The Infosys building at Mahindra World City in Chennai. Photo: Wikimedia Commons
Madras HC upholds ₹6.8 Cr electricity dues on Infosys’ Chennai campus
HC rules Infosys's amenities like food courts, ATMs on campus are 'mixed-use activities', justifying higher commercial electricity tariff over industrial rates
In a major setback to IT giant Infosys Limited, the Madras High Court on Thursday (September 25) dismissed the company’s appeal challenging a demand for nearly ₹6.8 crore in electricity dues, ruling that the company's campus facilities in Tamil Nadu's Mahindra World City qualify for a higher commercial tariff rather than industrial rates.
The division bench, comprising Justices J Nisha Banu and M Jothiraman, upheld a single judge's order, emphasising that the "mixed-use activities" on the premises warranted the escalated billing.
Long-standing dispute
The 51-page judgment, delivered on September 24, 2025, stems from a long-running dispute between Infosys and the Tamil Nadu Generation and Distribution Corporation (TANGEDCO).
Infosys, which secured a high-tension (HT) electricity connection in 2005, under the industrial HT Tariff-IA for its software development unit, argued that amenities like food courts, shopping outlets, ATMs, and a gymnasium—provided free to employees—do not constitute as commercial operations.
However, an audit by the Accountant General (AG) in 2009 flagged irregularities in billing for the period April 2007 to March 2008, leading to an objection of ₹4.50 crore. This snowballed into a 2020 demand notice from TANGEDCO for ₹6.72 crore in shortfall payments for April 2009 to November 2011, citing "wrong application of tariff".
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The power utility also mandated switching future bills to the costlier HT-TF III commercial tariff until the activities could be segregated.
Infosys contests move
Infosys contested the move, producing certificates from the development commissioner of MEPZ Special Economic Zone dated July 6, 2010, and SOFTEX forms to prove it engaged solely in software development, not IT-enabled services (ITES) like BPO operations.
The company claimed the outlets consume less than 4 per cent of total energy and that no rents or charges are collected, insisting the demand—issued eight years after the initial audit—was barred by the two-year limitation under Section 56(2) of the Electricity Act, 2003.
TANGEDCO countered that the 2012 demand (reiterated in 2020) created a "continuing cause of action," with the arrears continuously reflected in their records. The utility argued that extending facilities to employees or leasing spaces—even without direct charges—triggers separate metering under commercial rates if they resemble public services.
What 2024 order said
The single judge, in an order dated May 23, 2024, sided with TANGEDCO, noting that Infosys's dual software and ancillary service activities within the same premises justified the higher tariff as per standard norms.
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"It is appropriate to adopt a higher tariff... in the case of service engaged in two types of activities within the same premises," the judge observed, dismissing the 2021 writ petition.
Infosys has not yet commented on plans to appeal to the Supreme Court, but sources indicated that the company may review compliance options to segregate metering for non-core areas.
