Madhya Pradesh High Court
M.P.State Electricity Board vs The M.P.Electricity Regulatory Comm. ... on 21 December, 2021
Author: Vijay Kumar Shukla
Bench: Ravi Malimath, Vijay Kumar Shukla
HIGH COURT OF MADHYA PRADESH : JABALPUR
(Division Bench)
W.P. No.1909 of 2004
M.P. Electricity Board, Jabalpur
-Versus-
The M.P. Electricity Regulatory Commission, Bhopal & Ors.
_______________________________________________________
CORAM :
Hon'ble Shri Justice Ravi Malimath, Chief Justice.
Hon'ble Shri Justice Vijay Kumar Shukla, Judge.
Shri M.L. Jaiswal, Senior Advocate with Shri K.K. Gautam,
Advocate for the petitioner.
Shri Anshuman Swami, Advocate for the respondents.
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ORDER
(Jabalpur, dtd.21.12.2021) Per : Vijay Kumar Shukla, J.-
The instant petition has been filed under Articles 226/227 of the Constitution of India, seeking issue of a writ of mandamus to declare that the provisions of Schedule 5 of the M.P. Electricity Regulatory Commission (Fees and Charges) Regulations 2002 [hereinafter referred to "the MPERC Regulations 2002"] as ultra vires of its power and the provisions of Section 55(2)(l) of the M.P. Vidyut Sudhar Adhiniyam, 2000 [hereinafter referred to as "the Adhiniyam 2000"]. The petitioner has further challenged the demand of licence fees of Rs.135.34 lacs made by the respondent No.1 in regard to generation, transmission and distribution of 2 electricity, vide notice dated 21-4-2004 as per MPERC Regulations 2002 and for a direction to refund the amount collected by the respondent No.1.
2. The petitioner is a statutory Corporation constituted under Section 5 of the Electricity (Supply) Act, 1948 and has been vested with the power to generate, transmit and distribute electricity. Further, it is vested with the statutory powers to frame tariffs and conditions of supply etc. as laid down by the Electricity (Supply) Act, 1948.
3. The learned counsel for the petitioner referred to various provisions of Enactments by the Parliament, regarding Electricity Regulatory Commissions Act, 1998 which came into force with effect from 18-8-1998 and the State Government constituted M.P. Electricity Regulatory Commission under Section 17 of the aforesaid Act. The said Commission carries out its function as laid down under Section 22 of the said Act. He also referred to the provisions of the Adhiniyam 2000, wherein under Section 3(4) of the Adhiniyam 2000 the State Electricity Commission constituted the first Commission.
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4. By order dated 11-03-2002 the State Government appointed a Chairman and other members for a period of 5 years. Section 14(1) of the Adhiniyam 2000 provides that no person, other than those authorized to do so by licence or by virtue of exemption under this Act or who is authorized or exempted under Indian Electricity Act, 1910 or the Electricity (Supply) Act, 1948. Under Section 26 of the Electricity (Supply) Act the Board is vested with all the powers and obligations of licence that the licensee shall be a deemed licensee. Under Section 15 of the Adhiniyam 2000 an application for licence on payment of fees has to be entertained. Under Section 55(2)(l) of the Adhiniyam the Commission is vested with the power to frame regulation to provide the amount of fees.
5. In the year 2002 the Commission framed the Fees and Charges Regulation, 2002 which postulates that licence fees 0.03% of billed amount of previous year to pay annually for grant of licence. Section 12 of the Electricity Act 2003 (for brevity, "the 2003 Act") provides that no person other than these authorized to do so by licensee or by virtue of exemption under Section 172 of the Act. Section 14 of the 2003 Act deals with application for grant of licence. The first proviso provides deemed to be licensee under the provisions of repealed law. Second proviso envisages that State transmission utility is deemed to be a transmission licence. The 4 Board has already been declared as transmission utility. The fifth proviso stipulates a Govt. Company deemed licensee. Section 15 postulates that application for licence to be accompanied with fees. Submission of the learned counsel for the petitioner is that under Section 31(2) of the 2003 Act, Govt. Companies and all distributing companies, are deemed licensee and, therefore, all the companies constituted under the reorganization of the Board are deemed licensees and hence, the petitioner is not required to make an application for grant of licence.
6. Section 86(1)(g) of the 2003 Act provides an application for the purpose of Act. This will not again apply to the deemed licensee. Submission is that thus, a deemed licensee under the Act is a separate class of licensee, who is not required to make any application for grant of licence. It is further contended that Section 173 of the 2003 Act provides that it will have overriding effect in regard to any provision inconsistent with the Act.
7. Section 176 of the 2003 Act is vested with the power to make rules. Section 186(2)(e) speaks about the fee for the application for grant of licence. Section 15(1) postulates about application for grant of licence regarding fees to be affixed on the application for grant of licence. Under Section 180(2)(a) of 2003 5 Act a provision has been made vesting power with the State Government to make rules on payment of fee on the application for grant of licence. Section 181 vests power with the State Government to make provisions for payment of fees for application for grant of licence under Section 180(2)(a), payment of fees for application for grant of licence under Section 15(1). Section 181 of the 2003 Act further vests power on the State Commission to make regulations. Under Section 181(2)(b) the form and manner of application under Section 15(1). Proviso 4 to Section 14 lays down that the company formed after the reorganization or as laid down in Section 23 of the Adhiniyam 2000, shall be deemed to be a licensee under this Act and as such, there is no power on the State Commission to impose any fees on deemed licensee.
8. Since the Acts from 1948 to 2003 Acct, there exists a provision for deemed licensee and no power has been granted under the Act to levy fees on the deemed licensee, therefore the State Commission has no power either by virtue of Section 55(2)(l) of the Adhiniyam 2000. Section 185 of the 2003 Act deals with repeal under Section 185(3), the provisions specified in Scheduled, not inconsistent with the provision of the Act shall apply to the State in which such enactment are applicable. It is contended that as per provisions of the Act 2000, Section 55(2)(l) vests power regarding 6 the amount of fees and charges payable under which application under Section 15 for grant of licence, based on application is required to be made.
9. On the bedrock of the aforesaid provisions, it is contended the Commission has no power to levy fees on a deemed licensee. It is assiduously urged that no rule can be framed which are inconsistent with the 2003 Act itself. Rules are subordinate legislations and they cannot override the provisions under the Act.
10. To substantiate his submissions, the learned counsel for the petitioner has relied upon the decisions rendered in the cases of Ahmedabad Urban Development Authority vs. Sharad Kumar Jayanti Kumar Pasawalla and others, (1992) 3 SS 285; Additional District Magistrate (Rev.) Delhi Admn. vs. Siri Ram and others; (2000) 5 SCC 451; Bhavnagar University vs. Palitana Sugar Mill (P) Ltd. and others, (2003) 2 SCC 111; Commissioner of Wealth Tax, Hyderabad vs. Trustees of H.E.H., (2003) 5 SCC 122; and Novva Ads. vs. Secretary Department of Municipal Administration and Water Supply and another, (2008) 8 SCC 42.
The learned counsel for the petitioner submitted that in the aforesaid judgments law has been settled that no subordinate legislation can be made contrary to the enabling Act. 7
11. In oppugnation to the aforesaid contentions, the learned counsel for the respondent No.1 submitted that the impugned provision is not ultravires to the provision of Section 55(2)(l) of the Adhiniyam 2000. It is submitted that the statement of object and reasons for enactment of the Electricity Regulatory Commission Act, 1998 [for brevity "the Act 1998"] was with a view to rationalization of electricity tariff, transparent policies regarding subsidies, promotion of efficient and environmentally benign policies and for matters connected therewith or incidental thereto.
12. Section 22 of the Act 1998 provides functions of State Commission. Section 28 empowers the Commission to determien the tariff. Section 57 permits the State Government by notification to make rules to carry out the provisions of this Act. Section 58 of the Act 1998 postulates power of State Commission to make regulations. In exercise of powers conferred under Section 65 of the Adhiniyam 2000 and in supercession of earlier notification the M.P. Electricity Commission has made the Regulations. These Regulations have been made within the powers vested with the Commission. The Commission is vested with the legislative powers and, therefore, it is entitled to exercise power all incidental rights in enjoyment of such power. It is urged that the Commission is functioning under the provisions of the Adhiniyam 2000 and is a 8 Body Corporate with perpetual succession and a common seal with permission to carry out the duty as specified in the Act. The Commission has to perform diverse type of specialized tasks for which it needs infrastructure to discharge its functions by having individual consultants with specialized knowledge, experience and skill.
13. The 2003 Act has been made applicable from 10th June, 2003. Section 103 of the Act provides for establishment of State Electricity Regulatory Commission Fund, in which all grants and loans provided by the State Government and fees, fines and other charges levied by the State Commission shall be deposited and the fund shall be applied for meeting of the expenditure of the Commission. It is putforth that capacity building of infrastructure and human resources in the Regulatory Commission are required for which appropriate fees is levied on different stakeholders.
14. Justifying the levy of fees, the learned counsel for the respondent submitted that on the basis of quid pro quo principle, the Commission has to provide facility of fixation of tariff, adjudication of disputes between the Board and the consumers and capacity building of infrastructure and human resources etc. The respondents have denied that there was any coercive method adopted by them on 9 the petitioner to deposit the licence fees. It is strenuously urged that the petitioner has deposited the fees for the year 2004, but the petitioner has prayed for refund of the licence fees, whereas the petitioner-Board has been paying the licence fees for subsequent years.
15. We have heard the learned counsel for the parties at length and gone through the various provisions of the various Acts, enactments and Regulations. The impugned Clause 5(b) of the MPERC (Fees & Charges) Regulation, 2002 being relevant for the present purpose, is extracted hereunder :
"Name of petition/application Fees/Charges (in Rs.) Annual fees payable by all 0.03% or the amount billed licensees who are authorized or during the previous financial exempted under the Indian year in the supply area of the Electricity Act, 1910 (Act 9 of licensee payable annually at 1910) or the Electricity Supply the beginning of financial year Act, 1948 (Act 54 of 1948) or (i.e. in April) during the distribution activities and are validity of the licence."
deemed licensees under
Madhya Pradesh Vidyut Sudhar
Adhiniyam, 2000 and
undertaking distribution and
supply.
16. As per provisions of Section 55 of the Adhiniyam 2000 the Commission is vested with the power to frame regulations and is also empowered to make amendment in the regulation. Therefore, the Commission has amended the MPERC (Fees and Charges) 10 Regulation 2002 by notification No.2335-MPERC, dated 10-4-2003 which was published in the Official Gazette on 18th April, 2003 and it has been made applicable to the deemed licencees also. The amendment came into force from the date of notification which was published in the Official Gazette on 18 th April 2003. The annual fees has been charged under Section 5 (b) of the MPERC Regulation and not under Section 5(a). Thus, it is graphically clear that the fees is to be charged from the deemed licencees also and the submission advanced by the learned counsel for the petitioner has no merit.
17. The next plank of submission of the learned counsel for the petitioner that since the assets and liabilities of the Board are being transferred from the Board to the Companies and, therefore, the Board is not required to pay the fees, does not deserve acceptance. Such transfer was not effected in the financial year 2003-2004. When such transfer will be effected the fees will be charged from its successors or transeferees.
18. So far as the contention of the petitioner that the Board being a deemed licencee, question of payment of licence fees has no merit, in view of the amendment in the MPERC Regulation 2002 on 18-4-2003. The annual fees is to be charged from the deemed liencees also. The contention of the petitioner cannot be accepted 11 that the Board has deposited the requisite amount of fees under misconception of law or due to any pressure. There is no material or foundation in this regard.
19. The annual fees for the various services being rendered by the Commission to the petitioner-Board is already charged. The Commission has to monitor whether the licensee is discharging fully and efficiently the duties and obligation as per provisions of the licence or the provisions of the Act or not. If the licensee or the deemed licensee fails to discharge the duties and obligations or if the financial position of the licensee is such that he is unable to fully and efficiently discharge the duties and obligation imposed on him by his licence, the Commission may take action against his licensee or even against the deemed licensee as per Section 142 of the 2003 Act.
20. From the conspectus of the above discussion, it is vivid that the Commission has power to impose fees in respect of deemed licensees. Further, there is no merit in the contention of the petitioner that the Regulation is hit by the provisions of Section 180(2)(a) of the 2003 Act. In the first proviso to Section 14 of the Act, it is stipulated that the provision of repeal Law or Act shall apply to the licensee for a period of one year from the date of commencement of the Electricity Act 2003 i.e. up to 10-6-2004. 12
Hence, till the new terms and conditions of licence are framed, the second amendment to the MPERC (Fees and Charges) Regulations 2002 shall be applicable in which deemed licensee is also required to pay fees to the Commission for carrying out business of transmission and supply of electricity.
21. The next contention of the learned counsel for the petitioner that asking to deposit the fees is illegal and ultravires, because fees have been demanded as annual fees under the then applicable clause 5(b) of the of the second amendment to the MPERC Regulations. The terms and conditions of the licence under the Electricity Act has been made applicable and the requirement of paying the annual fees under the aforementioned clause 5(b) has been repealed from 13th August, 2004 vide Gazette Notification dated 6-8-2004.
22. The levy of fees cannot be held to be illegal or without any authority of law. There are inherent powers with the Commission require to be exercised with a view to carry out the duties and functions effectively. The respondents have also justified that annual fees of Rs.135 lacs imposed was not highly excessive. Even otherwise, we refrain ourselves to delve into the aforesaid question under Article 226 of the Constitution of India, as there is no apparent arbitrariness in the aforesaid demand notices which have been issued in exercise of powers under the Regulations. 13
23. As per the provisions of Section 185(2)(a) of the 2003 Act anything done or any action taken including any Regulations or issued Notification, under the repealed laws shall in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provision of this Act. Therefore, imposition of annual fees is not in anyway inconsistent with the provisions of this Act. As per para 5(xx) the Commission is empowered to make regulations as per the provisions of Section 181(2) of the 2003 Act
24. The learned counsel for the respondents placed reliance on the judgment of the Apex Court rendered in the case of Maharashtra State Board of Secondary and Higher Secondary Education ad another vs. Paritosh Bhupesh Kumar Sheth and others, (1984) 4 SCC 27, wherein it is held that vires of a delegated legislation, scope of court's inquiry for determination is limited and the Court cannot examine the wisdom, merits or efficacy of policy of the Legislature or its delegate to see if it effectuates the purpose of the Act. It is further ruled that reasonableness of subordinate legislation does not depend upon the Court's own views on the legislative policy, as to what it ought to be. Reasonableness should be judged in realistic and practical context.
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25. There is no dispute on the proposition of law laid down in various judgments of the Supreme Court, which have been cited by the learned counsel for the petitioner that subordinate legislation cannot be made contrary to the enabling Act. But in the present case, on studied scrutiny of the various provisions of the Act 2003, Adhiniyam 2000 and the MPERC Regulations, we do not perceive that the impugned provisions of the Regulations is contrary to the enabling provisions of Section 55 of the Act. We do not find that the impugned provision of the Regulations is inconsistent or ultravires to the provisions of the Act or Section 55(2)(l) of the Adhiniyam 2000.
26. In view of our preceding analysis and exposition of law, we do not find any illegality or unconstitutionality in the impugned provision and further in the demand notice issued by the respondent.
27. Consequently, the writ petition being sans merit, is dismissed without any order as to costs.
Pending interlocutory application(s), if any, also stands disposed of.
(Ravi Malimath) (Vijay Kumar Shukla)
Chief Justice Judge
ac.
Digitally signed by AJAY KUMAR CHATURVEDI
Date: 2021.12.22 18:13:08 +05'30'