TPCL Is 'Authority' Under Article 226; Electricity Distribution Companies Discharging Public Duty Amenable To Writ Jurisdiction: Orissa High Court

The Orissa High Court on Monday held that the Tata Power Company Limited ("TPCL") is an "authority" within the meaning of Article 226 of the Constitution of India. 

Justice B.R Sarangi noted that TPCL although a company has engaged in the distribution of electricity in four distribution areas of the State under different names. It was further noted that its management is also controlled by the State through GRIDCO (Grid Corporation of Odisha). Accordingly, the Court held, 

"In view of the foregoing discussions, it is made clear that though TPCL is a company, but it has indulged in distribution of electricity in four distribution areas of the State in different names, such as, TPNODL, TPWDL, TPSODL and TPCODL, and, thereby, discharging the public duty and, as such, its management is also controlled by the State through GRIDCO. Therefore, TPCL can be said to be an "authority" within the meaning of Article 226 of the constitution of India."

Furthermore, the Court held that different electricity distribution companies such as TPNODL (Tata Power Northern Odisha Distribution Limited), TPWDL, TPSODL and TPCODL discharge functions in the nature of a public duty and thus qualify as an "authority" within the meaning of Article 12 of the Constitution. 

"On conspectus of the facts available on record and the propositions of law, as discussed above, it can be safely held that the distribution companies like TPNODL, TPWDL, TPSODL and TPCODL, in which the Government through GRIDCO has got 49% of equity share, whereas as TPCL has got 51% of equity share, are discharging their functions under the Statute and the activities undertaken by them are in the nature of a public duty. Therefore, they are coming within the meaning of 'authority' under Article 226 of the Constitution of India, if not as 'State' as prescribed under Article 12 of the Constitution of India", the Court observed. 

Background 

In the instant case, a number of writ petitions had been filed against different electricity distribution companies and thereafter the instant plea had been filed to decide upon the maintainability of these petitions. 

Initially the supply of electricity, including transmission, maintenance and distribution, was undertaken by Orissa State Electricity Board, a corporation created under the statute and completely regulated by the State. Subsequently, with the aim of restructuring the electricity industry the State Government, in exercise of the powers conferred under the Orissa Electricity Reforms Act, 1955 and after consultation with the Grid Corporation of Orissa Limited, made the transfer scheme rules. The rules were framed for giving effect to preparation and implementation of a scheme for the transfer of distribution undertakings of the Grid Corporation of Orissa Limited to the distribution companies, called "Orissa Electricity Reform (Transfer of undertakings, Assets, Liabilities, Proceedings and Personnel of Gridco to Distribution Companies) Rules, 1998. 

Accordingly, the entire State of Odisha was divided into four distribution zones/areas for supply of electricity and incorporated four distribution companies, namely, WESCO, NESCO, CESCO and SOUTHCO. These companies came into existence as per the Rules, 1998 and were entrusted with the task of spending the Central and State Government assistance, while executing such schemes. Those four distribution companies were in charge of collection of electricity duty, which is government revenue, along with the energy charges, collected from the customers.

Observations

The Court noted that under Article 12, the phrase 'State' has not been defined. It includes all other authorities within the territory of India or under the control of the Government of India, the Court stated further. 

"It does not say that such other authorities must be under the control of the Government of India. The word 'or' is disjunctive and not conjunctive", the Court elucidated further. 

It was further observed that it does not imply that every body or association which is regulated in its private functions becomes a 'State'. What matters is the quality and character of functions discharged by the body and the State control flowing therefrom, it was noted further. 

"The concept that all public sector undertakings incorporated under the Indian Companies Act or Societies Registration Act or any other Act for answering the description of 'State' must be financed by the Central/State Government and be under its deep and pervasive control has in the past three decades undergone a sea change. The thrust now is not upon the composition of the body but the duties and functions performed by it. The primary question which is required to be posed is whether the body in question exercises "public function", the Court underscored further. 

The Court then proceeded to refer to a host of Supreme Court judgments on the interpretation of Article 12 and accordingly held that TPCL falls under the purview of an "authority" within the meaning of Article 226 of the Constitution of India.

Therefore, the Court held that writ petitions are maintainable against these electricity distribution companies.

Case Title: Surendra Kumar Sahoo v. State of Odisha

Case Citation: 2022 LiveLaw (Ori) 5. 

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