Ashok Bhushan, J.@mdashHeard Sri B.C. Rai, learned Counsel for the petitioners and Sri Ravi Kant, Senior Advocate, assisted by Sri Pankaj Kumar Shukla for the Paschimanchal Vidyut Vitran Nigam Limited (hereinafter referred to as the Corporation).
2. Both the writ petitions raise similar issues and have been heard together. Pleadings in Writ Petition No. 30363 of 2009 (hereinafter referred to as the first writ petition) are complete and counsel for the parties agree that both the writ petitions be finally decided.
3. Brief facts giving rise to this writ petition are; the petitioner was sanctioned, in the year 1997, load of 97 KVA by U.P. State Electricity Board. An assessment dated 12th April, 1999 was made against the petitioner alleging theft of electricity for an amount of Rs. 8,38,998/-. The appeal filed by the petitioner against the said assessment was dismissed by the Regional Appellate Committee on 29th April, 2000 against which petitioner filed a writ petition being Writ Petition No. 29916 of 2000. An interim order was passed by this Court on 14th July, 2000 directing for restoration of supply subject to petitioner depositing Rs. 4,00,000/- with stipulation that petitioner would continue to deposit the current bills. The petitioner deposited an amount of Rs. 4,00,000/- within the stipulated time and thereafter continued to deposit the current bills issued from time to time. Writ Petition No. 29916 of 2009 is said to be pending. An application was made by the petitioner on 18thFebruary, 2009 for enhancement of contracted load from 97 KVA to 150 KVA. The enhancement of load was sanctioned vide order dated 15th April, 2009. The terms and conditions were issued vide order dated 16th April, 2009 demanding an amount of Rs. 2,97,800/- as line charges and security etc. The petitioner deposited the said amount and an agreement for supply was also submitted by the petitioner. The petitioner filed a writ petition being Writ Petition No. 30363 (the first writ petition) praying for quashing Condition No. 5 in the order dated 15th April, 2009, which required that the provisions of the U.P. Electricity Supply Code 2005 be strictly complied with. A direction was also sought for releasing the additional load. The writ petition was filed on 17th June, 2009. A letter dated 23rd June, 2009 was issued to the petitioner asking him to provide bank guarantee of an amount of Rs. 23,17,038/- as required by Clause 4.49 of the U.P. Electricity Supply Code 2005. Writ Petition No. 32562 of 2009 has been filed by the petitioner praying for following relief:
(I) issue a writ, order or direction in the nature of writ of certiorari calling for the records and to quash the impugned order dated 23rd June, 2009 (Annexure-1 to the writ petition) passed by the Respondent No. 2;
(II) pass appropriate writ, order or direction declaring Clause 4.49 of Code, 2005 to the extent it provides to furnish Bank Guarantee as ultra-vires being unconstitutional;
(III) issue writ order or direction in the nature of mandamus commanding the Respondent No. 2 to release the additional load of Petitioner Company without asking the petitioner Company to furnish Bank Guarantee of astronomically inflated figure of Rs. 23,17,038/-.
4. A counter affidavit has been filed by the Corporation in Writ Petition No. 30363 of 2009 (first writ petition) referring to provisions of Clause 4.43 and 4.40 of the U.P. Electricity Supply Code 2005 justifying the demand of bank guarantee for releasing the enhanced load. It is stated in the counter affidavit that since the amount assessed against the petitioner is stayed by interim order of this Court dated 14th July, 2000, the additional load can be released only on submission of the bank guarantee for the amount along with surcharge. It has been stated that petitioner having not fulfilled the condition of Clause 4.43(a)(iv) of U.P. Electricity Supply Code 2005, the load has not been released.
5. Sri B.C. Rai, learned Counsel for the petitioner raised following submissions in support of the writ petitions:
1. Clause 4.49 of U.P. Electricity Supply Code 2005 is ultra vires, it being beyond the matters provided u/s 50 of the Electricity Act, 2003. It is submitted that Section 50 of the Electricity Act, 2003 empowers the State Electricity Regulatory Commission to provide for recovery of the electricity charges, intervals for billing of electricity charges, disconnection of supply of electricity for non payment thereof, restoration of supply of electricity, measures for preventing tampering, distress or damage to electrical plant or electrical line or meter, entry of distribution licensee or any person acting on his behalf for disconnecting supply and removing the meter, entry for replacing, altering or maintaining electric lines or electrical plants or meters and it does not include any power to demand a bank guarantee for an amount, which has been stayed by this Court, hence Clause 4.49 is beyond the ambit of Section 50 and is ultra vires to the Act.
2. Section 181(2) of the Electricity Act, 2003 empowers the State Electricity Regulatory Commission for framing regulations determining fiscal liabilities u/s 45, 46 and 47 of the Act, therefore, items covered under the different heads u/s 181(2) of the Electricity Act, 2003 clearly exclude exercise of such power u/s 50 of the Electricity Act, 2003. The regulation making power u/s 181(2) stands on a high pedestal in respect of subject matter engrafted under Clauses (p), (q), (r), (s), (t), (u), (v) and (w). The State Electricity Regulatory Commission could not have bring the above items within the net of U.P. Electricity Supply Code.
3. The assessment amount having been stayed by this Court by order dated 14th July, 2000, which interim order is still continuing, an order asking for submission of bank guarantee to cover the said amount is interference with the High Court''s power of judicial review and the provisions of Clause 4.49, which abridges the Court''s order deserves to be struck down.
4. Clause 4.49 of U.P. Electricity Supply Code 2005 is ultra vires to the provisions of Sections 127(2) and 127(6) of the Electricity Act, 2003 read with Clause 6.8(d)(iv) of U.P. Electricity Supply Code 2005. The Clause 4.49 is also ultra vires to Section 56(2) of the Electricity Act, 2003.
6. Learned Counsel for the petitioner has relied on various judgments of the Apex Court and this Court, which shall be referred to hereinafter while considering the submissions in detail.
7. Sri Ravi Kant, Senior Advocate, appearing for the respondent-Corporation, refuting the submissions of counsel for the petitioner, contended that Clause 4.49 of U.P. Electricity Supply Code 2005 is intra vires. It is submitted that the provisions contained in U.P. Electricity Supply Code 2005 are not confined to subject mattes as contained in Section 50 of the Electricity Act, 2003 only, rather U.P. Electricity Supply Code 2005 has been framed on the subject matters as contained in Sections 43 - 48 and 50 of the Electricity Act, 2003 and covers the different heads as mentioned in Section 181(2) of the Electricity Act, 2003. The State Electricity Regulatory Commission has ample jurisdiction to frame regulations under various heads as mentioned in Section 181(2) and Clause 4.49 is fully covered by the regulation making power of State Electricity Regulatory Commission and the submission that clause is ultra vires is incorrect. The U.P. Electricity Supply Code 2005 is nothing but a compilation of regulations exercising power u/s 181 of the Electricity Act, 2003. Even if Section 50 was not there, the power to frame law as encompassed by Section 50 would have been encompassed by Section 181(1) of the Electricity Act, 2003. The statement of object and reasons appended to the U.P. Electricity Supply Code 2005 provide valuable key to the intention of the Legislature in framing the Code. The power to make law on a substantive topic would also subsume within its fold ancillary or subsidiary matters. The Court has to proceed with a presumption that such legislation is intra vires. Further Section 86(1) of the Electricity Act, 2003 enumerates functions of the State Electricity Regulatory Commission which also includes "supply". The word "supply" has to be read more liberally as to include within its fold even the power of adopting measures for protecting/preserving one''s revenue or recovery thereof. Clause 4.49 is nothing but a measure for protection from apprehended and future losses. The measures are ancillary to make provision for supply.
8. Replying the submissions of the petitioner that Clause 4.49 interferes with the power of the Court, it is contended that Clause 4.49 does not militate against interim order passed by this Court. It is submitted that Clause 4.43 in general and in particular Sub-clause (iv) of Clause 4.43 refers to Clause 4.49, which becomes one of the condition precedent for enhancement of the load. It is submitted that by passing of an interim order the assessment does not wipe out and the Corporation is not unjustified in protecting itself from future losses.
9. Sri Ravi Kant has also placed reliance on various judgments of the Apex Court, which shall be hereinafter referred while considering the submissions in detail.
10. We have considered the submissions of learned Counsel for the parties and have perused the record.
11. The main thrust of submission of learned Counsel for the petitioner is that Clause 4.49 of U.P. Electricity Supply Code 2005 is ultra vires, hence no bank guarantee can be demanded from the petitioner. Elaborating his submissions learned Counsel for the petitioner has raised various grounds challenging the vires of Clause 4.49. We shall proceed to examine grounds raised by the petitioner separately.
12. The first ground taken by the petitioner for challenging Clause 4.49 is that U.P. Electricity Supply Code 2005 has been specified exercising power u/s 50 of the Electricity Act, 2003, which provides for U.P. Electricity Supply Code and the subject matters, which have been included in Section 50 does not cover the subject matters, which have been specified in Clause 4.49. It is submitted that in Section 50, which is specifying U.P. Electricity Supply Code, no provision relating to fiscal matter can be included. It is contended that there are separate provisions in the Electricity Act, 2003, which are charging sections and there are separate heads under regulation making power given in Section 181(2), i.e., Section 181(2) Clauses (p) to (w). It is submitted that regulation making power referred to in sub-clauses of Section 181(2) is on a higher pedestal than the specifying Supply Code and when specific subject matters have been included in different heads, they shall be treated to have been excluded within the purview of Section 50 of the Electricity Act, 2003. Then Supply Code specified u/s 50 of the Act cannot contain any provision which is beyond the scope of Section 50. Reliance has also been placed by counsel for the petitioner on a Division Bench judgment of this Court in Writ Petition No. 31019 of 2007 (Pawan Kumar v. State of U.P. and Ors.) decided on 12th October, 2007 where the Division Bench has rejected the submission of counsel for the Corporation that entries mentioned in sub Clause (a) of Clause 3.4 of U.P. Electricity Supply Code 2005 are only illustrative and not restrictive. The Division Bench in the said case was considering Clause 3.4 of U.P. Electricity Supply Code 2005, which provided for supply through independent feeders. In sub Clause (a) of Clause 3.4 certain categories were mentioned, namely, Arc/Induction furnaces, Rolling Mills, Re-rolling Mills and Mini Steel Plants of more than 1000 KVA. The said provision requires that they shall be released load through an independent feeder. The submission that mention of entries were illustrative and not restrictive was rejected. Following was laid down by the Division Bench in the said judgment:
Except for the aforesaid provisions, there is no other provision which deals with supply from independent feeder. From a perusal of Sub-clause (a) of Clause 3.4 of the Code, we find that it is mandatory for supplying electricity through independent feeder to the Arc/Induction furnaces, Rolling Mills, Re-rolling Mills and Mini steel plants where the load applied is 1000 KVA and above. However, under Sub-clause (b), an option has been given for those consumers who have applied for load above 500 KVA, to opt for supply through independent feeder. It is not compulsory. The submission of Sri Dubey that under Sub-clause (a) the industries mentioned are illustrative and not restrictive, is wholly misplaced. Sub-clause (a) deals with specific industries of 1000 KVA and above load whereas Sub-clause (b) deals with consumers including industries mentioned in Sub-clause (a) and all other industries which have applied for load above 500 KVA and an option has been given to the consumers to get the supply through an independent feeder. But, if a consumer which falls under Sub-clause (b), does not want supply of electricity through an independent feeder, the respondents cannot compel or insist upon supplying the electricity though an independent feeder. Of course, the requirement is that it is technically feasible to supply the same from any other feeder which, in the present case, has been found by the respondents themselves.
13. Reliance has also been placed on the judgment of the Apex Court in the case of
...The word "specify" is used in Section 26A and Rule 2 as meaning, mentioning, describing or defining in detail: it does not mean expressly setting out in fractional or other shares....
14. It has been submitted that State Electricity Regulatory Commission cannot make any Supply Code on the field which has been expressly included in Section 50 of the Electricity Act, 2003. Reliance has been placed on the Apex Court judgment in the case of
8. Shri Anil Divan, the learned senior counsel for the appellants submitted that lands covered by seven categories as defined in Clauses (a) to (g) of Section 5 have been excluded from applicability of the provisions of the Act. Section 26 delegates to the State Government the legislative power of making rules which delegation is circumscribed by the expression - ''for carrying out the purposes of this Act''. In exercise of such delegated power to legislate, the State Government cannot bring within the net of the rules what has been excluded by the Act itself. We find merit in the submission so made....
15. Further reliance has been placed on paragraph 19 of the judgment of the Apex Court in the case of
19. ...It is significant to note that the rule-making power given to the State Government is not expressed in the usual form, i.e., is not to the effect that the State Government may make rules for the purposes of the Act. The rule-making power is limited to what is stated in Claus (a) to (e) of Section 27 and these clauses do not empower the State Government to prescribe the limit upto which the loans advanced by a moneylender are to remain outstanding at any particular moment of time.
16. Learned Counsel for the petitioner further contended that no word or expression used in the Electricity Act, 2003, specially under the various subheads of Section 181(2) can be said to be redundant or superfluous. It is submitted that if it is held that subjects, which are excluded from Section 50 can be provided for while specifying Supply Code, the specific entries has to be treated as redundant or superfluous. Reliance has been placed on the judgments of the Apex Court in the case of
17. Before we proceed to consider the above submissions of learned Counsel for the petitioner, it is necessary to look into the scheme of the Electricity Act, 2003, specially the powers of the State Electricity Regulatory Commission to specify Supply Code and to frame regulations.
18. Section 2(4) of the Electricity Act, 2003 defines "Appropriate Commission" which means the Central Regulatory Commission referred to in Sub-section (1) of Section 76 or the State Regulatory Commission referred to in Section 82 or the Joint Commission referred to Section 83 as the case may be. Part-VI of the Electricity Act, 2003 deals with distribution of electricity. Section 42 provides that it shall be the duty of a distribution licensee to develop and maintain an efficient co-ordinated and economical distribution system in his area of supply and to supply electricity in accordance with the provisions of the Act. Section 43 provides that every licensee shall on an application by the owner or occupier of any premises, give supply of electricity to such premises; Section 45 deals with power to recover charges; Section 46 deals with power to recover expenditure; Section 47 deals with power to require security; Section 48 deals with additional terms of supply and Section 50 provides for the Electricity Supply Code. Sections 45, 46, 47, 48 and 50 of the Electricity Act, 2003 are quoted as below:
45. Power to recover charges. (1) Subject to the provisions of this section, the prices to be charged by a distribution licensee for the supply of electricity by him in pursuance of Section 43 shall be in accordance with such tariffs fixed from time to time and conditions of his licence.
(2) The charges for electricity supplied by a distribution licensee shall be -
(a) fixed in accordance with the methods and the principles as may be specified by the concerned State Commission ;
(b) published in such manner so as to give adequate publicity for such charges and prices.
(3) The charges for electricity supplied by a distribution licensee may include -
(a) a fixed charge in addition to the charge for the actual electricity supplied;
(b) a rent or other charges in respect of any electric meter or electrical plant provided by the distribution licensee.
(4) Subject to the provisions of Section 62, in fixing charges under this section a distribution licensee shall not show undue preference to any person or class of persons or discrimination against any person or class of persons.
(5) The charges fixed by the distribution licensee shall be in accordance with the provisions of this Act and the regulations made in this behalf by the concerned State Commission.
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.
47. Power to require security. (1) Subject to the provisions of this section, a distribution licensee may require any person, who requires a supply of electricity in pursuance of Section 43, to give him reasonable security, as determined by regulations, for the payment to him of all monies which may become due to him -
(a) in respect of the electricity supplied to such persons; or
(b) where any electric line or electrical plant or electric meter is to be provided for supplying electricity to person, in respect of the provision of such line or plant or meter,
and if that person fails to give such security, the distribution licensee may, if he thinks fit, refuse to give the supply or to provide the line or plant or meter for the period during which the failure continues.
(2) Where any person has not given such security as is mentioned in Sub-section (1) or the security given by any person has become invalid or insufficient, the distribution licensee may, by notice, require that person, within thirty days after the service of the notice, to give him reasonable security for the payment of all monies which may become due to him in respect of the supply of electricity or provision of such line or plant or meter.
(3) If the person referred to in Sub-section(2) fails to give such security, the distribution licensee may, if he thinks fit, discontinue the supply of electricity for the period during which the failure continues.
(4) The distribution licensee shall pay interest equivalent to the bank rate or more, as may be specified by the concerned State Commission, on the security referred to in Sub-section (1) and refund such security on the request of the person who gave such security.
(5) A distribution licensee shall not be entitled to require security in pursuance of Clause (a) of Sub-section (1) if the person requiring the supply is prepared to take the supply through a pre-payment meter.
48. Additional terms of supply. A distribution licensee may require any person who requires a supply of electricity in pursuance of Section 43 to accept -
(a) any restrictions which may be imposed for the purpose of enabling the distribution licensee to comply with regulations made u/s 53;
(b) any terms restricting any liability of the distribution licensee for economic loss resulting from negligence of the person to whom the electricity is supplied.
49. ...
50. The Electricity Supply Code. The State Commission shall specify an Electricity Supply Code to provide for recovery of electricity charges, intervals for billing of electricity charges disconnection of supply of electricity for non-payment thereof; restoration of supply of electricity; tampering, distress or damage to electrical plant, electric lines or meter, entry of distribution licensee or any person acting on his behalf for disconnecting supply and removing the meter; entry for replacing, altering or maintaining electric lines or electrical plant or meter and such other matters..
19. Section 181 of the Electricity Act, 2003 provides for the power of the State Electricity Regulatory Commission. Sub-section (1) of Section 181 provides that State Commission may by notification make regulations consistent with the Act and Rules generally to carry out the provisions of the Act. Sub-section (2) of Section 181 provides that without prejudice to the generality of the power contained in Sub-section (1), such regulations may provide for all or any of the matters mentioned therein. Section 181 of the Electricity Act, 2003 is quoted below:
181. Powers of State Commissions to make regulations. (1) The State Commissions may, by notification, make regulations consistent with this Act and the rules generally to carry out the provisions of this Act.
(2) In particular and without prejudice to the generality of the power contained in Sub-section (1), such regulations may provide for all or any of the following matters, namely:
(a) period to be specified under the first proviso of Section 14;
(b) the form and the manner of application under Sub-section (1) of Section 15;
(c) the manner and particulars of application for licence to be published under Sub-section (2) of Section 15;
(d) the conditions of licence Section 16;
(e) the manner and particulars of notice under clause(a) of Sub-section (2) of Section 18;
(f) publication of the alterations or amendments to be made in the licence under Clause (c) of Sub-section (2) of Section 18;
(g) levy and collection of fees and charges from generating companies or licensees under Sub-section (3) of Section 32;
(h) rates, charges and the term and conditions in respect of intervening transmission facilities under proviso to Section 36;
(i) payment of the transmission charges and a surcharge under Sub-clause (ii) of clause(d) of Sub-section (2) of Section 39;
(j) reduction of surcharge and cross subsidies under second proviso to Sub-clause (ii) of Clause (d) of Sub-section (2) of Section 39;
(k) manner and utilisation of payment and surcharge under the fourth proviso to sub-clause(ii) of Clause (d) of Sub-section (2) of Section 39;
(l) payment of the transmission charges and a surcharge under sub-clause( ii) of Clause (c) of Section 40;
(m) reduction of surcharge and cross subsidies under second proviso to Sub-clause (ii) of Clause (c) of Section 40;
(n) the manner of payment of surcharge under the fourth proviso to Sub-clause (ii) of Clause (c) of Section 40;
(o) proportion of revenues from other business to be utilised for reducing the transmission and wheeling charges under proviso to Section 41;
(p) reduction of surcharge and cross-subsidies under the third proviso to Sub-section (2) of Section 42;
(q) payment of additional charges on charges of wheeling under Sub-section (4) of Section 42;
(r) guidelines under Sub-section (5) of Section 42;
(s) the time and manner for settlement of grievances under Sub-section (7) of Section 42;
(t) the period to be specified by the State Commission under Sub-section (1) of Section 43;
(u) methods and principles by which charges for electricity shall be fixed under Sub-section (2) of Section 45;
(v) reasonable security payable to the distribution licensee under Sub-section (1) of Section 47;
(w) payment of interest on security under Sub-section (4) of Section 47;
(x) electricity supply code u/s 50;
...
...
...
(zp) any other matter which is to be, or may be, specified.
(3) All regulations made by the State Commission under this Act shall be subject to the condition of previous publication.
20. Section 181 of the Electricity Act, 2003 provides that State Electricity Regulatory Commission may make regulations by notification to carry out the provisions of the act. Sub-section (1) contains a general power whereas Sub-section (2) indicates some specific subjects. Sub-section (1) is genesis of regulation making power whereas Sub-section (2) is only species. A perusal of Section 181(2)(x) indicates that regulations can be made with regard to "Electricity Supply Code" u/s 50. Section 50 of the Electricity Act, 2003 provides that State Commission shall specify Electricity Supply Code. Both Sections 50 and 181 have to be read together. The Supply Code, thus, can be provided by regulation by notification. The U.P. Electricity Supply Code 2005 has been made vide gazette notification dated 18th February, 2005. Thus the U.P. Electricity Supply Code 2005 is also a regulation framed in exercise of power u/s 181. Thus the submission that regulations as contemplated u/s 181(2) on the subject matters Clauses (p) to (w) are on higher pedestal than Supply Code is not factually correct.
21. The submission, which has been much pressed by the petitioner, is that Section 47 of the Electricity Act, 2003 provides for power to require security, which is specifically covered by Section 181(2)(v), hence the same is expressly excluded from Section 50. The submission of Sri Ravi Kant, Senior Advocate, appearing for the Corporation is that Supply Code contains regulations on different heads including Sections 42, 43, 46, 47, 48, 50 and other matters. The submission is that U.P. Electricity Supply Code 2005 is not confined to source u/s 50 of the Act. To support his submission learned Counsel for the Corporation has referred to statement of object and reasons, which specifically provided that draft Supply Code covers the issues of Sections 43 - 48, 50 and 55 to 59. It is useful to refer to the statement of object and reasons of U.P. Electricity Supply Code 2005, which is to the following effect:
Statement of Objects and Reasons
1. Under UP Electricity Reforms Act, 1999 (hereinafter referred to as the "Reforms Act"), UP Electricity Regulatory Commission was assigned with functions to regulate the distribution, supply, utilization of electricity, issue licenses to regulate the working of licensees and to set the standards of services for the consumers as well as standards for the electricity industry in the State. While granting licenses to the then three major distribution licensees i.e. UPPCL, KESCO & NPCL, the Commission required that the licensees should prepare distribution codes and submit them to the Commission for approval, as a condition of the supply license. In pursuance to the Commission''s directions, Uttar Pradesh Power Corporation Limited (UPPCL) had submitted a draft distribution code which was approved by the Commission and was made applicable in areas served by UPPCL, Kanpur Electricity Supply Company Limited ("KESCO") and the Noida Power Company Limited ("NPCL") with effect from 1st July 2002.
2. Electricity Act, 2003 was made applicable on 9th June 2003, as a self-contained comprehensive legislation, which replaced the existing legislations while preserving their core feature. Section 14 of the Electricity Act, provided that any supply licensee under Reforms Act shall be deemed to be a licensee under Electricity Act, 2003 for such period as stipulated in the license and the provisions of the Reforms Act in respect of such license shall apply for one year from the date of commencement of Electricity Act, 2003 that is up to 9th June 2004 in absence of any earlier period specified by the Commission, which was not done in the present case. Therefore, complete provisions of Supply Code, as a condition of supply license, continued to remain in force till 9th June, 2004. Meanwhile, in pursuance of Section 131(4) of the Electricity Act, 2003 and Sub-section 4(23) of the Reforms Act, the Uttar Pradesh Power Sector Reforms (Transfer Of Distribution Undertakings) Scheme, 2003 was effected on 12th August, 2003, wherein UP Power Corporation Limited i.e. one of the aforesaid distribution licensees was broken into four distribution companies viz Paschimanchal Vidyut Vitran Nigam Limited, Poorvanchal Vidyut Vitran Nigam Limited, Dakshinanchal Vidyut Vitran Nigam Limited & Madhyanchal Vidyut Vitran Nigam Limited, which have a deemed licensee status in accordance with fifth proviso of Section 14 of Electricity Act, 2003. Therefore, complete provisions of Supply Code 2002 continued to operate on above four distribution companies also till 9th June, 2004, as condition of license. Subsequent to 9th June 2004, only those provisions of the Reforms Act and accordingly Electricity Supply Code 2002 applied with respect to above six supply licensees, which were not inconsistent with the provisions of the Electricity Act, 2003, along with general application of Section 6 of the General Clauses Act, 1897 with regard to the effect of repeals.
3. Whereas Electricity Supply Code, 2002 was approved as a condition of supply license in Reforms Act, Section 50 of Electricity Act, 2003 required each State Commission to specify Electricity Supply Code for the purposes provided therein. The Commission, thus, undertook the exercise of specifying a Draft Electricity Supply Code, which was consistent with the Electricity Act, 2003 and was in line with the mandate setout in the aforesaid Section. In order to integrate various issues related to electricity supply business with harmonious construction, the Commission also decided to cover other supply related regulations envisaged under the Electricity Act, 2003 within the ambit of Draft Supply Code, 2004. Therefore, the Draft Supply Code covered issues of Sections 43-48, 50, 55-59 along with following regulations of Section 181(2) of the Electricity Act, 2003.
...
22. The U.P. Electricity Supply Code 2005 is divided in nine chapters. The provisions contained in U.P. Electricity Supply Code 2005 are not confined to subject matters as mentioned in Section 50 of the Electricity Act, 2003, rather they encompassed the subject matters contained in Sections 43 - 48, 50, 55 and 59 and certain other subject matters. For example, Chapter VII of U.P. Electricity Supply Code 2005 deals with Standard of Performance, Grievance Redressal Mechanism and Compensation, which are specifically included in items u/s 181(2)(s) and (b). The object and reasons of the Electricity Act, 2003 specifically states that Supply Code covers the subject matters of Sections 43 - 48, 50 and 55 to 59 and factually the different chapters of the Supply Code are referable to various specific heads included u/s 181(2). The provisions of U.P. Electricity Supply Code 2005 include ''''security'' which is subject matter given u/s 47 of the Electricity Act, 2003. Thus the submission of learned Counsel for the respondents has substance that Supply Code is not confined to the subject as mentioned u/s 50, rather it specifically covers various other subject specifically included in different sections including Section 47 of the Electricity Act, 2003.
23. Learned Counsel for the petitioner has submitted that statement and object cannot be seen for ascertaining meaning and effect. Reliance has been placed on the judgments of the Apex Court in the case of
13. It is undoubtedly true that the statement of Objects and Reasons accompanying a legislative Bill cannot be used to ascertain the true meaning and effect of the substantive provisions of the legislation, but it can certainly be pressed into service for the limited purpose of understanding the background, the antecedent state of affairs and the object the legislation sought to achieve....
24. Further in ITW Sigonde''s case (supra) the Apex Court has laid down following in paragraph 54:
54. The Statement of Objects and Reasons for enacting a statute can be read for a limited purpose. In Cotspun this Court held that Rule 10 does not deal with classification list or relate to reopening of the approved classification list. According to the Constitution Bench, the same is exclusively provided by Rule 173-B
25. Sri Ravi Kant on the other hand has placed reliance on the judgments of the Apex Court in the case of State of Maharashtra v. Bharat Shanti Lal Shah and Ors. reported in (2008)13 S.C.C. 5 , in the case of
53. It is now well settled that though the Statement of Objects and Reasons accompanying a legislative Bill cannot be used to determine the true meaning and effect of the substantive provisions of a statute, but it is permissible to refer to the Statement of Objects and Reasons accompanying a Bill for the purpose of understanding the background, the antecedent state of affairs, the surrounding circumstances in relation to the statute, and the evil which the statute sought to remedy. In this regard we may refer to the majority view (6:1) in the case of
Question 4. Statement of Objects and Reasons -- Significance and role there of
69. Reference to the Statement of Objects and Reasons is permissible for understanding the background, antecedent state of affairs in relation to the statute, and the evil which the statute has sought to remedy. (See Principles of Statutory Interpretation by Justice G.P. Singh, 9th Edn., 2004, at p. 218). In
70. In
15 ...The pronouncements of this Court further establish, amongst other things, that there is always a presumption in favour of the constitutionality of an enactment and that the burden is upon him, who attacks it, to show that there has been a clear violation of the constitutional principles. The courts, it is accepted, must presume that the legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds. It must be borne in mind that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest and finally that in order to sustain the presumption of constitutionality the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation.
21. ...The legislature is the best judge of what is good for the community, by whose suffrage it comes into existence.... This should be the proper approach for the court but the ultimate responsibility for determining the validity of the law must rest with the court.... (AIR para 21, also see the several decisions referred to therein.)
71. The facts stated in the preamble and the Statement of Objects and Reasons appended to any legislation are evidence of the legislative judgment. They indicate the thought process of the elected representatives of the people and their cognizance of the prevalent state of affairs, impelling them to enact the law. These, therefore, constitute important factors which amongst others will be taken into consideration by the court in judging the reasonableness of any restriction imposed on the fundamental rights of the individuals. The Court would begin with a presumption of reasonability of the restriction, more so when the facts stated in the Statement of Objects and Reasons and the preamble are taken to be correct and they justify the enactment of law for the purpose sought to be achieved.
26. From the proposition as laid down by the Apex Court in the above noted cases, it is clear that reference to the statement of objects and reasons is permissible for understanding the background in relation to the Statutes and the evil which the statute has sought to remedy. In the present case statement of objects and reasons are not being utilised to determine the true meaning and effect of any substantive provision of the statute. The statement of objects and reasons are being looked into for the background under which the draft Supply Code included the regulations under Sections 42, 48, 55 - 59 of the Act, which was published and subsequently final regulations were issued. The reference to statement of objects and reasons to know the subject matter on which regulations have been framed cannot be said to be prohibited. The reference of the statement of objects and reasons of the Supply Code thus can be looked into for limited purpose to know the subject matter, which is covered under the regulations. Thus from the statement of objects and the provisions, which are contained in different chapters of the Supply Code, it is clear that Supply Code is not confined to source of power u/s 50 only and the regulations have been framed under different heads as enumerated in Section 181(2) including 181(2)(b) of the Electricity Act, 2003.
27. Learned Counsel for the Corporation has also referred to marginal note of the U.P. Electricity Supply Code 2005 to support his submissions that the Code contains regulation on different subjects in addition to subjects as indicated in Section 50 of the Electricity Act, 2003. Learned Counsel for the petitioner has placed reliance on judgment of the Apex Court in the case of
11. Section 195(1) mandates a complaint in writing of the Court for taking cognizance of the offences enumerated in Clauses (b)(i) and (b)(ii) thereof. Sections 340 and 341, Cr.P.C. which occur in Chapter XXVI give the procedure for filing of the complaint and other matters connected therewith. The heading of this Chapter is - ''Provisions As to Offences Affecting The Administration of Justice''. Though, as a general rule, the language employed in a heading cannot be used to give a different effect to clear words of the Section where there cannot be any doubt as to their ordinary meaning, but they are not to be treated as if they were marginal notes or were introduced into the Act merely for the purpose of classifying the enactments. They constitute an important part of the Act itself, and may be read not only as explaining the Sections which immediately follow them, as a preamble to a statute may be looked to explain its enactments, but as affording a better key to the constructions of the Sections which follow them than might be afforded by a mere preamble. (See Craies on Statute Law, 7th Ed. Pages 207, 209). The fact that the procedure for filing a complaint by Court has been provided in Chapter XXVI dealing with offences affecting administration of justice, is a clear pointer of the legislative intent that the offence committed should be of such type which directly affects the administration of justice, viz., which is committed after the document is produced or given in evidence in Court. Any offence committed with respect to a document at a time prior to its production or giving in evidence in Court cannot, strictly speaking, be said to be an offence affecting the administration of justice.
28. It is also useful to refer to paragraphs 34, 35 and 36 of the judgment of the House of Lord in the case of R v. Montila (supra), which are as under:
34. The question then is whether heading and sidenotes, although unamendable, can be considered in construing a provision in an Act of Parliament. Account must, of course, be taken of the fact that these components were included in the Bill not for debate but for ease of reference. This indicates that less weight can be attached to them than to the parts of the Act that are open for consideration and debate in Parliament. But it is another matter to be required by a rule of law to disregard them altogether. One cannot ignore the fact that the headings and sidenotes are included on the face of the Bill throughout its passage through the legislature. They are there for guidance. They provide the contest for an examination of those parts of the Bill that are open for debate. Subject, of course, to the fact that they are unamendable, they ought to be open to consideration as part of the enactment when it reaches the statute book.
35. There is further point that can be made. In Pickstone v. Freemans Plo [1988]2 All ER 803 at 818 : [1989]AC 66 at 127 Lord Oliver of Aylmerton said that the explanatory note attached to a statutory instrument, although it was note of course part of the instrument, could be used to identify the mischief which it was attempting to remedy: see also Westminster City Council v. Haywood (No 2) [2002]2 All ER 634 at 645, : [2000]ICR 827 at 839 (Para 19) per Light man J. In Coventry and Solihull Waste Disposal Co Ltd v. Russell (Valuation Officer) [2000]1 All ER 97 at 107-108 : [1999]1 WLR 2093 at 2103, it was said that an explanatory note may be referred to as an aid to construction where the statutory instrument to which it is attached is ambiguous. In R (on the application of Westminster City Council) v. National Asylum Support Service [2002] UKHL 38 at [5] : [2002]4 All ER 654 at [5] : [2002]1 WLR 2956 Lord Steyn said that, in so far as the explanatory notes that since 1999 have accompanied a Bill on its introduction and are updated during the parliamentary process cast light on the objective setting on contextual scene of the statute and the mischief at which it is aimed, such materials are always admissible aids to construction. It has become common practice for their Lordships to ask to be shown the explanatory notes when issues are raised about the meaning of words used in an enactment.
36. The heading and sidenotes are as much part of the contextual scene as these materials, and there is no logical reason why they should be treated differently. That the law has moved in this direction should occasion no surprise. As Lord Steyn (at [5]) said in that case the starting point is that language in all legal texts conveys meaning according to the circumstances in which it was used.
29. Reliance in U.P. Electricity Supply Code 2005 has been made on the heading of various clauses, which can be looked into to explain its enactment. The headings of various sections including the heading of different chapters delineate that the Supply Code contains regulations on various subjects as specifically included in Section 181(2) Clause (p) to (x) of the Electricity Act, 2003. Thus the submission that U.P. Electricity Supply Code 2005 is beyond the scope of Section 50 and hence is liable to be struck down, cannot be accepted.
30. Two more grounds have been submitted by the petitioner''s counsel in support of his contention that Clause 4.49 of U.P. Electricity Supply Code 2005 is ultra vires; firstly that it is ultra vires to Section 127(2) of the Electricity Act, 2003 and secondly that it is ultra vires to Section 56(2) of the Electricity Act, 2003. Section 127 provides for appeal to the appellate authority. Section 127 is quoted as below:
127. "Appeal to Appellate Authority. (1) Any person aggrieved by a final order made u/s 126 may, within thirty days of the said order, prefer an appeal in such form, verified in such manner and be accompanied by such fee as may be specified by the State Commission, to an appellate authority as may be prescribed.
(2) No appeal against an order of assessment under Sub-section (1) shall be entertained unless an amount equal to one third of the assessed amount is deposited in cash or by way of bank draft with the licensee and documentary evidence of such deposit has been enclosed along with the appeal.
(3) The appellate authority referred to in Sub-section (1) shall dispose of the appeal after hearing the parties and pass appropriate order and send copy of the order to the assessing officer and the appellant.
(4) The order of the appellate authority referred to in Sub-section (1) passed under Sub-section (3) shall be final.
(5) No appeal shall lie to the appellate authority referred to in Sub-section (1) against the final order made with the consent of the parties.
(6) When a person default in making payment of assessed amount, he, in addition to the assessed amount shall be liable to pay, on the expiry of thirty days from the date of order of assessment, an amount of interest at the rate of sixteen per cent per annum compounded every six months.
31. Section 127 provides for appeal to the appellate authority against a final assessment made u/s 126. Sub-section (2) of Section 127 provides that no appeal against an order of assessment can be entertained unless an amount equal to (half of the assessed amount) is deposited in cash or by way of bank draft. Clause 4.49 of the U.P. Electricity Supply Code 2005 relates to security of the amount, which is stayed by any Court or forum. Thus Clause 4.49 of U.P. Electricity Supply Code 2005 does not in any manner violates the provisions of Section 127 of the Electricity Act, 2003 and the same cannot be said to be ultra vires to Section 127.
32. Section 56(2) of the Electricity Act, 2003 provides that no sum due from any consumer shall be recoverable after the period of two years from the date of such sum became first due unless such sum has been shown continuously as recoverable as arrear of charges for electricity supplied. Section 56(2) of the Electricity Act, 2003 is quoted below:
56. Disconnection of supply in default of payment.-(1) Where any person....
(2) Notwithstanding anything contained in any other law for the time being in force, no sum due from any consumer, under this section shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been shown continuously as recoverable as arrear of charges for electricity supplied and the licensee shall not cut off the supply of the electricity:
33. In the present case, we are not concerned with liability of the amount under assessment. Clause 4.49 contemplates stay by the Court or forum staying the recovery of any dues. The stay of recovery of any due pre-supposes the amount to be recoverable. Section 56(2) of the Electricity Act, 2003 thus has no application in the present case.
34. The next ground to challenge Clause 4.49 of U.P. Electricity Supply Code 2005 is that Clause 4.49 overreach the order of the Court. It is submitted that there being stay by the High Court against the assessment, the respondents cannot ask for submission of bank guarantee for an amount, which has already been stayed by this Court. It is contended that asking bank guarantee is a device to abridge the Court''s order and power of judicial review. Reliance has been placed by counsel for the petitioner on three judgments of the Apex Court in the matter of
35. The issue before the Apex Court in the matter of Cauvery Water Disputes (supra) was as to whether the interim order passed by the Tribunal on 25th June, 1991 is nullified by the ordinance issued by the Governor of the State of Karnataka. The Apex Court held that to the extent the ordinance interferes with the decision of the Supreme Court and of the Tribunal appointed under the Central Legislation, i.e., Inter-State Water Disputes Act, 1956, it was clearly unconstitutional. It was held that Legislature under the constitution, has within the prescribed limits, power to make laws prospectively as well as retrospectively. By exercise of those powers a legislature can remove the basis of a decision rendered by a competent court thereby rendering the decision ineffective, but no legislature in the country has power to ask the instrumentalities of the State to disobey or disregard the decisions given by the courts. In the present case Clause 4.49 of U.P. Electricity Supply Code 2005 in no manner affects the consequence of the interim order of the Court. The Bank guarantee has been asked on the premise that petitioner has applied for enhancement of load. Had the petitioner not applied for enhancement of the load, there was no question for asking any bank guarantee. The judgment in the matter of Cauvery Water Disputes (supra) does not help the petitioner in the present case.
36. The judgment in S.S. Bola''s case (supra) was a case where the Apex Court held that legislature cannot directly override a judicial decision but under its plenary powers under Articles 245, 246 and 248 it can make a new Act altering fundamentally the provision, which were the basis of the judicial decision. Following was laid down in paragraph 161 of the said judgment:
Where, however, the statutory provision is interpreted by the Court in a particular manner and directions are issued for implementing the judgment in the light of the interpretation placed on the statutory provisions, the Legislature need not pass a Validating Act. In this situation, the Legislature, in exercise of its plenary powers under Articles 245, 246 and 248 can make a new Act altering fundamentally the provisions which were the basis of the judgment passed by the Court. This can be done with retrospective effect. So far as service conditions are concerned, they can be altered with retrospective effect by making service rules under Article 309 or by an Act of the Legislature.
37. There cannot be any dispute to the proposition laid down by the Apex Court in S.S. Bola''s case (supra), but in the present case there is no provision which affects the interim order passed by this Court. Learned Counsel for the petitioner has relied on paragraph 153 of the judgment (Minority judgment of K. Ramaswamy, J.) where it has been held that judicial review is the basic feature of the constitution. There cannot be any dispute to the proposition that judicial review is the basic feature of the Constitution and it is constitutional duty and responsibility of the courts to maintain the balance of power between the legislature, the executive and the judiciary. There is no abridgement of the power of judicial review by Clause 4.49 of U.P. Electricity Supply Code 2005.
38. The judgment of the Apex Court in Indian Aluminium Co.''s case (supra) was a case where tests were laid down for judging the validity of validating act. It was laid down in the said judgment that in exercise of legislative power the legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It was held that legislature can render a judicial decision ineffective by enacting a valid law on the topic within its legislative field fundamentally altering or changing its character retrospectively. In the present case none of the above issues have arisen. As noted above, the occasion for demanding bank guarantee arose only due to the reason that petitioner has prayed for enhancement of the load from 97 KVA to 150 KVA. The requirement of asking bank guarantee is for insulating the Corporation against apprehended or future losses. Clause 4.49 of U.P. Electricity Supply Code 2005 is merely a protective provision rather than a provision for enforcing recovery. Clause 4.43 of U.P. Electricity Supply Code 2005, which relates to enhancement of load for cases other than public lighting provides that if the matter relates to dues is stayed by court, the procedure as per Clause 4.49 may be followed. Clause 4.49 comes into play in the present case since the amount of assessment u/s 126 of the Electricity Act, 2003 has been stayed by this Court in a writ petition, which is pending consideration.
39. In view of the foregoing discussions, we are satisfied that no grounds have been made out to declare Clause 4.49 of U.P. Electricity Supply Code 2005 as ultra vires. Thus the prayer of the petitioner to declare Clause 4.49 of U.P. Electricity Supply Code 2005 as ultra vires is refused.
40. Learned Counsel for the petitioner has also challenged the amount of Rs. 23,17,038/- as inflated. It is submitted that in the bill issued for the month of February, 2009 and May, 2009 the amount of arrears was mentioned as only Rs. 10,46,067/- whereas vide communication dated 23rd June, 2009 the arrear has been enhanced to Rs. 23,17,038/-. The petitioner submits that an amount of Rs. 4,00,000/- has already been deposited in pursuance of the interim order of this Court dated 14th July, 2000 and the total outstanding assessment amount against the petitioner is only Rs. 4,38,198/-
41. In this context ends of justice be served in giving liberty to the petitioner to represent the matter before the Executive Engineer insofar as amount of bank guarantee is concerned. If any representation is made with regard to the amount of bank guarantee, the same shall be considered and disposed of within three weeks from the date of filing representation along with a certified copy of this order.
42. In result, subject to liberty as above, both the writ petitions are dismissed.
