1995 (3) TMI 473 - SC - Indian Laws

Supreme Court Upholds Electricity Tariff Revisions & State Directive

The Supreme Court dismissed the appeals challenging the revision of tariffs by the Andhra Pradesh State Electricity Board and the direction under Section ... - Issues:1. Challenge to revision of tariffs by the Andhra Pradesh State Electricity Board2. Nature and effect of the direction given by the State Government under Section 78A of the Electricity (Supply) Act, 19483. Preferential treatment of agricultural consumers and its compliance with Article 14 of the ConstitutionAnalysis:1. Challenge to Revision of Tariffs:The appeals and connected matters stemmed from a Division Bench judgment of the Andhra Pradesh High Court concerning writ appeals challenging the revision of tariffs by the Andhra Pradesh State Electricity Board. The High Tension (Industrial) Consumers filed writ petitions questioning the revision of tariffs in B.P.Ms. No. 671 dated 10.6.1987 and B.P.Ms. No.353 dated 15.4.1989. The key issues revolved around the history of tariff revisions and the alleged lack of independent consideration by the Board in formulating the tariffs. The primary contention was the disparity in tariffs between High Tension consumers and agricultural consumers, raising concerns of arbitrariness and violation of the constitutional principle of equality under Article 14.2. Nature and Effect of Direction under Section 78A:The main focus of the case was the direction given by the State Government under Section 78A of the Electricity (Supply) Act, 1948, pertaining to the flat rate tariff system for agricultural pump-sets. The State Government's directive aimed to rationalize power tariffs for agricultural pump sets based on horsepower, emphasizing the need to support small and marginal farmers. The Court analyzed the Board's obligation to adhere to such directions and the extent to which the Board could deviate if it deemed necessary. The decision-making process of the Board in accepting the suggested rate by the State Government was scrutinized to determine compliance with statutory functions and policy considerations.3. Preferential Treatment of Agricultural Consumers:A critical issue examined was whether the preferential treatment accorded to agricultural consumers, particularly in the form of flat rate tariffs, infringed upon Article 14 of the Constitution guaranteeing equality. The Court deliberated on the rationale behind concessional tariffs for agriculturists as a policy decision and the justifiability of such treatment in the larger economic context. Previous judgments were cited to support the legality of differential treatment between High Tension consumers and agriculturists, emphasizing the distinct categorization of consumer classes.In conclusion, the Supreme Court dismissed the appeals after thorough consideration of the aforementioned issues, affirming the validity of the tariff revisions and the direction under Section 78A. The judgment underscored the Board's discretion in implementing policy directives while ensuring adherence to statutory obligations and constitutional principles.