21 WP No.8579.2013 -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 2026:BHC-AUG:38464 21 WP No.8579.2013 -2- 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. 21 WP No.8579.2013 -3- 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 21 WP No.8579.2013 -4- 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 21 WP No.8579.2013 -5- 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 21 WP No.8579.2013 -6- 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 21 WP No.8579.2013 -7- 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 21 WP No.8579.2013 -8- 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 21 WP No.8579.2013 -9- 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