Decided on January 19,2006



Arijit Pasayat, J. - (1.)Challenge in this appeal is to the judgment of a Division Bench of the Punjab and Haryana High Court holding that the demand made by the Punjab State Electricity Board (in short the Board) for a sum of Rs. 2, 17,000/- was impermissible.
(2.)The background facts in a nutshell are as under :- The respondent applied to the Board for a new electric L.S. (Large Supply) connection on 10-3-1992 for running an induction furnace. He deposited a sum of Rs. 2,01,000/- as security on the same day and his application was registered after all the formalities were completed. The Board in terms of its Circular CC No. 41/95 dated 4-5-1995 decided to recover one time charge from the Large Supply consumers demanding contract demand higher than 60% of the connected load and to charge monthly minimum charge on the connected load basis instead of Contract Demand basis. An additional demand of Rs. 2, 17,000/- over and above the amount already deposited was made on 12-2-1999 on the basis that the respondent had not deposited the requisite amount in terms of the Circular dated 4-5-1995 and clarificatory Circular dated 6-2-1996. The respondent made a representation to the authorities saying that there was no liability for liquidating the demand. But the authorities of the Board rejected the stand and held that the respondent was liable to make the deposit. A writ application was filed before the Punjab and Haryana High Court inter alia raising the following questions for adjudication of the High Court :
i) "Whether the representation made by petitioner can summarily be rejected without affording opportunity of hearing

ii) Whether the releasing of electricity connection will be taken on the date when all formalities were completed and lines were installed up to and within the premises of the factory of the petitioner

iii) Whether the demand of the respondent is illegal when the consumption charges are already been paid against the bills of electricity -

(3.)The High Court was of the view that in the Circular dated 4-5-1995, there was no requirement for the large scale consumers to make a deposit in terms of the said Circular. What was stated by the subsequent clarificatory Circular could not provide the Board the basis for making a demand in the manner done. The High Court held that in the earlier Circular the consumers who had applied for new consumer connection prior to 1-4-1995 were not required to pay one time demand charge. Since the Board decided to recover the charges from such consumers as well by issuing Circular No. CC 11/96 dated 6-2-1996, it is only with effect from the date of the said Circular such class of consumers were required to pay one time contract demand charge. Accordingly, the demand notice dated 12-2-1999 was quashed.

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