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TMI Blog2014 (5) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... nd this open access is to be given as per the provisions of Section 42(3) of the Act. It is here only that local authority is exempted from such an obligation and may refuse to provide makes it network available. Second option is, Under Section 43 of the Act, to provide the electricity to the consumer by the distribution licensee from its own network. It is difficult to accept the extreme position taken by the Appellant that if local authority is a distribution licensee in a particular area, there cannot be any other distribution licensee in that area without the permission of such a local authority. Not only such a contention would negate the effect of universal supply obligation Under Section 43, it will also amount to providing an exception which is not there either in Section 43 or Section 14 of the Act namely to treat local authority in special category and by giving it the benefit even that benefit which is not specified under the Act. Appeal dismissed. - Civil Appeal No. 4223 of 2012 - - - Dated:- 8-5-2014 - S.S. Nijjar and A.K. Sikri, JJ. For Appearing Parties: Shekhar Naphade, Dhruv Mehta, Jayant Bhushan, Mukul Rohatgi, J.J. Bhatt, Harender Toor, Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TPC, only TPC was made party. However, at the instance of Regulatory Commission BEST and Reliance Industries Limited (RIL) were also impleaded in these matters. After hearing all the parties, Regulatory Commission passed orders dated 22.2.2010 holding that TPC was bound to supply electricity in terms of applicable Regulations and therefore direction was given to the TPC to supply electricity to the consumers either through BEST wires or its own wires. The operative part of that order reads as under: In view of the above there is no requirement to issue a direction in regard to the Petitioner's claim of compensation Under Regulation 3.2 and 12 of the SOP Regulations. However, TPC is bound by Regulation 4.7 of MERC (Standards of Performance of Distribution Licensees, Period for Giving Supply and Determination of Compensation) Regulations, 2005 in terms of the timelines as mentioned in the said Regulation. Time has started ticking from the date of receipt of applications by TPC from the Petitioners who have requisitioned for electricity supply. TPC will have to adhere to the timelines specified in the Regulations. 3. We may point out here that the BEST (the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Regulatory Commission. 7. This contention was raised primarily on the ground that there was an alternative remedy provided to the consumer to raise his grievances before the Consumer Grievances Redressal Forum (CGRF) established Under Section 42(5) of the Act. Therefore, the consumer should have approached the said Forum instead of filing petition before the Regulatory Commission. This contention is totally misconceived and rightly rejected by the authorities below. As noted above, petition was filed by the consumer seeking direction against TPC to supply electricity to him. Thus, he approached the Regulatory Commission to enforce a distribution licensee obligation under the Act. As on that date, he was not the consumer of TPC but wanted to become its consumer. In so far as CGRF is concerned, which each distribution licensee is required to set up Under Section 42(5) of the Act, it deals with the grievances of the consumer. Consumer is defined Under Section 2(15) of the Act and reads as under: any person who is supplied with electricity for his own use by a licensee or the Government or by any other person engaged in the business of supplying electricity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proviso to Section 14 of the Act, it was a deemed licensee for the area of supply of BEST. Under Section 14 the Regulatory Commission is empowered to grant a license to any person on an application made to it Under Section 15 of the Act. This license may pertain to transmit electricity as a transmission licensee; or distribute electricity as a distribution licensee; or to undertake trading in electricity as an electricity trader, in any area, as may be specified in the license. This section has nine provisos which stipulated various circumstances under which no specific license is required by making an application Under Section 15 and if the conditions stipulated in any of these provisos are satisfied, such a person is treated as deemed licensee. We are here concerned with 1st proviso under which TPC claims to be a deemed distribution licensee as well as 6th proviso which is invoked by BEST in contending TPC cannot be a deemed distribution licensee in the area where BEST operates. Therefore, we reproduce both these provisos: st Proviso: Provided that any person engaged in the business of transmission or supply of electricity under the provisions of the repealed laws or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence Under Section 14. Proviso six, on the other hand, deals with a different situation. As per this provision, the Regulatory Commission is authorized to grant a licence to two or more persons for distribution of electricity through their own distribution system within the same area. It is subject to the conditions that the applicant for grant of licence within the same area shall apply with the additional requirements relating to the capital adequacy, creditworthiness, or code of conduct as may be prescribed by the Central Government. It further provides that merely because there exists a licensee in the same area would not be a ground to reject an application for another applicant for same purpose. This provision deals with open access policy. 14. As per the TPC, proviso one is applicable in their case since its predecessor were granted licence under the Act, 1910 and therefore it continuous to be licensee as per the aforesaid deeming provision under the Act, 2003 as well. The case set up by the TPC in this behalf is such a licence granted under the old Act is valid upto 15.8.2014 which is categorical stipulated in the Specific Licence Conditions by the Regulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the business of supply of electricity under the repealed laws on or before 10.6.2003, and (ii) a period (being, period of subsistence of licence) be stipulated in the licence granted to such person under the repealed laws. It was further pointed out that said deeming fiction applies (i) to such a person, and (ii) for such stipulated period. 16. There are two facets of the submissions made by Mr. Naphade. In the first instance it is to be found that there is a stipulation of period in the manner stated in the first proviso. Second aspect is as to whether it is incumbent, in all cases, to apply for licence under the provisions of Sections 14 and 15 of the Act immediately after the expiry of one year from the date of commencement of the said Act. In so far as first aspect is concerned, the argument of the Appellant loses sight of the fact that in the first proviso the period for which any person can be a deemed licensee is not only such period which is stipulated in the licence, clearance or approval granted to him under the repealed laws or such Act specified in the Schedule. It also provides that the provisions of repealed laws or such Act specified in the Schedule in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... virtue of the 1st Proviso to Section 14, Tata Power was deemed to be a licensee under that Act. This is also clear from Section 172(b) of the Act. It is trite law that once the purpose of the deeming provision is ascertained, full effect must be given to the statutory fiction and the fiction is to be carried to its logical end. 17. An argument was sought to be raised before us that Regulation 2008 laying down specific conditions for TPC are flouted as they were not made by the Regulatory Commission within the mandatory period of one year. However, no such argument was raised earlier and there is no challenge to the validity of the aforesaid Regulations which are made by the Regulatory Commission under its statutory powers and therefore are having statutory force. Once, we come to the conclusion that TPC can be treated as deemed distribution licensee under the first proviso to Section 14 of the Act 2003 and the area of the licence is the same which overlaps with the area covered by BEST, argument predicated on sixth proviso to Section 14 would not be available to the BEST. RE: AVAILABILITY OF OPEN ACCESS TO TPC IN THE AREA COVERED BY BEST, WHICH IS A LOCA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BEST). His submission was that the Legislature could never have and in fact, has not intended that such special status (inclusive of exemption from open access) be in vain or rendered illusory/infructuous/nugatory, and more so by a mere lay out or extension of a distribution system or network of the purported parallel licensee. It is a fundamental principle of law that duly made legislation can never be and should not be in vain or to no avail. Hence, such special status (inclusive of exemption from open access) cannot be ignored, but must necessarily be given full effect to and enforced. According to him an irrational situation would arise if the purported parallel licensee (such as TPC) could not supply electricity under open access in the area of supply of a local authority engaged in the business of distribution of electricity before the appointed date (such as BEST), but could lay or extend its distribution system or network in the area of supply of a local authority engaged in the business of distribution of electricity before the appointed date (such as BEST). As such, Section 42(3) necessarily has to be interpreted to qualify or restrict aforesaid Sixth Proviso to Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplier through the distribution network of a distribution licensee by seeking open access in terms of Section 42(3). In the first option, the distribution licensee operating in a particular area is required to lay down its network if required, in order to supply electricity to a consumer seeking supply. The second option, which is known as open access is provided Under Section 42 read with Section 2(47) of the 2003 Act. Under Section 42(3) of the 2003 Act, a consumer has the right to require a distribution licensee to make its network available for wheeling electricity to such consumer from a third party supplier (i.e. a supplier of electricity not being a distribution licensee in the area where the consumer is situated). He submitted that this distinction between the two different concepts is to be born in mind and the matter is seen in its proper perspective. Section 42(3) carries out an exception in favour of local authority only qua open access which would mean that a consumer is disallowed from seeking open access from a distribution licensee which is a local authority like BEST. That would mean that a consumer being supplied by BEST cannot demand that BEST allow a third p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority and other distribution licensee. It is also not a case of the Appellant that in a particular area where a local authority is a distribution licensee, there cannot be any other distribution licensee at all. 21. Thus, on a conjoint reading of Sections 42 and 43 of the Act along with the objectives and purpose for which Act 2003 is enacted, it becomes clear that there are two ways in which a consumer stated in a particular area can avail supply of electricity, as pointed out by the learned senior Counsel for TPC and noted above. When an application is made by a consumer to a distribution licensee for supply of electricity, such a distribution licensee for supply of electricity, such a distribution licensee can request other distribution licensee in the area to provide it network to make available for wheeling electricity to such consumers and this open access is to be given as per the provisions of Section 42(3) of the Act. It is here only that local authority is exempted from such an obligation and may refuse to provide makes it network available. Second option is, Under Section 43 of the Act, to provide the electricity to the consumer by the distribution licensee fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such distribution licensee. 23. The concept of open access under the Act enables competing generating companies and trading licensees, besides the area distribution licensees, to sell electricity to consumers when open access in distribution is introduced by the State Electricity Regulatory Commissions. Supply by way of open access is a completely different regime as is also clear from the fact that consumers who have been allowed open access Under Section 42 may enter into an agreement with any person for supply of electricity on such terms and conditions, including tariff, as may be agreed upon by them Under Section 49 of the Act unlike consumers who take supply Under Section 43 of the Act. 24. Once we read the provisions in the aforesaid manner, it becomes clear that there is no exemption from universal service obligation to any distribution licensee under the Act, on account of the presence of a local authority as a distribution licensee in the particular area of supply, which is also reinforced by Paragraph 5.4.7 of the National Electricity Policy which clearly states that the second licensee in the same area shall have the obligation to supply to all consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of electrical energy. The intervention of MIDC, Marol Industries Association and the appeals filed by it, has obviously been made in that context. In MSR Leathers v. S. Palaniappan and Anr. (2013) 1 SCC 177 it was observed: 24. That brings us to the question whether an offence punishable Under Section 138 can be committed only once as held by this Court in Sadanandan case. The holder of a cheque as seen earlier can present it before a bank any number of times within the period of six months or during the period of its validity, whichever is earlier. This right of the holder to present the cheque for encashment carries with it a corresponding obligation on the part of the drawer to ensure that the cheque drawn by him is honoured by the bank who stands in the capacity of an agent of the drawer vis-`-vis the holder of the cheque. If the holder of the cheque has a right, as indeed is in the unanimous opinion expressed in the decisions on the subject, there is no reason why the corresponding obligation of the drawer should also not continue every time the cheque is presented for encashment if it satisfies the requirements stipulated in Clause (a) of the proviso to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the specified time period will begin only after it has received such completed application by the applicant. Further, Sections 45 and 46 provide for the distribution licensee's powers to recover charges for electricity supplied and the expenditure incurred in providing electric line or plant for giving supply. Section 47 provides that the distribution licensee may require any person demanding electricity supply from him to give a reasonable security, failing which the distribution licensee may refuse to give supply of electricity to such consumer. We are of the opinion that it is in this context that the expression save as otherwise provided in this Act in Section 43(1) is to be construed. 28. Before we part with we would like to make it clear that there is a dispute between TPC and R-infra) (Respondent No. 9) which is the subject matter of Civil Appeal Nos. 4667-68/2013. R Infra is a distribution licensee in suburban Bombay where TPC is also a licensee. Both supply electricity to different consumers. Dispute is between them with regard to cross subsidiary surcharge (CSS) payable by consumer taking supply from TPC or R Infra network. We make it clear, by way o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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