Jharkhand High Court
M/S Sumi Vyapaar Pvt. Ltd vs Union Of India & Ors on 20 March, 2012
Author: Chief Justice
Bench: Chief Justice
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No. 4097 of 2011
M/s Gautam Ferro Alloys Vs. The Union of India & Ors.
With
W.P.(C) No. 4073 of 2011
M/s Bihar Foundry & Castings Ltd.Vs. The Union of India & Ors.
With
W.P.(C) No. 4223 of 2011
M/s Bhuwania Associates Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4245 of 2011
M/s Hanuman Alloys Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4338 of 2011
M/s Super Steel Casting Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4493 of 2011
M/s Tulshyan Metals Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4495 of 2011
M/s Maihar Alloys Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4497 of 2011
M/s Anjaney Ferro Alloys Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4498 of 2011
M/s Calcutta Carbide Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4500 of 2011
M/s Dayal Steel Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4510 of 2011
M/s Shree Bholey Alloys Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4517 of 2011
M/s Balasree Metals Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4524 of 2011
M/s Balmukund Sponge & Iron Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4527 of 2011
M/s Millennium Ingots & Steel Company
Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4114 of 2011
M/s Sundram Ferro Tech Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4197 of 2011
M/s Hindustan Melleables & Forging
Limited Vs. The Union of India & Ors.
With
W.P.(C) No. 4190 of 2011
M/s MDA Projects India (P) Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4163 of 2011
M/s Puja TMT Plant Pvt.Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4198 of 2011
M/s Shreewali Ferro Tech Pvt. Ltd.Vs. The Union of India & Ors.
With
2
W.P.(C) No. 4110 of 2011
M/s Jai Durga Iron (P) Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4132 of 2011
M/s Bishwanath Ferro Alloys Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4107 of 2011
M/s Naiyadih HiTech Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4104 of 2011
M/s Saluja Steel & Power (P) Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4103 of 2011
M/s Santpuria Alloys Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4108 of 2011
M/s Mongia Steel Ltd Vs. The Union of India & Ors.
With
W.P.(C) No. 4324 of 2011
Steel Authority of India Ltd. Vs. Central Electricity Regulatory Commission & Ors
With
W.P.(C) No. 4259 of 2011
M/s ACC Ltd. Vs. The Secretary,
Central Electricity Regulatory Commission & Ors.
With
W.P.(C) No. 4080 of 2011
M/s Atibir Industries Co. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4085 of 2011
M/s Shivam Iron & Steel Co. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4086 of 2011
M/s Atibir Industries Co. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4087 of 2011
M/s Jharkhand Ispat Private Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4088 of 2011
M/s Aloke Steel Industries Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4089 of 2011
M/s Shivam Iron & Steel Co. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4090 of 2011
M/s Bir Steels Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4092 of 2011
M/s Lall Iron & Steel Co. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4094 of 2011
M/s Atibir HiTech Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4099 of 2011
M/s Balajee Electrosteels Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4894 of 2011
M/s Parth Ispath (India) Pvt. Ltd. Vs. The Union of India & Ors.
With
3
W.P.(C) No. 4891 of 2011
M/s Yash Alloys Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 4979 of 2011
Jharkhand Electricity Board Vs. Damodar Valley corporation & Ors.
With
W.P.(C) No. 5068 of 2011
M/s Gaurang Alloys & Iron Vs. The Union of India & Ors.
With
W.P.(C) No. 5078 of 2011
M/s Swastik Ingots Electro Vs. The Union of India & Ors.
With
W.P.(C) No. 5155 of 2011
M/s Praneet Ispat Udyog Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 5164 of 2011
M/s Sumi Vyapaar Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 5200 of 2011
M/s Super Smelters Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 5210 of 2011
M/s Valley Refractories Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 5246 of 2011
M/s Castron Technologies Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 5379 of 2011
M/s War Steels Pvt. Ltd. Vs. The Union of India & Ors.
With
W.P.(C) No. 5075 of 2011
M/s Mihijam Vanaspati Ltd. Vs. The Union of India & Ors.
......
CORAM: HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE P. P. BHATT
In W.P.(C) Nos. 4097, 4073, 4223, 4245, 4338, 4497, 4510, 4114, 4197,
4190, 4163, 4198, 4110, 4132, 4107, 4104, 4103, 4108, 4080, 4085,
4086, 4087, 4088, 4089, 4090, 4092, 4094, 4099, 4894, 4891, 5068,
5078, 5210 & 5075 of 2011:
For the Petitioners: M/s N.K. Pasari & A.K.Pasari, Advocates
In W.P.(C) Nos. 4493, 4495, 4498, 4500, 4517, 4524, 4527, 5155, 5164,
5200, 5246 & 5379 of 2011:
For the Petitioners: M/s Ajit Kumar, Vijay Kr. Gupta, Prabhat Singh,
Gouri Shankar Prasad, Vikash Kumar, Rahul
Kumar, Sweta Rani and Kumar Sundaram &
Dhananjay Kr. Pathak, Advocates
In W.P.(C) Nos. 4324 & 4259 of 2011:
For the Petitioners: M/s Rajiv Ranjan, Abhay Kumar Mishra, Shresth
4
Gautam & Vishal Kr. Trivedi, Advocates
In W.P.(C) No. 4979 of 2011:
For the Petitioner: M/s Rajesh Shankar, Abhay Prakash, Dheeraj
Kumar, Advocates
........
For Respondent (Union of India):M/s Mr.M.Khan,ASGI,& Y.N.Mishra, CGC,
Prabhash Kumar,CGC & T.N.Mishra,CGC
For Respondent(DVC) :M/s Pradip Tarafdar, Sr. Adv.,(DVC)
Srijit Choudhary, Prashant Kr. Singh &
Rakesh Kumar Shahi & Rohit Roy
For Respondent(CERC) : Mr.Sumit Gadodia,Advocate
......
C.A.V. On 31.1.2012 Pronounced on
20th
March, 2012
Reportable
Prakash Tatia,C.J. : Bunch of writ petitions have been preferred by these writ
petitioners, who are obtaining electricity supply from the respondent
Damodar Valley Corporation (hereinafter to be referred as 'DVC'), a
licensee under the Electricity Act, 2003, having its registered office at DVC
Towers, VIP Road, Kolkata.
2. All the writ petitioners have challenged the validity of
Clause(4) of Regulation no. 5 of the Central Electricity Regulatory
Commission( Terms and Conditions of Tariff) Regulation, 2009 inserted by
amendment dated 2nd May, 2011 being ultravires the Constitution of India
and/or transgress the Electricity Act, 2003 and also aggrieved against the
order dated 23rd June, 2011 passed by the Central Electricity Regulatory
Commission on the basis of the said Regulation 5(4) and further aggrieved
against the various bills issued against these writ petitioners following the
order dated 23rd June, 2011 of the Central Electricity Regulatory
Commission ( in short 'CERC'), determining the provisional tariff to the
respondentDVC vide order dated 23rd June, 2011.
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3. It will not be necessary to give detailed facts of each of the writ
petitions with respect to their terms and conditions of the supply of the
Electricity by the DVC and details of the bills which have been challenged
because of the reason that issue raised in these writ petitions do not
require those details. However, the writ petitioners are consumers and are
obtaining supply of electricity from the DVC.
4. The DVC was constituted by the Damodar Valley Act, and is a
licensee under the 4th proviso to Section 14 of the Electricity Act, 2003.
Earlier DVC used to determine its own tariff under Section 20 of the DVC
Act and that position continued till Jharkhand State Electricity Regulatory
Commission(in short 'JSERC' ) issued order on 6th September, 2004 in
Case No. 4 of 2004 that DVC should get its generation tariff determined ,
obviously from JSERC. But DVC took the stand that it was outside the
jurisdiction of the JSERC and preferred a writ petition before this Court
which was dismissed by this Court, however, on account of non removal of
the defect by the DVC.
5. Be that as it may, CERC in the year 2004 initiated suo motu
proceeding by registering Petition no. 168 of 2004 against DVC and issued
direction to the DVC to file application for determination of its tariff
because of the reason that by that time the DVC did not file its tariff
application. On 29th March, 2005 CERC passed an order, directing DVC to
submits its application for approval of tariff w.e.f. 1st April, 2004, upon
which on 8th June, 2005 DVC submitted tariff Petition no.66 of 2005 for
the period 1.4.2004 to 31.3.2009 and still continued to charge tariff fixed
by it under Section 20 of the DVC Act which, according to the petitioner
Steel Authority of India Ltd., was contrary to the provisions of the
Electricity Act. In background of these facts, ultimately, the CERC passed
6
tariff order on 3rd October, 2006 for the period 200609 for the DVC. The
said tariff order was challenged by some of the consumers in Appeal No.
271 of 2006 and 272 of 2006 before the Appellate Tribunal and DVC also
preferred Appeal No.273 of 2006 against the same tariff order dated 3rd
October, 2006 for the period 200609. The Appellate Authority allowed
Appeal No. 273 of 2006 preferred by DVC and also disposed of other
appeals by the order dated 23rd November, 2007. The order of the
Appellate Authority dated 23rd November, 2007 was challenged before the
Hon'ble Supreme Court in Civil Appeal No.971973 of 2008. Even CERC
also preferred Civil Appeal No.4289 of 2008 before the Hon'ble Supreme
Court against the order dated 23rd November, 2007 passed by the Appellate
Tribunal. However, in none of the appeals pending before the Hon'ble
Supreme Court, operation of the order passed by the Appellate Tribunal was
stayed. Therefore, some of the issues are pending before the Hon'ble
Supreme Court which may have some bearing on final determination of
the tariff and, therefore, while framing the Central Electricity Regulatory
Commission( Terms and Conditions of Tariff) Regulation, 2009 by
exercising the powers conferred under Section 178 of the Electricity Act,
2003 by the CERC under Regulation 43 subclause(2) has been framed,
subject to decision of the Hon'ble Supreme Court in Civil Appeal No.4289
of 2008 and other related appeals pending before the Hon'ble Supreme
Court and the Regulation and declared that provisions in sub clause(2) of
Regulation 43 shall stand modified to the extent they are inconsistent with
the decision of the Hon'ble Supreme Court , obviously in Civil Appeal no.
4289 of 2008 and other related appeals, which are pending before the
Hon'ble Supreme Court till today.
6. These facts are necessary because of the reason that as per sub
7
section(3) of Section 64 of the Electricity Act, 2003, the appropriate
commission is required to issue a tariff order, either accepting or rejecting
the application for determination of tariff within a period of one hundred
and twenty days only from the date of receipt of an application for such
purpose i.e. for determination of tariff and in the present case, tariff
petition of the DVC 240 of 2009 for the year 200914 is pending before the
CERC, and even after two years no final tariff order was passed by the
CERC and the petitioners' grievance is that instead of passing final tariff
order, CERC without any application of the DVC for provisional
determination of the tariff and even when DVC itself submitted application
for provisional determination of tariff and withdrew it , the CERC suo
moto, without affording an opportunity of hearing to the petitioner, who
has submitted objection against request for determination of tariff and to
other affected parties, who are petitioners, has passed the provisional tariff
order on 23rd June, 2011 in consequence of which the respondentDVC has
raised electricity bills against these writ petitioners.
7. The facts referred above are relevant to examine some of the issues
raised by the writ petitioners, which includes allegation of writ petitioners
that DVC instead of getting the final tariff order from the CERC is taking
benefit of an order passed by the CERC in gross violation of the principles
of natural justice by taking help of amendment made in Regulation 2009
by inserting clause (4) under Regulation 5 and it has been alleged that
even CERC has transgressed the Electricity act, 2003 and inserted
Regulation 5(4) in Regulation, 2009.
8. We may now take the emerging facts of the present controversy and
may recapitulate that petitioners have challenged sub clause(4) of
Regulation 5 of the Regulation of 2009 made by Notification dated 2nd May,
8
2011 (Annexure4 in WPC No. 4097 of 2011). Sub Clause(4) of
Regulation5 thereof is as under:
"(4) Where application for determination of tariff of an
existing or a new project has been filed before the
Commission in accordance with clauses (1) and (2) of this
regulation, the Commission may consider in its discretion
to grant provisional tariff upto 95% of the annual fixed
cost of the project claimed in the application subject to
adjustment as per proviso to clause (3) of this regulation
after the final tariff order has been issued:
Provided that recovery of capacity charge and
energy charge or transmission charge, as the case may be,
in respect of the existing or new project for which
provisional tariff has been granted shall be made in
accordance with the relevant provisions of these
regulations."
9. According to the writ petitioners, Regulation 5(4) of 2009 is beyond
legislative competence of CERC, transgressed the Electricity Act, violative
of principle of natural justice and doctrine of transparency and ultravires
the Constitution of India. Petitioners also submitted that in alternative,
Regulation 5(4) should be read down to include principle of natural justice
to save it from unconstitutionality. According to the learned counsel for
the petitioners, there is no provision in the Electricity Act, 2003 or the
CERC to determine the provisional tariff and in view of Section 64 of the
Act, 2003 , CERC can entertain 'an' application for determination of tariff
under Section 62 of the Act, 2003 and 'such application' is required to be
published in abbreviated form and manner as may be specified by the
appropriate Commission and thereafter the Commission may issue 'a' tariff
order and may reject 'the' application. The emphasis of the learned counsel
for M/s Gautam Ferro Alloys (W.P.C.No. 4097 of 2011) was on the word 'a'
'the' and the 'tariff order' 'the application' and on the word ' the order'
as has been used by Section 64 of the Act of 2003 and it has been
submitted that not only as per Section 64 of the Act of 2003 only 'an' order
9
can be passed on 'an application' submitted before the CERC but it rules
out the possibility of passing any interim order. It is also submitted that
though there is subsection(2) of Section 94 empowering the appropriate
Commission to pass interim order in any proceeding pending before the
said Commission but under such provision also, only interim order can be
passed but provisional tariff order cannot be passed. Further, it is
submitted that Regulation 2009 itself has taken care of prescribing
provisional tariff for the subsequent period starting from 1st April, 2009
under sub clause(3) of Regulation 5 of the Regulation of 2009 and it
specifically provided that, starting from 1st April, 2009 till approval of
tariff, obviously by passing final tariff order by the Commission, the tariff
approved by the Commission, applicable as on 31st March, 2009, shall
continue. It is submitted that sub clause (3) of Regulation 5 has not been
amended or deleted and, therefore by virtue of sub clause(3) of Regulation
5 of the Regulation of 2009 , which is a statutory Regulation the tariff as
was in force on 31st March, 2009 is required to be continued and in
contravention to sub clause(3) of Regulation 5 , by purporting exercise of
power under newly inserted clause (4) under Regulation 5, a new tariff
has been prescribed by the Commission, which cannot prevail over the
statutory prescription of tariff by Regulation of 2009. It is also submitted
that the Central Commission has power to make regulation under Section
178 but nowhere provides and authorises the CERC to make and prescribe
a Regulation empowering itself to pass an order of provisional
determination of tariff. Section 61 read with Section 178 of the Act, 2003
are enabling sections, empowering the CERC to make Regulation to
prescribe the terms and conditions for determination of tariff but the
power to determine the tariff is not delegated to CERC and reserved in
10
Section 64 of the Act. Even Section 178(s),(v),(w)and (x) do not empower
CERC to make any Regulation for provisional tariff and, therefore,
Regulation 5(4) of the Tariff Regulation, 2009 as inserted by Notification
dated 2nd May, 2011 empowering the CERC itself to make provisional order
is beyond the legislative competence and is unconstitutional and,
therefore, Regulation 5(4)is in violation of Section 64 i.e., by way of
transgressing the parent Act i.e., Electricity Act, 2003, which requires
expeditious determination of tariff and rules out the possibility of
empowering the Commission to pass any order prescribing any provisional
tariff because the law framers were conscious that delay in such matters
have adverse impact by way of interest either on the utility or the
consumers/beneficiaries. Therefore, also the Commission could not have
frame Regulation empowering itself to order for provisional tariff. It is also
submitted that Regulation 5(4) empowers CERC to allow upto 95% of the
Annual Fixed Cost claimed by a Utility but without prescribing any
guideline as to in which cases that percentage can be allowed and,
therefore, by Regulation 5(4)CERC has empowered itself with arbitrary
power to burden the consumers and beneficiaries to the extent of
exorbitant 95%. Learned counsel for M/s Gautam Ferro Alloys submitted
that Durgapur TPS started commercial operation in the month of
September, 1992 whereas Mejia Unit no.4 started commercial operation
from the month of February, 2005 and all Thermal Generating Stations,
Hydel Generating Stations, Transmissions Systems, for every asset, CERC
has allowed 70% of the Capital Cost claimed by DVC, which clearly
demonstrate that not only Regulation 5(4) gives arbitrary power to the
CERC, but , in fact, it has been exercised arbitrarily by allowing 70% of
Capital cost claimed by DVC for the Unit established in the 1982 as well as
11
to the unit established in the year 2005 whereas the Capital cost cannot
increase in this fashion of the two Units, one established in the year 1982
and another established in the year 2005, Learned counsel for the
petitioner relied upon the judgments of the Hon'ble Supreme Court
delivered in the cases of Kantilal Babulal & Bros. Vrs. H.C.Patel & Ors.,
(AIR 1968 S.C. 445) & Akhil Bhartiya Upbhokta Congress vrs. State of
Madhya Pradesh & Ors. ( [2011] 5 SCC, 29). Learned counsel for the
petitioner also submitted that the framing of Regulation is subordinate or
delegated legislation and has to specify the following litmus test i.e., (i)It
must confer to the provisions of the Statute under which it is framed; (ii)It
must come within the scope and purview of rule making power under the
Statute; and in support of his contention, relied upon the decisions of the
Hon'ble Supreme Court, delivered in the cases of Kerala Samsthana
Chethu Thozhulali Union vrs. State of Kerala & Ors. ( [2006] 4 SCC
327) & Bidhannagar (Salt Lake) Welfare Assn. Vrs. Central Valuation
Board & Ors. ( [2007] 6 SCC 668 ).
10. As we have already noticed that petitioners' plea in alternative is
that Regulation 5(4) should be read down to include principle of natural
justice, otherwise it cannot be saved from being it unconstitutional for the
reason that the said provision without having applicability of principle of
natural justice and it has serious civil consequences, cannot be saved
because the respondentDVC by this mode will saddle the consumers with
an additional burden of Rs.800 Crores per year. Learned counsel for the
petitioners relied upon the decision of the Hon'ble Supreme Court in the
case of Automotive Tyre Manufacturers Association Vrs. Designated
Authority & Ors. , reported in [2011] 2 SCC 258 ). It is the admitted
position that after insertion of sub clause(4) under Regulation 5 of the
12
Regulation of 2009 vide notification dated 2nd May, 2011, the Commission
prescribed provisional tariff by increasing it by 70% vide order dated
23.6.2011(Annexure3) passed in Tariff Petition no.240 of 2009 submitted by the respondentDVC before the Commission in the year 2009 and, that too, without affording an opportunity of hearing to any of the parties, the writ petitioners or to writ petitioner, who submitted its objection against the Tariff Petition no.240 of 2009 of the DVC before the Commission. All the petitioners claimed that they are beneficiaries of DVC being purchasers of the electricity generated by the DVC and falling in the definition of beneficiaries as given in Regulation 3(6) of the Regulation, 2009 but CERC has prescribed the provisional tariff vide impugned order dated 23rd June, 2011, not only without giving opportunity of hearing to the writ petitioners but has passed the provisional tariff order without assigning any reason and, therefore, the provisional tariff order dated 23rd June, 2011 is in violation of the principle of natural justice as well as a non speaking order.
11. It is submitted that even if any authority has been given power to pass order, even in administrative side, having any adverse civil consequence, then also the said authority is required to pass speaking order and that order must speak itself, so that the affected person as well as if challenged, the Court may find out the reasons for passing the order from the order itself as mere use of some words picked up from the Statute is not compliance of requirement of statutory provision, as has been sought to be done in the present case, with the help of words used in order dated 23rd June, 2011 wherein the Commission without mentioning any of the reason for passing the order has used the word "in exercise of power under clause (4) of Regulation 5 of 2009 regulations, we have decided to grant 13 provisional tariff to the petitioner for its assets mentioned in para2 above pending determination of the final tariff" and thereafter in next paragraph, used the words 'after carrying out due prudence check, we allow the provisional annual fixed charges for the period 200914 in respect of the generation, transmission, and other assets, as stated overleaf.........' Learned counsel for the petitioners vehemently submitted that the word 'prudence check' has been used in the order dated 23rd June, 2011 without reflecting that , in fact, Commission has even made check before passing the impugned order.
12. Learned counsel for the petitioners advancing his argument further submitted that for exercise of power by CERC under Regulation 5(4) , pre condition is of filing a valid tariff application in accordance with Regulation, 2009 and order dated 23rd June, 2011 clearly, itself indicate that DVC even had not filed proper tariff application, in accordance with Regulation 2009 and, therefore, in ultimate para of the order the CERC itself has directed the DVC to file separate petitions for each of its generating stations and transmission systems, in accordance with Regulation 4 of the 2009 Regulations. Therefore, without there being any proper application filed by the DVC , the interim tariff has been prescribed by the CERC . The CERC is under obligation to consider whether there exist any reason for exercising power under Regulation 5(4) and 'consider' means there should be active application of mind and 'consider' postulates consideration of all the relevant aspect of the matter. Learned counsel for all the writ petitioners submitted that , in fact, the tariff has been prescribed without considering the facts of the each of the generating station and transmission system as well as without considering any of the objection which has already been filed by, at least, one of the petitioner 14 SAIL. It is submitted that even quasi judicial order cannot be sustained if it has been passed in violation to the principle of natural justice and is non speaking order. The learned counsel for the petitioners relied upon the judgments of the Hon'ble Supreme Court in the cases delivered in Bhikhubhai Vithkabhai Patel & Ors. Vrs. State of Gujrat & anr. ( [2008] (4) SCC 144), East Cost Railway & Anr. Vrs. Mahadev Appa Rao & Ors. ( [2010] 7 SCC 678) Kranti Associates Private Limited & Anr. Vrs. Masood Ahmed Khan & Ors. ( [2010] 9 S.C.C. 496 . Learned counsel also submitted that even proviso under newly inserted clause(4) under Regulation 5 has been totally ignored and, therefore, also the order is illegal. Learned counsel for the petitioners further submitted that even bills issued by DVC are not in consonance with the provisional order dated 23rd June, 2011 for which detailed reasons have been given by the writ petitioners.
13. In sum and substance, the above are the arguments of all the counsels. However, in support of their arguments, they relied upon a few more judgments of the Hon'ble Supreme Court and it has been submitted that statute must be fair and reasonable and not arbitrary and observance of principle of natural justice is implied in Article 14 and is a duty cast upon the authority, who passes any order to give reasons and non consideration of the relevant materials vitiates the order. All those provisions, like statute must be fair and reasonable and observance of principle of natural justice is implied in article 14 , the order must be speaking and non consideration of relevant materials vitiates the order, are the settled principles of law.
14. The respondents have submitted their counter to which rejoinders have been submitted by the writ petitioners. The respondent 15 CERC submitted that before the Regulation of 2009, there were Regulation 2004 duly notified by the CERC wherein also Regulation 5(3)(i) provided for provisional tariff and there was Regulation 5(A) which provides provision for provisional tariff or provisional billing of charges, however upon submitting separate application by the generating company or transmission licensee and upon passing of the provisional tariff order by the Commission. As per Regulation 5A of 2004, the consumer was required to pay, according to the provisional tariff or provisional bill, subject to adjustment against the final tariff approved by the Commission. Therefore, concept of prescribing provisional tariff is not new. 2009 Tariff Regulation introduced the concept of determination of tariff on the basis of projected capital expenditure during the period 200914 and permitted the generating companies and transmission licensees to file the tariff petitions six months prior to the date of commercial operation of the generating stations or transmission systems. Accordingly, Regulation 5(3) of Regulations of 2009 provided provisional tariff for the existing generating companies and transmission licensees which were in operation prior to 1.4.2009 and they were allowed to charge the tariff on provisional basis at the rate determined by the respondentCommission and applicable as on 31.3.2009 till the tariff was determined under the 2009 Tariff Regulation. This provisional arrangement of tariff is not under challenge. The Commission submitted that even after the end of second year of the tariff period 200914, the tariff of many of the generating stations and transmission systems could not be determine for various reasons, which includes time taken for finalization of the petitions for additional capital expenditure during 200409 after the audited cost was available, in respect of projects in operation prior to 1st April, 2009 and in respect of 16 new projects which achieved commercial operation on or after 1st April, 2009, the time taken for finalization of capital cost and submission of Auditor's certificate therefor. Then Commission submitted that due to the delay in final decision on the tariff petition because of the earlier round of litigation, reference of which has been given above, it resulted in cash flow problems for the generating companies and transmission licensees and extra liability in the form of interest for the beneficiary distribution companies, the respondentCommission decided to amend the 2009 Regulations and accordingly initiated the process in accordance with Section 178(3) of the Act of 2003. The Commission was of the view that it may not have granted provisional tariff under its functions for determination of tariff under Section 79(1)(a) to (d) of the Act of 2003 read with Section 94(2) of the Act, without undergoing the process of amendment of Regulation and, therefore, the Commission considered it appropriate after wide stakeholder consultations for which it has resorted to amendment of the 2009 Tariff Regulations. Section 178(1) of the Act of 2003 provides that Commission may, by notification, make regulations consistent with the Act and the rules generally to carry out the provisions of the Act. The Commission relied upon Section 178(2)(s) and 178(2)(ze) and submitted that by virtue of these provisions power vests to the Commission to specify by regulations, the terms and conditions for determination of tariff under Section 61 of the Act and for any other matter which is to be specified by regulations respectively. The Commission further submitted that after regulation for determination of Tariff are made under Section 61, the Commission is required to determine the tariff under Section 62(1) of the Act of 2003. Section 64 provides for procedure for passing order based on application for determination of tariff under 17 Section 62. The respondentCommission also specified the Central Electricity Regulatory Commission (Procedure for making of application for determination of tariff, publication of the application and other related matters), Regulations, 2004, the Central Electricity Regulatory Commission( Conduct of Business) Regulations, 1999 etc. However, the period of 120 days provided under Section 64(3) of the Act of 2003 for determination of final tariff cannot be considered as mandatory but envisages as an expeditious disposal of the application for tariff. According to the Commission, Section 64 of the Act of 2003 provides , inter alia, for the consideration of suggestion and objection received from the public and do not mandate a necessity for an oral hearing of the parties by the Commission. It is submitted that different languages have been used in sub clause (a) of subsection(3) of Section 64 visavis subsection(b) of subsection(3) of Section 64 and opportunity of hearing is required only under Section 64(3)(b) which is required to be provided to the applicant, who has filed application for prescribing tariff in a case and before rejection of the application of such applicant by the Commission. Such language has not been used for passing tariff order under Section 64(3)(a) . It is submitted that exclusion of hearing under Section 64(3)(a) is a deliberate exclusion and for that there exists reasons which is clear from the language of Section 64(3) itself. A bare perusal of Section 64(3) will clearly indicate that where any application is received by Commission, for determination of tariff under Section 62 then Commission is required to publish the application, may be in abridged form, and in the manner as may be specified by the Commission itself, but this is done so as to invite suggestions and objections from the public and, therefore, under sub clause (a) of subsection(3) of Section 64 , hearing 18 has been excluded as there cannot be public hearing in such matter and particularly when function of the Commission is of function of an expert and further public hearing neither required nor can be practical, nor can be provided in view of the fact that Commission is required to prescribe the Tariff within a period of 120 days. It is submitted that consideration of suggestion and objection fulfills the requirement of principle of natural justice and hearing in all cases cannot be must and has not been made requirement by the different languages, as used in sub clause(a) of sub section(3) of Section 64.
The learned counsel for the Commission has submitted that in respect of some of the function , the Act has clearly mandated the Commission to provide hearing as envisaged under Section 15(6)(b), 57(2), 142 and 143, whereas under Section 19(3), 63, 128(6) and 130 of the Act, scope of hearing has been deliberately excluded. Therefore, according to the learned counsel for the Commission, the Regulation framed by the Commission is intravires the Act and is not violative of the Article 14 of the Constitution. It is also submitted that the Commission proceedings are regulated by the Central Electricity Regulatory Commission(Conduct of Business) Regulation, 1999. Then, it has been submitted that Explanatory Memorandum attached to the said draft amendment, proposes to insert clause(4) under Regulation 5 is relevant, which would reveal the need of incorporation of a provision for provisional tariff. The said Explanatory Memorandum and public notice inviting comments/suggestions/objections on the draft regulation were posted in Website of the respondentCommission for information of all concerned. In response to such public notice, comments/suggestions of only nine stakeholders were received and none of the writ petitioners before this 19 Court had filed their comments/suggestions to the said amendment to the Regulations. It is also submitted that the Government of India , Ministry of Power, has notified on 9th June, 2005 , the Electricity (Procedure for previous publication) Rules, 2005, in exercise of power conferred under subsection(1) and clause(z) subsection(2) of Section 176 of the Act and following the said procedure the Commission after considering the comments/suggestions received of proposed amendment in Regulation of 2009 and before inserting sub clause(4) under Regulation 5 finalized the Regulation and notified the said amendment and thereby for framing of Regulation 5(4), Commission had adopted a transparency procedure which is in conformity with the Rules of 2005. Thus, having failed to submit their comments and objections to the draft Regulation which is duly published, cannot be now heard to say that it was not given opportunity to raise its objection and, therefore, insertion of sub clause(4) in Regulation 5 is violative of the Article 14 and 19(1)(g) of the Constitution of India.
15. Learned counsel for the Commission has relied upon the judgment of the Hon'ble Supreme Court, delivered in the case of West Bengal Electricity Regulatory Commission Vrs. CESC Ltd., reported in (2002) 8 SCC 715 in support of his argument that Commission has power and authority to regulate the proceeding before the Commission and this has been recognized by the Hon'ble Supreme Court in the above judgment. Therefore, the Commission was competent to frame such Regulation and has rightly framed the Regulation. Learned counsel for the Commission vehemently submitted that the term 'tariff' has not been defined by the Act and Tariff Order as envisaged under Section 62 of the Act would also include 'provisional tariff'. Learned counsel for the Commission also submitted that the provision of subclause(a) of subsection(3) of Section 20 64 is not under challenge wherein also no provision of personal hearing of the members of the public is there and none of the provisions of the Act of 2003 or Regulation provides for prior hearing of any of the person or even consumer before prescribing provisional tariff. Learned counsel for the Commission relied upon judgment of the Hon'ble Supreme Court, delivered in the case of Union of India Vrs. Tulsiram Patel , reported in (1985) 3 SCC 398, which is a Constitutional Bench judgment which clearly declared that observance of the principle of natural justice can be dispensed with by or under statutory provision. However, according to the learned counsel for the Commission , the Commission by considering the suggestions and objections of tariff application fully observed the principle of natural justice. But, so far as personal hearing is concerned, it is neither provided in the Act, nor it can be given to the public at large, looking to the nature of the function of the commission and order which is to be passed by the Commission of prescribing the tariff. Learned counsel for the Commission further submitted that even under the Central Electricity Regulatory Commission(Conduct of Business) Regulation, 1999 which was framed in exercise of power conferred by Section 55 of the Central Electricity Regulatory Commission Act, 1998, personal hearing was excluded by the Commission, which is clear from the Regulation 52(3) of the Regulation of 1999, which says that unless permitted by the Commission, the person filing objection or comments, shall not necessarily be entitled to participate in the proceedings to make oral submissions and it provided that Commission shall be entitled to take into account the objections and comments filed by the parties to the proceeding and even in Regulation of 2004 i.e., Central Electricity Regulatory Commission(Terms and Conditions of Tariff) Regulation, 2004, there was provision for 21 provisional tariff under Regulation 5(A) and, therefore, concept of prescribing provisional tariff was also statutory in existence with power to Commission to prescribe the provisional tariff on its own motion, obviously without there being application of the parties and in the present case, the DVC submitted application for provisional tariff but it withdrew because of the insertion of sub clause(4) under Regulation 5, which empowers the Commission to consider and pass appropriate provisional tariff order without there being any application and, therefore, the Commission has not committed any illegality in prescribing the provisional tariff at its own, after withdrawal of the application for prescribing provisional tariff by the DVC, which was withdrawn because of the reason of insertion of sub clause(4). Learned counsel for the Commission further submitted that even in the Regulation of 1999 Commission was given power to pass any interim order, which Commission may consider appropriate and which can be passed at any stage of proceeding, as has been provided under Regulation 6(8) of the Regulations, 1999. According to the learned counsel for the Commission, the Commission has power to pass interim order under Section 94(2) of the Act, 2003 and this power is also a suo motu power of the Commission. However, that was a general power and, therefore, the Commission has included the said power in the Regulation of 2009 by the impugned notification. It is also submitted that prescribing of a tariff is also an order, which can be in the form of interim order under Section 79(2). The learned counsel for the Commission also submitted that DVC submitted its tariff application but in consolidated form and, therefore, only the Commission in its order dated 23rd June, 2011 directed the applicant DVC to submit separate applications which is only a direction to make some technical correction in the application, otherwise the facts in 22 relation to all claims, which should have been filed separately, are already in the consolidated application and, therefore, it cannot be said that the application filed by the DVC was not in accordance with the Regulation of 2009.
16. Learned counsel for the DVC seriously contested the objection of the petitioners that specification of prescribing tariff to the extent of 95% in the discretion of the CERC give arbitrary and unfettered power to the Commission and with the help of the judgment of the Hon'ble Supreme Court delivered in the case of U.P. Cooperative Cane Unions Federations Vrs. West U.P. Sugar Mills Association & Ors. , reported in (2004) 5 SCC 430 submitted that power to regulate includes power or the thing and the power must be regarded as plenary or the entire subject. It is submitted that for passing order impugned, prescribing provisional tariff, the Commission had decided certain guidelines on file, based on the admissibility of the expenditure in respect of generating stations and transmission systems for the purpose of provisional tariff. Such guidelines have also been made applicable for grant of provisional tariff for a number of generating stations and transmission systems of NTPC and Power Grid corporation of India respectively and, therefore, discretion exercised by the Commission is not unfettered and unguided, as alleged by the writ petitioners. It is also submitted that Regulation 5(4) has been framed by the Corporation, keeping in view the interest of the consumers/beneficiaries and to safeguard Utility, as could be observed from the Explanatory Memorandum to the said Regulation. It is submitted that by prescribing provisional tariff the balance has been strike by the Commission which are beneficial to the generating companies and transmission licensees as well as in the interest of the consumers. The 23 provision for interest at the rate equal to the short term prime lending rate of SBI on the extra amount recovered from the public refund take cares of interest of both of the parties. It is submitted that the facts clearly reveals that even after prescribing the period of 120 days for determination of the tariff, it could not have been done because of the valid reason and, therefore, the Commission by application of mind and after considering the facts of the case has allowed the enhancement of the tariff, by impugned order. Learned counsel for the DVC relied upon the judgment of the Hon'ble Supreme Court in the case of W est Bengal Electricity Regulatory Commission Vrs. CESC Ltd., reported in (2002) 8 SCC 715, wherein Hon'ble Supreme Court held that Commission has power to evolve its own procedure restricting the manner in which it can proceed for determination of tariff including restriction on the right of hearing. In some judgments, Hon'ble Supreme Court held that the Commission, in the event of there being any delay in determination of Tariff by it has the power to pass interim direction. In the case of Uttar Pradesh Power Corporation Limited and others Vrs. National Thermal Power Corporation Limited (2009)6 SCC 235, the Hon'ble Supreme Court in para21 held that the power and/or jurisdiction of the Central Commission to frame tariff is undisputed, which includes power to carry out any amendment, alterations and additions in the said Tariff and in para22 it has been held that CERC exercised diverse powers including legislative power, power of enforcement of Regulations as also the adjudicatory power and each of its functions, although separate and distinct, were held to be overlapping and the Hon'ble Supreme Court held that power of the Commission is extensive and recognized the power of the Commission to act suo motu on its own motion and the Hon'ble Supreme Court further held that making of a tariff 24 is a continuous process and the same can be amended or altered by the Commission, if any occasion arises therefor and the said power can be exercised not only on the application filed by the generating companies but by the Commission on its own motion. In the case of Binani Zinc Ltd. Vrs. Kerala State Electricity Board & Ors. (2009) 11 SCC 244, the Hon'ble Supreme Court again held that power to frame tariff includes the power to revise the same also. With the help of yet other judgments, delivered in the cases of PTC India Ltd. Vrs. Central Electricity Regulatory Commission through Secretary ( [2010] 4 SCC, 603 ) & Vasu Dev Singh & Ors. Vrs. Union of India & Ors. ( [2006] 12 SCC 753, it has been submitted that provision for provisional tariff framed by the CERC was a valid exercise of power conferred to it in discharge of its mandatory function under Section 79 of the Act read with Section 171 of the Act. Learned counsel for the DVC also placed reliance on the judgments delivered in the cases of Jiyajeerao Cotton Mills Ltd. Vrs. Madhya Pradesh Electricity Board & anr. ( 1989 Supp. (2) SCC 52 ), U.P. State Electricity Board, Lucknow Vrs. City Board, Mussoorie & Ors. ( [1985] 2 SCC 16, M.J.Sivani & Ors. Vrs. State of Karnataka & Ors. ( [1995] 6 SCC 289, Bihar State Electricity Board Vrs. Pulak Enterprises & Ors. ( [2009] 5 SCC 641), in support of his argument.
17. In sum and substance, according to the learned counsel for the CERC, the Commission had authorized suo motu powers to pass interim orders and also had power to prescribe provisional tariff earlier in 2004 Regulations and, that too, without there being any applciation of the applicant and the Commission had also power to pass orders, without affording an opportunity of hearing to the concerned parties under specific statutory provisions in Regulations and even under the Electricity Act, 25 2003 specifically under Section 64(3)(a), the Commission has power to prescribe even final tariff after considering the suggestions and objections of the public without giving an opportunity of hearing to anybody and, therefore, framing of regulation empowering the Commission to prescribe provisional tariff is in consonance with the provisions of the Act of 2003 and does not violate the Constitution in any manner . The power is not arbitrary, even prescribing the tariff , which may be upto 95%. Sofar reasons in the order are concerned, the Commission has clearly mentioned that it has passed the order after prudence check and consideration of the materials on record, which includes all the aspects of the matter, including the objections/suggestions which might have been received by the Commission. Therefore, neither the insertion of clause(4) under Regulation 5 is ultravires, nor it has been enacted transgressing the Act of 2003.
18. Learned counsel for the respondentDVC also supported the argument advanced by the learned counsel for the CERC that CERC has been sufficiently empowered by the Act of 2003 to make Rules and Regulations and in exercise of such power CERC has framed the said Regulation 5(4) and Section 178 of the Act of 2003 empowers CERC to frame Regulations consistent with the Act of 2003 and rules generally to carry out the provisions of the Act of 2003. The powers under Section 178 are wide enough and without prejudice to the wide power under Section 178(2) some specific steps have been given under subsection(2) of Section 178 and clause(s) of subsection(2) of Section 178 provides power to make Regulations regarding the terms and conditions for determination of tariff under Section 64 of the Act of 2003 whereas under clause(x) provides such power of making such Regulation regarding issue of tariff 26 order with modifications or conditions under subsection(3) of Section 64 . Clause (ze) of Section 64 also provides power for making Regulation regarding any other matter which is to be or may be specified by Regulations. The Statute has taken care to give widest possible power to the Commission in the matter of making Regulations and, therefore, it includes the power of the Commission to make provision for determination of provisional tariff. The Act of 2003 does not make any distinction between final tariff and provisional tariff.
It is also submitted that even under Section 94(2) whereunder the Commission can pass interim order, the language of Section indicate that for passing interim order, it is not necessary to submit any application over the Commission and Commission can pass interim order suo motu. Learned counsel for the DVC relied upon judgment of Supreme Court , delivered in the case of Reserve Bank of India Vrs. Peerless General Finance and Investment Co. Ltd. & Ors. reported in (1987) 1 SCC 424 and submitted that no part of a Statute and no word of a statute can be construed in isolation and Statutes have to be construed so that every word has a place and everything in its place. Learned counsel for the DVC further pointed out that in the Webster's Encyclopedic Unabridged Dictionary of the English Language ( New Revised Edn. 1996), the word 'interim' has been has been defined as could mean (i) an intervening time,
(ii) meantime, (iii) a temporary or provisional arrangement. Relying upon the Oxford English Dictionary, it is submitted that the word ' provisional' is synonyms to the word 'interim' and after relying upon the Black's Law Dictionary(6th Edition), it has been submitted that there cannot be any iota of doubt that the Act of 2003 empowers the appropriate Commission to pass provisional tariff order under Section 94(2) till the final tariff order 27 is passed under Section 64.
19. Learned counsel for the DVC submitted that Section 94(2) of the Act of 2003 gives power to the Commission to pass any interim order, including interim tariff order, which the Commission may consider appropriate and it gives wide discretion to the Commission, which is apparent from the language in the said Section and, therefore, in the light of the above provisions also the power given to the Commission under Regulation 5(4) to grant provisional tariff to the extent of 95% of the Annual Fixed Cost of the Project claimed in the tariff application, cannot be said to be a provision giving unbridled and unguided power to the Commission. It is also submitted that Regulation has been provided, keeping in view the interest of consumers i.e., to save the consumer from tariff shock on final determination and also to keep the project of the generating companies viable by ensuing recovery of some cost of generation of electricity during pendency of the tariff application in a reasonable manner, as envisaged in Section 61 of the Act of 2003. Learned counsel for the DVC also relied upon the Explanatory Memorandum of the draft Regulation , 2011 to show that all aspects have been considered in the interest of all the parties before enacting Regulation 5(4) and various factors have been taken into consideration before introducing Clause 5(4) in the Regulation of 2009, including the facts that till date orders in all the petitions for additional capital expenditure have not been issued, generating companies and transmission licensees are raising bills on the tariff as on 31st March, 2009 without accounting the impact of additional capital expenditure, increase of tariff during the year 200914 on account of increase in Return on Equity (ROE) and Operation & Maintenance (O&M) expenses, on account of pay revision of employees of Public sector 28 Undertakings, there is a gap between the tariff being provisionally billed by the generating companies and transmission licensees and tariff to be determined under the 2009 Regulations, which resulted in cash flow problem in the generating companies and transmission licensees and extra liabilities on the beneficiaries in the form of interest. Considering all the above facts, the Commission felt it necessary to introduce provision for provisional tariff in Regulation, 2009. Learned counsel for the DVC also argued in detail by taking all the pleas which have already been taken note while considering the argument of the learned counsel for the CERC and submitted that well settled principle 'Expressio unius est exclusion alterius' is applied for interpretation of Statutes and subordinate legislations, which mean that express mention of one thing implies the exclusion of another and in view of the different languages used in sub clause(a) of sub section (3) of Section 64 visàvis languages used in sub clause(b) of subsection(3) of Section 64 clearly indicate that where opportunity of hearing is required to be given has been mentioned specifically in proviso to in subclause(b) and that implies exclusion of such hearing to the public under sub clause(a) of subsection (3) of Section
64. It is also submitted that nature of compliance of natural justice varies as per the scheme of the statute under which it is claimed and Statute may even exclude natural justice, if so required for achieving the object of the Statute. There is no straight jacket formula for complying the natural justice. It depends on the facts and circumstance of the case, the nature of enquiry and the rules under which the authority is acting, the subject mater to be dealt with. It is also submitted emphatically that if natural justice is translated to personal hearing in every case then it would lead to chaotic situation and may defeat the object of the statutory provision. 29 Applying this principle in the present facts, it has been submitted that in the instant case, statute requires tariff to be determined within 120 days upon considering objections and suggestions received from the public . Under such scheme, the Statute has excluded personal hearing of objector to avoid a chaotic situation and the same will frustrate the object and the scheme of the statute and in all probability drag the process of determination of the tariffs indefinitely and thereby rendering generating utilities financially unviable . In support of this proposition, learned counsel for the DVC also relied upon the same judgment reported in K.M. Chikkaputtaswamy & Ors. Vrs. State of Andhra Pradesh & Ors. reported in 1985(3) SCC 398 and also relied relied upon the judgment of the Hon'ble Supreme Court delivered in the case of Union of India & anr. Vrs. Jesus Sales Corporation (1996) 4 SCC 69 as well as in the case of Madhya Pradesh Industries Ltd. Vrs. Union of India and Ors. , reported in AIR 1966 S.C. 671. Learned counsel for the DVC also relied upon the judgments of the Hon'ble Supreme Court delivered in the cases of K.L.Tripathi Vrs. State Bank of India & Ors., reported in (1984)1 SCC 43 and also Mohd. Ibrahim Khan & Ors. Vrs. State of Madhya Pradesh & Ors., reported in 1979 (4) SCC 458. Learned counsel for the DVC submitted that one of the petitioner has made a detailed objection to the tariff application and the CERC has considered the same and after due prudence check , as required by Regulation7 of the Tariff Regulation 200914 has granted provisional tariff to the DVC and prudence check is a methodology prescribed in the procedure for determining tariff and Commission has recorded in its order for provisional tariff that after due prudence check, DVC is granted provisional tariff at the rate of 70% of the capital AFC. It is also submitted that petitioner has not pointed out in its 30 petition as to what real prejudice has been caused to the petitioner in not being given hearing in person. It is also submitted that out of all the writ petitioners, who have preferred these writ petitions, except Steel Authority of India Limited , none of the petitioners has filed any objection to the tariff petition of the DV C and, therefore, they are not entitled in law to contest the interim relief that was granted to the DVC by way of provisional tariff. Sofar as SAIL is concerned, the SAIL in its writ petition nowhere stated that its objection was not considered by the Commission in passing provisional tariff order and, therefore, SAIL has also , in fact, could not make any case of prejudice or grievance for not being given an opportunity of hearing in person. It is submitted that even in final determination of the tariff also the consumers have not been even provided by Statute any right to be heard. The counsel for the DVC submitted that every month DVC has to incur expenditure to the tune of Rs.700 Crores , but DVC has been realizing revenue to the tune of only Rs.475 to 500 Crores and as such every month DVC is suffering revenue shortfall of Rs.200 to Rs.225 Crores due to continuation of the previous tariff, which is eroding the financial base of the DVC . In order to meet such shortfall , the DVC had to borrow huge amount of money from the nationalized banks on short term borrowing to the tune of Rupees four thousand one hundred Crores upto 31st July, 2011 and the repayment schedule of such debts has commenced from September, 2011 and DVC is under obligation to repay about Rs.400 Crores per month on a average to the lending banks. It is submitted that , if the DVC is not allowed to recover some revenue under the provisional tariff, DVC shall not be in a position to repay its debts to bank and in such circumstances bank shall not extend further financial assistance to the DVC , which may lead to closure of DVC and that will 31 result into credit lose to the State of Jharkhand and State of West Bengal and Industries set up therein. Learned counsel for the DVC further submitted that this is a fact in present case that inspite of statutory period of 120 days given to the Commission for passing the final tariff order, the tariff order could not be passed because of the none of the fault of anybody but because of the dispute raised and pending in the Courts. Therefore, in that situation, if the Commission has passed the interim order suo motu , it cannot be questioned. It is submitted that there was urgent need of obtaining provisional tariff and, therefore, the DVC tried its best to obtain the interim relief from the Commission by moving application but after insertion of Clause(4) under Regulation 5 , there was no need for the DVC to press the application for interim relief as the Commission got the power to pass appropriate order of prescribing the provisional tariff. It is also submitted that the entire record has been summoned by the Court and that has been perused wherefrom it can be gathered that Commission has considered all the issues and thereafter prescribed the provisional tariff.
20. Learned counsel for the Commission as well as learned counsel for the DVC vehemently submitted that these writ petitions are not maintainable for various reasons, firstly, none of the writ petitions has any locus standi to challenge the interim order because it was an application of the DVC before the Commission for prescribing the tariff for the year 200914, wherein none of the petitioners, except SAIL has submitted objection/suggestion and Commission could have passed the final order immediately after considering the suggestion and objection without affording any opportunity of hearing. When opportunity of hearing is not provided even for passing final order, there cannot arise any question of opportunity of hearing before passing interim order. Therefore, none of the 32 parties can be said to be a party in the proceeding before the Commission. None of the party was entitled to opportunity of hearing, therefore, also they have no locus standi to challenge the order impugned as well as Regulations. None of the parties raised any objection to framing of the Regulations inspite of publication of the draft Regulations with its reasons and objects. None of the party will be prejudiced by the impugned order because of the reason that in case final tariff order is passed, which may be less than the tariff allowed, then the petitioner will get the more than sufficient interest over the amount which they will be paying under interim order. In case , the provisional order is set aside and tariff is prescribed by the Commission then the petitioners will have to pay interest. It is also submitted that under equitable jurisdiction, this Court may not interfere , where , in fact, justice has been done, which is equitable also and also in the interest of the consumer that they will not have to pay interest if a final tariff order is passed even to the extent of the relief granted by the Commission in interim order.
21. We have considered the submissions of the learned counsel for the parties, including learned counsel for the Jharkhand State Electricity Board and the counsel for the Union of India and perused the entire records and considered the judgments relied upon by the learned counsel for the parties.
22. It will be relevant to mention here that earlier Electricity Act was firstly governed by the Indian Electricity Act, 1910, Electricity (Supply) Code, 1948 and Electricity Regulatory Commission Act, 1998. The Indian Electricity act, 1910 created the basic frame work for electric supply to the Industries. The Electricity(Supply)Act, 1948 mandated the creation of State Electricity Board. The State Electricity Board had the responsibility of 33 arranging the supply of electricity in the State. Over a period of time, the performance of the State Electricity Board had deteriorated on account of various factors. To address all these problems which have been faced by the State Electricity Board and for distancing of Governments from determination of tariffs, the Electricity Regulatory Commission Act, 1998 was enacted and Central Electricity Regulatory Commission and State Electricity Regulatory Commission were created. With the policy of encouraging private sector participation in generation , transmission and distribution and the objectives of distancing the regulatory responsibilities from the Government to the Regulatory Commission, the need for harmonizing and rationalizing the provisions in the Indian Electricity Act, 1910, the Electricity (Supply)Act, 1948 and the Electricity Regulatory Commission Act, 1948 in a new self contained comprehensive legislation arose.
With this introductory remarks in the Electricity Act, 2003, detailed statement of objects and reasons have been given. The main features of the Electricity Act, 2003 provided for delicensing of generation units and captive generation units of electricity and it provided for provision for private transmission licensees and substantially it provided involvement of the private companies in the field of generation supply and distribution of the electricity and therefore this act of 2003 was enacted to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of 34 Central Electricity Authority, Regulatory Commission and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto. In the Act of 2003, by Section 76, it has been provided that there shall be Central Electricity Regulatory Commission and as per Section 82 for the State, there shall be State Electricity Regulatory Commission. As per Section 61 of the Act of 2003, appropriate Commission have been empowered to specify the terms and conditions for the determination of the tariff and guidelines have been provided for prescribing the tariff as clause(a) to (i) under Section 61 of the Act of 2003.
23. Learned counsel for the petitioners submitted that as per clause(d) of Section 61, Commission is required to safeguard the interest of the consumers; whereas counsel for the DVC and the Commission relied upon the same clause(d) , which also is the provision guiding the Commission to ensure recovery of cost of electricity in a reasonable manner. Clause(b) is also relevant , which says that the generation, transmission, distribution and supply of electricity are conducted on commercial principles. Clause(g) says that the tariff progressively reflects the cost of supply of electricity and also reduces crosssubsidies in the manner specified by the appropriate Commission. The Commission has been vested with the powers to make Regulations under Section 178. subsection(1) of Section 178 gives wide power to the Commission in the matter of making Regulations. However, the Regulations must be consistent with the Act of 2003 and the Rules and generally to carry out the provisions of the Act without prejudice to the generality of the powers given to the Commission under subsection(1) of Section 178, some specific steps have been specifically mentioned as Clause(a) to clause (ze) under sub section(2) of Section 178 for which the Commission can frame the Regulations, which 35 includes sub clause(s), the terms and conditions for determination of tariff under Section 61 and also under sub clause(ze) for any other matter which is to be, or may be specified by regulations. These Regulations are required to be published prior. By exercising power under Section 178, the Commission has time to time made Regulations and relevant are Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2004 and Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2009 and further Central Electricity Regulatory Commission (Procedure for making of application for determination of tariff, Publication of the Application and other related matters) Regulations, 2004.
24. Before proceeding further, it will be appropriate to consider the preliminary objection raised by the learned counsel for the respondents. According to the learned counsel for the respondents, all the writ petitioners have no locus standi to challenge the impugned notifications by which sub clause(4) has been added under Regulation 5 because of the reason that petitioners are aggrieved against the order dated 23rd June, 2011, which is an appellable order under Section 111 of the Act of 2003 before the Appellate Tribunal for Electricity and in view of the available alternative remedy, which is efficacious remedy, the writ petition of the petitioners deserves to be dismissed and it is also submitted that the petitioners had full opportunity to submit their suggestions and objections against framing of sub clause(4) of the Regulation 5 but none of the petitioners ever raised any objection, therefore, also the writ petitioners cannot challenge the Regulation 5(4). It is also submitted that none of the parties except SAIL even submitted objection to the tariff petition of the DVC before the Commission and, therefore, the petitioners cannot be said 36 to be aggrieved against the interim order passed by the Commission. So far SAIL is concerned, though it has submitted objection but because of that reason the SAIL cannot get the right to be heard as SAIL even has no right of audience even in the matter of final determination of Tariff. Therefore, it cannot be afforded an opportunity of hearing.
25. The petitioners, since have challenged the constitutional validity of sub clause(4) of Regulation 5, which cannot be challenged in appeal under Section 111 of the Act of 2003 and this Court is of the view that the plea raised by the writ petitioners against the validity of sub clause(4) of Regulation 5 is not illusory and challenge to said provision requires consideration, therefore, writ petitions of the petitioners cannot be dismissed on the ground of availability of alternative remedy. All the writ petitioners also have alleged that the principle of natural justice has been violated by sub clause(4) of Regulation 5 as in view of the Commission and the DVC, the contesting respondents, because of the language used in sub clause(4) of Regulation 5, no opportunity of hearing is required. Therefore, this issue requires serious consideration and the writ petition cannot be rejected summarily without examining the issue in detail. Not raising any objection against the framing of Regulation cannot stop any person in proving the unconstitutionality or illegality in framing of the Regulations as there cannot be estoppal against the law and an illegal law cannot become legal by conduct of party.
26. Whether petitioners are beneficiaries in the definition given in Regulation 3(6) or not is also not relevant because of the reason that petitioners are certainly effected by the Regulation 5(4) and impugned orders, by which interim tariff has been prescribed by the Commission. Therefore, on these technical ground, the writ petitions of the petitioners 37 cannot be dismissed.
27. So far coming to the merit, it will be appropriate to examine whether insertion of sub clause(4)of Regulation 5 by amendment dated 2nd May, 2011 by the CERC is beyond legislative competence of CERC, transgress the electricity, 2003 and violative of principles of natural justice and doctrine of transparency and is ultravires the Constitution of India. It is not in dispute that Central Commission has vested with the power to make Regulations and as per subsection(1) of Section 178, such regulations should be consistent with the Act of 2003 and the Rules and to carry out the provisions of the Act of 2003. Therefore, Commission has all pervasive power to make Regulations, not only related to the subjects given under sub section(2) of Section 178 only and which have not been taken away by any other provision. This position is made clear by sub section(2) of Section 178 itself, which clearly says that 'in particular and without prejudice to the generality of the power contained in subsection(1), such regulations may provide for all or any of following matters, namely ......' . Therefore, the contention of the learned counsel for the petitioners that framing of Regulation 5(4) is not specifically covered in any of the clauses of sub clauses of subsection(2) of Section 178 and beyond the rule making power of Commission , is liable to be rejected and the Commission can make the Regulation, which is in consistent with the Act of 2003 and the Rules and to carry out the provisions of the Act.
28. Furthermore, it is not in dispute that Tariff Regulation, 2009 have been made by the Commission itself by exercising power under Section 178 and Regulation 4 specifically provided for determination of the tariff in respect of generating stations and tariff of the transmission system and it also has prescribed procedure for determination of the tariff. This 38 Regulation no.4 is not under challenge, therefore, this argument cannot be accepted that the Commission can form regulation for making tariff but cannot make provision for making interim arrangements.
29. Counsel for the petitioners tried to submit that there can be only one application for tariff determination, which excludes any interim application for making provisional tariff and tried to substantiate his arguments specifically by the learned counsel, Mr.N.K.Pasari for the Gautam Ferro Alloys, with the help of the language used in Section 64 wherein words 'an application' 'the application' and 'tariff order' etc. etc. have been used.
The argument advanced by the learned counsel for the petitioner is hyper technical and liable to be rejected, for the simple reason that Section 64 of the Act of 2003 prescribed procedure for tariff order and provided for 'an application' for determination of the tariff under Section 62, which cannot be read to mean that there can be only one application for determination of the tariff and that shall be only for final determination of the tariff. If this proposition is accepted, then in the matter of determination of the tariff, there can be only one application and that will destroy the petitioners' own argument that the Commission could not have issued provisional tariff order without application and further it will be not in consonance with the petitioners own stand, if examined in the light of subsection (2) of Section 94 of the Act of 2009, which empowers the Commission to pass interim order in any proceeding pending before the appropriate Commission. Then in that situation, according to the argument of the learned counsel for the petitioners, the Commission has power to pass interim order without application under subsection(2) of Section 94 and at the same time one of the ground raised by the petitioners is that the 39 Commission has no power to pass any order, including interim order, without application of the party. Otherwise also Section 64 only provides 'an application' for determination of tariff under Section 62 then it does not mean that for obtaining any other relief, other than obtaining final tariff order, no other application can be submitted before the Commission. Not only this but when authority has power to pass a final order, certainly and consequently it possess power to pass interim order. We are of the considered opinion that Section 94(2) fully empowered the Commission to pass interim order in any proceeding, which is pending before the Commission and such interim order can be passed by the Commission at it's own, suo motu or on an application filed by any party. The interim order is synonyms to the provisional order, which is clear from the Webster's Encyclopedic Unabridged Dictionary of the English Language ( New Revised Edn. 1996) wherein the word interim has been defined to mean (I) an intervening time, (ii) meantime, (iii) a temporary or provisional agreement. The Oxford English Dictionary also says the phrase 'interim, synonyms to provision . The word provisional has been defined in Black's Law Dictionary(6th Edn.) as 'ad interim'. Therefore, "interim order"
includes provisional order.
30. The Commission has very many functions and, therefore, in all matters power has been given to the Commission to pass any interim order in any pending proceeding before it. Therefore, Commission can pass interim order , according to the nature of the proceeding pending before it and when a proceeding for final determination of tariff is pending before the Commission then in that situation the appropriate order can be prescribing provisional tariff . The interim order does not mean only order of injunction or stay , but interim order mean, interim arrangement or 40 provisional direction.
31. It will be relevant to appreciate that power to pass interim order under Section 94(2) is a general power and in the Tariff Regulation of 2009, by Regulation 5(3), it was provided for existing projects, the generating company or the transmission licensee, as the case may be, that they shall continue to provisionally bill the beneficiaries or the transmission customers with the tariff approved by the Commission and applicable as on 31.3.2009 for the period starting from 1.4.2009 till approval of tariff by the Commission in accordance with these regulations. Therefore, there was interim arrangement of prescribing provisional tariff in the Regulations, 2009 itself. The petitioners who are challenging the provisional tariff are since last two years paying provisional tariff bills. It appears that provisional tariff prescribed in Clause(3) of Regulation 5 created a working difficulty and may also have created a legal difficulty in handling the peculiar situation in granting appropriate relief to the applicantDVC, because such provisional arrangement as made by clause(3) of Regulation 5 operate "till approval of tariff by the Commission in accordance with these regulations". Therefore, when due to passage of long time of two years and due to reasons mentioned in Explanatory Memorandum attached to draft amendment it was found necessary to insert specific clause in the Regulation 2009 so that with approval of provision a tariff, the continuation of tariff prescribe under clause (3) of Regulation 5 may come to an end. Therefore, in these circumstances and due to reasons mentioned in the Explanatory Memorandum attached to the draft amendment ( AnnexureR/21 to the counter affidavit dated 12th September, 2011), the Commission found it necessary to insert Clause (4) under Regulation 5 specifically after taking 41 note of sub clause(3) of Regulation 5 . The Commission found that two years of the tariff period 200914 have already passed and in all petitions for additional capital expenditure , no orders have been issued , the generating company and transmission licensees are raising the bills on the basis of tariff as on 31st March, 2009 without accounting for the additional capital expenditure. The Commission found that there is increase in tariff during 200914 on account of increase in ROE and O&M expenses on account of pay revision of employees of Public Sector Undertakings. The Commission was of the view that there is a gap between tariff being provisionally billed by the generating company and licensees and the tariff to be determined under 2009 Regulations, which resulted in cash flow problem for the generating company and transmission licensee and extra liability on the beneficiary in the form occurred due to delay in finalization of capital cost of plant of the Projects and submission of the auditor's certificate. The Commission opined that it has resulted in cash flow problem, apart from creating extra liability on the beneficiaries and after considering other facts relevant for the purpose opined that there is need to introduce appropriate provision for provisional tariff in the year 2009 Regulation, so that billing and payments are not hampered on account of delay of issue of tariff orders by the Commission.
32. From the above, two things are clear, (i) the provisional tariff, which according to the learned counsel for the petitioners, could not have been prescribed, was already prescribed by Regulation 2009 itself under sub clause(3) of Regulation 5 and sub clause(3) of Regulation 5 is not under challenge and the petitioners are paying the bill, according to the provisional tariff, by virtue of sub clause (3) of Regulation 5 and in sub clause(3) specific words have been used 'shall continue to provisionally 42 bill the beneficiaries or the transmission customers' according to the tariff approved by the Commission and applicable as on 31st March, 2009. This clearly indicate that certainly Commission even without sub clause(4) of Regulation 5 had power to prescribe provisional tariff because after 31st March, 2009, admittedly the tariff finally prescribed by the earlier tariff order ceased to operate from 31st March, 2009 and it become provisional tariff by virtue of sub clause (3) of Regulation 5. Since there was specific provision in Tariff Regulation, 2009 that the tariff approved by the Commission and applicable as on 31st March, 2009 shall continue to operate from 1st April, 2009 till approval of the Tariff by the Commission in accordance with the Regulation of 2009 therefore, to bring within this clause empowering Commission to approve tariff, Clause(4) has been inserted under Regulation 5, so that instead of passing any order by exercising general power under Section 94(2) of the Act of 2003, the Commission may pass appropriate order of approving tariff provisionally, so that order may be in consonance with sub clause(3) of Regulation 5 as any order which would be passed under sub clause(4) of Regulation 5 would be a tariff approved by the Commission. Therefore, the order which has been passed under sub clause(4) of Regulation 5 is an order of approval of tariff(provisionally) by the Commission and, therefore, from the date of approval of tariff( may it be provisional) by the Commission , operation of billing to the beneficiaries , according to the tariff approved by the Commission and which was applicable as on 31st March,2009, stands inoperative with effect from becoming operative the provisional tariff approved by the Commission .
33. Therefore, we may conclude that Commission itself had power under Regulation, 2009 to prescribe provisional tariff which it has done by 43 framing sub clause(3) of Regulation 5 and, therefore, contention of the petitioners is liable to be rejected that the Commission had no power to make provision for provisional tariff.
34. At this juncture, it is relevant to mention here that Commission's power to make provisional tariff by sub clause(3) of Regulation 5 has not been challenged by the writ petitioners and they, in fact, accepted the provisional billing even after end of the tariff application period approved by the Commission for the period upto 31st March, 2009. The Commission has also power to frame the Regulation for providing for provisional tariff as it also has power to frame Regulation for determination of final tariff. Therefore, Regulation 5(4) is neither beyond legislative competence of the CERC nor transgress the Electricity Act, 2003.
35. Next question is whether Regulation 5(4) is violative of principles of natural justice.
The petitioners' contention is that Regulation 5(4) empowers the Commission to pass any order of prescribing the tariff, which may have serious adverse civil consequence and, therefore, before passing any adverse order of civil consequence upon a concerned party, he is required to be given an opportunity of hearing is the mandate of Article 14 and 19(1)(g) of the Constitution; whereas learned counsel for the DVC as well as the Commission vehemently submitted that for passing appropriate order under Regulation 5(4), it is true that no opportunity of hearing is required to be given to any person but still it does not violate either principles of natural justice or the procedure prescribed is unjust, unfair and unreasonable. Learned counsel for the respondents submitted that opportunity of hearing is not the only way to comply with the principles of natural justice.
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36. Learned counsel for the respondentDVC also submitted that nobody is entitled to opportunity of hearing even at the time of prescribing final tariff and this has been excluded impliedly by the different languages used in sub clause(a) and (b) of subsection(3) of Section 64 of the Act of 2003.
37. The aforesaid argument, we have already referred above, and now we may proceed to examine whether anybody is entitled to an opportunity of hearing before making of final tariff order .
Section 64 of the Act of 2003 is relevant , which is as follows :
"64. Procedure for tariff order.--(1) An application for determination of tariff under Section 62 shall be made by a generating company or licensee in such manner and accompanied by such fee, as may be determined by regulations. (2)Every applicant shall publish the application, in such abridged form and manner, as may be specified by the Appropriate Commission.
(3) The Appropriate Commission shall, within one hundred and twenty days from receipt of an application under sub section(1)and after considering all suggestions and objections received from the public,
(a)issue a tariff order accepting the applciation with such modification or such conditions as may be specified in that order;
(b) reject the application for reasons to be recorded in writing if such application is not in accordance with the provisions of this Act and the rules and regulations made thereunder or the provisions of any other law for the time being in force :
Provided that an applicant shall be given a reasonable opportunity of being heard before rejecting his application.
(4) The Appropriate Commission shall, within seven days of making the order, send a copy of the order to the Appropriate Government, the Authority, and the concerned licensees and to the person concerned.
(5) Notwithstanding anything contained in Part X, the tariff for any interState supply, transmission or wheeling of electricity, as the case may be, involving the territories of two States may, upon application made to it by the parties intending to undertake such supply, transmission or wheeling, be determined under this section by the State Commission having jurisdiction in respect of the licensee who intends to distribute electricity and make payment therefor.45
(6) A tariff order shall, unless amended or revoked, continue to be in force for such period as may be specified in the tariff order."
38. As per subsection(1) of Section 64, an application is required for determination of tariff under Section 62 and when it is submitted then that application is required to be published, may be in abridged form, and in the manner as may be prescribed by the Appropriate Commission. Then subsection(3) of Section 64 mandates that Appropriate Commission shall issue tariff order within one hundred and twenty days from the date of receipt of such application under subsection(1). Thereafter subsection (3) only provides that the Commission may pass appropriate tariff order 'after considering all suggestions and objections received from the public'. Therefore, any member of public can submit suggestion and objection to the tariff application submitted by the applicant. Section provides that Commission shall pass tariff order after considering suggestions and objections. Under Section (3) read with clause (a), it is clear that specifically it has not been provided that opportunity of personal hearing before issuing final tariff order shall be given to the public or to the persons, who have submitted suggestions and objections against the applicant's application.
39. Learned counsel for the petitioners submitted that to save the constitutionality validity of such provision, such provisions are required to be read down to mean within its inclusion of right of personal hearing, otherwise it will violate the principles of natural justice and will give arbitrary power to the authority.
40. In view of the above submission, we have to look into sub clause(b) of subsection(3) of Section 64 also, wherein it has been specifically provided that before rejecting the application of the applicant for prescribing tariff the Commission shall give opportunity of hearing to the 46 applicants and sub clause(b) of subsection(3) thereof also provides that the Commission shall record reasons in writing for rejecting the application of the applicant. There is a vast difference between two provisions, one clause (a) and another clause(b). In clause(a), it is not provided that for accepting the application for tariff even when such application is required to be published and a public can submit suggestion and objection and, then the Commission shall hear and thereafter issue a tariff order. In contrast, only it is provided that the Commission shall ' consider all suggestions and objections. At this juncture, it will be appropriate to mention here that these suggestions and objections can be submitted by any member of the public and, therefore, if it is held that everybody or any member of the public, who has submitted suggestion and objection to the tariff application, is required to be given opportunity of hearing, it will create a chaotic situation and unworkable situation for the Commission because the Commission is required to issue a tariff order within short period of one hundred and twenty days only. When the legislation has used different languages in different clauses of the same Section then it is presumed that the legislature has purposefully used the languages differently in different places in the same Section of the Statute. Therefore, which has not been provided in sub clause(a) of subsection(3) of Section 64 cannot be read within it. It appears from the different languages used in clause (a) and (b) of subsection(3) of Section 64, the legislature, to exclude personal hearing to public framed the clause(a) for which there exists reasons, which we have referred above.
41. Now, the question arises whether because of non providing of opportunity of hearing to the parties in all cases violates the principles of natural justice.
47Learned counsel for the petitioners has relied upon several judgments and it cannot be disputed that above general principles of law that principles of natural justice are not the creation of Article 14 only. Article 14 is not begetter but their constitutional guardian. Principles of natural justice trace their ancestry to ancient civilizations and centuries long past. Until about two centuries ago the term 'natural justice' was often used interchangeably with 'natural law' and at times, it is still so used. So has been held by the Constitution Bench of the Hon'ble Supreme Court in the case of Union of India Vrs. Tulsiram Patel ( [1985] 3 SCC 398. Thereafter, the Hon'ble Supreme Court in Tulsiram Patel's case in para101 held as follows :
" Not only, therefore, can the principles of natural justice be modified but in exceptional cases they can even be excluded. There are well defined exceptions of the nemo judex in causa sua rule as also to the audi alter partem rule. The nemo judex in causa sua rule is subject to the doctrine of necessity and yields to it as pointed out by this Court in J. Mohapatra and Company v. State of Orissa. So far as the audi alter partem rule is concerned, both in England and in India, it is well established that where a right to a prior notice and an opportunity to be heard before an order is passed would obstruct the taking of prompt action, such a right can be excluded. This right can also be excluded where the nature of the action to be taken, its object and purpose and the scheme of the relevant statutory provisions warrant its exclusion; nor can the audi alter partem rule be invoked if importing it would have the effect of paralyzing the administrative process or where the need for promptitude or the urgency of taking action so demands, as pointed out in Maneka Gandhi case at page 681. If legislation and the necessities of a situation can exclude the principles of natural justice including the audi alter partem rule, a fortiori so can a provision of the Constitution for a constitutional provision has a far greater and all pervading sanctity than a statutory provision............"
In view of the Constitution Bench decision of the Hon'ble Supreme Court, it is clear that there are well defined exceptions of the nemo judex in causa sua rule as also to the audi alter partem rule. The Constitution Bench of the Hon'ble Supreme Court held that it is well established that 48 where a right to prior notice and an opportunity to be heard before an order is passed would obstruct the taking of prompt action, such a right can be excluded. This right can also be excluded where the nature of the action to be taken, its object and purpose and the scheme of the relevant statutory provisions warrant its exclusion. More important is that Hon'ble Supreme Court in Tulsiram Patel's case(supra) held that if audi alter partem rule is invoked, if it has the effect of paralyzing the administrative process or where the need for promptitude or the urgency of taking action so demands, then in that situation the application of rule of audi alter partem cannot be applied.
42. At the cost of repetition, we may state here that under sub section(3) of Section 64, notice is required to be given to the public, who may submit suggestions and objections, which are required to be considered by the Commission before issuing tariff order and such tariff order is required to be issued with one hundred and twenty days. The period of tariff admittedly can be for five years. Then in that situation, if personal hearing is given to the parties by the Commission then it will certainly paralyze the working of the Commission because Commission has to decide not only one application of one applicant and if all members of the public are allowed to submit objections and suggestions also are required to be given hearing then no order can be passed by the Commission. The exclusion of the personal hearing to the members of the public is implied by reading subclause(b) and sub clause(a) of sub section(3) of Section 64. This exclusion of hearing is permissible, in view of the Constitution Bench Judgment of the Hon'ble Supreme Court in Tulsiram Patel's case(supra).
43. Thirdly, even this case, the Commission could not issue tariff order in 49 two years for valid reasons and order which is permitted by sub clause(4) of Regulation 5 is only an interim order whereas even in main Section 64, opportunity of hearing is not provided and that provisions' validity is not under challenge.
The fact situation of this case that the Commission could not pass tariff order in last two years then what was so urgent so as to deny the opportunity of hearing to the petitioner/public, will not make any difference, firstly legal issue cannot be decided by considering only on fact situation and secondly, when law is clear , law cannot be interpreted by taking in one fact situation.
44. However, it is clear that Commission is required to prescribe its own procedure and Commission, if entertains any objection and requires hearing of any of the party, who submitted suggestion or objection to the tariff order, may also, if necessary, give opportunity of hearing to that party but that party cannot claim as a matter of right of audience. The Hon'ble Supreme Court in earlier judgment delivered in the case of K.L.Tripathi Vrs. State Bank of India ( [1984] 1 SC.C. 43) after considering the Administrative Law, Fifth Edition at pages 472475 , has observed that the said author has opined that it is not possible to lay down rigid rules as to when the principles of natural justice are to apply:
nor as to their scope and extent. Everything depends on the subjectmatter, application of principles of natural justice, resting as it does upon statutory implication,must always be in conformity with the scheme of the Act and with the subjectmatter of the case. In the application of the concept of fair play there must be real flexibility. There must also have been some real prejudice to the complainant ; there is no such thing as a merely technical infringement of natural justice. The requirements of natural justice must 50 depend on the facts and the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter to be dealt with, and so forth.
We are also of the considered opinion that consideration of suggestion and objection by the Commission without affording any opportunity of hearing to the objector to the tariff petition under Section 64 is sufficient compliance of the principles of natural justice and hearing is not necessarily required for compliance of the natural justice. However, it was submitted by the learned counsel for the petitioners that one of the petitionerSAIL submitted objection and it is being given opportunity of hearing. If it is so, then that can be done by the Commission, even after fulfillment of requirement of principles of natural justice by inviting suggestions and objections but that will not make anybody entitle ti claim right of personal hearing.
45. In view of the above reasons, we are of the considered opinion that if an opportunity of hearing is not provided by newly added sub clause(4) of Regulation 5 in Regulation,2009 then it has not violated the principles of natural justice.
46. The learned counsel for the petitioners vehemently assailed the impugned consequential order passed by the Commission dated 23rd June, 2011 on the ground that order is not a reasoned order, therefore, it is a non speaking order; the order has been passed without considering even facts of the case as well as any of the suggestions and objections submitted by one of petitionerSAIL and the total nonapplication of mind is apparent from the order. The Commission has allowed increase of tariff by 70% on capital cost claimed by the DV C, irrespective of the fact that one of the Unit Durgapur TPS commenced commercial operation in the month of 51 September, 1982 and another Unit Majea Unit No. IV commenced its commercial production in February, 2005. Therefore, this clearly indicate that Commission did not apply its mind to the facts of the case as there cannot be increase in capital cost of the Unit of 1982 to the extent of 70%, if capital cost of the Unit of 2005 increased to 70% and it cannot be vice versa. The Commission has not given reason for increase to extent of 70% of the capital cost, claimed by the DVC.
47. We have already referred the detailed argument of the learned counsel for the parties and, therefore, we need not to give details of the argument here again.
It appears from the impugned order dated 23 rd June, 2011 that this order is a brief order and we cannot appreciate the order. It was expected of the Commission that in a case where opportunity of hearing is not provided to the effected party then order must be indicating reasons which may be in brief but reasons should have been in the order, so that the person who give suggestion and submits objection against tariff application as well as, including the member of public, may come to know that order has been passed after considering his suggestion and objection and what is reason for passing order and may not feel aggrieved and challenge such order. Only mentioning of the word ' after carrying due prudence check' is not sufficient compliance of the requirement of passing any order by such authority, like CERC. Even where ex parte order is passed, here ex parte is virtually final interim order, then in that situation it was all the more necessary for Commission to give some basic facts for arriving at the conclusion. However, we have called record of the Commission and found that several calculations have been made in that record before passing the impugned order. The gist of those could have been given in the impugned 52 order, which may have satisfied the writ petitioners, which could have avoided unnecessarily litigation.
48. Be that as it may, now question arises whether by invoking the jurisdiction under Article 226 of the Constitution of India, should this Court interfere in the impugned order.
It is settled law that jurisdiction under Article 226 of the Constitution is an extraordinary equitable jurisdiction. It is also settled law that it is not necessary to correct illegality if it is not in the interest of justice. We are of the considered opinion that the petitioners failed to make out any case for interference in the impugned order because of the reasons that a tariff which was required to be prescribed within one hundred and twenty days could not be prescribed by the Commission and we cannot find fault in the Commission because the issue before the Commission was very complex and was dependent upon number of technical parameters and factors, which required consideration and we have already narrated the facts of the case leading to this position, which indicate that the Commission because of the valid reason could not issue the final tariff order and has made this interim arrangement. This interim arrangement is in the interest of both the parties because of the reason that as per proviso to Clause (3) of Regulation 5, if there is delay in issuing tariff order the parties were bound to pay the difference of the amount with simple interest at the rate equal to the short term prime lending rate of SBI, which was as on 1st April of concerned/respective year. If the provisional bill paid by the consumer exceeds the final tariff approved by the Commission then in that situation the applicant( herein, in this case DVC) shall require to pay and refund the amount with the same rate of interest as prescribed for the beneficiaries and consumers. Sub clause(d) Section 61 of the 53 Electricity Act, 2003 provides that Appropriate Commission shall be guided by the principles/guidelines given in various clauses of Section 61, which includes subclause(d), which requires safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner In our opinion , the prescribing of the provisional tariff is also in the interest of the consumers as they will not have all of a sudden burden of arrears of electricity charges with interest. It may be argued and has been argued hat the petitionersconsumers are of the opinion that in final tariff order, tariff may not be increased and if increased then the petitioners are ready to pay all arrears with interest in accordance with law and, therefore, in the garb of such order, the respondentDVC cannot issue bills to the writ petitioners.
We are not convinced by this argument. Safeguarding of the interest of consumers is apparently is by reducing its liability by provisional tariff and at the same time balance is required to be strike for recovery of the cost of electricity in the reasonable manner. Stagnancy created by whatsoever reason, it was not in the interest of both the parties. Furthermore, it was more and heavy burden for the DVC as compared to writ petitioners. The recovery of huge amount at one time is certainly difficult than recovery of lesser amount in periodical recovery. We are of the considered opinion that, if all the consumers of DVC will not pay the electricity charges in a reasonable manner then definitely that may go against the public interest as well as against the nation's interest as the electricity is essential commodity. Its production is required to be safeguarded even if it is at some inconvenience and cost of the writ petitioners to the extent, which cannot be said unreasonable burden upon the writ petitioners.
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49. We are also of the view that even if the impugned order is set aside and direction is given to the Commission to pass a fresh reasoned order, then also no useful purpose will be served, in view of the work done by the Commission in it's File, which is recorded in the Office File of the Commission and the interim order will ultimately merge in final order, if any correction is required. However, we are making it clear that we are not deciding the justification of increase in the tariff to the extent of 70% as it is yet to be finally decided by the Commission and, therefore, our observation is limited only for the purpose of finding out whether the Commission has applied its mind to the facts of the case and thereafter passed the order impugned and we are of the view that the Commission has examined facts of the case and thereafter passed the impugned order, however, without mentioning the detailed facts and the reasons.
50. We are also not impressed by the argument of learned counsel for the petitionerMr.N.K.Pasari that the order may be set aside because of the reason that the Commissioner has not ensured the transparency while exercising its power and discharging its functions, which is mandatory requirement under subsection(3) of Section 79 of the Act of 2003. Ensuring transparency does not mean that Commission should have complied with the procedure, which has not been envisaged by law and provided the opportunity of hearing to the writ petitioners, who admittedly have not submitted any objections or suggestions upon the tariff application submitted by the respondentapplicant or to the SAIL, who submitted the objection of the tariff petition.
51. Learned counsel for the petitioners also submitted that DVC itself submitted application for provisional determination of tariff, which was withdrawn by the DVC and in that situation the Commission should not 55 have passed the interim order.
Admittedly, the DVC withdrew the application for provisional tariff because of the insertion of subclause(4) under Regulation 5, which is clear from the order of withdrawal and this Court is of the view that the interim tariff order can be passed by the Commission suo motu and without application of any of the parties. Therefore, in that situation, if the DVC has withdraw its application for determination of provisional tariff , it has not effected the right of the Commission to prescribe any provisional tariff. We also find no force in the submission of the learned counsel for the petitioners that Regulation 5(4) gives unguided, unfettered , unbridled and uncanalized power to the Commission because of the reason that the Commission in the matter of passing interim order is guided by the principles laid down for final determination of tariff. At this juncture, it will be appropriate to mention here that the Commission has not only passed the provisional tariff for DVC but also for number of applicants, including NTPC while invoking the same sub Clause(4) of Regulations 5 and increase the tariff upto 90% in place of to the extent of 70%, as has been done in this case.
52. Learned counsel for the petitioners also submitted that there was no valid tariff application before the Commission, which is apparent from the impugned order dated 23.6.2011 itself wherein, in last paragraph, the DVC was directed to file separate petition for each of its generating stations and transmission systems in accordance with Clause(4) of Regulations 5 of Tariff Regulations,2009.
This objection is technical only, in view of the fact that the DVC submitted one application for all the generating stations and transmission systems but it is not in dispute that fact of each generation stations and 56 transmission systems have been mentioned in the application and it appears that to make it more clear and convenient, direction was given to the DVC to submit separate applications. It is not the case of even the petitionerSAIL that the applicant DVC had not submitted required details in the application submitted by it for its generating stations and transmission systems .
53. In view of the above reasons , we do not find any force in the challenge to order dated 23rd June, 2011 on any of the grounds.
54. Some of the petitioners also raised objection that bills are not in accordance with the order dated 23.6.2011.
This Court is not entering into this controversy, so as to examine the factual aspect which was the component, could have been added in the bill which could not have been added. For such disputes, the appropriate remedy is before the Appellate forum and not before this Court under Article 226 of the Constitution of India.
55. Consequently, we find no merit in the writ petitions preferred by these writ petitioners, hence all the writ petitions are dismissed and the interim order passed by this Court is vacated.
(Prakash Tatia, C.J) ( P. P. Bhatt, J) G.Jha/ 57