GRID CORPORATION OF ORISSA LTD. AND ORS. versus EASTERN METALS AND FERRO ALLOYS AND ORS.

Citation: [2010] 10 S.C.R. 779 · Decided: 31-08-2010 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2010] 10 S.C.R. 779 
GRID CORPORATION OF ORISSA LTD. AND ORS. 
v. 
EASTERN METALS AND FERRO ALLOYS AND ORS. 
(Civil Appeal Nos. 5842-5889 of 1998) 
AUGUST 31, 2010 
[R.V. RAVEENDRAN AND H.L. GOKHALE, JJ.] 
Orissa Electricity Reform Act, 1995: s.14(iv) -
Provisional licence issued by State Government in exercise 
A 
B 
of power under s. 14(iv) - Words "charges made by the 
C 
licencee not to exceed on average 117% of those permitted 
under the interim tariffs in force on 1.4.1996" used in Clause 
9. 1 of the licence - Correct interpretation of - Held: The use 
of the words "charges made by the licencee" and the words 
"shall not exceed on average 117%" necessarily indicates that 
D 
the rates fixed by the licencee should not result in an increase 
in realization or revenue in excess- of 17% of what it would 
have realized with reference to the tariff rates that were earlier 
in force under the interim tariff -
"Charges made by the 
licencee," therefore, refers to the total revenue by sale of 
E 
electricity to the different categories of consumers - The word 
'on average' used in clause 9. 1 gives the discretion to 
licencee to charge tariff rates with different increases 
depending upon the category of consumers, so long as the 
overall increase in revenue, that is, the "charges made" by the 
licencee, does not exceed 17% - Any other interpretation 
would render the words 'on average' otiose and have the effect 
of substituting the words 'tariff rate' for the word 'charges' -
Interpretation of statutes - Electricity. 
F 
Administrative law: Opinion of technical body G 
(Electricity Regulatory Commission) - Acceptability of - Held: 
The opinion of a technical body in regard to purely technical 
matters deserves acceptance and should not be interfered, 
unless it is arbitrary or unreasonable. 
779 
H 
780 
SUPREME COURT REPORTS 
[2010] 10 S.C.R. 
A 
Interpretation of statutes: Purposive construction -
Held: The golden rule of interpretation is that the words of a 
statute have to be read and understood in their natural, 
ordinary and popular sense - Where, however, the words used 
are capable of bearing two or more constructions, it is 
B necessary to adopt purposive construction, to identify the 
construction to be preferred - Such an exercise involving 
ascertainment of the object of the provision and choosing the 
interpretation that would advance the object of the provision 
can be undertaken, only where the language of the provision 
c is capable of more than one construction. 
By virtue of Section 14(iv) of the Orissa Electricity 
Reform Act, 1995, the State Government is authorized to 
grant provisional licences for carrying on the business 
of transmission or supply of electricity. In exercise of the 
D power under the said section, the State Government, by 
notification dated 30.3.1996, issued three licences to the 
appellant subject to the terms and conditions mentioned 
in those licences. The appellant took over the 
transmission, distribution and supply of electricity from 
E the Orissa State Electricity Board (OSEB) with effect from 
1.4.1996. Clause 9 of the licences was related to tariffs. 
Clause 9.1 stated that the charges made by the licencee 
should not exceed on average 117% of those permitted 
under the interim tariffs in force on 1.4.1996. The interim 
F tariffs in force as on 1.4.1996, referred to in the said 
clause 9.1 were the tariffs contained in the Notification 
dated 28.10.1995 issued by the OSEB, predecessor of the 
appellant. 
By notification dated 13.5.1996, the appellant revised/ 
G prescribed different tariff rates for different categories of 
consumers in supersession of the tariff rates prescribed 
in the OSEB Notification dated 28.10.1995. Several writ 
petitions were filed before the High Court, challenging (i) 
the validity of Section 14(iv) of the Act; (ii) the validity of 
H the Notification dated 30.3.1996, in particular the 
GRID CORPORATION OF ORISSA LTD. v. EASTERN 
781 
METALS AND FERRO ALLOYS 
provision of the licence which enabled the appellant to 
A 
increase the tariff not exceeding on average 117% of 
those permitted under the interim tariff issued by the 
State Government; and (iii) the tariff notification dated 
13.5.1996 issued by the appellant. 
The High Court upheld the validity of Section 14 (iv) 
of the Act and the Notification dated 30.3.1996. It also 
upheld the power of the appellant to revise the tariff under 
the provisional licence. It, however, held tha

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