9911796707
TMI Blog1987 (5) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... al in a composite industrial complex in a place called Therubali in the State of Orissa. The company has also a subsidiary by name M/s. Indian Metal and Carbide Ltd. engaged in the manufacture of silicon carbide and its factory is also situated in the same industrial complex. All the four units utilise electricity as raw material and they are, therefore, classified as 'power intensive industrial units'-the four units shall hereinafter referred to as "11 KV IMFAL", "33 KV IMFAL", "11 KV IMCL" and "132 KV IMFAL".-The company has entered into separate agreements with the Orissa State Electricity Board (hereinafter called the 'Board') for supply of electric energy to these four different units and the rates of tariff to be charged for such supply. The agreement in respect of 11 KV IMFAL was entered into initially on 3.4.1967 and subsequently renewed on 1.8.1983, that in respect of 33 KV IMFAL on January 2, 1974 and the agreement for supply of 11 KV IMCL was entered into on January 28, 1975. The agreement in respect of supply of energy to 132 KV IMFAL was entered into on 4.12.1982. These agreements show that the Board had agreed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply at 132 KV IMFAL . It was also made clear that the said order will be effective from July 16, 1983, that being the date of the company's letter of request. Pursuant to the above permission the company clubbed the supply of power to all its units for the water year 1983-84. On July 23, 1984, the Chief Engineer addressed a letter to the company informing the latter that with effect from July 1, 1984 the drawal of power by the company against the different units will be regulated separately and as such the company was requested to, limit its drawal for the different units as per the allotment indicated in that letter with effect from July 1, 1984; in other words, the facility of clubbing was withdrawn by the said letter with effect from July 1, 1984. On July 2, 1984, the company wrote to the Board pointing out the hardship involved in the denial of the facility of clubbing and requesting for permission to club the energy for all the four units for the water year 1984-85. In reply thereto the Chief Engineer of the Board sent a communication dated July 12, 1984 informing the company as follows: ORISSA STATE ELECTRICITY BOARD BHUBANESHWAR No. Com-V- /4238 Dated 12.7.1984 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industry. It was treated only as a 'power intensive industry' just like the other three units of the company. The aforesaid letter was followed by another communication addressed by the Chairman of the Board to the Company stating inter alia as follows: Since it has been decided by the Government to treat allotment of power to 100% export oriented industries separately, allotment of power to your 100% export oriented unit at 132 KV cannot be permitted to be utilised for other purposes unless specific Government permission is necessary for the same. As you are aware, the allocation of power for IMFAL-11 KV, IMFA1-33 KV and IMCL had been combined together for the purpose of flexibility in operation and hence you should have no difficulty regarding the same. 6. It will thus be seen that the sole reason given for refusing the facility of clubbing to the company was that the State Government had taken a decision that 100% export oriented industries should be treated separately for the purposes of power allocation. Significantly, no statutory order of the State Government incorporating such a policy decision has been placed on record either before the High Court or before this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 985 demanding payment at the higher tariff rate for the period from October, 1984 to June, 1985 on the basis that there had been alleged excess drawal by the company due to clubbing. 10. Aggrieved by the said action taken by the Board the company filed Writ Petition No. OJC 1549 of 1985 in the High Court of Orissa challenging the order dated January 22, 1985 passed by the State Government in purported exercise of its powers under Section 22B of the Act, as also the letter dated January 24, 1985 of the Board refusing clubbing for the entire water year 1984-85. Besides seeking the quashing of the aforesaid letter as well as the revised bills of the higher tariff issued to the company on July 8, 1985, the company also sought a writ of mandamus directing the Board and the State Government to permit clubbing for the water year 1984-85 as well as the future years. In the counter-affidavit filed by the State of Orissa the stand taken by the State was that clubbing had been allowed to the company by the Board temporarily for the month of July, 1984 only during the water year 1984-85. It was further contended that the power allotted to the 132 KV IMFAL furnace could not be allowed to be cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay that after due consideration, Government have been pleased to reject your request for clubbing of power allocation during the water year 1985-86. 2. You are allowed to draw only 57.60 Million K.W.H. of energy of 11 KV and 33 KV and 52.66 Million KW of energy on 132 KV as allotted in this department order No. 37477 dated 31.8.1985 for the period from 1-7-1985 to 30-6-1986. Yours faithfully, Sd/- DEPUTY SECRETARY TO GOVT. It will be noticed that no reason whatever was given by the Government in this order for rejecting the company's request for clubbing of power allocation. After receipt of the said communication, the company moved the High Court by a miscellaneous petition for amending the Writ Petition OJC No. 2496 of 1985 by incorporating a challenge against the said letter of the State Government refusing clubbing for the water year 1985-86. That prayer for amendment was allowed by the High Court. 14. Ultimately the two Writ Petitions O.J.C. No. 1549 of 1985 and O.J.C. No. 2496 of 1985 were disposed of by the High Court by a common judgment dated August 7, 1986. The High Court held that under Section 22B of the Act the State Government had the power to grant or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riate statutory order rejecting its request. The Writ Petitions were disposed of by granting the aforesaid reliefs to the company. 15. Subsequent to the judgment of the High Court, the State Government passed an order dated October 31, 1986 in purported exercise of its power under Section 22B of the Act effecting an allocation of power supply for the water year 1986-87. The allocation followed the same pattern as was adopted for the previous year by making a joint allotment in respect of the three units of the company other than the 132 KVIMFAL unit and a separate allotment in respect of the 132 KV IMFAL unit. The order also contained a note in terms identical with the note that was contained in the order relating to the water year 1985-86, the text of which has been already reproduced supra. 16. By its letter dated November 22, 1986, the company made a request to the State Government to allow clubbing of the power allotted to its four units for the water year 1986-87 and requested also for a personal hearing before a decision was taken in the matter. The State Government refused the said request by its letter dated December 8, 1986, which reads as follows: Government of Orissa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3849 of 1986 have been filed by the State of Orissa challenging the correctness of the above mentioned judgment of the High Court in O.J.C. No. 1549 of 1986 and O.J.C. No. 2496 of 1985. 18. S.L.P. (C) Nos. 14173-14174 of 1986 have been separately filed by the Board challenging the very same judgment. 19. The company has filed S.L.P.(C) Nos. 14923-14924 of 1986 questioning the correctness of the High Court's judgment in so far as the High Court has turned down its contentions regarding the competence of the State Government to pass orders under Section 22B of the Act making allocation of power supply to individual consumers and to deny the benefit of clubbing and to prescribe for levy of higher tariff for excessive drawal. 20. It was submitted before us by Counsel appearing for the company that the four electrical submerged are furnaces of the company producing Ferro alloys cannot be run at a low capacity and they require continuous and uninterrupted supply of energy to sustain production and also to ensure that the furnaces do not sustain damage. It is electric power that is used as a raw material in the manufacture of Ferro alloys. The electrical energy is converted to heat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her made before or after the commencement of the Indian Electricity (Amendment) Act, 1959, for the supply (other than the resumption of a supply) or an increase in the supply of energy to any person, or (ii) any requisition for the resumption of supply of energy to consumer after a period of six months, from the date of its discontinuance, or (iii) any requisition for the resumption of supply of energy made within six months of its discontinuance, where the requisitioning consumer was not himself the consumer of the supply at the time of its discontinuance. 23. It is also necessary to refer to Section 49 of the Electricity (Supply) Act, 1948 as amended in 1967. That Section reads- 49. (1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs. (2) In fixing the uniform tarrifs, the Board shall have regard to all or any of the following factors, namely- (a) the nature of the supply and the purposes for which it is required; (b) the coordinated development o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before us by the Counsel appearing for the State and the Board that the power availability position in respect of each water year can be reasonably ascertained with some degree of precision only after the peak monsoon period and hence the High Court was not right in holding that the orders under Section 22B of the Act cannot be passed with retrospective effect in the middle of a water year. We find there is some force in this argument and we hold that the High Court was not right in observing that the orders under Section 22B of the Act imposing restrictions on consumption of power could not legally and validly be passed by he Government "with retrospective effect" in the middle of a water year. But the position regarding disallowance of clubbing stands on an entirely different footing. If a consumer had been allowed the benefit of clubbing previously, that benefit cannot be taken away with retrospective effect thereby saddling him with heavy financial burden in respect of the past period where he had drawn and consumed power on the faith of the orders extending to him the benefit of clubbing. The High Court was, therefore, perfectly right in holding that the benefit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board as per the revised bills issued to the company produced in the High Court as Annexure-II series in O.J.C. No. 1549 of 1985 were illegal and were liable to be guashed. 26. We are in complete agreement with the view expressed by the High Court that the sole reason stated by the Board in its letter dated January 24, 1985 for refusing the facility of clubbing to the company is not valid or tenable. 27. On a reference to the Orissa State Electricity Board (General Conditions of Supply) Regulations, 1981, it is seen that the Regulation 28 which deals with classification of service to consumers, classifies consumers under 15 different categories namely, domestic lighting and power, commercial lighting and power, cinema, theatre etc., street lighting, railway traction, irrigation pumping and agriculture, public water works and sewerage pumping, general purpose tariff, small industries, medium industries, large industries, power intensive industries, heavy industries and temporary supply. There is no separate categorisation of 'export oriented industries'. Under the scheme of the Regulation, industries have to fall under one or other of the five categories small, medium, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an export oriented industry, it may well be that to the extent of such additional allocation which is specifically granted for the purpose of promotion of export, diversion of supply to the other units may not be permitted. So long as no additional power allocation has been made and no preferential treatment has been given to the particular power intensive industry on the ground that it is a 100% export oriented industry, it cannot be meted out a prejudicial treatment different from what is given to other power intensive industries which are termed as "domestic units". We have therefore, no hesitation to uphold the conclusion reached by the High Court that the reason stated by the Board in its letter to the company dated January 24, 1985 for refusing the benefit of clubbing to the company for the year 1984-85 was fallacious, illegal and untenable. We have already held that the High Court was not right in observing that orders under Section 22B of the Act imposing restrictions on consumption of power could not legally and validly be passed by the State Government in the middle of a water year. There is no merit in the rest of the contentions raised in S.L.P. (C) Nos. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional power on the ground that it is a 100% export oriented industry must be treated on the same footing as other power intensive industries called "domestic industries" and so long as the benefit of clubbing is allowed to domestic 'power intensive' units, such benefit cannot be denied to an export oriented unit which has not been allocated any additional power on the basis of its export performance. 29. We make it clear that nothing contained in this judgment is to be construed as laying down as a general proposition that industrial consumers having more than one unit are, under all circumstances, entitled as of right to club the power allotted to their different units since we are not called upon to consider or pronounce upon the said question in this case. The observations and the conclusions recorded in our judgment are based on the special facts and circumstances of the instant case before us where admittedly all power intensive industries in the State of Orissa other than export oriented industries had been allowed the benefit of clubbing by the Board and the limited question arising for consideration has been whether the denial of said benefit to some ..... X X X X Extracts X X X X X X X X Extracts X X X X
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