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West Bengal Electricity Regulatory Commission & Others v. West Bengal State Electricity Distribution Company Limited & Others

West Bengal Electricity Regulatory Commission & Others v. West Bengal State Electricity Distribution Company Limited & Others

(High Court Of Judicature At Calcutta)

C. Appeal From Order No. 3291 Of 2015, Civil Application No. 7450, 9594, 9597 Of 2015 & Mat No. 1182 Of 2015 | 01-02-2016

Dr. Manjula Chellur, J.

1. These appeals are directed against the orders of the learned Single Judge in W.P. 2760/12 and other connected matters. Appellant was the respondent before the learned Single Judge. The controversy which fell for consideration before the learned Single Judge was whether the Ombudsman has jurisdiction to award compensation in the event of failure on the part of the distribution licensee to give electric connection to new consumers within the stipulated time frame or for breach of any other conditions prescribed in the standards of the performance of licensees under Sec. 57(1) of the Electricity Act of 2003 (in short for the purpose of reference it shall be referred to as the Act).

2. Ombudsman had directed the distribution company to pay compensation in terms of regulation 3.3 and regulation 12(a) of the 2005 regulations and so also 2010 regulations since there was delay in granting electric connection to the consumers unit. The learned Judge was of the opinion that such power vested in the appropriate commission under the electricity Act and there was no delegation of such power to the Ombudsman under Sec. 97 thereof at the relevant point of time.

3. The learned Senior Counsel arguing for the appellant commission argued that Ombudsman is nothing but a statutory body constituted under Sec. 42(6) of the Act and commission has ample power to authorize the Ombudsman to receive the representations relating to grievances of the consumers/intending consumers in case of failure on the part of the distribution company to maintain the conditions and standards of performance relating to consumer services. Under the Act standards of performance is envisaged which would relate to the procedure and time limit within which electricity is to be supplied by the distribution licensee to intending consumers. Failure to do so would attract liability to pay penalty and also compensation under the provisions of the Act that is Sec. 43(3) and Sec. 57(2).

4. Certain regulations are framed by the commission empowering the Ombudsman to settle grievances relating to delayed supply of electricity to new consumers and award compensation subject to giving an opportunity of hearing to the distribution licensee. In this regard relevant regulations were made known as West Bengal Electricity Regulatory Commission (guidelines for establishment of forum for redressal of grievances of consumers and time and manner of dealing with such grievances by the Ombudsman) regulations, 2006 (hereinafter referred to as the 2006 regulations) and as well as West Bengal Electricity Regulatory Commission (standards of performance of licensees relating to consumer services) regulations, 2010 (2010 regulations).

5. It is contended that power of Ombudsman to pay compensation is in addition to that of the Commission to impose penalty under Sec. 43(3) of the Act. Subsequently a notification dated 30.06.2013 was issued under Sec. 97 of the Act delegating power of the Commission to impose penalty to the Ombudsman and its power to award compensation under these regulations was reiterated and clarified by drawing power from the aforesaid provision of law. It is further contended that in the absence of challenging vires of the constitutionality of the regulations in the instant case and in the light of the above said regulations, the orders of the Commission was within jurisdiction, therefore ought not to have been interfered with.

6. Learned Senior Counsel Mr. Mitra arguing for respondent (Distribution Company) Contends that Sec. 43 lays down procedure and time limit for supply of electricity to new consumers and if any breach of such liability occurs, the procedure is spelt out therein under Sec. 43. Such remedy is exhaustive and the matter of imposition of penalty is to be adjudicated by the Commission or its members under Sec. 143 of the Act.

7. He also brought to our notice that Sec. 145 debars Civil Courts jurisdiction to deal with such disputes.

8. According to senior Counsel Mr. Mitra, such adjudication is to be conducted by a member of the Commission having requisite qualification as specified under Sec. 84(1) of the Act and he must have been selected through election process envisaged under Sec. 85 of the Act. Since Ombudsman does not possess such qualifications therefore he could not have been authorized to deal with such disputes. He contends that the order of the appropriate Commission, unlike that of the Ombudsman, was appealable under Sec. 111 of the Act. Therefore, the scheme of the Act could not have been altered by empowering the Ombudsman to decide cases involving breach of duty of the distribution licensee to supply electricity to the consumers within the stipulated time frame and award compensation. It is his stand that essential adjudicatory power could not be delegated by the Commission. He relies upon, AIR 1965 SCC 1486 (Bombay Municipal Corporation v/s. Dhundu Narayan Chowdhury). According to him delegation of authority of the Commission could only be done by a general or special order in writing under Sec. 97 of the Act.

Such delegation, in fact, was made after passing of the impugned orders.

Accordingly, the impugned orders of the Commission were bereft of jurisdiction and were justly quashed by the learned Single Judge.

9. Sec. 43(1) provides that a licensee shall on application of an intending consumer to any premises supply electricity to such premises within one month from the date of receipt of application seeking supply. Proviso to the said Sec. empowers the Commission to specify periods within which the distribution licensee shall effect supply if such supply requires extension of distribution mains or commissioning of a new stations or is to a village or hamlet where there is no electrification. Reading of the aforesaid sub -section makes it clear that the Commission is entitled to prescribe time frame to effect supply of electricity to intending consumers in appropriate cases. Sub -section 3 of the said Sec. further provides that if the distribution licensee fails to effect such supply within specified time frame, it shall be liable to pay penalty which may extent to Rs. 1,000 only for each day of default.

10. Sec. 143 provides for adjudication by the Commission in the name of imposition of penalty under the Act. The said provision lays down the procedure of holding such enquiry. Any order passed under the said Sec. is appealable under Sec. 111 of the Act.

11. It has been strenuously contended, that the aforesaid provisions provide for a complete remedy in cases of delay in effecting supply to new consumers.

Therefore, Ombudsman cannot be vested with such jurisdiction and award compensation as provided under 2010 Regulations.

12. To test this proposition one has to look into the various clauses of relevant Regulations which were operating in the field at the time when the impugned orders of compensation were passed by the Ombudsman.

13. Regulation 8 of 2006 regulations, inter -alia, provides for the procedure of making representation by an aggrieved consumer to the Ombudsman.

14. Regulation 9 of the above said regulations provides for the procedure in which the Ombudsman is required to look into the grievances ventilated in such representation. The Ombudsman upon receipt of such representation ventilating grievances shall seek for a report from the distribution licensee in the matter and only after perusal of the said report and the materials -on -record shall pass a reasoned order thereon subject to hearing of all the parties.

15. Regulation 11 provides that orders passed by the Ombudsman as the delegatee of the Commission are appealable under Sec. 111 of the Act.

16. Regulations laid down the standards of performance by a distribution licensee in the matter of supply of electricity to consumers/intending consumers.

17. Regulation 4 of the same Regulations prescribes the time limit for giving electricity to intending consumers as a part of the standards of performance laid down by the Commission to be applied by the distribution licensee in the matter of consumer services.

18. Regulation 14.3 of the said Regulations empowers the Ombudsman to award compensations to consumers/intending consumers for failure to meet the standards of performance laid down in terms of the Regulations.

19. Regulation 15 clause (a) provides for compensation @ Rs. 500/ - to be paid to intending consumers for each additional day of delay or part thereof in the matter of delay in giving electricity connections to intending consumers.

20. By virtue of Rulemaking powers of the commission under Sec. 178 of the Act to give effect to the provisions of the Act particularly Sec. 57 thereof, the aforesaid Regulations were promulgated.

21. Sec. 57 of the Act empowers the Commission to lay down standards of performance of a licensee in the matter of consumer services. Sub -Section 2 of the said Sec. contemplates imposition of compensation payable to the affected persons if a licensee fails to meet the said standards. This is, however, without prejudice to imposition of penalty or prosecution initiated in that regard. Compensation shall be determined only after giving a reasonable opportunity of hearing to the licensee. The compensation is to be paid within 90 days of such determination. Under Sec. 59 licensee is under an obligation to furnish information to the Commission within stipulated time, the level of performance achieved by it vis-a-vis standards of performance laid down under Sub -Section 1 of Sec. 57 of the Act and the number of cases in which the compensation was awarded under Sec. 57(2) of the Act and the aggregate of the amount of compensation so awarded. Under Sub-Section 2, the Commission is under an obligation to publish such information.

22. There is a provision for time limit within which intending consumers are to be given new connections and said Regulations also authorizes the Ombudsman to deal with the grievances in that regard and also award compensation for such breach. This is contemplated under standards of performance laid down by the Commission. The Commission is required to prescribe the time limit for giving electricity connection to intending consumers under the proviso to Sec. 43(1) of the Act. In order to give effect to such provision, the Commission by promulgating the 2010 Regulations prescribed such time frame in respect of new connections as a part of standards of performance under Sec. 57(1) of the Act. In short, promulgation of 2010 Regulations is to give full effect to Sec. 43 of the Act and not in derogation thereof as contended by the respondent licensee. To achieve such end result, the aforesaid Regulations include within its remedial ambit not only existing consumers but also intending consumers who have applied for new connections. If the arguments of the learned Senior Counsel for the respondent licensee is to be accepted that operation of Regulations extend only to existing consumers as defined under Sec. 2(15) of the Act would, in fact, defeat the very purpose of the Act resulting in maiming the implementation of Sec. 43 thereof in particular.

23. The next controversy for our consideration is whether the Commission is authorized to delegate its power to award compensation for delay in giving new connections by reading Sec. 43 read with Sec. 142 of the Act wherein Commission and/or its members are authorized to impose penalty for the self-same breach.

24. To understand the controversy before us, it would be just and proper to examine the scheme of the Act, particularly with reference to Sec. 147 of the Act which reads as follows:

"147. Penalties not to affect other liabilities. - -The penalties imposed under this Act shall be in addition to, and not in derogation of, any liability in respect of payment of compensation or, in the case of a licensee, the revocation of his license which the offender may have incurred."

25. The plain reading of the provisions of Sec. 147 of the Act clearly indicate that the penalty impose for any breach under the Act is in addition to and not in derogation of any penalty to pay compensation thereunder or revocation of license so far as it relates to an offending licensee. The aforesaid legislative scheme definitely leaves no doubt in ones mind that the power to impose penalty towards a breach by a distribution Company to supply electric connection to an intending consumer within the time stipulated under the Act and the Regulations framed therein is not exhaustive but is in addition to the liability to pay compensation under Sec. 57(2) of the Act. Reading to Sec. 57(2) of the Act clarify the said position which reads as under:

"57. Standards of performance of licensee. - -(1)....................."

(2) If a licensee fails to meet the standards specified under subsection (1), without prejudice to any penalty which may be imposed or prosecution be initiated, he shall be liable to pay such compensation to the person affected as may be determined by the Appropriate Commission:

Provided that before determination of compensation, the concerned licensee shall be given a reasonable opportunity of being heard.

(3)............"

26. Hence, the Commission is empowered to award compensation to an intending consumer under Sec. 57(2) of the Act in case of failure on the part of the distribution licensee to comply with the standards of performance prescribed under Regulation 4 of 2010 Regulations in addition to penalty that may be imposed under Sec. 43(3) of the Act.

27. By virtue of clause 14.3 and 15 of the 2010 Regulations such power of the Commission to award compensation has been delegated to the Ombudsman.

28. Learned Single Judge was however of the view that delegation of such power could only be done under Sec. 97 of the Act and not otherwise. In order to understand proper and right purpose envisaged under the Act, one has to understand Sec. 97 of the Act.

29. Sec. 97 of the Act contemplates that the Commission may delegate any of its powers except those under Sec. 79 or 86 or its rule making power under Sec. 179/181 under the Act to its member, secretary or any other person by a general or special power. Such provision cannot be construed to be exhaustive of the modes of delegation of powers by the Commission. Apart from such provision, Commission is empowered to make Regulations under Sec. 179 of the Act to give effect to the provisions of the Act. Such rule making power of the Commission under Sec. 179 cannot be understood in its restrictive sense but has to be construed in the most wide and general terms because the Commission is empowered to legislate by way of Regulations on any residual matter under Clause (ZP) of Sec. 181(2) of the Act including delegation of its powers to the Ombudsman unless such delegation is expressly barred by statute that is powers under Sec. 79 or 86 of the Act.

30. Interpretation of similar rule making power of the Central Commission under Sec. 178 of the Act fell for consideration in PTC India Private Limited v/s. Central Electricity Regulatory Commission reported in : 2010 Supreme Court Cases Volume IV page 603 wherein it was held that such power is exhaustive encompassing everything of similar nature. In the said decision of the Apex Court, it was opined that the Regulations are a source of law which are binding and held as follows: - -

"49. A statutory instrument, such as a rule or regulation, emanates from the exercise of delegated legislative power which is a part of administrative process resembling enactment of law by the legislature whereas a quasi-judicial order comes from adjudication which is also a part of administrative process resembling a judicial decision by a court of law.

(See Shri Sitaram Sugar Co. Ltd. v/s. Union of India : (1990)3 SCC 223) [LQ/SC/1980/152] "

31. In conclusion, the Apex Court at para 92(vi) opined that application of the number of generality versus enumeration of Regulations can be made as residuary item while exercising powers under Sec. 178(1) read with Sec. 178(2)(Z) of the Act of 2003. We have no doubt in our mind that the said ratio would apply with full force in the interpretation of the rule making power of the State Commission also under Sec. 178 and enables it to make Regulations in respect of any residual matter including authorizing the Ombudsman to receive representation, look to the grievances of consumers for breach of time frame laid down in the matter of electricity supply to new connections also and then award compensation in appropriate cases. Promulgation of delegated legislation like Regulations required a more elaborate and rigorous procedure under the Act than issuance of an executive order under Sec. 97 of the Act of 2003. Hence, the delegation of powers through the legislative mode of rule making under Sec. 178 of the Act by the Commission is a valid mode which may be resorted to by the commission in addition to the process of delegation envisaged under Sec. 97 of the Act by way of executive authority.

32. As promulgation of Regulations under the Act requires pre -publication and laying of the said Regulations before the State legislature, it is absurd to suggest that resorting to such an action which is an arduous legislative course for delegation of powers by the self -same authority was for the purpose of circumventing a more simple procedure of issuance of mere executive order under Sec. 97 of the Act. Once the Regulations are promulgated, they become a part of the Act 2010 Regulations, so promulgated is, therefore, a valid piece of delegated legislation whereby the Commission authorized the Ombudsman to deal with issues and award compensation under Sec. 57(2) of the Act.

33. Above said mode of delegation of power is independent of the power of the Commission under Sec. 97 of the Act. Delegation through regulations does not offend the provisions of the Act unless such delegation relates to subject matter covered under Sec. 79 or 86 of the Act which is impermissible under the Act.

34. As the provisions of the Act provide delegation of all powers of the Commission including the power of adjudication under Sec. 43(3) or 57(2) thereof, the clauses of 2010 regulations cannot be said to be contrary to the provisions of the Act and the ratio in Bombay Municipal Corporation v/s. Dhondu Narayan Chowdhury reported in, AIR 1965 SCC 1486 clearly holds that ordinarily adjudicating powers cannot be delegated unless the statute in express or implied terms permits the same is of no assistance to the distribution licensee since there is no embargo in the statute in that regard. This view is further fortified by the fact that by a subsequent order dated 13.01.2013 under Sec. 97 of the Act. The Commission delegated its power to impose penalty under Sec. 43(3) of the Act to the Ombudsman and also by way of abundant caution reiterated the same by way of clarification the delegation of its power to the Ombudsman to award compensation under Sec. 57(2) of the Act which had already been done by the 2010 regulations as indicated above.

35. In the light of above discussion it is very clear that the power of the Commission to impose penalty or compensation may be delegated in respect of breach of liability of the distribution licensee to supply electricity within the stipulated time to the new consumers.

36. As the power to delegate by way of legislative rule making under Sec. 178 of the Act is independent and in addition to the powers under Sec. 97 and is not overshadowed by the latter ratio. Ratio in Nazir Ahmad v/s. King Emperor reported in, AIR 1936 Privy Counsel 253 is in applicable to the facts of the present case.

37. Apparently, constitutionality of 2010 regulations has not been assailed in the instant writ petition however, during the oral arguments across the bar and in the written submissions filed on behalf of the distribution licensee an attempt has been made to contend that 2010 Regulations are inconsistent with the provisions of the Act. As discussed earlier the scope of rule making power under Sec. 178 of the Act is wide enough to encompass the power of the Commission to delegate any of its powers by way of Regulations provided such delegation is not expressly barred by the provisions of the Act. In the instant situation there is no such embargo on the delegation of power to award compensation under Sec. 57(2) of the Act. Hence, the authorization of the Ombudsman to award compensation under Sec. 57(2) of the Act for breach of standards of performance as laid down by it under Sec. 57(1) of the Act thereof cannot be said to be contrary to the provisions of the Act. That apart, such delegation in the 2010 regulations to the Ombudsman is not an uncanalised one and sufficient guidelines have been laid down for exercise of its discretion.

38. The Regulations provide the procedure to be followed in dealing with such grievances. There is an obligation on the part of the Ombudsman to notify the distribution licensee, supply copy of representation to it and seek its opinion by way of a report thereon. After considering the report submitted by the licensee and only after giving an opportunity of hearing to the licensee, Ombudsman shall pass a reasoned order in the matter. So far as report of compensation that may be awarded has also been provided under regulation 15 of the 2010 Regulations. Order awarding compensation by the Ombudsman as a delegate of the Commission under Clause 14.3 read with Clause 15 of the said regulations are appealable under Sec. 111 of the Act in the light of Clause 11 of the 2006 regulations. Hence, above said regulations are in consonance with the Act and does not violate its letter and spirit in whatsoever manner. In the light of above discussion and reasoning, we are of the opinion that the Ombudsman has sufficient jurisdiction to entertain the representation in the matter of delay in supply of electricity to proposed consumers or breach of any other condition in the standards of performance of licensees under Sec. 57(1) of the Act and award compensation in appropriate matters. We have gone through the orders passed by the Ombudsman in the instant appeals and we find that the orders are well reasoned orders. Defense or challenge raised by the distribution licensee were rightly not accepted on the factual matrix of each case. Judicial review does not permit the Court to substitute its view in place of the statutory authority unless the same is perverse. We fail to note any such perversity in the facts of the present appeals.

39. Accordingly, the appeals are allowed. The order of the learned Single Judge is set aside by upholding the orders of the Ombudsman. There shall be no order as to costs.

Advocate List
  • For the Appearing Parties Ritwik Pattanayak, Samir Halder, Anindya Mitra, Srijan Nayek, Raj Kumar Basu, Sujit Sankar Koley, Rituparna Mitra, K.K. Bandopadhyay, Advocates.
Bench
  • HON'BLE CHIEF JUSTICE DR. MANJULA CHELLUR
  • HON'BLE MR. JUSTICE JOYMALYA BAGCHI
Eq Citations
  • AIR 2016 CAL 144
  • 2016 (2) CLJ 40
  • 2016 (1) CHN (CAL) 715
  • 2016 (2) CLJ (CAL) 600
  • LQ/CalHC/2016/119
Head Note

Electricity Act, 2003 — Ss. 179 and 97 — Delegation of power to award compensation by way of legislative rule making under S. 178 of Electricity Act, 2003 — Held, is independent and in addition to powers under S. 97 of the Act — S. 178 — S. 97