These statutory appeals under Section 125 of the Electricity Act, 2003 are directed against a common judgment and order dated 6th May, 2008 passed by the Appellate Tribunal for Electricity, New ...
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REPORTABLE
IN THE SUPREME COURT OF IDNIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 3510 - 3511 OF 2008
Tata Power Company Ltd. …. Appellant
Versus
Reliance Energy Limited and others … Respondents
WITH
CIVIL APPEAL NO. 4269 OF 2008
Tata Power Company Ltd. …. Appellant
Versus
Maharashtra Electricity Regulatory Commission
and others … Respondents
WITH
CIVIL APPEAL NO. 3593 OF 2008
Municipal Corporation of Greater Mumbai
BEST Undertaking …. Appellant
Versus
Reliance Energy Ltd. and others … Respondents
WITH
1
CIVIL APPEAL NO. 6098 OF 2008
Municipal Corporation of Greater Mumbai
BEST Undertaking …. Appellant
Versus
Maharashtra Electricity Regulatory Commission
and others … Respondents
AND
CIVIL APPEAL NO. 6099 OF 2008
Municipal Corporation of Greater Mumbai
BEST Undertaking …. Appellant
Versus
Maharashtra Electricity Regulatory Commission
and others … Respondents
J U D G M E N T
S.B. SINHA, J.
INTRODUCTION
These statutory appeals under Section 125 of the Electricity Act, 2003
(hereinafter called and referred to for the sake of brevity as ‘the 2003 Act’)
are directed against a common judgment and order dated 6
th
May, 2008
2
passed by the Appellate Tribunal for Electricity, New Delhi in Appeal
No.143 of 2007 and I.A. No.70 of 2008 whereby and whereunder a
judgment and order dated 6
th
November, 2007 passed by the Maharashtra
Electricity Regulatory Commission (MERC) was set aside.
THE PARTIES
Whereas Appellants, the Tata Power Company Ltd. (TPC) has two
divisions – ‘Generation’ [TPC (G)] and ‘Distribution’ [TPC (D)]; the Brihan
Mumbai Electricity and Transport Corporation (BEST) is a distribution
company; Respondent - Reliance Energy Ltd. now named as Reliance
Infrastructure Ltd. (RInfra) is a generating as well as a distributing company
within the meaning and provisions of the 2003 Act.
All of them have been operating in the city of Mumbai including
Suburban Mumbai of having approximately 384 sq. Km in area and the city
of Mumbai having approximately 60 sq. Km in area.
We may place on record that the aggregate capacity to generate
electricity of TPC is 1777 MW of power. The generation capacity of the
respondent RInfra is 500 MW, but it uses its power, as per its license, only
to serve its own consumers.
BACKGROUND FACTS
3
The following factual matrix relevant for proper appreciation of the
legal issues arising in the present case may be noticed.
Indisputably TPC has been generating and supplying electricity to
distribution licensees like RInfra and BEST for over a century. On or about
5
th
March, 1907 ; 3
rd
April, 1919 ; 15
th
November, 1921 and 19
th
November,
1953, the Bombay (Hydro-Electric) Licence ; the Andhra Valley (Hydro-
Electric) Licence, the Nila Mula Valley (Hydro-Electric) Licence and
Trombay Thermal Power Electric Licence respectively were granted to TPC
to generate and supply power in terms thereof.
Since 1907 consumers of electricity in Mumbai were served by
distribution lisensee, BEST (for the island city of Mumbai) and since 1926
onwards by RInfra (for suburban Mumbai). Indisputably demand of
electricity earlier was relatively low as compared to the demand post 1990s.
Nevertheless TPC progressively increased its capacity to meet the demand
of both RInfra and BEST. Issues of wrongful inter se allocation between the
various distribution licensee never really arose prior to the present scenario.
On or about 1
st
October, 1916 TPC and BEST (both Appellants
herein) entered into an agreement in terms whereof the former agreed to
4
supply and later agreed to buy power in bulk. This agreement was renewed
from time to time.
Subsequently a distribution licence was also issued to BSES,
predecessor in interest of respondent RInfra to supply power to the
consumers in the suburbs of Mumbai. Under the said license RInfra was
authorized to purchase electricity from the bulk Licensees. Accordingly it
began procuring bulk power from TPC generating stations according to its
requirements from time to time, based on its consumer load (TPC had been
the only bulk licensee for Mumbai). Indisputably, however, no agreement in
writing had ever been entered into by and between TPC and RInfra. It must
be noted in this regard that since its inception and till a very long time
RInfra continued to buy its entire requirement of power from TPC.
However in 1978 RInfra’s distribution license was amended to permit
it to put up a generation station to supply power only to its own consumers.
In or about 1995, RInfra commissioned its 500MW generating plant at
Dahanu, pursuant whereto the quantum of power purchased by it from TPC
was reduced by about 54%. Even then RInfra had been buying nearly 42%
of the energy generated by TPC. It had continued to purchase its remaining
requirements of power from TPC.
5
On or about 1998 a Committee on Review of Power demand in
Mumbai area commonly known as the ‘Kukde Committee’ was constituted
by the Government of Maharasthtra for the purpose of studying the techno
commercial feasibility of new power generation projects at Bhivpuri (500
MW) and Palghar (495 MW) proposed to be set up by TPC and RInfra
respectively.
It is accepted that before the said Committee, RInfra took the stand
that it wanted to supply to its existing consumers with the power generation
from its own proposed project instead of providing power from TPC. The
committee submitted its report on or about 26
th
May, 1998. In its report it
recommended for grant of approval for both the said projects. It was
furthermore recommended that the additional power generated from RInfra’s
project be used only to meet the future growth in demand arising from the
consumers of Mumbai. The Kukde Committee also recommended that first
the then existing generation facility of TPC be fully utilized to meet the
requirements of the current consumers of RInfra so as not to disturb the
existing technical and commercial arrangement between TPC and RInfra.
Subsequent thereto a ‘Principles of Agreement’ (POA) was executed
between TPC and RInfra on or about 31
st
January, 1998 inter alia providing
that there be a minimum power purchase (‘off-take’) on the basis of ‘pay or
6
take’ in each financial year by RInfra on the basis of its consumer demand
forecast. The POA also envisaged execution of a detailed Power Purchase
Agreement by the parties. However, no such agreement ever fructified.
Thereafter in 2000 the Maharashtra State Electricity Board [MSEB]
gave consent to the Saphale power project of RInfra. Approval however was
not granted to the Bhivpur project of TPC. Against the said order granting
approval in favour of RInfra, TPC filed a writ petition being No.916 of
2001 before the Bombay High Court on the premise that it had not approved
TPC’s proposal for the Bhivpuri power project despite it having been
submitted at an earlier point of time. It was alleged in the said petition that
the impugned decision of the MSEB was illegal and contrary to the 1948
Act, which forbade it from granting sanction to any other person to generate
electricity if the existing bulk licensee was able and willing to supply power.
A prayer inter alia was made therein that the recommendations of the Kukde
Committee should not be implemented.
In response to the said petition MSEB withdrew its approval to
RInfra’s Power project on the ground that TPC being the bulk licensee was
able and willing to supply power to it. On the withdrawal of the approval
TPC too withdrew its petition filed before the High Court
7
Thereafter the 2003 Act came into force with effect from 26
th
May,
2003. Under the new Act the ‘Generating Companies’ have been given
freedom of choice to sell power to any person or licensee. The Act also
introduced the concept of ‘open access’ which allows the distribution
licensee to source its power from any generating company. The distributors
accordingly under the changed law do not have to depend upon state based
generators to meet their needs.
PROCEEDING UNDER THE ACT
RInfra applied to Maharashtra Electricity Regulatory Commission
[MERC] for grant of ‘open access’ to bring in power from sources, outside
Mumbai, to supply electricity to its consumers.
On or about 11
th
June, 2004 TPC through its executive summary for
Annual Revenue Requirement (ARRA) filed before the MERC for the year
2003-04 insisted on having a PPA with RInfra as a condition for supply of
power to RInfra in the future. It, however, rejected the said demand on the
ground that there was no ‘legal justification’ or ‘tenable reason’ for entering
into such an agreement.
8
On or about 23
rd
August, 2005 the Commission made Regulations
known as MERC (Terms and Conditions of Tariff) Regulations, 2005,
Part-D whereof required all power purchase agreements/arrangements
entered into by the Distribution Licensees to be approved by MERC. The
regulation also provided that any amendment to such an agreement or
arrangement would require prior permission of the MERC irrespective of
whether such an agreement or arrangement was approved by the commission
or not.
MERC, on an application, filed by RInfra for direction to TPC to
provide additional outlets, agreed to the position that distribution licensees,
such as RInfra, can procure their power from any generating company in
India and because of the said flexibility in the 2003 Act also directed it to
enter into a PPA with TPC.
On or about 18
th
January, 2006, BEST executed a PPA with TPC for
purchase of 800 MW of power for a period of 10 years which was
subsequently revised in terms of the MERC’s order dated 7
th
July, 2006.
The said PPA was submitted for approval of MERC on 27
th
December, 2006
which was registered as Petition No.87 of 2006.
9
On or about 12
th
July, 2006 a Minutes of the Meeting (MoM) was
signed between TPC (G) and TPC (D) for allocation of power to TPC (D).
TPC (D) indicated requirement of 500 MW power from TPC (G) in the said
MoM. A minor modification in the MoM was directed by MERC, pursuant
whereto, on or about 16
th
March, 2006, TPC (D) entered into a PPA with
TPC (G) for 477 MW power which was submitted for approval of MERC on
27
th
December, 2006 being Petition No.87 of 2006.
RInfra filed an application for intervention before the commission in
both the applications for approval of both the PPAs It subsequently also
filed its objections in the said proceedings.
It appears from the record that in the meanwhile TPC proposed to
enter into PPA with RInfra for its balance quantity after meeting the
contractual requirement of BEST for 800 MW and of TPC (D) for 477 MW
of electricity . The offer was made by TPC to RInfra for supply of 600 MW
which was not accepted. The later instead insisted on obtaining a much
higher quantum of power based on its consumer demand. TPC rejected the
said demand keeping in view its continuing obligation to its own consumers
and also those of BEST. No consensus was therefore reached with respect
to the said PPA between TPC-G and RInfra.
10
On or about 2
nd
April, 2007 MERC passed generation tariff order for
TPC (G) for the period 2006-2007. Commission, however, took the view
that since PPAs had not been approved, by way of an interim arrangement, it
would allocate available energy from TPC (G) on the basis of coincident
peak demand of the distribution licensees.
Aggrieved by and dissatisfied therewith BEST preferred an appeal
before the Electricity Appellate Tribunal on 26
th
April, 2007 which was
marked as Appeal No.41 of 2007. Similar appeal was filed by TPC against
the tariff order dated 2
nd
April, 2007 providing for allocation of TPC (G)
capacity on the basis of coincidence peak demand on 4
th
May, 2007, which
was marked as Appeal No.51 of 2007.
By an order dated 17
th
May, 2007 the Appellate Tribunal in Appeal
No.51 of 2007 filed by TPC directed MERC to decide BEST’s and TPC’s
petitions for approval of PPA and recorded the undertaking of all parties that
they would not claim equities on the basis of order of MERC dated 2
nd
April, 2007.
RInfra in the meantime initiated a proceeding under Section 86 of
2003 Act before MERC seeking direction against TPC (G) to allocate 762
11
MW to it and to enter into a PPA with RInfra on the said basis, which was
marked as Case No. 30 of 2007.
By reason of a judgment and order dated 6
th
November, 2007 the
Commission approved PPA between TPC (G) and BEST and the
arrangement between TPC (G) and TPC (D) for supply of 800 MW and 477
MW of power respectively with effect from 1
st
April, 2008. In relation to its
own jurisdiction it was, however, opined that it can issue direction upon the
generating companies in terms of Section 23 of 2003 Act.
RInfra preferred an appeal thereagainst which was marked as Appeal
No.143 of 2007.
Two separate appeals were preferred by BEST and TPC questioning
the interpretation of Section 23 of 2003 Act by the Commission which were
marked as Appeal No.159 of 2007 and Appeal No. 14 of 2008 respectively.
MERC while dealing with the application filed by RInfra for
continuing the tariff for financial year 2007-2008 even beyond 31
st
March,
2008 till the tariff year 2008-2009, by an order dated 1
st
April, 2008 clearly
indicated that for the purpose of fixing the distribution tariff of all the three
distribution licensees namely, BEST, TPC (D) and RInfra, based on the
share of generation capacity of TPC (G), it will be proceeding in the manner
12
as directed by the Commission in its order dated 6
th
November, 2007
approving the PPA entered into by and between TPC (G) and BEST and
TPC (G) and TPC (D).
Appellate Tribunal thereafter passed the impugned judgment on 7
th
April, 2008 in Appeal No.51 of 2007 filed by TPC against the tariff order
dated 2
nd
April, 2007 on the submission of appellant-TPC that it was not
pressing for the adjustment of any amount that may be payable by RInfra to
TPC for the period 2007-2008 in terms of the interim order of the Appelalte
Tribunal dated 17
th
May, 2007.
RInfra filed petition marked as Case No.6 of 2008 before MERC on
17
th
April, 2008 seeking equitable allocation of power generation from TPC
(G)’s generation facility under Section 23 of 2003 Act.
ORDER OF THE COMMISSION
The Commission passed a fairly detailed order. It took into
consideration the factual matrix ; the nature of agreements ; submissions of
BEST; its earlier orders ; contentions raised by BEST in its original
application as also revised petitions ; firm capacity and other details.
It noticed that a Technical Validation Session in case No. 87 of 2006
was held on 18
th
April, 2007 including justification for entering into a long
13
term contract for ten years taking into account the demand forecast during
peak and off-peak hours and analysis of other sources of power and
availability of transmission capacity in future. It also took into account the
basis for arriving at 10 paise/kwh surcharge payable by TPC (G) to BEST in
case the availability of generating stations of TPC (G) falls below 85%
alongwith supporting computations. It also noticed the mechanism for
assessing the amount of compensation payable in case of termination due to
events of default may be incorporated in the PPA. It furthermore noticed
that before it a public hearing was held on 17
th
July, 2007 wherein points
were raised by the participants and BEST’s response thereto.
We may also place on record that that RInfra did not make
submissions in the technical session but did so only at the public hearing.
The Commission took up Case No.88 of 2007 and noticed the details
of Technical Validation Session in regard to internal capacity allocation
from the generation division of TPC to its own distribution division
including RInfra’s intervention application. It also noticed the details in
regard to the public hearing in the aforementioned case which was held on
29
th
August, 2007. Similarly the application filed by RInfra which was
marked as Case No.30 of 2007 was considered in great details.
14
Submissions of learned counsel appearing for the parties were noticed.
Part IV of its judgment contains ‘the decision with reasons’. It took into
consideration the relevant provisions of law. It noticed its functions under
Section 86 of the 2003 Act as also various Regulations framed thereunder.
It placed on record that it had issued certain directives to the distribution
licensees from time to time. It opined that submission of Power Purchase
Agreements (PPA) for approval are imperative as the objective thereof is to
remove any uncertainty that may be faced by the consumers of a distribution
licensee who does not have any written terms and conditions. It opined that
RInfra’s recalcitrant attitude in seeking approval of the terms and conditions
of its power procurement deserved to be deprecated, whereupon a warning
was administered.
Submissions of BEST before the Commission were :-
(i)Ambit of approval process under Section 81(1)(b) of 2003 Act
was required to be restricted to the price and the Commission
had no power to reduce the quantum agreed by distribution
licensee and the generating company under the PPA submitted
for approval.
15
(ii)Insertion of the word “including” before the words “the price”
makes the intention of the legislature clear that the scope of the
power to regulate is extensive.
(iii)Power of a Regulatory Body is extensive under Section
86(1)(b) of the 2003 Act. Even the generator can be subject to
Regulations.
(iv)Section 86(1)(b) is required to be harmoniously read. For
invoking the provisions of Section 60 of the Act, the following
three situations must conclusively be shown to exist :
(a)any agreement has been entered into which is likely to
cause or causes an adverse effect on competition in
electricity industry; or
(b)dominant position has been abused which is likely to
cause or causes an adverse effect on competition in
electricity industry; or
(c)a combination has entered into which is likely to cause or
causes an adverse effect on competition in electricity
industry.
FINDINGS OF THE COMMISSION
16
The Commission discussed clause by clause of the PPAs entered into
by and between TPC-D and BEST and TPC (G) and TPC (D) in terms of the
MERC Regulations. It took into consideration each of the factors
enumerated in those PPAs to hold that they were justified for meeting the
requirements of BEST and TPC (D), stating :-
“Based on the above analysis, the Commission is
satisfied with the data and information submitted
by BEST and TPC substantiating the requirements
of Regulation 24 of the MERC (Terms and
Conditions of Tariff) Regulations, 2005”
In conclusion the Commission held that Section 86 (1) (b) of the 2003
Act would be applicable only when the PPA is produced before it for its
approval and not otherwise.
It also noted that it has the jurisdiction to go into the question with
regard to the quantity of supply of electrical energy in terms of the PPAs.
However, as the PPA took into consideration the demand of the licensee for
the next 10 years, the stipulations contained therein were held to be fair and
proper.
It was opined that the language of Section 60 of the Act being
restrictive, no cause had been made out for issuance of any direction
thereunder.
17
It furthermore noted that Section 23 of the 2003 Act brought within its
fold a generating company but no case had been made for issuance of any
direction thereunder while considering the question of grant of approval of a
long term PPA.
On the aforementioned findings the Commission approved the PPA of
BEST and TPC (D). It was directed :-
“(C)REL-D is directed to file long-term Power
Purchase Agreements for procurement of power
from generating Companies and other sources at
the earliest. Also, REL-D should submit Power
Purchase Arrangement for procurement of power
from its own generating unit REL-G, for the
Commission’s approval, within one month of the
issue of this Order.
(D)In the past, in view of the prevailing supply
shortage situation, the Commission has invoked its
powers under Section 23 of the EA 2003, and has
directed the distribution licensees to share the
available generation capacity in a particular ratio,
based on the share of non-coincident peak demand
for FY 2006-07, and subsequently based on the
share of the coincident peak demand for FY 2007-
08, since the coincident peak demand data was
available by then. The situation in the previous
years was compounded by the fact that there were
no approved PPAs between the parties, and an
important aspect like power procurement cannot
operate in a vacuum. However, the Commission’s
powers to issue directions under Section 23 of the
EA 2003 are wide and if necessary and found
expedient, the Commission may issue such
directions in future also, despite the existence of
any or all the approved PPAs, in case of any
18
shortfall in contracted capacity, in order to protect
interests of consumers. During the transition
period, in case of shortage of supply of electricity
in the city of Mumbai, the Commission will assess
the situation at the time of conduct by the
Commission of Annual Performance Review in
terms of Regulation 17 of the MERC (Terms and
Conditions of Tariff) Regulations, 2005 and assess
whether any specific direction to the distribution
licensees is required to be issued, to ensure that the
consumers of all three distribution licensees in
Mumbai city are treated equitably and for
equitable distribution of electricity. It is clarified
that the supply in the form of generation capacity
does not necessarily have to be located within
Mumbai or even within Maharashtra, and the
supply availability referred to here is in the context
of firm long-term power purchase agreements
between the distribution licensees and power
suppliers. With the above observations, the
Commission disposes of Case No. 87 of 2006,
Case No. 88 of 2006 and Case No. 30 of 2007.”
APPELLATE TRIBUNAL
Four appeals were preferred by RInfra theregainst. Appellants also
preferred appeals in regard to the interpretation of Section 23 of 2003 Act.
The Tribunal by reason of its impugned judgment dated 6
th
May, 2008
disposed of the said appeals.
19
Therein apart from the factual matrix involved in each case, statutory
provisions and the submissions made by learned counsel for the parties were
duly noticed. The tribunal also extracted in details the averments made by
TPC in its writ petition before the High Court, which as noticed
hereinbefore, had ultimately been withdrawn.
The Tribunal in paragraph 93 of the judgment formulated the
questions for its consideration which read as under :-
“93. The main question in the set of these appeals
revolves around the approval of PPA between
TPC(G) and BEST and arrangement between
TPC(G) and TPC(D). These appeals raise the
question whether the Commission has the power to
disapprove the PPA and allocate the power of a
generating company amongst the distribution
licensees by regulating the supply in terms of
Section 23 of the Act?”
The Appellate Tribunal did not disturb the findings of the
Commission in regard to its interpretation of Section 60 as also Section 23
of the 2003 Act.
It, however, held that having regard to the purpose and object of the
Act, the Commission should have taken into consideration the need of the
first respondent in regard to the allocation of quantity of supply
20
Upon considering the provisions of the Act and the Regulations, the
Tribunal held :
“102. We note from the above regulations that the
Commission itself recognizes an agreement or an
arrangement for long-term power procurement by
a Distribution Licensee. Regulations require prior
approval of the Commission for any change to an
existing arrangement or agreement for long term
procurement. When an arrangement for power
procurement between TPC and BEST as also
between TPC and REL does exist, how the
Commission failed to consider the claim of REL.
103. We conclude from the aforementioned that
the Commission has wide powers to regulate the
quantity of energy that may be supplied by a
generating company to a distribution licensee
when both are under the jurisdiction of the same
Commission.
104. It is not in dispute that the claims of REL
have not been considered by the Commission
while approving the PPA between the TPC(G) and
BEST and arrangement between TPC(G) and
TPC(D). It is also not in dispute that the approval
of PPA and the arrangement has affected the
allocation of power to REL. The interests of REL
have been adversely affected by the Commission
in violation of the principle of natural justice. The
Commission ought to have considered the claim of
REL for allocation of power while considering the
approval of PPAs between TPC(G) and BEST and
arrangement between TPC(G) and TPC(D).
105. In the circumstances, appeal No. 143 of 2007
is allowed and order dated November 06, 2007 of
the MERC approving the PPA of TPC and BEST
and arrangement between TPC and TPC(D) with
reference to allocation of power to BEST and
21
TPC(D) is set aside. The Commission is directed
to consider the question of approval of PPA and
the arrangement afresh after taking into
consideration the claims of BEST, REL and
TPC(D). While considering the case of the parties
the Commission shall have regard to the fact that
the consumers of respective areas have been
bearing the Depreciation and Interest on Loan
elements of the Fixed Cost of tariff and also
consider all other submissions of the parties which
are permissible in the law.”
The Tribunal set aside the approval of PPA’s and remanded the matter
to MERC for its reconsideration.
The Tribunal, furthermore, did not interfere with the tariff order dated
2
nd
April,2007 while disposing of Appeal No. 41 of 2007 filed by BEST,
opining that the period for which allocation was made on the basis of
consistence peak demand had already expired
Both TPC as also BEST are before us questioning the legality and/or
validity of the final order passed by the Appellate Tribunal as also the orders
disposing of the interim applications.
SUBMISSIONS OF THE COUNSEL
Mr. Jaideep Gupta and Mr. Rohington Nariman, learned senior
counsel appearing on behalf of the appellants would submit :-
22
i)The Appellate Tribunal misdirected itself in passing the
impugned judgment in so far as it failed to take into
consideration that in terms of the provisions of the 2003 Act the
Commission had no jurisdiction to interfere with the functions
of the generating company and its jurisdiction was restricted to
regulate the terms of the agreement between a generating
company and a distribution company, particularly when no
fault with the approval of the PPA entered into by and between
TPC and BEST and TPC (G) and TPC (D) was found by it.
ii)RInfra also filed an application and the same having been
considered in great details, it has incorrectly been held by the
Appellate Tribunal that the principle of natural justice had not
been complied with.
iii)Direction of the Tribunal to the Commission to take into
consideration contribution towards depreciation and interest on
loan elements of fixed costs of TPC generation capacity while
considering the claim of RInfra is without any basis inasmuch
as :-
(a)Such direction of the Appellate Tribunal has the effect of
recognizing ownership of consumers over the generation
23
assets. The Act does not recognize any such right of
ownership of consumers over the generating assets.
(b)RInfra consumers have only paid towards costs of the
generation of the power consumed by them, which the
developer is entitled to recover as reasonable cost of
electricity and return of his investment.
If this argument is taken to its logical conclusion, every
consumer of electricity, whether domestic, industrial or
commercial, would claim ownership of generation plants for the
purpose of supply of power to their respective areas.
iv)2003 Act must be interpreted not only having regard to history
of legislation but also the purpose and object it seeks to achieve
wherefor the Commission and the Tribunal were not only
required to consider the chapter headings but also the marginal
notes.
v)Principles of harmonious construction of the provisions of the
statutes having not been resorted to either by the Commission
or by the Tribunal, they committed a serious error in opining
that Section 23 not only controls distribution of power but also
generation thereof.
24
Dr. A.M. Singhvi, learned senior counsel appearing on behalf of the
respondent, on the other hand, urged :-
(i)The factual matrix involved herein would clearly demonstrate a
long standing commercial relationship existing between TPC
(G) and RInfra and/or its predecessor-in-interest in regard to
supply of electrical energy for the consumers of suburb
Mumbai (approximately 384 sq. kms. area) being twenty five
lacs in number out of which eighteen lacs being small
individual and relatively economically weaker sections
consuming less than 300 units per month vis-à-vis the number
of consumers BEST serves, all of being in the town of Mumbai
being approximately of an area of 60 sq. kms. area who are
higher paying consumers and those of TPC (D) having 23846
consumers, the Commission must be held to have its
jurisdiction rightly to allocate supply of power to the licensees
in greater public interest.
(ii)2003 Act does not contemplate exclusion from the purview of
the Commission’s jurisdiction of all matters relating to
generation but also covers regulation of several aspects thereof
including tariff of generation companies, sale of electricity by
25
generators, maintaining efficient supply, securing the equitable
distribution of electricity, promotion competition, preventing
abuse of dominant position by generating companies,
preventing advese effect on competition in electricity industry
etc.
(iii)Regulation of tariff would bring within its fold inter alia the
quantity that a generator supplies to a distribution licensee or a
consumer and various interconnected and interrelated issues
which have a bearing on generation of electricity.
(iv)It is not that the 2003 Act merely empowers the Commission to
fix only the generating tariff and to otherwise adopt a hands off
attitude towards the generation company on the alleged ground
that the Commission did not have any other jurisdiction over
the generating companies.
(v)The principle of ‘purposive interpretation’ should be resorted to
for interpreting a statute regulating generation, distribution and
supply of electrical energy which is in short supply in the
country wherefor endeavour should be made to ascertain the
object and purport not only by reading one of the provisions of
the Act but the preamble thereof as also the other important
26
provisions, namely Sections 2(70) ; 7 ; 10 ; 11 ; 23 ; 60 ;
86(1)(b) and 86(1)(f) of the 2003 Act.
(vi)Only because the generation of electricity was taken outside the
purview of the licensing regime, the same would not mean that
a generator of an electrical energy would be entitled to free
wheel its entire supply to any person it likes and in any
quantity it likes.
(vii)The chapter heading and the marginal note of Section 23 of
2003 Act cannot be resorted to for its interpretation as it is well
settled that marginal notes do not control the meaning of the
section.
(viii)Chapter heading should not be treated to be containing
provisions dealing with a particular subject matter as rigid
compartment and it is not uncommon that a provision, rule or
regulation relatable to one chapter is in fact interpreted, applied
or related to other chapters of the same Act.
(ix)The term “supply” having been defined in Section 2(70) of the
2003 Act, in any event, the jurisdiction of the Commission
would clearly cover a situation where the power of regulation in
27
relation to supply and ensuring efficient thereof are required to
be regulated.
(x)Neither Section 23 nor Section 86(1)(b) of 2003 Act provides
‘any context to the contrary’ for the purpose of application/
interpretation of term “supply” as defined in Section 2(70).
Context of Section 86(1)(b) read with Section 23 and Section
2(70) of the Act if construed with the preamble thereof, upon
applying the principle of purposive interpretation, it would be
evident that the said provisions constitute an invisible seamless
web creating a context which, far from being to the contrary,
mutually reinforces each other and points only in one direction,
namely the necessity to regulate supply of electrical energy not
only at the hands of the licensees but also the generating
companies.
(xi)The basic and overriding purpose of 2003 Act being ensuring
generation of electricity and efficient equitable distribution
thereof with the interest of the consumers in mind the
generating companies cannot be permitted to act outside the
purview of Regulations of a Regulatory Commission and
consequently it must be held that the Commission has full
jurisdiction not only to regulate tariff and price issues but also
28
distribution of quantum of electricity and other necessary
concomitance thereto.
(xii)The word “regulate” reflects a statutory mandate of all
encompassing jurisdiction.
(xiii)TPC being in a public utility service, it is required to act fairly,
equitably and not in an arbitrary fashion.
(xiv)The principle of harmonious construction may be resorted to
only in a case where there exists any contradiction or
overlapping as in this case the provisions of Sections 11 and 23
apply in different fields, there is absolutely no necessity to take
recourse to the said principle.
(xv)As TPC (G)’s acts and omission, despite its status as
commercial entity, constitutes an abuse of its dominant
position, which cannot be permitted to take rccourse to “cherry
picking” of RInfra’s high end consumers.
ISSUES ARISING HEREIN
Although before us a large number of contentions had been raised, the
core questions, which arise for our consideration, are :-
29
(A)Whether recourse to Section 23 of the Act can be taken for
issuance of any direction to the generating company?
(B)Whether the Commission while applying the provisions of
Section 86(1)(b) of the Act could also take recourse to Sections
23 and 60 thereof?
(C)Whether equitable allocation of power generated by a
generating company is permissible?
LEGISLATIVE HISTORY
1910 ACT
The earliest statute relating to control of generation of supply,
distribution of electrical energy which governed the field was Indian
Electricity Act, 1910 (1910 Act). Part-II of the said Act provided for supply
of energy. Section 3 thereof provided for grant of licence to any person to
supply energy in any specified area and also to lay down or place electric
supply-lines for the conveyance and transmission of energy.
However, after coming into force the 1948 Act, such licences could be
granted only upon consulting the State Electricity Boards constituted and
incorporated under Sections 5 and 12 thereof. Section 22-B in the 1910 Act,
30
which was inserted by Act 32 of 1959, provided for power to control the
distribution and consumption of energy stating :-
“Section 22B - Power to control the distribution
and consumption of energy
(1) If the State Government is of opinion that it is
necessary or expedient so to do, for maintaining
the supply and securing the equitable distribution
of energy, it may by order provide for regulating
the supply, distribution, consumption or use
thereof.
(2) Without prejudice to the generality of the
powers conferred by sub-section (1) an order made
thereunder may direct the licensee not to comply,
except with the permission of the State
Government, with—
(i) the provisions of any contract, agreement or
requisition whether made before or after the
commencement of the Indian Electricity
(Amendment) Act, 1959, for the supply (other
than the resumption of a supply) or an increase
in the Supply of energy to any person, or
(ii) any requisition for the resumption of supply
of energy to a consumer after a period of six
months, from the date of its discontinuance, or
(iii) any requisition for the resumption of
supply of energy made within six months of its
discontinuance, where the requisitioning
consumer was not himself the consumer of the
supply at the time of its discontinuance.”
1948 ACT
31
The 1948 Act was enacted to provide for the rationalization of the
production and supply of electricity and generally for taking measures
conducive to electrical development. Section 43 conferred power on the
Board to enter into arrangements for purchase or sale of electricity under
certain conditions. Section 43-A provided for terms, conditions and tariff for
the sale of electricity generated by it to any other person with the consent of
the competent government or governments.
Section 44 of 1948 Act also placed restrictions on establishment of
new generating stations or major additions or replacement of plant in
generating stations except with the previous consent in writing of the Board,
to establish or acquire a new generating station or to extend or replace any
major unit of plant or works pertaining to the generation of electricity in a
generating station.
1998 ACT
The Parliament enacted Electricity Regulatory Commissions Act,
1998 (for short, “the 1998 Act”) to provide for the establishment of a Central
Electricity Regulatory Commission and State Electricity Regulatory
Commissions, rationalization of electricity tariff, transparent policies
regarding subsidies, promotion of efficient and environmentally benign
policies and for matters connected therewith and incidental thereto.
32
In terms of the 1998 Act, the Regulatory Commission was conferred
with the power to determine tariff for all sales by a generating company in
terms of Section 22(1)(c) thereof. It further required in line with the
provisions of the 1910 Act as also the 1948 Act, for the State Commission
constituted thereunder to regulate investment approval for generation,
transmission, distribution and supply of electricity to require the licensees to
formulate prospective plans and schemes for the promotion of generation,
transmission, distribution and supply of electricity and to devise proper
power purchase and procurement process, and to regulate the assets and
properties related to the electricity industry, etc. The 1998 Act did not
envisage de-licensing of generating companies as in terms thereof the
following requirements were to be complied with on the establishment and
operations of a generating station:
(a)Setting up a generating station requires approval of a Board (u/s
44 of Electricity Supply Act, 1948)
(b)Sale of Power by a generating company of any person requires
approval of the competent government (u/s 43A of Electricity
Supply Act, 1948)
(c)Investment approval for generating was regulated by the
ERCA.
33
(d)The tariff for all supply of power by a generating company was
determined by the Regulatory Commission.
(e)The generating company was also regulated from the
perspective of transmission grid stability and operation, which
is necessary on the technical side.
Section 22(1)(c) of the 1998 Act reads :-
“Section 22 - Functions of State Commission
(1) Subject to the provisions of Chapter III, the
State Commission shall discharge the following
functions, namely:--
(c) to regulate power purchase and procurement
process of the transmission utilities and
distribution utilities including the price at which
the power shall be procured from the generating
companies, generating stations or from other
sources for transmission, sale, distribution and
supply in the State;”
2003 ACT
The 2003 Act was enacted to consolidate the laws relating to
generation, transmission, distribution, trading and use of electricity.
Before noticing the relevant provisions of the 2003 Act, we may place
on record the statement of objects and reasons for enactment thereof, the
relevant portion whereof reads as under :-
34
“3.With the policy of encouraging private
sector participation in generation, transmission and
distribution and the objective of distancing the
regulatory responsibilities from the Government to
the Regulatory Commissions, the need for
harmonizing and rationalizing the provisions in the
Indian Electricity Act, 1910, the Electricity
(Supply) Act, 1948 and the Electricity Regulatory
Commissions Act, 1998 in a new self contained
comprehensive legislation arose. Accordingly, it
became necessary to enact a new legislation for
regulating the electricity supply industry in the
country which would replace the existing laws,
preserve its core features other than those relating
to the mandatory existence of the State Electricity
Board and the responsibilities of the State
Government and the State Electricity Board with
respect to regulating licensees. There is also need
to provide for newer concepts like power trading
and open access. There is also need to obviate the
requirement of each State Government to pass its
own Reforms Act. The Bill has progressive
features and endeavours to strike the right balance
given the current realities of the power sector in
India. It gives the State enough flexibility to
develop their power sector in the manner they
consider appropriate. The Electricity Bill, 2001
has been finalized after extensive discussions and
consultations with the States and all other stake
holders and experts.
4.The main features of the Bill are as follows:-
(i)Generation is being delicensed and
captive generation is being freely permitted. Hydro
projects would, however, need approval of the
State Government and clearance from the Central
Electricity Authority which would go into the
issues of dam safety and optimal utilization of
water resources.
35
(ii)There would be a Transmission
Utility at the Central as well as State level, which
would be a Government company and have the
responsibility of ensuring that the transmission
network is developed in a planned and coordinated
manner to meet the requirements of the sector.
The load dispatch function could be kept with the
Transmission Utility or separated. In the case of
separation the load dispatch function would have
to remain with a State Government
organization/company.”
Section 2 is the interpretation section.
Section 2(4) defines “appropriate Commission” to mean the Central
Regulatory Commission referred to in sub-section (1) of section 76 or the
State Regulatory Commission referred to in section 82 or the Joint
Commission referred to in section 83, as the case may be.
“Consumer” has been defined in section 2(15) to mean any person
who is supplied with electricity for his own use by a licensee or the
Government or by any other person engaged in the business of supplying
electricity to the public under this Act or any other law for the time being in
force and includes any person whose premises are for the time being
connected for the purpose of receiving electricity with the works of a
licensee, the Government or such other person, as the case may be;
36
Section 2(17) defines “distribution licensee” to mean :-
(17) "distribution licensee" means a licensee
authorised to operate and maintain a distribution
system for supplying electricity to the consumers in
his area of supply;
(23) "electricity" means electrical energy--
(a) generated, transmitted, supplied or traded for
any purpose; or
(b) used for any purpose except the transmission of
a message;
(28) "generating company" means any company or
body corporate or association or body of individuals,
whether incorporated or not, or artificial juridical
person, which owns or operates or maintains a
generating station;
(38) "licence" means a licence granted under section
14;
(39) "licensee" means a person who has been granted
a licence under section 14;
(50) "power system" means all aspects of generation,
transmission, distribution and supply of electricity and
includes one or more of the following, namely:--
(a) generating stations;
(b) transmission or main transmission lines;
(c) sub-stations;
(d) tie-lines;
(e) load despatch activities;
(f) mains or distribution mains;
37
(g) electric supply-lines;
(h) overhead lines;
(i) service lines;
(j) works;
(57) "regulations" means regulations made under this
Act;
(71) "trading" means purchase of electricity for resale
thereof and the expression "trade" shall be construed
accordingly
Section 3 provides for the National Electricity Policy and Plan
enabling the Central Government to prepare the National Electrcity Policy
and tariff policy, in consultation with the State Government and the
Authority for development of the power system based on optimal utilization
of resources such as coal, natural gas, nuclear substances or materials, hydro
and renewable sources of energy.
Part III of the Act provides for generation of electricity. Section 7
enables a generating company to establish, operate and maintain a
generating station without obtaining a licence if it complies with the
technical standards relating to connectivity with the grid referred to in clause
(b) of Section 73.
38
Section 8, however, provides that a generating company intending to
set up a hydro-generating station shall prepare and submit to the Authority
for its concurrence, a scheme estimated to involve a capital expenditure
exceeding such sum, as may be fixed by the Central Government from time
to time by Notification.
Section 9 provides for captive generation. Section 10 lays down
duties of generating companies, sub-sections (1) and 2 whereof reads as
under :-
“10 - Duties of generating companies
(1) Subject to the provisions of this Act, the duties
of generating company shall be to establish,
operate and maintain generating stations, tie-lines,
sub-stations and dedicated transmission lines
connected therewith in accordance with the
provisions of this Act or the rules or regulations
made thereunder.
(2) A generating company may supply electricity
to any licensee in accordance with this Act and the
rules and regulations made thereunder and may,
subject to the regulations made under sub-section
(2) of section 42, supply electricity to any
consumer.”
The power to issue directions to the generating companies by the
Appropriate Government and appropriate Commissions are laid down in
sub-section (1) of Section 11 of the 2003 Act stating :-
39
“Section 11 - Directions to generating companies
(1) The Appropriate Government may specify that
a generating company shall, in extraordinary
circumstances operate and maintain any generating
station in accordance with the directions of that
Government.
Explanation:--For the purposes of this section,
the expression "extraordinary circumstances"
means circumstances arising out of threat to
security of the State, public order or a natural
calamity or such other circumstances arising in
the public interest.”
Part IV of the 2003 Act provides for licensing.
Section 12 prohibits any person to transmit electricity, or distribute
electricity; or undertake trading in electricity, unless authorized to do so by a
licence issued under Section 14 or exempt under Section 13 of the 2003 Act.
Section 14 provides for grant of licence by the Appropriate Commission to
any person – (a) to transmit electricity as a transmission licensee ; or (b) to
distribute electricity as a distribution licensee; or (c) to undertake trading in
electricity as an electricity trader in any area as may be specified in the
licence.
40
Section 15 of the 2003 Act provides for procedure for grant of licence.
Section 16 provides for conditions of licence. Section 15 mandates the
licensee not to do certain things. The provisions for amendment of licence is
contained in Section 18 thereof. Section 19 provides for revocation of
licence. Section 20 provides for sale of utilities of licensees. Section 21
provides for vesting of utility in purchaser.
Section 23, which is relevant for our purpose, reads as under :-
“23 - Directions to licensees
If the Appropriate Commission is of the opinion
that it is necessary or expedient so to do for
maintaining the efficient supply, securing the
equitable distribution of electricity and promoting
competition, it may, by order, provide for
regulating supply, distribution, consumption or use
thereof.”
Section 24 provides for suspension of distribution licence and sale of
utility.
Part V deals with transmission of electricity.
Section 60 provides for market domination. It reads :-
“The Appropriate Commission may issue such
directions as it considers appropriate to a licensee
or a generating company if such licensee or
generating company enters into any agreement or
41
abuses its dominant position or enters into a
combination which is likely to cause or causes an
adverse effect on competition in electricity
industry.”
Section 86 provides for functions of State Commission, clauses (a),
(b) and (f) of sub-section (1) whereof, read as under :-
“Section 86 - Functions of State Commission
(1) The State Commission shall discharge the
following functions, namely:--
(a) determine the tariff for generation, supply,
transmission and wheeling of electricity,
wholesale, bulk or retail, as the case may be,
within the State:
PROVIDED that where open access has
been permitted to a category of consumers
under section 42, the State Commission
shall determine only the wheeling charges
and surcharge thereon, if any, for the said
category of consumers;
(b) regulate electricity purchase and
procurement process of distribution licensees
including the price at which electricity shall be
procured from the generating companies or
licensees or from other sources through
agreements for purchase of power for
distribution and supply within the State;
.. … …
(f) adjudicate upon the disputes between the
licensees and generating companies and to refer
any dispute for arbitration;
42
Section 181 of 2003 Act empowers the State Commissions to make
regulations, consistent with the provisions of the Act and the rules generally
to carry out the provisions of the Act.
Pursuant to or in furtherance of the aforementioned regulations
making powers, the Commission has made regulations known as MERC
(Terms and Conditions of Tariff) Regulations, 2005.
Regulation 7 deals with determination of generation tariff.
Regulation 22 provides for Power procurement guidelines to the
following terms :
“22.1 A Distribution Licensee shall follow the
guidelines contained in this Part with respect to:
(a) Procurement of power under any arrangement
or agreement with a term or duration exceeding
one year (i.e. long-term power procurement); and
(b) Procurement of power under any arrangement
or agreement with a term or duration less than or
equal to one year (i.e. short-term power
procurement).”
Regulation 23 mandates the distribution of licenses to prepare long
term power procurement plan which should fulfill the requirements specified
thereunder.
43
We may now notice that Regulation 24 provides for approval of
power purchase agreement/arrangement.
PRELIMINARY OBSERVATIONS
Before adverting to the rival contentions of the parties we may
observe :
The Tribunal committed a factual error in so far as it failed to notice
that no long term PPA exists between TPC (G) and RInfra. It furthermore
was not correct in opining that the Commission had not considered the claim
of RInfra while approving the arrangements between TPC (G) and TPC (D),
despite the fact that REL (RInfra) not only filed objections to the application
for grant of approval of PPA filed by the parties herein, it also filed
independent application; took part in the deliberations and all its contentions
had been considered. On what basis the Tribunal opined that the decision of
the Commission is in violation of the principle of natural justice is beyond
anybody’s comprehension. It furthermore took into consideration an
irrelevant fact, namely that the Commission in determining the issue
between the parties should have regard to the fact that the consumers of
respective areas have been bearing the ‘depreciation’ and interest on loan
44
elements of the Fixed Cost of tariff. It furthermore without assigning any
reason dismissed the appeals being Nos. 159 of 2007 and 14 of 2008.
INTERPRETATION OF THE STATUTORY PROVISIONS
A statute, as is well known, must be construed having regard to
Parliamentary intent. For the said purpose it is open to a court not only to
take into consideration the history of the legislation including the mischief
sought to be remedied but also the objects and purpose it seeks to achieve.
The 1910 Act provided for licensing of all the operators who were
engaged not only in transmission and distribution of electricity but also
generation thereof. Indisputably ‘electricity’ comes within the purview of
the public utility service. It, in the modern context, is a necessary item for
the purpose of better living of the citizens. After India became independent
and with the advent of industrialization as also for other reasons, the benefit
of availing consumption of electrical energy not only remained with the
urban areas but also extended to rural areas. With growth in
industrialization as also trade and commerce in the country, its requirements
increased many fold. With a view to provide for effective control and
regulation of generation, distribution and supply of electrical energy each
45
State was separately required to set up Electricity Boards wherefor the
Parliament enacted 1948 Act. For all intent and purport the Boards
constituted under the 1948 Act were to exercise monopoly power. The 1910
Act also made provisions for purchase of electricity undertakings by the
State.
Section 3 of 1910 Act, as amended in 1959, and Sections 43-A and 44
of 1948 Act clearly go to show that the private generating companies were
brought under an extensive control as not only for extension of its existing
plants but also for setting up or acquiring new plants, the previous consent of
the concerned State and the Board became necessary.
The private generating companies, in terms of the provisions of the
statutes governing the field were, thus, subjected to an extensive control by
the States. As the years rolled by, the activities of the Boards grew by leaps
and bounds. The Boards, for all intent and purpose, acquired monopoly
status. In terms of Sections 46 and 49 of the 1948 Act, they were entitled to
fix grid tariff and to make provisions for earning reasonable profits.
It was, however, noticed that in the absence of any competition from
the private operators, the Boards were not in a position to provide for the
desired optional results. It was in the aforementioned premise and
46
particularly having regard to the liberalized economic policy of the Central
Government since 1991 necessities were felt for providing greater room for
the private generating companies. For the aforementioned purposes, the
Central Government as also the State Governments adopted liberalized
polices. They invited private operators to generate electrical energy not only
through conventional modes, namely, Hydro Electric Power and Thermal
Power but also generation of power by using other raw-materials, for
example gas, naptha etc.
The 1998 Act, as notice hereinbefore, did not envisage delicensing of
generating companies. It provided for approval by the Board therefor. It
provided for imposition of other conditions for generation of electricity.
The Parliament by making 2003 Act clearly acknowledged the
necessity of providing a greater room for generation of electrical energy so
as to enable the country to meet its requirements. It is only in that view of
the matter, the liberalization policy of the State provided for de-licensing of
the generating companies.
In terms of the said provision, the activities of the erstwhile licensees
of power generation on the one hand and those of transmission and
distribution in electricity on the other were separated. The concept of
47
trading was brought thereunder for the first time. Trading activities are
permitted subject to grant of licenses. Distribution of electricity was defined
as licensed activity in terms whereof a holder of a license can supply power
to a person for his own use. A licensee for the activity of transmission could
own the wires/transmission lines constituting the part of their grid but it
could not engage itself in the activity of buying or selling the electrical
energy.
The core question which, therefore, arises for consideration is as to
whether despite the Parliamentary intent of giving a go-bye to its licensing
policy to generating companies, whether through imposing stringent
regulatory measures the same purpose should be allowed to be achieved?
The Act is a consolidating statute. It brings within its purview
generation, transmission, distribution, trade and use of electricity. Whereas
generation of electricity has been brought outside the purview of the
licensing regime, the transmission, distribution and trading are subject to
grant of licence are kept within the regulatory regime.
The statute provides for measures to be taken which would be
conducive to development of electricity industry. Measures are also
required to be taken for promoting competition which would also mean the
48
development of electricity industry. It, indisputably, provides for measures
relating to the protection of interest of consumers and supply of electricity to
all areas. The generating companies, however, despite de-licensing, do not
enjoy the monopoly status. They are subject to rationalization of electricity
tariff. The preamble envisages ensuring transparent policies, policies
regarding subsidies, promotion of efficient and environmentally benign
policies, constitution of Central Electricity Authority Regulatory
Commissions and establishment of Appellate Tribunal and for matters
connected therewith or incidental thereto.
Electricity is not an essential commodity within the meaning of the
provisions of the Essential Commodities Act, 1955 or any other statute. It
is, however, in short supply. As the number of consumers as also the nature
of consumption have increased many fold, the necessity of more and more
generation of electrical energy must be given due importance.
The preamble of the 2003 Act, although speaks of development of
electricity industry and promotion of competition, it does not speak of
equitable distribution of electrical energy. The statutes governing essential
and other commodities in respect whereof the State intends to exercise
complete control, provide for equitable distribution thereof amongst the
consumers.
49
For the purpose of deciphering the object and purport of the Act, it is
well known, the Court can look to the statement of objects and reasons
thereof. One of the principal purposes which had been taken note of for
enactment of 2003 Act by the Parliament is the poor performance of the
State Electricity Boards. The Government intended to have an independent
body for determining the tariff which was required to be carried on in a
professional and independent manner. It was felt that cross-subsidies have
reached to unsustainable levels. The enactment provides for establishment
of the Electricity Regulatory Commissions.
Encouraging private sector participation, generation, transmission and
the distribution of electricity became the statutory policy. The Parliament
felt the need of harmonizing and rationalizing the provisions of the Act. De-
licensing of generation as also grant of free permission of captive generation
is one of the main features of the 2003 Act. It is clearly provided that only
hydro-generating projects would need the approval of the State Commission
and the Central Electricity Regulatory Authority. It recognized the need of
prohibiting transmission licensees. It also for the first time provided for
open access in transmission from the outset. It even provides where the
distribution licensee proposes to undertake distribution of electricity for a
50
specified area within the area of supply through another person, that person
shall not be required to obtain separate licence.
In terms of Section 7 of the 2003 Act, all persons are permitted to
establish, operate and maintain a generating station. It can, in terms of
Section 62(1)(a) of the 2003 Act, supply electricity to any licensee i.e.
distribution licensee or trading licensee. The 2003 Act permits the
generating company to supply the electricity directly to a trader or a
consumer. In terms of Section 42(2) of the 2003 Act even for the said
purpose no tariff is required to be determined.
The primary object, therefore, was to free the generating companies
from the shackles of licensing regime. The 2003 Act encourages free
generation and more and more competition amongst the generating
companies and the other licensees so as to achieve customer satisfaction and
equitable distribution of electricity.
The generation company, thus, exercises freedom in respect of choice
of site and investment of the generation unit; choice of counter-party buyer;
freedom from tariff regulation when the generating company supplies to a
trader or directly to the consumer.
51
If de-licensing of the generation is the prime object of the Act, the
courts while interpreting the provisions of the statute must guard itself from
doing so in such a manner which would defeat the purpose thereof. It must
bear in mind that licensing provisions are not brought back through the side
door of Regulations.
DIRECTION TO GENERATING COMPANIES
This brings us to the interpretation of Section 11 of the 2003 Act. In
terms of 1910 Act the State Government was the licensing authority. It
alone, therefore, in the said capacity was entitled to issue directions. Sub-
section (1) of Section 11 of 2003 Act empowers the Appropriate
Government to issue directions but such direction can be issued only in
extraordinary circumstances as stated in the explanation appended thereto
i.e. arising out of threat to security of the State, public order or a natural
calamity or such other circumstances arising in the public interest.
Interpretation clause contained in Section 2 of the Act prefixes the
words “unless the context otherwise requires”. The word “supply” has
separately been used even for generation and distribution. Thus, although a
broad meaning may be assigned to the said term but the same must be held
to be ‘subject to the context’. The word “supply” used in Section 23 of 2003
52
Act for bringing in efficient supply would mean regulate and
consequentially licensing in respect of the generating company.
For the aforementioned purpose it cannot be given a general or
popular meaning denoting supplier and receiver. Once it is held that by
reason thereof the Parliament aimed at ensuring the supply, the purported
object it sought to achieve by enacting Section 7 would lose its purpose. It,
however, does not mean that Section 23 itself becomes unworkable as it
would not be possible to secure equitable distribution and supply. The
agreement of distribution (PPA) being subject to approval, indisputably the
Commission would have the public interest in mind. It has power to
approve a MOU which subserves the public interest. It, while granting such
approval may also take into consideration the question as to whether the
terms to be agreed are fair and just.
SECTION 23 – DIRECTION BY THE COMMISSION
Could a generating company, despite Section 11 be subjected to any
direction by the Commission in terms of Section 23 of the 2003 Act?
Whether chapter headings and marginal notes should be taken into
consideration for the purpose of interpretation of the main provision are the
questions?
53
Chapter headings and the marginal note are parts of the statute. They
have also been enacted by the Parliament. There cannot, thus, be any doubt
that it can be used in aid of the construction. It is, however, well settled that
if the wordings of the statutory provision are clear and unambiguous,
construction of the statute with the aid of ‘chapter heading’ and ‘marginal
note’ may not arise. It may be that heading and marginal note, however, are
of a very limited use in interpretation because of its necessarily brief and
inaccurate nature. They are, however, not irrelevant. They certainly cannot
be taken into consideration if they differ from the material they describe.
We may notice some authorities on the subject at the outset.
In Bennion on Statutory Interpretation, Fifth edition, Section 255, it is
stated : “where general words are preceded by a heading indicating a
narrower scope it is legitimate to treat the general words as cut down by the
heading.”,
Section 256 of the said treatise deals with “sidenote, heading or title”,
wherein it is stated :-
“Use in interpretation – Like anything else in what
Parliament puts out as its Acts, a sidenote or
heading is part of the Act, despite dicta to the
contrary. It may therefore be used by the
54
interpreter. ‘No judge can be expected to treat
something which is before his eyes as though it
were not there. However, the sidenote or section
heading is of very limited use in interpretation
because of its necessarily brief and therefore
possibly inaccurate nature.”
It was commented :-
“If the sidenote contradicts the text this puts the
interpreter on inquiry; but the answer may be that
the drafter chose an inadequate signpost, or
neglected to alter it to match an amendment made
to the clause during the passage of the Bill. Such
facts are outside the knowledge of the interpreter,
who must therefore adopt a rule not depending on
them.
… ….. …..
Modern judges believe it proper to consider
sidenotes or headings to sections, and gather what
guidance they can from them. Thus Vinelott J said
that the sidenote to the Income and Corporation
Taxes Act, 1970 s 488 (repealed) was a
permissible and useful guide that threw a light on
the mischief at which the section was aimed.
Upjohn LJ gave a precisely accurate indication of
the role of the sidenote when he said :
‘While the marginal note to a section cannot
control the language used in the section , it
is at least permissible to approach a
consideration of its general purpose and the
mischief at which it is aimed with the note
in mind.’
The italicised words accurately show the
relationship of this component to the informed
interpretation rule. Earlier inconsistent dicta, a
55
selection of which are now considered, must be
treated as erroneous.”
In Interpretation of Statutes, Fourth Edition, by Vepa P. Sarathi at
page 347 it is stated :-
‘The heading of a chapter may be referred to in
order to determine the sense of any doubtful
expression in a section ranged under it. But it
cannot control unambiguous expressions.
It is true that a heading cannot control the
interpretation of a clause if its meaning is
otherwise plain and unambiguous, but it can
certainly be referred to as indicating the general
drift of the clause and affording a key to a better
understanding of its meaning.”
Similarly in Principles of Statutory Interpretation by Justice G.P.
Singh, upon noticing the conflicting opinion, the learned Author states:-
“The view is now settled that the Headings or
Titles prefixed to section or group of sections can
be referred to in construing an Act of the
Legislature.”
Chapter heading, therefore, is a permitted tool of interpretation. It is
considered to be a preamble of that section to which it pertains. It may be
taken recourse to where an ambiguity exists. However, where there does not
56
exist any ambiguity, it cannot be resorted to. Chapter heading and marginal
note, however, can be resorted to for the purpose of resolving the doubts.
It furthermore appears that there is a drift from the old value in recent
times.
We may notice that the English decisions whereupon reliance had
been placed by this Court in various judgments and in particular Chandler v.
DPP, [ (1962) All ER 142 ], str considered to be a no longer a good law in
the country of origin, as stated in Bennion on Statutory Interpretation Fifth
Edition at page 748 :-
“ Superseded dicta Phillimore LJ referred to a
‘general rule of law’ to the effect that marginal
notes must be disregarded ‘upon the principle that
those notes are inserted not by Parliament nor
under the authority of Parliament, but by
irresponsible persons’. In fact, with occasional
triffling exceptions, the marginal notes in an Act
are not inserted by parliamentary clerks - or even
drafters – but are contained either in the Bill as
introduced or in new clauses added by amendment.
Furthermore, the clerks are not ‘irresponsible
persons’, but are subject to the authority of
Parliament. Avory J. said that ‘marginal notes
form no part of a statute’. He added : ‘They are
not voted on or passed by Parliament, but are
inserted after the Bill has become law’. This is not
the case however. The entire Act is passed by
Parliament and is entered, or deemed to be entered,
in the Parliament Roll with all non-amendable
components included. These components mostly
57
remain unchanged throughout the passage of the
Bill. They are certainly not inserted after the Bill
has become law. Willes J. after asserting that the
marginal notes and other ‘appendages’ are not part
of an Act, said of any Act, passed after the practice
of actually engrossing Acts on the Parliament Roll
ceased in 1849: ‘The Act, when passed, must be
looked at just as if it were still entered upon a roll,
which it may be again if Parliament should be
pleased so to order; in which case it would be
without these appendages…’”
It is, however, evident from the decision of this Court in Indian
Aluminium Company v. Kerala State Electricity Board, [ AIR 1975 SC
1967 ], that the modern trend is to take into consideration the marginal note.
It could be used, as has been held, in R.S. Joshi, Sales Tax Officer, Gujarat
and Ors. v. Ajit Mills Limited and Anr., [ (1977) 4 SCC 98 ]. Relevance of
marginal note was also taken note of in Ramesh Chand and Ors. v. State of
U.P. and Ors., [ (1979) 4 SCC 776 ].
In Bombay Dyeing and Mfg. Co. Ltd. v. Bombay Environmental
Action Group and Ors., [ (2006) 3 SCC 434 ], marginal note has been taken
into consideration as an intrinsic part of the Section. In Deewan Singh and
Ors. v. Rajendra Pd. Ardevi and Ors., [ 2007 (1) SCALE 32 ] it has been
held that the marginal note may be taken into consideration for the purpose
of proper construction of the provision although there is no ambiguity.
58
Sarabjit Rick Singh v. Union of India (UOI), [ (2008) 2 SCC 417 ] follows
Deewan Singh (supra).
SUPPLY – CONTEXTUAL MEANING
It was submitted by the respondents that in any event the word
‘supply’ as used in Section 23 should be given the same meaning as is given
to it in Section 2(70) of the Act i.e. the sale of electricity to a licensee or
consumer. Accordingly by its very nature, supply would have a supplier and
a receiver and any direction which is aimed at ensuring or regulating supply
by its very nature would have to be directed to both the supplier and the
receiver.
However, when the question arises as to the meaning of a certain
provision in a statute, it is not only legitimate but proper to read that
provision in its context.
The legal principle is that all statutory definitions have to be read
subject to the qualification variously expressed in the definition clause
which created them and it may be that even where the definition is
exhaustive inasmuch as the word defined is said to mean a certain thing, it is
possible for the word to have some what different meaning in different
sections of the Act depending upon the subject or context. That is why all
59
definitions in statutes generally begin with the qualifying words ‘unless
there is anything repugnant to the subject or context’. [See Whirlpool
Crporation v. Registrar of Trade Marks, Mumbai and others, { (1998) 8
SCC 1 ; Garhwal Mandal Vikas Nigam Ltd. v. Krishna Travel Agency,{
(2008) 6 SCC 732 } and National Insurance Co. Ltd. v. Deepa Devi,
[ (2008) 1 SCC 414 } ].
Accordingly the word ‘supply’ cotnained in Section 23 refer to
‘supply to consumers only’ in the context of Section 23 and not to supply to
licensees. On the other hand, in Section 86(1)(a) ‘supply’ refers to both
consumers and licensees. In Section 10(2) the word ‘supply’ is used in two
parts of the said Section to mean two different things. In the first part it
means ‘supply to a licensee only’ and in the second part ‘supply to a
consumer only’. Further in first proviso to Section 14, the word ‘supply’ has
been used specifically to mean ‘distribution of electricity’. In Section 62(2)
the word ‘supply’ has been used to refer to ‘supply of electricity by a trader’.
To assign the same meaning to the word “supply” in Section 23 of the
Act, as is assigned in the interpretation section, it is, in our opinion,
necessary to take recourse to the doctrine of harmonious construction and
read the statute as a whole. Interpretation of Section indisputably must be
premised on the scheme of the statute. For the purpose of construction of a
60
statute and in particular for ascertaining the purpose thereof, the entire Act
has to be read as a whole and then chapter by chapter, section by section and
word by word.
{See Reserve Bank of India, v. Peerless General Finance and
Investment Co. Ltd, [ (1987) 1 SCC 424 ] ; Peerless General Finance and
Investment Co. Ltd. v. Reserve Bank of India, [ (1992) 2 SCC 343 ] and
National Insurance Co. Ltd. v. Swaran Singh, [ (2004) 3 SCC 297 ]. }
Thus, in a case where interpretation of a Section vis-à-vis the scheme
of the Act, the purport and object of the legislation, particularly having
regard o the mischief it seeks to remedy; the chapter heading as also the
marginal note, in our opinion, are relevant.
PURPOSIVE CONSTRUCTION
Legislation has an aim, it seeks to obviate some mischief, to supply an
inadequacy, to effect a change of policy, to formulate a plan of government.
That aim, that policy is not drawn like nitrogen, out of air ; it is evidenced in
the language of the statute, as read in the light of other external
manifestations of purpose. [See Justice Frankfurtir, Some Reflextions on the
reading of Statutes, 47 Columbia LR 527, at page 538 (1947) ; Union of
61
India v. Ranbaxy Laboratories Ltd. and others ; { (2008) 7 SACC 502 }and
D. Purushotam Reddy and another vs. K. Sateesh, {(2008) 11 SCALE 73}].
ANALYSIS
In this case the relevance of chapter heading is more for the purpose
of arriving at a conclusion as to whether the arrangement and scheme of the
statute is such it can be said be relatable to different types of licensees on the
one hand and a generating company which does not require a licence on the
other. If by reason of a provision of a statute the generating companies are
excluded from the licensing provisions, one of the principal tool of
interpretation is that the mischief which was sought to be remedied may not
be brought back by a side door. It has to be borne in mind that if the licence
raj is brought back through the side door or regulations seeking to achieve
the same purpose which the Parliament intended to avoid, there would be a
possibility of mis-interpretation and mis-application of statute.
For the said purpose even the history of the Act may be noticed. It is
from this point of view that the ambiguity, if any, must be found out.
If the marginal note in this case is given effect to it would come
within the scheme. If it is not given effect to and plain meaning is resorted
62
to it will produce anomaly with the purpose and object of the Act. Chapter
IV in which Section 23 occurs deals with a particular category of licensees.
Almost all the sections preceding Section 23 as also Section 24 refer to the
licensees and the licensees alone. None of the sections in the said chapter
refers to generating companies.
Furthermore in the scheme of the Act wherever regulation of
generating companies is necessary the same has been provided for. Section
11 and Section 60 provide for adequate indication in this behalf. They deal
with extra ordinary situations.
Transmission of electrical energy does not come within the purview of
section 23. Trading therein also does not per say come within the purview
thereof.
It has to be construed harmoniously with other powers. Had the
power of the Commission to issue direction in regard to supply of electrical
energy was so pervasive, Section 23 could have been appropriately worded..
It could have been placed in an appropriate chapter and not in the chapter
dealing with licensing. There was also no necessity to bring out
transmission of electricity from the purview thereof as the same would also
come within the purview of supply of electricity. If transmission of
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electricity can be kept outside the purview of direction by the Commission,
there is no reason why generation thereof would not be.
We, therefore, of the opinion that Section 23 of the 2003 Act does not
contemplate issuance of any direction by the Commission.
SECTION 86 – FUNCTION OF THE COMMISSION
Section 86 provides for the functions of the Sate Commission, clause
(a) of sub-section (1) whereof empowers it to determine the tariff for
generation, supply, transmission and wheeling of electricity. Clause (b)
empowers it to regulate electricity purchase and procurement process of
distribution licensees. Inevitably it speaks of PPA. PPA may provide for
short term plan, a mid term plan or a long term plan. Depending upon the
tenure of the plan, the requirement of the distribution licensee vis-à-vis its
consumers ; the nature of supply and all other relevant considerations,
approval thereof can be granted or refused.
While exercising the said function necessarily the provisions of
Section 23 may not be brought within its purview. While even exercising
the said power the State Commission must be aware of the limitations thereo
as also the purport and object of the 2003 Act. It has to take into
consideration that PPA will have to be dealt with only in the manner
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provided therefor. The scheme of the Act, namely the generation of
electricity is outside the licensing purview and subject to fulfillment of the
conditions laid down under Section 42 of the Act a generating company may
also supply directly to consumer wherefor no licence would be required,
must be given due consideration. The said provision has to be read with
Regulation 24. In regard to the grant of approval of PPA the procedures laid
down in Regulation 24 are required to be followed. While exercising its
power of ‘Regulation’ in relation to purchase of electricity and procurement
process of distribution, it is not permissible for the Commission to direct
allocation of electricity to different licensees keeping in view their own
need. Section 86(1)(b) read with Section 23 if interpreted differently would
empower the Commission to issue direction to the generating company to
supply electricity to a licensee who had not entered into any PPA with it.
We do not think that such a contingency was contemplated by the
Parliament. A generating company, if the liberalization and privatization
policy is to be given effect to, must be held to be free to enter into an
agreement and in particular long term agreement with the distribution
agency, terms and conditions of such an agreement, however, are not
unregulated. Such an agreement is subject to grant of approval by the
Commission. The Commission has a duty to check if the allocation of
power is reasonable. If the terms and conditions relating to quantity, price,
65
mode of supply the need of the distributing agency vis-à-vis the consumer,
keeping in view its long term need are not found to be reasonable, approval
may not be granted. A generating company has to make a huge investment
and assurances given to it that subject to the provisions of the Act he would
be free to generate electricity and supply the same to those who intend to
enter into an agreement with it. Only in terms of the said statutory policy,
he makes huge investment. If all his activities are subject to regulatory
regime, he may not be interested in making investment. The business in
regard to allocation of electricity at the hands of the generating company
was the subject matter of the licensing regime. While interpreting the statute
it must be borne in mind that such a mechanism should not come back.
That, however, would not mean that the generating company is
absolutely free from all regulations. Such regulations are permissible under
the 2003 Act ; , one of them being fair dealing with the distributor. Thus,
other types of regulations should not be brought in which were not
contemplated under the statutory scheme. If he is exercising his dominant
position, Section 60 would come into play. It is only in a situation where a
generator may abuse or misuse his position the Commission would be
entitled to issue a direction. The regulatory regime of the Commission, thus,
can be enforced against a generating company if the condition precedent
therefor becomes applicable.
66
INTERRETATION OF SECTION 86
Section 86(1)(b) provides for regulation of electricity purchase and
procurement process of distribution licensees. In respect of generation its
function is to determine, the tariff for generation as also in relation to
supply; transmission and wheeling of electricity. Clause (b) of sub-section
(1) of Section 86 provides to regulate electricity purchase and procurement
process of distribution licensees including the price at which the electricity
shall be procured from the generating companies or licenses or from other
sources through agreements. As a part of the regulation it can also
adjudicate upon disputes between the licensees and generating companies in
regard to the implementation, application or interpretation of the provisions
of the said agreement.
There are some provisions which provide for regulation etc. of
generation and/or generating companies, namely –
(i)Section 10(3)
(ii)Section 11(2)
(iii)Section 23
(iv)Section 33(2)
(v)Section 55(2) and (3)
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(vi)Section 60
(vii)Section 62(1), (2) and (95)
(viii)Section 81(1)(a), (b), (e), (f) and sub-section (2)
(ix)Section 128(1), (6), (7) and (8)
(x)Section 129
(xi)Section 181
The Parliament thought it necessary to provide for specific provisions
for the purpose of regulating the functions of the generating companies,
those provisions are special provisions vis-à-vis the other general provisions
which take within its abridge the function of the distributor, transmitter and
trader.
In U.P. Power Corporation Ltd. v. NTPC and others, [2009 (3)
SCALE 620] this Court opined :
“There cannot be any doubt whatsoever that the
word ‘regulation’ in some quarters is considered to
the unruly horse.”
[See also Bank of New South Wales v. Commonwealth {(1948) 76
CLR 1} and Prasar Bharti and others v. Amarjeet Singh and others, { 2007
(2) SCALE 486 } ].
68
We may notice a comparative chart of the provisions of Section
22(1)(c) of 1998 Act and Section 86(1)(b) of the 2003 Act.
Section 22(1)(c) of the 1998 Act Section 86(1)(b) of the 2003 Act
to regulate power purchase and
procurement process of the
transmission utilities and
distribution utilities including the
price at which the power shall be
procured from the generating
companies, generating stations or
from other sources for
transmission, sale, distribution
and supply in the State;
regulate electricity purchase and
procurement process of distribution
licensees including the price at
which electricity shall be procured
from the generating companies or
licensees or from other sources
through agreements for purchase of
power for distribution and supply
within the State;
A critical comparison of the said provisions would show that the
agreements for purchase of power referred to therein is directly linked with
the procurement process of distribution license either from the generating
companies or licensees or from other sources. Regulation of transmission
has been taken out of the regulatory provision. The words ‘through
agreements for purchase of power’ inserted in Section 86(1)(b) of the 2003
Act bring about a significance distinction. It is neither irrelevant nor
immaterial as contended by Dr. Singhvi.
A PPA may be a long term one or a short term one. Regulations have
been made by the Commission by making MERC (Terms and Conditions of
Tariff) Regulations, 2005.
69
Short term power procurement refers to an agreement for procurement
of power for a period of less than one year. Regulation 23.1 requires the
distribution licensee to prepare a five year plan inter alia upon taking into
consideration the sources for procurement thereof. Regulation 24.1
mandates obtaining of prior approval of the Commission therefor. Approval
by Commission is granted upon examining the process of procurement
having regard to the factors specified in Regulation 24.2. It is in the
aforementioned context grant of approval of the PPA by and between TPC
(G) on the one hand and BEST and TPC (D), on the other hand, necessitated.
The proposal of TPC (G) that RInfra should enter with it a long term
agreement assumes significance.
RE: HARDSHIP OF RIinfra
For the purpose of interpretation and/or application of a statute, this
Court cannot base its decision on any hypothesis. Construction of a statute,
save and except some exceptional cases, cannot be premised on the hardship
of a party which may be suffered by one of the licensees. Enabling
provisions are made for entering into a free contract.
A company incorporated under the Companies Act being not a citizen
of India does not have any fundamental right to carry on business in terms of
70
Article 19(1)(g) of the Constitution of India; its shareholders and directors
have. Even otherwise in a free market economy right to enter into contract
by and between two private parties are not to be discouraged in absence of
any statute or statutory regulation. The intendment of Parliament in making
statute is clear and unambiguous. Requirements of a licensee and/or sheer
number of its consumers, in our opinion, would be wholly irrelevant for the
purpose of the construction of a statute.
RELEVANCE OF SECTION 60
It is, in the facts and circumstances of this case, not necessary for us to
consider an extraordinary situation where the Commission may exercise its
jurisdiction both under Section 86(1)(b) and Section 60 simultaneously. We
are also not concerned with any extra ordinary situation. Assuming that
such a contingency may take place and having regard to Sections 23 & 60
of the Act while issuing direction to the licensee company the right of a
generating company may also be affected., but we are not concerned with
such a situation. The Commission which is an expert body has not found
that any such case has been made out for exercise of its jurisdiction in that
behalf.
71
The 2003 Act even permits the generating company to supply
electricity to a consumer directly. For the said purpose what is necessary is
to comply with the provisions of the Act , Rules and the Regulations.
Section 14 of the Act categorically provides for grant of licnece to any
person who is transmitting electricity or distributing supply or undertaking
trading therein, indisputably, however, the generator of an electrical energy,
although is not subject to the grant of licence but while supplying electrical
energy to a distributing agency, in turn would be subject to approval and
directions of the Commission.
CONCLUSION
1)Activities of a generating company are beyond the purview of
the licensing provisions.
2)The Parliament therefor did not think it necessary to provide for
any regulation or issuance of directions except that which have
expressly been stated in the Act.
3)Section 21 occurs in the chapter of “licensing” under which the
generating companies would not be governed.
4)As almost all the sections preceding Section 23 as also Section
24 talk about licensee and licensee alone, the word “supply” if
72
given its statutorily defined meaning as contained in Section
2(70) of the Act would lead to an anomalous situation as by
reason thereof supply of electrical energy by the generating
company to the consumers directly in terms of Section 12(2) of
the Act as also by the transmission companies to the consumers
would also come within its purview.
5)In a case of this nature the principle of exclusion of the
definition of Section by resorting to “unless the context
otherwise requires” should be resorted to.
6)Section 86(1)(a) of the 2003 Act clearly shows the para meters
of supply for the purpose of Regulation, viz. supply of
electricity by the distribution company to the consumer.
7)If regulatory clause is sought to be applied in relation to
allocation of power, the same would defeat the de-licensing
provisions. Generating companies have the freedom to enter
into contract and in particular long term contracts with a
distribution company subject to the regulatory provisions
contained in the 2003 Act. .
8)PPA for a long term is essential for increasing and decreasing
the capacity of generation of electricity by the generating
73
company, which purpose by the 2003 Act must be allowed to
be achieved.
9)Duration of the contract in regard to supply of electricity by and
between TPC (G) and RInfra prior to coming into force of the
contract is of no consequence, particularly when no written
long term or short term contract had been entered into by and
between them.
10)Fairness or otherwise of the supply of electricity to different
distribution companies being outside the jurisdiction of the
Commission, the same by itself cannot be a ground for bringing
back the licence raj, which is not contemplated by the Act.
11)For true and correct construction of the Act, the principle of
harmonious construction is required to be resorted to.
12)Recourse to the principle of purposive construction does not
militate against the conclusion reached by us and as indicated
hereinbefore in fact in terms of the said doctrine the purpose
and object of the Parliament must prevail over a narrow and/or
literal interpretation, which would defeat the purpose and object
of the Act.
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13)Section 86(1)(b) of the 2003 Act clearly shows that the
generating company indirectly comes within the purview of
regulatory jurisdiction as and when directions are issued to the
distributing companies by the appropriate Commission but the
same would not mean that while exercising the said
jurisdiction, the Commission will bring within its umbrage the
generating company also for the purpose of issuance separate
direction.
For the aforementioned reasons, the impugned judgment of the
Tribunal cannot be sustained. It is set aside accordingly. The appeals are
allowed with costs. Counsel’s fee Rs. 1,00,000/- (Rupees one lakh) in each
appeal.
……….……………………J.
[ S.B. Sinha ]
……………..………………J.
[Dr. Mukundakam Sharma ]
New Delhi
May 06, 2009
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