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2011 DIGILAW 849 (ALL)

GHAZIABAD INDUCTION FURNACE ASSOCIATION v. STATE OF U. P.

2011-04-01

AMITAVA LALA, ASHOK SRIVASTAVA

body2011
JUDGMENT Hon’ble Amitava Lala, J.—This writ petition has been filed by Ghaziabad Induction Furnace Association, which is a registered welfare association of the owners of Rolling and Re-rolling Mills and Arc/Induction Furnace in the district of Ghaziabad and Association of Secondary Steel Manufacturers, Ghaziabad. 2. The grievance of the petitioners is with regard to the public notice issued by the U.P. Power Corporation on 11.3.2011, being Annexure-6 to the writ petition. The public notice issued by the U.P. Power Corporation is as follows : Uttar Pradesh Power Corporation Limited Shakti Bhawan’, 14- Ashok Marg, Lucknow. PUBLIC NOTICE Pursuant to provisions contained in Indian Electricity Act, 2003, the State Government owned distribution companies viz. Purvanchal Vidyut Vitran Nigam Ltd., Madhyanchal Vidyut Vitran Nigam Ltd., Paschimanchal, Vidyut Vitran Nigam & Dakshinanchal Vidyut Vitran Nigam Ltd., have submitted petition to UPERC to create a new Tariff category namely HV-5 for Industrial connections with process-Arc/Induction Furnance, Rolling Mills and Mini Steel Plants which are part of HV-2 category of present Tariff Order. In compliance to the instructions of UPERC for information to the general public, consumers (including consumers of KESCo) the rates of newly created HV-5 category are being notified as under:- Details Present Tariff Proposed Tariff Voltage Level 132 KV 33 KV For 132 KV 33 KV & For & above & 66 KV supply at & above 66 KV supply at 11 KV 11 KV Demand Charges 200 220 230 1350 1500 1650 (Rs./KVA/Month) Energy Charges 3.75 3.85 4.60 1.20 1.50 1.70 (Rs./KVAh) All concerned, consumers, institutions, licensee and department Government of U.P. may send their representation, if any, in 6 copies (4 copies) to Secretary, UPERC, 2nd Floor, Kisan Mandi Bhawan, Gomti Nagar, Lucknow-226010 & 2 copies to Chief Engineer, RAU, 15th floor, Shakti Bhawan Extn.,14-Ashok Marg, Lucknow-226001) latest by 30.3.2011. Navneet Sehgal Chairman 3. The petitioners have challenged the public notice. According to them such public notice as issued by Uttar Pradesh Power Corporation Limited, Lucknow is required to be quashed since the Corporation is not authorized to issue such notice. Further prayers are with regard to creating new category for Arch/Induction Furnace, Rolling and Re-rolling Mills which is in respect of Rate Schedule HV-2 category regarding which we are not required to discuss this issue in the present writ petition. 4. Further prayers are with regard to creating new category for Arch/Induction Furnace, Rolling and Re-rolling Mills which is in respect of Rate Schedule HV-2 category regarding which we are not required to discuss this issue in the present writ petition. 4. The petitioner’s case is that the U.P. State Electricity Board was formed and continued till 14.1.2000 for the purpose of transmission and distribution of electricity in the State of Uttar Pradesh. It was divided into three organizations out of which one is Uttar Pradesh Power Corporation Limited, having licence in respect of transmission and distribution upto 12.8.2003. Now it has been divided into five organizations. U.P. Power Transmission Corporation Ltd. is the holder of transmission licence and so far as the distribution is concerned four other companies have been formed which are Purvanchal Vidyut Vitran Nigam Ltd., Madhyanchal Vidyut Vitran Nigam Ltd., Paschimanchal Vidyut Vitran Nigam Ltd. & Dakshinanchal Vidyut Vitran Nigam Ltd. 5. According to Mr. B.C.Rai, learned counsel appearing for the petitioners, when the U.P. Power Corporation Ltd. has its own licence it cannot issue a public notice to make representation to the Regulatory Commission. In other words, Regulatory Commission cannot determine the issue in such manner as proposed. On the other hand, Mr. P.K.Shukla who is appearing for the U.P. Power Corporation Ltd. and also for Paschimanchal Vidyut Vitran Nigam Ltd. has contended before us that there is no bar of issuing any notice as per Section 64 (2) of the Electricity Act, 2003. According to Section 64 (1)an application for determination of tariff under Section 62 shall be made by a generating company or licensee in such manner and accompanied by such fee, as may be determined by regulations. Sub-Section 2 of Section 64 says every applicant shall publish the application, in such abridged form and manner, as may be specified by the Appropriate Commission. In Section 62 Appropriate Commission is directed to determine tariff. There is no dispute that Appropriate Commission, in this case, is Uttar Pradesh Electricity Regulatory Commission and it is authorized to determined the tariff. 6. Mr. B.C. Rai, learned counsel for the petitioners, has drawn our attention to Sub-Section 4 of Section 62 to thrust his case even towards the merits. There is no dispute that Appropriate Commission, in this case, is Uttar Pradesh Electricity Regulatory Commission and it is authorized to determined the tariff. 6. Mr. B.C. Rai, learned counsel for the petitioners, has drawn our attention to Sub-Section 4 of Section 62 to thrust his case even towards the merits. Section 61 (d) says that Appropriate Commission shall, subject to other provisions, specify the terms & conditions for the determination of tariff, and in doing so, shall be guided by following namely ‘safeguarding of consumers’ interest and at the same time, recovery of the cost of electricity in a reasonable manner. Section 62 (4) says that no tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified. In this case 2009-2010 determinations are already there. Therefore, no such change is required to be made in this financial year and it will go against the interest of the consumers. 7. We are of the view that if we ultimately hold and say that the Regulatory Commission has power to determine the issue, so far as the public notice which is under challenge herein is concerned, the petitioners will be able to raise the issue before such Regulatory Commission to determine the same. But before that we have to see whether the notice which has been issued by the U.P. Power Corporation Ltd. is valid notice or not. 8. It has been pointed out that determination of tariff under Section 62 is made by a generating company or licesee in a prescribed manner as is clear from Section 64 of the Electricity Act. We have gone back, at the invitation of the respondents, to the definition clause under Section 2 of the Act. Section 2 (17) gives the definition of “distribution licensee” which is as follows : (17) “distribution licensee’ means a licensee authorized to operate and maintain a distribution system for supplying electricity to the consumers in his area of supply.” Sub-sections 39 and 73 of Section 2, give the meaning of licensee and transmission licensee which are as follows : (39)’’licensee” means a person who has been granted a licence under Section 14. Sub-Section 73 gives the definition of “ transmission licensee” which is as follows : (73)” transmission licensee” means a licensee authorized to establish or operate transmission lines. 9. Therefore, merely by saying that the transmission licence and distribution licence are given by the U.P. Power Corporation Ltd. to some five companies, they have lost their right absolutely even to the extent of the said public notice does not appear to be proper. 10. Mr. A.N. Singh, learned counsel appearing for Uttar Pradesh Electricity Regulatory Commission has contended before us that we are not against anything. They have to impartially determine the cause and hear out all the submissions as made by the petitioners herein, being the consumers, they will allow them to do so. 11. Mr.P.K. Shukla has already drawn our attention to a letter of U.P. Electricity Regulatory Commission dated 14.12.2010 on the subject of Separate Tariff Category for Arc/Induction Furnaces & Rolling Mills and Mini Steel Plants (HV-5), the copy of such notice be kept with the record. 12. Now the last but the important matter which is already discussed herein is with regard to the power of U.P. Power Corporation Ltd. in connection with the issuance of the notice. 13. We have called upon Mr.H.P.Dubey who earlier appeared for U.P. Power Corporation and normally appearing for Purvanchal Vidyut Vitran Nigam Ltd., who is not a party herein, but he is present in the Court at the time of arguments. We wanted to share his experience in this branch by treating him as Amicus Curiae to know as to whether the U.P. Power Corporation Ltd. has lost his every right to issue any public notice in the manner as has been done or not. As we understood by our own experience and also from the submissions of the contesting parties he has made the same submission that all the companies are the subsidiary companies of the U.P. Power Corporation Ltd. and it is overall incharge inclusive of tariff and governance, therefore, there is no dearth of power of issuance of public notice. 14. On the basis of the such submissions let us see the ratio of two judgments of the Division Bench of this Court. 15. 14. On the basis of the such submissions let us see the ratio of two judgments of the Division Bench of this Court. 15. Paragraph 38 of M/S Maa Vindvasini Industries and another v. Purvanchal Vidyut Vitran Nigam Ltd., Varanasi and others, 2008(1) ADJ 75 (DB), and paragraph 45 of Ashok Kumar and others v. State of U.P. and others, 2008(6) ADJ 660 (DB) are very important in this respect. In paragraph 38 of M/s. Maa Vindasini Industries and another (supra) the Division Bench has held that once independent companies have come into existence, rights, property and obligations have also vested therein separately, they are all totally separate and individual bodies and have to function in an autonomous manner without any influence from any third party except to the extent the statutory provisions otherwise require. No provision has been shown therein under which it can be said that the U.P. Power Corporation Ltd. can issue binding orders to other companies like various Discoms including the appropriate respondent therein. 16. Such judgment was followed in the second judgment where it has been held that one of the company is a Government company in view of the provisions of Companies Act but being an independent electrical undertaking having its own identity, it cannot be identified with the U.P. Power Corporation Ltd. for a purpose not less than what is prescribed in law. Since it is a separate and independent distribution company to which assets, liabilities etc. of U.P. Power Corporation Ltd. have been transferred under the Transfer Scheme, 2003, it is a separate Undertaking and unless, notified as required under the law cannot qualify to be a Government Electrical Undertaking under 1958 Act to avail the benefit of the said Act as such. 17. We are of the view that a subsidiary company has its independent right and there is no doubt with regard thereto. But practicability of all the issues are to be separately taken care of. In the instant case public notice has been issued by the pen of the Chairman of U.P. Power Corporation Ltd. who is the Chairman of all five subsidiary companies and for the purpose of calling representations from the consumer institutions, licence department is to determine a uniform prescription of tariff in the State of U.P. that is done as per the Act and in respect of the State Government owned distribution company alone. Therefore, we can safely construe that it is a bounden duty of a holding company to maintain the uniformity on behalf of the consumption and tariff in the State. Therefore, it should be adjudicated by different companies to avoid discrimination and come to an uniform finding by an independent body i.e. by Regulatory Commission. A subsidiary company can be disassociated with regard to certain amount of works but when the notices of different subsidiary company are issued it is the prime duty of a holding company to make a uniform rule for all by its own upon discussions with the subsidiary company or by a independent body. The subsidiary companies may be a successor but their interest and interest of the holding company cannot be said to be clashed on this issue. Meaning of “holding company”’ and “subsidiary company” are there as under Section 4 of the Companies Act, 1956. Therefore, our own view is that a public notice which has already been issued by the U.P. Power Corporation, a holding company, in this case, cannot be said to be bad. Therefore, the writ petition cannot succeed and hence it is dismissed, however, without imposing any cost. 18. Passing of this order will in no way affect the right of the petitioners to proceed before the Regulatory Commission, if they so chose or advised, to proceed accordingly. Hon’ble Ashok Srivastava, J.—I agree. —————