| SooperKanoon Citation | sooperkanoon.com/506316 |
| Subject | Electricity |
| Court | Madhya Pradesh High Court |
| Decided On | Oct-20-1994 |
| Case Number | M.P. No. 1789 of 1992 |
| Judge | A.R. Tiwari, J. |
| Reported in | 1995(0)MPLJ704 |
| Acts | Electricity (Supply) Act, 1948 - Sections 49 |
| Appellant | Steel Furnace Association of India and ors. |
| Respondent | M.P. Electricity Board and anr. |
| Appellant Advocate | A.M. Mathur and ;A.K. Shrivastava, Advs. |
| Respondent Advocate | R.S. Garg, Adv. |
| Cases Referred | Ferro Alloys Corporation Ltd. v. A. P. State Electricity Board |
A.R. Tiwari, J.
1. This order shall also govern the disposal of the connected other 12 petitions particularised as -
(1) M. P. No. 1859/92 (M/s Madhumilan v. MPEB), (2) M. P. No. 1871/92 (M/s Chirag v. MPEB), (3) M. P. No. 1876/92 (The Associated Cement v. MPEB), (4) M. P. No. 1971/92 (National Steel v. MPEB), (5) M. P. No. 1972/92 (M/s Ruchi Strips v. MPEB), (6) M. P. No. 446/93 (M/s Ruchi Soya v. MPEB), (7) M. P. No. 447/93 (M/s Gen. Foods v. MPEB), (8) M. P. No. 1392/93 (M/s Madhumilan v. MPEB), (9) M. P. No. 2145/93 (M/s Jalan v. MPEB), (10) M. P. No. 712/94 (M/s Jalan v. MPEB), (11) M. P. No. 788/94 (Dhar Textiles v. MPEB) and (12) M. P. No. 789/94 (Maya Spinners v. MPEB).
2. Briefly stated, the facts of the cases are that the respondents issued circulars dated 30-9-1992, 30-9-1993 and 18-2-1994. By the circular dated 30-9-1992, (Annexure P/2-A in M. P. No. 1789/92) the respondents merged fuel cost adjustment charges and NTPC charges into energy charges effective from 1-10-1992. Prior to 1-10-1992, energy charges were being levied separately on the basis of minimum charges whereas the FCA and NTPC charges were being charged separately on units consumed by the consumer. Effective from 1-10-1992 all these three charges (energy charges, FCA charges and NTPC charges) were merged and called as energy charges. NTPC charges were thus totally obliterated as separate levy whereas fuel cost adjustment charges were substantially scaled down and its substantial part was merged in energy charges. By subsequent circulars dated 30-9-1993 and 18-2-1994, these charges were further revised. In M. P. No. 408/92, the right to increase has been upheld. The question involved in these 13 petitions is about the merger of three different charges into one category i.e. electrical energy charges. In M. P. Nos. 1789/92, 1859/92, 1871/92, 1876/92, 1971/92, 1972/92, 446/93 and 447/93, the validity of the circular dated 30-9-1992 is challenged. In M. P. Nos. 712/92, 788/94 and 78/94 the validity of circular dated 18-2-1994 is challenged and in M. P. No. 1392/93 and M. P. No. 2145/93 the validity of the circular dated 30-9-1993 is challenged.
3. The respondents have filed the return in oppugnation.
4. On request, these petitions were taken up for final hearing.
5. I have heard Shri S.C. Bagadia, learned counsel for the petitioners in M. P. Nos. 1971/92, 1972/92, 446/93, and 447/93. I have heard Shri A. M. Mathur, learned Senior counsel with Shri A. K. Shrivastava for the petitioners in the remaining petitions. I have also heard Shri R. S. Garg learned counsel for the respondents in all these petitions.
6. Shri Mathur urged before me as under :-
a) The merger of three different charges into one charge is not permissible under the terms of the agreements and is also violative of the provisions of the Act. The learned counsel has drawn my attention to clause 20(b) of the agreement executed between the consumers and the respondents. He has also drawn my attention to Section 49(2)(c) of the Electricity (Supply) Act in 1948 in support of his contention. According to the counsel, such merger is arbitrary, inconsistent with the contract and law and extremely injurious to the consumers.
b) The energy charges are leviable on the basis of minimum charges and the merger as such, consigns the consumers to pay fuel cost adjustment charges and NTPC charges, which were payable on the basis of actual consumption, according to minimum charges and this step is violative of contract and law and compels the consumer to pay enormous amount without any justification and authority of law.
(c) The act of merger is thus, liable to be mortalized.
7. Shri Bagadia, adopted the submissions of Shri Mathur and prayed for proper reliefs.
8. Shri Garg dubbed the aforesaid contentions as non-meritorious and urged that the expression 'tariff used in Section 49 of the aforesaid Act is all inclusive and comprehends in its scope, fuel cost adjustment and NTPC charges as well. According to him, the mode can be prescribed by the Board and as such, the petitioners are not right in their submissions. His further contention is that the petitioners have not approached the respondents either through representation or through notice and have rushed to this Court unnecessarily. According to the counsel, if the petitioners had any grievance, they could have approached the respondents in this behalf.
9. Shri Mathur has placed reliance on AIR 1986 Raj. 137, Mis Man Industrial Corporation v. Rajasthan State Electricity Board and others, AIR 1989 AP14, Grindwell Norton Ltd. v. Andhra Pradesh State Electricity Board., AIR 1976 SC 1100, Mis Northern India Iron and Steel Co. v. State of Haryana, and AIR 1993 SC 2005, Ferro Alloys Corporation v. Andhra Pradesh Electricity Board and another.
10. I proceed to examine the worth of the rival contentions.
11. It is contended that 'merger' augments the level of liability from 39.6 lacs to 77.85 lacs (page 5 of M. P. No. 1789/92). It is argued that prior to 1-10-1992 energy charges were 93 paise, FCA charges were 60 Paise and NTPC charges were 13 paise (Total being Rs. 1.66 Paise per Unit) and after 30-9-1992, this, on merger, shot upto Rs. 1.79 Paise per unit as energy charges besides 4 Paise (which now stands increased) as FCA charges with liability to pay on the basis of minimum charges.
12. The thrust of the argument is that energy charges, FCA charges and NTPC charges have distinct and different objects and purposes to serve. It is submitted that energy charges were leviable not only on units consumed, but on minimum charges as fixed and contracted whereas FCA and NTPC charges were billed on the basis of 'Units Consumed'. It is thus, urged that consequence of merger is to make the consumer liable to pay FCA and NTPC charges now not on 'units Consumed' but on 'minimum charges' and as such, things dissimilar were not liable to be clubbed like this. The counsel goes on to say that explicitly it is not a case of enhancement simpliciter, but a clear case of destruction of basic fabric and feature of billing thereby exposing the consumers to pay 'something' which they did not contract, and the Act did not sanction.
13. Clause (b) of 20 of the agreement provides as under -
'(b) The incidence of the fuel cost adjustment clause which shall be levied only on units consumed shall be in addition to any minimum charges prescribed under the tariff in clause 19 or any minimum or special guarantee referred to in clauses 21 and 22 hereof.'
14. Section 49(1) and (2) of the aforesaid Act read as under :-
'49. Provisions for the sale of electricity by the Board to persons other than licensees. - (1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply, frame uniform tariffs.
(2) In fixing the Uniform tariffs, the Board shall have regard to all or any of the following factors, namely, -
(a) the nature of the supply and the purpose for which it is required;
(b) the co-ordinated development of the supply and distribution of electricity within the state in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensees;
(c) The simplification and standardisation of methods and rates of charges for such supplies;
(d) the extension and cheapening of supplies of electricity to sparsely developed areas.'
15. The aforesaid provision permits the Board to 'frame uniform tariffs'. The Agreement, as noted above, recites that 'The incidence of the fuel adjustment clause, which shall be levied only on units consumed shall be in addition to any minimum charges prescribed..........'. It is submitted that this term spells out that -
a) Incidence of the fuel adjustment clause is relatable ONLY to Unit Consumed and is additional to any minimum charges or minimum or special guarantee as prescribed under the tariff in clause 19.21 or 22 of the agreement.
b) Merger is not envisaged- in the name of uniformity in tariffs.
16. Section 26 of the Act prescribes the 'powers and obligations' of the Board.
17. Section 49 of the Act, enabling provision was once under challenge but the Apex Court in case of Ferro Alloys Corporation Ltd. v. A. P. State Electricity Board, AIR 1993 SC 2005, upheld its validity with observation that the terms and conditions notified therein, despite absence of norms or guidelines, must relate to 'object and purpose' and that power so conferred is not exercisable for 'a collateral purpose'. The question, posed and opposed, is whether 'merger' is permitted by Section 49 of the Act or is a collateral purpose and whether it is also offensive to clause 2()(b) of the agreement as quoted above
18. Coming to the 'nexus' as contended, it is noticed that Section 2(g) of the Indian Electricity Act, 1910 defined the word 'energy' as electrical energy generated, transmitted or supplied for any purpose or used for any purpose except the transmission of a message. It is contended that concept of minimum charges for supply of energy is to assure the supplier of receipt of particular level of amount so as to save it from loss in the bargain whereas the FCA charges and NTPC charges, exposed to frequent revisions on change of relevant facts and factors, are related to cover expenses incurred on fuel and payment made to NTPC in purchase of energy respectively. It is urged that charges unconnected with Minimum level are not liable to be clubbed with the charge levied on Minimum level. It is thus, submitted that such a merger of dissimilar factors is a collateral purpose unauthorised by Section 49 of the Act, and is luculently violative of the agreed term of enforcement on 'units Consumed.'
19. Perusal of Circular of 30-9-1992 shows that Board decided, in exercise of powers conferred under Section 49 of the Act, to amend 'rates' of electricity. It is not clear as to how abolition of FCA or NTPC charges was resolved and how merger, without due consideration to nature of charges i.e. leviable on units consumed, was ordered and enforced. However, as one of the contentions in opposition is that the petitioners on such grievance should have approached the Respondents, I find it fit not to probe and record my decision one way or the other and to leave the petitioners free to petition to Respondents via appropriate representations in this behalf and to seek the reasoned opinion of the Board. Lord Keynes once observed that 'words ought to be a little wild because they represent the assault of thought upon the unthinking'. Accordingly this is pre-eminently an issue where words should structure the points.
20. The points, illustrative but not exhaustive, for consideration can thus be formulated as under -
a) Whether Board can direct merger of dissimilar liabilities in an effort to 'frame uniform tariffs' in terms of Section 49 of the Act?
b) Whether merger, as impugned, is relatable to object and propose of manifests a collateral purpose forbidden by the provision?
c) Whether Board is empowered to levy FCA and NTPC charges on Minimum level as was the case about energy charges through merger?
d) Whether Circulars are violative or clause 20(b) of the agreement which pointed applicability of fuel cost clause only on units consumed? What is the effect of words like 'only' and 'in addition to'?
e) Whether the expression 'Uniform Tariffs' employed in Section 49 of the Act is suggestive of plurality on uniform pattern and thus rules out singularity and in the result merger?
f) In face of conflict, if any, between agreement and the Act, which one should be permitted to prevail? and
g) Any other proper point, proposed by consumers or considered relevant by the Board.
21. President Mitterrand remarked 'Silence nourishes oppression. I am thus, of the view that in the larger interests, the Board (Respondent No. 1) should be granted proper opportunity to consider the 'issue' in its entirety and answer the questions after due and specific deliberation in an urge to end and mend matters if so required by law. After all, law and justice are not to be seen as distant neighbours. The Statutory Authority, like the Respondent is not expected to be economical with truth. Truth must triumph. It would be inutile and futile to have the opposite course.
22. Agreeing, therefore, with the objection of the counsel for the Respondents, I dispose of all these 13 petitions with directions as under :-
a) The petitioners are granted freedom to submit appropriate, but detailed, representations to the Respondents within 15 days from the date of this order, on the points projected herein.
b) The Respondent No. 1 on receipt of the representations, from all or any of these petitioners, shall consider and decide the same in the light of observations made hereinabove within a period of two months from today.
c) On acceptance of contentions, the Respondent No. 1 shall take steps to correct circulars, under challenge and pass consequential orders. Immediately thereafter and on rejection shall pass reasoned order in respect of all the connected points under intimation to the petitioners.
23. In view of these directions, circulars are left intact.
24. The petitioners, if aggrieved by the order of the Board on representation, are granted liberty to pursue appropriate remedy. Points raised in the petitions and returns are accordingly left open and litigable if occasion arose for it.
25. All these petitions are thus, disposed of finally with directions as above, but without any orders as to costs.
26. A copy of this order shall be retained in each of the aforesaid twelve petitions. Order accordingly.