IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 14/06/2002
Coram:
THE HON'BLE MR. B. SUBHASHAN REDDY, CHIEF JUSTICE
and
THE HON'BLE MR. JUSTICE V. KANAGARAJ
W.P. No.23807 OF 2001 AND W.P. No.25219 OF 2001 AND W.P.No. 25220 of 2001 AND W.P. No.23807 of 2001
VOICE Consumer Care Council
Rep. by its Founder Trustee
No.11, VOC Colony, 4th Street,
CHENNAI – 600 004. … Petitioner
Vs.
1. State of Tamil Nadu,
rep. by Secretary to Government,
Energy Department,
Fort St. George,
CHENNAI – 600 009.
2. Tamil Nadu Electricity Board,
rep. by its Chairman,
Anna Salai,
CHENNAI – 600 002. … Respondents
Petition under Article 226 of the Constitution of India to issue Writ of
Declaration as stated therein.
W.P. Nos.25219 and 25220 of 2001
Citizen, Consumer & Civic Action Group,
Rep. by its Trustee Mr. N.L. Rajah,
No.8, 4th Street, Venkateswara Nagar,
Adyar, CHENNAI – 600 020. … Petitioner in
both petitions
Vs.
1. The State of Tamil Nadu
rep. by the Secretary to Government,
Energy Department,
Fort St. George,
CHENNAI – 600 009.
2. The Tamil Nadu Electricity Board,
rep. by its Chairman,
800, Anna Salai,
CHENNAI – 600 002.
3. The Tamil Nadu Electricity Regulatory Commission,
rep. by its Secretary,
No.8, III Main Road, Seethamma Colony, … Respondents in
CHENNAI – 600 018. both petitions.
Petitions under Article 226 of the Constitution of India to issue Writ
of Certiorarified Mandamus and Writ of Mandamus as stated therein.
!For petitioner in W.P. : Mr. Sriram Panchu, Sr.Counsel,
Nos.25219 and 25220 for M/s. T. Mohan
of 2001
For Petitioner in W.P. : Mr. K.M. Vijayan, Sr. Counsel,
No.23807 of 2001 for M/s. La Law
For 1st Respondent in : Mr. R. Muthukumaraswamy,
both the petitions Addl. Advocate General,
assisted by Mrs. T. Kokilavani,
Govt. Advocate and Mr.
Vasudevan
For 2nd Respondent in : Mr. Vasudevan
both the W.Ps.
For 3rd Respondent in : Mr. K.S. Natarajan
W.P. Nos. 25219 and
25220 of 2001
: O R D E R
THE HON’BLE THE CHIEF JUSTICE
At issue, is the constitutionality of revision of power tariff by
the State of Tamil Nadu. Tamil Nadu Electricity Board prepares Budget
estimates every year and they are placed before the State Legislature.
For the year 2001 – 2002 too, such Budget estimate was prepared and
was placed before the State Legislature. The revenue gap, after
compiling, between the receipts and expenditure, was arrived at
Rs.2,747.59 Crores. Responding to the same, the Government had issued
G.O. Ms.No.95, dated 28.11.2001 revising power tariff but on
representation being made, the escalation in power tariff was slightly
reduced by later G.O. Ms. No.96, dated 5.12.2001, making the said
modification applicable only to domestic consumers. G.O. Ms. No.95
became effective from 1.12.2001 as modified by G.O. Ms. No.96. The
above three writ petitions are pro bono publico. First in order is
W.P. No.23807 of 2001 followed by W.P. Nos.25219 and 25220 of 2001.
While the power to enhance the power tariff is in question in W.P.
Nos.23807 and 25219 of 2001, the relief sought for in W.P. No 25220
of 2001 is quite different, as, in the said Writ Petition, a Mandamus
is sought for to direct the first respondent Government to convene the
Selection Committee to select and appoint the Chairperson and the
Members of the Tamil Nadu State Electricity Regulatory Commission.
Though in the first writ petition, the challenge initially was to G.O.
Ms.No.95, an amendment was sought to challenge G.O. Ms. No.96 and
the said amendment petition was allowed.
2. Mr. K.M. Vijayan, learned senior counsel, appeared for
the petitioner in W.P. No.23807 of 2001 while Mr. Sriram Panchu,
learned senior counsel, appeared for the petitioners in other
petitions viz., W.P. Nos.25219 and 25220 of 2001. The State was
defended by Mr. R. Muthukumaraswamy, learned Additional Advocate
General. Mr. K.S. Natarajan, learned counsel, appeared for the
State Regulatory Commission. Mr. Vasudevan, learned counsel,
appeared for the Tamil Nadu Electricity Board.
3. In first two writ petitions, the questions raised are not
only regarding the power of the State Government to revise power
tariff but also regarding the quantum of escalation, as being
arbitrary and unreasonable. But during the arguments, both M/s. K.M.
Vijayan and Sriram Panchu, learned senior counsel, gave up the issue
relating to the quantum of escalation of power tariff and confined
their arguments on the power and jurisdiction of the State Government
in revising power tariff. The learned senior counsel submit that
after the enactment of Electricity Regulatory Commissions Act, 1998 by
the Parliament, the State Government ceased to have any role in the
matter of revision of tariff for the user of electrical energy and
that the said power is vested only with State Electricity Regulatory
Commission and as such, the impugned Governmental Orders are non est
in law and the power tariff revision ordered therein, is
unenforceable.
4. Mr. K.S. Natarajan, learned counsel appearing for the
Tamil Nadu State Electricity Regulatory Commission, supports the said
argument and submits that the Commission came into force and had been
functional ever since July 1999 and that the impugned Governmental
Orders G.O. Ms. Nos.95 and 96 are fit to be struck down.
5. Countering the said arguments, Mr. R. Muthukumaraswamy,
learned Additional Advocate General, appearing for the State of Tamil
Nadu, submits that even though the Parliament had enacted Central Act
14 of 1998, providing for the constitution of both Central and State
Regulatory Commissions, the State Electricity Regulatory Commission
did not come into force and had been non-functional, and as there was
huge revenue deficit, as is evident from the statement submitted by
the Tamil Nadu Electricity Board, it was imperative on the part of the
State Government to effect the revision without further loss of time,
as, making the Commission functional would entail in further delay and
that the State Government was of the considered view that any further
delay would affect the public interest because of the depletion of
essential revenue source. The learned Additional Advocate General
also submits that there is no repugnancy in the action of the State
Government as the repugnancy arises only when the State Electricity
Regulatory Commission starts discharging its functions effectively as
provided by the Central Act 14 of 1998 and what is to be seen is the
repugnancy ‘in fact’ and not by mere enactment of Central Act on the
same legislative field. Mr. Vasudevan, learned counsel appearing for
the Electricity Board, adopted the argument of the learned Additional
Advocate General.
6. The power tariff in the State of Tamil Nadu was being
revised from time to time invoking the provisions of the Tamil Nadu
Revision of Tariff of Supply of Electricity Energy Act, 1978,
hereinafter referred to as the State Act. Legislation on the power
tariff and revision thereof before the said Act is not relevant.
Section 3 of the State Act contains a non obstante clause empowering
the Government to fix the tariff rates payable to the Tamil Nadu State
Electricity Board, hereinafter referred to as T.N.E.B., by any
consumer, as specified in the Schedule thereto. Section 4 thereof
confers powers on the State Government to amend the tariff mentioned
in the Schedule from time to time. The said provision reads, ‘the
State Government may, after taking into account the cost of production
of energy and such other matters as may be prescribed, by
notification, amend the provisions of the Schedule to this Act’.
The State Act was enacted tapping the Entry 38 of Concurrent List
(List III) of Schedule VII of the Constitution and it received the
assent of the President on 23.2.1979, was gazetted on 3.3.1979 and
brought into effect retrospectively with effect from 1.3.1978.
Exercising the power under Section 4 of the State Act, the State
Government had been revising the tariff from time to time depending
upon the exigencies to do so. The impugned Governmental Orders in
G.O. Ms.Nos.95 and 96 have been issued in exercise of Section 4 of
the State Act making upward revision of power tariff.
7. The Electricity Regulatory Commission Act, 1998,
hereinafter referred to as the Central Act, was enacted by the
Parliament and the same is traced to the same legislative Entry 38 of
the Concurrent List. The Central Act came into force with effect from
25.4.1998. Article 254 of Indian Constitution reads,
“254. Inconsistency between laws made by Parliament and laws made by
the Legislatures of States.- (1) If any provision of a law made by the
Legislature of a State is repugnant to any provision of a law made by
Parliament which Parliament is competent to enact, or to any provision
of an existing law with respect to one of the matters enumerated in
the Concurrent List, then, subject to the provisions of clause (2),
the law made by Parliament, whether passed before or after the law
made by the Legislature of such State, or as the case
may be, the existing law, shall prevail and the law made by the
Legislature of the State shall, to the extent of the repugnancy,
be void.
(2) Where a law made by the Legislature of a State
with respect to one of the matters enumerated in the Concurrent
List contains any provision repugnant to the provisions of an
earlier law made by Parliament or an existing law with respect
to that matter, then, the law so made by the Legislature of such
State shall, if it has been reserved for the consideration of the
President and has received his assent, prevail in that State:
Provided that nothing in this clause shall prevent Parliament from
enacting at any time any law with respect to the same matter including
a law adding to, amending, varying or repealing the law so made by the
Legislature of the State”.
Basing upon the said Constitutional provision, the learned senior
counsel appearing for the petitioners submit that on the advent of the
Central Act with effect from 25.4.1998, the State ceased to have the
power to invoke Section 4 of the State Act and that the revision of
power tariff in Tamil Nadu can now be made only by the Tamil Nadu
Electricity Regulatory Commission, hereinafter referred to as
T.N.E.R.C. The learned Additional Advocate General submits that in
spite of enactment of Central Act, the power still vested in the State
Government as the T.N.E.R.C. did not become functional with no
Chairman and even two Members not having taken oath as contemplated in
sub-Section (4) of Section 19 of the Central Act, which reads, ‘every
member of the State Commission shall, before entering upon his office,
make and subscribe to an oath of office and of secrecy in such form
and in such manner and before such authority as may be prescribed.’
If the Central Act is operative, then the State Act cannot be invoked
and on that count, the impugned G.Os. fall to ground because of the
Parliamentary supremacy provided in Article 254 (1) of the
Constitution. Sub-Article (2) of Article 254 is inapplicable for the
reason that the State did not enact any law superceding the Central
Act. We now proceed to consider as to whether the impugned G.Os. are
repugnant to Section 29 of the Central Act, which reads,
29. Determination of tariff by State Commission. – (1)
Notwithstanding anything contained in any other law, the tariff for
intra-State transmission of electricity and the tariff for supply of
electricity, grid, wholesale, bulk or retail, as the case may be, in
State (hereinafter referred to as the ‘tariff’), shall be subject to
the provisions of this Act and the tariff shall be determined by the
State Commission of that State in accordance with the provisions of
this Act.
8. Out of the judgments cited at Bar, seven judgments are
relevant for discussion and they are (i) KULWANT KAUR AND OTHERS v.
GURDIAL SINGH MANN (2001 (4) S.C.C. 262), (ii) BELSUND SUGAR
CO. LTD v. STATE OF BIHAR AND OTHERS (1999 (9) S.C.C. 620), (iii)
ELECTION COMMISSION OF INDIA v. Dr. SUBRAMANIAM SWAMY
(1996 (4) S.C.C. 104), (iv) INDIAN ALUMINIUM CO. LTD v.
KARNATAKA ELECTRICITY BOARD (1992 (3) S.C.C. 580), (v)
SHABBIR v. STATE (AIR 1965 Allahabad 97), (vi) WATRAP S.
SUBRAMANIA AIYAR v. THE UNITED INDIA LIFE INSURANCE CO.
LTD. (LV M.L.J. 385) and (vii) a decision of this Court W.P.
No.3121 of 1999. While the decisions (i) and (vi) supra are cited by
the learned senior counsel for the petitioners, the rest of the
decisions are cited by the learned Advocate General. The decision of
the Supreme Court in KULWANT KAUR AND OTHERS v. GURDIAL SINGH MANN
(cited (i) supra) deals with the Parliamentary supremacy whenever
there is a clash between the Central legislation and the State
legislation on the topics of legislation in Concurrent List. In the
said case, Section 41 of the Punjab Courts Act, 1918, was held to be
repugnant to Section 100 of the Code of Civil Procedure as amended in
1976. But the learned Additional Advocate General submits that the
situation in the instant case is quite different and that the facts of
this case are more closer to the dicta laid down by the Supreme Court
in the decision in BELSUND SUGAR CO. LTD v. STATE OF BIHAR AND
OTHERS (cited (ii) supra). In that decision, the provision of Bihar
Agricultural Produce Markets Act, 1960 fell for consideration. The
argument was that a particular provision of the State Act empowering
the levy of market fee was repugnant to the Bihar Sugar Cane
(Regulation of Supply and Purchase) Act, 1981 read with Sugarcane
(Control) Order, 1966, and Sugar (Control) Order, 1966, issued under
the Essential Commodities Act. Such question does not arise in this
case. But the learned Additional Advocate General draws our attention
to paragraph 169 of the said judgment and submits that the repugnancy
must exist ‘in fact’ and that inasmuch as the T.N.E.R.C. is not
functioning, there is no repugnancy ‘in fact’ and as such, the
impugned G.Os. are sustainable. In INDIAN ALUMINIUM CO. LTD
v. KARNATAKA ELECTRICITY BOARD (cited (iv) supra), the point was
as to whether Electricity (Supply) (Karnataka Amendment) Act, 1981,
was repugnant to Industries (Development and Regulation) Act, 1951, a
Central legislation. While reiterating the Parliamentary supremacy,
the Supreme Court held that in deciding the question of legislative
competence, the Constitution should not be construed with a narrow or
pedantic approach and as a mere law and it should be construed as a
machinery by which laws are made and such interpretation should be
made broadly and liberally and that the Entries in the Constitution
only demarcate the legislative field of the respective legislature and
do not confer legislative power as such. In the said case, in spite
of the tripartite agreement between the Karnataka Electricity Board,
Karnataka Government and the Indian Aluminium Company, specifying the
electric tariff for a stipulated period, State amendment was brought
forth increasing the tariff and that was questioned as being
unconstitutional and repugnant to the Industries (Development and
Regulation) Act, 1951. Firstly, the matter was dealt with by the
Karnataka High Court and it upheld the contention of the State
Government that even though Section 18-G of the Industries
(Development & Regulation) Act empowered the Central Government to
issue notification on the subject, as no such notification was issued,
the State Act was intra vires the Constitution. The said statement of
law made by the High Court was upheld by the Supreme Court.
9. In our Constitutional scheme, the Parliamentary supremacy
provided in Article 254 of Constitution is well settled. A reading of
Central Act makes it obvious that the Parliament did not intend to
impose on the State Governments to compulsorily constitute State
Electricity Regulatory Commission. The language employed in Sections
3 and 17 of the Central Act makes the above legal position very clear.
Section 3 of the Central Act reads,
3. Establishment and incorporation of Central Commission.
– (1) The Central Government shall, within three months from
the date of the commencement of this Act, by notification in the
Official Gazette, establish a body to be known as the Central
Electricity Regulatory Commission to exercise the powers
conferred on, and the functions assigned to it, under this Act. –
(2) to (5) ………………”
The word ‘shall’ is very significant, which makes it obligatory on the
Central Government to constitute Central Electricity Regulatory
Commission per force. What is more, even a timeframe of three months
reckoning from the date of commencement of the Act has been stipulated
and there is no option for the Central Government but to constitute
the Central Commission and it has been so constituted. In contrast,
Section 17 dealing with the State Electricity Regulatory Commission is
worded differently and not in a mandatory language but it is optional.
Section 17 reads,
“17. Establishment and incorporation of State Commission.
– (1) The State Government may, if it deems fit, by notification
in the Official Gazette, establish, for the purposes of this Act, a
Commission for the State to be known as the (name of the
State) Electricity Regulation Commission.
(2) to (9) ………..”
The words, ‘the State Government may, if it deems fit’, do not impose
any obligation on the State Government to constitute a State
Commission and it is only an enabling provision. There cannot be any
enforcement of an enabling provision. But the State of Tamil Nadu has
opted to constitute the State Commission and T.N.E.R.C. has been
constituted by a notification issued vide G.O. Ms.No.58, Energy
Department, dated 17.3.1999.
10. Now, the lis is in a narrow compass as to whether the
Commission became functional in terms of the Central Act so as to oust
the power and jurisdiction of the State Government to exercise the
power under Section 4 of the State Act.
11. G.O. Ms.No.58, Energy Department, dated 17.3.1999 was
issued by the State of Tamil Nadu constituting T.N.E.R.C. with Mr.
K. Venkatesan, I.A.S. (Retd.) as Chairperson and M/s. E.C.
Arunachalam, Chief Engineer (Retd.) and Mr. M.G. Devasagayam, I.A.S.
(Retd.) as Members. But the Chairperson and Mr. Devasagayam refused
to honour the assignments. Only Mr. Arunachalam assumed charge as a
Member in July, 1999. Later, one Mr. D.S. Hanumantha Rao was
appointed as a Member, who took charge in September, 1999. But no
Chairperson has been appointed. While it is true that they did not
take oath of allegiance as contemplated by sub-Section (4) of Section
19 of the Central Act, they cannot be found fault with, as the State
Government did not frame Rules in that regard. Section 57 of the
Central Act confers power on the State Government to frame the Rules
and clause (b) of sub-Section (2) of Section 57 makes a specific
reference for framing the Rule regarding the form and the manner of
and the authority before whom the oath of office and of
secrecy should be subscribed. The said clause runs, “57. Power of
State Government to make rules. –
(1) ….
(2) In particular and without prejudice to the generality of the
foregoing power, such rules may provide for all or any of the
following matters, namely:-
(a) ….
(b) the form and the manner in which and the authority before
whom the oath of office and of secrecy should be subscribed
under sub-Section (4) of Section 19.”
For acceding to the contention of the State Government that since two
members have not taken oath as contemplated under Section 19 (4) of
the Central Act and as such their presence in the Commission has to be
just ignored, the Government had to perform its statutory obligation
of framing the Rule in that regard. In the absence of framing of a
Rule by the State Government in spite of the Rule-making power
conferred in that regard, it cannot lie in the mouth of the State
Government to contend that two members have not been functioning in
accordance with the Act. Mr. R. Muthukumaraswamy, learned
Additional Advocate General, cites the judgment of a Division Bench of
Allahabad High Court in SHABBIR v. STATE (cited (v) supra) in support
of his argument that in the absence of subscribing oath, the members
cannot be deemed to be functioning. But the ratio of the said
judgment is inapplicable to the instant case. There a Division Bench
of the Allahabad High Court was dealing with the provision contained
in Article 219 of the Indian Constitution, which specifically deals
with subscribing oath. Article 219 reads thus,
“219. Oath or affirmation by Judges of High Courts . –
Every person appointed to be a Judge of a High Court shall,
before enters upon his office, make and subscribe before the
Governor of the State, or some person appointed in that behalf
by him, an oath or affirmation according to the form set out for
the purpose in the Third Schedule.”
The form has been set out in the Third Schedule and by a later
Constitutional Amendment Act, the form was changed and in that
context, adjudication was made by the Allahabad High Court holding
that before entering office, a Judge has to subscribe oath in
accordance with the form set out and in that case, even though the
oath was taken according to the old format, it was held that that was
a mere irregularity. In the Central Act, the procedure relating to
taking oath is left to the Rule-making authority and that is the State
Government in so far as the State Commission is concerned and as
already stated above, the State Government has failed to frame Rule.
The judgment of the Allahabad High Court referred to above is,
therefore, not of any help to the State Government. On the other
hand, the argument of Mr.Sriram Panchu, the learned senior counsel
appearing for some of the petitioners, is that the State Government
having failed to frame the Rules cannot turn back and take advantage
of its wrong and the judgment cited by him reported in
WATRAP S. SUBRAMANIA AIYAR v. THE UNITED INDIA LIFE
INSURANCE CO. LTD. (cited (vi) supra), is acceptable. That apart,
the two members namely M/s.E.C. Arunachalam and D.S. Hanumantha Rao
convened five meetings. They had also framed Conduct of Business
Regulations in exercise of the powers under Section 58 of the Central
Act and in their First Meeting on 8.3.2000, approved for publication
of the said Regulations in the Official Gazette. Pursuant to the
same, the said Business Regulations were gazetted on 17.5.2000.
– Second meeting was held on 20.6.2000. The decision taken
was to accept the financial assistance from M/s. Power Finance
Corporation Ltd (PFC) and authorising D.S. Hanumantha Rao to execute
the agreements, deeds and other relevant documents with other
financial institutions.
– The third meeting was held on 3.10.2000 to fill up the
post of Secretary in T.N.E.R.C. under Section 21 (1) of the E.R.C.
Act, 1998. It is mentioned therein that T.N.E.R.C. was constituted
by the Government vide G.O. Ms.No.58 Energy (A1) Department, dated
17.3.1999, that members have assumed charge during July and September
1999, that the Commission started functioning with skeleton staff
sanctioned by the Government and framed various Regulations and
gazetted them also and considering the increase in the work, filling
up the post of Secretary was sought for and the
name of R. Balasubramanian, Executive Engineer, T.N.E.B. on
deputation to T.N.E.R.C. was suggested.
– The fourth meeting was held on 14.11.2000 reiterating the
Resolution to accept the financial assistance from P.F.C. for
procurement of computer based projection equipment and to authorise
D.S. Hanumantha Rao to sign the necessary papers.
– The fifth meeting was held on 16.3.2001 seeking
upgradation of the post of Secretary from that of Executive Engineer
to Superintending Engineer and to continue Mr. Balasubramanian on
promotion as Superintending Engineer as Secretary of T.N.E.R.C. Mr.
Balasubramanian has been promoted to the post of Superintending
Engineer with effect from
4.12.2000 vide (Permanent) B.P. (Ch) No.301, Secretariat Branch,
dated 4.12.2000. It has been decided to allow the following perks
available to his grade in the Tamil Nadu Electricity Board, i.e. as
Superintending Engineer, T.N.E.R.C. from the date of his joining as
Superintending Engineer.
1. Providing vehicle facility from his residence to office and back;
2. Purchase of one Tamil and one English newspaper at his residence;
3. To pay his residence telephone bill to the extent used for
official purpose. After this, there is no meeting of T.N.E.R.C.
12. In view of the above, we are unable to countenance the
argument of Mr.R.Muthukumaraswamy, learned Additional Advocate
General, that existence of the above two members in the State
Commission can be treated as non est in law. The Doctrine of
Necessity relied upon by the learned Additional Advocate General and
the decision cited by him in ELECTION COMMISSION OF INDIA v. Dr.
SUBRAMANIAM SWAMY (cited (iii) supra) have got no relevance in so far
as this case is concerned. The Supreme Court has propounded the
Theory of Doctrine of Necessity in a different context.
13. If we stop here, then the writ petitions are necessarily to be
allowed, which would result in the quashing of the impugned
notifications. But there is another aspect to the matter and that is
the absence of the Chairperson. Learned Additional Advocate General
submits that even if the members can be deemed to be functioning, the
Commission had been non- functional and particularly in the context of
revision of power tariff. The State Electricity Regulatory Commission
shall consist of a Chairperson and two Members. There cannot be a
Commission without a Chairperson. Indisputably, there had been no
Chairperson ever since the constitution of T.N.E.R.C. as Mr.
Venkatesan, who was appointed as Chairperson, has refused to assume
the office and relinquished his appointment. It is ununderstandable
as to why no effort has been made by either the previous Government or
the present Government to appoint a Chairperson. The
successive Governments ought to know that the Commission cannot
function in terms of Central Act for realising the Objects and
Intendment of the Act unless the Chairperson is appointed, as the
Chairperson is the Chief Executive of the State Commission. While it
was open to the State Government not to constitute the State
Commission, as already stated above that Section 17 of the Central Act
is only an enabling provision, but having constituted the Commission
in exercise of the power under Section 17 of the Central Act, it was
incumbent upon the State Government to see that T.N.E.R.C. functions
effectively. Not only there is in-action on the part of the present
Government in this regard but the previous Government also was a party
to in-action. It is interesting to refer to the action of the
previous Government in exercising the power of revision of power
tariff culminating in G.O. Ms.No.3, Energy Department, dated
7.1.2000. In the Note of the Energy (A-1) Department, dated 3.5.1999,
it was noticed that even though
G.O. Ms.No.58, dated 17.3.1999 was issued constituting Tamil Nadu
State Electricity Regulatory Commission with a Chairperson and two
members for the purpose of rationalisation of electricity tariff etc.,
the Chairperson and two Members have not taken oath of office till the
said date and even if the Commission assumes office, it may take some
time to settle down and take up the work assigned and inasmuch as the
last revision of electricity tariff was ordered in July 1998 and there
was necessity to increase the said tariff in view of the gap between
revenue and expenditure, the Law Department’s clarification was sought
for was as to whether it is legal for the State Government to take up
revision of electricity tariff based on the proposal of Tamil Nadu
Electricity Board as was done on earlier occasions. The Law
Department, by its reply note dated 10.5.1999, has clarified the legal
position that the Commission cannot function if the Chairperson and
Members have not assumed the charge and only when they assume charge,
the question of their functioning will come into effect and sought for
information in that regard from the Energy Department. The Energy
Department, by its note dated 12.5.1999, clarified that the
Chairperson and other two Members have not taken oath of office so far
then and hence, the Chairperson and other two Members have not assumed
charge so far and no office of S.E.R.C. has started functioning. By
its Note dated 9.6.1999, the Law Department opined that merely because
the Regulatory Commission has been constituted, it cannot be concluded
that the State Government is deprived of its power to discharge the
functions till the Regulatory Commission starts functioning
effectively and as per the requirements of the Act. This was on the
premise that the Regulatory Commission had not started functioning;
then the opinion given was that it is open to the State Government to
take up the revision of electricity tariff based on the proposal
of T.N.E.B. as was done hitherto. This Note was accepted by Energy
Department on 19.6.1999. On 24.9.1999, the Energy Department had
again sought for a clarification from the Law Department stating that
even though one Mr. K.Venkatesan was appointed as the Chairman of
S.E.R.C., he has conveyed his inability to take up the post on health
grounds but members M/s. E.C. Arunachalam and D.S. Hanumantha Rao
have assumed their office on 1.7.1999 and 22.9.1999 respectively and
the Commission has also found a rental premises at Alwarpet, Chennai
and started its office with skeleton staff taken from Tamil Nadu
Electricity Board on deputation and as to whether in the said
circumstances, the Government could embark on
exercise for revision of electricity tariff. But by Note dated
26.9.1999, the Law Department has sought for some more particulars
from the Energy Department and the Energy Department having given the
same on 27.6.1999, the Law Department, by its Note dated 6.10.1999,
has opined that the process of constitution of State Commission has
not reached its completion and therefore, the requirement as to
notification in the official gazette regarding the Head Office has not
been carried out and apart from
this unfulfilled statutory requirement, there is no Chairman for the
Commission and in the circumstances, previous Note holds good and it
is open to the Government to effect revision of tariff rate as
effected hitherto.
The result is the revision of power tariff effected by issuance of
G.O. Ms.No.3, Energy Department, dated 7.1.2000 referred to supra.
Of course, the present Government has repeated the feat of its
predecessor by issuing the impugned G.Os. on the same analogy that
since T.N.E.R.C. is not
functional without their being Chairperson and a Member, treating one
Member as not conforming to the mandatory requirement of the Central
Act to discharge the functions of the State Commission. We are unable
to appreciate the lethargic attitude of the successive Governments in
not giving full effect to the functioning of T.N.E.R.C. But on that
count, we cannot set at naught the impugned Governmental Orders. A
Full Bench judgment dated 6.4.1999 rendered by this Court in W.P.
No.3121 of 1999, cited by the learned Additional Advocate General is
relevant in the context of this case. In the said case, arising out
of Administrative Tribunals Act, 1985, the writ
petition was entertained by this Court in the matter relating to
service, which has to be dealt with by the Administrative Tribunal.
The Administrative Tribunal was having only a single Administrative
Member and in that context, it was held that as the Tribunal was not
functional, the High Court was having jurisdiction to entertain the
writ petition under Article 226 of the Constitution of India. It may
be relevant to point out that in view of Constitution (42nd) Amendment
Act, 1976, Article 323-A was introduced investing the Parliament with
power of enacting a law for the Constitution of some Tribunals
including Administrative Tribunal and the Supreme Court in
L. CHANDRAKUMAR v. UNION OF INDIA (AIR 1997 S.C. 1125), held
that the service matter should first be filed before the
Administrative Tribunal and only then, the High Courts would be
entitled to entertain the writ petition under Article 226 of the
Constitution of India at the instance of the aggrieved party. Similar
is the situation in the instant case. While there
had been in-action on the part of the successive Governments in not
making T.N.E.R.C. functional by exercising the powers conferred under
the Central Act, we cannot ignore the public interest involved as
there had been necessity to revise the tariff of electrical energy by
upward revision to make the electricity supply financially viable.
14. In view of what is stated supra, we uphold the impugned
G.O. Ms. Nos.95 and 96, dated 28.11.2001 and 5.12.2001 respectively
and dismiss the W.P. Nos.23807 and 25219 of 2001. We allow W.P.
No.25220 of 2001 and direct the State Government to make the
T.N.E.R.C. fully functional to act in consonance with the Central
Act.
15. We make it clear that future power revision tariff shall
be done only by T.N.E.R.C. The first respondent shall frame the Rules
under Section 57 of the Central Act within a period of 15 days from
today. To avoid unnecessary litigation in future, the Chairperson and
Member, who are said to have been appointed just the other day, be
directed to subscribe oath in accordance with the Rule to be framed as
directed above.
16. With regard to Business Regulations, which have been
framed by two Members, we need to clarify that we referred to the
framing of the said Regulations only in the context of the effect of
the erstwhile Members not subscribing to oath and to point out that in
the absence of the framing of statutory Rules by the State Government,
assumption of charge by the said members and continuing to function as
such, cannot be found fault with. T.N.E.R.C., after it becomes
functional as directed above, shall look into the aspect as to whether
Business Regulations already framed and gazetted should be re-issued
or not. In the facts and circumstances of the case, we
direct the parties to bear their own costs.
(B.S.R., CJ) (V.K., J)
bh/
14.06.2002