2016 (5) TMI 591 - HC - Indian Laws

Claim of incorrect categorization of the electricity meters installed at the Petitioner s premises - Held that - The categorisation of electricity tariff is on the basis of usage and not the terms of usage . If a gymnasium uses electricity, it is usage for running a gymnasium, irrespective of the terms of such usage, namely, whether for a charge or not and whether on a profit motive or no profit principle. It is usage clearly falling within Non-residential or Commercial usage. A non-residential or commercial establishment for the purposes of electricity tariff does not cease to be non-residential or commercial if it is run on a no profit basis. Even the usage of electricity categorized as commercial is not because there is a profit motive, but because the activity is commercial as opposed to residential or individual. In the premises, electricity used by the Petitioner for the Sports Complex, which houses an athletic track, a gymnasium and a tennis court is correctly assessed and charged under the tariff item LTII, which is for Non-residential or Commercial use. No fault can be found with respect to such categorization or billing.

Summary

Issues:
Challenge to electricity bills based on incorrect categorization of meters.

Detailed Analysis:
1. The petitioner, a public charitable trust, challenged electricity bills from the distribution company due to the incorrect categorization of meters at their premises. The trust operates a public park and sports complex on government-owned land, divided into a public garden and a sports complex with facilities like an athletic track, gymnasium, and tennis court.

2. The dispute revolves around the categorization of three electricity meters on-site: one for the public garden under LTVI category and two for the sports complex under LTII (a) and LTII (b) categories. The petitioner argued that all meters should be categorized as LTVI since the activities are non-commercial and run on a non-profit basis, providing public utility services.

3. The distribution company contended that the categorization of meters as LTII for the sports complex was appropriate, emphasizing that categorization is based on usage, not profit motive. They argued that the sports complex activities were commercial as they were restricted to trust members who were charged separately, contrary to the petitioner's claim of open access.

4. The court noted that the dispute essentially involved a tariff issue between a consumer and a licensee, typically addressed by the Consumer Forum under the Electricity Act, 2003. However, due to extensive arguments presented, the court decided to address the categorization issue.

5. Citing the Electricity Act, 2003, the court explained the tariff categories based on usage, distinguishing between LT II (Non-residential or Commercial) and LT VI (Street Lights). The court analyzed the usage of electricity in the public garden and the sports complex, ultimately affirming that the sports complex fell under the LTII category for commercial use, regardless of profit motive.

6. Ruling against the petitioner's claim, the court dismissed the petition, upholding the correct categorization and billing of electricity used by the sports complex. The court clarified that usage determines categorization, not the profit motive behind the activities, emphasizing that commercial usage remains so even without a profit motive.

7. The court rejected the petitioner's reliance on unrelated judgments concerning profit motive in different contexts, affirming that the categorization of electricity tariff is based on usage, not the nature of the organization or its activities. The judgment concluded that the billing under LTII for the sports complex was appropriate, leading to the dismissal of the petition.