TMI Blog2018 (7) TMI 2025X X X X Extracts X X X X X X X X Extracts X X X X ..... late Tribunal. The learned Appellate Tribunal has also taken the view that having regard to the provisions of Section 79 of the 2003 Act it is the CERC which would be the Appropriate Commission for determination of tariff inasmuch as the Damodar Valley Corporation is a Corporation owned and controlled by the Central Government. The detailed inputs to arrive at the aforesaid conclusion have been duly considered by us - On such consideration, we are of the view that the above conclusion recorded by the learned Appellate Tribunal is neither unreasonable nor irrelevant so as to warrant our interference, particularly, in exercise of the limited jurisdiction Under Section 125 of the 2003 Act. Appeal dismissed. - Civil Appeal Nos. 971-973, 1914, 4504-4508 and 4289 of 2008 - - - Dated:- 23-7-2018 - Mr Ranjan Gogoi And R. Banumathi, JJ. JUDGMENT Ranjan Gogoi, J. 1. This group of appeals arise out of a common judgment and order dated 23rd November, 2007 passed by the learned Appellate Tribunal for Electricity at New Delhi (hereinafter referred to as learned Appellate Tribunal ). The challenge in the appeals before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st September, 2000. The 2003 Act came into force with effect from 10th June, 2003. Despite coming into force of the 2003 Act the Corporation had not approached the CERC for determination of the tariff chargeable by it. Consequently, the CERC initiated suo motu proceedings by order dated 29th March, 2005 and directed the Corporation to submit an application for determination of tariff for the period from 1st April, 2004 to 31st March, 2009. In terms of the said order passed by the CERC, the Corporation made an application dated 8th June, 2005 before the CERC (i.e. Petition No. 66 of 2005) for determination of tariff for the period in question. It appears that in view of the complexity of the issues involved, the CERC had requested one of its members to go into the necessary fact-finding exercise and to submit a report of the detailed facts that would be relevant for determination of tariff by the CERC. On the basis of the available inputs received from the aforesaid single member Bench of the CERC, the CERC issued a tariff order dated 3rd October 2006 determining the tariff for generation and transmission for the period from 1st April, 2006 to 31st March, 2009 by allowing a two- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y period is concerned and the State of Jharkhand and West Bengal Electricity Regulatory Commission insofar as the exclusion of the power of the State Regulatory Commission to determine the intra-State transmission of electricity is concerned had approached the learned Appellate Tribunal by way of separate appeals. 8. The learned Appellate Tribunal by the impugned judgment and order dated 23rd November, 2007 took the view that by virtue of fourth proviso to Section 14 of the 2003 Act, while the Corporation continued to be a deemed licensee, the provisions of the Act of 1948, which are not inconsistent with the provisions of the 2003 Act, shall continue to apply to the Corporation. In other words, insofar as the inter-play between the provisions of the Act of 1948 and the 2003 Act is concerned, according to the learned Appellate Tribunal, it is only the provisions of the earlier Act inconsistent with the later Act that will cease to have effect and such provisions of the Act of 1948 that are consistent will continue to hold the field notwithstanding the enactment of the 2003 Act. Continuing further, the learned Appellate Tribunal held that while Section 20 of the Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers in the matter of determination of tariff is vitiated by grave and apparent errors? 10. It will be useful to notice, at this stage, that in terms of the impugned order dated 23rd November, 2007 passed by the learned Appellate Tribunal the matter has been de novo considered and re-determined by the CERC by its order dated 6th August, 2009. This has happened due to the absence of any interim restraint. The said order of the CERC dated 6th August, 2009 has since been affirmed by the learned Appellate Tribunal by a separate order dated 10th May, 2010 which is the subject matter of challenge in Civil Appeal No. 4881 of 2010 presently pending before this Court. The said appeal (Civil Appeal No. 4881 of 2010) has been ordered to be heard after disposal of the present appeals. 11. The arguments advanced by the respective Appellants who are also the Respondents in the connected appeals may be noted at this stage. 12. On behalf of the CERC, which is the Appellant in Civil Appeal No. 4289 of 2008, it has been contended that second part of the fourth proviso to Section 14 of the 2003 Act cannot be understood to mean, as has been held by the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the question of the extent of depreciation allowable. It is emphasised that Section 40 leaves the question of the percentage of depreciation to be determined by the Central Government. It is contended that the purpose and intent behind the enactment of 2003 Act is to distance the Central Government from the determination of tariff under the 2003 Act which is to be fixed by the Regulatory Commissions on the principles acknowledged in the Tariff Regulations. Regulation 21(1)(ii) of the Tariff Regulations, therefore, according to the CERC, should have been the basis for the determination of the extent of depreciation. In this regard, reliance has been placed on the decision of this Court in PTC India Ltd. v. Central Electricity Regulatory Commission (2010) 4 SCC 603 [Para 17]. 15. It is on the same basis that the findings of the learned Appellate Tribunal so far as the Sinking Fund is concerned, which has been held to be recoverable through the tariff, has been assailed. It is urged that the Tariff Regulations do not make any provision for any Sinking Fund and, therefore, the recovery of such fund through tariff is abhorrent to the provisions of Section 61 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of 2003 Act, the Parliamentary Standing Committee on Energy had, in fact, recommended that the Corporation, having regard to the special responsibility entrusted to it under the Act of 1948, should be exempted from the application of the 2003 Act. Parliament, however, decided not to provide a blanket exemption in favour of the Corporation. It is pointed out that Under Section 173 of the 2003 Act it is only such of the provisions of the 2003 Act which are inconsistent with the provisions of the Consumer Protection Act, 1986 or the Atomic Energy Act, 1962 or the Railways Act, 1989 that will not have any effect. Instead, insofar as the Corporation is concerned what was provided for is a limited exemption, the extent of which has been spelt out by Section 14 (fourth proviso) of the 2003 Act, which, necessarily, has to be understood to be circumscribed by the provisions of the main part of Section 14 of the 2003 Act which deals with licensing as distinguished from tariff determination. It is further urged on behalf of the Appellants - consumers that the decision to keep in abeyance the tariff for a period of two years is ultra vires the provisions of the 2003 Act, there being no auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in provision itself going beyond the parameters of the matter of which the proviso may have been enacted as a part. In this regard, reliance has been placed on the decisions of this Court in State of Rajasthan v. Leela Jain (1965) 1 SCR 276, S. Sundaram Pillai and Ors. v. V.R. Pattabhiraman and Ors. (1985) 1 SCC 591 [Para 27 to 43], Shah Bhojraj Kuvarji Oil Mills Ginning Factory v. Subhash Chandra Yograj Sinha (1962) 2 SCR 159 [Para 9 and 10], Motiram Ghelabhai v. Jagan Nagar (1985) 2 SCC 279 [Para 9]. 23. Coming specifically to the rate of depreciation, sinking fund, interest on capital, etc., it has been urged that there being no provisions in the 2003 Act in respect of the aforesaid matters which are dealt with only by the Tariff Regulations in contra-distinction to specific provisions of the Act of 1948 covering the issue i.e. Section 40 of the Act of 1948, it is the provisions of Part IV of the Act of 1948 which will govern the matter. So far as the debt-equity ratio is concerned, it has been urged that the determination of the ratio at 50:50 for capital assets created prior to 30th March, 1992 and the ratio of 70:30 for the capital assets after 30th March, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eside bulk supply to main beneficiaries of State Electricity Boards of West Bengal and Jharkhand, the said fact, itself, is another peculiar feature which distinguishes the Corporation from other licenses. If in a situation where the Corporation in addition to generation, transmission and distribution of electricity is statutorily required to undertake certain social security/beneficial measures like flood control, control of soil erosion, afforestation, navigation, promotion of public health, etc. we do not see how the grant of transitory period can be faulted with. We, therefore, decline to interfere with the aforesaid part of the order of the learned Appellate Tribunal. 28. The learned Appellate Tribunal has also taken the view that having regard to the provisions of Section 79 of the 2003 Act it is the CERC which would be the Appropriate Commission for determination of tariff inasmuch as the Damodar Valley Corporation is a Corporation owned and controlled by the Central Government. The detailed inputs to arrive at the aforesaid conclusion have been duly considered by us. On such consideration, we are of the view that the above conclusion recorded by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to life and property. It is now proposed to harness the water of this river and some of its tributaries and utilize it in multiple development of the Damodar Valley and the adjoining area. This Bill seeks to set up a Corporation, called the Damodar Valley Corporation on the lines of the Tennessee Valley Authority in the USA. It will be an autonomous body within the framework of the enactment. Its objects, constitution and powers are laid down in the Bill. Briefly, its main function will be to control food in the Damodar, generate electric power for distribution and provide water for irrigation and other purposes. In addition, the Corporation will, endeavour to promote economic development of the Damodar Valley and the adjoining areas. It will consist of three members including the Chairman. These three members and the Secretary and the treasurer will be appointed by the Central Government. The Corporation will have the power to acquire land and construct or cause to be constructed such dams, barrages, reservoirs, power-houses and power structures, electrical transmission line, irrigation and navigation works as may be necessary. The capital required by the Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power by a statute. In the latter case, the impugned exercise of discretion may be considered on all grounds on which administrative action may be questioned such as non-application of mind, taking irrelevant matters into consideration, etc. The subordinate legislation is, however, beyond the reach of administrative law. Thus, delegated legislation-otherwise known as secondary, subordinate or administrative legislation-is enacted by the administrative branch of the government, usually under the powers conferred upon it by the primary legislation. Delegated legislation takes a number of forms and a number of terms-rules, Regulations, by-laws etc; however, instead of the said labels what is of significance is the provisions in the primary legislation which, in the first place, confer the power to enact administrative legislation. Such provisions are also called as enabling provisions . They demarcate the extent of the administrator s legislative power, the decision-making power and the policy making power. However, any legislation enacted outside the terms of the enabling provision will be vulnerable to judicial review and ultra vires. 36. The opinion of a seven Judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enough that the legislature retains control over the subordinate agent and could recall him at any time it likes, to justify its arming the delegate with the legislative powers in regard to a particular subject. Subordinate legislation not only connotes the subordinate or dependent character of the agency which is entrusted with the power to legislate, but also implies to subordinate or ancillary character of the legislation itself, the making of which such agent is entrusted with. If the legislature hands over its essential legislative powers to an outside authority, that would, in my opinion, amount to a virtual abdication of its powers and such an act would be in excess of the limits of permissible delegation. On a consideration of all these decisions I have no hesitation in holding that as regards constitution of the delegation of legislative powers the Indian Legislature cannot be in the same position as the prominent British Parliament and how far delegation is permissible has got to be ascertained in India as a matter of construction from the express provisions of the Indian Constitution. It cannot be said that an unlimited right of delegation is inherent in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an electricity trader, In any area as may be specified in the licence: PROVIDED that any person engaged in the business of transmission or supply of electricity under the provisions of the repealed laws or any Act specified in the Schedule on or before the appointed date shall be deemed to be a licensee under this Act for such period as may be stipulated in the licence, clearance or approval granted to him under the repealed laws or such Act specified in the Schedule, and the provisions of the repealed laws or such Act specified in the Schedule in respect of such licence shall apply for a period of one year from the date of commencement of this Act or such earlier period as may be specified, at the request of the licensee, by the Appropriate Commission and thereafter the provisions of this Act shall apply to such business: PROVIDED FURTHER that the Central Transmission Utility or the State Transmission Utility shall be deemed to be a transmission licensee under this Act: PROVIDED also that in case an Appropriate Government transmits electricity or distributes electricity or undertakes trading in electricity, whether be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a distribution licensee shall not require a licence to undertake trading in electricity. 39. It is contended on behalf of the Appellants that the application of a proviso must always be confined and understood within the parameters of the provisions of the main Section of which the proviso is a part and that a proviso, in no case, can be construed to have any general application. This argument would require some examination. In this regard the decision of this Court Shah Bhojraj Kuvarji Oil Mills (supra) may be usefully recapitulated and the following observations may be specifically taken note of: It is contended by the learned Attorney-General that the construction placed by the High Court upon the first proviso to Section 50 (of Bombay Rents, Hotel and Lodging House Rates Control Act of 1947) is erroneous. Though he concedes that the proviso must be read as qualifying what the substantive part of Section 50 enacts, he urges that the proviso goes beyond that purpose and enacts a substantive law of its own. He relies upon the following observations of Lord Loreburn, L.C., in Rhondda Urban Council v. Taff Vale Railway, (1909) A.C. 253, where a proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DVC as a deemed licensee and not requiring to apply for and obtain licence. The Legislature could have simply stopped there. There was no necessity to incorporate the second part. The second part of the fourth proviso is to bring in the continued application of some of the provisions of the Act of 1948 which are not inconsistent with the provisions of the Act of 2003. To elaborate it further, let us take the case of the third proviso to Section 14 of the Act of 2003 which provides that in case an appropriate Government transmits electricity or distributes electricity or undertakes trading in electricity whether before or after the commencement of the Act, such Government shall be deemed to be a licensee under the Act but shall not be required to obtain licence under the Act . In so far as DVC is concerned, if the fourth proviso is to be confined only to licensing as in the case of third proviso, the fourth proviso also would have stopped with the first part of the proviso. There would have been no necessity to incorporate the second part of the proviso. The legislature does not incorporate any words which are irrelevant or redundant and every expression used in a statutory provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at has been urged and, therefore, will require our consideration. While dealing with the question as to whether Reports submitted by Parliamentary Standing Committee, can be taken as permissible external aids for interpretation of a statute, this Court in a recent decision in Kalpana Mehta and Ors. v. Union of India and Ors. 2018 (7) SCALE 106. had occasion to observe as follows: X x x x it clear as day that the Court can take aid of the report of the parliamentary committee for the purpose of appreciating the historical background of the statutory provisions and it can also refer to committee report or the speech of the Minister on the floor of the House of the Parliament if there is any kind of ambiguity or incongruity in a provision of an enactment. Further, it is quite vivid on what occasions and situations the Parliamentary Standing Committee Reports or the reports of other Parliamentary Committees can be taken note of by the Court and for what purpose. Relying on the same for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Act of 1948 itself be repealed/amended insofar as all non-power related activities are concerned which constitute only about 10% of the total activities of the Corporation. 48. After considering the respective stands taken, the Parliamentary Standing Committee had recommended that the Corporation should be exempted from the operation of the provisions of the proposed 2003 Act in view of the special status and responsibilities of the Corporation as envisaged under the Parliamentary enactment constituting it (i.e. the Act of 1948). However, it appears that Parliament was not inclined to provide a blanket/total exemption in favour of the Corporation and the 2003 Act did not include the Corporation as one of the entities in Section 173 of the 2003 Act which provides exemption in so far as the provisions of the Consumer Protection Act, 1986, the Atomic Energy Act, 1962 and the Railways Act, 1989 clearly excluding the provisions of the Act of 1948 therefrom. Instead, the fourth proviso to Section 14 of the 2003 Act was specifically incorporated, details of which have already been noted. Having regard to the legislative history behind the enactment of the provision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he remaining heads of tariff fixation, it appears that so far as the depreciation rate and sinking fund is concerned it is the provisions of Section 40 of the Act of 1948 which have been held to be determinative. We have gone through the reasoning adopted by the learned Appellate Tribunal in this regard. Having clarified the manner in which the fourth proviso to Section 14 of the 2003 Act has to be understood, we do not find the reasoning adopted by the learned Appellate Tribunal on the issues relating to depreciation and sinking fund to be fundamentally flawed in any manner so as to give rise to a substantial question of law requiring our intervention/interference Under Section 125 of the 2003 Act. 51. Insofar as the debt-equity ratio is concerned, we find that except for the projects which have been completed prior to 1992 in which case the ratio has been worked out at par with other public-sector organisation at 50:50, the ratio of 70:30 has been adopted following the prescription under Regulation 20 of the Tariff Regulations in the absence of any specific rate under the Act of 1948. 52. So far as the pension and gratuity fund is concerned, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k-force deployed in the power sector of the Corporation. In fact, in the counter arguments advanced on behalf of the Corporation this contention has been refuted and it is asserted that such materials were, indeed, laid before the CERC, a fact which we find to be correct. 55. Insofar as the issue of allowance of cost relating to other activities of the Corporation to be recovered through tariff on electricity is concerned, we have taken note of the objection(s) raised in this regard which in sum and substance is that Sections 32 and 33 of the Act of 1948 are in direct conflict with Sections 41 and 51 of the 2003 Act and, therefore, recovery of cost incurred in other works undertaken by the Corporation through power tariff is wholly untenable. Apart from reiterating the basis on which we have thought it proper to affirm the findings of the learned Appellate Tribunal on the purport and scope of the fourth proviso to Section 14 of the 2003 Act and the continued operation of the provisions of the Act of 1948 which are not inconsistent with the provisions of the 2003 Act, we have also taken note of the specific provisions contained in Sections 41 and 51 of the 2003 Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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