JUDGMENT
1. This appeal is arising out of an order passed by the Hon’ble First Court on October 8, 2002 in the writ petition when His Lordship was pleased to hold that both the authorities below erred in law in holding that the proposal of construction of switching-cum-substation by the writ petitioners/ respondent herein falls within the ambit of “commercial use”.
2. His Lordship was pleased to set aside the said orders and directed the Bhatpara Municipality (hereinafter referred to as “the said Municipality”) to mutate the names of CESC Ltd. upon payment of the mutation fees and the charge for conversion of the use of land from “agriculture to industrial one” at the rate fixed by the West Bengal Municipal Act.
3. Being aggrieved by the said order passed by the Hon’ble First Court the appellant preferred this appeal.
4. The facts of the case briefly are as follows:
The CESC Ltd. purchased 80 cottahs of “agricultural land” and applied for mutation of the said property in their name before the Municipality. On July 4, 2001, the CESC Ltd. applied for permission of ‘lay out” application under Section 193 of the West Bengal Municipal Act (hereinafter referred to as “the said Act”) for installation of 132/220 KV switching-cum-substation for augmentation of power distribution. On July 5, 2001 the said Municipality requested the CESC Ltd. to deposit a sum of Rs. 10,96,990/- for “development charges” towards the “change” of “use” of land. The CESC Ltd. gave a reply on July 31, 2002 stating that the definition of “manufacturing process” under Section 2(k) of Factories Act, 1948 means “generating, transforming and distributing” power and the same would come within the definition of “industry” under Section 2(10) of the Town and Country (Planning and Development) Act, 1979 (hereinafter referred to as “the 1979 Act”) and thereby the CESC Ltd. agreed to pay at the rate of Rs. 55/- per sq. metre and not at the rate of Rs. 205/- per sq metre as claimed by the Municipality.
5. On December 31, 2001, the Municipality held that “generating, transforming and transmitting” of power cumulatively cannot take place in the switching-cum-substation. Hence, the proposed change of “land use” constitutes commercial activities.
6. Thereafter, the CESC Ltd. filed an appeal before the appellate authority and on May 15, 2002, the appellate authority disposed of the said appeal construing the “sub-station” is a “commercial” one.
7. On September 13, 2002 the CESC Ltd. filed a writ petition challenging the said order passed by the appellate authority. The Hon’ble First Court after hearing the parties upheld the submission made on behalf of the writ petitioner and allowed the said application. The Municipality preferred this appeal from the said judgment and/or order dated October 8, 2002.
8. Mr. Shibaji Sen, learned Senior Advocate appearing on behalf of the appellant drew our attention to Section 102 of the 1979 Act and contended that the Municipality is entitled to impose levy for developing the land in question. According to him, under Section 103 of the said 1979 Act, the change of “land use” from “agriculture” to “industry”, levy is Rs. 55/- per sq. metre whereas the conversion from “agriculture to commercial use” levy is Rs. 205/- per sq metre. Admittedly, the land in question is “agricultural”. He also contended that the “commercial use” means use of any land or building or plant thereof for the purpose of commerce or for storage of goods or as an office whether attached to any industry or otherwise.
9. Section 2(10) of the said Act defines “industry” and “industry” within the ambit of the 1979 Act includes the carrying out of the “manufacturing process” as defined in the Factories Act, 1948 and the expression “industry” shall be construed accordingly.
10. Mr. Sen relied upon the following decisions in support of his contention Workmen of Delhi Electric Supply Undertaking v. Management of Delhi Electricity Supply Undertaking; 1984(2) LLJ 370 Gujarat Electricity Board v. State of Gujarat and 1981 Labour Industrial Cases 1678 Madhya Pradesh Electricity Board v. State of Madhya Pradesh and submitted that the activities viz. the “generating, transforming or transmitting” cumulatively do not take place in a ‘sub-station’ or in a zonal station. Therefore, it cannot be stated to be the “manufacturing process” within the meaning of Factories Act, 1948 and he further drew our attention to Section 2(k) of the Factories Act, 1948, in particular, Section 2(k)(iii) of the Factories Act and further contended that “generating, transforming or transmitting” cannot be stated to be “manufacturing process” within the meaning of Factories Act, 1948.
11. He further drew our attention to Section 2(11-A) of the Electricity Supply Act, 1948 and submitted that if there is any “manufacturing process”, then only it can be treated as an “industry”.
12. According to him the word “or” used in Section 2(k)(iii) of the Factories Act, 1948 in between the words “transforming or transmitting” should be read as “and” instead of “or”.
13. He further contended that the “manufacturing process” to be read as “disjunctively” in applying Section 2(k)(iii) of the Factories Act, 1948 in the context of the said 1979 Act for the purpose of construing/interpreting the words “manufacturing process”.
14. According to him to set up a station for “transforming and transmitting” power to cater the need of different customers in the locality cannot be treated as “manufacturing process”.
15. He also relied upon the decisions reported in 2001 (10) SCC 401 Judicial Legislation V. Jagannatha v. State of Andhra Pradesh AIR 1979 SC 574 Md. Sabit v. State of Maharashtra 1985(10) Appeal Cases 364 Mayor of Alderman and Burgesses of the Borough of Portsmouth v. Charles Bovill Smith and Ors. AIR 1995 Allahabad 598 Sridhar Mishra v. Jaichandra Vidyalankar and the Black’s Law Dictionary (6th Edition) at page 1236 and drew our attention to the meaning of the word “purpose”. He submitted that the words “purpose” and “object” have been treated as synonymous words. He also submitted that “switching-cum-substation” cannot be stated to be a “manufacturing process”.
16. He further relied upon decision Keval Chand Nemi Chand Mehta v. CIT and drew our attention to Hallsbury’s Law of England, 4th Edition, Vol. 27 para 352 and contended that there is no question of doubt that the word “contemplated” to be carried out, by CESC Ltd. in the aforesaid sub-station is, and indeed constitutes, “purpose of business” and accordingly he relied upon a decision Commissioner of Gift Tax, Kerala v. P. Gheevarghese, Travancore Timbers & Products, Kottayam and submitted that the activities at the sub-station clearly for the purpose of business. Hence, it has to be treated as “commercial use”.
17. Mr. Sen further contended that the Hon’ble First Court suo motu raised the point of application of Section 2(k)(i) of the Factories Act, 1948 admittedly, without any plea or pleading or even submission made by any of the parties before His Lordship. His Lordship of his own came to the conclusion that the activities of the CESC Ltd. in the switching cum sub-station would fall within. the ambit of Section 2(k)(i) of the Factories Act, 1948, i.e., “manufacturing process” which means any process that is “making, altering or adapting etc.
18. Mr. Sen further submitted that the Hon’ble First Court has no jurisdiction to entertain the plea without any pleadings and he relied upon the decisions reported in AIR 1959 SC 31 Moran Mar Basselios Catholics v. Thukalan Paulo Avira and Ors. Muralidhar Chatterjee v. International Film Co. Ltd. and State of U.P. and Ors. v. Maharaja Dharmender Prasad Singh etc. and Lucknow Dev. Authority and Ors. v. Maharani Rajlaxmi Kumari Devi and Ors. etc, and furthermore he submitted that the applicability of Section 2(k) is not a question of law and fact, but a pure point of law.
19. According to him the Court under Article 226 of the Constitution of India cannot assume suo motu jurisdiction and he relied upon a decision Khanna Improvement Trust v. Land Acquisition Tribunal and Ors.
20. He further contended that the Hon’ble First Court should have applied the well-known maxim “generalia specialibus non derogant” which means there are two entries, one general, in its character, and the other, specific, the former must be excluding the later and he relied upon a decision Waiverly Jute Mills v. Raymond & Co.
21. He further submitted that in a “judicial review” the Court’s jurisdiction has circumscribed by the “decision making process” only and not by the decision which is well-settled. The Court is only competent to “review” if the authority misdirected itself or relies on irrelevant facts and ignores the relevant facts etc. and he relied upon two decisions State of U.P. v. Dharmender Prasad Singh and 1982 (3) All ER 141 Chief Constable of the North Wales Police v. Evans.
22. According to him, the finding of the Hon’ble First Court is based on no evidence and hence the finding is perverse. Hence, the finding of the Hon’ble First Court should be vitiated. Furthermore, the Hon’ble First Court erroneously applied the principle of law laid down in the case Nagpur Electric Light & Power Co. Ltd. v. Regional Director and contended that the learned statutory appellate authority applied the ratio of the case laid down in the case Workmen of Delhi Electricity Supply Undertaking v. Management of Delhi Electricity Supply Undertaking) and submitted that the Hon’ble First Court has exceeded its jurisdiction in judicial review and exercise appellate jurisdiction.
23. He further submitted that the decision cited suo motu by the Hon’ble First Court de hors the pleading/plea of the CESC Ltd. and the said point was never urged before the Hon’ble First Court on behalf of the CESC Ltd. hence, the Hon’ble First Court should not have decided the matter relying on the said section and should not have relied upon the decisions suo motu. Therefore, he submitted that the said order should be set aside.
24. On the contrary, Mr. Anindya Mitra, learned Senior Advocate appearing on behalf of the CESC Ltd. contended that the rate of development charge still depends upon the proposed user of the land. Three categories of the users are mentioned namely, residence, industry and commerce and the development charges will vary according to the nature of user.
25. According to his submission, the definition of “commerce” has been given in Section 2(5) of the said 1979 Act. The definition of “commercial use” has been given in Section 2(6) and the definition of “industry” has been given in Section 2(10) and the definition of “industrial use” has been defined in Section 2(11) of the said 1979 Act.
26. He also drew our attention to the said sections which have been specifically stated by the Hon’ble First Court in the judgment. He further contended that the switching-cum-substation do not fall within the definition of “commerce” or “commercial use”. No sale of electricity or storage of electricity is done at this switching-cum-substation. Electricity is sold to the consumers at the consumer’s premises. No reason was given by or on behalf of the Municipality to establish that switching-cum-substation can possibly fall within the definition of commerce or commercial use as given in the said 1979 Act.
26A. He further submitted that the Municipality claims that switching-cum-substation is nothing but a commercial one. It is for them to establish and show how switching-cum-substation comes within the definition of Section 2(5) and no business or profession or sale or exchange of goods of any type whatsoever is carried on at the said switching-cum-substation.
27. According to his further submission, the switching-cum-substation is not for residential use. Therefore, the only category under Section 103 of the said 1979 Act in respect of which development charges can be levied is for industry. The conclusion arrived at by the Hon’ble First Court can be supported by the process of elimination of category of use as mentioned in Section 103 of the said 1979 Act, apart from reasons given by the Hon’ble First Court.
28. Mr. Mitra further contended that the issue is whether the “manufacturing process” as defined under the Factories Act, 1948 is carried on at the switching-cum-substation. Section 2(k) of the said Act defines “manufacturing process” for different categories of goods, different meaning of the word “manufacturing process” is given. For power industry meaning has been given under Section 2(k)(iii) of the Factories Act, 1948 which is generating, transforming and transmitting, “or” is disjunctive, as held by the Hon’ble First Court. If anyone of the three activities, namely generating or transforming or transmitting power takes place at the switching cum sub-station, the “manufacturing process” can be said to be carried on at switching cum sub-station and he relied upon a decision reported in 1986 ILLJ 172 East West Hotels Ltd. v. Regional Director E.S.I.C.
29. Mr. Mitra further submitted that transmitting of electricity is a “manufacturing process” and accordingly will be industrial use within the meaning of Section 2(10) of the said 1979 Act. Significantly, for power industry, a different meaning to “manufacturing process” has been given under the Factories Act, 1948. It is also not necessary that generating or transforming of power shall also be carried out at the switching-cum-substation. According to him, there is no dispute that the power is transmitted through switching-cum-substation to the nearby area of Shyamnagar-Bhatpara area and relying upon a decision Nasiruddin v. State of Transport Appellate Tribunal and Ramai v. State of U.P. he submitted that the word “or” cannot be read as “and” as the precise words used are plain and unambiguous and, therefore, they are bound to be construed in their ordinary sense and unless it leads to absurd inconvenience or it is contrary to legislative intent, where the words are plain, the Court would not make any alteration.
30. On the contrary, if “or” is read as “and” in this case, it will defeat the legislative intent and the same would lead to absurdity. In that event, unless generation, transformation, transmission of electricity – all take place within the same premises, it would not be treated as factory and in that event none of the sub-stations although employing more than 20 persons or the generating stations will not be declared as factories and consequently employees will be deprived of benefits of the Factories Act, 1948, which will be contrary to the legislative intent.
31. He further contended that electricity cannot be stored, sold across the country nor it can be seen or handed over to the customers in a package. Generation of electricity is the beginning of the process which culminates upon transmission of power to the customers, which means, delivery to the customers. Hence, a special definition is given under Section 2(k)(i) of the Factories Act, 1948.
32. Mr. Mitra further submitted that it is the bounden duty of the licensee to deliver electricity by way of transmission at the ‘customers’ places and that is why, transmission of electricity is a part of “manufacturing process”.
33. Hence, he submitted that the conversion of this land for setting up switching-cum-substation is clearly for industrial use within the meaning of the 1979 Act read with definition of “manufacturing process” as given under the Factories Act, 1948.
34. In support of his contention, Mr. Mitra relied upon a decision Nagpur Electric Light and Power Co. Ltd. v. ESI Corporation and contended that the decisions cited on behalf of the appellant (supra) and 1981 LIC 1678 (supra) have no application in the facts and circumstances of this case.
35. After hearing the learned Senior Advocates appearing for the parties and after analyzing the decisions cited before us, we have to answer the question whether generating, transforming and distributing can be called as part of “manufacturing process” of electricity carried on at the switching-cum-substation?
36. It appears to us that the definition of’ manufacturing process’ as defined under the Factories Act, 1948 as specifically stated in Section 2(k) for different categories of goods and the different meanings of the word ‘manufacturing process’ is given under the said section for power industry.
37. It appears that under Section 2(k)(iii) of the said Act, it has been specifically stated that ‘generating, transforming or transmitting’ the word used ‘or’ is disjunctive, anyone of the said three categories viz. ‘generating, transforming or transmitting’ power takes place at he ‘switching-cum-substation’, then it has to said that the manufacturing process has been carried on at the said ‘switching-cum-substation’.
38. It further appears that transmitting of electricity is nothing but the ‘manufacturing process’ and therefore it is given within the meaning of Section 2(10) of the 1979 Act as ‘industrial use’.
39. We cannot brush aside the fact that the legislature significantly for power industry gave different meaning to ‘manufacturing process’ under the Factories Act, 1948. It cannot be disputed that the power is transmitted through “switching-cum-substation” to the nearby area of Shyamnagar-Bhatpara area.
40. Therefore, the Court would not make any alteration which is contrary to legislative intent and after construing all the sections of the said Acts, we have to come to the conclusion that the generation of electricity is the beginning of the process and it culminates upon transmission of power to the customers, that is the reason for giving the definition by legislators under Section 2(k)(i) of the Factories Act, 1948.
41. In this circumstances, we have to come to the conclusion that setting up of a ‘switching-cum-substation’ is clearly for industrial use within the meaning of the 1979 Act.
42. Accordingly, we conclude that “generating, transforming and distributing” is nothing but a part of “manufacturing process” of electricity and thereby ‘switching-cum-substation’ has to be treated as industrial use.
43. Hence, in these circumstances, we accept the opinion expressed by the Hon’ble First Court and uphold the decision of His Lordship and dismiss this appeal.