S.R. Bannurmath and A.N. Venugopala Gowda, JJ.
1. The appellant, had filed the writ petition seeking the following prayers: To,
(a) declare Regulation 43 of the Karnataka Electricity Regulatory Commission (General Conduct of Proceedings) Regulations 2000, ("Regulations" for short), as ultra vires and unenforceable;
(b) direct the Karnataka Electricity Regulatory Commission not to give effect to or apply Regulation 43 of the Karnataka Electricity Regulatory Commission (General Conduct of Proceedings) Regulation 2000;
(c) to quash the letter of the Karnataka Electricity Regulatory Commission dated 15.12.2000, rejecting Appeal No. 32/2000 and for directing the 'Commission' to entertain the said Appeal and decide the same on merits.
2. The writ petition having been dismissed by the learned Single judge, this writ appeal has been filed, to set aside the order passed by the learned Single Judge and allow the writ petition.
3. We have heard Sri S. Naganand, learned Sr. counsel for the appellant and Sri K.G. Raghavan, learned Sr. counsel for respondent 1. The 2nd respondent though served, has remained un-represented. We have perused the record of the writ appeal.
4. The matter to state in brief, has arisen in the following way:
The 2nd respondent, was a consumer, of electricity supply, by the appellant. An official of the appellant, has inspected the installation of the 2nd respondent and has noticed that the energy meter, was found to be recording slow by 3.56%. Consequently, a back bill for Rs. 80,758/-was issued by the appellant, calling upon the 2nd respondent to pay the bill amount.
4.1. The 2nd respondent, had raised a dispute about the said bill and had sought adjudication of the matter as provided under Section 26(6) of the Indian Electricity Act, 1910 ("the Act of 1910" for short), by the Chief Electrical Inspector. The said authority has passed an order on 16.6.2000, holding that, the back billing should be in the order of 0.56% as against 3.56% and directed the appellant to raise a fresh demand on the said calculation.
4.2. The appellant being aggrieved, had preferred an appeal to the 1st respondent - Commission, under Section 40 of the Karnataka Electricity (Reforms) Act, 1999 ("the Act'' for short). The Karnataka Electricity Regulatory Commission ("Commission" for short) by its communication dated 15.12.2000, has informed the appellant that, the appeal having been found to be filed beyond the time, in terms of Regulation 43 of the Commission, the delay being 111 days, the prayer for condonation of delay in filing the appeal is not considered by the Commission and the same is rejected.
Decision of the learned Single Judge:
5. The learned Single Judge, taking into account the submission made that, the provisions of the Electricity Act, 2003, now takes care of various possibilities, the grievance of the appellant, regarding stipulation of limitation, prescribed by the Commission, was not gone into and was left open, if needed, to be agitated by the appellant, in any other case. The learned Single Judge declined to examine the aspect or even the request for remanding the matter for fresh consideration on merit by the Commission, on the ground that even for remanding, the impugned order has to be quashed, which the learned Single Judge found was not necessary on the ground that, the revenue effect involved to the appellant is not, so substantial, so as to warrant an enquiry into all legal questions in the writ petition. Noticing that the matter had arisen in 1992 and the litigation Page 2069 should be brought to an end expeditiously under public policy, the learned Single Judge declined to consider the contentions urged on behalf of the appellant.
6. Sri Naganand, learned Sr. counsel appearing for the appellant contended that, Regulation 43 of the Commission is clearly invalid, being ultra vires, of the provisions of the Act and is required to be invalidated. It is his further contention that, the power to frame the rules is conferred on the Legislature and there is no scope for the Commission to frame Regulations, particularly for providing the period of limitation to prefer statutory appeal provided under the Act. The learned Counsel contended that, the law relating to limitation can be made only by the Legislature. It is contended that, neither in Section 36(2) of the Act of 1910 nor Section 40 of the Act, the period of limitation for filing the appeal is stipulated. In the absence of the Legislation by the Legislature, the Commission had no authority to frame the impugned regulation. To buttress the submission, the learned Counsel relied upon the judgment in the case of Bharat Barrel and Drum Mfs. Co. Private Ltd., and Anr. v. The Employees' State Insurance Corporation .
6.1. Per contra, the learned Counsel for the 1st respondent contended that, the Commission had the competence to frame the impugned Regulation, to regulate the proceedings before it and the same is intra vires. The learned Counsel also supported the impugned order, passed by the learned Single Judge, generally on the basis of the reasons stated therein.
6.2. The questions that arise for our consideration are:
(a) Whether Regulation 43 of the Karnataka Electricity Regulatory Commission (General Conduct of Proceedings) Regulations, 2000, is ultra vires and unenforceable?
(b) Whether the 'Commission' should be directed to entertain the appeal, filed by the appellant and decide the same on merit?
The facts which are not in dispute are:
7. Annexure-A, is the order dated 16.6.2000, passed by the Chief Electrical Inspector to Government of Karnataka under Section 26(6) of 'the Act of 1910', on the appeal filed by the 2nd respondent. Annexure-B, is the appeal filed under Section 40 of 'the Act', by the appellant, before the Commission, impugning the order at Annexure-A. Annexure-C, is the communication dated 15.12.2000, whereby the appellant was informed by the Secretary of the Commission that the appeal having been filed beyond Page 2070 the time stipulated under Regulation 43 of the Regulations, the delay being 111 days, the prayer for condonation of delay is not considered by the Commission and the appeal was rejected.
8. The following are the relevant, provisions:
Section 56 of 'the Act' confers power on the Commission to make Regulations by notification in Official Gazette, for the proper performance of its functions under 'the Act'. The Commission by virtue of the said provision, has framed the 'Regulations'. Chapter IV of the Regulations, is with respect to appeals from electrical inspectorate. Regulation 42 is with respect to the appeals, which can lie to the Commission, from the decisions of the electrical inspectorate, as are passed in exercise of their powers under 'the Act of 1910' and the Electricity Act, 1948. Regulation 43 is with respect to the time frame for filing appeal, i.e., within one month of the communication of the impugned decision by the electrical inspectorate. The said Regulation also stipulates that, the period may be extended by the Commission at its discretion, by not more than 30 days. Regulation 44 is with respect to the form of appeals and the appellate proceedings.
Whether the Regulation 40 is invalid?
9. It is settled position of law that there is a presumption in favour of constitutionality or validity of a subordinate legislation and the burden is upon him who attacks it, to show that it is invalid. It has now become clear from the various decisions of the Hon'ble Supreme Court that, the subordinate legislation can be challenged under any of the following grounds:
(a) Lack of legislative competence to make the subordinate legislation;
(b) Violation of fundamental rights guaranteed under the Constitution of India;
(c) Violation of any provisions of the Constitution of India;
(d) Failure to conform to the statute under which it is made or exceeding the limits of authority conferred by the enabling Act;
(e) Repugnancy to the laws of the land, i.e., any enactment and
(f) Manifest arbitrariness or unreasonableness (to an extent where Court might well say that legislature never intended to give authority to make such rules/regulations.
9.1. It is also clear from the declarations of the Hon'ble Supreme Court, that the Court considering the validity of a subordinate legislation, will have to consider the nature, object and scheme of the enabling Act and also the area over which power has been delegated under the Act and then decide whether the subordinate legislation conforms to the parent Act.
The Hon'ble Supreme Court in the case of Indian Express Newspapers (Bombay) Private Ltd., and Ors. v. Union of India and Ors. , has held as follows:
A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent legislature. Subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. In addition it may also be questioned on the ground that it does not conform to the statute under which it is made. It may further be questioned on the ground that it is contrary to some other statute. That is because subordinate legislation must yield to plenary legislation. It may also be questioned on the ground that it is unreasonable, unreasonable not in the sense of not being reasonable but in the sense that it is manifestly arbitrary.
The Hon'ble Supreme Court in the case of Supreme Court Employees' Welfare Association v. Union of India and Anr. , has held that the validity of subordinate legislation is open to question if it is ultra vires the Constitution or the governing Act or repugnant to the general principles of laws of the land or is so arbitrary or unreasonable, that no fair minded authority could ever have made it. It was further held that the rules are liable to be declared invalid if they are manifestly unjust or oppressive or outrageous or directed to be unauthorised and/or violative of general principles of law of the land or so vague that it cannot be protected with certainty as to what it prohibited or so unreasonable that they cannot be attributed to the power delegated or otherwise discloses bad faith.
The Hon'ble Supreme Court in the case of Shri Sitaram Sugar Co. Limited and Anr. v. Union of India and Ors. , has held as follows:
Power delegated by statute is limited by its terms and subordinate to its objects. The delegate must act in good faith, reasonably, intra vires the power granted, and on relevant consideration of material facts. All his decisions, whether characterised as legislative or administrative or quasi-judicial, must be in harmony with the Constitution and other laws of the land. They must be "reasonably related to the purposes of the enabling legislation". See Liela Mourning v. Family Publications Service 411 US 356 : 36L ed 2d 318. If they are manifestly unjust or oppressive or outrageous or directed to an Page 2072 unauthorised end or do not tend in some degree to the accomplishment of the objects of delegation, court might well say, "Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires": Per Lord Russel of Killowen, C.J. in Kruse v. Johnson (1898) 2 QB 91.
The Hon'ble Supreme Court in the case of St. Johns Teachers Training Institute v. Regional Director, National Council for Teach Education and Anr. , while explaining the scope and purpose of delegated legislation, has held as follows:
A regulation is a rule or order prescribed by a superior for the management of some business and implies a rule for general course of action. Rules and regulations are all comprised in delegated legislation. The power to make subordinate legislation is derived from the enabling Act and the delegate on whom such a power is conferred has to act within the limits of authority conferred by the Act. Rules cannot be made to supplant the provisions of the enabling Act but to supplement it. What is permitted is the delegation of ancillary or subordinate legislative functions, or, what is fictionally called, a power to fill up details. The legislature may, after laying down the legislative policy confer discretion on an administrative agency as to the execution of the policy and leave it to the agency to work out the details within the framework of policy. The need of delegated legislation is that it is framed with care and minuteness when the statutory authority making the rule, after coming into force of the Act, is in a better position to adapt the Act to special circumstances. Delegated legislation permits utilisation of experience and consultation with interests affected by the practical operation of statutes.
9.2. Appeal to the Commission from the decision of the electrical inspector has been provided under Section 40 of 'the Act'. The said Section does not prescribe any period of limitation, within which, the appeal has to be filed to the Commission. In contrast, the Act under Section 41 prescribes the period of limitation, when appeal has to be filed against the order of the Commission to the High Court of Karnataka. Thus it is apparent that, if the Legislature wanted to prescribe any period of limitation, even for filing of the appeal from the decision of electrical inspector to the Commission, it would have stipulated the period within which, the appeal has to be filed, in the same manner as stipulated in Section 41 of the Act. The right to file the appeal, is available in Section 40 of 'the Act' and not merely Regulation 42 of the Regulations. When Section 40 of the Act itself provides the right of filing of appeal, the regulation, which is a subordinate legislation, must conform exactly Page 2073 to the provisions contained in Section 40 of the Act to make it intra vires 'the Act', under which, Section 56 provides for framing of the regulations by the Commission. On examination of Regulation 43, it is apparent that it does not conform to Section 40 of 'the Act'. Further Regulation 56, does not provide for making Regulation by the Commission, stipulating the time limit, within which, the appeal has to be filed, which is provided under Section 40 of the Act. The Regulations that can be framed by the Commission, by virtue of the power under Section 56 of the Act, can only be for proper performance of its functions under the Act and not beyond thereto. The power to prescribe the time limit, in our view, does not fall, under the category of proper performance of the functions under the Act. Thus Regulation 43 does not fall within the scope and purview of Section 56, enabling the Commission to frame the Regulations.
10. The question for consideration is, whether the Commission can frame the Regulation 43, which is beyond the scope provided under the "Act of 1910" or "the Act." It could be seen that, under Section 36(2) of 'the Act of 1910' or Section 40 of 'the Act', no period of limitation for filing an appeal, has been prescribed. For filing of appeal under the said provisions, when no limitation is prescribed, can the Commission, without any source of power under 'the Act of 1910' or 'the Act', prescribe the period of limitation in terms of the Regulation 43? Section 57 of the Act empowers the State Government to make the Rules. Section 56 of the Act confers power on the Commission to make Regulations for the proper performance of its functions under the Act or relating to any other matter, which is required to be or may be specified by the Regulation. In our view, the said power does not enable the Commission, the right to frame a regulation, which can have over-riding effect on the provisions of the Act, which has been enacted by the State Legislature. The fixing of period of limitation, is not ancillary to any power conferred upon the Commission. The right to file appeal having been provided under Section 40 of the Act, the period within which the appeal has to be filed should be stipulated in the statute itself. Such a statutory right cannot be curtailed by the Commission, as per Regulation 43 when no guidelines have been provided by the legislature.
11. In the Case of Kunj Behari Lal Butail and Ors. v. State of H.P. and Anr. , the Hon'ble Supreme Court held as follows:
14. We are also of the opinion that a delegated power to legislate by making rules for carrying out the purposes of the Act" is a general delegation without laying down any guidelines; it cannot be so exercised as to bring into existence substantive rights or obligations or disabilities not contemplated by the provisions of the Act itself.
11.1. "Limitation" is a subject specified in Entry 13 of List III of the 7th Schedule to the Constitution of India. The Parliament and the state Legislature have the power to make law relating to it, by virtue of Article 246(2) of the Constitution. Limitation Act has been enacted by the Parliament. Section 29(2) of the Limitation Act, saves the operation of any special or local law prescribing period of limitation. Section 40 of 'the Act' is a special law. The said provision does not contain any period of limitation, within which, the appeal has to be filed. Neither in Section 36(2) of 'the Act of 1910' nor Section 40 of 'the Act', the period of limitation for filing the appeal is stipulated. The Hon'ble Supreme Court in the case of Bharat Barrel and Drum Mfg. Co. Private Ltd v. ESI Corporation has held as follows:
13...Be that as it may in our view the omission to provide a period of limitation in any of these provisions white providing for a limitation of a claim by an employee for the payment of any benefit under the regulations shows clearly that the legislature did not intend to fetter the claim under Section 75(2)(d). It appears to us that where the legislature clearly intends to provide specifically the period of limitation in respect of claims arising thereunder, it cannot be considered to have left such matters in respect of claims under some similar provisions to be provided for by the rules to be made by the Government under its delegated powers to prescribe the procedure to be followed in proceedings before such Court. What is sought to be conferred is the power to make rules for regulating the procedure before the Insurance Court after an application has been filed and when it is seized of the matter. That apart the nature of the rule bars the claim itself and extinguishes the right which is not within the pale of procedure. Rule 17 is of such a nature and is similar in terms to Section 80. There is no gain-saying the fact that if an employee does not file an application before the Insurance Court within 12 months after the claim has become due or he is unable to satisfy the Insurance Court that there was a reasonable excuse for him in not doing so, his right to receive payment of any benefit conferred by the Act is lost. Such a provision affects substantive rights and must therefore be dealt with by the legislature itself and is not to be inferred from the rule making power conferred for regulating the procedure unless that is specifically provided for. It was pointed out that the Constitution also where the Supreme Court was authorised with the approval of the President to make rules for regulating generally the practice and procedure of the Court a specific power was given to it by Article 145(1)(b) to prescribe limitation for entertaining appeals before it. It is therefore Page 2075 apparent that the legislature does not part with the power to prescribe limitation which it jealously retains to itself unless it intends to do so in clear and unambiguous terms or by necessary intendment.
11.2. In the case of Prabhu Narayana v. A.K. Srivatsava , the Hon'ble Supreme Court while considering the rules framed by the Madhya Pradesh High Court for trial of election petitions under Article 225 of the Constitution, specially with regard to the import of Rule 9, has held as follows:
More over, it appears to us that the provisions of Rule 9 of the Madhya Pradesh High Court Rules regarding election petitions framed by the Madhya Pradesh by reference to Rule 7 of the Madhya Pradesh High Court Rules found in Chapter III regarding affidavits cannot be made use of for this purpose. The former set of rules are made under Article 225 of the Constitution and cannot make any substantive law and the rules themselves on a perusal of them would show that they merely relate to procedural matters unlike Rules made under Section 1(2)(ii) of the CPC.
11.3. Section 57 of 'the Act' empowers the State Government, by notification after previous publication, to make rules to carry out the purposes of 'the Act'. The rules that could be made are in respect of matters shown at Clauses (a) to (d) of Sub-section (2) of Section 57. Sub-section (3) of Section 57 of 'the Act' mandates that every rule made under 'the Act', shall be laid as soon as, may be, after it is made, before each house of the State Legislature. Though the rules are made by the State Government by virtue of the power under Section 57 of 'the Act', still it is mandatory that the rules be laid before each house of the State Legislature for action as stated therein. Even such an action, has to conform to the rule making power provided under the Statute. While considering a similar aspect, the Hon'ble Supreme Court in the case of The Kerala State Electricity Board v. The Indian Aluminium Co. Ltd., and Ors. , has held as follows:
In India many statutes both of Parliament and of State Legislatures provide for subordinate legislation made under the provisions of those statutes to be placed on the table of either the Parliament or the State Legislature and to be subject to such modification, amendment or annulment, as the case may be, as may be made by the Parliament or the State Legislature. Even so, we do not think that where an executive authority is given power to frame subordinate legislation within stated limits, rules made by such Page 2076 authority if outside the scope of the rule making power should be deemed to be valid merely because such rules have been placed before the legislature and are subject to such modification, amendment or annulment, as the case may be, as the legislature may think fit. The process of such amendment, modification or annulment is not the same as the process of legislation and in particular it lacks the assent either of the President or the Governor of the State, as the case may be. We are, therefore, of opinion that the correct view is that notwithstanding the subordinate legislation being laid on the table of the House of Parliament or the State Legislature and being subject to such modification, annulment or amendment as they may make, the subordinate legislation cannot be said to be valid unless it is within the scope of the rule making power provided in the statute.
Though Section 57 mandates that the rules made by the State Government should be laid before each house of the State Legislature, no such stipulation can be found under Section 56, which empowers the Commission to make Regulations, for the proper performance of its functions under 'the Act'. Thus there is a striking difference in the powers exercised by the State Government under Section 57 and by the Commission under Section 56.
11.4 Applying the above principles of law, it has to be held that the Regulation 43 made by the Commission, fixing the period of limitation to file appeal under Section 40 of 'the Act' is, without jurisdiction and is ultra vires. It is clear that the Regulation 43 does not conform to the provisions of 'the Act' and is thus not within the scope and purview of, the power of the Commission to frame the said Regulation. Thus the Commission has acted beyond its power. It is well recognized principle of interpretation of statutes that the conferment of rule/regulation making power by an Act does not enable the rule/regulation making authority to make the rule/regulation which travels beyond the scope of the enabling Act or which is inconsistent there with or repugnant thereto. Hence Regulation 43 is liable to be declared as made in excess of the Regulation making power given to the Commission and is thus void.
Re. Question (b):
12. The Commission has rejected the appeal on the ground that it is beyond the period prescribed under Regulation 43. The Commission has not considered the appeal nor the cause shown for the delay in filing the appeal. Since we have held Regulation 43 as void, for the reasons stated supra, it has to be held that the Commission should be directed to entertain the appeal filed by the appellant and decide the same on merits.
13. When the issue relating to the validity of the Regulation was questioned in the writ petition, in our view, the learned Single Judge Page 2077 was not justified in declining to examine the contentions urged, by exercise of jurisdiction under Articles 226 and 227 of the Constitution of India. The learned Single Judge has not exercised jurisdiction and has erroneously dismissed the writ petition. The reasons assigned by the learned Single Judge for declining to entertain the writ petition, in our view, are incorrect. Issue relating to validity of a statutory provision, rule or regulation, when questioned on tenable grounds, the writ Court has to exercise jurisdiction, examine the validity and render the decision. The reasons, such as, the quantum of revenue or expeditious ending of litigation, in our view, normally should not, come in the way of exercise of the jurisdiction by the writ Court.
14. In view of the above discussion, we pass the following:
(i) The writ appeal is allowed. The order dated 12.9.2003 passed by the learned Single Judge, dismissing writ petition No. 11771/2001, is hereby set aside.
(ii) We declare that Regulation 43 of the Karnataka Electricity Regulatory Commission (General Conduct of Proceedings) Regulation, 2000, as ultra vires and unenforceable.
(iii) We direct the 1st respondent Commission not to give effect to or apply Regulation 43 of the Regulations and entertain appeals filed, till appropriate amendment is brought to the relevant provision of the Karnataka Electricity (Reforms) Act, 1999.
(iv) The order dated 15.12.2000 communicated under letter bearing No. N/10/0/1919, of the 1st respondent Commission, rejecting the appeal No. 32/2000, is hereby quashed and the Commission is directed to entertain the said appeal and decide the same on merits, within the period of three months after notice to the parties.
In the facts and the circumstances of the case, we direct the parties to bear their respective costs.