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TMI Blog2006 (9) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... a body corporate in terms of Section 12 thereof. The territorial jurisdiction of the Board was the entire State of Madhya Pradesh as notified and constituted by 'States Reorganisation Act, 1956' (for short "the 1956 Act"). 2. A new State known as State of Chhattisgarh comprising of 16 districts carved out of the State of Madhya Pradesh was formed on 1.11.2000. Distribution of assets and liabilities of the States are indisputably governed by the 2000 Act. Pursuant to or in furtherance of the provisions of Section 58 of the 2000 Act, the State of Chhattisgarh was entitled to constitute its own State Electricity Board. It was constituted with effect from 15.11.2000. It started collecting revenue with effect from the said date but it offered the revenues collected to the MSEB till 30th November, 2000. The State of Madhya Pradesh also constituted a new Board with effect from 1.1.2001. It informed the Government of India about the formation thereof and requested it to issue necessary orders under Section 58(4) of the 2000 Act enabling the successor Boards to take over assets, liabilities of the existing Board. 3. A meeting of the officers of the both the States was he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the purported criteria laid down in the notification dated 12.4.2001. 5. The State of Chhattisgarh filed a writ petition in the High Court of Chhattisgarh questioning the said orders of the Central Government dated 12.4.2001 and 4.12.2001. A transfer application was filed by the MPSEB for transfer of the said writ petition to the High Court of Delhi which was allowed by an order dated 19.8.2002. The Central Government issued an order purported to be under Section 58(4) of the 2000 Act on 23.5.2003 provisionally allocating various liabilities of the MPSEB between the MPSEB and the CSEB. The said order was questioned by the CSEB before the High Court of Delhi. 6. In the course of hearing before the High Court of Delhi, the Union of India suggested that the dispute between the parties should be resolved by passing a final order by it upon giving an opportunity of hearing on all the issues raised by the parties in the said writ petition. The said suggestion on the part of the Central Government was accepted by the High Court of Delhi by an order dated 10.8.2004. Pursuant to or in furtherance of the said representation before the High Court, admittedly the Government of India conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he successor Boards; and (e) Pass any other order and/ or direction, as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case. 8. The main contentions raised in the writ petition as also the transfer petitions are: (i) Fixation of a date of dissolution as 15.11.2000 is ultra vires Article 14 of the Constitution of India. (ii) Division of assets and liabilities had been made without giving due regard to revenue generation potential which is of paramount importance, (iii) The Central Government acted arbitrarily in rejecting the contention of the Petitioner - Board and in particular in ignoring the provisions contained in the proviso appended to Section 131 of the Electricity Act, 2003. (iv) Apportionment of assets and liabilities pursuant to fixation of cut-off date as 15.11.2000 had caused serious prejudice to the Petitioner - Board as would be evident from the following: (a) as against the consumption of 78%, the capacity allotted was only 68%. (b) as against 88% of liabilities allocated to Madhya Pradesh, the revenues allocated is 64%. (c) The order of the Central Government has foiled to take into account the adverse consumer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz., 15.4.2001 would itself have been arbitrary and unreasonable. Current assets and liabilities of the Board were required to be apportioned and the same having been done on the basis of power consumption ratio of the States, which is roughly 77:23, the same cannot be said to be arbitrary particularly when the current liabilities, mostly on fuel and power purchases, were directly relatable to the power consumption ratio. 12. The 2000 Act was enacted to provide for the reorganization of the existing State of Madhya Pradesh and for matters connected therewith. Section 2 of the said Act provides for the interpretation of the terms mentioned thereto. Section 2(a) defines the "appointed day" to mean the day which the Central Government may, by notification in the Official Gazette, appoint. Indisputably, the appointed day is 1.11.2000. 'Population ratio' in relation to the States of Madhya Pradesh and Chhattisgarh is defined to mean the ratio of 485.7:176.2. 'Successor State' in relation to the existing State of Madhya Pradesh has been defined in Section 2(j) to mean the State of Madhya Pradesh or Chhattisgarh. 13. The 2000 Act makes various provisions for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Chhattisgarh in such manner as may be agreed upon between them within one year of the dissolution of the Board or the Corporation, as the case may be, or if no agreement is reached, in such manner as the Central Government may, by order, determine: (4) Nothing in the preceding provisions of this section shall be construed as preventing the Government of the State of Madhya Pradesh or, as the case may be, the Government of the State of Chhattisgarh from constituting, at any time on or after the appointed day, a State Electricity Board or a State Road Transport Corporation or a State Warehousing Corporation for the State under the provisions of the Act relating to such Board or Corporation; and if such a Board or Corporation is so constituted in either of the States before the dissolution of the Board or the Corporation referred to in Sub-section (1),-- (a) provision may be made by order of the Central Government enabling the new Board or the new Corporation to take over from the existing Board or Corporation all or any of its undertakings, assets, rights and liabilities in that State, and (b) upon the dissolution of existing Board or Corporation,-- (i) any assets, rights a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n absence of an agreement between the two States, as the Central Government may by order determine. Sub-section (4) of Section 58, on the other hand, contains a special provision. It enables both the States to constitute respective State Electricity Boards. Such constitution of the State Electricity Boards could only be made on or after the appointed day, i.e., 1.11.2000. 17. In the event of constitution of such Boards by either of the States before the dissolution of the Board by the State concerned, the Central Government by order direct take over of the new Board or Corporation from the existing Board or Corporation all or any of its undertakings, assets, rights and liabilities thereof Clause (b) of Sub-section (4) of Section 58 contemplates that upon such dissolution any asset, right and liability which would otherwise have passed to that State by or under the provisions of Sub-section (3) shall pass to the new Board or the new Corporation instead of to or by that State. 18. The principal question which arises for consideration is that if the Central Government had directed that the Board constituted by the respective States shall act in a particular manner, whether the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It appears that the Additional Secretary of MPSEB by a letter dated 21.11.2000 directed the Chief Engineer, CSEB "that the revenue collections should be kept in Chhattisgarh and should not be remitted to the Madhya Pradesh with effect from 21.11.2000. Yet again in the minutes of discussions between the Chief Ministers of the States of Chhattisgarh and Madhya Pradesh held on 25th November, 2000, it was acknowledged that the State of Chhattisgarh had already set up a separate Electricity Board with effect from 15.11.2000. It was further noticed that it has also approached the Government of India for orders under Section 58(4) of the 2000 Act. In the said backdrop, it was inter alia agreed: Since the Government of Chhattisgarh has already set up a separate Electricity Board w.e.f. 15.11.2000 and approached the Government of India for orders Under Section 58(4) of the MPRA, 2000, it has become imperative to consider relevant principles for apportionment of assets, rights & liabilities and manpower of the MPEB analogous to the principles enunciated in the Madhya Pradesh Reorganization Act, 2000 for apportionment of assets and liabilities of the State Government (Chapter VI) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attisgarh has been constituted w.e.f. 1.11.2000. Thereafter a separate Chhattisgarh State Electricity Board has been constituted for the new State, which has started working independently w.e.f. 1.12.2000. In respect thereof, it has been decided that after the issue of this circular, matters relating to the various offices/ employees of the Electricity Board situated in the State of Chhattisgarh may not be forwarded to the Board for its approval and all such pending matters may be returned after listing them out. The Minister of Power, Government of India noticing certain grid indiscipline as regards drawal of power from the grid requested the Chief Minister of the State of Chhattisgarh stated: ...I would also urge upon you to take in immediate review of the pattern of drawls from the regional grid and ensure that drawls under no circumstances exceed the quantum is scheduled by Regional Load Despatch center. For this purpose you may kindly give instructions to your SEB to strictly maintain grid discipline, including resort to load shedding it and when necessary. This also goes to show that the functioning of the CSEB had been recognized by the Central Government. 23. Yet again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds are dependant on the generation capacity (variable), the tariff rate and the consumer profile (which are relatively constant). Generation capacity is, thus, directly correlated with sales revenues and we have, therefore, suggested that this measure be used for distribution of liabilities instead of population, which has no economic nexus with the earning capacity of the Electricity Board. I request that the Government of India may abjure any unequal, interim division based on simplistic assumptions which will endanger the viability of the successor boards, while making subsequent adjustments an arduous task. The provisional order may also come into force prospectively; and revenues unilaterally appropriated by the CSEB remitted to the MPEB before that date, so that the organization may discharge accrued liabilities towards coal companies, NTPC, etc. 25. It appears that a meeting was also held between the Empowered Committees on 3rd July, 2002 at Bhopal in regard to the division of assets and liabilities wherein a large number of officers represented their respective States participated. In the context of independent working of the two State Electricity Boards, it appears, an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature. The order impugned in the writ petition was admittedly passed by the Central Government upon giving an opportunity of hearing to both the parties. We have referred to some of the correspondences exchanged between the parties and/ or the respective State Governments inter se or with the Central Government only for the purpose of showing that there had been certain materials before the Central Government to appoint a day for the purpose of Sub-section (3) of Section 58 of the 2000 Act. Sub-sections (3) and (4) provide for a scheme. A meaningful interpretation is required to be given thereto. Both the provisions are required to be construed harmoniously. 29. The Central Government under the 2000 Act has an important role to play. Such a statutory role is envisaged only when the States differ in their approach. It was, therefore, required to resolve the dispute where for it was obligatory on its part to arrive at an independent decision. The respective Boards had come into being on 15.11.2000 and 1.1.2001. The Central Government as indicated hereinbefore could have chosen any of the aforementioned dates. For the said purpose, the functioning of the respective Boards was requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the new Board. In that view of the matter, the submission of Mr. Tankha that the word "and" used in between Clauses (a) and (b) of Sub-section (4) of Section 58 of the 2000 Act must be read conjointly is devoid of any merit. The word "and" has been used for the purpose of showing the two different consequences arising therefrom. 33. Clauses (a) and (b) of Sub-section (4) of Section 58 of the 2000 Act operate in different fields. They have different consequences and, thus, both cannot operate simultaneously. When an order is passed by the Central Government under Clause (a) of Sub-section (4) of Section 58, it merely provides for only take over of the existing Board by the new Board but the same would not mean that the date provisionally fixed must be the date of dissolution as envisaged under Sub-section (3) thereof. Two different dates are, thus, possible to be fixed, one provisional and other final. When a date is appointed in terms of Sub-section (3) of Section 58 of the 2000 Act, the same shall be final and the consequences arising therefrom shall ensue. 34. In the backdrop of the aforementioned events and particularly in view of the fact that the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date has been fixed in supersession of the earlier orders. We have noticed hereinbefore that the said order has been issued in supersession of all earlier orders. The writ petitions filed by the CSEB questioning the validity of the said orders, therefore, become infructuous. 39. The only question which survives now is as to whether the order dated 4.11.2004 regarding division of assets and liabilities between two successor Boards is just and proper. The apportionment of current assets and liabilities has been made on the basis of power consumption ratio of States. Any other variable might not have any rational nexus with the apportionment of current assets and liabilities. It was submitted that the Central Government had adopted the most rational method of apportionment of current assets and liabilities as the power consumption ratio had a rational link with the subject matter of apportionment It was further submitted that any change from this principle would have resulted in the same grievance from the CSEB. Long term assets and liabilities were divided in the ratio of 90:10 and hence, overall, the MPSEB had been given 85% of the assets and 84% of the liabilities. The action on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs The Customs Authorities assessed duty under Item 45(4) of the Indian Customs Tariff. The petitioners in that case contended that the duty should have been assessed under Item 45(a). This Court held that there was neither any violation of fundamental right under Article 19 or any unequal treatment and the petition was not maintainable. This Court in the case of Ujjam Bai v. State of U.P. as also in the case of Bhatnagars & Co. Ltd. v. Union of India held the same view that any erroneous decision would not be a violation of fundamental rights. 43. In Fertilizer Corporation Kamgar Union (Regd.), Sindri and Ors. v. Union of India and Ors. (1981)ILLJ193SC , this Court held: In view of the fact that neither the decision to sell nor the sale proceedings were unreasonable, unjust or unfair, it cannot be held that the petitioner's rights if any, under Article 14 are violated. The learned Attorney-General contended that arbitrariness would be actionable under Article 32, only if it causes injury to the fundamental rights of the petitioner, and that the petitioners in the instant case have no fundamental right in the exercise of which they can challenge the sale. We consider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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