R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23rd DAY OF JULY, 2019 BEFORE THE HON’BLE MRS.JUSTICE S.SUJATHA WRIT PETITION No.45093/2015 (GM – KEB) BETWEEN:
M/s EUREKA FORBES LIMITED NO.143, C-4, BOMMASANDRA INDUSTRIAL AREA, OFF HOSUR ROAD, BENGALURU-560 099.
REP BY ITS DIRECTOR Mr. P.J.REDDY, AGED ABOUT 72 YEARS, AUTHORISED BY BOARD, RESIDING IN BANGALORE.
(CAUSE TITLE AMENDED VIDE COURT ORDER DATED 13.02.2019.) ... PETITIONER [BY SRI G.SHIVADASS, SENIOR COUNSEL FOR SRI PRASHANTH SHIVADASS, ADV.] AND:
1. BANGALORE ELECTRICITY SUPPLY COMPANY (WHOLLY OWNED GOVERNMENT OF KARNATAKA UNDERTAKING) REP BY ITS MANAGING DIRECTOR CAUVERY BHAVAN, K.G.ROAD, BENGALURU-560 009, AND HEREIN REP BY ITS MANAGING DIRECTOR.
2. EXECUTIVE ENGINEER (ELECTRICAL) BESCOM CHANDAPURA SUB-DIVISION, BENGALURU-560 099.
3. ASSISTANT EXECUTIVE ENGINEER (ELECTRICAL) BESCOM CHANDAPURA SUB-DIVISION, BENGALURU-560 099.
4. EXECUTIVE ENGINEER BESCOM VIGILANCE, JAYANAGAR VIGILANCE POLICE STATION, 1 FLOOR, NO.32/1, 32/2, CRESENT TOWER, CRESENT ROAD, MADHAVANAGAR, BENGALURU-560 001.
5. ASSISTANT EXECUTIVE ENGINEER BESCOM VIGILANCE, 1 FLOOR, NO.32/1, 32/2, CRESENT TOWER, CRESENT ROAD, MADHAVANAGAR, BENGALURU-560 001. …RESPONDENTS [BY SRI P.PRASANNA KUMAR, ADV. FOR R-1 & R-3.] THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH ORDER DATED 22.09.2015 VIDE ANNEXURE-A ISSUED BY R-3.
THIS PETITION HAVING BEEN HEARD AND RESERVED, IS COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY, THE COURT PASSED THE FOLLOWING:
O R D E R The petitioner has challenged the order dated 22.09.2016 issued by reps No.3 whereby Assessing Officer has held that installation bearing RR No.AKLHT- 184 attracts the penal measure as per Clause 42.05 of the Conditions of Supply of Electricity of distribution licensees in the State of Karnataka ['COS’ for short] and hence the consumer/petitioner is liable to pay the back billing charges.
2. The petitioner is a Public Limited Company and absolute owner of the premises situated at No.143, C-4, Bommasandra Industrial Area, off Hosur Road, Anekal Taluk, Bengaluru admeasuring approximately 19002 Sq. Mts. ['Composite Premises']. In the year 2007, the petitioner had entered into a lease with M/s. Shell India Markets Private Limited ['lessee' for short] for a portion of Composite Premises of an area approximately 85,920 Sq. Ft of the built up area for the purposes of conducting research and development activities in the laboratory. The petitioner had availed connection of Contract Demand of 1250 KVA from respondent No.1 and has been allotted connection with meter number RR No.AKLHT 184. The petitioner and the lessee have been operating in the Composite premises and have been sharing electricity connection and paying electricity bills as per the Tariff HT – 2[a][ii] as made applicable by BESCOM from time to time. It transpires that on 18.03.2015, the Composite Premises of the petitioner was inspected by respondent No.2 along with respondent Nos.3 and 4 and the petitioner was requested to submit certain documents. The petitioner had applied for the separate meter on 06.05.2015 and inspection was carried out by respondent No.4 for allotting the separate meter. However, on 27.05.2015, respondent Nos.2 to 4 visited the premises of the petitioner and disconnected the electricity supply to the petitioner premises by issuing Inspection Report, referring Clause 42.05 of the COS.
3. Aggrieved by the said action of respondent Nos.2 to 4, Writ Petition No.22696/2015 was filed by the petitioner before this Court. In the said proceedings, the inspection report was quashed and the respondents were directed to reconnect the power supply. Accordingly, the power connection was restored, after which inspection was carried out by the corporate office of respondent No.1. A show-cause notice was issued by respondent No.3 alleging unauthorized extension of power to neighboring premise and 7 days time was granted to remove unauthorized extension and report compliance before the matter is adjudicated. Pursuant to which, the order impugned has been passed creating liability of Rs.12,55,47,954/- [Rupees Twelve Crores Fifty Five Lakhs Forty Seven Thousand Nine Hundred and Fifty Four Only] as back billing charges. Hence, this writ petition.
4. Learned Senior counsel Sri. G. Shivadass representing the learned counsel for the petitioner on record submitted that the arbitrary exercise of power by respondent No.3 is nothing but gross misuse of quasi- judicial power resulting in the orders impugned passed sans non-application of mind which is ex-facie perverse and calls for interference of this Court albeit the alternative remedy of appeal available under the Electricity Act, 2003 ['Act' for short]. It was argued that Petition No.24/2015 was filed by Bangalore Electricity Supply Company Limited before the Hon’ble Karnataka Electricity Regulatory Commission, Bangalore (‘Commission’ for short), seeking approval for the amendment to Clause 42.05 of the COS.
5. Further the State Government has issued the notification dated 22.11.2016 [gazetted] bringing amendment to Clause 8.14 of the COS, substituting Clause 8.14 to the effect that the LT/HT/EHT industrial consumer desirous of letting out a part of his premises shall be permitted to allow his tenant to use the power at the same tariff as applicable to the said consumer and to collect the charges for the power from such tenant on no profit no loss basis [i.e., sharing of electricity bill], through a sub-meter as approved by the licensee and such arrangement shall not be treated as unauthorized extension of supply or resale of electricity provided that for billing, the consumption recorded in the main meter shall be reckoned as per the slab rates in accordance with the Tariff Order in force.
6. In view of the aforesaid, the demand made by the respondent authorities for supply of electricity power to the tenant situated in the composite premises is unjustifiable and requires to be set aside. Learned counsel in support of his contentions, has relied on the following judgments:
1. Shah Chunnilal Sohanraj V/s. T.Gurushantappa [1972] 1 Mys LJ 327;
2. Commissioner of Central Excise and Service Tax, Bangalore V/s. Forsoc Chemicals [India] Pvt. Ltd., [2015] 318 ELT 240;
3. The Hassan Co-operative Milk Producers Societies Union Limited V/s. State of Karnataka AIR 2014 Kant 120;
4. Sonal Apparel Private Limited and Others V/s. The State of Karnataka and Others [2017] 97 VST 488 [Karn];
5. Zile Singh V/s. State of Haryana and Others [2004] 8 SCC 1;
6. Government of India V/s. Indian Tobacco Association 2005 [187] ELT 162 [S.C];
7. Commissioner of Income Tax [Central]-I, New Delhi V/s. Vatika Township Pvt. Ltd. 2014-TOIL—78-SC-IT-CB; and 8. Mehler Engineered Products India Pvt. Ltd., V/s. Union of India 2018 [364] ELT 27 [Mad.] 7. Learned counsel for the respondent Nos.1 and 3 submitted that the said amendment referred to by the learned counsel for the petitioner would depict that the sharing of electricity bill through a sub-meter as approved by the licensee shall not be treated as unauthorized extension of supply or resale of electricity but not otherwise. The petitioner has not shared the electricity bill through a sub-meter approved by the licensee. No sub-meter was approved by the licensee. Further, it was argued that the said notification dated 22.11.2016 has come into force from the date of its publication in the official Gazette of Karnataka i.e., on November 22nd, 2016. The phrase ‘substituted’ employed in the Notification would not give any retrospective effect to the Notification. In support of his contentions, learned counsel has placed reliance on the following judgments:
1. Govardhan.M. V/s. State of Karnataka and Others1;
2. Securities and Exchange Board of India V/s. Classic Credit Limited2;
1 2012 SCC OnLine Kar 9088 2 [2019] 1 SCC [Cri] 431 3. Sri Vijayalakshmi Rice Mills, New Contractors Co., and Others V/s. State of Andhra Pradesh3.
8. I have carefully considered the submissions of the learned counsel for the rival parties and perused the material on record.
9. The points that arises for consideration are:
[1]. Whether the notification dated 22.11.2016 issued by the Government of Karnataka amending the conditions of supply of electricity of distribution licensees in the State of Karnataka substituting column No.2 by the column No.3 would have a retrospective effect with respect to clause 8.14?
2. Whether the demand made by the respondent authorities is justifiable?
10. Before adverting to the submissions of the parties, it is beneficial to refer to the relevant Clauses of the COS.
3 [1976] 3 SCC 37 “2.62.“Unauthorized use of Electricity” means the usage of electricity.
(i) by any artificial means, or (ii )by a means not authorized by the concerned person or authority or licensee; or (iii) through a tampered meter; or (iv) for the purpose other than for which the usage of electricity was authorized”..
8.14 iii) The HT/EHT consumer desirous of letting out a part of his premises for industrial purpose shall be permitted to allow his tenant to use the power at the same tariff as applicable to the said consumer and to collect the charges for the power from such tenant on no profit no loss basis (i.e., sharing of electricity bill) through a sub-meter as approved by the licensee and such arrangement shall not be treated as unauthorized extension of supply or resale of electricity.
Provided that for billing, the consumption recorded in the main meter shall be reckoned as per the slab rates in accordance with the Tariff Order in force.
(Substituted as per the Notification dated 22.11.2016) 42.05 Unauthorised Extension of Supply [Applicable to both HT and LT Installations]-
[If at any time, energy supplied to a Consumer/premises is found extended unauthorisedly to some other person/premises, the installation shall be disconnected only after unauthorized extension of supply is removed and reported by the Consumer. Further, the Assessing Officer, shall assess the quantum of energy and excess load so extended and charge for that quantum for the entire period during which such unauthorized use of electricity has taken place and if, however, the period during which such unauthorized use of electricity has taken place cannot be ascertained, such period shall be limited to a period of 12 months immediately preceding the date of inspection at two times the Tariff applicable for the purpose for which the energy is so extended as per the Electricity [Amendment] Act, 2007 [No.26 of 2007], dated 15.06.2007.
Such amount shall be paid within thirty days from the date of final order, failing which, the installation shall be disconnected, and such amount shall be deemed to be arrears of electricity charges.
42.06 Theft of Electricity. – [a] [i] Where it is prima facie established to the satisfaction of the officer authorized by the State Government in this behalf under Section 135 of the Electricity Act, 2003 that the person/Consumer or his agent, servant etc., has committed/is committing theft of Electricity as indicated in Section 135 of the Electricity Act, 2003, Authorized officer shall estimate the value of the electricity thus abstracted, used or wasted or diverted, in accordance with the calculation table: 1 as noted hereunder, for the entire period during which such unauthorized use of electricity has taken place and if, however, the period during which such unauthorized use of electricity has taken place cannot be ascertained, such period shall be limited to a period of 12 months immediately preceding the date of inspection at two times the Tariff applicable to such category of installation and demand and collect the same by including the same in the next bill or in a separate bill pending adjudication by the Special Court. Before including the said amount in the bill, the Authorised Officer shall issue a provisional assessment notice indicating the demand to the concerned person within 3 days from the date of inspection informing such person to file his objections, if any, within 7 days and due opportunity shall be given to such person of being heard.] 11. The controversy mainly revolves around Clause 42.05 – unauthorized extension of supply [applicable to both HT and LT installations] vis-à-vis interpretation of clause 8.14 of the COS. The BESCOM had filed a petition vide O.P.No.24/2015 before the Commission seeking amendment to the clause 42.05 so as to permit extending of energy supply to a tenant by the registered consumer. Further the consumer herein – erstwhile M/s. Aquamall Water Solutions Limited vide its petition No.I.A-2/2006 had filed for impleadment as petitioner seeking amendment to conditions of supply providing for power supply to the tenements within the industrial premises. There were other requests/representations made by similar consumers. Considering the same, exercising the power conferred under Section 16 of the Electricity Act, 2003 and Clause 7.3 of KERC (Conditions of Licence for the ESCOMS) Regulations, 2004, the Commission has decided to make certain amendments to various clauses of the conditions of supply of electricity of distribution licenses in the State of Karnataka. The relevant sub-clause [3] of clause 8.14 provides that the HT/EHT consumer desirous of letting out a part of his premises for industrial purpose shall be permitted to allow his tenant to use the power at the same tariff as applicable to the said consumer and to collect the charges for the power from such tenant on no profit no loss basis. The said notification contemplates that it shall come into force from the date of its publication in the official gazette of Karnataka. Clause II of the said Notification reads thus:
“In the conditions of supply of electricity of distribution licenses in the State of Karnataka, the existing clause mentioned in Column 2 of the table below shall be substituted by the clause mentioned in Column No.3.”
12. The question whether the phrase “substituted” employed in the notification relates back to the original date of enactment of the conditions of supply giving retrospective effect to the notification covering the period in question requires to be considered by this Court.
13. The Division Bench of this Court in the case of Govardhan.M. supra, in the context of the Rules governing recruitment prescribing the upper age limit held thus:
“29. It is well-settled rule of construction that every statute or statutory rule is prospective unless it is expressly or by necessary implication made to have retrospective effect. The principle is also well settled that statutes should not be construed so as to create new disabilities or obligations or impose new duties in respect of transactions which were complete at the time the Amending Act came into force. When the legislature amends an existing provision in a statute by way of substitution, the effect is the substituted provision stands repealed and the amended provision is substituted in the place of earlier provision in the earlier Act, as if the substituted provision is there in the earlier act from the inception. By express provision or by implication if it is not made clear that it is prospective in nature the said amended provision comes into effect from the date of the earlier Act. But it is not an invariable Rule. If such an interpretation is given, if it leads to repugnancy, inconsistency or absurdity, then the said general rule is not followed. In certain situations, the court having regard to the purport and object sought to be achieved by the Legislature may construe the word "substitution" as an "amendment" having a prospective effect. If the amendment Act expressly states that the substituted provision shall come into force from the date the amendment comes into force, the said provision is prospective in nature. Then it is not open to the Court by way of interpretation to give retrospective effect to such provision. Ultimately to decide whether these provisions are prospective or retrospective, it is the intention of the legislature which is the sole guide. If the procedure adopted for amendment is substitution and in the Amended Act it is specifically stated that the substituted provisions come into effect from the date the amended Rules or Act came into force, the intention of the legislature is clear. On the pretext that it is the case of substitution, the effect cannot be given to that substituted provision from the date of the earlier statute. It has to be necessarily from the date the amended rules came into force.
30. In the field of service law it is settled law that a rule made in exercise of the power conferred by Article 309 of the Constitution can have retroactive operation. Rules operate prospectively. Retrospectively is an exception. Even where the statute permits framing of rule with retrospective effect the exercise of power must not operate discriminately or in violation of any constitutional right so as to affect vested right. The substitution would have the effect of amending the operation of law during the period in which it was in force. In the case of rules relating to recruitment, it is settled law that if a recruitment has to take place for public office, to be in conformity with Articles 14 and 16 of the Constitution of India, it has to be by way of paper advertisement. A notification has to be issued calling for applications from all eligible candidates. It is for the recruiting authority to prescribe qualifications and conditions for eligibility to apply. Once a notification is issued prescribing the qualifications in pursuance of the rules governing the said recruitment, it is settled law that the rules cannot be altered during the process of selection/recruitment. When the selection process has actually commenced and the last date for inviting applications is over, any subsequent change in the requirements regarding qualifications will not affect the process of selection which has already commended otherwise it would involve issuing a fresh advertisement with the new qualification. If it is altered, persons who have not applied on the assumption that they did not possess the requisite qualification are denied an opportunity to apply for a public post. Therefore, any alterations and amendments to the Rules regarding recruitment should only be prospective in nature. It has no application to the recruitment process, which are set in motion. If it is given retrospective effect, such a rule violates Articles 14 and 16 of the Constitution of India and it cannot be given effect to.”
14. It is significant to note that the Notification therein was issued in pursuance of the Rules governing recruitment which prescribes the upper age limit for general merit candidates and for SC, ST and OBCs. The applicant was over-aged according to the said Notification. During the pendency of the proceedings challenging the said Rules by the applicant, the said Rules were amended raising the upper age limit wherein it was expressly stated that the said Rules shall come into force from the date of Notification in the Official Gazette. In such circumstances, this Court observed that if the benefit of enhancement of age is given to the applicant, the effect is persons who were similarly placed, who did not apply against the Notification on the ground that they were over aged, are denied the opportunity in public employment. Hence, it was observed that alteration and amendments to the Rules regarding recruitment should only be prospective in nature, it has no application to the recruitment process which are set in motion.
15. The Apex Court in the case of Shamrao V.Parulekar and others .vs. District Magistrate, Thana, Bombay and others4 dealing with the interpretation to be placed on a substituted provision held as under:-
“(7). The construction of an Act which has been amended is now governed by technical rules and we must first be clear regarding the proper canons of construction. The rule is that when a subsequent Act amends an earlier one in such away as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed(except where that would lead to a repugnancy, inconsistency or absurdity) as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter 4 AIR 1952 SC 324 there is no need to refer to the amending Act at all”.
16. The Apex Court in Vijayalakshmi Rice Mills, New Contractors Co. and others5 explaining the effect of the word “substitute” appearing in an amendment act held as under:-
“It is no doubt true that the literal meaning of the word "substitute" is "to replace' but the question before us is from which date the substitution or replacement of the new Schedule took effect. There is no deeming clause or some such provision in the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964 to indicate that it was intended to have a retrospective effect. It is a well recognized rule of interpretation that in the absence of express words or appropriate language from which retrospectivity, may be inferred, a notification takes effect from the date it is issued and not from any prior date. The principle is also well settled that statutes should not be construed so as to create new disabilities or obligations or impose 5 AIR 1976 SC 1471 new duties in respect of transactions which were complete at the time the Amending Act came into force.”
17. The Hon’ble Apex Court in the case of Vatika Township Pvt. Ltd, supra, has observed thus:
“33. We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. In Government of India & Ors.
v. Indian Tobacco Association[5], the doctrine of fairness was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in the case of Vijay v. State of Maharashtra & Ors.[6] It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature. However, we are confronted with any such situation here.”
18. The Division Bench of this Court in Commissioner of Central Excise and Sales Tax, Bangalore, supra, has considered the effect of “substitution” of a provision in the place of an existing one in the context of a Notification dated 31.12.2008 coming into force on the date of the publication in the official gazette inasmuch as extending the benefit to the excisable goods to a “developer” of a special economic zone for their authorized operation. Prior to the said substitution, Sub-Rule 6 of clause(i) of Rule 6 of Cenvat Credit Rules, 2004, provided the benefit only to the excisable goods clear to a “unit” in a special economic zone. The Hon’ble Court observed that the word “developer” was conspicuously missing and only “unit” was included before the 2008 amendment. The amendment by Notification dated 31.12.008 was brought in to clarify the doubt. As the said amendment was clarificatory in nature, the same was brought by way of “substitution”.
The effect of the said “substitution” was, the Cenvat Rules are to be read and construed as if the altered words had been written into the Rules 2004 with pen and ink and the words “to a developer of the SEZ for their authorised operation” was there from the inception. Therefore, it was held that the amendment has to be construed as retrospective in nature .
19. In the case of The Hassan Co-Operative Milk Producers Societies Union Limited, supra, the question that fell for consideration was:
Whether Section 28-A(4) of the Karnataka Co- Operative Societies Act, 1959, as substituted by the Amendment Act dated 11.02.2013, is prospective or retrospective in nature?
The main argument of the learned Prl. Government Advocate was that when substitution takes place, unless the amending Act specifically indicates that it is retrospective, it cannot be presumed or implied that such substitution would be retrospective and as such, it is to be necessarily held as prospective. Attention of the Court was invited to the Notification issued by the State in exercise of its power under Section 1(2) of the Amending Act No.3 of 2013, appointing the date on which the amending Act was brought into force i.e., 11.2.2013, and contended that substituted provision would be applicable from the appointed date. This argument was addressed by the Full Bench of this Court and in paras.21 and 22 it is held as under:
“21. We would also like to examine the effect of amendment by way of substitution and to find out whether amendment by Act No.3 of 2013, by way of substitution would have retrospective operation. It is true that substitution of a provision results in repeal of the earlier provision and its replacement by the new provision. When the legislature amends the old provision by way of substitution it intends to keep alive the old provision. The Supreme Court in Zile Singh (supra) while dealing with such situation observed that having regard to the totality of the circumstances centered around the issue the Court can hold that the substitution has the effect of just deleting the old provision and making the new provision operative. The Supreme Court in State of Rajasthan vs. Mangilal Pindwal, AIR 1969 SC 2181 upheld the legislative practice of an amendment by substitution being incorporated in the text of a statute which had ceased to exist and held the substitution would have the effect of a amending operation of law during the period in which it was in force. Similarly, in Koteswar Vittal Kamath v. K.Rangappa Baliga, AIR 1969 SC 504, the three Judge Bench of the Supreme Court emphasized the distinction between supersession of rule and substitution of a rule and held that the process of substitution consists of two steps: first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place. Thus, what emerges from the aforesaid judgments of the Supreme Court is that an amendment which has the effect of substitution of a provision has the effect of replacing the old provision by the substituted provision and in the absence of repugnancy, inconsistency and absurdity, must be construed as if it has been incorporated in the Act right from abinitio. In other words, an amendment by way of substitution has retrospective operation.
22. The State Government, in the present case, by substituting new provisions of the Act in the place of old one, in our opinion, did not intend to keep alive the old provisions, otherwise, it would have made its intention clear in the amending Act No.3 of 2013. Having regard to the totality of the circumstances centering around the issue, we have no hesitation to hold that substitution, by the amending Act No.3 of 2013, had the effect of just deleting the old provisions and making the new provisions operative as if the same were in existence from inception. It is well settled that the process of substitution consists of two steps, first, the old Rule is made to cease to exist and, next, new rule is brought into existence in its place. Having regard to this principle, we find that all the substituted provisions introduced by way of Amending Act No.3 of 2013, have retrospective operation. Thus, the rule against retrospectivity is not applicable when an amendment is made to a provision by way of substitution. Considering that the elected members of the Managing Committee do not have any substantive/vested right and their term is governed by the provisions, in particular, the amended Sub-section (4) of Section 28-A of the Act, shall continue till the expiry of the period of five years from the date of their election. We do not agree with the view taken by the Division Bench in S M Kelageri.”
20. In Sonal Apparel Private Limited and others, supra, the Cognate bench of this Court observed that the ambiguity as to the purport of Section 10(3) of the Karnataka Valued Added Tax Act, 2003 arose as a result of the Department’s clouded interpretation of the Centum Industries case. The newly substituted provision clears the air and puts to rest the ambiguity, it may hence be said that the amendment to Section 10(3) is clarificatory and therefore could be given retrospective effect.
21. The Hon'ble Apex Court in the case of Zile Singh, supra, has declared thus:
“15. Though retrospectivity is not to be presumed and rather there is presumption against retrospectivity, according to Craies (Statute Law, Seventh Edition), it is open for the legislature to enact laws having retrospective operation. This can be achieved by express enactment or by necessary implication from the language employed. If it is a necessary implication from the language employed that the legislature intended a particular section to have a retrospective operation, the Courts will give it such an operation. In the absence of a retrospective operation having been expressly given, the Courts may be called upon to construe the provisions and answer the question whether the legislature had sufficiently expressed that intention giving the Statute retrospectivity. Four factors are suggested as relevant: (i) general scope and purview of the statute; (ii) the remedy sought to be applied; (iii) the former state of the law; and (iv) what it was the legislature contemplated (p.388). The rule against retrospectivity does not extend to protect from the effect of a repeal, a privilege which did not amount to accrued right (p.392).”
22. In the light of these judgments, the Court has to examine the context in which the Notification dated 22.12.2016 was issued. It is imperative that BESCOM filed petition No.24/15 before the Hon’ble KERC, Bangalore, seeking amendment to clause 42.05 of the conditions of supply of electricity distribution in the State of Karnataka. It was submitted that as per clause 9.10 of the Karnataka Electricity Regulatory Commission (Electricity Supply and Distribution) Code, 2000-01, anybody who is supplied with power within the State of Karnataka under clause No.9.00 is permitted to extend the power supply to the tenements/individual consumers. Such power supply is not treated as resale of energy. In view of the said condition, the registered consumers for whom the power supply is sanctioned, were permitted to extend to their tenements/individual consumers under domestic and commercial category, not treated as resale of energy but the same was not applicable to the LT-5 (Industrial) and HT-2(A) consumer (industries). Hence, the BESCOM moved for amendment to bring the LT-5 (Industrial) and HT-2(A) consumer (industries) which are permitting extension of power to such tenements within the premises on par with clause 9.00 or in other words to permit such extension of power within the premises to the tenements/individual consumers by the registered consumers and a proposed amendment was also recommended. It is on the said proposal/ recommendation made by the respondent No.1, KERC thought it fit to amend the regulation 8.14 of the COS. Accordingly the Notification dated 22.11.2016 was issued substituting regulation 8.14. clause 3 of the said Regulation permit the HT/EHT consumers desirous of using a part of the premises for own purpose and extending other part of the premises to another person either for industrial or residential or commercial purposes to allow his tenant to use the power at the same tariff as applicable to the consumer and to collect the charges for the power from such tenant on no profit no loss basis through a sub-meter as approved by the licensee and such arrangement shall not be treated as unauthorized extension of supply or resale of electricity.
23. It is the argument of the learned counsel for the respondent No.1 that the said approval by the licensee as regards the sub-meter cannot be made at this juncture. Hence the said Notification has to be given the prospective effect which otherwise would lead to absurdity. This argument would not be countenanced for the reason that the petitioner has already discharged the electricity power supply charges with regard to the meter installed in the composite premises. At most the approval of the licensee for the sub meter would be required for actual recording and to determine whether such extension of power supply was on no profit and no loss basis. If that object could be achieved through the main meter and the same has been already discharged, such a clause of approval of sub meter by the licensee would not render the substantial remedy granted by virtue of the substitution redundant. As could be seen, the said amendment by way of substitution was brought with a purpose to remedy the problems or to set right the dispute faced by the registered consumers for no fault of theirs.
24. The entire process for amendment has started with the request of the respondent No.1. It is thus clear that the amendment confers a benefit on the registered consumes without inflicting a corresponding determent on some other person or on the public. Generally giving a purposive construction to the phrase “substitution” in the present context, it appears the object of the amendment by “substitution” was to give effect retrospectively. This view is fortified by the judgment of the Hon'ble Apex Court in the case of Vatika Township Pvt. Ltd., and the Full Bench decision of this Court in The Hassan Co-operative Milk Producers Societies Union Limited, supra. The doctrine of fairness has to be held to be a relevant factor to construe a statute conferring a benefit as the law if it is enacted for the benefit of the registered consumers, as a whole, retrospectivity has to be attached to benefit such registered consumers. In the circumstances, the amendment brought to by condition No.8.14 by “substitution” has to be held clarificatory in nature. Hence, the point No.1 has to be answered in the affirmative.
25. Clause 42.05 of COS would be attracted only when the energy supplied to a consumer/premises is found extended unauthorizedly to some other person/premises. The term unauthorized use of electricity is defined under the Clause 2.62 of the Code read with Explanation [b] to Section 126 of the Electricity Act, 2003. In the wake of these provisions it would be inferred that the usage of electricity under the following circumstances could be construed as unauthorized – [i] by any artificial means; or [ii] by a means not authorized by the concerned person or authority or licensee; or [iii] through a tampered meter; or [iv] for the purpose other than for which the usage of electricity was authorized;
26. In the present case, though reference has been made to Clause 42.05 of the Code in the order impugned, none of the circumstances mentioned aforesaid is said to have been found by the Inspection Team. On the other hand, it is observed that the power supply has been extended unauthorizedly to the tenant since 2007. It is not in dispute that the RR.No.AKLHT184 was installed in the composite premises. It is an admitted fact that the petitioner has not defaulted in payment of electricity charges discharged on the bill, as could be seen from the order of the Assessing Officer at para 11 of the order impugned. A reasonable interpretation that can be given to the Clause 42.05 is that when the power supply is authorized/sanctioned to a particular premises/ consumer, extending the power supply to another premises/consumer outside the sanctioned premises would amount to unauthorized extension of power supply. The power supply sanctioned to a particular premises and continued to be used within the said premises though the premises was leased out to another person by the petitioner would not come within the ambit of Clause 42.05. This view is fortified by the substitution of clause 8.14 of the COS mentioned aforesaid.
27. Further if it is examined from another angle of supply of power in the same premise to a tenant whether has resulted in excess load and loss of Revenue, the answer would be in negative in terms of the table shown in the writ petition which is not controverted by the respondent. The said table is extracted hereunder:
Statement showing combined billing with single meter v/s separate billing with two independent meters for the period 2007-08 to 2014-15 Year Units Consumed Unit Rate [Amount. in Rs.] As per present billing method [Actual [Amt in Rs.] Billing when calculated separately with two meters [Amt in Rs.] Difference between combined billing [+] and separate billing [-] [Amt in Rs.] Remarks Full consumpti 2007-08 2,82,927 5.62 15,91,035, 15,91,035 -
on was within 1st slab [Rs.3.80] Full consumpti
28. In furtherance of this, it can be stated that if there were two separate meters, the amount paid to BESCOM would have been less by Rs.64,800/- for the period from 2007-08 to 2014-15. It is not the case of the respondent authorities that there is any excess load used by the petitioner over and above the sanctioned load or difference in tariff to the power supplied to the tenant. Giving a purposive interpretation to Clause 42.05 as well as 8.14, it appears that demand made by the respondent authorities towards back billing is not founded on any substantial evidence to invoke Clause 42.05, more particularly, the amendment made to Clause 8.14 of the COS vide Notification dated 22.11.2016 pursuant to the representation made by several consumers including the petitioner herein.
29. For the aforesaid reasons, the order impugned at Annexure-A dated 22.09.2015 is set aside and the proceedings are restored to the file of the respondent No.3 to consider the matter in the light of the observations made herein above and take a decision in accordance with law in an expedite manner in any event not later than four weeks from the date of receipt of certified copy of the order, after providing an opportunity of hearing to the petitioner.
With the aforesaid observations and directions, writ petition stands disposed of.
No order as to costs.
Sd/- JUDGE PMR/Dvr/NC