EASTERN METALS AND Vs. STATE OF ORISSA

JUDGEMENT

(1.) Petitioner No. 1, a private company through its Managing Director (petitioner No. 2), challenges the provisional licence issued by the State Government under Section 14 of the Orissa Electricity Reforms Act, 1995 (hereinafter called as the 'Reform Act') in favour of the Grid Corporation of Orissa Limited (for short, the 'Gridco') for distribution, transmission and supply of electricity power in the State as ultra vires as well as Gridco's authority in enhancing the tariff as arbitrary and against the law. This is also the allegation of all the other petitioners in the writ petitions named above and the present judgment will govern all these cases heard analogously with this case.

(2.) Petitioner's case, is, it is a small scale industrial unit engaged in the business of manufacture and sale of low carbon ferro alloys. It started its commercial production from 4-1-1984. The company had earlier entered with an agreement with the Orissa State Electricity Board (for short, the 'Board') for supply of electricity to its factory with a contract demand of 150 KVA. As per the contract the company used to pay to the Board various electricity charges as per its regulations. As regards the Industrial Policy Resolution (for short, the 'IPR') since the contract demand was less than 500 KVA, it was exempted from payment of electricity duty.

(3.) The State of Orissa (opposite party No. 1) brought out the Orissa Electricity Reforms Act, 1995, the aims and objects of which was restructuring of the electricity industry and rationalisation of generation, transmission, distribution and supply of electricity energy in the State in an efficient, economic and competent manner. The Act received the assent of the President of India on 3-1-1996. It was published in the Orissa Extra Ordinary Gazette No. 40 dated 10-1-1996.On 30-3-1996 the State of Orissa issued a notification under Section 14(4) of the Act granting the Gridco (incorporated on 20-4-1995) provisional licence for supply of electricity energy on the terms and conditions incorporated in the licence to be effective from 1-4-1996. It is claimed that Section 14(4) of the Reforms Act being ultra vires of the provisions of the Indian Electricity Act, 1910, the notification granting the licence is also invalid in the eye of law. It is further their case that without any justifiable reason and arbitrarily the Gridco enhanced the tariff by way of revision by more than 17%, only with a view to make up the deficit incurred because of its accepting the unusually enhanced value of assets of the Board at the time of taking over. Such enhancement of tariff by the Gridco was notified on 13-5-1996 to be enforced from 21-5-996 which affected different categories of consumers including, the petitioner company. Besides payment of enhanced tariff, in some cases even more than the rate of 17%, the notification further required the consumers to pay other statutory charges imposed.It is further the case that since the bills were raised by the Gridco in utter violation of the incentive under the 1995 IPR which the petitioner company is entitled to, being a continuing industry having a contract demand below 500 KVA such bills should be quashed.