Orissa High Court
Nilamani Pany vs State Of Orissa And Others on 13 November, 2017
Equivalent citations: AIRONLINE 2018 ORI 392
Author: S. N. Prasad
Bench: Sujit Narayan Prasad
HIGH COURT OF ORISSA: CUTTACK.
O.J.C. No.3431 of 2002
In the matter of application under Articles 226 and 227 of the
Constitution of India.
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Nilamani Pany ...... Petitioner
- Versus-
State of Orissa and others ...... Opposite Parties
For Petitioner : M/s. J.K. Rath, S.N. Rath, P.K. Rout, S.
Mishra, C.K. Rajguru, D.N. Rath.
For Opposite Parties :Addl. Govt. Advocate, M/s. B.K. Nayak,
D.K. Mohanty.
PRESENT:
THE HONOURABLE SHRI JUSTICE SUJIT NARAYAN PRASAD
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Date of hearing and judgment : 13.11.2017
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S. N. Prasad, J.This writ petition is under Article 226 and 227 of the Constitution of India, whereby and where under the decision taken by the opposite party no.5 under Annexure-11 dated 28.01.2002 has been sought to be quashed.
2. Brief facts of the case of the petitioner is that the petitioner- unit is registered under the District industries Center, Dhenkanal on 2 6.11.1985 and was allotted a Registration Number bearing No.150510 PMT-OSI dated 6.11.1985. The unit has been taken as Small Scale of Industry as per the Industrial Policy of the State Government that was in vogue during the relevant period. The State Government has come out with the Industrial Policy Rules known as IPR made from time to time the Hotel Unit is taken as Industrial Unit for which it was necessary to make registration with the Industries Department and accordingly the District Industries Center were authorized to register such Unit as an Industrial Units so as to facilitate the benefit of the Industrial Policy of the State Government as extended from time to time of the State Government such as finance, Tax, Deduction, Moratorium benefit and that of electricity tariff.
The petitioner-Unit has made an agreement for consumption of 56 K.W. per month and since the Hotel is taken as Small Scale industries unit, the electricity tariff meant for small scale industries were made applicable to the Hotel Units including to that of petitioner's unit. The petitioner-Company has also availed loan from the Orissa State Finance Corporation (in short 'OSFC') and while approved by the State Government under the Tourism and Culture Department as an approved Hotel of the State. Accordingly, the petitioner-unit is entitled to the benefit of the Industrial tariff rate as per the provision of Clause-21(5) of IPR to the effect that "Power supply to existing and new Hotels shall be made at the Industrial tariff rate of the Orissa State Electricity Board. The State Government has come out with different Industrial Policy, time to time as 3 would be evident from the Industrial Policy Resolution, 1992 and Industrial Policy Resolution, 1996.
3. As per the Industrial Policy, 1992 under Clause 4.2, the provision has been made that the industrial unit is covered under the earlier policy resolutions shall continue to enjoy the incentives admissible under the relevant I.P.R. for such periods as are mentioned there, not only that, Clause 17 of the IPR, 1992, provided for promotion of tourism in the State of Orissa, new Hotels/Motels/way side amenities centers will be eligible for supply of power at Industrial tariff of the O.S.E.B. provided such units to satisfy the norms and conditions stipulated by the State Government. Hence, in view of the said provision, the petitioner-unit which was registered under District Industries Center, Dhenkanal as an industry was enjoying the power supply at industrial tariff and was having no problem in any manner, the Orissa Tourism policy, 1997 also extended Clause-14, the same benefit to the hotel units, hence the petitioner has approached to the authorities to extend the benefit of industrial tariff to the hotel units but the same has been rejected while the decision taken by them under Annexure-11 dated 28.01.2002 of the writ petition, which is impugned in the instant writ petition.
4. Learned Senior Counsel, appearing for the petitioner while arguing the case, has submitted that the rejection of the claim of the petitioner is without any application of mind and the reason given therein 4 i.e. the Hotel in question comes under the Commercial tariff category in view of Clause-80 (b) of the OERC distribution code, 1998 and the benefit of industrial tariff was extended under the industrial policy resolution under State Government by the O.S.E.B and the GRIDCO, since the policy resolution is no more in force, hence the industrial establishment will be charged under the commercial tariff category as per the tariff applicable.
Learned Counsel further submits that the authority while passing the said order, the provision of industrial policy rules has not been taken into consideration, wherein in order to develop the tourism, the Hotel has been brought under the fold of Industrial Policy Resolution.
5. While on the other hand, learned counsel appearing for opposite parties 4 and 5 has submitted that the Orissa Government in order to make reform in the power sector passed legislation known as Orissa Electricity Reform Act, 1995 under the Reform Act, the Orissa Electricity Regulatory Commission (in short 'OERC') was created. In exercise of power conferred under the Reforms Act, OERC framed the regulation known as OERC (Distribution and Conditions of Supply) Code, 1998 to govern distribution and supply of electricity and procedures thereof such as the system of billing, modality of payment of bills, the powers, functions and obligations of the suppliers and the rights and obligations of consumers and matters connected therewith and incidental thereto. The 5 said code at the relevant time has its application and is binding all types of consumers and suppliers. Chapter-VII of the Code 1998 deals with "Classification of Consumer" Clause 80 of the said Chapter provides that the licensee may classify or reclassify the consumers into various categories from time to time as may be approved by the Commission and fix different tariffs and conditions of supply of power to different classes of consumers. Clause 80(b) of the Code deals with "commercial category of consumers", which relates to supply of power to premises which are used for office, business, commercial or other purposes not covered under any other category with a contract demand up to but excluding 110KVA and where the non-domestic load exceeds 10% of the total connected load.
Subsequently, the Parliament has enacted Electricity Act, 2003 (in short "Act 2003") which came into force w.e.f. 10.06.2003, Section 185(3) of the Act, 2003 has saved the Orissa Electricity Reform Act, 1995. In exercise of power conferred under Section 181 of the Electricity Act, 2003 read with Section 50 of the Act, 2003, the Commission framed the O.E.R.C. (Distribution and Conditions of Supply) Code, 2004. Chapter-VII of Code, 2004 deals with classification of consumers. Clause 80 of the said Chapter provides that the licensee may classify or reclassify the consumer into various categories from time to time as may be approved by the Commission and fix different tariff and conditions of supply of power to different classes of consumers. Clause 80(2) of the Code, 2004 deals with "General Purpose" category of consumers.
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6. A close reading of both the O.E.R.C. (Distribution and Conditions of Supply) Code, 1998 and O.E.R.C. Distribution and Conditions of Supply) Code, 2004, it would be evident that in the Code 1998 the word 'commercial' was used but in the Code, 2004, it has been substituted as "General Purpose". The Categorization which was existing on the basis of the load in the Code, 1998 is no more available in Code 2004.
The provision has been made under the Reform Act, 1995 that the State Government is entitled to issue policy directives, on matters concerning electricity in the State. Section 12 (iii) of the Act provides that the State Government shall be entitled to issue policy directives, concerning the subsidies to be allowed for supply of electricity to any class or classes or person or in respect of any area in addition to the subsidies permitted by the Commission while regulating and approving the tariff structure. Provided that, the State Government shall pay the amount to compensate any concerned body or unit affected by the grant of subsidies by the State Government to the extent the subsidies granted. But the State Government has refused to provide any subsidy to any distribution company and as such there is no question of providing any subsidies, in such a case where the Government has not decided to compensate the licensee in advance before the extension of the benefit. In view of such assertion, it has been argued that the petitioner has got no case.
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7. Learned Senior Counsel while responding has submitted that this case is squarely covered under the judgment rendered by the Coordinate Bench of this Court passed in W.P.(C) No.10928 of 2007 rendered in the case of Dwaraka Resorts Pvt. Ltd. vrs. State of Odisha and others wherein the judgment pronounced on 23.12.2014.
Heard the learned counsel for the parties and on perusal of the rival submission, it is evident that the petitioner is claiming for extension of benefit under the Industrial Policy Resolution, which has been rejected on the ground that the Hotel-unit has been declared by the authority as the commercial unit.
8. This Court in order to appreciate the rival submissions, thought it proper to discuss certain statutory provision before going into the legality and propriety of the decision taken by the authority which is impugned in this writ petition.
The Orissa State Electricity Board (in short 'OSEB') was the licensee in the State prior to commencement of the Orissa Electricity Reform Act, 1995 (in short "Act 1995) wherein the provision has been made under Section 12 conferring power upon the State Government, for ready reference, the same is being reproduced herein below:-
"12. General Powers of the State Government- (1) The State Government shall have the power to issue policy directives on matters concerning electricity in the State 8 including the overall planning and coordination and all such policy directives shall be consistent with the objects sought to be achieved by this Act.
(2) If any dispute arises between the Commission and the State Government as to whether a question is or is not a question of policy, it shall be referred to the Central Electricity Authority whose decision thereon shall be final and binding and for this purpose the Central Electricity Authority may appoint one or more of its members to act on behalf of the said authority.
(3) The State Government shall be entitled to issue policy directives, concerning the subsidies to be allowed for supply of electricity to any class classes or persons or in respect of any area in addition to the subsidies permitted by the Commission while regulating and approving the tariff structure.
Provided that the State Government shall pay shall pay the amount to compensate any concerned body or unit affected by the grant of subsidies by the State Government to the extent the subsidies granted."
It is evident from the said provision that the State Government have the power to issue policy directives on matters concerning electricity in the State with the objects sought to be achieved by the Act. The State Government shall be entitled to issue policy directives, concerning the subsidies to be allowed for supply of electricity to any class or classes or persons or in respect of any area in addition to the subsidies permitted by the Commission, provided that the State Government shall pay shall pay the amount to compensate any concerned body or unit affected by the grant of subsidies by the State Government to the extent the subsidies granted.
After coming into effect of the Electricity Act, 2003, the provision has been made under Section 65 to provide subsidy by the State 9 Government, which is the parameteria to Section 12 of the Orissa Electricity Reform Act, 1995, for ready reference the same is being reproduced herein below:-
"65. Provision of subsidy by State Government - If the State Government requires the grant of any subsidy to any consumer or class of consumers in the tariff determined by the State Commission under Section 62, the State Government shall, notwithstanding any direction which may be given under section 108, pay, within in advance in the manner as may be specified, by the State Commission the amount to compensate the person affected by the grant of subsidy in the manner the State Commission may direct, as a condition for the licence or any other person concerned to implement the subsidy provided for by the State Government.
Provided that no such direction of the State Government shall be operative if the payment is not made in accordance with the provision contained in this section and the tariff fixed by State Commission shall be applicable from the date of issue of orders by the Commission."
Section 185 of the Electricity Act, 2003 provides the repeal and saving clause wherein under the provision of 185(3), it has been provided that the provision of the enactments specified in the Schedule, not inconsistent with the provision of this Act, shall apply to the State in which such enactments are applicable and in view of the saving clause, the provision of the Act, 1995 is being carried.
9. It is, thus, evident that before seeking any subsidy, it is upon the State Government to compensate the licensee affected by the grant of subsidies to the extent the subsidies granted, while Section 65 of the Act, 2003 contains a provision that the provision of subsidy by the State Government is subject to the proviso that no such direction of the State Government shall be operative if the payment is not made in accordance 10 with the provisions contained in the Section and the tariff fixed by the State Commission shall be applicable from the date of issue of orders by the Commission.
10. It is evident from the joint reading of Section 12 (3) of the Reform Act, 1995 and the provisions of Section 65 of the Act, 2003 that the State Government is empowered to take decision for granting subsidy but subject to conditions that the licensee is to be compensated to the amount or extent of subsidies and if there is no decision taken in this regard, the decision of Regulatory Commission will prevail.
11. It is evident from the pleading made in the counter affidavit that the State Government has refused to provide any subsidy to any distribution company as would be evident from para-7 of the counter affidavit, wherein at para-6.1.5. of the tariff order for the financial year 2001-2002, the Commission has observed as being referred herein below:-
"6.1.5.- The Commission is convinced that subsidies are not in harmony with the spirit of Reforms Act, 1995. In any case, the Government cannot afford to grant subsidy to Companies or consumers for the electricity they consume xxx xxx. As a result of; total withdrawal of subsidies in Orissa, the tariff rise has to be of considerable magnitude if cause reflective tariff has to be adopted in 2000-01. In response to the Commission's query to ascertain whether Government was prepared to grant subsidy or subvention to reduce the impact of tariff increase, the State Government has clearly stated that they are not in a position to provide subsidy or subvention which could have resulted in lower bulk supply tariff and enhanced financial viability of WESCO."11
In the light of the legal position, the case of the petitioner is to be seen and also to be seen as to whether the judgment rendered in the case of Dwarka Resorts is applicable in the facts and circumstances of this case or not.
12. It has not been brought on record by the petitioner in the entire pleading of the writ petition that they have taken any endeavour by making an application before the State Government for seeking subsidy under the IPR. It is also not reflected in the order impugned.
13. The petitioner is only claiming on the basis of the Industrial Policy Resolution, 1996. At this juncture, the reference of Industrial Policy Resolution needs to be made, the purpose for enhancing the industrial policies by the State Government to maintain and enhance the tempo of industrialisation in the State, accordingly, Industrial policies has been issued from time to time. The Industrial Policy for the purpose of the instant case is relevant i.e. the Industrial Policy, 1992 or 1996 , the petitioner is claiming by virtue of the said Industrial Policy Resolution, since the petitioner-establishment as started from the year 1985.
The Industrial policy Resolution 1992 (in short IPR 1992) reflects the category of promotion of tourism under clause-17 and that reflects as under:
"17. Promotion of tourism-12
17.1. "New hotels/motels and way-side amenities centres" means a hotel/motel/way-side amenities centre for which investment on land, building and equipment is made only on or after effective date."
Under clause 17(2), it has been provided that new hotels/motels/way-side amenities centres will be eligible for supply of power at industrial tariff rate of the OSEB, provided such units satisfy the norms and conditions stipulated by the State Government.
14. It is the admitted fact here that the petitioner's hotel is not new hotels or motels or way-side amenities centre, for which investment on land, building and equipment is made only on or after effective date. Under the IPR 1992 or 1996, the effective date would be the date of issuance of the policy, meaning thereby the construction of the hotels is on the date of issuance of the policy but admittedly the petitioner-hotel herein is continuing since 1985 and as such the petitioner's hotel will not come under the purview of Clause-17 of IPR 1992 or paramater provision to it under Clause 16 (i) of IPR 1996. The petitioner's hotel is also not coming under the purview of the IPR 1992 or 1996, in view of the fact that under the provision of clause 17 of the IPR, 1992 or under the provision of clause 16 of the IPR 1996, the benefit of subsidy is to be given subject to satisfaction of norms/conditions as stipulated by the State Government as has been dealt with hereinabove that under the Reform Act, 1995 or the Electricity Act 2003, the provision has been made under Section 12 (3) of 13 the Reform Act, 1995 and under Section 65 of the Electricity Act, 2003 that the subsidy to the consumer would be given under the Industrial Policy Resolution subject to the decision of the State Government to the effect that the State Government will compensate the extent of the amount of subsidy and then only it can be given.
15. Here in the instant case, nothing has been brought on record by the petitioner as to whether the State has taken any decision in consonance with the said provision and thereby they are entitled to get the benefit. So far as applicability of the judgment rendered in the case of Dwaraka Hotel Ltd. is concerned, all these factual aspects which has been dealt herewith is not under reference in the said judgment.
It is settled that there cannot be any universal application of any judgment rather it depends upon the facts and circumstances of the case, but whatever has been discussed above regarding the factual aspect read with the legal position, since the same is not available in the case of Dwarka Resorts, hence the ratio of the said judgment is not applicable in the facts and circumstances of this case.
16. In the entirety of facts and circumstances of this case and in view of the provision under Clause 80(b) of the OERC (Distribution and Conditions of Supply) Code 1998, the hotel in question since comes under the commercial tariff category and as such the decision taken by the 14 authority declining to extend the benefit of Industrial Policy Resolution has rightly been refused.
In view thereof, this Court declines to interfere with the decision of the authority.
In the result, the writ petition is dismissed.
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S. N. Prasad, J.
Orissa High Court, Cuttack, Dated the 13th November, 2017/RRJena