State Commission can, in public interest direct the Administrator under S. 20(1)(e) of Electricity Act, 2003 to sell the utility

Appellate Tribunal for Electricity: While delivering the judgment in an appeal filed under Section 111 of the Electricity Act, 2003, a two Member Bench comprising of Ranjana P. Desai, J. (Chairperson) and I.J. Kapoor (Technical Member), dismissed the appeal holding inter alia, that the Administrator is appointed to ensure that the utility is operated in efficient manner. He is an appointee of the State Commission and the State Commission acts through him in public interest. If public interest requires, sale can be effected through the Administrator.

In September, 2005, one Shri Mohanty filed a petition under Section 19 of the Electricity Act for revocation of licence of the appellants inter alia on the grounds of violation of license conditions and non-implementation of directions of the State Commission. Notices were issued to the appellants and all the parties were heard. The State Commission found that the replies filed by the appellants were not satisfactory. The State Commission recorded its prima facie conclusion that the appellants had violated the terms and conditions of their respective licences and it is necessary in public interest to suspend the licenses of the appellants and appoint an Administrator.

The appellants (DISCOMS) challenged order dated 04/03/2015 passed by Respondent 1 Odisha Electricity Regulatory Commission (State Commission) revoking the licences of the appellants and appointing an Administrator for the appellants’ utilities.

The Tribunal referred to the principle of purposive construction of a statute. It was of opinion that one of the avowed objects of the Electricity Act is to protect interest of consumers as was evident from its Statement of Objects and Reasons and from its Preamble. The facts of this case disclosed that the State Commission had passed several orders and had conducted extensive exercise of fact finding. Information had been elicited from the appellants. They were confronted with the material against them, which was also communicated to them. The Appellants were given ample opportunities of hearing. Their exhaustive replies were on record, which were perused by the State Commission. The requirements of the Electricity Act and the relevant regulations had therefore been complied with. There was no infraction of principles of natural justice as contended by the appellants.

The Tribunal perused Sections 19-24 of the Act to hold that the idea behind these provisions appears to be to ensure that the utility is operated in an efficient manner so as not to cause any inconvenience to the consumers. This scheme is based on equitable considerations. It does not rule out a sale by the Administrator appointed under Section 20(1)(d). Under Section 20(1)(e) the Administrator has to exercise such powers and discharge such functions as the appropriate Commission may direct. Therefore, if the appropriate Commission is so minded, it can in public interest direct the Administrator to sell the utility. There is nothing in the relevant provisions which prevents the Administrator from selling the utility if the State Commission so directs. The licensees have no vested right to insist that the utilities be sold in a particular manner.

In the view of the above, both the impugned orders were confirmed. The appeal was accordingly dismissed. [Western Electricity Supply Company of Odisha v. Odisha Electricity Regulatory Commission, Appeal No. 64 of 2015, decided on August 21, 2017]

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