Madras High Court Dismisses Infosys's Plea Challenging ₹6.7 Crore Demand By TANGEDCO

The Madras High Court recently rejected a petition filed by IT major Infosys challenging an order of TANGEDCO demanding around 6.7 crores as Shortfall Amount/Adjustment charges. Justice GK Ilanthiraiyan held that there was no infirmity or illegality in the proceedings and that the petition was devoid of any merits. The court noted that the demand made by TANGEDCO was not barred by limitation as per Section 56(2) of the Electricity Act."This Court finds no infirmity or illegality in the proceeding issued by the respondent and the writ petition is devoid of merits and liable to be dismissed. Accordingly, the Writ Petition stands dismissed," the court ordered. Infosys had approached the court after TANGEDCO raised a demand of Rs. 6,76,09,540.12 as Shortfall Amount/Adjustment charges. Infosys had submitted that it had a software facility in Chengalpattu where it was providing facilities like food courts, gymnasiums, shopping outlets, banking facilities, etc as welfare services to its 16,000 employees working out of its campus. Infosys claimed that it had leased out its premises to branded service providers and was not even charging for water and electricity. It was contended that there was no commercial intent. Thus, claiming that it was not carrying out any Information Technology Enabled Service, Infosys claimed that it could not be classified under commercial tariff. Infosys claimed that the tariff was fixed under HR tariff I-Industry since no commercial activity was being done. Infosys also claimed that it was only engaged in software development activity and thus industrial tariff was correctly applied. For this, Infosys relied on the certificate of the Development Commissioner, MEPZ, and SOFTEX returns. Further, it was also contended that TANGEDCO's claim was barred by limitation and was illegal and barred by law and facts. On the other hand, TANGEDCO claimed that Section 56 of the Electricity Act had two limbs where the first one was to recover the charge of the electricity bill by filing suit and the other one was to disconnect the electricity supply till payment of electricity charges. TANGEDCO submitted that though Infosys claimed to provide different welfare activities, there was no segregation or separate connection and it was not billed separately. Further, it was submitted that as per the Tamil Nadu Electricity Regulatory Commission 2017, the supply used for creating facilities should be incidental to the main purpose of the establishment of the consumer such as facilities extended to their employee/students/patients/ residents as the case may be, the premises of the consumer, shall be considered to be bonafide purpose, irrespective of whether there are outsourced to a third party. The court noted that while Infosys might not have been charging for electricity and water, it would have collected license fees from the service providers. The court also noted that the service providers were running their business with profit and not on a subsidized rate to the employees of the petitioner. The court noted that as per the certificate issued by MEPZ, Infosys was engaged in both software development and Information Technology Enabled Service within the same premises and it was appropriate to adopt a higher tariff. Thus, the court found no infirmity in the order of TANGEDCO and dismissed the petition. Counsel for Petitioner: Mr.Jose John For M/s.King & Partridge Counsel for Respondent: Mr.P.Wilson, Senior Counsel For Mr.L.Jaivenkatesh, Standing Counsel Citation: 2024 LiveLaw (Mad) 212 Case Title: Infosys Limited v The Superintending Engineer, TANGEDCO Case No: W.P.No.1839 of 2021Click here to read/download the judgment

Madras High Court Dismisses Infosys's Plea Challenging ₹6.7 Crore Demand By TANGEDCO

Upasana Sajeev

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