VIDYUT
OMBUDSMAN
5th Floor, Singareni Bhavan, Red Hills,
Hyderabad 500 004.
Present: S. Surya Prakasa Rao, Ombudsman
M/s. Hindustan Petroleum
Corporation Ltd.
Represented by Chief Manager
- VSPL
VR-ATP Area, Naval Base Post
Visakhapatnam 530 014 ...
.. Appellant
and
1. Superintending
Engineer/Operation/Nalgonda
2. General Manager/Customer
Service/Corporate Office /CPDCL Hyderaba
.
Respondents
This appeal dated 01-06-2006
(received on 05-06-2006) filed by M/s Hindustan Petroleum Corporation Ltd
(herein after called as consumer or Appellant), against the order dated 13-04-2006
of the Forum for Redressal of Grievances of Consumers (herein after called as
the Forum), of CPDCL, Hyderabad in CG.No.21/2006, Nalgonda Circle, coming up
before the Ombudsman for consideration and having stood over till this day, the
Ombudsman issues the following: -
2. The
facts on record in this case are narrated herein briefly. The consumer availed
HT supply for the booster station of visakha-Vijayawada-Secunderabad pipeline
(VVSPL) project, at Imampet, near Suryapet, Nalgonda District, at 33 KV for a Contracted
Maximum Demand of 1550 KVA with HT Service connection No. NLG 417 with effect
from 13-02-2002. The service was sanctioned under HT category II (a residual
category) but the test report at the time of release of supply on 13-02-2002
contains the tariff applicable, as HT category I (Industrial). How ever, the
billing is being done under HT category II right from the date of release of
supply on 3-02-2002 and the consumer paid the bills accordingly. In January
2004, the consumer made a representation to the corporate office of the
respondents to refund the excess amount paid. The CPDCL sent a common
clarification to the representations made by 3 oil companies stating that the
HT category I is not applicable for their HT services as per the Tariff
classification in the Tariff Order of A.P. Electricity Regulatory Commission
(APERC) and requested them to pay the C.C. bills under HT category II with
effect from February 2004 consumption month. Subsequently after a period of
about 2 years the consumer filed a complaint before the Forum of CPDCL,
Hyderabad 18/02/2006 protesting the classification under HT category II. The
learned Forum rejected the complaint in its order dated 13-04-2006. Hence this
appeal.
3. In this appeal, the consumer made the
following prime contentions:
(i) It is not material that the location must carry on directly some manufacturing or processing activity. The pipeline project is an integral part of the Industrial activity of manufacturing goods for sale.
(ii)
The supply was released
under HT category I as per DE/Operation/Suryapet letter dated 25-02-2002
(iii)
From inception,
(February 2002) the billing is done under HT category II and payment is being
made accordingly, though supply was released under HT category I.
(iv)
The mere fact of
payment of charges by the appellant under HT category II does not mean that
they accepted the classification.
(v)
In letter dated
08-01-2004, the CPDCL was requested to refund the excess payment made.
(vi)
The CPDCL clarified in
the letter addressed to IOCL (another oil company) cherlapally, Hyderabad that
the services fall under HT category II and requested the oil companies to pay
bills under HT category II from February 2004.
(vii)
The re-categorisation
was done without giving any show cause notice and no opportunity was given to
make their submissions.
The appellant cited a few judgments of the Honble Supreme Court to assert his contention that the entire activity up to the point where goods are stored for sale, is to be treated as Industrial activity.
For all the reasons stated above the
appellant requested the Ombudsman to setaside the order of the Forum of CPDCL.
4. It may be mentioned here that this
appellant filed two other appeals in respect of the HT services availed for the
VVSPL project at Vijayawada (No.16 of 2006) and at Visakhapatnam and
Rajahmundry (No.17 of 2006). As required under clause 8(1)(C) and clause 11 of
the Regulation No.1 of 2004 of the Honble APERC, the Ombudsman endeavoured to
promote a mutually acceptable settlement by convening a meeting between the
parties herein along with respondents in the other two Appeals of this appellant,
on 25-07-2006 in the office of Ombudsman at Hyderabad. The respondents sought time for consultation
with respective managements for responding to the deliberations that occurred
in the meeting. However no response was
received from either of the parties and hence the Ombudsman took up further
proceedings in the appeal by issuing notice for filing counters/rejoinders and
fixing the hearing on 11-10-2006, which was later postponed to 10-11-2006 at
the request of the respondents in appeal No.17 of 2006, as all these 3 appeals
were agreed to be heard together as the appellant was one and the same and
issues are more or less same.
5. The SE/Operation/Nalgonda (respondent
No.1) filed counter on behalf of the respondents in his letter dated 15-09-2006,
which can be summarized as follows:
(i)
As per Tariff order
approved by APERC this service is not entitled for HT category I. The
estimate was prepared and submitted to the corporate office for sanction under
HT category II
(ii)
The revenue return and
also the security deposit was calculated as per HT category II Tariff rates
(Rs.4.50/unit).
(iii)
The minimum energy @ 25
units/KVA applicable for HT category II was adopted while arriving at the
revenue return.
(iv)
The purpose of supply
is mentioned in the agreement as Transportation, storage and distribution of
petroleum products.
(v)
The
DE/Operation/Suryapet mentioned the nature of supply and Tariff applicable as
HT-I instead of HT-II byover-sight.
(vi)
However, even the first
bill was correctly issued under HT category II only, as per sanction and the
consumer is paying the bills under HT category II right from the beginning.
(vii)
No re-classification was done in this case
in February 2004. Hence there is no need to issue any show-cause notice.
For all the reasons stated above, the
respondent No.1 requested the Ombudsman to dismiss the appeal as no injustice
was done to the appellant.
6. The appellant filed rejoinder in letter dated
29-09-2005. In this rejoinder the appellant responded to the points in the
counter as follows:
(i)
The consumer is an
Industrial consumer with a refinery at visakhapatnam i.e. manufacturer of
petroleum products for sale and the booster station at suryapet is a part of
the industrial activity of the consumer for storage before sale.
(ii)
Though the appellants
did not recognize the basis of sanction and billing at the initial period, they
reserve the right to claim refund of excess amount paid, in case HT category
I is applicable.
(iii)
The respondent No.1 has
merely assumed that the DE/Operation/Suryapet mentioned HT category I by over sight.
No other test report is provided to prove that the sanction was made under HT
category II.
(iv)
The decision of CPDCL
in February 2004 pursuant to the representation of the appellants was ex-parte
and unilateral.
(v)
The clarification given
by the erstwhile APSEB in letter dated 22-06-1998 was not considered.
(vi)
The decision of the
respondent licensee is erroneous under the law as per the decision of the Apex
court in the case cited by the appellant.
For all the reasons stated above, the
appellant requested to confirm HT category I for this service and order for
refund of excess amount paid with 12% interest.
7. As mentioned in para 4 above, the
parties in all the 3 appeals (Nos.16, 17 and 18 of 2006) were heard together on
10-11-2006. sri D.P. Bhave, Advocate and learned counsel for the appellants,
presented the issues involved in these appeals. He dealt at length the basis
for classification, power to re-classify and power to re-classify with
retrospective effect and effect of section 56(2) of Electricity Act 2003 etc.
He stated that the activity of the consumer cannot be disected, and oil-pumping
activity is part of the Industrial activity of the appellant who is an
Industrial consumer. He also stated that the terms of the Agreement do not
empower the respondents to change the category. When his attention was invited to the provisions under clause 35
of the Terms & Conditions of Supply in the matter of power to re-classify
the services, the learned advocate said that the said provisions are not made
available and requested for copy of the same to enable them to file rejoinder
on this aspect. The respondent in Appeal No.17 of 2006 has been requested to
provide the same to the appellant. The
Learned counsel also provided a copy of the judgment of Honble High court of
Gujarat and stated that this matter is covered by the said judgment. He also handed over a book-let containing
the written submissions on behalf of the appellant, copies of which were also
handed over to the respondents.
On behalf of respondents:
The
respondent No.1 in appeal No.16/2006,
Respondent No.2 and 3 in
appeal No. 17/2006,
and Respondent No.1 in
appeal No.18/2006,
have
attended the hearing on 10-11-2006. They have stated that they will submit
written submissions on the issues raised in the hearing. But no further written submissions are filed
by respondents, except furnishing the copies of certain documents like HT
requisition, sanction letter, Test Report etc. as required by the Ombudsman
during the hearing. Hence, the
submissions as filed in the counters are considered for the stand of the
Respondents.
8. In the background of the above rival
contentions, the issues for consideration in this appeal No.18 of 2006 or:
(i)
Whether the sanction
under HT category II and billing under HT category II from the date of
release of supply on 13th February 2002 is correct ?, and
(ii)
Whether the
clarification of CPDCL in February 2004 constitutes change of category ?.
9. The issue of classification of the
connections taken by HPCL for its VVSPL project was thoroughly dealt in paras
12 to 14 of the order dated 14-12-2006
of this Ombudsman in Appeal No.16 of 2006 of this appellant. The relevant paras
are appended as Annexure to this order. The various decisions of the
Honble Supreme Court cited by appellant in support of its contentions on the
classification, power of re-classification etc. have also been discussed in the
said order of this Ombudsman including the clarification dated 22-06-1998 of the
erstwhile APSEB.
In
view of the above and in accordance with the discussion contained in paras 12
to 14 of the order dated 14-12-2006 of this Ombudsman in Appeal No.16 of 2006
of this appellant, I hold that the S.C.No NLG-417 is not entitled for classification
under HT category I, and it falls under the residual category i.e. HT category
II
10. The next issue to be decided in this
appeal is whether the common clarification given by CPDCL in February 2004
pursuant to the representation of the oil companies constitutes an act of
re-clarification.
The facts on records in this appeal lead
to an inevitable conclusion that no such re-classification is done in so far as
HPCL connection at Suryapet (HT SC No.417) is concerned. The appellant has
relied upon the mention of HT category I in Test Report Communicated by
DE/Operation/Suryapet in his letter dated 25-02-2002 and the common
clarification given by CPDCL in February 2004 (for all the 3 oil companies). I
have no doubt that this clarification does not constitute an act of
re-classification. The service was already under HT category II and was being
billed under that category for about 2 years. The CPDCL merely proposed to
continue the status-quo and no change was contemplated.
I
therefore agree with the contention of the respondent No.1 that no show-cause
notice is required in this case.
11. Concluding the above discussion, I hold
that there is no merit in the contentions of the appellant and accordingly the
appeal is dismissed. No costs.
12. Reasons for delay:
This Appeal was received on 05-06-2006. As there are two more appeals of this
appellant on similar matters in two other DISCOMs, the proceedings had to be
programmed simultaneously for the convenience of the parties herein as
explained in para 4 above. During the reconciliation meeting, the respondents
sought time for discussion with managements for proposing settlement terms if
possible. A part from this, after hearing is over, further time had to be given
for written submissions by appellants on condition 35 of TCS. Thus there is a delay of about 3 1/2months,
(15 weeks) over the three months period specified by the Honble Commission in
Regulation No.1 of 2004, for which no one is responsible.
ANNEXURE
(Paras 12 to 14 of Order
dated 14-12-2006 in Appeal.No.16 / 2006)
12. I will now deal with the above issues
considering all the contentions raised by the appellant as well as the
respondents
Classification:
12.1 Pumping activity an integral part of
Industrial activity of HPCL.
This is the crucial aspect in all the
three (3) appeals, which requires to be examined carefully. The relevant
portion of the description of HT Industrial category (i.e. HT category I) is
extracted here under:
This Tariff is applicable for supply
to all HT Industrial consumers. Industrial purpose shall mean manufacturing,
processing and/or preserving goods for sale, but shall not
.
The above description does not cover the activity of
transport of goods through pumping (over long distances) and storing them
before sale. Thus it requires a reasonable interpretation and harmonious
construction of the relevant provisions. It may be of some help to examine the
existing classification of consumer categories from the viewpoint of any
activity of pumping being covered in any of the categories. The following questions can be framed for
this limited purpose.
(i) Whether
pumping of any fluid in any form is covered in any of the categories covered in
the Tariff Order issued by the APERC.
(ii)
Whether there is
any specific consumer or class of consumers who have composite activities and
of the same consumer has different activities whether such different activities
are classified under different categories?