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CASE NO.: Appeal (civil)  3996 of 2006

PETITIONER: Chattisgarh Vidyut Mandal Abhiyanta Sangh

RESPONDENT: Chattisgarh State Electricity Regulatory Commission & Anr

DATE OF JUDGMENT: 19/09/2007

BENCH: H.K. SEMA & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO. 3996 OF 2006 (With C.A.No.4268 of 2006 & C.A.No.4529 of 2006)

H.K.SEMA,J

1.              Civil Appeal No.3996 of 2006 is filed by  Chhattisgarh Vidyut Mandal Abhiyanta Sangh.  Civil Appeal  No.4268 of 2006 is filed by Chhattisgarh State Electricity  Board and Civil Appeal No.4529 of 2006 is filed by M/s Jindal  Steel and Power Limited. 2.              All these appeals are directed against the common  judgment and order of the Tribunal dated 11.5.2006 passed in  Appeal Nos. 179 of 2005, 188 of 2005, 16 of 2006 and 27 of  2006 preferred under Section 111 of the Electricity Act, 2003  (in short the Act).  In the aforesaid appeals, the appellants  have challenged the order dated 29.11.2005 passed by the  Chhattisgarh State Electricity Regulatory Commission (in  short the Commission) 3.              We have heard Mr. Ravi Shankar Prasad, learned  senior counsel, appearing on behalf of Chhattisgarh State  Electricity Board - appellant in C.A.No.4268 of 2006; Mr.  Shanti Bhushan, learned senior counsel, appearing on behalf  of M/s Jindal Steel and Power Limited \026 appellant in  C.A.No.4529 of 2006 and Mr. Kavin Gulati, learned counsel  appearing on behalf of Chhattisgarh Vidyut Mandal Abhiyanta  Sangh \026 appellant in C.A.No. 3996 of 2006. 4.              Counsel for the appellant in C.A.No.3996 of 2006  has adopted the arguments of Mr. Ravi Shankar Prasad,  learned senior counsel, appearing for the appellant in  C.A.No.4268 of 2006. 5.              In C.A.No.4268 of 2006, the appellant has assailed  the order dated 29.11.2005 passed by the Commission,  granting license in favour of respondent No.2 herein and the  appellant in C.A.No.4529 of 2006. 6.                Mr. Ravi Shankar Prasad, learned senior counsel  appearing for the appellant, would contend that the impugned  order of the Commission granting license to respondent No.2 -  M/s Jindal Steel and Power Limited, is contrary to the  provisions of Section 14 particularly proviso 6 of the Section.   He would also contend that the grant of license is contrary to  Section 43, the National Electricity Policy framed under  Section 3 particularly 5.4.7. which according to the counsel is  statutory in character and sub-rule 2 of Rule 3 of the Code of  Conduct Rules, 2005 and explanation thereof.  He would also  contend that the grant of license in favour of respondent No.2

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would also offend the provisions of Section 41 proviso 3 and  Section 86(4) of the Act.  In this connection, counsel has taken  us to the grounds taken in the memo of appeal filed by the  appellant.   He has also taken us to the entire impugned  judgment rendered by the Tribunal.  The Tribunal has not at  all dealt with the grounds urged by the appellant in the  judgment.  The Tribunal, however, rejected the grounds in  paragraph 38 as under:  

"Taking up the fourth point, Concedingly  after coming into force of The Electricity  Act 2003 the Jindal Power has submitted  an application for grant of distribution  license under Section 12 of the Act.   Section 14 of the Act provides for the grant  of license.  Section 15 of the Act prescribes  procedure for grant of license.  Though the  Electricity Board has raised an objection, it  is a clear after thought presumably  because of change or shifting of  personalities in power, and such shifting  stand had been adopted.  The objections  raised by Electricity Board are devoid of  merits.  The Regulatory Commission has  considered the request of Jindal Power and  directed issue of distribution license.  We  do not find any illegality or error in the  grant of license as Jindal Power do possess  all the requirements for the grant."

                 7.       M/s Jindal Steel and Power Limited - appellant in  C.A.No.4529 of 2006, was aggrieved by the order of the  Commission recorded in paragraph 22 of the Order.   Paragraph 22 of the Order is in the following terms:- "The last issue for discussion is the  treatment of the period from 1.4.04 till  the date of the grant of distribution  licence, during which supply of power by  the applicant has been without legal  authority.  As already discussed in para  11 to 13 ante, the applicant did not have  the necessary legal authority either under  the 1910 Act or under the present Act to  supply electricity in his industrial estate.   This constitutes a clear contravention of  the provisions of Sec.12 of the Act that  mandates licence to be obtained for  supply of electricity.  This act of the  applicant is punishable under Sec.142 of  the Act.  The applicant is clearly liable for  penalty under this provision of law.   Although no opportunity has specifically  been provided to the applicant of being  heard in this regard as required and the  provision of this section, the elaborate  proceedings in this case has provided  sufficient opportunity to the applicant to  prove that he had not contravened the  provision of the Act, in supply of power to  his industrial estate. In fact, his main  case is that he had the legal authority for  his action, which we have not accepted.   The Commission, therefore, feels that  there is no need for another opportunity

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being given to the applicant of being  heard in the matter.  The Commission  directs that the applicant pay a penalty of  Rs. One lakh for contravention of the  provisions of the Act aforementioned.   The amount shall be deposited with the  Secretary of the Commission within seven  days of this order."   

        8.              Aggrieved by this order M/s Jindal Steel and Power  Limited \026 appellant in C.A.No.4529 of 2006 also filed appeal  No.27 of 2006 before the Tribunal. 9.              The ground taken in the appeal was that Jindal  Power does not require the license for supply of electricity as  in terms of Section 10(2) of the Act as a generating company, it  is competent to supply electricity to any person without using  the transmission lines of the Electricity Board.  After  considering the ground of appeal, the Tribunal framed the  following issues:-

1.      Whether Jindal Power was licensed to  distribute electricity at any time?   Without securing a license is it  permissible for Jindal Power to  distribute Power?

2.       Whether Jindal Power could claim  that it is a deemed licensee entitled to  distribute power after coming into  force of The Electricity Act, 2003?

10.       Mr. Shanti Bhushan, learned senior counsel, has  taken us through the entire judgment of the Tribunal but the  questions so framed were not at all addressed particularly the  application of Section 10(2) of the Act.  11.             It is in these circumstances, learned senior  counsels, appearing for the respective appellants, contended  that this is eminently a fit case where this Court should set  aside the order of the Tribunal and the matter be remitted to  the Tribunal for fresh decision after considering all the  grounds raised in the respective appeals.  In the facts as  alluded above we would also think so.            

12.             We may also hasten to note that the appeal under  Section 111 before the Tribunal is in the nature of first appeal.  The Tribunal, therefore, must examine the entire grounds of  appeal and record its reasons on each ground while disposing  of the appeal.  13.             Accordingly, these appeals are allowed.  The order  dated 11.5.2006 passed in appeals are set aside.  The appeals  are restored to the file of the Tribunal.  The Tribunal shall  consider each ground in appeals and dispose of the appeals in  accordance with law.  We make it clear that we have not  expressed any opinion on the merit of the case whatsoever.     14.             Having regard the question of public importance of  far reaching consequences involved in these appeals, the  Chairman of the Tribunal may consider for constituting an  appropriate bench for hearing the appeals.   With the aforesaid  directions/observations these appeals are allowed.  No costs.