Appellate Tribunal for Electricity (ATE): A division bench of Ramesh Ranganathan (Chairperson) and Sandesh Kumar Sharma (Technical Member) set aside the order passed by Secretary, Bureau of Energy Efficiency (‘Bureau’) and held that since the first test report was deficient, inconsistent with the set standards and conducted without proper notice, it did not stand legal scrutiny, thus, directed to treat the second test report as the first test report with certain directions. Depending upon the result of further investigation, the Tribunal granted the Bureau the permission to act against Whirlpool of India Limited (‘appellant’) in accordance with law.
In this case at hand, the appeal was filed by appellant under Section 31(1) of the Energy Conservation Act, 2001 against the order passed by Bureau. The Director General of the Bureau took suo- motu verification test on a sample refrigerator of the appellant and found it to be non-compliant with standards set by it.
Consequently, a second test was conducted, the result of which confirmed that the samples had failed to meet the requisite parameters and standards.
In exercise of the powers, conferred under Regulation 11 (5) (a) of the Bureau of Energy Efficiency (Particular and Manner of their Display on Labels of household Direct Cool Refrigerator) Regulations, 2016 (‘Regulations’), the Bureau issued directives to the appellant to correct the labeling on the product or remove the defects and deficiencies found during the testing. It further directed to withdraw all stocks from the market, and change the information displayed in advertising material. The Bureau further stated that if the appellant failed to comply with the above stated directions, it would proceed to act in terms of provisions contained under Regulations.
- Whether the manner in which the sample refrigerator was tested was in accordance with law?
Whether the appellant was intimated of the second test prior to its commencement?
While dealing with the first issue persisting , it referred to Clause 6.1 (v) of Guidelines for permitting standard and labelling program of Bureau Energy Efficiency (‘Guidelines’) and stated that since the statutory regulations do not place any restrictions on the second test to be conducted in another empaneled laboratory, ifthe Bureau was unable to conduct the test in the same laboratory, therefore, the Bureau cannot be faulted for having conducted the second test in another independent laboratory. However, the Bureau ought to have furnished reasons before the Tribunal to show why it was not possible for it, to test the second sample in the same laboratory.
The Tribunal stated that in terms of Regulation 11(4), it is only if the sample fails the first test, the Bureau is entitled to conduct the second test with twice the number of samples as the first.
The Tribunal after examining both the first and the second test report regarding volume measurements, stated that the figures under energy consumption parameters pertaining to Bureau Energy Efficiency (‘BEE’) star label value and BEE specification value were both incorrect as being less than 215 units.
The Tribunal stated that the action of the testing laboratory which conducted the first test was spurious in leaving the measurement column blank. The Tribunal further went on to note inconsistency in relation to the temperature of ‘fresh food compartment’ and ‘freezer compartment’ as mentioned in the first test report and the submissions made on behalf of the bureau.
Keeping such observations in mind, the Tribunal stated that the first test report suffers from several errors and inconsistencies, thus, it would be impossible for the respondent to conduct second round of testing based on deficient first report. Moreover, the respondent could not explain their denial to obtain clarification from Central Power research Institute, Bengaluru which conducted the first test regarding the errors therein, as also for leaving the relevant column in the table blank.
The Tribunal noted the casual manner in which the first test report was prepared, and failure on the part of the respondent to even fault the said report and call for the required information regarding the actual measurement value of energy consumption of the sample product.
The Tribunal held that since the first test report cannot be considered a valid report in the eye of law, the second test report (even if it is presumed to be valid) cannot form the basis for action being taken against the appellant, since it is only if the sample product is found deficient in the first test, do the statutory regulations permit a second test to be conducted.
While dealing with the second issue before the Tribunal for consideration, it noted that the appellant was neither furnished with a copy of the first test report nor intimated, well in advance, regarding the respondent’s intention to conduct the second test. The speed post containing the intimation letter was received by the appellant two days after the second test had commenced at Vadodara and emails sent by the respondent to the appellant did not reach them either. Due to the prevailing lockdown on account of Covid-19, the appellant could not have travelled from Pune to Vadodara to be present during the second test either.
Therefore, while setting aside the order passed by Bureau the Tribunal held that the appellant have been denied their rights under Regulation 11, both on the grounds of the first test report being deficient, and for not receiving advance intimation of the second test.
The Tribunal, however, did not ignore the fact that the second test report did not measure up to the energy consumption specifications stipulated by the Bureau which has been established, under the Energy Conservation Act, 2001, with the object of promoting energy efficiency and reducing energy consumption. Therefore, held that since the first test report was deficient, it did not stand legal scrutiny and was directed to treat the second test report as the first test report with certain directions that the appellant must deposit funds with BEE for the procurement of two new samples of the same refrigerator models, and that a new test must be conducted in the presence of the appellant with proper notice and in accordance with law. After the second test is conducted, and depending on its result, the Tribunal granted Bureau the permission to take action, if need be, against the appellant in accordance with law.
[Whirlpool of India Limited v. Bureau of Energy Efficiency, 2022 SCC OnLine APTEL 125, decided on 22-12-2022]
Advocates who appeared in this case :
For the Appellants- Advocate Anannya Ghosh, Advocate Brianhenry Moses and Advocate Dushyant Manocha
For the Respondents: Advocate Aamir Zafar Khan, Advocate Sadiqua Fatma, Advocate Gagan Anand, Advocate Ishan Khanna, Advocate Ankit Konwar, Advocate Jitendra Kumar and Advocate Grusha Mehta