{"id":45409,"date":"2006-04-28T00:00:00","date_gmt":"2006-04-27T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/oswal-woolen-mills-ltd-vs-punjab-state-electricity-board-on-28-april-2006"},"modified":"2016-07-28T13:45:19","modified_gmt":"2016-07-28T08:15:19","slug":"oswal-woolen-mills-ltd-vs-punjab-state-electricity-board-on-28-april-2006","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/oswal-woolen-mills-ltd-vs-punjab-state-electricity-board-on-28-april-2006","title":{"rendered":"Oswal Woolen Mills Ltd vs Punjab State Electricity Board & … on 28 April, 2006"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Oswal Woolen Mills Ltd vs Punjab State Electricity Board & … on 28 April, 2006<\/div>\n
Author: S.B. Sinha<\/div>\n
Bench: S.B. Sinha, P.K. Balasubramanyan<\/div>\n
           CASE NO.:\nAppeal (civil)  2335 of 2006\n\nPETITIONER:\nOswal Woolen Mills Ltd.\n\nRESPONDENT:\nPunjab State Electricity Board & Anr.\n\nDATE OF JUDGMENT: 28\/04\/2006\n\nBENCH:\nS.B. Sinha & P.K. Balasubramanyan\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T<\/p>\n
[Arising out of SLP (Civil) Nos.1398-1442 of 2005]
\nWITH
\nCIVIL APPEAL NOS. 2334 OF 2006
\n[Arising out of SLP (Civil) Nos,15357-15358 of 2005]<\/p>\n
S.B. SINHA, J :\n<\/p>\n
\tLeave granted.\n<\/p>\n
\tThe appellant is a mill represented by its authorized representative.
\nFor the purpose of its working, it at all material times was and still is a
\nconsumer of electrical energy.  It had for the said purpose taken electrical
\nconnection from the respondent-Board.  The connected load is 6664 KW.  In
\nterms of the tariff framed by the Board, the  Appellant  herein (Company)
\ncomes under the category of ‘general industry’. The Board on or about
\n21.01.1991  issued   a  circular  whereby  it proposed to levy surcharge @ 17
\n= % on the actual consumption of electricity in respect of those industrial
\nconsumers who had  been  sanctioned load exceeding 5000 KW or
\nsanctioned contract demand exceeding 5000 KVA and had supply from  a 11
\nKV line.  The said circular stipulated that surcharge would continue to be
\nlevied till conversion of supply to 33 KV or higher voltage by the
\nconsumers.  It is, however, not in dispute that a letter was issued to the
\ncompany intimating that for installation of 66 KV Sub Station, a site plan
\nwas required to be supplied.\n<\/p>\n
\tYet again by circular dated 30.05.1991, it was stipulated :\n<\/p>\n
\t“Continuation to CC No.5\/91 dt. 21.1.91 vide
\nwhich it was decided  to levy surcharge @ 17% on
\ngeneral industrial consumers having sanctioned
\nload\/demand exceeding 5000 KW\/KVA and running at
\n11 KV till conversion of supply to 33 KV or higher
\nvoltage.  The matter has been reconsidered by the Board
\nand it has been decided that the surcharge @ 17 =% shall
\nbe levied on such consumers who do not switch over
\ntheir supply system to 33 KV and higher voltage in line
\nwith the following provisions :\n<\/p>\n
i)\tA lead time of 12 months may be given to all the
\nexisting consumers having load\/demand above
\n5000 KW\/KVA and running at 11 KV to convert
\nsupply to higher voltage within stipulated period.
\nThis period includes the time spent on getting
\nestimated cost of works, deposit of charges with
\nthe PSEB and erection of 33 KV or higher voltage
\nworks by the consumer as well as by the PSEB .\n<\/p>\n
The time schedule for different activities involved
\nfor erection\/completion of higher voltage works
\nshall be fixed by the load sanctioning authority,
\nand any slippage\/evasion in adhering to the laid
\ndown targets on the part of the consumer shall
\nattract levy of surcharge @ 17 =%.  In case after
\nthe stipulated period, the higher voltage works of
\nthe consumers are ready but the works of the
\nPSEB are not ready, surcharge shall not be levied
\nand also likewise if the Board’s works of higher
\nvoltage are ready but the consumers are not ready
\nthis surcharge shall be leviable     <\/p>\n
\tThe validity of the said circular dated 21.01.1991 came to be
\nquestioned by the company in a writ petition, filed before the High Court,
\nwhich was marked as CWP No.7069 of 1991.  In the meanwhile, the said
\ncircular letter was modified by the Board, in terms whereof it was stipulated
\nthat a time of 12 months extendable  upto the maximum of 18 months was to
\nbe  granted to all the existing consumers having load above 5000 KW\/KVA
\nand running at 11 KV to convert supply system to higher voltage.\n<\/p>\n
\tAnother letter dated 19.09.1991 was issued by the Board intimating it
\nthat electric supply had to be converted to 66 KV and hence the company
\nwas required to show the place of installation of 66 KV sub-station, failing
\nwhich a penalty @ 17 =% would be levied.  A further letter was issued by
\nthe Board demanding a sum of Rs.34 lacs towards the tentative cost of
\nconversion.  The writ petition filed by the company, however, was disposed
\nof stating :\n<\/p>\n
“In the short reply filed on behalf of the Electricity
\nBoard, it is stated that from the petitioners 17 =%
\nsurcharge collected will be adjusted in the subsequent
\nbills.  It is further mentioned that there would be
\nconversion from 11 KV to 33 KV or 66 KV.  Certain
\nformalities are to be observed by both the parties in that
\nconnection and one year’s time has been given to the
\npetitioners to comply with the directions.  However,  it is
\nmade clear that the period of one year would start from
\nthe pointing out of feasible point for installation of sub
\nstation at the factory premises by the Board.”\n<\/p>\n
\t\t\t[Underlining is ours for emphasis]<\/p>\n
\tYet again, without complying with the said directions, a demand was
\nmade by the Board from the company for depositing the said amount of
\nRs.34 lacs.  On or about 14.02.1992, the company replied to the said letter
\nstating that the matter was pending adjudication before the civil court and
\nfurthermore no other feasible point had been pointed out by the officers of
\nthe Board so far.  A site plan was again sought for from the company by the
\nBoard by a letter dated 13.05.1992, wherein it was stated :\n<\/p>\n
\t“Your kind attention is drawn to above references
\nand it is requested that the site plan and site for the
\nconstruction of 33\/66 KV Sub grid must be shown to the
\nundersigned within 7 days and according to the
\ninstructions of the Board  required amount may be
\ndeposited so that further action may be taken otherwise
\n17 =% surcharge will be levied.”\n<\/p>\n
\tIn exercise of its powers under Sections 46 and 49 of the Electricity
\n(Supply) Act, 1948, (for short, ‘the Act’) the Board made a tariff which
\ncame into force with effect from 01.02.1994.  Section (B) of the said tariff
\nrefers to the schedule thereof the relevant portion of which reads as under  :\n<\/p>\n
“Schedule of Tariff<\/p>\n
\t\tSchedule LS.-Large Industrial Power Supply<\/p>\n
1.\tAvailability<\/p>\n
(i)\tThis tariff shall apply to consumers having
\nindustrial connected load above 100 KW.  Their
\ncontract demand shall not be less than 100 KVA
\n(85 KW).\n<\/p>\n
(ii)\tNo consumer availing supply of energy at high
\ntension 11000 volts and  above (33 KV and above
\nfor Arc furnace) shall increase his connected load
\nwithout approval of the Board.  The consumer
\navailing supply at high tension shall indicate the
\nrating capacity of all the step-down transformer(s)
\ninstalled in his premises and shall not increase the
\ncapacity of such step-down transformer(s) without
\nprior approval of the Board.”\n<\/p>\n
Clause 3 of the Schedule of Tariff reads as under :<\/p>\n
\n\n\n\t\"(A) General Category\n\na)\tConsumers with connected load less than \n1000  KW\t    \t\t\t 153 Paise\/Unit\n\n<\/pre>\n
b)\tConsumers with connected load 1000 KW and
\nabove :\n<\/p>\n
Demand Charges\t\t\t Rs.90\/KVA\nPLUS\nEnergy Charges\t\t\t128 Paise\/Unit\nMaximum overall rate\t\t163 Paise\/Unit\n\n(B)\tPower Intensive Units\n\na)\tConsumers with connected load less than\n1000 KW\t\t\t\t 158 Paise\/Unit\n\n<\/pre>\n
b)\tConsumers with connected load 1000 KW and
\nabove<\/p>\n
Demand Charges\t\t\tRs.90\/KVA
\nPLUS
\nEnergy charges\t\t\t133 Paise\/Unit
\nMaximum overall rate\t\t168 Paise\/Unit<\/p>\n
\tThe energy charges under category (A) and (B)
\nabove shall be without prejudice to the Monthly
\nMinimum Charges leviable under item 7 of this Schedule
\nL.S.\n<\/p>\n
Note  (i)\t<\/p>\n
(ii)\tSurcharge of 17 =% on the above tariff shall be
\nleviable for all the Arc furnace load consumers
\nwhich are being given supply at 11 KV.”\n<\/p>\n
\tFrom note (ii) of the aforesaid tariff, it is, therefore, evident that
\nsurcharge @ 17=% thereupon was leviable only for all the Arc Furnace load
\nconsumers which were being given supply at 11 KV.  Moreover, these other
\nmills which were liable to bear the specified surcharge were specifically
\nmentioned in the tariff notification.  It is also not in dispute that prior to
\nissuance of the said notification, executive orders had been issued levying
\nsuch surcharge.    The said executive order, however, was later on made part
\nof the tariff.\n<\/p>\n
\tHowever, on 26.07.1991, a notification was issued under Sections 46
\nand 49 of the  Act inter alia stating :\n<\/p>\n
“(b)\tFor consumers with connected load of 1 MW and
\nabove<\/p>\n
Demand Charges\t\t\tRs.60\/- per KVA
\n\t        Plus\t\t\t\t\tPlus
\nEnergy charges\t\t\tRs.83 paise\/unit<\/p>\n
\tSubject to max. rate of 107 P\/Unit without
\nprejudice to the MMC under item  7 of this Schedule
\nLS<\/p>\n
i)\t<\/p>\n
ii)\tSurcharge of 17 =% on the above tariff shall be
\nleviable for all the Arc furnace load consumers
\nwhich are being given supply at 11 KV.\n<\/p>\n
iii)\t”\n<\/p>\n
\tQuestioning the said demand, admittedly, a suit was filed by the
\ncompany. The trial court  as also the appellate court on the basis  of the
\nmaterials brought on record came to the conclusion that the Board could
\nlevy such surcharge only with effect from 13.05.1992.\n<\/p>\n
\tBy reason of the impugned judgment the High Court opined :\n<\/p>\n
\t“Learned counsel for the appellant could not point
\nout any clause in the circular which stipulates the
\nmodification or suppression of the earlier circular dated
\n21.01.1991 and 03.05.1991.  In the absence of any
\nsupersession of notifications, I am unable to hold that
\nsuch notification stood superceded by virtue of a fresh
\nnotification dealing with revision of tariff for general
\ncategory consumers as well as contemplate levy of
\nsurcharge for the ARC furnace load consumers.  There is
\nno clause in the said circular that surcharge will be
\nleviable only on the ARC furnace.  Still further, such
\nargument was not raised before the courts below.
\nTherefore, it is apparent that levy of surcharge by
\nnotification dated 21.01.1991 and 03.05.1991 was never
\nsuperceded.”\n<\/p>\n
\tA limited notice was issued by this Court on the special leave petition
\nfiled by the company as to whether revision of tariff issued as per the memo.
\nNo.10061\/10761\/CC\/T\/2\/Rev.\/Vol.XIII dated 01.02.1994 was applicable to
\nthe company  or not.  The Board has also approached this Court in regard to
\nthe question as to whether the one year period should be calculated from
\n13.05.1992 or from the date of issuance of the notification.\n<\/p>\n
\tTwo questions, thus, arise for our consideration in these appeals : (i)
\nWhether the High Court is correct in holding that in view of the fact the
\nmatter relating to payment of surcharge was governed by circulars, which
\nhaving  not been  superseded by the  notification dated  21.01.1991 and
\n03.05.1991 the impugned demand was valid in law; and (ii) what would be
\nthe proper interpretation of the judgment of the Division Bench of the
\nPunjab and Haryana High Court dated 29.01.1992 <\/p>\n
\t The Board is a creature of the statute.  It is constituted in terms of
\nSection 5 of the Act.  It is incorporated and  can sue and be sued in its own
\nname in terms of Section 12 thereof.  Section 46 of the Act provides for the
\nGrid Tariff  and  Section 49 thereof empowers the Board to make provision
\nfor the sale of electricity by it to persons other than the licensees.   While
\nexercising  the said power the Board would be governed by the general
\nterms which may be issued by the State in terms of Section 79 of the Act.
\nSurcharge by way of additional rate or penalty can be levied only in terms of
\na tariff notification.  Such a power, therefore, can be exercised by the Board
\nonly in exercise of its statutory power and not by reason of an executive
\npower.  In terms of a circular letter issued by the Board, therefore, neither
\nany surcharge nor any penalty could be levied.\n<\/p>\n
In the year 1991, indisputably, the said circular letter dated
\n21.01.1991  was followed by the tariff notification issued in terms of
\nSections 46 and 49 of the  Act.  The subsequent circular letter dated
\n03.05.1991 was, however, not followed by any notification making the tariff
\napplicable with retrospective effect.\n<\/p>\n
We have noticed hereinbefore that the tariff notification dated
\n26.07.1991 speaks of levy of such surcharge  inter alia on Arc furnaces.
\nSimilar is the position in regard to the  notification dated 01.02.1994.  The
\nBoard, therefore, could levy surcharge only in terms of the notification and
\nnot by reason of any circular letter.  As in the notification, it has clearly been
\nstated that 17 =% surcharge on the above tariff should be leviable for all the
\nArc furnace load consumers which were being given the supply at 11 KV,
\nthe High Court clearly fell in error in arriving at the finding that by reason of
\nthe said notification, the circular letters dated 21.01.1991 and 03.05.1991
\nwere not superseded.  The Board being a statutory authority, its power to
\nissue bills for consumption of the electricity would be governed solely by
\nthe tariff notification.  It being a statutory authority must act within the four-
\ncorners of the statute.\n<\/p>\n
\tThe High Court, therefore, in our opinion was clearly wrong in
\narriving at the finding that the earlier notifications dated 21.01.1991 and
\n03.05.1991 were not superseded.  The High Court failed to pose unto itself
\nthe correct question, namely, as to whether after issuance of the tariff
\nnotification, the Board could levy any surcharge @ 17 =% on the tariff  on
\nthose consumers who did not have Arc furnace.   The High Court, therefore,
\nmisdirected itself in law in passing the impugned order.\n<\/p>\n
\tThe question which falls for consideration is from which date the
\nperiod of one year could have started.  Although on the basis of the
\naforementioned finding, the Company could have contended that from
\n13.05.1991, no surcharge could have been levied, but it did not raise such a
\ncontention before the High Court.\n<\/p>\n
  \tWe have seen that herein also a limited notice was issued.\n<\/p>\n
\tIt is not in dispute that for the purpose of giving effect to the offer
\nmade by the Board in terms of its letter dated 30.05.1991, no surcharge
\ncould have been levied immediately.   A  Division Bench of the High Court,
\nas noticed hereinbefore, by an order dated 29.01.1992 clearly stated that the
\nperiod of one year would start from the date when the feasible point is
\npointed out.\n<\/p>\n
\t The observation of the High Court in the earlier writ petition was in
\nthe nature of a direction.\n<\/p>\n
\tThe submission of Mr. Ranjit Kumar, the learned Senior Counsel
\nappearing on behalf of the Board, in this behalf, cannot be accepted.
\nNormally the period should be counted from the date of issuance of the
\nnotification and not from the date of the High Court’s judgment. The High
\nCourt, however, made observations, whereupon both the parties acted.  The
\nsaid observations were made in terms of the affidavit affirmed on behalf of
\nthe Board itself.\n<\/p>\n
\tThe High Court’s direction leads only to one conclusion that the cut-
\noff date would be considered to be one in futuro, i.e., a date after 29.01.1992
\nalone was required to be fixed.\n<\/p>\n
 \tOnce the final notice by the Board had been issued, the negligence on
\nthe part of the consumer to point out the actual site had not been condoned
\nby the courts.\n<\/p>\n
\tThe High Court’s observations might be incorrect; but then the same
\nwas accepted.   As indicated hereinbefore, the parties acted thereupon.  The
\nperiod of one year in terms of the judgment of the High Court, therefore,
\nwas to start from the date when the feasible point for installation of Sub
\nStation at the factory premises by the Board was pointed out.  Selection of a
\nsite for the purpose of drawing 33 KV line was not an empty formality.
\nSeveral factors including the convenience of the Board were required to be
\ntaken into consideration. In some cases probably compensation for
\nacquisition of land was required to be paid.\n<\/p>\n
\tAll the courts had arrived at a finding of fact, having regard to the
\nBoard’s letter dated 03.12.1992 that the final notice in terms of the said
\ncircular had been given only on 13.05.1992.  The company had contended
\nthat actual feasibility was found out on 28.05.1994, but as noticed
\nhereinbefore, the court did not accept  its  plea that even the date of the said
\nnotice could not have been considered to be the date for the purpose of the
\nstarting point of the period of  one year.\n<\/p>\n
\tFor the reasons aforementioned, although Mr. R.K. Jain, the learned
\nSenior Counsel appearing for the company, may be right in his submission
\nthat the Board has no jurisdiction to levy surcharge after 29.01.1992, but as
\nthe said contention had not been raised and furthermore as notice was issued
\nby the court on a limited question, we are of the opinion that the company is
\nliable to pay the surcharge with effect from 13.05.1992.  We may
\nfurthermore notice that the actual amount of surcharge payable from that
\ndate has already been paid by the company to the Board.  However, in view
\nof our findings aforementioned, there cannot be any doubt that the surcharge
\n@ 17 =% was not required to be paid in terms of the tariff  notification
\ndated 01.02.1994.\n<\/p>\n
\tFor the reasons aforementioned, the Civil Appeals arising out of
\nS.L.P. (Civil) Nos. 1398-1442 of 2005 preferred by the Company are
\nallowed to the aforementioned extent and the Civil Appeals arising out
\nS.L.P. (Civil) Nos. 15357-58 of 2005 preferred by the Board are dismissed.
\nIn the facts and circumstances of the case, the parties shall pay and  bear
\ntheir own costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Oswal Woolen Mills Ltd vs Punjab State Electricity Board & … on 28 April, 2006 Author: S.B. Sinha Bench: S.B. Sinha, P.K. Balasubramanyan CASE NO.: Appeal (civil) 2335 of 2006 PETITIONER: Oswal Woolen Mills Ltd. RESPONDENT: Punjab State Electricity Board & Anr. DATE OF JUDGMENT: 28\/04\/2006 BENCH: S.B. Sinha & P.K. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-45409","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nOswal Woolen Mills Ltd vs Punjab State Electricity Board & ... on 28 April, 2006 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/oswal-woolen-mills-ltd-vs-punjab-state-electricity-board-on-28-april-2006\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Oswal Woolen Mills Ltd vs Punjab State Electricity Board & ... on 28 April, 2006 - 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