1996 CLC 1090

Per Ch. Mushtaq Ahmad Khan, J.

(a) Constitution of Pakistan, 1973, Article 199
r/w West Pakistan Water and Power Development Authority Act (XXXI of 1958)

From the perusal of the various statutory provisions on the subject and the relevant case-law cited at the bar, the following legal principles appear to have been authoritatively settled:–

(i) That a licensee has the power to change the tariff of electricity subject to the condition of his licence and with approval of the relevant Government.
(ii) That the fuel adjustment charges, surcharge and additional surcharge are not a tax or a cess but are appendage to the tariff and, hence, a part thereof, which as such can be levied /increased by the licensee.
(iii) That the agreement which includes the abridged conditions agreeing to the payment of tariff rates to be fixed by the licensee from time to time in future is valid in law.
(iv) That licensee who deals with the supply and distribution of items of public utility, while fixing the price thereof, although is entitled to keep under consideration the commercial aspects of the vocation adopted by him, yet, he cannot totally shed himself from being a concern of public utility.
(v) That the unilateral change of tariff rates is permissible under the law and it is not necessary to issue a prior show cause notice to the consumers. [p. 1152]A

Moreover, section 25 of the WAPDA Act is a special provision governing the fixation of price of electricity by WAPDA, therefore, the provisions of Electricity Act, 1910 are not applicable to the Authority, while fixing the rate, therefore, the said enactment being not applicable, reference to the provisions of that Act is irrelevant to the controversy in question. We, therefore, hold that the Authority is authorized to fix the rate for sale of power, with prior approval of Federal Government within the parameters as mentioned in section 25 of the WAPDA Act, 1958. [p. 1155]E
It cannot be said that the questioned levies have been imposed not for the reasons and purposes which have been mentioned before us. Consequently, we hold that the imposition of the same falls within the permitted scope of provisions of section 25 of the WAPDA Act.

We accordingly hold that the questioned levies are not a tax but are a part of the tariff for sale of power by the Authority, which can be imposed under the provisions of section 25 of the WAPDA Act, 1958.

This question has also been authoritatively determined against the petitioners in cases of M. Daud Khan; M/s. Subhash Oil Industries and M/s. Bisra Stone Lime Co. Ltd. (supra). Therefore, we hold that it was not necessary to serve a prior notice upon the petitioners or general public before imposition of the questioned levies.

As regards the issue regarding the vires of the abridged conditions, suffice it to say that the principles of unequal bargain, economic duress or undue influence are not attracted in these cases as the petitioners have entered into contract with the respondents with their free consent and the compulsion to execute the agreements cannot be said to be pressing to such an extent that the petitioners could be held to fall within that category of persons who are “unequal in bargain” or under “economic duress” or “undue influence”. The abridged conditions, as such, are valid in law. This view has also been taken in cases of M. Daud Khan and Ch. Muhammad Shafi (supra). We accordingly hold that the abridged Conditions Nos. 26 and 27 are valid and, hence, are binding upon the petitioners.

As regards the issue of demand of fuel adjustment charges, income-tax and late payments. Learned counsel for the petitioners have not seriously contested the legality of the same. Even otherwise, fuel adjustment charges are fully covered by the operational costs inasmuch as the thermal generation is necessary to supplement the hydro-electric generation to meet the consumers demand and, as such, the cost of running the aforementioned thermal units does fall within the definition of operational costs. As regards the income-tax, the Authority is authorized to fix the rate which includes the payment of necessary tax and even otherwise the consumer, who pays the amount of income-tax is also entitled to deduct the amount from the payable income-tax at the time of filing of yearly return, as such, it cannot be said that the demand of income-tax as contained in the bill is in any manner illegal or otherwise unauthorized. As regards the demand of late payment in the bill, the amount is only payable if the consumer fails to deposit the bill amount within the stipulated period, therefore, the said payment being a penalty on account of non-deposit of the original amount, it cannot be said that the mentioning of the same in the bill in any manner is illegal. We accordingly hold that all the aforementioned three demands are lawful. . [pp. 1156, 1157]F, G, H, I
In case the questioned levies are struck down merely on the ground that the increase in rates appears to be on the higher side, it would result in abandoning power generating schemes including Ghazi Brotha Hydel Scheme, which are so essentially needed t cater for the present and future requirement of electricity in the country. We can take a judicial notice of the fact that during the present era of awareness, hard competition, mechanization of the life, trading and productive activities, nobody can visualize even to exist not to speak of flourish without there being continuity and expansion of supply of energy in the near future. As per data supplied by the respondents, 57% of the population is yet without the facility of energy. Therefore, we are of the view that in such a situation, element of sacrifice on the part of the consumers is also a relevant factor, while taking a decision about reasonableness of the tariff. [p. 1159]K

(b) Constitution of Pakistan, 1973, Article 199
r/w West Pakistan Water and Power Development Authority Act (XXXI of 1958)

That the High Court has power of judicial review to strike down arbitrary and unreasonable tariff rates, but not the rates which may appear to be merely on the higher side. [p. 1152]B

Power under Article 199 of the Constitution is a power of judicial review. The power is a great weapon in the hands of Judges but the Judges must observe the Constitutional limits set by the Parliamentary system on their exercise of this beneficial power, namely, the separation of powers between the Parliament, the Executive and the Court, Judicial review, must, therefore, remain strictly judicial and in its exercise, Judges must take care not to intrude upon the domain of the other branches of Government, as under a Constitutional system which provide for judicial review of executive actions, it is, a fallacy to think that such a judicial review must be in the nature of an appeal against the decision of the Executive Authority. It is not the purpose of Judicial Authority reviewing executive actions to sit on appeal over the executive or to substitute the discretion of the Court for that of the administrative agency. “Judicial restraint” is so essential to the continuance of rule of law, for the continued public confidence in the political impartiality of the judiciary and the voluntary respect for the law as laid down and applied by the Courts, and, hence, we hold that on the present record the questioned levies are not proved to be arbitrary or unreasonable, leaving the issue still open for the Federal Government who is better equipped with the facts/information/expert advise on socio-economic issues. [p. 1160] L

(c) Constitution of Pakistan, 1973, Articles 25 & 199
r/w West Pakistan Water and Power Development Authority Act (XXXI of 1958)

That various rates of tariff applicable to the various classes of consumers described with reference to the areas, the nature and extent of consumption of electricity are not discriminatory in nature and hence, are not violative of the fundamental rights of the citizens, hence, are valid in law. [pp. 1152, 1153]C

It is well established a legal proposition that different rates of tariff are permissible under the law as held in case of State of U.P. and others (supra). Even otherwise a consumer of lesser units uses less amount of electricity generated by thermal generation which is six times more costlier to the energy produced by hydel generation and, therefore, has a right to be treated differently in fixation of the rate to a person who consumers more units of thermal generated energy. Therefore, the above-referred argument of discrimination being without any lawful basis and justification, is repelled. [p. 1157] J

(d) Constitution of Pakistan, 1973, Articles 157 & 154
r/w West Pakistan Water and Power Development Authority Act (XXXI of 1958)

As regards the contention that the tariff is to be determined by the Provincial Government, the same is misconceived. It is admitted position amongst the parties that the electricity is on the concurrent legislative list and hence the Federal Government as well as the Provincial Government can legislate on the subject. A bare perusal of Article 157 of the Constitution shows that clauses (b), (c) and (d) of sub-Article (2) of the said Article (2) were satisfied, which is to the effect that the province should get supply of electricity in bulk from the national grid for transmission and then distribute it itself within the province. In the case in hand it is the WAPDA who is supplying and distributing the electricity amongst the consumers of various provinces and not the Provincial Governments. Therefore, the argument that the tariff for distribution of electricity is to be determined by the Provincial Government is misconceived and, hence, is repelled. [p. 1154]D

(e) Constitution of Pakistan, 1973, Article 199
r/w West Pakistan Water and Power Development Authority Act (XXXI of 1958)

In view of what has been held above, we decline to issue the writ of order as prayed for in all these writ petitions and dismiss/dispose of the same with the direction/observations that keeping in view our observations as contained in paragraphs 27 to 29, the issue shall be examined by the Federal Government of Pakistan, who is the competent supervisory Authority after giving due consideration to the allegations of: rampant maladministration in the WAPDA, high rate of theft of electricity line losses, extravagance in administrative expenses, misuse of transport, non-replacement of outdated equipments including the meters and the suggested measures for reducing the rate of electricity by the petitioners, which have been taken note of and highlighted in the earlier part of this judgment and if found necessary shall appoint a high powered inquiry/advisory commission/committee to suggest necessary remedial steps/measures of interim/permanent nature. The Federal Government shall issue necessary directives to the Authority in view of the report of the Commission/Committee in addition thereto or independent thereof to remedy the sated ills. If found feasible, the Federal Government may also in its administrative discretion direct WAPDA to readjust and reduce, if and whatever possible, the rates of additional surcharge for various categories of consumers, with a view to give relief to any or all categories of the consumers. Keeping in view the prevalent inflationary conditions in the country it will be highly an appreciable gesture which is expected from a concern of public utility, if the Chairman, WAPDA directs the recovery of arrears of surcharge and additional surcharge, which has accumulated during the period of stay granted by this Court in accord with a uniform policy by easy installments to be recovered alongwith running bills instead of recovering the same in lump sum. . [p. 1160]M

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