S.L. Saraf, J. - (1.) THE Petitioners are businessman -cum -industrialists in the state of Meghalaya. They are consumers of Electricity supplied to them by the Meghalaya State Electricity Board. The case of one, Shri Kamal Agarwalla, one of the Petitioners/consumers, like other consumers had entered into an agreement with the Electricity Board for supply of High Tension Line, By the agreement dated 7.1.92, the Petitioner as Director of M/S Reena Enterprises Pvt., Ltd., Complex, Thana Road, Shillong, has agreed to take from the Meghalaya State Electricity Board electric power for five years on contract demand of 100 KVA in the first year, 130 KVA for the second to the fifth year. Under the agreement, the Petitioner has agreed to comply with all the requirements of the Indian Electricity Act, 1910, Electricity (Supply) Act, 1948, rules made thereunder, provisions of the schedule of Miscellaneous charges, terms and conditions of supply prescribed by the Board from time to time and agreed hot to dispute the same. A copy of the agreement has been filed by the Respondents. Clauses 10 and 11 of the agreement are set out hereunder: 10. Board's Right to vary terms of Agreement: I/We agree that the Board shall have the unilateral right to vary, from time to time, the terms and conditions of supply under this agreement by special or general proceedings. In particular, the Board shall have the right to enhance the rates chargeable for supply of electricity and alter/enhance the Miscellaneous charges according to exigencies as may be decided by the Board. 11. Monthly Minimum charges: I/We shall pay minimum charge every month as prescribed in the tariff and terms and conditions of supply even if no electricity is consumed for any reason whatsoever and also if the electricity consumed is less than the minimum charges. The minimum charges shall also be payable by me/us even if electricity is not consumed because the supply has been disconnected by the Board because of non -payment of electricity charges, pilferage or other malpractice or any valid reason for discontinuance/interruptions of supply. I/We hereby agree that if I/We am/are found indulging in theft of energy or any malpractice in respect of the use of electrical energy, I/We shall pay additional charges as may be levied by the Board and I/We also agree that in such an event, the Board shall in addition to levy of this additional charges, have the right to disconnect the supply of electricity to my/our premises for such period as may be declared by the Board. For Low Tension Line, no copy of any written agreement between the State Electricity Board and the consumers have been filed by the Petitioners or the Respondent.
(2.) THE grievance of the Petitioner is that the State Electricity Board has by a notification dales 2nd June, 1992, has revised the tariff on account of both Low Tension and High Tension lines. Such unilateral revision of electricity rate has been most exorbitant, high and unreasonable. That such increase of the tariffs by way of revision would adversely affect the industrial and commercial houses. The said tariff hike is unprecedented, unfair and unreasonable and bound to close and throw out workmen engaged in industries and undertaking, Consequently, it will be extremely difficult to find out alternative employment for the large work -force and livelihood of such workmen would be grievously affected, Such unprecedented hike in power tariff in a backward state like Meghalaya will be a deterrent in raising the economic standard of the people of the State. According to the Petitioners, the hike was to the extent of 500% to 600% and on representation being made to the Chief Minister, subsequently, by a notification dated 8.12.92, the hike in tariff was reduced to 250% to 300%. The same continued to be unfair, unreasonable and exorbitant thereby affecting the industries and the people as such. On the aforesaid facts, the Petitioner has challenged the hike in the power tariff (electricity charges) as illegal and contrary to several provisions of the Indian Electricity Act, 1910 and Electricity (Supply) Act, 1948. According to the Petitioner, the enhancement of the minimum charge in case of Low Tension industrial and commercial component was in violation of proviso (a) to clause (6) of the Indian Electricity Act, 1910. According to the Petitioner, clause 10 of the Indian Electricity Act, 1910, provides for enhancement but such enhancement could only be in relation to energy charge and other miscellaneous charges. It does not provide for any enhancement in the minimum charge, as such enhancement of the minimum charge is contrary to cause 10 of the aforesaid Act of 1910. The energy charge has also been enhanced to the extent of 67% to 75% from the previous tariffs fixed on 1.1.91. Since there was an enhancement in 1991, on consideration of the entire gamut of tariff, the enhancement made in 1992 is unreasonable and arbitrary. The rebate provided for the Low Tension line if paid on due date and if paid on the last date, if calculated would show that there was a levy of interest of more than 25% for fifteen days. The other ground of the Petitioner relates to the High Tension line. That there have been an increase of 47% in case of demand charge and 67% increase in case of energy charge. In cases of industry, the increase is of 94% and in case of commercial consumption, the increase is of 144%. According to the Petitioner, the increase in demand charge is not permissible u/s 49 of the Act as under the said section, the Meghalaya State Electricity Board, Respondents has no power or authority to provide for creation of two components demand and energy charges. Section 46 is not applicable in cases of consumers of electricity locally. The further ground of objection is that the electricity supply is made at a much cheaper rate to the state of Assam whereas high tariff is being imposed locally en consumers of both industrial, commercial and domestic consumers. Mr. S.R. Sen. the learned Counsel appearing for the Meghalaya State Electricity Board submits that in order to maintain the economic equilibrium of the Board as well as the poorest sections of society the Board has to take the necessary steps to revise its tariffs and the same is neither unreasonable nor exorbitant or arbitrary. According to Mr. Sen, the average cost of transmission and distribution of electricity during the year, 1992 -93 for 400/230 Colts (Low Tension) stands at Rs. 2.82p per unit. The Board, however, did not enforce the said cost as it would have been very prohibitive to the consumers and instead of that only an average price of 94p per unit has been, charged with he expectation that the cost of the electricity will reach the no profit no loss position by the year, 1966 -67 with annual increase of tariff by way of revision and consciously avoided Prime Cost Pricing. Mr. Sen submits referring to paragraph 24 of the affidavit filed by the Board that on representation being made, the tariff had been re -revised and the minimum charge new being imposed is very reasonable and fair. The charge now being levied has been set -out in para 24 of the affidavit and the same is set -out hereunder. Regarding the increase in High Tension Category, according to Mr. Sen, only 39% enhancement was there which would not affect the Petitioners at all. Mr. Sen, sets -out in paragraph 25 of the Board's affidavit the increase in the revised and the pre revised rates which is set -out hereunder JUDGEMENT_38_LAWS(GAU)3_1995.htm Mr. Sen submits that such revision of power tariff is authorised and is in consonance with the various provisions of Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 and the rules made thereunder. There has been no violation of the various provisions of the aforesaid Acts and rules. Mr. Sen at the time of hearing of the matter had handed over to this Court a report prepared by the Board for restructuring of the Electricity tariffs of the Meghalaya State Electricity Board with the help and assistance of the Calcutta Electricity Supply Ltd. in January of the year, 1992. According to Mr. Sen, such tariff hike was done on the basis of expert advice received by the Board from the Calcutta Electric Supply Ltd. who considered all the aspects of the Electricity Supply, the cost factor and other factors before deciding to advice them an increase in the tariffs by the Meghalaya State Electricity Board. According to Mr. Sen, after the consideration of the expert advice and the relevant factors, the electricity tariffs was revised only after a gap of ten years. Though there was an ad -hoc increase in the year, 1991, such increase was much less than the cost of supply of electricity. All these years the Board was supplying electricity at a much lower rate than the cost of the same. The liberal increase over the years meant subsiding the consumers inside the State to the extent of Rs. 1.88p per single unit of Low Tension line consumption. The re -revised imposition of tariffs is the minimum possible and any further reduction would accelerate the already deteriorating Board's economy and may load it to the collapsing stage.
(3.) I have carefully considered the above submissions of the learned Counsel of both the sides. I find that the increase in tariff by the Notification of the 8th December, 1992 as it stands today is not unreasonable or arbitrary. The Board has taken the appropriate steps of fixing the tariffs after being advised by an Expert Body on restructuring of Electricity Tariffs for the Meghalaya State Electricity Board in January, 1992. The revision made in June, 1992 may have been unreasonable, but the same has been corrected by the subsequent re -revision of the tariff rates. Considering the fact that there had been no revision of tariffs of Electricity over a period of ten years, the 1991 enhancement in the tariffs was only an ad -hoc increase and did not relate to proper restructuring of tariffs. The figures disclosed to the Court show that the Electricity Board is aware of its social objectives and have re -revised the tariffs on consideration of the same at the intervention of the Chief Minister. In the case reported in : AIR 1984 S.C. 657, the Supreme Court has held that Section 49 of the Electricity (Supply) Act expressly authorised the Board to fix different tariffs to supply electricity to any person not being licensee having regard inter -alia to the nature of the supply and purpose for which supply is required and other relevant factors. The Board is empowered to divide the consumers in to different categories and to fix differential tariffs and this authority has been conferred on the Board by the provisions of Section 49 of the Act itself. In the aforesaid decision and the decision reported in : AIR 1976 S.C. 127, it has been held that enhancement of tax by way of surcharge is well within the power of the Board to fix revised rate of tariffs under the provisions of the Act. The Supreme Court in the MR 1976 has further held that as merely because there was a special agreement between the parties, it could not be said that the stipulated rates would not be increased by way of surcharge in question. The Allahabad High Court in the AIR 1974 Allahabad (page 70) in paragraph 5 has held that the term 'Tariff includes within its ambit not only fixing of rate but also rules and regulations relating to it. When the electricity supply is being made on the footing that the consumers will pay the minimum guarantee charges, this charge is one of the terms or conditions for supply. The fixation of this charge would be included in the fixation of the rates for supply of electricity. As such, I hold that Section 49 authorises the imposition of different categories of tariffs on the consumers on consideration of relevant factors. Section 46 does not apply in the cases of consumers other than licensees, so reference to Section 46 is redundant in the notification issued on 2nd June, 1992. However, the same does not make the notification bad or invalid. Section 10 and Schedule (6) of the Act of 1910 does not affect the present revised tariff.;