Clause 4.2, 4.6(b), 4.6(c) & 4.21 -
Electricity Act, 2003 - Sections 42, 43, 45,
46 & 50 - Petitioner-company, seeks
direction
to
respondents
to
refund
₹42,14,181 with interest, including additional
interest for six-month delay in refunding
security deposit, following cancellation of
3200 KVA power load - Petitioner contended
that system-loading charge was refundable,
as it is to recover upgrade costs from new or
enhanced-load consumers - Since sanction
was cancelled before electricity supply began,
petitioner not liable for such charges -
Explanation to Note No. 4 of Chapter IV of
Cause Data Book was misplaced, it permits
licensee to retain higher amount paid as
system-loading charges, in case consumer
subsequently opts for new load of lower
capacity - Such consumer continues to be
beneficiary of distribution system, liable to
share burden - Only actual expenses, not
normative costs, be recovered unless licensee
starts availing services - System-loading
charges recover costs for strengthening
distribution system, apply when prospective
consumer begins using electricity - If supply
never starts, consumer cannot be charged,
once supply begins, licensee may retain
amount, under Clause 4.21(a), no refund is
made even if load is later reduced - Petitioner,
being only prospective, not actual consumer,
no liability to share system upgrade costs,
entitled to refund of ₹32 lakhs with 8.5%
annual interest from date of deposit till refund.
(Para 1, 10, 38, 40)

Writ petition allowed. (E-13)

List of Cases cited:

## Text

_Characters 0–39,919 of 48,897. This is a partial read: ask again with offset=39919 for what follows._

11 All. Suman Engineering & Chem. Pvt. Ltd. Vs. U.P.P.C.L. & Ors.
603
same, unless he can provide cogent reasons
for his hopping around. In the present case
the petitioner has not provided any such
reasons.

13. In view thereof, the writ petition
is dismissed with liberty to petitioner to file
the same at Allahabad.

14. Interim order, if any, stands
vacated.
----------
(2023) 11 ILRA 603
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 21.11.2023

BEFORE

THE HON'BLE MANOJ KUMAR GUPTA, J.
THE HON'BLE MANISH KUMAR NIGAM, J.

Writ-C No. 6072 of 2016

Suman Engineering & Chem. Pvt. Ltd.
 ...Petitioner
Versus
U.P.P.C.L. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Ranjit Saxena, Sri Bidhan Chandra Rai

Counsel for the Respondents:
C.S.C.,
Sri
Anadi
Krishna
Narayana,
Sri
AwadheshKumar Saxena, Sri Krishna Agarwal,
Sri Narendra Kumar Tiwari, Ms. Vishakha, Sri
Shambhu Chopra (Sr. Advocate)

Civil Law - U.P. Electricity Supply Code,
2005 - Clause 4.2, 4.6(b), 4.6(c) & 4.21 -
Electricity Act, 2003 - Sections 42, 43, 45,
46 & 50 - Petitioner-company, seeks
direction
to
respondents
to
refund
₹42,14,181 with interest, including additional
interest for six-month delay in refunding
security deposit, following cancellation of
3200 KVA power load - Petitioner contended
that system-loading charge was refundable,
as it is to recover upgrade costs from new or
enhanced-load consumers - Since sanction
was cancelled before electricity supply began,
petitioner not liable for such charges -
Explanation to Note No. 4 of Chapter IV of
Cause Data Book was misplaced, it permits
licensee to retain higher amount paid as
system-loading charges, in case consumer
subsequently opts for new load of lower
capacity - Such consumer continues to be
beneficiary of distribution system, liable to
share burden - Only actual expenses, not
normative costs, be recovered unless licensee
starts availing services - System-loading
charges recover costs for strengthening
distribution system, apply when prospective
consumer begins using electricity - If supply
never starts, consumer cannot be charged,
once supply begins, licensee may retain
amount, under Clause 4.21(a), no refund is
made even if load is later reduced - Petitioner,
being only prospective, not actual consumer,
no liability to share system upgrade costs,
entitled to refund of ₹32 lakhs with 8.5%
annual interest from date of deposit till refund.
(Para 1, 10, 38, 40)

Writ petition allowed. (E-13)

List of Cases cited:

1. Central GST Delhi-III Vs Delhi International Airport
Ltd, (2023) 9 SCC 294

(Delivered by Hon'ble Manoj Kumar Gupta, J.)

1. The prayer made in the writ petition is
for a direction to the respondents to refund Rs.
42,14,181/- to the petitioner, along with interest
on the said amount and further interest for the
period of six months for delay caused in
refunding the security amount as a result of
cancellation of 3200 KVA power load by
order dated 22.11.2014.

Background Facts -

2. The petitioner, a private limited
company, applied for 2975 KVA load for
running an induction furnace. Along with
the application, the petitioner deposited
604 INDIAN LAW REPORTS ALLAHABAD SERIES
Rs.1,000/-. Shortly thereafter on 10.9.2009,
it filed another application for sanction of
load of 3200 KVA instead of 2975 KVA. A
sum of Rs.4,000/- was further deposited
along with the application. The load was
sanctioned
by
Paschimanchal
Vidyut
Vitaran Nigam Limited (respondent no. 2)
vide Office Memorandum dated 18.1.2011,
subject to the condition that the petitioner
would obtain No-Objection Certificate
(NOC) from the U.P. Pollution Control
Board. The case of the petitioner is that it
applied for NOC from U.P. Pollution
Control Board on 22.2.2011. By letter dated
3.10.2012, estimate for releasing the
electricity
load
amounting
to
Rs.80,54,181/- was sent to the petitioner.
The breakup of the said amount is as
follows: -

Service Charges

 Rs.
5,49,181/-

Security Deposit
Rs.
38,40,000/-

System Loading Charges
Rs.
32,00,000/-

Charges as per letter of
Rs.
4,65,000/-

Executive Engineer dated 8.8.2012.

3. The petitioner was required to
deposit the said amount within fifteen days,
failing which, the sanction order would stand
cancelled automatically. Consequently, the
petitioner deposited the entire amount on
8.11.2012 and communicated the said fact to
the respondents. However, even after lapse of
considerable time, the U.P. Pollution Control
Board did not issue NOC and consequently the
respondents cancelled the sanction vide order
dated 22.11.2014.

4. Upon cancellation of the sanction
order, the respondents refunded the security
amount of Rs.38,40,000/- vide order dated
4.3.2015.
By
another
order
dated
17.3.2015, Rs. 6,38,400/- was paid as
interest on the security amount to the
petitioner.
The
respondents
however
refused to refund other amounts to the
petitioner on the ground that the same were
non-refundable. The petitioner therefore
filed the writ petition for the reliefs noted
above.

5. The writ petition was initially
allowed by a Co-ordinate Bench on
25.9.2018. It was held that the petitioner
was not issued NOC by the U.P. Pollution
Control Board despite all efforts. The
agreement could not be executed between
the parties for want of NOC, for which the
petitioner was in no manner responsible. It
was also observed that no material was
filed by the respondents to prove that they
actually incurred
any expenses after
sanction of the load, nor could place any
provision under the Electricity Act or the
U.P. Electricity Supply Code, 2005, which
would entitle them to appropriate the
amount deposited by the petitioner in
pursuance of sanction order. Accordingly,
the petitioner was held entitled to a refund
of the amount deposited by it along with
interest @ 8.5% per annum from the date
of deposit upto the date of payment.

6. The respondents being aggrieved
by the order and judgment of this court,
challenged the same before the Supreme
Court. The Supreme Court by order dated
29.11.2022 remanded the matter to this
court,
granting
opportunity
to
the
respondents to file additional counter
affidavit with supporting documents to
prove actual expenses incurred by them.
This court was required to "deny refund, to
the extent" the respondents are able to
prove "the actual expenses incurred". It
11 All. Suman Engineering & Chem. Pvt. Ltd. Vs. U.P.P.C.L. & Ors.
605
was clarified by the Supreme Court that all
contentions which may be available to the
respective parties, would remain open for
consideration by this court while deciding
the writ petition afresh on remand. The
relevant portion from the order of the
Supreme Court is extracted below: -

"If the appellant would have been
called upon to produce such documents and
thereafter
prove
the
actual
expenses/amount incurred and if it is
ultimately found that some amount was
actually
spent,
to
that
extent,
the
respondent-original writ petitioner may not
be entitled to refund. Therefore, we remand
the matter to the High Court by giving one
additional opportunity to the appellant to
produce
the
relevant
documents/materials/evidences
to
show
actual amount incurred by the appellant
while completing the system and other
formalities
required
for
getting
the
connection. For that purpose, it will be
open for the appellant to file additional
counter with supporting documents, which
can be rebutted by the respondent-original
writ petitioner and thereafter appropriate
order be passed by the High Court denying
the refund, to the extent, the appellant is
able to prove the actual expenses incurred.

The impugned judgment and order
passed by the High Court is set aside and
the matter is remanded to the High Court to
do the exercise, as observed hereinabove.
The aforesaid exercise shall be completed
by the respective parties within a period of
3 months from today and thereafter, the
High Court to finally decide and dispose of
the petition, on remand, within a period of
3 months thereafter.

All
contentions
which
may
be
available to the respective parties are kept
open to be considered by the High Court,
while deciding the writ petition afresh on
remand."

(emphasis supplied by us)

7. After remand, the respondents have
filed supplementary counter affidavit and
additional supplementary counter affidavit
and the petitioner has filed affidavits in
rejoinder.

8. We have heard Sri B.C. Rai for the
petitioner, learned Standing Counsel for the
State respondents, Sri Shambhu Chopra,
learned Senior Advocate, assisted by Sri
N.K. Tiwari for respondent nos. 2, 3 and 5
and Ms. Vishaka, Advocate, holding brief
of Sri Krishna Agarawal for respondent no.
1.

Submissions -

9. Sri Shambhu Chopra, learned
counsel appearing on behalf of respondent
nos. 2, 3 and 5, submitted that under Clause
4.6(b) of U.P. Electricity Supply Code,
2005 (hereinafter referred to as 'the Code'),
the estimate would include security deposit,
charges for laying the service line,
distribution mains (if required) & material,
and
system-loading
charges,
etc.
as
determined by the licencee with the
approval of the Commission once in two
years. Per Clause 4.6(c) of the Code, the
respondents had published cost data book
and according to which, processing fee is
non-refundable and it is also provided
therein that in case system-loading charge
for the new load is lower than what is
already paid by the consumer, no refund
shall be made. Therefore, the claim of the
petitioner for refund of system-loading
charges is not sustainable in law. He also
invited our attention towards the balance
sheet of respondent no. 2 as on 31.3.2013
to show that the consumer's contribution
606 INDIAN LAW REPORTS ALLAHABAD SERIES
towards service line and other charges
constitutes the capital reserve of the
Company and thus it is submitted that the
amount deposited towards system-loading
charges was non-refundable. He also urged
that the Corporation was compelled to
establish new feeder of 220 KVA to supply
electricity in rural areas, because load of
3200 KVA was reserved for the petitioner's
industrial unit for two years. He also urged
that the Executive Engineer of the
concerned Division by letter dated 8.8.2012
requested for sanction of Rs. 4.65 lakhs as
the estimated cost for strengthening of one
number 33 KV Bay for furnace - IV Feeder
at 220 KV Sub Station, Nara to facilitate
supply of electricity to the petitioner. He
further relied on letter of Chief Engineer
dated 21.8.2012 to Executive Engineer
(Technical),
written
in
reference
to
proposed
power
connection
to
the
petitioner-company. It mentioned that the
new power connection is to be supplied
from 33 KV Shahpur Bay which till that
time was a rural feeder. Since, it was to be
utilized for industrial units and therefore
the apparatus on the aforesaid Bay were
required
to
be
upgraded
to
ensure
uninterrupted power supply to industrial
units. The said letter was in continuation of
the letter of Executive Engineer dated
8.8.2012 aforenoted. According to the
respondents, the work of strengthening of
equipments for commissioning of 33 KV
Bay at 220 KV Sub Station, Nara was
carried out through the contractor M/s Pal
Electricals. The contract given in its favour
was for Rs. 28,020/-. He also submitted
that the respondents had to undertake
bifurcation of 33 KV line and construct a
new 33 KV line and install four-pole
structure near the place of consumer. He
places reliance on Clause 4.21 of U.P.
Electricity Supply Code, 2005 and the
provisions of Chapter IV of Cost Data
Book in support of his contention that Rs.
32,00,000/- realized as system-loading
charges was non-refundable. A letter of the
Superintending Engineer dated 19.3.2013
has also been filed to show that the
respondents were in a position to release
power connection as soon as NOC was
submitted. A letter of Executive Engineer
dated
19.12.2014
addressed
to
Superintending Engineer mentioning that
according to Cost Data Book, systemloading charge was non-refundable, has
also been relied upon. Reliance has been
placed on the judgment of the Supreme
Court in Central GST Delhi-III vs. Delhi
International Airport Ltd.1

10. On the other hand, learned counsel for
the petitioner submitted that it is the
primary duty of the respondents to maintain
an efficient distribution system in its area.
They were under obligation to upgrade and
strengthen the distribution system. The
respondents were only authorized to deduct
processing fee and line charges, which
were actually spent, whereas the amount
realized as system-loading charge was
refundable, as it is realized from new
customers or those seeking enhancement of
load to recover the cost of upgradation of
the system. Since the sanction order was
cancelled even before any electricity was
supplied to petitioner-company, therefore it
was not liable to bear the system-loading
charges. It is also submitted that the
reliance placed on Explanation to Note No.
4 of Chapter IV of the Cause Data Book is
wholly misplaced, as it only permits the
licensee to retain higher amount paid as
system-loading
charges,
in
case
the
consumer subsequently opts for new load
of lower capacity. Such a consumer
continues
to
be
beneficiary
of
the
distribution system and thus made liable to
share the burden. However, the same
11 All. Suman Engineering & Chem. Pvt. Ltd. Vs. U.P.P.C.L. & Ors.
607
analogy cannot be applied to the petitioner.
In support of his contention, he has placed
reliance on Section 42, 43, 45 and 46 of the
Electricity Act, 2003 and has tried to draw
a
distinction
between
the
expenses
realizable as expenditure under Clause 4.6
of the Electricity Supply Code, 2005 as
against amounts which are realized as
normative
cost from
the
consumers.
According to him, it is only the actual cost
incurred which can be realized and not the
normative cost, unless the licensee starts
availing the services. He has placed
reliance on various orders passed by the
Appellate Tribunal for Electricity in various
States
and
certain
orders
of
the
Ombudsman.

ANALYSIS:

Statutory regime -

11. Respondent no. 2 is a distribution
licensee, defined under Section 2(17) of the
Electricity Act, 2003 (for short referred to
as 'the Act'), as follows: -

"distribution
licensee"
means
a
licensee authorised to operate and maintain
a
distribution
system
for
supplying
electricity to the consumers in his area of
supply.

12. Under Section 42 of the Act, it is
the duty of a distribution licensee to
develop and maintain an efficient, coordinated and economical
distribution
system in his area of supply and to supply
electricity
in
accordance
with
the
provisions contained in this Act. Section
42(1) runs thus: -

42. Duties of distribution licensees
and open access - (1) It shall be the duty
of a distribution licensee to develop and
maintain an efficient co-ordinated and
economical distribution system in his area
of supply and to supply electricity in
accordance with the provisions contained in
this Act.

13. Under Section 43 of the Act, it is
the duty of the licensee to supply electricity
to the premises owned or occupied by an
applicant within one month from the date
of receipt of application or where supply
requires extension of distribution mains, or
commissioning of new supply stations,
after such extension or commissioning or
within such period as may be specified by
the Appropriate Commission. Under subsection (2), every distribution licensee is
obligated to provide, if required, electric
plant or electric line for giving electric
supply to the premises specified in subsection (1), subject to the applicant paying
to the licensee such price for the electric
plant or electric line as determined by
Appropriate Commission, to the licensee.
Section 43 is reproduced below for
convenience of reference: -

43. Duty to supply on request.- (1)
Save as otherwise provided in this Act,
every distribution licensee, shall, on an
application by the owner or occupier of any
premises, give supply of electricity to such
premises, within one month after receipt of
the application requiring such supply:

Provided that where such supply
requires extension of distribution mains, or
commissioning of new sub-stations, the
distribution licensee shall supply the
electricity to such premises immediately
after such extension or commissioning or
within such period as may be specified by
the Appropriate Commission:

Provided further that in case of a
village or hamlet or area wherein no
608 INDIAN LAW REPORTS ALLAHABAD SERIES
provision for supply of electricity exists,
the Appropriate Commission may extend
the said period as it may consider necessary
for electrification of such village or hamlet
or area.

(2) It shall be the duty of every
distribution licensee to provide, if required,
electric plant or electric line for giving
electric supply to the premises specified in
sub-section (1):

Provided that no person shall be
entitled to demand, or to continue to
receive, from a licensee a supply of
electricity for any premises having a
separate supply unless he has agreed with
the licensee to pay to him such price as
determined
by
the
Appropriate
Commission.

(3) If a distribution licensee fails to
supply the electricity within the period
specified in sub-section (1), he shall be
liable to a penalty which may extend to one
thousand rupees for each day of default.

14. Section 43 contemplates two
kinds of work to be undertaken by the
licensee depending on the fact situation.
The first one is extension of distribution
mains and commissioning of new substations
where
needed.
The
second
obligation is to provide electric plant or
electric line for giving electric supply to the
premises in respect of which request is
made for supply of electricity. 'Electric line'
and 'electric plant' are mutually exclusive
terms and have been defined thus :-

"(20) "electric line" means any line
which is used for carrying electricity for
any purpose and includes -

(a) any support for any such line, that
is to say, any structure, tower, pole or other
thing in, on, by or from which any such line
is, or may be, supported, carried or
suspended; and

(b) any apparatus connected to any
such line for the purpose of carrying
electricity;

.........................

(22) "electrical plant" means any
plant, equipment, apparatus or appliance or
any part thereof used for, or connected
with,
the
generation,
transmission,
distribution or supply of electricity but does
not include -

(a) an electric line; or

(b) a meter used for ascertaining the
quantity of electricity supplied to any
premises; or

(c) an electrical equipment, apparatus
or appliance under the control of a
consumer;"

15. Section 45 of the Act empowers
the licensee to recover charges for
electricity supplied whereas Section 46
empowers
it
to
recover
expenses
reasonably incurred in providing any
electric line or electrical plant used for the
purpose of giving that supply. Section 45
and 46 which are pertinent to the
controversy
involved,
are
reproduced
below: -

45. Power to recover charges. - (1)
Subject to the provisions of this section, the
prices to be charged by a distribution
licensee for the supply of electricity by him
in pursuance of section 43 shall be in
accordance with such tariffs fixed from
time to time and conditions of his licence.

(2) The charges for electricity supplied
by a distribution licensee shall be -

(a) fixed in accordance with the
methods and the principles as may be
specified
by
the
concerned
State
Commission;

(b) published in such manner so as to
give adequate publicity for such charges
and prices.
11 All. Suman Engineering & Chem. Pvt. Ltd. Vs. U.P.P.C.L. & Ors.
609

3) The charges for electricity supplied
by a distribution licensee may include -

(a) a fixed charge in addition to the
charge for the actual electricity supplied;

(b) a rent or other charges in respect of
any electric meter or electrical plant
provided by the distribution licensee.

(4) Subject to the provisions of section
62, in fixing charges under this section a
distribution licensee shall not show undue
preference to any person or class of persons
or discrimination against any person or
class of persons.

(5)
The
charges
fixed
by
the
distribution licensee shall be in accordance
with the provisions of this Act and the
regulations made in this behalf by the
concerned State Commission.

46. Power to recover expenditure. -
The State Commission may, by regulations,
authorise a distribution licensee to charge
from a person requiring a supply of
electricity in pursuance of section 43 any
expenses reasonably incurred in providing
any electric line or electrical plant used for
the purpose of giving that supply.

16. Section 46 speaks of "expenses
reasonably incurred in providing electric
line or electrical plant'. It does not speak of
expenses
incurred
in
extension
of
distribution mains or commissioning of
new sub-station, which a distribution
licensee has to undertake where required as
part of its statutory obligation under the
first proviso to sub-section (1) of Section
43. Under the direction of the Supreme
Court also, the refund is to be disallowed
only to the extent the respondents are able
to prove "the actual expenses incurred." In
other words only such expenses which
would fall within the ambit of Section 46
could be permitted to be retained by the
respondents. In order to determine the
same, we would like to refer to few more
statutory provision which have bearing on
the issue.

17. Section 47 empowers the licensee
to realise reasonable security as may be
determined by the Regulations to facilitate
supply of electricity. The provision entitles
the consumer to interest at bank rate on the
security amount and refund of such amount
on request.

18. Section 61 empowers the
Appropriate
Commission
to
frame
regulations and lays down guidelines for
determination of the tariff. Section 62
confers
power
on
the
Appropriate
Commission to determine the tariff and
Section 64 lays down the procedure for
passing tariff order.

19. Section 50 of the Act empowers
the State Commission to frame Electricity
Supply Code, providing for recovery of
electricity charges, intervals for billing of
electricity charges, disconnection of supply
of electricity and payment thereof etc.
Section 50 reads thus: -

50. The Electricity Supply Code -
The State Commission shall specify an
Electricity Supply Code to provide for
recovery of electricity charges, intervals for
billing of electricity charges, disconnection
of supply of electricity for non-payment
thereof, restoration of supply of electricity,
measures for preventing tampering, distress
or damage to electrical plant or electrical
line or meter, entry of distribution licensee
or any person acting on his behalf for
disconnecting supply and removing
the meter, entry for replacing, altering
or
maintaining
electric
lines
or
electrical plants or meter and such
other matters.
610 INDIAN LAW REPORTS ALLAHABAD SERIES

20. The Electricity Supply Code,
2005 framed by the State Commission in
exercise of power under Section 50 of the
Act, deals with the procedure for grant of
electric supply to consumers. Under
Chapter IV thereof, Clause 4.1 obligates the
licensee to supply electricity to the
consumers as per the mandate of Section 42
of the Act. Under Clause 4.2, it is the
licensee's
obligation
to
extend
the
distribution system. It reads as follows:-

4.2 Licencee's Obligation to Extend
the Distribution System

(a) The Licencee shall have obligation
for ensuring that its distribution system is
upgraded, extended and strengthened to
meet the demand for electricity in its area
of
supply.
Wherever
the
existing
transformation capacity is loaded upto 80%
of its capacity, the licencee shall prepare a
scheme report for augmentation of such
transformation capacity.

Provided that the responsibility of
laying the distribution network for new
street lights shall be that of the concerned
local body.

Provided also that for prospective
connections in un-electrified areas in his
area of supply, the Licencee may intimate
to the Commission the details of such unelectrified
colonies/areas
along
with
approximate no. of prospective consumers.
The licencee may also submit detailed plan
for electrification of such areas by any
licencee / developer / Authority / Private
Colonizers / Promoters / local body or any
collective body of the consumers. The
plans may be updated each year before
submission to Commission.

(b) The Licencee shall meet the cost
for strengthening/ upgradation of the
system to meet the enhanced demand of the
existing consumers as well as future growth
in demand. Such expenditure shall be
allowed
to
be
recovered
from
the
consumers
through
tariff
subject
to
financial
prudence
check
by
the
Commission.

21. Clause 4.6 deals with estimates
which includes -

(i) Security deposit;

(ii) Charges for laying the service line;

(iii) Distribution mains, if required and
material, and

(iv) System-loading charges, etc.

It reveals that system-loading charges
and the establishment cost are realized as a
percentage of the normative estimates,
specified in Cost Data Book to be deposited
with the licensee before work begins.
Although system-loading charge is not
defined anywhere, but Clause 4.6(h)
reveals that system-loading charge is the
cost of extension and upgradation of the
system for meeting demand of new
consumers/consumers
desiring
enhancement of load. In areas where
distribution mains do not exist, the cost for
installation of new distribution mains is
normally to be recovered by grant from the
State Government, or the local body, or any
collective body of the consumers, or a
consumer. It is open to the licensee to
install new distribution mains from the
surplus available with the licensee, after
meeting all expenses. However, the cost of
extension
of
service
line
from
the
distribution mains to the point of supply,
has to be borne by the applicant himself in
all cases. Clause 4.6 is extracted below: -

4.6 Estimate

(a) After sanction of load, an estimate
shall be prepared, which shall remain valid
for three months from the date of sanction
letter to the applicant.
11 All. Suman Engineering & Chem. Pvt. Ltd. Vs. U.P.P.C.L. & Ors.
611

(b) The estimate shall include security
deposit, charges for laying the service line,
distribution mains (if required) & material,
and
system-loading
charges
etc,
as
determined by the Licencee with the
approval of the Commission once in two
years.

(c) After approval of the Commission,
the Licencee shall publish a cost data book,
and make it available to any interested
person at a reasonable charge and shall also
place it on their website.

(d) The above estimate shall be based
on
Rs/KW
(or
Rs
/KVA)
of
the
sanctioned/contracted load, or on Rs per
service installation for specific bands of
contractual load applied for OR sanctioned
load at each voltage level up to 33 KV
voltage on which supply is to be given.
Beyond 33 KV voltage level, the charges
for laying shall be based on actual
estimates of the licencees.

Provided
that
the
estimates
for
independent feeder shall be in accordance
to requirements laid down in clause 3.4 of
this code.

Note: Commission had specified a
time frame for release of new connection in
the Code subject to certain conditions.
Commission observes that estimates to be
made by licencee for the initial connection
has uncertain elements-the uncertainty of
time, as well as uncertainty of what
consumer has to pay. The commission is
therefore constrained to direct the licencee
to notify in advance the normative
estimated charges as specified above,
within 3 months from the date of
enforcement of this revised Code, failing
which, the licencee shall charge on such
provisional normative charges that may be
specified by Commission.

(e)(i) LT Loads upto 50 kW shall be
developed by the licensee only, for which
no supervision charges shall be applicable.

(ii) If the work is to be done by the
developer
/
applicant
/
development
authority,
the
Licensee
shall
charge
supervision charges (on the estimated
labour cost, cost of material handling and
storage/inventory, but excluding the system
loading charges and the establishment
costs), as a percentage of the normative
estimates, specified in cost data book,
which shall be deposited with the licensee
before work begins.
•
For LT Loads upto 50 KW,
if the supply released on
HT on the request of
consumers (in such cases,
metering will be done on
LT and billing as per LT
tariff) - 15%.
•
For Loads exceeding 50
KW (56 KVA) upto 3600
KW (4000 KVA) - 15%.
•
For Loads exceeding 3600
KW
upto
9000
KW
(10,000 KVA) - 8%.
•
For Loads exceeding 9000
KW (10,000 KVA) - 5%.
•

(iii) The Licensee shall commence the
work after the applicant has deposited the
full amount of the estimates."

(f) Disputes regarding the estimate
may be referred to the authority that is
one level higher than the sanctioning
authority and if the applicant is still
aggrieved
he
may
approach
the
Consumer Grievance Redressal Forum
for adjudication.

(g) A final bill shall be prepared
after completion of the work by the
Licencee.

- If the final bill exceeds the value
of the estimate, the difference shall be
deposited
by
the
applicant
before
connection is energized.
612 INDIAN LAW REPORTS ALLAHABAD SERIES

- If it were less, the difference shall be
adjusted in subsequent electricity bills or
refunded by cheque within 60 days.

Provided further that, in case of
revision of charges, if the estimates were
sanctioned prior to the date of revision, the
estimates in excess shall not be charged on
completion of works on the basis of revised
charge. However, if the work is completed
at an estimate less than that prepared in
revised
charges,
the
excess
amount
deposited by the applicant on the basis of
unrevised charges, shall be refunded within
60 days.

Provided also that, if the licencee has
published updated normative charges in the
cost data book, and has included the same
in preparing the estimate, the final bill and
above proviso, shall not be necessary.

(h) Consumer's Share in the Cost
Estimate

(i) The cost of extension and upgradation of the system for meeting
demand of new consumers/consumers
desiring enhancement of load shall be
deemed to have been recovered from them
through system loading charges as approved
by the Commission.

(ii) In areas where distribution mains do
not exist, the costs for installation of new
distribution mains shall normally be covered
by grant from State Government or the local
body or any collective body of the consumers
or a consumer. The licencee may also install
new Distribution Mains from the surplus
available with the licencee after meeting all
expenditure.

(iii) In all cases the applicant shall bear
the cost of the extension of service line from
the Distribution Mains to the point of supply.

22. Clause 4.21 relates to cost of
servicing
of
new
connection,
reduction/enhancement of load and reads
thus: -

4.21 Cost of Servicing a New
Connection Reduction/Enhan cement of
Load

(a) The consumer shall pay the cost of
service line etc. and system loading charges
as
a
cost
of
servicing
a
New
Connection/Enhancement of Load to the
licencee. These charges shall be either on
the basis of the schedule of standard
charges specified in the cost data book duly
approved by the Commission, or in its
absence, the actual cost of works as given
in the estimate (clause 4.6) prepared by the
Licencee. For reduction of load, system
loading charges shall not be refunded, but if
the load is enhanced again by the same
consumer, only enhanced system loading
charges over and above the system loading
charges
already
deposited
shall
be
charged.]

(b) For Conversion from 1 phase to 3
phase LT & vice-versa, and Conversion
from LT to HT & vice-versa, the procedure
laid down for new connection, and clause
3.3 shall be followed.

23. Clause 4.29 indicates that the
service
line
and
other
apparatus
provided to a consumer to supply
electricity vests in him and for a limited
period only the licensee is permitted to
use the same for providing supply to
other
consumers.
Clause
4.29
is
reproduced below: -

4.29
Use
of
Service
line
of
consumers by Licencee

(a) The Licencee may use the service
line and other apparatus to give supply to
other consumers provided that the supply to
11 All. Suman Engineering & Chem. Pvt. Ltd. Vs. U.P.P.C.L. & Ors.
613
the consumer who has paid for them is not
affected.

(b) Further, even if the supply to the
consumer who has paid for the line /
apparatus is disconnected for whatever
reason, the consumer shall permit the
Licencee continued access to the service
line and other apparatus if they are required
to give supply to other consumers, and no
payment shall be due to the consumer for
such
access/facility,
until
alternate
arrangements are made.

(c) However, it is expressly provided,
that the Licencee shall make all possible
efforts to make alternate arrangements, as
early as may be practicably possible. For
this purpose, the Licencee may explore a
mutually
acceptable
arrangement
for
continuation of the installation at the
existing place.

24. 'Service line' is defined under
Section 2(61) as follows :-

"Service line means any electric
supply-line through which electricity is, or
is intended to be, supplied-

(a) to a single consumer either from a
distributing main or immediately from the
Distribution Licensee's premises; or

(b) from a distributing main to a group
of consumers on the same premises or on
contiguous premises supplied from the
same point of the distributing main;

Processing fees:

25. As per cost data book processing
fees was non-refundable. Chapter-II of cost
data book deals with processing fees.
According to it, for load above 300 KVA
the processing fees stipulated at the
relevant time was Rs. 5000/-. Although, the
load applied was slightly less than 3000
KVA but the petitioner deposited Rs. 5000/-
under the said head. This amount was nonrefundable.

Charges for laying service Line

Clause 4.6(h)(iii) of the Code enjoins
upon the petitioner to bear the cost of
extension
of
service
line
from
the
Distribution Mains to the point of supply.
While under sub-section (i) of Section 43,
the obligation to extend the distribution
system or commission new Sub Station or
extend the Distribution Mains to an area
where no provision of supply of electricity
exist is on the licensee, the duty to provide
electric plant and electric line to an
applicant is dependent upon his agreeing to
pay to the licensee, such price therefor as
determined by the appropriate commission.
Again under Section 46, the licensee has
been empowered to realise expenses
reasonably incurred in providing any
electric line or electric plant directly from
the consumer. As per Clause 4.21, the cost
of service line charge shall be either on
basis of schedule of standard charges
specified in the Cost Data Book, duly
approved by the Commission or in its
absence the actual cost of work as given in
the estimate (clause 4.6) prepared by the
licensee.

26. The estimate shows that the
respondents have realised Rs.5,49,181/- as
service connection charges and another
sum of Rs.4,65,000/- as per letter of
Executive Engineer dated 08.08.2012. The
respondents have not led any evidence to
prove expenditure of Rs. 5,49,181/- and
4,64,000/-. The only evidence brought on
record is regarding expenditure of a sum of
Rs.28,020/-
towards
strengthening
of
equipments for commissioning of 33 KVA
at 220 KVA sub-station, Nara through the
contractor M/s Pal Electricals.
614 INDIAN LAW REPORTS ALLAHABAD SERIES

27. As per condition No. (ii) of
sanction order dated 18.1.2011, a new 33
KVA line was to be constructed from
220/132 KV sub-station Nara to Furnace
Feeder No.1 for which entire expenses was
to be borne by the petitioner. Again, no
evidence has been brought on record to
prove actual expenditure incurred for the
said purpose. In para 12 of supplementary
counter affidavit it is pleaded that on
8.8.2012, the Executive Engineer addressed
a communication to the Zonal Officer. By
the said letter, the previous demand of
Rs.18.37
lakh
for
providing
new
infrastructure for supply of power to the
petitioner was cancelled and in its place an
estimate of Rs. 4.65 lakh was submitted.

28. The pleading in reference to letter
dated 08.08.2012 in para 12 on the
supplementary counter affidavit is as
follows:-

"That, corporation was compel to
establish new feeder of 220 KVA to supply
electricity in rural area beca1-28use the
load of 3200 KVA was reserved for the
petitioner industrial unit for two years. The
Transmission
executive
Engineer
and
Superintending
Engineer
Distribution
Circle Muzzafar Nagar wrote letter dated
08.08.2012 and 21.08.2012 that new
infrastructure is required for proper supply
to rural area as 3200 KVA load is proposed
for industrial supply. Copy of letter dated
08.08.2012 and Superintending Engineer
Distribution Circle Muzzafar Nagar filed
herewith and 1-28marked as Annexure No.
SCA-2 to this affidavit. "

29. In para 13 of supplementary
counter affidavit, it is pleaded that the work
was
got
executed
through
M/s
Pal
Electricals under a contract. Para 13 is
reproduced below:-

"That, the necessary Communication
made by the Transmission executive
Engineer and Superintending Engineer
Distribution Circle Muzzafar Nagar is part
of record. The work was performed by the
M/s Pal Electricals and Feeder of 220 KVA
was established. The copy of agreement
with M/s Pal Electrical dated 29.01.2013
and payment to the concern firm are jointly
filed herewith and marked as Annexure No.
SCA-3 to this affidavit."

30. In para 19 and 20 of the
supplementary
counter affidavit
dated
3.03.2023, it is pleaded as follows:-

"19. That, the letter dated 08.11.2011,
further
poignantly
stipulate
that
for
providing electricity load of 3200 KVA, the
power corporation has to incur expenses for
bifurcation of 33 KVA line and also to
construct new 33 KVA line with 4 pole
structure at the door step (manufacturing
unit) of consumer. Petitioner has submitted
affidavit accepting such conditions.

20. That, petitioner admitted in his
letter dated 16.03.2013 that he is ready to
get connection without having NOC from
pollution control Board. It proves that
power corporation has bifurcated 33 KVA
line, laid a separate 33 KV line constructed
4 pole structure. Copy of letter dated
16.03.2016 of petitioner to Executive
Engineer is being filed herewith as
ANNEXURE NO.SCA-3 to this affidavit."

31. No evidence has been filed to
prove the above expenditure, but in para 21
it is pleaded thus:-

"21. That, the Executive Engineer
responded vide letter dated 19.03.2013 and
categorically emphasis that 30 days time is
given to take NOC. It shows that
corporation has already completed its work
11 All. Suman Engineering & Chem. Pvt. Ltd. Vs. U.P.P.C.L. & Ors.
615
to release new electricity connection. Copy
of letter dated 16.03.2016 of Executive
Engineer to Managing Director of company
is being filed herewith as ANNEXURE
NO.SCA-4 to this affidavit.

32. We proceed to accept the statement on
oath in para 21 read with letter dated
16.03.2016 as evidence of the fact that 4
pole structure and service line was
constructed as in that event only, the
respondents were in position to write to the
petiti1-28oner to complete the formalities
so that the line is energised. There is also
no challenge by learned counsel for the
petitioner
that
the
respondents
had
completed these works.