OSWAL WOOLEN MILLS LTD. versus PUNJAB STATE ELECTRICITY BOARD & ANR.

Citation: [2006] SUPP. 1 S.C.R. 480 · Decided: 28-04-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Disposed off

Judgment (excerpt)

A 
B 
OSWAL WOOLEN MILLS LTD. 
v. 
PUNJAB STA TE ELECTRICITY BOARD & ANR. 
APRIL 28, 2006 
[S.B. SINHA AND P.K. BALASUBRAMANY AN, JJ.] 
Electricity (Supply) Act. 1948-Sections 46 & 49-Supply to industrial 
consumers-State Electricity Board issued circular stipulating levy of 
C surcharge on consumption of electricity till the consumers switched over 
their supply system to higher voltage-Challenge to-Held: Electricity Board 
being a statutory authority was entitled to levy surcharge only in terms of 
tariff notification issued under the Act and not by reason of any circular. 
State Electricity Board issued circular dated 2l.l.1991 stipulating levy 
D of surcharge @ I 7Yz% on actual consumption of electricity in respect of 
industrial consumers having supply from a 11 KV line till such consumers 
switched over their supply system to 33 KV or higher voltage. On 03.5.1991, 
vide another circular, the Board issued a clarification allowing exemption from 
surcharge for a period of one year to enable all its existing consumers to 
switch over their supply system to higher voltage. 
E 
The entire controversy in the present set of cross-appeals by a consumer 
company (mill) and by the Board is as to from what date the period of one year 
should be calculated. Applicability or otherwise of the tariff notification issued 
under Sections 46 and 49 of the Electricity (Supply) Act, 1948 which provided 
F for revision oftariffw.e.f. 01.02.1994 is also in question. 
Disposing of the cross-appeals, the Court 
HELD: I.I. The Board is a creature of the statute. It is constituted in 
terms of Section 5 of the Electricity (Supply) Act, 1948. Section 46 of the Act 
provides for the Grid Tariff and Section 49 thereof empowers the Board to 
G make provision for the sale of electricity by it to persons other than the 
licensees. While exercising the said power the Board would be governed by 
the general terms which may be issued by the State in terms of Section 79 of 
the Act. [ 487-CJ 
H 
480 
OS WAL WOOLEN MILLS LTD. v. PUNJAB STA TE ELECTRICITY BOARD 
481 
1.2. The Board being a statutory authority, its power to issue bills for A 
consumption of the electricity would be governed solely by the tariff 
notification. Such a power can be exercised by the Board only in exercise of 
its statutory power and not by reason of an executive power. In terms of a 
circular letter issued by the Board, therefore, neither any surcharge nor any 
penalty could be levied. Surcharge by way of additional rate or penalty can be B 
levied only in terms of a tariff notification. [487-G, DJ 
2. The tariff notification dated 26.07.1991 speaks of levy of such 
surcharge inter alia on Arc furnaces. Similar is the position in regard to 
the notification dated 01.02.1994. As in the notification, it has clearly been 
stated that l 7Y. % surcharge on the above tariff should be leviable for all the C 
Arc furnace load consumers which were being given the supply at 11 KV, the 
High Court clearly fell in error in arriving at the finding that by reason of 
the said notification, the circular letters dated 21.01.1991 and 03.05.1991 
were not superseded. The High Court failed to pose unto itself the correct 
question, namely, as to whether after issuance of the tariff notification, the 
Board could levy any surcharge@ 17Y.% on the tariff on those consumers D 
who did not have Arc Furnace. (487-F-G; 488-A, BJ 
3.1. The question which falls for consideration is from which date the 
period of one year could have started. Although the company could have 
contended that from 03.05.1991, no surcharge could have been levied, but it E 
did not raise such a contention before the High Court. Herein also a limited 
notice was issued. (488-C) 
3.2. The High Court by its order dated 29.01.1992 stated that the period 
of one year would start from the date when the feasible point for installation 
of 33KV or higher voltage sub-Station at the factory premises by the Board F 
was pointed out. But selection of a site for the purpose of drawing 33KV line 
was not an empty formality. Several factors including the convenience of the 
Board were required to be taken into consideration. In some cases probably 
compensation for acquisition of land was required to be paid. The High Court's 
observations might be incorrect; but then the same was accepted and the 
parties acted thereupon. [488-H; 489-A, BJ 
G 
3.3. All the Courts below had arrived at a finding of fact, having regard 
to the Board's le

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