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Reportabl e

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL  APPEAL  NO. 6128 OF 2009

Himachal Pradesh State Electricity Regulatory Commission and another ...Appellants

Versus

Himachal Pradesh State Electricity  Board              ...Respondent

WITH CIVIL APPEAL NO. 6129 of 2009

WITH CIVIL APPEAL NO. 6130 of 2009

WITH CIVIL APPEAL NOS. 6131 of 2009

WITH CIVIL APPEAL NO. 6132 of 2009

WITH CIVIL APPEAL NO. 6133 of 2009

J U D G M E N T

Dipak Misra, J.

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These appeals, by special leave, are directed against  

the  common  Judgment  and  order  dated  21.11.2007  

passed by the High Court of Himachal  Pradesh in FAOs  

(Ord.)  Nos.  489,  490,  491,  492,  493  &  494  of  2002  

whereby the learned Single Judge overturned the decision  

dated  17.08.2002  rendered  by  the  Himachal  Pradesh  

State  Electricity  Regulatory  Commission  (for  short,  “the  

Commission”) constituted under the provisions of Chapter  

IV  of  Electricity  Regulatory  Commission  Act,  1998  

(hereinafter referred to as “the 1998 Act”).   

2. The  controversy  that  has  emerged  for  

consideration being common to all the appeals, we shall  

adumbrate the facts from Civil Appeal No. 6128 of 2009  

for the sake of convenience.   

3. The  facts  requisite  to  be  stated  are  that  the  

Commission  was  established  for  rationalization  of  

electricity tariff, transparent policies regarding subsidies,  

promotions  of  efficient  and  environmentally  benign  

policies and for matters connected therewith or incidental  

thereto.  In exercise of the power conferred on it under  

Sections 22 and 29 of the 1998 Act the Commission vide  

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order dated 29.10.2001 determined the tariff  applicable  

for  electricity  in  the  State of  Himachal  Pradesh.   While  

determining  the  tariff  it  also  issued  certain  directions  

which are as follows:-  

(a) “Furnishing of information and also periodical  reports  with  respect  to  the  value  of  the  assets and capital projects of the Board.

(b) Replacement  of  all  dead  and  defective  meters by electronic meters from 31st March,  2002 onwards and reporting the status, as on  31st December, 2001 by 31st March, 2002.

(c) To develop and implement a comprehensive  public  interaction  programme  through  Consultative  Committees,  preparation,  publication  and  advertisement  of  material  helpful  to  various consumer interest groups  and general public on various activities of the  utility,  dispute  settlement  mechanism,  accidents,  rights  and  obligations  of  the  consumers etc.  Accordingly, the Board was  directed on September 22,  2001,  to submit  its plan for approval of the commission and  implement the same by 31st March, 2002.   

(d) Submission  of  plans,  short  term  and  long  term, by 31st March, 2002, for rationalization  of  existing  manpower  for  improvements  in  efficiency  through  scientific  engineering  resources  management,  improving  and  updating  the  organization  strategies  and  systems  and  skills  of  human  resources  for  increased  productivity.   The  Board  in  its  affidavit of 3rd October, 2001 has agreed to  comply and submit the above study by the  above-mentioned date.   

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(e) Submission of a plan by 31st March, 2002, for  reducing  loss,  both  technical  and  non- technical,  together  with  relevant  load  flow  studies  and  details  of  investment  requirement  to  achieve  the  planned  reductions.  The Commission also observed in  its  interim  order  of  20th September,  2001  passed in the course of  public  hearing that  investments must aim at reducing the T & D  losses  and  better  quality  of  supply  and  service to the consumers as it  happened in  the case of Palampur area which has mixed  domestic  and  commercial  loading.   The  strategy  can  be  considered  for  adoption  elsewhere  also  to  produce  similar  results.  The Board has confirmed and undertaken to  complete this study by 31st March, 2002  

(f) To  do a  comparison  of  the  capital  costs  of  Malana Plant with the capital costs of HPSEB  Plants  and  submit  a  report  on  this  by  31st  March, 2002.”  

4. Be it noted, the commission issued the directions  

as a part of the tariff order and the said directions were  

contained in  paragraphs 7.1,  7.4,  7.5,  7.6,  7.8,  7.9 and  

7.13.  The Commission in paragraphs 7.31 and 7.32 had  

further stated as follows:-  

“7.31 The Commission would monitor the  progress in complying with these directions.  The  Commission  accordingly  directs  the  Board  to  furnish  the  information  on  milestones required in column 3 of the Annex  (7.1)  by  December  31,  2001.   Subsequent  reports  should  be  sent  every  quarter,  providing the information required in columns  

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4,  5,  6  and  7.   The  first  report  should  be  submitted by January 15, 2002.

7.32   In the directions where the Board is  to comply by the next tariff petition and the  same is not filed within next six months, the  directions should be complied within the next  six months.”

5. Thereafter,  the Commission while  discharging its  

regulatory  functions  proceeded  to  review the  directions  

issued by it and found that part of the tariff had not been  

complied with.  In view of the complaints, the Commission  

issued notice on 23.7.2002 under Section 45 of the 1998  

Act.  Pursuant to the aforesaid notice the Board filed its  

reply raising the question of jurisdiction and competence  

of the Commission to issue the aforesaid directions.  The  

Commission while dealing with the same framed number  

of issues and thereafter came to hold that the Board had  

not fully complied with the directions of the Commission,  

and  accordingly  imposed  penalty  of  Rs.5000/-  on  the  

Board  with  a  further  stipulation that  the same shall  be  

deposited  within  a  period  of  30  days.  The  Board  was  

directed  to  submit  further  steps  taken by  it  before  the  

Commission.   

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6. Being aggrieved by the aforesaid order, the Board  

preferred  an  appeal  under  Section  27  of  the  1998  Act  

forming the subject matter of FAO No. 489 of 2002.  

7. During the pendency of the appeal, the 1998 Act  

was repealed and the Electricity Act, 2003 (for short, “the  

2003 Act”) came into force.  The 2003 Act was brought in  

to  consolidate  the  laws  relating  to  generation,  

transmission,  distribution,  trading  and  use  of  electricity  

and  generally  for  taking  measures  conducive  to  

development  of  electricity  industry,  promoting  

competition therein, protecting interest of consumers and  

supply  of  electricity  to  all  areas,  rationalisation  of  

electricity  tariff,  ensuring  transparent  policies  regarding  

subsidies,  promotion  of  efficient  and  environmentally  

benign  policies,  constitution  of  Central  Electricity  

Authority,  Regulatory Commissions and establishment of  

Appellate Tribunal and for matters connected therewith or  

incidental thereto.   

8. At this juncture, it is apt to state that the batch of  

appeals was taken up for hearing by the learned Single  

Judge,  learned  counsel  for  the  respondent-Commission  

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raised a preliminary objection about the maintainability of  

the appeals.  It was contended that as under Section 110  

of the 2003 Act the appellate tribunal has already been  

established  and  an  appeal  would  lie  to  the  appellate  

tribunal  as contemplated under Section 111 of  the said  

Act,  the High Court  had lost  its  jurisdiction to hear  the  

appeals.  The learned Single Judge took note of the fact  

that the appeals were preferred under Section 27 of the  

1998 Act and at that stage an appeal was maintainable  

before the High Court.   The High Court  referred to  the  

repealed Act and the language employed under Section  

185  of  the  Act  of  2003  and  Section  6  of  the  General  

Clauses  Act,  1897  and  analyzing  the  gamut  of  the  

provisions came to hold that the appeal preferred under  

the 1998 Act could be heard by the High Court even after  

coming into force of the 2003 Act.  

9. After  dwelling  upon  the  maintainability  of  the  

appeal the learned Single Judge delved into the merits of  

the  appeal  and  for  the  aforesaid  purpose,  he  studiedly  

scrutinized the  language employed in Section 22 of the  

1999 Act and came to hold that when the Commission was  

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approached  by  the  Board  to  determine  the  tariff  for  

electricity, the Commission was called upon to discharge  

the functions mentioned in sub-Section 1 (a) of Section 22  

of the 1998 Act and under the said provision it had the  

jurisdiction  to  issue  further  directions.   Thereafter,  the  

learned  Single  Judge  proceeded  with  regard  to  the  

monitoring  facet  by  the  Commission,  appreciated  the  

directions and, eventually, opined thus:-  

“Commission’s  observation  that  the  directions were issued in the larger interest  of the Board and the consumers is also out of  the  context.   As  already  noticed,  the  Commission was approached by the Board to  fix the tariff of electricity. Once the tariff had  been  fixed  the  job  of  the  Commission  was  over.   It  became  functus  officio once  the  function of determination of tariff  had been  performed.  The interests of the Board and  the consumers were required to be borne in  mind  and  protected  while  fixing  the  tariff.  The Commission could not have arrogated to  itself and superintendence and control of the  Board  on  the  pretension  of  watching  and  protecting the larger  interests  of  the Board  and the consumers.”

As stated earlier, the aforesaid judgment and order  

are  the  subject  matter  of  assail  before  us  in  these  

appeals.  

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10. Mr.  Jaideep  Gupta,  learned  senior  counsel,  

questioning the sustainability of the judgment of the High  

Court has raised the following submissions:-  

(a) The High Court has absolutely flawed by coming to  hold that appeal was maintainable before it despite a  separate forum having been created and provision  for appeal being engrafted under Section 111 of the  2003 Act.  It is urged by him that the High Court has  totally misguided itself in interpreting the Repeal and  Saving  provision  contained  in  Section  185  of  the  2003 Act.  

(b) The High Court has erred in holding that despite the  repeal of the 1998 Act and coming into force of the  2003 Act the right to prefer an appeal under the old  Act would still survive.  It is urged by him that from  the  schematic  content  of  the  2003  Act  it  is  graphically  clear  that  a  contrary  intention  of  the  legislature is clear from the 2003 Act that the appeal  has to lie to the appellate tribunal and the High Court  has been divested of its appellate jurisdiction to deal  with the pending appeals.   

(c) The view expressed by the High Court that the Board  had approached the Commission to fix the electricity  tariff and once the said tariff had been fixed by the  Commission it became functus officio and it could not  have  arrogated  to  itself  the  power  of  superintendence  and  control  of  the  Board  on  the  pretext  of  monitoring  of  larger  public  interest,  is  sensitively  susceptible.    Learned  counsel  would  submit  that  the  Commission  had  been  conferred  power under Section 22 (1) of the 1998 Act by virtue  of issuance of notification by the State of Himachal  Pradesh but the High Court failed to appreciate and  scrutinize the effect  of conferment of  power under  the  said  provision  as  a  consequence  of  which  an  indefensible order came to be passed.   

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11. Mr. Anand K. Ganesan, learned counsel appearing for  

the respondent-Board, resisting the aforesaid submissions  

contended as follows:-

(i) The conclusion arrived at by the High Court that the  appeal can be heard despite repeal of the 1998 Act  and  introduction  of  the  2003  Act  on  the  basis  of  Section 6 of the General Clauses Act 1897 and the  provision contained in Section 185(5) of the 2003 Act  cannot be found fault with, for there is no express  provision to take away the vested right of appeal and  no contrary intention can be gathered from any of  the provisions of the new enactment.  

(ii) The  right  of  appeal  before  the  High  Court  was  a  vested right and the same has not been taken away  by  the  2003  Act  and,  therefore,  the  opinion  expressed  by  the  High  Court  being  impregnable  deserves to be concurred with by this Court.  Right of  forum as  regards  an appeal  is  also  a  vested  right  unless abolished or altered by subsequent law and in  the case at hand the 2003 Act does not extinguish  the said vested right and hence, the judgment and  order passed by the High Court are impeccable.

(iii) The Commission under the 1998 Act could not have  issued directions inasmuch as the notification issued  by  the  State  had  only  conferred  powers  under  Section 22 (1) of the 1998 Act and not under any  other  provisions,  and  hence,  the  directions  issued  travel beyond the power conferred which have been  appositely nullified.   It is further argued that though  the finding of  the High Court that the Commission  had  become  functus  officio  may  not  be  a  correct  expression in law but directions issued being without  jurisdiction,  the  Commission  could  not  have  been  proceeded and imposed penalty.  Alternatively, it is  submitted  that  even  if  the  issue  of  jurisdiction  is  determined  in  favour  of  the  Commission.   The  directions  issued  by  it  having  been  substantially  

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complied with by the respondent and there being no  willful  and deliberate  non-compliance,  on  the  facts  and  circumstances  imposition  of  penalty  was  not  justified.  

12. First, we shall proceed to deal with the jurisdiction of  

the High Court to hear the appeal after coming into force  

the 2003 Act.   The Board, as is manifest, was grieved by  

order imposing penalty.  The relevant part of the order of  

the Commission reads as follows:-

“The  instant  matter  is  one  of  the  first  incidents  of  the  contravention  of  the  Commission orders/ directions attributable to  the conduct of Respondents / objectors.  The  commission has determined the quantum of  fine  to  be  imposed  after  considering  the  nature  and  extent  of  non-compliance  and  other relevant factor as per Regulation 51 (iii)  of HPERC’s Conduct of Business Regulations,  2001 under the overall  provision of  Section  45  of  the  ERC  Act,  1998.   Penalty  of  Rs.  5,000/-  only  is  hereby  imposed  upon  Respondent  No.  7-HPSEB.   The  penalty  be  deposited  with  the  Secretary  of  the  Commission within a period of 30 days from  today.   Additional  penalty  for  continuing  failure  @ Rs.  300/-  only  per  day  is  further  imposed  on  HPSEB  and  shall  be  ipso  facto  recoverable  immediately  after  January  15,  2002  until  the  date  of  compliance  to  the  Commission’s satisfaction to be so notified by  the Commission.  The Board shall submit the  Status / Action taken reports on the fifteenth  day  of  every  month  until  compliance  is  made.”

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13. By the time the order was passed by the Commission  

it was subject to challenge in appeal before the High Court  

under Section 27 of the 1998 Act, which reads as follows:-  

“27.  Appeal  to  High  Court  in  certain  cases.  –  (1)  Any  person  aggrieved  by  any  decision  or  order  of  the  State  Commission  may file an appeal to the High Court.   

(2) Except  as  aforesaid,  no  appeal  or  revision  shall  lie  to  any  court  from  any  decision or order of the State Commission.  

(3) Every appeal under this section shall be  preferred within sixty days from the date of  communication of the decision or order of the  State Commission to the person aggrieved by  the said decision or order.  

Provided that the High Court may entertain an  appeal after the expiry of the said period of  sixty days if it is satisfied that the aggrieved  person had sufficient cause for not preferring  the  appeal  within  the  said  period  of  sixty  days.”

14. It  is  not  in  dispute  that  when  the  appeals  were  

preferred  under  Section  27  of  the  1998  Act  pending  

before the High Court awaiting adjudication the 2003 Act  

was  enacted.   Chapter  XI  of  the  2003  Act  deals  with  

“Appellate Tribunal for Electricity”.  Section 110 deals with  

establishment  of  appellate  tribunal.   The said  provision  

reads as under:-

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“110. Establishment of Appellate Tribunal.  – The Central Government shall, by notification,  establish an Appellate Tribunal to be known as  the  Appellate  Tribunal  for  Electricity  to  hear  appeals against the orders of the adjudicating  officer  or  the Appropriate Commission [under  this Act or any other law for the time being in  force].”

15. Section 111 provides for an appeal to the appellate  

tribunal.  Sub-Sections (1) and (2) being relevant for the  

present purpose are reproduced below:-  

“111.  Appeal  to  Appellate  Tribunal  -  (1)  Any person aggrieved by an order made by an  adjudicating  officer  under  this  Act  (except  under section 127) or an order made by the  Appropriate  Commission  under  this  Act  may  prefer an appeal to the Appellate

Tribunal  for  Electricity:  Provided  that  any  person  appealing  against  the  order  of  the  adjudicating officer levying and penalty shall,  while filling the appeal , deposit the amount of  such penalty:  Provided further that where in  any particular case, the Appellate Tribunal is  of the opinion that the deposit of such penalty  would cause undue hardship to such person, it  may  dispense  with  such  deposit  subject  to  such conditions as it may deem fit to impose  so as to safeguard the realisation of penalty.

(2) Every appeal under sub-section (1) shall be  filed within a period of forty-five days from the  date on which a copy of the order made by  the  adjudicating  officer  or  the  Appropriate  Commission  is  received  by  the  aggrieved  person and it shall be in such form, verified in  

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such manner and be accompanied by such fee  as may be prescribed:

Provided  that  the  Appellate  Tribunal  may  entertain  an  appeal  after  the  expiry  of  the  said period of forty-five days if it  is satisfied  that there was sufficient cause for not filing it  within that period.”

16. From the aforesaid provision it is clear as crystal that  

a different forum of appeal has been created under the  

new legislation with certain conditions.  

17. At this stage, we may usefully refer to Section 185  

which deals with Repeal and Saving.  It reads as follows:-  

“185.  Repeal  and  saving.  -(1)  Save  as  otherwise  provided  in  this  Act,  the  Indian  Electricity Act, 1910 (9 of 1910, the Electricity  (Supply)  Act,  1948  (54  of  1948)  and  the  Electricity Regulatory Commissions Act, 1998  (14 of 1998) are hereby repealed.

(2) Notwithstanding such repeal, -

(a)  anything  done  or  any  action  taken  or  purported  to  have  been  done  or  taken  including  any  rule,  notification,  inspection,  order  or  notice  made  or  issued  or  any  appointment,  confirmation  or  declaration  made or any licence, permission, authorisation  or  exemption  granted  or  any  document  or  instrument  executed  or  any  direction  given  under the repealed laws shall, in so far as it is  not inconsistent with the provisions of this Act,  be deemed to have been done or taken under  the corresponding provisions of this Act.

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(b) the provisions contained in sections 12 to  18  of  the  Indian  Electricity  Act,  1910  (9  of  1910) and rules made thereunder shall have  effect until the rules under section 67 to 69 of  this Act are made;

(c)  The  Indian  Electricity  Rules,  1956  made  under section 37 of the Indian Electricity Act,  1910  (9  of  1910)  as  it  stood  before  such  repeal  shall  continue  to  be  in  force  till  the  regulations  under  section 53 of  this  Act  are  made;

(d)  all  rules  made  under  sub-section  (1)  of  section 69 of the Electricity (Supply) Act, 1948  (54 of 1948) shall continue to have effect until  such rules are rescinded or modified, as the  case may be;

(e)  all  directives  issued,  before  the  commencement  of  this  Act,  by  a  State  Government  under  the enactments  specified  in the Schedule shall continue to apply for the  period for which such directions were issued  by the State Government.  

(3) The provisions of the enactments specified  in  the  Schedule,  not  inconsistent  with  the  provisions of this Act, shall apply to the States  in which such enactments are applicable.

(4)  The  Central  Government  may,  as  and  when  considered  necessary,  by  notification,  amend the Schedule.

(5) Save as otherwise provided in sub-section  (2), the mention of particular matters in that  section, shall not be held to prejudice or affect  the  general  application  of  section  6  of  the  General Clauses Act, 1897  (10 of 1897),  with  regard to the effect of repeals.”  

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18. It is submitted by Mr. Jaideep Gupta, learned senior  

Counsel that when the 1998 Act has been repealed and a  

new legislation has come into force the intention of the  

legislature is clear to the effect that the appeals are to be  

heard  by  the  newly  constituted  appellate  tribunal.  

Learned  senior  counsel  would  also  contend  that  if  the  

interpretation placed by the High Court is accepted then  

there  would  be  two  appellate  authorities  after  the  

enactment  of  the  2003  Act  which  would  lead  to  an  

anomalous  situation.   In  this  context  Mr.  Gupta  has  

commended us to the authorities in  State of Punjab v.  

Mohar Singh1,  Brihan Maharashtra Sugarsyndicate  

Ltd. v. Janardan Ramchandra Kulkarni and Others2,  

Manphul  Singh  Sharma  v.  Ahmedi  Begum  (Smt)   

(since  deceased)  through  her  alleged  legal   

representative/successors (A) M.A.  Khan (B) Delhi   

Wakf  Board3,  Commissioner  of  Income  Tax,  

Bangalore v. R. Sharadamma4 and Commissioner of  

Income Tax, Orissa v. Dhadi Sahu 5.   

1  (1955) 1 SCR 893 2 AIR 1960 SC 794 3 (1994)  5 SCC 465 4 (1996) 8 SCC 388 5 1994 Supp (1) SCC 257

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19. In Mohar Singh (supra), the Court has ruled thus:-  

“Whenever there is a repeal of an enactment,  the consequences laid down in section 6 of the  General  Clauses Act  will  follow unless,  as  the  section itself says, a different intention appears.  In the case of a simple repeal there is scarcely  any room for expression of a contrary opinion.  But  when  the  repeal  is  followed  by  fresh  legislation  on  the  same  subject  we  would  undoubtedly have to look to the provisions of  the  new  Act,  but  only  for  the  purpose  of  determining  whether  they  indicate  a  different  intention.  The  line  of  enquiry  would  be,  not  whether the new Act expressly keeps alive old  rights and liabilities but whether it manifests an  intention to destroy them. We cannot therefore  subscribe to the broad proposition that section  6 of the General Clauses Act is ruled out when  there is repeal of an enactment followed by a  fresh legislation. Section 6 would be applicable  in  such  cases  also  unless  the  new  legislation  manifests  an  intention  incompatible  with  or  contrary to the provisions of the section. Such  incompatibility  would  have  to  be  ascertained  from  a  consideration  of  all  the  relevant  provisions of the new law and the mere absence  of a saving clause is by itself not material. It is  in  the  light  of  these  principles  that  we  now  proceed  to  examine  the  facts  of  the  present  case.”

[Underlining is ours]

20. In  Messrs. Hoosein Kasam Dada (India) Ltd. v.  

The State of Madhya Pradesh and others6, this Court  

was considering the effect of amendment of provisions of  

6 AIR 1953 SC 221

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Central Provinces and Berar Sales Tax Act.  Section 22(2)  

prior  to  the  amendment  of  the  Act  stipulated  that  no  

appeal  against  an  order  of  assessment  with  or  without  

penalty could be entertained by the appellate authority  

unless it was satisfied that such amount of tax or penalty,  

or both, as the appellant had admitted due to him had  

been paid.  The amended provision laid a postulate that  

appeal had to be admitted subject to the satisfaction of  

proof of payment of tax in appeal to which the appeal had  

been preferred.  It was contended that the appellant was  

covered under the unamended provision and that he had  

not  admitted  any  tax  and  hence,  he  was  not  liable  to  

deposit  any  sum along  with  the  appeal.   It  was  urged  

before  this  Court  that  the  restriction  imposed  by  the  

amending Act could not affect his right to appeal as the  

same was a vested right prior to the amendment at the  

time of commencement of the proceeding under the Act.  

Dealing with the said contention, the Court opined that a  

right of appeal is not merely a matter of procedure but a  

matter of substantive right.  It was also held that the right  

of  appeal  from the decision of  an inferior  tribunal  to  a  

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superior  tribunal  becomes  vested  in  a  party  when  

proceedings  are  first  initiated  and  before  a  decision  is  

given by the inferior Court.  It has been further observed  

that such a vested right cannot be taken away except by  

express  enactment  or  necessary  intendment  and  an  

intention to interfere with or to impair or imperil such a  

vested right cannot be presumed unless such intention is  

clearly  manifested  by  express  words  or  necessary  

implication.  Eventually,  the Court ruled that as the old  

law continues to exist for the purpose of supporting the  

pre-existing right of appeal and that old law must govern  

the exercise and enforcement of that right of appeal and  

there is  no question of applying the amended provision  

preventing the exercise of that right.

21. In  this  context,  we  may  refer  with  profit  to  the  

Constitution Bench judgment in  Garikapati Veeraya v.  

N.  Subbiah  Choudhry  and  others7.  In  the  said  

decision,  the Constitution Bench referred to the leading  

authority of the privy council in Colonial Sugar Refining  

Company  Ltd.  v.  Irving8.  The  Constitution  Bench  

7 AIR 1957 SC 540 8 1905 AC 369

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observed that the doctrine laid down in the decision of the  

privy council in Colonial Sugar Refining Company Ltd.  

(supra) has been followed and applied by the Courts in  

India.   The  passage  that  was  quoted  from  the  Privy  

Council’s judgment is as follows:-

“As regards the general principles applicable to  the case there was no controversy. On the one  hand, it was not disputed that if the matter in  question  be  a  matter  of  procedure  only,  the  petition is well founded. On the other hand, if it  be  more  than  a  matter  of  procedure,  if  it  touches a right in existence at the passing of  the  Act,  it  was  conceded  that,  in  accordance  with  a  long line of  authorities  extending from  the time of Lord Coke to the present day, the  appellants  would  be  entitled  to  succeed.  The  Judiciary  Act  is  not  retrospective  by  express  enactment  or  by  necessary  intendment.  And  therefore the only question is, was the appeal to  His  Majesty  in  Council  a  right  vested  in  the  appellants at the date of the passing of the Act,  or was it a mere matter of procedure? It seems  to  their  Lordships  that  the  question  does  not  admit of doubt. To deprive a suitor in a pending  action of an appeal to a superior tribunal which  belonged to him as of right is a very different  thing  from  regulating  procedure.  In  principle,  Their  Lordships  see  no  difference  between  abolishing an appeal altogether and transferring  the  appeal  to  a  new  tribunal.  In  either  case  there  is  an  interference  with  existing  rights  contrary  to  the  well-known  general  principle  that  statutes  are  not  to  be  held  to  act  retrospectively unless a clear intention to that  effect is manifested.”

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22. Thereafter,  the larger Bench referred to number of  

authorities  and  proceeded  to  cull  out  the  principles  as  

follows:-

“23. From  the  decisions  cited  above  the  following principles clearly emerge:

(i)  That the legal  pursuit  of  a remedy, suit,  appeal and second appeal are really but steps  in a series of proceedings all connected by an  intrinsic  unity  and are to be regarded as  one  legal proceeding.

(ii) The right of appeal is not a mere matter of  procedure but is a substantive right.

(iii) The institution of the suit carries with it  the implication that all rights of appeal then in  force  are  preserved to  the  parties  thereto  till  the rest of the career of the suit.

(iv) The right of appeal is a vested right and  such a right to enter the superior court accrues  to  the litigant  and exists  as  on and from the  date the lis commences and although it may be  actually exercised when the adverse judgment  is pronounced such right is to be governed by  the law prevailing at the date of the institution  of the suit or proceeding and not by the law that  prevails at the date of its decision or at the date  of the filing of the appeal.

(v) This vested right of appeal can be taken  away only by a subsequent enactment, if it so  provides expressly or by necessary intendment  and not otherwise.”

23. On  a  proper  understanding  of  the  authority  in  

Garikapati Veeraya (supra), which relied upon the Privy  

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Council  decision,  three  basic  principles,  namely,  (i)  the  

forum of appeal available to a suitor in a pending action of  

an appeal to a superior tribunal which belongs to him as  

of  right  is  a  very  different  thing  from  regulating  

procedure; (ii) that it is an integral part of the right when  

the action was initiated at the time of the institution of  

action; and (iii) that if the Court to which an appeal lies is  

altogether abolished without any forum constituted in its  

place for the disposal of pending matters or for lodgment  

of the appeals, vested right perishes, are established.  It is  

worth  noting  that  in  Garikapati  Veeraya (supra),  the  

Constitution Bench ruled that  as  the  Federal  Court  had  

been abolished, the Supreme Court was entitled to hear  

the appeal under Article 135 of the Constitution, and no  

appeal lay under Article 133.  The other principle that has  

been  culled  out  is  that  the  transfer  of  an  appeal  to  

another  forum  amounts  to  interference  with  existing  

rights which is contrary to well known general principles  

that  statutes  are not  to  be held  retrospective unless  a  

clear intention to that effect is manifested.  

24. In Dhadi Sahu (supra), it has been held thus:-

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“18. It  may be stated at  the outset  that  the  general  principle  is  that  a  law  which  brings  about  a  change  in  the  forum does  not  affect  pending actions unless intention to the contrary  is  clearly  shown.  One of  the modes by which  such  an  intention  is  shown  is  by  making  a  provision for change-over of proceedings, from  the court or the tribunal where they are pending  to the court or the tribunal which under the new  law gets jurisdiction to try them.

xxx xxx xxx

21. It is also true that no litigant has any vested  right in the matter of procedural law but where  the question is of change of forum it ceases to  be a question of procedure only. The forum of  appeal  or  proceedings  is  a  vested  right  as  opposed  to  pure  procedure  to  be  followed  before  a  particular  forum.  The  right  becomes  vested when the proceedings are initiated in the  tribunal or the court of first instance and unless  the  legislature  has  by  express  words  or  by  necessary implication clearly so indicated, that  vested right will continue in spite of the change  of  jurisdiction  of  the  different  tribunals  or  forums.”

25. At this stage, we may state with profit that it is a  

well  settled  proposition  of  law  that  enactments  dealing  

with substantive rights are primarily prospective unless it  

is expressly or by necessary intention or implication given  

retrospectivity.  The aforesaid principle has full play when  

vested  rights  are  affected.   In  the  absence  of  any  

unequivocal expose, the piece of Legislation must exposit  

adequate intendment of Legislature to make the provision  

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retrospective.   As has been stated in various authorities  

referred to hereinabove, a right of appeal as well as forum  

is a vested right unless the said right is taken away by the  

Legislature  by  an  express  provision  in  the  Statute  by  

necessary intention.

26.  Mr.  Gupta  has  endeavoured hard  to  highlight  on  

Section  111  of  the  2003  Act  to  sustain  the  stand  that  

there  is  an  intention  for  change  of  forum.   It  is  the  

admitted  position  that  Legislature  by  expressed  

stipulation  in  the  new  legislation  has  not  provided  for  

transfer  of  the  pending  cases  as  was  done  by  the  

Parliament  in  respect  of  service  matters  and  suits  by  

financial  institutions/banks  by  enactment  of  

Administrative Tribunal Act, 1985 and Recovery of Debts  

due  to  Banks  and  Financial  Institution  Act,  1993.   No  

doubt right to appeal  can be divested but this requires  

either a direct legislative mandate or sufficient proof or  

reason  to  show and  hold  that  the  said  right  to  appeal  

stands  withdrawn  and  the  pending  proceedings  stand  

transferred to different or new appellate forum.  Creation  

of  a  different  or  a  new appellate forum by itself  is  not  

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sufficient to accept the argument/contention of an implied  

transfer.   Something  more  substantial  or  affirmative  is  

required which is not perceptible from the scheme of the  

2003 Act.  

27.  It  is  urged  by  Mr.  Gupta  that  Section  6  of  the  

General Clauses Act would not save the vested right of  

forum in view of the language employed in Section 185(2)  

of the 2003 Act.  In this context, we may usefully refer to  

Ambalal  Sarabhai  Enterprises  Ltd.  v.  Amrit  Lal  &  

Co. and Another9 wherein the learned Judges referred to  

the opinion expressed in  Kolhapur Canesugar Works  

Ltd.  v.  Union  of  India10 and  distinguishing  the  same  

observed as follows:-

“18. In  Kolhapur  Canesugar  Works  Ltd. v.  Union of India, this Court held: (SCC p. 551,  para 37)

“37.  The  position  is  well  known  that  at  common law, the normal effect of repealing a  statute or deleting a provision is to obliterate  it from the statute-book as completely as if it  had never been passed, and the statute must  be considered as a law that never existed.”

19. Relying  on  this  the  submission  for  the  tenant is, if the repealing statute deletes the  provisions, it would mean they never existed  

9 (2001) 8 SCC 397 10 (2000) 2 SCC 536

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hence pending  proceedings  under  the  Rent  Act cannot continue. This submission has no  merit. This is not a case under the Rent Act,  also  not  a  case  where  Section  6  of  the  General  Clauses Act  is  applicable.  This  is  a  case where repeal of rules under the Central  Excise  Rules  was  under  consideration.  This  would have no bearing on the question we  are  considering,  whether  a  tenant  has  any  vested right or not under a Rent Act.”

28. We have referred to the aforesaid paragraphs as Mr.  

Gupta  has  contended  that  when  there  is  repeal  of  an  

enactment  and  substitution  of  new  law,  ordinarily  the  

vested  right  of  a  forum  has  to  perish.   On  reading  of  

Section 185 of the 2003 Act in entirety,  it  is difficult to  

accept  the  submission  that  even  if  Section  6  of  the  

General Clauses Act would apply, then also the same does  

not save the forum of appeal.  We do not perceive any  

contrary intention that Section 6 of the General Clauses  

Act would not be applicable.  It is also to be kept in mind  

that  the  distinction  between what  is  and what  is  not  a  

right  by  the provisions  of  the  Section 6  of  the  General  

Clauses  Act  is  often  one  of  great  fitness.   What  is  

unaffected by the repeal of a statute is a right acquired or  

accrued under it and not a mere hope, or expectation of,  

or  liberty  to  apply  for,  acquiring  right  (See  M.S.  

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Shivananda  v.  Karnataka  State  Road  Transport   

Corporation and Others11).

29. In this context, a passage from  Vijay v. State of  

Maharashtra and Others12 is worth noting:-

“....It is now well settled that when a literal  reading of the provision giving retrospective  effect  does  not  produce  absurdity  or  anomaly, the same would not be construed to  be only prospective.  The negation is not a  rigid rule and varies with the intention and  purport of the legislature, but to apply it  in  such a case is a doctrine of fairness.”   

30. We have referred to the aforesaid passage to hold  

that tested on the touchstone of doctrine of fairness, we  

are also of the opinion that the legislature never intended  

to take away the vested right of appeal in the forum under  

the 1998 Act.

31. On the basis of the aforesaid analysis it can safely be  

concluded that the conclusion of the High Court that it had  

jurisdiction to hear the appeal is absolutely flawless.

32. The next aspect that emanates for consideration is  

that whether the finding recorded by the High Court that  

the Commission has no authority to issue directions or to  11 (1980) 1 SCC 149 12 (2006) 6 SCC 289

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impose penalty as it had become functus officio is correct  

or  not.   We  may  state  here  that  the  learned  counsel  

appearing for the parties very fairly stated that the High  

Court  was  not  correct  in  using  the  expression  that  the  

Commission had become functus officio.  Learned counsel  

for  the parties,  however,  urged that  the High Court,  by  

stating that the Commission had become functus officio, it  

meant after the Commission had fixed the tariff it had no  

power to give directions or proceed with monitoring for  

the  purpose  of  compliance  of  the  directions.   It  is  

submitted  by  Mr.  Ganesan,  learned  counsel  for  the  

respondent, that Section 22 occurring in Chapter V of the  

1998  Act  deals  with  powers  and functions  of  the  State  

Commission  and  for  exercise  of  power  of  Board  under  

Section 22(2) a notification in the official Gazette by the  

State Government is required to be issued, but the same  

was not  issued when the Commission passed the order  

and hence, it is bereft of jurisdiction.  In oppugnation of  

the  said  submission,  Mr.  Gupta,  learned  senior  counsel  

appearing for the Commission, has submitted that though  

no notification under Section 22(2) of the 1998 Act has  

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been issued, yet the directions which had been issued can  

fall within the ambit of Section 22(1)(d) of the 1998 Act.  

33. To appreciate the said submission we may refer to  

Section 22(1)(d) of the 1998 Act.  It reads as follows: -

“22. Functions  of  State  Commission.  –  (1)  Subject  to  the  provisions  of  Chapter  III,  the  State Commission shall discharge the following  functions, namely: -

xxx xxx xxx

(d) to  promote  competition,  efficiency  and  economy  in  the  activities  of  the  electricity  industry to achieve the objects and purposes  of this Act.”

The  language  employed  in  Section  22(1)(d)  has  to  be  

understood in its proper connotative expanse.  It enables  

the  State  Commission  to  carry  out  the  function  for  

promoting  competition,  efficiency  and  economy  in  the  

activities of the electricity industry to achieve the objects  

and  purposes  of  the  Act.    We  find  that  the  State  

Commission under Section 22(1)(d) was conferred power  

to address to various facets and we see no reason that the  

terms, namely, “efficiency, economy in the activity of the  

electricity industry” should be narrowly construed.  That  

apart, it would not be seemly to say that under Section  

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22(1) of the 1998 Act the Commission had only the power  

to fix the tariff and no other power.  Had that been so, the  

legislature would not have employed such wide language  

in Section 22(1)(d).  At this stage, we may also note that  

the powers enumerated under sub-section (2) of Section  

22 are more enumerative in  nature and the jurisdiction  

conferred  comparatively  covers  more  fields.   In  the  

present  case,  if  we  read  the  directions  issued  by  the  

Commission in proper perspective, the same really do not  

travel beyond the power conferred under Section 22(1)(d)  

of the 1998 Act.  We are inclined to think so as all of them  

can  be  connected  with  the  tariff  fixation  and  with  the  

associated  concepts,  namely,   purpose  to  promote  

competition,  efficiency and economy in the activities of  

the electricity industry regard being had to achieve the  

objects and purposes of the Act.

34. It is not inapposite to take note of the fact that the  

Board  had  agreed  to  comply  and  submit  the  report.  

Though  the  Commission  later  on  has  found  some fault  

with the Board, yet we factually find on a close perusal of  

the  explanation  by  the  Board  that  there  has  been real  

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substantial compliance with the directions.  In this factual  

backdrop,  it  was  not  correct  on  the  part  of  the  

Commission to impose penalty on the Board.  However,  

we  may  hasten  to  add  that  under  the  2003  Act  

constitution  of  the  State  Commission  is  governed  by  

Section 82.  Section 86 deals with the function of the State  

Commission.  On a reading of Section 86 we find that at  

present no notification is required to be issued to confer  

any power on the State Commission.  It is conferred and  

controlled by the statute.  If anything else is required to  

be  done  in  praesenti,  the  Commission  is  at  liberty  to  

proceed  under  the  provisions  of  the  2003  Act.   Be  it  

clarified,  our grant of liberty may not be understood to  

have said that the Commission can take any action arising  

out  of  its  earlier  order  dated  29.10.2001  or  any  

subsequent orders passed thereon.  We have said so, for  

the Commission and a statutory Board can really work to  

achieve the objects and purposes of the 2003 Act.

35. The appeals stand disposed of in the above terms  

leaving the parties to bear their respective costs.

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.............................J. [Anil R. Dave]

.............................J. [Dipak Misra]

New Delhi; October 03, 2013.

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