Uttar Gujarat Vij Company Ltd. Vs. Hindustan Petroleum Corpn. Ltd. - Court Judgment

D.A. Mehta, J.

1. Today, all these applications have been heard and the following order was made:

The substitution applications are allowed. Reasons will follow.

Accordingly, the reasons are recorded hereinafter.

2. All these applications have been filed by different companies seeking substitution of the name of the respective applicant-company in place of Gujarat Electricity Board in the captioned Special Civil Applications and Letters Patent Appeals arising from respective Special Civil Applications. The applicants herein are seeking substitution in place of the original respondents in the main petitions as well as in the Letters Patent Appeals. Admittedly the Letters Patent Appeals have been filed on 20.01.2005 wherein the appellant is shown as Gujarat Electricity Board. The appeals are against common judgment and order dated 17.12.2004 rendered by the learned Single Judge in Special Civil Application No.1038 of 2004 and cognate matters. The respondents herein are the original petitioners. For the sake of convenience, hereinafter the parties shall be referred to as per their respective description in the main petition. The petitioners have opposed these applications filed by the respondents.

3. The case of the petitioners in the petitions is that the respondent has wrongly called upon the petitioners to discharge liability which has been raised by way of issuance of supplementary bills for electricity consumed in past. The learned Single Judge accepted the case of the petitioners holding that the notices issued by the respondent were contrary to the terms of contract and the tariff had been revised without jurisdiction and without hearing the petitioners. The appeals have been admitted on 08.04.2005.

4. The opposition to the prayer for substitution is principally based on the contention that the applicant-companies were not in existence on the date when the order came to be made by the learned Single Judge, viz. on 17.12.2004 and Gujarat Electricity Board was not in existence on the day the appeals were filed, viz. 20.01.2005. For this purpose, reliance has been placed on the provisions of the Electricity Act, 2003 (the Electricity Act), the Gujarat Electricity Industry (Reorganisation and Regulation) Act, 2003 (Reorganisation Act) and the Transfer Scheme framed under the Reorganization Act with special reference to GR No.GEB-1004-7318-K issued by Government of Gujarat on 31.12.2004.

5. The question is, not whether the Board has ceased to exist, but who is entitled to collect the amount of supplementary bills issued by the Board: whether the Board or the applicant transferee companies. As the provisions of the scheme go to show it cannot be disputed that book debts are assets. Hence, when did the assets get transferred from the Board to the transferee companies, that is the only issue which requires to be determined.

6. Under the Act of 2003 the old Act came to be repealed and admittedly the Board was converted into State Transmission Utility subject to the State framing a scheme for transfer. The Reorganisation Act has come into effect from 16.05.2003. Under Section 28(1) of the Reorganisation Act, it is open to the State Government to publish schemes and effect the transfer of specified functions, duties, etc. and undertaking of the Government Electricity Industry or such portion thereof consisting of assets, properties, etc. on the terms and conditions the State Government may provide in the Transfer Scheme. Under Sub-section (2) of Section 28 of Reorganiation Act transferring and vesting of the undertakings, or portion thereof consisting of assets, etc. in the State Government is provided for on and from the date the transfer scheme under Sub-section (1) of Section 28 of the Reorganisation Act is notified in the Official Gazette. It is admitted that by virtue of Sub-sections (3) and (4) of Section 28 of the Reorganisation Act the State Government is empowered to transfer such vested assets etc. to the First Transferee and in turn to the Second Transferee, as may be specified by notification, including date of transfer. Accordingly, the State Government vide notification dated 24.10.2003 has published in the State Official Gazette the scheme called the 'Gujarat Electricity Industry Reorganisation and Comprehensive Transfer Scheme, 2003' (the Scheme).

7. The following definitions provided in the Scheme are relevant for the present purpose:

2. Definitions:

In this scheme, unless the context otherwise requires,

(b) Assets includes power systems, dams, tunnels, generating plants, machinery, equipment, transformers, meters, poles, lines, towers, sub-stations, conductors, switchyards, land, building, offices, stores, furniture, fixtures, vehicles, residential quarters and guest houses and amenities and installations pertaining thereto and other movable and immovable properties, cash in hand, cash at bank, investments, stocks, book debts (corporeal and incorporeal), tangible and intangible assets benefits, licenses, consents, authorities, registrations, patents, trade marks and powers of every kind, nature and description whatsoever, privileges, liberties, easements, advantages, benefits and approvals, contracts, deeds, schemes, bonds, agreements and other instruments and interest of whatever nature and wherever situated;

(e) Date of transfer means the date notified by order by the State Government for effecting transfer of assets, properties and interest therein; rights, liabilities and obligations; functions, duties and powers; proceedings and personnel to the relevant transferee in accordance with this scheme and different date may be notified for different transfers.

8. The definition of the term Sassets includes Sbook debts (corporeal and incorporeal). For the present it is not necessary to deal with the other items included in the term Sassets. On going through the definition of the phrase SDate of transfer it is apparent that different dates may be notified for different transfers and as the definition shows there could be separate transfers in relation to assets, properties and interest; rights, liabilities and obligations; functions, duties and powers; etc.

9. It is an admitted position that on 24.10.2003 by a separate notification in terms of the powers available to the State Government vide Sections 28 to 30 of the Reorganisation Act and the terms of the Scheme 01.11.2003 was notified to be the Date of Transfer for the purpose of the Scheme. The Notification provided for transfer of assets etc. to different companies. In other words, by the Notification different portions (including assets) of the undertaking came to be transferred to different companies. Subsequently, the State Government found that as the Gujarat Electricity Board could not complete the process within a period of one year from the notified Date of Transfer (01.11.2003) on 01.11.2004 another notification came to be issued substituting the Date of Transfer as 01.04.2004.

10. Therefore, it is apparent that the book debts in the form of supplementary bills issued to the petitioners by Gujarat Electricity Board came to be transferred by virtue of the notification latest by 01.04.2004. The petition was filed on 27.01.2004 against Gujarat Electricity Board but came to be decided by the learned Single Judge on 17.12.2004. Therefore, it was incumbent upon the petitioners to substitute the original respondent-GEB by different companies during pendency of the petitions.

11. The case of the petitioners is primarily based on notification dated 31.12.2004 whereunder the State Government has passed a resolution to incorporate a new company viz. The Gujarat Urja Vikas Nigam Limited to carry out the residual functions (including power trading) of the Gujarat Electricity Board whereunder it is specified that the said resolution shall come into effect on and from 01.01.2005. The learned Counsel for the petitioners emphasized that under Paragraph No.4 sub-paragraph No.4 provides that all the transferee Companies shall continue to function independently and undertake business activities assigned to them on behalf of and as agents of Electricity Board till the final order is issued by the Government in this behalf. The emphasis, therefore, was that the Board had ceased to be in existence on and from 31.12.2004 while the applicant-companies came into effect from 01.01.2005 and, therefore, the appeals could not have been filed by Gujarat Electricity Board on 20.01.2005. Therefore, there was no question of permitting substitution as the appeals had been filed by an entity, which was not in existence.

12. The entire contention proceeds on a fallacy. There is no provision or notification which has brought the existence of the Gujarat Electricity Board to an end. Under the Act of 2003 it has only been renamed as State Transmission Utility. Merely because it may cease to be a licensee under the Act of 2003 the existence need not come to an end and law permits simultaneous existence of both the Board as well as the different companies. Each one is a separate legal entity. As already hereinbefore noticed, the Scheme envisages the transfer of Sassets to the companies and such assets include Sbook debts. The Scheme has admittedly come into effect on and from 01.04.2004 which is the notified date of transfer and this also becomes clear from Paragraph No.3 of the notification dated 31.12.2004 on which reliance has been placed by the counsel for the petitioners.

13. Even otherwise under Sub-section (9) of Section 28 of the Reorganisation Act it is categorically provided that all suits and other legal proceedings instituted or that may be instituted or pending involving the Government Electricity Industry or the First Transferee, as the case may be, before relevant transfer scheme becomes effective shall in the manner specified in the relevant transfer scheme be continued or instituted by or against the First or Second Transferee. Under Clause-8, the Scheme specifically provides that the proceedings of whatever nature by or against the Board pending on the date of transfer in regard to the assets, etc. transferred to the respective transferee shall not abate or discontinue or otherwise in any way prejudicially be affected by reason of transfer under the Scheme but such proceedings may be continued, instituted, prosecuted and enforced by or against the respective transferee.

14. In these circumstances, the contention raised on behalf of the petitioners opposing the prayer for substitution is devoid of merits and is rejected.

15. The prayer for substitution is, accordingly, allowed. The applicants are directed to amend the cause-title of the respective Letters Patent Appeals. Rule made absolute.

16. Registry to place a copy of this order in connected matters.