Gujarat High Court
Utility Users' Welfare Association vs State Of Gujarat & 12....Opponent(S) on 8 October, 2015
Author: Jayant Patel
Bench: Jayant Patel, N.V.Anjaria
C/WPPIL/172/2014 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
WRIT PETITION (PIL) NO. 172 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE ACTING CHIEF JUSTICE MR. JAYANT PATEL
and
HONOURABLE MR.JUSTICE N.V.ANJARIA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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UTILITY USERS' WELFARE ASSOCIATION....Applicant(s)
Versus
STATE OF GUJARAT & 12....Opponent(s)
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Appearance:
MR AJ YAGNIK, ADVOCATE for the Applicant(s) No. 1
DS AFF.NOT FILED (N) for the Opponent(s) No. 1
MR KAMAL TRIVEDI, LD. ADVOCATE GENERAL with MS SANGEETA
VISHEN, AGP for the Opponent(s) No. 1
MR KK NANAVATI, ADVOCATE with MR GANDHI, ADVOCATE for
NANAVATI ASSOCIATES, ADVOCATE for the Opponent(s) No. 3
NOTICE SERVED BY DS for the Opponent(s) No. 4 , 7 , 9 - 11 , 13
MR ANAL S SHAH, ADVOCATE for the Opponent(s) No. 2
MR APURVA A DAVE, ADVOCATE for the Opponent(s) No. 6
MR GAURAV S MATHUR, ADVOCATE for the Opponent(s) No. 11
MR PREMAL R JOSHI, ADVOCATE for the Opponent(s) No. 5
MR VH KANARA, ADVOCATE for the Opponent(s) No. 8
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C/WPPIL/172/2014 CAV JUDGMENT
MR. ASHOK A PUROHIT, ADVOCATE for the Opponent(s) No. 13
MS TRUSHA K PATEL, ADVOCATE for the Opponent(s) No. 12
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CORAM: HONOURABLE THE ACTING CHIEF JUSTICE MR.
JAYANT PATEL
and
HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 08/10/2015
CAV JUDGMENT
(PER : HONOURABLE THE ACTING CHIEF JUSTICE MR. JAYANT PATEL)
1. The petitioner, claiming to be a Public Spirited Organization, approached this Court, seeking various reliefs, inter alia, for directing the respondent State to consider appointing a retired or sitting Judge of the High Court as Chairperson of respondent No.2, Gujarat Electricity Regulatory Commission (hereinafter referred to as "the Commission") by giving reference to Section 84(1) and Section 84(2) of the Electricity Act , 2003 (hereinafter referred to as "the Act"). Based on the earlier, the petitioner has prayed for the direction against the Commission not to hear Petition No.1389 of 2014 of respondents No.3 and 4, who are Electricity Companies, unless a retired or sitting Judge of the High Court is appointed as Chairperson of the Commission. It Page 2 of 74 HC-NIC Page 2 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT is also prayed by the petitioner to quash and set aside the Notification dated 2.1.2014 appointing respondent No.11 as the Chairperson of the Commission. The last prayer made is to declare Section 84(1) and Section 84(2) of the Act independently or collectively to the extent it fails to provide a sitting or retired Judge of the High Court mandatorily and compulsorily as Chairperson of the respondent Commission as ultra vires and violative of Article 14 of the Constitution of India and it is further prayed to direct that the Commission has to have a Chairperson, who is a retired or sitting High Court Judge.
2. We may record that the other two prayers are, as such, for deletion of the word "Chairperson" under Section 84(1) of the Act and to read with word "may" as "shall" under Section 84(2) of the Act. "Shall" get included in the principal prayer while considering the question of constitutional validity of Section 84(1) and Section 84(2). Hence, we find that such may not be required to be considered and dealt with Page 3 of 74 HC-NIC Page 3 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT separately.
3. We have heard Mr.A.J. Yagnik, learned Counsel for the petitioner, Mr.Kamal Trivedi, learned Advocate General appearing with Ms.Sangeeta Vishen, learned AGP for respondent No.1, Mr.K.K. Nanavati, learned Counsel for Nanavati Associates and Mr.Gandhi, learned Counsel for Nanavati Associates for respondent No.3, Mr.Anal Shah, learned Counsel for respondent No.2, Apurva Dave, learned Counsel for respondent No.6, Ms.Trusha K. Patel, learned Counsel for respondent No.12, Union of India, Mr.Premal Joshi, learned Counsel for respondent No.5, Mr.Gaurav Mathur, learned Counsel for respondent No.11, Mr.Kanara, learned Counsel for respondent No.8 and Mr.Ashok Purohit, learned Counsel for respondents No.13.
4. Before we proceed to examining the matter, we find it proper to record that one of the prayers for challenging the Notification dated 2.1.2014 for the appointment of respondent No.11 as Chairperson has become infructuous by efflux of time pending the petition, since it is an admitted position that respondent No.11 has Page 4 of 74 HC-NIC Page 4 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT retired upon expiry of the term. Hence, we need not address ourselves on such prayer. As on today, when we are to consider the matter, the post of Chairperson is vacant in the Commission.
5. In view of the aforesaid fact situation, principally, we need to examine the constitutional validity of Sections 84(1) and (2) of the Act. Before we proceed to examine the said aspect, we may broadly consider the approach on the part of the Court, when validity of any statute or section of any statute is challenged on the ground of unconstitutionality.
6. As per the well settled principles of law, the challenge can broadly be examined on the legislative power or the competence of the Parliament or State Legislature, as the case may be, by taking aid of various subjects of the Entries of List-I or List-II or List-III of the Seventh Schedule. If a statute or a particular section of the Act is found to be with the legislative competence, the Court may further examine as to whether any provision of the statute is against the basic structure of the Page 5 of 74 HC-NIC Page 5 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT Constitution, more particularly of maintenance of three separate pillars of the Constitution in maintenance of the democracy; first is Parliament or the Legislature; second is the Executive and the third is Judiciary. Any statute allowing encroachment of power or taking away the power from one to another may have to meet with the test for no adverse effect on the basic structure of the Constitution. Further, if a particular provision of an Act is put to test by taking aid of Article 14 or Article 21, scrutiny would also be called for to that extent with the limits for testing the validity of a particular provision of statute or the Act, as the case may be.
7. In any case, while undertaking the aforesaid exercise, the Court would make an attempt to see that the statute is saved as far as possible, either by examining the entries in the List-I or List-II or List-III of the Seventh Schedule by applying the principles of pith and substance and thereafter even if the statute, literally read and interpreted, goes in conflict with the basic structure of the Constitution or is unable to Page 6 of 74 HC-NIC Page 6 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT satisfy the test of Article 14, the Court would read down the provision in order to make it rational or in order to maintain the basic structure of the Constitution. Thereafter, if the Court finds that reading down is not possible at all or the reading down of section would not serve the purpose, the Court may again try to save the statute by applying the principles of severance but while doing so, the Court would also ensure that the statute becomes operational, even thereafter and if neither of the situations is available, the Court may lean to strike down the provision as unconstitutional.
8. After having taken into consideration the aforesaid broad principles, but before we further examine the matter, we find that, since the jurisdiction of this Court is invoked as public spirited litigant, some background of the petitioner would be relevant.
9. As per the petitioner, it is a utility user of welfare association and a registered body. It is an Association for the benefits of end-users of electricity in the State of Gujarat. As per the Page 7 of 74 HC-NIC Page 7 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT petitioner, its activities are to safeguard the interest of the end-users in the use of utility services. As per the petitioner, it plays a broad active role in the fields of rights of the users of electricity and has the object to create awareness regarding non-conventional energy source. It is the case of the petitioner that it has participated and is participating in various proceedings before the Commission, so as to protect the rights of the consumers.
10. We may not deal with various details which are given by the petitioner in the present petition and the other subsequent pleadings about the role played by the petitioner for protecting the interest of the consumers of electricity, since such would add the record, but suffice it to observe that the details produced in the record of the present petition do show that the petitioner is making an attempt to protect the rights of the electricity consumers generally and in our view, as the cause espoused in the petition may ultimately have the effect on the adjudicatory mechanism by the Commission, the Page 8 of 74 HC-NIC Page 8 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT grievance raised by the petitioner in the present petition needs to be examined for the larger public interest. Be it recorded that it would be in the interest of the electricity consumers as well as the electricity companies or any person incidentally affected thereby to have better and proper system of adjudication of the disputes and also for the fixation of appropriate tariffs, etc. etc. Therefore, the larger public interest. We may also record that on the locus of the petitioner Association for espousing the public cause involved, no much resistance is made on behalf of the State.
11. As per the petitioner, on the date when the petition was filed, the Commission had only two members appointed under Section 84 of the Act. They were (1) Pravin Patel, who was technical member, but appointed as Chairperson and (2) Mr.Dr.M.K. Iyer, Member (Finance). Incidentally, Dr. M.K. Iyer was an employee of Gujarat Electricity Board and its subsidiary after 2003-
04. He was then appointed as the Member (Finance) of the respondent Commission Page 9 of 74 HC-NIC Page 9 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT immediately upon his resignation as senior employee of finance department of Gujarat Energy Transmission Company Ltd, popularly known as GETCO, which is a subsidiary of respondent Gujarat Urja Vikas Nigam Limited (GUVNL). GETCO is a deemed transmission licensee under Section 14 of the Act. GETCO is one of the regular litigants before the Commission for tariff fixation and resolution of other disputes.
12. It is contended that such appointments are not prudent and is potent in creating conflict of duty and interest. In order to show the situation created in the Commission when it functions without a judicial member as its Chairperson, the petitioner has given instances in details at paragraph 4.7 to 4.11 of the petition. By giving the instances of various proceedings, pending before the Commission, it has been contended that in the cases where compensatory tariff after reassessment and revaluation of terms and conditions of power purchase agreement between respondent Nos. 3 and 4 on one hand and respondent No.5- Gujarat Urja Vikas Nigam Limited Page 10 of 74 HC-NIC Page 10 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT on the other hand. The Commission is required to deal with various complex issues, involving rights of two parties and has to perform adjudicatory functions of judicial in nature. By giving such details, it has been contended that the adjudication made by the Commission on complex contractual and civil issues are having far-reaching financial implications and greater involvement of public interest. It has been contended that if the Commission is permitted to decide the cases by the panel of existing Chairperson and the Member, wherein none is judicial Member, it would be travesty of justice and the functioning of the Commission would also be rendered arbitrary and unconstitutional.
13. It is further contended by the petitioner that the information received by application under the Right to Information Act shows that in the process of deciding the cases before the Commission and while passing the orders by the Commission the assistance is taken of the consultants and the process of adjudication is outsourced. As per the petitioner, the Page 11 of 74 HC-NIC Page 11 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT aforesaid state of affairs is alarming and outrageous and it is contended that if such assistance is outsourced to outside agencies for finalization of orders and editing the orders in English language, such would adversely affect, not only the sanctity of the decision, but quality too. In any case, it shows that the Chairperson or the Member, who are not judicial persons, having no knowledge to prepare and draft orders, much less adjudication of disputes, since they are not at all having experience in the field. It is with the aforesaid details, the petitioner has tried to assail the constitutional validity of Section 84(1) and Section 84(2) of the Act. The petitioner contended that by interpreting the word "may" as "shall" under Section 84 of the Act, the Chairperson must be a Judge or has been a Judge of High Court and he should not be any other person. It has been submitted that if the provisions of Sections 84(1) and (2) are not read and interpreted as contended by the petitioner, it would adversely affect the basic structure of the constitution for the adjudication of the disputes by the Page 12 of 74 HC-NIC Page 12 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT person having judicial background and knowledge of law. It has been contended that if Sections 84(1) and (2) of the Act are not read so as to mandate the State Government for appointing Chairperson from amongst the persons, who are or have been Judges of the High Court, the statutory provisions would not meet with the requirement of the Constitution and, therefore, they may be declared as unconstitutional.
14. The principal contention raised by the petitioner is based on the observations made by the Apex Court in its decision in the case of T. N. Generation and Distribution Corporation Limited Vs. PPN Power Generation Company Pvt. Limited (reported in (2014) 11 SCC, 53 - 2014(4) SCALE,
560) more particularly the observations made at paragraphs 55 to 62.
15. Whereas, on behalf of the State, it has been contended that prior to the Act of 2003, there was already other statute in operation namely, the Electricity Regulatory Commission Act, 1998 (hereinafter referred to as "the Act of 1998") and as per the said Act of 1998, Sections 17(5) Page 13 of 74 HC-NIC Page 13 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT and (7) provided with the same language and same qualification for the appointment of the Chairperson and Member of he Commission. It has been submitted that the Commission was also earlier functioning being aided by the person other than one, who was and has been Judge of the High Court. It has been submitted that, therefore, the provisions made under Section 84 of the present Act is not something new brought into force by the Parliament for the first time. It was also contended that it is available to the State to appoint any person, who is or has been the Judge of the High Court as Chairperson, but the Government can decide not to opt for the same and to appoint any other person as Chairperson having knowledge of Engineering, Finance, Commerce, Economics, Law or Management. It was also submitted that if the Government decides to appoint any person other than the person, who is or has been a Judge of the High Court, the Selection Committee is provided as per Section 85 in the present Act, which is more or less at par with Section 18 in the Act of 1998 and the said Committee is to be aided by a person, who has Page 14 of 74 HC-NIC Page 14 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT been a Judge of the High Court and the other Members are the Chief Secretary of the State and the Chairperson of the Authority or the Chairperson of the Central Commission and, therefore, the Legislature has provided sufficient inbuilt mechanism to ensure that the appointments are not made in an arbitrary manner, but is made by the Expert Body of the Committee constituted under Section 85 of the Act. It was submitted that the majority of the functions of the Commission are ministerial functions and very few functions are of adjudication of disputes. If the Commission finds that it is not possible for it to adjudicate the dispute, it can refer such dispute to arbitration. It was also submitted on behalf of the State as well as on behalf of the Commission that the matters of outsourcing are very few. In the case of outsource for drafting of orders, etc., are very few and such would not alter the nature of broad functions, which are to be decided by the Commission under Section 86 of the Act. It has been submitted that there is no unconstitutionality in Section 84(1) or (2) of Page 15 of 74 HC-NIC Page 15 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT the Act, nor it can be said that the provision is to adversely affect the basic structure of the Constitution as canvassed. The learned Advocate General also submitted that as per the Scheme of the Act the appeal against the decision of the Commission lies to Central Electricity Commission, which is, in any case, headed by Appellate Tribunal, wherein the Chairperson of the Tribunal is or has been the Judge of the Supreme Court of India or Chief Justice of a High Court. When the forum of Appellate Tribunal is provided, it cannot be said that the Commission should also be mandatorily headed by a person, who is or has been a Judge of the High Court as Chairperson. The learned Advocate General submitted that when the statute has provided two clear options to the State, the same may not be curtailed by this Court even while interpreting the provisions of the Act and no reading down is called for, nor any mandamus may be issued by this Court to the State to appoint only a person as a Chairperson, who is or has been a Judge of the High Court. It was also submitted that such an interpretation given may invalidate the Page 16 of 74 HC-NIC Page 16 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT provisions of Section 84(1) read with Section 84(2) of the Act and, therefore, the contention raised on behalf of the petitioner may not be accepted and the petition be dismissed.
16. The learned Counsel for the petitioner as well as for the respondents have relied upon certain decisions, but we shall be referring to those decision, which, as per our view, are relevant for considering the controversy.
17. Before we proceed to examine the other aspects, we find that it would be appropriate to refer to the provisions of Section 84, 85, 86, 94, 95, 96 and 145 of the Act, which read as under:-
"84. Qualifications for appointment of Chairperson and Members of State Commission (1) The Chairperson and the Members of the State Commission shall be persons of ability, integrity and standing who have adequate knowledge of, and have shown capacity in dealing with problems relating to engineering, finance, commerce, economics, law or management.
(2) Notwithstanding anything contained in subsection (1), the State Government may appoint any person as the Chairperson from amongst persons who is, or has been, a Judge of a High Court :Provided that no Page 17 of 74 HC-NIC Page 17 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT appointment under this subsection shall be made except after consultation with the Chief Justice of that High Court.
(3) The Chairperson or any other Member of the State Commission shall not hold any other office.
(4) The Chairperson shall be the Chief Executive of the State Commission."
"85. Constitution of Selection Committee to select Members of State Commission (1) The State Government shall, for the purposes of selecting the Members of the State Commission, constitute a Selection Committee consisting of(a) a person who has been a Judge of the High Court .............Chairperson;
(b) the Chief Secretary of the concerned State ...............Member;
(c) the Chairperson of the authority or the Chairperson of the Central Commission ...............Member:
Provided that nothing contained in this section shall apply to the appointment of a person as the Chairperson who is or has been a Judge of the High Court.
(2) The State Government shall, within one month from the date of occurrence of any vacancy by reason of death, resignation or removal of the Chairperson or a Member and six months before the superannuation or end of tenure of the Chairperson or Member, make a reference to the Selection Committee for filling up of the vacancy.
(3) The Selection Committee shall finalise the selection of the Chairperson and Members within three months from the date on which the reference is made to it.
(4) The Selection Committee shall recommend a panel of two names for every vacancy Page 18 of 74 HC-NIC Page 18 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT referred to it.
(5) Before recommending any person for appointment as the Chairperson or other Member of the State Commission, the Selection Committee shall satisfy itself that such person does not have any financial or other interest which is likely to affect prejudicially his functions as such Chairpersons or Member, as the case may be.
(6) No appointment of Chairperson or other Member shall be invalid merely by reason of any vacancy in the Selection Committee."
86. Functions of State Commission "(1) The State Commission shall discharge the following functions, namely :(a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State :
Provided that where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers;
(b) regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State;
(c) facilitate intraState transmission and wheeling of electricity;
(d) issue licences to persons seeking to act as transmission licensees, distribution licensees and electricity traders with respect to their operations within the Page 19 of 74 HC-NIC Page 19 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT State;
(e) promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licensee;
(f) adjudicate upon the disputes between the licensees and generating companies and to refer any dispute for arbitration;
(g) levy fee for the purposes of this Act;
(h) specify State Grid Code consistent with the Grid Code specified under clause (h) of subsection (1) of section 79;
(i) specify or enforce standards with respect to quality, continuity and reliability of service by licensees;
(j) fix the trading margin in the intra State trading of electricity, if considered, necessary;
(k) discharge such other functions as may be assigned to it under this Act.
(2) The State Commission shall advise the State Government on all or any of the following matters, namely :(i) promotion of competition, efficiency and economy in activities of the electricity industry;
(ii) promotion of investment in electricity industry;
(iii) reorganization and restructuring of electricity industry in the State;
(iv) matters concerning generation, Page 20 of 74 HC-NIC Page 20 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT transmission, distribution and trading of electricity or any other matter referred to the State Commission by that Government.
(3) The State Commission shall ensure transparency while exercising its powers and discharging its functions.
(4) In discharge of its functions, the State Commission shall be guided by the National Electricity Policy, National Electricity Plan and tariff policy published under section 3."
"94. Powers of Appropriate Commission (1) The Appropriate Commission shall, for the purposes of any inquiry or proceedings under this Act, have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 in respect of the following matters, namely :(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) discovery and production of any document or other material object producible as evidence;
(c) receiving evidence on affidavits;
(d) requisitioning of any public record;
(e) issuing commission for the examination of witnesses;
(f) reviewing its decisions, directions and orders;
(g) any other matter which may be prescribed.
(2) The Appropriate Commission shall have the powers to pass such interim order in any proceeding, hearing or matter before the Appropriate Commission, as that Commission may consider appropriate.
(3) The Appropriate Commission may authorize any person, as it deems fit, to represent Page 21 of 74 HC-NIC Page 21 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT the interest of the consumers in the proceedings before it.
95. Proceedings before Commission All proceedings before the Appropriate Commission shall be deemed to be judicial proceedings within the meaning of sections 193 and 228 of the Indian Penal Code and the Appropriate Commission shall be deemed to be a Civil Court for the purposes of sections 345 and 346 of the Code of Criminal Procedure, 1973.
96. Powers of entry and seizure The Appropriate Commission or any officer, not below the rank of a Gazetted Officer specially authorized in this behalf by the Commission, may enter any building or place where the Commission has reason to believe that any document relating to the subject matter of the inquiry may be found, and may seize any such document or take extracts or copies therefrom subject to the provisions of section 100 of the Code of Criminal Procedure, 1973, in so far as it may be applicable."
"145. Civil Court not to have jurisdiction. No Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which an assessing officer referred to in section 126 or an appellate authority referred to in section 127 or the adjudicating officer appointed under this Act is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act."
(Emphasis supplied)
18. The aforesaid shows that as per Section 86 Page 22 of 74 HC-NIC Page 22 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT various functions of the State Commission are provided and such functions include determination of tariffs, regulation of electricity purchase, issuance of licence, sale and purchase of electricity, adjudication of disputes between licencees and electricity generating companies levying fees, specify or enforce standards with respect to quality, continuity and reliability of service by licensees, fixation of trade margins. Section 94 provides for the powers with the Commission as that of the Civil Court under CPC for summoning and enforcing the attendance of any person, discovery and production of any document, receiving evidence on affidavits, requisitioning of any public record, issuing of any commission for examination of witnesses, reviewing its decision, directions and orders, etc. Further, Sub-section (2) of Section 94 provides for enabling power to the Commission to pass any orders in any proceedings, hearing or matter before the Commission. Section 95 of the Act provides that the proceedings before the Commission shall be deemed to be judicial proceedings within the meaning of Sections 193 Page 23 of 74 HC-NIC Page 23 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT and 228 of the Indian Penal Code and the Commission shall be deemed to be Civil Court for the purpose of Sections 345 and 346 of the Code of Criminal Procedure. Section 96 of the Act provides that the Commission, either itself or any officer on behalf of the Commission not below the rank of Gazetted Officer so authorized will have power to seize any document or extract any copy thereof.
19. It may be recorded that the Commission in exercise of the power under Section 181 of the Act has framed Gujarat Electricity Regulatory Commission (Conduct of Business) Regulations, 1999 (hereinafter referred to "Regulation"). As per Chapter VI, General Rules are framed concerning to the proceedings before the Commission. Regulation 14 provides for hearing, meeting, discussion, deliberations, inquiries, and investigations by the Commission. Regulation 15 provides that all proceedings before the Commission shall be deemed to be judicial proceedings under Section 193 and 228 of IPC and the Commission shall be deemed to be Civil Court Page 24 of 74 HC-NIC Page 24 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT for the purpose of Section 345 and 346 of Cr.P.C. Regulation XXII provides for representation by any party through authorized Advocate or a Member of any statutory professional body. Regulation 23 provides for suo moto powers to initiate any proceedings. Regulation 24 provides for reply by affected party. Regulation 26 provides for submission of the petition and reply. Regulation 28 provides for submission of affidavit in support of the case. Regulation 29 provides that any false statement made or any false, fabricated evidence produced shall be punished for a term, which may extend to 7 years and shall also be liable for fine. Regulation 41 provides for various modes of service of notice and process issued by the Commission. Regulations 48 to 51 provides for filing reply, objections, etc. Regulations 52 and 53 provides for hearing of the matter before the Commission and it further provides that the Commission may decide the matter on the pleadings of the parties and affidavits in support thereof and evidence on record. Regulations 54 and 55 provide for power with the Commission to call for further Page 25 of 74 HC-NIC Page 25 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT information and evidence, as if the Civil Court exercising power under CPC and it also provides for search and seizure powers. Regulation 56 provides for reference of issues to others. Regulation 57 provides for the procedure to be followed, where any party does not appear for dismissal of the complaint or to proceed ex parte. Regulation 58 provides for judgement to be pronounced by the Commission, but one of the relevant aspects is that as per Clause (4) the judgement should contain a brief statement of the facts, the points or issues for determination, decision thereon and the reasons for such decision, which is more or less the same requirement under CPC for Civil Court to render the judgement. Regulation 61 provides for power with the Commission to pass interim order. Regulation 64 provides for penal measure for non- compliance of the order and direction of the Commission. In chapter VIII under the head of Miscellaneous, Regulation 72 provides for the power of review with the Commission, Regulation 73 provides for continuance of proceedings after death of the person. Regulation 74 provides for Page 26 of 74 HC-NIC Page 26 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT proceedings of the Commission to be open to public. Again the important aspect is that as per Regulation 75 if any party or person in the proceedings before the Commission intentionally insults the Chairperson or any Member or misbehaves or deliberately causes interruption of such proceedings and/or disobeys order or direction of the Commission, he shall be punished for term, which may extend to six months or with fine, which may extend to Rs.1,000/- or with both, or dealt with under the Contempt of Courts Act. It has been further provided under Clause (2) of Regulation 75 that if any person, who intentionally offers any insult or causes any interruption in the presence of the Commission, the Commission may cause the offender to be detained in custody and after giving reasonable opportunity, may sentence the offender to fine not exceeding Rs.200/- and simple imprisonment for a term which may extent to one month in default. Regulation 76 provides for forwarding of the case to a Magistrate having jurisdiction to try the same and it further provides that the security may be taken by the Commission from such Page 27 of 74 HC-NIC Page 27 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT person for appearance before the Magistrate and if the security is not given, such person in custody may be sent to the Magistrate. Under the head of Saving of inherent power of the Commission, Regulation 80 provides for inherent power with the Commission to make such orders, as may be necessary for ends of justice or to prevent the abuse of process of the Commission. Such powers are at par with Section 151 of CPC. Regulation 86, under the head of Effect of non- compliance, provides not to invalidate any proceeding before the Commission, unless the Commission is of the view that such failure has resulted in miscarriage of justice. Regulation, under the head of Costs, provides for enabling power with the Commission to direct for cost and such cost is to be paid within 30 days from the date of the order and the cost so awarded shall be executed in the same manner as decree or order of a Civil Court. Regulation 92 provides that Regulations are in addition to and not in derogation of provisions of the Act, Rules or Regulations framed under any other laws. Page 28 of 74 HC-NIC Page 28 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT
20. The aforesaid provisions of the Act read with the Regulations so framed leave no manner of doubt in our mind that the functions of the proceedings before the Commission and the powers so vested with the Commission are more or less at par with the powers of the Civil Court while adjudicating the dispute coupled with the inherent power available with the Commission and the power for punishing the disobedients of its own order and further such disobedience would attract penal consequence, such disobedience or disrespect or insult or obstruction would attract penal consequence under the Contempt of Courts Act.
21. The above referred provisions of the Act read with the Regulations show that for all purposes the proceedings before the Commission are at par with the judicial proceedings and the Commission enjoys practically all powers as that of a Civil Court under CPC and it is expressly provided that the proceedings before the Commission shall be deemed to be judicial proceedings within the meaning of Sections 193 Page 29 of 74 HC-NIC Page 29 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT and 228 of IPC and further it has been expressly provided under Section 95 that the Commission shall be deemed to be the Civil Court for the purpose of Section 345 and Section 346 of Cr.P.C.
22. Under these circumstances, we cannot agree with the submissions made by the learned Advocate General that the functions of the Commission are in majority ministerial functions or administrative functions and not judicial functions.
23. At this stage, we may usefully refer to the decision of the Apex Court in the case of Union of India Vs. R. Gandhi, President, Madras Bar Association, reported in (2010) 11 SCC, 1, wherein the question arose for appointment of Chairperson of the Tribunal having judicial power. The Apex Court, after considering various case laws summarized the legal position at paragraph 106 as under:-
"106.We may summarize the position as follows :
(a) A legislature can enact a law transferring the jurisdiction exercised by courts in regard to any specified subject Page 30 of 74 HC-NIC Page 30 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT (other than those which are vested in courts by express provisions of the Constitution) to any tribunal.
(b) All courts are tribunals. Any tribunal to which any existing jurisdiction of courts is transferred should also be a Judicial Tribunal. This means that such Tribunal should have as members, persons of a rank, capacity and status as nearly as possible equal to the rank, status and capacity of the court which was till then dealing with such matters and the members of the Tribunal should have the independence and security of tenure associated with Judicial Tribunals.
(c) Whenever there is need for 'Tribunals', there is no presumption that there should be technical members in the Tribunals. When any jurisdiction is shifted from courts to Tribunals, on the ground of pendency and delay in courts, and the jurisdiction so transferred does not involve any technical aspects requiring the assistance of experts, the Tribunals should normally have only judicial members. Only where the exercise of jurisdiction involves inquiry and decisions into technical or special aspects, where presence of technical members will be useful and necessary, Tribunals should have technical members. Indiscriminate appointment of technical members in all Tribunals will dilute and adversely affect the independence of the Judiciary.
(d) The Legislature can reorganize the jurisdictions of Judicial Tribunals. For example, it can provide that a specified category of cases tried by a higher court can be tried by a lower court or vice versa (A standard example is the variation of pecuniary limits of courts). Similarly while constituting Tribunals, the legislature can prescribe the qualifications/ eligibility criteria. The same is however subject to Judicial Review. If the court in exercise of Page 31 of 74 HC-NIC Page 31 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT judicial review is of the view that such tribunalisation would adversely affect the independence of judiciary or the standards of judiciary, the court may interfere to preserve the independence and standards of judiciary. Such an exercise will be part of the checks and balances measures to maintain the separation of powers and to prevent any encroachment, intentional or unintentional, by either the legislature or by the executive." (Emphasis supplied)
24. After having summarized the aforesaid legal position, the Apex Court upheld the decision of the High Court for creation of the National Company Law Tribunal and the National Company Law Appellate Tribunal and vesting in them, the powers and jurisdiction exercised by the High Court in regard to company law matters, are not unconstitutional, but declared Parts I-B and I-C of the Act as unconstitutional, but with the further observation that Part I-B and I-C of the Act may be operationalized by suitable amendment as indicated in the judgement for appointing High Court Judges or Judges, who have served in the rank of District Judge for five years or a person who has practised as a lawyer for ten years as judicial members.
25. Useful reference can also be made to another Page 32 of 74 HC-NIC Page 32 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT decision of the Apex Court in the case of State of Gujarat and Anr. Vs. Gujarat Revenue Tribunal Bar Association and Anr., reported in 2012(10) SCC, 353, wherein the question arose for appointment of the President of Gujarat Revenue Tribunal. The Apex Court observed at paragraphs 16, 17 and 18 as under:-
"16. Although, term 'court' has not been defined under the Act, it is indisputable that courts belong to the judicial hierarchy and constitute the country's judiciary as distinct from the executive or legislative branches of the State. Judicial functions involve the decision of rights and liabilities of the parties. An enquiry and investigation into facts is a material part of judicial function. The legislature, in its wisdom has created tribunals and transferred the work which was regularly done by the civil courts to them, as it was found necessary to do so in order to provide efficacious remedy and also to reduce the burden on the civil courts and further, also to save the aggrieved person from bearing the burden of heavy court fees etc. Thus, the system of tribunals was created as a machinery for the speedy disposal of claims arising under a particular Statute/Act. Most of the Tribunals have been given the power to lay down their own procedure. In some cases, the procedure may be adopted by the Tribunal and the same may require the approval of the competent authority/government. However, in each case, the principles of natural justice are required to be observed. Such tribunals therefore, basically perform quasijudicial functions. The system of tribunals is hence, Page 33 of 74 HC-NIC Page 33 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT unlike that of the regularly constituted courts under the hierarchy of judicial system, which are not authorised to devise their own procedure for dealing with cases. Under certain statutes Tribunals have been authorised to exercise certain powers conferred under some provisions of the Code of Civil Procedure (hereinafter referred to as the 'CPC') or the Code of Criminal Procedure (hereinafter referred to as the 'Cr.P.C.'), but not under the whole Code, be it Civil or Criminal. However, in a regular court, the said Codes, in their entirety, civil as well as criminal, must be strictly adhered to. Therefore, from the above, it is evident that the terms 'court' and 'Tribunal' are not interchangeable.
17. A Tribunal may not necessarily be a court, in spite of the fact that it may be presided over by a judicial officer, as other qualified persons may also possibly be appointed to perform such duty.One of the tests to determine whether a tribunal is a court or not, is to check whether the High Court has revisional jurisdiction so far as the judgments and orders passed by the Tribunal are concerned. Supervisory or revisional jurisdiction is considered to be a power vesting in any superior court or Tribunal, enabling it to satisfy itself as regards the correctness of the orders of the inferior Tribunal. This is the basic difference between appellate and supervisory jurisdiction. Appellate jurisdiction confers a right upon the aggrieved person to complain in the prescribed manner, to a higher forum whereas, supervisory/revisional power has a different object and purpose altogether as it confers the right and responsibility upon the higher forum to keep the subordinate Tribunals within the limits of the law. It is for this reason that revisional power can be exercised by the competent authority/court suo motu, in order to see that subordinate Tribunals do not Page 34 of 74 HC-NIC Page 34 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT transgress the rules of law and are kept within the framework of powers conferred upon them.Such revisional powers have to be exercised sparingly, only as a discretion in order to prevent gross injustice and the same cannot be claimed, as a matter of right by any party. Even if the person heading the Tribunal is otherwise a "judicial officer", he may merely be persona designata, but not a court, despite the fact that he is expected to act in a quasijudicial manner. In the generic sense, a court is also a Tribunal, however, courts are only such Tribunals as have been created by the concerned statute and belong to the judicial department of the State as opposed to the executive branch of the said State. The expression 'court' is understood in the context of its normally accepted connotation, as an adjudicating body, which performs judicial functions of rendering definitive judgments having a sense of finality and authoritativeness to bind the parties litigating before it. Secondly, it should be in the course of exercise of the sovereign judicial power transferred to it by the State. Any Tribunal or authority therefore, that possesses these attributes, may be categorized as a court.
18. Tribunals have primarily been constituted to deal with cases under special laws and to hence provide for specialised adjudication alongside the courts. Therefore, a particular Act/set of Rules will determine whether the functions of a particular Tribunal are akin to those of the courts, which provide for the basic administration of justice. Where there is a lis between two contesting parties and a statutory authority is required to decide such dispute between them, such an authority may be called as a quasijudicial authority, i.e., a situation where, (a) a statutory authority is empowered under a statute to do any act (b) the order of such authority Page 35 of 74 HC-NIC Page 35 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT would adversely affect the subject and (c) although there is no lis or two contending parties, and the contest is between the authority and the subject and (d) the statutory authority is required to act judicially under the statute, the decision of the said authority is a quasi judicial decision. An authority may be described as a quasijudicial authority when it possesses certain attributes or trappings of a 'court', but not all. In case certain powers under C.P.C. or Cr.P.C. have been conferred upon an authority, but it has not been entrusted with the judicial powers of the State, it cannot be held to be a court. (See : The Bharat Bank Ltd., Delhi v. The Employees of Bharat Bank and Anr., AIR 1950 SC 188; Virindar Kumar Satyawadi v. The State of Punjab, AIR 1956 SC 153;
Engineering Mazdoor Sabha and Anr. v. Hind Cycles Ltd., AIR 1963 SC 874; Associated Cement Companies Ltd. v. P.N. Sharma and Anr., AIR 1965 SC 1595; Ramrao and Anr. v. Narayan and Anr., AIR 1969 SC 724; State of Himachal Pradesh and Ors. v. Raja Mahendra Pal and Anr., AIR 1999 SC 1786 : (1999 AIR SCW 1376); Keshab Narayan Banerjee v. State of Bihar and Ors., AIR 2000 SC 485 : (1999 AIR SCW 4646); Indian National Congress (I) v. Institute of Social Welfare and Ors., AIR 2002 SC 2158 : (2002 AIR SCW 2245); K. Shamrao and Ors. v. Assistant Charity Commissioner, (2003) 3 SCC 563 : (AIR 2003 SC 1828 : 2003 AIR SCW 1281); Trans Mediterranean Airways v. Universal Exports, (2011) 10 SCC 316 at page 338 : (2011 AIR SCW 6028); and Namit Sharma v. Union of India, JT 2012 (9) SC 166)."
26. Thereafter, the Apex Court at paragraphs 31.2 to 32 further observed thus:-
"31.2 The Tribunal has also been conferred with the power to adjudicate disputes, which may arise from the Page 36 of 74 HC-NIC Page 36 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT provisions of the Bombay Tenancy and Agricultural Lands Act, 1948. Section 75(1) of the said Act provides that an appeal against the award of the Collector, made under Section 66 may be filed before the Tribunal. Subsection (2) of Section 75, provides that in deciding appeals preferred under subsection (1), the Tribunal shall exercise all the powers which a court has and subject to the regulations framed by the Tribunal under the Act, 1957, follow the same procedure which a court follows in deciding appeals from the decree or order of an original court under the CPC. Section 76(1) of the Act provides that notwithstanding anything contained in the Act, 1957, an application for revision may be made to the Tribunal against any order of the Collector, except an order under Section 32P, or an order in appeal against an order under subsection (4) of Section 32G.
Section 80 provides that all inquiries and proceedings before the Tribunal shall be deemed to be judicial proceedings within the meaning of Sections 193, 219 and 228 of the IPC. Section 85 deals with bar of jurisdiction. It further provides that no Civil Court shall have the jurisdiction to settle, decide or deal with, any question which is by or under this Act, required to be settled, decided or dealt with, by the Tribunal in appeal or revision. It is also provided in subsection (2) of Section 85 that no order of the Tribunal shall be questioned in any civil or criminal court.
31.3 The Gujarat Agricultural Lands Ceiling Act, 1960, was enacted to fix a ceiling on holdings of agricultural lands, and to provide for the acquisition and disposal of surplus agricultural lands. Chapter VI of the said Act deals with procedure, appeals and revision. Section 36 provides that any person aggrieved by an award made by the Tribunal under Section 24, or by the Collector under Section 28, may Page 37 of 74 HC-NIC Page 37 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT appeal to the Tribunal. Subsection (3) of Section 36 provides that in deciding such appeal the Tribunal shall exercise all the powers which a Court has and follow the same procedure which the Court follows in deciding appeals from the decree or order of the original court under the CPC. Section 38 provides that notwithstanding anything contained in the Act, 1957, an application for revision may be made to the Tribunal constituted under the said Act, against any order passed by the Collector. Section 47 deals with bar of jurisdiction, as it provides that no civil court shall have the jurisdiction to settle, decide or deal with any question which is by or under this Act required to be settled, decided or dealt with by the Tribunal. Section 48 provides that all inquiries and proceedings before the Tribunal shall be deemed to be 'judicial proceedings', within the meaning of Sections 193, 219 and 228 of the IPC.
31.4 The Bombay Public Trust Act, l950, has been enacted to regulate, and to make better provision for the administration of public religious and charitable trusts in the State of Bombay, which also extends to the State of Gujarat. In exercise of powers conferred under Section 84 of the said Act, the Government of Bombay has framed the Bombay Public Trusts (Gujarat) Rules, 1961. Section 51 of the Act provides for consent of the Charity Commissioner for the institution of a suit. Subsection (2) of Section 51 says that if the Charity Commissioner refuses his consent for the institution of a suit under subsection (1) of Section 51, the concerned person may file an appeal to the Tribunal. References made to the Tribunal have been dealt with in Chapter Xl of the Act. Section 71 deals with appeals to the Tribunal, and provides that an appeal to the Tribunal under subsection (2) of Section 51, against the decision of the Charity Commissioner, refusing consent Page 38 of 74 HC-NIC Page 38 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT for the institution of a suit, shall be filed within 60 days from the date of such decision, in such form and shall be accompanied by such fee, as may be prescribed, and that the decision of the Tribunal shall be final and conclusive.
Section 74 provides that all inquiries and appeals shall be deemed to be judicial proceedings within the meaning of Sections 193, 219 and 228 of the IPC. Section 76 provides that, save, insofar as they may be inconsistent with anything contained in the Act,the provisions of the CPC will apply to all proceedings before the court under this Act. Section 80 deals with bar of jurisdiction of civil courts, as it provides that no civil court can deal with any question which is by, or under the Act, to be decided or dealt with, by any officer or authority under the Act in respect of which, the decision or order of such officer or authority has been made final and conclusive.
31.5 Section 13(1) of the Act, 1957, provides that in exercising the jurisdiction conferred upon the Tribunal, the Tribunal shall have all the powers of a civil court as enumerated therein and shall be deemed to be a civil court for the purposes of Sections 195, 480 and 482 of the Cr.P.C., and that its proceedings shall be deemed to be judicial proceedings, within the meaning of Sections 193, 219 and 228 of the IPC.
32. The aforesaid observations made by the High Court, taking into consideration various statutes dealing with not only the revenue matters, but also covering other subjects, make it crystal clear that the Tribunal does not deal only with revenue matters provided under the Schedule I, but has also been conferred appellate/revisional powers under various other statutes. Most of those statutes provide that the Tribunal, while dealing with appeals, references, Page 39 of 74 HC-NIC Page 39 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT revisions, would act giving strict adherence to the procedure prescribed in the CPC, for deciding a matter as followed by the Civil Court and certain powers have also been conferred upon it, as provided in the Cr.P.C. and IPC. Thus, we do not have any hesitation in concurring with the finding recorded by the High Court that the Tribunal is akin to a court and performs similar functions." (Emphasis supplied)
27. The Apex Court ultimately did not interfere with the decision of the High Court of Gujarat in the case of Gujarat Revenue Tribunal & Anr. Vs. Shri A.K. Chakravorty, IAS & Anr., reported in 2009(3) GLR, 2665, whereby the High Court declared Rule 3(1) (iii)(a) conferring the power on the State Government to appoint a Secretary to Government as President of the Tribunal as ultra vires the provisions of the Act.
28. The question again came up for consideration before the Apex Court in the case of Madras Bar Association Vs. Union of India and Anr., reported in (2014) 10 SCC, 1, wherein the earlier decision of the Apex Court in the case of Union of India Vs. R. Gandhi, President, Madras Bar Association (supra) was considered, wherein at paragraphs 107 to 109, it was observed thus:- Page 40 of 74
HC-NIC Page 40 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT "107 In Union of India v. Madras Bar Association case (supra), all the conclusions/propositions narrated above, were reiterated and followed, whereupon the fundamental requirements, which need to be kept in mind while transferring adjudicatory functions from courts to tribunals, were further crystalised. It came to be unequivocally recorded that tribunals vested with judicial power (hitherto before vested in, or exercised by courts), should possess the same independence, security and capacity, as the courts which the tribunals are mandated to substitute. The Members of the tribunals discharging judicial functions, could only be drawn from sources possessed of expertise in law, and competent to discharge judicial functions. Technical Members can be appointed to tribunals where technical expertise is essential for disposal of matters, and not otherwise. Therefore it was held, that where the adjudicatory process transferred to tribunals, did not involve any specialized skill, knowledge or expertise, a provision for appointment of Technical Members (in addition to, or in substitution of Judicial Members) would constitute a clear case of delusion and encroachment upon the independence of the judiciary, and the "rule of law". The stature of the members, who would constitute the tribunal, would depend on the jurisdiction which was being transferred to the tribunal. In other words, if the jurisdiction of the High Court was transferred to a tribunal, the stature of the members of the newly constituted tribunal, should be possessed of qualifications akin to the judges of the High Court. Whereas in case, the jurisdiction and the functions sought to be transferred were being exercised/performed by District Judges, the Members appointed to the tribunal should be Page 41 of 74 HC-NIC Page 41 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT possessed of equivalent qualifications and commensurate stature of District Judges.
The conditions of service of the members should be such, that they are in a position to discharge their duties in an independent and impartial manner. The manner of their appointment and removal including their transfer, and tenure of their employment, should have adequate protection so as to be shorn of legislative and executive interference. The functioning of the tribunals, their infrastructure and responsibility of fulfilling their administrative requirements ought to be assigned to the Ministry of Law and Justice. Neither the tribunals nor their members, should be required to seek any facilities from the parent ministries or department concerned. Even though the legislature can reorganize the jurisdiction of judicial tribunals, and can prescribe the qualifications/eligibility of members thereof, the same would be subject to "judicial review" wherein it would be open to a court to hold, that the tribunalization would adversely affect the adjudicatory standards, whereupon it would be open to a court to interfere therewith. Such an exercise would naturally be, a part of the checks and balances measures, conferred by the Constitution on the judiciary, to maintain the rule of "separation of powers" to prevent any encroachment by the legislature or the executive.
108. The position of law summarized in the foregoing paragraph constitutes a declaration on the concept of the "basic structure", with reference to the concepts of "separation of powers", the "rule of law", and "judicial review". Based on the conclusions summarized above, it will be possible for us to answer the first issue projected before us, Page 42 of 74 HC-NIC Page 42 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT namely, whether "judicial review" is a part of the "basic structure" of the Constitution. The answer has inevitably to be in the affirmative. From the above determination, the petitioners would like us to further conclude, that the power of "judicial review" stands breached with the promulgation of the NTT Act. This Court in Minerva Mills Ltd. case (supra) held, that it should not be taken, that an effective alternative institutional mechanism or arrangement for "judicial review" could not be made by Parliament. The same position was reiterated in S.P. Sampath Kumar case (supra), namely, that "judicial review" was an integral part of the "basic structure" of the Constitution. All the same it was held, that Parliament was competent to amend the Constitution, and substitute in place of the High Court, another alternative institutional mechanism (court or tribunal). It would be pertinent to mention, that in so concluding, this Court added a forewarning, that the alternative institutional mechanism set up by Parliament through an amendment, had to be no less effective than the High Court itself. In L. Chandra Kumar case (supra), even though this Court held that the power of "judicial review" over legislative action vested in High Courts, was a part of the "basic structure", it went on to conclude that "ordinarily" the power of High Courts to test the constitutional validity of legislations could never be ousted. All the same it was held, that the powers vested in High Courts to exercise judicial superintendence over decisions of all courts and tribunals within their respective jurisdictions, was also a part of the "basic structure" of the Constitution. The position that Parliament had the power to amend the Constitution, and to create a court/tribunal to discharge functions which the High Page 43 of 74 HC-NIC Page 43 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT Court was discharging, was reiterated, in Union of India v. Madras Bar Association case (supra). It was concluded, that the Parliament was competent to enact a law, transferring the jurisdiction exercised by High Courts, in regard to any specified subject, to any court/tribunal. But it was clarified, that Parliament could not transfer power vested in the High Courts, by the Constitution itself. We therefore have no hesitation in concluding, that appellate powers vested in the High Court under different statutory provisions, can definitely be transferred from the High Court to other courts/tribunals, subject to the satisfaction of norms declared by this Court. Herein the jurisdiction transferred by the NTT Act was with regard to specified subjects under tax related statutes. That, in our opinion, would be permissible in terms of the position expressed above. Has the NTT Act transferred any power vested in courts by the Constitution? The answer is in the negative. The power of "judicial review"
vested in the High Court under Articles 226 and 227 of the Constitution, has remained intact. This aspect of the matter, has a substantial bearing, to the issue in hand. And will also lead to some important inferences. Therefore, it must never be overlooked, that since the power of "judicial review" exercised by the High Court under Articles 226 and 227 of the Constitution has remained unaltered, the power vested in High Courts to exercise judicial superintendence over the benches of the NTT within their respective jurisdiction, has been consciously preserved. This position was confirmed by the learned Attorney General for India, during the course of hearing. Since the above jurisdiction of the High Court has not been ousted, the NTT will be deemed to be discharging a supplemental role, rather than a substitutional role. In the Page 44 of 74 HC-NIC Page 44 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT above view of the matter, the submission that the NTT Act violates the "basic structure" of the Constitution, cannot be acquiesced to.
109. Even though we have declined to accept the contention advanced on behalf of the petitioners, premised on the "basic structure" theory, we feel it is still essential for us, to deal with the submission advanced on behalf of the respondents in response. We may first record the contention advanced on behalf of the respondents. It was contended, that a legislation (not being an amendment to the Constitution), enacted in consonance of the provisions of the Constitution, on a subject within the realm of the concerned legislature, cannot be assailed on the ground that it violates the "basic structure" of the Constitution. For the present controversy, the respondents had placed reliance on Articles 245 and 246 of the Constitution, as also, on entries 77 to 79, 82 to 84, 95 and 97 of the Union List of the Seventh Schedule, and on entries 11A and 46 of the Concurrent List of the Seventh Schedule. Based thereon it was asserted, that Parliament was competent to enact the NTT Act. For examining the instant contention, let us presume it is so.
Having accepted the above, our
consideration is as follows. The
Constitution regulates the manner of
governance in substantially minute
detail. It is the fountainhead
distributing power, for such governance. The Constitution vests the power of legislation at the Centre, with the Lok Sabha and the Rajya Sabha, and in the States with the State Legislative Assemblies (and in some States, the State Legislative Councils, as well). The instant legislative power is regulated by "Part XI"
of the Constitution. The submission Page 45 of 74 HC-NIC Page 45 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT advanced at the hands of the learned counsel for the respondents, insofar as the instant aspect of the matter is concerned, is premised on the assertion that the NTT Act has been enacted strictly in consonance with the procedure depicted in "Part XI" of the Constitution. It is also the contention of the learned counsel for the respondents, that the said power has been exercised strictly in consonance with the subject on which the Parliament is authorized to legislate. Whilst dealing with the instant submission advanced at the hands of the learned counsel for the respondents, all that needs to be stated is, that the legislative power conferred under "Part XI"
of the Constitution has one overall exception, which undoubtedly is, that the "basic structure" of the Constitution, cannot be infringed, no matter what. On the instant aspect, some relevant judgments, rendered by constitutional benches of this Court, have been cited hereinabove. It seems to us, that there is a fine difference in what the petitioners contend, and what the respondents seek to project. The submission advanced at the hands of the learned counsel for the petitioners does not pertain to lack of jurisdiction or inappropriate exercise of jurisdiction. The submission advanced at the hands of the learned counsel for the petitioners pointedly is, that it is impermissible to legislate in a manner as would violate the "basic structure"
of the Constitution. This Court has repeatedly held, that an amendment to the provisions of the Constitution, would not be sustainable if it violated the "basic structure" of the Constitution, even though the amendment had been carried out, by following the procedure contemplated under "Part XI" of the Constitution. This leads to the determination, that the "basic structure"Page 46 of 74
HC-NIC Page 46 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT is inviolable. In our view, the same would apply to all other legislations (other than amendments to the Constitution) as well, even though the legislation had been enacted by following the prescribed procedure, and was within the domain of the enacting legislature, any infringement to the "basic structure" would be unacceptable. Such submissions advanced at the hands of the learned counsel for the respondents are, therefore, liable to be disallowed. And are accordingly declined.
II. Whether the transfer of adjudicatory functions vested in the High Court to the NTT violates recognized constitutional conventions?
III. Whether while transferring
jurisdiction to a newly created
court/tribunal, it is essential to maintain the standards and the stature of the court replaced?" (Emphasis supplied)
29. Further at paragraph 128, it was observed thus:-
"128. There seems to be no doubt, whatsoever, that the Members of a court/tribunal to which adjudicatory functions are transferred, must be manned by judges/members whose stature and qualifications are commensurate to the court from which the adjudicatory process has been transferred. This position is recognized the world over. Constitutional conventions in respect of Jamaica, Ceylon, Australia and Canada, on this aspect of the matter have been delineated above. The opinion of the Privy Council expressed by Lord Diplock in Hind case (supra), has been shown as being followed in countries which have constitutions on the Page 47 of 74 HC-NIC Page 47 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT Westminster model. The Indian Constitution is one such Constitution. The position has been clearly recorded while interpreting constitutions framed on the above model, namely, that even though the legislature can transfer judicial power from a traditional court, to an analogous court/tribunal with a different name, the court/tribunal to which such power is transferred, should be possessed of the same salient characteristics, standards and parameters, as the court the power whereof was being transferred. It is not possible for us to accept, that Accountant Members and Technical Members have the stature and qualification possessed by judges of High Courts." (Emphasis supplied)
30. Mr.Kamal Trivedi, learned Advocate General made an attempt to distinguish the above referred three decisions of the Apex Court by contending, inter alia, that in both the cases of Madras Bar Association (supra) the question came up for consideration before the Apex Court was for providing for another forum of Tribunal, which was earlier possessed by the constitutional Court i.e., High Court, whereas such is not the fact situation in the present case, since, as per him, prior to the Act of 2003, earlier Act of 1998 was prevailing and as per the said Act of 1998, the Government could appoint any person other than the person, who is or has been a Judge of the Page 48 of 74 HC-NIC Page 48 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT High Court as Chairperson, if so recommended by the Committee constituted for such purpose. He submitted that the same scheme continued in the Act of 2003 and, therefore, the observations made by the Apex Court in the said decision would have no applicability. He also submitted that in the case of the decision of the Apex Court in the case of State of Gujarat (supra) for the appointment of the President of the Revenue Tribunal, the situation was different, inasmuch as the Apex Court having found that the Revenue Tribunal would be required to deal with the complex question of rights in the properties of the persons, etc., the Apex Court found that the provision made to appoint the person, who has worked as Secretary in the Government was ultra vires the power. He submitted that such are not the fact situation in the present case.
31. As per him, the Commission is essentially or the majority of the work of the Commission is administrative and ministerial function, less function is for adjudication mechanism and, therefore, he submitted that the said decision Page 49 of 74 HC-NIC Page 49 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT will have no applicability to the facts of the present case.
32. The contention may prima facie appear to be attractive, but upon close scrutiny, it appears that the question is not about the substitution of the mechanism for adjudication of disputes at the High Court level or at the Civil Court level, but the relevancy and observations of the Apex Court in the above referred decision may apply for considering the broad exercise of the legislative power for delegating the mechanism to any other authority like that of Commission in place of the Civil Court and the second is the appointment of the members that if such powers are delegated by the Legislature to any other independent body like that of Commission, the person heading the authority or the Commission, whether should have the capacity to conduct the judicial proceedings based on his qualification or not? It is with this context and the facet the decisions of the Apex Court and rather the observations made by the Apex Court are to be considered. Further, the additional aspect for Page 50 of 74 HC-NIC Page 50 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT maintaining the principles for basic structure of the constitution will have to be borne in mind while interpreting any statute when it is challenged on the ground of unconstitutionality. Hence, we do not find that the attempt made by the learned Advocate General should be countenanced.
33. After having found that the proceedings before the Commission are judicial proceedings and are having the majority of the substantial power as that of the Civil Court, coupled with the aspect that the above referred deeming fiction given by the Act itself, we need now further to consider the provisions of Section 84(1) and Section 84(2), keeping in view the provisions of Section 85 further.
34. By the literal meaning of Section 84, it is provided that the Chairperson or any Member of a Commission can be appointed from amongst the persons of the ability, integrity and the standing, who have adequate knowledge and have capacity to deal with the problems relating to finance, commerce, economics, law and management. Page 51 of 74 HC-NIC Page 51 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT The aforesaid is provided by Sub-section (1), whereas Sub-section (2) provides that notwithstanding anything contained in Sub-section (1), the State Government may appoint any person as Chairperson from amongst the persons, who are or have been Judges of the High Court. The proviso further provides that no appointment under Sub-section (2) shall be made except after consultation with the Chief Justice of the High Court.
35. The Section 85(1) provides for constitution of the selection committee comprising of a person, who has been a Judge of the High Court as the Chairman and the Chief Secretary of the State as a Member and the Chairperson of the Authority or the Chairperson of the Central Commission as a Member. But the proviso provides that nothing contained in Section 85 would apply to the appointment of the person as Chairperson, who is or has been a Judge of the High Court. Conjoint literal interpretation would show that the State Government may appoint any person as Chairperson from amongst the persons, who are or have been Page 52 of 74 HC-NIC Page 52 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT Judges of the High Court. The attempt was to contend that as the word "may" has been used, it cannot be read as "shall" and, therefore, the mandate cannot be issued to the State Government to appoint Chairperson of the Commission from amongst the persons, who are or have been Judges of the High Court. The argument further proceeds on the basis that the statute has provided clear option to the State Government, which may not be foreclosed by interpreting the word "may" as "shall". It was also contended that when the literal meaning can be extracted, there is no reason to interpret otherwise by using the word "shall". It was also contended that if the word "shall" is interpreted in place of the word "may", Sub-section (1) of Section 84 may be redundant for the appointment of Chairperson. It was also submitted that when the Parliament by express provision has provided for the appointment of Chairperson also from the persons having knowledge of engineering, finance, commerce, economics, law or management, there is no reason to curtail the power of the State to appoint Chairperson as provided under Section Page 53 of 74 HC-NIC Page 53 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT 84(1) of the Act. As observed earlier, the literal meaning is already considered by us, but at the same time if the intention of the Parliament is considered, one may say that by virtue of Sub-section (2) of Section 84 and by proviso to Section 85(1) the Parliament has also found that if the appointment of any person as Chairperson is to be made from amongst the persons, who are or have been Judges of the High Court, requirement of selection process by selection committee is done away and further Sub- section (2) can be said to have overriding effect upon Sub-section (1), which goes to show that the Parliament, while making provision, has given more weightage to the appointment of any person as Chairperson from amongst the persons, who are or have been Judges of the High Court.
36. Apart from the above, if the power is read with the State Government, as optional on account of the word "may", the resultant effect would be that the Chairperson can be appointed, may be appointed from the persons having knowledge of engineering or finance or commerce or economics Page 54 of 74 HC-NIC Page 54 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT or law or management. Let us test the option available under Section 84(1) independently with Section 85(1) providing for selection committee. The language used under Sub-section (1) of Section 84 is as vague as anything. It does not specifically provide that for Chairperson, there shall be added requirement, nor does it provide that the knowledge of which branch should be preferred, may be engineering, may be finance, may be commerce, may be economics, may be law or may be management. Such would give unguided, un- channelized power with the selection committee, even if the selection committee comprises of experts. The another important aspect is that when it comes for constitution of selection committee, the person, who has been Judge of the High Court is a 'must' and further he has given higher position than the Member. One may, at the first brush, find that it is on account of the higher status as that of a former Judge of the High Court, he has been placed in the position of Chairperson of the selection committee, but we do not find so, but upon a further scrutiny and rather the purpose appears to be to give higher Page 55 of 74 HC-NIC Page 55 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT weightage in the selection committee to a person, who has been a Judge of the High Court because of his more experience in dealing with the judicial proceedings.
37. If Section 85(1) provides for higher weightage to be given to the person, who has been a Judge of the High Court in the selection committee and if read with Sub-section (2) of Section 84, we can say that the person having more experience for conducting judicial proceedings as that of the person, who is or has been a Judge of the High Court is to be on higher pedestal in comparison to the persons having knowledge in the field of engineering, finance, commerce, economics or management. Not only that but what will be the degree of adequate knowledge, if it falls for consideration before the selection committee is not specifically provided. One may say that it is the subjective satisfaction of the Committee clothed with the power to make selection, but in our view such power may leave room for arbitrariness, whims and caprices when the Parliament is silent about the Page 56 of 74 HC-NIC Page 56 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT degree of adequate knowledge.
38. In any case, if the word "may" used under Sub-section (1) of Section 84 is read to give absolute option to the State to fall back upon Sub-section (1) of Section 84, not only such provision would leave room for arbitrariness, whims and caprices of the State Government, but such powers may also result into un-channelized and unguided option made available to the State. Further, if the person to be appointed as Chairperson is not read as having experience of judicial proceedings, the Commission may be comprising of all persons having knowledge of engineering or finance or commerce or economics or management. If such resultant situation is created on account of the aforesaid interpretation of the provisions of the Act, the Commission would be manned by the persons having no experience whatsoever of the judicial proceedings, much less as that of the Civil Court. If the Parliament has made any provision or conferment of the power or creation of the mechanism for adjudication process of rights of Page 57 of 74 HC-NIC Page 57 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT the Electricity Company and the citizens by giving power to the persons, who have no capacity to deal with the judicial proceedings, Section 84(1) would not meet with the test as observed by the Apex Court in the above referred decision in the case of (1) Union of India Vs. R. Gandhi, President, Madras Bar Association (supra) and (2) Madras Bar Association Vs. Union of India and Anr.(supra) as well as in the case of State of Gujarat and Anr. Vs. Gujarat Revenue Tribunal Bar Association and Anr. (supra). If the contention of the learned Advocate General is considered and accepted for giving absolute option available to the State as per Section 84(1), even if read with Section 85(2), we find that the Commission will be headed by the person, who will have no capacity or who cannot be said to be qualified to deal with the judicial proceedings for adjudication of the rights of the Electricity Companies and the consumers and the incidental aspects thereof. We are not dealing with the relevant statutory provisions in detail at this stage, since they are already referred to herein above, wherein the Act itself has treated Page 58 of 74 HC-NIC Page 58 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT the proceedings as judicial proceedings and the statute itself has created a deeming fiction of the Commission as if of the Civil Court coupled with the application of powers under the Contempt of Court Act and also the availability of inherent powers under regulation which are only available to Court under C.P.C.
39. As observed earlier, attempt on the part of the Court would be to save the statute or the provisions of the Act. If the contention is considered of the learned Advocate General for the State for giving literal meaning of the word "may" as an absolute option to the State, we will be left with no option but to declare Section 84(1) as unconstitutional, since it would not meet with the test as already observed by the Apex Court in the above referred decision. But if the purposeful and meaningful interpretation is made and the provisions of Section 84(1) and Section 84(2) are read down so as to maintain the principles for the system of adjudication machinery of a judicial proceedings, situation can be salvaged and the section to the possible Page 59 of 74 HC-NIC Page 59 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT extent can be saved. Hence, we find it appropriate to read and interpret the section accordingly.
40. In our view, under the above circumstances, the word "may" as provided under Sub-section (1) can be interpreted in two ways; one is to interpret as "shall", the another is to interpret as "as far as possible". It is hardly required to be stated that when the words used are "as far as possible", and the word "may" is interpreted as "as far as possible", the resultant effect would be that unless impossible, the second option would not be available like that of non- availability of any person, who is or has been a Judge of the High Court or that it is impossible for the State to appoint any person, who is a or has been a Judge of the High Court for very very strong valid reasons, that too, on record. When the Court is to make interpretation, the principles of purposive interpretation are required to be kept in mind, of course, by not compromising with the principles observed by the Apex Court in the above referred decision(s). Page 60 of 74 HC-NIC Page 60 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT But when impossibility is traced, the doctrine of necessity may apply and instead keeping the post vacant, so as to make the Commission functional, the State may be required to fall back upon Sub- section (1) for the appointment of Chairperson of a Commission, otherwise not, with the further rider that as and when the character of impossibility is lost, it would be obligatory for the State to make it possible by adopting the approach of "as far as possible". Not only that but even in a situation of impossibility when the State has fallen back upon Section 84(1) the State needs to distinguish the eligibility for the post of Chairperson and for the post of a member. In case of former requisite knowledge of law to deal with judicial proceeding should and must be possessed. Such can be made available from a judicial officer who has worked in the cadre of District Judge at least for five years or the advocate who has experience of practice in District Court or High Court at least of 10 years. Even Selection Committee while undertaking selection for the post of Chairperson would be required to be satisfied with the Page 61 of 74 HC-NIC Page 61 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT aforesaid eligibility criteria in the event State in a given circumstance of impossibility exercises power under Section 84(1) for appointment of Chairperson of the Commission. Further, if the aforesaid minimum eligibility is not satisfied for a person to be appointed as a Chairperson, such appointment would not meet with the requisite principles as observed by the Apex Court in the above referred decisions of the Apex Court in case of Union of India Vs. R. Gandhi, President, Madras Bar Association (supra), (2) Madras Bar Association Vs. Union of India and Anr.(supra) and State of Gujarat and Anr. Vs. Gujarat Revenue Tribunal Bar Association and Anr. (supra). Consequently, such appointment of Chairperson shall be liable to be set aside. If the aforesaid aspects are not satisfied the action of the State would be vulnerable and would be subject to challenge under Article 226 of the Constitution and constitutional Court may issue mandamus for directing the State to make it possible the appointment as conceived of a Chairperson under Sub-section (2) of Section 84 of the Act or may set aside appointment made Page 62 of 74 HC-NIC Page 62 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT under Section 84(1) of the Act. Considering the facts and circumstances and the statutory provisions, we find that by only aforesaid reading down of the provisions of Section 84(1) and Section 84(2) can be saved and both can remain on statute book. The aforesaid interpretation would be in furtherance of the language by the Parliament in Sub-section (2) of the words "notwithstanding anything contained in sub-section (1)", apart from the fact that such an interpretation would be in consonance with the principles observed by the Apex Court in the above referred decisions.
41. Attempt was made by the learned Advocate General as well as Ms.Patel for the Union of India to contend that the Commission is not having of trapping of the Court or that of the Tribunal. When the language is used by the Parliament as that of "Commission" they cannot be termed at par with the Tribunal or the Courts and, therefore, the same analogy would not be applicable to the Commission. We are afraid such contention can be accepted, more particularly Page 63 of 74 HC-NIC Page 63 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT when we have in detail considered the Scheme of the Act, various powers of the Commission and the procedure to be followed by express provisions of the Regulations. As recorded earlier, the statute itself gives a deeming fixation as that of the Court exercising the power in the judicial proceedings and, therefore, we do not find that such attempt can be countenanced.
42. At this stage we may usefully refer to the decision of the Apex Court in the case of T. N. Generation and Distribution Corporation Limited Vs. PPN Power Generation Company Pvt. Limited (supra), wherein the Apex Court at paragraphs 55 to 62, it was observed thus:-
"55. We, however, find substance in the submission of Mr.Nariman that adjudicatory functions generally ought not to be conducted by the State Commission in the absence of a Judicial Member. Especially in relation to disputes which are not fairl relative to tariff fixation or the advisory and recommendatory functions of the State Commission.
56. A Constitution Bench of this Court in Kihoto Hollohan (supra) has examined the nature of the power of the Speaker or the Chairman under paragraph 6(1) of the Tenth Schedule of the Constitution of India which contains "PROVISIONS AS TO DISQUALIFICATION ON GROUND OF DEFECTION" of a Member of either House of Parliament. Upon consideration of the entire Page 64 of 74 HC-NIC Page 64 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT matter, it was observed as follows :
"95. In the present case, the power to decide disputed disqualification under Paragraph 6(1) is preeminently of a judicial complexion."
57. The Constitution Bench relied on the earlier judgment of this Court in Harinagar Sugar Mills Ltd. vs. Shyam Sundar Jhunjhunwala[16]. In that case, Hidayatullah, J. said:
"98. ... By 'courts' is meant courts of civil judicature and by 'tribunals', those bodies of men who are appointed to decide controversies arising under certain special laws. Among the powers of the State is included the power to decide such controversies. This is undoubtedly one of the attributes of the State, and is aptly called the judicial power of the State. In the exercise of this power, a clear division is thus noticeable. Broadly speaking, certain special matters go before tribunals, and the residue goes before the ordinary courts of civil judicature. Their procedures may differ but the functions are not essentially different. What distinguishes them has never been successfully established. Lord Stamp said that the real distinction is that the courts have 'an air of detachment'. But this is more a matter of age and tradition and is not of the essence. Many tribunals, in recent years, have acquitted themselves so well and with such detachment as to make this test insufficient."
58. Again in para 99, it is observed as follows :
"99. Where there is a lis -- an affirmation by one party and denial by another -- and the dispute necessarily involves a decision on the rights and obligations of the parties to it and the Page 65 of 74 HC-NIC Page 65 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT authority is called upon to decide it, there is an exercise of judicial power. That authority is called a Tribunal, if it does not have all the trappings of a Court. In Associated Cement Companies Ltd. v. P.N. Sharma36 this Court said: (SCR pp. 38687) "33 ... The main and the basic test however, is whether the adjudicating power which a particular authority is empowered to exercise, has been conferred on it by a statute and can be described as a part of the State's inherent power exercised in discharging its judicial function. Applying this test, there can be no doubt that the power which the State Government exercises under Rule 6(5) and Rule 6(6) is a part of the State's judicial power.... There is, in that sense, a lis; there is affirmation by one party and denial by another, and the dispute necessarily involves the rights and obligations of the parties to it. The order which the State Government ultimately passes is described as its decision and it is made final and binding."
59. In view of the aforesaid categorical statement of law, we would accept the submission of Mr. Nariman that the tribunal such as the State Commission in deciding a lis, between the appellant and the respondent discharges judicial functions and exercises judicial power to the State. It exercises judicial functions of far reaching effect. Therefore, in our opinion, Mr. Nariman is correct in his submission that it must have essential trapping of the court. This can only be achieved by the presence of one or more judicial members in the State Commission which is called upon to decide complicated contractual or civil issues which would normally have been decided by a Civil Court. Not only the decisions of the State Commission have far reaching Page 66 of 74 HC-NIC Page 66 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT consequences, they are final and binding between the parties, subject, of course, to judicial review.
60. As noticed earlier, Section 84(2) enables the State Government to appoint any person as the Chairperson from amongst persons who is, or has been, a Judge of a High Court. Such appointment shall be made after consultation with the Chief Justice of the High Court. The provision contained in Section 84(2) is notwithstanding the provision contained in Section 84(1). In our opinion, the State Government ought to have exercised its power under subsection (2) to appoint one or more Judicial Members on the State Commission especially when complicated issues are raised involving essentially civil and contractual matters. A Constitution Bench of this Court in the case of R.Gandhi (supra) recognized that :
"87. ...........that the legislature has the power to create tribunals with reference to specific enactments and confer jurisdiction on them to decide disputes in regard to matters arising from such special enactments. Therefore it cannot be said that legislature has no power to transfer judicial functions traditionally performed by courts to tribunals."
"90. But when we say that the legislature has the competence to make laws, providing which disputes will be decided by courts, and which disputes will be decided by tribunals, it is subject to constitutional limitations, without encroaching upon the independence of the judiciary and keeping in view the principles of the rule of law and separation of powers. If tribunals are to be vested with judicial power hitherto vested in or exercised by courts, such tribunals should possess the independence, security and capacity associated with courts. If the tribunals are intended to serve an area Page 67 of 74 HC-NIC Page 67 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT which requires specialised knowledge or expertise, no doubt there can be technical members in addition to judicial members............."
61. Keeping in view the aforesaid observations of this Court, in our opinion, the State of Tamil Nadu ought to make necessary appointments in terms of Section 84(2) of the Act. We have been informed that till date no judicial Member has been appointed in the Tamil Nadu State Commission. We are of the opinion that the matter needs to be considered, with some urgency, by the appropriate State authorities about the desirability and feasibility for making appointments, of any person, as the Chairperson from amongst persons who is, or has been, a Judge of a High Court.
62. We have noticed earlier that Section 113 of the Act mandates that the Chairman of APTEL shall be a person who is or has been a Judge of the Supreme Court or the Chief Justice of a High Court. A person can be appointed as the Member of the Appellate Tribunal who is or has been or is qualified to be a Judge of a High Court. This would clearly show that the legislature was aware that the functions performed by the State Commission as well as the Appellate Tribunal are judicial in nature. Necessary provision has been made in Section 113 to ensure that the APTEL has the trapping of a court. This essential feature has not been made mandatory under Section 84 although provision has been made in Section 84(2) for appointment of any person as the Chairperson from amongst persons who is or has been a Judge of a High Court. In our opinion, it would be advisable for the State Government to exercise the enabling power under Section 84(2) to make appointment of a person who is or has been a Judge of a High Court as Chairperson of the State Commission."
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43. The aforesaid shows that the observations were made by the Apex Court that it would be advisable for the State Government to exercise the enabling power under Section 84(2) to make appointment of a person, who is or has been a Judge to the High Court as Chairperson of the Commission.
44. The learned Advocate General did submit that the observations made by the Apex Court is not the ratio but obiter and he further submitted that the language used is advisable and, therefore, it should not operate as a bar in absolute option available to the State to fall back upon Section 84(1). We are not impressed by the submission. Even if it is obiter in the decision, in our view, it would carry a great weightage. Further, when the observations are made even with the word "advisable", such would mean "as far as possible" and, therefore, the observations made by the Apex Court cannot be diluted on the ground as sought to be canvassed.
45. The reliance placed by the learned Advocate General appearing for the State upon the decision Page 69 of 74 HC-NIC Page 69 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT of the Apex Court in the case of Rajesh Awasthi Vs. Nand Lal Jaiswal and Ors., reported (2013) 1 SCC, 501 as well as another decision of the Apex Court in the case of West Bengal Electricity Regulatory Commission Vs. CESC Ltd., reported in 2002(8) SCC, 714 are of no help to the respondent State, inasmuch as in the decision of the Apex Court in the case of Rajesh Awasthi Vs. Nand Lal Jaiswal and Ors. (supra), the question was about the appointment issuance of writ of quo warranto against the person, who was selected by the selection committee under the Act and various aspects to be borne in mind by the selection committee at the time of recommending the name. The Apex Court found that it was obligatory for the selection committee to satisfy itself that the selected candidates had no financial interest or other interest, which was likely to affect prejudicially his function as Chairperson and it was found that the selection was vitiated on account of non-compliance with the statutory prescription and the decision of the High Court to set aside the selection was not interfered with. In the said case before the Apex Court, Page 70 of 74 HC-NIC Page 70 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT the question did not arise for consideration of the constitutional validity of Section 84(1) and Section 84(2) of the Act and the consideration of the role of selection committee under Section 85 vis-a-vis the provisions of Sections 84(1) and (2). In the case of West Bengal Electricity Regulatory Commission Vs. CESC Ltd. (supra) it is true that the observations were made by the Apex Court for effective appellate forum, but the constitutional validity is pari meteria with section of the Act of 1998 did not come up for consideration before the Apex Court. Further, the regulations, which are framed in the present case after enactment of Indian Electricity Act also did not come up for consideration before the Apex Court. In any case, after the aforesaid decision of the Apex Court on the aspect of competence of the Parliament or the Legislature would delegate the power to the other body for adjudication of the rights of the Electricity Company and the appointment of the person to head such body by the persons, who are not competent to deal with judicial proceedings came to be considered by the Apex Court in the above Page 71 of 74 HC-NIC Page 71 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT referred three decisions of the above referred Apex Court in the case of Union of India Vs. R. Gandhi, President, Madras Bar Association (supra) and State of Gujarat and Anr. Vs. Gujarat Revenue Tribunal Bar Association and Anr. (supra). Hence, we do not find that the said decision would be of no help to the State.
46. In view of the aforesaid observations and discussion, the following conclusion:-
(1) The word used "may" in Section 84(2) shall be interpreted to mean "as far as possible" and unless impossible for the appointment of any person as Chairperson from amongst the persons, who are or have been Judge of the High Court.
(2) When it is impossible to resort to Sub-section (2) of Section 84 as per the interpretation made in the present judgement, the Government may fall back upon Section 84(1) for appointment of chairperson, but such action of appointment, if made on the basis of misconceived or non-availability of doctrine of necessity, the said action would be vulnerable and subject to challenge under Article 226 of the Constitution.
(3) Even in case of impossibility to make appointment under Section 84(2), if the State Page 72 of 74 HC-NIC Page 72 of 74 Created On Fri Oct 09 01:59:23 IST 2015 C/WPPIL/172/2014 CAV JUDGMENT decides to exercise power under Section 84(1) of the Act, then the person to be considered for appointment as Chairperson must possess the minimum experience of work for 5 years in the cadre of District Judge or minimum experience of practice in District Court or High Court for 10 years as an advocate.
(4) If Sections 84(1) and (2) are read down as observed earlier, then only it would meet with the test of constitutional validity, otherwise Section 84(1) for appointment of Chairperson would be rendered unconstitutional and void.
(5) It is clarified that the present judgement will have prospective effect and it would not, in any manner, adversely affect the decision already taken by the Commission prior to the pronouncement of the present judgement.
(6) As it has been reported that the vacancy of Chairperson in the Commission is for a long time and large number of litigants are waiting for the adjudication of the matters pending before the Commission, the State Government is directed to undertake the process for making the appointment of Chairperson as per the present judgement at the earliest, but not later than three months from today.Page 73 of 74
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47. The petition is disposed of accordingly.
(JAYANT PATEL, ACJ.) (N.V.ANJARIA, J.) FURTHER ORDER:
After the pronouncement of the judgement, Ms.Patel, Advocate for the Central Government prays that the operation of the present judgement is stayed for some time, so as to enable her client to approach before the higher forum. Considering the facts and circumstances that three months' time is already given, we do not find that such request should be entertained, more particularly when large number of litigants are waiting for the appointment to be made of the Chairperson in regular functioning of the matters before the Commission. Hence, the said request is declined.
(JAYANT PATEL, ACJ.) (N.V.ANJARIA, J.) vinod Page 74 of 74 HC-NIC Page 74 of 74 Created On Fri Oct 09 01:59:23 IST 2015