Summary
The Supreme Court upheld Kerala’s higher electricity tariff for self-financing educational institutions compared with government-run and aided institutions. The statutory purpose of supply could account for the character, beneficiaries and public funding of the institutions, rather than merely their shared activity of imparting education. Inclusion under a commercial tariff heading did not require proof that education itself was a commercial business. The Division Bench judgment invalidating the distinction was reversed.
Issues
- Whether differential tariffs for self-financing and government-run or aided educational institutions were permissible under Section 62(3).
- Whether the unopposed tariff notification failed for want of contemporaneous reasons.
Provisions considered
- Section 62(3), Electricity Act, 2003Permitted distinction based on the purpose of supply, understood with reference to institutional character and beneficiaries, without undue preference. (¶¶ 3, 7, 16, 18, 19, 20)
Held
- The purpose of supply is not determined solely by the nature of the educational activity. The identity and character of the provider, the beneficiaries and taxpayer funding were relevant; the State’s provision of education discharged a welfare function. The differentiation did not confer undue preference. (¶¶ 18, 19, 20)
- A commercial tariff heading is a matter of classification convenience and does not limit that category to entities whose activities independently constitute commercial business. Diverse entities may be grouped at a common rate. Profiteering was not the sole basis of the distinction. (¶¶ 14, 17, 18, 20)
- The tariff proposal was adequately publicised and drew no objections from these institutions. Absent a contrary statutory requirement, lack of reasons accompanying finalisation did not invalidate that unopposed exercise; the Commission remained obliged to defend its decision if challenged. Failure to object did not itself forfeit the right to challenge. (¶¶ 9, 10, 11)
- Given that both courts below had examined the merits, remitting the parties to a statutory appeal solely on the alternative-remedy objection would waste judicial time. The Court did not test the notification under Article 14, that challenge not having been pressed before the Division Bench. (¶¶ 5, 15)
Result
Appeals allowed; Division Bench judgment set aside and Single Judge’s judgment sustaining the tariff restored. Connected applications disposed of, interim orders dissolved and no order as to costs.