KEPALA BATAS BIHUN SDN BHD v TENAGA NASIONAL BHD [2016] 2 MLJ 181

KEPALA BATAS BIHUN SDN BHD v TENAGA NASIONAL BHD [2016] 2 MLJ 181

Court of Appeal (Putrajaya)

Claim For Loss of Revenue

Facts 1. The Appellant, a company operating a noodle processing business, received electricity supply from the Respondent.

2. On 12 May 2011, SP1, the Respondent’s officer conducted an inspection of the Appellant’s premise and revealed that the meter board did not record accurate electricity usage.  Specifically, the red phase displayed zero reading on the meter board.

3.  About a week later, on 17 May 2011, the Respondent sent the second team of officers led by SP2 for a follow-up inspection.  SP2 recorded a similar reading.

4. SP2 identified that the wiring for the “arus pendua” for the red phase was disconnected, causing the main current on the meter board to show a zero reading.

5.  In accordance with Section 38(3) of the Electricity Supply Act 1990 (Act 447), the Respondent filed a claim for the loss of revenue for the sum of RM428,327.24.   In its defence, the Appellant denied any meter-tempering on the meter board.

6.  At the end of the trial, the judicial commissioner (the JC) found meter tampering, resulting in the discrepancy in meter reading involving the red phase.

Issue 1.  Whether the Respondent failed to prove that the Appellant had tampered the meter with the wiring on the floor of the premises or meter installation?

2.  Whether the claim for loss of revenue by the Respondent for the period between 14 October 2008 to 12 May 2011 was made with basis?

Ratios 1.  Whether the Respondent failed to prove that the Appellant had tampered the meter with the wiring on the floor of the premises or meter installation?

(a) Upon the second investigation by the officers on 17 May 2011, they discovered that there was tampering of the meter upon the breaking up of the concrete cement conducted to inspect the discrepancy of the red phase meter reading.  The red, blue and yellow phases were located between the current transformer (CT) to the TNB’s terminal underground.

(b)  The metal conduit had the markings of being broken or being cut in respect of the red phase.  The same broken markings were also found for the yellow and blue phases, which had been restored using black tape.  The photographs of the description of tampering were produced to evidence the explanation of tampering by the representative of the officers as P6(1) to (36).

(c) In the present appeal, the Court agreed with the finding facts by the JC on the decision that there was tampering of the meter by the Appellant.

(d)  The Court of Appeal held that there was no mistake in the trial judge’s finding, therefore the Court held that there was no merit for an intervention by the Appellate Court.

2. Whether the claim for loss of revenue by the Respondent for the period between 14 October 2008 to 12 May 2011 was made with basis?

(a)  Section 38 (3) and (4) of the Electricity Supply Act 1990 (Act 447) highlights the right of electricity provided to demand compensation from a consumer for revenue losses and expenses incurred due to offences related to electricity usage.  It provides that –

“Disconnection of supply of electricity

(3)  The licensee may require the consumer to pay him for the loss of revenue due to the offence committed under subsections 37(1), (3) and (14) and any reasonable expenses directly incurred by the licensee under this section including expenses incurred in respect of reconnection of electricity in the manner as have been directed by the Commission:

Provided that and subject to subsection (4), if the licensee does not proceed with a claim for such loss of revenue and expenses in court, the licensee may only claim against the consumer for the said loss of revenue and expenses for a period not exceeding six months retrospectively from the date the offence was discovered under subsection (1).

(4)   A written statement by an employee of the licensee duly certified by the licensee or any person authorized by the licensee specifying—

 (a) the amount of loss of revenue or the reasonable expenses incurred by the licensee;

(aa) the manner of calculation of the loss of revenue and items of expenses; and

 (b) the person liable for the payment thereof,

shall be prima facie evidence of the payment that has to be made by the consumer under subsection (3) and such written statement shall be notified to the consumer within fourteen working days or any period as extended with the written approval of the Commission after the disconnection.”

(b) The Appellant contended that the Respondent was not entitled to claim losses or back-biling from 14 October 2008 to 12 May 2011 because there was no evidence to show that there was meter tampering prior to 12 May 2011.

(c) In claiming for back-billing chargers, the officers’ representative, SP3 testified that the average usage was computed based on a stable usage period before the sudden surge detected in October 2008.  As such, there was no further increase in the usage for the red phase.

(d) SP3 explained that he had calculated the average use four (4) months prior to the sudden drop date of 14 August 2008.  The learned JC had accepted the evidence of SP3 and the explanation of back-billing as a prima facie proof under Section 38 (4) of Act 447.

(e) The Court referred to the Court of Appeal case of Ichi-Ban Plastic (M) Sdn Bhd v Tenaga Nasional Bhd [2014] 6 MLJ 461 and Sumbang Projeks Sdn Bhd v Tenaga Nasional Bhd [2014] 4 CLJ 323 which both cases uphold the principle of law that the prima facie proof under Section 38 (4) of Act 447 is subjected to challenge.

(f) In both cases aforementioned, the Court of Appeal had held that; there must be clear explanation on how a back-billing is calculated.  Therefore, it cannot be based on speculation or done in an arbitrary manner.

(g) In this particular instance, the Court had agreed with the learned trial judge that the calculation had been adequately and reasonably clarified and acknowledged by learned JC.

(h) The two cases cited had also established that to rebut such presumption, the Appellant would have to adduce acceptable evidence to contradict the prima facie evidence relied upon by the Respondent.

Decision The Court of Appeal dismissed the appeal with cost of RM 20,000.00.
Key Take Away

1. Electricity providers rely on revenue from the sale of electricity to cover operational costs, infrastructure maintenance, and investments in future energy generation.

2. As such, when electricity is used but not properly accounted for or billed, it will result in revenue losses which can affect the provider’s financial stability.

3. To succeed in a claim for loss of revenue under Section 38 of Act 447, there is no legal requirement for there to be prosecution and conviction first.

4. Further to that, the computation of loss of revenue under the same provision i.e. Section 38 of Act 447 shall be properly and reasonably explained which shall also be based on the facts of every case.

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