LexBIHAR STATE ELECTRICITY BOARD versus M/S PULAK ENTERPRISES & ORS.
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[2009] 6 S.C.R. 292 ' ""!- A BIHAR STATE ELECTRICITY BOARD v. MIS PULAK ENTERPRISES & ORS. (Civil Appeal Nos.7220-7239 of 2000) APRIL 15, 2009 B [DR. ARIJIT PASAYAT AND TARUN CHATTERJEE, JJ.] Electricity (Supply) Act, 1948 : ~ - s.49 - Fixing of tariff - Bihar State Electricily Board c Notification dated 21.6.1993- Clauses 16.10.3, 16.10.3.1 and 17 - Amendment to - Levy of 'Fuel surcharge' - Formula - Held : Though fuel surcharge is a part of tariff, fixin} rate of fuel surcharge under Clause 16.10 of Tariff Notifil:ation is different from fixing tariff u/s 49 of the Act - Where fidng rate D of fuel surcharge is just an arithmetical exercise, giving opportunity of hearing would not serve any pu"pose - Electricity Board is entitled to levy fuel surcharge on the consumers receiving high Tension supply leaving out the consumers coming in other categories - Validit:r of the E formula has already been upheld - Fuel surcharge h=is to be calculated strictly within the framework of the formula - ... Administrative Law - Subordinate Legislation - Principle of natural justice - Opportunity of hearing - Constitution of India, 1950 - Article 14. F The instant appeals were filed against the juctgment of the High Court in writ petitions filed by the consumers challenging the levy and collection of fuel surcharge by the Bihar State Electricity Board. G Dismissing the appeals of the Board and a lowing >.- those of the consumers, the Court HELD: 1.1. The significance of the question as to whether fixing the rate of fuel surcharge is a legislative function or a non-legislative function is that if the function H 292 BIHAR STATE ELECTRICITY BOARD v. PULAK 293 ENTERPRISES & ORS . • -t is held to be legislative, in the absence of any provision A ~ in that regard the principles of natural justice would not be applicable and the scope of judicial review would also be limited to the plea of discrimination i.e. violation of Article 14 of the Constitution of India, 1950. [Para 21J [311- C, DJ B Prag Ice and Oil Mills v. Union of India AIR 1978 SC -i 1296; Rohtas Industries v. Bihar State Electricity Board AIR 1984 SC 657 and Kera/a State Electricity Board v. Mis S.N. Govind Prabhu & Brothers AIR 1986 Supreme Court 1999, relied on. c Saraswati Industrial Syndicate Limited v. Union of India AIR 1975 SC 460; Union of India v. Cynamide India Ltd. AIR 1987 SC 1802 and Shri Sitaram Sugar Company L_td. v. Union of India 1990 (3) SCC 223, referred to. D ~ 1.2. In a sense, fixing rate of fuel surcharge under clause 16.10 of the Tariff notification is different from fixing the tariff u/s 49 of the Electricity (Supply) Act. Fuel surcharge is undoubtedly a part of tariff. But fixing rates of consumption charges or the guaranteed charges or E the fixed charges or the delayed payment surcharge etc. and fixing rates of fuel surcharge do not stand on par. Though rates of consumption charges etc. are based on .... objective materials, there is enough scope for flexibility . in fixing the rates. It also involves policy to fix different F rates for different categories of consumers. Such is not the position with the fuel surcharge. [Para 26J [313-B, CJ 1.3. Clause 16.10.1 specifies the categories coming in the net of the levy and clause 16.10.3 provides the formula. The formula envisages addition of units G ~ generated or purchased and increased average cost of fuel and average unit rate of purchase rates and division of the total by the quotient is the average fuel surcharge per unit (expressed in terms of paise) described by denominator 51 in the formula. The whole exercise, it H 294 SUPREME COURT REPORTS [20m1] 6 S.C.R. • would appear, involves arithmetical accounting. There is - ~ A no scope for exercise of any discretion or flexibility. If fixing rate of fuel surcharge is just an arithmetical exercise, giving opportunity of hearing would hardly serve any useful purpose. [Para 26) [311-D, E] B 1.4. Where the fixation of rate or determination of the amount is made individually, depending on the context in which this is to be done, there may be justification or J. - necessity to give opportunity of hearing to the person(s) concerned; But where the rate is fixed for pmsons at c large the only way by which such opportunity can be given is to notify the rates and then invite ohjections. There is no such provision. In the absence of any mechanism provided in the
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