Tariff regulation for essential electricity supply upheld where statutory power covered price revision and no discrimination was proved.
The SC construed Section 3(1) of the Madras Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949 as wide enough to regulate the supply, distribution and pricing of essential articles, including electrical energy supplied by the State itself, and held that this power extended to enhancing tariff rates by notified order. The Court further held that the tariff revision was a law for Article 19 purposes and was justified in public interest because the earlier tariff had become uneconomic and the revised rates were not shown to be excessive or unreasonable. The Article 14 challenge also failed because no clear material established discrimination or irrational classification among consumers.
Issues: (i) Whether Section 3(1) of the Madras Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949 empowered the State Government to issue notified orders enhancing the tariff for supply of electrical energy by the State itself; (ii) whether the impugned notified orders infringed Articles 19(1)(f) and 19(1)(g) of the Constitution of India; (iii) whether the impugned notified orders violated Article 14 of the Constitution of India.
Issue (i): Whether Section 3(1) of the Madras Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949 empowered the State Government to issue notified orders enhancing the tariff for supply of electrical energy by the State itself.
Analysis: The statutory language of Section 3(1) was construed as wide enough to permit regulation of the supply, distribution and pricing of essential articles. Electrical energy being included in the Schedule, the power to regulate supply at fair prices extended to supply made by the State as well as by private suppliers. Sub-section (2) was treated as illustrative and not restrictive, and the power to regulate necessarily included the power to increase or decrease rates where needed to secure supply at fair prices.
Conclusion: The State Government had authority under Section 3(1) to issue the impugned notified orders enhancing tariff rates.
Issue (ii): Whether the impugned notified orders infringed Articles 19(1)(f) and 19(1)(g) of the Constitution of India.
Analysis: The orders were treated as law for Article 19 purposes. The restriction imposed by revising the tariff was examined in the light of public interest and the need to ensure continued supply of electricity. As the earlier tariff had become uneconomic and the revised rates were not shown to be excessive or unreasonable, the restriction was held to serve the general public and to be justified on the materials before the Court.
Conclusion: The impugned notified orders did not violate Articles 19(1)(f) and 19(1)(g).
Issue (iii): Whether the impugned notified orders violated Article 14 of the Constitution of India.
Analysis: The challenge under Article 14 failed for want of clear and specific material showing discrimination or irrational classification. The record did not establish comparable rates or any legally cognisable basis to infer hostile discrimination among consumers.
Conclusion: No violation of Article 14 was made out.
Final Conclusion: The tariff revision was upheld as a valid exercise of statutory power and the constitutional challenge failed, leaving the respondents entitled to enforce the impugned orders.
Ratio Decidendi: A statutory power to regulate the supply of essential articles at fair prices includes authority to adjust contractual tariffs by notified order, and such regulation will be sustained where it is reasonably justified in the public interest and no proven discriminatory treatment is shown.
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