2015 (4) TMI 1285 - HC - Indian Laws

Appeal delay condoned, demand notices stayed pending bank guarantee. Oral hearings not required for tariff determination under Electricity Act.

The court condoned a delay in filing an appeal and stayed demand notices issued by DVC pending a bank guarantee. It held that consumers were not entitled ... Determination of retail/distribution tariff of the licensee Damodar Valley Corporation by the appellant West Bengal Electricity Regulatory Commission - It is the grievance of the respondent/writ petitioners, prior to determination of such retail tariff by the State Commission, on the basis of generation and interstate transmission tariff orders passed by CERC, DVC raised demand notices for differential amount payable for the period from May, 2010 to August, 2010 as also revised bills on and from September, 2013 as per its own calculation. Whether the respondent/writ petitioners have a right of oral hearing before the appellant State Commission in the matter of determination of retail tariff under section 64 of the Act or alternatively, in the facts of this case they are entitled to such relief on an equitable premise being saddled with the liability to furnish bank guarantee in terms of the order appealed against? HELD THAT:- A perusal of section 64 would make it clear that an application filed by a licensee for fixation of tariff under section 62 of the Act is to be published in such form and manner as may be specified by the appropriate Commission. In response to such publication, members of the public (including consumers) are entitled to submit suggestions and objections before the Commission. The Commission upon receipt of such suggestions/objections (if any) from the public shall within 120 days from receipt of tariff application consider such suggestions/objections and pass tariff order accepting the application with such conditions or modifications as may be specified in the said order or reject such application after assigning reasons in support thereof - Order under section 64 of the Act is subject to an appeal before the Appellate Tribunal under section 111 of the Act at the behest of an aggrieved party where the parties shall be given an opportunity of hearing by the Tribunal while disposing of such appeal. Natural justice is not a strait jacketed formula. Oral hearing may be a constituent of natural justice but is not an inalienable facet in all cases. Even otherwise whether it is oral or written objection as long as such opportunity is provided . There is no question of violation of principles of natural justice . However the procedure contemplates oral hearing only if decision is to reject application for tariff fixation submitted by the license - Statutory scheme under which the decision is taken, nature and subject matter of enquiry, nature of the decision taken and prejudice, if any, caused to a party in course of such decision making process if only written representation is considered are relevant parameters to decide whether oral hearing is a mandatory requirement in a decision making process. The scheme of the legislation in the instant case gives rise to an irresistible inference that the objection of consumers and other members of the public before the State Commission under section 64 of the Act are to be made in written form only and no right of oral hearing is reserved in their favour - in view of the fact that the Commission is required to arrive at an informed decision relating to tariff fixation within a time frame under a statutory scheme which requires considering written objections/representations only of the objectors including consumers, it is difficult to come to a conclusion that it was the intention of the legislature to provide oral hearing to objectors/consumers at the time of determination of tariff by the State Commission under section 64 of the Act of 2003. It is trite law that all consumers are to be treated equally and fairly by the State Commission in the matter of determination of tariff under section 64 of the Act. Merely because the writ petitioners have been directed to furnish bank guarantee they cannot be held to have better rights and treated differently from other consumers/objectors. The respondent/writ petitioners are not entitled to oral hearing either as of right or on equitable principles in the instant case in the course of fixation of retail/distribution tariff under the Act of 2003 - Appeal disposed off. Issues Involved:1. Delay in filing the appeal and condonation of the same.2. Legality of the demand notices and revised bills issued by DVC.3. Right to oral hearing in the determination of retail/distribution tariff by the State Commission.4. Equitable relief based on the requirement to furnish a bank guarantee.Detailed Analysis:1. Delay in Filing the Appeal:The court condoned the delay of 327 days in filing the appeal (MAT No. 1984 of 2014) after being satisfied with the reasons provided in the application under section 5 of the Limitation Act.2. Legality of the Demand Notices and Revised Bills Issued by DVC:The respondent/writ petitioners challenged the demand notices and revised bills issued by DVC for the differential amount payable for the period from May 2010 to August 2010 and from September 2013 onwards. The Single Judge stayed the impugned demand notices subject to the petitioners furnishing a bank guarantee of Rs. 3.75 crores. The DVC was directed to file the necessary application for tariff determination, and the State Commission was instructed to dispose of the matter within 120 days after giving a reasonable opportunity of hearing to the respective parties.3. Right to Oral Hearing in Tariff Determination:The core issue was whether the respondent/writ petitioners had a right to an oral hearing during the determination of retail tariff by the State Commission under section 64 of the Electricity Act, 2003. The court examined section 64 and regulation 2.4 of the West Bengal Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2011, which clarified that consumers were entitled only to make written suggestions and/or objections to the tariff application. The court held that there was no statutory duty to provide an oral hearing to the consumers, and such a requirement was not mandated by the principles of natural justice in this context.The court referenced several cases, including Union of India & Anr. Vs. Cynamide India Ltd. & Anr., PTC India Ltd. Vs. Central Electricity Regulatory Commission, and Institute of Chartered Accountants of India Vs. L.K. Ratna & Ors., to support the view that the procedure adopted by the State Commission, which involved written submissions, was fair and reasonable under the statutory scheme.4. Equitable Relief Based on Bank Guarantee:The court considered whether the writ petitioners were entitled to an oral hearing on equitable grounds, given that they were required to furnish a bank guarantee of Rs. 3.75 crores. The court concluded that the requirement to furnish a bank guarantee was a condition for the stay of the demand notices and did not entitle the petitioners to an oral hearing. The principle of treating all consumers equally under the statutory scheme was emphasized, and the court held that furnishing a bank guarantee did not confer any special rights to the petitioners.Conclusion:The court modified the orders dated 20.12.2013 and 31.07.2014 to the extent that the State Commission was not required to provide an oral hearing to the respondent/writ petitioners during the tariff determination process. The State Commission was directed to consider all written suggestions/objections and fix the retail tariff within two months from the date of communication of this order. The appeals were disposed of with these directions.