Full Judgment Text
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PETITIONER:
CHITTOOR ZILLA VYAVASAYADARULA SANGHAM
Vs.
RESPONDENT:
A.P. STATE ELECTRICITY BOARD & ORS.!Rythu SamakhyaVs.Govt. of A.P. & Ors.
DATE OF JUDGMENT: 03/11/2000
BENCH:
N. Santosh Hegde.
JUDGMENT:
MISRA, J.
L...I...T.T.......T.......T.......T.......T.......T.......J
Leave granted in all the special leave petitions.
The questions raised in these appeals are:
(a) Whether the Andhra Pradesh Electricity Board
(hereinafter referred to as the Board) is competent to
put an end to the policy decision of the State to supply
electricity to the agricultural sector at subsidised
uniform flat rate and convert the same into multi different
tariff rates discarding the principle of fixation of
uniform tariff as contemplated in Section 59 of the
Electricity (Supply) Act, 1948. (b) Whether the Board is
competent to fix tariff as per use of smaller or bigger@@
JJJJJJJJJJ
H.P. motor and whether this fixing has any rational basis@@
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
which discriminate between one from the other
agriculturists.
The present appeals are directed against the orders of
the Andhra Pradesh High Court dismissing appellants writ
petitions, holding that the Board decision in fixing
different rates based on the capacity of motor is neither
arbitrary nor discriminatory.
In order to appreciate the controversy we are herein
giving short matrix of facts. The appellant is a
registered society having farmers in various districts of
Andhra Pradesh as its members. According to the case of
the appellant, a farmer-consumer of electricity for his
agricultural purpose is classified by the respondent-Board
as a low tension consumer entitled for a subsidised price
in the light of the policy of the State Government. In
pursuance to the same, the Board reduced the tariff rates
for a very short period, in the light of the assurance
given on the Floor of the Assembly in January, 1995 by the
then Chief Minister. Accordingly the tariff was reduced to
Rs.50/- per H.P. per annum with effect from 1.4.1995 under
B.P.Ms. No.110, dated 5.6.1995. Subsequently the Board
after consultation with the State revised the impugned
tariff. The question raised is, whether revision of this
tariff could be justified when it runs counter to the said
policy decision of the State, based on the assurance of the
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Chief Minister and in view of the social and statutory
obligation, both on the Board and the State to supply
electricity economically towards its subject. The revised
new tariff rate through B.P.Ms. No.32, dated 29.7.1996
was:
Tariff rate @@
IIIIIIIIIIIII
year
i) Upto 3 H.P. Rs.250/- per H.P. per year
ii) Between 3 H.P. to 5 H.P. Rs .350/- per H.P. per
year
iii) From 5 H.P. to 10 H.P. R s.450/- per H.P. per
unit
iv) 10 H.P. and above Metered supply @ Rs.0.50 per per
of Rs.600/- subject to a minimum H.P. per year.@@
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII
Thereafter on the representation from the farmers this
tariff was reduced, first through B.P.Ms. No.35, dated
14.8.1996:
Tariff rate
i) Upto 3 H.P. Rs.200/- per H.P. per year
ii) Between 3 H.P. to 5 H.P. Rs.300/- per H.P. per
year
iii) From 5 H.P. to 10 H.P. Rs.400/- per H.P. per@@
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
year
iv) 10 H.P. and above Rs.500/- per H.P. per year
Finally, came the impugned revised rates as per B.P.Ms.
No.40, dated 3.9.1996 which is:
Tariff rate DPAP Area Others@@
JJJJJJJJJJIIIIII
i) Upto 3 H.P. Rs.100/- per H.P. per yearRs.150/-@@
IIIIIIII
ii) Between 3 H.P. to 5 H.P. Rs.200/- per H.P. per
yearRs.250/-@@
IIIIIIII
iii) From 5 H.P. to 10 H.P. Rs.300/- per H.P. per
yearRs.350/-@@
IIIIIIII
iv) 10 H.P. and above Rs.400/- per H.P. per
yearRs.400/-@@
IIIIIIII
Before reaching this stage, it is necessary to give
some historical background of the imposition of the tariff
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from the year 1982 till the date of the impugned tariff.
The TDP Government headed by Mr. N.T. Rama Rao in
exercise of powers under Section 78A of the aforesaid Act,
directed the Board, through letter dated 15.12.1982 from
the Secretary to the Government of Energy, Environment,
Science and Technology Department to revise the electricity
tariff for Borewell/Tubewell pumpset to Rs.50/- per H.P.
per annum without installation of meters. The relevant
portion of the said letter is quoted hereunder:
While agriculturists owning lands under flow
irrigation from major projects for both reliable and cheap
irrigation, farmers depending on ground-water based
irrigation, most of whom are small and marginal farmers,
have to incur relatively higher expenditure in lifting
water, besides being vulnerable to recurring drought
resulting in lowering of the water table in the wells.
Moreover, in rural areas maintenance of electricity meters
and the billings of individual farmers based on meter
reading is be set with administrative defects leading to
loss of revenue, hardship to the farmers and high
collection cost. Keeping all the above factors in view,
the Government feel that the present power tariff for
agricultural pump sets needs rationalisation and that a
flat rate system based on the horse-power of each pump-set
would be more appropriate in such cases. Government have
therefore, decided that with effect from 1st November, 1982
the revised power tariff for agricultural pumpsets in the
State should be a flat rate of Rs.50/- per H.P. per annum.
With a view to mitigate hardship to small and marginal
farmers depending solely on well irrigation and to give a
fillip to agricultural production in the State, the
Government under Section 78-A of the Electricity (Supply)
Act, 1948 direct that, in supersession of the instructions
issued in the letter cited (dated 20.1.1982), the APSEB
shall revise the electricity tariff for irrigation wells to
Rs.50/- per H.P. per annum, and that this rate shall take
effect from 1.11.1982.
Accordingly the Board fixed the tariff at Rs.50/- per
H.P per annum.
After the change of the Government the tariff were
again revised. Thereafter when again Government of Mr.
N.T. Rama Rao came into power, it gave assurance to the
State Legislature on 20.1.1995, as aforesaid that the
farmers in the State would be supplied with power @ Rs.50/-
per H.P. per annum. Based on this assurance, followed by
the communication of the Government dated 27th May, 1995
the Board issued B.P.Ms. No.110, dated 5.6.1995, revising
tariff to Rs.50/- per H.P. per annum for all pumpsets upto
75 H.P.. At that point of time B.P.Ms. No.147 dated
18.11.1992 issued by the Board was in operation as amended
from time to time through B.P.Ms. No.100, dated
29.12.1992, B.P.Ms. No.471, dated 15.3.1994, through
B.P.Ms. No.64 dated 24.4.1995, B.P.Ms. No.70 dated
8.5.1995 and through B.P.Ms. No.72 dated 9.5.1995.
With the change of the Government again the present
impugned B.P.Ms. No. 40, dated 3.9.1996 was issued.
Submission for the appellant is, this impugned B.P.Ms.
has divided the agriculturists into multi groups, based on
the consumption of the horse power by the pumpsets into
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various slabs which runs contra to the uniform tariff as
contemplated under Section 49 of the Act.
Learned Senior counsel Mr. P.P. Rao appearing for the
appellant submits, the impugned tariff rates are contrary
to the Government policy issued under Section 78A, in
pursuance to the assurance given by the Chief Minister, as
it instead of being at flat rates, is based on slab rates
and is also discriminatory inter se between the same class
of agriculturists. He also submits, even otherwise the
revision of rate is based on factual misrepresentation by
showing deficit to the Board for 1996-97, the year in
question, wherein as per figures placed before the public
in the Power Development in Andhra Pradesh (Statistics)
1997-98, shows surplus for the same year. In fact this
inconsistency was placed before the High Court by some of
the connected appellants through review petition but the
High Court without application of mind rejected the same.
In support of the first part of submission, it is submitted
that the policy decision of the State cannot be changed by
mere consultation. The change could only be broughtforth
by the issuance of fresh policy order by the State under
Section 78 A and communicating the same. He submits under
General Clauses Act (Central) and also under Section 15,
State General Clauses Act, a thing can only be undone in
the same way as it was done earlier. In other words, when
there is an order under Section 78A based on the assurance
of the Chief Minister there has to be another such order by
the State withdrawing the same under the same Section. In
the present case, submission is, admittedly even as per
Board there was no such order passed. He also referred to
Section 49 to show that Board while supplying the
electricity has to frame uniform tariffs and while fixing
such tariffs it has to take into consideration what is
stated under sub-section (2).
He also laid emphasis that justification to enhance the
tariff cannot be sustained when admitted losses of
electricity through transmission and theft etc. are to the
extent of 33%. He fairly admits, under Section 78A
direction by the State Government would be confined to the
policy decision only and the fixation of rate of tariff is
within the domain of the Board.
On the other hand, learned senior counsel for the
respondent-Board Mr. Shanti Bhushan submits, the impugned
tariff does not suffer from any illegality and have been
validly revised. In fixing the tariff, the Board has kept
in view, Sections 49 and 50 of the Act. For ready
reference Sections 49 and 50 are quoted hereunder:
Section 49.
49. Provision for 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
supply frame uniform tariffs.
(2) In fixing the uniform tariffs, the Board shall have
regard to all or any of the following factors, namely:-
(a) the nature of the supply and the purposes for which
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it is required.
(b) the co-ordinated development of the supply and
distribution of electricity within the State in the most
efficient and economical manner, with particular reference
to such development in areas not for the time being served
or adequately served by the licensee;
(c) the simplification and standardisation of methods
and rates of charges for such supplies; (d) the extension
and cheapening of supplies of electricity to sparsely
developed areas.
(3) Nothing in the foregoing provisions of this section
shall derogate from the power of the Board, if it considers
it necessary or expedient to fix different tariffs for the
supply of electricity to any person not being a licensee,
having regard to the geographical position of any area, the
nature of the supply and purpose for which supply is
required and any other relevant factors.
(4) In fixing the tariff and terms and conditions for
the supply of electricity, the Board shall not show undue
preference to any person.
Section 59:
59. General Principles for Boards finance (1) The
Board shall, after taking credit for any subvention from
the State Government under section 63, carry on its
operations under this Act and adjust its tariffs so as to
ensure that the total revenues in any year of account shall
after meeting all expenses properly chargeable to revenues,
including operating, maintenance and management expenses,
taxes (if any) or income and profits, depreciation and
interest payable on all debentures, bonds and loans, [leave
such surplus as is not less than three per cent, or such
higher percentage, as the State Government may, by
notification in the Official Gazette, specify in this
behalf, of the value of the fixed assets of the Board in
service at the beginning of such year.
Explanation For the purposes of this sub-section,
value if the fixed assets of the Board in service at the
beginning of the year means the original cost of such
fixed assets as reduced by the aggregate of the cumulative
depreciation in respect of such assets calculated in
accordance with the provisions of this Act and consumers
contributions for service lines.
(2) In specifying [any higher percentage] under sub-
section (1), the State Government shall have due regard to
the availability of amounts accrued by way of depreciation
and the liability for loan amortization and leave
(a) a reasonable sum to contribute towards the cost of
capital works; and
(b) where in respect of the Board, a notification
has been issued under sub-section (1) of
section 12A, a reasonable sum by way of
return of the capital provided by the State
Government under sub-section (3) of that
section and the amount of the loans (if any)
converted by the State Government into
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capital under sub-section (1) of section
66A.
Board supplies electricity and fixes tariff from time
to time under Section 49. In doing so, it has classified
the consumers into low tension consumers and high tension
consumers. Under low tension consumers among the 7
categories the agriculturists is category no.5 (to which we
are concerned) and under high tension consumers fall
factories, industries and also agriculture of high tension
consumers. Different tariff rates are being fixed from the
very inception by the Board for each class or category.
The impugned tariff revision was undertaken by the Board
keeping in view its statutory responsibility it has to
undertake in terms of Section 59. In doing so, it has to
ensure that the total revenue in any year, after meeting
all expenses properly chargeable including operation,
maintenance and management expenses, taxes (if any) on
income and profits, depreciation and interest payable on
all debentures, bonds, and loans, leave such surplus as is
not less than 3%, or such high percentage as State
Government may, by notification in the official Gazette,
specify. It is one of the statutory obligation cast on the
Board. It is also relevant to reproduce Section 78 A
hereinunder to properly test the scope of the direction of
the State. Section 78 A: 78A. Directions by the State
Government.- (1) In the discharge of its functions, the
Board shall be guided by such directions on questions of
policy as may be given to it by the State Government.
(2) If any dispute arises between the Board and the
State Government as to whether a question is or is not a
question of policy, it shall be referred to the Authority
whose decision thereon shall be final.
The submission for the Board is, the communication by
the Government dated 27.5.1995 cannot be construed to be a
direction issued under Section 78A of the Act. Any
direction under Section 78A could only be for the
furtherance to discharge its function by the Board. Any
direction which makes Board travel outside such Sections 49
and 59 cannot be covered by Section 78 A. The Board in
order to honour the assurance given by the Chief Minister,
notwithstanding it not to be a direction under Section 78A,
through B.P.Ms. No.110 as aforesaid, brought the tariff to
Rs.50/- per H.P. per annum to all the pump sets upto
Rs.75/- H.P. But later, in consultation with the State
Government, once again revised the tariff to bring it
within the norms as envisaged by Section 59. Thus
submission for the Board is, firstly issuance of letter
dated 27.5.1995 is not a policy direction issued under
Section 78A and even if such direction could be read
implicitly as a policy decision then subsequent revision of
the impugned tariff after consultation with the Government
has also to be construed implicitly as withdrawal of the
said policy direction. He submits, so far the Government
policy of supply of electricity to the Ryots
(agriculturists) at a cheaper and subsidised rates is still
maintained by the Board and the impugned revision is still
in consonance within the same. He has also placed figures
before us, about which we shall be referring later, to show
that the supply of power to the agriculturists, even as per
the impugned tariff, the average supply is at the
subsidised rate of about 90%. The actual cost incurred by
the Board in generation and supply of the electricity is
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Rs. 1.77 per unit.
It is denied that any misrepresentation was made by the
Board before the High Court. The submission is, that in
the counter affidavit filed by the Board in the High Court
it is true - it records projected losses for 1996-97
showing revenue deficit of Rs.1,533/- crores. These
projected losses are shown with reference to the tariff if
imposed at the rate of Rs.50/- per H.P. per annum. This
figure is not actual loss. It is only to overcome these
projected losses, the tariff has been revised. Hence in
the statistics of 1997- 98 rightly for 1996-97 surplus is
shown. This surplus is still within 3% as referred in
Section 59.
For the appellant it is submitted that the subsidies
tariff @ Rs.50/- per H.P. per annum fixed by the Board in
1982 and also on 5.6.1995 was by way of implementation of
the directions issued by the State Government under Section
78A which is binding on the Board. It is relevant here to
record the assurance of the Chief Minister, dated 20.1.1995
in the Andhra Pradesh Legislative Assembly:
We have assured that electricity will be supplied for
cultivation to Ryots at the rate of Rs.50/- per horse power
per annum. I once again respectfully reiterate the
assurance that for the development and welfare of Ryots
electricity will be supplied at the rate of Rs.50/- only.
It is our responsibility to ensure that according to
the Government policy Ryots are supplied electricity at the
rate of Rs.50/- per H.P. per annum.
This was followed by a letter dated 25.5.1995 from the
Secretary of the State Legislature to the Member-Secretary
to the Government of Andhra Pradesh referring to the
assurance given by the Chief Minister and this was followed
by letter dated 27.5.1995 from the Joint Secretary of
Government to the Member-Secretary of the Board. It
records:
Sub: A.P. Leg. Assembly Assurance regarding supply
of power at the rate of Rs.50/- per one House power to the
Agriculturists implementation report
Ref: From Secy. To Legislature, Lr. No.1959
(assu/95-1, dt: 20.5.95. --- I am directed to enclose
herewith a copy of the reference cited, together with
Assurance No.1959, dt: 20.1.95, regarding supply of power
at the rate of Rs.50/- per one horse power to the
Agriculturists and request you to send the implementation
report, immediately.
The question is whether such letter could be an order
under Section 78A and to be such as to bind the Board for
its compliance. Strong reliance has been placed by Mr.
Rao on the certain observations made by this Court in Real
Food Products Ltd. And Ors. Vs. A.P. State Electricity
Board & Ors., 1995 (3) SCC 295. The reliance is on the
following observations:
It does appear that the view expressed by the State
Government on a question of policy is in the nature of a
direction to be followed by the Board in the area of the
policy to which it relates
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In the present case, the flat rate per H.P. for the
agricultural pump-sets indicated by the State Government,
appears to have been found acceptable by the Board as
appropriate particularly because it is related to the
policy of concessional tariff for the agriculturists as a
part of the economic programme.
The submission is, this decision holds State Government
policy direction has to be followed by the Board and flat
rate of charging tariff is part of the policy of the State
Government. Hence, the letter dated 27.5.1995 is a
direction of the State Government under Section 78A
according to which the rate of tariff has to be Rs. 50/-
per H.P. per annum which is binding on the Board. The
Board notwithstanding this, when it revised its tariff
upwards is in contravention of this direction hence liable
to be quashed. Emphasis is that fixation of flat rate,
namely, in the present case Rs. 50/- per H.P. per annum
is a part of the policy though it is open to the Board to
escalate the rate, viz., it may be Rs. 100/- per H.P. per
apnnum, Rs. 200/- per H.P. per annum but it cannot vary
the policy from flat rate to slab rate.
It is necessary first to examine the periphery of the
statutory fields within which the Board and the State
Government has to function. Admittedly both are statutory
functionaries under the Central Act. They have to perform
their obligations within the limits they have been
entrusted with. Section 78 A empowers the State Government
to issue directions to the Board on question of policy, on
the other hand the Board has to perform its statutory
obligations under the said Act and with reference to the
fixation of tariff it has to act in term of what is
contained in Sections 49 and 50. But this field of policy
direction is not unlimited. There cannot be any policy
direction which pushes the Board to perform its obligations
beyond the limits of the said two sections. Any policy
direction, which in its due performance keep the Board
within its permissible statutory limitations would be
binding on the Board. So, both State and the Board have to
maintain its cordiality and co- ordination in terms of the
statutory sanctions. If any policy direction pushes the
Board in its compliance beyond statutory limitations, it
cannot be a direction within the meaning of Section 78 A.
It is significant that opening words of Section 78 A is,
in the discharge of its functions, the Board shall be
guided by such directions. So, the direction of the State
is for the guidance to the Board, in the discharge of its
functions. Thus this direction has also limitation to give
such direction which will subserve in performing its
statutory obligation. We would be returning later to test,
if direction to charge tariff at the rate of Rs. 50 per
H.P. per annum would have been followed by the Board,
whether it would have travelled beyond Section 59.
Now, we proceed to see to what extent the Board as per
impugned revised rates is charging the tariff from
agriculturists. Learned counsel for the Board has placed
before us the rate per unit charged from the
agriculturalists in question from 1983-84 till 1997-98. It
is said in spite of this upward revision of tariff, even
now the rate is heavily subsidised.
Year Flat rate per unit
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Charged
1983-84 9.20 Paisa.
1984-85 6.12 P.
1985-86 5.57 P.
1986-87 4.87 P.
1987-88 4.72 P.
1988-89 4.27 P
1989-90 4.29 P.
1990-90 2.87 P.
1991-92 3.27 P.
1992-93 8.10 P.
1993-94 6.40 P.
1994-95 5.27 P.
1995-96 2.81 P.
1996-9 13.51 P.
1997-98 16.18 P.
Submission is this chart shows, in spite of increase in
the cost escalation in every field, even in the impugned
tariff for 1996-97, the year in question, the Board is
merely charging 13.51 per unit when the cost of production
is Rs.1.77 per unit. In other words, it is subsidised
approximately 90% of the average cost. On the other hand,
if the same tariff, in terms of the letter dated 27th May,
1995 would have been charged there would have been heavy
loss to the Board and thus compliance of the same would
have resulted in contravention of Section 59 of the Act.
Now, we proceed to examine what this Court held in the
Real Food Products Ltd., (supra). This Court examined the
nature and effect of the direction given by the State
Government under Section 78-A. It was examined in the
context of charging a flat rate per H.P. for agricultural
pumpsets. It holds, view expressed by the State on a
question of policy to be followed by the Board in the
context of Boards function under Sections 49, 59 and other
provisions of the Act. This Court held, that the flat rate
per H.P. for the agricultural pump set was found
acceptable by the Board. What does, acceptable to the
Board means? It only means, it to be within the parameters
of Sections 49 and 59 of the Act. In other words, Board
has not to travel outside its obligations under Section 59.
This decision records: However, in indicating the
specific rate in a given case the action of the State
Government may be in excess of the power of giving a
direction on the question of policy, which the Board, if
its conclusion be different, may not be obliged to be bound
byif the view expressed by the State Government in its
direction exceeds the area of policy, the Board may not be
bound by it unless it takes the same view on merits itself
At any rate, there is no material in the present case
to indicate that the flat rate indicated by the State
Government for the agricultural pump- sets was so
unreasonable that it could not have been considered
appropriate by the Board.
Thus it is clear Board would not be bound to follow
every policy directions. According to the Board, if tariff
was charged at the rate of Rs.50/- per H.P. per annum, as
per the direction in question, loss to the Board would have
been to the extent of Rs.1,553 crores for the year 1996-97.
This would have gone contrary to the obligation cast on the
Board under Section 59. Section 59 mandates the Board to
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leave such surplus not less than 3% of the revenue, after
meeting all its expenses referred to therein. This Board
has not to supply electricity at such rate to be in
deficit, leaving no hope for its extensions for the benefit
of persons living in an uncovered area. It is for this and
other reason statute mandates Board to maintain this
surplus in every year. If it has to perform this statutory
obligation, how can it do so, if it follows any such
direction which takes it away from it. It is true
government can to cater to the popular demand in order to
earn its legitimate favour, give any such policy direction,
but it should have to be within permissible limit.
It seems Board initially, in order to maintain
cordiality and cohesion in functioning did honour the said
assurance by issuing B.P.Ms. No. 110 dated 5.6.1995 and
reducing the tariff to Rs. 50/- per H.P. with effect from
1.4.1995. However, subsequently, in view of the aforesaid
facts, the Board it seems did bring it to the notice of the
State by consulting it and thereafter issued the aforesaid
impugned increased tariff B.P.No.40 dated 3rd September,
1995. On the facts of this case the policy decision by the
State Government, for the year in question, can only be
construed to mean to supply the electricity to ryots at the
subsidised and concessional tariff rates. The other part
of the assurance, namely, to supply electricity at the rate
of Rs. 50/- per H.P. per annum which results into the
aforesaid loss to the Board cannot be construed to be part
of the policy direction under Section 78 A. The reliance
by Mr. Rao that in Real Food Products Ltd. (supra) the
flat rate of charging tariff has been held to be a policy
decision cannot be construed to be so on the facts of the
present case. In that case first we find there is clear
order under Section 78 A, which leaves no room of doubt it
to be so. The relevant portion of the same is quoted
hereunder:
With a view to mitigating hardship to small and
marginal farmers depending solely on well irrigation and to
give a fillip to agricultural production in the State, the
Government under Section 78-A of the Electricity (Supply)
Act, 1948 direct that, in supersession of the instructions
issued in the letter cited (dated 20.1.1982), the APSEB
shall revise the electricity tariff for irrigation wells to
Rs. 50 per H.P. per annum, and that this rate shall take
effect from 1.11.1982.
But even this direction was only approved by this Court
because such direction of the State was held to be
acceptable by the Board, as there was no material in that
case to indicate that the flat rate @ Rs.50/- per H.P. per
annum was so unreasonable that it could not have been
considered appropriate by the Board. In the present case,
the Board has accepted broadly the policy of the State
Government to supply electricity to the Ryots at the
subsidised and concessional rate but could not have
accepted the rate @ Rs.50/- per H.P. per annum as it would
have run contra to Section 59. In the present case, for
the year 1996-97, according to the Board its fixed assets
were Rs. 135 crores and after taking into consideration of
all the expenses, as aforesaid, the net amount to be
harnessed by the Board was to the tune of Rs.1,668/- crores
in terms of Section 59, which could not have been achieved
if the aforesaid direction is question was applied.
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In fact, if flat rate as a policy was to be charged,
the submission of Mr. Rao is, the Board could have fixed
at 200, 300 etc. H.P. per annum in order to overcome the
deficit then it would have been in consonance with policy
decision. This submission lacks merit. If this would have
been implemented, it would have put heavy burden on small
farmers who are using minimum electricity and would have
run contra to the central theme of the policy. Even
submission of Mr. Rao, the small agriculturist who get
water at the deeper level has to consume more electricity
than bigger farmers who get water at higher level, thus
consuming more electricity and paying more in slab system,
though at the first look is attractive but cannot be
accepted. Big farmers have to irrigate larger area than
small farmers and have to consume more electricity. There
may be small range of farmer, in the situation as submitted
but for this there are no material on the records to
sustain such a submission. The imposition, on the facts of
this case, of the slab system is in keeping the interest of
small farmer to pay less for consuming less electricity
hence is reasonable and cannot be faulted. In doing so, it
also does not violate Section 49 as submitted, by not
framing uniform tariff. Firstly, the pattern of tariff
fixed is uniform, even otherwise in terms of sub-section
(3) of Section 49, Board could make departure from it, for
any relevant factor. Hence we do not find any illegality.
So, we may conclude, on the facts of this case, the
aforesaid letter of the Government following assurance of
the Chief Minister, could not be construed to be a binding
direction under Section 78 A, except to the extent which is
implicit, to supply electricity to the Ryots at the
subsidised and concessiosnal rate, which the Board has
followed.
Another submission on behalf of the appellant is, High
Court committed error, when it decided by accepting the
misrepresented figures placed by the Board. According to
the learned counsel, the figure accepted by the High Court
for the year 1996-97 was deficit of Rs. 1,533 crores while
the very Board while issuing its statistics published
through Power Development in Andhra Pradesh (Statistics)
1997-98 it showed the figure of Rs. 1,049 crores and Rs.
1,777.48 crores for the years 1996-97 and 1997-98
respectively as surplus. We have considered this
submission and as per the submission for the Board, the
figure recorded by the High Court was based on the figures
in the counter affidavit filed by the Board, which showed
these figures as projected loss, not actual loss. The
submission is this projected loss was shown in case if the
assurance of charging tariff at the rate of Rs. 50/- per
H.P. per annum would have been accepted, while in the
1997-98 statistics published the actual figure is shown to
be in surplus. This resulted on account of upward revision
of tariff. The relevant portion of the said counter
affidavit is reproduced below:
The projections for 1996-97 have revealed a revenue
deficit of Rs. 1,533/- crores with reference to the
revenues expenses to be met as per provisions under
Section. 59 of Supply Act. Further the said section
refers to a three per cent return on the fixed assets for
which another R. 135/- crores have to be earned as
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revenue. Thus an amount of Rs. 1,668/- crores have to be
mobilised through tariff revision to achieve the three per
cent statutory surplus prescribed in the Act.
For the said reason the submission for the appellant
has no force. We do not find any mis-representation made
by the Board before the High Court.
The last submission by Mr. Rao with vehemence is that
the loss incurred by the Board is on account of theft and
transmission loss which is as high as 33% on average and
Board if not able to control this, the burden should not be
passed on to the consumers including the poor
agriculturists. It is true transmission losses by theft is
on high side. It is a matter of concern. It is an onerous
duty of the Board to be vigilant and keep on guard and
check such transmission losses. The Board must take steps
at the highest level to see these transmission losses of
such high order does not take place in future, as this high
percentage of loss is bound to have impact on the rate of
tariff and the total revenue of the Board. The person
found responsible should be dealt with strictly so that
there is no future reoccurrence. However, such losses
itself would not be sufficient for this Court to strike
down the impugned tariff.
So, out of the two questions posed, to the first
question (a), we hold, the Board has not put an end to any
policy decision of the State. In fact, it has followed
such direction falling under Section 78A, by supplying
electricity to the Ryots at subsidized and concessional
rate, and imposition of tariff based on slab system cannot
be said to be illegal. To the second question (b), we
hold, this slab system applied by the Board on the facts
and circumstances of this case is not discriminatory but
has rationale behind it in the interest of smaller farmers.
Taking into consideration the overall facts and
circumstances of the present case, in view of the findings
we have recorded, we hold the impugned revised increase
tariff to be valid and uphold the order of the High Court,
for the reasons stated above by us. Accordingly, the
aforesaid appeals are dismissed with costs.