The Supreme Court has dismissed the appeals of several industries of West Bengal demanding deductions in respect of maximum power charges for interrupted and disrupted energy supply (Nipha Steels Ltd vs W Bengal State Electricity Board).
They had argued when there was such an adjustment in respect of minimum charges, there was no reason why the same principle should not be applied to maximum charges.
The Calcutta High Court had earlier accepted their view, but a Division Bench rejected it. Therefore, they moved the Supreme Court, without success.
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The apex court said maximum demand and minimum charges operated at different levels and their objectives were different.
The maximum is charged to defray the capital costs and the latter to meet the running costs. Electricity boards required huge capital outlay for machinery, plants, and transmission lines.
The maximum char-ges are collected to meet the capital outlay, while running costs are met by collection of consumption char-ges. They do not overlap, according to the Supreme Court.
The industrial consumers, on receipt of their bills, challenged the demand of maximum charges at the rate set in their agreement with the board arguing that while remission was granted in respect of minimum charges, there was no reason why a departure should be made in case of maximum demand charges.
Earlier, the board used to grant remission in respect of maximum demand charges. Later it was abandoned. When the contract was for continuous supply, there was an in-built intention that there should be abatement of the charges when continuous supply was not available, the industries argued.
The power board contended that the maximum and minimum charges stood on different footings. The court accepted the board