And Another vs West Bengal State Electricity ...
2022 Latest Caselaw 8680 Cal

                            In the High Court at Calcutta
                           Constitutional Writ Jurisdiction
                                    Appellate Side



The Hon'ble Justice Sabyasachi Bhattacharyya



                              W.P.A. No.20408 of 2017

                Kalimata Ispat Industries Private Limited
                               and another
                                     Vs.
        West Bengal State Electricity Distribution Company Limited
                               and another


     For the petitioners              :     Mr. Tanoy Chakraborty,
                                            Mr. Kallol Saha,
                                            Mr. Shounak Mukhopadhyay

     For the WBSEDCL                  :     Mr. Sujit Sankar Koley

     Hearing concluded on             :     15.12.2022

     Judgment on                      :     23.12.2022




     Sabyasachi Bhattacharyya, J:-



1.   The petitioner no.1 is a manufacturer and supplier for the Indian Railways

     and has its factory at 1/98, Bidhan Sarani, Saheb Dihi, Barjora, District-

     Bankura. Both the Damodar Valley Corporation (DVC) and the West Bengal

     State   Electricity     Distribution   Company    Limited   (WBSEDCL)   are

     Distribution Licensees authorised to supply electricity to the consumers

     within the said command area. The petitioner no.1 is a consumer of

     WBSEDCL.

2.   The petitioner no.2 is a Director of the petitioner no.1.
                                        2


3.   The petitioner no.1 has been taking electricity supply from the WBSEDCL

     and has preferred the instant writ petition contending that all benefits of

     the Scheme notified by the respondent no.1 (WBSEDCL) on October 15,

2015 have not been given to the petitioners and seeking extension of such

benefits as well as refund of a sum of Rs.16,81,155/-, being allegedly the

actual financial loss of the petitioners in the form of difference in revenue

collected by the WBSEDCL.

4. The petitioners also claim benefits of Load Factor Rebate (including

additional Load Factor Rebate) as per the Scheme of extension of additional

rebate notified by the WBSEDCL in its Notice dated February 10, 2017 on

the basis of the Order dated February 8, 2017 passed by the West Bengal

Electricity Regulatory Commission (WBERC).

5. It is contended that as per the Scheme Dated October 15, 2015, effect to

the same had to be given from 15 days after the Notification, that is, from

November 1, 2015 but with regard to the petitioners, effect has been given

only from the month of February, 2016, thereby subjecting the petitioners

to a loss of Rs.16,81,155/-, a chart containing the break-up of which is

also given by the petitioners.

6. The petitioners applied for rebate under the Notification dated October 15,

2015 on October 29, 2015.

7. Vide Letter dated February 11, 2016, the WBSEDCL indicated that the

effect of the said Notification in respect of the petitioner would be given

from the month of February, 2016. The WBSEDCL reiterated such stand

on April 21, 2016, refusing the petitioners' claim on the ground that no

retrospective effect had been allowed by the competent authority.

8. It is argued by learned counsel for the petitioners that the petitioner no.1 is

entitled to tariff at competitive rates as per the Notification dated October

15, 2015 since November 1, 2015. In view of such specific representation

having been given by the WBSEDC, which is a public authority, the said

authority is bound under the principles of promissory estoppel and

legitimate expectation to give such benefit to the petitioners from the

appointed date. However, such benefit was refused to the petitioners

without any cogent reason. For such proposition, learned counsel for the

petitioners relies on the Judgment reported at (2020) SCC OnLine 968 [State

of Jharkhand and others Vs. Brahmputra Metallics Ltd., Ranchi and

another].

9. It is next contended that vide Order dated February 8, 2017 passed by the

WBERC on an application submitted by the WBSEDCL for issuance of

order on a Scheme for revenue enhancement through increased sale to the

industries under WBSEDCL through rationalization under Regulation 8.10

of the Regulation No.48 dated April 25, 2011 of the WBERC, it was

categorically decided that the load factor rebate as proposed in the Scheme

would be in addition to the rebate already allowed in the tariff order in

respect of WBSEDCL for 2016-2017 for respective categories of consumers.

It is also stated therein that the WBSEDCL shall publish a notification in

this regard, clearly mentioning the rates of rebates and the consumers to

whom those would be applicable, before introduction of such Scheme both

in the newspaper and on the website of WBSEDCL.

10. Pursuant to such order, the WBSEDCL issued a Notice on February 10,

2017, whereby the Revenue Enhancement Scheme of the WBSEDCL was

made effective from the consumption-month of February, 2017.

11. It is argued that the said Scheme contemplates exemption in Demand

Charge for additional drawal up to 50 per cent from existing 30 per cent

during off-peak period for all 33 and 132 KV industrial consumers, within

which category the petitioner no.1 also comes.

12. It is argued that since the said exemption has been applied to all such

industrial consumers, the WBSEDCL acted patently without authority in

refusing the same to consumers enjoying competitive rates. It is argued

that such action is de hors the Order of the WBERC as well as violative of

Article 14 of the Constitution of India. Discrimination has been

unreasonably made between the competitive rate-holders and other

consumers, thereby creating a class within a class, which is not sanctioned

in law.

13. Learned counsel for the petitioners further contends that as per the first

proviso to Clause 2.1.1 of Chapter-II of the 2011 Regulation, which speaks

of determination of tariff in case of distribution of electricity in the same

area by two or more licensees, the Commission may, for promoting

competition among licensees, fix the maximum ceiling of tariff for retail sale

of electricity. It is further argued that as per Clause 8.10 of the same

Regulation, if any difficulty arises in giving effect to any order based on the

Regulations, then the Commission, by subsequent supplementary order,

may remove the difficulties keeping consistency with the provisions of the

Act and the Regulations.

14. It is submitted that the WBSEDCL acted in contravention of such

provisions in refusing to extend the rebates-in-question to the petitioners.

15. Learned counsel for the WBSEDCL argues that as per the first proviso of

Section 66 of the Electricity Act, 2003 (for short, "the 2003 Act") as well as

the third proviso to Clause 2.2.2 of the 2011 Regulations, the appropriate

Commission may, for promoting competition among Distribution Licensees,

fix only the maximum ceiling of tariff for retail sale of electricity and not

further.

16. Inasmuch as the grant of rebates is concerned, nothing is provided in the

said provisions to justify the present challenge.

17. It is further argued that the competitive tariff holders already enjoyed

preferential rates of tariff, due to which the rebate in respect of load factors,

as per the Notification of 2017, was given to the other consumers. As such,

the basis of such classification is reasonable and there is no violation of

Article 14 of the Constitution of India.

18. It is next argued that although the Notification was published on October

15, 2015, the application was filed by the petitioners only on October 30,

2015. About three months were taken to process the said application, due

to which the effect thereof was given from the month of February, 2016. As

such, it is argued that in the absence of any retrospective provision in the

Notification of 2015, the effect of the same could not be given from any

prior date.

19. Upon hearing learned counsel for the parties, it is quite evident from the

first impugned Notification dated October 15, 2015 that the competitive

rates stipulated therein were to be effective after 15 days from the date of

the said Notification. The application in that regard was made by the

petitioners on October 29, 2015, which was, one day prior to expiry of the

15 days after issuance of the Notification.

20. Irrespective of the time taken by the WBSEDCL for processing the said

application, such time cannot have any bearing upon the entitlement of the

petitioners, since the petitioners cannot suffer for such delay.

21. There is no conceivable reason as to why the WBSEDCL flouted its own

Notification, which is the source of the grant of competitive tariff, by giving

effect to such competitive rates for the petitioners from February 1, 2016,

that is, three months after the date of commencement of such rates.

22. A period of 15 days after the issuance of the Notification dated October 15,

2015 brings us to October 30, 2015 and, as such, the petitioner no.1 could

legitimately claim the rates on and from November 1, 2015 itself.

23. Thus, such action of the WBSEDCL is violative of Article 14 of the

Constitution of India as well as patently contrary to its own Notification and

cannot be sustained in law.

24. Insofar as the first proviso to Section 62 of the 2003 Act is concerned, the

same provides that the appropriate commission may, for promoting

competition among the Distribution Licensees, fix only maximum ceiling of

tariff for retail sale of electricity.

25. Neither the said proviso nor any of the provisions of the 2011 Regulations

leaves any scope of discrimination between consumers. As such, there is

no reason why the petitioner no.1 should be deprived of getting the

competitive rates of tariff from November 1, 2015 itself.

26. With regard to the Order dated February 8, 2017 passed by the WBERC,

the same is squarely in consonance with Clause 8.10 of the WBERC

Regulations of 2011. The said clause provides that if any difficulty arises in

giving effect to any order based on these Regulations, the Commission, by

subsequent supplementary order, may remove the difficulties keeping

consistency with the provisions of the Act and the Regulations.

27. The said provision was invoked as the source of power for issuance of the

Order dated February 8, 2017. The order, in fact, was issued by the

Commission, which is authorised under Section 62 to determine the tariff.

28. It is seen from Clause 6.0 of the Order that sub-clause (b) thereof stipulates

that the load factor rebate as proposed in the Scheme will be in addition to

the rebates already allowed in the tariff order in respect of the WBSEDCL

for 2016-2017 for respective categories of consumers.

29. As such, the line of distinction sought to be drawn between consumers

enjoying competitive rates as per the 2015 Notification and those not

enjoying such rebate is artificial and not sanctioned by the Order itself.

30. Sub-clause (d) of Clause 6.0 says that the WBSEDCL shall publish a

Notification in that regard clearly mentioning the rate of rebates and the

applicable consumers before introduction of the Scheme, both in the

newspaper and the website of WBSEDCL.

31. The concerned Scheme, a copy of which is annexed at page 32 of the Writ

Petition, clearly stipulates that the exemption contemplated therein was

intended for all 33 and 132 KV industrial consumers. As such, the

expansive language of the Scheme, read in conjunction with the Order

dated February 8, 2017, does not leave scope for discriminating between

consumers enjoying competitive tariff rates and other consumers. The

principle envisaged in sub-clause (b) of Clause 6.0 of the Order provides

clearly that the load factor rebate contemplated in the latter scheme would

be in addition to and not alternative to the rebates already allowed in the

tariff order of WBSEDCL for 2016-2017.

32. Hence, the said competitive rates of 2016 could not be a relevant yardstick

for discriminating against the competitive tariff consumers inasmuch as the

extension of the 2017 relief is concerned.

33. In the absence of any such distinction being shown by the WBSEDCL, it

has to be deemed that all consumers of electricity fell within the category of

entitlement for Load Factor Rebate as proposed in the Scheme of 2015,

irrespective of whether they enjoyed competitive tariff rates or not.

34. The competitive tariff rates in respect of command areas where more than

one distributors operate and the load factor rebate given to consumers

operate in two different fields and are distinct in scope of operation.

Therefore applicability of one cannot exclude any consumer, if otherwise

entitled, to be deprived of the other benefit.

35. However, since Clause 6.0 (e) of the 2017 Notification stipulates that the

Scheme would be effective on and from the consumption month in which

the Notification was published, there is no irregularity in the effect to the

same being given from the month of February, 2017, since the date of

publication of the concerned Notification was February 10, 2017.

36. Nothing in the Regulations of 2011 empowers the WBSEDCL to

discriminate between the consumers enjoying principle tariff as per the

2015 Notification and the others. As such, the refusal to extend such

additional rebate as per the 2015 Scheme to the petitioner no.1, on the

ground that consumers enjoying competitive tariff Scheme were not entitled

to get such additional rebate, as communicated vide Letter dated May 15,

2017 (annexed at page 43 of the Writ Petition) is palpably de hors the

principles of Natural Justice as well as the concept of equality as enshrined

in Article 14 of the Constitution of India.

37. Such discrimination contravenes the extant law and the Regulations of the

WBERC as well as the Order dated February 8, 2017 passed by the

appropriate Commission (that is, the WBERC) in consonance with the

statutory provisions.

38. Insofar as the decision in Brahmputra Metallics Ltd., Ranchi (supra) is

concerned, the same lays down that promissory estoppel and legitimate

expectation principles are to be applied even in case of public authorities.

Such ratio is apt for the present adjudication and applies squarely to the

parties herein as far as the rebates-in-question are concerned.

39. After having notified the conferment of a right by way of rebate/competitive

tariff, the same cannot be resiled from by the authorities themselves. Such

deviation violates the principle of promissory estoppel as well as the

doctrine of legitimate expectation and ought to be set aside.

40. Insofar as the quantification of the financial loss suffered by the petitioner

no.1 for not getting the benefit of the 2015 Scheme to the tune of

Rs.16,81,155/- is concerned, a chart showing the corresponding break-up

of extra payments made by the petitioner no.1, in the form of difference in

revenue collected by the respondent no.1, has clearly been given in

Annexure P-12 at page 44 of the Writ Petition.

41. There being nothing on record to controvert the veracity of the said chart

and/or such quantification, the WBSEDCL ought to refund such excess

payment made by the petitioner no.1 in order to compensate for the

unlawful act of the WBSEDCL in not extending the benefit of the 2015

Notification to the petitioner no.1 on and from November 1, 2015 till

January 31, 2016.

42. In view of the above considerations, W.P.A. No.20408 of 2017 is hereby

allowed, thereby directing the WBSEDCL to apply the benefit of the

Competitive Tariff Rate Notification dated October 15, 2015 to the petitioner

no.1 and, accordingly to refund the amount of Rs.16,81,155/- to the

petitioner no.1 by January 31, 2023.

43. The WBSEDCL is further directed to extend the Scheme of additional rebate

(including additional load factor rebate) notified in the Notice of the

WBSEDCL dated February 10, 2017, on the basis of the Order dated

February 8, 2017 passed by the WBERC to the petitioner no.1. The

amount due on such count shall be calculated by the WBSEDCL within

January 15, 2023 and intimated immediately thereafter to the petitioners.

In the event the petitioners have any grievance in respect of such

calculations, it will be open to the petitioners to approach the WBSEDCL-

Authorities with the suggested corrections as pointed out by the petitioners.

44. If and when such approach is made by the petitioners, the WBSEDCL shall

resolve the issue upon giving an opportunity of hearing to the petitioners

and/or their authorised agent within January 31, 2023. The amount found

payable shall be disbursed in favour of the petitioners by March 31, 2023.

45. There will be no order as to costs.

46. Urgent certified copies, if applied for, be issued by the department on

compliance of all requisite formalities.

( Sabyasachi Bhattacharyya, J. )

Later:

After the judgment is passed, learned counsel for the WBSEDCL seeks an

order of stay of operation of the said judgment. However, due to the relaxed time-

line given for compliance of the judgment/order, no further stay is required to be

granted.

Hence, the prayer for stay is refused.

( Sabyasachi Bhattacharyya, J. )