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Category Tariff under notification dt. 28-1-1986 Tariff under notification dt. 21-4-1990 LMV-6 small and medium power

1. for load up to 25BHP

1. for load up to 25BHP a. fixed charge Rs. 15/- per BHP a. fixed charge Rs. 20/- per BHP b. energy charge 65 per paise unit AC b. energy charge 90 per paise unit AC per paise unit DC

2. above 25BHP up to 100BHP 90 palse per unit DC

6. It may be mentioned that the tariffs imposed under the notification dated the 28th of January, 1986, which came into effect from 1st of February, 1986, were challenged in a group of writ petitions, which came up for consideration before the Lucknow Bench of this Court, the leading case being the case of M/s. Modi Steels (unit of Modi Industries) Ltd. v. U. P. State Electricity Board and other, being Civil Miscellaneous Writ Petition No. 7058 of 1986, decided on the 27th of October, 1989. In the said petitions a comprehensive challenge was offered to the framing of new tariffs by the Board. The challenge included a challenge under Articles 19 and 14 of the Constitution of India and various arguments, relating to Sections 49 and 59 of the Act, as also challenge to the levy of demand charge or fixed charge, fuel surcharge etc. were considered and negatived by the Bench and all the writ petitions were dismissed with costs.

32. Among what Mr. Gupta described as his subsidiary arguments, Mr. Gupta took up the arguments assailing the fuel surcharge as also the fixed charge (also know as demand charge.) Mr. Gupta argued that the increase of rupee one per metric ton in the price of coal results in the corresponding increase in tariff at the rate of 0. 1354P. per unit. Mr. Gupta argued that the aforesaid figure of 0.1354 P has not been validly arrived at because the same is sought to be recovered from 44 per cent, of the consumers and the selection of 44 per cent, of the consumers from whom to recover fuel surcharge is arbitrary and liable to be struck down. Mr. Gupta further pointed out that thermal adjustment is 74.7 per cent, of the total electricity generated and sold. Mr. Gupta pointed out that the supply is grid supply with the result that it is now known as to what power was supplied from which source and yet, Mr. Gupta argued, instead of recovering costs qua 74.7 per cent, of the consumers what is recovered is extra costs qua of 100 per cent, of them. These arguments with regard to levy of fuel surcharge being alleged to be arbitrary have been specifically dealt with and negatived by the Lucknow Bench of this Court in its earlier referred judgment in the matter of M/s. Modi Steels. Paragraph 115 of the judgment in the aforesaid case is, for the convenient reference, quoted below:

40. With regard to the fixed charge (also known as demand charge) Mr. Gupta argued that the tariff determined under S. 49 includes depreciation in the capital assets and, therefore, a fixed charge or a demand charge realised only from the consumers of the industrialists categories LMV-6, HV-1 and HV-2 is illegal. Mr. Gupta stated that the "pleading" in respect of this argument is to be found in the supplemental affidavit. This is not satisfactory. But apart from this, in para 114 of its judgment in M/s Modi Steels v. U.P. State Electricity Board, the Lucknow Bench of this Court has not accepted the challenge to the demand charge or the fixed charge and the minimum consumption guarantee charges pointing out that the fixed charge or the demand charge ensures return of investment and the assets of the Board like machinery, plants, etc. While minimum guarantee charge ensures all returning cost of supplying electrical energy. We have not delved into greater details with regard to the arguments relating to expenses properly chargeable to revenue, fuel surcharge and fixed charge as we are satisfied that it is not within our province to examine the price structure in minute detail if we are satisfied that the revision of tariff is not arbitrary and is not the result of the application of any wrong principle. We have already held earlier that on the whole it cannot be said that the rates have been so fixed by the Board so as to throw an unreasonably heavy burden on any section of the consumers without regard to their ability to pay, without regard to the nature of supply and the purpose for which the supply is required nor have we found that the principle of uniformity in tariffs has, in any way, been sacrifised. Indeed, we have found that in fixing the tariff the Board has borne in mind the object of the Act and the duty with which the Board stands charged and the factors which has been indicated under the Act for fixing tariffs. We find no substance in the challenge offered to the fixation of tariff, the subject-matter of these petitions.