Jharkhand High Court
Tata Steel Ltd. vs Jharkhand State Electricity Bo on 25 September, 2012
Author: Aparesh Kumar Singh
Bench: Aparesh Kumar Singh
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C). No. 1091 of 2006
M/s Perfect Electric Concern Ltd. ......... Petitioner
Versus
Jharkhand State Electricity Board & ors ... Respondents
with
W.P.(C). No. 5393 of 2006
M/s TATA Steel Ltd. ......... Petitioner
Versus
Jharkhand State Electricity Board & ors ... Respondents
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CORAM: HON'BLE MR. JUSTICE APARESH KUMAR SINGH
For the Petitioner : M/s M.S.Mittal, Sr. Advocate, A.R.Choudhary,
Nitin Pasari and Shilpi John, Advocates
For the J.S.E.B : M/ Rajesh Shankar, Abhay Prakash & Dhiraj Kumar
For the J.S.E.R.C. : Mr. Sudershan Shrivastav
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07 /25.09.2012W.P.(C). No. 1091 of 2006 Since the issues raised in both the writ petitions are common, they are being heard and decided by this common order.
The instant writ petition has been preferred for a direction upon the respondent to grant interest on the security deposit from the initial date of deposit till the date in terms of order and Judgment of this court passed in another case and also in terms of the circular dated 11.8.1996 by which the Tariff Order dated 23.6.1993 was amended. The petitioner has also sought for direction for the payment of interest on security deposit of the petitioner by the Board at the rate of 6% per annum in terms of Section 47(4) of the Electricity Act, 2003.
The issues involve in the present writ application relates to the payment of interest on security deposit for a period prior to 10.6.2003 i.e. before coming into force of the Act of 2003 and the payment on security deposit post 10.6.2003.
W.P.(C). No. 5393 of 2006
Heard learned counsel for the parties. At the outset, learned counsel for the petitioner seeks to implead the Jharkhand State Electricity Regulatory Commission as party- respondent in this case.
2Prayer is allowed and necessary correction may be carried out in the memo of the writ petitions and other relevant places.
The petitioner is aggrieved by the order dated 16.6.2006 passed by the 'Vidyut Upvokta Sikayat Niwaran Forum', J.S.E.B, Ranchi( herein after referred to as Forum) in Case No. 02 of 2006, whereby two of the learned members of the said forum has declined to allow interest at the rate of 6% per annum in terms of clause 10.6 of the JSERC( Electricity Supply Code) Regulation 2005 read with Section 46(4) of the Electricity Act, 2003 from 10.6.2003 on the security deposit of the petitioner. One of the ground for assailing the said order is that out of the majority of the two, one of the member of the forum has directed to pay interest at the rate of 6% per annum while in the other case decided on the same date by the same forum in respect of the same petitioner, by a unanimous decision of the forum the Board was directed to pay the rate of interest at 5% prior to 10.6.2003. So there is apparent contradictory order passed by the same forum. Petitioner has also sought a direction upon the respondent- Board to forthwith grant interest on security deposit from 1.4.1998 till 9.6.2003 in terms of the BSEB's standing order no. REV-C1-D1-4008/88/678 dated 27.5.1998 by which the rate of interest according to the petitioner was revised from 4% to 5% and at the rate of 6% per annum w.e.f. 10.6.2003 in terms of the order passed by this court relied by the petitioner.
Learned counsel for the petitioner submits that the petitioner had approached the forum in case No. 02 of 2006 for a direction upon the respondent for grant of interest on security deposit from initial date of deposit till date and further for payment of interest at the rate of 6% per annum in terms of Section 47(4) of the Electricity Act, 2003. He further prayed that the interest on the security deposit be allowed to the petitioner in the bill of March of the financial year or otherwise the petitioner may be allowed to make own adjustment in the next financial year.
According to the petitioner the issue raised in Case No. 2 of 2006 relates to 5 connection in the name of the petitioner in which different security deposit were made and the details of which has been furnished in 3 para 7 of the present writ application. It has been submitted by the counsel for the petitioner that under the standing order dated 27.5.1988, referred to herein above the B.S.E.B revised the rate of interest from 4% to 5% interest on the security deposit as payable in terms of clause 15(3) of the Tariff Order. It has been further submitted that after coming into force the Electricity Act, 2003 w.e.f. 10.6.2003 under Section 47(4), a distribution licensee is liable to pay interest on the amount of security deposit by the consumer at the rate equivalent to bank rate or more, as may be specified by the concerned State Commission, on the security referred in sub Section(1) and refund such security on the request of the person who give it.
Learned counsel for the petitioner further submits that by the regulation making power, the Jharkhand State Electricity Regulatory Commission has framed the supply code published on 20.7.2005 made effective from 28.10.2005. It is also submitted that in terms of the said code clause 10.6, the distributor shall pay interest on amount of security deposit by the consumer at the rate equivalent to the bank rate of the R.B.I. It is further submitted that the Forum should have followed the judgment and order of this court passed in W.P.C. No. 5219 of 2005 dated 30.9.2005 where in the case of a consumer, Board had been directed to pay interest on the security amount at the rate of 6%. It is further submitted that in the counter affidavit filed on behalf of the respondent- Board, at para 6 the detail of only 4 connection of the petitioner has been indicated, whereas the petitioner's case before the Forum as well as before this Court is in respect of 5 connection as has already been indicated herein above. According to the petitioner the bill shown at Annexure-E series for consumer no. DHL1547, for one of the connection, the adjustment of the interest on security deposit calculated by the Board itself contained in Annexure- E series at page 28 for the said connection being a total of Rs.7,30043 has not been adjusted rather the sum of Rs.73004.30 has been adjusted. The petitioner would have been entitled to adjustment of the entire bills against the interest on security which is of 4 much higher amount and the balance ought to have refunded to the petitioner.
Learned counsel for the petitioner has also drawn the attention of this Court to Annexure-D to the counter affidavit dated 3.5.2012 wherein the Chief Engineer of the Board concerned has taken stand that regulation has come into effect from 20.10.2005 and the rates determined by the Commission will take effect from that date.
Learned counsel for the respondent- Board, on the other hand submits that the rate of interest before coming into force of the Electricity Act, 2003 was determined on the basis of the circular relied by the petitioner himself contained at Annexure-1 to the writ petition. According to the respondent- Board, the erstwhile Bihar State Electricity Board in consideration of the demand of the consumers enhanced the existing rate of interest on security deposit from 4% per annum to 5% per annum at simple interest w.e.f 1.4.1998 and it was further indicated in the said standing order that these rate of interest would be automatically revised as and when Nationalized Banks revised their savings bank rate. The relevant para 2 is quoted herein below:-
"In view of several representations received from consumers for enhancement of rate of interest on security deposit. The Board after considering all relevant aspect of the matter has been pleased to enhance the existing rate of simple interest of 4% (four percent) per annum to 5%( five percent) per annum at par with the interest payable on saving bank accounts W.E.F. 1st April 1988 on the amount of security deposit received in cash from the consumers and will automatically got revised as and when Nationalized Bank revise this rate".
It is further submitted by the respondent- Board that the Forum in its judgment has taken into account this very circular in the case No. 02 of 2006 and by a majority of 2:1 held that the Board would be liable to pay interest on security deposit for the period upto 9th June 2003 on the basis of the Board's standing order dated 27.5.1998 at the rate of interest of 5% on savings bank accounts as shown in the said standing order which will automatically be revised as and when Nationalized Bank revised its rate. The actual rate of interest needs verification by the respondent- Board 5 while calculating the rate of interest payable on security deposit for the period till June 2003. Forum also held that the contention of the consumer that interest on security deposit should be treated as per the rates applicable on fixed deposit or terms deposits is not correct in view of the Apex court decision relied upon by the Forum reported in 1993(Supplementary) 4 SCC 136 in the case of Ferro Alloys Corporation Ltd. Vrs. A.P. State Electricity Board and another. Accordingly, the Forum directed that the distribution licensee shall pay interest on the amount of security deposit by the consumer at the rate equivalent to Bank rate of the Reserve Bank of India. It shall ascertain the rate of interest in respect of Savings Bank deposit from the Reserve Bank of India and make payment to the petitioner consumer.
Counsel for the respondent has further submitted that the Forum has properly taken into account the judgment of the Hon'ble Supreme Court reported in 1993(Supplementary) 4 SCC 136(supra). It is submitted that issue relating to payment of interest on security deposit was squarely under consideration in the said judgment and the Hon'ble Apex Court had settled the legal position, so far as the issue concerning the interest on security deposit to consumer of Electricity Board is concerned holding that it would not be treated as interest on fixed deposit or terms deposit( para 127 and 144 of opinion of the Apex Court are quoted herein below):-
Para 127:- The deposit made cannot be equated to a fixed deposit. It has already been seen that in the case of daily supply of electricity, there is a consequential liability to pay for each day's consumption of electricity. To ensure that payment, the security deposit is furnished. Hence, it cannot be equated to a deposit at all. It is in the nature of running current account".
Para 144:- We should also observe that the rate of interest on security deposit cannot be equated with the rate of interest on the fixed deposit. First of all, if the consumption charges are to be appropriated the moneys accrued by way of deposits cannot be held in fixed deposits. Nor all deposits need carry interest in every transaction. Secondly, the nature and character of the security deposit is essentially different from fixed deposit. It is worthwhile, in this connection, to refer to Companies(Acceptance of Deposits)Rules, 1975. In Rule 2 it is stated:
"2.Definitions.- In these rules, 6 unless the context other wise requires-
(a) * * * *
(b) 'deposit' means any deposit of money with, and includes any amount borrowed by, a company, but does not include-
(i) -(iv) * * *
(v) any amount received from an employee of the company by way of security deposit;
(vi) any amount received by way of security or as an advance from any purchasing agent, selling agent, or other agents in the course of or for the purposes of the business of the company or any advance received against orders for the supply of goods or properties or for the rendering of any service;...."
We may add that merely because the English Acts provide for interest, it is not necessary the same should be adopted here as well".
It is further submitted by the counsel for the respondent that the judgment relied by the petitioner passed by this court, does not lay down the law in the sense that in the said judgment this court had directed the Board to pay interest at the rate of 6% per annum straightway without adjudicating on the issues concerning payment of interest on security deposit and in one of the said case relied upon, a Letters Patent Appeal is also pending against the judgment of the learned Single Judge. Learned counsel for the respondent further submitted that the judgment relied upon by the petitioner delivered by the Forum in the Case No. 1 of 2006 does not determine the legal issues nor does it amount to a declaration of law, which have been extensively discussed in the impugned judgment. In the Judgment in Case No. 01 of 2006 relied by the petitioner, the aforesaid aspects have not been considered rather straightway the Board has been directed to pay interest on security deposit at the rate of 4% per annum till
31.3.1988 and 5% per annum from 1.4.1988 as per the standing order no. 678 dated 27.5.1998. Learned counsel for the respondent has also submitted that the circular has not been properly taken into account.
However, in respect of issue relating to payment on interest post June 2003 period, although the respondents have referred to the letter of the Chief Engineer, Commercial and Revenue of the respondent- Board dated 3.5.2012 stating that since the supply code has come into effect on 28.10.2005, therefore the rates fixed by the Commission as per clause 7 10.6 of the said code should govern the consumer only w.e.f. 28.10.2005, this issue has not been seriously pressed. The reason for not pressing the issue so far as the payment of interest on security deposit w.e.f. 28.10.2005 is concerned is that in another connected writ petition being W.P.C No. 1091 of 2006, which is also being heard and decided by the common order today, the commission and the board both have come to a uniform stand so far as the payment of interest on security deposit post 10th June, 2003 is concerned in view of the coming into force of Electricity Act, 2003. The stand of the commission as contained in the affidavit in the said writ petition has been agreed and reiterated in the affidavit filed by the Board in the same case by stating that in terms of clause 10.6 of the Electricity Supply Code , distribution licensee were required to follow the rates of interest on security deposit as per the bank rate of R.B.I. The said rate of interest has been brought on record in the affidavit of the commission as well as accepted by the Board stating categorically that since 10th June , 2003 bank rate of R.B.I is at the rate of 6% till 13.2.2012. Thereafter, it was revised fixing at 9.5 % for a couple of months till 16.4.2012 and thereafter, it is at the rate of 9%. Chart of the bank rate has been enclosed with the affidavit of the commission.
Learned counsel for the respondent - Board in respect of bills referred by the petitioner contained at Annexure-E series submits that there is no anomaly in the said bill in relation to consumer No. 00510(BHD-510) DHL-1546 as only 10% interest on security deposit has been adjusted in such bill out of total Rs. 730043/- on interest on security and petitioner is entitled to refund of rest of interest on security deposit.
Learned counsel for the Jharkhand State Electricity Regulatory Commission submits, in relation to payment of interest on security deposit post 10th June 2003 period, by referring to Section 47 of the Electricity Act, 2003, that the distribution licensee is liable to pay interest on the amount of security deposit by the consumer at the rate equivalent to bank rate or more, as may be specified by the concerned State Commission, on the security referred in sub Section(1) and refund such security on the request 8 of the person who gave such security. It is further submitted that to give effect to the aim and object of the Act of 2003, the commission framed regulation being Electricity Supply Code in June 2005 and clause 10.6 whereby has already referred to herein above categorically says that licensee is liable to pay interest on the amount of security deposited by the consumer at the rate equivalent to the bank rate of the R.B.I. Clause 10.6 of the code is quoted herein below:-
"The Distribution Licensee shall pay interest on the amount of security deposit by the consumer at the rate equivalent to bank rate of Reserve Bank of India".
It is submitted that the Bank rate as notified by the R.B.I keeps on fluctuating from time to time and, therefore, it is not required for the commission to notify it at regular interval as the licensee can always ascertain from the notifications / guidelines issued by the R.B.I from time to time verifying the bank rate upon which the distribution licensee is liable to pay the interest on security deposit. It is further submitted that irrespective of the fact that the code has itself come into force on October, 2005 by the Act of 2003, the commission has notified the regulation being Electricity Supply Code and under Section 47(4) of the Act of 2003 the distribution licensee is bound to pay interest on the security deposit from 10th June, 2003 onwards at the rate equivalent to the Bank rate of the R.B.I. I have learned counsel for the parties at length and gone through the relevant materials on record and the judgment relied upon by the parties including the judgment rendered by the Hon'ble Supreme Court of India in the case reported in 1993(Supplementary) 4 SCC 136(supra). The issues involved in the present writ petition can be easily bifurcated into two. One is liability of the licensee i.e. the Board in this case to pay interest on security deposit for the period before coming into force of the Act of 2003 i.e. before 10th June, 2003 and the second is liability of the licensee- Board to pay interest on security deposit for the period post 10th June, 2003 i.e. after coming into force the Act of 2003.
Let us address the first issue involved in the writ petition. It is 9 apparent from the stands of the rival parties that the standing order dated 27.5.1988 is the basis upon which both parties are relying, so far as the payment on the rate of interest over security deposit is concerned w.e.f. 1.4.1988 till coming into force of the Act of 2003. The said relevant portion of the circular has been quoted herein above. The board will be liable to pay simple interest at the rate of 5% at par with the interest payable on saving bank accounts w.e.f. 1.4.1988 which will be automatically revised as and when Nationalized Bank revise their savings account bank rate. The bone of contention of the parties is whether the interest should be determined on the basis of savings account bank or fixed deposit/ term deposit. The issue, so far as the payment of interest of security deposit on the basis of terms deposit of otherwise has been squarely discussed and decided by the Hon'ble Supreme Court in the case of Ferro Alloys Corporation Ltd. Vrs. A.P. State Electricity Board and another reported in 1993(Supplementary) 4 SCC 136(Supra), para 127 and 144 of the said judgment have been quoted herein above. From perusal of the impugned judgment it appears that upon the first issue contested between the parties the law laid down by the Apex court has been taken into account by the Forum directing the Board to pay interest for pre 10th June 2003 period on the basis of the standing order dated 27.5.1988 relied upon by both the parties. It is made it clear that the same would be revisable on the basis of interest of the savings bank deposit and not on the basis of term deposit. No flaw in the said judgment can be said to be made on the part of the petitioner.
The other judgment of the forum relied upon by the petitioner in Case No. 1 of 2006 ( annexure-10) does not address itself squarely to the issues which have been settled by the Hon'ble Supreme Court of India in the judgment relied upon by the Board before the Forum as also during the argument today in the present case. The forum in other case 1 of 2006 have straightway directed the Board to pay at the rate of 5% from 1.4.1988 without taking into account the fluctuation of rate of interest of savings account as is clear from the reading of the standing order itself. 10 The said judgment, therefore, cannot be said to have any binding effect so far as the determination of the issue relating o payment of interest on security deposit up to 9th June, 2003 is concerned. So far as the judgment relied by the petitioner in another case of this court, where the direction to pay interest at the rate of 6% is concerned, in the said judgment as it appears no such issues were raised or decided after upon contest between the parties and direction was made simply to make payment of interest on a particular rate of interest. Moreover, it appears that in one of the judgment, Letters Patent Appeal is pending before the Division Bench of this court as per the submission of the counsel for the respondent.
So far as the second issue is concerned, as has been discussed herein above, the commission and the licensee is required to follow the provision of section 47(4) of the Electricity Act, 2003, wherein it has been mandated that the distribution licensee shall pay interest at the rate of the Bank rate or more as specified by the State Commission concerned. The State Commission has framed Electricity Supply Code under its regulation making power under Section 118 of the Act of 2003. Under clause 10.6 of the said code, the licensee is required to pay interest to the consumer on the security deposit at the rate equivalent to Bank rate of R.B.I. The bank rate notified from time to time by the R.B.I. is to be ascertained by the licensee as it is in the public domain. In the affidavit filed by the commission as well as by the Board in the other connected case being W.P.C. No. 1091 of 2006 it is apparent that neither the Commission nor the licensee are at crossroad over the question of rate of interest payable post 10th June, 2003 i.e. coming into force of the Electricity Act, 2003. As per the affidavit of the Commission and the Board, the licensee is liable to pay interest at the rate of 6% from 10 th June, 2003 being the Bank rate of R.B.I till 13.2.2012, thereafter, it has been revised at the rate of 9.50 % for a couple of months till 10.4.2012 and again at the rate of 9%, thereafter. Since, the Commission and the licensee both are not joining issues on the said rate of interest, which is obviously determined by the R.B.I. from time 11 to time, the distribution licensee being the Board in this case is liable to pay interest to consumer at the rate w.e.f. 10.6.2003.
So far as the contention of the petitioner in this case, which relates to a particular bill of consumer No. 00510(BHD-510) DHL-1546 and others, the licensee is directed to rework the calculations of interest on security deposit in view of the legal position declared herein above and pay the interest on the security deposit at the Bank Rate w.e.f. 10.6.2003 onwards giving effect to the same either on the bills of the consumer or refund it to the consumer as per its request.
Learned counsel for the petitioner pointed out that the Forum in its order dated 16.6.2006 in the case No. 2 of 2006, which has been impugned herein, directed that the Board shall ascertain the rate of interest in respect of savings Bank deposit from the R.B.I and make payment to the petitioner consumer. In view of the specific issue decided by this court herein above the order of the Forum to that extent stands modified. It is made clear that the Board is liable to pay interest at the rate of Bank Rate notified by the R.B.I. from time to time w.e.f 10.6.2003.
The very same issues raised in writ petition being W.P.C No. 1091 of 2006 have been considered and squarely decided in W.P.C. No. 5393 of 2006, hereinabove . Accordingly, the case of the petitioner in W.P.C No. 1091 of 2006 will also be guided by the decisions made in the said case.
However, it is further made clear that the respondent- Board would be liable to pay interest for the period prior to 10.6.2003 on the security amount deposited by the petitioner at the rate of savings bank account deposit as revised from time to time in terms of the circular dated 27.5.1988. For the period post 10.6.2003, the distribution licensee and the Commission both have filed their counter affidavit in the instant case stating therein that licensee would be liable to pay interest at the rate equivalent to the bank rate notified by the R.B.I from time to time in terms of clause 10.6. of the Electricity Supply Code and Section 47(4) of the Act of 2003.
12
In view of the aforesaid discussion made herein above, both the issues involved in these writ petitions stands squarely answered. Accordingly, both these writ petitions are disposed of in the aforesaid terms.
(Aparesh Kumar Singh, J.) A. Mohanty