CHAMUNDESHWARI ELECTRICITY SUPPLY CORPORATION vs J. K. TYRE AND INDSTURIES LIMITED

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WA No. 439 of 2025


TH
RESERVED ON 15 SEPTEMBER 2026

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 29 DAY OF OCTOBER, 2026


PRESENT

THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE


AND

THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA

WRIT APPEAL NO. 439 OF 2025 (GM-KEB)

BETWEEN:

1. CHAMUNDESHWARI ELECTRICITY




SUPPLY CORPORATION

CORPORATE OFFICE, NO.29

ND
VIJAYANAGAR, 2 STAGE

HINKAL, MYSURU - 570 017

REPRESENTED BY ITS

MANAGING DIRECTOR

…APPELLANT
(BY SRI S. SRIRANGA, SENIOR ADVOCATE A/W
SMT. UTTUR PADMAVATI SURESH, ADVOCATE &
SMT. ANITHA N. RAVINDRA, ADVOCATE)

AND:

1. J. K. TYRE AND INDSTURIES LIMITED
Digitally
signed by
AMBIKA H B
Location:
High Court
of Karnataka

HAVING ITS FACTORIES AND OFFICE AT
K.R.S. ROAD, METAGALLI
MYSURU - 570 016
REPRESENTED BY ITS

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WA No. 439 of 2025


GENERAL MANAGER
COMMERCIAL AND ACCOUNTS
MR. RAMPRASAD M.P.

2. STATE OF KARNATAKA
BY PRINCIPAL SECRETARY TO THE
DEPARTMENT OF ENERGY
VIKASA SOUDHA
DR.AMBEDKAR VEEDI
BENGALURU - 560 001
…RESPONDENTS
(BY SRI R.V.S. NAIK, SENIOR ADVOCATE A/W
SRI N.D. SATISHCHANDRA, ADVOCATE FOR R-1;
SRI K.S. HARISH, GOVERNMENT ADVOCATE FOR R-2)


THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER DATED 18.12.2024 PASSED BY THE LEARNED SINGLE
JUDGE IN W.P.No.9969/2021 (GM-KEB) AND CONSEQUENTLY
DISMISS THE WRIT PETITION.

THIS WRIT APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT, COMING ON FOR
PRONOUNCEMENT THIS DAY, JUDGMENT WAS
PRONOUNCED AS UNDER:

CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MRS. JUSTICE K.S. HEMALEKHA

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C.A.V. JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

1. The appellant, Chamundeshwari Electricity Supply
Corporation Limited [ 'CESCOM' ], has filed the present appeal
impugning the order dated 18.12.2024 [ the impugned order ]
passed by the learned Single Judge in W.P.No.9969/2021 (GM-
KEB).

2. Respondent No.1, J.K. Tyre and Industries Ltd. [ JKTIL ] had
filed the aforesaid petition praying as under:
“i. Direct the respondents to relax the payment of
Demand Charge/Fixed Charges during the
lockdown period and refund the payments made by
the petitioner towards Demand Charge/Fixed
Charges, during the lockdown period.

ii. Pass such other order as this Hon’ble Court
deems fit, in the interest of justice and equity.”

3. The learned Single Judge partly allowed the petition by the
impugned order. The court directed CESCOM to retain only 3.1%
and 5.1% of the demand charges of ` 16,95,750/- and ` 18,74,250/-
invoiced for April, 2020, in respect of its installations bearing RR
No.HT-57 and RR No.HT-138 respectively, and to refund or adjust
the remainder against future bills.

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FACTUAL MATRIX
4. JKTIL is a company incorporated under the Companies Act,
1956, having its registered office in Rajasthan and three tyre-
manufacturing plants at Mysuru. JKTIL has secured high-tension
[ 'HT' ] power supply under two connections bearing RR No.HT-57
and RR No.HT-138, for its plants in Mysuru. The erstwhile
Mangalore Electricity Supply Company Limited [ 'MESCOM' ]
originally provided these electricity connections and since its
bifurcation, CESCOM supplies them.

5. JKTIL had entered into the agreements dated 11.12.2003
[ Agreement HT-57 ] and 16.02.2006 [ Agreement HT-138 ] for
permanent HT power supply in respect of two installations – plant
nos.1 and 2. These agreements, which are similarly worded are
hereafter collectively referred to as ‘the agreements’. Clause 2 of
the agreements obliged the supplier to supply, and the consumer to
receive, the contracted demand and Clause 3, titled "Reduction of
Minimum Charges", provided for alteration of demand if the
Consumer is prevented from receiving and using electrical energy

supplied under this agreements

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6. In view of the outbreak of the COVID-19 pandemic, the
Central Government ordered a nationwide lockdown with effect from
24.03.2020 until 03.05.2020. The lockdown restrictions were eased
from 04.05.2020 onwards. JKTIL contends that, as a result of the
disruption caused by the nationwide lockdown, its plants remained
non-operational and it was unable to receive and use the contracted
electrical energy.

7. Pursuant to the Government Order dated 08.05.2020, the
Government of Karnataka granted relaxation in the payment of
electricity bills due to the lockdown. MSME industries were
exempted from paying demand/fixed charges for April and May
2020, and Non-MSME industries could defer payment of
consumption charges until 30.06.2020.

8. It is not in dispute that JKTIL’s industry falls within the Non-
MSME category.

9. JKTIL addressed a representation dated 29.08.2020 to
CESCOM seeking waiver of the demand/fixed charges and
electricity charges for the lockdown period. CESCOM declined the
request by communication dated 05.10.2020, stating that only
deferment, not waiver, was available to non-MSME units. JKTIL

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submitted a representation to the Hon'ble Chief Minister and the
Minister of Energy on 29.09.2020, in response to which the
Additional Chief Secretary, Energy Department, sent a
communication dated 19.10.2020, advising JKTIL to approach
CESCOM's local office.

10. Aggrieved by the denial of its request, JKTIL instituted
W.P.No.9969/2021 (GM-KEB), seeking a direction to CESCOM to
relax the demand/fixed charges levied during the lockdown period
and to refund the amounts already recovered, together with
consequential reliefs.

11. One of the questions that arose during the course of hearing
of the writ petition was whether the charge levied on the respondent
was, in substance, a 'demand charge' or a 'minimum charge'. By an
order dated 23.08.2024, the learned Single Judge directed
CESCOM to place on record an affidavit disclosing the units
consumed by JKTIL. In compliance with the said directions,
CESCOM filed an affidavit disclosing the energy consumed by
JKTIL during the months of February, March and April 2020.
The counter affidavit filed by JKTIL disclosed that, for April, 2020, its

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consumption had fallen to 3.1% (RR No.HT-57) and 5.1% (RR
No.HT-138) of its average consumption for the preceding months.

12. By the impugned order, the learned Single Judge held that the
pandemic-induced lockdown constituted a force majeure event
within the scope of Clause 3 of the agreements. The learned Single
Judge reasoned that the steep, undisputed fall in consumption
established that JKTIL's units had in fact remained shut during the
said period. The court observed CESCOM's contention that
'demand charges' and 'minimum charges' were distinct and separate
concepts was, in substance, an argument to avoid its contractual
liability. The court held that any charge payable irrespective of
actual consumption fell within the expression 'minimum charge' and
that JKTIL was entitled to a proportionate reduction of the demand
charges levied for April, 2020. However, the learned Single Judge
also clarified that the directions would not operate as a precedent
for other consumers, as they were rendered in the context of the
specific contractual clause between the parties.

13. Aggrieved by the impugned order, CESCOM preferred the
present appeal, principally on the grounds that the dispute, being
contractual and relating to billing, ought to have been relegated to

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the Consumer Grievance Redressal Forum under Section 42(5) to
(7) read with Section 181 of the Electricity Act, 2003; and that the
learned Single Judge erred in treating 'demand charges' as
synonymous with 'minimum charges' for the purposes of Clause 3 of
the agreements. The learned counsel for CESCOM contended that
the two are distinct charges under the Conditions of Supply of
Electricity of Distribution Licensees, 2010 [ Conditions of Supply ].

14. Clause 3 of the agreements expressly provide that if a
consumer is prevented “from receiving and using” electrical energy
supplied under the agreements owing to certain force majeure
events, the contracted demand for such period shall be altered
accordingly. T he dispute is essentially confined to whether “demand
charges” fall within Clause 3 of the agreements in question. The
electricity bill for the month of April 2020 is placed on record. The
said bill includes “Demand Charges” of 8,075 KVA at ` 210/- per
KVA, amounting to ` 16,95,750/-.

15. The term “Demand Charge” is not defined in the agreements.
However, the same is defined under clause 2.22 of the Conditions
of Supply as under:
“Clause 2.22 – ‘Demand Charge’ refers to a
charge levied to a Consumer, which is based on

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the contracted demand or maximum demand
recorded.”


16. The terms “Maximum Demand” and Minimum Charges are
defined under clause 2.38 and 2.41 of the Conditions of Supply as
under:
“2.38 “Maximum Demand” means the average
amount of kilowatts or kilovolt amperes, as the
case may be, delivered at the point of supply of the
Consumer and recorded during a thirty minute
period of maximum use in the month, however,
subject to the Licensee reserving the right to
shorten this period in the case of special classes of
Consumers, if necessary, with the approval of the
Commission.”

“2.41 – Minimum Charges means the minimum
charges payable under the Tariff schedule in
force from time to time.”

17. Clause 33 of the Conditions of Supply also refers to Minimum
Charges as under:
"33.00-Minimum charges: Charges for power
supply In accordance with Tariff in force from time
to time shall be payable by the Consumer until the
power supply Agreementis terminated irrespective
of whether the installation is in service or under
disconnection."

18. As is apparent from the above, the term Minimum Charges is
defined to mean charges payable under the tariff schedule which is
in force. T he learned counsel appearing for CESCOM also referred
to an affidavit affirmed on 19.09.2024 which sets out the relevant

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extract of the tariff order dated 30.05.2019 fixing the tariffs
applicable to HT-2 (a) connection. Admittedly, the said tariff order is
applicable to the electricity connections provided to JKTIL. The
relevant extract of the said tariff order is set out below:

"Conditions applicable to billing of HT installations:

Billing Demand: The billing demand during
unrestricted period shall be the maximum demand
recorded during the month or 85% of the Contact
Demand (CD), whichever is higher."

Rate schedule
HT-2 (b): Applicable to all areas of CESC




Demand Charges Rs.210/kVA of billing
demand/month
Energy Charges
For the first one 695 paise per unit
lakh units


For the first one 720 paise per unit
lakh units


"

19. As is apparent from the above, billing demand is the
maximum demand recorded during the month or 85% of the
'Contract Demand', whichever is higher. Thus, the demand charges
as levied in terms of the applicable tariff order are at the specified
rate for 85% of the Contract Demand. As rightly pointed out by the
learned Senior Counsel appearing for CESCOM, the tariff order
does not provide for levy of any Minimum Charges. However, the

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learned Single Judge interpreted Clause 3 of the agreements to
provide for waiver or relaxation of the Minimum Charges payable by
JKTIL in the event of force majeure . The learned Single Judge held
that the Minimum Charges would be those charges that would be
payable irrespective of whether JKTIL consumed any electricity or
not. On that basis, the Court held that the demand charges
mentioned in the invoice for April 2020 are the minimum charges,
which are required to be reduced under Clause 3 of the
agreements.

20. We are unable to concur with the aforesaid view. Clause 3 of
the agreements cannot be read in isolation and must be read in the
context of the other clauses. Clause 2 of the agreements provides
for Contracted Demand. Clause 3 of the agreements in question
provides for alteration of the contracted demand, which obviously
refers to the demand as mentioned in Clause 2 of the respective
agreements. Clause 2 of the Agreement HT-57 provides for the
contracted demand of 6000 KVA and the Agreement HT-138
provides for the Contracted Demand of 4850 KVA.

21. Clauses 2 and 3 of the Agreement HT-57 are set out below:
“2. Contracted Demand : During the period of
supply hereinafter mentioned the Supplier shall

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supply and the Consumer shall take from the
Supplier Electricity required by the Consumer for
the purpose hereinabove recited at the point of
supply upto a maximum extent of :

1. 6000 KVA (hereinafter termed as "Contracted
Demand" From___________ to __________)

2. ____________ KVA (hereinafter termed as
"Contracted Demand from ___________ to
__________)
3. ____________ KVA (hereinafter termed as
"Contracted Demand from ___________ to
__________)

4. ____________ KVA (hereinafter termed as
"Contracted Demand" From___________ to
__________)

5. ____________ KVA (hereinafter termed as
"Contracted Demand" From___________ to
__________)

3. Reduction of Minimum Charges : If at any
time Consumer is prevented from receiving and
using electrical energy supplied under this
agreementeither in whole or in part owing to
causes like war, mutiny, riot, earthquake,
hurricane, strike, tempest and accident to
machinery or if the supplier is unable to supply
power for the reasons stated above the contracted
demand for such period shall be altered
accordingly, provided, due notice of such causes
and extent of such reduction sought for its for the
full billing month(s).”

22. The terms of HT 57 Agreement are similar to the terms of the
HT 138 Agreement, except that the Contracted Demand under
clause 2 of that agreement is 4850 KVA.

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23. In terms of Clause 2 of the agreements, JKTIL was obliged to
take supply for the contracted demand under the respective
agreements to the maximum extent. In terms of Clause 3 of the
agreements, the contracted demand could be altered in the event of
any force majeure event as set out in that clause, provided that due
notice of such causes and the extent of reduction sought is for the
full billing month(s). Although JKTIL has sought relaxation of the
demand charges, it does not appear that any notice was issued
under clause 3 of the agreements.

24. We may also refer to clause 9 of the agreements which
provides for payment of power supply charges, taxes, etc. The said
clause is set out below:
“9. Payment of power supply charges,
taxes, etc.:

a. From the date of commencement of supply
until termination of the agreement, the consumer
shall pay to the supplier for the electricity
supplied during the prescribed billing period at
the rates specified in the supplier's tariff in the
class of power supply, irrespective of installation
being in the service or under disconnection.

b. The billing when the meter is not provided
or faulty shall be regulated as per the
relevant provisions of the ES&D Code 2000-
01.

c. The consumer shall also in the same manner,
pay to the supplier, electricity taxes and such

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other levies as may be leviable under any
enactment."


25. As apparent from the above, JKTIL is liable to pay for the
electricity supplied at the rates specified in the supplier’s tariff in the
power supply clause, irrespective of whether the installation is in
service or under disconnection. The tariff order dated 30.05.2019
sets out the applicable tariffs.

26. As noted above, the demand charges in turn are based on the
contracted demand. And the contracted demand is as agreed under
the agreements in question. Clause 3 of the agreements would be
triggered if JKTIL was prevented from receiving and using electrical
energy. A plain reading of the said clause indicates that it would be
applicable only if there was some impediment to JKTIL receiving
electrical energy owing to certain causes like war, mutiny, riot,
strikes or by reason of earthquake, hurricane, tempest or other such
events or if the suppliers was unable to supply power
force majeure
for those reasons. In the present case, there was no impediment for
JKTIL in receiving electrical energy. JKTIL had received electricity
and admittedly utilised energy in April 2020, although its
consumption was a fraction of its normal consumption. Thus, there
is no alteration of the contracted demand as contemplated under

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Clause 3 of the agreements. Further, JKTIL had not issued any
notice of such cause involving reduction of the contracted demand.

27. We may also refer to clause 16 of the agreements which
reads as under:
“16. Reduction of Contracted demand: During
the agreement period initial or extended, the
consumer is entitled to get his contracted demand
reduced by executing a fresh agreement. The
reduction will be given effect from the meter
reading date following the expiry of two months
from the date of registration of his application for
reduction of contracted demand along with fresh
agreement for reduced contracted demand duly
making payment of registration fees as prescribed
by the supplier from time to time.”


28. Under the agreements, JKTIL was entitled to reduce the
contracted demand by executing a fresh agreement. The same
would be given effect to from the meter reading date following the
expiry of two months from the date of registration of reduction of the
contracted demand along with fresh agreement. Clause 3 of the
agreements in question is an exception to clause 16. Thus,
notwithstanding the provisions of clause 16, of the contracted
demand could be altered provided due notice for such causes was
given, and the alteration sought was for the full billing month(s).

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29. In the absence of any specific notice seeking alteration of the
contracted demand and the extent of the contracted demand, it is
difficult to accept that JKTIL would be entitled to insist on alteration
of the contracted demand. JKTIL has placed a letter dated
29.08.2020 on record which refers to a letter dated 30.03.2020.
Although that letter is not placed on record, the letter dated
29.08.2020 makes it clear that JKTIL sought a waiver/relaxation of
payment of fixed charges and electricity charges. By its letter dated
29.08.2020, JKTIL had sought waiver of the complete electricity
charges, including fixed Demand Charges for the lockdown period –
24.03.2020 to 14.04.2020, which was later extended to 03.05.2020.
JKTIL had sent another letter dated 29.09.2020 seeking similar
relief. It claimed that because it was compelled to shut down
operations, it could not draw power for reasons beyond its control.
The said communication indicates that JKTIL also had sought relief
based on the orders passed by the Government of Karnataka
providing for relaxation in payment of electricity charges. These
letters did not seek alteration of the contracted demand under
Clause 3 of the agreements in question and neither of them can be
considered as a notice as contemplated under the said clause.

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30. The learned Single Judge had proceeded on the basis that
Clause 3 of the agreements in question provided for waiver of
Minimum Charges and the Demand Charges under the tariff order
are synonymous with the Minimum Charges as referred to under the
agreement. We may note that although the heading of Clause 3 of
the agreements is "Reduction of Minimum Charges", the clause
does not refer to Minimum Charges; it provides for alteration of “the
contracted demand” which obviously has to be read in conjunction
with clause 2 of the agreements. The said clause provides for the
obligation of the supplier to supply the contracted demand and
JKTIL to consume the same.


31. T here is no dispute that JKTIL is not an MSME, and the
Government of Karnataka has not granted any concession waiving
electricity charges for units that fall under the Non-MSME category.
The only concession available to industry falling under the Non-
MSME category was a relaxation of the period for payment of
electricity charges. Admittedly, that benefit has been accorded to
JKTIL.

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32. In view of the above, the appeal is allowed and the impugned
order is set aside.


Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE


Sd/-
(K.S. HEMALEKHA)
JUDGE


SD/AHB