Case comment on the Executive engineer v M/s Sri Seetaram rice mill

Facts of the case

The facts of the case of executive engineer SOUTHCO v Sri Seetaram
Rice Mills were such that the respondent, (Sri Seetaram rice mill) which
was a partnership firm claiming to be a small-scale industrial unit
engaged in the production of rice, entered into an electric supply
agreement with the appellant (executive engineer SOUTHCO).
according to the agreement, the respondent was classified in medium
industry category which deals with the contract demand of 99 KVA and
above but below 110 KVA. Thereafter the electricity division inspect the
business premises of the respondent and error within the limit of
power was found by it. Subsequently, intimation was issued to the
respondents informing them of the unauthorized use of electricity
falling under provisions of section 126 of the 2003 Act. The respondent
was required to file objections and also to pay the amount of additional
electricity used. Instead of filing any objections, the respondent
challenged the provision and assessment order and the intimation of
authorized use before the high court of Orissa in the grounds of lack of
authority and jurisdiction on the part of the executive engineer, along
with contending that no inspection was conducted, the respondent also
challenged the maintainability and sustainability of the order on the
basis of dump charges relating to large industry while the respondent
was classified as medium scale industry. It was also contended that the
provisions of section 126 of the 2003 act were not attracted, which was
contested by the appellants contending that unauthorized use of
electricity as defined under section 126 came into play as per clause (b)
of the explanation under section 126. The dump report dated 10th June
2009 and the intimation dated 25th July, 2009 had been sent showing
overdraw of MD where, according to the appellants, the respondent
had consumed electricity by means 'unauthorized by the licensee’ and
thereby breached the agreement and therefore, the provisional
assessment order and the intimation were fully justified. The high court
accepted the case of the respondent and held that the words
'unauthorized use of electricity and 'means' as provided in the relevant
explanation were exhaustive. overdraw of MD would not fall under
'unauthorized use of electricity ' as defined in the 2003 Act and the
appellant had no jurisdiction to issue the intimation inquest on and
pass the assessment in terms of section 126 of the 2003 act. aggrieved
by the high court judgement, the appellants appealed against the
judgement by way of special leave petition in the supreme court.
STATEMENT OF ISSUES
The issues in the case were as follows-
1. Wherever the consumer consumes electricity in excess of the
maximum of the contracted agreement, the provisions of section 126 of
the 2003 act be attracted on its scope and interpretation?
2. Whether the high court, in the facts and circumstances of the case,
was justified in interfering with the provisional order of assessment
notice dated 25th of July 2009, in exercise of its jurisdiction under
article 226 of the constitution of India?
3. Was the writ petition before the high court under article 226 of the
constitution of India not maintainable because of statutory alternative
remedy being available under section 127 of the 2003 act?
ANALYSIS
The Supreme Court in its judgement, while considering the issues of
the case, first of all focused on how the 2003 act should be construed.
While rejecting the contention of the respondent that the court should
interpret section 126 of the Act in a strict and textual construction to
the extent that they have to be read exhaustively in absolute terms, the
court instead preferred a construction which will improve the
workability of the statute and it be more effective and purposive. The
intention of this logic was to make sure that the objective and intent of
the legislature behind enacting a statute is not hindered or lost upon
while focusing on any particular case. In the same context ,the SC while
noting that fiscal and penal laws have to be construed in a strict
manner, also said that there have to be certain exceptions singled out
by the court in order to make sure that the law would be interpreted
having regard to the subject matter of the offence and the object the
law seeks to achieve. Briefly summing up, the SC adopted a purposive
and broad interpretation of the 2003 act and drawing on this
interpretation, the SC observed that section 126 of the act becomes a
code in itself, as all matters from initiation of the proceedings by
conducting an inspection, to the right to file an appeal before the
appellate authority come under these provisions. the SC observed that
the relevant section had a purpose to achieve, which was to put an
implied restriction on such unauthorized consumption of electricity.
The court further held that section 126 of the act should be read with
other provisions and regulations in force. the applicability of the section
126 in cases where there is no theft of electricity but there was
consumption of electricity which was in violation of the terms
conditions of supply leading to malpractices. These malpractices were
held to be falling under the expression unauthorized use of electricity'
mentioned in the act and also that the assessing officer has been vested
with the powers to pas provisional and final orders of assessment in
cases of unauthorized use of electricity.
the court then went on to determine the scope of section 126 and the
implication of the expression 'unauthorized use of electricity'. it was
held that the manner in which the respondent used electricity came
clearly under the expression 'unauthorized use of electricity' which
further is within the ambit and scope of section16 of the 2003 act.
holding that the section be given an exhaustive interpretation would
defeat the objective or the purpose of the act. Therefore, the court was
of the opinion that the expression unauthorized use of electricity
should not be restricted to the stated clauses under the explanation but
has to Be given a wider meaning so as to cover the cases of violation of
terms and conditions of supply.
Therefore, the court finally held that the appellant had been provided
with powers to inspect the unauthorized use of electricity and pass an
order of assessment in terms of sections 126(6) to 126(6) of the 2003
act.
Coming to the second issue regarding article 226, the court that under
article 226 of the constitution, the high court having regard to the facts
of the case has a discretion to entertain or not to entertain a writ
petition. but the high courts have imposed upon itself certain
restrictions one of which is that if an alternative and efficacious remedy
is available, the high court would not normally exercise its jurisdiction.
the courts take the view that the statutory remedy, if provided under a
specific law, would impliedly oust the jurisdiction of the civil courts. The
SC also held that being so, the High Court was not justified in dismissing
the writ petition at the initial stage without examining the contention
that the show cause notice issued to the appellant was wholly without
jurisdiction and that the registrar, in the circumstances of the case, was
not justified in acting as the tribunal. There was also a contention
where the statutory remedy would not apply as a bar in cases of filing
of writ petition for enforcing fundamental rights, cases of violation of
the principle of natural justice and where the orders or proceedings are
wholly without jurisdiction or the vires of an act are challenged.
examining the facts of the case the SC observed that while the high
court was not in error of jurisdiction in entertaining the writ petition
but it certainly failed to exercise its jurisdiction within the prescribed
limitations of law for exercise of such jurisdiction. the proper exercise
of jurisdiction by the high court would have been to answer the
question of law relating to lack of jurisdiction and exercise of
jurisdiction in futility without travelling into and determining the
validity of the demand which squarely fell within the domain of the
specialized authority. finally the SC of the opinion that while the high
court did not commit any error of jurisdiction while entertaining the
writ petition, it did transgress its jurisdictional limitations while going
into the exclusive domain of the assessing officer and that high courts
should normally decline to interfere in a final order of assessment
passed by a competent authority.
CONCLUSION
This judgement which allowed the appeal made by the Boardwas a
major one in terms of defining the various powers given to then
relevant authorities under the Electricity Act, 2003 and how such
authorities can take action in case of unauthorized use of electricity is
found during their operations. During examining the first issue, the SC
also laid out how an act should be interpreted by courts and that such
interpretation should be in such a way so as to not render an act or its
objectives futile. This judgement also outlined how the powers of the
high court under article 226 of the constitution of India are to be used
in case of such acts which have remedial functions given in it after any
violation of any rules mentioned in the act takes place.