Judgment:
B.P. Das, J.
1. M/s. Tata Iron & Steel Company Ltd. and one of its principal officers, have filed this writ petition under Articles 226 and 227 of the Constitution of India challenging the order dated 22.3.2005 passed by O.P. No. 3-the Orissa Electricity Regulatory Commission ('OERC1 in short) in Case No. 141 of 2004, vide Annexure-4, fixing the retail supply tariff of O.P. No. 2-North Eastern Electricity Supply Company Ltd. ('NESCO' in short) for the financial year 2005-06 to the extent it does not extend the benefit of 25% discount on the energy charges up to 50% load factor to the petitioner's Ferro Alloys Plant at Joda and praying for a direction to OERC to grant similar tariff to the said Plant at Joda, as has been granted to other Ferro Alloys Industries in the State.
2. The brief facts leading to this writ petition are that petitioner No. 1 -M/s. Tata Iron & Steel Company Ltd. (hereinafter described as 'petitioner') is a manufacturer of Iron and Steel and it is having a Ferro Alloys Plant at Joda in the district of Keonjhar. In the year 1991, the petitioner also acquired a Ferro Alloys plant from the State Government at Bamanipal. According to the petitioners, power constitutes almost 50% of the raw-materials of a Ferro Alloys Industry for which uninterrupted supply of power at competitive rate is essentially required for sustenance of such industry. The Ferro Alloys Plant of the petitioner at Joda, which was set up in the year 1958 and is one of the oldest Ferro Alloys producing units in the State, is an export-oriented unit and competes in the international market with manufacturers of similar product from different countries in the world. Since its inception, the Joda Ferro Alloys unit was receiving power supply from the Orissa State Electricity Board (OSEB) under various agreements entered into between them from time to time for supply of power. The last of such agreements was entered into on March 16, 1992 between the OSEB and the petitioner for supply of 24000 KVA of uninterrupted power on the terms and conditions as stipulated therein. After constitution of Grid Corporation of Orissa Ltd. (GRIDCO) on the introduction of reforms in power sector as per the Orissa Electricity Reforms Act, 1995, the assets, liabilities, functions and powers of OSEB were vested with GRIDCO, which was also granted provisional licence by the State Government w.e.f. 1.4.1996 to engage itself in the State in the business of transmission or supply of electricity on certain specified terms and conditions. The GRIDCO, which was carrying on the business of distribution, of electricity in the State of Orissa and was holding Transmission and Bulk Supply Licence for carrying on the business of transmission and bulk supply of electricity in the State of Orissa, restructured itself by incorporating four wholly owned subsidiary Companies to take over the business of supply of electricity in different zones in the State while retaining the Transmission and Bulk Supply Licence with it. One of such subsidiary Companies is NESCO, i.e., O'.P. No. 2.
With effect from 1.4.1999, the NESCO was admittedly appointed by the OERC as a Licensee for distribution of power in the districts of Mayurbhanj, Keonjhar, Bhadrak, Balasore and a major part of Jajpur district. On. 7.7.2000, the Petitioner executed an agreement with NESCO being the Licensee for supply of 17,500 KVA of uninterrupted power and subsequently the contract demand was enhanced to 19,500 KVA, In March, 2003 NESCO restricted power supply to the petitioner's Joda unit due to failure of the system in its 11 KV Sub-station for which the petitioner's unit could not draw uninterrupted power supply and could not operate its furnaces at desired levels. The petitioner requested NESCO to supply uninterrupted power and to upgrade its 11 KV sub-station but NESCO expressed its inability to upgrade and maintain its 11 KV Grid Sub-station. The petitioner then upgraded its supply system to 132 KV by making huge investment and installed a 132 KV Grid Sub-station within its factory premises by investing a huge sum to facilitate drawal of uninterrupted power. Thereafter the petitioner requested NESCO to supply power to its Ferro Alloys Plant at Joda under the special agreement as was being done in the case of other Ferro Alloys producing industries in the State, which are the consumers under NESCO. NESCO turned down petitioner's request for supply of power under special agreement. Against that, the petitioner filed a writ application being W.P.(C) No. 126 of 2004 before this Court which is pending for adjudication.
While the matter stood thus, on 25.11.2004, the NESCO submitted an application before the OERC under Section 62 of the Electricity Act, 2003 in respect of its Revenue Requirement and Tariff for Retail Supply of power in its zone for the financial year 2005-06 (Annexure-1), which was registered as Case No. 141 of 2004. OERC issued public notice inviting objections from interested persons for fixation of Retail Supply Tariff of Distribution Companies for the financial year 2005-06 to which the petitioner-Company filed its objection. The OERC considering the objections filed, passed the Retail Supply Tariff Order on 22.3.2005 in the aforesaid case, inter alia, granting special tariff to other existing Ferro Alloys Industries in the State and to the industries which will be set up but excluded the petitioner's Ferro Alloys Plant at Joda. The petitioner's allegation is that its Ferro Alloys plant at Joda has been discriminated by the OERC in its Retail Supply Tariff Order being differently classified and subjected to higher tariff than the other Ferro Alloys Industries of State, namely, M/s. FACOR, M/s. Ispat Alloys Limited, M/s. IDCOL Ferro Chrome & Alloys Limited and the petitioner's Ferro Alloys Plant at Bamanipal, which are all consumers of NESCO, even though there was no differentiation on account of load factor, power factor, voltage, total consumption of energy, nature of supply and purpose of supply etc.
3. The petitioners submit that the order passed by the OERC in granting special tariff to other similarly situated Ferro Alloys Industries in the State, namely, FACOR at Randia, Ispat Alloys at Balgopalpur, IDCOL Ferro Chrome & Alloys Ltd., Jajpur Road, and petitioner's other unit at Bamanipal, which have executed special agreements with NESCO and not granting such special tariff to the petitioner's Ferro Alloys Plant at Joda, is illegal, arbitrary, discriminatory and violative of the constitutional provisions contained in Articles 14 and 19(1)(g) of the Constitution of India. A prayer has been made to quash the impugned order in Annexure-4 to the extent it does not extend the benefit of 25% discount to the petitioner's Ferro Alloys Plant at Joda and to direct OERC to grant similar tariff to the Petitioner's Ferro Alloys Plant at Joda as has been granted to other Ferro Alloys Industries in the State.
Mr. Sovesh Roy, learned Senior Counsel for the petitioners placing reliance upon Section 62(3) of the Electricity Act, 2003, which provided-
62(3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required.
submitted that at the time of determination of tariff, the OERC should not show undue preference to any consumer of electricity and the tariff should be non-discriminatory in nature. According to Mr. Roy, even though petitioner's Ferro Alloys Plant at Joda belonged to the same category of other their Ferro Alloys Industries in the State which had executed special agreements with NESCO and had similar load factor, power factor, voltage, total consumption of energy nature of supply and purpose of supply etc., it would be subjected to a higher tariff than other power intensive Ferro Alloys units which is not permissible under Section 62(3) of the Electricity Act, 2003. It was also submitted by Mr. Roy that even though the NESCO in its application dated 25.11.2004 had requested the OERC to allow special tariff to Ferro Alloys Industries having contract demand of 25 MVA and above, the OERC without considering such proposal of NESCO as well as the prayer of the petitioner made in the objection to fix viable tariff in favour of Ferro Alloys power intensive industries including its Ferro Alloys Plant at Joda, granted special tariff to the existing Ferro Alloys Industries which had special agreements with NESCO and to the new industries, which would be set up having contract demand of 5 MVA and above. In this regard, our attention was drawn to the finding/observations recorded in paragraphs 8.26, 8.26.1, 8.27 and 8.27.4 of the impugned order which are quoted hereunder:
8.26 In view of the aforesaid facts, the Commission concurs with the proposal of NESCO to allow a special tariff to those industries which had enacted agreement(s) to avail power at the special rate from NESCO up to 09.12.04 irrespective of the contract demand.
Table : 44
Existing tariff for Power Intensive/Other Industries
_____________________________________________________________________________AT E.H.T. AT H.T._____________________________________________________________________________Demand Charge 200 KVA 200 KVAEnergy Charge 200 P/U 300 P/UConsumption in excess of 50% LF 180 P/U 200 P/UConsumption in excess or 60% LF 150 P/U 170 P/U_____________________________________________________________________________8.26.1 The Commission, 'therefore, without upsetting the existing tariff structure of power intensive industries at HT and EHT directs that the industries covered under special agreement will be allowed a discount of 25% on the energy charges upto 50% load factor.
8.27 The Commission takes into consideration the presentation made by IPICOL regarding addition of new industries particularly in the steel sector. The Commission is desirous of encouraging new industries in the State. Therefore, the Commission has decided to provide financial incentive in the form of discount for higher consumption to attract new industries. It is hoped that higher sale will compensate the discount being offered to the industries. The conditions for grant of discount are as follows:
xxx xxx xxx8.27.4 The existing tariff for industrial EHT and HT consumers has been indicated in the table-44 above. Without changing the tariff structure, new industries with contract demand of 5 MVA and above coming into operation on or after 01.04.2005 fulfilling the aforesaid criteria will be allowed a discount of 25% on the energy charge up to 50% load factor in the existing tariff.
Our attention was further drawn to that part of the impugned order wherein the OERC has granted special tariff to the Ferro Alloys Plant set up by IDCOL having contract demand of 10.7 MVA whereas such special tariff has not been granted to the petitioner's plant at Joda having admittedly contract demand of 19.5 MVA. It was pointed out that the OERC in paragraph 8.27 of the impugned order considered the representation made by IPICOL regarding allowance of compensatory discount of 25% on energy charges up to 50% load factor to the new industries in steel sector and the OERC for the purpose of encouraging new industries in the State, decided to provide financial incentive in the from of discount for higher consumption to attract new industries and ultimately the OERC came to the conclusion as indicated in paragraph 8.27.4 which is quoted above.
4. Mr. Roy submitted that the petitioner's Fero Alloys Plant at Joda and IDCOL Ferro Chrome & Alloys Plant at Jajpur Road belonged to the same category, i.e., Ferro Alloys Power Intensive Industries and as the contract demand of petitioner's Plant was 19.5 MVA and that of IDCOL's Plant was 10.7 MVA and as petitioner's Plant was drawing power from its own 132 KV Grid Sub-station and IDCOL's Plant was drawing power from 33 KV Grid Sub-Station of NESCO, petitioner's Plant stood on a better footing as compared to IDCOL's Plant. But while OERC, allowed special tariff to IDCOL's Plant as well as other Ferro Alloys Industries in the State, it denied such concession to the petitioner's Plant at Joda, even though it stood on the same footing. It was further contended that the petitioner was discriminated because it did not have a special agreement which could not be a ground for discrimination under Section 62(3) of the Electricity Act, 2003. That too, the OERC has not given any specific reason as to why the petitioner's unit at Joda, which was a power intensive industry engaged in manufacture of Ferro Alloys, was not treated at par with other Power Intensive Ferro Alloys Industries in the State which have been allowed concessional tariff.
5. The sum and substance of the petitioner's grievance is that the OERC has not taken into consideration the case of the petitioner's Ferro Alloys Plant at Joda in terms of the statutory mandate of Section 62(3) of the Electricity Act, 2003 for which the order passed by the OERC is illegal so far as it relates to the claim of the petitioner.
6. A counter affidavit has been filed by O.P. No. 2-NESCO denying the allegations made in the writ petition. Mr. Sanjit Mohanty, learned Senior Counsel appearing for O.P. No. 2-NESCO, submitted that the petitioner's unit at Joda was not treated as an export-oriented unit while allocation of power was made by the Central Electricity Authority, constituted by the Government of India. He further submitted that against the impugned order of the OERC, an appeal would lie to the Appellate Tribunal for Electricity under Sections 110 and 111 of the Electricity Act, 2003 for which this writ application was not maintainable. The next contention of Mr. Mohanty, learned Senior Counsel was that while OSEB and GRIDCO were carrying on the business of supply of electricity, the Ferro Alloys units were enjoying the Special Tariff till 31.1.1999 after executing necessary special agreement by way of allocation of least cost NTPC-powers with wheeling charges. The said arrangement was cancelled after the Distribution Companies were privatized. However, the same was extended up to 31.8.1999. The Retail Supply Tariff as determined by the OERC was made applicable to them. Considering the request and survival of the units, NESCO entered into special agreement with three export-oriented units, namely, Balasore Alloys Ltd., FACOR and TISCO, Bamanipal, for supply of power at a concessional tariff. Since the said concessional tariff was not restructured in the revenue requirement of NESCO, the Licensee-NESCO was forced to terminate the agreement by issuing four months' notice as per the terms and conditions of the special agreement. The OERC in its order dated 6.11.2004 in Case No. 114 of 2004 directed the Licensee to continue Special Tariff till determination of the Special Retail Tariff for 2004-05. NESCO in the counter further stated that the OERC considering the facts as mentioned in paragraph-8 of its order which dealt with Special Tariff, in paragraph 8.22 observed that there was necessity for allowing financial incentive to those industries who could provide a steady stream of revenue by utilizing substantial quantum of power with a guaranteed off-take in the best interest of State Power Sector that would be beneficial for industries as well as licensees. With these findings, in paragraph 8.26 of the order, the OERC concurred with the proposal of NESCO to allow Special Tariff to those industries which had enacted agreement(s) to avail power at the special rate from NESCO up to 9.12.2004 irrespective of the contract demand. Mr. Mohanty, learned Senior Counsel further submitted that as the petitioner's unit at Joda was not coming under the industry, which had entered into Special Agreement to avail power at concessional rate from NESCO, petitioner's unit was not entitled to get discount of 25% on the energy charges up to 50% load factor, as claimed, and the order of the OERC cannot be construed to be discriminatory and violative of the provisions of Article 19(1)(g) of the Constitution.
7. These being the rival contentions of the parties, let us first take up whether this writ application is maintainable.
Admittedly, against the order of OERC, an appeal lies but the writ application was filed on 2.5.2005, and the appellate forum was constituted by notification dated 9.6.2005, i.e., after filing of the writ application. Law is well settled that availability of alternative remedy will not be a bar in entertaining a writ application in certain cases. In this regard, the apex Court in the case of Harbanslal Sahania and Anr. v. Indian Oil Corporation Ltd. and Ors. reported in : AIR2003SC2120 , held as follows:.In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the Fundamental Rights: (ii) where there is failure of principles of natural justice or, (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act and is challenged....
Here in this case, the writ petition has been filed on the ground that the order of the OERC is discriminatory and violative of Articles 14 and 19(1)(g) of the Constitution of India as well as on the allegation that the said order was passed in violation of the provision of Section 62(3) of the Electricity Act. Counter affidavit has already been filed in the meantime and the matter was heard at length on merits for which it would not be proper to dismiss the writ petition as not maintainable solely on the ground of constitution of the Tribunal during pendency of the writ petition. Form the facts narrated, it is clear that the petitioner had taken the ground of discrimination before the OERC, as evident from the objection filed by the petitioner before the OERC, copy of which is annexed to the writ application as Annexure-2. In paragraph 8.22 of the impugned order, the OERC observed the following:
8.22 An analysis of these facts and figures establishes to our satisfaction that there is a necessity for allowing financial incentive to those industries who could provide a steady stream of revenue by utilizing substantial quantum of power with a guaranteed off take in the best interest of the State's power sector that would be beneficial for the industries as well as the licensees.
After observing the aforesaid, the OERC in paragraph 8.23 came to the following conclusion:
8.23 The Commission under Section 62(3) is empowered to fix an appropriate tariff taking into consideration the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which supply is required.
8. While arriving at the conclusion in the aforesaid paragraph in 8.23, the OERC has not given any reason as to why the petitioner's unit at Joda had not been given the benefit which has been extended to other power intensive units including new industrial units going to be set up in Orissa though the specific case of the petitioner before the OERC was that there was violation of Section 62(3) of the Electricity Act and there is discrimination. There is no answer to the aforesaid allegation in (he order passed by the OERC which is impugned in this writ application.
9. In our considered opinion, the OERC has not considered the case of the petitioner in terms of the statutory mandate of Section 62(3) of the Electricity Act, 2003 and the objections raised and the relief sought for by the petitioner before the OERC at the time of fixation of tariff have not been dealt with by the OERC and no reason has been ascribed therefor. Therefore, we have no hesitation to quash the order passed by the OERC in Annexure-4 so far as it relates to the petitioner's Ferro Alloys Plant at Joda. At the same time, we are also aware of the limitation of this Court so far as it relates to fixation of tariffs. The apex Court in the case of West Bengal Electricity Regulatory Commission v. C.E.S.C. Ltd. reported in : AIR2002SC3588 , held as follows:
A collective reading of Sections 22, 29 and 30 of 1998 Act leaves no room for doubt that under the Act, it is the Commission and the Commission alone which is authorized to determine the tariff.
10. Therefore, we direct the OERC to re-hear the objection of the petitioner and pass a reasoned order as expeditiously as possible in terms of Section 62(3) of the Electricity Act, 2003 read with the observations made herein above. The refund/adjustment of the amount paid by the petitioners during the pendency of the writ application, shall be subject to the decision of the OERC.
11. With the aforesaid direction, the writ application is disposed of.
A.K. Samantaray, J.
12. I agree