MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LIMITEDversusM/S JINDAL SEEDS COMPANY PVT. LIMITED

2026:BHC-AUG:38464



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                                               -1-

                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                BENCH AT AURANGABAD

                            WRIT PETITION NO. 8579 OF 2013

                 MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY
                                      LIMITED
                                      VERSUS
                         M/S SUNRISE FOOD PROCESS LIMITED
                                              ***
              Advocate for the Petitioner : Mr. Avishkar S. Shelke
              Advocate for Respondent : Mr. Nitin K. Chaudhari
                                              ***
                                        WITH
                            WRIT PETITION NO. 8580 OF 2013

                 MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY
                                      LIMITED
                                       VERSUS
                        M/S MARKS FIELD HYBRID SEEDS LIMITED
                                              ***
              Advocate for the Petitioner : Mr. Avishkar S. Shelke
              Advocate for Respondent : Mr. Nitin K. Chaudhari
                                              ***
                                        WITH
                            WRIT PETITION NO. 8495 OF 2013

                 MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY
                                      LIMITED
                                      VERSUS
                       M/S JINDAL SEEDS COMPANY PVT. LIMITED
                                              ***
              Advocate for the Petitioner : Mr. Avishkar S. Shelke
              Advocate for Respondent : Mr. Nitin K. Chaudhari

                                              ***

                               CORAM : SACHIN S. DESHMUKH, J.
                                 Date : 20th August, 2026
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ORDER :-


1.          By way of these three connected Writ Petitions, the

Petitioner, Maharashtra State Electricity Distribution Company

Limited (MSEDCL), challenges the validity and legality of the

Common Order dated May 31, 2013, passed by the Electricity

Ombudsman, Nagpur, in Representation Nos. 25/2013, 26/2013,

and 27/2013.



2.          By the impugned common order, the Ombudsman

allowed the representations presented by the contesting private

respondents, quashed the retrospective supplementary bills issued

by the Petitioner, and directed the Petitioner to continue applying

the industrial tariff category to the respondents' connections.



3.                The factual matrix of the present petitions is that

the contesting Respondents, namely M/s. Jindal Seeds Co. Pvt.

Ltd., M/s. Markfield Hybrid Seeds, and M/s. Sunrise Food Process,

operate industrial units and factories situated within the Additional

MIDC Area, Jalna. These units are admittedly engaged in the

activities of seed processing, hybrid seed processing, and grain

food processing respectively.
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4.          Since the inception of their respective electrical service

connections,   the    Petitioner-licensee       had   classified   all        three

consumers / respondents under the 'LT-V (Industrial)' Tariff

category. Accordingly, regular monthly electricity consumption bills

were raised by the Petitioner under the industrial classification, and

the respondents consistently paid the same without default.



5.          The controversy arose when the Deputy Executive

Engineer of the Flying Squad, MSEDCL (Aurangabad Rural),

conducted   spot     inspections   at     the   factory   premises       of    the

respondents between November 2011 and May 2012.



6.          Where in Spot Inspection, the Flying Squad noted that

while the electrical connections were sanctioned for industrial

purposes, the actual consumption of electricity at the site was

being utilized for the cleaning, treatment, packaging, and trading of

seeds and grains. Asserting that such processing activities lacked a

core, transformative "manufacturing process," the Flying Squad

concluded that the respondents were effectively engaged in

commercial and trading endeavors. Consequently, it was proposed

that the respondents be reclassified from the industrial category to
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the 'LT-II (Commercial)' Tariff category.



7.          On the strength of the Flying Squad's inspection

reports, the Petitioner-licensee retrospectively reclassified the

respondents and issued supplementary bills for the difference in

tariff. These demands covered retrospective periods spanning

between 41 to 48 months, raising substantial differential claims of

against the respective respondents.



8.          Aggrieved    by   these    retrospective   demands,      the

respondents presented grievances before the Consumer Grievance

Redressal   Forum     (CGRF),    Aurangabad.     By    orders     dated

01.01.2013, the CGRF partly allowed the grievances. While

upholding the Petitioner's reclassification of the consumers into the

commercial tariff category based on actual use, it restricted the

Petitioner's entitlement to recover the arrears to a statutory period

of 24 months preceding the date of the bills, without the imposition

of any interest or penalty.



9.          Dissatisfied with the order of CGRF, the respondents

approached the Electricity Ombudsman, Nagpur. By the common

order under challenge, the learned Ombudsman allowed the
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representations and quashed the Petitioner's supplementary bills in

its entirety. Aggrieved by the same, the Petitioners are before this

Court.



10.           Learned Counsel for the Petitioner, strenuously submits

that the activity undertaken by the respondents, which involves the

cleaning, treatment, packaging, and trading of seeds and grains,

cannot   be    equated   with   a   "manufacturing   process".    Under

Regulation 13 of the MERC Supply Code Regulations, 2005, and

relevant Tariff Orders, the 'Industrial' category strictly applies only

to activities in relation to the actual manufacture of goods. Since

the respondents' consumption is for non-residential and non-

industrial purposes, it must inevitably be classified under the 'LT-II

Commercial' category.



11.           The Learned Counsel further contends that          the 24-

month restriction on arrears, submitting that the limitation under

Section 56(2) of the Electricity Act, 2003 is inapplicable to

retrospective billing arising out of the factual discovery of a

commercial misclassification. Since the right to recover differential

charges accrued from the Commission's August 2009 tariff order,

the supplementary demands raised from June 2008 are well within
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the bounds of law, and therefore, the impugned order deserves to

be set aside in toto.



12.            Learned Counsel for the Respondent has supported the

order under challenge and prayed to dismiss the petition.



13.            Upon examination of the rival contentions, evaluated

the grounds raised in the memo of the petitions, and analyzed the

provisions of the Electricity Act, 2003, alongside the MERC

(Electricity    Supply   Code   and     Other   Conditions   of   Supply)

Regulations, 2005. The controversy requiring adjudication centers

upon whether the Petitioner-licensee’s retrospective reclassification

of the Respondents from the industrial to the commercial tariff

category and the consequent issuance of supplementary bills.



14.            The primary contention raised by, Learned Counsel for

the Petitioner, is that under Regulation 13 of the MERC Supply

Code Regulations, 2005, the distribution licensee has the unilateral

power to reclassify a consumer at any stage based on its actual

usage.



15.            There is no debate that the statutory power of the
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licensee to classify or reclassify consumers into Commission-

approved categories, however, such administrative power cannot

be exercised in a high-handed, arbitrary, or retrospective manner.



16.         When a consumer has been categorized, billed, and has

regularly paid its dues under the 'LT-V Industrial' classification

since inception, an abrupt migration to a higher tariff carries severe

civil and adverse financial consequences. Consequently, compliance

with the principles of natural justice, specifically the issuance of a

show-cause notice and the grant of a pre-decisional hearing,

becomes a mandatory prerequisite before altering the status quo.



17.         The Petitioner's failure to accord any such opportunity

to the Respondents fundamentally vitiates the reclassification

process, rendering it unsustainable.



18.         Furthermore,   the    Petitioner's    assertion     that   seed

processing, cleaning, treatment, and mechanical packaging do not

constitute a "manufacturing process" reflects narrow interpretation

of industrial activity. Seed processing is not a mere "trading shop"

or retail enterprise; it involves mechanical sorting, grading,

chemical   treatment,    and     specialized     preservation     methods
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designed to transform raw agricultural yield into commercially

viable seeds. Such specialized processing activities are well within

industrial and electricity regulatory frameworks as core industrial

operations.


19.           In the absence of a technical audit or an assessment of

the machinery load, a cursory observation by a flying squad cannot

be made the basis for retrospective differential tariff demand. The

learned Ombudsman was, therefore, perfectly justified in holding

that the Flying Squad’s assessment lacked a sound factual

foundation and was purely speculative.


20.           So far as challenge regarding the limitation period, the

Petitioner's contention that Section 56(2) of the Electricity Act,

2003 does not apply to the recovery of retrospective differential

demands is statutorily untenable. Section 56(2) provides a strict

bar stating that no sum due from any consumer shall be

recoverable after a period of two years from the date when such

sum   became first      due,   unless    such sum   has   been    shown

continuously as recoverable arrears.


21.           The statutory intent of the Act is to prevent distribution

licensees from raising stale, unexpected demands to the detriment

of consumer stability. Attempting to recover dues spanning up to
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48 months retrospectively without indicating them continuously in

normal billing cycles, the Petitioner's demands counters the

legislative mandate of Section 56(2) of the Act. As held herein

above, since the entire reclassification process was in total violation

of natural justice, the Ombudsman rightly quashed the demands in

its entirety.


22.             In view of the aforesaid discussion, this Court finds no

perversity, illegality, or jurisdictional error in the order under

challenge.


23.             Accordingly, the writ petitions stand dismissed.




                                           (SACHIN S. DESHMUKH, J.)

Omkar Joshi