M.P. STATE ELECTRICITY BOARD versus UNION OF INDIA AND ORS.

Citation: [2006] SUPP. 6 S.C.R. 133 · Decided: 13-09-2006 · Supreme Court of India · Bench: S.B. SINHA, DALVEER BHANDARI · Disposal: Directions issued
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Judgment (excerpt)

M.P. STATE ELECTRICITY BOARD 
A 
v. 
UNION OF INDIA AND ORS. 
SEPTEMBER 13, 2006 
[S.B. SINHA AND DAL VEER BHANDARI, JJ.) 
B 
Madhya Pradesh Reorganisation Act, 2000-Section 58-Bifurcation of 
State of Madhya Pradesh-Constitution of new Electricity Boards in the two 
bifurcated States on different dates-Chhattisgarh State Electricity Board C 
constituted w.e.f 15.I 1.2000 and started collecting revenues-Complaint by 
State of Madhya Pradesh-Central Government forbid the unilateral collection 
till the bifurcation of the erstwhile Board-State of Madhya Pradesh constituted 
its Board w.e.f 1.1.2001-Central Government by notification approved 
constitution of successor Boards w.e.f 15:4.2001-Provisional apportionment 
of assets and liabilities between the two successor Boards w.e.f 15.4.2001- D 
Notifications and allocations of assets and liabilities challenged before High 
Court-Pursuant to High Court's direction date of dissolution of erstwhile 
Board fixed as 15. I 1.2000 and perinitted same to be functional within State 
of Madhya Pradesh-Order of dissolution challenged before Supreme Court-
Held: Cut off date fixed by Central Government no/arbitrary hence not violative 
of Article 14-As the date of bifurcation was fixed by Central Government in E 
terms of its undertaking given before High Court and on compliance of the 
principles of natural justice, the fixation cannot be said to be made by non-
application of mind-Apportionment of current assets and liabilities between 
the successor Boards on the basis of power consumption ratio of the States 
and on revenue generation capacity is not arbitrary or irrational-Constitution F 
of India, 1950-Article 14. 
Constitution of India, 1950-Article 32-Jurisdiction under-Scope of-
Held: Ordinarily in exercise of its discretionwy jurisdiction under Article 32, 
where the decision of the Government which might be erroneous but not 
illegal, is challenged, the Court shall not inte1fere. 
G 
Interpretation of Statutes-Interpretation of ambiguous statute-Held: 
When a statute is ambiguous, the construction which better serves the ends 
and answers the principles of fairness and justice, should be accepted 
133 
H 
134 
SUPREME COURT REPORTS [2006] SUPP. 6 S.C.R. 
A 
Madhya Pradesh State Electricity Board (MPSEB) was established 
in 1957 in terms of Electricity (Supply) Act, 1948. A new State of 
Chhattisgarh was carved out of the State of Madhya Pradesh and formed 
on 1.11.2000 by virtue of Madhya Pradesh Reorganisation Act, 2000. In 
furtherance of Section 58 of 2000 Act, State of Chhattisgarh constituted 
B its own Electricity board w.e.f. 15.11.2000. It started collecting revenues 
w.e.f. the said date. However, it remitted all the revenues collected to the 
MPSEB from 15.11.2000 to 30.11.2000. The State of Madhya Pradesh 
constituted a new board w.e.f. 1.1.2001. On a complaint from the State of 
Madhya Pradesh that the revenues were being collected illegally by 
Chhattisgarh State Electricity Board (CSEB), Government of India 
C clarified that no unilateral action was to be taken by any State, and 
revenues realized within the State relating to distribution of power should 
be remitted without fail to MPSEB till the Board was bifurcated on a date 
as certified by the competent authority. Government of India issued a 
notification approving constitution of successor Boards w.e.f. 15.4.2001. 
Guidelines with regard to division of assets, rights, liabilities, contracts, 
D employees and arrangement for distribution of power were laid down 
therein. State of Madhya Pradesh made a representation to the 
Government of India requesting for modification of the notification with 
regard to the basis of the apportionment of assets and liabilities. MPSEB 
filed a Writ Petition before Delhi High Court against CSEB for remittance 
E of revenues illegally retained from 1.12.2000 to 14.4.2001. Government of 
India, by a letter dated 4.12.2001 provisionally confirmed the 
apportionment of assets and liability w.e.f. 15.4.2001 and opined that the 
revenue collected by CSEB before the said date should be remitted to 
MPSEB. Central Government also appointed an independent agency for 
ascertaining the total ·liabilities of the two States in terms of the purported 
F criteria laid down in the notification dated 12.4.200 I. State of Chhattisgarh 
filed a Writ Petition in the High Court of Chhattisgarh questioning the 
orders of Government of India dated 12.4.2001and4.12.2001. This Petition 
was
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