IMPORTANT POINT
Electricity Regulatory Commission is bound by policy decisions of State Government. It cannot suo motu impose any burden of subsidy on the Government.

Headnote:(a) Electricity Act, 2003 – Section 65 and 108 – Grant of subsidy to any consumer or class of consumers in public interest – Prerogative of the State Government – Government’s such direction in public interest – Binding upon the Commission. (Para 25)
       (b) Electricity Act, 2003 – Section 65 and 108 r/w section 12, UP Electricity Reforms Act, 1999 – State Government providing for subsidy to LMV-2 and LMV-6 consumers and not HV-2 consumers – Commission also confining tariff respite to LMV-2 and LMV-6 consumers – Later, Commission extending the subsidy to HV-2 consumers and directing Government to release the same – Beyond jurisdiction. (Para 26)
       (c) Electricity Act, 2003 – Section 65 – Government extending subsidy to power loom weavers in like manner as farmers – Never intended to extend the same to large industries having HV-2 category connections – Commission acting beyond jurisdiction and not recalling the same even after communication from Government – Not permissible. (Para 28)
       (1990) 1 SCC 461 – Referred
       (d) Promissory estoppel – State Government not extending any assurance in any way to industries for granting subsidy – On the other hand, making its stand clear and objecting to Commission’s clarification vide its letter dt 6.10.2006 – Government not stopped from declining subsidy to HV-2 consumers. (Para 29, 30)
       (1983) 3 SCC 379; (1979) 2 SCC 409 – Relied upon
       Facts of the case:
       The question involved in these appeals is whether policy decision dated 14.6.2006 issued by the Government of Uttar Pradesh regarding supply of the electricity to power loom bunkers on the flat rate could have been applied by the U.P. Electricity Regulatory Commission to the industries availing HV-2 category connection.
       Finding of the Court:
       Impugned judgment is not sustainable.
       Result: Appeals arising from SLP (C) Nos.29322/10, 9869/2008, 29320/2010 and 29324/2010 allowed and the appeal arising from SLP(C) No. 30528/2009 dismissed.

JUDGMENT

Arun Mishra, J.

1. Leave granted in all the special leave petitions.

2. The question involved in the appeals is whether policy decision dated 14.6.2006 issued by the Government of Uttar Pradesh regarding supply of the electricity to power loom bunkers on the flat rate could have been applied by the U.P. Electricity Regulatory Commission (hereinafter referred to as “the Commission”) to the industries availing HV-2 category connection.

3. To dispose of the appeals, we notice facts from civil appeal arising out of SLP (Civil) No.9869 of 2008. The backdrop facts indicate that the Commission fixed tariff for the year 2004-2005, whereby rebate of Rs.5,000/-per consumer was granted to power loom bunkers availing LMV-2 and LMV-6 connections in accordance with policy of the U.P. Government.

4. LMV-2 is a non domestic light, power and electricity connection, LMV-6 electricity connection is of small and medium power having connected load up to 100 HP for industrial/processing or agro-industrial purposes, power loom, etc. HV-2 connection is provided for utilising large and heavy power for industrial and other purposes having contracted load of above 100 HP. Industries which are having load more than 100 HP are covered by tariff HV-2.

5. The State Government had issued order dated 14.6.2006 to Managing Director, U.P. Power Corporation Ltd. (hereinafter referred to as ‘Corporation’). The Commission opined that it has the effect of altering the rate schedule approved by it. The Commission, in turn, issued order dated 3.7.2006 restraining all electricity supply undertakings in the State of U.P. from implementing the provisions of State Government order dated 14.6.2006.

6. The Commission took up the matter to work out modalities as per the Government order. Chairman of the U.P. Power Corporation Limited filed an affidavit before the Commission providing a new scheme compatible with legal framework along with a directive from the State Government issued under Section 108 of the Electricity Act, 2008. The scheme as proposed in the affidavit states that despite the aforesaid order, the normal billing as per applicable tariff shall be made but payment shall be collected as per the directions of the Government at normal billing cycle and that the advance subsidy shall be collected from the Government in one instalment or maximum two half yearly instalments. Pursuant thereto the Commission on 11.7.2006 passed order in which it had prescribed the rate for LMV-2 and LMV-6 consumers only. However, Commission also opined that the State Government has permitted realization on flat rate depending upon reed space, number of looms, etc. It appeared to be the case of altering the rate schedule of the tariff order fixed by it which is not permissible within the legal framework to be attempted by the State Government. The State Government also did not spell out compliance of the advance subsidy payment as envisaged under Section 65 of the Electricity Act, 2003. While dealing with the matter, the Commission observed that billing of the power loom be done strictly in accordance with prevalent schedule.

7. It is pertinent to mention that tariff order 2004-2005 was issued by the Commission for providing benefit to LMV-2 and LMV-6 consumers, it admittedly did not cover HV-2 consumers. The Commission ultimately directed that billing of the power loom consumers shall be done strictly in accordance with prevalent rate schedule of tariff order 2004-2005 on monthly basis. It issued further directions with respect to the collection of the subsidy. It also directed that payment from the power loom consumers shall be collected as per the policy direction of the Government on monthly basis. It also directed that Government should earmark capital subsidy for providing free of cost meters to power loom consumers in case of new connections.

8. Later on, industries enjoying HV-2 connection approached the Electricity Regulatory Commission to clarify that whether the ord

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2014 Supreme(SC) 853

IMPORTANT POINTElectricity Regulatory Commission is bound by policy decisions of State Government. It cannot suo motu impose any burden of subsidy on the Government.

Cases Referred (3)

IMPORTANT POINT
Electricity Regulatory Commission is bound by policy decisions of State Government. It cannot suo motu impose any burden of subsidy on the Government.