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2009 DIGILAW 937 (ORI)

SOUTHERN ELECTRICITY SUPPLY COMPANY OF ORISSA LTD v. STATE OF ORISSA

2009-12-09

B.P.DAS, S.C.PARIJA

body2009
JUDGMENT S. C. PARIJA, J. ( 1 ) THIS writ application is directed against the letter of the State government in the Energy Department dated 16-3-2006 (Annexure-1), holding that the petitioner company falls within the definition of "public authority" as defined in Section 2 (h) of the Right to Information Act, 2005, (for short RTI Act ). ( 2 ) THE sole contention raised by the learned counsel for the petitioner is thai the petitioner company, i. e. Southern Electricity Supply Company of Orissa Limited (SOUTHCO) is a public limited company, incorporated under the Companies Act, 1956, on 19-11-1997, having its registered office at Bhubaneswar and commenced its business from 26-11-1998, as a 100% subsidiary of grid Corporation of Orissa Limited (for short gr1dco), which is a wholly owned Government Company, with the object of undertaking distribution and supply of electricity. The petitioner company is engaged in distribution and supply of electricity in the southern parts of Orissa under statutory licence granted to it by the Orissa Electricity Regulatory Commission (OERC ). The petitioner company was privatized on 1-4-1999 as per the transfer scheme envisaged under the orissa Electricity Reforms (Transfer of As sets, Liabilities, Properties and Personnel of gridco to Distribution Companies) Rules, 1998, (for short 1998 Rules), and became a joint venture company between BSES Ltd. and GRIDCO, after 5 1% equity and management control was divested by the GRIDCO in favour of the petitioner company. Accordingly, the GRIDCO, which is a wholly owned government Company, was dissolved and its assets, undertakings, employees and liabilities etc. were vested with the petitioner company. The business of the petitioner company is governed by the provisions of the Electricity Act, 2003 and Orissa Electricity Reforms Act, 2005 and rules/regulations framed thereunder and their performance and tariff are regulated by OERC. ( 3 ) IT is accordingly submitted by the learned counsel for the petitioner that the petitioner company being a public limited company engaged in distribution and supply of electricity in the southern part of Orissa, under a licence granted to it by the OERC, it is not a "public authority", as defined in Section 2 (h) (i) of the RTI Act and therefore, the decision of the State Government in the Energy Department, holding that the petitioner company falls within the said definition is erroneous and misconceived. In support of his contention, learned counsel has relied upon a single Bench decision of Bombay high Court, in the case of Dr. Panjabrao deshmukh Urban Co-operative Bank Ltd. v. The State Information Commissioner, vidarbha Region, Nagpur and Ors. , AIR 2009 bombay 75. ( 4 ) IN the said decision, Hon'ble single judge was considering the question whether the petitioner, which was Co-operative Bank, was a "public authority" within the meaning of Section 2 (h) of the RTI Act. On the facts of the said case, the Hon'ble Court held that there was nothing to show that the petitioner-Bank was having any monopoly nor it had any State protection. The Co-operative Bank did not discharge any governmental function and the function of the Bank can be carried out by any private individual or by institution registered under the appropriate law. Accordingly, the Hon'ble Court proceeded to hold that as there was no director indirect control over the affairs of the. Bank for deep and pervasive control, the petition-Bank was not "public authority", within the meaning of Section 2 (h) of the RTI Act. ( 5 ) LEARNED Advocate General with reference to the counter affidavit filed by the State submits that to provide for restructuring of the electricity industry for rationalization of the generation, transmission, distribution and supply of electricity, for avenues for participation of private sector entrepreneurs in the electricity industry in the State in an efficient, economic and competitive manner including the constitution of an Electricity Regulatory commission for the State and for matters connected therewith or incidental thereto, the state Government enacted the Orissa Electricity Reforms Act, 1995 (Orissa Act 2 of 1996 ). As a measure of restructuring and reforming the power sector in Orissa the State government framed the 1998 Rules for the purpose of providing and giving effect to the preparation and implementation of a scheme to transfer the distribution undertakings of gridco to the distribution companies. Accordingly, the entire State was divided in four distribution zones/areas for supply of electricity and incorporated four distribution companies. The present petitioner company is engaged in di stribution of supply of electricity within the southern parts of Orissa. It is submitted that the 4 distribution companies including the petitioner company are public limited companies but performing very essential public duty and also executing schemes sponsored by the Central and the State Government. The present petitioner company is engaged in di stribution of supply of electricity within the southern parts of Orissa. It is submitted that the 4 distribution companies including the petitioner company are public limited companies but performing very essential public duty and also executing schemes sponsored by the Central and the State Government. These companies, including the present petitioner, came into existence as per the 1998 Rules and have been entrusted with the task of spending the Central and, State Government assistance, while executing such scheme. Further, the petitioner company as well as the other 3 distribution companies are in charge of collection of electricity duty, which is a Government revenue, along with the energy charges, collected from the customers. The petitioner company is a subsidiary of GRIDCO, which is a wholly owned company of the State government, which holds 49% of share in the petitioner company and therefore, the petitioner company is indirectly funded by the state Government through the shares held by the GRIDCO. It is further submitted that various schemes like Accelerated Power Development and Reform Programme (APDRP) and minimum Need Programme (MNP) etc. are carried out by the petitioner company, for which funds are provided by the State Government for electrification work in the State. Accordingly, it is submitted that the petitioner company is a "public authority" as defined in Section 2 (h) of the RTI Act. ( 6 ) LEARNED counsel for the State has relied upon a Division Bench decision of punjab and Haryana High Court, in the case of D. A. V. College Trust and Management society and Ors. v. Director of Public Instruction and Ors. , AIR 2008 Punjab and Haryana 117, wherein the Hon'ble court was considering the question whether the D. A. V. College, Chandigarh, could be regarded as a "public authority" within the meaning of section 2 (h) of the RTI Act. On the facts of the said case, the Hon'ble Court came to hold as under : "a perusal of the definition of 'public authority' shows that 'public authority' would mean any authority or body or institution established or Constituted apart from other things by the notification issued by an order made by the appropriate Government. It is to include even any body owned, controlled or substantially financed or non-Government organisation substantially financed directly or indirectly by the funds provided by the appropriate Government. It is to include even any body owned, controlled or substantially financed or non-Government organisation substantially financed directly or indirectly by the funds provided by the appropriate Government. It is undisputed that the petitioners are receiving substantially grant-in-aid from the Chandigarh Administration. Once a body is substantially financed by the Government, the functions of such body partake the character of public authority. The definition of expression 'public authority' itself shows that 'public authority' would include any organization/body owned, controlled or substantially financed directly or indirectly by funds provided by the Government or even the non-Government organization which is substantially financed. The petitioner has claimed that they are getting only 45% grant-in-aid after admitting that initially the grant-in-aid paid to them was to the extent of 95 %. If on account of policy of the Government the grant-in-aid to the extent of 95% which was given initially allowing the petitioner to build up its own infrastructure and reducing the grant-in-aid later would not result into an argument that no substantial grant-in-aid is received and therefore it could not be regarded as 'public authority'. Therefore, we do not find any substance in the stand taken by the petitioner that it is not a 'public authority'". ( 7 ) LEARNED counsel for the State also relies upon a single Bench decision in the case of Dhars Singh Girls High School ghaziabad v. State of Uttar Pradesh and Ors. AIR 2008 Allahabad 92, wherein the question for consideration was whether the petitioner, which is a Girls High School, recognized and receiving grant-in-aid from the state Government, is a 'public authority" as defined under Section 2 (h) of the RTI Act. The Hon'ble Court held as follows : "in my opinion, whenever there is even an iota of nexus regarding control and finance of public authority over the activity of a private body or institution or an organization etc: the same would fall under the provisions of Section 2 (h) of the Act. The provisions of the Act have to be read in consonance and in harmony with its objects and reasons given in the Act which have to be given widest meaning in order to ensure that unscrupulous persons do not get benefits of concealment of their illegal activities or illegal acts by being exempted under the Act and are able to hide nothing from the public. The working of any such organization or institution of any such private body owned or under control of public authority shall be amenable to the Right to Information Act. The petitioner being an institution recognized under the provisions of U. P. High School and Intermediate Education Act, 1929 and receiving grant-in-aid from the State Government is therefore, covered under the aforesaid Act. " ( 8 ) THE very object of the RTI Act is to provide for setting out the practical regime of right to information for citizens to secure access to information under the control of public authorities, in order to promote transparency and accountability in the working of every public authority. ( 9 ) SECTION 2 (a) defines "appropriate Government" as follows :- " (a) "appropriate Government" means in relation to a public authority which is established, constituted, owned, controlled or substantially financed by funds provided directly or indirectly- (i) by the Central Government or the union territory administration, the Central government; (ii) by the State Government, the State government". ( 10 ) THE term "public authority" has been defined in the Section 2 (h), which reads as under : "2 (h) 'public authority' means any authority or body or institution of self government established or constituted- (a) by or under the Constitution; (b) by any other law made by Parliament; (c) by any other law made by State Legislature; (d) by notification issued or order made by the appropriate Government, and includes any- (i) body owned, controlled or substantially financed; (ii) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government. " ( 11 ) THE term "public authority", as defined in Section 2 (h) of the RTI Act, would therefore mean any authority or body or institution established or constituted apart from other things, by the notification issued by an order made by the appropriate Government. It includes even a body owned, controlled or substantially financed directly or indirectly by the funds provided by the appropriate government. Even non-Government organizations substantially financed, directly or indirectly by the funds provided by the appropriate Government would come within the ambit of "public authority", as defined in section 2 (h) of the RTI Act. It includes even a body owned, controlled or substantially financed directly or indirectly by the funds provided by the appropriate government. Even non-Government organizations substantially financed, directly or indirectly by the funds provided by the appropriate Government would come within the ambit of "public authority", as defined in section 2 (h) of the RTI Act. ( 12 ) IN the present case, admittedly the petitioner company is a subsidiary of gridco, which is a wholly owned Government company, which holds 49% equity in the 4 distribution companies, including the petitioner company, who are engaged in distribution and supply of electricity in different parts of Orissa tinder licences granted to them by the OERC, as per the 1998 Rules. Rule 6 of the said 1998 Rules provides that all the suits, proceedings etc. pending against gridco on and from the appointed date, with regard to distribution business or a distribution undertaking, which are transferred to the 4 distribution companies including the petitioner company shall not abate or discontinue and the same shall be continued, prosecuted and enforced by or against the concerned distribution company, in the same manner and to the same extent, as it would or might have been continued, prosecuted and enforced by or against GRIDCO, if the transfers provided for in the said 1998 Rules had not been made. Furthermore, the petitioner company as well as the other 3 distribution companies execute different schemes sponsored by the Central and the State Government, the funds of which are provided by the appropriate Government. The 4 distribution companies, including the petitioner company have been created under the aforementioned 1998 Rules, which was framed by the State government for the purpose of providing and giving effect to the preparation and implementation of the scheme for transfer of distribution undertakings of the GRIDCO to the said 4 distribution companies. The said 4 distribution companies are governed by the different rules and regulations framed by the state Government, for supply and distribution of electricity in the State of Orissa under the Electricity Act, 2003 and Orissa Electricity Reforms Act 1995. The performance of the distribution companies and the rate of tariff to be collected by them are regulated by OERC Moreover, the 4 distribution companies, including the petitioner company are discharging governmental functions of distribution and supply of electricity to the people of the State, which is an essential public duty. The performance of the distribution companies and the rate of tariff to be collected by them are regulated by OERC Moreover, the 4 distribution companies, including the petitioner company are discharging governmental functions of distribution and supply of electricity to the people of the State, which is an essential public duty. All these go to show that the state Government has a deep and pervasive control over all the 4 distribution companies including the petitioner and such control is not mere regulatory. ( 13 ) IN view of the above, we are of the considered opinion that the petitioner company is a "public authority" and therefore the decision of the State Government in the Energy Department, as communicated to the petitioner vide the letter dated 16-3-2006 (Annexure-1 ). holding that the petitioner company falls within the definition of "public authority" as defined in the RTI Act, cannot be faulted. ( 14 ) THE writ application being devoid of merit, the same is accordingly dismissed. Application dismissed. --- *** --- .