ORDER
B. Sudershan Reddy, J
1. A 'power guzzler' invokes the extraordinaryjurisdiction of this Court under Article 226 of the Constitution of India for issuance of a writ of mandamus directing the respondents to charge the energy consumed by the petitioner's ferro silicon unit at Rudraram village in Medak District at HT Category-I tariff rates instead of HT Category-III tariff rates after declaring the inclusion of item No.9 in HT Category-III by BP Ms. No.353 (Commercial) dated 15-4-1989 and by BPMs. No.298, dated 30-3-1988 as unconstitutional and violative of Articles 14 and 19(1)(g) of the Constitution of India.
2. Before adverting to the question that may fall for consideration, it may be necessary to notice the various averments and allegations made by the petitioner and the stand taken by the respondents in reply to those averments and allegations. The petitioner is a Public Limited Company incorporated under the Companies Act, 1956. It is a manufacturer of Ferro Silicon and set up its factory for manufacturing the Ferro Silicon at Rudraram village near Sangareddy in Medak District.
3. The electrical energy for the petitioner's company is supplied by the respondents under HT agreement dated 12-3-1985. The maximum contracted demand is 16.5 MVA, and the energy supplied by the respondents at the relevant time was at 132 KV pressure. Under the HT agreement dated 12-3-1985 the first respondent reserved the unilateral right to vary, from time to time, tariffs, scale of general and miscellaneous charges and terms and conditions of supply and in particular to enhance the rates chargeable for supply of electricity according to the exigencies.
4. It is stated that by letter dated 28-12-1984 the first respondent informed the petitioner that the petitioner's unit could not be granted a special tariff rate of 48 paise per unit for the first three years ofoperation as requested and it would have to opt for either HT Category-I tariff or power intensive tariff and that 25% rebate was applicable only to HT Category-I and not for power intensive tariff, as the said tariff rate itself was highly concessional in nature. It was made clear that the petitioner was at liberty to choose and opt for either the tariffs applicable to HT Category-I or the power intensive tariff on condition of availing a minimum of 403.325 units per KVA and that the option once exercised would be final. The petitioner informed that it was willing to take energy under HT Category-I with 25% rebate for the first three years. Accordingly, the agreement dated 12-3-1985 was executed by the petitioner and the petitioner has since been availing the energy at 132 KV voltage at HT Category-I tariff. HT Category-I was meant for HT consumers whose energy consumption on account of lights and fans did not exceed 10% of the total consumption of the factory. HT Category-H was meant for all HT consumers other than those covered by HT Category-I.
5. The first respondent herein by BP Ms.No.671 (Commercial), dated 10-6-1987 later amended by BP Ms. No.735 (Commercial) dated 14-7-1987 revised the tariffs for supply of electricity and there was enormous increase in the rates applicable to HT consumers. The first respondent through BP Ms. No.671 introduced HT Category-III for Power Intensive Industries and initially eight specified industries were categorized under the HT Category-III. The first respondent by BP Ms. No.298, dated 30th March, 1989 enlarged the number of categorised consumers falling under HT Category-Ill. Apart from the earlier eight categorised consumers referred in BP Ms. No.671, item No.9 was added as follows:
'(9) Other consumers manufacturing Caustic Soda, Ferro Silicon, Sodium Metal, Ferro Chrome, Ferro Manganese, Charge Chrome, Silicon Carbide, CalciumCarbide, Sodium Chlorate, Potassium Chlorate.'
Thus, the Ferro Silicon Industry was also brought under HT Category-III.
6. The first respondent issued BP Ms. No.353 (Commercial) dated 15-4-1989 in supercession of the BP Ms. No.671, dated 10-6-1987 further increasing the tariff rates without altering the categories of consumers under the HT tariffs. In the case of HT Category-I consumers, the demand charges were increased to Rs.42/- per KVA per month and the energy charges were increased to 0.95 paise per unit with fuel cost adjustment extra. In the case of HT Category-III consumers, the rate for all units consumed were increased to 113 paise per unit (with fuel cost adjustment extra) without any reference to the maximum charges. The said HT Category-III comprised of the eight specified and named consumers and also the new item 9 consumers introduced by the amendment under the said BP Ms. No.298, dated 30-3-1988. It is the specific case of the petitioner that even after the said BP Ms. No.353 (Commercial), dated 15-4-1989 came into force in June, 1989, the energy consumed by the petitioner unit was continued to be charged at the tariff rates applicable to HT Category-I consumers. In fact, the petitioner questioned the legality and validity of the increase in the tariff rates under the said BP Ms. No.353 (Commercial), dated 15-4-1989 in WP No.15739 of 1989. This Court partly allowed the Batch of writ petitions filed by several HT industrial consumers questioning the said BP Ms. Nos.671 of 1987 and 353 of 1989 by its judgment dated 6-9-1989 striking down BP Ms. No.353 dated 15-4-1989 in toto as invalid and striking down BP Ms. No.671 dated 10-6-1987 partly insofar as fuel cost adjustment charges are concerned and directing the first respondent to revise the bills and issue revised bills in respect of the past period to the consumers' withintwo months and directing the payment of the said amounts, if any, demanded in the revised bills within one month from the date of the service of the said bills and directing that if any excess is found the same should be adjusted in the future bills. The petitioner's WP No.15739 of 1988 was also allowed on 18-10-1989 following the said judgment in Batch of writ petitions filed by the HT consumers.
7. In the meanwhile, the third respondent herein issued bill No.RRL 129, dated 27-11-1989 for the month of October charging the energy consumed by the petitioner at the tariff rates applicable to HT Category-III instead of HT Category-I in which category the petitioner was all along paying the energy charges since 12-3-1985, that is to say from the date of the agreement. It is the case of the petitioner that it had absolutely no notice of the said change and the receipt of the bill under HT Category-ill was a total surprise to it. On enquiry, the petitioner was informed of the issuance of BP Ms. No.298 dated 30-3-1988 amending theBPMs.No.671 dated 10-6-1987 wherein item No.9 in the list of HT Category-Hi power intensive tariff consumers was included. We have already noticed the amendment.
8. In the circumstances, the petitioner in the instant writ petition impugns the validity of the said BP Ms. No.298 dated 30th March, 1988 amending the BP Ms. No.671 dated 10-6-1987. The petitioner also challenges the validity of BP Ms. No.353 dated 15-4-1989 continuing the said re-categorisation on the ground that the re-categorisation is arbitrary, unreasonable and not based on any acceptable, valid and reasonable classification. According to the petitioner, both the proceedings are violative of the fundamental right guaranteed under Article 14 of the Constitution of India.
9. There is no dispute whatsoever that till the amendment was introduced by BPMs. No.298, dated 30th March, 1988, the petitioner's unit was included in HT Category-I. It is the case of the petitioner that the first respondent through BP Ms. No.671 dated 10-6-1987 could not have picked the units manufacturing certain commodities and included them in an arbitrary way in HT Category-Ill. There is no rational explanation or basis for introducing the said amendment. The differential treatment meted out to the petitioner's unit by effecting the said change all of a sudden is unjustifiable, according to the petitioner. It is stated that the petitioner's unit is receiving the energy at 132 KV voltage just like, any industrial consumer in HT Category-I receiving the energy at 132 KV voltage and the first respondent is supplying energy to HT Category-I industrial consumers, and therefore, there is no basis whatsoever for differential treatment for imposing higher tariff rates and higher minimum charges. It is the specific case of the petitioner that the nature and manner of supply and the purpose for which the supply is required has not changed in any way to warrant the lifting of the petitioner's Ferro Silicon unit from HT Category-I and inclusion in HT Category-Ill. There is absolutely no justification whatsoever in the differential treatment meted out to the petitioner's unit by arbitrarily picking the petitioner from the HT Category-I to HT Category-Ill, is the case of the petitioner. It is contended that equals cannot be treated as un-equals. This contention is based upon an allegation that the quantity of energy consumed by the petitioner is much less than the consumption of energy by several other industrial units falling under HT Category-I.
10. It is also the case of the petitioner that by including the petitioner's unit in the Category of hand picked units originally included in HT Category-III would amount to treating the un-equals as equals. It is stated that the units like the caustic sodaplant of the Andhra Sugars Ltd., the Ferro Silicon Plant of Nava Bharat Ferro Alloys Ltd., etc., originally included in HT Category-III were differentially treated for the past several years by fixing power intensive tariffs at incredibly low negotiated rates thereby giving them a preferential treatment. Rates were increased gradually in their case. There may be a historical basis for differentially treating the eight consumers originally included in HT Category-III in BP Ms. No.671 and the same may be the reason for that separate categorisation. But there is no such reason to include the petitioner's unit in HT Category-III and club it along with the other specified eight categories.
11. It is also the case of the petitioner that the product manufactured cannot be the basis or criteria for classification for imposing different tariffs. Such a classification has no reasonable nexus to the object of imposing tariffs. There can be large units and small units and even mini units manufacturing the same product. The Board may be entitled to impose different tariff rates on the basis of voltage of supply, quantity of energy supplied etc., as such criteria may have rational nexus. But the imposition of tariff based on the product manufactured by a unit has no rational basis, is the case of the petitioner. This is the sum mum of the petitioner's case.
12. Then, we may as well refer to the sum and substance of the first respondent's answer to the challenge of the petitioner : In the counter-affidavit, it is inter alia stated that the petitioner could not plead ignorance of the amendment as the same is published in A.P. State Gazette and the same itself is a notice to all the concerned. The petitioner, no doubt is being charged at the tariff applicable to HT Category-I Consumer because of its own choice to be billed as such.
13. The issue of the Bill No.RRL 1129 dated 27-11-1989 billing the petitionerunder HT Category-III is perfectly in accordance with rules and in tune with the amendment introduced vide BP Ms. No.298 dated 30th March, 1988. No individual notice as such to the petitioner is necessary, as the amendment had come into force after its publication in A.P. State Gazette.
14. It is submitted that BP Ms. No.298itself does not make any re-categorisation of HT categories, but makes only an addition to the already existing HT categories. By virtue of the amendment, the petitioner's Company automatically comes under the HT Category-III-
15. There is a rational basis for making such categorisation and classifying the petitioner Company into HT Category-III. Several factors have been taken into consideration by the first respondent-Board before making such categorisation. In reply to the averments made in para 13 of the affidavit filed by the petitioner in support of the writ petition, it is submitted in the counter-affidavit as follows:
'The revised tariff covered by BP Ms. No.689 dated 17-9-1975 was also examined by an expert committee headed by Sri K.C. Rao and the report dated 6-10-1975 reveals that the incidence of cost of power in relation to the cost of production is the main basis in identifying power Intensive Industries. Accordingly 8 categories of Industries were identified as such. It is also stated in paragraph-4 of the report that for the purpose of classifying industries under the new power intensive tariff all categories of industries where the cost of power to the cost of produce is 5% or more were to be brought under the head 'Power Intensive Industries'. Even the Director of Industries in his letter dated 14lh October, 1976 stated that during the discussions that preceded the issuance of BP Ms. No.689, it was agreed thatcategories of industries, viz., (i) Ferro Manganese, (ii) Ferro Chrome, (iii) Ferro Silicon, (iv) Sodium Metal, (v) Caustic Soda, (vi) Calcium Carbide, (vii) Silicon Carbide and (viii) Potassium Chlorate/ Sodium Chlorate, would be classified as Power Intensive Industries. The letter further shows that the tariff was arrived at after a thorough examination of the intensity of the power consumption and the cost of the power in relation to the cost of the end-product. The Principal criterion for identifying the 'Power Intensive Industries' is, thus, their intensity of power consumption and the cost of power in relation to the cost of the end product.....'
16. In the counter-affidavit, reliance is sought to be placed upon a Division Bench decision of this Court in Ferro Alloys Corporation Ltd. v. A.P.S.E. Board, : AIR1993AP183 . It is submitted that the classification is based upon a reasonable relationship to the object sought to be achieved by exercising the power vested under Section 49(3) of the Act. This is the sum and substance of the case of the respondent-Board.
17. This writ petition came up for hearing before A.S. Bhate, J. It was specifically contended before the learned Judge by the petitioner that there is no rationale in arbitrarily picking the petitioner's unit from IIT Category-I and to include it in Category-III by the amended item No.9 by BP Ms. No.298 dated 30th March, 1989. In support of the said submission, the learned Counsel for the petitioner appears to have placed reliance upon various decisions including the decision rendered by a Division Bench of this Court in Hindustan Zinc Limited and another v. Government of A.F. and another, WPNo.755 of 1983 dated 22-2-1989. The learned Counsel for the petitioner appears to have particularly placed reliance upon the following passage in the said judgment :
'Now it is admitted by the learned Standing Counsel for the Board that the Board had not issued any proceeding or Memorandum laying down the criteria applying which an industry will be recognised or classified as a Power Intensive industry.'
18. The learned Standing Counsel of the Board appears to have placed reliance upon another Division Bench judgment of this Court in Ferro Alloys Corporation Limited v. A.P.S.E.B. (supra). It was held by the Court:
'Where certain industries were classified as 'Power Intensive Industries' and the two basic factors that formed basis for the classification of 'Power Intensive Industries were (i) the intensity of the power industries consume, more or less a raw material, and (ii) the cost of power in relation to the post of the end-product roughly at 20% which was the differentia evolved as the rational basis behind the classification of 'Power Intensive Industries', as distinct from HT Category-I consumers such classification was not violative of Article 14 because it was not only founded on an intelligible differentia distinguishing the HT Category-I consumers, but the differentia had also its rational relation to the object sought to be achieved by Section 49(3) of the Act. This classification could not be said to be 'Mini-classification based on micro-distinction' to hold that it is a over-done classification. So also, the differentiation brought in was not such a mathematical or minute inequality so as to attract Article 14 of the Constitution to strike down the differentiation rendering the classification an invalid one. Moreover, HT consumers were categorised into industrial, non-Industrial and Power Intensive Industries. Therefore, it cannot be said that HT Category-I and Power Intensive Industrieswere grouped together and therefore, they cannot be brought under two different classes. Further Section 49(3) of the Act is the enabling provision for the Board to classify the consumers and fix differential tariffs. As long as the classification is not invalid and the fixation of tariff is not arbitrary, the classification and the fixation are immune from challenge. In such a case, merely because there was some delay in the addition of other industries to the said class, it cannot be said that there was no classification at all with reasonable rational and differentia or that it amounted to violation of Article 14 of the Constitution of India.'
19. The learned single Judge after referring to the judgments in Ferro Alloys and Hindustan Zinc (supra) observed :
'Thus there are two contradictory judgments. While in Hindustan Zinc Limited case it was specifically stated that the Board had conceded that there was no criteria for classifying the Industries under the Power Intensive Industry, Ferro Alloys' case it was assumed that there were guidelines evolved for classifying the Industries under Power Intensive Industry. It is arguable that if in Ferro Alloys' case it had been brought to the notice of the Bench that admittedly there were no guidelines for classifying, as has been recorded in the Hindustan Zinc Limited case, the decision perhaps could have been different. In any event there is manifest diversions between the two judgments referred above i.e., in Ferro Alloys' case and Hindustan Zinc Limited's case. Even now no specific criteria or guidelines, which are basis of classification of Industry under HT Category-III and HT Category-I, are made available. The only argument is that the power vests absolutely with the Board to classify the Industries and another argument is that even in HindustanZinc Limited's case it was submitted on behalf of the Board that the Board was clear as to the principle upon which Industry would be classified under one category or the other. Even though that argument was advanced, no intelligible criteria or guidelines were produced, to reach any objective decision on the point.
Whatever that may be there is obvious conflict between the two judgments i.e., Ferro Alloys' case and the Hindustan Zinc Limited's case and hence I think that this matter deserves to be decided by a Larger Bench for deciding the conflict that has arisen.'
20. In the circumstances, the learned Judge referred the matter to a Larger Bench for answering the question :
'Whether the categorisation of the Industries for differential tariff can be done without evolving any objective tests or rational basis for categorising the same under different heads?'
'That is how the matter comes before us for its consideration.
21. We have elaborately heard the learned senior Counsel appearing on behalf of the petitioner and the respondent-Board not only with regard to the question referred by the learned single Judge, but also on the merits of the case. We propose to dispose of the writ petition itself finally.
22. Sri Thyagarajan, learned senior Counsel appearing on behalf of the petitioner urged the following contentions:
(a) The agreement dated 12-3-1985 is the resultant of negotiations and as such the same is a special agreement entered into under Section 49(3) of the Electricity (Supply) Act, 1948 (for short 'the Act') and the agreement is valid and binding on therespondents for a period of five years commencing from 12-3-1985. A genera] reclassification purported to have been made in exercise of Section 49 of the Act cannot override the special agreement entered into under Section 49(3) of the Act.
(b) The categorisation of certain product manufacturers as power intensive category for the first time by BP Ms. No.298 dated 30th March, 1988 has no rational basis for the object of fixation of tariff and at any rate, there is no rational basis for keeping the differential tariff consumers for HT-I and HT-III consumers after 1987. The classification by which the petitioner's Ferro Silicon unit was lifted from HT Category-I and included in HT Category-III is arbitrary and without any rational basis and having no rational nexus. Nothing has been brought on record to sustain the act of picking and choosing certain commodity manufacturers under HT Category-III. Such categorisation on the basis of product manufactured by the manufacturers is discriminatory in its nature. There is no reason or rational basis in discriminating of charging higher tariffs from the Ferro Silicon manufacturers from other industrial consumers who are similarly situated and consuming power as from the Board's point of view the voltage at which the supply is made and the bulk supply remains the same. Both of them are industrial consumers. The action, therefore, on the part of the Board is discriminatory.
(c) The judgment of the Division Bench in Ferro Alloys (supra) had not decided the crucial issue with regard to the object and purpose of classification and the rationality of such classification. The Division Bench in Ferro Alloys (supra) wasvirtually misled into believing as if there was some rational classification based on definite criteria and separate category called power intensive category created in 1975 itself. The plea before the Division Bench in Ferro Alloys (supra) on behalf of the Board and the finding thereon is contrary to the categorical admissions made before the Division Bench in Hindustan Zinc (supra).
(d) If there was really a classification called power intensive category based on definite criteria as set out in Ferro Alloys (supra), there was no reason for refusing the petitioner's request in 1984 to be classified as power intensive unit and give the concessional rate to them along with other power intensive category consumers.
(e) The demand to collect the difference between HT Category-III and HT Category-I tariff in the energy consumed by the petitioner's unit from 15-7-1987 when BP Ms. No.735 was brought into effect to September, 1989 is untenable and unsustainable. The accounts of the petitioner for the previous year were already finalised and audited and the returns under Income Tax Act were already filed and paid the taxes. In the circumstances, the retrospective demand of tariffs is unreasonable and violative of the Fundamental Right guaranteed by the Article 19(1)(g) of the Constitution of India.
23. On the other hand, Sri Chella Seetharamaiah, learned senior Counsel appearing on behalf of the Board contends:
(i) There is no conflict whatsoever between the decisions rendered by this Court in Ferro Alloys (supra) and Hindustan Zinc (supra). The decisionof this Court in Ferro Alloys (supra) has been confirmed and upheld by the Supreme Court in Petitions for Special Leave to Appeal (Civil) Nos.4496 of 1993 and 6639 of 1993. This Court is, therefore, bound by the decision rendered in Ferro Alloys (supra). It is submitted that there is no finding as such by the Division Bench in Hindustan Zinc (supra) that there is no definite and discernible criteria for the categorisation applying which an industry is recognized and classified as a power intensive industry. All that the Division Bench observed is that the Board had not issued any proceeding or Memorandum laying down the criteria. The learned senior Counsel submits that there need not be any separate proceeding or Memorandum laying down the criteria as such, provided the classification is reasonable.
(ii) The agreement dated 12-3-1985 entered by the petitioner with the respondent-Board is not a special agreement. The very agreement recognises the Board's unilateral right to vary, from time to time, tariffs, scale of general and miscellaneous charges and the terms and conditions of supply by special or general proceedings.
(iii) The power conferred upon the Board to impose and collect the tariff and other charges is legislative in character. The power to levy and collect the tariff being legislative in character includes the power to impose the same with retrospective effect.
24. We have given our anxious consideration to the rival submissions made in a serene atmosphere and dignifiedway.
Equality Before Law : Its content and meaning
25. The primary question that arises for consideration is as to whether the classification of all the units manufacturing Ferro Silicon and their inclusion into HT Category-III is unreasonable and not based on any acceptable, valid and reasonable classification? Is it violative of the fundamental right guaranteed under Article 14 of the Constitution of India?
26. The Supreme Court as long back as in 1960 observed that the propositions applicable to cases arising under Article 14 'have been repeated so many times during the past few years that they now sound almost platitudinous'. What was considered to be platitudinous about 40 years ago has, in the natural course of events, become even more platitudinous today, especially in view of the multitudinous pronouncements on the subject. We are conscious that whatever we propose to say now would be at the cost of some repetition, which is unavoidable. It is not in the formulation of principles underlying the Article 14 but in their application to concrete cases that difficulties generally arise. There are numerous authoritative pronouncements, which deal with different facets of complex issues arising under Article 14 and which set out principles and formulations applicable to questions, which commonly arise under the said Article. No discussion under Article 14 of the Constitution of India is complete without reference to the principles enunciated in Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar, : [1959]1SCR279 and The State of West Bengal v. Anwar ALI Sarkar, : 1952CriLJ510 .
We are fully conscious of the observations of Mathew, J., in Stale of Gujarat v. Shri Ambica Mills Ltd., Ahmedabad, : [1974]3SCR760 , that 'it would be an idle parade of familiar learning to review the multitudinouscases in which the constitutional assurance of equality before the law has been applied.'
27. The concept underlying the equality clause enshrined in Article 14 is that a law must operate alike on all persons under like circumstances. The equality clause forbids class Legislation but does not forbid classification.
'The constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula. Therefore, classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. The Courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case. Classification is justified if it is not palpably arbitrary. The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the Legislation.' (See: In Re The Special Courts Bill, 1978, : [1979]2SCR476 ).
28. Article 14 of the Constitution ensures equality' among equals; its aim is to protect persons similarly placed against discriminatory treatment. It does not however operate against rational classification. A person setting up a grievance of denial of equal treatment by law must establish that between persons similarly circumstances, some were treated to their prejudice and the differential treatment had no reasonable relation to the object sought to be achieved by the law. (See: W.M.P.KP. and Supply Company Lid. v. Slate of U.P., : [1969]3SCR865 ).
29. We will look at the problem on hand in the light of the above discussion and particularly in the light of the observations of Mathew, J., that 'laws regulating economic activity would be viewed differently from laws which touch and concern freedom of speech and religion, voting, procreation, rights with respect to criminal procedure, etc. (See: State of Gujarat v. Shri Ambica Mills Ltd., (supra)).
30. We do not find any difficulty whatsoever to accept the proposition putforth by the learned senior Counsel appearing for the petitioner that any classification made must be founded on an intelligible differentia, which must have rational relation to the object sought to be achieved. The settled proposition of law is that the two conditions must be fulfilled for making classification, viz., (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) that the differentia must have a rational relation to the objects sought to be achieved by the Statute in question (See: Ram Krishna Dalmia v. Justice Tendolkar and others, (supra)). It is the contention of the petitioner that no criteria as such was ever enunciated by the Board for the purpose of classifying as power intensive industries (HT Category-III). There is no rational basis at all for such classification. This submission is amplified by contending that there is no record and material taken into consideration before making such classification.
31. This Court in Ferro Alloys (supra) having perused the material and record made available by the Board observed:
'The record disclosed that on 16-9-1975 the Chairman of the Board circulated a note to the members of the Board for approval of the revisions made in the tariffs, which are the resultant of severaldiscussions and meetings held on 12th, 15th and 16th of September. On 12tli, the meeting was convened in the room of the Minister for Power based on the covering note dated 10-8-1975 of the Chairman, in which the Power Minister, Secretary to the Chief Minister, Secretary to Government (Finance), Secretary to Government (Irrigation & Power), Financial Adviser and Chief Accounts Officer, Director of Industries, Technical Members, Member (Accounts), Secretary, APSEB, FA & CCA, Industrial Adviser, Divisional Engineer (Commercial) and others were present. The subsequent discussions took place on 15th in the room of the Secretary to the Chief Minister. From there, the meeting switched over to the room of the Minister for Industries where the Minister for Power was also present besides the Secretary (Industries) and Director of Industries. During that meeting it was suggested that 'separate tariffs for power intensive industries may be fixed with a view to keep the overall rate somewhat less than the rate proposed for all other classes of HT consumers.' An indication was also given that some concessions may have to be given to new industries in order to attract them to the State. Tariffs with regard to other lasses of consumers was also subject mailer of discussion. On those discussions a schedule of revised tariffs was worked out and that was put in the meeting dated 16th during which the Secretary to the Chief Minister, the Joint Secretary for Industries and the Industrial Adviser were present and they all expressed their consent for the schedule while the Finance Secretary conveyed his consensus over telephone. The revised schedule was also explained to the Chief Minister by his Secretary and the Chairman resulting in according of approval. Even after reception of consent from the concerned Members and the Chairmanof the Board, pursuant to the note circulated by the Chairman, the schedule of revised tariffs as culminated in BP Ms. No.689 dated 17-9-1975 was ratified by the Board in an Emergency Meeting held on 20-9-1975. The BP, was given its effect only from 20-10-1975. The draft note put up by one M. Venkateswarlu on 18-9-1975 reveals that the draft copy of the BP, received its approval by the members of the Board in circulation as appended to the note of the Chairman and that in compliance with Regulation 11 of the APSEB (Meetings) Regulations, 1959 the matter was placed for ratification before the Board and that was ratified in the Emergency Meeting referred to supra. In the face of this abundant material made available to the Court, it cannot be said that the procedure contemplated by Sections 13 and 14 of the Act was not followed before effecting classification of the Industrial Concerns as 'Power Intensive Industries' and fixing the tariff separate for them. (Emphasis of mine).
The revised tariff covered by BP Ms. No.689 dated 17-9-1975 was also examined by an expert committee headed by Sri K.C. Rao and the report dated 6-10-1975 reveals that the incidence of cost of power in relation to the cost of product is the main basis in identifying Power Intensive Industries. Accordingly '8' categories of Industries were identified as such. It is also stated in paragraph 4 of the report that for the purpose of classifying industries under the new power intensive tariff all categories of industries where the cost of power to the cost of product is 5% or more were to be brought under the head 'Power Intensive Industries'. Even the Director of Industries in his letter dated 14th October, 1976 stated that during the discussions that preceded the issuance of B.P. Ms. No.689, it was agreed that'8' categories of industries, viz., (i) Ferro Manganese, (ii) Ferro Chrome, (iii) Ferro Silicon, (iv) Sodium Metal, (v) Caustic Soda, (vi) Calcium Carbide, (vii) Silicon Carbide and (viii) Potassium Chlorate/ Sodium Chlorate, would be classified as 'Power Intensive Industries'. The letter further shows that the tariff was arrived at after a thorough examination of the intensity of the power consumption and the cost of the power in relation to the cost of the end-product. The principal criterion for identifying the 'Power Intensive Industries' is, thus, their intensity of power consumption and the cost of power in relation to the cost of the end-product. In other words, such of the industries that consume power, more or less, as raw-material and the cost of power in relation to the cost of the end-product is considerable, are brought under the classified head 'Power Intensive Industries'. In view of this criterion evolved and adopted during the course of meetings and deliberations that preceded the classification and fixation to the tariffs, it cannot now be heard to contend that the procedure contemplated by the provisions of the Act was not followed.'
32. It is clear that the principal criterion for identifying the power intensive industries is, thus, their intensity of power consumption and the cost of power in relation to the cost of the end-product. In other words, such of the industries that consume power, more or less, as raw-material and the cost of power in relation to the cost of the end-product is considerable, are brought under the classified head 'Power Intensive Industries'. This Court in Ferro Alloys (supra) held:
'The classification is based upon a reasonable relationship to the object sought to be achieved by exercising the power vested under Section 49(3) of the Act.'
In Hindustan Zinc (supra), the petitioner therein wanted a direction from the Court to treat it as a Power Intensive Unit from November, 1996 onwards and not to give effect to BP Ms. No.607 dated 21-7-1981. It was the case of the petitioner therein that it is entitled to be classified as power intensive unit for the reason that the electricity is the main raw-material required by it. The submission was that till July, 1987 the Board never did evolve any criteria or principle upon which a unit could be identified as a power intensive unit. It was urged that without laying down any such criteria, the Board was arbitrarily recognising one or the other unit as a power intensive unit/industry, while refusing to recognize others. This is nothing but arbitrary. There is no Board Proceeding or any other Memorandum laying down the criteria relevant in this behalf. It was argued that the Board has been recognising one or the other Unit as a power intensive unit in its subjective satisfaction without laying down any objective criteria. In the circumstances, it was prayed that the Board be directed to evolve an objective criteria with retrospective effect and to consider the case of the petitioner therein on the basis of such criteria.
33. In the course of discussions, the Division Bench observed:
'Now it is admitted by the learned standing Counsel for the Board that the Board had not issued any proceeding or Memorandum laying down the criteria applying which an industry will be recognised or classified as a Power Intensive Industry.
Apparently, there was no admission as such by the learned Standing Counsel to the effect that there was no principle or criteria upon which an Industry could be classified as a power intensive industry. It was specifically brought to the notice of the Court that the Board was clear as to theprinciple upon which an industry may he classified as such, viz., the cost of electricity should constitute at least 20% of the sale price of the product. The Court observed that 'this is not a question, which can be pronounced upon by this Court. On what principle or on what basis should an industry be categorised, as a Power Intensive Industry by the Electricity Board is not a matter, which this Court can decide. All that we can say is that, if one or more industries are recognised as such it should have been done on some definite, known objective criteria, and that if any other industry claims the same treatment, it should be included in that category provided it satisfies that criteria. Now, it is admitted by the Board that no such criteria was ever enunciated' (Emphasis is supplied). In the circumstances, this Court took the view that there has never been a full and fair consideration of the issue to treat the petitioner therein as a power intensive unit by the Board. In the circumstances, the Board was directed to first lay down the criteria according to which it has recognised eight industries as power intensive industries and then consider the petitioner's case on that basis.
34. It is thus clear that this Court in Hindustan Zinc (supra) never held that there is no valid classification. This Court never held that there was no discernible criteria at all for classifying certain industries as power intensive industries. This Court merely held that the Board had not issued any proceeding or memorandum laying down the criteria applying which an Industry can be recognized or classified as a power intensive industry. This Court observed that no criteria was ever enunciated. The observations have to be understood properly in the context in which such observations were made. The classification of some industries as power intensive units itself was never in question. On the other hand, the petitioner therein wanted to be classified asa power intensive unit for the reason that at the relevant time the tariff imposed on the power intensive unit was much less than that of HT Category-I consumers. Therefore, the decision in Hindustan Zinc (supra) is not an authority on the issue relating to the classification of industries as power intensive units. This Court in Hindustan Zinc (supra) directed the Board to first lay down the criteria according to which it has recognised eight industries as power intensive units and then consider the petitioner's case on that basis. All that the Court directed the Board was to lay down the criteria and enunciate the same according to which it has already recognised eight industries as power intensive industries. It was nobody's case that eight power industries were recognised by the Board without any rational basis. All that this Court held in Hindustan Zinc (supra) is that the Board should reveal the criteria and treat all the industries alike and apply the same uniformly to consider the claim of the interested industries to classify them as power intensive units.
35. In the circumstances, in our considered opinion, there is no conflict of opinion as such between the decisions rendered by this Court in Ferro Alloys (supra) and Hindustan Zinc (supra). The reference if' any by the learned single Judge could have been as to 'whether the categorisation of the Industries for differential tariff can be done without the Board issuing any proceeding or memorandum laying down the criteria applying which an industry will be recognised or classified as a power intensive industry.' There is no admission by the Board in Hindustan Zinc's case (supra), that there was no objective test or rational basis for categorising the industries for differential tariff under different heads. The admission by the learned Standing Counsel as observed by the Division Bench was that there was no proceeding or memorandum issued by the Board layingdown the criteria applying which an industry will be recognised or classified as a power intensive industry. Practically, an insignificant direction was issued in Hindustan Zinc's case (supra) directing the Board to make available the criteria upon which eight of the industries were already classified as power intensive units and to consider the case of the petitioner therein in accordance with law. In fact, it may be noticed that the HT Category-III is added for the first time in B.P. Ms. No.671 (Commercial) dated 10-6-1987. Therefore, the addition of HT Category-III by B.P. Ms. No.671 dated 10-6-1987 was never the subject matter of any debate in Hindustan Zinc's case (supra) as the writ petition was filed in the year 1983 much before the B.P. Ms. No.671 came into existence.
36. On the other hand, the question relating to classification had squarely fallen for consideration in Ferro Alloys, (supra). This Court in Ferro Alloys's case held that the classification of power intensive industries, is not only founded on an intelligible differentia distinguishing the HT category-I consumers, but the differentia has also rational relation to the object sought to be achieved by Section 49(3) of the Act. This decision met the approval of the Apex Court in Petitions for Special Leave to Appeal (Civil) Nos.4496 of 1993 and 6639 of 1993.
37. Now, we will turn to the crucial question relating to the object and purpose of classification. Is there any rational basis for such classification? It is well settled that the classification should have rational nexus with the object sought to be achieved and it must be founded on an intelligible differentia. In State of J&K; v. T.N. Khosa, : (1974)ILLJ121SC , the Supreme Court held:
'The relevant material is always admissible to show the reasons and the justification for the classification. Suchreasons need not appear on the face of the rule or law which effects the classification.
Classification must be truly founded on substantial differences which distinguish persons grouped together from those left out of the group and such differential attributes must bear a just and rational relation to the object sought to be achieved.
Judicial scrutiny can thereforeextend only to the consideration whether the classification rests on a reasonable basis and whether it bears nexus with the object in view. It cannot extend to embarking upon a nice or mathematical evaluation of the basis of classification, for were such an inquiry permissible it would be open to the Courts to substitute their own judgment for that of the legislature or the rule-making authority on the need to classify or the desirability of achieving a particular object.'
38. As observed in T.N. Khosa's case (supra) itself, the classification need not be apparent and the relevant material can be scrutinised by the Court to find out whether the classification rests on a reasonable basis and bears nexus to the object in view. This Court in Ferro Alloys's case (supra) took into consideration all the material produced by the Board and held that the material discloses two basic factors that formed the basis for classification of power intensive industries, viz., (i) the intensity of the power industries consume, more or less a raw-material, and (ii) the cost of power in relation to the cost of the end-product roughly at 20%. This is the differentia evolved as rational basis behind the classification of 'Power Intensive Industries' as distinct from HT Category-I consumers. This Court held that 'this classification cannot be said to be 'Mini-classification based on micro-distinction' to hold that it is a over-done classification.' Itis further held by this Court that the classification of power intensive industries is not only founded on an intelligible differentia distinguishing the HT Category-I consumers, but the differentia has also its rational relation to the object sought to be achieved by Section 49(3) of the Act.
39. In A.C. Mills v. A.P.S.K Board, : [1977]1SCR133 , the Supreme Court observed:
'Section 49(3) of the 1948 Act states that in fixing the tariffs and terms and conditions for the supply of electricity the Board shall not show undue preference to any person. This section embodies the same principle which is enunciated in Article 14 of our Constitution. The Board is a State for the purpose of Part III of our Constitution. In the present case, we, are, however, not concerned with the application of Article 14. AM that requires to be appreciated is that the provisions of Article 14 of our Constitution and Section 49(3) of the 1948 Act are similar in principle. It is the principle of equality or non-discrimination. Section 49(4) of the 1948 Act does not mean a mechanical equal treatment. It is fair settled that equality before the law does not mean that things which are different shall be treated ax though they were the same. The obligation not to discriminate involves both the right and the obligation to make reasonable classification on the basis of relevant factors. To illustrate, cutting down 50 per cent of the needs of a hospital and the needs of industries producing consumer goods cannot be treated on the same footing. It would be justifiable to treat them with reference to their urgency, their social utility and also the impact on the conservation and economies in the available supply of electric power. The guidance is clearly furnished by the principles embodied in Section 49(4) ofthe 1948 Act similar to Article 14 of our Constitution.'
The decisions of the Supreme Court in T.N. Khosa and A.C. Mills (supra) were not brought to the notice of this Court in Hindustan Zinc (supra). In A.C. Mills (supra), it is held by the Supreme Court that the language of Section 49 of the 1948 Act makes it clear that the power can be exercised without making any regulation. In T.N. Khosa's case (supra), it is held that the relevant material is always admissible to show the reasons and the justification for the classification. Such reasons need not appear on the face of the rule or law, which effects the classification. Therefore, mere fact that the Board had not issued any proceeding or memorandum laying down the criteria applying which an industry will be recognised or classified as a power intensive industry is of no consequence. The classification itself cannot be held to be without any basis as contended by the learned Counsel for the petitioner.
40. What applies to B.P. Ms. No.671 is equally applicable to B.P. Ms. No.298 by which item No.9 in the list of HT Category-III power intensive tariff consumers is added. The reasons for which B.P. Ms. No.697 dated 10-6-1987 is upheld by this Court would equally applicable for upholding the B.P. Ms. No.298 dated 30th March, 1988. By B.P. Ms. No.298 some other consumers manufacturing caustic soda, Ferro silicon etc., are added to the list of HT Category-III power intensive consumers. Therefore, we hold that the B.P. Ms. No.298 dated 30th March, 1988 does not suffer from any constitutional infirmity. Likewise, continuing the recategorisation of the petitioner's unit in HT Category-III vide B.P. Ms. No.353 also does not suffer from any unconstitutionality.
41. The issue relating to classification, in our considered opinion, is conclusively settled by the decision of this Court in FerroAlloys (supra), which had received the approval of the Supreme Court.
42. This Court in Ferro Alloys (supra) relied upon Hindustan Zinc Ltd. v. A.P.S.E.B., : [1991]2SCR643 , in which it is observed by the Supreme Court that 'the HT consumers, including the power intensive consumers, are known power guzzlers and in power intensive industries, electricity is really a raw material. This category of consumers, therefore, forms a distinct class separate from other consumers..... There is also a rational nexus of this classification with the object sought to be achieved..... since the consumption in the power intensive industries accounts for a large quantity.' Thus the power intensive industries were held to be distinct class separate from other consumers. It is a class by itself. This decision should really put an end to the controversy relating to the classification of power intensive industries as a separate class.
43. It is well settled that even if certain aspects of a question were not brought to the notice of the Court it would decline to enter upon re-examination of the question, more particularly so if the decision had received the approval of the Apex Court. 'Every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent. The submissions sparkling with creative ingenuity and presented with high-pressure advocacy, cannot persuade us to reopen what was laid down for the guidance of the nation in a binding precedent.' (See: T. Govindaraja Mudaliar v. State of Tamil Nadu, : [1973]3SCR222 ; Ambika Prasad Mishra v. State of U.P., (1980) 3 SCC 719.).
44. However, for the sake of completeness, we propose to deal with the challenge based on Article 14 from a different angle. The challenge is mounted on the ground that the impugned proceedingssuffer from arbitrariness. It is urged that the quantity of energy consumed by the petitioner's unit is much less than that consumed by several other industrial units falling under HT Category-I, like, M/s. Hindustan Zinc Limited and others receiving the energy at 132 KV voltage and yet, they continued to be included in HT Category-I while the petitioner's unit is arbitrarily picked out from HT Category-I and included in HT Category-III. In nutshell, it is the submission that the equals cannot be treated unequally. We do not find any substance in this submission. The decision taken by the Board for the achievement of a specific object or purpose need not be all embracing. Mere fact that certain categories of consumers which would stand on the same footing as those which are covered by the impugned proceedings are left out would not vitiate the very classification. It is well settled that the equals should not be treated unlike and unless should not be treated alike. Likes should be treated alike. But it is equally well settled that in giving effect to the said principle, a mathematical precision is not envisaged and there should be no doctrinaire and unrealistic approach to the matter. It is always open to the State and its instrumentalities to classify the persons, things or objects, for legitimate purpose. The Supreme Court in Sakhawat Ali v. State of Orissa, : [1955]1SCR1004 , observed:
'..... Legislation enacted for theachievement of a particular object or purpose need not be all embracing. It is for the Legislature to determine what categories it would embrace within the scope of Legislation and merely because certain categories which would stand on the same footing as those which are covered by the Legislation are left out would not render Legislation which has been enacted in any manner discriminatory and violative of the fundamental right guaranteed by Article 14 of the Constitution.'
45. Following the ratio of the said decision, we accordingly reject the submission.
46. Legislation or an instrument which is legislative in character cannot be struck down by this Court by merely characterising the same as arbitrary unless some or other constitutional infirmity is established. Having upheld the classification and having found that the impugned Board proceedings arc not vioiative of the equality clause/equal protection clause enshrined in Article 14, it would not be possible for this Court to strike down the same on the ground of arbitrariness. A legislative instrument which satisfies the test of classification cannot be held to be an arbitrary one.
The tariff fixation by the Board is legislative in character :
47. It is well settled that the price fixation is more in the nature of a legislative measure even if it is based upon objective criteria found in a report or other material. It is true; the criteria adopted must be reasonable. Its validity does not depend on the observance of any procedure to be complied with or particular types of evidence to be taken on any specified matters as conditions precedent to its validity. It is equally well settled that the principles of natural justice are not attracted in case of price fixation. The mechanics of price fixation/tariff fixation has necessarily to be left to the judgment of the authority concerned and unless it is patent that there is hostile discrimination against a class of consumers, the processual basis of price fixation has to be accepted in the generality of cases as valid. The Board is entitled to make pragmatic adjustments, which may be required in the particular circumstances. The tariff fixation can be declared unconstitutional only if it is patently arbitrary, irrational, discriminatory or demonstrably irrelevant. The Court in exercise of itsjudicial review jurisdiction ought not to normally interfere so long as the exercise of the power to fix the tariff is within a 'zone of reasonableness'. The Supreme Court repeatedly held that the price fixation is not within the province of the Courts. Judicial function in respect of such matters is exhausted when there is found to be a rational basis for the conclusions reached by the concerned authority. (For proposition, see: Saraswati Industrial Syndicate Ltd v. Union of India, (1974) 2 SCC 630, Prog Ice and Oil Mills v. Union of India, : 1978CriLJ1281a , Union of India v. Cynamide India Ltd., (1987) 2 SCC 720, Shri Sitaram Sugar Company Limited v. Union of India, : [1990]1SCR909 and Kerala State Electricity Board v. S.N. Govinda Prabhu and Bros., : [1986]3SCR628 .
48. Therefore, the failure on the part of the Board in issuing any notice to the petitioner itself does not invalidate the action of the respondents since there is no requirement in law to observe the principles of natural justice.
49. The Supreme Court in Bihar State Electricity Board v. Usha Martin Industries, : AIR1997SC2489 , while considering the power of the Board in fixing the price in exercise of the power conferred under Section 49 of the Act observed that 'in fixing the price, the Board has to take into consideration various factors laid down in Section 49 of the Electricity (Supply) Act, 1948. The Board is also under a statutory mandate to charge price from its customers in such a way that the total revenue received by it in a year is more than its expenditure..... Pricing is a matter ofpolicy. It is for the Board and the State to decide the rate at which electricity will be supplied.'
50. As observed by the Supreme Court it is for the Board to lay down what should be the proper tariff at which theelectricity may have to be supplied to its consumers in exercise of the power under Section 49 of the Act. What is best for the industry and to itself and in what manner the policy should be formulated and implemented, bearing in mind the fundamental object of the Electricity (Supply) Act, 1948, viz., rationalisation of the production and supply of electricity and measures conducive to the electrical development is a matter for decision exclusively within the province of the Board. Such matters do not ordinarily attract the power of judicial review except when it is patent that there is hostile discrimination against a class of consumers. It is not permissible for the Courts to interfere with such tariff fixation when there is found to be a rational basis for the conclusions reached by the Board. Justice Cardozo in Mississippi Valley Barge Line Company v. United States of America, 292 US 282, 286-87 : 78 Led 1260, 1265 observed:
'The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which the Commission by training and experience is qualified to form ..... The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body.'
51. This Court has no expertise to go into the intricate and complicated mechanism of tariff fixation. It would not be possible for this Court to reweigh the relevant factors and substitute its notion of expediency and fairness for that of the statutory authority. The contention of the petitioner in this regard is accordingly rejected.
Nature of agreement:
Is it a special agreement?
52. Whether the agreement entered into by the petitioner with the Board is a specialagreement under Section 49(3) of the Act? Whether the agreement is binding on the respondent-Board for a period of five years commencing from 12-3-1985?
53. It is contended on behalf of the petitioner Company that the agreement dated 12-3-1985 entered into by the petitioner with the respondent-Board is valid one and binding on the respondent-Board for a period of five years commencing from 12-3-1985. The general re-classification made by the Board in exercise of the power under Section 49 of the Act and classifying the petitioner Company as power intensive one cannot override the special agreement entered under Section 49(3) of the Act. The learned senior Counsel placed reliance upon the decision of the Supreme Court in Indian Aluminium Company v. Kerala Slate Electricity Board, : [1976]1SCR70 , wherein it was observed:
'It would, therefore, seem clear that the Board can, in exercise of the power conferred under sub-section (3) of Section 49, enter into an agreement with a consumer stipulating for a special tariff for supply of electricity for a specific period of time. Such a stipulation would amount to fixing of special tariff and if would clearly be in exercise of the power to fix special tariff granted under sub-section (3) of Section 49..... The power to enter intoan agreement giving a special tariff for supply of electricity for a specified period of time is, therefore, relatable to subsection (3) of Section 49 and such an agreement entered into by the Board would be in exercise of the power under that sub-section.....
To hold that the Board could unilaterallyrevise the charges notwithstanding these stipulations would mean that the stipulations had no binding effect, or in other words, the Board had no power to enter into such stipulations. That wouldnegate the existence of statutory power in the Board under sub-section (3) of Section 49 to fix the charges for a specific period of time, which would be contrary to the plain meaning and intendment of the section.
The Supreme Court in the said decision held that 'since the special stipulations in the agreement were made in exertion of the statutory power under Section 49(3), they could not, during the subsistence of the agreement, be varied unilaterally by exertion of another statutory power under the same statute.' On facts, it was found that it was a special agreement entered into by the petitioner therein with the Electricity Board.
54. Before we proceed further, it may be necessary to briefly notice the features of the agreement entered by the petitioner herein with the State Electricity Board. It is the petitioner who undertook to avail the supply for a period of five years from the date of agreement coming into force. Liberty is given to the petitioners to determine the contract by giving in writing one year's notice expressing such intention at any time after the period of four years. The petitioners have agreed in categorical terms for termination of the agreement by the Board at any time giving one week's notice if the petitioner violates the terms of this agreement or the terms and conditions of supply notified by the Board from time to time or the provisions of any law touching this agreement including the Electricity (Supply) Act, 1948 and the Indian Electricity Act, 1910 and the Rules thereunder. The petitioners have also agreed and conceded that the Board shall have unilateral right to vary, from time to time, tariffs, scale of general and miscellaneous charges and the terms and conditions of supply under this agreement by special or general proceedings. This is an important aspect of the matter. Can it still be said that it is a specialagreement entered into by and between the petitioner and the Board under Section 49(3) of the Act? In our considered opinion, this agreement cannot be held to be a special agreement traceable to Section 49(3) of the Act.
55. The Supreme Court in Fertilisers and Chemicals Travancore Ltd. v. K.S.E.B., : [1988]3SCR925 , explained and distinguished the judgment of the Supreme Court in Indian Aluminium Company's case (supra) and observed:
'If an agreement, entered into by the Board does not contain any stipulation as to the specific period for which a particular rate should apply or, after so providing, also contains a specific stipulation that the rates agreed upon under it could unilaterally, be altered at the instance of the Board, then it becomes merely academic whether such an agreement does not qualify itself to be considered as one entered into by the Board in exercise of its statutory power under Section 49(3) or even if so qualified, yet, it does not have the effect of excluding the exertion of the other statutory powers under Section 49(1). The real question is whether a unilateral increase could be effected or not.
It is further observed:
'A contract which does not have, and provide for, an obligation to supply electricity at a specific rate for a specific period and does not, therefore, have the effect of excluding Section 49(1) cannot be said to fall under Section 49(3). If by an unilateral, volitional act on the part of the Board the assurance of a fixed rate to the consumer could be denuded, that circumstance, in itself, would be such as to detract from the agreement being considered as one entered into in exercise of power under Section 49(3).'
56. It would be relevant to notice the decision of the Supreme Court in Bisra Lime Stone Company v. Orissa State Electricity Board, : [1976]2SCR307 . The said decision directly answers the question that falls for consideration. The Supreme .Court after referring to M/s. Titagarh Paper Mills Ltd. v. Orissa Slate Electricity Hoard, : (1975)2SCC436 and the Indian Aluminium Company v. Kerala Slate Electricity Board, (supra) held:
'An agreement entered in exercise of the power conferred by the' statute, such as under Section 49(3) of the Act, cannot be set at naught by unilateral exercise of power by the Board under the Act to enhance the rates agreed upon between the parties in the absence of any provision in that behalf in the agreement itself.' In the Indian Aluminium Company's case (supra), there was no provision in the agreement with regard to the revision of tariff such as we find in Clause 13 of the present agreement. This Court, therefore, had not to consider in that case about the effect of a clause like Clause 13.'
It is further observed:
'Sub-Sections (1) and (2) of Section 49 empower the Board to fix uniform rates of tariff. Sub-section (3) of Section 49 on the other hand reserves to the Board the power of filing different tariffs having regard to certain factors mentioned therein. Section 49(3) contemplates what arc known as 'special agreements'. Power under Section 49(1) and (2) cannot be invoked during the subsistence of special agreements providing for stipulation of rates of tariff in absence of any reservation therein'
57. It is thus clear that even in case of statutory special agreement entered inconformity with Section 49(3) of the Act, the Board is unilaterally entitled to enhancethe rates of tariff, provided there is a stipulation and reservation in favour of the Board enabling the Board unilaterally to revise the tariffs.
58. We have already noticed the terms and conditions of the agreement. The agreement itself is precarious in its nature. It is susceptible to termination on the volition of the Board on finding that there is a violation of the terms of the agreement and terms and conditions of the supply notified by the Board from time to time or by any provision of law touching the agreement including the Electricity (Supply) Act, 1948 and the Rules framed thereunder. It specifically enables the Board to vary terms and conditions of supply by special or general proceedings. Therefore, there is no specific period fixed with an assurance as such by the Board to the petitioner herein to supply the power at the agreed rate in exercise of power under Section 49(3) of the Act. Therefore, we do not have any hesitation whatsoever to reject the plea taken by the petitioner that the agreement dated 12-3-1985 entered by the petitioner with the Board is a special agreement and binding on the respondents for a period of five years commencing from 12-3-1985. Therefore, on that ground, it is not possible to exempt the petitioner from the operation of BP Ms. No.298 dated 30th March, 1988 adding item No.9 in the list of HT Category-III power intensive tariff consumers. The amendment to BP Ms. No.671 (Commercial) dated 10-6-1987 bringing the petitioner's unit under HT Category-III does not suffer from any legal infirmity or constitutional vice. We have already noticed that this Court upheld the legality and constitutional validity of BP Ms. No.671 (Commercial) dated 10-6-1987 in Ferro Alloys (supra).
Whether BP Ms. No.298 is retrospective in nature?
59. Whether the respondents can give effect to B.P. Ms. No.298 dated30th March, 1988 from any date anterior to 30th March, 1988? It is alleged that the respondents are demanding and threatening to collect the difference tariff between HT Category-III and HT Category-I for the energy consumed by the petitioner's Ferro Silicon Unit from 15-7-1987 when BP Ms. No.671 (Commercial) dated 10-6-1987 as amended by BP Ms. No.735 (Commercial) dated 14-7-1987 was brought into effect from 15-7-1987. It is true; the petitioner's unit is brought under HT Category-III by virtue of B.P. Ms. No.298 dated 30th March, 1988. The respondent-Board by B.P. Ms. No.298 dated 30th March, 1988 amended the B.P. Ms. No.671 (Commercial) dated 10-6-1987 as under:
ADD: the following as item No.9 in the list of HT Category-III Power Intensive Tariff Consumers :
(9) Other consumers manufacturing Caustic Soda, Ferro Silicon, Sodium Metal, Ferro Chrome, Ferro Manganese, Charge Chrome, Silicon Carbide, Calcium Carbide, Sodium Chlorate, Potassium Chlorate.
There were already eight consumers under HT Category-III Power Intensive Tariff consumers. The Supreme Court in Hyderabad Vanaspathi Ltd. v. A.P. State Electricity Board, : [1998]2SCR620 , held:
'Section 49 of the Supply Act empowers the Board to prescribe such terms and conditions as it thinks fit for supplying electricity to any person other than a licensee. The section empowers the Board also to frame uniform tariffs for such supply. The terms and conditions of supply were notified in B.P. Ms. No.690 dated 17-9-1975 in exercise of the powers conferred by Section 49 of the Supply Act. They came into force from 20-10-1975. They were made applicable to all consumers availing supply of electricity from the Board.'
It is further observed by the Supreme Court:
'Section 49 of the Act does not require the Board to enter into a contract with individual consumer. Even in the absence of an individual contract, the Terms and Conditions of Supply notified by the Board will be applicable to the consumer and he will be bound by them..... The Board in performanceof a statutory duty supplied energy on certain specific terms and conditions framed in exercise of a statutory power. Undoubtedly the terms and conditions are statutory in character and they cannot be said to be purely contractual.'
It is thus clear that the terms and conditions framed by the Board in exercise of statutory power even if incorporated in the agreement entered into with each consumer cannot be said to be purely contractual. The terms and conditions are statutory in character. Even applying the principles of statutory interpretation, can it be said that BP Ms. No.298 which brings the petitioner's unit under HT Category-III Power Intensive Tariff consumers is retrospective in operation?
60. A plain reading of BP Ms. No.298 dated 30th March, 1988 does not suggest that it is retrospective in operation. It does not declare that the petitioner's Ferro Silicon unit along with others mentioned therein are brought under HT Category-III Power Intensive Tariff Consumers with effect from 15-7-1987 when BP Ms. No.671 came into effect. It is true that there need not be any express provision be made to make a statute or statutory instrument retrospective and the presumption against retrospectivity may be rebutted by necessary implication. Thus to apply BP Ms. No.298 which creates a new obligation to pay additional amounts for the power already consumed, will be to construct retrospectively, which cannot be done unless such construction followsexpress words or implication. There is not even an explanation forth coming in the counter affidavit as to why BP Ms. No.298 dated 30tli March 1988 should be given retrospective effect nor the language employed in BP Ms. No.298 makes the proceeding retrospective. Statutes imposing fiscal liability arc generally governed by the normal presumption that they are not retrospective in operation. It is a cardinal principle of the fiscal law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. (See: Reliance Jute and Industries Ltd. v. Commissioner of Income-tax, : [1979]120ITR921(SC) ).
61. It is well settled that a new obligation cannot be created with retrospective effect unless the language and the object discernible from the statutory instrument is manifestly clear.
62. Sri Chella Seetharamaiah, learned senior Counsel, however, relied upon a decision of the Supreme Court in Entertainment Tax Officer v. Ambae Picture Palace, : (1994)1SCC209 . The Supreme Court observed that 'if the Parliament or the State Legislatures have competence to legislate, they can do so prospectively as well as retrospectively and taxation laws are no exception to this power.' It is also observed that 'the legislative power conferred on the appropriate Legislatures to enact laws in respect of topics covered by the several entries in the three lists can be exercised both prospectively and retrospectively.'
63. We cannot equate the power of the Board to fix tariff though Legislative in character to that of legislative power conferred on sovereign law making Bodies to legislate with respect to any of the matters enumerated in the lists of the Seventh Schedule of the Constitution.
64. At any rate, as has beenrepeatedly held by the Supreme Court aprice fixation measure does not concern itself with the interests of an individual manufacturer or producer. It is generally in relation to a particular commodity or class of commodities or transactions. It is a direction of a general character, not directed against a particular situation.It is intended to operate in the future.
65. In the instant case strictly speaking we are not concerned with the question as to whether the Board can impose tariff with retrospective effect. We need not express any opinion on that question.
66. We confine our opinion and decide as to whether the B.P. Ms. No.298 dated 30th March, 1988 is retrospective in nature. We have already expressed our opinion that it is not retrospective in nature. Therefore, the respondent-Board is not entitled to collect any tariff from the petitioner herein from the date anterior to B.P. Ms. No.298 dated 30th March, 1988.
67. The impugned letter dated 8-11-1989 addressed to the petitioner stating that the petitioner's unit comes under HT Category-Mi power intensive industry with effect from 15-7-1987 is absolutely unsustainable. BP Ms. No.671 bringing certain consumers (not the petitioner herein) under HT Category-III power intensive tariff consumers came into force, with effect from 15-7-1987. It is only by BP Ms. No.298 dated 30th March, 1988 notifying the amendment to B.P. Ms. No.671 dated IO-6-1987, the petitioner herein and other consumers manufacturing Ferro Silicon are added in the list of HT Category-III power intensive tariff consumers. Therefore, it cannot be said that the petitioner is brought under HT Category-III power intensive tariff consumers with effect from 15-7-1987 itself. In the circumstances, the respondents cannot be permitted to revise the bills issued to the petitioner under HT Category-I from 15-7-1987 for charging the petitioner underHT Category-III power intensive tariff consumers. The decision of the respondents to this extent is void and inoperative. However, the respondents are entitled to revise the bills under HT Category-I and bill under HT Category-III with effect from 30th March, 1988 when B.P. Ms. No.298 came into effect bringing the petitioner herein under HT Category-III power intensive consumers.
68. The petitioner is accordingly entitled for this limited relief declaring that the respondents are not entitled to revise the bills issued to the petitioner under HT Category-I from 15-7-1987, but entitled to revise the bills only with effect from 30-3-1988.
69. The writ petition is partly allowed. No order as to costs.