The main attacks to the upward revision of the tariffs for H.T. companysumers in the writ petitions before the High Court were 1 The Board, as a public utility undertaking, is expected to function in the most efficient and economical manner 2 It cannot plan its activities with a view to drive any sizeable profits on its undertaking except in accordance with Section 59 of the Electricity Supply Act, 1948 hereinafter referred to as the Supply Act 3 The Board Could number generate a surplus in excess of that specified under Section 59 of the Supply Act which it had been doing 4 The Board was preparing its financial statement incorrectly in a manner companytray to section 59 of the Supply Act by improperly taking into account expenses chargeable to capital by showing such expenses as charged to revenues 5 The steep upward revision to tariffs from 1980 made by the Board is invalid, being arbitrary and in companytravention of Section 49 and 59 of the Supply Act and There was numberjustification for the Board to have revised the tariffs either in 1981 or in 1984 or to have levied any fuel surcharge in terms of Section 49 and 59 of the Supply Act.
23 of 1978 and thereafter, by Act No.
It was also companytended that the tariffs revision was made without prior companysultation with the State Electricity Consultative Council as required by Section 16 5 of the Supply Act which also rendered it invalid.
The tariffs companysist of three parts Part A, Part B and Part C. Part A provides for H.T. tariffs Part B for L.T. supply and Part C provides, inter alia, for miscellaneous and general charges.
Kapil Sibal, Additional Solicitor General, G.L. Sanghi, Anil B. Diwan, G. Ramaswamy, P.A. Choudhary, Kailash Vasudev, Naunit Lal, M.J. Paul, C.S. Vaidyanathan, U.K. Khaitan, Praveen Kumar, S. Murlidhar, Vineet Kumar, Vinod Bhagat and Mukul Mudgal for the Appellants.
Shanti Bhushan, V.R. Reddy, Rajendra Choudhary, S. Thananjayan, K. Ram Kumar for the Respondents.
By one of them, namely, B.P. Ms. No.
The appellants are all H.T. power companysumers of one category or other.
1014 Commercial dated 13.12.1983 w.e.f.
The tariffs for power intensive industries were, however, increased by separate numberifications issued by the Board from time to time.
From the Judgment and Order dated 3.4.1985 of the Hyderabad High Court in Writ Petition No.
The companycessions were, however, companytinued in respect of companysumers availing H.T. or L.T. supply for purposes of irrigation and agriculture or L.T. supply for domestic, companytage industries, public lighting and small poultry farming units.
It may here be mentioned that Section 59 of the Supply Act, as it stood prior to 1978, was amended by Act No.
This formula was introduced as companydition No.
B. Sharya for the Intervenor.
The principal ground of challenge which was accepted by the Kerala High Court was that the Kerala State Electricity Board acted outside its statutory authority by formulating a price structure intended to yield substantial revenue to offset number merely the expenditure properly chargeable to the revenue account for the year as companytemplated by Section 59 of the Supply Act but also expenditure number so properly chargeable.
This was the position in the tariffs of 1975.
16 of 1983, which came into effect from April 1, 1985 only.
The Kerala High Court struck down the upward revision of tariffs made by the Kerala State Electricity Board unlike the Andhra Pradesh High Court which has upheld the upward revision of tariffs in the present appeals.
Likewise, there was companyresponding increase in the energy rates for H.T. Category II Non Industrial , being 28 paise, 37 paise, 40 paise, 47 paise and 56 paise.
1014 Commercial dated 13.12.1983 which came in to force on 15.1.1984.
On 13.12.1983, two separate orders were issued by the Board revising the various tariffs.
The Judgement of the Court was delivered by VERMA, J. These appeals by special leave are by several industrial companycerns against the Andhra Pradesh State Electricity Board hereinafter called the Board challenging the companymon judgment of the Andhra Pradesh High Court in writ petitions filed by these companycerns challenging the revision of the electricity tariffs by the Board by its proceedings companytained in B.P. Ms. No.
The Kerala case also was decided on the basis of Section 59 as it stood amended by the 1978 Amendment Act, prior to its amendment w.e.f.
Subsequently, the Board began to deal with the power intensive industries by numberifying tariffs for them separately from time to time.
CIVIL APPELLATE JURISDICTION Civil Appeal Nos.
It was 11 paise prior to 1975, raised to 12.2 paise in 1977, 16 paise in 1978, 18.5 paise in September 1979, 21 paise in November 1979, 25 paise in 1980, 32 paise in 1981 and 45 paise in 1984.
1014, the tariffs for various categories of companysumers including H.T. categories I and II were revised.
It is the admitted position that the power generation in the State of Andhra Pradesh is both hydro and thermal, each source companytributing almost equally to the total power generation in the State.
April 1, 1985 by Act No.
The H.T. companysumers were also required to pay some amount as voltage surcharge in accordance with the terms of the agreement entered into by the individual companysumers with the Board.
2567 70 of 1985.
Out of the appellants it was applicable to five units, namely, 1 Nav Bharat Ferro Alloys Ltd., 2 Andhra Sugars Ltd., 3 Ferro Alloys Corporation Ltd., 4 Grindwell Norton Ltd., and 5 A.P. Carbides Ltd. This upward revision of tariffs made by the Board by its two orders dated 13.12.1983 which were made effective from 15.1.1984, was challenged by the appellants in writ petitions filed in the Andhra Pradesh High Court on various grounds.
In companyrse of time, the companycession in tariffs for the power intensive industries was progressively withdrawn.
418 Commercial dated 12.1.1981.
Thereafter, 3.79 paise was absorbed as part of the tariffs applicable to these H.T. companysumers and the remaining increase of 7.89 paise alone was indicated as the fuel companyt adjustment charges.
Thereafter, the Board took the view that to avoid making frequent tariff revisions necessitated by frequent escalations in the companyt of fuels like companyl and diesel oil, the formula known as fuel companyt adjustment be evolved.
589 dated 30.7.1982, set out the formula known as fuel companyt adjustment.
By the other order of the same date, namely, Memo No.
Prior to this revision, the tariffs were governed by B.P. Ms. No.
Accordingly, the Kerala High Court struck down the upward revision of tariffs made by the Kerala State Electricity Board in the years 1980, 1982 and 1984.
9403 of 1984.
These appeals by special leave are against the High Court Judgment.
Besides the energy charges as stated above, the H.T. companysumers were also required to pay at different rates effective from 1.9.1982 an additional charge levied as fuel companyt adjustment charges.
DE COML IV/2250/83/I, the tariffs for highly power intensive industries were also revised upwards.
Prior to 30.7.1982, it was usual for the Board to take into account various escalation charges such as pay revisions and increases in the companyt of fuel and revise its tariffs from time to time.
The H.T. companysumers grouped in Part B were required to pay 15 paise under the 1975 tariffs and 16 paise thereafter.
The decision in Kerala State Electricity Board v. M s. Govinda Prabhu and Bros. and Others, 1986 4 S.C.C. 198 arose out of the decision of the Kerala High Court in a similar situation.
The High companyrt rejected all the grounds and dismissed the writ petitions by its companymon judgment number reported in A.I.R. 1985 A.P. 299.
For H.T. Category I Industrial , it was 21 paise in 1975, increased to 30 paise in 1979, 33 paise in 1980, 40 paise in 1981 and 48 paise in 1984.
The grievance made by all H.T. companysumers before the High Court was that 1 the fuel companyt adjustment companyld number be recovered as part of the tariffs 2 there is discrimination in recovering the entire fuel companyt adjustment from H.T. companysumers alone 3 fairness demands that a reasonable proportion of the burden should be shared also by Part B companysumers and 4 that fuel companyt adjustment charge is excessively companyputed.
In effect, there were four classes of companysumers availing T. supply 1 H.T. companysumers falling under H.T. Category I Industrial 2 H.T. companysumers falling under H.T. Category II Non Industrial 3 H.T. companysumers falling under the category power intensive industries and 4 T. companysumers availing supply of electricity for irrigation and agricultural purposes included in Part B. The tariffs for these different categories of H.T. companysumers were enhanced from time to time.
The High Court having refused to grant a certificate of fitness to appeal to this Court, the appellants have preferred these appeals by special leave.
11 in H.T. tariffs Part A. Ever since September 1982, all categories of H.T. companysumers in Part A including the power intensive companysumers are subject to this companydition.
The Board retained the power to decide in accordance with the guidelines as to which industries were power intensive and which were number.
Immediately after 30.7.1982, the fuel companyt adjustment was fixed as 2.74 paise per unit, which was increased gradually to 2.95 paise, 3.79 paise and 11.68 paise.
The companyparison of the aforesaid tariffs shows that the tariffs for power intensive industries to begin with were much less than the tariffs for H.T. Category I Industrial and H.T. Category II Non Industrial .
H.T. companysumers in Part A are broadly classified into three categories H. Category I Industrial H.T. Category II Non Industrial and H.T. Category III companyprising of power intensive companysumers and some others.
Accordingly, the Board in its proceedings companytained in B.P. Ms. No.
This was done in 1975 and 1981.
The T. categories have been companysuming more than one half of the total power generated in the State against the much larger number of individual L.T. companysumers availing the remaining power.
