Gujarat High Court
Dakshin Gujarat Vij Company Limited vs Land Mark Corporation on 30 June, 2021
Author: Vineet Kothari
Bench: Vineet Kothari, B.N. Karia
C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021
DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s)
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
(1) R/LETTERS PATENT APPEAL NO. 74 of 2014
In R/SPECIAL CIVIL APPLICATION NO. 3739 of 2012
With
(2) R/LETTERS PATENT APPEAL NO. 1583 of 2019
In
SPECIAL CIVIL APPLICATION NO. 4668 of 2016
With
(3) R/LETTERS PATENT APPEAL NO. 1582 of 2019
In
SPECIAL CIVIL APPLICATION NO. 4311 of 2016
With
(4) R/LETTERS PATENT APPEAL NO. 1584 of 2019
In
SPECIAL CIVIL APPLICATION NO. 5229 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE DR. JUSTICE VINEET KOTHARI
and
HONOURABLE MR. JUSTICE B.N. KARIA
==========================================================
1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy
of the judgment ? NO
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution NO
of India or any order made thereunder ?
==========================================================
LPA No. 1583 of 2019
Ashwamegh Co.Op Housing Society Ltd. Vibhag-5
Vs.
Uttar Gujarat Vij Company Limited & Electricity Ombudsman
LPA No. 1582 of f 2019
V.Square Project, Naroda
Vs.
Uttar Gijarat Vij Company Limited & Electricity Ombudsman
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C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021
DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s)
LPA No. 1584 of 2019
V.Square Project, Naroda
Vs.
Uttar Gijarat Vij Company Limited & Electricity Ombudsman
==========================================================
Appearance:
LPA No. 74 /2014
MR. MIHIR THAKORE, SR. Advocate
with MS. LILU K. BHAYA, ld. Advocate for the Appellant (s) No.1
MS. SONAL D. VYAS, Ld. Advocate for the Respondent No.1
Rule served for the Respondent No.2
LPA No.1583/2019, 1582/2019 & 1584/2019
MR. RAVINDRA SHAH, Ld. Advocate for the Appellant
MR. MIHIR THAKORE, SR Advocate
with MS. LILU K. BHAYA for the Respondent
==========================================================
CORAM:HONOURABLE DR. JUSTICE VINEET KOTHARI
and
HONOURABLE MR. JUSTICE B.N. KARIA
Date : 30/06/2021
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE B.N. KARIA)
1. This Letters Patent Appeal No. 74 of 2014 is filed by the present appellant {hereinafter referred to as Electric Company in LPA No. 74 of 2014} against the judgment and order dated 22.10.2013 passed by learned Single Judge wherein, Special Civil Application preferred by the Appellant was dismissed and order passed by the The Electricity Ombudsman Gujarat State in Case No. 82 of 2011 dated 9.1.2012 was challenged.
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2. Whereas, Letters Patent Appeal No. 1583 of 2019, Letters Patent Appeal No. 1582 of 2019 and Letters Patent Appeal No. 1584 of 2019 are against the order passed by learned Single Judge in Special Civil Application No. 4668 of 2016; Special Civil Application No. 4311 of 2016 and Special Civil Application No. 5229 of 2016 dated 30.4.2019 respectively preferred by the respondent No.1 with a request to quash the orders passed by the Electricity Ombudsman directing the difference of charges to the Appellant. As all these Letters Patent Appeal are based on identical facts and are raising similar questions of law, with the consent of the parties, the matters are taken up for joint hearing in this Court for the purpose of concluding decision of this group of Letters Patent Appeals.
3. The facts are extract from the lead matter i.e. Letters Patent Appeal No. 1583 of 2019.
3.1 It is the case of the Appellant that Appellant being Co- operative Housing Society registered under the provisions of the Gujarat Co-operative Societies Act, 1961. The main object of the Society is for providing 52 residential accommodation to its members by constructing their respective bungalows. The society needed electric connection for the purpose of construction as well as for the residential bungalows. The land of the society was abutting the Town Planning Scheme where the respondent -Company electric sub station Page 3 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) was situated and had its distribution mains and from where, the respondent No.1 -Company was required to lay the service line for supplying the electricity to the society and its members. The Appellant needed the following electricity supply for the residences of its members in the society.
Sr. Total Number of Demand in Aggregate Total KW
No. Bungalows KW demand in
KW
1. 1 13 13
2. 1 12 12
3. 3 11 33
4. 15 10 150
5. 3 9 27
6. 29 8 232 467
7. Common 15 15 15
lighting
8. Water works 35 35 35
Grand Total 517
3.2 As per say of the Appellant, the provision of Regulation 4.1(i)
of the GERC (Licensee's Power to Recover Expenditure)
Regulations, 2005, the Appellant and its members for domestic consumers made a demand on KW basis for the aforesaid total load of 517 KW for supply of electricity from the respondent No.1 Distribution Company. Respondent -Company is duty bound to recover charges on KW basis from the Appellant in accordance with the directions dated 30.12.2010 issued by GERC and as per the Page 4 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) schedule reflected in the communication dated 30.12.2010. As per say of the Appellant, respondent No.1-Electric Company cannot recover the cost of transformer and service line from the Society and its members being domestic consumers. On 25.2.2013, the Appellant applied to the respondent No.1 for providing electricity supply for itself and for its 52 members being the bungalows. Respondent No.1 without any authority has collected huge amount of Rs. 16,55,665- and Rs.40,713/- from the Appellant. The Appellant -Society made a complaint to the Consumer Grievance Redressal Forum of the respondent No.1 vide complaint No. 22/2015-16, wherein, it was prayed for a refund of the excess amount of Rs.16,96,378/-. The Grievance Forum, ignoring the provisions of the Central Act, State Act and Regulations enacted by the GERC being the regulatory authority and the directions issued by it from time to time as well as the provisions of Supply Code, mechanically passed the order dated 9.6.2015 rejecting the complaint filed by the Appellant. The Appellant, being aggrieved by the order of the Grievance Forum dated 9.6.2015 approached the respondent No.2 -The Electricity Ombudsman, Gujarat State raising his grievance of illegal recovery of the amount. Respondent No.2 vide its order dated 18.9.2015 held that respondent No.1 -Electric Company is not authorized to recover such charges which amounts to duplication, from the Appellant - Page 5 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022
C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) Society and directed the respondent No.1 to refund the amount within 10 days to the Appellant -Society. Respondent No.1 preferred three different Special Civil Applications i..e Special Civil Application No. 4668 of 2016, Special Civil Application no. 4311 of 2016 and Special Civil Application no. 5229 of 2016 before the learned Single Judge which was allowed vide order dated 30.4.2019.
4. The short facts of Letters Patent Appeal No. 74 of 2014 preferred by Electric Company are as under:-
4.1 Two applications were made by the respondent No.1 to the Appellant -DGVCL on 10th March, 2011 for suppling of electricity to two buildings known as Landmark Empire Building 'A' & 'B' developed by respondent No.1- M/s.Land Mark Corporation.
Therefore, on the basis of such application, the estimate for necessary infrastructure for installing the transformers was given. It is case of the respondent No.1 that it was for creating a lighting infrastructure and it was not an application for individual units by the individual parties, but it was made by the respondent No.1 for the infrastructure in building 'A' & 'B'. Relying on the provision of Electricity Act and the Rules, particularly Rule 50(A), the payment was demanded, which laid to the proceedings before the Electricity Ombudsman under the Act. The Electricity Ombudsman passed an order directing the Appellant to make necessary arrangement for Page 6 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) supply of electricity to the occupants of the building constructed by Respondent No.1 based on the applications as per the impugned order. The order passed by the Electricity Ombudsman, Gujarat State was challenged in Special Civil Application No. 3739 of 2012 before this Court which was dismissed vide order dated 22.10.2013. Hence, Letters Patent Appeal No. 74 of 2014 is preferred.
5. Heard Learned Counsel Mr. Ravindra Shah for the Appellant and Learned Senior Counsel Mr. Mihir Thakore with Ms. Lilu K.Bhaya, Learned Counsel for the respondent in LPA No. 1583 of 2019, LPA No. 1582 of 2019 & LPA 1584 of 2019; whereas, Learned Senior Counsel Mr. Mihir Thakore with Ms. Lilu K.Bhaya, Learned Counsel for the Appellant and Ms. Sonal D.Vyas, Learned Counsel for the respondent No.1 in LPA No. 74 of 2014.
6. Learned Counsel Mr. Ravindra Shah for the Appellant has referred Chapter 3 of the State Act and Section 65(1) of the State Act pertains to Licensees's power to recover expenditure incurred in providing supply and other miscellaneous charges) Regulations, 2005. He has referred Section 46 :-Power to recover expenditure of the Central Act and Regulation. It is further submitted that the State Commission may, by regulations, authorize a distribution license to charge from a person requiring a supply of electricity in pursuance of Section 43 any expenses reasonably incurred in providing any electric Page 7 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) line or electrical plant used for the purpose of giving that supply. 6.1 He has further referred Chapter 3 :- Duty of the Distribution License to supply electricity on request and recovery of expenditure. It is further submitted that licensee is allowed to be recovered from the applicant, requiring supply of electricity, any expenses to reasonably incur to provide any electric line or electrical plant specifically for the purpose of giving such supply to the Appellant. That, respondent No.1 has classified different categories of consumers according to the types of premise namely residential, commercial, industrial institution, agricultural and others under the provision of Section 3 of the Supply Code. The GERC has permitted it to classify its consumers in any category apart from the above. That, respondent No.1 was required to charge the Appellant on the basis of per kilo watt of contracted load. Under clause 4.2(II)(c), respondent No.1- Company cannot recover cost from the appellant and its members being domestic consumers. However, apart from recovering such a huge amount for 52 bungalows individually on kilo watt basis as well as for the common light connection and water works on kilo watt basis, by flouting and violating the provision of Regulation of GERC (Licensee's Power to Recover Expenditure) Regulations, 2005 and in defiance of the directions dated 30th December, 2010, 23rd February, 2011 and 21st April, 2011 calculated Page 8 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) sum of Rs.16,55,665/- and Rs.40,713/- from the Appellant. It is further submitted that respondent No.1 is not legally entitled to charge or retain any such amount of Rs.16,96,373/- from the Appellant, as infrastructure is developed and new transformer was erected as well as new high tension line was laid by the Respondent No.1. That, Appellant, in fact, is domestic consumer of respondent No.1, however, in-correct misleading averments were made as "developer". That,GERC issued direction/ guidelines to charge in line with Torrent Power which was charged its consumers on a fixed charge basis on kilo watts as per the schedule of charges approved by the GERC and such fixed charges included the cost of transformer, service lines, service connection charges etc. incurred by the DISCOM. It is further submitted that "GUVNL"parent Company while incorporated the schedule of charges in the tabular form decided by GERC sent communication dated 30.12.2010 to all its subsidiary Company including the respondent No.1-Company requiring them to charge accordingly. Further request was made by GUVNL to GERC permitting "DISCOMS" to recover charges towards service lines, transformer and service connection for new connection by modifying approval dated 30th December, 2010 of the GERC by writing letter dated 12th January, 2011. It is further submitted that GERC while replying on 23rd February, 2011 refused Page 9 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) request made by GUVNL specifically directing not to recover any separate charges relating to distribution transformer and HT line. Inspite of specific directions issued by GERC, DISCOMs flouted the same. GERC was compelled to issue another directions specifically directing GUVNL on 21st April, 2011 not to charge separate transformer charges, separate HT/LT charges or other charges. On, 11th May, 2011, GUVNL addressed to its subsidiary company with respect to the aforesaid directives of the GERC again and sent communication to all DISCOMs including the respondent No.1- Company to charge only according to the tabular charge approved by the GERC on per kilo watt basis towards fixed charges. 6.2 Learned Advocate for the Appellant Mr. Ravindra Shah has submitted that "Transformer charges" cannot recover from the Appellant as transformer is a part of "transmission line" . He has referred Section 2(72) of the Central Act which defines transmission line. He has further submitted that respondent No.1-Company had already an established network of its above defined transmission lines in the area of the Appellant-Society. Transformer is part of the said transmission line and not a part of "service line" as defined under Section 2(61) of the Central Act . That, learned Single Judge has committed a grave error in not appreciating that the transformer being a part of transmission line and not a service line and the Page 10 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) respondent No.1 has no legal authority or right to claim or charge any amount whatsoever towards the "transformer" much less the amount of Rs.18,89,081/-.That, order passed by respondent No.2 - Ombudsman may not be interfered by the learned Single Judge. He has further submitted that there is no provision whatsoever either under the Central Act or State Act or the Supply Code or any of the Regulations recognizing the classification of consumer as "Infrastructure Development" for a new connection. That, findings of learned Single Judge concluded in Special Civil Application are contrary to the facts and law. The Appellant-Society made applications for infrastructure development and electric connection for the purpose of commercial activities, are contrary to the facts on record. That, respondent No.1 was prohibited charging any amount towards infrastructure development charges and the said directives were tendered across the bar by the respondent No.1 itself. That, in compliance with the said directive/order dated 3rd June, 2014, respondent No.1 had discontinued charging any amount towards "infrastructure development" which necessarily includes "transformer charges". That, directives/orders dated 30th December, 2010, 23rd December, 2011, 21st April, 2011, and 3rd June, 2014 were not properly considered by the learned Single Judge in Special Civil Application 4668 of 2016.
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C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) 6.3 Learned Counsel appearing for the Appellant in support of his arguments has relied upon the following judgments.
1. Daman Singh Vs. State of Punjah reported in (1985) 2 SCC
670.
2. New Delhi Municipal Council Vs. Sohanlal Sachdev (dead) reported in (2000) 2 SCC 494.
3. Employers in relation to the Bhowra Colliery Vs. Their Workmen reported in (1962) Supp. 2 SCR 883.
4. M/s. Vishwa and Co; Vs. State of Gujarat reported in AIR 1967 Guj. 19.
5. M.P.Clectricity Board and others Vs. Shiv Narayan and another reported in (2005) 7 SCC 283.
6. U.P.Power Corporation Ltd. Vs. National Thermal Power Corporation Ltd. and others reported in (2011) 12 SCC 400. 6.4 Ultimately, it was requested by learned Counsel for the appellant to quash and set aside the impugned order dated 30th April, 2019 passed in Special Civil Application No. 4668 of 2016, Special Civil Application No. 4311 of 2016 and Special Civil Application No. 5229 of 2016.
7. From the other side, learned Counsel appearing for the respondent No.1 has supported the findings and reasons arrived at by the learned Single Judge in Special Civil Application No. 4668 of 2016 and allied matters submitting that there is no error committed by learned Single Judge in allowing Special Civil Application in Page 12 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) favour of respondent No.1 He has further submitted that Appellant is a Developer for its scheme and as per their scheme, they have purchased huge chunk of land where they wanted to construct bungalows which would provide common facilities and amenities. Therefore, the Appellant had asked for huge load of 517 KG, which was without meter, and therefore, for development of line from 66 KV sub-station to outskirt the society work which was to be done and transformer was to be installed as mentioned in the estimate. He has further submitted that different amounts were recovered so that development of infrastructure can be made and consumers can get connection. The Application in A1 Form was submitted by the Appellant- Society for the purpose of development of infrastructure. That, the Appellant was agreed to pay and in fact paid the amount of estimate with full knowledge. That it is estimate for development of infrastructure and the Appellant had also filed an undertaking on stamp paper notarized to pay the infrastructure development charges. It is further submitted that after making payment of estimate and completion of work, separate application for new connection were made and thereafter, after passing of two years, appellant made an application for refund of the amount to "CGRS". It is further submitted that u/s. 43 of the Electricity Act connection is to be given, which is always subject to the terms and conditions. He has also Page 13 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) referred Section 45(2) which permits to recover charges. It is further submitted that Section 46 authorizes respondent No.1 regarding power to recover expenditure reasonably incurred in providing the electricity lines for electrical plant. Learned Senior Counsel appearing for respondent No.2 has referred Section 2(20) and 2(22) of the Electricity Act, 2003 which defines electrical line and electrical plant. It is further submitted that development of the infrastructure which is not for electrical connection but for development of infrastructure reasonable expenditure incurred by Respondent No.1 is to be recovered and it is accepted and agreed by the Appellant by giving undertaking on stamp paper duly notarized and thereafter, amount was paid. He has also referred Notification No. 9/2005 of GERC and submitted that Respondent No.1 is permitted to charge reasonable expenditure from the Appellant. That, the Appellant cannot be treated as domestic consumer as rightly held by learned Single Judge. Since this was not an application from domestic consumer but it was for development of infrastructure. It is further submitted that application for infrastructure for service connection without underground distribution systems confined to the premises of the Appellant and it was demanding estimate for development of infrastructure.
7.1 Learned Counsel has relied upon the communication with Page 14 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021
DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) GERC, GUVNL dated 30th December, 2010, 11th May, 2011, 23rd December, 2011 and 21st April, 2011, and submitted that as per request of the Appellant for electrification full cost of electrification was recovered. It is further submitted that case of the appellant would not fall under the Section 4, 4.2(II)(c) that is domestic consumer. That respondent No.1 was to install HT lines as per the demand of the Appellant which falls under Section 4.2(ii). 7.2 Learned Counsel has referred Notification No. 9/2005 and regulations framed by GERC authorizing Licensee's Power to recover expenditure incurred in providing supply and other Misc. Charges. Referring Chapter 3(III), Chapter IV of the GERC (Licensee's Power to Recover Expenditure) Regulations, 2005 and provision 4.1 and 4.2, 4.2(ii), it is submitted that Respondent No.1 is allowed to recover any expenses reasonably incurred to provide any physical line for physical plant specifically for the purpose of giving such supply to the Appellant. It is further submitted that Low Tension Supply, estimate would include the cost of electric line, electric plants and meter arrangements would be based on the latest cost data. That, in case of erect new electrical plant, such as distribution transformer (DTR) along with switch gear etc. for extending supply to the appellant for Low Tension connection, the estimate was prepared including cost of the electrical plant. It is Page 15 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) further submitted that in cases of applications, when the capacity of existing electrical plant is required to be augmented, the differential cost of the existing and new such electrical plant will form the basis of calculation of pro-rata charges. It is further submitted that in case of applications or extension of the HT line for providing supply to the Appellant, estimate of the cost of such section of HT line was made as per KW basis That, distribution licensee shall recovere the cost, as mentioned in sub Clause 4.2(i) and 4.2(ii) from all the applicants except agricultural consumers, water works and sewerage pumps, domestic consumers, commercial consumers upto 100 KVA/125 HP of contract demand. It is further submitted that learned Single Judge has committed no error in allowing the petition preferred by the respondent No.1. In support of his arguments, learned Senior Counsel has relied upon the following three judgment of this Court and requested to dismiss the present appeal and allow Letters Patent Appeal No. 74 of 2014:
1. N.D.M.C.Vs. Sohan Lal Sachdev (Dead) Represented by Mrs. Hirinder Sachdev, W/o. Late Shri Sohan Lal Sachdev reported in 2000 (O) AIJEL-SC-18695
2. Chairman Madhya Pradesh Electricity Board Vs. Shiv Narayan reported in 2005(O) AIJEL-SC-35370
3. Chairman, M.P.Electricity Board & Ors.Versus Shiv Narayan Page 16 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) & Anr.
8. Learned Counsel Mr. Sonal Vyas, for the Respondent No.1 in LPA No. 74 of 2014 has supported the findings and reasons arrived by learned Single Judge as well as The Electricity Ombudsman. She has further submitted that demand of electricity/load was made by the developer and not by consumer. She referred communication dated 10th March, 2011 and submitted that it was specifically stated therein that the building has total 180 units with 9 lifts, and therefore, the bifurcation was made for the purpose of total estimate and demand was for the consumers, who were the occupants of the respective units whether, it was flat or the shop. It was further submitted that appellant was under obligation to supply electricity. She has further referred that the Gujarat Urja Nigam Limited ("GUVNL") by a communication dated 11th May, 2011, made it clear that the recovery of charges from the perspective consumer would be in line with the Torrent Power Limited. She further referred communication dated 30th March, 2010 of GERC and argued that the Appellant was under obligation to apply rates as approved and no discretion is available. The GERC has therefore, also advised to strictly follow the rates fixed by Commission with a specific clarification that if there is any dispute with regard to actual expenditure, they can seek fresh approval from the GERC. That, Page 17 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) Appellant has no business to make any such claim, and therefore, the order passed by learned Single Judge as well as The Electricity Ombudsman in detail referring to every technical aspect, cannot be questioned and present appeal may not be entertained. She further referred the Circular from GERC dated 21st January, 2011 with affidavit-in-reply addressed to the Appellant in respect of charges to be recovered towards service line and transformer centers. She further submitted that the Appellant was requested to recover the fixed charges as per KW basis from the prospective consumers in accordance with GERC approval dated 30.12.2010. That, correspondence and details provides about the methodology to recover the service connection or the charges. It was requested to dismiss the present appeal. She has adopted rest of the the arguments made by learned Counsel Mr. Ravindra Shah appearing for the respondent.
9. Having heard learned Counsel appearing for the respective parties at length and the rival submissions made by them and impugned orders challenged by either side as well as after referring record of respective Special Civil Applications, it appears that the Appellant is shown as Co-operative Housing Society registered under the provision of the Gujarat Co-operative Society Act, 1961. The main object of the Society of the Appellant was to provide 52 Page 18 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) residential accommodation. The Society needed electricity connection for the purpose of construction as well as for all the bungalows for its members. Land of the society was abutting the Town Planning Scheme where the respondent No.1- Company Electric Sub Station was situated and had its distribution mains from where, the respondent No.1-Company was required to lay the service line supplying electricity to the Appellant-Society and its members in accordance with provision of Section 4.1(1) of GERC. Demand on KW basis for total load of 517 KW for supply of electricity from respondent No.l was made by the Appellant. Respondent No.1.Company was bound to recover the charges on KW basis from the Appellant -Society in accordance with the approval dated 30th December, 2010 of GERC. As per the schedule reflected in the communication dated 30th December, 2010 sent by GUVNL to respondent No.1 demand for supply of electricity of low tension in (LT) as defined under Section 2.1.1 of the Supply Code and Regulation 2.1(XII) of the GERC Power to Recover (expenditure) Regulation 2005, was permitted the electric connection was supplied by the respondent No.1 to the Appellant at its premise as define u/s. 2(51) of the Central Act and Section 2.1.1. of Supply Code. The Appellant was "Consumer" of the respondent No.1 as defined under Section 2(15) of the Central Act and Section 2.1.1 of the Supply Page 19 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) Code. Undoubtedly electric supply demanded by the Appellant for itself and its members was for residential usage i.e. for domestic purpose which consist of electric supply of 230 watt i.e. low tension supply Respondent No.1-Company was not entitled to recover the charges towards amounts of HT line/ LT line from the Appellant - Society as well as the amount of Rs.15,89,999/- from the Appellant towards the "Transformer Charges" as the transformer was part of "transmission line" as pointed out in Section 2(72) of the Central Act. It appears that respondent No.1-Company had already established network of its transmission lines in the area of Appellant- Society. The step down transformer forming part of the said transmission line is not part of the "service line" as per Section 2(61) of the Central Act. Here, this Court would like to refer the judgment of ths Divison Bench of Allahabad High Court in case of UP Electricity Board Vs. Smt. Laxmidevi Sehgal and anr. reported in AIR 1977 Allahabad 499 "8. In computing the cost of any "Service Line" as may be laid or placed for the purposes of supply of energy beyond 100 feet of its distributing main, the Board, in terms of Clause VI cannot demand the cost of the transformer from the consumer.
9. "Service Line" as defined by Section 2(1) of Indian Electricity Act, 1910 means any electric supply line through which energy is, or is intended to be supplied-
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(i) to a single consumer either from a distributing main or immediately from the supplier's premiess or
(ii) from a distributing main, to a group of consumers on the same premises or an adjoining premises supplied from the same point of the distributing main."
S. 2(e) of that Act says that 'distributing main' means the portion of any main with which a service line is, or is intended to be, immediately connected. From the definition assigned to "Service Line" and the "Distribution Main", it cannot be said the transformer is a part and parcel of the "Service Line". Further, the first Proviso to Sub-clause (1) of the clause entitles the Board to discontinue supply in the events specified thereunder. It does not give power to the Board to discontinue supply if the consumer failed after the supply had commenced, to deposit the cost of the stolen transformer. Even if it were assumed that the transformer is a part and parcel of the "Service Line", which in our opinion it is not, the claim of the Board that the consumer should bear its replacement cost is, in our opinion, negatived by Sub-clause (2) which provides that the "Service Line" laid for the purposes of supply in pursuance of a requisition under Sub-clause (1), shall be maintained by the licensee. The transformer is the part of the main "transmission line"
as defined by Section 2(7) of the Act. The Electricity Supply Act, 1948 draws a distinction between "Main transmission line" and "Service Line", It is only the cost of the "Service Line" which the prospective consumer has to bear, before the Board complied with his requisition for supply of electricity. Analysed in that manner, we should hold that the transformer is not the part of "Service Line"
and that the Board having once commenced the supply it has to maintain the "Service Line". Neither does 1910 Act nor the Electricity (Supply) Act, 1948 authorise the Board in our opinion to demand the replacement cost of the transformer. This Page 21 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) being so, if a condition as that were added by the Board to the Conditions of Supply, comprising the agreement between it and the Board, such a condition would be void as against the public policy. It is well recognised that public corporations have no implied powers to enter into contracts whereby the performance of their duties to the public is prevented or unduly restricted. It amounts to a condition "so obviously inimical to the interest of the community that it offends almost any concept of the public policy". The Act lays down the conditions to regulate the relationship between the Board and the consumer. No contract would be enforced which would be contrary to the general policy of the law, The consumer may have agreed to abide by the conditions subsequently altered or modified by the agreement, nevertheless, what is injurious to and against the public policy, must be forbidden. Contractual freedom must be fostered but no contract, that tends to circumvent the law creating the corporation, would be countenanced in law. Judged in that manner, the newly added condition No. 23 (a) which the Board seeks to invoke to its aid, is unlawful, in the sense that the law will not enforce it. This disposes of the main submission canvassed by the learned counsel appearing on behalf of the Board.
10. It has been next urged that the rights and obligations arising from under the contract cannot be enforced in the extraordinary proceeding under Article 226 of the Constitution. In general, one cannot quarrel with the correctness of the proposition. But, here we are dealing with, a statutory corporation, the powers and obligations of which have been well defined by the statute creating it, It being a statutory licensee, its duties towards the consumer to supply electricity arise not only by virtue of the agreement but also by the provisions of Clause VI of the Schedule to 1910 Act. If it transgresses the limits of its powers and seeks to impose conditions of supply, not warranted by the Act, an aggrieved person can seek Page 22 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) to enforce its corresponding obligations in pursuance of statutory provisions. This reciprocity of the obligations, apart from its basis in agreement, has in the present case acquired an operative force resting on statutory sanction and equity. This disposes of the second submission.
11. Learned counsel for the Board has vehemently argued that there being no express prohibition by law to agree to the condition of the nature as is contained in Condition No. 23 (a), and the consumer having agreed to its incorporation in the agreement by Condition No. 10 (1) of the Agreement, even if it were something beyond the conditions prescribed by Clause VI of the Schedule, the Court should refuse to nullify the bargain at the instance of the consumer. In support of this contention our attention has been invited to Lachoo Mal v. Radhey Shyam (AIR 1971 SC 2213) and in particular to Paragraph 248 in Halsbury's Laws of England. Volume 8, Third Edition, where at page 143 it is stated:
"As a general rule, any person can enter into a binding contract to waive the benefits conferred upon him by an Act of Parliament, or, as it is said can contract himself out of the Act, unless it can be shown that such an agreement is in the circumstances of the particular case contrary to public policy. Statutory conditions may, however, be imposed in such terms that they cannot be waived by agreement, and, in certain circumstances, the legislature has expressly provided that any such agreement shall be void."
12. The case at hand falls, in our opinion, within the category of cases where the enforcement of such a condition would amount to disobedience of law. As already discussed in the foregoing, the insertion of Condition No. 23 (a), having regard to the scheme of 1916 and 1948 Acts, would be contrary to public policy. It is well known that no contract would be enforced which is contrary to the Page 23 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) general policy of the law or is detrimental to the interest of the consumer, which the State has to protect in the interest of the public good. Thej case of Lachoo Mal v. Radhey Shyam (AIR 1971 SC 2213) (supra) was one arising under the U. P. (Temporary) Control of Rent and Eviction Act, 1947 wherein the landlord had waived the exemption benefit available to him for constructions made after 1-1- 1951. The agreement was neither illegal nor did it defeat the provisions of any law within the meaning of Section 23, Contract Act and, therefore, their Lordships of the Supreme Court held that the landlord could give up the benefit which otherwise could be available to him under Section 1-A of the Act. Manifestly and for reasons which we need not repeat, that principle does not govern the point in controversy here.
10. The aforesaid ratio laid down by the Division Bench of the Allahabad High Court would squarely applied to the present case. As GUVNL was incorporated as a Government of Gujarat Company and it is holding 100% shares in all the six DISCOMS including the respondent No.1 UGVCL. The Transformer, HT/LT lines etc. would not form part of the service line and despite GERC's earlier directive dated 21/4/2011 was not complied with by the parent company i.e. UGVCL and its subsidiary companies so as not to recover charges of the same from their consumers, GERC was compelled to issue the subsequent direction again prohibiting them from recovering such charges. It appears that thereafter, respondent No.1-Company stopped its practice from recovery such charges from its consumers of Page 24 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) all categories like the Appellant which is clear from para 10.4 of the impugned judgment. Undisputedly, the GERC, is a statutory authority and its directions are binding to the respondent No.1 - Company . Both the directions issued by the GERC, however, they were never challenged by the respondent No.1- Company or its parent company i.e. GUVNL. The Hon'ble Apex Court in case of U.P. Power Corporation Ltd Vs. National Thermal Power Corporation Ltd. And others reported in (2011) 12 SCC 400 has laid down as under :-
10. Upon hearing the learned counsel for the parties and upon perusal of the record, we find that several factual issues with regard to calculation of capital employed are involved in these appeals.
The issues are not only based on the principles on which the amount of interest and the energy charges are to be determined but they also depend upon certain other technical and factual aspects.
11. Our attention was drawn to the judgment delivered by this Court in the case of WEST BENGAL ELECTRICITY REGULATORY COMMISSION v. CESC LTD. reported in (2002) 8 SCC 715 and more particularly to Para 102 of the same judgment, which reads as under:
"102. We notice that the Commission constituted under Section 17 of the 1998 Act is an expert body and the determination of tariff which has to be made by the Commission involves a very highly technical procedure, requiring working knowledge of law, engineering, finance, commerce, economics and management. A perusal of the report of ASCI as well Page 25 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) as that of the Commission abundantly proves this fact. Therefore, we think it would be more appropriate and effective if a statutory appeal is provided to a similar expert body, so that the various questions which are factual and technical that arise in such an appeal, get appropriate consideration in the first appellate stage also. From Section 4 of the 1998 Act, we notice that the Central Electricity Regulatory Commission which has a judicial member as also a number of other members having varied qualifications, is better equipped to appreciate the technical and factual questions involved in the appeals arising from the orders of the Commission. Without meaning any disrespect to the Judges of the High Court, we think neither the High Court nor the Supreme Court would in reality be appropriate appellate forums in dealing with this type of factual and technical matters. Therefore, we recommend that the appellate power against an order of the State Commission under the 1998 Act should be conferred either on the Central Electricity Regulatory Commission or on a similar body. We notice that under the Telecom Regulatory Authority of India Act, 1997 in Chapter IV, a similar provision is made for an appeal to a Special Appellate Tribunal and thereafter a further appeal to the Supreme Court on questions of law only. We think a similar appellate provision may be considered to make the relief of appeal more effective."
12. Looking to the observations made by this Court to the effect that the Central Commission constituted under Section 3 of the Act is an expert body which has been entrusted with Page 26 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) the task of determination of tariff and as determination of tariff involves highly technical procedure requiring not only working knowledge of law but also of engineering, finance, commerce, economics and management, this Court was firmly of the view that the issues with regard to determination of tariff should be left to the said expert body and ordinarily High Court and even this Court should not interfere with the determination of tariff.
13. Looking to the aforestated legal position and in view of the technical aspect involved in the impugned order with regard to determination of tariff, which we prima facie find to have been determined in a just and proper manner, we are of the view that the conclusion arrived at by the Tribunal in the impugned orders do not appear to be unreasonable or unjustified and therefore, in our opinion the impugned orders require no interference by this Court and, therefore, all these appeals are dismissed with no order as to costs.
11. The provision of Section 43 of the Central Act mandates DISCOMS Act to supply electricity to the premises of consumers and as per Section 46 thereof to recover reasonably incurred in supply such electricity. The said provisions read as under :-
43. Duty to supply on request"
(1) Save as otherwise provided in this Act, every distribution licensee, shall, on an application by the owner or occupier of any premises, give supply of electricity to such premises, within one month after receipt of the application requiring such supply:Page 27 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022
C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) Provided that where such supply requires extension of distribution mains, or commissioning of new sub-
stations, the distribution licensee shall supply the electricity to such premises immediately after such extension or commissioning or within such period as may be specified by the Appropriate Commission:
(2) It shall be the duty of every distribution licensee to provide, if required, electric plant or electric line for giving electric supply to the premises specified in sub-
section (1) :
Provided that no person shall be entitled to demand, or to continue to receive, from a licensee a supply of electricity for any premises having a separate supply unless he has agreed with the licensee to pay to him such price as determined by the Appropriate Commission.
1. (3) If a distribution licensee fails to supply the electricity within the period specified in sub-section (1), he shall be liable to a penalty which may extend to one thousand rupees for each day of default.
46: Power to recover expenditure:
The State Commission may, by regulations, authorise a distribution licensee to charge from a person requiring a supply of electricity in pursuance of section 43 any expenses reasonably incurred in providing any electric line or electrical plant used for the purpose of giving that supply. [Emphasis supplied] Page 28 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) 7.1 In accordance with the aforesaid provisions of the Central Act, the following provisions are made in the GERC (Power to Recover Expenditure) Regulations, 2005.
3. Duty Of The Distribution Licensee To Supply Electricity On Request And Recovery Of Expenditure
(i) The Distribution Licensee shall, subject to the provisions contained in Section 43 of the Act, fulfill his obligation to supply electricity to the premises of consumers.
(iii) Subject to the provisions of the Act and these Regulations and subject to such directions, orders or guidelines as the Commission may issue from time to time, every Distribution Licensee is allowed to be recovered from an applicant, requiring supply of electricity, any expenses that the Distribution Licensee shall be required to reasonably incur to provide any electric line or electrical plant specifically for the purpose of giving such supply to the applicant.
(iii) The Licensee shall lay free of charge a service line (overhead line or underground cable depending upon the type of distribution system existing) up to a length of 30 meters from its nearest distributing main on public roads, outside the limits of the property in respect of which requisition for electricity supply is received.
[Emphasis Supplied]
7.2. Similarly, in accordance wiht the aforesaid
Page 29 of 34
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C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021
DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) provisions of the Central Act, the following provisions are made in this regard in the GERC (Distribution Licensee ) Regulations, 2005.
21. Obligation to supply on demand
(i) Subject to the provisions of the Act, the Distribution Licensee shall, on the application of the owner or occupier of any premises within the Area of Licence, give supply of electricity to such premises within one month of the receipt of such application or within such period as may be specified by the Commission if such supply requires extension of distribution mains or new substations.
(ii) Where the owner or occupier of any premises requires supply of electricity under the terms of clause (i) above, the application shall be made in a form prescribed by the Commission and the procedure for responding to that application shall be in accordance with the procedure approved by the Commission;
(iii) The Distribution Licensee shall have the duty to provide, if required, any electric plant or electric line for providing the electric supply to the premises in terms of clause (i) above.
Provided that no person shall be entitled to demand, or to continue to receive, from a Licensee (including a Distribution Licensee) a supply of electricity for any premises having a separate supply unless he has agreed with the Licensee (including the Distribution Licensee) to Page 30 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) pay to it such price as determined by the Commission.
(iv) The Distribution Licensee shall always endeavour to procure adequate power of appropriate quality for supply to consumers.
12. It appears from record that GERC has categorized the prospective consumers in the following 6 (Six) categories according to the type of premises (1) Residential (2) Commercial (3) Industrial (4) Institutional (5) Agricultural and (6) Others. The application made by the Appellant -Society marking in Col 6 showing "infrastructure development" is not category and apart from not being recognized as such by the GERC in the supply code. It is not so recognized in any of the enactments being the Central Act, State Act, supply Code or any of the Regulations framed by the GERC. It appears that application printed by the Respondent No.1 -Company is not as per Form A-I of the Supply Code. The Form A-I does not contain the words "ma>g`Ino hetu AO2oigk hoy to ]2ogno p/kar"
Respondent No.1-Company has deliberately included such words in its printed application form. The Appellant Society did not ask for an Industrial connection and thus the check box of "Industrial connection" was unchecked. The words "infrastructure development"
written against the words " ma>g`Ino hetu AO2oigk hoy to ]2ogno p/kar" do not make any sense. As per the requirement of the Form A- Page 31 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022
C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) I to demand the electricity supply in terms of KW as well as the approval given by GERC dated 30.12.2010, the Appellant -Society has demanded the same by not only clearly stipulating and mentioning specifically for 52 residences but also given breakup of such demand of load in KW for such residences as per their requirement. Even otherwise, mere mentioning of the said word only in the application of Appellant-Society was not relevance to the action of the Respondent No.1-Company in recovering the amounts of Transformer and HT line charges from the Appellant -Society in total absence of any authority much less legal and in the teeth of the aforesaid prohibitory direction dated 21.4.2011 reiterated by the GERC vide its impugned direction dated 3.6.2014. We are not agreement with the findings given by learned Single Judge in Special Civil Application No. 4668 of 2016; Special Civil Application No. 4311 of 2016 and Special Civil Application No. 5229 of 2016. Herein, We are in complete agreement with the findings and reasoning arrived at by the learned Single Judge in its order dated 22 nd October, 2012 in Special Civil Application No. 3739 of 2012.
13. From the record, it clearly transpires that vide Proposal No. GUVNL/Tech/2658 dated 4th December, 2010, approval was sought from GERC to permit it to recover expenditure from its consumers on KW load demand basis in line with the Torrent Power Limited. Page 32 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022
C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) The said proposal was approved by the GERC on 30th December, 2010. Despite the said approval, the subsidiary DISCOMS of GUVNL had recovered separate charges relating to HT line and distribution transformers from its consumers, thereafter, the GERC again vide letter dated 23rd February, 2011 addressed to GUVNL clearly stipulated that Torrent Power Limited had not recovered any separate charges relating to HT line and distribution transformer, however, if GUVNL wanted any refund of charges to be recovered in any of the categories, may submit revised per KW rate basis on actual expenditure relating to HT line charges. There is nothing on record that respondent No.1 or GUVNL again across the GERC to revise per KW rates based on its actual expenditure relating to HT line charges and same was not done until 2014 and continue to recover transformer charges, separate HT/LT charges from its consumer indefiance of the directives of GERC dated 21st April, 2011. It compelled the GERC again to send directives on 3rd June, 2014 to the Managing Director of the GUVNL being parent Company and its subsidiary Company including respondent No.1 and thereafter practice to recover separate charges relating to HT line and distribution transformer was discontinued.
14. Considering the aforesaid facts and provisions as referred in the judgment, respondent No1 is not entitled to recover (1) transformer Page 33 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022 C/LPA/74/2014 CAV JUDGMENT DATED: 30/06/2021 DAKSHIN GUJARAT VIJ COMPANY LIMITED Vs. LAND MARK CORPORATION & 1 other(s) charges (2) Separate High Tension (HT) line (LT) line charges from the Appellant inspite of the prohibitory direction issued by the GERC.
15. Under the circumstances, the amount so recovered by the respondent No.1-Electric Company from the Appellant on 30th June, 2013 needs to be refunded to the Appellant. Hence, we pass the following order:-
The amount recovered by the respondent No.1 from the Appellant shall be refunded within a period of 4 weeks from the date of passing of the order.
16. Hence, Letters Patent Appeal No. 1582 of 2019; Letters Patent Appeal No. 1583 of 2019 and Letters Patent Appeal No. 1584 of 2019 are hereby allowed. LPA No. 74 of 2014 is hereby dismissed. Impugned judgments and orders passed in Special Civil Application No. 4311 of 2016, Special Civil Application No. 4668 of 2016 and Special Civil Application no. 5229 of 2016 passed by learned Single Judge are hereby quashed and set aside. Judgment and order passed in Special Civil Application No. 3739 of 2012 is hereby confirmed.
(DR. VINEET KOTHARI,J) (B.N. KARIA, J) BEENA SHAH Page 34 of 34 Downloaded on : Sat Jan 15 09:35:36 IST 2022