1988 (5) TMI 374 - SC - Indian Laws

Summary

Issues Involved:

1. Whether the agreement dated 21.10.1948 should be deemed to have been entered into by the Board under Section 60 of the Electricity (Supply) Act, 1948.
2. Whether the agreement dated 21.10.1948 qualifies as one entered into by the Board under Section 49(3) of the Act, making it immune from unilateral tariff enhancements.
3. Whether the enhancement of the electricity tariff under Exhibit P-2 constitutes hostile discrimination against the appellant.

Issue-wise Detailed Analysis:

1. Whether the agreement dated 21.10.1948 should be deemed to have been entered into by the Board under Section 60 of the Electricity (Supply) Act, 1948:

The appellant contended that the agreement dated 21.10.1948, originally entered into with the erstwhile Travancore State, should be deemed to have been entered into by the Kerala State Electricity Board under Section 60 of the Act. Section 60(1) of the Act states that all contracts entered into by the State Government for purposes of the Act before the formation of the Board shall be deemed to have been entered into by the Board. The Board argued that the agreement did not qualify under Section 60(1) because it was not entered into by the State Government and lacked subsequent recognition by the Board. The court found it unnecessary to delve into these contentions, focusing instead on whether the agreement qualified under Section 49(3).

2. Whether the agreement dated 21.10.1948 qualifies as one entered into by the Board under Section 49(3) of the Act, making it immune from unilateral tariff enhancements:

The principal controversy was whether the agreement dated 21.10.1948 could be considered under Section 49(3) of the Act, which allows the Board to fix different tariffs for specific cases. The court examined the statutory provisions and the agreement's terms, particularly noting the absence of a specific duration for the agreement. The court held that the agreement's lack of a fixed term and its susceptibility to termination at the Board's volition meant it did not qualify for protection under Section 49(3). The court emphasized that agreements under Section 49(3) must stipulate a special tariff for a specific period to be immune from unilateral changes. The court concluded that the agreement did not exclude the Board's power under Section 49(1) to revise tariffs unilaterally.

3. Whether the enhancement of the electricity tariff under Exhibit P-2 constitutes hostile discrimination against the appellant:

The appellant argued that the tariff enhancement was discriminatory, as other similarly situated high tension consumers were not subjected to similar revisions. The Board countered that no similarly situated consumer was left out of the tariff revision, except where protected by agreements under Section 49(3). The Board also cited differences in the nature of the industries and power factors as justifications for differential treatment. The court found that the appellant failed to establish a proper foundation for a discrimination claim under Article 14 of the Constitution. The court noted that governmental actions are presumed reasonable and in public interest unless proven otherwise. The court held that the Board's inability to unilaterally revise tariffs for consumers protected by Section 49(3) agreements was a valid ground for differential treatment. Consequently, the court rejected the appellant's discrimination claim.

Conclusion:

The court dismissed the appeal, upholding the Kerala State Electricity Board's tariff enhancement and rejecting the appellant's claims of statutory protection and discrimination. The court emphasized the importance of specific terms and conditions in agreements to qualify for statutory protections under Section 49(3) and found no evidence of arbitrary discrimination in the Board's actions.