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Andhra Pradesh High Court
Judges : P.CHENNAKESAVA REDDY, P.RAMACHANDRA RAJU
Nava Bharat Ferro Alloys Ltd. - Appellant
Versus
A.P.S.E.Board, Hyderabad - Respondent
Decided On : 04-03-85
The Court examined the legality of the Andhra Pradesh State Electricity Board's (Board) tariff revisions for high tension (H. T.) power consumers, including power-intensive industries, and the applicability of fuel cost adjustment charges. The Court analyzed the relevant provisions of the Electricity (Supply) Act, 1948 (Supply Act) and the Board's contractual, statutory, and other powers in setting tariffs.
Fact of the Case:
Numerous petitions were filed by H. T. power consumers challenging the Board's tariff proceedings and notifications issued between 1975 and 1984, alleging mala fides, discriminatory practices, violations of the Supply Act, and arbitrary and unreasonable tariff increases.
Finding of the Court:
The Court found that the Board had the authority to revise tariffs under the Supply Act and its contractual agreements with consumers. It rejected the allegations of mala fides and malice, noting that the tariff increases were motivated by the Government's policy to discourage power-intensive industries and mobilize funds for developmental activities. The Court held that the Board was not obligated to seek prior advice from the State Electricity Consultative Council before revising tariffs, as the Council's function was to provide advice on major policy decisions, not to grant prior approval.
Issues: 1. Whether the Board acted with mala fides or malice in revising the tariffs. 2. Whether the tariff revisions were discriminatory, particularly with regard to power-intensive industries and township supply. 3. Whether the tariff revisions violated the provisions of the Supply Act, including the requirement for prior consultation with the State Electricity Consultative Council. 4. Whether the tariff increases were arbitrary, unreasonable, or excessive.
Ratio Decidendi: 1. Mala Fides and Malice: - The Court found no evidence of mala fides or malice on the part of the Board in revising the tariffs. - The tariff increases were seen as a legitimate exercise of the Board's powers to adjust tariffs in response to increased costs and policy objectives. 2. Discrimination: - The Court rejected the claim that the tariff revisions were discriminatory against power-intensive industries. - The Court recognized that these industries had previously enjoyed concessional tariffs but held that the Board was entitled to gradually withdraw such concessions in light of the industries' relatively larger capacity to bear the additional burden. - The Court also found that the Board's decision to continue concessional tariffs for certain categories of L. T. consumers, such as agriculture, irrigation, and public lighting, was reasonable and justified. 3. Violation of the Supply Act: - The Court held that the Board was not required to seek prior advice from the State Electricity Consultative Council before revising tariffs. - The Council's role was limited to providing advice on major policy decisions, and tariff revisions did not fall within this category. 4. Arbitrariness and Reasonableness: - The Court rejected the argument that the tariff increases were arbitrary or unreasonable. - The Court noted that the Board had taken into account various factors, including increased fuel costs, the need to mobilize resources, and the socio-economic policies of the Government. - The Court also found that the Board had not acted in a hostile or discriminatory manner towards the petitioners.
Final Decision: The Court dismissed all the writ petitions filed by the H. T. power consumers, upholding the legality of the Board's tariff revisions and the applicability of fuel cost adjustment charges. The Court also granted a stay of collection of tariff arrears for a period of four weeks to enable the petitioners to approach the Supreme Court.
( 1 ) THE Petitioners are all H. T. power consumers of one category or other. They seek in common to quash on various grounds the proceedings in B. P. Ms. No. 1014 (Commercial) dated 13-12-1983 (Tariffs 84) issued by the respondent-Andhra Pradesh State Electricity Board ( board for short) notifying certain revised tariffs to come into force with effect from 15th January 1984. Prior to the impugned proceedings, the tariffs were governed by B. P. Ms. No. 418 (Commercial) dated 2nd June, 1981 (tariffs 81 ).
( 2 ) DURING the course of arguments, our attention was also drawn to : (1) B. P. Ms. No. 689 dated 17-9-1975 (tariffs 1975); (2) B. P. Ms. No. 772 (Commercial) dated 15-9-1979 (tariffs 1979) and B. P. Ms. No. 807 (Commercial) dated 26-9-1980 (tariffs 1980 ).
( 3 ) THE tariffs consist of three parts : Part A Part-B and Part-C. Part-A provides for H. T. tariffs which are applicable for supply of electricity to H. T. consumers having loads with a contracted demand not less than 70 KVA or having contracted load exceeding 75 H. P. Part-B provides for L. T. supply. Part-C provides, inter alia, for miscellaneous and general charges.
( 4 ) H. T. consumers in Part-A are broadly classified into three categories : H. T. Category-I (Industrial) and H. T. Category-II (Non-Industrial ). In tariffs 1975, H. T. power intensive consumers were grouped with H. T. consumers availing supply of electricity for irrigation and agricultural purposes, as a separate category. The Board retained thereunder the power to decide, in accordance with such guidelines as it may determine as to which industries are power intensive and which are not. In the subsequent years, the Board began to deal with the power of intensive industries by notifying them separately from time to time. The H. T. consumers availing supply of electricity for irrigation and agricultural purposes were, in the tariffs after 1975, provided for as a separate category under Part-B applicable to L. T. tariffs. In the result, we, therefore, have currently four classes of consumers availing H. T. supply. They are (1) H. T. consumers falling under H. T. Category I (Industrial); (2) H. T. consumers falling under H. T. Category-II (Non-industrial); (3) H. T. consumers falling under power intensive industries and (4) H. T. consumers availing supply of electricity for irrigation and agricultural purposes and included in Part-B. The petitioners before us fall under one or the other of the H. T. categories in Part-A.
( 5 ) THE tariffs for these different categories of H. T. consumers were being enhanced from time to time. What was 21 paise in 1975, was increased to 30 paise in 1979; 33 paise in 1980, 40 paise in 1981 and 48 paise in 1984 for H. T. Category-I (Industrial ). Likewise, there was escalation in the energy rates for H. T. Category-II (Non-industrial), the corresponding rates being 28 paise; 37 paise; 40 Paise; 47 Paise and 56 Paise. The tariffs for power intensive industries were, however, being increased by separate notifications issued by the Board from time to time. It was originally 11 paise immediately prior to 1975. The 1975 tariffs contemplated the rate at 15 paise, but for some reason with which we are not concerned, the tariff was not so raised at that time. Energy rates were, however, raised to this class of H. T. consumers from 11 paise 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. The H. T. Category consumers grouped in Part-B were, however, paying 15 paise under the 1975 tariffs and 16 paise thereafter. Besides the energy charges, as stated above, the H. T. consumers were also subjected to pay at different rates effective from 1-9-1982 an additional charge levied as fuel cost adjustment charges. These H. T. consumers were also required to pay some amounts as voltage surcharges in accordance with the terms of the agreement entered into by the i
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