Case: Waryam Steel Castings Pvt.Ltd Vs. Punjab State Power Corpn.Ltd

62 of the Electricity Act, 2003 requires an appropriate Commission to determine the tariff in accordance with the provisions of the Act. The Regulatory Commission has been constituted and notified under the provisions of Section 3 read with Section 11 of the Reform Act, 1998 which in terms of Sections 11(1)(c) and (e) is expected to fix the tariff as well as the terms of licence.37. There are three different legislations in course and the Regulatory Commission has been constituted under the Reform Act, 1998 which in turn would be the Commission as contemplated under the Electricity Regulatory Commission Act, 1998 and the Electricity Act, 2003. In terms of first proviso to Section 82(1) of the Electricity Act, 2003 the State Electricity Regulatory Commission established by the State Government under Section 17 of the Electricity Regulatory Commission Act, 1998 and the enactment specified in the Schedule shall be the State Commission for the purposes of this Act. Even in terms of Section 185(3) of the Electricity Act, 2003 the said authority would be deemed to be an appropriate Commission for all purposes and intent as the Reform Act, 1998 has been specifically mentioned in Entry 3 of the Schedule to the Electricity Act, 2003. In other words, as already noticed the Regulatory Commission constituted by the said notification would be the appropriate Commission under all these Acts and is required to perform the functions as contemplated under Sections 11, 17 and 82 of the respective Acts.38. The functions assigned to the Regulatory Commission are wide enough to specifically impose an obligation on the Regulatory Commission to determine the tariff. The specialised performance of functions that are assigned to the Regulatory Commission can hardly be assumed by any other authority and particularly, the courts in exercise of their judicial discretion. The Tribunal constituted under the provisions of the Electricity Act, 2003, again being a specialised body, is expected to examine such issues, but this Court in exercise of its powers under Article 136 of the Constitution would not sit as an appellate authority over the formation of opinion and determination of tariff by the specialised bodies. We would prefer to leave this question open to be considered by the appropriate authority at the appropriate stage.39. We do not consider it appropriate to go into the merit or demerit of determination of tariff rates in the appeals. Determina24 tion of tariff is a function assigned legislatively to a competent forum/authority. Whether it is by exercise of legislative or subordinate legislative power or a policy decision, if the Act so requires, but it generally falls in the domain of legislative activity and the courts refrain from adverting into this arena.40. We have to further examine the legality of this issue in the light of the findings that we have recorded on the issues in relation to jurisdiction of the Regulatory Commission to determine/review the tariff. The jurisdiction of this Court is limited in this aspect. This Court has consistently taken the view that it would not be proper for the Court to examine the fixation of tariff rates or its revision as these matters are policy matters outside the preview of judicial intervention. The only explanation for judicial intervention in tariff fixation/revision is where the person aggrieved can show that the tariff fixation was illegal, arbitrary or ultra vires the Act. It would be termed as illegal if statutorily prescribed procedure is not followed or it is so perverse and arbitrary that it hurts the judicial conscience of the court making it necessary for the court to intervene. Even in these cases the scope of jurisdiction is a very limited one." (Underlining is ours) 23. In this regard, it has already been noticed that the Regulatory Commission had, on remand, by its order dated 19th January, 2011 reduced the rate of surcharge from 10% and 17.5% respectively to 7% and 10% respectively. The industrial establishments in the appeals before the learned Appellate Tribunal contended that the said rate is without justification inasmuch as the State Regulatory Commission in its order had unambiguously noticed that the cost to the consumers to switch over to the 66 KV supply would correspond to a much lower amount than what would work out on the basis of the rate of surcharge levied, details of which are available in paragraph 8 of the order of the State Regulatory Commission dated 19th January, 2011. However, a reading of the entire paragraph 8 of the said order of the State Regulatory Commission would go to show that the State Commission thought it proper to work out the appropriate rate of surcharge by adding a penal element to the cost of conversion to disincentivise the consumers from continuing to receive supply on the 11 KV transmission lines. It is on the aforesaid basis that an additional input had been added to the cost of conversion to work out the rate of surcharge as determined in the order dated 19th January, 2011. If the aforesaid is the basis for determination of the rate and that too by the Expert Body which has been upheld by the learned Appellate Tribunal we can find no fault with the said exercise. In this regard we may take note of the fact that though under the Act of 2003 "surcharge" is not specifically defined, the said expression stands "for an additional/extra charge ... surcharge is thus a super added charge, a charge over and above the usual or current dues ... it is in substance an addition to the stipulated rate of tariff." The above observations made in the context of the provisions of the Electricity (Supply) Act, 1948 in M/s Bisra Stone Lime Co. Ltd. v. Orissa State Electricity Board and Anr., AIR 1976 SC 127 , would be squarely applicable to the present case to dismiss all speculations with regard to the nature of the levy (surcharge) and the power of the Commission to impose the same at particular rate(s) as may be determined.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]20. Insofar as the order of the High Court dismissing the Letter Patent Appeals filed by the industrial establishments is concerned the matter should not detain the Court. Not only the levy of surcharge has been upheld by this Court by dismissal of Civil Appeal No.10889 of 2010, though for the yearwhat stares at the face of the record is the consistent view taken by the Regulatory Commission in all the tariff orders commencing from the yearthat to offset the transmission and all other losses and other incidental charges incurred in enabling the Induction Furnace Units to draw power at 11 KV supply without switching over to 66 KV supply line, levy of surcharge on such consumers is necessary. The "compromise" and "concession" made and effected by issuing circular No.25/99 dated 8th June, 1999 must be understood to have come to an end with the introduction of the new electricity regime by the 2003 Act unless extension of the same has been explicitly made/recognized in any of the tariff orders, which fact is conspicuously absent. The absence of continuation of the said concession made by the Government in respect ofindustries in any of the tariff orders for the subsequent years i.e. after coming into force of the Act is a conscious decision of the Regulatory Commission with regard to the necessity and justifiability of the levy of surcharge on the defaulting industries. The reason for levy of surcharge being justifiable on the touchstone of the necessity to disincentivize the defaulting units cannot be faulted. The exercise being statutory and being clear and unambiguous as manifested by the tariff order, noticed and extracted above, there will be little room for taking any other view in the matter except to hold that the High Court was fully justified in dismissing the writ petitions. In fact, from another perspective, it can very well be said that the issue with regard to legality and justification for levy of surcharge stands foreclosed by the order of this Court dated 14th February, 2011 dismissing the Civil Appeal No.10889 of 2010 filed in the circumstances already noticed.21. This will bring the Court to a consideration of the other limb of the case, namely, the correctness of the quantum/rate of surcharge as determined by the Regulatory Commission and upheld by the learned Appellate Tribunal.In this regard, it has already been noticed that the Regulatory Commission had, on remand, by its order dated 19th January, 2011 reduced the rate of surcharge from 10% and 17.5% respectively to 7% and 10% respectively. The industrial establishments in the appeals before the learned Appellate Tribunal contended that the said rate is without justification inasmuch as the State Regulatory Commission in its order had unambiguously noticed that the cost to the consumers to switch over to the 66 KV supply would correspond to a much lower amount than what would work out on the basis of the rate of surcharge levied, details of which are available in paragraph 8 of the order of the State Regulatory Commission dated 19th January, 2011. However, a reading of the entire paragraph 8 of the said order of the State Regulatory Commission would go to show that the State Commission thought it proper to work out the appropriate rate of surcharge by adding a penal element to the cost of conversion to disincentivise the consumers from continuing to receive supply on the 11 KV transmission lines. It is on the aforesaid basis that an additional input had been added to the cost of conversion to work out the rate of surcharge as determined in the order dated 19th January, 2011. If the aforesaid is the basis for determination of the rate and that too by the Expert Body which has been upheld by the learned Appellate Tribunal we can find no fault with the said exercise. In this regard we may take note of the fact that though under the Act of 2003 "surcharge" is not specifically defined, the said expression stands "for an additional/extra charge ... surcharge is thus a super added charge, a charge over and above the usual or current dues ... it is in substance an addition to the stipulated rate of tariff." The above observations made in the context of the provisions of the Electricity (Supply) Act, 1948 in M/s Bisra Stone Lime Co. Ltd. v. Orissa State Electricity Board and Anr., AIR 1976 SC 127 , would be squarely applicable to the present case to dismiss all speculations with regard to the nature of the levy (surcharge) and the power of the Commission to impose the same at particular rate(s) as may be determined.