Allowed

M/S Induction Furnace Association of North India v. Punjab State Power Corp. Ltd. (Pspcl)&Ors

Punjab & Haryana HC17 May 2012CWP/16261/2011

Case brief

AI extract

What is this about?

The Court held that distribution licensees must pay interest on advance security deposits from 2003 under Section 47 of the Electricity Act, 2003, regardless of later regulations, directing respondents to pay interest for the specified period.

What did the court decide?

Respondents directed to pay interest on advance security from 2003; specifically for 2007-2008 at the rate prescribed by Regulations per petitioners' limited prayer.

M/S Induction Furnace Association… — Pension and Retirement Benefits | Punjab & Haryana HC (2012)

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C.W.P. No.16261 of 2011 -1-

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IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH.

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DATE OF DECISION : 17.5.2012

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C.WP. No.16261 of 2011

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M/s.Induction Furnace Association, Ludhiana

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VERSUS

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Punjab State Power Corporation Ltd. and others

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C.W.P. No.16262 of 2011

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Ranjeev Alloys Ltd. and others

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VERSUS

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Punjab State Power Corporation Ltd. & others

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CORAM : HON'BLE MR.JUSTICE MAHESH GROVER

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Present:Shri Puneet Jindal, Advocate for the petitioners. Ms.Madhu Dayal, Advocate for the respondents.

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MAHESH GROVER, J.

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By this common order I am disposing C.W.P. Nos.16261 and 16262

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of 2011.

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The petitioners pray that the advance deposit/security has been lying with the respondents since 1986 and that with effect from 2003, there was no

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C.W.P. No.16261 of 2011 -2-

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condition to pay interest on the security but subsequent to 2003, on coming into existence of Rule 27 of the Electricity Rules, 1956, read with clause 14 of the Model Form of Draft Conditions of Supply, grant of interest was made possible in accordance with the provisions of Section 47 of the Electricity Act, 2003.

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The grievance of the petitioners is limited, even though a number of prayers have been made, that interest on the advance security should be paid to them since 1986 to 2003. Reliance has been placed on M/s.Jagdamba Paper Industries (Pvt.) Ltd. and others v. Haryana State Electricity Board and others (1983) 4 SC.C. 508 and Ferro Alloys Corporation Ltd. V. A.P.State Electricity Board, 1993 Supp.(4) SCC 136.

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The respondents have stated that they are paying interest after the promulgation of the 2003 Act, but before that since there was no provision in the Act or the Regulations, the respondents could not pay any interest for the said period. It has further been stated that the terms and conditions applicable at that point of time are to govern the situation and since prior to 2003 there is no condition of paying any interest, consequently, the claim of the petitioners is totally baseless.

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On due consideration of the matter, I am of the opinion that the liability to pay the interest is no longer a question now considering the fact that the statute itself provides for such a contingency. Section 47(4) of the Electricity Act, 2003 which is extracted here below, clearly stipulates grant of interest on the amount of advance deposit/security :-

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“47(4).The distribution licensee shall pay interest equivalent to the bank rate or more, as may be specified by the concerned State Commission, on the security referred to in sub-section(1) and refund such security on the request of the person who gave

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C.W.P. No.16261 of 2011 -3-

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such security.”

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The stand of the respondents that Regulations framed under the Act are to be made applicable and operative from 1.1.2008 on which date such Regulations i.e. Electricity Supply Code and Related Matter Regulations, 2007 came into operation, is erroneous for the simple reason that once the statute provides for the grant of interest, then the subsequent Regulations which are mere regulatory in nature and intended to prescribe the mode and manner and expression to the provisions of the Act, cannot be made the starting point of the operation which certainly has to be the date on which the Act itself was made applicable.

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On account of the said proposition, particularly where the provision of statute has to be given paramount of consideration over any regulation or notification, I am of the opinion that the stand of the respondents deserves to be negated whereas the plea of the petitioners merits acceptance.

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Consequently, the petitions are accepted and the petitioners are held entitled to interest on their advance deposit/security with effect from the date when the statute came into existence i.e. 2003. The respondents are directed to pay interest to the petitioners for the period 2007 to 2008 on the rate of course which is prescribed by the Regulations as per limited prayer made by the petitioners.

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May 17, 2012 GD

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(MAHESH GROVER) JUDGE

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WHETHER TO BE REFERRED TO REPORTER? YES/NO

M/S Induction Furnace Association of North India v. Punjab State Power Corp. Ltd. (Pspcl)&Ors

Case brief

What is this about?

What did the court decide?

M/S Induction Furnace Association of North India v. Punjab State Power Corp. Ltd. (Pspcl)&Ors

Case brief

What is this about?

What did the court decide?

What the court decided

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