JUDGMENT :

J.B. PARDIWALA, J.

1. This appeal under Section 27 of the Electricity Regulatory Commission Act, 1998 (for short “the Act 1998”) is at the instance of the Gujarat Electricity Board being the original respondent before the Gujarat Electricity Regulatory Commission, Ahmedabad and is directed against the common order passed by the Commission dated 6th September 2002 declaring the levy and the collection of charges @ 3 times of demand charges on excess drawal of power under clause 15 of the Commercial Circular No. 687 dated 21st December 1998 and the revised Commercial Circular No. 687-A dated 26th October 1999 resply as without jurisdiction. The Commission also directed the appellant-GEB to refund the amount recovered from the respondent herein under the two circulars referred to above for the period between 1998 and October 1999 with interest @ 6% per annum.

2. The facts giving rise to this appeal may be summarised as under.

3. The appellant-Gujarat Electricity Board came to be constituted by the State Government under Section 5 of the Electricity (Supply) Act, 1948 (for short “the Supply Act”). It is a body corporate having perpetual succession and a common seal. The appellant-Board is engaged in generating, distributing and supplying electrical energy to the consumers and licensees.

4. The respondent No. 1-M/s. Reliance Industries Limited is a company registered under the Companies Act, 1956 (for short “the Act, 1956”) and is engaged in the business of manufacturing petrochemicals at its plant situated at village: Mora on the Surat Hazira Road.

5. It is the case of the appellant-Board that it has been supplying electrical energy to the plant of the respondent No. 1. As there was a huge demand for electrical power in Gujarat and other parts of the country and the Board was not in a position to cope with such demand, the Government of Gujarat formulated a power policy levying the private participation in the installation of generator sets. Under the said policy, the industrial units were to be permitted to set up their own Captive Power Plant (CPP) to meet with their requirements.

6. In pursuance of the power policy announced by the Government of Gujarat in December 1995, the Government of Gujarat, Energy and Petrochemicals Department, by its resolution dated 9th November 1998 declared the policy for supply of surplus electrical power to a group of companies. The said resolution dealt with the contract demand. It provides that the industries on commissioning of the CPP would be allowed to reduce their original contract demand (i.e. if the contract demand is of 1000 KVA, then it could be reduced to any level upto 250 KVA depending upon the need of the consumers) when they intend to have parallel operation with the Grid.

7. The demand of power from the State Grid by the industrial unit was subjected to the applicable tariff of the licensee.

8. In view of the State Government Resolution referred to above laying down the power policy, the appellant - Board, vide its resolution No. 10374 provides that any excess drawal of power from the contract demand would be charged at the rate which would be 3 times of the demand charges of applicable HT tariff per KWA and the energy charges would be charged at the applicable HT tariff.

9. On the strength of the Captive Power Policy, which came into force w.e.f. 9th November 1998, the appellant - Board issued Commercial Circular No. 687 dated 21st December 1998. The clause 15 therein provided that any excess drawal of power from the contract demand would be charged at the rate which would be 3 times of the demand charges as per the applicable HT tariff per KVA. According to appellant - Board, any industry, if found to be exceeding the contracted load, would fall within the ambit of the “malpractice” and would be liable for disconnection of power supply and liable of penal assessment as per t