NO NEED TO COMPENSATION CHARGES FOR LOW PF DURING LOCKDOWN

The Madras High Court resolved the dispute between HT Consumers and Tamil Nadu Generation & Distribution Corporation Limited (TANGEDCO). TANGEDCO was levying Maximum Demand Charges and the Compensation Charges. Also, the company was charging compensation towards low PF.

Various individual industries or their Associations filed a writ petition where there was the mentioning of the first proviso of Regulation 6(b) of the Tamil Nadu Electricity Supply Code, 2006. This proviso states that the Licensee who is TANGEDCO, in this case, has the authority to recover Minimum Charges at 20% of the Billable Demand or Recorded Demand, whichever is higher only in the situation when the consumer is prevented from consuming electricity due to “reasons beyond his control”. The abovementioned charges can be obtained besides charges for the actual consumption of electricity.

The Court held that all the industries are going through a hard time during this lockdown and the TANGEDCO who is levying the Maximum Demand Charges will land the industries in a huge problem post lockdown. Before they make post lockdown even worse, they need to understand that their attitude will compel the industries to shut down, and this will have the ultimate financial implications on TANGEDCO also.

The single-judge bench of Justice N. Anand Venkatesh addressed the mentioning of the first proviso of Regulation 6(b) of Tamil Nadu Electricity Supply Code 2006 and stated that this case falls within the ambit of the first proviso and the consumers must be granted the benefit of Minimum Charges. Adding to this point, it was also stated that the claims made by the TANGEDCO is meaningless and every HT consumer is bound to pay the Minimum Charges provided under Regulation 6 regardless of the fact that whether electricity is consumed or not.

The Honorable Court finds the Maximum Demand Charges and the Compensation Charges, which is levied by TANGEDCO against the HT Consumers, completely illegal, unsustainable and in violation of the statutory regulations. Henceforth, the question raised by the TANGEDCO regarding the Maximum Demand Charges and the compensation towards low PF was being struck down by the Court.

Hence, in this case, the Pandemic led to the collapsing of many industries, so there was no effective utilisation of the power at the consumer’s end, and therefore, TANGEDCO had levied compensation.

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