1. The above four writ applications under Article 226 of the Constitution raise identical questions and therefore can be disposed of conveniently by a common judgment and we accordingly do so.
2. The petitioner in Civil Writ Petition No. 1 of 1968: M/s. Aditya Mills Ltd., Madanganj-Kishengarh, District Ajmer is a public limited company and carries on business of manufacturing yarn etc. In exercise of its powers under Section 5 of the Electricity (Supply) Act, 1948 (which will hereinafter be called 'the Supply Act') the Government of Rajasthan constituted a State Electricity Board under the name, the Rajasthan State Electricity Board (which will hereinafter be called 'the Board'). An agreement was entered into between the petitioner and the Board on 29-10-1963, for supply of high tension electricity to the petitioner by the Board, a copy of which has been placed on the record and has been marked as Ex. A. Clause 16 of the agreement consisting of three Sub-clauses (a), (b) and (c) which would be relevant for our purposes may be reproduced below:--
'16 (a) The consumer shall pay to the Board every month charges for electrical energy supplied to the consumer during the preceding month under this agreement at rate of 13.5 nP. per KWh per month till the period upto 31st March, 1963.
Whereafter the provisions and scale of rates set forth in Board's notified Charabal Hydel Tariff Schedule instead of 12.5 NP. as aforesaid shall be applicable from 1st April 1963. The Board's aforesaid Chambal Hydel Tariff Schedule is being appended to this agreement and shall be deemed to be part of this agreement.
(b) The consumer is permitted to use the electrical energy supplied upto 10 per cent of the monthly Industrial Consumption for purposes of providing lighting ventilation etc. in the office situated in the main factory building, stores,' Time Keeper's Office Canteen, Library, Dispensary Staff Welfare Canteen, compound lighting etc. within the factory premises. The power consumed for lights, fans ventilation etc. in excess of this limit shall be charged at the rate of 37 NP per unit for lighting and fan consumption and at 19 NP per unit for small heat and power consumption per month.
Provided that the consumption of lighting and power including lighting used in the factory colony for the residential use of the Factory's employees shall be metered separately and charged for at the rate of 37 NP per unit for lighting and 19 NP per unit for power. The units so metered shall be deducted from the total number of units registered in the main meter on the H. T. side of the main supply for billing purposes.
Provided further that the provisions and scale of rates for lighting and power as provided in the Chambal Tariff Schedule would be applied instead of the aforesaid rates of 37 NP, and 19 NP per unit when the said Schedule is enforced for this supply as aforesaid.
(c) If the Board by notification makes any alteration in the aforesaid scale of charges, such altered rates shall be treated as if the same were part of this agreement in supersession of the charges set out in the schedule attached hereto with effect from the date fixed in the notification and if no date is fixed in the notification then from the date of publication of such notification.
Provided that this provision shall be applicable only from the date when the provisional Chambal Tariff Schedule is made applicable as aforesaid.'
It was agreed between the Board and the petitioner that the petitioner would pay as charges for electrical energy supplied to the petitioner at the rate of 12.5 paisa per KWh per month till the period upto 31-3-1963. It was further agreed that after this date the provisions and scales set forth in Board's notified Chambal Hydel Tariff Schedule shall be applicable. It may be stated that the two part tariff was introduced in the Chambal Hydel Tariff Schedule which was made applicable to the petitioners from 1-4-1983. The Board replaced the Chambal Hydel Tariff Schedule by the 'Tariffs for supply of Electricity' by its notification dated 18-3-64 which was published in the Rajasthan Rajpatra, Extraordinary Part II-A, dated 20-3-1964. Since it would be necessary to make reference to the 'Tariffs for Supply of Electricity' at more than one place in this judgment, we shall refer to it as 'Tariffs' hereinafter, It is the admitted case of the parties that the petitioner is governed by the provisions of the Tariffs. The allegation in the petition is that the petitioner is regularly paying the charges for electrical energy consumed by it at the rates mentioned in the Tariffs.
3. The Board by its notification dated 26-7-66 published in the Rajasthan Gazette, Extra ordinary dated 3-8-1966 decided to levy a surcharge on the supply of electricity to its consumers of the various categories mentioned in the notification. It was further mentioned in the notification that the surcharge would be applicable to the consumption charges of electricity commencing from August 1966, Among the categories of consumers the petitioner comes under the category of 'Large Industrial Loads' and the surcharge levied on the supply of electricity to industrial power consumers was fixed at the rate of 15 per cent.
4. The petitioner's case is that the Board had no authority to levy such a surcharge. The petitioner submits that it protested against the levy of this surcharge, but without any result and since the Board threatened to disconnect the electricity on its failure to pay the amount of surcharge. The petitioner paid surcharge for bills in respect of the energy consumed upto November, 1967, but on 6-12-1967 the Board sent a notice intimating that a fuel surcharge at the rate of 1.5 paisa per KWh in respect of the Tariff Schedule applicable to the industrial consumers has been levied. It was also mentioned in the notice that the said fuel surcharge would be leviable from the month of April 1967. A supplementary bill for Bs. 42,409.71 paisa from the month of May, 1967 to November 1967 was also sent to the petitioner for payment on or before 5-1-1968 failing which the electrical supply would be disconnected. The petitioner's grievance is that the Board had no authority to levy the fuel surcharge. In the bill sent to the petitioner 15 per cent surcharge was added to the amount of fuel surcharge. The petitioner has also attacked the validity of levy of surcharge on the fuel surcharge. Thus by this writ application the petitioner has attacked: (1) the validity of the levy of surcharge on the consumption charges at the rate of 15 per cent; (2) the levy of fuel surcharge at the rate of of 1.5 paisa per Kwh, and (3) also the surcharge on the fuel surcharge itself.
5. Identical grounds of attack against the aforesaid levy of surcharge and fuel surcharge have been taken in writ 'petitions Nos. 77 and 78 of 1968, and no separate arguments have been advanced in respect of these petitions by Shri Dwarka Prasad Gupta, who represents the petitioners in three writ petitions Nos. 1, 77 and 78 of 1968. We, therefore, do not think it necessary to State the facts of writ petitions Nos. 77 and 78 of 1S68, nor shall we deal with these writ petitions separately.
6.' Writ Petition No. 135 of 1968 filed by M/s. Man Industrial Corporation Ltd., Jaipur is directed only against the levy of fuel surcharge but one additional argument was raised by Mr. Agarwal on behalf of the Corporation and it is this: The Corporation, it is alleged, pn receipt of the supplementary bill for fuel surcharge for the months of May to December 3987, made a representation in writing to the Board disputing the right of the Board to levy fuel surcharge. It was contended by Mr. Agarwal that a bona fide dispute had been raised by the petitioner and, therefore, the Board could not press into service the provisions of Section 24 of the Indian Electricity Act, 1910 for purpose of disconnceting electricity at the premises of the petitioner. We shall deal with this argument of Mr. Agarwal at the proper plaee.
7. Ml the writ petitions have been opposed on behalf of the Board. The Bowl's reply is that under Section 49 of the Supply Act, it was authorised to fix its own Tariffs for supply of electricity, that the petitioners are being charged at the rates mentioned in the 'Tariff's and they arc also liable to pay such other charges as may be added from time to time. It was submitted that the Board was running into heavy losses on, account of rise, in the cost of production and increase in expenses and so it had become pecessary to increase the rate of electricity supplied to the consumers. According to Section 59 of the Supply Act, it was urged, that the Board cannot carry on its opera lions at a loss and therefore it had become necessary to increase the rates of electricity. With that end in view a general surcharge of 10 per cent and 15 per cent was levied on all consumers according to the class to which they belonged. It is further stated that this was done with the consent of the State Government. As regards fuel surcharge, it is submitted, that on account of the abnormal rise in the price of coal it had become necessary to add fuel surcharge at the rate of 1.5 paisa per Kwh. to save the Board from further losses.
8. We shall take up the question of levy of surcharge first. Mr. D.P. Gupta, learned counsel for the petitioners has urged the following points in this connection:--
(1) The Board has no right or authority in law to levy surcharge over and above the rates specified in the 'tariffs' as surcharge is in the nature of a tax upon the consumers and no tax can be levied or collected except by authority of law.
(2) The levy of surcharge at the rate of 15 per cent is arbitrary and is without any reasonable basis.
(3) That since the notification levying surcharge was published in the Rajasthan Gazette dated 3-8-1966, the surcharge could not be levied retrospectively from 1-8-1966.
(4) That at any rate the surcharge can be made applicable to energy charges and not to demand charges, payable by the petitioners.
9. We propose to deal with these points in the same order in which they have been set out above.
10. The first question that arises for our determination is whether surcharge is a tax and whether the Board had right to levy it? In this connection we may refer to section 49 of the Supply Act. It reads as below:--
'49. Provisions for sale of electricity by the Board to persons other than licensees:
(1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, t'ie Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purpose of such supply frame uniform tariffs.
(2) In fixing the uniform tariffs, the Board shall have regard to all llowing factors, namely:--
(a) the nature of the supply and the purpose for which it is required;
(b) the coordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee';
(c) the simplification and standardisation of methods and rates of charges for such supplies;
(d) the extension and cheapening of supplies of electricity to sparsely developed areas.
3. Nothing in the foregoing provisions of this section shall derogate from the power of the Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee, having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and any other relevant factors.
4. In fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person.'
11. A bare perusal of this section would show that the Board has been given power to prescribe the terms and conditions as the Board thinks fit upon which the Board may supply electricity to any person not being a licensee, and the Board has also been given an authority to frame uniform tariffs for the purpose. Section 49(2) further lays down that in fixing the uniform tariffs the Board shall have regard to all or any of the factors mentioned therein. It further appears that it is open to the Board to change the terms and conditions even unilaterally and so far as the petitioner M/s. Aditya Mills Ltd., Madanganj is concerned, it cannot make any grievance with respect to the change of terms and conditions for supply of electricity because there is a specific clause in this respect in the agreement entered into by it and that is clause 16 (c) which says that,
'If the Board by notification makes any alteration in the aforesaid scale of charges such altered rates shall be treated as if the same were part of this agreement in supersession of the charges set out in the schedule attached hereto with effect from the date fixed in the notification and if no elate is fixed in the notification then from, the date of publication of such notification.'
The validity of Section 49 of the Supply Act was called into question in M. S. E'.. Board v. Kalyan Borough Municipality, AIR 1968 SC 991, but the contention advanced on behalf of the consumer was repelled and their Lordships were pleased to hold:--
'that section 49 is not, in any way, bad on the ground that it gives an unguided and arbitrary power to the Board to fix its tariffs as it likes.'
12. Learned counsel for the petitioner has vehemently contended that the surcharge is in the nature of a tax. He has argued that the Board is not competent to levy any tax. He has relied on Article 265 of the Constitution, which lays down that no tax shall be levied or collected without authority of law. He has submitted that the word 'tax' used in Article 265 of the Constitution includes any impost or compulsory levy such as a duty, cess or fee. He has placed before us a few decided cases bringing out distinction between a tax and a fee. But we do not consider it necessary to make any detailed reference to them. It is incontrovertible that a fee is a payment levied by the State in respect of services performed by it for the benefit of the individual, while tax is paid for the common benefits conferred by the Government on all tax payers; fee is payment made for some special benefit enjoyed by the Board and the payment is usually proportionate to the Special benefit. The money raised by a fee is set apart and appropriated specifically for the performance of the service for which it has been imposed and is not merged in the general revenues of the State. While in the case of tax there is no quid, pro quo, between the tax payer and the State, there is a necessary correlation between fee collected and the service intended to be rendered. Thus the amount of fee is based upon expenses incurred by the State in rendering the services. So far, there can be no dispute but the difficulty arises when Mr. Gupta, wants the Court to hold that the surcharge levied by the Board in the present case is a fee covered by Article 265 of the Constitution. The word 'surcharge' has not been defined, nor has been used in the Supply Act. It may therefore be permissible to make reference to authoritative English Dictionaries to find out the meaning of the word 'surcharge'.
13. In the Shorter Oxford English Dictionary by William Little, H. W. Fowler, J. Coulson, the word 'surcharge' has been defined as below:--
'Surcharge--To charge too much as a price or payment; to subject to an additional or extra charge or payment.'
14. In Webster's Third New International Dictionary the word 'surcharge' has been defined so as to mean a charge in excess of the usual normal amount; an additional tax, cost, or impost; an additional rate added to the usual charge in transportation; an additional and usually excessive charge, load burden, or supply.
15. The Random House Dictionary of the English Language defines 'surcharge' as below:--
'(i) an additional charge, tax, or cost;
(ii) an excessive sum or price charged;
(iii) an additional or excessive load, or burden.'
16. Thus surcharge may be levied by way of additional burden in respect of certain tax, fee, cess or duty, and it may also be in the nature of excess cost or price for a certain article or service. It would not be correct to say that whenever surcharge is levied, it is always in the nature of a tax or a fee. The nature of surcharge will depend upon the original charge. If the original charge is a tax and surcharge is levied upon it, then the surcharge would also be a tax. Similarly if the original charge is in the nature of the price or cost of an article then the surcharge would also be in the nature of price only. The answer to the question, what is the nature of the surcharge in the present case would depend upon the answer to the question, as to what is the nature of the original charge. Is the charge for supply of electricity, a tax or a fee, or is only a price for the energy supplied by the Board? There is no gain-saying the fact that there is no element of compulsion or coercion in the matter of consumption of electricity. One is not bound to get electric installation at his premises It is dependent upon the sweet will of a person to take energy from the Board or not to take such energy. Of course if he consumes electricity he is bound to pay for the same. Thus it is not a compulsory levy. and, therefore in our opinion, it is not correct to say, as has been argued by the learned counsel for the petitioners that the charge for electrical energy is a tax or a fee. The surcharge on the consumption of electricity is only an overcharge or additional price and the contention of the petitioners that it is a tax or a fee cannot be accepted.
17. Learned counsel for the petitioners referred to Article 271 of the Constitution, which provides that the Parliament may at any time increase any of the duties or taxes referred to in those articles by a surcharge for purposes of the Union and the whole proceeds of any such surcharge shall form part of the Consolidated Fund of India. It is argued that in the Constitution the word 'surcharge' has been used in connection with duties or taxes, and, therefore, the surcharge levied in the present case is in the nature of a tax. We, however, do not find any force in this submission of the learned counsel, and as we have already observed, duty, tax, cess, fee 'or price, any of these can be increased by a surcharge. But that does not mean that every surcharge is in the nature of a tax or a fee. In the present case it clearly appears to us that surcharge is the additional price for consumption of electrical energy and is neither a tax nor a fee. The learned counsel for the petitioners also relied upon Nizam S. Factory Ltd. v. Bodhaa Municipality, AIR 1965 Andh Pra 91. In our opinion this ruling has no bearing on the facts and circumstances of the present case. It was a case of water tax levied by the Municipality for supply of water not to individuals but in a particular locality and the question canvassed in this case was whether the levy of water tax was justified. It was not a case where the water connection was installed in the premises of an individual and therefore we are clearly of the opinion that this case is not of any assistance to the petitioners.
18. Learned counsel also argued that in any case if the Board wanted to increase the rates of consumption for electricity it ought to have revised the 'Tariffs', and should not have levied a surcharge. We do not see any substance in this contention. It was open to the Board either to increase the rate in the 'Tariffs' or to levy surcharge, in view of the provisions of Section 49 of the Supply Act. Thus there is no force in the first contention of the petitioners that the Board had no authority to levy the surcharge.
19. Then we come to the second point. Whether the levy of surcharge in the present case is arbitrary and without a reasonable basis? The case of the Board is that the Board was running into heavy losses on account of rise in the cost of production and increase in expenses. It has placed on record a Press-communiqu issued by it wherein detailed reasons have been given why the surcharge has been levied. It is stated that On account of persistent failure of monsoon during the last two years in the catchment area of the Chambal river and the consequential curtailment in generation from Gandhi Sagar, Rajasthan has been faced with an unprecedented power crisis and in order to meet the obligations towards its consumers and to make available the power to the maximum extent possible, the Board proceeded to tap all possible sources and made special arrangements which placed a heavy drain on its resources. It drew one 132 K. V Transmission Line on an emergency basis to connect Jaipur with Bhakra System and it had also to install a number of diesel sets at the various places to supplement the availability of power.
The heavy expenditure thus incurred by the Board in making special arrangements, had a severe impact on the operational expenditure of the Board which registered a sharp rise during the period. It is further stated that the Board sustained a loss of over' Rs. 75,00,000 in the year 1964-65, and over a crore of rupees in the year 1965-66 It is submitted that in order to tide over this difficulty which was beyond the control, the Board had no option but to impose surcharge. It is urged that instead of introducing a revised tariff the Board thought it fit to introduce a general surcharge for all consumers of 10 % and 15 per cent according to the different categories of consumers and that the surcharge is neither excessive nor arbitrary. We have no reason to disbelieve the reasons given by the Board for levying the surcharge and the petitioners have placed nothing on the record to the contrary. In face of the averments made by the Board supported by an affidavit of the Executive Engineer, Rajasthan State Electricity Board, Ajmer we have no alternative but to hold that the impugned surcharge in question is neither arbitrary nor unreasonable.
19A. The third point raised by the petitioners against the surcharge is that it could not have been levied retrospectively. The notification of the Board levying surcharge is dated 26-7-66 and was published in the Rajasthan. Gazette dated 3-8-1966. It has: been mentioned in the notification that the surcharge would be added in the bills issued during September 1966, commencing from August 1966. In these circumstances it cannot be said that the surcharge has been levied retrospectively. So far as M/s. Aditya Mills Ltd., is concerned it is clearly mentioned in the agreement that the altered rates would be effective from the date fixed in the notification. The date fixed in the notification is August 1966, and thus there is no force in the contention of the petitioners in this respect either.
20. Now we come to the last objection raised by the petitioners in connection with, surcharge. It is contended that two part-tariff is applicable to the petitioners. It is common ground that the petitioners come under the category of 'Largo Industrial Loads' mentioned as Item No, 8 in the 'Tariffs'. In order to appreciate the contention of the petitioners in this respect it may be relevant to state that in case of 'Large Industrial Loads' charges are made for consumption of electricity under two heads:--
(1) Demand Charges, and
(2) Energy Charges.
The table prescribed for both types of charges is as below:--
First600 KVA ....
Rs. 6.50per month per KVA of billing demand.
. . Rs. 6.00 per mouth per KVA of billing demand.
Over1800 KVA . . .
. Rs.5.50 per month per KVA of billing demand. PLUS
First50,000 Kwh. per month . . 5.98 nP.per Kwh.
Next150,000 Kwh. per month . . 5.82 nP.per Kwh.
Next300,000 Kwh. per month . . 5.51 nP.per Kwh.
Over 500,000 Kwh per month . .5.20 nP. per Kwh.
The contention of the petitioner is that Demand Charges are not part of the consumption charges. According to the learned counsel for the petitioners Demand Charge is the charge for the energy kept in reserve for the consumer and is charged irrespective of the fact whether any energy is consumed or not. In other words, according to the petitioners, over and above the consumption charges, Demand Charges are also levied in case of 'Large Industrial Loads'. On the other hand ,the case of the Board is that in case of 'Large Industrial Loads' there is no doubt two part Tariff, and those industries which have maximum demand of above 200 KVA (Kilo Volt Ampear) have to pay the aggregate of 'Demand Charges' and Energy Charges. Learned counsel for the Board contends that the definition of Demand Charges given by the petitioners' counsel is not correct. The two-part rate may be in two component parts--a separate Demand Charge and a separate Energy Charge or the demand and energy factors may be combined in a single rate schedule. It is contended by the Board's learned counsel that different types of electric rate schedules have been evolved--flat rate schedule, straight line meter rate, block rate or slab system. According to the learned counsel for the Board 'Demand Charges' are a part of the consumption charges and therefore surcharge is leviable not only on the energy charges but on Demand Charges also.
21. It is further argued that energy charges per Kwh. in case of 'Large Industrial Loads' are much less as compared to Domestic Service, Commercial Service etc., where a uniform single charge per unit is made for all energy consumed.
22. After hearing learned counsel for the parties we are convinced that two part-rates is only a system of charging. Demand Charges are charged on the basis of the maximum demand for energy recorded on the basis of Kilo Volt Ampear whereas energy charges are recorded on consumption of energy Kilo Wat per hour. It should be appreciated that there are two methods of charging prescribed in the 'Tariffs'. One is what may be termed one-part Rates i. e. a single charge is made on the basis of quantity of energy consumed or which is supposed to cover both the demand costs and the output costs. The other is the two-parts rates which provides specifically for the demand costs in addition to the charges for energy costs. The two parts rate is in two component parts a separate demand charge and a separate energy charge. Consequently the surcharge is leviable on the Demand Charges as well as Energy Charges and there is no force in the petitioners' contention in this respect also and we hereby overrule it,
23. At one stage of his arguments the learned counsel also seemed to argue that there was unlawful discrimination introduced by the Board in levying a different rate of surcharge in the case of certain types of consumers at the rate of 10 per cent only but having realised that there was a reasonable basis for this differentiation he did not pursue this point.
24. After a careful examination of all the points urged by the learned counsel for the petitioners we are of the view that there is no force in any of them and accordingly we hold that the levy of surcharge is not bad and is not liable to be struck down.
25. This brings us to the question of fuel surcharge. Learned counsel for the petitioners has raised the following points in connection with his attack against the levy of fuel surcharge:--
(i) That neither the Board nor the Chief Engineer bad authority in law to levy fuel surcharge.
(ii) That the petitioner M/s. Aditya Mills Ltd., is being supplied energy from Hydel System for which no fuel or coal is used and therefore it is not liable to pay any fuel surcharge.
(iii) That there is no basis for fixing the fuel surcharge at the rate 1.5 nP. per Kwh.
(iv) That the fuel surcharge could not be recovered retrospectively from April 1967 to November 1967 when the notification for levy of fuel surcharge was issued on 6-12-1967.
(v) That 15 per cent surcharge could not be levied on the amount of fuel surcharge.
26. We may first take up the objection regarding the authority of the Board to levy fuel surcharge. It is urged by the learned counsel for the Board that there is provision in the Tariffs for 'fuel adjustment clause, and the Board had full authority to levy surcharge. It is submitted that the fuel surcharge has been levied by the Board with the sanction of the State Government. It is admitted even by the petitioners that there is fuel adjustment clause contained in the Tariffs, which reads as under:--
'Fuel Adjustment Clause--The rate per unit under schedules HS/LP/HT-I, HS/ML /HT-2, HS/DL/HT-3 shall be varied if the cost of coal having a net calorific vatao of 11,500 BTHU, varies from the basic cost of Rs. 50 per metric ton at the power house bunkers. The variation shall be determined half yearly by multiplying the variation in the price of coal above or below Rs. 50 per metric ton with the total coal burnt at the Steam Stations during the period and dividing by the sum, of the units received from hydel systems and the units generated at the thermal stations.
The price of the coal shall be determined by taking the average cost of coal during each half year ending 31st day of March and thirtieth day of September and any adjustment in the accounts shall include, pending the determination of the price of each half year as aforesaid, provisional adjustment of increase or decrease in the charge per KWh, based on the price of coal at the end of the preceding half year. Such provisional adjustmment in monthly bills shall be subject to final adjustment at the close of each half year as aforesaid.
Provided that should any other fuel be substituted partly or entirely for coal such fuel will be reduced to terms of coal value per ton on the basis of its cost and calorific value as compared to the coal of 11,500 BTHU per pound.
For the purpose of this clause samples of fuel will be taken from the consignments received from the suppliers and analysed by the Engineer of the Board. The decision of the Board shall be final and binding on the consumer.'
It is clear from a bare perusal of this clause that the Board has been given power to vary the rate per unit under the schedules mentioned in this clause if the cost of coal varies from the basic cost of Rs. 50 per ton at the power house bunkers. The, method of determination of the variation has also been provided in the clause. Thus the argument of the learned counsel that the Board has no power to levy fuel surcharge has no substance. It is stated by the learned counsel for the Board that the fuel surcharge has been levied by the Board its ell and not by the Chief Engineer. He has invited our attention to the letter dated 6-12-1967 (Ex. 4) issued from the office of the Assistant Engineer Rajasthan State Electricity Board, Kishengarh to the Manager, M/S. Aditya Mills Ltd., wherein it has been, mentioned that,
'a fuel surcharge at 1,5 paisa (one and a half paisa) per K. W. H. in respect to the Tariff Schedule HS/LP/HT-1, HS/ML/HT-2 and HS/DL/HT-3 has been levied by the Board as per notification No. CE/RSEB/ XEN/Comml., 1221, dated 9-10-1967 received from the Chief Engineer Rajasthan State Electricity Board, Jaipur.'
He has also submitted that if the petitioners had taken a specific objection on the point that the Board had not at all sanctioned the fuel surcharge, he would have placed on record all the correspondence which had passed between the Board and the Chief Engineer to show that the Board had levied it. During the course of arguments learned counsel showed us some letters and ' also submitted that he could place many more in support of his submission but we did not think it necessary to call upon the learned counsel to place on the record this correspondence because the petitioners had nowhere taken any specific objection in the writ petition that as a matter of fact the Board had not levied the surcharge and it was the Chief Engineer who had levied it. The two letters (1) Ex. 4 which we have already referred to above and (2) the letter dated 9-10-1967. (Ex. 6) addressed by the Chief Engineer to the Superintending Engineer and other Engineers posted at Ajmer go to show that it was the Board which had made the fuel adjustment clause applicable. We, therefore, do not find force in the first point urged by the petitioners.
27. The second contention of the petitioners is that the fuel adjustment clause can only apply when electricity is supplied from steam stations where coal is used for generating electrical energy or where the electricity is supplied partly from steam station and partly by the hydel power but since the electricity is supplied to the petitioners entirely from the hydel system, the variation in the cost of coal will have no effect upon the cost of production of energy supplied to the petitioners. This position is disputed by the learned counsel for the Board. It is submitted by him that the tariff for electricity supplied by hydel system and/or from thermal process is one and the same. In order to lend support to his argument he has referred to Section 49 of the Supply Act which provides for framing a uniform tariff for all consumers falling in the same category irrespective of the sources from which electricity is supplied to them.
28. We have examined the respective contentions of the parties and are of opinion that 'fuel adjustment clause' is applicable to all consumers, who come under the three categories mentioned in the clause, viz.,
(1) Large Industrial Loads;
(2) Bulk Supply For Large Mixed Loads;
(3) Bulk Supply To Distributing Licensees:
On a careful examination of the 'Tariffs' we find that they have been divided into three parts :--
(1) Tariffs applicable in the areas fed mainly from hydel and steam stations;
(2) Tariffs applicable in the areas fed from diesel stations;
(3) Tariffs for temporary supply of the areas fed from hydel, steam ana diesel stations.
So far as the areas fed from diesel stations only are concerned there is no question of applying 'fuel adjustment clause' to consumers in such areas. The contention of the learned counsel on behalf of the Board is that the petitioners fall under the Ist clause viz., the clause applicable to the areas fed mainly from hydel and steam stations. It has been urged by him that 'fuel adjustment clause, would be applicable to the petitioners and if the price of coal goes own then the petitioners, and other persons, who are supplied energy from hydel system would also be benefited. It is submitted on behalf of the Board that fuel does not necessarily refer to coal only but to any other fuel which may be substituted partly or entirely for coal. Moreover in areas fed mainly from hydel system the diesel may sometimes have to be used and therefore it would not be correct to say that 'fuel adjustment clause' can apply only to the units generated at the thermal stations only. In this connection, we may refer to the provision in the fuel adjustment clause which says that--
'the variation shall be determined hall yearly by multiplying the variation in the price of coal above or below Rs. 50 per metric ton with the total coal burnt at the Steam Stations during the period and dividing by the sum of the units received from hydel systems and the units generated at the termal stations.'
Again there is a proviso to this clause which reads as follows :--
'Provided that should any other fuel be substituted partly or entirely for coal such fuel will be reduced to terms of coal value per ton on the basis of its cost and calorific value as compared to the coal of 11,500 BTHU per pound.'
These provisions go to fortify the submission of the learned counsel for the Board and make it only clear that the 'fuel adjustment clause' would be applicable not only to the areas fed by steam stations only but also to those areas which are fed mainly from hydel and steam stations Mr. Hari Prasad Gupta, learned counsel for the Board has frankly stated that the petitioners who are supplied electricity mainly from hydel station would also be entitled to the benefits which, may accrue on account of fall in the price of coal. It is also interesting to note that the same rates have been prescribed under the 'tariffs' for supply of electricity from hydel station as well as from steam station, whereas different rates have been prescribed in case of areas fed from diesel sta-tions. This also goes to show that the consumers from hydel station and steam station have been placed at par for the application of various clauses mentioned in the tariffs and the 'fuel adjustment clause' would be applicable also to those who get electricity from hydel stations. We are, therefore, convinced that the fuel adjustment clause would be applicable to the petitioners even though they get supply of electricity mainly from hydel station.
29. The third objection of the petitioners in this respect is that there has been no determination of the variation of the price of coal as provided in the fuel adjustment clause, and the fuel surcharge at the rate of 1.5 nP. per KWh has been introduced arbitrarily without any reasonable basis. It has been submitted on behalf of the Board that on account of the abnormal rise in the price of coal it had become necessary to add fuel surcharge at the rate of 1.5 nP. per KWh., to save the Board from incurring further losses. It is urged that this figure was arrived at after taking into account the following factors viz.,
(i) increase in the price of coal;
(ii) calorific value or coal supplied from hydel sources and those generated from thermal process and that the charge was properly arrived at after working out all the details necessary for the purpose.
It is further submitted that the present charge at the rate of 1.5 nP. per unit has been fixed provisionally on the basis of the data of the previous six months and when the account for the relevant period is finalised the rate of correct fuel surcharge shall be calculated and adjustment of the same shall be made later on. Shri K.L. Bafna, Executive Engineer (Commercial) Rajasthan State Electricity Board, Jaipur has also filed an affidavit in support of this reply. The learned counsel for the Board also placed on record the calculations by which this figure has been arrived at provisionally. No material has been placed on behalf of the petitioners to the contrary and we have no reason for not accepting the figures supplied by the Board. In, those circumstances the burden lay on the petitioners to show that the fuel surcharge at the rate of 1.5 nP. has been arrived at arbitrarily without any basis and that it has no reasonable relationship with the cost of production of electrical energy supplied by the Board. We, therefore, overrule this contention.
30. We shall now deal with the next objection of the petitioners viz., that the fuel surcharge has been levied retrospectively for the months commencing from April 1967 to November 1967 even though the letter for levy of fuel surcharge was issued on 6-12-1967. It appears from the letter dated 6-12-1967 (Ex. 4) that the fuel surcharge has been made leviable from the month of April 1967 i. e., with effect from the billing month of May 1967. It is provided in the fuel adjustment clause that the variation shall be determined half yearly by taking the average cost of coal during each hair year ending 31st day of March and 30th day of September and any adjustment in the accounts shall include, pending the determination of price of each half year as aforesaid, provisional adjustment of increase Or decrease in the charge per KWh., based on the price of coal at the end of the preceding half year. It is further provided that such provisional adjustment in monthly bills shall be subject to final adjustment at the close of each half year as aforesaid.
In the present case the fuel surcharge has been made leviable from the month of April 1967. From the calculations supplied by the Board, it is clear that the rates taken into consideration for determining the variations in the price of coal and other fuel are for the period commencing from October 66 to March 1967, and it is understandable that it must have taken time to complete these calculations. Merely because the bill for surcharge has been issued on 6-12-1967 for the months of May 1967 to November 1967, it cannot be said that it has been levied retrospectively. All that has been, pleaded by the petitioners in their writ petitions is that even upto November 1967 the respondent No. 1 or any of its officers never informed the petitioners that the cost of coal had gone up and the fuel surcharge was suddenly levied by the letter dated 6th December, 1967, and, therefore, there is no justification for charging the fuel surcharge for the months prior to December 1967.
Learned counsel for the petitioners has failed to point out how the bill for the fuel surcharge issued for May 1967 to November 1967 in December 1967 is illegal. We do not consider that it is a retrospective levy. It is only a question of adjustment of the price of electricity supplied to the petitioners for which provision has been made in the fuel adjustment clause of the 'tariffs.' We do not find any force in this contention of the petitioners either. The learned counsel for the petitioners also submitted that so much time has passed, even then the final adjustment has not been made and unless final adjustment is made fuel surcharge cannot be charged on provisional basis for a period more than six months. Learned counsel for the Board has stated that the account for the relevant period has been finalised and the rate of correct fuel surcharge has been calculated and necessary orders for adjustment are soon to be issued by the Board. Even apart from that there is nothing to debar the Board from charging fuel surcharge provisionally for even more than six months if the rate is not finalised. We do not see any substance in this argument of the learned counsel.
31. The next contention of the petitioners is that the Board is not entitled to levy 15% surcharge on the fuel surcharge. In the notification levying surcharge it has been mentioned that surcharge will be levied on consumption charges of electricity. It cannot be denied that fuel surcharge is a part of the consumption charges and therefore there is nothing wrong if the surcharge has been calculated at the rate of 15% on fuel surcharge, also. Learned counsel for the petitioners was not able to show how the levy of surcharge on the fuel surcharge is illegal. This point also therefore cannot prevail.
32. Now it remains to deal with the submission made by Mr. Agarwal on behalf of M/s. Man Industrial Corporation Limited, Jaipur. His contention is that the notice under Section 24 of the Electricity Act of the Board for disconnecting the electricity on failure to pay the fuel surcharge must be quashed. It is argued by him that his client cannot be said to have neglected to pay any charge for energy or any sum due from it. He has submitted that his client had raised a bona fide dispute regarding the levy of fuel surcharge and had solicited information from the Board which the Board had failed to supply. In these circumstances, it is argued by him that the amount of fuel surcharge cannot be said to be due from the petitioners nor the petitioners can be said to have neglected to pay any charge for energy or any sum other than a charge for energy.
In support of his submission he has relied upon Joseph v. East Ham Corporation, 1936-1 KB 367, British India Banking Corporation v. Sylhet Commercial Bank Ltd., AIR 1949 Assam 45, Tulsidas v. Bharat-khand Cotton Mills Co., AIR 1914 Bom 251, Nagpur Corporation v. N. E. L. and P. Co., AIR 1958 Bom 498 and Maharashtra State Electricity Board v. M/s. Madhusudandass and Brothers, Tumsar, AIR 1966 Bom 160. We, however, do not feel inclined to decide this question because on merits we have come to the conclusion that the Board was justified in levying fuel surcharge and irrespective of the question whether the petitioners raised a bona fide dispute before the Board they are liable to pay the fuel surcharge in view of the findings given by us with respect to it. Mr. Agarwal himself frankly conceded that if a finding were given on the question of validity of the fuel surcharge, it would not at all be necessary to decide whether the dispute raised by the petitioners was bona fide or was merely a cloak. We are also of the opinion that in view of the finding arrived at by us that the fuel surcharge in question is valid, it is not at all necessary to decide the question whether there was neglect on the part of the petitioners to pay any dues to the Board.
33. In view of the findings arrived at by us there is no force in these writ petitions which are hereby dismissed. In the circumstances of the case, we leave the parties to bear their own costs.