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[REPORTABLE]

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2909/2014 (arising out of SLP(Civil) No.22047/2011)

Jharkhand State Elect.Board & Ors. ……Appellants

Vs.

M/s. Laxmi Business & Cement Co.P. Ltd. & Anr.   . …Respondents

WITH

CA. No.2910/2014 @ SLP(Civil) No.22049/2011,    C.A.No.2911/2014 @SLP(Civil)  No.6350/2014 @ CC 20307/2012   and  CA. No.2913/2014 @ SLP(Civil) No.6351/2014 @ CC  20360/2012

J U D G M E N T

A.K.SIKRI,J.

1. Delay condoned.

2. Leave granted.

3. The appellant in both the cases is Jharkhand State Electricity  

Board (JSEB), which is aggrieved by the common judgment dated  

5th July  2011  passed  by  the  High  Court  of  Jharkhand  in  two  

appeals.  These  appeals  were  preferred  by  the  appellant  JSEB  

against the orders dated 17th February 2010 passed by the learned  

Single Judge of that court in the two Writ Petitions which were filed

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by M/s.  Laxmi Business & Cement Co.  Pvt.  Ltd.  and M/s.  Laxmi  

Ispat  Udyog  (arrayed  as  respondent  No.1  in  each  appeal  and  

hereinafter  referred  to  as  the  ‘consumers’).  These  respondents  

had questioned the validity of the bills raised by the JSEB in those  

Writ Petitions, primarily on the ground that the bills were contrary  

to  and  in  excess  of  the  tariff  fixed  by  the  Jharkhand  State  

Electricity Regulatory Commission (hereinafter referred to as the  

‘SERC”).  Their  contention  was  accepted  by  the  learned  Single  

Judge and the order  of  learned Single Judge is  affirmed by the  

Division Bench as well.

4. To give a glimpse of the controversy involved, in the year  

1994  HT  Agreement  was  entered  into  between  Bihar  State  

Electricity  Board  (predecessor  in  interest  of  JSEB)  and  the  

consumers which,  inter-alia,  stipulated the tariff  that was to be  

charged by the JSEB from the consumers for supply of electricity  

to these consumers by the JSEB. In Clause 4(c) of the Agreement  

there was a provision of Minimum Guarantee Charges. In the year  

2003,  Electricity  Act  was  enacted.  Indubitably,  power  to  frame  

tariff under this Act is given to SERC.  SERC passed  order  dated  

framing the new tariff schedule (‘2004 Tariff Schedule’ for short)

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under Section 86 of the Electricity Act (hereinafter referred to as  

the Act). The JSEB, however, continued to send the bills as per the  

Clause 4(c) referred to in the agreement which were paid by the  

consumers under protest.  In May 2010, Writ Petitions were filed  

by the consumers for quashing of the energy bills on the ground  

that  it  had  wrongly  been  raised  as  per  Clause  4(c)  of  the  

Agreement which had ceased to have any effect on the framing of  

2004 Tariff Schedule by the SERC. The JSEB, however, contended  

that  the  HT  agreement  entered  into  with  the  consumers  still  

survived as the 2004 Tariff Schedule saves this Agreement.

5. Since  the  Writ  

Petitions  of  the  consumers  were  allowed  and  the  order  of  the  

learned Single Judge is already upheld by the Division Bench, it is  

obvious that pleas raised by the JSEB have not found favour with  

the High Court.  Before us as well,  same very contentions were  

raised  which  were  raised  by  the  JSEB  in  the  High  Court.  

Additionally, it was also contended that even Section 185 (2)(a) of  

the  Act  read  with  Section  6(B)  of  the  General  Clauses  Act  

categorically  protects  the  previous  operation  of  the  earlier  

enactment, duly done or saved thereunder.

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It  is,  thus,  clear  that  questions which arise for  consideration in  

these appeals are the following:

(i) Whether after the enactment of the Electricity Act, 2003  

which came into force on 10.6.2003 and after passing of the new  

tariff  order  dated  27.12.2003  by  Jharkhand  State  Electricity  

Regulatory  Commission  as  per  the  Act  of  2003  can  the  State  

Electricity Board still charge a tariff determined by itself?

(ii) Whether the issue of demand charge to HTS – 1 category  

of  consumers  has  been  left  non-considered  by  the  State  

Commission in the tariff order dated 27.12.2003 so that the same  

may be continued in the manner existed in the State or whether  

the same has been considered and given affect  to in  the tariff  

order dated 27.12.2003 which came into effect from 1.1.2004?

(iii)  What  would  be the  effect  of  Section 185 (Repeal  and  

Saving  Clause)  of  the  Electricity  Act  2003  upon  the  HT  supply  

Agreement  entered upon the Board and the Consumer prior  to  

Electricity Act, 2003?

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6. While dealing with these questions,  we will  narrate further  

seminal facts and the details submissions of the learned counsel  

for the parties of either side.

1. Re.: Power of SERC under Electricity Act 2003.

Legal  position  contained  in  Act  of  2003  is  hardly  in  

dispute.  Before this Act was enacted in the year 2003,  we had  

Indian Electricity Act, 1910 and thereafter Electricity (Supply) Act,  

1948  was  passed.   It  is  the  Electricity  Board  in  the  respective  

States  which  were  supplying  electricity  to  the  consumers  and  

determining the operation rates at which the electricity was to be  

supplied.  Section 49 of  the Act,  1948 empowered the Board to  

supply electricity to any person upon such terms and conditions as  

the Board thinks fit and made for the purposes of such supply from  

time to time and were empowered to frame uniform tariffs for the  

purpose of such supply. This power to frame tariff under Section  

49(1)  of  the  Act  1948  included  the  power  to  fix  minimum  

guarantee charges. In State of Bihar, such rates were fixed in the  

year 1993 tariff.  It, inter-alia, provided for tariff for HT consumers.  

Three categories of HT consumers were mentioned there. HTS-I, II

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and III. Both the consumers in the instant appeals were put in HT-I  

category.  HT  Agreement  dated  26.4.1974  was  entered  into  

between the Board and the consumers. As per Clause 4 of this  

Agreement,  the  consumers  were  to  pay  to  the  Board  for  the  

energy so supplied and registered or taken to have been supplied  

at the appropriate rates applicable to the consumers according to  

the tariff framed by the Board and in force from time to time.  It  

was subject to the minimum contract demand applicable for the  

category of supply category in which the consumers fell. Clause  

4(b)  explained that  the maximum demand of  the consumer for  

each month shall be the largest total amount of kilovolt amperes  

(KVA) that was delivered to the consumers at the point of supply  

during any consecutive 30 minutes in the months. Since the JSEB  

has  worked  out  the  charges  as  per  Clause  4  (c)  which  it  is  

demanding, we reproduce the said clause hereinbelow:

“4(c) Maximum demand charges for supply  in any month will be based on the maximum  KVA demand for the month or 75 per cent of  the  contract  demand  whichever  is  higher,  subject to provision of clause 13. For the first  twelve months service the maximum demand  charges  for  any  month,  will  however,  be  based  on  the  actual  monthly  maximum  demand for that month.”

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Thus,  as  per  the  aforesaid  clause,  JSEB  had  been  raising  

energy bills on the basis of 75% of the contract demand.

7. As  mentioned  above,  after  the  Electricity  Act,  2003  was  

enacted, power to frame tariff is given to the SERC. This power is  

statutorily  conferred upon the SERC under the Act.  However,  it  

would be relevant to mention herein that before the passing of this  

Act, Electricity Regulatory Commission Act, 1998 was enacted and  

under  Section  17  of  the  said  Act,  Jharkhand  State  Electricity  

Regulatory  Commission  was  constituted  by  the  Government  of  

Jharkhand vide Notification No.1763 dated August 22, 2002.  Its  

functions  and  duties  were  notified  by  the  Government  as  per  

Section 22 of the Electricity Regulatory Commission Act.

8. On the  passing  of  the  Electricity  Act,  2003,  Electricity  Act  

1910,  Electricity  (Supply)  Act  1948  and  Electricity  Regulatory  

Commission Act, 1998 have been repealed.  At the same time, Act  

2003 recognizes the SERCs constituted under the 1998 Act. The  

object clause of this Act reads as under:

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“An  Act  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, rationalization  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.”

9. It is also not in dispute that 2004 Tariff Schedule framed by  

the SERC is in exercise of powers conferred upon it under Section  

86  (a)  of  the  Act.  In  PTC  India  Ltd.  V.  Central  Electricity  

Regulatory  Commission (2010)  4  SCC  603  this  Court  has  

categorically  held  that  Act,  2003  is  an  exhaustive  code  on  all  

matters  concerning  electricity  which  also  provides  for  

“unbundling” of State Electricity Boards into separate utilities for  

generation,  transmission  and  distribution.  Further,  Regulatory  

regime  is  entrusted  to  the  State  Electricity  Regulatory  

Commissions which are given vide ranging responsibilities.  This  

Act has distanced the Government from all forms of regulations,  

including  tariff  regulation  which  is  now specifically  assigned  to

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SERC. Relevant observations, outlining the scheme of this Act, are  

reproduced below:

“The  2003  Act  is  enacted  as  an  exhaustive  code  on  all  matters  concerning  electricity.  It  provides for unbundling” of SEBs into separate  utilities  for  generation,  transmission  and  distribution. It repeals the Electricity Act, 1910:  the  Electricity  (Supply)  Act,  1948  and  the  Electricity Regulatory Commissions Act,  1998.  The  2003  Act,  in  furtherance  of  the  policy  envisaged  under  the  Electricity  Regulatory  Commissions  Act,  1998  (the  1998  Act),  mandated the establishment of an independent  and  transparent  regulatory  mechanism,  and  has entrusted wide-ranging responsibilities with  the  Regulatory  Commissions.  While  the  1998  Act provided for independent regulation in the  area of tariff determination: the 2003 Act has  distanced  the  Government  from  all  forms  of  regulation, namely, licensing, tariff  regulation,  specifying  Grid  Code,  facilitating  competition  through open access, etc.”[Paragraph 17] The 2003 Act contains separate provisions for  

the  performance  of  dual  functions  by  the  Commission.  Section61  is  the  enabling  provision  for  framing  of  regulations  by  the  Central  Commission:  the  determination  of  terms and conditions of tariff has been left to  the  domain  of  the  Regulatory  Commissions  under  Section  61  of  the  Act  whereas  actual  tariff  determination  by  the  Regulatory  Commissions is  covered by Section 62 of the  Act. This aspect is very important for deciding  the  present  case.  Specifying  the  terms  and  conditions  for  determination  of  tariff  is  an  exercise  which  is  different  and  distinct  from

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actual tariff  determination in accordance with  the provisions of the Act for supply of electricity  by  a  generating  company  to  a  distribution  licensee or for transmission of electricity or for  wheeling  of  electricity  or  for  retail  sale  of  electricity. 26. The term “tariff” is not defined in the 2003  

Act. The term “tariff” includes within its ambit  not only the fixation of rates but also the rules  and  regulations  relating  to  it.  If  one  reads  Section 61 with Section 62 of the 2003 Act, it  becomes  clear  that  the  appropriate  Commission shall determine the actual tariff in  accordance  with  the  provisions  of  the  Act,  including the terms and conditions which may  be  specified  by  the  appropriate  Commission  under  Section  61  of  the  said  Act.  Under  the  2003 Act, if one reads Section 62 with Section  64, it becomes clear that although tariff fixation  like price fixation is legislative in character, the  same under  the  Act  is  made  applicable  vide  Section  111.  These  provisions,  namely,  Sections 61, 62 and 64 indicate the dual nature  of  functions  performed  by  the  Regulatory  Commissions  viz.  decision-making  and  specifying  terms  and  conditions  for  tariff  determination.”[Paragraph  25,26]  [Emphasis  supplied]

10. It is, thus, beyond the pale of doubt that the State Electricity  

Boards have no power whatsoever to frame tariff which is under  

the exclusive domain of the Commission. This legal position has  

been judicially recognized. [See Gujarat Urja Vikas Nigam Ltd. V.

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Essar  Power  Ltd.,  (2008)  4  SCC 755  and  A.P.  TRANSCO v.  Sai  

Renewable Power (P) Ltd. (2011) 11 SCC 34.

11. Notwithstanding the aforesaid legal position, JSEB contends  

that agreement entered into with the consumers in the year 1994  

is saved and the JSEB has right to charge the tariff as per Clause 4  

(c) thereof. According to the JSEB this is the position because of  

the reason that Clause 1.4 of the 2004 Tariff Schedule framed by  

the  SERC  provides  for  such  a  position  and  further  that  even  

Section 186 of the Act 2003 saves this agreement. On these twin  

aspects, we have already framed question Nos. 2 and 3 above and  

would now proceed to deal with them.

2. Re: Whether the Agreement dated 26.4.1994 is saved  

by the 2004 Tariff Schedule?

Mr. Sinha, learned senior counsel for the JSEB submitted that  

in the 2004 Tariff Schedule there was no such provision which is  

contained  in  the  agreement  dated  26.4.19994  particularly  in  

Clause  4(c)  and  in  the  absence  thereof  in  the  tariff  schedule  

energy bills  raised on the  basis  of  75  % contract  demand was  

saved. It was submitted that the Agreement dated 26.4.1994 is a

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statutory agreement as it was under the Act of 1948. The learned  

senior counsel further submitted that it had never been the case  

of  consumers  that  the  aforesaid  provision  was  repealed,  

repudiated  or  destroyed.   It  has  not  happened  either.  For  this  

purpose, Mr. Sinha sought to rely upon averments made in the  

Writ  Petitions  filed  by  the  consumers  and  on  the  basis  it  was  

contended that even the consumers admitted that the provision of  

75% of contract demand is absent and not provided in the 2004  

Tariff Schedule.  He also placed strong reliance on Clause 1.4 of  

2004 Tariff Schedule of SERC which reads as under:

“All other Terms and Conditions in respect of  Meter  Rent,  Supply  at  Lower  Voltage,  Capacitor  Charge,  Electricity  Duty,  Rebate,  Security  Deposit,  Surcharge  for  exceeding  contract  demand  etc.,  shall  remain  the  same as existing in the State.” Further, the tariff order 2003-04, in Clause 5  under the heading Design of Tariff Structure  and Analysis of Tariff,  particularly at Clause  5.4 has dealt with the two part tariff structure  and Minimum Guarantee Charges wherein it  was  stated  that  “Ideally,  the  fixed/demand  charge should be levied in proportion to the  demand placed by an individual consumer on  the system. This is  so because it  facilitates  the utility in designing an appropriate system  to cater to the supply needs of a consumer

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and is therefore a just and fair mechanism for  recovering fixed costs of the system.”

Mr. Sinha further argued that Clause 4 (c) of the High Tension  

Agreement dated 26.8.2004 which the Respondent Consumer has  

signed with the Board much after 1.1.2004, when the Tariff Order  

2003-04  came  into  effect,  clearly  specified  that  after  

commencement of power supply, the respondent shall be liable to  

pay KVA/Maximum Demand Charges on actual consumption basis  

in the first 12 months and after that on the basis of 75% of the  

contract demand or recorded demand, whichever is higher. This is  

uniformly applied to similarly situated all the HTS-1 consumers.

12. In order to appreciate this argument, we will have to construe  

relevant provision of 2004 Tariff Schedule as framed by the SERC.  

It would be pertinent to observe that the SERC fixed the tariff on  

the request of the JSEB itself when it approached the SERC for this  

purpose. We find that in the Tariff Petition filed by the JSEB before  

the SERC, the JSEB did not propose to continue the manner of 75%  

of  contract  demand and the SERC allowed the demand charge  

140-KV-Month.   On  perusal  of  the  Tariff  Order,  it  becomes

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apparent that this is divided in different sections viz., section 1 is  

the  chapter  containing  ‘introduction’,  section  2  is  the  chapter  

containing ‘ARR’ i.e. the Annual Revenue Requirement and tariff  

proposal  submitted  by  the  Board,  section  3  is  the  chapter  

containing ‘objections’ received from the stake holders, section 4  

is the chapter containing ‘Commission’s analysis on ARR’, Section  

5 is the chapter containing ‘design of tariff structure and analysis  

of  tariff’,  section  6  is  the  chapter  containing  ‘Directions  to  the  

JSEB’  and  finally  there  is  Annexure  5.1  containing  the  ‘Tariff  

Schedule’. This Tariff Schedule which is the final outcome of the  

tariff process is binding on the State as well. The relevant portion  

of  the  Annexure  5.1  of  the  tariff  order  wherein  the  State  

Commission has dealt with the tariff  applicability upon the High  

Tension  Service  (HTS)  consumers  i.e.  category  applicable  to  

Respondent No.1 is reproduced below:

“Category: High Tension Service (HTS)

1. Applicability

For consumers having contract demand above 100 kVA

2. Character of service

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50 cycles, 3 Phase at 6.6. KV/11 Kv/33 kV or 132 kV.

3. Tariff

Tariff for HTS

DESCRIPTION TARIFF* RS./kVA/month DEMAND CHARGE HTS 140

ENERGY CHARGE KWh/month Rs/KWh All consumption 4.00

Monthly              minimum

charge For Supply at 11 and 33 kV Rs.250/kVA For Supply at 132 KV Rs.400/kVA

13. However,  as  stated  above,  the  JSEB  itself  in  its  

application/reference  to  the  SERC  did  not  ask  for  fixing  any  

minimum guarantee charges. It would be relevant to mention that  

the JSEB in its proposal for fixation of tariff for 2003-04, submitted  

before  the  Regulatory  Commission,  indicated  both  the  existing  

tariff  and the tariff  proposed by it  in  respect  of  all  consumers,  

including all categories of HTS (High Tension Service) consumers.  

The SERC after undertaking the necessary exercise, fixed the tariff

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of  all  categories.  The  tariff  proposed  by  the  Board  for  HTS-I  

consumers along with existing tariff is reproduced in Tables 5.28  

and 5.29 of the 2004 Tariff Schedule which will clearly reflect that  

the aspect of minimum guarantee charges was duly considered by  

the SERC. To demonstrate it,  we reproduce the said two tables  

hereunder:

5.28 Tariff for HTS-II Consumers (Existing/Proposed )

               DESCRIPTION                           TARIFF                                  DEMAND CHARGE

             Existing         Proposed Rs./KVA/Month               115               200                                           ENERGY CHARGE

Rs./KWH              Existing          Proposed      All Consumption               1.72              4.30                                       FUEL SURCHARGE CHARGE

Rs./KWH               2.44                - Annual Minimum Guarantee (AMG) Charge

Subject  to  minimum  contract demand for  this  category,  monthly  minimum  demand  charge  as  per appropriate tariff  based  on  actual  

The  following  AMG  charge  shall  be  realized  from  the  consumer  as  per  appropriate tariff.

AMG Charge  based

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maximum  demand  of  that  month  or  75% of the contract  demand  whichever  is higher. Energy  charges  based on load factor  of  30%  and  power  factor  0.85  on  contracted  demand  payable  at  the  rate  of Rs.1.72/KWH

on  load  factor  of  30%  and  power  factor  0.9  on  contract  demand  payable  at  the  rate  of  energy  charge  applicable  to  HTS-II  category.

5.29 Tariff for EHTS Consumers (Existing/Proposed)               DESCRIPTION                  TARIFF  DEMAND CHARGE

    Existing              Proposed Rs./KVA/Month         110                 200                                        ENERGY CHARGE Rs./KWH      Existing              Proposed All Consumption          4.13                  4.15                                        FUEL SURCHARGE Rs./KWH           2.44                     -                            Annual Minimum Guarantee (AMG) Charge

Subject  to  minimum  contract demand for  this  category,  monthly  minimum  demand  charge  as  per appropriate tariff  based  on  actual  maximum  demand  of  that  month  or  75% of the contract  

The  following  AMG  charge  shall  be  realized  from  the  consumer  as  per  appropriate tariff.

AMG Charge  based  on  load  factor  of  50%  and  power

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demand  whichever  is higher

Energy  charges  based on load factor  of  50%  and  power  factor  0.85  on  contracted  demand  payable  at  the  rate  of Rs.1.69/KWH

factor  0.9  on  contract  demand  payable  at  the  rate  of  energy  charge  applicable  to  EHTS  category.

14. The  tariff  order  further  reveals  that  the  SERC  had  even  

compared the proposal of JSEB with the tariff prevailing in other  

States in India and after detailed analysis thereof, it approved the  

tariff for HTS consumers which is mentioned in table 5.31 of the  

2004 Tariff Schedule. Therefore, it cannot be said that the SERC  

was  oblivious  of  the  clause  relating  to  minimum  guarantee  

charges which JSEB was charging from its consumers as per the  

earlier  agreements  entered into  with  them.  The  position  would  

become crystal  clear  from the following discussion in  the 2004  

Tariff  Schedule  wherein  the  SCRC  gave  specific  reasons  for  

revising and approving the tariff for HTS consumers.

The  SERC  has  filed  its  response  to  these  appeals, wherein the provision in this behalf is  explained in the manner noted below: “It  is

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evident from the above table that there is no  common  approach  towards  minimum  charge.  However,  if  we  compare  neighbouring  States  like Orissa,  West  Bengal  and Madhya Pradesh  (supply  at  less  than  132  KVA),  there  is  no  minimum  charge.  As  mentioned  earlier,  the  Commission  would  ideally  like  to  scrap  this  charge, but for current year it has retained this  charge due to lack of information and data to  ascertain  the  true  impact  of  this  charge.  The  Commission has already directed the Board to  provide  details  in  this  regard  in  the  next  petition.

For  the  current  year,  the  Commission  would  not like to increase the burden on the industries  on  account  of  minimum  charge  and  has  therefore attempted to keep it  at  the existing  level. The Commission has assumed a minimum  level  of  supply  and  a  minimum  level  of  consumption.  For  this,  the  Commission  has  considered 10% load factor for HTS-I and HTS-II  categories considering an average consumption  of  two  (2)  hours  in  a  day.  For  EHTS  and  HT  Special load factor of 20% and 30% respectively  has  been  taken  by  considering  an  average  consumption  of  four  (4)  hours  and  seven  (7)  hours  in  a  day  respectively.  The  Commission  observes that if  these categories of industries  are  not  able  to  maintain  this  minimum  load  factor, than they should reduce their contracted  load.  The  Commission  would  like  to  explicitly mention that if the consumption  exceeds  the  mentioned  load  factor,  no  minimum charge would be applicable. For  encouraging  consumption,  the  

Commission  has  also  introduced  a  load  factor rebate for all industries consumers.  For  the  entire  consumption  in  excess  of

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this  defined  load  factor,  a  rebate  is  provided on the energy charges for such  excess consumption.  The Commission would  have liked to align the tariff structure towards  cost of supply during the current year itself, but  it was constrained due to the huge tariff shock  that it would translate into for other consumes  and consequent increase that would have been  required in tariff for other categories. Thus as a  principle  the  Commission  has  taken  the  first  step towards reducing this distortion in the tariff  structure.  The Commission is conscious of the  fact that HT industry in Jharkhand has borne the  brunt of cross subsidy in the past and the tariff  applicable to them is above the cost of supply.  The  significance  of  this  step  should  not,  however, be judged by the quantitative decline  but  the  signal  and  intent  whereby  the  Commission  intends  to  further  rationalize  the  tariff in the future.”

15. We would like to reproduce the following discussion in the  

impugned judgment of the High Court,  as we are in agreement  

therewith the observations made in those paragraphs:

“……10.We are concerned with  the Demand  Charge only, rather to say not concerned with  the Demand Charge itself but the manner in  which the Demand Charge can be calculated  for the purpose of raising demand against the  consumer  charging  of  the  Demand  Charge  “has been allowed in Tariff Order 2003-04 @  Rs.140/-  as  mentioned  at  page  141  of  the  Tariff Order. As we have already noticed that a  formula was given in Clause 15.2 in the tariff

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of 1993 as well as in the contract on the basis  of which the Board was charging the Demand  Charge on the basis of the actual  consumed  units  but  was  charging  the  said  amount  irrespective of the consumption of the units of  electricity.  Now  the  contention  of  the  respondent-writ  petitioners  is  that  they  are  liable only according to the units consumed by  them and  not  according  to  the  formula.  We  found  from  Board’s  proposal  contained  in  Table  5.27  that  the  Electricity  Board  consciously (or  may inadvertently)  submitted  its  proposal  only  to  the  effect  that  existing  annual Demand Charge is Rs.125/- per KVA per  month.  This  proposal  of  the  Board  was  considered and ultimately the Demand Charge  was  allowed  by  the  Tariff  Order  of  2003-04  which is mentioned at page 141by which only  it has been approved that the Electricity Board  shall  be  entitled  to  charge Rs.140/-  per  KVA  per month as proposed by the Board, the Tariff  Order of 2003-04 increased it to Rs.140/-only.

11.  In  view  of  the  above  reasons,  we  cannot  hold  that  the  Electricity  Regulatory  Commission has not  considered the proposal  of  the Electricity  Board with  respect  to  their  claim for Demand Charge and the manner in  which it will be charged……”

12.In view of the above facts, we are of  the  considered  opinion  that  the  appellant- Board cannot take help of Clause 5.1. wherein  Electricity  Regulatory  Commission  wherein  it  has been observed that some of the matters  have  not  been  dealt  with  and  they  shall  continue  to  be  the  same  as  they  were  in  existence in the State because of the reason  that there is a specific proposal made by the  Electricity  Board  for  the  Demand  Charge  as

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well as the manner in which it will be charged  and  this  proposal  was  considered  by  the  Electricity  Regulatory  Commission  and  thereafter Tariff Order has been issued…”

16. To put the matter beyond the pale of controversy, we would  

like to  highlight  another  fact,  namely   the JSEB had even filed  

clarification applications before the SERC contending that having  

regard  to  the  Clause  4(c)  of  the  Agreement  with  the  HT-I  

consumers,  the  maximum  demand  charges  would  be  those  

prescribed under Clause 4(c) of the Agreement. These applications  

were  specifically  rejected  by  the  Commission.  No  appeal  was  

preferred by the JSEB challenging those orders. It is, therefore, too  

late  in  the  day  for  the  JSEB  to  now  argue  that  this  aspect  of  

minimum guarantee charge has not been dealt with by the SERC  

in the 2004 Tariff Schedule.  

3. Re.: Effect of Section 185 of the Electricity Act 2003.

Submission of Mr. Sinha, learned senior counsel, predicated  

on Section 185 (2)(a) of the Electricity Act and Section 6 (B) of the  

General Clauses Act, was that by virtue of the aforesaid provision

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the  earlier  Agreement  of  1994,  including   Clause  4(c)  thereof  

entered into between the Electricity Board and the consumers was  

saved. Section 185(2)(a) of the Act reads as under:

“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  license, permission, authorization 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.”  

We also reproduce Section 6(B) of the General Clauses Act  

hereinbelow:

“affect  the  previous  operation  of  any  enactment so repealed or anything duly done  or suffered thereunder; or”

17. It was the submission that since all the  actions deemed to  

have been done or taken under the corresponding provision of the  

earlier  Act  are  saved,  the  Agreement  in  question  which  was  

entered into by the Electricity Board in exercise of statutory power  

and was having legal force, had been saved under the aforesaid

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provisions. To prop this submission, Mr. Sinha also referred to the  

judgment of this Court in the case of  Himachal Pradesh State  

Electricity  Regulatory  Commission  &  Anr.  v.  Himachal  

Pradesh State Electricity Board (2013) 12 SCALE 397 with the  

plea that this very aspect had been specifically dealt with in the  

aforesaid  judgment  and therefore  the  issue was  no  longer  res-

integra.   Mr.  Sinha  pointed  out  that  in  that  case  the  courts  

specifically dealt with the effect of repealed provision contained in  

Section 185 of the Act, 2003 read with Section 6(B) of the General  

Clauses Act and held that the previous agreements were saved  

unless it could be pointed out that there was a manifest intention  

to destroy them.  He referred to the following passage from the  

earlier  judgment  in  the  case  of  State  of Punjab  vs.  Mohar  

Singh  1955  (1)  SCR  893  which  is  quoted  in  the  aforesaid  

judgment and reads as under:

“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

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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)

He  also  banked  upon  the  following  discussion  in  the  said  

judgment:

“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

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contrary  intention  that  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.Shivanand  v.Karnataka State Road Transport Corporation  and  Ors.  MANU/SC/0371/1979:  (1980)  1  SCC  149).”

18. In order to appreciate this argument, we will have to traverse  

through some salient provision of the agreement of 1994 entered  

into with the consumers. These are paras 4(c) and 11 of the HT  

agreement:

“4..(c)  Maximum  demand  charge  for  supply  in  any  month  will  be  based  on  the  maximum KVA demand for the month of 75%  of  the  contract  demand whichever  is  higher,  subject to provision of clause 13……..

11.  This  agreement  shall  be  read  and  construed as subject to the provisions of the  Indian  Electricity  Act,  1910,  rules  framed  thereunder,  the Electricity  (Supply)  Act  1948  together with rules, regulations (if any) tariffs  and  terms  and  conditions  for  supply  of  electricity framed and issued thereunder and  for the time being in force as far as the same  may  respectively  be  applicable  and  all  such  provisions shall prevail in case of any conflict

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or inconsistency between them and the terms  and conditions of this agreement.”

19. It is also to be borne in mind that the tariff in force during the  

period was Tariff Order dated 27.12.2003 for the period 2003-04  

which  was  having  force  of  law under  the  Electricity  Act  2003.  

Thus, what follows from the above is that even if we proceed on  

the basis that the statutory agreements entered into earlier were  

saved, the agreement in question stands replaced by 2004 Tariff  

Schedule.  At this juncture, we would like to refer to the judgment  

of this Court in the case of BSES v. Tata Power Co.Ltd. (2004)  

1 SCC 195 wherein following pertinent observations were made.

“16. The word “tariff” has not been defined in  the Act. “Tariff” is a cartel of commerce and  normally it is a book of rates. It  will  mean a  schedule  of  standard  prices  or  charges  provided  to  the  category  or  categories  of  customers  specified  in  the  tariff.  Sub-section  (1)  of  Section 22 clearly  lays  down that  the  State Commission shall determine the tariff for  electricity (wholesale, bulk, grid or retail) and  also  for  use  of  transmission  facilities.  It  has  also the power to regulate power purchase of  the distribution utilities including the price at  which  the  power  shall  be  procured from the  generating  companies  for  transmission,  sale,  distribution and supply in  the State.  “Utility”  has been defined in Section 2(1) of the Act and

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it means any person or entity engaged in the  generation,  transmission,  sale,  distribution or  supply, as the case may be, of energy. Section  29 lays down that the tariff for the intra-State  transmission of electricity and tariff for supply  of electricity — wholesale, bulk or retail — in a  State shall be subject to the provisions of the  Act and the tariff shall be determined by the  State Commission.  Sub-section (2) of Section  29  shows  that  the  terms  and  conditions  for  fixation  of  tariff  shall  be  determined  by  Regulations  and  while  doing  so,  the  Commission  shall  be  guided  by  the  factors  enumerated in clauses (a) to (g) thereof. The  Regulations  referred  to  earlier  show  that  generating companies and utilities have to first  approach the Commission for approval of their  tariff  whether  for  generation,  transmission,  distribution or supply and also for terms and  conditions  of  supply.  They  can  charge  from  their  customers  only  such  tariff  which  has  been approved by the Commission.  Charging  of a tariff which has not been approved by the  Commission is an offence which is punishable  under Section 45 of the Act. The provisions of  the  Act  and  Regulations  show  that  the  Commission  has  the  exclusive  power  to  determine the tariff. The tariff approved by the  Commission is final and binding and it is not  permissible for the licensee, utility or anyone  else to charge a different tariff.”

20. In view of the above,  we are of the opinion that even the  

argument based on Section 185 of the Electricity Act, 2003 would  

not bring any change to the results of this case. We, thus, do not  

fault with the judgment of the High Court appealed against.

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21. Before we part with, it is necessary to deal with one more  

argument of the appellant. It was submitted that there was delay  

in filing the Writ Petitions inasmuch as bills raised by the JSEB on  

the basis of Clause 4(c) of the 1994 Agreement, even after the  

formulation  of  2004  Tariff  Schedule  were  being  paid  by  the  

consumers and they approached the Court by filing Writ Petitions  

only in the year 2010. Thus, there was a delay and latches of 5  

years. It is further argued that in such scenario, the High Court at  

least should not have directed the appellants to refund the excess  

amount charged under the bills  raised for earlier period.  Other  

related submission was that it would be unjust enrichment to the  

consumers who would have recovered the amount from the user  

of the electricity.

22. In so far as delay in filing the Writ Petition is concerned, it  

appears from the chronology of events that the same has been  

duly explained. It is not in doubt that the consumers had paid the  

amount of bills raised by JSEB under protest because of the threat  

of  disconnection.  While doing so,  they had raised specific  plea  

with  the  JSEB  that  it  was  now  supposed  to  raise  the  bills  in  

accordance with the 2004 Tariff Schedule.   The matter remained

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under consideration at the level of JSEB which kept approaching  

the  Court  as  well  as  SERC  seeking  clarification  of  2004  Tariff  

Schedule. As already pointed out above, clarification applications  

were filed which were dismissed by the Commission. However, as  

the JSEB did not judge from its stand even after the dismissal of  

these applications, the consumers approached the Court and filed  

the  Writ  Petitions.  The  Writ  Petitioners  have  thus  furnished  

satisfactory explanation for approach the Court.

23. The plea of unjust and enrichment will not be available to the  

appellants. In the first place, no such plea was raised before the  

High Court either before the learned Single Judge or the Division  

Bench.  In the Special Leave Petition, this submission was made  

for the first time at the time of hearing of the present appeals.  

Moreover, it is not a case of payment of tax which is a burden  

passed on the consumers. It is only in such cases that was held in  

Mafatlal Industries Ltd. vs. Union of India (1997) 5 SCC 536  

that  the  question  of  unjust  enrichment  would  arise  for  

consideration. As far as issue like the present is concerned, such a  

question was left open in para 107 of the aforesaid judgment. The  

Court had made it clear the concept of unjust enrichment had no

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application  for  refunds  other  than  taxes,  as  is  clear  from the  

reading thereof.

“107. A Clarification: The situation in the case of  captive consumption has not been dealt with by  us in this opinion. We leave that question open.”

24. As a result, we find that the appeals are bereft of any merit  

and are accordingly dismissed. No costs.

…………………………..J. (K.S.Radhakrishnan)

…………………………..J. (A.K.Sikri)

New Delhi,

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Dt. February 28, 2014.