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1990 Supreme(AP) 165

Andhra Pradesh High Court
Judges : B.P.JEEVAN REDDY, S.S.M.QUADRI
A.P.State Electricity Board - Appellant
Versus
Gowthami Solvent Oils - Respondent
W.A. No. 1427/89 etc.
Decided On : 04-02-90
Advocates Appeared :
Mr. V.A. Reddy,Mr. S. Parvatha Rao

Headnote:ELECTRICITY SUPPLY ACT, 1948 - Secs 49, 59 and 78-A - BPMS No 671, dt10-6-1987 and BPMS No 353, dt 15-4-1989 revising tariffs on consumption of electricity by High Tension (Industrial) Consumers - Not arbitrary or unreasonable - levy of Fuel Cost adjustment charges only upon HT Industrial Consumers - Not invalid

       Held : Sub-Sec(2) of Sec49 itself empowers the Board to classify the consumers into more then one Category, having regard to the factors mentioned therein The power to classify consumers is inherent in the subsection Having regard to the large number of rural connections and the difficulties in the way of billing and connections, the fixation of a flat rate tariff cannot be said to be an unreasonable direction The mere fact that FCA charges and levied only upon HT Consumers also does not prove that the HT Industries Consumers are in effect subsidizing the agriculturists The tariffs prescribed for HT Industrial Consumers cannot be said to be high having regard to the cost of supply The levy of FCA charges only upon HT Consumers is valid

       WAs Allowed

( 1 ) THESE Writ Appeals are preferred against a common judgment of a learned single Judge, G. Radha-krishna Rao, J. , partly allowing a batch of writ petitions filed by a number of industries. The writ petitioners are consumers of electricity. They fall in the category of High Tension (Industrial) Consumers. They challenged the revision of tariffs in B. P. Ms. No. 671, dated 10-6-1987 (with effect from 15-7-1987), as well as the further revision of tariffs in B. P. Ms. No. 353, dated 15-4-1989 (given effect from 1-6-1989 ). Both the respondent-Electricity Board and the writ-petitioners have filed appeals against the judgment of the learned single Judge.

( 2 ) THE A. P. State Electricity Board is constituted under Section 5 of the Electricity (Supply) Act, 1948 (hereinafter referred to as "the Act" ). Section 49 empowers the Board to classify/categorize the consumers having regard to the several factors mentioned in sub-section (2) thereof, and to fix different tariffs for them. From the very beginning the Board has been categorizing the consumers into more than one category and has been charging them at different rates. For purposes of these appeals it is sufficient if we commence our consideration from the year 1981 onwards.

( 3 ) UNDER B. P. Ms. No. 418, dated 2-6-1981 the tariff rates for several categories of consumers were revised upwards. We shall refer to this as the "first revision". In B. P. Ms. No. 1014 dated 13-12-1983 there was another revision of tariffs, which was brought into force with effect from 15-1-1984. We shall refer to this as "second revision". In the year 1987 the Board issued B. P. Ms. No. 671 dated 10-6-1987, revising the tariffs once again with effect from 15-7-1987. We shall refer to this revision as "third revision". In the year 1989 again the Board revised the tariffs under B. P. Ms. No. 353, dated 15-4-1989 with effect from 1-6-1989 (hereinafter referred to as the "fourth revision" ). Validity of the third and fourth revisions was questioned in the batch of writ petitions, from which these Writ Appeals arise.

( 4 ) IN the year 1982, two significant developments took place, which have a crucial relevance herein. On 30-7-1982 the Board issued B. P. Ms. No. 589 introducing the concept of fuel Cost Adjustment (F. C. A.) by amending part A, H. T. Tariffs, notified in the first revision (B. P. Ms. No. 418 dated 2-6-1981 ). By these proceedings the existing Condition 11 under Part A, H. T. Tariffs was renumbered as Condition 12, and a new Condition No. 11 was inroruced. Condition 11 so introduced read as follows:-- "11. Fuel Cost Adjustment: The above tariffs are applicable so long as the average cost of coal and oil Ex. Board s Tharmal Generation Stations do not exceed Rs. 175. 00 per Metric Tonne and Rs. 2. 440. 00per Kilo litre respectively. If the cost of coal and/ or oil increases beyond the limits specified above. All consumers availing H. T. supply of electricity shall pay additional amounts for the energy consumed as indicated below. ! (a) For every increase of Rs. 10 per Metric Tonne in the average coal of cost Ex-Board s Generating Stations, over and above Rs. 175. 00 Metric Tonne, an additional charge of 0. 10 paise per unit of energy consumed will be levied. (b) For every increase of Rs. 10. 00per Kilo- litre in the average cost of oil Ex-Board s Thermal Generating Stations over and above Rs. 2440. 00 Kilolitre, an additional charge of 0. 02 paise per unit of energy consumed will be levied. These additional charges will be applicable for the consumption for September, 1982 and onwards. "

( 5 ) THIS concept of Fuel Cost Adjustment was introduced with a view to off set the constant rise in the price of coal and oil. Instead of revising the tariff every time the price of coal and oil goes up, they introduced this concept, according to which an additional amount, called "fuel Cost Adjustment" is levied upon H. T. Consumers every time there is a rise in the price of coal and oil beyond the pre












































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