Decided on February 20,2020

Principal Sir Syed Institute For Technical Studies Respondents


ANIRUDDHA BOSE,J. - (1.)The legality of a part of a tariff notification issued by the Kerala State Electricity Regulatory Commission ("Commission") segregating Self-Financing Educational Institutions (SFEI) from Government run and Government Aided Private Educational Institutions and subjecting the former to a higher category of tariff is the only question involved in this batch of appeals. The notification to that effect was issued by the Commission on 26th November, 2007 bearing Order No.TP 23 and TP 30 of 2007. Such tariff was to take effect from 1 st December, 2007. SFEIs have been categorised under the head Low Tension VII(A) Commercial in that notification. The Government run or aided private educational institutions have been placed under Low Tension VI Non-Domestic tariff category. The Commission is the appellant before us in this set of appeals. Such tariff notification was published in terms of Kerala State Electricity Regulatory Commission (Terms and Conditions of determination of tariff for distribution and retail sale of electricity under MYT Framework) Regulations, 2006.
(2.)Several Writ Petitions came to be filed by different SFEIs questioning legality of such segregation which in effect created a higher tariff regime for them. Altogether 52 writ petitions were taken up for hearing by a learned Single Judge of the Kerala High Court (the First Court). The learned Single Judge found the tariff order to be valid, relying on a decision of a Constitution Bench of this Court in the case of T.M.A Pai Foundation and Anr. v. State of Karnataka and Ors. 2002 (8) SCC 481 and a Bench judgment of the High Court of Kerala in the case of Social SG of Assisi sisters v. KSEB 1988 (1) KLT 1727. The First Court decided the issue in favour of the Commission, inter-alia, on the following reasoning:-
"But, I note that there is no pleading whatsoever for the petitioners about the Government Order. There is no case in the Writ Petitions based on the Order. Further, the Higher Secondary Schools are attached to Schools having Standards upto High School Section, where as I have already noted, there is no restriction as contained in relation to Government and Aided Schools. Also, what has been fixed is the minimum salary of teachers and others. It appears to be low. What is important is the capability to raise revenue and its ramifications, and not whether any particular Self-Financing Educational Institutions is actually making use of its power to raise revenue, as ordinarily a Self-Financing Educational Institution may raise."

(3.)In appeal by the SFEIs, the Division Bench of the High Court set aside the judgment of the First Court. The Division Bench found that the differentiation was not for any of the grounds specified in Section 62 (3) of the Electricity Act, 2003. That is the provision under which the State Commission can determine the tariff. Section 62 of the 2003 Act specifies:-
"62. Determination of tariff:-

(1) The Appropriate Commission shall determine the tariff in accordance with the provisions of this Act for ­ (a) supply of electricity by a generating company to a distribution licensee: Provided that the Appropriate Commission may, in case of shortage of supply of electricity, fix the minimum and maximum ceiling of tariff for sale or purchase of electricity in pursuance of an agreement, entered into between a generating company and a licensee or between licensees, for a period not exceeding one year to ensure reasonable prices of electricity;

(b) transmission of electricity;

(c) wheeling of electricity;

(d) retail sale of electricity:

Provided that in case of distribution of electricity in the same area by two or more distribution licensees, the Appropriate Commission may, for promoting competition among distribution licensees, fix only maximum ceiling of tariff for retail sale of electricity.

(2) The Appropriate Commission may require a licensee or a generating company to furnish separate details, as may be specified in respect of generation, transmission and distribution for determination of tariff.

(3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required."

(4) No tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified.

(5) The Commission may require a licensee or a generating company to comply with such procedures as may be specified for calculating the expected revenues from the tariff and charges which he or it is permitted to recover.

(6) If any licensee or a generating company recovers a price or charge exceeding the tariff determined under this section, the excess amount shall be recoverable by the person who has paid such price or charge along with interest equivalent to the bank rate without prejudice to any other liability incurred by the licensee.


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