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Issues Involved:
1. Validity of Section 14(iv) of the Orissa Electricity Reform Act, 1995. 2. Validity of the provisional Retail Supply and Distribution Licence issued under Section 14(iv) of the Act. 3. Validity of the tariff notification dated 13.5.1996 issued by the appellant. Detailed Analysis: 1. Validity of Section 14(iv) of the Orissa Electricity Reform Act, 1995 The High Court upheld the vires of Section 14(iv) of the Act, which authorized the State Government to grant provisional licences for a period not exceeding twelve months for transmission or supply of electricity until the establishment of the Orissa Electricity Regulatory Commission. The Supreme Court did not find any reason to question this decision, thus affirming the validity of Section 14(iv). 2. Validity of the provisional Retail Supply and Distribution Licence issued under Section 14(iv) of the Act The High Court upheld the validity of the provisional Retail Supply and Distribution Licence issued to the appellant under Section 14(iv) and confirmed the appellant's power to revise the tariff under the provisional licence. The Supreme Court agreed with this interpretation, emphasizing that the provisional licence was issued within the legal framework established by the Act. 3. Validity of the tariff notification dated 13.5.1996 issued by the appellant The core issue revolved around the interpretation of Clause 9.1 of the provisional licence, which stated that "the charges made by the licensee shall not exceed on average 117% of those permitted under the interim tariffs issued by the State Government and in force on 1st April 1996." - High Court's Interpretation: The High Court interpreted Clause 9.1 to mean that the increase in tariff rates for any category of consumers could not exceed 17% over the previous rates. It quashed the tariff notification dated 13.5.1996 as it found that the increase for some categories exceeded 17%. - Appellant's Argument: The appellant contended that Clause 9.1 allowed different rates of increase for different categories of consumers, provided the overall increase in revenue did not exceed 17% on average. This interpretation was based on the understanding that "charges made" referred to the total revenue, not the individual tariff rates. - Supreme Court's Analysis: The Supreme Court found that Clause 9.1 was capable of multiple interpretations. It applied the golden rule of interpretation, which involves understanding the words in their natural, ordinary, and popular sense. The Court concluded that the words "on average" indicated that the appellant could apply different rates of increase to different categories, as long as the total revenue increase did not exceed 17% over the previous revenue. - Commission's Report: The Orissa Electricity Regulatory Commission's report supported the appellant's interpretation to a large extent, noting that the increase in revenue was only 16.65%, which was within the permissible limit of 17%. The Commission also acknowledged that varying charges for different categories of consumers was a standard practice, considering factors like the nature and purpose of use and affordability. - Final Judgment: The Supreme Court held that the High Court's interpretation rendered the words "on average" in Clause 9.1 redundant. It accepted the appellant's interpretation that the clause allowed for different rates of increase for different categories, provided the overall revenue increase did not exceed 17%. Consequently, the Supreme Court set aside the High Court's judgment and upheld the validity of the tariff notification dated 13.5.1996. Conclusion: The Supreme Court allowed the appeals, set aside the High Court's judgment, and upheld the validity of the tariff notification dated 13.5.1996. The Court confirmed that Clause 9.1 of the provisional licence permitted the appellant to apply different rates of increase to different categories of consumers, as long as the overall revenue increase did not exceed 17% on average.
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