1997(1) ALL MR 709
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

R.M. LODHA, J.

Maharashtra State Electricity Board. Vs. Arvind Purushottam Joshi.

Second Appeal No.522 of 1994

22nd January, 1997

Petitioner Counsel: Mr. P.P.CHAVAN, Advocate i/b. M/s. LITTLE & CO.
Respondent Counsel: Mr. R.S.APTE

(A) Electricity (Supply) Act (1948), Ss.49, 79(j) - Tariff LD-I and LD-II - electricity supply to hotel - Hotel applying for supply under commercial purpose - Hotel was sanctioned supply for the said purpose but was billed under LTPG at low rate - After detecting the mistake Board issuing supplementary bill - Held supply to Hotel was for commercial purpose and not for industrial purpose and as such Board was right in making supplementary bill.

In ordinary parlance and as is understood in the sense in which the people conversant with the hotel would understand that hotel is run for financial gain and is a business activity and profit is its primary aim. In my view the consumer is liable to pay the charges under the item LD-2 of tariff, the tariff which is applicable for power supply to non-domestic, commercial and business premises for the use of light. fan, refrigerators, heaters, cookers, radios, TV sets, etc. The consumer in fact applied for supply of electricity for the commercial purposes for the use of electricity for aforesaid purposes and he was sanctioned electricity for that purpose and, therefore, he was liable to pay charges under the tariff accordingly. The mistake was committed by the Board in raising the bills to the consumer charging rates under item LTP-G to which consumer was not entitled and since the mistake was detected, later on the supplementary bills were raised. The trial court, therefore, was justified in passing the decree in favour of the board permitting it to recover Rs.37,527.39 p.s. with interest @ 12% p.a. from the date of bills till full realisation and the appeal court seriously erred in reversing the said judgment and decree passed by the trial court. [Para 12]

Merely because under the Industrial Disputes Act, it happens to be an 'Industry' or an 'Industrial establishment' for the purposes of Income Tax Act or is excluded from the definition of 'commercial establishment' under the Bombay Shops & Establishments Act, 1948, the supply of power to commercial premises and use of the electrical supply by a hotel for commercial purposes cannot be excluded from the tariff issued by the Board for charging the electrical supply to the commercial and business premises. The definition of 'industry' under the Industrial Disputes Act, 'Industrial undertaking' under the Income Tax Act, and, the 'commercial establishment' under the Bombay Shops & Establishments Act is confined to such expressions for the said statutes only and by no stretch of imagination can it be held that since hotel is an industry under the Industrial Disputes Act, the board could only charge the tariff fixed for industrial use.

(B) Interpretation of Statutes - An expression occuring in one statute cannot be construed in the light of definition of such expression in another statute.

1985(19) E.L.T. 15 (SC) Rel.on. (Para 7)

Cases Cited:
(1910) A.C. 220 (223) [Para 7,8]
1985 (19) E.L.T. 15 (S.C.) [Para 8]


JUDGMENT

JUDGMENT :- The substantial question of law framed at the time of admission of this second appeal and that needs answer is: Whether the use of energy by the Respondent in his hotel is for the purpose of Industrial use or Commercial Use under the tariff issued by the Appellant under the provisions of Electricity (Supply) Act, 1948?

2. The aforesaid substantial question of law arises in the facts and circumstances briefly narrated hereunder :

The Respondent herein Shri Arvind P. Joshi (for short, 'consumer') is the sole proprietor of Hotel Raviraj situated at 865, Shivajinagar, Pune. He applied to the Maharashtra State Electricity Board, Appellant herein (for short, 'the Board') for supply of 49.78 KW of electrical energy for commercial purposes particularly for the use of deep freezers, freezers, oven, mixer, grinder, water-heater, air-conditioners, water-coolers and like. The officials of the board inspected the site and submitted the testing report on 13-5-1978 and sanction was granted to the consumer for supply of electricity for the commercial purpose as sought by him. However, it appears that though the electrical energy sanctioned by the Board to the consumer was for commercial purposes, the bills for consumption of electrical energy were raised under the tariff fixed for supply of electrical energy for the industrial purposes. On 14.1.96 the Board detected this mistake and accordingly two supplementary bills were raised one for recovery of difference of amount for the period from January-83 to January-86 amounting to Rs.30,856.16 and, another for recovery of difference of amount for the period from 1979 to December-82 amounting to Rs.6,691.25. The consumer disputed his liability to make the payment aforesaid, Both the parties filed seperate suits. The consumer filed the suit seeking declaration to the effect that the two bills raised by the Board for difference of amount for the period from 1979 to Jan.86 were illegal and void and consequential injunction that the Board was not entitled to recover the said amount. The suit filed by the consumer was registered as Special C.S.Suit No.1010/86. The board also filed S.C.Suit No.48/89 against the consumer in the court of 6th Jt. Civil Judge, Senior Division, Pune for recovery of amount of Rs.51,861.97. In the said suit the claim of the Board was that consumer applied for supply of electrical energy for the commercial purposes i.e. for the business of Hotel Raviraj and on the said application after testing report, sanction was granted for supply of electrical energy for the commercial purposes. According to the Board therefore, the bills raised to the consumer for consumption of electricity on the basis of the tariff for the industrial purposes for the period from 1979 to January-86 was bonafide mistake and error of the officials and, the Board was entitled to recover the difference of tariff fixed for supply of electricity for commercial purposes. The consumer contested the claim of the Board and set-up the plea that the demand made by the Board was against the principles of equity, justice and good conscience, and, the Board has no right to demand the arrears raised by way of two supplementary bills.

3. On the basis of the pleadings of the parties, the trial court framed various issues and after recording the evidence reached the finding that the consumer was given electrical connection for commercial purposes and not for industrial purposes. The trial Court also held that the consumer was under legal and contractual obligation to pay electrical charges as per the existing tariff for supply of electrical energy for commercial purposes. The trial Court accordingly partly decreed the Board's suit and passed the decree on 12.01.1990 in it's favour by directing recovery of Rs.37,527.39 with interest @ 12% p.a. from the consumer from the date of bills till full realisation of the decretal amount. The trial Court dismissed S.C.Suit No.1010/86 filed by the consumer. Two appeals came to be filed by the consumer against the judgment and decree dated 12.01.1990 passed by the trial Court in the suit filed by the Board as well as in the suit filed by him. The appeal court heard both the appeals together and by the judgment and decree dated 30th September-93 allowed both the appeals filed by the consumer and resultantly the suit filed by the board stood dismissed and the suit filed by the consumer was decreed. The present second appeal arises out of the judgment and decree dated 30th September-93 whereby civil Appeal No.31/91 filed by the consumer was allowed and the judgment and decree passed in favour of the board by the trial court for recovery of amount of Rs.37,537.39 from the consumer with interest @ 12% p.a. was set-aside and Board's suit was dismissed.

4. Mr. Chavan, learned counsel for the Board strenuously argues that the approach of the first appellate court was wholly erroneous and it seriously erred in holding that hotel run by the consumer was an 'industry' for the purposes of the tariff issued by Board under Electricity (Supply) Act, 1948. He argued that definition of 'industry' under the Industrial Disputes Act, 1947, the definition of 'industrial undertaking' under the Income-Tax Act, and, definition of 'commercial establishment' under the Bombay Shops and Establishments Act, 1948 have no relevance for determination of question involved. He referred to the tariff issued by the Board under the provisions of Electricity (Supply) Act, 1948, and, urged that the consumer was sanctioned power supply to the commercial and business premises and Hotel was commercial and business premises and the tariff relating thereto is applicable to the consumer.

5. Mr. Apte, learned counsel for the consumer on the other hand supported the judgment passed by the first appellate court and submitted that 'commercial establishment' or 'industrial establishment' and/or 'general motive power' are not defined in the tariff issued under the Electricity (Supply) Act, 1948. He would submit that if these expressions have not been defined in the tariff, by taking external help and relying on the definition of 'industry' under the Industrial Disputes Act, and 'commercial establishment' under the Bombay shops & Establishments Act, it could be found out whether the hotel run by the consumer was an industry and liable to pay charges under the tariff fixed for industrial purposes. The learned counsel for consumer would also urge that tariff should be construed in a manner which is benefial to the consumer and not in favour of the supplier i.e. the Board, Mr. Apte, thus, contended that the judgment and decree passed by the first appellate court does not suffer from any error warranting interference by this Court.

6. In exercise of the powers conferred by Section-49 read with Section-79(j) of the Electricity (Supply) Act, 1948 and other enabling provisions in the Act, the Board issued the tariff and the relevant portion of tariff reads as under :


“1. LD-1 (Domestic L&F H&P)
Applicability.










This tariff is applicable for supply to Residential places, Religious places, like temples, Churches, Mosques, and Educational Institutions for the following uses : Light, fans, refrigerators, heaters, Small cookers, radios, T.V. sets, battery charging equipments, X’ray machines, small motors upto 1 BHP attached to appliances which includes domestic water pump.
Tariff Rates.


30 P/U - for first 30 units
50 P/U for next 120 units.
85 P/U for balance consumption.
Monthly minimum
charges.

Rs.5/- for 1 0 supply
Rs.20/- for 3 0 supply.
2. LD-2 (Commercial L & F & H & P).
Applicability.






This tariff is applicable for power supply to the non domestic, commercial and business premises and to hospitals, hostels, etc. for the various uses as mentioned under tariff LD-1 above.
Tariff Rates,



50 P/U for first 30 Units.
88 P/U - for next 120 units.
98 P/U . for balance consumption.
Monthly minimum
charges.



Rs.10/- per 1/Osupply
Rs.30/- per 3 0 supply
Rs.200/ per cinema and video parlours.
3. LTP-G
Applicability




This tariff is applicable to General motive power (excluding Agricultural pumping loads) and Rural Water Supply Schemes) service.
Tariff Rates.




42 P/U for consumers having connected load of 1 BHP.55 P/U for consumers having connected load more than 1 BHP but upto 20 BHP.
  75 P/U for consumers having connected load more than 20 BHP but upto 67 BHP.
  90 P/U for consumers having connected load above 67 BHP
  FCA. (FCA as applicable from time to time as per FCA formula)
Monthly mini-
mum charges       Rs/10/BHP/month
(for non-seasonal
consumers).
Annual mini-
mum                     Rs.150/BHP/Annum
charges (For
seasonal con-
sumers)



The actual monthly consumption will be charged at the above rates as the case may be.
*(The FCA formula is applicable for low tension motive power consumers (other than Agricultural) having connected load exceeding 67 BHP only).”

 
 
 
 

7. LD-1 is the tariff applicable for supply of electricity to residential places, religious places like temples, churches, mosques and educational institutions for the use of light, fans, refrigerators, heaters, small cookers, radios TV sets, battery charging equipments, x'ray machines, small motors upto 1 BHP attached to appliances including the domestic water pump. LD-2 is the tariff applicable for power supply to the non-domestic, commercial and business premises and to hospitals, hostels for the various uses as mentioned under tariff LD-1. LD-2 tariff is also applicable to combined lighting and power services for cinemas and video parlours. The third category i.e. LTP-G is applicable where supply is to general motive power excluding agricultural pumping, loads and Rural water supply schemes. It would be thus seen that there are three categories of tariffs for LT supply framed by the Board in exercise of its powers are under Electricity (Supply) Act. As required under law the Board while fixing the uniform tariffs had regard to the nature of supply and the purpose for which it is required amongst other relevant factors. The predominant consideration while fixing the tariffs by the Board definately appears to be nature of supply and the purposes for which it is required. Supply of electrical energy to residential places, religious places and educational Institutions covered under LD-1 is at lower rate while power supply to the non-domestic, commercial and business premises, hospitals, hostels, etc. is at higher rate under LD-2. General motive power supply is covered under LTP-G which is lower tariff than LD-2. All the expressions viz., residential places, religious places, educational institutions, non-domestic, commercial and business premises, hospital, hostels are well understood in common parlance and have to be given the meaning accordingly. An expression occuring in one statute cannot be construed in the light of definition of such expression in another statute. When an expression is defined in a particular statute, such definition is meant for that statute. The definition of an expression in particular statute cannot be used or borrowed to find out the meaning of the same expression in other statute or statutory instruments. In Macbeth v. Chislett-(1910) A.C. 220 (223) it has been held that:

"In construing a word in an Act caution is necessary in adopting the meaning ascribed to the word in other Acts. "It would be a new terror in the construction of Acts of parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone."

8. The said principle was considered by the Apex Court in MSCO Pvt. Ltd. Versus Union of India and others 1985 (19) E.L.T. 15 (S.C.), and, the Supreme Court held thus:

"4. The expression, 'industry' has many meanings. It means 'skill', 'ingenuity', 'dexterity', 'diligence', systematic wor or labour'. 'habitual employment in the productive arts', 'manufacturing establishment' etc. But while construing a word which occurs in a statute or a statutory instrument in the absence of any definition in that very document it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or statutory instrument understand it. It is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when such statute or statutory instrument is not dealing with any cognate subject. Craies on Statute law (6th Edn.) says thus at page 164:

"In construing a word in an Act caution is necessary in adopting the meaning ascribed to the word in other Acts. "It would be a new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone' Macbeth v. Chislet-(1910)A.C.220, 223.'

5. When the word to be construed is used in a taxing statute or a notification issued thereunder it should be understood in its commercial sense. It is well known that under the law levying customs duties sometimes exemptions are given from the levy of the whole or a part of customs duty when the goods in question are sold either in the form in which they are received or in a manufactured or semi-manufactured state to a manufacturing establishment for purposes of using them in manufacturing finished or semi-finished gods in order to lessen the cost of machinery or equipment employed in or raw materials used by such manufacturing establishment. The object of granting such exemption is to give encouragement to factories or establishments which carry on manufacturing business. The appellant, however, relies upon the meaning assigned to the word 'industry' in the Industrial Disputes Act, 1947 in support of its case. The expression 'industry' is no doubt given a very wide definition in section 2(j) of the industrial disputes Act, 1947. It reads thus:

"2(j) 'Industry' means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen."

The above definition is given in the context of the subject matter with which the Industrial Disputes Act, 1947 is concerned. The pith and substance of that Act is to make provision for settlement of disputes between employers and employees in institutions, establishments, industrial or business houses or factories of various kinds. It is true that in the Bangalore Water Supply & Sewerage Board, etc. v. R. Rajappa & Others (1978-3-S.C.R. 207 this Court has held that hospitals would also come within the definition of the expression 'industry' given in the Industrial Disputes Act, 1947 which is as wide as the legislature could have possibly made it. But that definition cannot be used for interpreting the word 'industry' in a notification granting exemption from customs duty under the customs Act, 1962. A perusal of the provisions of the constitution shows that the expression 'Industry' does not ordinarily possess such wide meaning. In Article 19(6)(ii) the word 'industry' does not include 'trade' business' or 'service' which are specifically referred to therein. Then we have the expression 'industry' in Entries 7 and 52List, 1, Entry 24 of List II and Entry 33 of List III of the Seventh Schedule to the Constitution. The said expression in these entries does not include trade or commerce or distribution of goods which are found elsewhere in the said Lists. What is of significance is that in List II hospitals and dispensaries, are specifically refered to in Entry 6 and they cannot, therefore, possibly fall under Entry 24 thereof which refers to 'industries'. As observed by this Court in Ch. Tika Ramji & Others etc. v. The State of Uttar Pradesh & Others (1956 S.C.R. 393 at page 420, 'industry' in the wide sense of the term would be capable of comprising three different aspects: (1) raw materials which are an integral part of the industrial process, (2) the process of manufacture or production, and (3) the distribution of the products of the industry. But raw materials are dealt with by Entry 27 of List II, the process of manufacture or production by Entry 24 of List II except where the industry is a controlled industry when it would fall under Entry 52 of list I and the products of the industry would fall under Entry 27 of List II except where they are products of controlled industry when they would fall under Entry 33 of List III. An analysis of these provisions shows that 'industry' ordinarily means the process of manufacture or production. We have referred to the above provisions of the Constitution only to show how that expression is understood ordinarily. It may also be relevant to mention here that the new definition (Amendment) Act, 1982 (46 of 1982) specifically excludes hospitals or dispensaries' from the category of 'industry', in the Industrial Disputes Act, 1947 cannot be depended upon while construing other statutes or statutory instruments and it should be confined to the Industrial Disputes Act, 1947. We are of the view that in the notification under which the exemption is claimed by the petitioner, the word 'industry' means only the place where the process of manufacture or production of goods is carried on and it cannot in any event include 'hospitals' dispensaries or nursing homes'.

9. It is indeed surprising that the appellate court relied upon the definition of 'industry' under the Industrial Disputes Act, 'industrial establishment' under the Income Tax Act, and, 'commercial establishment' under the Bombay Shops and Establishments Act in holding that the hotel Raviraj run by the consumer was an 'Industry' and electrical supply to the consumer could only be charged treating consumer as an industry under tariff LTP-G and not under tariff LD-2 fixed for non-domestic, commercial and business premises. A hotel may be industry and is an industry under the Industrial Disputes Act, but it has no relevance whatsoever for the purpose of tariff fixed for the supply of electrical energy to the consumer since while fixing the tariffs one of the important factors considered is the nature of supply and purposes for which it is required. The electricity supply to the consumer is non-domestic and for commercial and business premises and nature and use of such supply does not cease to be so because for the purposes of different Acts it may be an industry or an industrial establishment or may not be commercial establishment. Merely because under the Industrial Disputes Act, it happens to be an 'industry or an 'industrial establishment' for the purposes of income Tax Act or is excluded from the definition of 'commercial establishment' under the Bombay Shops & Establishments Act, 1948, the supply of power to commercial premises and use of the electrical supply by a hotel for commercial purposes cannot be excluded from the tariff issued by the Board for charging the electrical supply to the commercial and business premises. The definition of 'industry' under the Industrial Disputes Act, 'industrial undertaking' under the Income Tax Act, and, the 'commercial establishment' under the Bombay Shops & Establishments Act is confined to such expressions for the said statutes only and by no stretch of imagination can it be held that since hotel is an industry under the Industrial Disputes Act, the board could only charge the tariff fixed for industrial use.

10. The word 'commercial' in Oxford dictionary is defined as.

'engaged in, or concerned with, commerce, having profit as a primary aim rather than artistic etc. value....'

11. In Webster English dictionary, the word commercial is explained.

"Of or belonging to trade or commerce mercantile. 2 Made inlarge quantities for the market. 3 Having financial gain or popular appeal as an object...."

12. In ordinary parlance and as is understood in the sense in which the people conversant with the hotel would understand that hotel is run for financial gain and is a business activity and profit is its primary aim. In my view the consumer is liable to pay the charges under the item LD-2 of tariff, the tariff which is applicable for power supply to non-domestic, commercial and business premises for the use of light, fan, refrigerators, heaters, cookers, radios, TV sets, etc. The consumer in fact applied for supply of electricity for the commercial purposes for the use of electricity for aforesaid purposes and he was sanctioned electricity for that purpose and, therefore, he was liable to pay charges under the tariff accordingly. The mistake was committed by the Board in raising the bills to the consumer, charging rates under item LTP-G to which consumer was not entitled and since the mistake was detected, later on the supplementary bills were raised. The trial court, therefore, was justified in passing the decree in favour of the board permitting it to recover Rs.37,527.39 p.s. with interest @ 12% p.a. from the date of bills till full realisation and the appeal court seriously erred in reversing the said judgment and decree passed by the trial Court. From the discussion made hereinabove, I answer that for the use of energy by the Respondent consumer in his hotel was for the purpose of commercial use and to commercial and business premises under the tariff issued by the Board under the provisions of Electricity (Supply) Act, 1948, and, consumer is liable to pay the charges for electrical supply accordingly.

13. Second appeal is, accordingly, allowed. The judgment and decree passed by the Additional District Judge, Pune on 30.9.1993 is set-aside relating to civil Appeal No.31/91, and, the judgment and decree passed by the VIth Joint Civil Judge, Pune is Special Civil Suit No.48/89 Maharashtra State Electricity Board vs. Shri Arvind Purushottam Joshi is restored. Parties are directed to bear their own costs.

Appeal allowed.