Ferro Alloys Corporation Ltd., Shreeramnagar vs A.P. State Electricity Board, Hyderabad

Y. Bhaskar Rao, J.—The writ appeals arise out of an order of the learned single Judge dismissing the writ petitions filed by the appellant-Industrial concerns against the action of the A.P. State Electricity Board (hereinafter referred to as ''the Board'') in not treating them as H.T. Category-1 units. The writ petition, W.P. 18678 of 1987, assails a similar action questioned in the above dismissed writ petitions. All these matters, therefore, are disposed of by this common judgment.

In the year 1975 the Board having evolved certain guidelines classified the Industrial concerns herein as ''Power Intensive Industries'' and fixed the tariff by virtue of the power vested in it under S. 49 of the Electricity (Supply) Act, 1948. The earliest of the proceedings, B.P. Ms. No. 689 dated 17-9-1975, fixed the tariff for these Industrial concerns at ''eleven'' paise per unit as against ''twenty-three'' paise for H.T. Category-1 consumers. As a matter of fact, the Industrial concerns have opted to fall under ''Power Intensive Industries'', obviously because the difference in the unit rate was 52% to their benefit. The tariffs for ''H.T. Category-1'' and ''Power Intensive Industries'' had undergone revisions from time to time and ultimately in the year 1987 through B.P. No. 671 dated 10-6-1987 the tariff for ''Power Intensive Industries'' was fixed at 83 (eightythree) paise per unit whereas it was at 76 (seventy six) paise for H.T. Category-I consumers. The difference in the unit rate worked out to 9% to the disadvantage of the Industrial concerns aggrieved in these proceedings. Consequently the Industrial concerns wanted to switch over to ''H.T. Category-1'' to avail of the unit rate applicable therefore and inasmuch as their efforts proved futile, having been turned down by the Board, they invoked the writ jurisdiction of this Court.

The learned counsel for the Industrial concerns, Sri K. Srinivasa Murthy, Sri T. Anantha Babu and Sri M.R.K. Choudhary, mainly contended that (i) the fixation of the tariff under B.P. Ms. No. 671 dated 10-6-1987 is not one resultant of the procedure contemplated by Ss. 13 and 14 of the Electricity (Supply) Act, 1948 (hereinafter referred to as ''the Act''), (ii) the very classification of the Industrial concerns as ''Power Intensive Industries'' lacks the rationale basis to the object sought to be achieved, in that, it suffers not only from the vice of discrimination but also of arbitrariness, (iii) the Board is not a profit making unit and therefore cannot raise the tariff as per its wish and whim and (iii) that the action in not permitting the Industrial concerns to switch over to H.T. Category-1 while permitting certain similarly placed industries amounts to discrimination.

Adverting to the contention that the procedure contemplated by Ss. 13 and 14 of the Act is not complied with before making the classification of the Industrial concerns as ''Power Intensive Industries'', it is to be noticed that S. 13 envisages that all orders and decisions of the Board shall be signed by the Chairman or by such member as it authorised in that behalf, while S. 14 stipulates convening of meetings by the Chairman and also as regards the quorum. On a direction issued by the Court, the Standing Counsel for the Board produced the record concerned in this behalf. The record discloses 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 several discussions and meetings held on 12th, 15th and 16th of September. On 12th, 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, A.P.S.E.B., F.A. & C.C.A., 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 alt other classes of H.T. 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 classes of consumers was also subject matter 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 Chairman of the Board, pursuant to the note circulated by the Chairman, the schedule of revised tariffs as culminated in B.P. Ms. No. 689 dated 17-9-1975 was ratified by the Board in an Emergency Meeting held on 20-9-1975. The B.P., 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 B.P., 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 A. P.. S.E.B. (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 Ss. 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.

The revised tariff covered by B. P. 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 indusiries under the new power intensive tariff all categoric 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, (in) 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 of the tariffs, it cannot now be heard to contend that the procedure contemplated by the provisions of the Act was not followed.

It is apposite at this stage, before dealing with the other contentions, to have a look at Section 49 of the Act in order to appreciate the scope and ambit of the said provisions. It is this provision that enables the Board to fix the tariffs. It reads thus:

"49. Provision for the sale of electricity by the Board to persons other than licensees:

(1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purpose of such supply frame uniform tariffs.

(2) In fixing the uniform tariffs, the Board shall have regard to all or any of the following factors, .. .. ..

(3) Nothing in the foregoing provisions of this section shall derogate from the power of Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee, having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and any other relevant factors.

(4) In fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person."

In these proceedings we are not concerned with Sec. 49 inasmuch as the tariff is not uniform for H. T. Category-I and Power Intensive Industries'' and therefore it is under sub-sec. (3) of Sec. 49 that the tariff is fixed for Power Intensive Industries. Section 49(3) recognises the power of the Board to fix different tariffs for the supply of electricity. Since there is scope, if at all, to show undue preference by virtue of this power under Sec. 49, sub-section (4) of Sec. 49 controls the same by mandating that no such undue preference shall be shown. The scope and ambit of Sec. 49 of the Act is the subject-matter of interpretation by the Supreme Court in Indian Aluminium Company Vs. Kerala State Electricity Board, Head Note-A. The Supreme Court held :

"Section 49(3) confers power on the Board to fix special tariff for a consumer if the geographical position of the area, the nature of the supply, the purpose for which the supply is required and other relevant factors so warrant. Now fixation of special tariffs can be a unilateral act on the part of the Board but more often that not, it would be the result of negotiations between the Board and the consumer and hence a matter of agreement between them..... Now, when the power to fix special tariff for a consumer is given to the Board, the possibility cannot be ruled out that the Board may in exercising this power show undue preference to one consumer as against the other. Sub-section (4) of Sec. 49, therefore, provides a safeguard by enacting that in fixing tariff and terms and conditions for supply of electricity, the Board shall not show any undue preference to any person..... If is, therefore, obvious that sub-section (4) of Sec. 49 controls the action of the Board in fixing tariff under sub-sec. (3) of Sec. 49 and it has no application where uniform tariffs are fixed under sub-sections (1) and (2) of Sec. 49."

Earlier, the Supreme Court was having the occasion to scrutinise the validity of Sec. 49, in Maharashtra State Electricity Board Vs. Kalyan Borough Municipality and Another, . The Supreme Court held:

"The Legislature has also made it clear that in sub-sec. (3) that the Board, in the special circumstances mentioned therein, has got power to fix different tariffs for the supply of electricity. Sub-sec.(4) directs that the Board not to show undue preference to any person for fixing the tariffs and the terms and conditions for the supply of electricity. Though prima facie it would appear that sub-sec. (4) will govern sub-ss. (1) to (3), in S.49, the proper way to interpret sub-s. (4) will be to read it along with sub-s. (3)."

In Kerala State Electricity Board Vs. S.N. Govinda Prabhu and Bros. and Others, the Supreme Court held (at p. 2014 of AIR) :

"Section 49(3) expressly reserves the power of the Board, if it considers it necessary or expedient, to fix different tariff for the supply of electricity to any person having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and other relevant factors. Different tariffs for High and Low Tension Consumers and for different classes of consumers, such as, Industrial, Commercial, Agricultural and Domestic have been prescribed and the differentiation appears to be reasonable and far from arbitrary and to be based on intelligent and intelligible criteria."

In an earlier round of proceedings brought in by some of the industrial concerns in the present proceedings, power of the Board to enhance the tariff by withdrawing the earlier concessions accorded, when sought to be assailed, the same was upheld by this Court in Nava Bharat Ferro Alloys Limited Vs. Andhra Pradesh State Electricity Board, Hyderabad, at p. 305 as under :

"The Government in our opinion, should be free to alter its industrial policies from time to time according to its own assessment based on socio-economic conditions of the society. If at one time such industrial policy was oriented in favour of encouraging the growth of heavy industries by offering concessional tariffs, if any, in their favour, it does not prevent the State Government from revising its policy and, instead encourage medium and small scale or light industries, which could be more evenly distributed with a view to remove regional imbalances, if any, in the matter of setting up of such industries and to promote employment potential in different areas of the State. If, in that process, the pre-existing concessions/tariffs applicable to H.T. consumers are gradually withdrawn or even if such tariffs are fixed at a higher level than the rates at which power is made available for the more needy sections of consumers no malice can be attributed either to the Govt. or the Board."

On an appeal preferred by the industrial concerns to the Supreme Court, the above observations were signified approval in M/s. Hindustan Zinc Ltd. etc. Vs. Andhra Pradesh State Electricity Board and others, in the following lines:

"The Board in the present case shows that the surplus resulting from upward revision of tariffs applicable to the H. T. Consumers made in the present case was for the purpose of better discharge of its other obligations under the Supply Act and in effect, it has merely resulted in agradual withdrawal of the concessional tariffs provided earlier to the power intensive industries which do hot in its opinion require continuance of the concessional tariffs any longer."

This assertion of the Board as regards withdrawal "of concessions, in the absence of any rebutting material, was held to be in consonance with the spirit of Sec. 49 of the Act.

Now, turning to the prime contention that the classification of the present Industiial concerns as ''Power Intensive Industries'' lacks the very basis of rationality, it is useful to refer to the case law at the very outset.

The settled proposition of law, as was submitted by the learned counsel for the Industrial concerns in these proceedings, is that any classification made must be founded on intelligible differentia which must have rational relation to the object sought to be achieved. The validity of the classification would be upheld if only the classification has a rational nexus with the object sought to be achieved. In The State of Jammu and Kashmir Vs. Shri Triloki Nath Khosa and Others, (Head Note D) the Supreme Court held :

"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.

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 therefore extend 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."

In State of Kerala Vs. Kumari T.P. Roshana and Another, , the Supreme Court in paragraph 15 of the decision held :

"It is trite law that every inconsequential differentiation between two things does not constitute the vice of discrimination, if law clubs them together ignoring venial variances. Article 14 is not a voodoo which visits with invalidation- every executive or legislative fusion of things or categories where there are no pronounced inequalities, Mathematical equality is not the touchstone of constitutionality."

Before proceeding to the next decision, it has got to be borne in mind that as held in The State of Jammu and Kashmir Vs. Shri Triloki Nath Khosa and Others, reasons for the classification need not be apparent and the relevant material can be scrutinised to find out whether the classification rests on a reasonable basis and bears nexus to the object in view. In the case on hand, the material produced by the learned Standing Counsel for the Board, as discussed earlier, discloses that the two basic factors that formed basis for the classification of ''Power Intensive Industries'' are (i) the intensity of the power the industries consume, more or less as raw-material, and (ii) the cost of power in relation to the cost of the end-product roughtly at 20%. This is the differentia evolved as the rational basis behind the classification of ''Power Intensive Industries'', as distinct from H.T. Category-1 consumers. This classification cannot be said to be ''Mini-classification based on micro-distinction'' to hold that it is a over-done classification as happened to be so in the case before the Supreme Court in The State of Jammu and Kashmir Vs. Shri Triloki Nath Khosa and Others, . So also, the differentiation brought-in is not such a mathematical or minute inequality so as to attract Art. 14 of the Constitution to strike down the differenciation rendering the classification an invalid one. These two decisions are of no help to the learned counsel appearing for the Industrial concerns in these proceedings in view of the fact that the classification of ''Power Intensive Industries'' is not only founded on an intelligible differentia distinguishing the H.T. 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.

The learned counsel appearing for the Industrial concerns drew our attention to a decision of the Supreme Court in Kanoria Chemicals and Industries Ltd. and Another Vs. State of U.P. and Others, . There, the Kanoria Chemicals was originally supplied electricity at a concessional rate than for H V-2 category concerns and in course of time the tariff in respect of the said Chemicals was raised beyond what is fixed for HV-2 concerns on the ground that the Board suffered heavy losses and this rise beyond HV-2 tariff was frowned upon by the Supreme Court. The facts therein are, thus, distinguishable inasmuch as they do not relate to classification and its validity as happened to be assailed in the present proceedings.

The learned counsel for the Industrial concerns next sought to contend that in the case of M/s. Hindustan Zinc Ltd. etc. Vs. Andhra Pradesh State Electricity Board and others, the Supreme Court dealing with the contention (at p. 1486 of AIR),

"that the rise in the fuel cost which led to the fuel cost adjustment applicable only to the H.T. consumers was unreasonable and discriminatory since the burden of rise in fuel cost was placed only on H.T. consumers".

Held that :

"The H.T. consumers, including the power intensive consumers, are known power guzzlers..... This category of consumers, therefore, forms a distinct class separate from other consumers like L.T. consumers....."

and thus put the H.T. consumers and ''Power Intensive Industries'' in one category and therefore the present classification of ''Power Intensive Industries'' as a separate category is squarely against the holding of the Supreme Court, thereby calling for quashing of the classification assailed in these proceedings. The contention, patently, is misconceived. The distinction drawn therein is between H.T. consumers and L.T. consumers. This is abdundantly clear from the facts narrated in paragraph-2 of the said decision. The relevant portion runs as under :

"2. The appellants are all H.T. power consumers of one category or other. The tariffs consist of three parts: Part-A, Part-B and Part-C. Part-A provides for H.T. tariffs; Part-B for L.T. supply; and Part-C provides, inter alia, for miscellaneous and general charges. H.T. consumers in Part-A are broadly classified into three categories: H.T. Category-1 (Industrial); H.T. Category-II (Non-Industrial); and H. T. Category-III comprising of power intensive consumers and some others....."

The very categorisation of H.T. consumers into Industrial, Non-Industrial and Power Intensive Industries, knocks at the very bottom of the present contention sought to be advanced by the learned counsel that H.T. category-I and Power Intensive Industries were grouped together and therefore they cannot be brought under two different classes. Furthermore interesting is the contention urged before the Supreme Court by the learned counsel appearing on behalf of the Industrial concerns to the effect:

"28. One of the contentions of Shri G. Ramaswamy, on behalf of the appellant was that the G. Os., issued in respect of the power intensive units amounted to a special tariff for them resulting in their exclusion from the category of H.T. consumers and, therefore, the clause relating to fuel cost adjustment inserted by amendment to the H .T. tariffs did not apply to the power intensive consumers without insertion of a similar clause in the special tariff applicable to them."

The Industrial concerns, therefore, themselves wanted to be separate and distinct from H.T. consumers. In this background of the facts, pleas and contentions urged before the Supreme Court, the present contention that the very classification of the Industrial concerns as ''Power Intensive Industries'' runs against the decision rendered by the Supreme Court therein is awfully devoid of substance and therefore deserves no countenance.

One more aspect worth noticing at this stage is that the same Industrial concerns that preferred the appeal to the Supreme Court referred to in the preceding paragraph had suffered an adverse observation before this Court in the decision rendered at writ petition stage in Nava Bharat Ferro Alloys Limited Vs. Andhra Pradesh State Electricity Board, Hyderabad, , as under :

"The power intensive consumers were since then continued as a separate class in respect of whom the Board was giving separate tariff notifications." (paragraph 46 at page 316)

This observation further fortifies the submission made on behalf of the Board that the of ''Power Intensive Industries'' as distinct from H,T. Category-1 consumers was in effect, even prior to the earlier round of litigation that ultimately culminated in the decision of the Supreme Court in M/s. Hindustan Zinc Ltd. etc. Vs. Andhra Pradesh State Electricity Board and others, . Further, as pointed out by the learned Standing Counsel for the Board, 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 fixa- tion are immune from challenge. It is held by the Supreme Court in Rohtas Industries Ltd. and Others Vs. Chairman, Bihar State Electricity Board and Others, , as under:

"Section 49(3) expressly authorises the Board to fix different tariffs for the supply of electricity to any person not being a licensee, having regard inter alia to the nature of the supply, the purpose for which the supply is required and other relevant faciors. The power to classify the consumers into different categories and to fix differential tariffs has thus been conferred on the Board by the Section itself....." (Head Note-A)

In Indian Aluminium Co. Ltd. v. Karnataka Electricity Board AIR 1992 SCW 2551, the rate of tariff was agreed to, after negotiations, and those agreements stood anulled by virtue of an amendment brought-in to the provisions of the Act by the Karnataka State resulting in a higher tariff rate to the Indian Aluminium Company as is applicable to the other industries classified under the same category as Indian Aluminium Company was. When this resultant tariff was challenged, the Supreme Court held (at p. 2573 of AIR SCW) :

"Mr. Narasimhamurthy is justified in his contention that since the agreements stood anulled in view of the amended provisions of Section 49 of the Act, the Board was empowered to ask for uniform tariff rate from the industries classified under one category."

In view of this decision, it cannot be disputed that there can be no different tariffs to different industries falling under the same class, namely, Power Intensive Industries, in the present proceedings.

The learned counsel appearing for the Industrial concerns also attempted to attack the validity of the classification on the ground that it has brought-in a discrimination among equals and therefore offends Article 14 of the Constitution of India. In this connection, the learned counsel sought to place reliance upon a decision of the Supreme Court in Deputy Commissioner and Collector, Kamrup and Others Vs. Durga Nath Sarma, , where the facts reveal that in the State of Assam some land could be taken under Assam Act No. 6 of 1955 for the purpose of works and other measures in connection with flood control and prevention of erosion on payment of nominal compensation while an adjoining land may be taken for the public purpose under the Land Acquisition Act, 1894. Dealing with this differential treatment, the Supreme Court held (para 18, at pp. 404-05 of AIR):

"This differential treatment of land acquired under the two Acts is not permissible under Article 14. The Constitutional guarantee of Art. 14 requires that all persons shall be treated alike in like circumstances and conditions, The Article permits reasonable classification and differential treatment based on substantial differences having reasonable relation to the objects sought to be achieved. The classification of land required for works and other measures in connection with flood control and prevention of erosion and land required for other public purposes has no reasonable relation to the object sought to be achieved. viz. acquisition of the land by the State. In either case, the owner loses his land and in this place, the State becomes the owner . There is unjust discrimination between owners of land similarly situated the mere accident of scope land being required for purposes mentioned in Assam Act No. 6 of 1955 and some land being acquired for other purposes."

So holding, the Supreme Court struck down the Assam Act No. 6 of 1955, being unconstitutional and violative of Art. 14 of the Constitution. The facts have no relevance to the instant proceedings and accordingly this decision of the Supreme Court is of no help to the Industrial concerns.

In Ram Prasad v. State of Bihar AIR 1953 SC 214 a legislation was made singling out two individuals and denying them the right, which every Indian citizen possesses, to have his rights adjudicated upon by a judicial tribunal in accordance with the law which applies to his case. The Supreme Court observing "It is impossible to conceive of a worse form of discrimination than the one which differentiates a particular individual from all his fellow subjects and visits him with a disability which is not imposed upon anybody else and against which even the right of complaint is taken away", issued mandamus directing the respondents therein not to take any steps in pursuance of the impugned legislation. It is useful to notice, in the very same decision the Supreme Court observed that "there is no classification at all, and no attempt has been made to select any individual or group with reference to any differentiating attribute.....''. That case, thus, is one devoid of any classification and therefore those facts have no relevancy to the present proceedings.

The next decision on which reliance has been placed is the one in The Adoni Cotton Mills Ltd. and Others Vs. The Andhra Pradesh State Electricity Board and Others, . There, the contention of the appellants before the Supreme Court was that the Board has no power u/s 49 of the 1948 Act either to impose different percentage of cuts in the supply to consumers or to impose penalty. While holding the contention to be unsound, the Supreme Court observed in paragraph-23.

"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. All 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(3) of the 1948 Act does not mean a mechanical equal treatment. It is fairly settled that equality before the law does not mean that things which are different shall be treated as 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 in the conservation and economies in the available supply of electrical power. The guidance is clearly furnished by the principles embodied in Section 49(3) of the 1948 Act similar to Article 14 of our Constitution."

Section 49(4) is, thus, a check against the vice of discrimination among equals, just as Article 14 envisages equal protection.

The incidental contention advanced at this stage by the learned counsel appearing for the Industrial concerns is that even though it is open to the Board to withdraw the concessions once granted to the Industrial concerns under the category ''Power Intensive Industries'', the tariff in relation to the said category cannot be raised to an extent beyond what it is for H.T. Category-I consumers. The learned counsel pointed out that Vizag Steel Plant is one where also there is bulk consumption of power and still that plant is kept under the category of H.T. Category-1 and charged tariff at a rate lesser than that made applicable to the Power Intensive Industries. This fixation of tariff they challenge as one discriminatory and arbitrary. As pointed out by the learned counsel for the Board ''Power Intensive Industries'' come under a separate category different from H.T. Category-1 consumers and they were so right from 1975 and therefore fixation of separate tariff for them, whether it is less or more than for the consumers under H.T. Category-I, cannot be held to be discriminatory, muchless arbitrary because the classification as held supra has a rational nexus to the object sought to be achieved by virtue of the power vested in the Board under S. 49(3) of the Act.

It is next contended by the learned counsel apeparing for the Industrial concerns that industries were picked up and chosen initially to bring them under the category ''Power Intensive Industries'', and therefore it cannot be said that there has been any classification as such. It is to be borne in mind that while dealing with the contention regarding the procedure followed before bringing-in the classification, viz. ''Power Intensive Industries'', we have at length dealt with this factual position. It is only after evolving the differentia, viz. (i) the intensity of the power the industries consume, more or less as raw-material and (ii) the cost of power in relation to the cost of the end-product, roughly at 20%, for ''Power Intensive Industries''certain industries were identified to be brought under that class, not at all in the converse. Initially four industries were identified, viz. (i) Caustic Soda Plant of M/s, Andhra Sugars, Kovvur, (ii) Ferro Silicon Plant of M/s. Nava Bharat Ferro Alloys Ltd., Paloncha, (iii) Sodium Metal Plant of M/s. Alkali Metals, Hyderabad and (iv) Silicon Corbide Plant of M/s. Electro Thermics of Hyderabad, and later at their own volition and option three more industries, viz. (i) M/s. Chlorate India(P) Ltd., Tirupathi, (ii) M/s. Grindwell Norton Ltd., Karakambadi, Tirupathi and (iii) M/s. A.P. Carbides, Kurnool, were added to that category. Merely because there was some delay in the addition of other industries, 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 We have already held that the classification is based upon a reasonable differentia and bears rational relationship to the object sought to be achieved by exercising the power vested u/s 49(3) of the Act and thus a valid one. When once it is so, any negligence culminating in delay in bringing the other industries by the Board under the category ''Power Intensive Industries'', cannot be said to be having the effect of rendering the entire process that preceded as ''arbitrary'' nor can it be said that it is hit by Article 14 of the Constitution. To the same effect is the decision of the Supreme Court in Sakhawat Ali Vs. The State of Orissa, . There, it is held (para 9) :

"Article 14 forbids class legislation but does not forbid reasonable classification for the purpose of legislation. That classification however cannot be arbitrary but must rest upon some real and substantial distinction bearing a reasonable and just relation to the things in respect of which the classification is made. In other words the classification must have a reasonable relation to the object or the purpose sought to be achieved by the impugned legislation, the classification in S. 16(1)(ix) has a reasonable relation to the object or purpose sought to be achieved and hence the disqualification prescribed by the section does not violate Art. 14."

It is further held in paragraph 10 :

".....legislation enacted for the achievement 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."

This decision has full application to the present proceedings with the only difference, there it is legislation that brought-in the classification whereas it is the policy evolved by virtue of a provision in a legislation that brought-in the classification in the instant proceedings. We accordingly find that the present contention advanced is devoid of any substance.

Mr. Anantha Babu, the learned counsel, on the question regarding pick-and-choose of the industries sought to piace reliance upon a decision of the Supreme Court in State of Mysore Vs. S.R. Jayaram, . The facts therein disclose that Rule 9 (2) therein reserves a right in the Government to appoint any candidate whom It finds suitable to a particular cadre without laying down any date or guidelines to so find out the suitability. Such a power envisaged for reservation under Rule 9(2) is held to be violativeof Arts. 14 and 16(1) of the Constitution. There is absolutely no quarrel with the said proposition. In the case on hand there are factors evolved to bring any industry under the class ''Power Intensive Industry'' and therefore that decision has no application to the facts of the present case.

Before parting with this aspect of ''classification'' it can usefully notice that some of the present appellants, including Nava Bharat Ferro Alloys Ltd., and Ferro Alloys Corporation Limited, have earlier filed writ petitions before this Court challenging the revision of the electricity tariffs through B.P. Ms. No. 1014 dated 13-12-1983 as extended to the Power Intensive Industries through a memo dated 13-12-1983. In the affidavit filed therein it is averred :

"It may be submitted that a Ferro silicon plant is a power intensive industry consuming a very large quantity of electric power."

The matter was also carried to the Supreme Court under a M/s. Hindustan Zinc Ltd. etc. Vs. Andhra Pradesh State Electricity Board and others, . One of the contentions advanced before the Supreme Court by the learned counsel appearing for the present Industrial concerns, was that :-

"The G.Os., issued in respect of the power intensive units amounted to a special tariff for them resulting in their exclusion from the category of HT consumers."

and therefore the clause relating to file! cost adjustment that resulted in escalation of the tariff is not applicable to power intensive industries. The pleadings as well the contention noted disclose that the appellant-Industrial concerns themselves held out to be of a separate class, viz. ''Power Intensive Industries'' -- different from H.T. category-I -- so as to shield themselves from the onslaught of escalated tariff. As a matter of fact the Industrial concerns themselves enjoyed the concessional rates of tariff as ''Power Intensive Industries'' for about 12 years, from 1975 to 1987. By their own conduct they accepted and acquiesced themselves to be of a separate class, viz. ''Power Intensive Industries''. Therefore, it can also be put as an agreed classification, though it is fact that for purposes of getting the concessions either they have opted or acquiesced to be ''Power Intensive Industries''.

The next contention advanced by the learned counsel for the Industrial concerns is that the Board is not a ''Trading Corporation'' to make profits by escalating the tariffs as per its own wish and whim. In this regard, the learned counsel also sought to place reliance upon two decisions of the Supreme Court in Kerala State Electricity Board Vs. The Indian Aluminium Co. Ltd., and Bihar State Electricity Board, Patna Vs. Their Workmen, . The Supreme Court held :

"Electricity Boards are not trading corporations. They have to function without any profit motive."

To the same effect is the other decision at page 251. There is absolutely no quarrel with this proposition that the Board is not a profit-making concern. However, as envisaged by Section 59, the Board as far as practicable shall not carry on its operations at a loss. The Board having found that the cost of production of the electricity has gone up considerably due to increase in cost of fuel, labour, interest charges and wages to its employees resulting in the existing tariffs being not sufficient to meet escalating expenses for generation and supply of power, has reviewed the position and revised the tariffs by invoking its power under Sec. 49 of the, Act and after due discussions and deliberations issued B. P. 689 dated 17-9-1975. The rise in the rates of tariff is not with a view to make any profits but only to meet the growing expenges, as was submitted by the learned counsel appearing for the Board. The contention thus lacks the basis and merits rejection.

It is lastly sought to be urged that VBC Ferro Alloys and (ii) M/s. derate India Limited were permitted to switch over back to H.T. Category-I whereas the Industrial Concerns in the present proceedings were not so permitting, thereby rendering the action of the Board ''discriminatory''. According to the learned counsel for the Board, VBC Ferro Alloys was never brought under the category ''Power Intensive Industries'' and on the other hand it continued throughout under H.T. Category-1. It was in the year 1988, this YBC Ferro Alloys was for the first time brought under the category ''Power Intensive Industries'' to come in to effect from 15th July, 1987. In so far as M/s. Clorate India Limited is concerned, it was in the category ''Power Intensive Industries'' till 1981, when it was closed. Thereafter, pursuant to a direction issued in order to rehabilitate the said Clorate India Limited, it was brought under H.T. Category-1 in the year 1984. However, in the year 1988 the said industry (Clorate India Ltd.) was again brought under the category ''Power Intensive Industry'' to come into effect from 15-7-1987, Bringing back both these industries to the category ''Power Intensive Industry'' is the resultant of B. P. Ms. No. 298 dated 30-3-88 whereby item No. 9 was introduced to B. P. Ms. No. 671, giving the former B. P., retrospective effect from 15-7-1987 on which date B. P. 671 came into effect. The facts position, thus, does not support the contention advanced and therefore we find no force in this submission too.

One more fact that needs to be noticed before concluding the proceedings is that from the year 1990 onwards the difference in the rates of tariff between the ''Power Inten- sive Industry'' and the ''H. T. Category-1 consumers is no more continued by fixing the same tariff for both the categories, while of course maintaining the same minimum demand as earlier envisaged in respect of the ''Power Intensive Industry'' obviously keeping in view the intensity of power consumption by the said industries.

In the result, all the four writ appeals and the writ petition (W. P. No. 18668 of 87) are dismissed. However, in the circumstances, we make no order as to costs.

Order accordingly.