KERALA STATE ELECTRICITY BOARD v. M/S BINANI ZINC LTD and THE GOVERNMENT OF KERALA

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY, THE 26TH DAY OF JUNE 2018 / 5TH ASHADHA, 1940 ## **WA.No. 1101 of 2016** **--------------------** AGAINST THE ORDER/JUDGMENT IN WP(C) 9861/2009 of HIGH COURT OF KERALA DATED 25-03-2014 ## **APPELLANTS/RESPONDENTS 1 & 2 IN WP(C)** ## **--------------------------------------** 1 KERALA STATE ELECTRICITY BOARD, VYDHUTHI BHAVAN, PATTOM PALACE P.O, THIRUVANANTHAPURAM 695 004, REPRESENTED BY ITS SECRETARY. 2 THE SPECIAL OFFICER (REVENUE), K S E BOARD, VYDHUDHI BHAVAN, PATTOM PALACE P.O, THIRUVANANTHAPURAM 695 004 BY ADVS.SRI.P.SANTHALINGAM (SR.) SRI.S.SHARAN,SC,K.S.E.BOARD SRI.P.A.AHAMED, SC, KERALA STATE ELECTRICITY BOARD LIMITED ## **RESPONDENT(S)/PETITIONER/3RD RESPONDENT IN WP(C).:** ## **-------------------------------------------------** 1. M/S.BINANI ZINC LTD, BINANI PURAM 683 502, REPRESENTED BY ITS ASSISTANT VICE PRESIDENT, (ELECTRICAL AND INSTRUMENTATION), MR. A.A. MOHAMED NAWAZ. 2. THE GOVERNMENT OF KERALA, REPRESENTED BY ITS SECRETARY TO GOVERNMENT, (POWER (A) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM 695 001. R1 BY ADV. SRI.V.ABRAHAM MARKOS R1 BY ADV. SRI.ABRAHAM JOSEPH MARKOS R1 BY ADV. SRI.ISAAC THOMAS R1 BY ADV. SRI.NOBY THOMAS CYRIAC R1 BY ADV. SRI.HARAN THOMAS GEORGE R1 BY ADV. SRI.GOVIND VIJAYAKUMARAN NAIR R2 BY SR. GOVERNMENT PLEADER SRI RENIL ANTO THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 26-06-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: jma ## K. VINOD CHANDRAN & ASHOK MENON, JJ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ## W.A No.1101 of 2016 - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 26[th] day of June, 2018 ## J U D G M E N T ## Vinod Chandran, J Kerala State Electricity Board is the appellant herein. The issue relates to a tariff enhancement made by Ext.P1. The Government approved the enhancement of 25% of the Tariff as applicable to Extra High Tension Consumers (For short EHT Consumers only). The tarriff at Rs.1.90 stood enhanced to Rs.2.375. The Board rounded it off to Rs.2.40 and issued demands on that basis. A further enhancement was made by Ext.P13 increasing the tariff by 50 paise. The first enhancement of 25% was applicable from August 2001 to September 2002. The second enhancement was applicable from October 2002 to November 2007. W.A No.1101/2016 2 2. A series of writ petitions were filed by the EHT Consumers challenging the tariff enhancement. There was a conditional order passed directing the Board to levy only Rs.2.38 per unit. Subsequently, the writ petitions were disposed of and that filed by the appellant herein by Ext.P10 judgment, wherein the Government was directed to take a decision pursuant to the judgment in O.P No.3394/2002. That was a writ petition filed by one another EHT Consumer. The direction in the cited judgment was also to consider the issue. The direction was complied with and the Government again fixed the tariff at Rs.2.38, which the appellant challenged in the present writ petition. The appellant also raised a challenge against the subsequent increase at Ext.P13. We do not see the challenge against the 50 paise increase having been urged before the learned Single Judge. We hence take it that the appellant did not pursue the said challenge before the learned Single Judge. W.A No.1101/2016 3 3. On the challenge against the tariff fixation at Rs.2.38 the learned Single Judge relied on the judgment in O.P. 3394 of 2002 to find that there was a specific declaration that the enhancement would be only to the extent of 25% which is the mandate given by the Government. The said declaration was also noticed in Ext.P10 judgment. The Board then contended that the tariff fixation was under Section 49 and 59 of the Electricity Supply Act, 1948. The fixation was stated to be on account of the increased administrative and operational charges. The learned Single Judge however, held that there was no contention raised at any point of invocation of Section 49 and 59 and hence declined the contentions of the Board. The learned Single Judge found that the enhancement permitted being only to the extent of 25%, the same has to be restricted at Rs.2.375 per unit for the period between 10.08.2001 to September 2002. 4. Admittedly, subsequent to the directions issued by W.A No.1101/2016 4 the Hon'ble Supreme Court the Electricity Commission which was constituted in the year 2002 fixed the tariff applicable to EHT consumers from December 2007 to be Rs.2.90. We are not concerned with such fixation nor are we concerned with the increase of 50 paise between October 2002 and November 2007. 5. The learned Standing Counsel appearing for the Board relied on 1995 (3) SCC 295 [M/s. Real Food 'Products Ltd., and others v. A.P. State Electricity Board and others] . There was a policy laid down by the Government under Section 78A of the Electricity Supply Act. The policy laid down was to fix a concessional tariff for agricultural pump sets at a flat rate. The Board was found to be liable to follow the policy as laid down by the Government. The challenge raised was insofar as the Board having not accepted the opinion of the State Government on the specific concession that could be granted to such consumers. The Hon'ble Supreme Court held that though the policy as laid W.A No.1101/2016 5 down under Section 78A has to be followed by the Board, it does not fetter the authority of the Board to fix the tariff. The State Government was found to have acted in excess of the powers under Section 78A insofar as indicating the specific rate. The decision as to the tariff to be applied was held to be exclusively with the Board. It is on this premise that the learned Counsel would urge interference to the judgment insofar as the fixation having been restricted to 25% as indicated by the Government in Ext.P1. 6. In the present case, the Board has fixed the tariff on the directions as issued under Section 78 A invoking the powers under Section 49 and 59. However, at no point of time it was the case of the Board that tariff fixation at the rate of Rs.2.40 was with reference to the administrative and organisational charges. The Board accepted the Government's policy declaration insofar as tariff fixation for EHT consumers as given under Ext.P1 and W.A No.1101/2016 6 even adopted the rate indicated being 25% enhancement of the existing rate. The contention of the Board all through was that they have rounded off the figure to Rs2.40 This may not be a proper exercise of power under Section 49 and 59 of the Act. Rounding off is not permissible under the provisions of the Act. Rounding off can be only of a total demand and if it is made per unit of consumption it results in a huge demand being raised especially in the case of EHT Consumers whose contract demand of power runs to several crore units. Hence the Board has to confine itself to the enhancement as indicated by the Government in Ext.P1 and accepted by them. 7. We also reiterate that the earlier judgment in O.P No.3394/2002 specifically declared so: “It is declared that there shall be no enhancement above 25% since the mandate given by the Government is only to that effect”. Even if the Government does not have the power to indicate a rate; as held by the Hon'ble W.A No.1101/2016 7 Supreme Court, the Board failed to challenge the declaration made by this Court in the aforesaid judgment. Inter-partes the declaration has a binding effect which cannot be wriggled out off. 8. On the above reasoning we do not see any valid ground to interfere with the judgment impugned. We hence reject the appeal leaving the parties to bear their respective costs. It is made clear that if there is any refund due to the petitioner on the basis of the declaration made by the learned Single Judge, as affirmed by us, the same shall be first adjusted against existing or future dues. Writ Appeal would stand dismissed. No order as to costs. Sd/- K. Vinod Chandran, Judge Sd/- Ashok Menon, Judge jma