THE HON’BLE SRI JUSTICE C.V. RAMULU W.P. Nos. 4010, 4013, 4328, 24082 and 25597 of 2005 COMMON ORDER: In all these writ petitions, common questions of law and fact arise for consideration, therefore, they are being disposed of by this common order. The controversy that arose for consideration in these writ petitions, in brief, is as under: “Whether the respondents were justified in demanding and collecting development charges for release of additional load, over and above 1500 KVA, from petitioners and whether the said action is contrary to Sections 43 and 46 of the Electricity Act, 2003 (for short, ‘the Act’) read with Regulation 3 of A.P. Electricity Regulatory Commission (Licencees, Duty for supply of Electricity on request) Regulation, 2004 (for short, ‘the Regulations’), on the ground that Clauses 5 to 11 of the said Regulations are deleted. Petitioners are all SSI Units, involved in various manufacturing processes, and they are all consumers of electricity and are connected with the supply of electricity through high tension lines, whereas, respondents are licencees. Under Clauses 5 to 11 of the Regulations, no development charges were being permitted to be collected from the consumer for new connections or for the additional load consumed than the contracted demand. The above clauses read as under: “5. RIGHT OF THE DISTRIBUTION LICENSEE TO RECOVER EXPENDITURE: (1) The Distribution Licensee shall, unless otherwise specified in this Regulation or otherwise by an order of the Commission fulfil the obligation to supply electricity to the premises, without claiming any payment or reimbursement by the applicant for any expenditure, if such expenditure has been incurred or is to be incurred by the Distribution Licensee in terms of or under any scheme approved by the Commission or when such expenditure is otherwise allowed to be recovered by the Distribution Licensee as a part of the revenue requirements of the Distribution Licensee. (2) Subject to the provisions or Act and this Regulation and subject to such directions, orders or guidelines the Commission may issue from time to time, every Distribution Licensee is authorized to recover from an applicant, requiring supply of electricity, any expenses that the Distribution Licensee shall be required to reasonably incur in addition to those specified in sub- clause (1) above to provide any electric line or electrical plant specifically for the purpose of giving such supply to the applicant. (3) Before taking up the erection of electric line or electrical plant required for extending supply to the applicant, the Distribution Licensee shall estimate the charges for erecting such electric line or electrical plant and present the same to the applicant. (4) In the event the electricity supply is required by two or more applicants in the same area through extension of common electric line and electric plant and the expenditures in respect thereof are not covered by sub-clause (1) above, the Distribution Licensee shall apportion such expenditure amongst all such applicants. (5) The Commission may from time to time and by a general or special order specify the extent to which the Distribution Licensee shall install, establish or extend the Distribution Main, the Electric Line and Electric Plant as a part of a scheme to be implemented by the Distribution Licensee or otherwise to be undertaken and the expenditure to be covered as a part of the revenue requirements of the Distribution Licensee to be recovered from the Tariffs to be determined by the Commission. 6 . SPECIFIC PROVISION FOR LOW TENSION SUPPLY: The following provisions shall apply for low- tension supply: (a) In case of applications for Low Tension supply where such supply requires only laying the service line from the existing distributing main to the consumer’s premises, the Distribution licensee shall estimate the cost of service line and the cost of terminal and metering arrangements at the premises of the consumer, but not including the cost of meter. (b) In case of applications where there is a need to erect new electrical plant such as the distribution transformer (DTR) along with switch-gear etc., for extending supply to the applicant for Low Tension connection, the licensee shall estimate the cost of electrical plant as follows: Cost of the works of erection of DTR including switch-gear (in Rupees) = P Rated capacity of DTR (KVA) = q Cost per KVA (in Rupees) = P/Q Contracted load (HP)/Demand (KVA) of the applicant = K Amount payable by applicant towards electrical plant (in Rupees) = K*(P/Q) Provided that the Distribution licensee shall estimate the cost of electrical plant based on the latest cost data as published by the Distribution licensee. (c) In case of applications where there is a need to erect or extend the 11 KV line in order to erect a distribution transformer and extend supply to the applicant, the Distribution licensee shall estimate the cost of such section of 11 KV line on a per kilometer basis based on the latest cost data as published by the Distribution licensee. 7. SPECIFIC PROVISION FOR HIGH TENTION SUPPLY: The following provisions shall apply for high-tension supply: (a) In case of applications for new connections, where such supply requires only extension of High Tension line from the existing distributing main to the consumer’s premises, the Distribution licensee shall estimate the cost of service line and the cost of terminal and metering arrangements at the premises of the consumer, but not including the cost of meter and current transformer and/or potential transformer used for metering; The Distribution Licensee shall estimate the cost of service line on per kilometer basis and the cost of metering arrangements based on the latest cost data as published by the Distribution Licensee. (b) In case of applications where there is a need to erect a new power transformer or augment the capacity of existing power transformer with or without bay extension at a 33/11 KV substation for extending supply to the applicant, the Distribution Licensee shall estimate the cost of the works involved in the same way as indicated in sub-clause 6(b) above. (c) In case of applications where there is a need to erect a new 33/11 KV substation in order to extend supply to an individual applicant, the Distribution Licensee shall estimate the cost of such substation as per the latest cost data published by the Distribution Licensee. 8. SPECIFIC PROVISION FOR EXTRA HIGH TENSION SUPPLY: The following provisions shall apply for extra high tension supply: (a) In case of applications for new connections, where such supply requires only extension of Extra High Tension line from the existing transmission substation to the consumer’s premises, the distribution licensee shall estimate the cost of such line and the cost of terminal and metering arrangements at the premises of the consumer, but not including the cost of meter and current transformer and/or Potential Transformer used for metering. The distribution licensee shall estimate the cost of line on per kilometer basis and the cost of metering arrangements based on the latest cost data as published by the transmission licensee. (b) In case of applications where it is required to erect a new power transformer or augment the capacity of existing Power transformer with or without bay extension at a transmission substation, for extending supply to the applicant, the licensee shall estimate the cost of the works involved in the same way as indicated in sub-clause 6(b) above. 9. STANDARD COST DATA: (1) The Distribution licensee shall on an annual basis publish a cost data book by 1st April of the year, which shall be the basis of making the initial estimate for erection of electric line or electrical plant in order to extend supply to the applicant. (2) The Distribution licensee shall make available the copies of the cost data book to the general public on demand at a reasonable charge. 10. SECURITY FOR PROVIDING ELECTRIC LINE OR ELECTRICAL PLANT: The Distribution licensee is authorized to demand security from the applicants for the purpose of erecting electric line or electrical plant for extending supply, as per the Regulation prescribed under Section 47 of the Act. 11. MANNER OF ACCOUNTING AND ADJUSTMENTS: (1) The Distribution licensee shall maintain records of all expenditure actually incurred by him in extending supply to the applicant and shall carry out the adjustments for security, recovery of excess expenditure or refunds thereof, in accordance with the Regulation prescribed under Section 47 of the Act. (2) The Distribution licensee shall account, under appropriate account heads, all charges recovered by him for erection line for extending supply to the applicant seeking new connection. The amounts so recovered shall be deducted from the Gross Fixed Assets to arrive at the value of Net Fixed Assets. (3) The Distribution licensee shall complete the finalization of expenses and adjustment for differences and present the detailed statement of expenses to the consumer within a period of one month from the date of release of supply”. However, it appears, the four distribution companies (licensees) approached the A.P. Electricity Regulatory Commission, Hyderabad for deletion of Clauses 5 to 11 of the Regulations, expressing certain difficulties. The said objections have been numbered as R.P. Nos. 1, 2, 3 and 4 of 2005 and, initially, on 19.2.2005, interim suspension of operation of Clauses 5 to 11 of Regulation 3 of 2004 was granted till disposal of main R.Ps. Ultimately, all the Review Petitions were allowed by an order dated 24.8.2005, deleting Clauses 5 to 11 of Regulation 3 of 2004 and holding that they shall remain applicable till a separate Regulation under Section 46 of the Electricity Act, 2003 is issued by the Commission. In view of the above position, notional development charges for release of additional load were demanded. The justification for such demand, according to respondents, is the suspension of Clauses 5 to 11 on 19.2.2005 and final deletion by order dated 24.8.2005. Therefore, all the consumers who are consuming additional loads of KVA are liable for notional development charges as was being charged earlier to Regulation 3 of 2004. Learned counsel for the petitioners Sri D.V. Nagarjuna Babu contended, firstly the Commission is not vested with any such power to delete Clauses 5 to 11 of Regulation 3 of 2004. Secondly, no review or revisional powers are vested in the Commission and the very review/revisions filed by the Distribution Companies were not maintainable. Deletion of Clauses 5 to 11 is contrary to the spirit of Section 46 of the Electricity Act, 2003. Section 46 of the Act reads as under: “ 46. Power to recover expenditure.—The State Commission may, by regulations, authorise a distribution licensee to charge from a person requiring a supply of electricity in pursuance of Section 43 any expenses reasonably incurred in providing any electric line or electrical plant used for the purpose of giving that supply”. Further, review and appeal remedies are alien to the authority which is delegated with the power to make subordinate legislation. Until and unless such power is vested with the Commission for the purpose of deleting Clauses 5 to 11 from Regulation 3 of 2004, the question of deleting such clauses, purported to be while exercising power under Clause 14 of Regulation 3 of 2004, does not arise. Regulation No.14 reads as under: “14. POWER TO AMEND: The Commission may, at any time, add, vary, alter, modify or amend any provision of this Regulation”. Further, the provisions of Sections 181 and 182 of the Act, 2003 were not followed. Therefore, deletion, purported to be while exercising powers under Regulation 14, amounts to legal malice. Even if there is any power vested with the Commission, such power should be exercised within the framework of law. Further, the rule maker (Commission), which made Regulation 3 of 2004, had suspended the above clauses. There is no such power vested with it and while deleting Clauses 5 to 11 by final order dated 24.8.2005, it had applied the same with retrospective effect i.e. from 5.3.2004. No public notice of hearing etc. was issued calling for objections from the affected parties like the petitioners. From the order passed by the authority, it could be seen that few selected people were invited to participate, who are unconnected with the dispute. A rule making authority cannot make or delete a charging provision without hearing the affected parties. While giving new connections, respondents have already collected developmental charges as required under the law in vogue as on that date. By drawing additional load, no new infrastructure is created and no additional expenditure is met by the Distribution Companies. In fact, there was such a charging provision available before Regulation 3 of 2004 had come into force. After taking various circumstances into consideration, Clauses 5 to 11 were incorporated into Regulation 3 of 2004. Such clauses should not have been deleted abruptly, even without hearing the affected parties and without any authority of law. Therefore, the demand made by the respondent – Distribution Companies is arbitrary and illegal and liable to be declared as such. Per contra, learned counsel for the respondents – Distribution Companies Sri O. Manohar Reddy submitted that Clause 14 of Regulation 3 of 2004 empowers the Commission to add, vary, alter, modify or amend any provisions of the Regulations. Since there was heavy expenditure for maintenance and supply of electricity to the consumers and there was discrimination between a person who applied for the first time and met with all the expenditure requiring for extension of services of electricity supply to his industry and those who have enjoyed the facility already provided without paying any development charges, it made them to approach the Commission for deletion of the clauses. Under Section 94 (f) and 94(2), the Commission has got all the powers to entertain such revisions filed by the Distribution Companies and notices were issued as required under Section 94 of the Act. He justified the deletion in view of previous history as noticed in B.P.Ms.No.8 dated 28.4.2007, whereunder the revised unit rates of service line charges and development charges payable by prospective consumers for new and additional loads were considered and a policy decision was taken for collecting development charges and service line charges, payable by different category of consumers for new/additional loads. After advent of Regulation 3 of 2004, when the expenditure was incurred by the Distribution Companies, they went before the Commission seeking deletion of those clauses. The deletion was done as per the Rules and it is justified as per the provisions under Section 185 (3) of the Act read with the Schedule and A.P.E.R.C. (Conduct of Business) Regulations, 1949. In support of his contentions, learned counsel for the respondents – Distribution Companies relied upon a decision of this Court in Hind Rerolling Industries, Hyderabad vs. APSEB, Hyderabad[1] and drawn attention of the Court to para 8, which reads as follows: “(8) THE power to make regulations providing for all matters, like principles governing fixation of power tariff, principles governing supply of electricity are conferred on the Board under Section 79 of the Electricity Supply Act. Sub- section (2) of Section 49 of the Electricity Supply act lays down broad principles for fixing tariffs. While fixing tariffs, the Board has to take into consideration the nature of supply, the simplification and standardization methods and rights of authorities, transmission and supply of cheap electricity to sparsely developed area and to carry out development, supply of electricity within the States in the most viable and economic manner with particular reference to such development in areas not for the time being served or adequately served by the licensee. Clauses (b)and (d) of sub-section (2) of Section 49 of the Electricity Supply Act have great relevance for the Board while fixing tariffs. The costs involved for development, supply and distribution of electricity to remote areas with reference to development of remote areas is one of the criteria, which cannot be ignored while fixing the tariffs. Indeed, sub-section (3), of Section 49 of the electricity Supply Act empowers the Board to fix different tariffs for the supply of electricity having regard to geographical position of any area, the nature of supply and purpose for which supply is required. On the other hand, learned counsel for 5th respondent – Commission submitted that the deletion orders passed by the Commission in Review or Revision Petition Nos. 1 to 4 of 2005 dated 24.8.2005 were not published as required under Section 181 of the Act. In fact, the exercise is under the process. Further, the order passed deleting Clauses 5 to 11 of Regulation 3 of 2004 is appealable under Section 111 of the Act, which is mandatory, but the petitioners have not availed the same. The Commission has all the power and it can vary, alter, amend, which includes even deletion of any clauses of the said Regulation 3 of 2004. Therefore, there are no merits in the writ petitions and they are liable to be dismissed, firstly, as not maintainable since there is an effective alternative remedy of appeal under Section 111 of the Act and, secondly, being devoid of merits. I have given my earnest consideration to the respective submissions made by the learned counsel on either side and perused the impugned order and other material made available on record. It is true that prior to the advent of Regulation 3 of 2004, the Distribution Companies have a power, since there was a charging clause, for collecting developmental charges payable by the prospective consumers of new/additional loads. However, as noticed above, after the advent of Regulation 3 of 2004, under Clauses 5 to 11, the developmental charges for the prospective consumers of new/additional loads were dispensed with. Clause 7 of the Regulations, which is relevant for the purpose, is as under: “7. SPECIFIC PROVISION FOR HIGH TENTION SUPPLY: The following provisions shall apply for high-tension supply: (d) In case of applications for new connections, where such supply requires only extension of High Tension line from the existing distributing main to the consumer’s premises, the Distribution licensee shall estimate the cost of service line and the cost of terminal and metering arrangements at the premises of the consumer, but not including the cost of meter and current transformer and/or potential transformer used for metering; The Distribution Licensee shall estimate the cost of service line on per kilometer basis and the cost of metering arrangements based on the latest cost data as published by the Distribution Licensee. (e) In case of applications where there is a need to erect a new power transformer or augment the capacity of existing power transformer with or without bay extension at a 33/11 KV substation for extending supply to the applicant, the Distribution Licensee shall estimate the cost of the works involved in the same way as indicated in sub-clause 6(b) above. (f) In case of applications where there is a need to erect a new 33/11 KV substation in order to extend supply to an individual applicant, the Distribution Licensee shall estimate the cost of such substation as per the latest cost data published by the Distribution Licensee”. Section 94 of the Act, 2003 enumerates powers of appropriate Commission, which reads as under: “94. Powers of Appropriate Commission.—(1) The Appropriate Commission shall, for the purposes of any inquiry or proceedings under this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 in respect of the following matters, namely:— (a) summoning and enforcing the attendance of any person and examining him on oath; (b) discovery and production of any document or other material object producible as evidence; (c) receiving evidence on affidavits; (d) requisitioning of any public record; (e) issuing commission for the examination of witnesses; (f) reviewing its decisions, directions and orders; (g) any other matter which may be prescribed. (2) The Appropriate Commission shall have the powers to pass such interim order in any proceeding, hearing or matter before the Appropriate Commission, as that Commission may consider appropriate. (3) The Appropriate Commission may authorise any person, as it deems fit, to represent the interest of the consumers in the proceedings before it”. Thus, Section 94 (2) empowers the Commission to pass such interim orders in any proceedings, hearing or matters before such Commission as the Commission may consider appropriate. Under Section 94 (3), it may authorize any person as it deems fit to represent the interest of the consumers in the proceedings before it. Though learned counsel for the respondents specifically drawn attention of the Court to Section 94 (1)(f) and stated that the Commission has power to review its decisions, directions and orders and, therefore, the review petitions filed by the Distribution Companies are maintainable, it appears to be attractive but does not stand the scrutiny of law. Under Section 94 (1)(f), power is vested with the Commission for reviewing its decisions, directions and orders and not for entertaining reviews for the purpose of deletion of the provisions made under Regulation 3 of 2004. A plain reading of Section 94 discloses that it does not confer any such powers. The power conferred under Section 94 is a general power as to reviewing its decisions, directions and orders etc. and in the process, issuing appropriate interim orders for the purpose of conducting any enquiries etc. but that cannot be enlarged or extended to say that the Commission has the power under Section 94 of the Act read with Section 14 of the Act, to delete the clauses. Further, as contended by the learned counsel for the petitioners, no notice of any kind was issued to any of the affected parties or any public notice was issued while deleting such important provisions of law, as was done while making Regulation 3 of 2004. Section 181, which deals with the powers of the State Commission to make regulations, at Sub-Clause (3) says “all regulations made by the State Commission under this Act shall be subject to condition of previous publication”. Section 181 of the Act reads as under: “181. Powers of State Commissions to make regulations.— (1) The State Commissions may, by notification, make regulations consistent with this Act and the rules generally to carry out the provisions of this Act. (2) In particular and without prejudice to the generality of the power contained in sub-section (1), such regulations may provide for all or any of the following matters, namely:— (a) period to be specified under the first proviso to Section 14; (b) the form and the manner of application under sub- section (1) of Section 15; (c) the manner and particulars of application for licence to be published under sub-section (2) of Section 15; (d) the conditions of licence under Section 16; (e) the manner and particulars of notice under clause (a) of sub-section (2) of Section 18; (f) publication of the alterations or amendments to be made in the licence under clause (c) of sub-section (2) of Section 18; (g) levy and collection of fees and charges from generating companies or licensees under sub-section (3) of Section 32; (h) rates, charges and the terms and conditions in respect of intervening transmission facilities under proviso to Section 36; (i) payment of the transmission charges and a surcharge under sub-clause (ii) of clause (d) of sub- section (2) of Section 39; (j) reduction 1[* * *] of surcharge and cross-subsidies under second proviso to sub-clause (ii) of clause (d) of sub-section (2) of Section 39; (k) manner and utilisation of payment and surcharge under the fourth proviso to sub-clause (ii) of clause (d) of sub-section (2) of Section 39; (l) payment of the transmission charges and a surcharge under sub-clause (ii) of clause (c) of Section 40; (m) reduction 2[* * *] of surcharge and cross- subsidies under second proviso to sub-clause (ii) of clause (c) of Section 40; (n) the manner of payment of surcharge under the fourth proviso to sub-clause (ii) of clause (c) of Section 40; (o) proportion of revenues from other business to be utilised for reducing the transmission and wheeling charges under proviso to Section 41; (p) reduction 3[*