Rohit Ferro Tech Limited vs West Bengal State Electricity Regulatory Commission

S.P. Talukdar, J.—This relates to an appeal against the judgment and Order dated October 4, 2004 passed by the Hon''ble Single Bench in W.P. No. 16166 (W) of 2004.

Grievances of the Appellants, as ventilated, may briefly be stated as follows:

Appellants, as Petitioners, by filing an application before the Hon''ble Court challenged order dated June 9, 2004 issued by the West Bengal State Electricity Regulatory Commission and prayed for issuance of a writ in the form of mandamus directing the West Bengal State Electricity Board to continue to allow the concessions at the rate specified in the letter dated June 30, 2003 to the industrial units of the Petitioners during the year 2004-05 and 2005-06.

The Petitioners also prayed for injunction restraining the Respondents from giving effect to the said order dated June 9, 2004 and from withdrawing the concession granted under the West Bengal Incentive Scheme, 1999 and from realising and/or charging the Petitioners at the new rates in terms of the said order or to reject the same in any manner whatsoever.

They also sought for order restraining the Board from disconnecting the electricity supply to the factories of the Petitioners No. 1,4, 5 and 6.

Petitioners claim was opposed by the Respondent, West Bengal State Electeicity Board as well as others.

Learned Judge after due consideration of all relevant aspects by the impugned order dated October 04, 2004 refused to grant any interim relief and directed the Petitioners to pay the bills raised by the said Board on the undertaking given to the Board to refund and/or adjust any excess payment, if so directed by the Court.

Mr. Ajit Panja, learned Counsel appearing for the Appellants submitted that the Learned Judge failed to appreciate the matter in its proper perspective. Inviting attention of the Court to the preamble of the Electricity Act, 2003 hereinafter referred to as ''the Act'', he submitted that ''protection of interest of consumers'' finds special mention and this was not so earlier. True, preamble plays quite a significant role in interpretation of a statute. Where words of a statute are capable of either of the construction offered by the parties, the construction which fits the preamble may be preferred but when words of statute admit of only one construction, that will receive effect even if it is inconsistent to the preamble. Ref. : House of Lords in Attorney General v. H.R.H. Prince Ernest Augustus of Hanover (1957) A.C. 436.

He then drew attention of the Court to Sections 110, 111, 112 and 113 of the Act as well as other provisions of Part-XI. According to him, in spite of due service of notice and earlier directions of the Court, the Respondents being Union of India and the State of West Bengal, could not claim that any Appellate Tribunal has been established. In fact, it is the admitted position that no such Tribunal has been set up so far in the State of West Bengal Quite strange, indeed. Mr. Panja submitted that preferring an appeal against an order of Commission Respondent No. 1, being a vested right, nonexistence of an appellate forum has virtually frustrated the entire scheme and object of the Act, which is, thus, unworkable.

Going a step further, he submitted that such a vital point was raised but even after having been recorded, it was not dealt with by the Learned Judge and thus, according to him, makes the impugned order suffer from perversity. To this, learned Counsel for the various Respondents replied that where do the Appellants go if the entire act is thrown out? Mr. Aninda Mitra, learned Counsel for the Board submitted that an interpretation which virtually brings anarchy should be avoided.

We apreciate the anxiety of Mr. Ajit Panja in this regard. True, when conferred by statute, right of appeal becomes a vested right Ref.: Shiv Shakti Coop. Housing Society, Nagpur Vs. Swaraj Developers and Others, . Inordinate delay in establishment of Tribunal reflects painful indifference, if not wilful negligence, on the part of the authorities. But non-existence of an appellate forum for a temporary period which may also due to some teething problems, cannot make the entire Act unworkable. In fact, Appellants have also brought themselves under the umbrella of such Act. Moreover, in absence of an existing alternative statutory remedy, the doors of writ Court are wide open for the Appellants and none has challenged the writ application on the ground of maintainability. It may be mentioned that we are not unmindful to the Apex Court decision in the case of State of Sikkim Vs. Dorjee Tshering Bhutia and others, as referred to by Mr. Panja. But in the facts and circumstances of the present case we do not think hat the entire Act is not operational in view of non-existence of the Appellant Tribunal at this stage. Moreover, it was submitted on behalf of the Respondents that if the Act was unworkable, why did the Appellants choose to partiipate? In fact, the argument that in absence of appellate Tribunal the tariff order is still born was not taken as a plea in the application.

Having regard to the fact that this Court is now required to deal with an interim order refusing to interfere in the manner as sought for, any further discussion in this regard is neither desirable, nor possible.

Next grievance of the Appellants is that the Appellants were not even heard by the commission. He contended that denial of an opportunity of hearing violates the inherent ingredients of the principles of natural justice. He submitted that right of hearing before the commission should be read into in absence of expressed exclusion.

Section 64 of the Act, 2003 deals with the procedure for tariff order. Though it relates to the manner of such determination of tariff in response to an application u/s 62 made by a generating company or licensee, the commission is required to consider all suggestions and objections received from the public. And the Applicant is further required to be given a reasonable opportunity of being heard before rejection of the application. In this context Mr. Panja discussed about the evolution of law relating to generation, transmission, distribution, trading and use of electricity. He referred to the various provisions of the Indian Electricity Act, 1910, Electricity (Supply) Act, 1948 and the Electricity Regulations Commission Act, 1098, which according to him, help in better appreciation of Act, 2003. The need for consideration of the protection of interest of the consumers was highlighted. Relying upon the decision of the Supreme Court in the case of West Bengal Electricity Regulatory Commission Vs. C.E.S.C. Ltd. etc. etc., reported in, Mr. Panja emphatically added that right of hearing is implied and inherent and denial of such right by itself is a violation of principle of natural justice.

Reference was made to the decision in the case of Sayeedur Rehman Vs. The State of Bihar and Others, wherein the Apex Court held that this unwritten right of hearing is fundamental to a just decision by any authority which decides a controversial issue affecting the rights of the rival contestants.

In the case of S.L. Kapoor Vs. Jagmohan and Others, it was held that the requirements of natural justice are met only if opportunity to represent is given. The Court observed that the demands of natural justice are not met even if the very person proceeded against has furnished the information on which the action is based, if it is furnished in a casual way or for some other purpose. The person proceeded against must know that he is being required to meet the allegations which might lead to a certain action being taken against him. If that is made known the requirements are met.

Our attention was also drawn to the decision in the case of Ramchandra Keshav Adke (Dead) by Lrs. and Others Vs. Govind Joti Chavare and Others, wherein the Apex Court held that where a power is given in a certain way, the thing must be done in that way or not at all and other methods of performance are necessarily forbidden.

In the case of Board of Education v. Rice and Ors. 1911 A.C. 179 the House of Lords was of the view that the authority must act in good faith and fairly listen to both sides, for that is a duty lying upon every one who decides anything. If that is not done, there is a remedy by mandamus and certiorari.

Reference was also made to the decision in the case of The King v. Electricity Commissioner 1911 A.C. 179 as well as in the case of Inland Revenue Commissioners v. Northern Aluminium Co. Ltd. 1947 (1) All. E.L.R. 608. The facts and circumstances of the said judgments, however, are significantly different from those of the present case.

Relying upon the judgment in the case of The The Scheduled Caste and Weaker Section Welfare Association (Regd.) and anothers Vs. State of Karnataka and others, , it was submitted that if there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power and the rule of natural justice operates in areas not covered by any law validly made.

Mr. Pahja submitted that nature of statutory duty necessarily implies obligation to hear before deciding. He then submitted that the word ''considering'' in Sub-section (3) of Section 64 of the Act cannot be permitted to be an empty assurance by denying the right of hearing.

On the other hand it was submitted by Mr. Mitra for Respondent No. 2 that there is no statutory right of hearing in the Act, 2003 at the stage of determination of tariff. Learned Counsel Mr. S. Pal appearing for the C.E.S.C. Limited, which appeared as an intervener before the Learned Single Bench, shared the stand of Mr. Mitra and submitted that Section 111(3) of the Act clearly mandates that the appellate Tribunal may pass order ''after giving the parties to the appeal an opportunity of being heard'' and absence of such a provision at the stage of determination of tariff is an act of conscious omission.

There is force in the submission that opportunity of hearing is an inalienable right, which cannot be parted with. But the Act, 2003 mentions about ''consideration'' and it does not necessarily demand actual physical hearing. In fact, etymological meaning of the word ''hearing'' includes ''an opportunity to state one''s case''. In these days of scientific advancement and technological revolution, person can very well be heard without being physically seen and it may not necessarily be ''to perceive with the ear''.

Mr. Panja then quoted from ''The Twilight of Natural Justice'' by H.W.R. Wade which may be reproduced as follows:

This in turn has led to the suggestion that it is onfy where the case is triangular - two ''parties'' and a third person as ''judge'' between them - that an administrative decision is ''judicial'' in the sense that natural justice must be observed....

The only difference that results from the third party judge is that he owes a duty to the local authority, as well as to the objector, to give it a hearing.

Mr. Panja further contended that the present Appellants are ''class consumers''. They approached the commission, being Respondent No. 1 and sought to be heard. Their request was not even replied to by the commission, which being a statutory authority was bound to pass order with reasons. The commission cannot be allowed to pass order on ad hoc basis for indefinite period.

After due consideration of the relevant provisions of the Act, 2003 and having regard to the submission made by learned Counsel for the parties, we think that what required at the stage of determination of tariff is consideration and not ''hearing''. But in view of the fact that we are now only concerned about an appeal from an interim order, we do not consider it necessary to explore this aspect any further.

Mr. Panja then submitted that the Appellants were assured of concessions under the West Bengal Incentive Scheme, 1999. Referring to the principle of promissory estoppel and the doctrine of fairness, it was submitted that the Respondent cannot be allowed to frustrate the legitimate expectations. To this, it was submitted on behalf of the Respondent/Board that no such assurance was ever given by it, no such promise was made.

Respondent/State of West Bengal, though entered appearance at a belated stage, did not make any submission. Naturally, in the best interest of justice, those aspects are not dealt with at this stage.

Learned Single Bench refused to pass an interim order in the manner as sought for Learned Counsel, Mr. Mitra, submitted that even assuming that the Appellants have arguable points, there cannot be any interim order in their favour. He referred to Section 111(3) of the Act, 2003 while asserting that there is no scope for granting any stay.

Relying upon the decision in the case of Siliguri Municipality and Others Vs. Amalendu Das and Others, it was submitted that the Court must strike a delicate balance after considering the pros and cons of the matter lest larger public interest is not jeopardized and institutional embarrassment is eschewed. It was submitted that in the present case, in view of the undertaking given by the Respondent/Board to refund and/or adjust any excess payment, if any at all, there could be no occasion for prejudice. Referring to the decision of the Apex Court in the case of Colgate Palmolive (India) Ltd. Vs. Hindustan Lever Ltd., , Mr. Mitra submitted that the Court must consider whether the grant or refusal of injunction will adversely affect the interest of the general public which can or cannot be compensated otherwise.

Mr. Mitra then invited our attention to another decision of the Supreme Court. It was in connection with the case of Wander Ltd. and Another Vs. Antox India P. Ltd., . Relevant extract from the said judgment may be reproduced as follows:

An appeal against exercise of discretion is said to be an appeal on principle Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the Court below if the one reached by that Court was reasonably possible on the material.

On behalf of all the contesting Respondents, it was emphatically asserted that there should be no stay order on realisation of tariff.

The Court while passing an interim order of injunction need also take into consideration as to whether the party seeking injunction will suffer from any injury which cannot be repaired like, by way of payment of compensation.

Having regard to the facts and circumstances of the present case, it cannot be said that the plesent Appellants will suffer from any such irrepairable injury and balance of convenience and inconvenience also does not tilt in their favour. It also cannot be denied that the matter involves public interest as well and has far reaching consequences.

After due consideration of all facts and materials, we cannot hold that the order under challenge suffers from any arbitrariness. It cannot be said that the Learned Judge acted capriciously or perversely nor it can be said that settled principles of law were ignored.

Accordingly, the interim order dated December 8, 2004 passed in connection with the present appeal is vacated and the impugned order dated October 4, 2004 passed by Learned Single Bench in W.P. No. 16166 (W) of 2004 stands affirmed. It is, however, expected that all the parties herein will make all possible endeavours and assist the Learned Court to decide the case expeditiously which, perhaps, the nature of the case demands and deserves.

The present appeal being A.S.T. No. 2295 of 2004 with A.S.T. 2297 of 2004 be dismissed.

No order as to costs.

Urgent xerox certified copy of this order, if applied for, be supplied to the parties after due compliance with the legal formalities.

Aloke Chakrabarti J.

I agree.

Later:

In view of the prayer made by Mr. Panja, learned Counsel for the Appellants/Petitioners and also in view of the facts and circumstances of the case in respect of objection raised on behalf of the Board, the operation of our judgment will remain stayed for a period of ten (10) days from date.