KERALA STATE ELECTRICITY BOARD REP. BY ITS SECRETARY & ANR. versus PRINCIPAL SIR SYED INSTITUTE FOR TECHNICAL STUDIES & ORS.

Citation: [2020] 7 S.C.R. 885 · Decided: 20-02-2020 · Supreme Court of India · Bench: DEEPAK GUPTA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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[2020] 7 S.C.R. 885
885
KERALA STATE ELECTRICITY BOARD
REP. BY ITS SECRETARY & ANR.
v.
PRINCIPAL SIR SYED INSTITUTE
FOR TECHNICAL STUDIES & ORS.
(Civil Appeal No.8350 of 2009)
FEBRUARY 20, 2020
[DEEPAK GUPTA AND ANIRUDDHA BOSE, JJ.]
Electricity Act, 2003 – s.62(3) – Scope of – Tariff notification
issued by appellant – Respondents-Self-Financing Educational
Institutions (SFEIs) were segregated from State run and State aided
private educational institutions and subjected to higher category
of tariff – Challenged – Single Judge of the High Court found the
tariff order to be valid – Aforesaid order set aside by Division Bench
– On appeal, held: No undue preference was given to the State run
and State aided institutions in the tariff notification – No error
committed by the appellant in fixing higher tariff for the SFEIs
categorising them as commercial entities – Judicial notice taken of
the fact that the student profile of State run and State aided
institutions is different from those of SFEIs – Students from
comparatively modest background go to these institutions –While
construing the meaning of the expression “purpose” u/s.62(3), for
the purpose of settling the tariff question, who is serving the
“purpose” and for whom such “purpose” is being served have to
be factored in – Nature of service rendered by them cannot be the
sole determinant for the tariff-fixing exercise – The fact that SFEIs
were clubbed together with several commercial service providers
wholly unrelated to education becomes insignificant once it is found
that purpose of the SFEIs could be differentiated from the State run
and State aided educational institutions – Impugned judgment set
aside while that of the Single Judge is restored – Principles of Natural
Justice – Constitution of India – Art.14.
Principles of Natural Justice – When not breached – Self-
Financing Educational Institutions (SFEIs) segregated from State
run and State aided educational institutions and subjected to higher
tariff by Kerala State Electricity Regulatory Commission –
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SUPREME COURT REPORTS
[2020] 7 S.C.R.
Challenged inter alia on breach of principles of natural justice
contending that the tariff notification did not contain any reason –
Held: Commission’s role as a quasi-judicial body or it having
trappings of a Court would emerge only if it was called upon to
adjudicate a dispute – Having failed to generate any lis on the tariff
proposal by not raising any kind of objection, it would not be open
to SFEIs to demand disclosure of reasons along with publication of
the tariff rates – Thus, tariff notification being unaccompanied by
reason cannot be faulted for having breached the principles of
natural justice – Electricity Act, 2003.
Electricity Act, 2003 – Tariff fixation – Self-Financing
Educational Institutions (SFEIs) clubbed together with commercial
service providers and subjected to higher tariff – Challenged –
Held: While an educational institution in ordinary perception may
not be performing functions similar to the other entities undertaking
business ventures, a tariff fixing body is not required to proceed on
the basis of such common perception – Duty of such body is to
determine which rate an organisation shall pay, and entities working
in diverse fields can be clubbed together under a common umbrella
to be subjected to a common rate – In that context, for exercise of
this nature, the heading “commercial” cannot be constructed to
restrict the entities that can come under that head on the basis of
the nature of their activities – Selection of heading is an exercise of
convenience in fixing tariff rates and not necessarily the controlling
factor in choosing the entities included under that heading.
Words & Expressions– “Purpose”, “Commercial” – Meaning
of, in the context of 2003 Act – Electricity Act, 2003.
Allowing the appeals, the Court
HELD: 1. There is a negative mandate of the legislature
upon the Commission in sub-section (3) of Section 62, Electricity
Act, 2003. While fixing tariff, the Commission cannot show undue
preference to any consumer of electricity. The Commission,
however, is vested with the power to prescribe differential rates
according to the consumers’ load factor, power factor, voltage,
total consumption of electricity during any specified period of
time at which supply is required. The other permissible
differentiating factors are geographical position of any area, the
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nature of supply an

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