Madras HC directs TANGEDCO to levy only minimum demand charges from industries for Lockdown period; says it "will kill industries" otherwise

The Madras High Court has directed the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) to collect only minimum demand charges for electricity from High Tension consumers whose establishments were shut during the COVID-19 pandemic lockdown..While examining the case, Justice N Anand Venkatesh, found that the TANGEDCO could not exercise discretion as to whether a given High Tension consumer (bulk purchaser of electricity such as industries, establishments and the like) could be classed as being eligible to pay minimum demand charges under Regulation 6(b) of the Tamil Nadu Electricity Supply Code Regulations. ."The minimum monthly charges are payable even when no electricity is consumed or even where supply has been disconnected or even when the electricity supplied is less than the Minimum Charges. For every HT consumer, there is an infrastructure that is created by the Licensee and that has to be maintained and therefore, irrespective of the fact as to whether electricity is consumed or not, these Minimum Charges provided under Regulation 6 has to be paid by a consumer", the Court explained..The Court further noted that the levy of a minimum charge for High Tension Consumers would operate in two scenarios as per the proviso to Regulation 6(b):1. Where a licensee is prevented from supplying Electricity due to various factors beyond its control;2. Where the consumer is prevented from consuming electricity due to reasons beyond his control..The High Tension consumers sought to bring their case within the ambit of the second scenario, it was noted. .Being unable to run their industries, establishments, and enterprises during the government-mandated pandemic lockdown, these consumers were prevented from consuming electricity for nearly 42 days, the Court recorded.. The Court additionally noted that the lockdown of some enterprises continued even after this, as all industries have not been allowed to commence operations..The Regulation requires the consumer to produce a certificate about its reasons for not consuming electricity. Considering the reason, that is the pandemic lockdown, was known to everyone, the Court found it absurd to insist upon a certificate to the effect. ."In the present scenario, insisting for such a certification itself becomes absurd since a certificate will be insisted upon for a situation about which everyone is aware. Insisting for a certification will be a futile formality in a situation like this", the Court opined..The Court found that the authority had no discretion to decide whether a particular case fitted the second condition under the proviso given the prevailing pandemic and directed TANGEDCO to levy the minimum charges only.."The HT consumers were actually caught between the devil and deep sea. On the one hand the government asked them to shut down their establishment and on the other hand TANGEDCO was levying the Maximum Demand from the consumers. If this is allowed to be continued, it will virtually lead to permanent shutting down of the industries."Madras High Court.The Judge added, "the huge challenge they are going to face post the pandemic is now made worse by TANGEDCO by levying the Maximum Demand Charges. TANGEDCO must understand that its attitude will kill the industries and closing down of industries will ultimately have a financial implication on TANGEDCO also. And TANGEDCO was virtually killing the goose that was laying the golden eggs.".The Court thus found the maximum demand charge levies to be "illegal, unsustainable and in violation of the statutory regulations" and accordingly allowed the batch of writ petitions challenging the same..The Court also clarified that its directions will apply only for the period during which the establishment was under total lockdown due to the orders issued by the Government. .Further, the Court added that the directions pertain only to the minimum charges payable under Regulation 6(b) of the Supply Code. There is no exemption or concession insofar as the charges payable for the actual consumption of electricity (Energy Charges), Justice Venkatesh clarified. .However "If any of the establishments continue to be under lockdown due to the Government Orders passed in this regard, the minimum charges alone shall be collected till the lifting of the lockdown.".The Court also recorded its appreciation for all the counsel who appeared in the matter, for their consent to the pleas being heard as a batch and for assisting the Court during hearings on a holiday. ."...Interestingly, the entire arguments were heard by this Court through video conferencing. This Court wanted to treat this case as a test case and see if Batch Matters involving common issues can be heard and disposed of through video conferencing. The effective hearing started on 7 August 2020 and could not be completed on that day. This court suggested to the counsels appearing on either side as to whether the hearing can be continued on 8 August 2020 since the same fell on a Saturday which was a Court holiday. The learned counsels readily consented to the suggestion made by this Court..." Justice Venkatesh narrated.