Modern Parboiled Mills P. Ltd. vs Punjab State Electricity Board and Others

G.S. Singhvi, J.—In this petition filed under Article 226 of the Constitution of India, the petitioner has prayed for grant of the following substantive relief.

"(a) A writ in the nature of certiorari quashing the orders dated 14.9.1998 and 30.3.1999 issued by the respondents Annexure P.4 and P.6 whereby the respondents have directed the petitioner to deposit Rs.7,26,654/- and Rs.7,53,772/- on account of surcharge within seven days illegally and arbitrarily;

(b) for quashing the P.R. Circular No.2/98 dated 28.4.1998 (Annexure P-5);

(c) for issuance of a writ in the nature of mandamus directing the respondents not to disconnect the electricity connection and not to recover the said illegal amount in the shape of surcharge amount."

A perusal of the averments made in the petition shows that in May, 1996, the competent authority of the Punjab State Electricity Board (hereinafter referred to as ''the Board'') sanctioned a load to the extent of 475 KVA to the petitioner''s industry situated in Village Mishriwala, District Ferozepur. After one year and six months, action was initiated against the petitioner on the allegation that it had violated the peak load restriction. Vide notice Annexure P.1 dated 21.11.1997, the Assistant Engineer. Sub Division, PSEB, Ferozeshah asked the petitioner to deposit Rs. 1,97,400/- in terms of P.R. circular No. 14 of 1997. This was contested by the petitioner with the assertion that the Board had no authority to impose surcharge. At the same time, it deposited 50% of the amount indicated in the notice and requested that the matter be referred to the Disputes Settlement Committee. However, the concerned authority of the Board did not take any action for reference of the dispute. Instead, vide notice, Annexure P.4 dated 14.9.1998, penalty amounting to Rs.7,26,654/- was imposed on the petitioner on the basis of circular No.2 of 1998. This notice was also contested by the petitioner on the ground that the instructions contained in circular No.2 of 1998 cannot be applied to its case. The concerned authority of the Board not only ignored the petitioner''s plea but also issued letter Annexure P.6 dated 30.3.1999 requiring it to deposit Rs.7,53,772/- as surcharge in accordance with the instructions issued by the Board.

In the written statement filed by them through the Senior Executive Engineer City Division, Ferozepur Cantt. respondents No.l to 4 have justified the demand created by the impugned notices by contending that they have done that in accordance with the instructions issued vide circular No.2 of 1998. The have averred that the revised instructions were issued by the Board after considering the representations of various industrial organisations and, therefore, the petitioner is not entitled to challenge the applicability of P.R. Circular No.2 of 1998 to its case.

Shri C.M. Munjal argued that the instructions issued by the Board in 1998 cannot be applied with retrospective effect so as to make the petitioner liable to pay the enhanced penalty for the alleged violation of the peak load restrictions. Learned counsel submitted that the right acquired by the petitioner to secure reference of the dispute raised by it by paying 50% of the amount specified in the letter Annexure P.1 dated 21.11.1997 cannot be adversely affected by applying the instructions issued after more than 4 months of the alleged violation of the instructions contained in P.R. Circular No. 14 of 1997. He argued that the instructions issued by the Board from time to time are administrative in character and. therefore, they cannot be enforced with retrospective effect. On the other hand. Shri Sukhbir Singh argued that the instructions issued by the Board are legislative in character and no illegality has been committed by the respondents by imposing penalty on the petitioner in accordance with the revised instructions. In support of his argument, learned counsel placed reliance on Section 22-B of the Indian Electricity Act, 1910 (hereinafter referred to as ''the Act''). He then argued that the dispute raised by the petitioner was not pending on the date of issuance of P.R. Circular No.2 of 1998 and, therefore, the Board''s decision to levy enhanced penalty cannot be declared as illegal. He submitted that the petitioner will have to deposit 50% of the amount specified in the impugned demand as a condition precedent to the reference of the dispute raised by it.

We have thoughtfully considered the respective submissions. Section 22-B of the Act reads as under:

"22-B. Power to control the distribution and consumption of energy.- (1) If the State Government is of opinion that it is necessary or expedient so to do, for maintaining the supply and securing the equitable distribution of energy, it may by order provide for regulating the supply, distribution, consumption or use thereof.

(i) the provisions of any contract, agreement or requisition whether made before or after the commencement of the Indian Electricity (Amendment) Act, 1959 (32 of 1959), for the supply (other than the resumption of a supply) or an increase in the supply of any energy to any person, or

(ii) any requisition for the resumption of supply of energy to a consumer after a period of six months, from the date of its discontinuance, or

(iii) any requisition for the resumption of supply of energy made within six months of its discontinuance, where the requisitioning consumer was not himself the consumer of the supply at the time of its discontinuance."

A bare reading of the above quoted provisions shows that in exercise of the power vested in it u/s 22-B the State Government can, for maintaining the supply and securing the equitable distribution of energy, issue appropriate order containing provision for regulation of the supply, distribution, consumption and use of the energy. Sub-section (2) of Section 22-B confers power upon the State Government to issue direction to the licensee that it shall not, except with the permission of the State Government, comply with the provisions of any contract, agreement or requisition for the supply or an increase in the supply of energy to any person or any requisition for supply of energy to a consumer after 6 months from the date of its discontinuance or any requisition for the resumption of supply of energy made within 6 months from the date of its discontinuance or any requisition for the resumption of supply of energy made within 6 months of its discontinuance, where the requisitioning consumer was not itself the consumer of the supply at the time of its discontenuance. A plain reading of Section 22-B shows that it empowers the State Government and not the Board to issue an order regulating supply, distribution, consumption and use of energy. Therefore, P.R. Circular No.2 of 1998 cannot be treated as issued u/s 22-B of the Act. In any case, in the absence of any express simulation to that effect in Section 22-B, neither the State Government nor the Board can issue an order under that Section which may retrospectively affect the supply, distribution, consumption or use of the energy. Therefore, P.R. Circular No.2 of 1998 can neither be treated as a piece of sub-delegated legislation nor the instructions contained therein can be applied with retrospective effect.

The issue deserves to be examined from two other angles. A careful reading of P.R. Circular No.2 of 1998 shows that it does not contain any express provision by virtue of which the competent authority can apply the instructions or incidents. Rather, a conjoint reading of the various clauses of the circular leads to an irresistible inference that the same will be applicable from the date of issue of circular. The ambiguity, if any, on this issue must be treated as cleared by virtue of clause 12-A which declares that the instructions contained in this circular will be applicable with immediate effect in respect of the consumers who violate peak load restrictions and having installed electronic meters. Sub-section (b) of clause 12 further declares that other instructions contained in this circular will be applicable from 1.6.1998.

We are further of the view that a penal provision like the one contained in P.R. Circular No.2 of 1998 cannot be applied with retrospective effect so as to affect the pending cases. In Pyare Lal Sharma Vs. Managing Director and Others, , Regulation 16.14 of the Jammu and Kashmir Industries Employees Service Rules which was amended vide notification dated 20.4.1983 came up for consideration before the Supreme Court.

"The amendment added certain more grounds for termination of service of an employee and one of the added grounds was: If he (the employee) remains on unauthorised absence. In construing the Regulation, their Lordships of the Supreme Court held that the period of unauthorised absence prior to the date of amendment could not be taken into consideration for terminating the service of an employee. Their Lordships observed" "It is the basic principle of natural justice that no one can be penalised on the ground of a conduct which was not penal on the day it was committed."

On the basis of above discussion, we hold that the instructions contained in P.R. Circular No.2 of 1998 cannot be applied with retrospective effect so as to adversely affect the petitioner and the demand raised on the basis of this circular will have to be treated as ultra vires to the powers of the Board.

The question whether the Board is under an obligation to make reference of the dispute raised by the petitioner to the Disputes Settlement Committee must be answered in the affirmative because it is an admitted position that the petitioner has deposited 50% amount specified in the bill raised in pursuance of P.R. Circular No.14 of 1997.

In view which we have taken is in consonance with the order dated 28.7.1999 passed in C.W.P No. 15529 of 1998, Master Industries, Mamdot v. Punjab State Electricity and Ors.,

In the result, the writ petition is allowed. Annexures P-4 and P-6 are quashed with the direction that the competent authority of the Board shall make reference of the dispute raised by the petitioner to the Disputes Settlement Committee within a period of 2 months from the date of submission of certified copy of this order. This shall be subject to the condition that the petitioner fulfills the requirement of P.R. Circular No.14 of 1997.