1988 (4) TMI 440 - HC - Indian Laws

Religious & Charitable Entities Misclassified as Commercial; Hospitals Pay Normal Tariff; Reclassification Allowed.

The court concluded that KSEB improperly classified Churches, Temples, Mosques, Convents, Monasteries, and Orphanages as commercial consumers, directing ... - Issues Involved:1. Classification of establishments as 'commercial consumers' or 'non-domestic consumers' for the purpose of enhanced electric tariff.2. Validity and application of the Government's directive under Section 22-B of the Indian Electricity Act.3. Jurisdiction and authority of the Kerala State Electricity Board (KSEB) in classifying consumers and levying enhanced tariffs.4. Specific classification of various establishments such as Churches, Convents, Orphanages, Seminaries, Hospitals, Educational Institutions, Hostels, etc.Issue-wise Detailed Analysis:1. Classification of Establishments:The main question was whether establishments like Churches, Convents, Orphanages, Seminaries, Hospitals, Educational Institutions, and Hostels should be classified as 'commercial consumers' liable to pay enhanced electric tariffs or as 'non-domestic consumers' paying reduced rates. The petitioners were classified under the LT VI - Non-domestic category by the KSEB's 1985 tariff order, which included various types of non-domestic establishments.2. Validity and Application of Government's Directive:The Government of Kerala issued several orders under Section 22-B of the Indian Electricity Act due to power shortages, imposing restrictions and enhanced tariffs on 'commercial consumers.' The petitioners did not challenge the Board's 1985 tariff order or the Government's directive but contended that their establishments should not be treated as commercial consumers.3. Jurisdiction and Authority of KSEB:The court recognized the KSEB's authority to classify consumers and set tariffs. However, it emphasized that the Board must objectively determine whether an establishment is commercial or non-commercial. The Government's power under Section 22-B allows it to make its own classification for tariff purposes, independent of the Board's classification.4. Specific Classification of Establishments:- Churches, Temples, Mosques: These are places of worship with a spiritual orientation, not economic activities. They cannot be classified as commercial consumers.- Convents and Monasteries: These are religious establishments with a focus on spiritual life, not economic activities. They are not commercial consumers.- Orphanages: Institutions for the care of orphans, not patterned on a commercial basis, and thus not commercial consumers.- Bishop's House: Primarily a residence for a clergyman with spiritual functions, not a commercial establishment.- Educational Institutions and Nursing Schools: These involve organized, systematic economic activities and material services to the community. They are correctly classified as commercial consumers.- Hostels: As part of educational institutions, they take on the same commercial classification.- Seminaries: Institutions for training clergy, analogous to educational institutions, and thus commercial consumers.- Hospitals: Provide essential services with systematic economic activities. However, hospitals were exempted from enhanced tariffs due to their essential nature, as previously recognized by the court.Conclusion:The court held that the KSEB was wrong in treating Churches, Temples, Mosques, Convents, Monasteries, and Orphanages as commercial consumers. They should be billed at the normal tariff for non-domestic consumers. Educational Institutions, Nursing Schools, Hostels, and Seminaries were correctly classified as commercial consumers. Hospitals, while commercial, should only pay the normal tariff due to their essential service status. The Board was instructed to issue revised bills accordingly and consider reclassification requests from other non-domestic consumers based on the principles stated in the judgment. The judgment also allowed for future reclassification or additional levies by the Government or the Board in accordance with the law.