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2004 DIGILAW 111 (AP)

Sarwottam Ispat (P) Ltd. v. Transmission Corporation of A. P. Ltd.

2004-02-03

V.V.S.RAO

body2004
V. V. S. RAO, J. ( 1 ) THE petitioner is a company registered under the Companies Act, 1956, engaged in the manufacturing of steel ingots by following the procedure of induction furnace. The petitioner is availing power supply from the respondents to their factory at Industrial Estate, Medchal. The petitioner was initially availing power supply to a tune of Contracted Maximum Demand (CMD) of 3600 KVA. It appears, due to slump in the market, the petitioner removed one furnace with effect from 15-4-2003 and, therefore, approached the fourth respondent for reduction/deration of C. M. D. from 3600 KVA to 1900 KVA under Condition No. 26. 8 of the Terms and Conditions of Supply of Electrical Energy applicable to the case. The petitioner s application was considered and the petitioner was allowed deration by order of the fourth respondent dated 21-5-2003. This is not denied in the writ petition. ( 2 ) AS per Condition No. 28. 2, the respondents are required to undertake general review for the purpose of additional consumption deposit (ACD) by the consumers. ( 3 ) UNDERTAKING such review, the fourth respondent, by a letter dated 29-5-2003 reckoned the C. M. D. of the petitioner from April, 2002 to March, 2003 and arrived at the average consumption charges equivalent to two months at rs. 1,37,46,400/ -. As the petitioner has already deposited Rs. 24,74,917/- as consumption deposit (CD), by the said letter, the fourth respondent requested the petitioner to arrange the payment of balance of Rs. 1,12,71,500/- towards additional consumption deposit within a period of thirty days on or before 28-6-2003. The petitioner was also informed that non-compliance with the demand notice entails in disconnection of power supply without any further notice. The petitioner approached the Director (Commercial) of the second respondent contending that as his request for deration was accepted, the review for the purpose of consumption deposit should be based on the C. M. D. as on the date of such review. By letter dated 22-7-2003, the Director, third respondent herein, informed the petitioner that the Central Power Distribution company Limited (CPDCL) is not agreeable for recovery of additional consumption deposit for the year 2003-04 on the basis of revised derated C. M. D. of 1900 KVA. ( 4 ) THE petitioner, therefore, assailed the action of the respondents in demanding a. C. D. in a sum of Rs. 1,12,71,500/ -. ( 4 ) THE petitioner, therefore, assailed the action of the respondents in demanding a. C. D. in a sum of Rs. 1,12,71,500/ -. ( 5 ) AT the admission stage itself, the fourth respondent has filed a counter affidavit opposing the writ petition. It is stated that the representation was undertaken in accordance with the terms and conditions of supply and the A. C. D. for the year 2003-04 was revised on the consumption of power for the year 2002-03 ignoring the deration from 3600 KVA to 1900 KVA, which was affected after 31-3-2003. It is also stated that the deration will be taken into consideration for the forthcoming financial year 2004-05. It is further stated in the counter affidavit that the petitioner made a request to permit to pay the a. C. D. in nine (9) interest free equated monthly instalments as per Memo dated 21-7-2003. ( 6 ) THE learned counsel for petitioner, Sri Duba V. Nagarjuna Babu, raised two contentions. He would submit that the C. M. D. of the petitioner, being 1900 KVA with effect from 21-5-2003, when the fourth respondent reviewed the C. D. on 29-5-2003, he ought to have taken into consideration the derated C. M. D. of 1900 kva and not 3600 KVA, which was the original C. M. D. Secondly, he would urge that the petitioner Company was purchasing 9,00,000 units of electricity from m/s. Rein Calcining Limited under an agreement dated 15-5-2003 and if this is taken into consideration, the consumption deposit payable by the petitioner as per Condition No. 28. 1 and 28. 2 would be drastically reduced. But the fourth respondent failed to notice the same. These contentions are refuted by the learned Standing Counsel for CPDCL. ( 7 ) THE petitioner sought for reduction of C. M. D. under Condition No. 26. 8 on 24-1-2003. The fourth respondent was permitted such deration by proceedings 21-5-2003, with effect from 22-4-2003 i. e. , from consumption month of May as ordered by the Director (Commercial ). A plain reading of Condition No. 26. 8 would show that though the consumer is required to seek reduction of C. M. D. by giving three months notice in writing, expressing his intention to do so, the same would come into effect only when such request for reduction is accepted by the power Company. A plain reading of Condition No. 26. 8 would show that though the consumer is required to seek reduction of C. M. D. by giving three months notice in writing, expressing his intention to do so, the same would come into effect only when such request for reduction is accepted by the power Company. Indeed, in paragraph-2 of the affidavit accompanying the writ petition, the petitioner admits that with effect from 15-4-2003 only the second induction furnace was removed. A reasonable inference can, therefore, be drawn that the petitioner was drawing power supply at a C. M. D. of 3600 KVA. Having regard to this, the next question would be, whether the fourth respondent is required to review the additional consumption deposit on the date of review? the relevant conditions of supply to be noticed are 28. 2. 1 (a), (b) and 28. 2. 2 (i), (ii), (iii), which reads as under: 28. 2 Additional consumption Deposit (ACD) 28. 2. 1 (a) All consumers, other than the domestic consumers whose monthly consumption is upto 50 Kilo Watt Hours per month shall keep with the Board an amount equivalent to three months consumption charges (i. e. demand and energy charges) as consumption deposit. (b) General Review: the adequacy of the consumption deposit in respect of consumers shall be reviewed by the Board based on the average consumption for the period representing 12 (Twelve) consumption months from April to March, usually once in every year and/or at any time during the year, if so warranted, due to revision of tariffs, enhancement of the CMD by the consumer, changes in pattern of consumption by the consumer, relaxation of power restriction, completion period of tariff rebate, if any, or such other factors, which in the opinion of the board, warrant review of adequacy of the existing consumption deposit. (c) Omitted. 28. 2. 2 The review shall take into account the following factors (i) The periods of closure (i. e. , the periods of disconnection of services) and the periods of near closure (i. e. , the periods where the consumption is not more than the monthly tariff minimum changes) shall be excluded for the purpose of arriving at the average consumption. (ii) In the case of consumers who were sanctioned additional demand, the additional consumption deposit shall be calculated for the additional demand as if it is a new service. (ii) In the case of consumers who were sanctioned additional demand, the additional consumption deposit shall be calculated for the additional demand as if it is a new service. The energy consumption per month shall be computed as follows:- energy Consumption = MD x LF x PF x 240 x No. of shifts per day as per the requisition. Where PF = Power Factor = 0. 9 (B. P. Ms. No. 95, dt. 21-9-98) lf = Load Factor 240 = Working hours per shift per month of 30 days. LF = 0. 7 in case of Ferro Alloys, Ferro Chrome, Caustic Soda, Cement, Paper, fertilizers, Hydrogen-Parodixe. LF = 0. 6 Induction Furnace in Mini Steel casting and Foundries. LF = 0. 5 in case of other industries other than above industries except Mini steel plants. LF = 0. 4 in case of other Mini Steel plants. (iii) The demand shall be contracted demand of the consumer at the time of review. It is now well settled that the terms and conditions of supply, which are made by A. P. TRANSCO as well as CPDCL, in exercise of their powers under Section 49 of the Electricity (Supply) Act, 1948 (for brevity the Act ) and made applicable to regulate the power supply by respondents 1 and 2, have statutory force. They are in the nature of Statutory Rules as held in M/s. Hyderabad Vanaspathi Ltd. v. APSEB. In the said case the Supreme Court held: we have already seen that Section 49 of the Supply Act empowers the Board to prescribe such terms and conditions as it thinks fit for supplying electricity to any person other than a licensee. The section empowers the Board also to frame uniform tariffs for such supply. Under Section 79 (j) the Board could have made regulation therefore but admittedly no regulation has so far been made by the Board. The terms and conditions of supply were notified in B. P. Ms. No. 690 dated 17-9-1975 in exercise of the powers conferred by Section 49 of the Supply act. They came into effect from 20-10-1975. They were made applicable to all the consumers availing supply of Electricity from the Board. The section in the act does not require the Board to enter into a contract with individual consumer. No. 690 dated 17-9-1975 in exercise of the powers conferred by Section 49 of the Supply act. They came into effect from 20-10-1975. They were made applicable to all the consumers availing supply of Electricity from the Board. The section in the act does not require the Board to enter into a contract with individual consumer. Even in the absence of an individual contract, the terms and conditions of supply notified by the Board will be applicable to the consumer and he will be bound by them. Probably in order to avid any possible plea by the consumer that he had no knowledge of the terms and conditions of supply, agreements in writing are entered within each consumer. That will not make the terms purely contractual. The Board in performance of a statutory duty supplied energy on certain specific terms and conditions framed in exercise of a statutory power. Undoubtedly the terms and conditions are statutory in character and they cannot be said to be purely contractual. ( 8 ) THEREFORE, the same principle of interpretation as are applied to Interpretation of Statutes need to be kept in mind while interpreting Condition No. 28. 2, which deals with A. C. D. There cannot be any doubt that if the plain meaning is clear and unambiguous, Court must resort plain literal interpretation and is not entitled to supply words to bring the provision in tune with Court s perception of law. ( 9 ) IN Gurudevdatta Vksss Maryadit v. State of Maharashtra it was held:further we wish to clarify that it is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning. It is yet another rule of construction that when the worlds of the statute are clear, plain and unambiguous, then the courts are bond to give effect to that meaning, irrespective of the consequences. It is said that the words themselves best declare the intention of the law-giver. It is yet another rule of construction that when the worlds of the statute are clear, plain and unambiguous, then the courts are bond to give effect to that meaning, irrespective of the consequences. It is said that the words themselves best declare the intention of the law-giver. The courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surpluses, if they can have a proper application in circumstances conceivable within the contemplation of the statute. In Harbhajan Singh v. Press Council of India after referring to cross in statutory Interpretation (3rd Edn. , 1995) the Supreme Court described the Rule of ordinary meaning or grammatical meaning and observed as under:the learned author cites three quotations from speeches of Lord Reid in the house of Lords Cases, the gist whereof is: (i) in determining the meaning of any word or phrase in a statute, ask for the natural or ordinary meaning of that word or phrase in its context in the statute and follow the same unless the meaning leads to some result which cannot reasonably be supposed to have been the legislative intent; (ii) rules of construction are our servants and not masters; and (iii) a statutory provision cannot be assigned a meaning which it cannot reasonably bear; if more than one meanings are capable you can choose one but beyond that you must not go. (p. 40, ibid) Justice G. P. Singh in his celebrated work - Principles of Statutory Interpretation (8th Edn. , 2001) states (at p. 54):"the intention of the legislature is primarily to be gathered from the language used, which means that attention should be paid to what has been said as also to what has not been said. As a consequence a construction which requires for its support addition or substitution of words or which results in rejection of words as meaningless has to be avoided. "the learned author states at another place (at p. 74 ibid) that the rule of literal construction whereby the words have to be assigned their natural and grammatical meaning can be departed from but subject to caution. The golden rule is that the words of a statute must prima facie be given their ordinary meaning. "the learned author states at another place (at p. 74 ibid) that the rule of literal construction whereby the words have to be assigned their natural and grammatical meaning can be departed from but subject to caution. The golden rule is that the words of a statute must prima facie be given their ordinary meaning. A departure is permissible if it can be shown that the legal context in which the words are used or the object of the statute in which they occur requires a different meaning. A Constitution Bench of the Supreme Court in Union of India v. Hansoli Devi, in the context of interpretation of Section 28-A of the Land Acquisition Act observed as under: it is a cardinal principle of construction of a statute that when the language of the statute is plain and unambiguous, then the court must give effect to the words used in the statute and it would not be open to the courts to adopt a hypothetical construction on the ground that such construction is more consistent with the alleged object and policy of the Act. If on going through the plain meaning of the language of statutes, it leads to anomalies, injustices and absurdities, then the court may look into the purpose for which the statute has been brought and would try to give a meaning, which would adhere to the purpose of the statute. It is not a sound principle of construction to brush aside words in a statute as being inapposite surplusage if they can have appropriate application in circumstances conceivably within the contemplation of the statute. The legislature is deemed not to waste its words or to say anything in vain and a construction which attributes redundancy to the legislature will not be accepted except for compelling reasons. Similarly, it is not permissible to add words to a statute which are not there unless on a literal construction being given a part of the statute becomes meaningless. But before any words are read to repair an omission in the Act, it should be possible to state with certainty that these words would have been inserted by the draftsman and approved by the legislature had their attention been drawn to the omission before the Bill had passed into a law. But before any words are read to repair an omission in the Act, it should be possible to state with certainty that these words would have been inserted by the draftsman and approved by the legislature had their attention been drawn to the omission before the Bill had passed into a law. At times, the intention of the legislature is found to be clear but the unskilfulness of the draftsman in introducing certain words in the statute results in apparent ineffectiveness of the language and in such a situation, it may be permissible for the court to reject the surplus words, so as to make the statute effective. Applying the rule of plain literal interpretation, Condition No. 28. 2. 1 (b) categorically stipulates that A. C. D. has to be calculated based on average consumption for the period representing 12 months from April to March. This pre-supposes that the consumption year is from 1st April of previous year to 31st March of succeeding year. It also pre-supposes the general review of adequacy of C. D. after the end of a consumption year. As a necessary corollary, whatever be the subsequent events like deration, termination of agreement, increase in C. M. D. while calculating the additional load, after the end of the of the consumption year, the reviewing officer/authority has to take into consideration the average consumption of 12 months during the previous consumption year i. e. , April of previous year to March of succeeding year. Insofar as Condition No. 28. 2. 2 is concerned, essentially the same gives the method and manner reviewing the A. C. D. It postulates that the period of closure shall be excluded for the purpose of arriving at the average consumption. In case, the consumer is sanctioned additional demand, the C. D. has to be calculated as if it is anew service as per the formula contained under Condition no. 28. 2. 2 (ii ). Condition No. 28. 2. 2 (iii) is to the effect that the demand shall be a contracted demand for the consumer at the time of review. As it is in relation to the additional demand, it must be held that it refers to the demand including the additional demand which is dealt by Condition No. 28. 2. 2 (ii ). Condition No. 28. 2. 2 (iii) is to the effect that the demand shall be a contracted demand for the consumer at the time of review. As it is in relation to the additional demand, it must be held that it refers to the demand including the additional demand which is dealt by Condition No. 28. 2. 2 (ii ). It cannot be interpreted as authorizing the competent authority to review the adequacy of C. D. on the date of review. Condition No. 28. 2. 2 (iii) has no application with regard to a case where deration is sought for and such deration is sanctioned after 31st March of succeeding year of the consumption year. Applying the above principle, even according to the petitioner, the deration was accepted with effect from 22-4-2003 and, therefore, the impugned action of the fourth respondent as manifested in the letter/demand notice dated 21-5-2003 is un-exceptionable. It is, however, made clear that while undertaking further review as per Condition No. 28. 2. 1, the fourth respondent shall have to take into consideration the fact that the petitioner was sanctioned deration from 3600 KVA to 1900 KVA with effect from 22-4-2003. The writ petition, for the above reasons fails and is accordingly dismissed. No order as to costs.