BRIHANMUMBAI ELECTRIC SUPPLY & TRANSPORT UNDERTAKINGversusMAHRASHTRA ELECTRICITY REGULATORY COMMISSION (MERC) & ORS.

                           [2014] 6 S.C.R. 50


'A     BRIHANMUMBAI ELECTRIC SUPPLY & TRANSPORT
                     UNDERTAKING
                                    v.            .J
            MAHRASHTRA ELECTRICITY REGULATORY
                 COMMISSION (MERC) & ORS.
B              (Civil Appeal No.4223 of 2012)

                              MAY 8, 2014

        [SURINDER SINGH NIJJAR AND A.K. SIKRI, JJ.]

C           Electricity Act, 2003 - ss.2(15) and 42(5) - Supply of
      electricity - Enforcement of distribution licensee obligation
      under the Act - Jurisdiction of Electricity Regulatory
       Commission to entertain dispute between a consumer and a
      distribution licencf!e - Petition filed by respondent no.3 before
 o Electricity Regulatory Commission seeking direction against
       Tata Power Company Limited (TPC) to supply electricity to
      him - Challenge to, on ground that respondent no. 3 had
      access to alternative remedy to raise his grievances before
       the Consumer Grievances Redressal Forum (CGRF)
.E __ established uls.42 (5) - Held: Not tenable - As on the date,
      respondent no.3 approached the Regulatory Commission, he
       was not consumer of TPC but wanted to become its consumer
      - Insofar as CGRF is concerned, which each distribution
      licensee is required to set up uls.42 (5), it deals with the
 F grievances of the consumer as defined u/s. 2 (15) -
       Respondent No. 3 not being a consumer could not have
      approached GGRF -Regulatory Commission had requisite
      jurisdiction to entertain petition filed by respondent no.3.

           Electricity Act, 2003 - s.14, 15 and 172(b) - Supply of
G    electricity - Deemed distribution licensee - Nine provisos u/
     s. 14 stipulating various circumstances under which no specific
     license required by making application u/s. 15 and if
     conditions stipulated in any of these provisos. were satisfied,

H                                   50
      BRIHANMUMBAI ELECT. SUP. &TRAN. UNDERTAKING v.         51
            MAHRASHTRA ELECT. REG UL COMMN.

such person to be treated as deemed· licensee - On facts,          A
Tata Power Company Limited (TPC) claiming to be deemed
distribution licensee under 1st proviso while appel/ant-
Brihanmumbai Electricity Supply and Transport Undertaking
(BEST) invoking 6th proviso to contend that TPC could not
be deemed distribution licensee in the area where BEST was         B
in operation - Whether TPC was not a deemed distribution
licensee for the area in question and therefore not permitted
to supply electricity to any consumer in that area - Held:
Since as on the date of commencement of the Act, TPC
became deemed licensee under the first proviso as its              C
predecessors were holding the distribution licence under the
repealed laws and thereafter specific conditions of licence
were formulated by the Regulatory Commission uls.16
mentioning the period of 15. 8. 2014, TPC was deemed
licencee till 15. 8. 2014 - Once, it is held that TPC can be
                                                                   0
treated as deemed distribution licensee under the first proviso
to s. 14 and the area of the licence is the same which overlaps
with the area covered by BEST, argument predicated on sixth
proviso to s.14 not available to BEST - Tata Power's license
to supply electricity clearly established.
                                                                   E
       Electricity Act, 2003 - ss.42(3), 43, 45, 46 and 47 -
 Supply of electricity - Parallel distribution licensees -
-'Availability of open access to Tata Power Company Limited
 (TPC) in the area covered by Brihanmumbai Electricity
 Supply and Transport Undertaking (BEST) - Permissibility          F
 of TPC to extend its network in BEST area of supply without
 its approval/consent - Whether unlike other distribution
 licensees, BEST being a local authority, no persons situated
 in BEST's area of supply could avail electricity from any other
 licensee, on account of BEST invoking a statutory exemption       G
 available to a local authority u/s.42(3) and whether TPC could
 not extend its network in BEST's area of supply, without
 BEST's consent and agreement - Held: There is no
  exemption from universal service obligation to any
  distribution licensee under the Act, on account of the           H
    52       SUPREME COURT REPORTS                [2014] 6 S.C.R.


A  presence of a "local authority" as a distribution licensee in the
   particular area of supply, which is also reinforced by
   Paragraph 5. 4. 7 of the National Electricity Policy which clearly
   states that the second licensee in the same area shall have
   the obligation to supply to all consumers in accordance with
B s.43 - The contention that if local authority is a distribution
   licensee in a particular area, there cannot be any other
   distribution licensee in that area without the permission of
   such a local authority, cannot be accepted - Not only such a
   contention would negate the effect of universal supply
C. obligation uls.43, it will also amount to providing an exception
   which is not there either in s.43 or s.14 namely to treat local
   authority in special category and by giving it the benefit even
   that benefit which is not specified under the Act - The Court
   should lean in favour of an interpretation which subserves the
   objective of the Act namely the purposive interpretation - The
0
   objective behind the Act is to promote competition and give
   the consumer open to choose the distribution licensee from
   which it seeks electricity - Interpretation of Statutes -
   Purposive interpretation.

E        Respondent No.3, a consumer of electricity (LT-II
    Category) whose premises were situated within the
    supply area of appellant-BEST, wanted to switch-over to
    respondent No.2-Tata Power Company Limited (TPC) for
    his electricity requirement. TPC advised respondent no.3
F   to approach appellant-BEST for its permission to use its
    distribution network to enable TPC to supply electricity
    to respondent no.3 using that network. Respondent no.3,
    accordingly, turned to BEST requesting it to give the said
    permission. It was, however, denied by BEST.
G        After receiving this rejection, respondent no.3 filed
    petition before the Mumbai Electricity Regulatory
    Commission. In the meantime, respondent Nos.4 to 8 also
    filed similar petitions before the Regulatory Commission
    with same relief as they also wanted to switch over to
H
     BRIHANMUMBAI ELECT SUP. &TRAN. UNDERTAKING v.       53.
           MAHRASHTRA ELECT REGUL. COMMN.

 TPC for their electricity requirement. The appellant-BEST     A
 resisted the demand of the consumers contending: (a)
 that the Regulatory Commission did not have the
 jurisdiction to entertain a dispute between the consumer
 and a distribution licensee; (b) that TPC was not a
 deemed distribution licensee for the area in question and     B
 therefore not permitted to supply electricity to any
 consumer in that area; (c) that unlike other distribution
 licensees, BEST being a local authority, no persons
1situated in BEST's area of supply could avail electricity
;trom any other licensee, on account of BEST invoking a        c
.statutory exemption available to a local authority under
 Section 42(3) of The Electricity Act, 2003 and (d) that TPC
 could not extend its network in BEST's area of supply,
 without BEST's consent and agreement.

      The Regulatory Commission rejected the contentions       D
 of BEST and held that TPC was bound to supply
 electricity in terms of applicable Regulations i.e. (MERC
 (Standards of Performance of Distribution Licensees,
 Period of Giving Supply and Determination of
·Compensation) Regulations 2005; and therefore direction       E
 was given to the TPC to supply electricity to the
 consumers either through BEST wires or its own wires.
 The Regulatory Commission held that Tata Power had a
 duty under the Act to extend its distribution network and
 supply electricity, if the consumers so required, and also    F
 that TPC would be deemed distribution licensee for the
 area in question. The directions passed by the
 Regulatory Commission was affirmed by the Appellate
 Tribunal and therefore the instant appeal.
                                                               G
     Dismissing the appeal, the Court

   HELD: RE:        Jurisdiction     of   the   Regulatory
Commission.

     1. The contention with regard to jurisdiction of the      H
      54       SUPREME COURT REPORTS             [2014] 6 S.C.R. -


  A Regulatory Commission was raised primarily on the
    ground that there was an alternative remedy provided to ·
    the consumer to raise his grievances before the
    Consumer Grievances Redressal Forum (CGRF)
    established under Section 42 (5) of the Electricity Act,
  B 2003; ·and therefore, the consumer should have
    approached the said Forum instead of filing petition
    before the Regulatory Commission. This contention is
    totally misconceived and rightly rejected by the
    authorities below. Petition was filed by the consumer
  c seeking direction against TPC to supply electricity to him.
    Thus, he approached the Regulatory Commission to
    enforce a distribution licensee obligation under the Act.
    As on that date, he was not the consumer of TPC but
    wanted to become its consumer. Insofar as CGRF is
    concerned, which each distribution licensee is required
  0
    to set up under Section 42 (5) of the Act, it deals with the .·
    grievances of the consumer as defined under Section 2
    (15) of the Act. Thus, respondent No.3 not being a
    consumer could not have approached CGRF. The
    Regulatory Commission has the power to require a
  E licensee to fulfill its obligations under the Act. Thus, the
    Regulatory Commission had the requisite jurisdiction to
    entertain the petition filed by the consumer. [Paras 7, 8]
    (66-D-G; -67-B-C]

  F        Maharashtra Electricity Regulatory v. Reliance Energy
      Ltd. (2007) 8 SCC 3812007 (9) SCR 9 - relied on.

           Re: Whether TPC is deemed distribution licensee

           2.1. Under Section 14 of the Electricity Act, 2003, the
- G Regulatory Commission is empowered to grant .a license
      to any person on an application made to it under Section
      15 of the Act. This license may pertain to transmit
      electricity as a transmission licensee; or d.istribule
      electricity as a distribution licensee; or to undertake
  H
    BRIHANMUMBAI ELECT. SUP. & TRAN. UNDERTAKING v.      55
          MAHRASHTRA ELECT. REGUL. COM MN.

trading in electricity as an electricity trader, in any area, A·
as may be specified in the license. This section has nine
provisos which stipulated various circumstances under
which no specific license is required by making an
application under Section 15 and if the conditions
stipulated in any of these provisos are satisfied, such a B
person is treated as deemed licensee. The case at hand
concerns 1st proviso under which TPC claims to be a
deemed distribution licensee as well as 6th proviso which
is invoked by appellant-BEST in contending TPC cannot
be a deemed distribution licensee in the area where BEST c
operates. [Para 12] [68-C-F]

     2.2. As per the first proviso to Section 14 if any
person was engaged in the business of transmission or
supply of electricity under the provisions of the repealed
laws etc. that person is deemed to be a licensee under D
the Act, 2003 as well. The period for such deemed licence
is the one that is stipulated in the licence, clearance or
approval granted to him under the repealed laws. If it is
under any Act specified in the Schedule in respect of .
such licence, then the period of licence is for one year E
from the date of commencement of the Act or such period
as may be specified by the Appropriate Commission. It
would mean that either the period of deemed licence for
such a person is the period which is stipulated in the
licence, clearance or approval granted to him under the F
repealed laws or for a period of o.ne year from the date
of commencement of the Act or the period which may be
specified, at the request of the licensee by the Regulatory
Commission. Once, such a period is over, then that
person is supposed to apply for licence under Section G
14. [Para 13] [69-E-H]

    2.3. Proviso six to Section 14, on the other hand,
deals with a different situation. As per this provision, the
Regulatory Commission is authorized to grant a licence         H
    56       SUPREME COURT REPORTS              [2014] 6 .S.C.R.


A to two or more persons for distribution of electricity
  through their own distribution system within the same
  area. It is subject to the conditions that the applicant for
  grant of licence within the same area shall apply with the
  additional requirements relating to the capital adequacy,
B creditworthiness, or code of conduct as may be
  prescribed by the Central Government. It further provides
  that merely because there exists a licensee in the same
  area would not be a -ground to reject an application for
  another applicant for same purpose. This provision deals
c with open access policy. [Para 13] [70-A-C]
         2.4. There are two facets-in the first instance it is to
    be found that there is a stipulation of period in the manner
    stated in the first proviso to Section 14. Second aspect
    is as to whether it is incumbent, in all cases, to apply for
D   licence under the provisions of Sections 14 and 15 of the
    Act immediately after the expiry of one year from the date
    of commencement of the said Act. In so far as first aspect
    is concerned, the argument of the appellant loses sight
    of the fact that in the first proviso the period for which
E   any person can be a deemed licensee is not only such
    period which is stipulated in the licence, clearance or
    approval granted to him under the repealed law~ or such
    Act specified in the Schedule. It also provides that the
    provisions of repealed laws or such Act specified in the
F   Schedule in respect of such a licence shall apply for a
    period of one year from the date of commencement of Act
    2003 or such earlier period as may be specified at the
    request of the licensee by the Regulatory Commission.
    In the present case, the Regulatory Commission
G   formulated MERC (Specific Conditions of License
    Applicable to TPCL) Regulation 2008 i.e. Specific Licence
    Conditions. These were formulated under Section 16 of
    the Act 2003 and it is in these conditions there is a
    specific stipulation regarding term of TPC licence up to
H   15.8.2014. One, therefore, is unable to accept the
                                                                    I
    BRIHANMUMBAI ELECT SUP. &TRAN. UNDERTAKING v.     57
          MAHRASHTRA ELECT REGUL. COMMN.

submissions of the appellant that the licence was valid     A
for a period of one year only. [Para 16] (71-G-H; 72-A-D]

      2.5. Proviso to Section 16 of the Act [under which
aforesaid Specific Licence Conditions of TPC are
formulated] very categorically enables the Regulatory 8
Commission to specify general or specific condition of
licence applicable to licensees referred to in the first to
fifth proviso to Section 14 after expiry of one year after
the commencement of that Act. Since as on the date of
commencement of the Act, TPC became deemed licensee
under the first proviso as its predecessors were holding C
the distribution licence under the repealed laws and
thereafter specific conditions of licence are formulated by
the Regulatory Commission under Section 16 mentioning
the period of 15.8.2014, it becomes clear that the
combined fact of that would be that YPC would be D
deemed licencee till 15.8.2014. Tata Power's license to
supply electricity in the South Mumbai area is clearly
established by virtue of the following: (a) The Erstwhile
Licensee authorized Tata Power to supply electricity to
all consumers in Mumbai, including the South Mumbai E
area; (b) When the new Act came into force, by virtue of
the 1st Proviso to Section 14, Tata Power was deemed
to be a licensee under that Act. This is also clear from
Section 172(b) of the Act. It is trite law that once the
purpose of the deeming provision is ascertained, full F
effect must be given to the statutory fiction and the fiction
is to be carried to its logical end. [Para 16] (72-H; 73-A-E]

    2.6. Once, it is held that TPC can be treated as
deemed distribution licensee under the first proviso to G
Section 14 of the Act 2003 and the area of the licence is
the same which overlaps with the area covered by BEST,
argument predicated on sixth proviso to Section 14
would not be available to the BEST. TPC and BEST are
                                                            H
    58      SUPREME COURT REPORTS             [2014] 6 S.C.R.


A   parallel distribution licensee in the South Bombay Area.
    [Paras 17, 26] [57-G-H; 83-D-E]

        Re: Availability of open access to TPC in the area
    covered by BEST, which is a local authority and
    Permissibility of TPC to extend its network in BEST area
8
    of Supply without its approval/consent.

       3.1. Section 42 of the Act deals with the duties of
  distribution licensee and open access. Sub-Section (1)
  thereof provides that it shall be the duty of a distribution
C licensee to develop and maintain an efficient co-ordinated
  and economical distribution system in his area of supply
  and to supply electricity in accordance with the provisions'
  contained in the Act. Sub-section (2) casts an obligation
  upon the State Commission to introduce open access in
D phases and subject to such conditions, as may be
  specified, these conditions may include the cross
  subsidies and other operational constraints. It is thereafter
  in sub-section (3) of Section 42 provision is made for
  wheeling of electricity with respect to supply stating that
E duties of distribution licensee shall be of a common carrier
  providing noh-discriminatory open access. Thus sub-
  section (3) provides for open access and casts a duty upon
  the distribution licensee in this behalf. Here, it excludes
  local authority, as distributor of electricity from such an
F obligation. However, when it comes to the duty of~
  distribution licensee to supply the electricity under section
  43, it mandates.that same is to be given to the owner or
  occupier of any premises on his application within one
  month from the receipt of the said application. This duty
G under Section 43 imposed upon a distribution licensee
  does not distinguish between a local authority and other
  distribution licertsee. It is also not a case of the appellant
  that in a particular area where a local authority is a
  distribution li~ensee, there cannot be any other
  distribution licensee at all. [Para 20] [78-A-F]
y
     BRIHANMUMBAI ELECT. SUP. &TRAN. UNDERTAKING v.         59
           MAHRASHTRA ELECT. REGUL COMMN.

      3.2. On a conjoint reading of Sections 42 and 4i of the A
 Act along with the objectives and purpose for which Act
 2003 is enacted, it becomes clear that there are two ways
 in which a consumer stated in a particular area can avail
 supply of electricity. When an application is made by a
 consumer to a distribution licensee for supply of electricity, B
 such a distribution licensee can request other distribution
 licensee in the area to provide it network to make available
 for wheeling electricity to such consumers and this open
 access is to be given as per the provisions of section 42
 (3) of the Act. It is here only that local authority is exempted c
,from such an obligation and may refuse to provide makes
 it network available. Second option is, under section 43 of
 the Act, to provide the elecfricity to the consumer by the
 distribution licensee from its own network. Therefore, if in
 a particular area local authority has its network and it does 0
 not permit wheeling of electricity from by·making available
 its network, the other distribution licensee will have to
 provide the electricity from its own network. For this
 purpose, if it is not having its network, it will have to lay
 down its network if it requires in order to supply electricity E
 to a consumer seeking supply. [Para 21) [78-G-H; 79-A-D]

   " 3.3. This interpretation i!? in consonance of the
objective and purpose of the Act. The aforesaid objective
is further clarified by the Tariff Policy and the National.
Electricity Policy under section 3 of the Act which F
emphasized the need for effici'ency and competition in the
distribution business. On going through the statement of
objects and reasons contained in the new Act, the
interpretation gets further facilitated. Prior to this Act,
there were three Acts, namely of 1910 (Indian Electricity G
Act, 1910), 1948 and 1998 which were governing the laws
relating to electricity and were operating in the field.
Within few years, it was felt that the three Acts of 1910,
1948 and 1998 which were operating in the field needed
to be brought in a new self contained comprehensive H
    60      SUPREME COURT REPORTS            [2014] 6 S.C.R.


A   legislation with the policy of encouraging private sector
    participation in generation, transmission and distribution
    and also the objectives of distancing the regulatory
    responsibilities from the Government and giving it to the
    Regulatory Commissions. With these objectives in mind
B   the Electricity Act, 2003 has been enacted. Significant
    addition is the provisions for newer concepts like power
    trading and open access. Various features of the 2003 Act
    are outlined in the statement of objects and reasons to
    this Act. Notably, genera~ion is being delicensed and
c   captive generation is being freely permitted. The Act
    makes provision for private transmission licensees. It
    now provides open access in transmission from the
    outset. While open access in transmission implies
    freedom to the licensee to procure power from any
    source of his choice, open access in distribution, with
0
    which this Court is concerned here, means freedom to
    the consumer to get supply from any source of his
    choice. The provision of open access to consumers
    ensures right of the consumer to get supply from a
    person other than the distribution licensee of his area of
E   supply by using the distribution system of such
    distribution licensee. [Para 22) [79-D-H; 80-A-C)

       3.4. The concept of open access under the Act
  enables competing generating companies and trading
F licensees, besides the area distribution licensees, to sell
  electricity to consumers when open access in
  distribution is introduced by the State Electricity
  Regulatory Commissions. Supply by way of open access
  is a completely different regime as is also clear from the
G fact that consumers who have been allowed open access
  under Section 42 may enter into an agreement with any
  person for supply of electricity on such terms and
  conditions, including tariff, as may be agreed upon by
  them under Section 49 of the Act unlike consumers whc
H take supply under section 43 of the Act. Once thE,
    BRIHANMUMBAI ELECT SUP. &TRAN. UNDERTAKING v.        61
          MAHRASHTRA ELECT. REGUL. COMMN.

provisions are read in the aforesaid manner, it becomes A
clear that there is no exemption from universal service
obligation to any distribution licensee under the Act, on
account of the presence of a "local authority" as a
distribution licensee in the particular area of supply,
which is also reinforced by Paragraph 5.4.7 of the B
National Electricity Policy which clearly states that the
second licensee in the same area shall have the
obligation to supply to all consumer€ in accordance with
Section 43. [Paras 23, 24] [80-D-H]

     3.5. It is difficult to accept the extreme position taken
                                                              c
by the appellant that if local authority is a distribution
licensee in a particular area, there cannot be any other
distribution licensee in that area without the permission of
such a local authority. Not only such a contention would
negate the effect of universal supply obligation under D
Section 43, it will also amount to providing an exception
which is not there either in Section 43 or Section 14 of the
Act namely to treat local authority in special category and
by giving it the benefit even that benefit which is not
specified under the Act. [Para 25] [81-C-D]                    E

     3.6. It is trite that Court should lean in favour of an
interpretation which subserves the objective of the Act
namely the purposive interpretation. The objective behind
the Act is to promote competition and give the consumer F
open to choose the distribution licensee from which it
seeks electricity. [Para 26] [81-E-F]

     3.7. The appellant sought to rely on the expression
"Save as otherwise provided in this Act" in Section 43(1)
of the Act to read into Section 43(1) the exception for local G
authorities provided for in Section 42(3). The TPC has
successfully refuted this submission by pointing out that
these words in Section 43(1) are required to be read in the
context in which they appear. The said words were
inserted in the section by way of an amendment to the Act H
    62       SUPREME COURT REPORTS               [2014] 6 S.C.R.


A   in 2007. An "Explanation" to Section 43(1) was also added
    by the same amendment providing that "application" by
    a consumer in Section 43(1) means an application
    complete· in all respects along with documents showing
    payment of necessary charges and other compliances,
B   meaning thereby that the obligation of the distribution
    licensee to supply within the specified time period will
    begin only after it has received such completed
    application by the applicant. Further, Sections 45 and 46
    provide for the distribution licensee's powers to recover
C   charges for electricity supplied and the expenditure
    incurred in providing electric line or plant for giving supply.
    Section 47 provides that the distribution licensee may
    require any person demanding electricity supply from him
    to give a reasonable security, failing which the distribution
    licensee may refuse to give supply of electricity to such
0
    consumer. It is in this context that the expression "save/
    as otherwise provided in this Act" in Section 43 (1) is to
    be construed. [Para 27] [83-E-H; 84-A-B]

         Chandu Khamaru v. Nayan Malik (2011) 12 SCC 314:
E   2011 (11) SCR 112; Tata Power Co.Ltd. v. Reliance Energy
    Ltd. & Ors. (2008) 1o sec 321: 2008 (1 O) SCR 293 and MSR
    Leathers vs. S. Palaniappan & Anr. (2013) 1 SCC 177: 2012
    (9) SCR 165 - relied on.                            '
                          Case Law Reference:
F
         2007 (9) SCR 9           relied on             Para 8
         2011 (11) SCR 112        relied on             Para 24
         2008 (10) SCR 293        relied on             Para 26
G
         2012 (9) SCR 165         relied on             Para 26
         CIVIL APPELLATE JURISDICTION : Civil Api;>eal No.4223
    of 2012.

H        From the Judgment and Order dated 04.04.2012 of the
       BRIHANMUMBAI ELECT. SUP. & TRAN. UNDERTAKING v.           63
             MAHRASHTRA ELECT. REGUL. COMMN.

  Appellate Tribunal for Electricity, New Delhi in appeal No. 149       A
  of 2010.

       Shekhar Naphade, Dhruv Mehta, Jayant Bhushan, Mukul
  Rohatgi, J.J. Bhatt, Harender Toor, Tavinder Sidhu, Pallavi
  Mohan, Sewga Agarwal, Ganesh Karnath (for M.V. Kini &                 B
  Associates), Sitesh Mukherjee, Prerna Priyadarshini (for Jagjit
  Singh Chhabra), Kanika Chugh, Sakya Singha Chaudhuri, AV.
  Rangam, Buddy A. Ranganadhan, S. Ravi Shankar, E.C.
  Agrawala, Anjali Chandurkar, Hasan Murtaza (for Shiv Kumar
  Suri), Siddhartha Chowdhury for the appearing parties.                C

       The Judgment of the Court was delivered by

        A.K.SIKRl,J. 1. Respondent No.3 is a consumer
   (hereinafter referred to as the "consumer'') of electricity (LT-II
   Category) whose premises are situated within area of supply D
   of the appellant namely Brihanmumbai Electricity Supply and
   Transport Undertaking (BEST). In April 2009, he approached
   respondent No.2 i.e. Tata Power Company Limited (TPC) with
   a request that he be supplied the electricity by TPC. In nutshell,
   he wants to switch over from BEST to TPC for his electricity E
   requirement. In response to his request, TPC advised the
   consumer vide letter dated 8.7.2009 to approach the BEST for
   its permission to use its distribution network of the BEST to
  -enable TPC to supply electricity to the consumer using that
·.network. The c,onsumer, accordingly, turned to BEST F
 : requesting it to give the said permission. It was, however,
   denied by BEST vide letter dated 31.7.2009 and again ori
   10.8.2009. After receiving this rejection, the consumer
   approached Mumbai Electricity Regulatory Commission
   (hereinafter referred to as the "Regulatory Commission") with G
   petition seeking the following directions:

       "(a) That this Hon'ble Commission may be pleased to
       direct TPC to provide electricity supply to the Petitioner and
       make such supply available as early as possible, either on
                                                                        H
    64       SUPREME COURT REPORTS                [2014] 6 S.C.R.


A        BEST Network or by extending its own network, as may
         be necessary, failing which TPC's distribution license
         should be cancelled by this Hon'ble Commission;

         (b) that the Hon'ble Commission may be pleased to direct
         the respondent to pay compensation to the petitioner
B
         under Regulations 3.2 and 12 of MERC (Standards of
         Performance of Distribution Licensees, Period of Giving
         Supply and Determination of Compensation) Regulations
         2005;"

C         2. In the meantime, respondent Nos.4 to 8 also filed similar
    petitions before the Regulatory Commission with same relief
    as they also wanted to switch over to TPC for their electricity
    requirement. Since direction was sought for TPC, only TPC was
    made party. However, at the instance of Regulatory
D   Commission BEST and Reliance Industries Limited (RIL) were
    also impleaded in these matters. After hearing all the parties,
    Regulatory Commission passed orders dated 22.2.2010
    holding that TPC was bound to supply electricity in terms of
    applicable Regulations and therefore direction was given to the
E   TPC to supply electricity to the consumers either through BEST_
    wires or its own wires. The operative part of that order reads
    as under:

         "In view of the above there is no requirement to issue a
         direction in regard to the Petitioner's claim of
F        compensation under Regulation 3.2 and 12 of the SOP
         regulations. However, TPC is bound by Regulation 4. 7 of
         MERC (Standards of Performance of Distribution
         Licensees, Period for Giving Supply and Determination of
         Compensation) Regulations, 2005 in terms of the timelines'
G        as mentioned in the said Regulation. Time has started
         ticking from the date of receipt of applications by TPC
         from the Petitioners who have requisitioned for electricity
         supply. TPC will have to adhere to the timelines specified
         in the regulations."
H
      BRIHANMUMBAI ELECT SUP. &TRAN. UNDERTAKING v.              65
      MAHRASHTRA ELECT REGUL. COMMN. [AK. SIKRI, J.]

       3. We may point out here that the BEST (the appellant           A
 herein) had resisted the demand of the consumers in their
 petitions with the following contentions:

     (a) The Regulatory Commission did not have the
jurisdiction to                                                        B

       entertain a dispute between the consumer and a
 distribution licensee;

      (b) TPC was not a deemed distribution licensee for the
 area in question and therefore was not permitted to supply the        C
 electricity to any consumer in that area;

      (c) that unlike other distribution licensees, BEST being a
 local authority, no persons situated in BEST's area of supply
 could avail electricity from any other licensee, on account of
                                                                       0
 BEST invoking a statutory exemption available to a local
 authority under Section 42(3) of The Electricity Act, 2003 Act
 (hereinafter referred to as the Act).

       (d) Since TPC had clarified that it was willing to extend its
  network and supply electricity, BEST also contended that TPC         E
  could not extend its network in BEST's area of supply, without
· BEST's consent and agreement.

      4. In its order dated 22.2.2010 while issuing the directions
 extracted above, the Regulatory Commission rejected BEST's            F
 contentions and held that Tata Power had a duty under the Act
 to extend its distribution network and supply electricity, if the
 consumers so required, in the South Mumbai area. In light of
 TPC's position that it was willing to extend its network and
 supply electricity, the MERC held that there was no requirement       G
 to give any directions to it. The Regulatory Commission also
 held that TPC would be deemed distribution licensee for the
 area in question.

    5. BEST challenged the aforesaid order of the Regulatory
 Commission by filing appeal before the Appellate Tribunal for         H
    66       SUPREME COURT REPORTS                 [2014] 6 S.C.R. ·


A Electricity, New Delhi (hereinafter referred to as the "Appellate
  Tribunal"). This appeal, however, has been dismissed by the
  Appellate Tribunal vide orders dated 4.4.2012, thereby affirming
  the findings and direction of the Regulatory Commission. Not
  satisfied, BEST has filed the instant appeal statutorily provided
B under Section 125 of the Electricity Act.

      6. We have already stated in brief the four contentions
  which were raised by BEST before the Regulatory
  Commission. Same contentions were raised before the
C Appellate Tribunal, which are the submissions before us as well ..
  Therefore, we proceed to deal with these submissions
  hereinafter:

    RE: Jurisdiction of the Regulatory Commission.

0       7. This contention was raised primarily on the ground that
  there was an alternative remedy provided to the consumer to
  raise his grievances before the Consumer Grievances
  Redressal Forum (CGRF) established under Section 42 (5) of
  the Act. Therefore, the consumer should have approached the
E said Forum instead of filing petition before the Regulatory
  Commission. This contention is totally misconceived and rightly
  rejected by the authorities below. As noted above, petition was
  filed by the consumer seeking direction against TPC to supply
  electricity to him. Thus, he approached the Regulatory
  Commission to enforce a distribution licensee obligation under
F the Act. As on that date, he was not the consumer of TPC but
  wanted to become its corisumer. In so far as CGRF is
  concerned, which each distribution licensee is required to set
  up under Section 42 (5) of the Act, it deals with the grievances
  of the consumer. Consumer is defined under Section 2 (15) of
G the Act and reads as under:

         "any person who is supplied with electricity·for his own use
         by a licensee or the Government or by any other person
         engaged in the business of supplying electricity to the
H        public µnder this Acfor any other law for the time being in
      BRIHANMUMBAI ELECT. SUP. & TRAN. UNDERTAKING v.             67
      MAHRASHTRA ELECT. REGUL. COMMN. [A.K. SIKRI, J.]

      force and includes any person whose premises are for the          A
      time being connected for the purposes of receiving
      electricity with the works of a licensee, the Government or
      such other person, as the case may be."

       8. Thus, respondent No.3 not being a consumer could not
                                                                        B
 have approached CGRF. Further, we find that in Maharashtra
 Electricity Regulatory v. Reliance Energy Ltd. (2007) 8 SCC
 381, this Court has held that the Regulatory Commission has
 the power to require a licensee to fulfill its obligations under the
 Act. Thus, we are of the opinion that the Regulatory
 Commission had the requisite jurisdiction to entertain the             C
 petition filed by the consumer. Presumably, for this reason, this
 contention was pressed half hearted before us and given up in
 the middle.

 RE: Whether TPC is deemed distribution licensee                        D
                                                                   f
      9. Before we take note of the argument of the parties on
 this aspect and deal with the same, some background facts
 need a mention. TPC is the successor of the Bombay
 Hydroelectric License, 1907, the Andhra Valley Hydro-electric
                                                                        E
 License, 1919, the Nila Mula Valley Hydro-electric License,
 1921 and Trombay Thermal Power Electric License 1953 to
·supply electricity to consumers in specified areas in and around
 Mumbai (Erstwhile Licenses). The Erstwhile Licenses were
 subsequently amalgamated and transferred to Tata Power on
 12.7.2001.                                                             F

      10. The Government of Mabarashtra, in exercise of powers
 under the Indian Electricity Act, 1910 amended the area of
 supply under the Erstwhile Licenses from time to time. This
 included addition of new areas as well as handing over of              G
 certain areas to the Government owned distribution company,
 earlier known as the Maharashtra State Electricity Board.

      11. TPC's area of supply overlaps with that of Reliance
 Infrastructure Limited (R Infra) another distribution licensee in
                                                                        H
    68       SUPREME COURT REPORTS                 [2014] 6 S.C.R.


A the suburban Mumbai area, and with that of the Appellant
  (BEST) in South Mumbai. In 2002, R Infra filed a petition before
  the Respondent No.1 (MERC) alleging that Tata Power's
  license did not authorize Tata Power to supply electricity to
  direct retail consumers (with a maximum demand below
B 1000KVA). While the petition was pending, the Electricity Act,
  2003 came into force.

          12. On the basis of aforesaid facts TPC claimed that by
    virtue of first proviso to Section 14 of the Act, it was a deemed
    licensee for the area of supply of BEST. Under Section 14 the
C   Regulatory Commission is empowered to grant a license to any
    person on an application made to it under Section 15 of the
    Act. This license may pertain to transmit electricity as a
    transmission licensee; or distribute electricity as a distribution
    licensee; or to und~rtake trading in electricity as an electricity
D   trader, in any area, as may be specified in the license. This
    section has nine provisos which stipulated various
    circumstances under which no specific license is required by
    making an application under Section 15 and if the conditions
    stipulated in any of these provisos are satisfied, such a person
E   is treated as deemed licensee. We are here concerned with
    1st proviso under which TPC claims to be a deemed
    distribution licensee as well as 6th proviso which is invoked by
    BEST in contending TPC cannot be a deemed distribution
    licensee in the area where BEST operates.' Therefore, we
F   reproduce both these provisos:

         1st Proviso:"Provided that any person engaged in the
         business of transmission or supply of electricity under the
         provisions of the repealed laws or any Act specified in the
         Schedule on or before the appointed date shall be deemed
G        to be a licensee under this Act for such period as may be
         stipulated in the licence, clearance or approval granted to
         him under the repealed laws or such Act specified in the
         Schedule, and the provisions of the repealed laws or such
         Act specified in the Schedule in respect of such licence
H
     BRIHANMUMBAI ELECT. SUP. &TRAN. UNDERTAKING v.             69
     MAHRASHTRA ELECT. REGUL. COMMN. [AK SIKRI, J.)

     shall apply for a period of one year from the date of            A
     commencement of this Act or such earlier period as may
     be specified, at the request of the licensee, by the
     Appropriate Commission and thereafter the provisions of
     this Act shall apply to such business.
                                                                      B
    6thProviso:Provided also that the Appropriate
    Commission may grant a licence to two or more persons
    for distribution of electricity through their own distribution
    system within the same area, subject to the conditions that
    the applicant for grant of licence within the same area shall,    C
    without prejudice to the other conditions or requirements
    under this Act, comply with the additional requirements
    [relating to the capital adequacy, creditworthiness, or code
    of conduct] as may be prescribed by the Central
    Government, and no such applicant, who complies with all
    the requirements for grant of licence,ihall be refused grant      D
    of license on the ground that there already exists a licensee
    in the same area for the same purpose."

        13. As per the first proviso if any person was engaged in
the business of transmission or supply of electricity under the       E
provisions of the repealed laws etc. that person is deemed to
be a licensee under the Act, 2003 aswell. The period for such
deemed licence is the one that is stipulated in the licence,
clearance or approval granted to him under the repealed laws.
If it is under any Act specified in the Schedule in respect of such   F
licence, then the period of licence is for one year from the date
of commencement of the Act or such period as may be
specified by the Appropriate Commission. It would mean that
either the period of deemed licence for such a person is the
period which is stipulated in the licence, clearance or approval      G
granted to him under the repealed laws or for a period of one
year from the date of commencement of the Act or the period
which may be specified, at the request of the licensee by the
Regulatory Commission. Once, such a period is over, then that
person is supposed to apply for licence under Section 14.
                                                                      H
    70       SUPREME COURT REPORTS                [2014] 6 S.C.R. .


A       Proviso six, on the other hand, deals with a different
  situation. As per this provision, the Regulatory Commission is
  authorized to grant a licence to two or more persons for
  distribution of electricity through their own distribution system
  within the same area. It is subject to the conditions that the
B applicant for grant of licence within the same area shall apply
  with the additional requirements relating to the capital
  adequacy, creditworthiness, or code of conduct as may be
  prescribed by the Central Government. It further provides that
  merely because there exists a licensee in the same area would
c not be a ground to reject an application for another applicant
  for same purpose. This provision deals with open access policy.

         14. As per the TPC, proviso one is applicable in their case ,
    since its predecessor were granted licence under the Act, 1910
    and therefore it continuous to be licensee as per the aforesaid
D   deeming provision under the Act, 2003 as well. The case set
    up by the TPC in this behalf is such a licence granted under
    the old Act is valid upto 15.8.2014 which is categorical
    stipulated in the Specific Licence Conditions by the Regulatory
    Commission. Therefore, it is only after 15.8.2014 that the TPC
E   would be required to take fresh licence by making application
    under S~ction 15 of the Act, 2003. This is stated on the ground
    that the MERC formulated the MERC (Specific Conditions of
    License applicable to the Tata Power Company Limited)
    Regulations, 2008 (Specific License Conditions) under Section
F   16 of the Act. The Specific License Conditions read with the
    MERC (General Conditions of Distribution License)
    Regulations, 2006 set out the terms and conditions of Tata
    Power's license in supersession of the Erstwhile Licenses, and
    authorize Tata Power to slipply electricity in its area of supply
G   to the public for all purposes in accordance with the Act. The
    Specific License Conditions further stipulate that the term of
    Tata Power's license is up to 15.8.2014.

      15. The argument of BEST, on the other hand, is that the
H Appellate Tribunal was wrong in holding TPC was a deemed
    BRIHANMUMBAI ELECT. SUP. &TRAN. UNDERTAKING v.             71
    MAHRASHTRA ELECT. REGUL. COMMN. [AK. SIKRI, J.]

licensee under the first proviso to Section 14, as well as a         A
parallel licensee under the sixth proviso to Section 14 of the
Act 2003. According to Mr. Naphade, the Appellate Tribunal
gravely erred in failing to appreciate that network of TPC cannot
be allowed or extended within the area of supply of BEST in
the absence of distribution licensee which TPC failed to obtain      B
from Regulatory Commission, though it is a necessary
requirement under sections 14 and 15 read with Section 12 of
the Act. It was argued that as per the first proviso to Section
14, a person is treated deemed licensee only if it is engaged
in the business of supply of electricity under the provisions of     c
the repealed laws and it is for such period "as may be
stipulated in the licence granted to him under the repealed
laws". It was argued that the protection was only_ for that period
which is stipulated in the licence and not on the basis of licence
and there is no such period specified in the business up to
                                                                     D
15.8.14 specified in the licence. It was, further, argued that the
provisions of the repealed laws in respect of such licences are
applicable for a period of one year within which arid thereafter
licence was to be ·obtained under Section 14 by moving an
application under Section 15, as per the procedure prescribed
in the Act 2003. It was argued that for the deeming fiction in
                                                                     E
the first proviso to said Section 14 to arise, (i) a person must
be engaged in the business of supply of electricity under the
repealed laws on or before 10.6.2003, and (ii) a period (being,
period of subsistence of licence) be stipulated in the licence
granted to such person under the repealed laws. It was further       F
pointed out that said deeming fiction applies (i) to such a
person, C}nd (ii) for such stipulated period.

     16. There are two facets of the submissions made by Mr.
Naphade. In the first instance it is to be found that there is a     G
stipulation of period in the manner stated in the first proviso.
Second aspect is as to whether it is incumbent, in all cases, to
apply for licence under the provisions of Sections 14 and 15
of the Act immediately after the expiry of one year from the date
of commencement of the said Act. In so far as first aspect is        H
     72       SUPREME COURT REPORTS                     [2014] 6 S.C.R.


A· concerned, the argument of the appellant loses sight of the fact
   that in the first proviso the period for whiG,h any person can be
   a deemed licensee is not only such period which is stipulated
   in the licence, clearance or approval granted to him under the
   repealed laws or such Act specified in the Schedule. It also
B provides that the provisions of repealed laws or such Act
   specified in the Schedule in respect of such a licence shall
   apply for a period of one year from the date of commencement
   of Act 2003 or such earlier period as may be specified at the
   request of the licensee by the Regulatorv Commission. In the
   present case, the Regulatory Commission formulated MERC
   (Specific Conditions of License Applicable to TPCL)
   Regulation 2008 i.e. Specific Licence Conditions. These were
   formulated under Section 16 of the Act 2003 and it is in these
   conditions there is a specific stipulation regarding term of TPC
~D licence up to 15.8.2014. We, therefore, are unable to accept
   the submissions of the appellant that the licence was valid for
   a period of one year only. It would be useful to refer to Section
    16 of the Act under which aforesaid Specific Licence
   Conditions of TPC are formulated.

E,        "16. Conditions of licence.- The Appropriate Commission
          may specify any general or specific conditions which shall
          apply either to a licensee or class of licensees and such
          conditions shall be deemed to be conditions of such
          licence:
F
          Provided that the Appropriate Commission shall, within
          one year from the appointed date, specify any general or
          specific conditions of licence applicable to the licensees
          referred to in the first, second, third, fourth and fifth provisos
          to section 14 after the expiry of one year from the
G
          commencement of this Act."

         Proviso to the aforesaid section very categorically enables
  the Regulatory Commission to specify general or specific
  condition of licence applicable to licensees referred to in the
H first to fifth proviso to Section 14 after expiry of one year after
              \




     BRIHANMUMBAI ELECT. SUP. & TRAN. UNDERTAKING v.             73
     MAHRASHTRA ELECT. REGUL. COMMN. [AK SIKRI, J.)

the commencement of thaf Act. Since as on the date of                  A
commencement of the Act, TPC became deemed licensee
under th.e first proviso as its predecessors were holding the
distribution licence under the repealed laws and thereafter
specific conditions of licence are formulated by the Regulatory
Commission under Section 16 menti_oning, the period of                 B
15.8.2014, it becomes clear that the combined fact of that would
be that YPC would be deemed licence till 15.8.2014. Tata
Power's license to supply electricity in the South Mumbai area
is clearly established by virtue of the following:

    (a) The Erstwhile Licensee authorized Tata Power to
                                                                       c
supply electricity to all consumers in Mumbai, including the
South Mumbai area;

     (b) When the new Act came into force, by virtue of the 1st
Proviso to Section 14, Tata Power was deemed to be a                   D
licensee under that Act.

     This is also clear' from Section 172(b) of the Act. It is trite
law that once the purpose of ~he deeming provision is
ascertained, full effect must be given to the statutory fiction and    E
the fiction is to be carried to its logical end.

     17. An argument was sought to be raised before us that
Regulation 2008 laying down specific conditions for TPC are
flouted as they were not made by the Regulatory Commission
within the mandatory period of one year. However, no such              F
argument was raised earlier and there is no challenge to the
validity of the aforesaid Regulations which are made by the
Regulatory Commission under its statutory powers and
therefore are having statutory force. Once, we come to the
conclusion that T"Pc can be treated as deemed distribution             G
licensee under the first proviso to Section 14 of the Act 2003
and the area of the licence is the same which overlaps with the
area covered by BEST, argument predicated on sixth proviso
to Section 14 would not be available to the BEST.
                                                                       H
    74        SUPREME COURT REPORTS                 [2014] 6 S.C.R.

A   RE: AVAILABILLITY OF OPEN ACCESS TO TPC IN THE
    AREA COVERED BY BEST, WHICH IS A LOCAL
    AUTHORITY .


                                  AND
B
    PERMISSIBILITY OF TPC TO EXTEND ITS NETWORK IN
    BEST AREA OF SUPPLY WITHOUT ITS APPROVAL/
    CONSENT.

c        18. It was argued by Mr. Naphade that under the Act neither
  open access can be allowed nor distribution system or network
  of a .purported parallel licensee (such as TPC) can be laid or
  extended within area of supply of BEST. The learned senior
  counsel labored on the aspect that admittedly BEST was a
0 Public Sector Undertaking and such bodies are given due
  recognition of and grant of exemption and/or protection to a
  special category of licensee being a local authority in the
  business of distribution of electricity before the appointed day.
  He submitted that as BEST would be covered by the
E expression " a local authority" protected measures provided
  under the Act would be applicable to it as well. According to
  him, a local authority was always placed on a special footing
  under Act, 1910 as well as Act, 1948 and now under Act, 2003
  which was clear from the provisions of Section 42 (3) of the
  Act that reads as under:
F
         "42(3) Where any person, whose premises are situated
         within the area of supply of a distribution licensee, (not
         being a local authority) engaged in the business of
         distribution of electricity before the appointed day) requires
G        a supply of electricity from a generating company or any
         licensee other than such distribution licensee, such person
         may, by notice, require the distribution licensee for
         wheeling such electricity in accordance with regulations
         made by the State Commission and the duties of the
H        distribution licensee with respect to such supply shall be
      BRIHANMUMBAI ELECT. SUP. & TRAN. UNDERTAKING v.           75
      MAHRASHTRA ELECT. REGUL. COMMN. [AK SIKRI, J.]

      of a common carrier providing non-discriminatory open           A
      access."

      This provision which deals with the duties of distribution .
 licensee as well as open access specifically excludes a local
 authority.                                                        B

        Mr. Naphade thus argued that if the Legislature, having
  regard to the special status of a local authority engaged in the
  business of distribution of electricity before the appointed date
  (such as BEST), has duly exempted open access in its area
  of supply, then it is but consequential and/or a fortiori that a    C
  distribution system or network of a purported parallel licensee
  (such as TPC) cannot be laid or extended within the area of
  supply of a local authority engaged in the business of
  distribution of electrici!Y before the appointed date (such as
  BEST). His submission was that the Legislature could never          D
  have and in fact, has not intended that such special status
  (inclusive of exemption from open access) be in vain or
  rendered illusory/infructuous/nugatory, and more so by a mere
  lay out or extension of a distribution system or network of the
  purported parallel licensee. It is a fundamental principle of law   E
  that duly made legislation can never be and should not be in
  vain or to no avail. Hence, such special status (inclusive of
  exemption from open access) cannot be ignored, but must
  necessarily be given full effect to and enforced. According to
  him an irrational situation would arise if the purported parallel   F
' licensee (such as TPC) could not supply electricity under open
  access in the area of supply of a local authority engaged in the
  business of distribution of electricity before the appointed date
  (such as BEST), but could lay or extend its distribution system
  or network in the area of supply of~ local authority engag~d in     G
  the business of distribution of electricity before the appointed
  date (such as BEST). As such, Section 42 (3) necessarily has
  to be interpreted to qualify or restrict aforesaid Sixth Proviso
  to Section 14, Section 43(1), Section 42(1) and/or Section
  42(2), to the extent that any person, whose premises are
                                                                      H
    76       SUPREME COURT REPORTS                  [2014] 6 S.C.R.

A situated within the area of supply of a distribution licensee,
  (which is a local authority engaged in the business of
  distribution of electricity before the appointed date)cannot
  require a supply of electricity from a generating company or any
  licensee other than such distribution licensee, through (i) open
B access and/or(ii)otherwise (including under parallel license).
  Moreso, as the provisions of the Electricity Act, 2003, provide
  for protection of interest of electricity consumers, and as such
  ought not and should not be interpreted to entail unnecessary
  burden of said capital expenditure or electricity consumers; a
  local authority enga9ed in the business of distribution of
C electricity before the appointed date (such as BEST) is ex-facie
  placed on a special pedestal vis-a-vis ordinary distribution
  licensees, under the Third Proviso to Section 51 of the
  Electricity Act, 2003, which has been liberally interpreted in
  favour of and to advantage of a local authority engaged, before
D the commencement of the Electricity Act, 2003, in the business
  of distribution of electricity (such as BEST), by the Hon'ble
  Supreme Court of India in the Order dated 8.2.2011 made in
  Civil Appeal No.848 of 2011 (Municipal Corporation of
  Greater Mumbai vs. Maharashtra Electricity Regulatory
E Commission & Ors.).

          19. On the other hand, Mr. Dhruv Mehta, learned senior
     counsel appearing for TPC submitted that by this argument of,
· ·' the appellant was mixing the otherwise two distinct concepts,
F namely that of open access under Section 42 (3) of the Act and
     that of Universal Service of Relations contained in Section 43
     of the Act. Highlighting the purpose of the Act which has, inter-
     alia, provided emphasizing the need for efficiency and
     competition in the distribution business as well as open access
G system and also multiple licences system in the same area of
     supply, he submitted that if the contention of the appellant is
     accepted it would negate the very objective which is sought to
     be achieved by the aforesaid provisions. Mr. Mehta argued that
     under the Act, there are two ways in which a consumer situated
     in a particular area can avail supply of electricity: (i) from a
H                                                                      i
     BRIHANMUMBAI ELECT. SUP. &TRAN. UNDERTAKING v.           77
     MAHRASHTRA ELECT. REGUL. COMMN. [AK SIKRI, J.]

distribution licensee authorized to supply electricity in that area A
under Section 43; or (ii) from any other supplier through the
distribution network of a distribution licensee by seeking "open
access'"in terms of Section 42(3). In the first option, the
distribution licensee operating in a particular area is required
to lay down its network if required, in order to supply electricity B
to a consumer seeking supply. The second option, which is
known as open access is provided under Section 42 read with
Section 2(47) of the 2003 Act. Under Section 42(3) of the 2003
Act, a consumer has the right to require a distribution licensee
to make its network available for wheeling electricity to such c
consumer from a third party supplier (i.e. a supplier of electricity
not being a distribution licensee in the area where the consumer
is situated). He submitted that this distinction between the two
different concepts is to be born in mind and the matter is seen
in its proper perspective. Section 42(3) carries out an exception 0
in favour of local authority only qua open access which would
mean that a consumer is disallowed from seeking open access
from a distribution licensee which is a local authority like BEST.
That would mean that a consumer being supplied by BEST
cannot demand that BEST allow a third party subject to supply E
electricity to such consumer through the network of BEST.
According to him, this exception would extend to position
contained in section 43 which casts "Universal Service
Obrtgation" on all distribution licensees to give supply to any
owner or occupier within its supply area. That would only mean
if there is an another distribution licensee in the area in which F
a local authority like BEST also operates, a consumer can
approach that distribution licensee to supply him the electricity.
However, for that purpose, the said distribution licensee will
have to supply the electricity from its own laid in the network
without using the network of local authority.                        G

     20. After considering the rival contentions, we are of the
opinion that the interpretation suggested by Mr. Mehta needs
to prevail and therefore we do not find any fault with the view
taken by the Appellate Tribunal. We have already reproduced         H
    78        SUPREME COURT REPORTS                 [2014] 6 S.C.R.

A   above provisions of Section 42 (3) of the Act. As pointed out
    above, Section 42 of the Act deals with the duties of distribution
    licensee and open access. Sub-Section (1) thereof provides
    that it shall be the duty of a distribution licensee to develop and
    maintain an efficient co-ordinated and economical distribution
B   system in his area of supply and to supply electricity in
    accordance with the provisions contained in the Act. Sub-
    section (2) casts an obligation upon the State Commission to
    introduce open access in phases and subject to such
    conditions, as may be specified, these conditions may include
c   the cross subsidies and other operational constraints. It is
    thereafter in sub-section (3) of Section 42 provision is made
    for wheeling of electricity with respect to supply stating that
    duties of distribution licensee shall be of a common carrier
    providing non-discriminatory open access. Thus sub-section (3)
    provides for open access and casts a duty upon the distribution
0
    licensee in this behalf. Here, it excludes local authority, as
    distributor of electricity from such an obligation. However, when
    it comes to the duty of distribution licensee to supply the
    electricity under section 43, it mandates that same is to be
    given to the owner or occupier of any premises on his
E   application within one month from the receipt of the said
    application. This duty under Section 43 imposed upon a
    distribution licensee does not distinguish between a local
    authority and other distribution licensee. It is also not a case of
    the appellant that in a particular area where a local authority is
F   a distribution licensee, there cannot be any other distribution
    licensee at all.

         21. Thus, on a conjoint reading of Sections 42 and 43 of
  the Act along with the objectives and purpose for which Act
G 2003 is enacted, it'becomes clear that there are two ways in
  which a consumer stated in a particular area can avail supply
  of electricity, as pointed out by the learned senior counsel for
  TPC and noted above. When an application is made by a
  consumer to a distribution licensee for supply of electricity, such
H a distribution licensee for supply of electricity, such a
     BRIHANMUMBAI ELECT. SUP. &TRAN. UNDERTAKING v.          79
     MAHRASHTRA ELECT. REGUL. COMMN. [AK. SIKRI, J.]

 distribution licensee can request other distribution licensee in A
 the area to provide it network to make available for wheeling
 electricity to such consumers and this open access is to be
 given as per the provisions of section 42 (3) of the Act. It is
 here only that local authority is exempted from such an
 obligation and may refuse to provide makes it network B
 available. Second option is, under section 43 of the Act, to
 provide the electricity to the consumer by the distribution
 licensee from its own network. Therefore, if in a particular area
 local authority has its network and it does not permit wheeling
 of electricity from by making available its network, the other c
 distribution licensee will have to provide the electricity from its
'own network. For this purpose, if it is not having its network, it
 will have to lay down its network if it requires in order to supply
 electricity to a consumer seeking supply.

      22. This interpretation of ours is in consonance of the D
objective and purpose of the Act. The aforesaid objective is
further clarified by the Tariff Policy and the National Electricity
Policy under section 3 of the Act which emphasized the need
for efficiency and competition in the distribution business. On
going through the statement of objects and reasons contained E
in the new Act, the interpretation, which we are leading to, gets
further facilitated. Prior to this Act, there were three Acts,
namely of 1910, 1948 and 1998 which were governing the laws
relating to electricity and were operating in the field. Within few
years, it was felt that the three Acts _of 1910, 1948 and 1998 F
which were operating in the field needed to be brought in a new
self contained comprehensive legislation with the policy of
encouraging private sector participation in generation,
transmission and distribution and also the objectives of
distancing the regulatory responsibilities from the Government G
and giving it to the Regulatoryc Commissions. With these
objectives in mind the Electricity Act, 2003 has been enacted.
Significant addition is the provisions for newer concepts like
power trading and open access. Various features of the 2003
Act which are outlined in the statement of objects and reasons H
    80       SUPREME COURT REPORTS                  [2014] 6 S.C.R.


A   to this Act. Notably, generation is being delicensed and captive
    generation is being freely permitted. The Act makes provision
    for private transmission licensees. It now provides open access
    in transmission from the outset. While open access in
    transmission implies freedom to the licensee to procure power
B   from any source of his choice, open access in distribution, with
    which we are concerned here, means freedom to the consumer
    to get supply from any source of his choice. The provision of
    open access to consumers ensures right of the consumer to
    get supply from a person other than the distribution licensee of·
C   his area of supply by using the distribution system of such
    distribution licensee.

         23. The concept of open access under the Act enables
    competing generating companies and trading licensees,
    besides the area distribution licensees, to sell electricity to
D   consumers when open access in distribution is introduced by
    the State Electricity Regulatory Commissions. Supply by way
    of open access is a completely different regime as is also clear
    from the fact that consumers who have been allowed open
    access under Section 42 may enter into an agreement with any
E   person for supply of electricity on such terms and conditions,
    including tariff, as may be agreed upon by them under Section
    49 of the Act unlike consumers who take supply under section
    43 of the Act.

F        24. Once we read the provisions in the aforesaid manner,
    it becomes clear that there is no exemption from universal
    seNice obligation to any distribution licensee under the Act, on
    account of the presence of a "local authority" as a distribution
    licensee in the particular area of supply, which is also reinforced
G   by Paragraph 5.4.7 of the National Electricity Policy which
    clearly states that the second licensee in the same area shall
    have the obligation to supply to all consumers in accordance
    with Section 43. In this context, it is relevant to reproduce the
    following obseNations in Chandu Khamaru v. Nayan Malik
    reported in (2011) 12 sec 314:
H
      BRIHANMUMBAI ELECT. SUP &TRAN. UNDERTAKING v.             81
      MAHRASHTRA ELECT. REGUL. COMMN. [AK SIKRI, J.]

      "7 ... These provisions in the Electricity Act, 2003 make it    A
      amply clear that a distribution licensee has a statutory duty
      to supply electricity to an owner of occupier of any
      premises located in the area of supply of the distribution
      licensee, if such owner or occupier of the premises applies
      for it, and correspondingly every owner or occupier of any      B
      premises has a statutory right to apply for and obtain such
      electric supply from the distribution licensee."

        25. It is, therefore, difficult to accept the extreme position
  taken by the appellant that if local authority is a distribution C
. licensee in a particular area, there cannot be any other
  distribution licensee in that area without the permission of such
 _a local authority. Not only such a contention would negate the
  effect of universal supply obligation under Section 43; it will also
  amount to providing an exception which is not there either in
  Section 43 or Section 14 of the Act namely to treat local, D
  authority in special category and by giving it the benefit even
  that benefit which is not specified under the Act.                  '=

       26. It is trite that Court should lean in favour of an
 interpretation which subserves the objective of the Act namely       E
 the purposive interpretation. In Tata Power Co.Ltd. v. Reliance
 Energy Ltd. & Ors. (2008) 10 SCC 321, this Court gave due
 recognition to objective behind the Act viz. to promote
 competition and give the consumer open to choose the
 distribution licensee from which it seeks elettricity as is clear    F
 from the following paragraphs:

      102. On the other hand, in our view, the provisions of both
      the 1903 and 1910 Electricity Acts encourage competition
      in the electricity trade and the same is also incorporated
      in the licences issued in favour of the distribution            G
      licensees, which also include licensees generating power
      for supply. The element of competition has been included
      in the Preamble. to the 2003 Act and permeate-~ the same
      in its various provisions.



                                                                           i .
    82        SUPREME COURT REPORTS                  [2014] 6 S.C.R.


A        103. As submitted by Mr Ch'agla, the Act is meant to be
         consumer-friendly and one of the objectives it sets out to
         achieve is to give the consumer an option to choose the
         distribution licensee from whom it wishes to receive supply
         of electrical energy. The intervention of MIDC, Marni
B        Industries Association and the appeals filed by it, has
         obviously been made in that context.

        In MSR Leathers vs. S.Pa/aniappan & Anr. °(2013) 1 SCC
    177 it was observed:

c        "24. That brings us to the question whether an offence
         punishable under Section 138 can be committed only once
         as held by this Court in Sadanandan easel. The holder of
         a cheque as seen earlier can present it before a bank any
         number of times within the period of six months or during
D        the period of its validity, whichever is earlier. This right of
         the holder to present the cheque for encashment carries
         with it a corresponding obligation on the part of the drawer
         to ensure that the cheque drawn by him is honoured by the
         bank who stands in the capacity of an agent of the drawer
E        vis-a-vis ttie holder of the cheque. If the holder of the
         cheque has a right, as indeed is in the unanimous opinion
         expressed in the decisions on the subject, there is no
         reason why the corresponding obligation of the drawer
         should also not continue every time the cheque is
F        presented for encashment if it satisfies the requirements
         stipulated in clause (a) of the proviso to Section 138. There
         is nothing in •that proviso to even remotely suggest that
         clause (a) would have no application to a cheque
         presented for the second time if the same has already
         been dishonoured once. Indeed if the legislative intent was
G
         to restrict prosecution only to cases arising out of the first
         dishonour of a cheque nothing prevented it from stipulating
         so in clause (a) itself. In the absence of any such provision
         a dishonour whether based on a second or any successive
         presentation of a cheque for encashment would be a
H
    BRIHANMUMBAI ELECT SUP. &TRAN. UNDERTAKING v.               83
    MAHRASHTRA ELECT REGUL. COMMN. [AK SIKRI, J.]

     dishonour within the meaning of Section 138 and clause           A
     (a) of the proviso thereto. We have, therefore, no manner
     of doubt that so long as the cheque remains unpaid it is
     the continuing obligation of the drawer to make good the
     same by either arranging the funds in the account on which
     the cheque is drawn or liquidating the liability otherwise. It   B
     is true that a dishonour of the cheque can be made a
     basis for prosecution of the offender but once, but that is
     far from saying that the holder of the cheque does not have
     the discretion to choose out of several such defaults, one
     default, on which to launch such a prosecution. The              c
     omission or the failure of the holder to institute prosecution
     does not, therefore, give any immunity to the drawer so
     long as the cheque is dishonoured within its validity period
     and the conditions precedent for prosecution in terms of
     the proviso to Section 138 are satisfied."
                                                                      D
     While dealing with the issue No.2 above, we have already
held that TPC and BEST are parallel distribution licensee in
the South Bombay Area.

     27. The appellant has sought to rely on the expression           E
"Save as otherwise provided in this Act" in Section 43(1) of the
Act to read into Section 43(1) the exception for local authorities
provided for in Section 42(3). The TPC has successfully refuted
this submission by pointing out that these words in Section
43(1) are required to be read in the context in which they            F
appear. The said words were inserted in the section by way of
an amendment to the Act in 2007. An "Explanation" to Section
43(1) was also added by the same amendment providing that
"application" by a consumer in Section 43(1) means an
application complete in all respects along with documents
                                                                      G
showing payment of necessary charges and other compliances,
meaning thereby that the obligation of the distribution licensee
to supply within the specified time period will begin only after it
has received such completed application by the applicant.
Further, Sections 45 and 46 provide for the distribution
                                                                      H
            84       SUPREME COURT REPORTS                 [2014] 6 S.C.R.


        A licensee's powers to recover charges for electricity supplied
          and the expenditure incurred in providing electric line or plant
          for giving supply. Section 47 provides that the distribution
          licensee may require any person demanding electricity supply
          from him to give a reasonable security, failing which the
        B distribution licensee may refuse to give supply of electricity to
          such consumer. We are of the opinion that it is in this context
          that the expression "save as otherwise provided in this Act" in
          Section 43 (1) is to be construed.
    (
/
               28. Before we part with we would like to make it clear that
        C there is a dispute between TPC and R-infra) (respondent No.9)
          which is the subject matter of Civil Appeal Nos. 4667-68/2013.
          R Infra is a distribution licensee in suburban Bombay where
          TPC is also a licensee. Both supply electricity to different
          consumers. Dispute is between them with regard to cross
        D subsidiary surcharge (CSS) payable by consumer taking supply
          from TPC or R Infra network. We make it clear, by way of
          abundant caution, that we have not touched upon the said
          dispute and obviously so as even otherwise the subject matter
          in the instance case is totally different. Therefore Civil Appeal
        E Nos.4667-68/2013 shall be decided on its own merits.

                 29. We, thus, do not find any merit in any of the contentions
            of the appellant. As a consequence, this appeal fails and is
            hereby dismissed with cost thereby affirming the order of the
        F   Appellate Tribunal.

            Bibhuti Bhushan Bose                             Appeal dismissed.