9911796707
TMI Blog1979 (4) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... energy ) for the production of aluminium, which is the most modern of the common metals. Unlike the other common industrial metals like iron, copper, zinc and lead, pure aluminium is not produced by the direct smelting of its ores. The metal is now produced by the modern electrolytic method under the influence of direct current. It takes about 10 kilo watt-hours of electricity to produce a pound of aluminium, and the supply of cheap electric power is therefore an essential requisite or raw material for its production. The metal has many advantages and uses and has gained such importance that it is an essential commodity under the Essential Commodities Act and its production is one of the scheduled industries under the Industries (Development and Regulation) Act. While the State feels aggrieved because the High Court has interfered with the Uttar Pradesh Electricity (Regulation of Supply, Distribution, Consumption and Use) Order, 1977, dated September 19, 1977, hereinafter referred to as the Order, which it made under section 22B of the Electricity Act, 1910, (for short the Act), the Company's grievance is that the High Court has not granted all the reliefs which it had claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Electricity Board (U.P.S.E.B.). The Government of U.P. held negotiations with the Company, and it was decided that the Company would produce the additional 60,000 metric tonnes of aluminium also in Uttar Pradesh. The Chief Secretary to the government of U.P. wrote a detailed letter to the Company on November 20, 1968, in which the position regarding the supply of energy was stated as follows,- Regarding the power plant, I can see no difficulty in meeting the interim requirements for 2 to 3 years from the U.P. State Electricity Board, nor do I see any difficulty in arranging for parallel running of your new power station, with the U.P. State Electricity Board. The Company then addressed a letter to the State Government on September 26, 1969 stating the position regarding the supply and generation of increased energy for the expansion of aluminum production as follows,- 5(a) The Scheme of power supply for our expansion by UPSEB is interlinked with the question of expansion of Our Renusagar power plant and its parallel operation with your system. The application for the expansion of our Renusagar Power Plant has already been submitted to your office, a copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted a note on the power situation which was likely to obtain from April to July 1977. He pointed out that there was acute shortage of energy and suggested the imposition of some restrictions upto the end of July 1977 by when the demand for agriculture was expected to decrease and the Rihand and Matatila reservoirs would be filled up. That was proposed to meet the needs of agriculture and related industries and to meet the industrial demand to the extent possible. One of the proposals was for a 50 per cent cut in the demand of the Company and some other industrial units including Kanoria Chemicals and Industries Ltd. That note came up for consideration in the State Cabinet on April 1, 1977, and was partially approved. The U.P. Electricity (Regulation of Distribution and Consumption) Order, 1977, was therefore issued on April 7, 1977. Under clause 6(a) (i) of the Order, the Company could draw energy only to the extent of 42.5 m w i.e. 50 per cent of its monthly consumption; but it was allowed to draw 55 m w for the time being. Uttar Pradesh came under the President's rule on April 30, 1977, and the Company was allowed to draw 55 m w until further orders. It is the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, the Company filed its second writ petition [No. 2160(c) of 1977] along with an application for stay. The High Court admitted the writ petition, but rejected the application for stay. The Company then moved this Court for special leave. The Hon'ble Vacation Judge made an observation that the matter may be discussed by the parties concerned, and the State agreed to give 20 m w of energy to the Company for the time being. Fresh elections were held to the State Legislative Assembly, and the new Cabinet was sworn in on June 23, 1977. It decided to reduce the supply of energy to the Company to zero, in pursuance of the amendment dated June 2, 1977, and called for a fresh note on the position regarding the generation and distribution of energy. The Executive Engineer, Rihand, accordingly asked the Company to reduce the consumption to zero. A detailed note was prepared by the Secretary concerned on June 28, 1977, and it came up for consideration in the Cabinet on June 30, 1977, but no decision was taken and the note was kept pending. It appears that the Chairman of the U.P.S.E.B. prepared a note on August 26, 1977, in which he pointed out the shortage of energy, includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... energy to the petitioner in accordance with law without taking into consideration the provisions of the said proviso . In order to examine the findings of the High Court about the invalidity of the proviso to clause 6(a) (i) of the order, it will be convenient to examine the relevant findings of the High Court on the various points of law. The High Court has taken the view that it is the statutory obligation of the U.P.S.E.B. because of the obligation of a licensee under sections 18 and 26 of the Electricity (Supply) Act, 1948 to supply electrical energy to a consumer. Reference in this connection has also been made to clause VI of the Schedule to the Act. Clause (h) of section 2 of the Act defines a Licensee to mean any person licensed under Part II to supply energy. Section 26 of the Act of 1948 provides, inter alia, that, subject to the provisions of that Act, the Electricity Board shall in respect of the whole State, have all the powers and obligations of a licensee under the Indian Electricity Act, 1910, and the Act of 1948 shall be deemed to be the licence of the Board for purposes of the Act (of 1910). The first proviso to the section excludes the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are made up of thick aluminium core steel reinforced cables, and has taken the view that the Pipri Bus Bar is a distributing main under section 2(e) of the Act and is an electric supply-line as defined in section 2(f) so that clause VI of the Schedule to the Act would be fully applicable to the Board in so far as its obligation to the Company is concerned. But as has been stated in the second proviso of section 26 of the Act of 1948, the provisions of clause VI of the Schedule to the Act could apply to the U.P.S.E.B. in respect of that area where distribution mains had been laid by the Board . It was therefore a question of fact whether that was so, and had to be examined on the basis of the averments of the parties to that effect. It is however not disputed before us that the Company did not plead that distributing mains had been laid by the Board for supply of energy to the Company, or to any one else, from the Pipri Sub-station. The State had therefore no occasion to controvert any such allegation. This has in fact been admitted to be so by Mr. Ray in his arguments, and the High Court went wrong in recording a finding of fact against the State without any basis for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as generated by the Board could be the subject-matter of an order under section 22B of the Act and it was not permissible for the State to take into account the energy generated by the Company for its own use. It may be recalled that the Company applied for the grant of sanction under section 28(1) of the Act to generate 120 m w of energy for the additional production of aluminium. That was allowed and a notification was issued on November 12, 1964, granting sanction to the Renusagar Power Company Limited (a wholly owned subsidiary of the Company) to engage in the business of supplying energy to the Company. It has two generating units and 135 m w power is being generated by the Renusagar Station for the exclusive use of the Company, and it is this energy for which it has been argued that it cannot be the subject-matter of an order under section 22B. But sub-section (1) of section 28 of the Act in terms refers to, and deals with, engaging by a non-licensee, in the business of supplying energy to the public . It is therefore futile to contend that what was generated by the Renusagar Power Company was not meant for supply to the public but was the Company's own energ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear that, like sub- section (2), sub-section (1) is also confined to a licensee and will not be applicable to the energy supplied by a sanction-holder under section 28. Our attention in this connection has been invited to the use of the article the in sub-section (2) while stating that the order made under sub-section (1) may direct the licensee' not to comply with the matters stated in clauses (i) to (iii). The argument is untenable for two reasons. Firstly, subsection(1) of section 22B refers to the State Government's power to control the distribution of energy as a whole and not merely the energy generated by a licensee, and there is no rule of construction by which the restricted scope of sub-section (2), which deals only with the licensees should govern the scope of sub-section (1) and confine it to licensees. Secondly, the purpose of sub- section (2) is to provide exceptions of the nature which are peculiar to licensees and are necessary to save them from the statutory obligations mentioned in the three clauses of the sub-section. It appears that the use of he article the in sub-section (2) is not quite appropriate, but we have no doubt that there is no justifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that where any such industrial consumer has his [own source of generation of energy which alone enables him to obtain] 50 per cent or more of his total consumption, then a cut of 100 per cent in the energy supplied by the Uttar Pradesh State Electricity Board shall be exercised. What has therefore been ordered is no more than a cut of 50 per cent in the monthly consumption of electricity and not a total prohibition of consumption of energy. That is a step in the direction of regulating the consumption of energy as far as it goes, and it is overridden with the further regulation contained in the proviso in the case of an industrial consumer having its own source of generation of energy which alone enabled him to obtain 50 per cent or more of his total consumption so as to ensure even to him a consumption of 50 per cent of energy and not a total prohibition. The proviso therefore operates in a special or particular field and for a particular purpose where it is considered necessary for regulating the supply etc. of the energy in the interest of the other consumers, for section 22B is meant to maintain the supply and secure the equitable distribution of energy to al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause 6(a) (i) was meant to deprive only a few consumers of energy, and that the cut of 100 per cent under the proviso operated exclusively against the Company. And it has to be appreciated that clause 6(a) (i) deals only with large and heavy industrial power consumers receiving power at 33 kv and above, and it is hardly permissible for such a heavy consumer as the Company to complain of any preference that may have been shown to small consumers in the field of agriculture, or agro-based or other small industries. The fact remains that large and heavy industrial consumers of the category mentioned in clause 6(a) (i) are a class by themselves and it is hardly permissible for them to complain that the small preference shown to agriculturists in supplying energy for their water pumps or tube-well, or in energising State tube-wells supplying water to them, or the supply of energy to small scale industries has really created a privileged class of consumers or brought into existence any such concept of priorities as to run counter to or defeat the objective of bringing about the equitable distribution of energy by an order under section 22B. No glaring instance of any preference has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on the record for us to hold otherwise. It has next been argued that the validity of the Order, which is by way of a piece of subordinate legislation, is open to judicial scrutiny and that the subjective satisfaction of the State Government in making it is open to challenge in a court of law. It will be enough for us to say that subordinate legislation is by now a well-recognised form of legislation for practical reasons. The modern administrative machinery is quite complex and it is often found difficult to pass complicated legislative measures through the full parliamentary procedure and on a permanent or durable basis. Even a carefully drafted Act may not work well in actual practice. It may also be that the exact means of achieving the object of an Act may not be adequately comprehended all at once, and it may be useful to provide for some elasticity in the actual working of a law. That can best be done by leaving some of the details to subordinate legislation. That is why some legislative powers are delegated to executive authorities, subject of course to the purpose and the scheme of the parent Act, the constant vigil of the Parliament or the State Legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself and we shall examine it separately. It will thus appear that the above arguments which have been advanced against the validity of clause 6(a) (i) of the order are not justified. The whole of the clause reads as follows,- 6(a) (i) In respect of electrical energy consumed by all large and heavy power industrial consumers receiving power at 33 kv and above, excepting fertilizers, from the U.P. State Electricity Board a cut of 50 per cent in their monthly consumption of electricity both in respect of energy and demand shall be exercised: Provided that where any such industrial consumer has his own source of generation of energy which alone enables him to obtain 50 per cent or more of his total consumption, then a cut of 100 per cent in the energy supplied by the Uttar Pradesh State electricity Board shall be exercised. It thus deals with the consumption of energy by all (excepting fertilizers) large and heavy industrial power consumers receiving power from the U.P.S.E.B. at 33 kv and above. It imposes a cut of 50 per cent in their monthly consumption of energy. Then it adds the provision that where such an industrial consumer has his own source for the genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is whether this has been Proved to be so in the present case. Mr. Ray has argued on behalf of the Company that the order is malafide, and has been made in the colourable exercise of the power under section 22B of the Act simply to compel the Company to agree to the payment of a higher rate for the supply of energy to it. He has tried to establish his argument on the basis of the statement of the Chief Secretary of the State Government dated July 8, 1977 and some statements of the Minister concerned. We shall examine them separately. What the Chief Secretary said in his press statement dated July 8, 1977, was that the State Government had reduced the supply of power to the Company from 85 m w to 10 m w and that it had been decided to almost double the rate for the supply of the power which was being given to the Company. It will be remembered that by virtue of the amendment which was made to the U.P. Electricity (Regulation of distribution and consumption) order on June 2, 1977, the Company was required to reduce its consumption of the Board's energy to zero, but it was, nonetheless, allowed to draw 30 m w for some time. That led to further directions for the reduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of emergency on June 26, 1975 that the Company received some 55 m w of energy, and then a fresh agreement was made soon after on November 30, 1976 to supply 85 m w of energy. But even before that date, for a sufficiently long period, the Company got far more energy than what it was entitled to. We are therefore not satisfied that the Company has been able to establish malice in law merely because of what the Chief Secretary or the Minister stated here and there. It may well be that the new State Government was dissatisfied with the new agreement which had been entered into at the instance of the political party which was then in power, but it cannot be said that the new Minister's desire to examine the validity or propriety of that agreement arose out of any extraneous or improper consideration so as to amount to malice in law. Our attention has also been invited in this connection to certain statements on behalf of the State Government and the Board that energy was available in abundance, and it has been urged that even so the Company was denied its supply in spite of the agreements and the assurances of the State Government to the contrary. That is a point relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Government failed to take into consideration the facts that the production of aluminium was of considerable importance to the national economy and that the Board was capable of generating more energy but was not doing so. Reference has also been made to the new aluminium policy which the Central Government announced on July 15, 1975, and to the benefits which the U.P.S.E.B. was deriving from the aluminium products manufactured by the Company. But the argument is untenable because there is nothing to show that these factors were not taken into consideration while making the Order, and an inference that they were ignored cannot be drawn against the State merely because the Company was not permitted to consume all the energy it wanted and there was a fall in the production of aluminium because of the restriction imposed by the Order. It may be that the U.P.S.E.B. was capable of generating more energy, or that it was not running efficiently and had not succeeded in reaching its target of ideal generation. But here again it will be enough to say that although the High Court arrived at the conclusion that the Company deserved the writ which it granted, it did not find it possible to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of it on behalf of the Company. But the fact remains that the demand for energy was far in excess of the supply from all the sources available to the U.P.S.E.B. It has also been well established that a situation had arisen when it became necessary to obtain an order from the State Government about the course of action to be adopted by the Board. Self-contained notes were therefore drawn up in March 1977, and on May 24, 1977, June 28, 1977 and August 26, 1977. We have gone through the notes and they are quite detailed and objective. We have made a mention of the developments which took place because of those notes, including the making of the Order. We have no doubt that it was made because a situation had arisen when regulation of the supply, distribution, consumption and use of energy had become necessary, and the Order was a genuine attempt to secure equitable distribution of energy. It is true that the Company was the worst sufferer under clause 6(a)(i) of the Order, but then it was also the greatest consumer. The basis for the making of the Order was the necessity or expediency for maintaining the supply and securing the equitable distribution of energy by means of an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the large thermal machines at loads lower than the rated capacity. We have made a reference to the finding of the High Court against the Company in this respect. Another aspect of the controversy before us relates to the contractual liability of the State to supply the energy which it had assured to the Company. It has been pointed out that under the agreement dated October 29, 1959, the State was bound to supply 55 m w of energy upto 1987 and then an agreement was entered into on November 30, 1976, to supply additional 30 m w, making a total of 85 m w for a period of 5 years. It has therefore been argued that instead of fulfilling its obligation under the agreements and the other assurances which were given by the State from time to time, the State took resort to the provisions of section 22B to get out of its obligation and the making of the impugned Order was really a colourable exercise of that statutory power. We find from the counter-affidavit of the State (October, 1977) that, as would appear from the Chief Secretary's letter dated November 20, 1968, what the State Government had assured the Company was to meet the interim requirement of the Company for 2 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat account. It is not disputed that the consumers which were hit by the provisions of clause 6(a) (i) of the Order were the Company, the Kanoria Chemicals and Industries Ltd., the Indian Railways, the Indian Explosives Ltd., and the Fertiliser Corporation of India. The last three of these have been exempted from the rigour of the Order. As regards the Kanoria Chemicals and Industries Ltd., the State has stated in its reply that it was manufacturing Benzena Chloride and BHC which are used for agricultural purposes and for purifying drinking water. They were entitled to 50 per cent of their consumption, and the State allowed them exemption to the extent of 3 m w making it permissible for them to consume 12.5 m.w. It cannot therefore be said that the continued supply of energy to Kanoria Chemicals was proof of any hostility on the part of the State in so far as the Company was concerned. It may also be that, as has been argued on behalf of the Company, some other restrictions which were initially imposed on some other consumers under the Order were withdrawn, so that it is the Company which is the main sufferer under the Order. Even so, it is not reasonable to take the view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts which are selected for inclusion in the Statute Law Revision Acts of England as having ceased to be in force otherwise than by express repeal, or having by lapse of time or otherwise become unnecessary. It is quite an exhaustive list and the question is whether the Order could be said to have spent itself or become obsolete , for the other four categories are inapplicable to the present case. But whether a piece of legislation has spent itself or exhausted in operation by the accomplishment of the purpose for which it was passed, or whether the state of things contemplated by the enactment has ceased to exist, are essentially questions of fact for the Legislature to examine, and no vested right exists in a citizen to ask for a declaration that the law has been impliedly repealed on any such ground. It has to be appreciated that the power to legislate is both positive in the sense of making a law, and negative in the sense of repealing a law or making it inoperative. In either case, it is a power of the Legislature, and should lie where it belongs. Any other view will be hazardous and may well be said to be an encroachment on the legislative field. In an extreme and a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such situation has been found to be established in the present case ? Now what the High Court has found in this respect is as follows,- This Court finds that circumstances have materially changed since the impugned order was made. The shortage in reservoir from which water is drawn for the generation of Hydro-electricity has ceased and further supplies of electrical energy are available from newly commissioned units. The respondents admit that fresh power connections have been given. In these circumstances, the continuance of the impugned order is no longer justified and consequently, the order must be held to have outlived the purpose for which it was made and, as such, it must be held to be no longer valid.' It has thus found three facts: (i) the shortage in the reservoir(s) for generation of hydel energy had ceased, (ii) further supply of energy was available from newly commissioned units, and (iii) fresh power connections had been given by the U.P.S.E.B. But what was lost sight of was the important fact that it was all along the case of the State that hydel energy was only one-third of the total generation, and that generation of thermal energy which met ..... X X X X Extracts X X X X X X X X Extracts X X X X
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