D.P. Mohapatra, J.
1. In these two writ petitions petitioners, M/s. Indian Metals and Ferro Alloys Limited, a Company incorporated under the Indian Companies Act, 1956 and one of its shareholders, challenge the orders of the State Government in the Irrigation and Power Department and the Orissa State Electricity Board (hereinafter referred to as the 'Board') imposing restrictions in supply of electric energy to their factories, refusing to permit the Company divert the energy allotted to one of its units to be used in other units and charging additional tariff for the alleged excess drawal of power by it.
2. The facts which are not in controversy in the case may be stated thus :
The petitioner-Company which manufactures ferrochrome has four different factories located in Koraput district. The units shall be hereinafter referred to as '11 KV. IMFAL', '33 KV IMFAL', 'IMCL' and '132 KV IMFAL'. The Company has entered into separate agreements with the Board for supply of electricity to the different units and the rate of tariff to be charged for such supply. All these units are classified by the Board as power intensive industries since they use electricity as a raw material. The unit of time for supply of electricity is the 'water year' which begins from 1st of July of a year and ends with 30th of June next year. The dispute in O. J. C. No. 1549 of 1985 relates to water year 1984-85 while that in O. J. C. No. 2496 of 1985 relates to water year 1985-86. Due to acute shortage of power in the State the State Government and the Board nave, been imposing restrictions in supply of electricity under the arrangement commonly referred to as 'power cut' since 1979. During the previous years the authorities were permitting the petitioner Company and other consumers owning/controlling more than one industrial unit to amalgamate the quantity of energy allotted for different units and use it in one or more of the units without exceeding the total allotment. This arrangement is referred to by the parties as 'clubbing'.
3. The petitioners allege that in view of the rationing imposed by the opposite parties, they have to suffer severe power cuts and the energy allotted is about 25 per cent of the quantity contracted for. With such meagre supply of power it is not possible to run any units efficiently and economically. Therefore, they sought permission from the authorities to club the power supply so that at least some of the units could be run successfully. The 132 KV IMFAL, an export oriented unit, needs a very large quantity of energy and if it is made to run with the low and irregular supply of power the furnace would get damaged. To avoid the situation the petitioner Company have been diverting the power meant for this unit to their other units, that is, 11 KV IMFAL and 33 KV IMFAL. As noticed earlier, this arrangement was continuing with the permission of the authorities during the year 1983-84 and even prior thereto. But suddenly in the midst of the water year 1984-85, in January, 1985, the petitioner-company was intimated by the Chairman of the Board that clubbing of power supplied to its different units is not permitted as per Govt. decision (Annexure-1) and each unit would be dealt with separately. As a consequence of this decision the bills for the energy consumed during the period commencing from July, 1984 were recast on the basis that the petitioner-company had overdrawn electricity in respect of its units 11 KV IMFAL, 33 KV IMFAL and IMCL (Annexure 2 series). The petitioners also challenge the reduced quota of power sanctioned to its different units under letter dated 22nd January, 1985 of the Irrigation and Rower Department for the water year 1984-85 (Annexure-3). It is pertinent to note here that in the annexure to the said letter three of the petitioners' units, viz. 11 KV IMFAL, 33 KV IMFAL and IMCL, Therubali, are together allotted 57,60 million Kwh of power while the quantity allotted to 132 KV IMFAL is 52.56 million Kwh.
4. It is the contention of the petitioners that refusal of the Company's request for clubbing is arbitrary, unreasonable and discriminatory. By granting this facility the supply and distribution of power by the Board is not affected in any manner since the total quantity of power allotted to the petitioner-company for its different units remains unaltered. The relaxation is in respect of the manner of user only and this enables the petitioner's industry to survive. The petitioners further contend that the decision has been taken without due application of mind inasmuch as the annexure to the letter under Annexure 3 clearly shows that clubbing has been permitted by the State Government in respect of 11 KV IMFAL, 33 KV IMFAL and IMCL and therefore in all fairness the Board and the State Govt. should have permitted diversion of power allotted for 132 KV IMFAL to the other three units. The petitioners also contend that the power to allow or disallow clubbing is vested solely in the Board and the State Govt. has no authority to intervene in the matter. Similarly the State Govt. has no authority to prescribe the rate of additional tariff to be charged in case the quota allotted is exceeded. In the present case the Board has not taken any independent decision to disallow the facility of clubbing to the petitioner-company. It appears that the Board has simply conveyed the decision of the State Govt. in the matter. According to the petitioners, in any view of the case, the decision to disallow clubbing cannot be given retrospective effect and recasting of the bills under Annexure-2 series on that basis is wholly untenable.
On the aforesaid averments the petitioners seek quashing of the orders communicated under annexures 1 and 3 and the bills under Annexure 2 series. They also pray for issue of writ directing the opposite parties to allow clubbing of their allotted quantum of energy to the domestic as well as export furnace during the year 1984-85 and in future, during the subsistence of power rationing.
5. The stand taken by the State Govt. and the Board in their counter affidavits is that the impugned decisions are within the competence of the State Govt. in view of the power vested in it under Section 22B of the Indian Electricity Act, 1910. The power to provide for additional tariff in case of exceeding the quota under power of rationing is also within the competence of the State Govt. It is the further case of the opposite parties that since the water year is taken as the unit, at any time during the said period, the decision relating to the extent of reduction of supply can be taken and the Company has to abide by such decision. The reason given in the counter-affidavits for disallowing clubbing of the power allotted to 132 KV IMFAL with the other units is that the former is an export-oriented industry and as such the State Govt. decided that the said unit should be dealt with separately regarding allocation of power.
6. The grounds of challenge indicated in the foregoing paragraphs have been reiterated before us by the learned counsel for the petitioners at the hearing of the case. The learned Addl. Govt. Advocate appearing for the Board, on the other hand, has supported the impugned decisions as within the powers of the authorities vested under Section 22B of the Indian Electricity Act. The learned Advocate-General raised a further contention that O. J. C. No. 1549 of 1985 has been rendered infructuous since water year 1984-85 to which the dispute in the case pertains is over.
7. Before proceeding to consider the merits of the contentions raised on behalf of the parties, it would be helpful to quote the relevant provisions of the two statutes, that is, the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948.
The Indian Electricity Act, 1910.
'Section 22B. Power to control the distribution and consumption of energy.-- (1) If the State Government is of opinion that it is necessary or expedient so to do, for maintaining the supply and securing the equitable distribution I of energy it may by order provide for regulating the supply, distribution, consumption or use thereof.
(2) Without prejudice to the generality of the powers conferred by Sub-section (1) an order made there under may direct the licensee not to comply, except with the permission of the State Government, with --
(i) The provisions of any contract, agreement or requisition whether made before or after the commencement of the Indian Electricity (Amendment) Act, 1959 (32 of 1959) for the supply (other than the resumption of a supply) or an increase in the supply of any energy to any person, or
(ii) any requisition for the resumption of supply of energy to a consumer after a period of six months, from the date of its discontinuance, or
(iii) any requisition for the resumption of supply of energy made within six months of the discontinuance, where the requisitioning consumer was not himself the consumer of the supply at the time of its discontinuance.
Section 23(2). No consumer shall, except with the consent in writing of the licensee, use energy supplied to him under one method of charging in a manner for which a higher method of charging is in force'.
The Electricity (Supply) Act, 1948.
'Section 78A. Directions by the State Government.-- (1) In the discharge of its functions, the Board shall be guided by such directions on questions of policy as may be given to it by the State Government.
(2) If any dispute arises between the Board and the State Government as to whether a question is or is not a question of policy, it shall be referred to the authority whose decision thereon shall be final.'
8. The questions that arise for examination in these cases are :
(a) If the State Government has power to pass the impugned orders, that is, the order imposing rationing of power and that refusing permission for clubbing?
(b) If the impugned orders could be given retrospective effect?
(c) If additional tariff could be demanded : for exceeding the quota sanctioned to each I industrial unit of the petitioner-company?
(d) Assuming that the answer to question (a) is in the affirmative, has the State Government exercised the power properly on due consideration of relevant matters?
9. Before proceeding to consider the aforementioned points, let me dispose of the preliminary objection raised by the learned Advocate-General in O. J. C. No. 1549 of 1985. No doubt water year 1984-85 is over and the reduction in supply of power has been suffered by the petitioners. As such no direction can be issued to the opposite parties to restore the supply of energy according to the contract. But that is not the end of the tether. The dispute relating to charging additional tariff for the alleged overdrawal of power still remains and for determining that question the justification for refusing the petitioners permission for clubbing of energy has to be considered. Thus I find no merit in the objection raised by the learned Advocate-General that O. J. C. No. 1549 of 1985 has been rendered infructuous.
Section 22B of the Indian Electricity Act vests power in the State Govt. to regulate the supply, distribution, consumption or use of energy by order if it is of the opinion that it is necessary or expedient so to do, for maintaining the supply and seeming equitable distribution of energy. The words 'supply, distribution, consumption or use', to my mind, take within their sweep the entire operation after the stage of generation of power till its use by the consumer. There is no controversy that imposition of rationing of electricity conies squarely within the scope of these words. Therefore, the power '1 the State Govt. to pass orders imposing power cut or power rationing under Section 22B is beyond any pale of doubt.
On the question of grant or refusal of permission for clubbing, the contention of the petitioners is that the power to deal with this matter is exclusively vested in the Board under Section 49 of the Electricity (Supply) Act and does not vest in the State Govt. Similar is the argument on the question of imposition of additional tariff in case of violation of the order imposing power rationing. It is contended on behalf of the opposite parties that the State Govt. is vested with ample powers under Section 22B of the Indian Electricity Act to deal with both these aspects. On careful consideration I do not find any merit in the contention of the learned counsel for the petitioners. The provisions of Section 22B are in the nature of emergency provisions intended, to enable the State to check the total breakdown of supplies when the demand is far in excess of supply. The question whether the consumer will be permitted to divert power allotted to one of its units for use in another unit is squarely referable to use of energy which comes within the purview of Section 22B, There can be, therefore, little doubt that the State Govt. in exercise of its power under Section 22B could grant or refuse the request of the petitioners for clubbing.
Taking up the question of imposition of additional tariff, the power can be exercised by the State as an ancillary power to that vested under the provisions of Section 22B. As noticed earlier, additional tariff is demanded in case a consumer draws energy in excess of the quantity allotted to him under the order passed under Section 22B. Thus the provision is meant to provide for the sanction behind the order of the State Govt. In other words, it is meant to be a measure to ensure proper enforcement of the order under Section 22B. Considering the very nature of the function vested in the State Govt. under Section 22B(1) and the intent and purpose to be achieved, it would be reasonable to infer that the order providing for electric energy to maintain the supply and equitable distribution of energy must be backed by rigour of sanction. The observations of the Supreme Court in the case of Adoni Cotton Mills Ltd. v. Andhra Pradesh State Electricity Board AIR 1976 SC 2414 throws considerable light on this question. Therein the Court observed that the Andhra Pradesh State Electricity Board has power under the Electricity (Supply) Act, 1948 to regulate supply and also to fix higher rates for consumption on excess of quota and further that there is no conflict between Section 22B of the Electricity Act 1910 and Section 49 of the 1948 Act with regard to regulating or restricting higher consumption. As such, no exception can be taken to the imposition of special tariff in case the allotted quota of energy is exceeded.
10. Now coming to the question of retrospective character of the order under Section 22B, it has to be held that the contentions raised by the petitioners have ample force. As noticed earlier, the petitioner-Company was entitled to draw certain quantity of power for its different units under the contracts. But for the rationing imposed by order under Section 22B, it would have been open to the company to draw the full quantity of power during the water year. The order under Section 22B imposes a cut in its use of energy. The desirability of notifying such cut before commencement of the water year cannot be over-emphasised. The company running industrial units using power as their raw material should know its position relating to supply of energy at the beginning of the year so that it may plan out its production programme for the different units. The position in the present case by the date of the impugned order was that though rationing of power had been imposed during the previous years, the Company was being permitted to club the quota in respect of all its units and use it in any one or more units according to its choice. This permission was also expressly granted for the month of July, 1984. Thereafter suddenly in January, 1985 the Company was intimated that permission for clubbing would not be granted for the water year 1984-85. Even the quota meant for the year was announced in January, 1985 by which time half of the year had passed. This, on the face of it, would land any consumer in a difficult position making it impossible to avoid payment of additional tariff meant to be imposed for exceeding the quota, even if it sincerely intended to avoid incurring the liability. In reply to this contention the opposite parties have taken the stand that the position relating to power generation can be known only towards the end of September since the flow of water in the rivers in the State is known by then. Before getting this data it is not possible to determine the extent to which rationing will be imposed. If this is the real position then it was open to the authorities to fix the unit of time accordingly instead of taking the water year as the unit which on their own showing is not suitable. Further Section 22B of the Indian Electricity Act, does not expressly or impliedly vest any power in the State Govt. to impose regulation regarding supply, distribution, consumption or use of electric energy with retrospective effect.
On the aforesaid analysis it has to be held that the State Govt. and the Board have no power under the Act to impose restriction on use of electric energy with retrospective effect and therefore the demands under the bills (Annexure 2 series) calculated on this basis have to be set aside. In this regard the decision of the Supreme Court in AIR 1972 SC 2427 Hukum Chand v. Union of India may be noticed. Therein the Supreme Court considering the provisions of Section 40 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 held that in the absence of any power under the statutes, the Central Government acted in excess of its power in so far as it gave retrospective effect to the Explanation to rule 49. The Court observed that unlike Sovereign Legislature which has power to enact laws with retrospective operation authority vested with the power of making subordinate legislation has to act within the limits of its power and cannot transgress the same.
11. The question that remains to be considered is even if the State Govt. had the power to deal with the question whether to grant or to refuse the request of the petitioner-Company for clubbing, has it exercised such power being conscious of the provisions of the statute. The answer, on consideration of the matter, has to be in the negative. It is apparent from the language of the provisions of Section 22B(1) that before passing any order under the said section, the State Govt. must form an opinion that it is necessary or expedient to regulate the supply, distribution, consumption or use of energy for maintaining the supply and securing the equitable distribution of the energy. Neither has it been stated in the counter-affidavits filed by the opposite parties nor has any material been produced at the hearing to show that indeed there exists an order of the State Govt. refusing the request of the petitioners for clubbing. In the absence of any such order, the question of examining whether the considerations prescribed under the section for forming the opinion by the State Govt. were kept in view does not arise. The conclusion is thus inescapable that the State Government has not passed any order in exercise of its power under Section 22B refusing permission to the petitioner-Company to club the quota of energy sanctioned to its various units. The only reason indicated in the counter-affidavits for refusing permission to divert the supply meant for 132 KV IMFAL to other units is that the former being an export-oriented unit has to be separately dealt with. This plea is without any substance. It is not the case of the opposite parties and there is also no material to show that export-oriented units are separately dealt with while allotting power under the rationing scheme. The only classification that appears from the records is of power intensive industries and others. This is also apparent from the annexure to the order under Section 22B which classifies all the four, units of the petitioner-Company under the heading power intensive units'. The only privilege available to an export-oriented unit as indicated in the said order, is that it would be entitled to additional power if it satisfied the conditions laid down therein. In the present case there is no claim for additional power by the petitioner-Company under the aforesaid order.
12. On ultimate analysis, it has to be held that the State Govt. had the power under Section 22B of the Indian Electricity Act to pass orders imposing rationing of energy and to provide for levy of additional tariff in case the quota allotted under the order is exceeded and also to deal with the request for clubbing by the petitioner-Company. But in the present case, the State Government has not exercised its power under Section 22B consciously and properly in refusing the request of the petitioner-Company for clubbing. The State Government and the Board have no power to impose restriction in supply of energy under Section 22B of the Indian Electricity Act with retrospective effect and the order under Section 22B has to be given effect prospectively.
Accordingly the writ petitions succeed in part. The demand for additional tariff made in the bills under Annexure-2 series in O. J. C. No, 1549 of 1985 is quashed. The petitioner-company will be liable to pay tariff at the contractual rate for the supply made during the water year 1984-85. For the water year 1985-86, which is the subject-matter of O. J. C. No. 2496 of 1985, the petitioner-company shall enjoy the benefit of clubbing till the State Government in exercise of its power under Section 22B of the Indian Electricity Act passes appropriate order rejecting its request. Both parties shall bear their respective costs.
Agarwal, C.J.
13. I have gone through the judgment prepared by my learned brother, and I agree with the views expressed by him. I would, however, like to add a few observations of my own.
14. Section 22B of the Indian Electricity Act, 1910 has been quoted in paragraph 7 of the judgment Sub-section (1) of the said section lays down the conditions and circumstances in which the State Government may make an order for regulating the 'supply, distribution, consumption or use' of electrical energy.
15. The Board in its counter-affidavit has not made out any case of independent exercise of authority or right under the agreement in the matter of regulating the clubbing. Its simple stand is that it issued the order in pursuance of the Government Notification contained in Annexure-1.
16. It was vehemently contended by Mr. B.K. Mohanty, learned counsel appearing for the petitioner, that under the provisions of the said section, the State Government has no authority to deal with individual consumers and accordingly the restriction in the matter of clubbing of electrical energy supplied to the different units of the petitioner is beyond its competence. Such restriction could be done, if at all, by the Electricity Board alone as it is a matter relating to the agreement between the Board and the petitioner for supply of energy. The submission of the learned counsel is that there is nexus in the matter of clubbing and the supply, distribution, consumption or use of electrical energy, as by clubbing the same amount of energy was used by the petitioner only by changing its pattern.
Mr. Mohanty further submitted that this power to regulate the consumption or supply is, if at all, with the Electricity Board as it is within the ambit of the contract between the parties for supply of the energy. Proceeding further, he submitted that since the petitioner had already been allotted different amounts of energy in a ration much smaller than the required energy, there should be no objection for clubbing the said energy to maintain at effective running of at least some of the unit for a reasonable time instead of utilising the said small amount of energy allotted to each of the units separately which would result it only in loss to the petitioner and also adversely affect the maintenance and working of the units.
The argument of the learned counsel' appeared at one stage to be attractive, but examining it more closely, and as was also rightly submitted by Mr. Rath, learned counsel appearing for the Board, it appears that the power to regulate the 'use' of the energy supplied by a licensee to a consumer is wide enough to clothe the State Government with the powers to issue appropriate directions even in matters of regulating the user of the electrical energy keeping in view the general principles mentioned in Section 22B, such as, prohibiting any clubbing of the supply of power allotted by the licensee to the different units of a consumer and the like, because according to him, this is squarely a matter with regard to maintaining the supply and securing its equitable distribution. After having given my anxious consideration to this submission of Mr. Rath, I find force in the same.
17. The expression 'use' in Section 22B of the Act is wide enough to authorise the State Government to issue any appropriate direction regarding the user or consumption of the electrical energy made available to any consumer, and since in the Annexures to the impugned Notification the State Government simply indicated the mode of user of the allotment of the electrical energy, the said direction was within the ambit and authority of the above provision.
18. It is thus obvious that the Notification contained in Annexure 1 issued under Section 22B(1) of the Act is fully protected by the provision.