The Karnataka High Court recently dismissed a writ petition challenging recovery proceedings initiated by Hubli Electricity Supply Company (HESCOM) for alleged wrongful availing of rebate under an electricity conversion scheme. The court held that clubbing multiple Low Tension (LT) installations for High Tension (HT) conversion requires all installations to be registered in the name of the same consumer, failing which the rebate incentive cannot be claimed. This judgment underscores the importance of strict compliance with scheme conditions and the burden of proof on consumers to substantiate eligibility claims.
Background & Facts
The Dispute
The petitioner, Hind Auto Cranks Pvt. Ltd., represented by its director, challenged a demand notice issued by HESCOM under No. BGM/EEE/AO/AAO/SAR/5506-11 dated 27.08.2013. The notice sought recovery of rebate availed by the petitioner under a scheme introduced by HESCOM for conversion of electricity supply from LT to HT. The respondent alleged that the petitioner secured the rebate by suppressing material facts, specifically by clubbing seven separate LT installations standing in the names of different consumers within the same premises.
Key Facts
- The petitioner availed rebate under a scheme introduced by HESCOM for LT to HT conversion, governed by a circular dated 15.02.1999 (Annexure-C).
- The scheme permitted clubbing of multiple LT installations for conversion to HT, subject to conditions.
- Clause ‘C’ of the circular expressly permitted clubbing only if all LT installations belonged to the same registered consumer within the same premises.
- The petitioner clubbed seven LT installations for conversion to HT but failed to establish that all installations were registered in its name.
- HESCOM issued a demand notice dated 27.08.2013 alleging wrongful availing of rebate and initiated recovery proceedings.
Procedural History
- 27.08.2013: Demand notice issued by HESCOM (Annexure-J).
- 07.11.2013: Petitioner filed an appeal before the appellate authority (Annexure-R).
- 2014: Writ Petition No. 101923 of 2014 filed before the Karnataka High Court under Articles 226 and 227 of the Constitution of India.
- 01.07.2026: Final hearing and judgment delivered by the High Court.
Relief Sought
The petitioner sought:
- Quashing of the demand notice dated 27.08.2013 (Annexure-J).
- A direction to the appellate authority (Respondent No. 5) to decide the appeal on merits.
The Legal Issue
The central question before the court was: Whether the petitioner established that all seven LT installations clubbed for conversion to HT were registered in its name, thereby rendering it eligible for the rebate under the circular dated 15.02.1999?
Arguments Presented
For the Petitioner
The petitioner’s counsel argued that the demand notice was arbitrary and unsustainable, contending that the petitioner had complied with the scheme’s conditions. However, during the hearing, counsel failed to provide instructions or documentary evidence to substantiate that all seven LT installations were registered in the petitioner’s name.
For the Respondent
HESCOM contended that the petitioner wrongly availed the rebate by clubbing installations belonging to different consumers, thereby violating Clause ‘C’ of the circular. The respondent argued that the petitioner failed to discharge the burden of proof to establish eligibility under the scheme.
The Court's Analysis
The court conducted a detailed examination of Clause ‘C’ of the circular dated 15.02.1999, which governed the rebate scheme. The clause permitted clubbing of LT installations for conversion to HT only if all installations belonged to the same registered consumer within the same premises. The court observed:
"Clause ‘C’ of the circular assumes significance. It expressly permits clubbing of several LT installations only where such installations belong to the same registered consumer and are situated within the same premises. The benefit of incentive is thus not attached to the premises as such, but to the identity of the registered consumer."
The court noted that the petitioner’s writ petition was conspicuously silent regarding the particulars of the seven LT installations. There was no categorical pleading or documentary evidence to establish that all installations were registered in the petitioner’s name. Despite the lapse of nearly thirteen years since the issuance of the demand notice, the petitioner failed to produce basic records such as installation particulars or registration details to substantiate its claim.
The court emphasized that the burden of proof rested squarely on the petitioner to demonstrate compliance with the scheme’s conditions. In the absence of such evidence, the respondent was justified in proceeding on the premise that the petitioner had clubbed installations belonging to different consumers and wrongly availed the rebate.
"Mere assertions, bereft of pleadings and documentary proof, cannot confer an entitlement to retain a fiscal incentive extended under a statutory scheme."
The Verdict
The court dismissed the writ petition, holding that HESCOM was fully justified in withdrawing the incentive and initiating recovery proceedings. The impugned demand notice was upheld as it was founded on the petitioner’s failure to satisfy the eligibility criteria under the circular. The court directed HESCOM to give credit to any amounts already deposited by the petitioner and recover only the balance amount, if any, in accordance with law.
What This Means For Similar Cases
Burden of Proof Lies on the Consumer
- Consumers availing benefits under statutory schemes must strictly comply with eligibility conditions and maintain adequate documentary evidence to substantiate their claims.
- Mere assertions or pleadings without supporting documents are insufficient to discharge the burden of proof.
Clubbing Installations Requires Strict Compliance
- Clause ‘C’ of the circular mandates that all LT installations clubbed for conversion to HT must belong to the same registered consumer.
- Consumers cannot club installations registered in different names, even if situated within the same premises, to claim rebate.
Recovery Proceedings Are Sustainable If Eligibility Is Not Proved
- If a consumer fails to establish eligibility under a scheme, recovery proceedings initiated by the authority are legally sustainable.
- Courts are unlikely to interfere under Article 226 unless the demand notice suffers from jurisdictional error, perversity, or arbitrariness.
Timely Production of Evidence Is Critical
- Delay in producing evidence, even over a decade, weakens the consumer’s case and may lead to dismissal of the challenge.
- Consumers must proactively preserve and produce records such as installation particulars, registration details, and correspondence to substantiate their claims.
