Appeal No. 39 of 2007

Between

M/s. Sai Rayalaseema Paper Mills Ltd

Plot No. 6, H.No. 6-3-569/1/4,

2^nd Floor, Rockdale Compound,

Opp : RTA Office, Somajiguda, Hyderabad … Appellant

And

1. The Superintending Engineer/Operation/APCPDCL/ Kurnool Circle

2. The Chief General Manager/Commercial/ APCPDCL / Corp. Ofice / Hyd

3. The General Manager/Revenue/ APCPDCL / Corp. Office / Hyd

4. The General Manager/Customer Services/ APCPDCL / Corp. Office / Hyd

… Respondents

The appeal / representation dated 26.11.2007 (received on 26.11.2007) of the appellant has come up for final hearing before the Vidyut Ombudsman on 27.03.2008 in the presence of Sri. B.V.Sathya Sai Prasad, Chairman and Managing Director on behalf of the appellant, no representation on the behalf of the respondents and having stood over for consideration till this day, the Vidyut Ombudsman passed / issued the following:

A W A R D

Aggrieved by the order passed by the Forum for Redressal of Consumer Grievances of APCPDCL (for short the “Forum”) in C.G. No. 28 / 2007-08 / Kurnool Circle dated 16.11.2007, the appellant herein filed appeal / representation dated 26.11.2007 mentioned supra, stating that: -

(a) the paper mill of the appellant was closed in the year 1989 as it became a sick company. The appellant company was referred to BIFR for suitable rehabilitation. However, the company was reopened again in the year 2006 with certain reliefs and concessions granted by different departments including the Central Power Distribution Company of Andhra Pradesh Limited (for short “APCPDCL”).

(b) at the time of reopening, the appellant intended to avail CMD of 11000 kVA in a phased manner with 6000 kVA in the first phase and the balance 5000 kVA in the second phase after about six months.

(c ) however, due to unprecedented floods and for want of funds, the appellant could not complete expected works and therefore, its demand remained 6000 kVA only. In view of the above, the appellant during the years 2006 and 2007 submitted several letters requesting APCPDCL to defer release the additional demand of 5000 kVA. APCPDCL did not release additional demand till June 2007. However, suddenly from the month of July 2007 onwards, APCPDCL issued revised bills for 11000 kVA with effect from f April 2007. In the months of July and August, 2007 the appellant was denied incentive as the demand was calculated at 1000 kVA. The appellant was not informed at any point of time that additional demand of 5000KVA was released. The action of the APCPDCL in calculating the demand including additional demand of 5000 kVA, which is not consumed, is a heavy financial burden to the appellant which is already a sick industry and under rehabilitation.

(d) aggrieved by such action of APCPDCL, the appellant by letter dated 11.10.2007 referred its grievance to the Forum. However, the Forum without giving any opportunity to present the case of the appellant and without holding any hearing, disposed-off the case by an order 16.11.2007 , without addressing the grievance of the appellant. Hence, the appeal / representation dated 26.11.2007 as mentioned supra.

2. In terms of Clauses 8(1)(c) and 11 (1) of the APERC Establishment of Forum and Vidyut Ombudsman for Redressal of Grievances of Consumers Regulation, 2004 (for short “Regulation No. 1 of 2004”), the Vidyut Ombudsman is required to promote settlement by mutual agreement between the parties. In pursuance of the same, respondents were intimated of the filing of the appeal / representation by notice dated 27.11.2007.

3. By Lr No. SE(O)KNL / SAO / JAO / F.097 / 544 / 07 dated 27.12.2007, respondent No.1 submitted that respondent No. 2 informed him that the Board of Directors of APCPDCL on 29.11.2007 resolved that (i) the release of second phase demand of 5000 kVA to the appellant be postponed upto June 2008 (ii) the C.C. bills for the period from April to October 2007 be revised treating the CMD of the appellant as 6000 kVA, instead of 11000 kVA (iii) to withdraw the excess demand charges billed against the second phase demand of 5000 kVA and (iv) to allow the eligible incentive amount. Respondent No.1 further informed that in pursuance of the said resolution (i) excess demand raised along with surcharges was withdrawn by allowing incentives from April to October 2007 (ii) the incentive amount of Rs.3,14,876.80 ps was already allowed for the month of June 2007 and (iii) the incentive for the month of August 2007 is allowed and the same was adjusted in the C.C bill of December 2007 payable in January 2008. Lastly, it is submitted that CMD of the appellant of HT service is 6000 kVA.

4. By letter dated 03.01.2008, the Vidyut Ombudsman requested the appellant to confirm the information submitted by respondent No.1 in his letter dated 27.12.2007 referred to above and to state whether such information redresses the grievance of the appellant. A copy of the letter dated 27.12.2007 of the respondent No.1 was also forwarded to the appellant. In response, the appellant sent a reply dated 14.01.2008 stating that the APCPDCL granted relief of postponing the release of second phase of 5000 kVA upto the month of June 2008 and revising the bills for the period from April to October 2007. It is further stated that the appellant is satisfied to that extent. However, it is submitted by the appellant that while formulating rehabilitation scheme, the Appellate Authority for Industrial & Financial Reconstruction (for short, “AAIFR”) envisaged certain concessions, viz., (i) to accept 25% down payment of Rs.65 lakhs of actual consumption charges after waiver of minimum demand / consumption charges, (ii) to retain the existing consumption deposit of Rs.84,27,000/- against power supply to the company without demanding for additional consumption charges, (iii) to restrict power cut, if any, to 25% for at least 3 years from the date of reopening of the plant and (iv) to fix requirement of power of minimum demand as may be required by the company. It is requested to grant the above mentioned reliefs and to direct APCPDCL to adhere the above mentioned terms.

5. On 23.01.2008, a copy of the above mentioned letter dated 14.01.2008 was forwarded to respondent No.1 with a request to offer its comments on the submissions made by the appellant therein. In response, respondent No.1 sent Lr.No. SE(O)KNL / SAO / JAO / F.097 / D.No. 643 / 07-08 dated 18.02.2008 stating that the Govt. of Andhra Pradesh issued G.O.Ms.No.144 dated 18-05-2006 extending certain concessions to the appellant and in accordance with the same APCPDCL agreed to restore power supply to the appellant in a phased manner subject to certain conditions. In pursuance of the same APCPDCL and the appellant entered Memorandum of Understanding on 28.08.2006. It is further stated that a demand notice was issued to the appellant for payment of Rs.3,08,06,460/- in 36 installments vide Lr No. SE(O)KNL / SAO / JAO / HT,Rev/ D.No. 275 / 07 dated 13.07.2007. However, the appellant filed W.P.No.17968 /2007 before the Hon’ble High Court of Andhra Pradesh on 23.08.25007 granted interim order stating “pending further orders there shall be interim suspension as prayed for a period of one week” and on 28.08.2007 the said Court issued further orders stating that “earlier orders shall continue until further orders”.

6. On 20.02.2008, a copy of the letter dated 18.02.2008 referred to above was forwarded to the appellant with a request to offer its comments on the information submitted by respondent No.1. In response, the appellant forwarded a copy of its letter dated 15.02.2008 submitted to the Chairman and Managing Director of APCPDCL, which clarifies its position and for settlement of the matter.

7. Notice of hearing scheduled on 27.03.2008 was sent to the appellant as well as to respondent No. 1. On the said date of hearing, heard the Chairman & Managing Director of the appellant and there is no representation on behalf of respondent No.1. On 04.04.08 “written arguments” was submitted on behalf of the appellant, wherein it is requested to (i) direct APCPDCL to defer the availment of 5000 kVA (second phase) demand till it is required by the appellant instead of June 2008 as already agreed by APCPDCL, in addition to reiterating the other two demands viz., (ii) to waive the minimum demand and other penal charges in terms of rehabilitation scheme sanctioned by BIFR / AAIFR and (iii) not to charge interest on deferred payment of monthly installments being paid towards Rs.65 lakhs arrears of the actual consumption charges pertaining to the closure period.

8. The point that arises for consideration is “whether the appellant is entitled for the relief as claimed by it in its appeal / representation dated 26.11.2007”.

9. In this context, it is necessary to refer to the letter dated 11.10.2007 filed by Sri K.S.R.Murthy, Director of the appellant company before the chairperson of the Forum. As per the said letter / complaint, the grievance of the appellant is that the “action of the APTRANSCO (should have been APCPDCL) in levying charges for the 5000 kVA demand which is not being drawn and utilized is causing lot of hardship to the company. Besides, the authorities are threatening to disconnect power supply in case they do not pay minimum demand charges for the undrawn and unutilized demand”.

10. The Forum below framed two issues viz., (i) whether the demand raised from 4/07 onwards for the phased demand of 5000 kVA aggregating to 11000 kVA by the respondents is in order ? and (ii) are there any short comings on the part of respondents. After enquiry, the Forum came to the conclusion that as per Clause 7 of the HT Agreement executed by the appellant and as per Clause 5.9.4.3 of General Terms & Conditions of Supply and Tariff in force, the demand raised by the respondents for 11000 kVA CMD after expiry of six months period from the date of execution of Agreement on 28.09.2006 is in order. For the said reason, the Forum in its order dated 16.11.2007 came to the conclusion that there is no deficiency of the service on the part of the respondents.

11. In the appeal / representation dated 26.11.2007 the appellant represented that the Forum disposed off its complaint without giving an opportunity to present its case and without holding any hearing. Whatever it might be, respondent No.1 by his letter dated 27.12.2007 brought to the notice of the Vidyut Ombudsman the resolution passed by Board of Directors, APCPDCL on 29.11.2007 as stated in paragraph 3 supra, as seen from the said letter dated 27.12.2007, the grievance of the appellant raised before the Forum was redressed in totality. By letter dated 14.01.2008, the appellant also confirmed that it is satisfied with the relief of postponing of release of second phase of 5000 kVA up to the month of June 2008 and revision of bills for the period from April to October 2007. However, the appellant is seeking relief with regard to certain other related issues which were not agitated before the Forum. As an Appellate Authority, the scope of appeal / representation before the Ombudsman is limited to the extent whether the order passed by the Forum below is correct or not. In this case, the relief sought by the appellant before the Forum was subsequently granted by APCPDCL and therefore the Ombudsman is not necessitated to examine whether the order of the Forum is correct or not.

12. As an Appellate Authority, the Ombudsman cannot traverse beyond the complaint agitated before the Forum below and grant relief which was not subject matter before such Forum. Even in the appeal / representation dated 26.11.2007, the appellant has not mentioned about waiver of minimum demand charges and other charges for the closure period from 1989 onwards and not to insist for the additional consumption deposit atleast for next three months, etc. After informing the decision of Board of Director of APCPDCL by the respondent No.1 in his letter dated 27.12.2007 which was communicated to the appellant by the Ombudsman by notice dated 03.01.2008, the appellant for the first time brought on record the rehabilitation scheme of AAIFR and sought for directions to APCPDCL for implementation of concessions supposed to have been envisaged in its order dated 20.07.2005. As mentioned above, the appellant cannot be permitted to bring new issues on record which were not agitated before the Forum. For that reason, the Vidyut Ombudsman cannot direct APCPDCL to defer the availment of 5000 kVA (second phase) demand till it is required by the appellant instead of June 2008, as requested by the appellant in its “written arguments” filed on 04.04.08. Thus, the appeal / representation dated 26.11.2007 is devoid of merits.

13. However, the appellant is at liberty to raise its grievances related to Modified Rehabilitation scheme dated 20.07.2005 which were agitated for the first time in the proceedings before the Vidyut Ombudsman and as already brought to the notice of Chairman & Managing Director in its letter dated 15.02.2008 with APCPDCL. In view of the fact that the appellant is a sick industry and under rehabilitation, it is necessary for APCPDCL to resolve the grievances of the appellant and to grant reliefs and concessions for its revival as per the recommendations of State Investment Promotion Board meeting held on 13.12.2005, order of AAIFR dated 20.07.2005 and G.O.Ms.No.144, Industries & Commerce (IFR.I) department dated 18.05.2006 in totality. Further, in view of the policy of the government to encourage industries to have more growth, the specific request of the appellant to waive minimum demand charges and other charges for the closure period from 1989 onwards and not to insist for additional consumption deposit atleast for next three years as per the terms of rehabilitation scheme mentioned in the letter dated 15.02.2008 referred to above needs to be considered expeditiously by APCPDCL.

14. In this context, it is necessary to state that in the year 2001, Chairman and Managing Director, APTRANSCO addressed Lr.No.CE/Comml/AE/TCS /D.No.411/ 2001 dt : 29-05-2001 to the Secretary, APERC relating to HT Industrial sales promotion and rationalization of procedures in respect of collection of minimum charges during periods of long closure of industrial units due to sickness. As a part of intensive power marketing strategies, APTRANSCO made certain proposals for HT industrial units which are under disconnection and are closed for long periods. Thereafter, the Secretary, APERC by Lr.No.APERC/Secy/Dir-Tariff/F./ D.No.4966/ 2001, dt: 05-11-2001 communicated approval of the scheme proposed by APTRANSCO as above with a condition that such scheme should be made applicable to HT-I consumer units under disconnection for more than four months and the said scheme was valid till 31.10.2002. The scheme was further extended from time to time, upto 31.03.2005. Subsequently by another letter dated 25.05.2005, the Secretary communicated further extension of the scheme upto 31.03.2006 and application of such reliefs to industrial units under LT Cat III(A) and III (B) as well. In order to develop HT & LT industrial sales and to increase revenues, DISCOMs gave wide publicity to the said scheme approved by the Commission. By letter No. CGM / (Coml) / SE(C) / DE (C) / ADE-II / F.No. Indl Sales/07 D.NO. 1995 Dt. 29.03.2008, the Chief General Manager / Comml / APCPDCL requested the Commission to extend the relief to the sick industries under LT Cat-III (A), III (B) and HT Cat-I upto 31.03.2009 for promoting industrial sales..

15. For all the reasons mentioned above, the appeal / representation dated 26.11.2007 is dismissed, however, with a direction to APCPDCL to redress grievances of the appellant related to Modified Rehabilitation scheme dated 20.07.2005, especially the request of the appellant to waive minimum demand charges and other charges for the closure period from 1989 onwards and not to insist for additional consumption deposit atleast for next three years as per the terms of the said rehabilitation scheme, expeditiously to encourage the appellant to revive its unit.

This order is corrected and signed on this 10^th day of April 2008.