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TMI Blog2018 (4) TMI 1945X X X X Extracts X X X X X X X X Extracts X X X X ..... s, B. Balaji, Rahul Mehra, Neha Sangwan, Chirag M. Shroff and E.C. Agrawala, Advs. JUDGMENT SANJAY KISHAN KAUL, J. 1. The Electricity Act, 2003 (hereinafter referred to as the 'said Act') provides for Central and State Regulatory Commissions. Insofar as the appointment of the Chairperson of these Commissions is concerned, the relevant provisions stipulate that the Chairperson "may" be a Judge of a High Court for the State Commission, a Judge of the Supreme Court or the Chief Justice of a High Court for the Central Commission. The common question, which arises for consideration in these appeals is whether the expression "may" should be read as "shall", i.e., whether it is mandatory to have a judicial mind presiding over these Commissions in the form of a Judge. 2. The Division Bench of the Madras High Court vide judgment dated 7.2.2014 took the view in respect of the challenge laid to the selection process of the Chairman of the Tamil Nadu State Electricity Commission that there was no such mandatory requirement though there was an option to appoint a Judge. 3. The Division Bench of the Gujarat High Court in a similar case in respect of the appointment of a Chairperson ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission Act of 1998 was an endeavour to distance the Government from determination of tariffs by having independent regulatory commissions. 9. Part X of the said Act deals with matters relating to Regulatory Commissions - their constitution, powers and functions, etc. Sections 76 & 77 of the said Act are concerned with the constitution of the Central Commission and the qualifications for appointment of Members of the Central Commission. The provisions are similar to the appointment of the Members and Chairperson of the State Commissions except to the extent that while the relevant Sub-section provides that the Central Government "may" appoint the Chairperson from amongst persons who is, or has been a Judge of the Supreme Court or the Chief Justice of a High Court in the case of the Central Commission, in the case of State Commissions, the provision states that the State Government "may" appoint any person as the Chairperson from amongst persons who is, or has been, a Judge of a High Court. Section 78 of the said Act deals with the constitution of the Selection Committee to recommend Members, while the functions of the Central Commission are specified in Section 79 of the said Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hief Secretary of the concerned State ....Member; (c) the Chairperson of the Authority or the Chairperson of the Central Commission ....... Member: Provided that nothing contained in this Section shall apply to the appointment of a person as the Chairperson who is or has been a Judge of the High Court. (2) The State Government shall, within one month from the date of occurrence of any vacancy by reason of death, resignation or removal of the Chairperson or a Member and six months before the superannuation or end of tenure of the Chairperson or Member, make a reference to the Selection Committee for filling up of the vacancy. (3) The Selection Committee shall finalise the selection of the Chairperson and Members within three months from the date on which the reference is made to it. (4) The Selection Committee shall recommend a panel of two names for every vacancy referred to it. (5) Before recommending any person for appointment as the Chairperson or other Member of the State Commission, the Selection Committee shall satisfy itself that such person does not have any financial or other interest which is likely to affect prejudicially his functions as such Chairperson or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation and restructuring of electricity industry in the State; (iv) matters concerning generation, transmission, distribution and trading of electricity or any other matter referred to the State Commission by that Government: (3) The State Commission shall ensure transparency while exercising its powers and discharging its functions. (4) In discharge of its functions, the State Commission shall be guided by the National Electricity Policy, National Electricity Plan and tariff policy published Under Section 3. 11. We may note a distinction between the Members of the Central Commission and the State Commissions inasmuch as Section 77 dealing with the appointment of Members of Central Commission provides as under: 77. Qualifications for appointment of Members of Central Commission.- (1) The Chairperson and the Members of the Central Commission shall be persons having adequate knowledge of, or experience in, or shown capacity in, dealing with, problems relating to engineering, law, economics, commerce, finance or management and shall be appointed in the following manner, namely: (a) one person having qualifications and experience in the field of engineering with specialisati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rperson of the Selection Committee has to be a Member of the Planning Commission in-charge of the energy sector. Once again, the proviso to Section 78 makes an exception to the appointment of a person as a Chairperson of the Central Commission, who is, or has been a Judge of the Supreme Court or the Chief Justice of the High Court, as in that eventuality, the Chief Justice of India has to be consulted. 15. The Appellate Tribunal for Electricity is provided in Part XI of the said Act. Section 111 of the said Act deals with the appeal to Appellate Tribunal from orders made by an adjudicating officer under the said Act, or the Appropriate Commission under the said Act. Section 112 of the said Act deals with the composition of the Appellate Tribunal. The Tribunal sits in Benches with at least one judicial member and one technical member. Section 113 of the said Act provides for qualifications for appointment of Chairperson and Member of the Appellate Tribunal. The Chairperson of the Appellate Tribunal has to be someone, who is, or has been a Judge of the Supreme Court or the Chief Justice of a High Court. Thus, there is no quibble over the proposition that there is a senior judicial m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rformance of a licensee. Section 61 deals with tariff Regulations and Section 66 deals with the development of a market in power, guided by the National Electricity Policy. Looking to all these functions, it was canvassed that a purposive interpretation should be given to the expression used, for interpreting the provisions of appointment of the Chairperson. Mindful of the technical nature of functions as they are, it was argued that a Judge was not required and that this was apparent from the fact that even at present, all State Commissions are headed by non-Judges, except one. The provision was stated to be only felicitous in character, as it gives an option to appoint a Judge. It was argued that there could be a possibility of a Judge, rarely, as it may be, being an expert in this field who could be so appointed. However, if a Judge is to be appointed, the process of appointment is different by reason of his/her having held a constitutional post and thus, the Selection Committee constituted would not be recommending the appointment, but the consultation would have to be with the Chief Justice concerned. 17. Learned Attorney General then proceeded to refer to the judgment of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, thus, the authorities concerned were required to look into the desirability and feasibility for making appointments, of any person, as the Chairperson from amongst persons, who is or has been a Judge of a High Court. 19. The provisions of Section 113 of the said Act were referred to, to conclude that the legislature was aware that the functions performed by the State Commission as well as the appellate tribunal are judicial in nature and, thus, the appellate authority has the trappings of the Court. This essential feature had not been made mandatory Under Section 84 of the said Act. In the opinion of the Bench, it would be "advisable" for the State Government to exercise the enabling power Under Section 84(2) of the said Act to appoint a person, who is, or has been a Judge of a High Court as Chairperson of the State Commission. The aforesaid discussions were referred to by the learned Attorney General to canvas that the question involved in the case really did not pertain to Section 84(2) of the said Act but certain observations had been made, nonetheless. The Tribunals envisaged under Part XIV A of the Constitution would stand on a different footing and therefore cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing or matter before the Appropriate Commission, as that Commission may consider appropriate. (3) The Appropriate Commission may authorise any person, as it deems fit, to represent the interest of the consumers in the proceedings before it. 95. Proceedings before Commission.- All proceedings before the Appropriate Commission shall be deemed to be judicial proceedings within the meaning of Sections 193 and 228 of the Indian Penal Code and the Appropriate Commission shall be deemed to be a civil court for the purposes of Sections 345 and 346 of the Code of Criminal Procedure, 1973 (2 of 1974). 96. Powers of entry and seizure.- The Appropriate Commission or any officer, not below the rank of a Gazetted Officer specially authorised in this behalf by the Commission, may enter any building or place where the Commission has reason to believe that any document relating to the subject matter of the inquiry may be found, and may seize any such document or take extracts or copies there from subject to the provisions of Section 100 of the Code of Criminal Procedure, 1973, insofar as it may be applicable. 23. The conclusion in favour of an Appropriate Commission being headed by a Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to the appointment of the Chairpersons and Members of the Tribunals. In the said case, reference was made to the earlier Constitution Bench judgment in the Union of India v. Madras Bar Association (2010) 11 SCC 1 (MJ-I), crystallizing the legal position while transferring adjudicatory functions from Courts to Tribunals. It was observed that such Tribunals should possess the same independence, security and capacity as the courts which the Tribunals are mandated to substitute and thus, Members of the Tribunals discharging judicial functions could only be drawn from sources possessed of expertise in law and competent to discharge judicial functions. Technical members could also be appointed where such technical expertise is essential. But where the adjudicatory process transferred to the Tribunal did not require any specialized skills, knowledge or expertise, the provision for appointment of technical Member would constitute a clear case of delusion and encroachment upon the independence of the judiciary, and the "rule of law." On the stature of Members, it was observed that the same would depend on the jurisdiction transferred, i.e., if the jurisdiction of the High Court was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at was observed by the Bench in that judgment would have to be construed and nothing more than that. It is this argument, which has been dealt with when the observations relied upon in the impugned order were referred to. This is stated to be quite apparent even from para 55, which records the submissions of the then counsel for the Appellant in Tamil Nadu Generation and Distribution Corporation Limited[supra] and what was accepted by the Court in para 59 of the judgment, i.e., adjudicatory functions generally ought not to be conducted by the State Commission in the absence of a Judicial Member, which are not fairly relative to tariff fixation or the advisory and recommendatory functions of the State Commission. 30. Learned Senior Advocate next turned to Section 86(1)(f) of the said Act and referred to the judgment in Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd. (2008) 4 SCC 755 (GJ-I) to submit that the expression 'and', used in Sub-section 86(1)(f) has already been read as 'or'. For clarity, the Sub-section is reproduced hereunder: 86. Functions of State Commission.- (1) The State Commission shall discharge the following functions, namely: xxxx xxxx xxxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stions of law show that Tribunals deal with such questions or substantial questions, and that the direct appeals to this Court has the result of denial of access to the High Court. Such Tribunals, thus, become a substitute for the High Courts, without the manner of appointment to such Tribunals being the same as the manner of appointment of High Court Judges. 33. Lastly, learned Counsel referred to Uttar Pradesh Power Corporation Limited v. National Thermal Power Corporation Limited and Ors. (2011) 12 SCC 400 where observations were made qua the function of the Central Commission constituted Under Section 3 of the Electricity Regulatory Commissions Act, 1998 as an expert body, which had been entrusted with the task of determination of tariff, which involves highly technical procedure requiring not only working knowledge of law but also of engineering, finance, commerce, economics and management. Thus, it was held that the issues with regard to determination of tariff should be left to the expert body and ordinarily the High Court and even this Court should not interfere with the determination of tariff. 34. Mr. Jayant Bhushan, learned Senior Advocate sought to crystallize his int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the Members present and voting, and in the event of an equality of votes, the Chairperson or in his absence, the person presiding shall have a second or casting vote. (4) Save as otherwise provided in Sub-section (3), every Member shall have one vote. (5) All orders and decisions of the Appropriate Commission shall be authenticated by its Secretary or any other officer of the Commission duly authorised by the Chairperson in this behalf. 37. Thus, as per Sub-section (2) of Section 92, the Chairperson has a right to nominate a member who would chair the meeting in his absence and as per Sub-section (3), the Chairperson has a casting vote. This, he contended was vital to the adjudicatory process, which is by majority and, thus, the necessity of having a judicial Member as a Chairperson apart from the aspect of power wielded by the Commission from Sections 94 to 96 of the said Act. Stand of Madurai Power Corporation Private Limited: 38. Mr. Mohan Parasaran, learned Senior Advocate appearing for the aforesaid intervener referred to Section 84(1) of the said Act to contend that where reference is made to a person of law, that cannot be a reference to a judicial Member. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the country where State functions were opened up to private players. This was not supposed to be unregulated and, thus, the Parliament provided a regulatory body. By the time the said Act was enacted in 2003, the Parliament had become wiser and the introduction of the requirement of a Judge to head the regulatory commission was, thus, introduced in this Act. 41. Turning to the specific provisions of the Act, he referred to Section 82(4) of the said Act, which provides that a State Commission would consist of not more than three members including the Chairperson. Section 2(43), defines a Member to include a Chairperson and reads as under: 2. Definitions.- In this Act, unless the context otherwise requires,- xxxx xxxx xxxx xxxx xxxx (43) "Member" means the Member of the Appropriate Commission or Authority or Joint Commission, or the Appellate Tribunal, as the case may be, and includes the Chairperson of such Commission or Authority or Appellate Tribunal; 42. In the sittings of the Commissions, disputes emanating from Section 86(1)(f) of the said Act being adjudicated upon are categorized as DRP (Dispute Resolution Petition) cases. Tariff fixation is, of course, not adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, it was observed that it had a number of adjudicatory functions as well. 44. In Gujarat Urja Vikas Nigam Ltd. [supra] (GJ-I), the implied conflict between Section 86(1)(f) of the said Act and Section 11 of the Arbitration & Conciliation Act, 1996, was reconciled and applying the harmonious construction principles (Mimansa principles) it was observed that where there is a dispute between a licensee and the generating company, only the State Commission or the Central Commission or arbitrator nominated by it could resolve such disputes, whereas all other disputes (unless there is some other provision in the Electricity Act, 2003) would be decided in accordance with Section 11 of the Arbitration & Conciliation Act, 1996. This was stated to be also in consonance with Section 158 of the said Act in Part XVI dealing with Dispute Resolution where arbitration was provided for in terms of the Arbitration & Conciliation Act, 1996. 45. Learned Senior Counsel sought to point out that no Judge had ever been appointed as the Chairperson. The mandate of Section 85(2) of the said Act, in fact, required that six months prior to the superannuation or end of the tenure of the Chairperson o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Act. This selection process was required to be completed in three months and had to recommend, at least, two names for the post of Members. The Committee recommended the name of Mr. G. Rajagopal (Respondent No. 7) on 27.12.2013. This appointment is specifically assailed on the ground that he was still working as Director (Finance), TANGEDCO when his name was recommended by the Selection Committee, and that Mr. Rajagopal opted for voluntary retirement after his name had been recommended by the Selection Committee. The Notification of his appointment was issued on 31.12.2013 whereafter he assumed office on 9.1.2014. 48. The impugned decision of the Madras High Court opining that the Chairperson need not be a High Court Judge was rendered on 7.2.2014. 49. Another Notification dated 27.2.2014 was published constituting a Selection Committee for selecting a person for the post of the Chairperson. Mr. S. Akshayakumar (Respondent No. 6) retired from the post of the Managing Director of TANTRANSCO on 31.5.2014 and was appointed as the Chairperson of the State Commission vide Notification dated 6.6.2014, assuming charge on 9.6.2014. 50. On 12.12.2014, the State Commission consisting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment to constitute a State Transport Authority and Regional Transport Authorities to exercise powers and functions specified in Chapter V Section 68(2) put a restriction that no person who has a financial interest whether as proprietor, employee or otherwise in any transport undertaking was to be appointed and in case such financial interest was acquired post appointment, the person was required to give notice in writing to the State Government of acquisition of such interest and would vacate office. The Transport Commissioner and Traffic Manager working in the Office of the General Manager of the Haryana Roadways, a State Undertaking, were held to fall within the mischief of Sub-section (2) of Section 68 of that Act. The nature of "financial interest" as contemplated by the said Sub-section was examined in the narrower sense and it was held to imply direct personal benefit of an economic nature while in the wider sense it would include direct or indirect interest that a person has in relation to the finances of an undertaking. Such an interest was held to include the interest of an official who manages the finances of the undertaking or on whom rests the burden of financial a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view taken by this Court in Union of India v. Namit Sharma (2013) 10 SCC 359 was sought to be distinguished since no adjudicatory functions were involved in the performance of the functions of an Information Commissioner. 58. A reference was, once again, made to the powers of the Commission Under Section 94 to 96 of the said Act as also to Section 97, which provides for delegation of the power to any Member, Secretary, Officer of the Commission except the powers to adjudicate disputes Under Sections 79 and 86, and the powers to make Regulations Under Section 178 or 181 as may be deemed necessary. 59. Our attention was also drawn to the order of the Appellate Authority dated 27.2.2013 in Appeal No. 184/2011 where some observations have been made on the functioning of the State Commission. Apparently the State Commission had refused to follow the judgment of the Tribunal on a specious plea and this attitude of the State Commission was called 'audacious' and 'most unfortunate', 'reflecting a lack of judicial approach, judicial knowledge and judicial ethics'. It was, thus, pointed out that the absence of a Judge as a Chairperson is resulting in such orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rits of the orders passed cannot be questioned. He further submitted that suo moto proceedings were initiated on 23.9.2013 while the appointment was made on 31.12.2013. Thus, Respondents Nos. 6 & 7 were both appointed after the suo moto proceedings had been initiated. The Selection Committee had not been impleaded as a party even though the selection process was being questioned. This Selection Committee was presided over by a retired Judge of the High Court. It was also submitted that a suo moto revisionary power was actually conferred on the appellate tribunal Under Section 111(6) of the said Act to cure any defects in the orders passed by the Commission. 64. Our attention was also invited to the order of the appellate authority in OP No. 1/2011 dated 11.11.2011. This arose out of a letter stated to be sent by the Ministry of Power dated 21.1.2011 complaining that most of the State Distribution Utilities have failed to file annual tariff revision petitions in time and, thus, a number of State's tariff revision had not taken place for a number of years. The Tribunal was requested to take appropriate action by issuing necessary directions to all the State Commissions to revise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 209. It was, once again, emphasized that the appellate tribunal takes care of various concerns, more so when matters have to be heard by a Bench with at least one judicial member. It was also emphasized that Under Section 82(2) of the Act a State Commission has to be a body corporate having perpetual succession and common seal and the provision reads as under: 82. Constitution of State Commission.- xxxx xxxx xxxx xxxx xxxx (2) The State Commission shall be a body corporate by the name aforesaid, having perpetual succession and a common seal, with power to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued. 68. As per Section 84(4) of the said Act, the Chairperson is to be the Chief Executive of the State Commission. It was, thus, pleaded that it may not even be advisable for a Judge to hold this nature of office. 69. It was also emphasized that the reliance placed by the opposite side on Mor Modern Cooperative Transport Society Ltd. [supra] is misplaced as the observations made in para 14 of the judgment have to be understood in the context of a dual charge being held by the said person, an aspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "shall". Thus, any person of the fields mentioned therein, having the ability, integrity and standing can be appointed as a Member or Chairperson. 74. Section 85 of the said Act provides for constitution of a Selection Committee to select the Members of the State Commission, which in turn has to consist of the persons as set out therein and mandatorily has to have a person, who has been a Judge of the High Court as the Chairperson of the Selection Committee. We may also note that this provision refers to the appointment of 'Members' of the State Commission but then that would also include the Chairperson of the State Commission, in view of Sub-section 43 of Section 2 of the said Act, which reads as under: 2. Definitions. .... .... .... .... .... (43) "Member" means the Member of the Appropriate Commission or Authority or Joint Commission, or the Appellate Tribunal, as the case may be, and includes the Chairperson of such Commission or Authority or Appellate Tribunal; 75. Thus, the reading of Sub-section (1) of Section 84 read with Section 85 of the said Act would leave no manner of doubt as to the fields from which a Chairperson or a Member of the State Commission c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n" would show that the modification of the language of a statute is the tool used only if, in its ordinary meaning and grammatical construction, there is a manifest contradiction of the apparent purpose of the enactment, or some inconvenience or absurdity which could hardly have been intended. It has been observed that in ordinary usage, "may" is permissive and "must" is imperative and that the word "may" used in a statute would not generally be held to be mandatory. However, in some cases where "may" is used in the context of a compulsory force, the meaning has been so modified by judicial exposition. The heading of the Chapter itself shows what is intended: "Modification of the language to meet the intention". 78. It is well-nigh impossible to lay down a general Rule for determining whether a provision is imperative or directory. We extract the relevant portion as under: No universal rule," said Lord Campbell L.C., "can be laid down for the construction of statues, as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the Legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disputes between the licencees and generating companies, or to refer such disputes to arbitration. There is also an advisory role to be performed by the State Commission as specified in Sub-section (2). The issue, however, is not whether a Judge would be comfortable doing this function but whether these are types of functions which necessarily mandate a Judge to be a Chairperson. The answer to this would also be in the negative, supporting the view we have adopted on the plain reading of the section. 82. We are conscious of the observations made in Tamil Nadu Generation and Distribution Corporation Limited[supra] in the context of Section 86(1)(f) of the said Act opining that the adjudicatory functions generally ought not to be conducted by the State Commission in the absence of a judicial Member, but then Sub-section (1) of Section 84 of the said Act provides for a person with knowledge in the field of law albeit not mandatorily, on a plain reading of the section. The effect of this will be dealt with in the latter part of our judgment. 83. We may also look at this issue from two other perspectives. Firstly, the composition of the Appellate Tribunal Under Section 112 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court is binding on all Courts within the territory of India, which would also include principles of law emanating from a judgment or interpretation of the law, but then the ratio decidendi of the judgments of the Supreme Court, makes the principle of mandatory requirement of a Judge applicable only to cases where the judicial function is sought to be shifted through the process of 'tribunalisation'. 87. We may also note that Section 84(2) of the said Act begins with a non-obstante clause, i.e., Notwithstanding anything contained in Sub-section (1), it does not take away what is stated in Sub-section (1), which deals with the requirements that are necessary in the appointment of a Member or Chairperson. It would not cut down the clear terms of the enactment being Sub-section (1). The occasion to use such a non-obstante Clause really arose because the process of appointment of a Chairperson who is, or has been a Judge, is required to be different, and thus, the mandatory consultation with the Chief Justice. It is nothing more or less. Further Sub-section (1) of Section 85 provides for a Selection Committee to be headed by a Judge of the High Court but with the proviso that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er proviso to Sub-clause (c) of Sub-section (1) of Section 77 of the said Act restricting it to not more than one member from the fields specified in the said clause, viz. economics, commerce, law or management. This is not the position insofar as the State Commission is concerned. 90. In order to appreciate any such requirement for a person from the legal field as a member of the State Commission, it becomes necessary to turn to the nature of functions performed by the State Commission. 91. We have, in the context of Section 84(2) of the said Act, discussed the various functions of the State Commission which are specified Under Section 86 of the said Act. The argument on behalf of the learned Attorney General and the counsel supporting him was that other than Sub-clause (f) of Section 86, there are really no adjudicatory functions. There is, however, no dispute that Sub-clause (f) is clearly an adjudicatory function. It provides for adjudication of disputes between the licencees and the generating companies. There is also a power to refer the dispute to arbitration and the expression "and" in the said Clause has been read as "or" in Gujarat Urja Vikas Nigam Ltd.[supra] (GJ-I), i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nerating companies by the State Commission or the arbitrator nominated by it under Clause (f) of Sub-section (1) of Section 86 of the said Act extends to all disputes and not merely to those pertaining to matters referred to in Clauses (a) to (e) and (g) to (k) of Section 86(1) as may arise between licensees and generating companies. In effect, it has been observed that this is the only process of adjudication which has to be followed as there is no restriction in Section 86(1)(f) of the nature of the dispute that may be adjudicated. Similarly in A.P. Power Coordination Committee and Ors. [supra] while referring to the judgment in Gujarat Urja Vikas Nigam Ltd. [supra] (GJ-I), it has been observed that the Commission has been elevated to the status of a civil court in respect of all disputes between the licensees and generating companies. Such disputes need not arise from exercise of powers under the said Act but even claims or disputes arising purely out of contract have to be either adjudicated by the Commission or be referred to an arbitrator nominated by the Commission. In that context it has also been observed that the advisability of having the State Commission presided over b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action. 97. In the latter judgment, it was observed as under: A true judicial decision presupposes an existing dispute between two or more parties, and then involves four requisites: (1) The presentation (not necessarily orally) of their case by the parties to the dispute; (2) if the dispute between them is a question of fact, the ascertainment of the fact by means of evidence adduced by the parties to the dispute and often with the assistance of argument by or on behalf of the parties on the evidence; (3) if the dispute between them is a question of law, the submission of legal argument by the parties, and (4) a decision which disposes of the whole matter by a finding upon the facts in dispute and an application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law. A quasi-judicial decision equally presupposes an existing dispute between two or more parties and involves (1) and (2), but does not necessarily involve (3) and never involves (4). The place of (4) is in fact taken by administrative action, the chara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st persons, who is, or has been, a Judge of the High Court should be explored. 101. It is undoubtedly true that the question which the Court was seized of, related to the interpretation of Section 86 of the said Act and certain other matters, which are not connected with the controversy herein. Thus, the issue arises, whether the observations made, albeit to be construed as advisory or suggestive qua the appointment of a Chairman and a Member are to be treated as ratio decidendi or obiter dicta. 102. In order to determine this aspect, one of the well-established tests is "The Inversion Test" propounded inter alia by Eugene Wambaugh, a Professor at The Harvard Law School, who published a classic text book called "The Study of Cases"[Eugene Wambaugh, The Study of Cases (Boston: Little, Brown, & Co., 1892)] in the year 1892. This text book propounded inter alia what is known as the "Wambaugh Test" or "The Inversion Test" as the means of judicial interpretation. "The Inversion Test" is used to identify the ratio decidendi in any judgment. The central idea, in the words of Professor Wambaugh, is as under: In order to make the test, let him first frame carefully the supposed proposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial functions which may be of far reaching effect, the presence of a member having knowledge of law would become necessary. The absence of a member having knowledge of law would make the composition of the State Commission such as would make it incapable of performing the functions Under Section 86(1)(f) of the said Act. 106. In Madras Bar Association[supra] (MJ-II), the Constitution Bench, referring to the decision in Madras Bar Association[supra] (MJ-I) observed that members of tribunals discharging judicial functions could only be drawn from sources possessed of expertise in law and competent to discharge judicial functions. We are conscious of the fact that the case (MJ-I) dealt with a factual matrix where the powers vested in courts were sought to be transferred to the tribunal, but what is relevant is the aspect of judicial functions with all the 'trappings of the court' and exercise of judicial power, at least, in respect of same part of the functioning of the State Commission. Thus, if the Chairman of the Commission is not a man of law, there should, at least, be a member who is drawn from the legal field. The observations of the Constitution Bench in Madras Bar A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 138/2015 is to the appointments made to the Tamil Nadu State Commission and the exercise of the powers suo moto by the Commission. The fundamental plea is of financial bias of the two members as they were working in their erstwhile avatars. The name of Mr. G. Rajagopal was recommended when he was still working as the Director, TANGEDCO and he opted for voluntary retirement after his name had been recommended. Mr. Akshayakumar retired from the post of Managing Director of TANTRANSCO on 31.5.14 and was appointed as Chairman of the Commission on 6.6.14. The tariff hike was approved by a majority of 2:1 with these two members being part of the majority view. 112. In respect of the aforesaid, reliance was placed on the judgment in Rajesh Awasthi[supra] and Mor Modern Cooperative Transport Society Ltd. [supra]. We, however, find that those judgments would not apply in the present case. The nature of financial interest was examined in the narrower sense as well as the wider sense and in the wider sense, it was held to include the direct or indirect interest of a person in relation to a financial undertaking. The situation arose when the person concerned was holding both the posts simulta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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