TaxTMI 
TaxTMI 
TaxTMI 
2011 (10) TMI 586
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....reinafter, 'the 1910 Act') and the Electricity (Supply) Act, 1948 (hereinafter, 'the 1948 Act'). For a considerable time, these three legislations remained in force, governing the electricity supply industry in India. The Boards created by the 1948 Act and the bodies created under the 1998 Act, as well as the State Governments, were provided distinct roles under these statutes. There was still overlapping of duties and some uncertainty with regard to exercise of power under these Acts. To address the issues like deterioration in performance of the Boards and the difficulties in achieving efficient discharge of functions, a better, professional and regulatory regime was introduced under the Electricity Bill, 2001, with the policy of encouraging private sector participation in generation, transmission and distribution of electricity and with the objective of distancing regulatory responsibilities from the Government by transferring the same to the Regulatory Commissions. The - need for harmonizing and rationalizing the provisions of the earlier statutes was met by creating a new, self-contained and comprehensive legislation. Another object was to bring unity in legislation an....
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....ndent, since the day of connection of power supply, the meter and all other associated equipments had been inspected by the appellants. On 10th June, 2009, the Executive Engineer, Jeypore Electrical Division and SDO, Electrical MRT Division, Jeypore inspected the business premises of the respondent's unit and dump was conducted. These officers issued a dump report by noticing as follows: "Dump of the Meter taken. Calibration of meter done and error found within limit. If any abnormality detected in Dump, it will be intimated later on." 5. It is the case of the respondent that no intimation was given to it as to finding of defects if any, in dump. On 25 th July, 2009, provisional assessment order bearing No.854 was issued by the appellants to the respondent. Intimation bearing No.853 had also been issued on the same day which informed the respondent that there was unauthorized use of electricity falling squarely within the ambit of provisions of Section 126 of the 2003 Act. In the dump report dated 10 th June, 2009, it was stated that there was unauthorized use of electricity and Maximum Demand (hereinafter MD) had been consumed up to 142 KVA. On this basis, the appellant pas....
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....thorized use of electricity was found. The respondent also challenged the maintainability and sustainability of the order of provisional assessment in calculating the dump charges for a period of 15 months from June 2008 to August 2009 on the basis of dump charges relating to large industry while the respondent was classified as medium scale industry. It was also the contention raised by the respondent before the High Court that the provisions of Section 126 of the 2003 Act were not attracted in the present case at all. This claim of the respondent was contested by the appellants, as according to them, unauthorized use of electricity as defined under Section 126 will come into play as per clause (b) of the Explanation appended to Section 126 of the 2003 Act. The dump report dated 10th June, 2009 and the intimation dated 25th July, 2009 had been sent showing - overdrawal of MD where, according to the appellants, the respondent had consumed electricity 'by means unauthorized by the licencee (overdrawal of maximum demand)' and thereby breached the Agreement and, therefore, the provisional assessment order and the intimation were fully justified. 7. The High Court, vide impugned j....
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....6 of the 2003 Act. To put it plainly, the argument is that the appellants lack inherent authority to raise such demand with reference to the present case on facts and law both. 9. On the contra, submission on behalf of the appellants is that the case of excessive consumption of power beyond the sanctioned load would be a case falling within the ambit of Section 126 of the 2003 Act. Section 126 of the 2003 Act is incapable of an interpretation which would render the said provision otiose in cases which do not specifically fall under - Section 135 of the 2003 Act. In order to answer these contentions more precisely, we find it appropriate to examine the question framed above, under the following sub-headings: (a) Interpretation; (b) Distinction between Sections 126 and 135 of the 2003 Act; (c) The ambit and scope of Section 126 with reference to the construction of the words 'unauthorised use' and 'means'; and (d) Effect and impact of change in applicability of tariff upon the power of assessment in accordance with the provisions of the 2003 Act and the relevant Regulations in the facts of the case. 1(a) Interpretation 10. First and foremost, we have to examine h....
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....ese provisions. It specifically provides the method of computation of the amount that a consumer would be liable to pay for excessive consumption of the electricity and for the manner of conducting assessment proceedings. In other words, Section 126 of the 2003 Act has a purpose to achieve, i.e., to put an implied restriction on such unauthorized consumption of electricity. The provisions of the 2003 Act, applicable regulations and the Agreement executed between the parties at the time of sanction of the load prohibit consumption of electricity in excess of maximum sanctioned/ installed load. In the event of default, it also provides for the consequences that a consumer is likely to face. It embodies complete process for assessment, determination and passing of a demand order. This defined legislative purpose cannot be permitted to be frustrated by interpreting a provision in a manner not intended in law. This Court would have to apply the principle of purposive interpretation in preference to textual interpretation of the provisions of Section 126 of the 2003 Act. We shall shortly discuss the meaning and scope of the expressions used by the Legislature under these provisions. At ....
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....gue and its language wholly intractable and absolutely meaningless, the statute could be declared void for vagueness. This is not in judicial review by testing the law for arbitrariness or unreasonableness under Article 14; but what a court of construction, dealing with the language of a statute, does in order to ascertain from, and accord to, the statute the meaning and purpose which the legislature intended for it. In Manchester Ship Canal Co. v. Manchester Racecourse Co. (1900) 2 Ch 352, Farwell J. said : (pp. 360-61) "Unless the words were so absolutely senseless that I could do nothing at all with them, I should be bound to find some meaning and not to declare them void for uncertainty." In Fawcett Properties Ltd. v. Buckingham County Council [(1960) 3 All ER 503] Lord Denning approving the dictum of Farwell, J. said : "But when a Statute has some meaning, even though it is obscure, or several meanings, even though it is little to choose between them, the courts have to say what meaning the statute to bear rather than reject it as a nullity." It is, therefore, the court's duty to make what it can of the statute, knowing that the statutes are meant to be operative a....
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....and reasons for enacting an Act is a relevant consideration for the court while applying various principles of interpretation of statutes. Normally, the court would not go behind these objects and reasons of the Act. The discussion of a Standing Committee to a Bill may not be a very appropriate precept for tracing the legislative intent but in given circumstances, it may be of some use to notice some discussion on the legislative intent that is reflected in the substantive provisions of the Act itself. The Standing Committee on Energy, 2001, in its discussion said, 'the Committee feel that there is a need to provide safeguards to check the misuse of these powers by unscrupulous elements'. The provisions of Section 126 of the 2003 Act are self- explanatory, they are intended to cover situations other than the situations specifically covered under Section 135 of the 2003 Act. This would further be a reason for this Court to adopt an interpretation which would help in attaining the legislative intent. 14. By applying these principles to the provisions of this case requiring judicial interpretation, we find no difficulty in stating that the provisions of Section 126 of the 2003 Ac....
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....hat such consumer is indulging in an 'authorized use of electricity'. Then the assessing officer shall provisionally assess, to the best of his judgment, the electricity charges payable by such consumer, as well as pass a provisional assessment order in terms of -Section 126(2) of the 2003 Act. The officer is also under obligation to serve a notice in terms of Section 126(3) of the 2003 Act upon any such consumer requiring him to file his objections, if any, against the provisional assessment before a final order of assessment is passed within thirty days from the date of service of such order of provisional assessment. Thereafter, any person served with the order of provisional assessment may accept such assessment and deposit the amount with the licensee within seven days of service of such provisional assessment order upon him or prefer an appeal against the resultant final order under Section 127 of the 2003 Act. The order of assessment under Section 126 and the period for which such order would be passed has to be in terms of Sub-sections (5) and (6) of Section 126 of the 2003 Act. The Explanation to Section 126 is of some significance, which we shall deal with shortly her....
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....nsume electricity would be punished in accordance with the provisions of the 2003 Act. 'Dishonesty' is a state of mind which has to be shown to exist before a person can be punished under the provisions of that Section. 19. The word 'dishonest' in normal parlance means 'wanting in honesty'. A person can be said to have 'dishonest intention' if in taking the property it is his intention to cause gain, by unlawful means, of the property to which the person so gaining is not legally entitled or to cause loss, by wrongful means, of property to which the person so losing is legally entitled. 'Dishonestly' is an expression which has been explained by the Courts in terms of Section 24 of the Indian Penal Code, 1860 as 'whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person is said to do that thing dishonestly'. [The Law Lexicon (2nd Edn. 1997) by P. Ramanatha Aiyar] 20. This Court in the case of Dr. S. Dutt v. State of U.P. [AIR 1966 SC 523] stated that a person who does anything with the intention to cause wrongful gain to one person or wrongful loss to another is said to do that dishonestly. 21. Colli....
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.... and where he files such objections, final order of assessment shall be passed, against which such person has a right of appeal under Section 127 of the 2003 Act within the prescribed period of limitation. Assessment and Computation 24. Wherever the assessing officer arrives at the conclusion that unauthorized use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorized use of electricity has taken place and if such period cannot be ascertained, it shall be limited to a period of 12 months immediately preceding the date of inspection and the assessment shall be made at the rate equal to twice the tariff applicable for the relevant category of service specified under these provisions. This computation has to be taken in terms of Sections 126(5), 126(6) and 127 of the 2003 Act. The complete procedure is provided under these sections. Right from the initiation of the proceedings till preferring of an appeal against the final order of assessment and termination thereof, as such, it is a complete code in itself. We have already indicated that the provisions of Section 126 do not attract the principles of Criminal Jurisprudence i....
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....r as may be prescribed. (3) The person, on whom an order has been served under sub-section (2), shall be entitled to file objections, if any, against the provisional assessment before the assessing officer, who shall, after affording a reasonable opportunity of hearing to such person, pass a final order of assessment within thirty days from the date of service of such order of provisional assessment, of the electricity charges payable by such person. (4) Any person served with the order of provisional assessment may, accept such assessment and deposit the assessed amount with the licensee within seven - days of service of such provisional assessment order upon him: (5) If the assessing officer reaches to the conclusion that unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorised use of electricity has taken place and if, however, the period during which such unauthorised use of electricity has taken place cannot be ascertained, such period shall be limited to a period of twelve months immediately preceding the date of inspection.; (6) The assessment under this section shall be made at a rate equal to....
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....pport the reasoning that 'unauthorized development' is one which is contrary to a master plan or zonal development plan as was the case under the DDA Act. Just as the right to develop a property is controlled by the restrictions of law as well as the terms and conditions of the permission granted for that purpose, the use of electricity is similarly controlled by the statutory provisions and the terms and conditions on which such permission is granted to use the electricity. 31. The unauthorized use of electricity in the manner as is undisputed on record clearly brings the respondent 'under liability and in blame' within the ambit and scope of Section 126 of the 2003 Act. The blame is in relation to excess load while the liability is to pay on a different tariff for the period prescribed in law and in terms of an order of assessment passed by the assessing officer by the powers vested in him under the provisions of Section 126 of the 2003 Act. 32. The expression 'means' used in the definition clause of Section 126 of the 2003 Act can have different connotations depending on the context in which such expression is used. In terms of Black's Law Dictionary (Eighth Ed....
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.... view which will further such application. 36. Once the court decides that it has to take a purposive construction as opposed to textual construction, then the legislative purpose sought to be achieved by such an interpretation has to be kept in mind. We have already indicated that keeping in view the legislative scheme and the provisions of the 2003 Act, it will be appropriate to adopt the approach of purposive construction on the facts of this case. We have also indicated above that the provisions of Section 126 of the 2003 Act are intended to cover the cases over and -above the cases which would be specifically covered under the provisions of Section 135 of the 2003 Act. 37. In other words, the purpose sought to be achieved is to ensure stoppage of misuse/unauthorized use of the electricity as well as to ensure prevention of revenue loss. It is in this background that the scope of the expression 'means' has to be construed. If we hold that the expression 'means' is exhaustive and cases of unauthorized use of electricity are restricted to the ones stated under Explanation (b) of Section 126 alone, then it shall defeat the very purpose of the 2003 Act, inasmuch as the di....
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....other person than those specifically mentioned under that definition. The definition and the expression 'means', if construed as exhaustive would necessarily imply exclusion of all other terms except those stated in that Section but this Court, while adopting the principle of purposive construction, came to the conclusion that even a foster son, who is obviously not the real son or direct descendant of a person, would be included. This Court, observing that there was consensus in precedent that the word 'family' is a word of great flexibility and is capable of different meanings, held as under : "While interpreting a definition, it has to be borne in mind that the interpretation placed on it should not only be not repugnant to the context, it should also be such as would aid the achievement of the purpose which is sought to be served by the Act. A construction which would defeat or was likely to defeat the purpose of the Act has to be ignored and not accepted. Where the definition or expression, as in the instant case, is preceded by the words "unless the context otherwise requires", the said definition set out in the section is to be applied and given effect to but thi....
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.... from the train, while the second being that it includes a situation where a person is trying to board the train and falls down while trying to do so. Since the provision for compensation in the Railways Act is a beneficial piece of legislation, in our opinion, it should receive a liberal and wider interpretation and not a narrow and technical one. Hence, in our opinion the latter of the abovementioned two interpretations i.e. the one which advances the object of the statute and serves its purpose should be preferred vide Kunal Singh v. Union of India [(2003) 4 SCC 524 para 9], B.D. Shetty v. Ceat Ltd. [(2002) 1 SCC 193 - para 12) and Transport Corpn. Of India v. ESI Corpn. [(2000) 1 SCC 332]" 41. The above judgments clearly support the view that we have taken with reference to the facts and law of the present case. It cannot be stated as an absolute proposition of law that the expression 'means' wherever occurring in a provision would inevitably render that provision exhaustive and limited. This rule of interpretation is not without exceptions as there could be statutory provisions whose interpretation demands somewhat liberal construction and require inclusive construction. ....
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....neral terms, therefore, have been used by the legislature to give the provision a wider and liberal meaning. These are generic or general terms. Therefore, it will be difficult for the Court, even on cumulative reading of the provision, to hold that the expression should be given a narrower or restricted meaning. What will be more in consonance with the purpose and object of the Act is to give this expression a general meaning on its plain language rather than apply unnecessary emphasis or narrow the scope and interpretation of these provisions, as they are likely to frustrate the very object of the Act." 42. The expressions 'means', 'means and includes' and 'does not include' are expressions of different connotation and significance. When the Legislature has used a particular expression out of these three, it must be given its plain meaning while even keeping in mind that the use of other two expressions has not been favoured by the Legislature. To put it simply, the Legislature has favoured non-use of such - expression as opposed to other specific expression. In the present case, the Explanation to Section 126 has used the word 'means' in contradistinction to 'do....
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....ntent and undertook to observe and abide by all the terms and conditions stipulated therein to the extent they are applicable to him. The respondent was a consumer under the 'medium industry category'. Clause (A) of the terms and conditions applicable to medium industry category reads as under : "This tariff rate shall be applicable to supply of power at a single point for industrial production purposes with contract demand/connected load of 22 KV and above up to but excluding 110 KVA where power is generally utilized as a motive force." 44. Minimum energy charges are to be levied with reference to 'contract demand' at the rate prescribed under the terms and conditions. These clauses of the Agreement clearly show that the charges for consumption of electricity are directly relatable to the sanctioned/connected load and also the load consumed at a given point of time if it is in excess of the sanctioned/connected load. The respondent could consume electricity up to 110 KVA but if the connected load exceeded that higher limit, the category of the respondent itself could stand changed from 'medium industry' to 'large industry' which will be governed by a higher tari....
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....and clause 31(f) of the same empowered the Board to disconnect supply and even levy higher charges as per the tariff applicable, this Court held that such higher tariff charges could be recovered. While noticing the prejudice caused, the Court in the case Bhilai Rerollers & Ors. v. M.P. Electricity Board & Ors. [(2003) 7 SCC 185], held as under : "21. The respondent-Board, therefore, is entitled to raise the demand under challenge since such right has been specifically provided for and is part of the conditions for supply and particularly when such drawal of extra load in excess of the contracted load is bound to throw out of gear the entire supply system undermining its efficiency, efficacy not only causing stress on the installations of the Board but considerably affect other consumers who will experience voltage fluctuations. Consequently, we see no merit in the challenge made on behalf of the appellants. The appeals, therefore, fail and shall stand dismissed but with no costs." 47. Similar view was taken by this Court in the case of Orissa State Electricity Board & Anr. v. IPI Steel Ltd. & Ors. [(1995) 4 SCC 328]. 48. It will also be useful to notice that certain malpractic....
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....' means if the electricity was used for a purpose other than for which the usage of electricity was authorised. Explanation (b) (iv), thus, would also cover the cases where electricity is being consumed in excess of sanctioned load, particularly when it amounts to change of category and tariff. As is clear from the agreement deed, the electric connection was given to the respondent on a contractual stipulation that he would consume the electricity in excess of 22 KVA but not more than 110 KVA. The use of the negative language in the condition itself declares the intent of the parties that there was an implied prohibition in consuming electricity in excess of the maximum load as it would per se be also prejudiced. Not only this, the language of Regulations 82 and 106 also prescribe that the consumer is not expected to make use of power in excess of approved contract demand otherwise it would be change of user falling within the ambit of 'unauthorised use of electricity'. Again, there is no occasion for this Court to give a restricted meaning to the language of Explanation (b)(iv) of Section 126. According to the learned counsel appearing for the respondent, it is only the ac....
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....a Caliber Builders Private Ltd. [(2010) 4 SCC 539], this Court was primarily concerned with the question whether the ombudsman would have the jurisdiction to issue directions for regularization of unauthorized electricity. Answering the same in the negative and dealing with the question of excess load, this Court held as under : "The fact that the appellant could not release connection with a load of 2548 KW on account of non-availability of transformer necessary for transfer of 8 MVA load from 66 KV sub station, G.T. Road, Ludhiana had no bearing on the issue of consumption of electricity by the respondent beyond the sanctioned load. Undisputedly, in terms of the request made by the respondent, the Chief Engineer had sanctioned connection on the existing system with a load of 1500 KW, but the respondent used excess load to the tune of 481.637 KW and this amounted to unauthorized use of electrical energy." 50. The consistent view of this Court would support the proposition that the cases of excess load of consumption would be squarely covered under Explanation (b)(iv) of Section 126 of the 2003 Act. Once this factor is established, then the assessing officer has to pass the fina....
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.... the scope of jurisdiction under Article 226 of the Constitution of India in face of the provisions of Section 127 of the 2003 Act. 53. It is a settled canon of law that the High Court would not normally interfere in exercise of its jurisdiction under Article 226 of the Constitution of India where statutory alternative remedy is available. It is equally settled that this canon of law is not free of exceptions. The courts, including this Court, have taken the view that the statutory remedy, if provided under a specific law, would impliedly oust the jurisdiction of the Civil Courts. The High Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India can entertain writ or appropriate proceedings despite availability of an alternative remedy. This jurisdiction, the High Court would exercise with some circumspection in exceptional cases, particularly, where the cases involve a pure question of law or vires of an Act are challenged. This class of cases we are mentioning by way of illustration and should not be understood to be an exhaustive exposition of law which, in our opinion, is neither practical nor possible to state with precision. The avai....
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....de Marks, Mumbai [(1998) 8 SCC 1] where this Court was concerned with the powers of the Registrar of Trade Marks and the Tribunal under the Trade and Merchandise Marks Act, 1958 and exercise of jurisdiction by the High Court in face of availability of a remedy under the Act. This Court while referring to various judgments of this Court and specifying the cases where the alternative remedy would not bar the exercise of jurisdiction by the Court, held as under: - "14. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution This power can be exercised by the High Court not only for issuing writs in the nature of Habeas Corpus, Mandamus, prohibition, Qua Warranto and Certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for "any other purpose". 15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious....
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....is Court took the view that the question raised was a legal one which required determination as to whether provision of telephone connections and instruments amounted to sale and why the Union of India should not be exempted from payment of sales tax under the respective - statutes. Holding that the question was fundamental in character and need not even be put through the mill of statutory appeals in hierarchy, this Court remitted the matter to the High Court for determination of the questions of law involved in that case. 56. Applying these principles to the facts of the present case, it is obvious that no statutory appeal lay against a provisional order of assessment and the respondents herein were required to file objections as contemplated under Section 126 (3) of the 2003 Act. It was only when a final order of assessment was passed that the respondents could prefer a statutory appeal which admittedly was not done in the case in hand. 57. In the present case, the High Court did not fall in error of jurisdiction in entertaining the writ petition but certainly failed to finally exercise the jurisdiction within the prescribed limitations of law for exercise of such jurisdiction....