The Board, being a delegatee of powers, could not make the revised tariff effective retrospectively unless specifically empowered by statute. The Board had to consider all relevant factors while fixing the uniform tariffs as required by section 49 of the 1948 Act. The increase in the power factor from 0.80 to 0.85 under the revised tariff was justified considering the inflation rate and the fact that the Board was liable to pay minimum guarantee charges irrespective of actual consumption. The system of calculating the energy charge on a monthly basis instead of an annual basis was irrational and unreasonable as it deprived consumers of the adjustment of unconsumed units in a particular month against consumption in other months. The requirement for installation of capacitors, linked switch or circuit breaker, and earth leakage circuit breaker by consumers was a valid condition of supply as it was necessary to prevent wastage of electricity and maintain the efficiency of the distribution system. The provision for average charging in case of defective meters was legal as it ensured that consumers were charged on a rational basis in the event of meter malfunction and discouraged deliberate breakage or tampering with meters.

Headnote:
ELECTRICITY - TARIFF - REVISION - VALIDITY - CONDITIONS PRECEDENT - PUBLICATION IN GAZETTE - RETROSPECTIVE EFFECT - UNIFORMITY - FACTORS TO BE CONSIDERED - MINIMUM GUARANTEE CHARGE - POWER FACTOR - INCREASE - JUSTIFICATION - MONTHLY BASIS FOR CALCULATION OF ENERGY CHARGE - RATIONALITY - INSTALLATION OF CAPACITORS - OBLIGATION OF CONSUMERS - LINKED SWITCH OR CIRCUIT BREAKER AND EARTH LEAKAGE CIRCUIT BREAKER - INSTALLATION BY CONSUMERS - AVERAGE CHARGING IN CASE OF DEFECTIVE METER - LEGALITY.
Fact of the Case:

The petitioners, various companies and partnerships dealing in production of items such as flour, paper, craft papers, alloy castings, etc., challenged the revised electricity tariff notified by the Bihar State Electricity Board (Board) on the grounds of arbitrariness, illegality, and violation of principles laid down in the Electricity (Supply) Act, 1948 (1948 Act). They specifically contested the validity of the revised tariff applicable to high tension service-I (HTS-I) and low tension industrial service (LTIS) consumers, including clauses related to minimum guarantee charge, demand charges, and fuel surcharge.
Finding of the Court:

The court held that the Board, being a delegatee of powers, was not entitled to make the revised tariff effective retrospectively unless specifically empowered by statute. It quashed the objectional part of the tariff notification that sought to make the revised tariff effective from a date prior to its publication in the Gazette. The court further held that the Board had to consider all relevant factors, including the nature of supply, coordinated development of electricity distribution, simplification of charging methods, and extension of electricity to sparsely developed areas, while fixing the uniform tariffs as per section 49 of the 1948 Act. The court found that the increase in the power factor from 0.80 to 0.85 under the revised tariff was justified considering the inflation rate and the fact that the Board was liable to pay minimum guarantee charges irrespective of actual consumption. However, it held that the system of calculating the energy charge on a monthly basis instead of an annual basis was irrational and unreasonable as it deprived consumers of the adjustment of unconsumed units in a particular month against consumption in other months. The court also upheld the requirement for installation of capacitors, linked switch or circuit breaker, and earth leakage circuit breaker by consumers as conditions of supply and dismissed the challenge to the provision for average charging in case of defective meters.
Issues: 1. Whether the Board could make the revised tariff effective retrospectively without specific statutory empowerment? 2. Whether the Board considered all relevant factors while fixing the uniform tariffs as required by section 49 of the 1948 Act? 3. Whether the increase in the power factor from 0.80 to 0.85 under the revised tariff was justified? 4. Whether the system of calculating the energy charge on a monthly basis instead of an annual basis was rational and reasonable? 5. Whether the requirement for installation of capacitors, linked switch or circuit breaker, and earth leakage circuit breaker by consumers was a valid condition of supply? 6. Whether the provision for average charging in case of defective meters was legal?
Ratio Decidendi: 1. The Board, being a delegatee of powers, could not make the revised tariff effective retrospectively unless specifically empowered by statute. The objectional part of the tariff notification that sought to make the revised tariff effective from a date prior to its publication in the Gazette was quashed. 2. The Board had to consider all relevant factors, including the nature of supply, coordinated development of electricity distribution, simplification of charging methods, and extension of electricity to sparsely developed areas, while fixing the uniform tariffs as per section 49 of the 1948 Act. 3. The increase in the power factor from 0.80 to 0.85 under the revised tariff was justified considering the inflation rate and the fact that the Board was liable to pay minimum guarantee charges irrespective of actual consumption. 4. The system of calculating the energy charge on a monthly basis instead of an annual basis was irrational and unreasonable as it deprived consumers of the adjustment of unconsumed units in a particular month against consumption in other months. 5. The requirement for installation of capacitors, linked switch or circuit breaker, and earth leakage circuit breaker by consumers was a valid condition of supply as it was necessary to prevent wastage of electricity and maintain the efficiency of the distribution system. 6. The provision for average charging in case of defective meters was legal as it ensured that consumers were charged on a rational basis in the event of meter malfunction and discouraged deliberate breakage or tampering with meters.
Final Decision: The writ applications were allowed in part. The objectional part of the tariff notification that sought to make the revised tariff effective retrospectively was quashed, and the revised tariff was held to be effective from the date of its publication in the Gazette. The provision for calculating the energy charge on a monthly basis was also quashed. The other challenges to the revised tariff were dismissed.

Order

With consent of parties all these writ applications in which common questions are involved have been heard together, in detail, for their disposal at the admission stage itself.

2. In all the applications the challenge to the various provisions of the revised tariff notified by the Bihar State Electricity Board, Patna (hereinafter referred to as ‘the Board'), vide Notification No. COM/TAR-1010/90-181 dated 26th August, 1991, in super-session of the earlier notification dated 17th June, 1983 has been made. The impugned notification is purported to have been issued in exercise of the powers conferred under sections 46 and 49 of the Electricity (Supply) Act, 1948 (hereinafter referred to as 'the 1948 Act'), with the approval of the State Government. By this various changes have been made with regard to high tension service consumer, low tension service consumer, domestic consumer and commercial consumer. The petitioners have challenged only the validity of formulation of tariff applicable to high tension service-I consumer (in short 'HTS-I') and low tension industrial service consumer (in short 'LTIS') such as, clause 15.2, 16.2(d), 16.6(f) & (g), 16.7(f), 16.8, enhancement in the demand charges with regard to High Tension Service (H.T.S.I.) and tariff of Low Tension Service.

3. In short, the points of attack are that (i) the tariff notification has to be published in the gazette and the Board being a delegate of powers is not entitled to make its tariff retrospectively effective unless the statute specifically empowers it to do so and as such clause 2 of the impugned notification so far it makes the tariff effective from 1.8.1991 is illegal and unauthorised; (ii) the changes in the tariff made are arbitrary, illegal and against the principle laid down in section 49 and other provisions of the Act unjustified, not commensurate with the quality of service provided inasmuch as the voltage supplied is much below the prescribed standard besides the supply being intermittent causing considerable damages and injury; (iii) the change in the minimum guarantee is unilateral even though there is no change in the p1ant and machineries used in manufacturing programme; and (iv) the action of the Board in raising of the bill on that basis, being a monopoly supplier amounts to realisation of electricity charges from the consumers forcibly and the same thus is in violation of Articles 14 and 19 of the Constitution of India.

4. The petitioner no. 1 is a Company incorporated under the Indian Companies Act and has been established for the purpose of promoting and protecting the trade, commerce, industry and manufacturers of India and in particular of Bihar and to take all appropriate steps relating thereto whereas the other petitioners are either a Company or partnership firm/establishment dealing in production of various items, such as, flour, paper, craft papers, alloy castings etc. and/or running their mills. So far as the petitioners of C.W.J.C. No. 7427 of 1991 are concerned, they are unemployed graduates and have established a small scale industry with their own resources and financial assistance from other financing institutions and manufactures wire drawing products.

5. The case of the petitioners is that the Board being a State within the meaning of Article 12 of the Constitution, is an instrument or the State discharging the duties and functions as such. From time to time it had formulated electricity tariff in accordance with section 49 of the 1948 Act; the one being vide its Notification No. COTAR-1010-/82-358 dated the 17th of June, 1983, before the impugned revision.

6. Section 49 of the Act is quoted below:

"49. Provision of the sale of electricity by the Board to persons other than licensees.-(1) Subject to the provisions of this Act and of regulations, if any made in this behalf the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such

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