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2005 Supreme(SC) 1796
SUPREME COURT OF INDIA
S.N. Variava, A.R. Lakshmanan, S.H. Kapadia, JJ.
Chairman, M.P. Electricity Board and others - Appellants
Versus
Shiv Narayan and another - Respondents
Civil Appeal No. 1065 of 2000 in Miscellaneous Petition No. 411 of 1987
Decided On : 27-10-2005
For the Appellant :M.L. Jaiswal, Sakesh Kumar, Advocates.
The interpretation of 'domestic' and 'commercial' purposes under the Electricity Supply Act, 1948 is based on the statutory classification of usage, and the character of the purpose of user of the premises by the owner or landlord is relevant for determining the applicable electricity charges.
Headnote:
Electricity Supply Act - Residential Premises - Interpretation of 'domestic' and 'commercial' purposes
Fact of the Case:
The Appellants, a statutory Corporation, levied charges on commercial basis for electricity usage in a residential premises let out to an advocate. The advocate had initially resided in the premises and later used it for running an office. The respondents filed a writ petition for quashing the demand, which was allowed by the impugned Judgment.
Finding of the Court:
The Court found that the Tariff entry classifies usage into 'domestic purposes' and 'commercial and non-domestic purposes' under the Electricity Supply Act, 1948. As the usage was not 'domestic', it fell into the category of 'commercial and non-domestic', and thus commercial rates were to be charged. The Court clarified that it did not consider whether an advocate's activities constituted commercial activity.
Issues: The main issue was the classification of electricity usage in a residential premises let out to an advocate as 'domestic' or 'commercial' under the Electricity Supply Act, 1948.
Ratio Decidendi: The Court interpreted the statutory classification of 'domestic purposes' and 'commercial and non-domestic purposes' under the Electricity Supply Act, 1948 to determine the applicable electricity charges for the usage in the residential premises.
Final Decision: The impugned Judgment was set aside, and the Appeal was allowed with no order as to costs.
ORDER :
The Respondent has remained absent even though served and in spite of notice from this Court.
2. This Appeal is against the Judgment of the M.P. High Court dated 6th May, 1999.
3. Briefly stated the facts are as follows:-
The Appellants are a statutory Corporation constituted under Section 5 of the Electricity (Supply) Act of 1948. The Respondent owns residential premises. He had let out a portion of the premises to an advocate. Initially the advocate was residing in the premises and also running a small office in a portion of those premises. Thereafter, the advocate moved his residence to some other place but continued his office in those premises. The Appellants, therefore, levied charges on commercial basis. The respondents filed a writ petition for quashing the demand. That writ petition has been allowed by the impugned Judgment.
4. When this matter reached before this Court on 24th August, 2005, a Bench of this Court did not agree with the following view expressed by this Court in the case of New Delhi Municipal Council v. Sohanlal Sachdev [2002 (2) SCC 494].
"The two terms "domestic and "commercial" are not defined in the Act or the Rules. Therefore, the expressions are to be given the common parlance meaning and must be understood in their natural, ordinary and popular sense. In interpreting the phrases the context in which they are used is also to be kept in mind. In Stroud's Judicial Dictionary (5th Edn.) the term "commercial" is defined as "traffic, trade or merchandise in buying and selling of goods". In the said dictionary the phrase "domestic purpose" is stated to mean use for personal residential purposes. In essence the question is, what the character of the purpose of user of the premises by the owner or landlord is and not the character of the place of user. For example, running a boarding house is a business, but persons in a boarding house may use water for "domestic purposes. As noted earlier the classification made for the purpose of charging electricity duty by NDMC sets out the categories "domestic" user, as contra distinguished from "commercial" user or to put it differently "non-domestic user". The intent and purpose of the classifications as we see it, is to make a distinction between purely "private residential purpose" as against commercial purpose. In the case of a "guest house", the building is used for providing accommodation to "guests" who may be travellers, passengers, or such temporarily for the purpose of their stay on payment of the charges. The use for which the building is put by the keeper of the guest house, in the context cannot be said to be for purely residential purpose. Then the question is, can the use of the premises be said to be for "commercial purposes"? Keeping in mind the context in which the phrases are used and the purpose for which the classification is made, it is our considered view that the question must be answered in the affirmative. It is the user of the premises by the owner (not necessarily absolute owner) which is relevant for determination of the question and not the purpose of which the guest or occupant of the guest house uses electric energy. In the broad classification as is made in the Rules, different types of user which can reasonably be grouped together for the purpose of understanding the two phrases "domestic" and "commercial" is to be made. To a certain degree there might be overlapping, but that has to be accepted in the context of things."
5. The Bench therefore referred the matter for consideration by a Larger Bench. Thus the matter is before us.
6. We have heard Mr. M.L. Jaiswal, learned senior counsel for the Appellant. We have perused the Circulars and seen the Tariff entries under which the levy has been made. We find that the Tariff entry classifies into two categories viz. (a) "domestic purposes" and (b) "commercial and non-domestic purposes". This classification has been done statutorily in exercise of powers under Section 49 of the Electri
