The Bihar Electricity Board vs The Union of India and Others

S.B. Sinha, J.—This appeal arises out of a judgment and decree dated 31.1.77 passed by Shri S.N. Sinha, 2nd Additional Subordinate Judge, Dhanbad in T.S. No. 83 of 1971 whereby and whereunder be decreed the plaintiffs-respondents suit. There are two plaintiffs, namely, The Union of India (Department of Labour, Employment and Rehabilitation) New Delhi and Coal Mines Welfare Commissioner, Dhanbad appointed under Coal Mines Labour Welfare Fund Act, 1947. The said suit was filed as against the Bihar State Electricity Board defendant No. 1 appellant and the defendant No. 2 respondent No. 3 herein for a declaration that the demand made by the said defendants with regard to the electricity duty in connection with connection No. D.W.C. 136, D.W.D. 293, NRC 26, NRC 199, KTC 151, DH 41 and KTB 25 as detailed in Schedule A of the plaint was illegal and without jurisdiction as also for a decree for permanent injunction restraining the defendants from disconnecting the lines of the plaintiffs as detailed in the Schedule A of the plaint.

The facts of the case involved in the suit are short and not much in dispute.

By reason of the bills submitted by the Bihar State Electricity Board, it purported to claim electricity duty from the plaintiffs. The plaintiffs contended that no electricity duty is payable as against the plaintiffs under the Bihar Electricity Duty Act, 1948 (Act No. 36 of 1948). The plaintiffs further contended that the Parliament enacted Coal Mines Labour Welfare Fund Act, 1947 (Act No. 32 of 1947) inter alia for making better provisions for financing measures and for promoting the welfare of Labour in the Coal Mining Industry. It is further contended that the main purpose of the said Act is to form a housing Board and the said Board is to carry out the approved schemes financed for the housing Scheme for colliery labourers. Various other buildings works, as per example, Central and Regional Hospitals and Maternity and Child Welfare Centres which are also financed from the welfare fund created under the said Act. It is further stated that the plaintiff No. 2 is a duly appointed Commissioner, commonly known as Coal Mines Welfare Commissioner u/s 9 of the said Act. It is further asserted that for the purpose of carrying out of the schemes under the said Act it is only the plaintiff No. 1, through its department of labour, administer various powers under the said Act and exercises complete control over the same. It has further been asserted in the plaint that with a view to carry out the schemes under the said Act an office was established at Dhanbad wherein employees of different categories are employed to carry out the scheme and there are well furnished hospitals for the purpose of treating the miners and other employees of the Coal Industry throughout India. It is further alleged that the Central Government has employed staff of different categories for the purpose of carrying out the provisions of the Act as well as Doctors, Medical practitioners, Nurses and other staff for the Central Hospital, the management whereof is done through the plaintiff No. 2. It is further asserted in the plaint that the Doctors and Nurses of the aforementioned Central Hospital have their quarters within the township known as Jagjivan Nagar. Besides the Central Hospital there are Regional Hospitals which are situated at Katras, Bhuli, Tisra, Mugma Baghmara and the said hospitals are also managed and controlled by the Union of India through the plaintiff No. 2.

It is the common case of the parties that the Bihar State Electricity Board used to Supply electrical energy to the aforementioned establishments of the plaintiffs.

However the defendants included electricity duty in the bills, which according to the plaintiffs, is not payable under the Bihar Electricity Duty Act, 1948.

For the purpose of disposal of this appeal it is not necessary to state the further facts as the basic facts as narrated hereinbefore are not disputed. The Bihar State Electricity Board, however, contended that the plaintiffs are liable to pay the electricity duty as the Coal Mines Welfare Organisation is a body corporate and is a separate legal entity other than the Union of India. The defendants have, however, taken the plea that for the purpose of running the aforementioned establishment, a fund has been created under the provisions of the aforementioned Act 32 of 1947 and the expenditure therefor are also met from the said fund.

It has further been pleaded in the written statement that the suit was bad for non-joinder of State of Bihar and the officers of the Commercial Taxes Department as parties to the suit as electricity duty realised by the defendants are to be deposited in the Commercial Tax Department. It has further been pleaded that the suit is not maintainable u/s 9B of the aforementioned Bihar Electricity Duty Act as also under the provision of Specific Relief Act, 1963.

Upon the respective pleadings of the parties, the learned court below have framed the following issues:

(i) Is the suit as framed maintainable?

(ii) Have the plaintiffs any cause of action for the suit?

(iii) Is the suit barred under the provisions of section 9(b) of the Bihar Electricity Duty Act. 1948?

(iv) Is the Coal Mines Labour Welfare Organisation a part of the Central Government, if so, are the plaintiffs entitled to a decree as claimed?

(v) To what relief or reliefs, if any, are the Plaintiffs entitled?

The learned court below, after examining the relevant provisions of the aforesaid Act (Act No. 32 of 1947) as also after examining the evidences adduced before it, came to the conclusion that the Coal Mines Welfare Organisation is a department of the Central Government. It further negatived the objection raised on behalf of the defendants that the suit is barred under the provision of section 9B of the Bihar Electricity Duty Act, 1948.

Mr. R.K. Choudhary, learned counsel appearing on behalf of the sole appellant, raised the following points for determination in this appeal.

He submitted that the suit is barred u/s 9B of the Bihar Electricity Duty Act, 1948. He further submitted that the suit is bad for non joinder of the State of Bihar as a party in the suit.

He further submitted that plaintiffs are not entitled to any relief claimed for the suit as the Coal Mines Welfare Organisation is not a department of the Central Government.

For the purpose of disposal of the first quest on the provision of section 9B of the Act (Act No. 36 of 1948) may be quoted herein below:

9B Bar of Jurisdiction.--save as provided in section 9-A no order passed under the Act or the rules made thereunder shall be called in question in any court.

In the instant case the plaintiffs have not challenged any order passed under the aforementioned Act. The plaintiffs have merely contended that the provision of the Bihar Electricity Duty Act has no application in view of clause (a) of sub-section (2) of section (3) of the said Act. In other words, the contention of the plaintiffs appears to be that as the supply of the electrical energy by the Bihar State Electricity Board has been made to the Government of India or the same has been sold to it for its consumption, the provisions of the said Act have no application and consequently the defendants had absolutely no authority or jurisdiction to make any demand with regard to the payment of electricity duty from the plaintiffs.

It is a well settled principle of law that the bar to jurisdiction of Civil Courts is not to be readily inferred and a litigant having a grievance of the civil nature has independently of any statute, a right to institute a suit in Civil Court unless its cognizance thereof is either expressly or impliedly barred. It is also well settled that there is a strong presumption in favour of the existence of jurisdiction of a Civil Court and further statute ousting the jurisdiction of the Civil Court must be strictly construed.

As noticed hereinbefore Section 9B of the Bihar Electricity Duty Act ousts the jurisdiction of the Civil Courts only in relation to an order passed under the provision of the said Act. In the instant case the plaintiffs have not challenged in the suit any order passed under the provision of the said Act. The Bihar Electricity Board or for that matter any licencee under the provision of the Indian Electricity Act, 1910 is neither an authority under the said Act nor has any jurisdiction to pass any order thereunder. The plaintiffs in the suit have merely contended that the electricity duty charged by the appellant from them is not leviable in terms of clause (a) of Sub section (2) of section 3 of the said Act as no electricity duty is payable by them in terms thereof.

From what has been noticed hereinafter, it would be evident that the plaintiffs in the suit have questioned the applicability of the said Act and have not challenged any order passed thereunder.

In that view of the matter, in my opinion, the plaintiffs'' suit was not barred u/s 9B of the Bihar Electricity Duty Act, 1948.

So far as the question that the suit is bad for non joinder of the State of Bihar or for that matter Commercial Taxes Department is concerned, it appears from the judgment of the learned court below that although the said plea was taken by the defendant No. 1 appellant in the written statement no issue in respect there of has been framed.

Even in the memo of appeal filed in this Court, no ground has been taken that the suit is bad for non joinder of the State of Bihar or the Commercial Taxes Department as a party thereto. In such a situation the defendant-appellant cannot be permitted to raise that issue in this appeal. However, even assuming that the defendant-appellant may be permitted to raise the said issue for the first time before this Court, in my view the answer to the question posed must be answered in negative. As has been noticed hereinafter that the plaintiffs have not been claiming any amount which has already been deposited by the Bihar State Electricity Board to the Commercial Taxes Department of the State of Bihar but only had prayed for a declaration that the bills submitted by the appellant to the plaintiffs-respondents charging electricity duty from them was illegal and has further sought for relief of permanent injunction for restraining the defendants from disconnecting the electrical connection of the plaintiffs.

If the plaintiffs'' contentions are found to be correct in that event the demands made by the Bihar State Electricity Board with regard to the levy of electricity duty upon the plaintiffs would be wholly without jurisdiction and thus void ab initio. The plaintiffs are not concerned, as to whether the defendants have deposited and/or are likely to be deposited (sic) the said amount to the commercial Taxes Department or not.

In that view of the matter, I am of the view that the suit is not bad for non-joinder of the State of Bihar and Commercial Taxes Department as a party therein.

However the issue as to whether Coal Mines Welfare Organisation is a department of the Central Government or not appears to be a debatable one.

Mr. Choudhary, learned counsel appearing on behalf of the appellant drew my attention to the provision of sub-section (3) of section 6 of the Act (ACT No. 32 of 1947) and submitted that the housing Board constituted u/s 6 of the said Act is a body corporate having perpetual succession with common seal with power to acquire property both moveable and immovable. He further drew my attention to Rule 42 of the Coal Mines Labour Welfare Fund Rules, 1949 framed u/s 10 of the Act (Act No. 32 of 1947) and submitted that even the employees of the fund created under the Act are not be government servants, notwithstanding the fact that the Central Government may direct that service rule applicable to the Government servants generally may apply with and without modification to such persons. He further submitted that the aforementioned Act 32 of 1947 is a complete Code by itself and any function that has been assigned to the Central Government is a statutory function and not a sovereign function and in that view of the matter it cannot be said that the said organisation is a department of the Central Government.

Mr. Debi Prasad, learned counsel appearing on behalf of the plaintiffs-respondents, however, submitted that for the purpose of determination of the issue in question as to whether Coal Mines Welfare Organisation is a department of the Central Government or not the fame has to be considered not only from the objects and reasons of the Act but also from the conduct of the parties in relation thereto meaning thereby the staff and the officers of the Coal Mines Welfare Organisation and the Central Government. He submitted that the plaintiff-appellant have filed various documents for the purpose of showing that the said organisation is merely a department of the Central Government, He further submitted that the very fact, that the Union of India itself is one of the plaintiffs in the suit, is by itself a proof that the organisation aforementioned is not a separate entity but a department of the Central Government. For the purpose of proving the fact that the said organisation was a department of the Central Government the plaintiffs have examined three witnesses and have also proved various documents.

The learned court below after perusal of the documents produced by the authorities came to the conclusion that ail actions on behalf of the Coal Mines Welfare Organisation used to be taken by the Central Government in the name of the President of India. He further found that even the contracts entered into by and between the Coal Mines Welfare Organisation and the third party used to be in the name of the President of India in terms of Article 299 of the Constitution and on that ground it has been held that the said organisation is a department of the Central Government. However before me the learned counsel for the parties confined their submissions for the purpose of determination of the aforementioned point on the basis of the scheme and object of the Act as laid down therein and the rules framed thereunder. For the purpose of determination of the aforementioned question as to whether the Coal Mines Welfare Organisation is a department of the Government or not the scheme or object of the said act being Act No. 32 of 1947 may be noted.

From a preamble of the said act it appears that the said act was enacted for making better provisions for financing measures for promoting the Welfare of labour employed in the coal-mining industry. It is evident that the Central Government even prior to coming into (sic) the aforementioned Act have been making provisions for promoting the welfare of labour in the coal-mining industry.

For the purpose of finding out the scheme and object of the act, the following provisions of the Act require to be noticed:--

Imposition and collection of duty--(1) The re shall be levied and collected as a cess for the purposes of this Act a duty of excise on all coal and coke dispatched from collieries in the territories to which this Act extend, at such rate (not less than twenty-five paise and not more than seventy-five paise pet ton) as may from time to time be fixed by the Central Government by notification in the Official Gazette:

Provided that the Central Government may, by notification in the official gazette, exempt from liability to the duty and specified class or classes of coal or coke.

(2) The duty levied under sub-section (1) shall, subject to and in accordance with rules made in this behalf, be collected by such agencies and in such manner as may be prescribed.

Coal Mines Labour Housing and General Welfare Fund--The proceeds of the duty levied u/s 3 shall be paid by the collecting agencies into the Reserve Bank of India at Calcutta in the prescribed manner and shall be credited to a fund to be called the Coal Mines Labour Housing and General Welfare Fund, and apportioned under two separate accounts, to be called the housing account of the Fund and the general welfare account of the Fund, in such manner as the Central Government from time to time, may, by notification in the official gazette, determine.

Expenditure from the Fund--(1) The cost of administering the Fund and the salaries and allowances, if any, of the Commissioner, Inspectors, Welfare Officers and other staff appointed to supervise or carry out measures financed from the Fund shall be defrayed out of the Fund, and shall be apportioned between and debited to the housing account and the general welfare account in such manner as may be prescribed.

(2) The Central Government may, out of the general welfare account of the Fund pay annually grants-in-aid to such of the colliery owners as maintain to the satisfaction of the Commissioner dispensary services of the prescribed standard for the benefit of labour employed in the collieries, so however that the amount payable as grant-in-aid to the owner of a colliery shall not exceed:--

(i) the amount of the duty at the rate of 41 paise per ton recovered in respect of coal or coke dispatched from the colliery less the proportionate cost of recovery; or

(ii) the amount spent by the owner of the colliery in the maintenance of the dispensary service, as determined by the Commissioner, whichever is less:

Provided that no grant-in-aid shall be payable in respect of any dispensary service maintained by the owner of colliery of the amount expended thereon as determined by the Commissioner, is less than eight rupees per mensem.

(3) The balance of the moneys in the general welfare account of the Fund shall be applied by the Central Government to next expenditure incurred in connection with measures which are in the opinion of the Central Government necessary or expedient to promote the welfare of labour employed in the coal-mining industry.

(5) The Central Government shall publish annually in the official gazette on estimate of receipts into and expenditure from the general welfare account of the Fund together with a statement of the accounts and a report of the activities financed during the previous year from the general welfare account of the Fund, and shall forward copies of such statement and report to members of the Advisory Committee.

Advisory Committee--(1) The Central Government shall, by notification in the official gazette, constitute an Advisory Committee, to advice on matters on which the Central Government or the Housing Board is required by this Act to consult the Committee and on any other matters arising out the administration of this Act which the Central Government may refer to it for advice.

(2) The members of the Advisory Committee shall be appointed by the Central Government and shall be of such number and chosen in such manner as may be prescribed:

Provided that the Advisory Committee shall include an equal number of members representing Government, the owners of coal mines and workmen employed in the coal mining industry, and that at least one member of the Advisory Committee shall be a woman.

(3) The chairman of the Advisory Committee shall be an officer of the Central Government appointed by the Central Government.

Appointment and powers of officers--(1) The Central Government may appoint a Coal Mines Labour Welfare Commissioner and such number of Inspectors, Welfare Officers and other staff as it thinks fit to supervise and carry out measures financed from the Fund.

(2) Any person so appointed shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code.

The Commissioner or any Inspector or Welfare Officer may, with such assistance if any, as he thinks fit, enter at all reasonable times any place which he considers it necessary to enter for the purpose of supervising or carrying out the measures financed from the Fund, and may do therein any thing necessary for the proper discharge of his duties.

From the aforementioned provisions as also the other provisions of the Act it would appear that the said Act was enacted with twin objects. First object of the Act is to provide the labour employed in the coal mining industry such welfare measures by way of providing them with medical facility etc. and the second to constitute a Housing Board known as Coal Mining Labour Housing Board for the purpose of providing housing accommodation to the labourers.

In this connection an important fact may be noticed. The provision relating to the constitution of Coal Mines Labour Housing Board and the other matters relating to its function are almost separate and distinct than the functions for financing measures for promoting the other welfare measures to the labour employed in the Coal-mining industry.

Whereas under sub-section 3 of section 6 of the said act the housing board has been made a body corporate having perpetual succession and a common seal with a power to acquire property both moveable and immovable and it has further been provided therein that the same may by the said name sue and be sued but no such provision has been made with regard to the other activities under the said act.

From the documentary evidence which have been produced before the Court below by the plaintiff-respondents it could appear that except the duties and functions which have been assigned to the Commissioner, all other statutory duties and functions are to be performed by the Central Government alone.

The Central Government is not only to make some expenditure and make provision for grant in-aid out of the general fund created in terms of sub-section (1) of section 5 of the Act but also is required to publish annually in the official gazette an estimate of receipts and expenditure from the general welfare account of the Fund together with a statement of the accounts and a report of the activities during the previous year from the general welfare account of the Fund.

From the aforementioned provision it is, therefore, absolutely clear that all the statutory functions and duties are to be performed only by the Central Government. The word Central Government has been defined in section 3(8) of the General Clauses Act as meaning the ''President''.

From the evidences on record it is evident that the function of the Central Government have been performed in terms of provision of Article 77 of the Constitution and as noticed hereinbefore even the contract has been executed with regard to the matters relating to the said organisation in the name of the President of India in fulfilment of the mandatory requirement of law as laid down under Article 299 of the Constitution.

Mr. Choudhary, learned Counsel appearing on behalf of the appellants submitted that the said act is a complete Code in itself and whatsoever functions have been assigned to the Central Government the same have been done under the provision of the said statute. It has further been submitted by Mr. Choudhary that in view of the fact that even the employees of the Coal Mines Labour Organisation are not to be treated as a government servant in terms of Rule 42 of the Coal Mines Welfare Rules 1949 and in this connection my attention has been drawn to a decision of the Calcutta High Court in S.S. Garga Vs. The Coal Controller and Others, .

It appears that the aforementioned decision of a learned Single Judge of the Calcutta High Court has also been affirmed in appeal, which decision is reported in 1975 Cal LJ 285. The aforementioned decision, it appears, appeared to be based on the basis of law as it then stood. However upon a perusal of the said judgment itself it would appear that Rule 42 was amended by the Central Government by a notification dt. 18th April, 1959. By reason of the said amendment the employees of the Coal Mines Welfare Organisation are now treated as employees of the Central Government.

Rule 42 aforementioned as amended reads as follows:--

Conditions of service of persons appointed u/s 9 of the Act--Unless other provision is made in this behalf, persons appointed u/s 9 of the Act shall be governed--

(a) by such rules relating to the conditions of service of Government servants generally, as have been made applicable with or without modifications to such persons, and as are in force immediately before the 1st March, 1959; and

(b) by such other rules relating to the conditions of service of Government servants generally, as may, after the said date, be made applicable with modifications, if any, to such persons by the Central Government.

From the aforementioned decision of the Calcutta High Court as also from the amendment made by the Central Government in Rule 42 of the Coal Mines Welfare Rules, 1949, it is evident that the Central Government, later on, considered that whereas the Coal Mines Welfare Organisation would itself be a department of the government its employees have also to be governed by the rules applicable to the Central Government employees and only in that view of the matter it had to amend Rule 42.

Further, had the said organisation be a body corporate having a common seal and a perpetual succession and was to sue and be sued in the name of the organisation, the matter would have been different. There is no provision in the entire Act as to whether the Coal Mines Welfare Organisation is a body corporate or for that matter can sue and be sued in its own name. No provision has further been made empowering the said organisation to acquire property in its own name or for that matter enter into a contract with the third parties in its own name.

Mr. Choudhary however relied upon a decision of the Supreme Court in Union of India (UOI) and Others Vs. Shri R.C. Jain and Others, and submitted that Coal Mines Welfare Organisation is a local authority within the meaning of section 3(31) of the General Clauses Act, 1897 (Act No. 10 of 1897). In my opinion, the aforementioned contention is not correct. Like the Delhi Development Authority which was constituted under the Delhi Development Act, the functions of the Coal Mines Welfare Organisation do not have the characteristics of a municipal function. By reason of the provision of the said Act, Coal Mines Welfare Organisation cannot impose any tax or a fee upon the colliery owners, the same has to be done by the Central Government itself by amending the provision of the Act and the Rules framed thereunder. Unlike the Delhi Development Authority, the said organisation does not have separate legal existence nor is a body corporate. Unlike the Delhi Development Authority it does not have a an separate and legal independent entity but the same is a mere government agency as all the duties and functions of the organisation are to be performed by the Central Government.

Having thus taken into consideration, the case from all its ramifications, I am of the view that the Coal Mines Welfare Organisation constituted under the Coal Mines Labour Welfare Organisation Fund, excepting the housing board, is a department of the Central Government. There is no doubt that no electricity duty is payable by a Central Government under the Bihar Electricity Duty Act and in that view of the matter there is no doubt that the learned court below has rightly held that the plaintiffs-respondents being a department of the Central Government, no electricity duty is payable by them and thus rightly decreed the suit. In this view of the matter I do not find any merit in this appeal. However, in the facts and in circumstances of the case there will be no order as to costs.