Calcutta High Court (Appellete Side)
Gagan Ferrotech Limited And ... vs West Bengal Electricity ... on 24 January, 2022
In the High Court at Calcutta
Constitutional Writ Jurisdiction
Appellate Side
The Hon'ble Justice Sabyasachi Bhattacharyya
W.P.A. No. 15428 of 2021
Gagan Ferrotech Limited and another
Vs.
West Bengal Electricity Regulatory Commission and others
With
W.P.A. No. 14166 of 2021
Chhabra Ispat Pvt. Ltd. and another
Vs.
West Bengal Electricity Regulatory Commission and others
With
W.P.A. No. 15432 of 2021
Jay Ambey Metals Pvt. Ltd. and another
Vs.
West Bengal Electricity Regulatory Commission and others
With
W.P.A. No. 16040 of 2021
Surya Alloy Industries Ltd. and another
Vs.
West Bengal Electricity Regulatory Commission and others
With
W.P.A. No. 4168 of 2021
+
CAN 1 of 2021
Debeanjana Hard Coke Private Limited and another
Vs.
West Bengal Electricity Regulatory Commission and others
With
2
W.P.A. No. 5985 of 2021
Alakananda Sponge Iron Ltd. and another
Vs.
West Bengal Electricity Regulatory Commission and others
With
W.P.A. No. 6047 of 2021
Ratan Ispat Pvt. Ltd. and another
Vs.
West Bengal Electricity Regulatory Commission and others
With
W.P.A. No. 6068 of 2021
Jagadamba Ispat Pvt. Ltd. and another
Vs.
West Bengal Electricity Regulatory Commission and others
With
W.P.A. No. 6075 of 2021
Lalwani Ferro Alloys Ltd. and another
Vs.
West Bengal Electricity Regulatory Commission and others
With
W.P.A. No. 6077 of 2021
Maan Concast Private Limited and another
Vs.
West Bengal Electricity Regulatory Commission and others
For the petitioners
in W.P.A. No.15428 of 2021 : Mr. Parthasarathi Sengupta,
Mr. Soumya Majumder,
Mr. Tanoy Chakraborty,
Mr. Chhandak Dutta
For the petitioners
in W.P.A. No.14166 of 2021 : Mr. Soumya Majumder,
Mr. Tanoy Chakraborty,
Mr. Chhandak Dutta
3
For the petitioners
in W.P.A. No.15432 of 2021
W.P.A. No.16040 of 2021
and W.P.A. No.4168 of 2021 : Mr. Surojit Nath Mitra,
Mr. Tanoy Chakraborty,
Mr. Siddharth Shroff,
Mr. Gautam Shroff
For the petitioners
in W.P.A. No.5985 of 2021
W.P.A. No.6047 of 2021
and W.P.A. No.6075 of 2021 : Mr. Soumya Majumder,
Mr. Tanoy Chakraborty,
Mr. Shiladitya Barma
For the petitioners
in W.P.A. No.6068 of 2021
and W.P.A. No.6077 of 2021 : Mr. Soumya Majumder,
Mr. Tanoy Chakraborty,
Ms. Riya Ghosh
For the WBERC
in W.P.A. No.15428 of 2021,
W.P.A. No.14166 of 2021,
W.P.A. No.15432 of 2021,
W.P.A. No.16040 of 2021,
W.P.A. No.4168 of 2021
and W.P.A. No.5985 of 2021 : Mr. Pratik Dhar,
Mrs. Sharmistha Ghosh,
Mr. Victor Chatterjee
For the WBERC
in W.P.A. No.6047 of 2021,
W.P.A. No.6068 of 2021,
W.P.A. No.6075 of 2021,
and W.P.A. No.6077 of 2021 : Mrs. Sharmistha Ghosh,
Mr. Victor Chatterjee
For the DVC : Mr. Joydip Kar,
Mr. Deepak Agarwal,
Mr. Prasun Mukherjee
Hearing concluded on : 20.12.2021
Judgment on : 24.01.2022
4
Sabyasachi Bhattacharyya, J:-
1.
The above-captioned ten writ petitions are heard and adjudicated
together since the questions involved therein are similar in nature.
2. A common question which has arisen for consideration in three of the
writ petitions, bearing WPA No.4168 of 2021 (Debanjana Hard Coke
Private Limited and another vs. West Bengal Electricity Regulatory
Commission and others), WPA No.15432 of 2021 (Jay Ambey Metals
Pvt. Ltd. and another vs. West Bengal Electricity Regulatory
Commission and others) and WPA 16040 of 2021 (Surya Alloy
Industries Ltd. and another vs. West Bengal Electricity Regulatory
Commission and others), which is different from those arising in the
other seven, is :-
i. Whether the Damodar Valley Corporation (DVC) can, in 2020-21,
claim dues on the basis of bills raised during the years 2009,
2010, 2011 and 2013.
3. The other cardinal questions involved in all the ten writ petitions are
the same, being :-
ii. Whether Delayed Payment Surcharge (DPS) could be charged by
the DVC from its consumers on the basis of the Central Electricity
Regulatory Commission (CERC) input tariff and/or otherwise,
before the final retail tariff is settled by the West Bengal
Electricity Regulatory Commission (WBERC), for the periods 2006-
2009 and 2009-2013;
iii. Whether the subsequent disconnection notices given by the DVC
to its consumers are de hors the law, in particular, Section 56(2)
of the Electricity Act, 2003 (hereinafter referred to as 'the 2003
Act').
4. At the outset, the DVC as well as the WBERC raise a preliminary
objection as to maintainability of the writ petitions. The definition of
"Consumer Grievance", as given in the prevalent Regulations issued
under the 2003 Act by the WBERC, as amended under the 2020
Regulation, it is argued, includes every possible dispute contemplated
under the 2003 Act. Such grievances are referable to the Forum
created under the Regulations, being the respective Grievance
Redressal Officer (GRO) and the Regional Grievance Redressal Officer
(RGRO). As such, it is argued that, in the absence of any challenge to
the vires of the Regulations, the same prevails.
5. Since a special statute with a special forum is required to be exhausted
before a party can approach a writ Court under Article 226 of the
Constitution of India, the writ court, it is submitted, ought to restrain
its hands in the matters and relegate those to the GRO and/or RGRO
concerned.
6. In this context, learned Senior Counsel appearing for the DVC relies
upon (1983) 2 SCC 433 [Titaghur Paper Mills Co. Ltd. and another Vs.
State of Orissa and others], (2005) 8 SCC 264 [U.P. State Spinning Co.
Ltd. Vs. R.S. Pandey and another], (2014) 1 SCC 603 [Commissioner of
Income Tax and others Vs. Chhabil Dass Agarwal].
7. Learned Senior Counsel appearing for the WBERC contends that the
disputes relating to the bills for electric charges raised by the DVC have
to be raised before the concerned GRO and/or Central Grievance
Redressal Officer (CGRO), as contemplated under Sections 42(5), 42(6)
and 52(5) of the 2003 Act, read with Regulation 3.5 of the 2013
WBERC Regulations.
8. It is argued that, in view of availability of such alternative efficacious
remedy, the writ Court cannot be moved and the appeals are not
maintainable under Article 226 of the Constitution of India.
9. For such proposition, learned Counsel places reliance on (2005) 8 SCC
264 [U.P. State Spinning Co. Ltd. Vs. R.S. Pandey and another], (2011) 2
SCC 575 [Transport and Dock Workers Union and others Vs. Mumbai
Port Trust and another], (2013) 5 SCC 470 [Rajasthan State Industrial
Development and Investment Corporation and another Vs. Diamond &
Gem Development Corporation Limited and another].
10. The dispute resolution mechanism within the purview of the 2003 Act
and the Regulations have been upheld and approved by the Supreme
Court in (2007) 8 SCC 381[Maharashtra Electricity Regulatory
Commission Vs. Reliance Energy Ltd. and others].
11. No exceptional case for seeking judicial review under Article 226, by-
passing the statutory alternative remedy as envisaged in (2018) 1 SCC
156 [Kamini Jaiswal Vs. Union of India and another] has not been made
out in the present case, it is argued.
12. Learned Senior Counsel for the WBERC submits that, it being a matter
of public policy, the disputes arising under the 2003 Act must be
adjudicated in the forum specified by the statute and before such
forums are exhausted, no petitioner is permitted to move this Court
under Article 226 of the Constitution of India.
13. (1983) 2 SCC 433 [Titaghur Paper Mills Co. Ltd. and another Vs. State of
Orissa and others] and (2014) 1 SCC 603 [Commissioner of Income Tax
and others Vs. Chhabil Dass Agarwal] are cited in that regard.
14. By placing reliance on (2020) 4 SCC 650 [Assistant Engineer (D1), Ajmer
Vidyut Vitran Nigam Limited and another Vs. Rahamatullah Khan Alias
Rahamjulla], on the question of limitation as stipulated in Section 56(2)
of the 2003 Act, learned counsel argues that the said provision has no
manner of application in the facts and circumstance of the case.
15. That apart, it is argued, the outstanding due for the period 2010-13
was paid by 24 installments, the last of which was paid on March 30,
2019. In view of the claim for DPS having been raised within two years
thereafter, the question of limitation does not arise, in any event.
16. Mere acceptance of the instalments by the DVC do not amount to
acquiescence and/or waiver, since the DVC, at no point of time,
relinquished its claim for DPS, either explicitly or implicitly.
17. The same line of arguments are adopted by learned Senior Counsel
appearing for the DVC as well.
18. On merits, learned counsel for the petitioners in the bunch of three
matters, where the first question for consideration arose, argue that, as
late as in the year 2021, the DVC could not claim dues on the basis of
bills raised during June, 2009, May, 2010, 2011 and/or 2013.
19. Apart from such claims being barred under Section 56(2) of the 2003
Act in view of the acceptance of the 24 instalments which were agreed
upon between the consumers and the DVC in final settlement of the
previous dues, the DVC could not claim any further dues, let alone
DPS, on the basis of previous bills.
20. It is argued that Section 62 of the 2003 Act provides specifically for
determination of tariff by the "Appropriate Commission". The
Appropriate Commissions respectively are the CERC and the State
Electricity Regulatory Commission, in the present case, WBERC.
21. Section 79 of the 2003 Act categorically provides, in Clause (a) thereof,
that the CERC shall regulate tariff of generating companies owned or
controlled by the Central Government. In other cases, Clause (b) of
Section 79 provides that the CERC shall regulate the tariff of
generating Companies, other than those owned and controlled by the
Central Government, if such companies entered into or otherwise have
a composite scheme for generation and sale of electricity in more than
one State. Clause (d) of Section 79 specifies that the CERC shall also
determine tariff for inter-State transmission of electricity. On the other
hand, Section 86 of the 2003 Act deals with the functions of the State
Commissions. Clause (a) thereof provides for determination of the tariff
for generation, supply, transmission and wheeling of electricity, wholly,
bulk or retail, as the case may be, within the State.
22. As such, it is argued that, insofar as the retail tariff is concerned, it is
the WBERC which has to settle such tariff.
23. It is further argued that Section 56 of the 2003 Act specifically provides
for disconnection of supply in default of payment. Sub-section (2)
thereof specifically stipulates that no sum from any consumer, under
Section 56, shall be recoverable after the period of two years from the
date when such sum became due, unless such sum has been shown
continuously as recoverable as arrear of charges for electricity supplied
and the licensee shall not cut off the supply of the electricity.
24. It is argued that since the WBERC settled retail tariff only in the year
2020, no dues can be claimed for prior periods. The first occasion
when the amounts-in-question became payable was after the bills were
raised for the respective periods of 2006-09 and 2009-13 and the rate
of retail charges were fixed finally on June 19, 2020 and March 19,
2020 respectively. Before that, it is contended, there could not be any
electric charge payable by the consumers, as contemplated under
Section 56 of the 2003 Act.
25. Since Section 56(2) of the 2003 Act specifically debars the
disconnection of electric supply on the ground of recoverability of any
dues after the period of two years and the claims in that regard made
by the DVC were crystallized only after such bills were finally raised on
the final tariff, prior thereto, there could not arise any occasion for the
consumers to pay electric charges and, as such, there could not have
been occasioned any "default" as such. Thus, the question of charging
DPS does not arise at all.
26. Learned counsel for the petitioners argue that a perusal of sub-section
(8) of Section 42 of the 2003 Act makes it abundantly clear that sub-
sections (5) and (6) of Section 42 provide for additional remedy in the
given circumstances and not an alternative remedy. The other rights of
the consumers are expressly reserved under the said sub-
section. Moreover, the mere availability of alternative remedies is not
an absolute bar to litigants approaching the High Courts under Article
226 of the Constitution of India.
27. The present disputes, it is argued, have been raised on the legality of
the DVC claim for past dues and DPS, on the basis of earlier retail
tariff, even before the retail tariff was finally determined by the
WBERC. Thus, the disputes in the present matters cannot be
relegated to the category of mere "billing disputes", to be decided by
GROs and/or CGROs.
28. On the proposition that alternative remedies, even if available, do not
operate as an absolute bar in filing a petition under Article 226 of the
Constitution, learned counsel places reliance on the following
judgments:
i. AIR 1966 SC 197 [M. G. Abrol, Additional Collector of
Customs, Bombay and another vs. Shantilal Chhotelal
& Co. and others];
ii. (1977) 2 SCC 724 [State of U.P. and others Vs. M/s.
Indian Hume Pipe Co. Ltd.];
iii. (1985) 3 SCC 267 [Ram and Shyam Company Vs. State
of Haryana and others];
iv. (1998) 8 SCC 1 [Whirlpool Corporation Vs. Registrar of
Trade Marks, Mumbai and others]; and
v. (2011) 5 SCC 697 [Union of India and others Vs. Tantia
Construction Private Limited].
29. It is iterated by learned counsel appearing for the petitioners that
'surcharge' means something over and in excess of the normal dues or
charge, in the context of electricity laws. Reference is made to (1976) 2
SCC 167 [M/s. Bisra Lime Stone Company Ltd. and another vs. Orissa
State Electricity Board and another] in such context.
30. The concept of "default" has a notable element of willfulness or an
element of mens rea or actus rheus. Even on the anvil of a civil
liability, the levy of surcharge is not automatic, unless there is a
finality attached to such civil liability and the payment had actually
become due to be discharged. In view of the admitted position that the
final rate of retail tariff was only determined in the year 2020 by the
WBERC for both the periods 2006-2009 and 2009-2013, there could
not arise any occasion to charge dues and/or DPS from the consumers
prior thereto.
31. Learned counsel for the petitioners rely on the following judgments
regarding disconnection notices being hit by the limitation period
prescribed in Section 56(2) of the 2003 Act:
i. 2012 (5) CHN (CAL) 213 [CESC Limited Vs. Shiva Glass
Company Limited],
ii. (2020) 4 SCC 650 [Assistant Engineer (D1), Ajmer Vidyut Vitran
Nigam Limited and another Vs. Rahamatullah Khan Alias
Rahamjulla].
32. Learned counsel also places reliance on the following judgments to
stress that the GRO being an officer of the DVC itself, there is all
likelihood of bias and violation of natural justice :
i. 2019 SCC OnLine SC 1517 [Perkins Eastman Architects DPC and
another Vs. HSCC (India) Ltd.],
ii. (1985) 3 SCC 267 [Ram and Shyam Company Vs. State of
Haryana and others],
iii. 1985(1) CLJ 332 [Shri Surendra Kumar Ray Chowdhury Vs. The
Collector of Calcutta and others].
33. Learned counsel also drew the analogy of the bars stipulated in the
Arbitration and Conciliation Act, 1996 to appointment of
Arbitrators in the above regard.
34. On merits, the DVC argues that there were different retail rates at
various points of time. Bills were raised for the period 2006-2009
as well as 2009-2013 during the period 2009-2013. In spite of
getting such bills, the consumers failed to clear the amounts
stipulated therein. Ultimately, in order to recover at least some
amount, the DVC acceded to the consumers paying in 24
installments. However, the right to claim DPS was not relinquished
by the DVC at any point of time.
35. The consumers were never absolved from their liability to make due
payments in time, in default of which they remained obligated to
pay DPS as claimed by the DVC for the respective periods of late
payment/non-payment.
36. It is further contended by the DVC as well as the WBERC, that
within the scheme of the 2003 Act and the Regulations framed
thereunder, the disputes raised in all the writ petitions can be
broadly termed as 'billing disputes' and ought to have been referred
to and decided by the respective GROs.
37. Bypassing such legal remedy, which is equally efficacious, if not
more, the writ petitions ought to be dismissed, it is contended.
38. It is further argued by the DVC that there was no occasion to claim
DPS prior to the final settlement of the retail charges by the
WBERC in the year 2020. However, the charges so payable relate
back to the period during which each of the defaults were
committed.
39. Learned Senior Counsel appearing for the WBERC, in particular,
argues that no analogy can be drawn between the provisions of the
Arbitration and Conciliation Act, 1996 and the 2003 Act, which are
entirely different in scope and operation.
40. The legislature, in its wisdom, created specific bars in the
appointment of Arbitrators for adjudicating disputes as
contemplated under the 1996 Act. However, the technical
decisions to be taken in dealing with disputes relating to electricity
charges were left by the legislature, also in its wisdom, to the
GROs.
41. Upon hearing learned counsel appearing for the parties, I would be
failing in my duty if I do not acknowledge and appreciate the co-
operation rendered by counsel appearing for all the parties in
preparing succinct and lucid notes of arguments which largely
enabled the Court to reach its conclusions.
42. To consider the short backdrop of the present case, several ad hoc
phases of transition were undergone by the DVC and its
consumers, vis-à-vis electricity charges.
43. The Damodar Valley Corporation Act, 1948 (for short, "the DVC
Act"), which was enacted to provide for the establishment and
regulation of a corporation for the development of the Damodar
Valley in the Provinces of Bihar and West Bengal, came into force
on and from April 2, 1948. Section 20 of the DVC Act specifically
empowered the DVC to fix the schedule of charges for the supply of
electrical energy by the DVC, including the rates for bulk supply
and retail distribution, and to specify the manner of recovery of
such charges. As such, the DVC had, since then, been validly
raising bills as per its own assessment of the tariffs.
44. However, the 2003 Act was subsequently promulgated, inter alia,
with the object and purpose of independent determination of tariffs
by Electricity Regulatory Commissions, the policy of encouraging
private sector participation in generation, transmission and
distribution of electricity and harmonization of the provisions of the
previous Acts. The 2003 Act came into force with effect from June
10, 2003.
45. Section 62 of the said Act stipulates that the "Appropriate
Commission" shall determine the tariff in accordance with the
provisions of the Act.
46. Section 79(1), Clauses (a), (b) and (d) provide that the Central
Commission shall determine the tariff of the generating companies
owned or controlled by the Central Government and inter-State
operators in the field of generation and transmission of electricity.
Section 86 (1) (a) provides that the State Commission shall, inter
alia, determine the tariff for generation, supply, transmission and
wheeling of electricity, wholesale, bulk or retail, as the case may be,
within the State.
47. Read together, it is evident that the retail tariffs for the respective
States have to be determined by the concerned State Commissions
and not the Central Commissions.
48. Although, obviously, such assessment of retail tariff depends
largely on the bulk rates for generation and transmission of
electricity, and could not be ascertained finally unless the said bulk
rates were determined by the CERC, the ultimate tariff for retail
supply in the States is that, which has been determined by the
respective State Commissions.
49. As such, the expression "any charge for electricity or any sum other
than a charge for electricity", as contained in Sections 56 of the
2003 Act, which provides for disconnection of electric supply in
default of payment of due charges, has to be read in the proper
perspective, as being consonant with the rates of tariff determined
for retail supply by the State Commissions (the WBERC, in the
present case).Section 56(2) of the 2003 Act stipulates that,
notwithstanding anything contained in other law for the time being
in force, no sum due from any consumer under Section 56 shall be
recoverable after the period of two years from the date when such
sum became first due, unless such sum has been shown
continuously as recoverable as arrear of charges for electricity
supplied, and that the licensee shall not cut-off the supply of the
electricity as contemplated in sub-Section (1) of Section 56.
50. In the present case, the retail tariff for West Bengal was finally
fixed by the WBERC on June 19, 2020 (for the period 2006-2009)
and on March 19, 2020 (for the period 2009-2013).
51. The bills of arrears, based on such charges, were sent for the first
time in each of the present cases, only in the year 2021 (although
on different dates of 2021).
52. It cannot be said that before 2021, when the bills were sent on the
final tariff rates, there was any occasion or instance of prior dues
in payment of electricity charges on the part of the consumers for
the purpose of disconnection of electric supply under Section 56 of
the 2003 Act. A joint reading of Sections 62, 79 and 86 of the 2003
Act would unerringly indicate towards such conclusion. In the
event it was to be adjudicated that the charges for the purpose of
attracting Section 56 were different for different periods, there
would be no uniformity and/or certainty, which are essential
characteristics of a penal provision such as disconnection under
Section 56 of the 2003 Act.
53. Although the DVC's rights to disconnect arose from the expiry
dates of the different periods for which the respective bills were
raised, that is, on different valid yardsticks, all such liabilities to
pay electric charges on the part of the consumers merged in the
final determination of tariff on June 19, 2020 (for the period 2006-
2009) and March 19, 2020 (for the period 2009-2013). Since the
bills based on such final rates were raised only in the year 2021 in
all the cases, the liability of the consumers with regard to payment
of such dues only arose after the respective due dates as stipulated
in the 2021 bills; more so, since the DVC had not previously
disconnected the supply of the consumers-in-question, in view of
uncertainty and chaos prevailing due to the inaction of the DVC
itself in not applying of its own for tariff fixation.
54. Section 64 of the 2003 Act specifically lays down the procedure for
tariff orders and casts an obligation on the
generator/distributor/supplier, as the case may be, to file an
application for determination of tariff under Section 62. Since the
DVC functions in all such capacities, it was for the DVC to make
such an application for the purpose of determination of tariff.
However, despite having lost authority to determine its own
electricity tariff, as conferred by the DVC Act, after the coming into
force of the 2003 Act on June 10, 2003, the DVC merrily continued
to charge electricity supply (retail) at its own rates instead of
approaching the WBERC in that regard. First, the CERC fixed
provisional tariff for generation and transmission and thereafter
determined the final tariff for such purposes, for the period 2009-
2014, only on June 23, 2011 and September 30, 2013. Since the
generation and transmission components of the tariff were
necessary pre-requisites for the State Commissions to fix the retail
rates, the WBERC and the other State Commissions were
handicapped in the absence of any application on behalf of the
DVC on such score. Only on the initiative of the WBERC and the
instigation of this Court by a judicial order did the DVC make an
application for determination of retail tariff to the WBERC. Since
the final retail tariff was fixed only on June 19, 2020 (for the period
2006-2009) and on March 19, 2020 (for the period 2009-2013), the
rates of retail tariff crystallized for the said period on the aforesaid
dates respectively.
55. In the impugned summary statements raised by the DVC, DPS was
charged for the first time by the DVC, although there were no prior
instances of prior defaults on the final rates.
56. Undoubtedly, we cannot lose sight of the fact that different
yardsticks of fixation of retail tariff were prevalent at various
periods of time, it is only for the DVC itself to blame for not having
approached the CERC and/or respective State Commissions for the
final determination of tariff for the purpose of generation,
transmission and retail supply at an inter-State level.
57. The initial concrete yardstick for fixation of retail tariff materialized
from April 2, 1948, when the DVC was empowered under Section
20 of the 1948 Act, to determine its own tariff. Thereafter, such
tariff witnessed several phases. Initially the CERC determined
input tariffs for 2006-2009 on October 3, 2006, giving a transitory
period of two years from April 1, 2004 to March 31, 2006 to the
DVC.
58. Thereafter, on May 10, 2010 the Appellate Tribunal decided the
DVC challenge thereto, affirming the CERC rates and directing that
in case of excess bill amounts refund with interest would be given
under Section 62(6) of the 2003 Act, alternatively to adjust excess
payments in 24 installments. The latter was done in the present
case, which was a valid clearance of the dues by the consumers as
per the Appellate Tribunal's order dated May 10, 2010.
59. The Supreme Court, in turn, stayed only the direction to refund,
given by the Appellate Tribunal, on July 9, 2010. However, there
was no stay of the direction to approach the respective State
Commissions.
60. The Supreme Court ultimately dismissed the challenge on
December 3, 2018, whereafter the Calcutta High Court, on the
application of a consumer, directed the DVC to apply before the
WBERC for determination of retail tariff.
61. Only thereafter, the retail tariffs were fixed finally, respectively on
June 19, 2020 for the period 2006-2009 and March 19, 2020 for
the period 2009-2013.
62. In the interregnum, the CERC had issued provisional tariff for
generation and transmission on June 23, 2011, which was set
aside by the Calcutta High Court on December 7, 2012, holding the
provisional tariff regulations ultra vires and setting aside the power
bills based on the provisional tariff.
63. On the other hand, the Jharkhand High Court, in another
challenge, upheld the provisional tariff as intra vires.
64. Hence, during the ensuing period a Schrodinger's Cat dichotomy
prevailed, inasmuch as the consumers of West Bengal were not
bound to honour the power bills based on such provisional tariff,
while the Jharkhand consumers were so bound, both during the
self-same period.
65. Ultimately on September 30, 2013 the CERC determined final tariff
for generation and transmission for the period 2009-2014.
66. Accordingly, the Supreme Court decided two appeals pending
before it, against the Calcutta High Court and the Jharkhand High
Court judgments respectively, on January 18, 2017, thereby
setting aside both the said judgments. Soon thereafter, the DVC
raised a bill asking the consumers to pay differential amount on
the basis of final tariff for generation and transmission.
67. Surprisingly, even thereafter, the DVC waited for a specific
direction from this Court dated December 3, 2018 to apply before
the WBERC for final determination of the retail tariff. Such
determination was made by the WBERC for the periods 2006-2009
and 2009-2013 on June 19 and March 19, 2020 respectively.
68. Albeit the WBERC was somewhat handicapped from ascertaining
the final retail tariff till the tariffs for generation and transmission
were finally decided, the WBERC took no active suo motu initiative
in that regard, at least as far as visible from the records, thereby
shirking the duty cast on it under Sections 62, 79 and 86 of the
2003 Act. The DVC also avoided discharging its statutory
obligation to make applications under Section 64 of the 2003 Act
for determination of tariffs under Section 62 of the Act. The
consumers, under no stretch of imagination, can be faulted for
such delay, both on the part of the DVC and the WBERC, in any
event.
69. Thus, only upon crystallization of the retail tariffs for the respective
periods-in-question did the liability of the consumers to pay the
retail tariff arose. In fact, such dues came into the picture only
after the bills were raised by the DVC in 2021 for the respective
consumers. There is no allegation of subsequent default of the
consumers. Hence, DPS could not be raised for the first time in
2021, in the utter absence of any prior dues and/or consequent
default.
70. As far as "Delayed Payment Surcharge (DPS)" is concerned, no
definition thereof has been provided either in the 2003 Act or the
Regulations framed thereunder.
71. The only guiding light on that score is thrown by Clause 4.14 of the
West Bengal Regulatory Commission (Terms and Conditions of
Tariff) Regulations, 2011, which is quoted herein below:
"The rates of the applicable delayed payment surcharge arising
from non-payment of electricity charges as also other charges by
a consumer shall be 1.25% per month of delay or pro-rated for
part thereof upto 3 months of delay, at 1.5% per month of delay or
pro-rated for part thereof for any period beyond 3 months of delay
but upto the next 3 months and at 2% per month of delay or
pro-rated for part thereof beyond first 6 months of delay. Delay
in payment shall be counted from the due date for payment. This
delayed payment surcharge is without prejudice to the provisions
of disconnection under the Act and the Regulations made
thereunder."
72. Taking a cue from the said provision, the DPS is in the nature of a
penalty, levied in addition to other charges, arising only on non-
payment of such other electricity charges. The expression
"charges" has to be read in consonance with the definition of tariff
within the contemplation of Sections 62, 79 and 86 of the 2003 Act
and the extant Regulations. Construing so, there could not have
arisen any occasion to charge DPS prior to the finalization of the
retail rates in the year 2020 and the raising of bills by the DVC
thereon, in 2021. After 2021, there is no allegation as regards any
default. As such, the Delayed Payment Surcharge levied by the
DVC for the period 2006-2009 as well as 2009-2013 for alleged
previous defaults are illegal and baseless.
73. The varying touchstones of retail charges at different periods of
time all merged into the retail tariff finally determined by the
WBERC and on the DVC claiming bills thereon only, the liability of
the consumers for payment of electricity charges arose in that
regard. In fact, prior to such final fixation of retail charges, the
DVC had not claimed DPS at any point of time.
74. Any other interpretation than such merger would give rise to
absurd consequences, since, in that event, the ad hoc
arrangements as regards such tariff, either by virtue of orders
passed by the High Courts or the Supreme Court or the different
Regulatory Commissions, being the CERC, the State Commissions
or the Appellate Tribunal, or the tentative tariffs prevalent as valid
at various points of time, would have to be taken as the bases for
ascertainment of the retail tariff, de hors the provisions of Sections
62, 79 and 86 of the 2003 Act, which in terms specifically empower
the Appropriate Commission to determine such tariff.
75. Hence, the subsequent disconnection notices given by the DVC on
the basis of such fluctuating yardsticks, even after final retail tariff
had been determined, were also illegal.
76. The DPS could not be charged at the first instance, without there
being any default regarding bills raised on the final tariff at any
previous point of time.
77. Even if any DPS was to be retrospectively claimed on the basis of
previous bills during the period 2009-2013, the same would be
barred by the two-year limitation as stipulated in Section 56(2) of
the 2003 Act. In the present case, however, such question does
not arise since the DPS was claimed for the first time in 2021.
78. In view of the above discussions, the first question which fell for
consideration is answered in the affirmative. The DVC could, in
the year 2021, claim dues on the basis of differential amounts of
charges, between the total amounts actually paid by the consumers
for the relevant periods and the due amounts as per the retail tariff
fixed on June 19, 2020 (for the period 2006-2009) and March 19,
2020 (for the period 2009-2013) respectively.
79. Such claims are justified in 2021, since the final tariffs were fixed
only in June and March, 2020, respectively for the periods 2006-
2009 and 2009-2013 and bills for the differential amount between
actuals and payables, even for the period during 2009-2013, were
raised on the basis of such final tariffs. Thus, the dates of fixation
of final tariff became the starting points of limitation within the
contemplation of Section 56(2) of the 2003 Act.
80. However, the second question which has come up for consideration
in the present case has to be decided in the negative. The DVC is
not entitled to charge any DPS for any of the defaults allegedly
committed prior to the fixation of final retail tariff on June 19, 2020
and March 19, 2020 respectively for the periods 2006-2009 and
2009-2013 which were committed, if at all, in respect of the then
fluid ad hoc tariffs which all merged ultimately into the final tariffs
as fixed in 2020.
81. Issue No. iii is, consequently, also negated, since no question of any
disconnection would arise, as there were no defaults in the first
place on the part of the consumers, regarding payment of electricity
charges on the basis of the final retail tariff.
82. W.P.A. No.15428 of 2021, W.P.A. No.14166 of 2021, W.P.A.
No.15432 of 2021, W.P.A. No.16040 of 2021, W.P.A. No.4168 of
2021 with CAN 1 of 2021, W.P.A. No.5985 of 2021, W.P.A. No.6047
of 2021, W.P.A. No.6068 of 2021, W.P.A. No.6075 of 2021 and
W.P.A. No.6077 of 2021 are thus disposed of in the light of the
above observations.
83. The DVC shall restore the electric supplies of each of the writ
petitioners, phase-wise or at one go, as expeditiously as feasible
but, in any event, within an outer limit of February 28, 2022.
84. All bills raised by the DVC on the writ petitioners on account of
Delayed Payment Surcharge stand hereby cancelled and revoked.
85. However, the DVC shall be entitled, by duly raising bills, to claim
from the writ petitioners/consumers, as arrears, the differential
amounts between the total actual amounts paid as electricity
charges by the writ petitioners respectively and the total amounts
due, as calculated on the basis of the final rates fixed by the
WBERC on June 19, 2020 and on March 19, 2020, for the periods
2006-2009 and 2009-2013 respectively, after giving due credit to
the petitioners for the amounts, if any, already paid by them by
way of the 24 instalments granted by the DVC for the period
between 2010 and 2013.
86. There will be no order as to costs.
87. Urgent photostat certified copies, if applied for, be issued to the
parties on compliance of due formalities in that regard.
88. Copies of this common order be kept separately in the files of each
of the above ten writ petitions for future reference.
( Sabyasachi Bhattacharyya, J. )
