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2015 Supreme(Online)(SC) 511
SUPREME COURT
Markandey Katju, S. S. Nijjar, JJ.
Municipal Corporation of Greater Mumbai v. Maharashtra Electricity Regulatory Commission and Others
C. A. No. 848 of 2007
The third proviso to Section 51 of the Electricity Act allows certain licensees exemption from maintaining separate accounts and prior intimation to the Commission.
Headnote:This appeal challenges the judgment of the Electricity Appellate Tribunal dated 18-8-2006, primarily concerning Section 51 of the Electricity Act, 2003. The Tribunal's interpretation regarding the maintenance of separate accounts by a distribution licensee was found incorrect. The issue regarding the exemptions applicable to certain distribution licensees was addressed. The court ruled in favor of the appellant, thereby setting aside the Tribunal's judgment and order.
| Table of Content |
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| 1. court reviews appeal against tribunal's judgment. (Para 1) |
| 2. interpretation of section 51 of the electricity act. (Para 2) |
| 3. incorrect tribunal view on account maintenance. (Para 3) |
| 4. exemption for certain distribution licensees. (Para 4) |
| 5. appeal successful; tribunal's order set aside. (Para 5) |
1. Heard the learned counsel for the parties. This appeal has been filed against the impugned judgment and order of the Electricity Appellate Tribunal, New Delhi dated 18-8-2006. The facts have already been set out in the impugned judgment and hence we are not repeating the same here.
2. S.51 of the Electricity Act , 2003 (for short "the Act") states:
"51. Other businesses of distribution licensees.-- A distribution licensee may, with prior intimation to the appropriate Commission, engage in any other business for optimum utilisation of its assets:
Provided that a proportion of the revenues derived from such business shall, as may be specified by the State Commission concerned, be utilised for reducing its charges for wheeling:
Provided further that the distribution licensee shall maintain separate accounts for each such business undertaking to ensure that distribution business neither subsidises in any way such business undertaking nor encumbers its distribution assets in any way to support such business:
Provided also that nothing contained in this section shall apply to a local authority engaged, before the commencement of this Act, in the business of distribution of electricity. "
3. Undisputedly, the appellant was engaged inter alia in the business of distribution of electricity prior to the commencement of the Act. In our opinion it would be not correct to hold that despite the third proviso to S.51 of the Act, the distribution licensee must not only maintain separate accounts for each of its businesses but must also ensure that the electricity distribution business should not subsidise the other business undertakings. Hence the view of the Tribunal in paras 56 and 57 of its order is not correct.
4. In our opinion in view of the third proviso to S.51 of the Act a certain limited electricity distribution licensees are exempt from the operation of the section insofar as the requirement of prior intimation to the Commission or the obligations of the first and second proviso are concerned. The appellant is admittedly doing business of transport besides electricity distribution for several decades.
5. On the facts of the case, we are of the opinion that the third proviso to S.51 of the Act applies and hence the impugned judgment and order cannot be sustained. The appeal is allowed. The impugned judgment and order is set aside.
