AI Insights
The case involves V.N. Public Health and Educational Trust, a charitable trust operating a hospital, which contested the provisional and final assessment orders issued by the Kerala State Electricity Board (KSEB) for unauthorized use of electricity. The trust argued that the requirement under Section 127(2) of the Electricity Act, 2003, to deposit half of the assessed amount before filing an appeal, was unconstitutional and violated Article 14 of the Constitution. The High Court of Kerala, referencing a previous judgment in Syrian Kurian v. Union of India, upheld the validity of Section 127(2), stating that the legislature can impose conditions for availing of appellate remedies, provided they pass the test of reasonableness and non-arbitrariness.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 798337 (HC-KERALA)
Assessee PAN
Bench
Appeal Number
CRN Number
Appellant
Respondent
Appeal Type
Others
Pronouncement Date
25-07-2023
Assessment Year
misc
Judgement Text
"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN TUESDAY, THE 25TH DAY OF JULY 2023 / 3RD SRAVANA, 1945 WP(C) NO. 23962 OF 2023 PETITIONER/S: V.N. PUBLIC HEALTH AND EDUCATIONAL TRUST AGED 54 YEARS A2, JAWAHAR NAGAR COLONY, SALES TAX OFFICE ROAD, KOZHIKODE. 673006 REPRESENTED BY ITS MANAGING TRUSTEE- SECRETARY, V. ANILKUMAR, PIN - 673006 BY ADVS. S.VINOD BHAT ANAGHA LAKSHMY RAMAN GREESHMA CHANDRIKA.R RESPONDENT/S: 1 ASSISTANT EXECUTIVE ENGINEER AND ASSESSING OFFICER ELECTRICAL SUB DIVISION, KERALA STATE ELECTRICITY BOARD, KANJIKODE, PALAKKAD DISTRICT, PIN 678 623, PIN - 678623 2 SENIOR SUPERINTENDENT ELECTRICAL SECTION, KERALA STATE ELECTRICITY BOARD, WALAYAR, PALAKKAD. 678624, PIN - 678624 3 SUB ENGINEER ELECTRICAL SECTION, KERALA STATE ELECTRICITY BOARD, WALAYAR, PALAKKAD. 678624, PIN - 678624 4 KERALA STATE ELECTRICITY REGULATORY COMMISSION K.P.F.C. BHAVANAM, C.V. RAMAN PILLAI ROAD, VALLAYAMBALAM, THIRUVANANTHAPURAM PIN 695010 REPRESENTED BY ITS CHAIRMAN, PIN - 695010 5 UNION OF INDIA MINISTRY OF POWER, SHRAM SHAKTI BHAWAN, NEW DELHI-110001. REPRESENTED BY ITS SECRETARY (POWER)., PIN - 110001 6 KERALA STATE ELECTRICITY APPELLATE AUTHORITY CC 51/52, NEAR 110 KV SUB STATION, VYTTILLA, KOCHI PIN 682019, PIN - 682019 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 23962 OF 2023 2 JUDGMENT The petitioner is a charitable trust running a 330 bedded hospital at Walayar. Exhibit P2 is the Provisional Assessment order issued by the Assistant Executive officer, the 1st respondent assessing the petitioner for unauthorized use of electricity. Based on Exhibit P2 Assessment Order, Exhibit P3 provisional demand notice was issued to the petitioner for an amount of Rs.67,77,404/-. The petitioner preferred Exhibit P4 objection. However, the objection was rejected and Exhibit P5 Final Assessment Order and Exhibit P6 Final Assessment bill were issued to the petitioner. 2. The petitioner preferred Exhibit P7 appeal before the 6th respondent under Section 127 of the Electricity Act, 2003. The office of the 6th respondent Appellate Authority refused to accept the appeal on the ground that the appeal is not in proper format and is not preferred along with 50% of the demand in Exhibit P6. 3. Section 127(2) of the Electricity Act, 2003 mandates deposit of half of the assessed amount as a condition WP(C) NO. 23962 OF 2023 3 precedent for filing an appeal. Section 127 (1) and (2) read as follows:- “127. Appeal to Appellate Authority.- (1) Any person aggrieved by the final order made under section 125 may, within thirty days of the said order, prefer an appeal in such form, verified in such manner and be accompanied by such fee as may be specified by the State Commission, to an appellate authority as may be prescribed. (2) No appeal against an order of assessment under sub- section (1) shall be entertained unless an amount equal to [half of the assessed amount] is deposited in cash or by way of bank draft with the licensee and documentary evidence of such deposit has been enclosed along with the appeal” 4. According to the petitioner, Section 127(2) which mandates deposit of half of the assessed amount as a condition precedent for preferring an appeal is illegal, arbitrary and violative of Article 14 of the Constitution of India. Accordingly, the petitioner has filed this writ petition to declare Section 127(2) of the Electricity Act, 2003 as WP(C) NO. 23962 OF 2023 4 unconstitutional. The petitioner has also prayed for direction to quash Exhibits P2, P3, P5 & P6. 5. Heard Sri. Vinod Bhat S., the learned Counsel for the petitioner, Sri.Riji Rajendran, learned Standing Counsel for respondents 1 to 3 , Sri.Vipin P. Rajendran, learned counsel for the 4th respondent, Sri. S. Manu, learned DSGI for 5th respondent. 6. According to Sri. Vinod Bhat, the impugned assessment has been made for the additional loads consumed by the petitioner and not for any theft of electricity and when the petitioner has got genuine grievance against the Final Assessment order passed by the respondents, the mandate under Section 127(2) to deposit half of the assessed amount lacks judicial and business sense and is violative of Article 14 of the Constitution of India. According to the learned counsel, there is no reasonable classification for orders being amenable to appeal under Section 111 before the Appellate Tribunal and that appealable under Section 127. While the requirement of WP(C) NO. 23962 OF 2023 5 pre-deposit can be waived or reduced under 111, Section 127(2) does not provide for any such waiver or reduction. Accordingly, it is contended that there is no rational nexus with the greater onus being placed for appeals under Section 127. It is contended that Section 127(2) is a piece of legislation which renders the right of appeal nugatory. 7. Sri. Riji Rajendran, learned Standing Counsel for the Electricity Board would rely on the judgment of the Division Bench of this Court in Syrian Kurian v. Union of India (Judgment dated 25.10.2016), wherein the Constitutional validity of Section 127(2) requiring deposit of half of the assessed amount as a condition to maintain an appeal under Section 127(1) has been considered. This Court relying of the judgment of the Hon’ble Supreme Court in Executive Engineer & Anr v. Sri Seetaram Rice Mill [2012 (2) SCC 108] : [2011 KHC 4978] held that the provision of Section 127(2) requiring deposit of half of the assessed amount as a condition to maintain an appeal under Section 127(1) does not suffer from any constitutional invalidity. Paragraph 7 of WP(C) NO. 23962 OF 2023 6 the judgment is extracted hereunder:- “ While Section 127(1) confers an appellate remedy against the final order passed under Section 126, sub- section 2 thereof imposes a condition requiring the appellant, to deposit an amount equal to half of the assessed amount in cash or by way of demand draft with the licensee as a condition for entertaining an appeal. The question is whether such a condition is constitutionally invalid. Having considered this issue, we find that appeal is a statutory remedy and it is always open to the parliament to impose conditions for availing of the appellate remedy. Such conditions are liable to be upheld so long as the same passes the constitutional test of the reasonableness and non-arbitrariness. Such conditions requiring remittance of amounts as condition for maintaining appeals, are not unknown. Similar provisions are available in the Customs Act, Central Excise Act, Sales Tax Act, Income Tax Act and such other enactments. While in these enactments, power of waiver has been confined on appellate authorities, there are enactments such as Payment of Gratuity Act which require deposit of full amount ordered by the controlling authority as condition for maintaining appeal. These provisions have also stood the test of judicial scrutiny. Therefore, the provision of Section 127(2) requiring deposit of half of the assessed amount in the order under Section 126(1) cannot be said to suffer from any constitutional invalidity. Therefore, we are unable to hold that Section 127(2) suffers from any unconstitutionality for it being declared as such.” 8. Sri.Vinod Bhat, learned Counsel for the petitioner tried to distinguish the judgment in Syrian Kurian (supra) on the ground that the pre-deposit of full amount required under the Payment of Gratuity Act or the provisions under WP(C) NO. 23962 OF 2023 7 the Customs Act, Central Excise Act, Sales Tax Act and the Income Tax Act cannot be equated with Section 127 (2) of the Electricity Act as they operate in two different spheres. I cannot agree with the argument of Sri.Vinod Bhat. The Division Bench in Syrian Kurian (supra) referred to various legislations only to point out that, it is always open to the parliament legislature to impose conditions for availing of the appellate remedy. I do not find any reason to take a different view from the decision of the Division Bench in Syrian Kurian (supra) and this Court is bound to follow the said decision. Accordingly, the writ petition fails and is dismissed. The 6th respondent shall entertain the appeal if the pre-deposit required under section 127(2) is made by the petitioner within 30 days from today. The writ petition is disposed of. Sd/- MURALI PURUSHOTHAMAN JUDGE bnu WP(C) NO. 23962 OF 2023 8 APPENDIX PETITIONER’S EXHIBITS Exhibit P1 A TRUE COPY OF A SITE MAHAZAR DATED 05- 05-2023 PREPARED BY THE 3RD RESPONDENT Exhibit P2 A TRUE COPY OF PROVISIONAL ASSESSMENT ORDER DATED 12-05-2023 ISSUED BY THE 1ST RESPONDENT Exhibit P3 A TRUE COPY OF PROVISIONAL INSPECTION BILL DATED 12-05-2023 Exhibit P4 A TRUE COPY OF THE OBJECTION DATED 20- 05-2023. Exhibit P5 A TRUE COPY OF FINAL ASSESSMENT ORDER DATED 19-06-2023 Exhibit P6 A TRUE COPY OF A FINAL ASSESSMENT BILL DATED 20-06-2023 Exhibit P7 A TRUE COPY OF APPEAL MEMORANDUM DATED 19-07-2023 "
Other Referred Cases
Syrian Kurian v. Union of India, Executive Engineer & Anr v. Sri Seetaram Rice Mill
Laws Referred To
Electricity Act, 2003, Constitution of India
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