LexM/S. REAL FOOD PRODUCTS LTD. AND ORS. ETC. ETC. versus A.P. STATE ELECTRICITY BOARD AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
\
A
MIS. REAL FOOD PRODUCTS LTD. AND ORS. ETC. ETC.
v.
A.P. STATE ELECTRICITY BOARD AND ORS.
MARCH 1, 1995
B
(J.S. VERMA, K.S. PARIPOORNAN AND S.B. MAJMUDAR, JJ.)
Electricity (Supply) Act, 194~Section 78A-Direction given by the
State Government-Electricity Board is to be guided by any such directiorr-lf
· "\..
view expressed by the State Government exceeds area of policy-Board not
C bound by it-{Jnless it also takes the same view on merits-Direction of State
y
Government to fix a concessional tariff for agricultural pump sets at a flat
rate per H.P.-Question of policy-Mandatory for the board to follow.
Constitution of India-ATticle14--Electricity tariff-Preferen(ial treat-
ment to agricultural consumers-Not violative of ATticle 14-Claim of High
D Tension consumers to be classified alongwith agriculturists-Untenable.
By virtue of a direction given by the A.P. State Government u/s 78A ,,.
of the Electricity (Supply) Act, 1948 the Oat rate tariff system for agricul- r
tural pump-sets was introduced and the rate was varied from time to time.
E The Andhra Pradesh State Electricity Board was accordingly requested to
take immediate necessary action. The Board introduced the concept of
"Fuel Adjustment Cost" (FCA) by amending the H.T. tariffs.
Certain 'power intensive units' filed Writ Petitions questioning the
levy of FCA only upon High Tension consumers and the fixation of Oat
F rate tariff for agriculturists. The High Court dismissed the petitions
holding that it was neither irrational nor unreasonable to pass on the
burden of rise in fuel cost only to High Tension consumers and the Oat
rate tariff system for agricultural pump sets being a concession in favour
of an under-privileged category of consumers was a policy decision which
G was not open to challenge.
,,.,The questions raised for determination in this court were regarding
the nature and effect of the diredion given by the State Government u/s
78A of the Electricity (Supply) Act, 1948 and whether the preferential
treatment given to agricultural consumers was violative of Article 14 of the
H Constitution.
396
J
\
REAL FOOD PRODUCTS LTD. v. AP. STATE ELECTRICITYBD.
397
Dismissing the appeals, this Court
A
HELD : 1.1 The High Tension consumers form a distinct class,
separate from the Low tension consumers and concessional tariffs to the
agriculturists does not violate Article 14 of the Constitution of India. The
claim of the High Tension consumers to be classified along with agricul-
turists was untenable.
Hindustan Zinc Ltd. Etc. Etc. v.Andhra Pradesh State Electricity Board
and Ors., (1991) 3 SCC 299, relied on.
B
1.2 Section 78A of the Electricity (Supply) Act, 1948, uses the expres-
C
sion "the Board shall be guided by such direction on questions of policy as
may be given to it by the State Government". In the instant case, the view
expressed by the Government on a question of policy was in the nature of
a direction to be followed by the Board. In the context of the function of
the Board of fixing the tariffs in accordance with section 49 read with
Section 59 and other provisions of the Act, the Board was to be guided by D
directions of the State Government. (402-D]
1.3 Where the direction of the State Government, as in the present
case, was to fix a concessional tariff for agricultural pump sets at a Oat
rate per H.P., it relates to a question of policy which the Board must follow.
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 is different, may
not be bound by. (402-E-F]
E
1.4 But where the Board considers even the rate suggested by the F
State Government and finds it to be acceptable in discharge of its function
of flXing the tariffs, the ultimate decision of the Board would not be vitiated
merely because it has accepted the opinion of the State Government even
about the specific rate. In such a case the Board accepts the suggested rate
because that appears to be appropriate in its own view. If the view ex-
G
pressed 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. (402-G]
1.5 In the instant case, the Oat rate per H.P. for the agricultural
pump sets indicated by the State Government, appears to have been found H
398
SUPREME COUExcerpt shown. Read the full judgment & AI analysis in Lexace.