TaxTMI 
TaxTMI 
TaxTMI 
2009 (3) TMI 1052
X X X X Extracts X X X X
X X X X Extracts X X X X
....e come into force with effect from 25th April, 1998. 4. By order dated 13th May, 1999, KSEB revised its tariff with effect from 15th May, 1999. A writ petition was filed by an Association questioning the said order. 5. Subsequently on 3rd May, 2001 the Government of Kerela effected an increase of tariff for all categories of consumers except old age homes, schools and hostels of mentally retarded persons etc. The revised tariff was made effective from August 10, 2001. According to the governmental order, KSEB was incurring a deficit of ₹ 160.44 crores per month and in order to make up for the said deficiency the tariff hike was necessitated. Pursuant to the said policy decision the KSEB later on issued a detailed tariff order. 6. The Power Department of the Government of Kerala issued G.O. (MS) No. 23/2001/PD on 17th August, 2001 inter alia declaring that the Government of Kerela had tentatively decided to enter into a MOU with the Government of India with a view to affirm the joint commitment of the two parties to reform the power sector in Kerela in a time bound manner. The said MOU in the relevant para stated :- "8. Kerala will constitute an independent State Electric....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inst. This court by an order dated 13th September, 2004 passed an interim order directing the KSEB not to disconnect appellant's electricity supply subject to its paying the demand as per the tariff before its revision on 24.10.2002. Appellant was also asked to deposit ₹ 1 crore with the KSEB. 15. Before the court it was contended by the appellant that the Electricity Act, 2003 having come into force with effect from June 10, 2003, the KSERC functioning as such prior thereto continues to function as the State Commission under the 2003 Act and thus it must be held to have considered the appellants' petition in terms of the provisions thereof. It was furthermore argued that the 1998 Act having been repealed by the 2003 Act, the appeal preferred by the appellant before the Kerela High Court was not maintainable. This Court, however, while disposing of the appeal held that the issues raised by the appellant could be more effectively considered and disposed of by the appellate tribunal under the 2003 Act, being an expert body. 16. Pursuant to or in furtherance of the said order the Appellate Tribunal upon hearing the parties has passed the impugned judgment inter alia opining t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to exercise the powers conferred on, and the functions assigned to, it under this Act." (Emphasis supplied) Section 17 of the Act provides for establishment and incorporation of State Commission, sub-section (1) whereof reads as under :- "(1) The State Government may, if it deems fit, by notification in the Official Gazette, establish, for the purposes of this Act, a Commission for the State to be known as the (name of the State) Electricity Regulatory Commission. (Emphasis supplied) Section 22 deals with the functions of State Commission. Section 28 provides for determination of tariff by the Central Commission. Section 29 provides for determination of tariff by the State Commission, relevant part of sub-sections (1) and (2) whereof read as under :- (1) Notwithstanding anything contained in any other law, the tariff for intra-State transmission of electricity and the tariff for supply of electricity, grid, wholesale, bulk or retail, as the case may be, in a State (hereinafter referred to as the tariff), shall be subject to the provisions of this Act and the tariff shall be determined by the State Commission of that State in accordance with the provisions of this Act. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the 1998 Act, it would be evident that no such mandate has been imposed on the State Government to constitute such a Commission. The Parliament advisedly used the words 'may' and 'if it deems fit' in Section 17 of the Act while using the word 'shall' in Section 3 thereof. Establishment of a State Commission by the State Government, therefore, is directory. It confers some discretionary power on the State Government to constitute a State Commission. The State, for sufficient and cogent reasons, may refuse to constitute such a Commission or fail or neglect to do so within a reasonable time. For the aforementioned purpose the Central Government can take recourse to certain measures but the same would not mean that the court can in exercise of its power of judicial review, issue a writ or order in the nature of mandamus directing the State to constitute such a Commission. 22. In fact in this case itself the Central Government was able to persuade the State Government to establish a Commission by entering into a Memorandum of Understanding on 17th August, 2001 in terms whereof the State of Kerala made itself bound to constitute the Commission by October, 2001. If the contention of Mr.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1948 Act. The tariff so framed is legislative in character. The Board as a statutory authority is bound to exercise its jurisdiction within the four-corners of the statute. It must act in all fields including the field of framing tariff by adopting the provisions laid down in 1948 Act or the Rules and the Regulations framed thereunder. It is one thing to say that while framing tariff it can only take into consideration the provisions laid down in the Schedule appended the Act and/or the directions contained in the policy decisions issued by the State as also other statutory principles governing the same but then a tariff framed by it cannot be held to be ultra vires only because it did not take into consideration certain principles laid down in clauses (c) to (g) of sub-section (2) of Section 29 of the 1998 Act. It is of some significance to note that the Commission in terms of clauses (a) and (b) of sub-section (2) of Section 29 of the 1998 Act are required to follow the principles provided for under Sections 46, 56 and 57 of the 1998 Act as also the Sixth Schedule appended thereto. The 1998 Act, therefore, recognises the principles contained in the 1948 Act also. 29. The provisi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ication was issued on 5-8-1999 constituting the Maharashtra Electricity Regulatory Commission (for short "the Commission"). The Committee constituted by the Government of Maharashtra on 27-5-1999 in its meeting held on 2-5-2000 resolved that in view of the constitution of the Commission, the question of payment of standby charges could only be determined by the Commission and accordingly resolved that the said issue be referred to the Commission for determination. An intimation in this regard was also sent to the respective parties. However, the Government of Maharashtra passed an order on 22-3-2000 whereby BSES was directed to pay standby charges to TPC at the rate of 50 per cent of the amount of standby charges payable by TPC to MSEB. This was done on the basis that MSEB was providing standby facility of 550 MVA to TPC and as TPC was providing standby facility of 275 MVA to BSES, it should pay half of the said amount. The order further provided that for the period 1-12-1998 to 31-3-1999 BSES should pay ₹ 9 crores as standby charges to TPC. BSES was not satisfied with the aforesaid order of the Government and made repeated requests for review of the same and lastly on 6-10-2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....refore, the notice to enhance the charges given by TPC, which was subsequent to the enforcement of the Act, can have no legal effect." 32. BSES (supra) must be held to have been determined on its own facts. Sub-section (6) of Section 29 of the 1998 Act bars constitution of a rating committee. In 'BSES' a Committee was constituted by the State of Maharashtra. In that case when the Regulatory Commissions had been set up by the State government under the ERC Act, no other authority including the Board, would obviously have the power to determine the tariff. It is presumably on that premise the that the provisions of the 1998 Act must be given effect to even for the period during which it had not come into force, must be understood. 33. We must also notice that the Electricity (Supply) Act, 1998 was not repealed by the ERC Act, 1998. It was only under Section 185 of the Electricity Act of 2003 that the provisions of the Indian Electricity Act 1010, Electricity (Supply Act 1948 and the ERC Act 1998 were repealed. But at the same time anything done or any action taken under the Acts of 1910 or 1948 or 1998 Act have been saved in so far as they are not inconsistent with provisions of th....