Honourable Mrs Justice Nisha Banu and Mr Justice Jyothi Raman, rejected the appeal filed by Infosys Limited against the TANGEDCO demand of 14.67 crores, representing the outstanding amount payable for commercial activities within the company’s industrial premises

The division bench of the Madras High Court, comprising Honourable Mrs Justice Nisha Banu and Mr Justice Jyothi Raman, rejected the appeal filed by Infosys Limited against the TANGEDCO demand of 14.67 crores, representing the outstanding amount payable for commercial activities within the company’s industrial premises. TANGEDCO provided subsidised electricity rates under the industrial tariff to Infosys for its office at Mahindra World City (HT Sc. No. 447), located in Paranur village (Chengalpattu), to attract industries. However, the company also operated ITES (BPO) services until 2010 under the commercial tariff. Additionally, Infosys accommodated various restaurants, banks, and commercial establishments within the premises and permitted them to use the industrial connection. Upon discovering this, TANGEDCO directed the company to pay current consumption charges under the commercial tariff for these violations. The company used the electricity service connection for its ITES operations, which were categorised as commercial tariffs until 2010. Consequently, TANGEDCO issued demands under the commercial tariff for these deviations. A single judge initially ruled in favour of TANGEDCO and dismissed the writ petition. Challenging this order, writ appeals were filed. Infosys through Mr Vijaynarayanan Senior Advocate contested before the division bench, asserting that it has not operated the ITES business until 2010 and claimed that the Electricity Board’s demand was barred by limitation under section 56(2) of electricity act. Infosys also argued that since the commercial establishments inside the industrial complex were allowed by them solely for the welfare of workers, the Electricity Board cannot impose the commercial tariff.
Mr P. Wilson, senior advocate appearing for TANGEDCO, contended that Infosys Limited operated ITES services up to 2010, as documented. Moreover, activities such as food courts, gymnasiums, employee shopping outlets, banks, ATMs, and others operated by third parties within the industrial complex which were allowed by Infosys used industrial connections unlawfully. Since TNERC classified these activities within the industrial complex as commercial activities attracting the commercial tariff, no concessions or application of industrial tariffs could be granted. Drawing the court’s attention to section 56(2) of the Electricity Act, 2003, Mr Wilson explained that no sum due from a consumer under this section can be recovered after two years unless it has been continuously shown as recoverable as arrears for the period. He argued that the claim is not stale if continuously listed as recoverable. He demonstrated that TANGEDCO’s records and communications show the amount as outstanding, citing the proceedings of the Board Office Audit Branch (BOAB). Admittedly, Infosys has not paid the demanded amount; thus, monthly non-payment constitutes a continuing cause of action. He further noted that, due to evidence of evasion, TANGEDCO has rightly issued demand notices for the difference amount related to both violations, amounting to Rs. 14,67,17,663.
Infosys sought to quash the TANGEDCO demand for arrears of electricity tariffs under the commercial category for operating ITES services (BPO) until 2010 and for permitting other commercial activities by third parties within its premises using electricity obtained under the industrial tariff, claiming that these activities are part of the establishment meant for workers. The division bench of Madras High court, however, rejected these contentions and accepting TANGEDCO’s arguments, dismissed the writ appeal.