“REPORTABLE”

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4209 OF 2007

U.P. Avas Evam Vikas Parishad …. Appellant

Versus

U.P. Power Corpn. Ltd. …. Respondent

J U D G M E N T

JAGDISH SINGH KHEHAR, J.

1.  The appellant herein, the Uttar Pradesh Avas Evam Vikas Parishad  

(hereinafter  referred  to  as,  the  U.P.  Avas  Evam Vikas  Parishad),  is  a  

statutory  body  constituted  under  the  U.P.  Awas  Evam  Vikas  Parishad  

Adhiniyam, 1965.  The U.P. Avas Evam Vikas Parishad has been engaged  

in development of colonies, residential plots, residential houses, as well as,  

commercial  plots  and complexes throughout  the State of  Uttar  Pradesh  

(U.P.).

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2. The U.P. Power  Corporation Ltd.  (hereinafter  referred to as,  U.P.  

Power Corporation)  is the successor of  the U.P. State Electricity Board  

(hereinafter referred to as, UP, SEB).  It has been the statutory duty of the  

UP,  SEB  (and  thereafter,  the  U.P.  Power  Corporation)  to  erect  

transmission lines, associated distribution sub-stations and L.T. distribution  

mains, throughout the State of U.P.  The aforesaid activity has also been  

carried out by the UP, SEB (and thereafter by the U.P. Power Corporation)  

in  colonies/multistoried  buildings,  developed/raised  in  the  State  of  U.P.  

The aforesaid statutory duty is cast on account of the fact, that the said  

authorities  are  “designated  licensees”,  for  supply  and  distribution  of  

electricity,  under  section  26  of  the  Electricity  (Supply)  Act,  1948.   The  

aforesaid provision has been re-enacted as a part  of  section 86 of  the  

Electricity Act, 2003.

3. The UP, SEB (and thereafter, the U.P. Power Corporation) used to  

exclusively carry out its legal obligations, of erection of transmission lines,  

associated distribution sub-stations and L.T. distribution mains, throughout  

the State of U.P., as a “designated licensee”.  The aforesaid activity was  

also carried out in colonies/multistoried buildings by the aforesaid, again as  

a  “designated  licensee”.   For  carrying  out  the  said  activities  in  

colonies/multistoried  buildings,  the  concerned  depleting  agency  was  

required to deposit  with the “designated licensee”, the estimated cost of  

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the  transmission  lines,  associated  distribution  sub-stations  and  L.T.  

distribution mains.   The said  work  was  entrusted to  the UP, SEB (and  

thereafter, the U.P. Power Corporation) as “deposit work”.

4. The State of U.P., in exercise of power vested in it under rule 133 (1)  

read with  the proviso to sub-rule  (1)  of  rule 45 of  the Indian Electricity  

Rules, 1956, had issued a Government order dated 2.6.1982 authorizing  

the U.P. Avas Evam Vikas Parishad (i.e., the appellant herein) to carry on  

by  itself,  in  the  colonies/multistoried  buildings  raised  by  it,  the  work  of  

erection of transmission lines, associated distribution sub-stations and L.T.  

distribution mains up to 11 K.V., subject to the conditions envisaged in the  

said Government order.  A relevant extract of the Government order dated  

2.6.1982, which was duly notified, is being reproduced hereunder:-

“The Governor is hereby pleased to provide relaxation under  the provisions of Rule 45(1) of Indian Electricity Rules, 1956  with respect to the works of installations upto 11 K.V. in the  land  etc.  of  complex  of  Avas  Evam  Vikas  Parishad  in  pursuance  of  the  provision  of  133(1)  of  Indian  Electricity  Rules, 1956 read with provision of rule 45(1).

1. All the installation of electrification works shall be done  under  the  supervision  of  recognized  engineer/Junior  Engineer  (Electrical),  who  has  got  the  certificate  of  Electrical Supervisor from Electrical Inspector Office.

2. The work of wiring and installation of overhead line shall  be  got  done  by  the  persons  and  linemen having  the  permit  of  wireman  obtained  from  Electrical  Inspector  Office.   Only  those  persons  shall  come  under  the  category  of  lineman,  who  have  passed  the  lineman  

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trade test from I.T.I. or who have worked on the post of  linemen minimum upto 10 six months in any institution.

3. There must be one Electrical Supervisor, two Wiremen  and  two  linesmen  separately  for  the  execution  of  electrification work in every area.

4. Before  commencement  of  construction  of  overhead  lines  and  cable  laying  etc.,  an  approval  of  drawing  regarding  method  of  construction  shall  have  to  be  obtained from Electrical Inspector Office.”

A perusal of the aforesaid Government order reveals, that no supervision  

charges  were  prescribed  as  payable  by  the  U.P.  Avas  Evam  Vikas  

Parishad to the UP, SEB.

5. Supervision charges were levied by the UP, SEB for the first time  

through  an  office  memorandum  dated  17.1.1984.   At  the  aforesaid  

juncture, the UP, SEB was pleased to levy 5% of total estimated cost of  

the electrification work as supervision charges.  The memorandum dated  

17.1.1984  prescribing  5%  as  supervision  charges,  was  applicable  for  

housing boards, local development authorities and NOIDA who opted to  

carry  out  on  their  own,  the  work  of  erection  of  transmission  lines,  

associated  distribution  sub-stations,  and  L.T.  distribution  mains  in  the  

colonies/multistoried  buildings  promoted/raised  by  them.   The  office  

memorandum dated 17.1.1984 laid down the following pre-conditions to be  

fulfilled by the housing boards/local development authorities/NOIDA who  

were desirous to take up the aforesaid electrification activity on their own:-

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“1. Specifications  of  materials  to  be  used  in  such  constructions  will  be  approved  by  the  Superintending  Engineer concerned of the U.P. State Electricity Board.

2. The materials to be used in such constructions will be  inspected and approved by an officer of the U.P. State  Electricity Board to be authorized by the Superintending  Engineer concerned of  the Board.  In case, however,  the UPSEB is satisfied that promoters of a colony have  engaged qualified and experienced Engineers  for  this  job,  this  condition  may be  waived  by express  written  orders of the Superintending Engineer concerned of the  UPSEB.

3. The  quality  of  the  work  to  be  executed  will  be  supervised by the UPSEB’s officer so that there is no  difficulty in taking over of the works of UPSEB.

4. 5%  (five  percent)  of  the  total  estimated  cost  of  electrification work has been deposited with the UPSEB  towards  supervision  charges,  with  provisions  for  its  adjustment as per final cost when works are completed.  For this purpose, the Housing Board/Local Development  Authority/NOIDA etc. shall first submit detailed estimate  of work proposed to be undertaken by them to enable  UPSEB work out above 5% amount for initial deposit.  On completion of work, they will  submit ‘as executed’.  On detailed account of work to the concerned authority  of the UPSEB.”

It  is  not  a  matter  of  dispute,  that  the  appellant  herein  commenced  to  

deposit  the aforesaid supervision charges at the rate of 5% of the total  

estimated cost of electrification work, consequent upon the issuance of the  

office memorandum dated 17.1.1984.  It would also be relevant to mention,  

that the memorandum dated 17.1.1984 provided, that maintenance of such  

installations,  after  the  transfer  of  the  electrification  works  by  such  

promoters to the UP, SEB (now, the U.P. Power Corporation), would be  

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carried out by the UP, SEB.  It also provided, that service connections to  

individual occupants of colonies/multistoried buildings, would be provide by  

the UP, SEB in accordance with its rules and regulations, issued from time  

to time.

6. On 24.4.1998, the UP, SEB (presently, the U.P. Power Corporation)  

issued  another  office  memorandum,  whereby  the  supervision  charges  

were revised upwards from 5% to 15%.  As per the office memorandum  

dated  24.4.1998,  the  aforesaid  supervision  charges  were  payable  in  

respect  of  residential/non-residential,  single/multi-storied  building  

complexes and colonies; developed by public enterprises, private builders  

and  promoters.   Based  on  the  memorandum  dated  24.4.1998,  higher  

supervision charges were  demanded from the appellant.   Disputing the  

applicability  of  the memorandum dated 24.4.1998,  the U.P. Avas Evam  

Vikas Parishad (i.e.,  the appellant herein),  addressed representations to  

the  “designated  licensee”  asserting,  that  the  memorandum  dated  

24.4.1998 was  not  applicable  to  it.   The appellant  herein  claimed,  that  

supervision  charges  were  recoverable  from it,  as  per  the  earlier  office  

memorandum dated 17.1.1984.  The various representations made by the  

appellant (i.e., the U.P. Avas Evam Vikas Parishad) came to be rejected by  

the U.P. Power Corporation on 10.10.2001.   

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7. The  appellant  herein  assailed  the  order  dated  10.10.2001  by  

preferring  an  appeal  before  the  Uttar  Pradesh  Electricity  Regulatory  

Commission,  Lucknow.   On  30.7.2002,  the  Uttar  Pradesh  Electricity  

Regulatory Commission held, that the appeal preferred by the appellant  

herein  was  maintainable.   Accordingly,  notices were  issued to the U.P.  

Power Corporation.  Thereafter the matter came to be finally adjudicated  

on merits, vide an order dated 3.2.2006.  The appeal preferred by the U.P.  

Avas Evam Vikas Parishad was allowed.  The operative part of the order  

dated 3.2.2006 is being reproduced hereunder:-

“It  is  concluded  on  the  basis  of  said  findings  that  Office  Memorandum No. 209-K/XIV-A/SEB/84 dated 17.1.1984 has  never  been  superseded,  so  far  as  it  concerns  levy  of  supervision charge on the petitioner, in any manner by other  said Office Memorandums on which the respondent has relied  upon.  This Office Memorandum has effect till 6th June, 02, the  date prior  to ‘The Electricity  Supply Code,  2002’  came into  force.

Therefore,  the  respondent  is  directed  to  levy  supervision  charges @ of 5% as per Office Memorandum No. 209-K/XIV- A/SEB/84  dated  17.1.1984  up  to  6.6.02  and  make  adjustments  for  the  amount  recovered  in  excess  from  the  petitioner.”

Accordingly, inspite of the office memorandum dated 24.4.1998, the U.P.  

Avas Evam Vikas Parishad was allowed to pay supervision charges at the  

rate  of  5%,  as  were  prescribed  by  the  office  memorandum  dated  

17.1.1984.   

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8. It, however, emerges from the operative part of the appellate order  

dated  3.2.2006,  that  it  had  been  held  that  the  payment  of  supervision  

charges at the rate of 5% (under the office memorandum dated 17.1.1984)  

was permissible only upto 6.6.2002 i.e., upto the date preceding the date  

from which the Electricity Supply Code, 2002, came into force.  It would be  

pertinent  to  mention  that  the  Electricity  Supply  Code,  2002  became  

enforceable with effect from 7.6.2002.  The inference emerging from the  

appellate order dated 3.2.2006 was, that supervision charges with effect  

from the date of  the enforcement  of  the Electricity Supply Code,  2002,  

would be governed by the said Code.  This determination at the hands of  

the Uttar Pradesh Electricity Regulatory Commission was not acceptable  

to the U.P. Avas Evam Vikas Parishad (i.e., the appellant herein).  It is,  

therefore,  that the U.P. Avas Evam Vikas Parishad preferred an appeal  

before the Appellate Tribunal for Electricity, assailing the determination of  

Uttar  Pradesh  Electricity  Regulatory  Commission  to  the  effect,  that  

supervision  charges  as  prescribed  by  the  office  memorandum  dated  

17.1.1984, would be applicable only upto 6.6.2002.  The challenge raised  

was  that  the appellant  herein  could  not  be required  to  pay supervision  

charges stipulated under the Electricity Supply Code, 2002.  The appeal  

preferred by the U.P. Avas Evam Vikas Parishad was dismissed by the  

Appellate Tribunal for Electricity on 7.3.2007.  Dissatisfied with the order  

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dated  7.3.2007,  the U.P.  Avas Evam Vikas Parishad has preferred  the  

instant Civil Appeal.

8. It  was  the  vehement  contention  of  the  learned  counsel  for  the  

appellant, that the Uttar Pradesh Electricity Regulatory Commission’s order  

dated 3.2.2006, as also, the order dated 7.3.2007 passed by the Appellate  

Tribunal for Electricity, were liable to be set aside.  It was submitted, that  

the aforesaid adjudicating authorities had failed to take into consideration,  

that the electrification work carried out by the appellant, i.e., the U.P. Avas  

Evam Vikas Parishad, in colonies, as well as, complexes raised by it, were  

governed by the office memorandum dated 17.1.1984.  It was submitted,  

that the aforesaid memorandum had never been rescinded or superseded.  

It was, therefore, the contention of the learned counsel for the appellant,  

that supervision charges could have been demanded from the appellant,  

only at the rate stipulated in the office memorandum dated 17.1.1984.  In  

conjunction with the aforesaid contention, it was also the contention of the  

learned counsel for the appellant that the U.P. Avas Evam Vikas Parishad  

(i.e.,  the  appellant  herein)  was  expressly  permitted  by  the  State  

Government vide Government order dated 2.6.1982, to execute on its own,  

electrification  work  in  colonies/complexes  developed  by  it.   It  was  

submitted, that the aforesaid order dated 2.6.1982 had been issued under  

rule 133 (1) read with the proviso to sub-rule (1) of rule 45 of the Indian  

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Electricity Rules, 1956 and as such, had statutory force.  It was, therefore,  

the contention of  the learned counsel  for the appellant,  that without the  

supersession of the order dated 2.6.1982, there was no justification for the  

respondent to claim from the appellant, supervision charges at the rate of  

15%.  Additionally,  it was the submission of the learned counsel for the  

appellant,  that  the  adjudicatory  authorities  had  failed  to  consider  the  

responsibility  vested  in  the  appellant,  namely,  that  the  appellant  was  

engaged in raising colonies/buildings/houses for the general welfare of the  

citizens  of  this  country,  on  a  no  profit  no  loss  basis;  and  in  case,  

supervision  charges  were  raised  from  5%  to  15%,  the  eventual  effect  

would have to be suffered by those who are provided with the buildings  

constructed by the appellant i.e., the general public.  It  was accordingly  

submitted  by  the  learned  counsel  for  the  appellant,  that  if  the  rate  of  

supervision charges is increased, the eventual cost of construction would  

also  naturally  enhance.   It  is,  therefore,  the  submission  of  the  learned  

counsel  for  the  appellant,  that  the  determination  by  the  adjudicatory  

authorities was devoid of genuine and valid consideration.

9. To start with, we shall deal with the Government order/notification  

dated  2.6.1982.   There  is  no  doubt  that  the  aforesaid  Government  

order/notification has statutory trappings,  inasmuch as, it  was issued by  

the State Government in exercise of power vested in it under rule 133 (1)  

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read with  the proviso to sub-rule  (1)  of  rule 45 of  the Indian Electricity  

Rules, 1956.  However, insofar as the present controversy is concerned, in  

our  considered  view,  the  aforesaid  notification  dated  2.6.1982  is  of  no  

relevance.   The  subject  matter  of  consideration  in  the  instant  appeal,  

pertains to supervision charges claimed by the UP, SEB (and thereafter,  

by  the  respondent  U.P.  Power  Corporation).   The  Government  

order/notification  dated  2.6.1982,  did  not  stipulate  any  supervision  

charges. It merely allowed the U.P. Avas Evam Vikas Parishad, by way of  

relaxation,  the  liberty  to  carry  out  electrification  works  which  were  

exclusively  vested  with  the  “designated  licensees”  (the  UP,  SEB  and  

thereafter,  the  U.P.  Power  Corporation).   The  fact  that  the  aforesaid  

relaxation granted  by the Government  order/notification  dated  2.6.1982,  

had  neither  been  rescinded  nor  been  withdrawn  is,  therefore,  

inconsequential  to  the  present  controversy.   It  is,  therefore,  not  

factually/legally  correct  for  the  appellant  to  contend  that  the  Electricity  

Supply  Code,  2002,  by  varying  the  supervision  charges,  had  

amended/modified  the  Government  order/notification  dated  2.6.1982.  

Since the Government  order/notification  dated  2.6.1982 does  not  make  

any reference to supervision charges, it is not possible for us to accept that  

the Electricity Supply Code, 2002 in any manner altered the Government  

order/notification dated 2.6.1982.  Accordingly, the contention advanced at  

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the  hands  of  the  learned  counsel  for  the  appellant  based  on  the  

Government order/notification dated 2.6.1982 is devoid of any merit.

10. The office memorandum dated 17.1.1984, as already noticed above,  

was  the  primary  basis  for  the  appellant  to  assail  the  determination  

rendered  by  the  two  adjudicatory  authorities,  on  the  issue  of  levy  of  

supervision  charges.   According  to  the  adjudicatory  authorities,  the  

supervision charges depicted in the office memorandum dated 17.1.1984  

would  be  applicable  upto  6.6.2002.   The  aforesaid  determination  was  

based  on  the  fact,  that  the  Electricity  Supply  Code,  2002  would  be  

applicable with effect from 7.6.2002.  As per the determination rendered in  

the impugned orders (passed by the adjudicatory authorities referred to  

hereinabove), the supervision charges depicted in the office memorandum  

dated 17.1.1984, would be applicable till 6.6.2002, whereafter, the same  

would be recoverable in terms of the provisions of the Electricity Supply  

Code,  2002.   We find  merit  in  the  determination  at  the  hands  of  the  

adjudicatory authorities.  Firstly, the office memorandum dated 17.1.1984  

had no statutory force.  It was issued as an administrative order passed by  

the UP, SEB.  The Electricity Supply Code, 2002, on the other hand, has  

statutory bearings.  It is relevant to notice, that the Electricity Supply Code,  

2002 had been drawn to carry out the responsibilities vested with the Uttar  

Pradesh Electricity Regulatory Commission under section 10 of the U.P.  

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Electricity Reforms Act, 1999.  Section 10 of the Uttar Pradesh Electricity  

Reforms Act, 1999 is being reproduced hereunder:-

“S.10.Functions of the Commission

The  Commission  shall  have  the  following  functions;  namely,-

(a) to  determine  the  tariff  for  electricity,  wholesale, bulk, grid or retail,  as the case  may be;

(b) to determine the tariff payable for the use of  the transmission facilities;

(c) to  regulate  power  purchase  and  procurement  process  of  the  transmission  utilities and distribution utilities including the  price at which the power shall be procured  from the generating companies, generating  stations  or  from  other  sources  for  transmission, sale, distribution or supply in  the State;

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

(e) to  regulate  investment  approval  for  transmission,  distribution  or  supply  of  electricity to the entities operating within the  State;

(f) to aid and advise the State Government in  matters  concerning  electricity  generation,  transmission, distribution and supply in the  State;

(g) to  issue  license  for  transmission,  distribution  or  supply  of  electricity  and  determine the conditions of the license;

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(h) to  regulate  the  working  of  licensees  and  other  persons  authorized  or  permitted  to  engage  in  the  electricity  industry  in  the  State  and to make their  working efficient,  economical and equitable;

(i) to require licensees to formulate plans and  schemes  for  the  promotion  of  generation,  transmission,  distribution,  supply  or  utilization  of  electricity  and  quality  of  service  and  to  device  proper  power  purchase and procurement process;

(j) to set standards for the electricity industry  in the State including standards relating to  quality, continuity and reliability of service;

(k) to  promote  competitiveness  and  make  avenues for participation of private sector in  the electricity industry in the State, and also  to ensure a fair deal to the consumers;

(l) to lay down and enforce safety standards;

(m) to aid and advise the State Government in  formulating power policy for the State;

(n) to collect and record information relating to  generation,  transmission,  distribution  or  utilization of electricity;

(o) to collect and publish data and forecasts on  the demand for, and use of electricity in the  State and to require the licensees to collect  and publish such data;

(p) to  regulate  the  assets,  properties  and  interest  in  properties  relating  to  the  electricity  industry  in  the  State  in  such  manner as to safeguard the public interest;

(q) to  adjudicate  upon  the  dispute  and  differences  between  a licensee and utility  or to refer the same for arbitration;

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(r) to  co-ordinate  with  environmental  regulatory  agencies  for  evolving  policies  and  procedures  for  appropriate  environmental  regulation  of  Electricity  Sector in the State; and

(s) to aid and advise the State Government on  any  other  matter  referred  by  the  State  Government.”

The  Electricity  Supply  Code,  2002  which  has  statutory  trappings  was  

formulated to carry out functions earlier  assigned to the U.P. Electricity  

Regulatory Commission under Section 10 of the U.P. Electricity Reforms  

Act, 1999 (already extracted above).  This is apparent from the order of the  

U.P. Electricity Regulatory Commission, reproduced hereunder:-

“Electricity  Supply  Consumers  Regulation,  1984,  formulated  by  the  erstwhile  U.P.  State  Electricity  Board  covers  the  conditions of supply of electricity to retail consumers.  After the  enactment  of  U.P.  Electricity  Reforms  Act,  1999,  the  U.P.  Electricity  Regulatory  Commission  has  been  assigned  functions  under  Section  10  of  the  Act  to  regulate  the  distribution, supply,  utilization of electricity,  issue licenses to  regulate the working of the licensees and to set the standards  of  services for  the consumers as well  as standards for  the  electricity industry in the State.”

Since the provisions of the Electricity Supply Code, 2002, has statutory  

trappings,  the  same  would  override  and  supersede  the  stipulations  

contained in the office memorandum dated 17.1.1984, which has the force  

of merely an administrative order.

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11. We are also satisfied, that the Appellate Tribunal for Electricity, while  

adjudicating upon the controversy in question, was fully justified in relying  

upon clauses 4.3, 4.5 and 4.45 of the Electricity Supply Code, 2002.  The  

aforesaid clauses are being reproduced hereunder:-

“4.3 The  Licensee  is  responsible  for  ensuring  that  its  distribution  system  is  upgraded,  extended  and  strengthened to meet  the demand for  electricity  in  its  area of supply.

4.5 The cost of extension and upgradation of the system for  meeting demand of new consumers shall be recovered  from  the  new  consumers  through  system  loading  charges  as  approved  by  the  Commission.   In  areas  where  distribution  mains  do  not  exist,  the  costs  for  installation of new distribution mains shall normally be  covered by grant  from the State Government  or  local  body  or  any  collective  body  of  consumers  or  a  consumer.   The  Licensee  may  also  install  new  Distribution  Mains from the surplus  available  with  the  Licensee after meeting all  expenditure.   The Licensee  shall submit a policy regarding the utilization of surplus  funds and the installation  of  Distribution  Mains to the  Commission for approval.  The…..

(a) responsibility  of  construction  of  the  required  distribution network in case of a new residential,  commercial  or  an  industrial  complex  with  load  exceeding 25 KW shall be that of the body or the  agency  (public  or  private)  that  constructs  such  complex, and

(b) responsibility for laying the distribution network for  street lights on any new road/street shall be that  of the local authority concerned.

4.45 The estimate shall be prepared as per the provisions of  the  Indian  Electricity  Act,  1910  and  on  the  basis  of  charges approved by the Commission.  The Licensee  shall  submit  once  in  two  years  a  proposal  to  the  

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Commission  for  approval  of  various  charges  to  be  charged  by  the  Licensee  from  the  consumer  in  the  estimate.  The estimate shall be valid for two months.  If  the work is to be done by the applicant, Licensee shall  charge 15% of the estimate as supervision charges that  shall need to be deposited before work begins.  In other  cases,  Licensee  shall  commence  the  work  after  the  applicant has deposited the full amount of the estimate.”

The cumulative effect of the aforesaid statutory provisions leave no room  

for  any  doubt,  that  the  responsibility  of  erection  of  transmission  lines,  

associated distribution sub-stations and L.T. distribution mains, throughout  

the State of U.P., was originally exclusively being carried out by the UP,  

SEB,  and  thereafter  by  the  U.P.  Power  Corporation,  as  “designated  

licensees”.  The aforesaid activity was also being carried out exclusively in  

colonies/multistoried  buildings  by  the  aforesaid,  again  as  “designated  

licensees”.   Subsequently,  through  the  Government  order/notification  

dated 2.6.1982, by relaxing the provisions of the Indian Electricity Rules,  

1956, the U.P. Avas Evam Vikas Parishad was permitted, subject to its  

complying  with  certain  conditions,  the  liberty  to  carry  out  the  aforesaid  

electrification works.  The delegated work was liable to be carried out in  

terms  of  the  prescribed  standards.   To  ensure  that  works  were  being  

executed as per norms, clause 4.45 of the Electricity Supply Code, 2002,  

provided for supervision of the works by the U.P. Power Corporation.  The  

aforesaid supervision work was liable to be carried out by charging 15% of  

the estimated cost of the work.  No fault can be found, for having done so.  

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12. According  to  the  learned  counsel  for  the  appellant,  the  rate  of  

supervision  charges  was  hiked  from  5%  to  15%  unauthorizedly,  and  

without application of mind.  The submission was, that the supersession of  

the office memorandum dated 17.1.1984 would have an adverse effect on  

the  public  at  large,  inasmuch  as,  the  eventual  cost  of  construction  of  

houses  offered  by  the  U.P.  Avas  Evam Vikas  Parishad  to  the  general  

public  would  be  costlier.   The  subject  matter  under  consideration  is  

erection of transmission lines, associated distribution sub-stations and L.T.  

distribution  mains.   The  aforesaid  activity  though  indispensable,  has  

dangerous connotations.  If appropriate standards are not maintained and  

if  adequate safety measures are not adopted,  disastrous consequences  

are possible.  Delegation of such activity has necessarily to be regulated  

by supervision, so as to avoid any lapses.  Supervision needs inputs which  

have to be paid for.  The Electricity Supply Code, 2002, stipulates 15% of  

the total estimated cost of electrification works as supervision charges.  It  

is  not  the  case  of  the  appellant,  that  the  aforesaid  charges  are  

disproportionate to the work involved or have been fixed arbitrarily.   It is  

not as if the appellant has any compulsion of carrying on these works by  

itself.  It has chosen to do so, by taking the responsibility on itself.  If the  

supervision charges are unacceptable, the appellant can require the U.P.  

Power Corporation to undertake the electrification work by depositing the  

estimated cost with the respondent.  In our considered view, the fact, that  

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the public at large would have to bear the brunt of the hike in supervision  

charges,  is  totally  unacceptable,  especially  in  the  background  of  the  

position noticed above.  The instant contention is even otherwise irrelevant  

to the subject matter under consideration.  Supervision charges have been  

levied, so that the agencies, such as the appellant herein, who decide to  

carry  out  the  activities  of  erection  of  transmission  lines,  associated  

distribution sub-stations and L.T. distribution mains, on their own, abide by  

the minimum prescribed norms.  Higher public cost ensuring prescribed  

safety measures, would certainly override the cost consideration projected  

by the learned counsel for the appellant.  We find no merit in the instant  

contention as well.  

12. Even otherwise, the contention raised at the hands of the learned  

counsel  for the appellant,  that the appellant was not liable to reimburse  

supervision charges stipulated under  the Electricity Supply Code,  2002,  

does not lie in the appellant’s mouth.  This is so, because the appellant  

has unilaterally accepted to pay supervision charges under the Electricity  

Supply Code, 2005.  The aforesaid Electricity Supply Code, 2005 became  

enforceable  w.e.f.  18.2.2005.   All  the pleas  raised  by the  appellant,  to  

avoid payment of supervision charges under the Electricity Supply Code,  

2002, are also available to the appellant to avoid payment of such charges  

under the Electricity Supply Code, 2005.  If the appellant has accepted the  

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enforceability  of  the  Electricity  Supply  Code,  2005 over  and above the  

office memorandum dated 17.1.1984, it is not possible for us to understand  

why the appellant has failed to accede to abide by supervision charges  

levied  under  the  Electricity  Supply  Code,  2002.   For  exactly  the  same  

reasons, for which the appellant has accepted the Electricity Supply Code,  

2005,  it  is  liable  to  accept  the  levy  of  supervision  charges  under  the  

Electricity Supply Code, 2002.

13. For  the  reasons  recorded  hereinabove,  we  find  no  merit  in  the  

instant Civil Appeal and the same is accordingly dismissed.

…………………………….J. (R.M. Lodha)

…………………………….J. (Jagdish Singh Khehar)

New Delhi; October 18, 2011.

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