1985 (2) TMI 293 - SC - Indian Laws

Supreme Court decision on tariff validity and additional charges

The Supreme Court upheld the validity of the tariff fixed under the notification dated April 24, 1962, and the enhancement made under the notification ... - Issues Involved:1. Validity of the tariff fixed under the notification dated April 24, 1962.2. Validity of the enhancement made under the notification dated September 30, 1967.3. Legality of the levy of an additional 7.1/2% charge under the impugned notifications.4. The City Board's right to question the Grid Tariff and the additional charges under Article 226 of the Constitution.Summary:1. Validity of the Tariff Fixed Under the Notification Dated April 24, 1962:The City Board challenged the notification issued on April 24, 1962, arguing it was not in conformity with section 46 of the Electricity (Supply) Act, 1948. The Supreme Court upheld the Division Bench's decision, stating that the absence of regulations under section 79(h) of the Act did not invalidate the tariff fixed under section 46(1). The Court emphasized that the Act provided ample guidance for tariff determination and rejected the claim of arbitrariness.2. Validity of the Enhancement Made Under the Notification Dated September 30, 1967:The City Board argued that the enhancement made on September 30, 1967, was invalid as it had not been permitted to correspondingly increase the rates chargeable to its consumers. The Supreme Court did not find merit in this argument, noting that the City Board had been given directions by the Government regarding the charges it could collect from consumers, which it was bound to implement under section 58 of the Act.3. Legality of the Levy of an Additional 7.1/2% Charge:The Division Bench held that the levy of an additional 7.1/2% charge under the first para of clause (2) of the notifications dated April 24, 1962, and September 30, 1967, was illegal. The Supreme Court, however, did not delve into the correctness of this part of the decision, noting that the City Board had not questioned the additional charge until March 23, 1968, and had likely recouped itself by collecting charges from consumers. The Court refused to grant any relief for the period prior to the filing of the writ petition.4. The City Board's Right to Question the Grid Tariff and Additional Charges:The Supreme Court held that the City Board could not question the Grid Tariff without also questioning the directions pursuant to which it had been collecting charges from consumers. The Court found no satisfactory evidence that the charges collected were uneconomical. The Court left the question of the validity of the additional charges open for reconsideration by the Electricity Board for the period between March 23, 1968, and July 1, 1968.Conclusion:The appeals were disposed of with no order as to costs. The Supreme Court upheld the validity of the tariff fixed and the enhancement made, while leaving the question of the additional charges open for reconsideration for a specified period.