K. A. SWAMI, J. ( 1 ) IN these petitions under Article 226 of the constitution the petitioners have sought for a declaration that clause (8) of the electric power tariffs, 1985 and also clause (8) of the electric power tariffs, 1987, (both the clauses relate to h. t. consumers) are illegal and are beyond the power of the Karnataka electricity board (hereinafter referred to as the 'keb') conferred under Section 49 of the Electricity (Supply) Act, 1948 (hereinafter referred to as the 'supply act' ). They have also sought for a further declaration that the keb has no authority to charge and recover fuel adjustment charges from the industrial installations. In addition to this, in each one of the petitions, the petitioners have sought for quashing the demands made. It is not necessary to refer to the demands made by the keb from each of the petitioners because the validity of these demands ultimately depends upon granting or refusing to grant the aforesaid main prayers made in each one of these petitions. Therefore, in this Order, the particulars of the demands made by the keb from each one of the petitioners are not referred to. ( 2 ) IN these petitions, the keb has filed statement of objections on 24-2-1989. Anadditional statement of objections dated 4-9-1990 is also filed by the keb. After the petitions were heard and before the judgment was delivered some more petitions came to be filed. Therefore, those petitions were ordered to be posted along with these petitions. Hence the keb has filed a separate statement of objections on 16-8-1990 to the petitions filed subsequent to 24-2-1989. In fact to the statement of objections dated 16-8-1990 a copy of the statement of objections filed on 24-2-1990 is annexed and it is stated that it may be treated as part of the statement of objections filed on 16-8-1990. Along with the statement of objections dated 16-8-1990 the keb has also produced the statement showing fuel adjustment charges recovered from h. t. consumers from October 1989 to March 1990 as Annexure i. In addition to filing the statement of objections there are two memos filed on 12-12-1989 and 18-12-1989. Along with the statement of objections dated 16-8-1990 the keb has also produced the statement showing fuel adjustment charges recovered from h. t. consumers from October 1989 to March 1990 as Annexure i. In addition to filing the statement of objections there are two memos filed on 12-12-1989 and 18-12-1989. On the previous date of hearing, a work-sheet was also produced to show that even after collecting the fuel adjustment charges from h. t. consumers the price of the energy does not exceed from what the keb is collecting from other consumers i. e. , l. t. consumers. Along with two memos dated 12-12-1989 and 18-12-1989 the average realisation from the sale of power for the years 1985-86, 1986-87,1987-88,19s8-89 and also the statement showing fuel adjustment charges recovered from h. t. consumers from october, 1985 to June 1989 and also the statement showing the amount of fuel adjustment charges claimed from rajashree cements, malkhed, vasavadatta cements, sedam, belgundi cements, belgaum, Mysore kirloskar, hubli and lamina industries, karkala and the notification dated 23-6-1987 bearing No. Keb/b10/2083/1986-87 were also produced. The memo dated 18-12-1989 only contains the statement relating to the fuel adjustment charges recovered from h. t. consumers during the period from October 1985 to March 1987 and from April 1987 to June 1989. ( 3 ) BEFORE the points for determination are framed, it is necessary to mention one more fact in these petitions we are concerned with the tariffs for the years 1985 and 1987. According to general condition No. 5 of the electric power tariff for the year 1985, the tariffs are subject to revision or levy of surcharges, fuel adjustment charges, as may be decided from time to time. Similar is the general condition No. 5 in the electric power tariff, 1987, in addition to the general conditions which are common to all the consumers irrespective of whether they are h. t. and l. t. consumers, there are special conditions which relate to h. t. consumers only. In the electric power tariff, 1985, general condition No. 8 pertaining to h. t. consumers regarding "fuel adjustment charges" was as follows:"fuel adjustment charges:-adjustments in fuel escalation charges based on accepted formula for power from thermal stations will be made by the board as and when required and recovered from industrial installations. "this clause was continued in electricpower tariff, 1987 as clause No. 8 only. "this clause was continued in electricpower tariff, 1987 as clause No. 8 only. However, the notification dated 23-6-1987 bearing No. Keb/b10/2083/1986-87 amended this general condition No. 8 pertaining to h. t. consumers. The amended condition No. 8 was as follows:"fuel adjustment charges, etc. : Adjustments in fuel escalation charges and other increases due to operation expenses etc. , Will be made by the board as and when required and recovered from industrial installations. "3. 1. At this stage itself, the difference between the old condition No. 8 and the new condition No. 8 which came to be introduced by the aforesaid notification may be noticed. In the old condition No. 8, the fuel escalation charges were to be charged "based on accepted formula for power from thermal station" and recovered as and when required from the industrial installations only. Whereas in the amended condition No. 8, the words "based on accepted formula for power from thermal stations" are not found. Further it is required to be recovered from all the h. t. consumers. This is pointed out in the beginning because an argument has been put forth on the basis of the wordings contained in general condition No. 8 pertaining to h. t. consumers as it stood prior to 23-6-1987. 3. 2. Having regard to the contentions urged on both sides, the following points arise for consideration: 1. Whether condition No. 8 of general conditions pertaining to h. t. consumers as it stood prior to 23-6-1987 is valid in law and whether it is opposed to Section 49 (4) of the supply act; and whether it is violative of Article 14 of the constitution?2. Whether general condition no, 8 as amended by notification dated 23-6-1987 pertaining to h. t. consumers is in conformity with Section 49 (4) of the supply act and whether it is violative of Article 14 of the constitution?3. Whether it is open to the keb to collect fuel escalation charges from h. t. consumers without there being an agreement between the consumers and the keb regarding the formula on the basis of which power escalation charges are to be charged and recovered?3. (a) whether it is open to the keb to recover fuel escalation charges from the petitioners in W. P. Nos. 6947 to 6949/1989 and other connected petitions viz. , W. p. Nos. (a) whether it is open to the keb to recover fuel escalation charges from the petitioners in W. P. Nos. 6947 to 6949/1989 and other connected petitions viz. , W. p. Nos. 3718 to 3726/19,90; 6775 to 6777/1990; 14105 to 14107/1990 and 15836 to 15838/1990 in respect of power consumed by the pollution controlling unit and also the housing colony for the period prior to 23-6-1987? (b) whether 10 paise surcharge per unit imposed under the government order dated 27th august, 1986 included the fuel escalation charges? If so, whether it is open to the keb to recover fuel escalation charges afresh for the period from 1st september, 1986 onwards? (c) whether it is permissible to recover fuel escalation charges, or whether fuel escalation charges can be recovered only from those who use or consume high cost energy?4. Whether the electric power tariffs, 1985 and 1987 did not take into accountthe fuel escalation charges upto the dates on which they came into force and if so, whether it is open to the keb to charge and recover fuel escalation charges separately from the date the electric power tariff, 1987 came info force? ( 4 ) BEFORE taking up point No. 1, it may also be relevant to notice that power escalation charges are being recovered as and when the ntpc recovers from the keb. It has become necessary for the keb to purchase power from the ntpc because the power generated in the state is not adequate to meet the demand. This aspect has also been noticed by the two tariff committees who went into the matter and submitted their reports during the year 1985 and 1987 and on the basis of which the tariffs for the year 1985 and 1987 were revised. In the tariff report 1985 regarding large power-intensive industries, the committee observed thus:"11. 09. The committee discussed at length the need or otherwise for creating a separate tariff schedule (as existed before 1981) for large power-intensive industries at rates lower than those payable by other h. t. consumers in the state. The committee noted that many of them had not availed high cost imported energy (which was available to them additionally over and above their entitlement under energy cut ). In fact some of them even gave up that part of the energy entitlement as was charged at high cost imported rates. The committee noted that many of them had not availed high cost imported energy (which was available to them additionally over and above their entitlement under energy cut ). In fact some of them even gave up that part of the energy entitlement as was charged at high cost imported rates. Notwithstanding the fact that large power intensive industries receiving power supply in bulk at extra high voltage which results in lower t and d losses, lower investment and lower cost of service to keb the majority view of the committee was against a lower rate to them. The committee felt that similar size power intensive industries in other parts of the country are thriving quite well in spite of higher power rates payable by them and in fact some of them own captive power plants wherefrom they generate power at as high a rate as Rs. 1-00 to Rs. 1. 25 per kwh. Therefore, the committee felt that if some of the power intensive industries in Karnataka are in distress and are seeking lower power tariff, it may be due to other reasons and not due to power rates. Hence in the majority view of the committee it was not considered proper to extend relief to them by way of preferential tariff. 12. 13. Fuel surcharge : fuel surcharge may be imposed by keb per kwh sold to all h. t. and l. t. industrial consumers (whenever purchase rates for thermal power from kpc and ntpc go up on this account) to the extent of the additional power purchase payment on this account divided by the number of units sold to h. t. and l. t. industrial consumers. "thus from the tariff report, 1985 it is clear that the fuel surcharges were to be imposed by the keb per kwh on all h. t. and l. t. industrial consumers, whenever purchase rates for thermal power from kpc and ntpc go up on this account, to the extent of die additional power purchase and payment made on this account divided by the number of units sold to h. t. and l. t. industrial consumers. However, the fuel escalation charges were recovered only from h. t. consumers and not from l. t. consumers. Whether it is justified in law or not is a matter to be considered while considering point No. 1. 4. 1. However, the fuel escalation charges were recovered only from h. t. consumers and not from l. t. consumers. Whether it is justified in law or not is a matter to be considered while considering point No. 1. 4. 1. In tariff report 1987 at para 7 of the report it is stated thus:"adjustment in fuel escalation based on accepted formula for power from thermal station will be made by the board as and when required and recovered from the industrial consumers. "in this report, the tariff committee itself excluded the l. t. consumers. Even though in tariff report, 1985, as already pointed out, the committee recommended that the fuel escalation charges should be recovered from both h. t. and l. t. industrial consumers, the state government did not accept this recommendation and directed that the keb should make adjustments in fuel escalation charges based on accepted formula for power from thermal stations as and when required, and recover the same only from industrial installations, by the order dated 27th september, 1985 bearing No. Pwd 175 keb 85. The recommendation made by the tariff committee in the tariff report, 1987 relating to fuel escalation charges was not approved by the state government in its entirety. By the order dated 2nd may, 1987 bearing No. Pwd 51 keb 87, the state government while according approval to the revision of the electricity tariff hi respect of the several categories of the consumers as indicated in Annexure-I to the Order, prescribed certain conditions. The condition No. (vii) is relevant for our purpose and it is as follows:"while announcing the revision of tariff, the additionality of fuel surcharge and other increase due to expenses etc. , To all the h. t. consumers should be specifically mentaioned. "thus recommendation made by the tariff committee, 1987 relating to power escalation charges came to be modified and it was made applicable to all the h. t. consumers. Thus as per the government direction, it was to be recovered from all h. t. consumers irrespective of whether they are industrial or non-industrial. ( 5 ) POINT No. 1: it is contended on behalf of the petitioners that the general condition No. 8 is discriminatory because it provides that the fuel escalation charges have to be recovered only from industrial installations even though the energy is consumed by all h. t. and l. t. consumers. ( 5 ) POINT No. 1: it is contended on behalf of the petitioners that the general condition No. 8 is discriminatory because it provides that the fuel escalation charges have to be recovered only from industrial installations even though the energy is consumed by all h. t. and l. t. consumers. It is contended that there is nothing like a supply of power i. e. , supply of power from ntpc to only industrial installations inasmuch as the power supplied by the ntpc goes along with the power generated in the state and supplied to all the consumers. Therefore the fuel escalation charges are required to be distributed among all the consumers irrespective of whether they are h. t. consumers or l. t. consumers and are to be recovered according to the units of power consumed by them by apportioning the fuel escalation charges on the number of units consumed. On the contrary it is contended on behalf of the keb that l. t. consumers consist of several categories and their number runs into above 45 lakhs and 50% of the energy is consumed by the h. t. consumers only. Further condition No. 8 of the general condition occurs only in part I of the tariff which relates to rates of power supplied at kva. Therefore the said condition is not applicable to non h. t. consumers. As the petitioners have challenged the very validity of the said condition on the ground that it is discriminatory inasmuch as it makes a difference between h. t. and l. t. consumers when both of them consume the energy supplied by the keb, whether the said condition occurs in general conditions pertaining to h. t. consumers or in the general conditions pertaining to all the consumers shall not make any difference for considering the validity of the contention urged by the petitioners. Therefore what is necessary to be seen is whether the classification made by condition No. 8 into industrial installations and non-industrial installations can be considered to be valid in law and is not discriminatory. ( 6 ) IT cannot be disputed, and it is also not disputed before me that the broad classification of consumers to whom the energy is supplied by the keb into l. t. and h. t. consumers is based on the valid classification because they form two different groups. ( 6 ) IT cannot be disputed, and it is also not disputed before me that the broad classification of consumers to whom the energy is supplied by the keb into l. t. and h. t. consumers is based on the valid classification because they form two different groups. The l. t. consumers cannot at all be compared with h. t. consumers. The l. t. consumers belong to the category of non-commercial lights and fans, bhagya jyothi installations, non-commercial combined lighting and heating, commercial and non-industrial lights, fans etc. , Irrigation pumpsets 10 hp and below and above 10 hp, agricultural operations, water supply to village and town panchayats, water supply to others, industrial heating and motive power, public lighting-village and town panchayats, public lighting and others, temporary power supply-non-commercial lights and fans and other small appliances, temporary power supply-commercial and industrial lights and fans, motive power. The remaining three consumers viz. , The industrial, non-industrial and commercial purposes h. t. , ibi (1985 tariff and h. t. 2 in 1987 tariff) irrigation and agricultural farm h. t. 2 in 1985 and h. t. 3 in 1987, and rural electric co-operative societies h. t. hi 1985 and h. t. 4 in 1987, are h. t. consumers. In addition to this, the l. t. consumers come under below 100 kva and h. t. consumers fall under above 100 kva. So both from the point of view of power supply and nature of consumption there cannot be any comparison or similarity between the h. t. consumers and l. t. consumers. Therefore, the validity of the classification of consumers into l. t. and h. t. consumers has not been rightly disputed before me. ( 7 ) HOWEVER, the contention is that even among h. t. consumers there is discrimination because the fuel escalation charges arc not recovered from all h. t. consumers as the same are recovered only from industrial installations. As already pointed out, apart from industrial, non-industrial and commercial purposes, the other h. t. consumers are only irrigation and agricultural farms h. t. 2 and rural electric co-operative societies h. t. 3. The rest of them are not h. t. consumers. As already pointed out, apart from industrial, non-industrial and commercial purposes, the other h. t. consumers are only irrigation and agricultural farms h. t. 2 and rural electric co-operative societies h. t. 3. The rest of them are not h. t. consumers. The aforesaid other two consumers among the h. t. consumers form if "group by themselves inasmuch as irrigation and agricultural farm (h. t. 2) and rural electric co-operative ciocieties, h. t. 3) are the consumers to whom the power has to be made available on lesser price because they relate to large number of consumers viz. , Agricultural and also rural electric co-operative societies which are many in number. They relate to a common man. They cannot also be compared with the industrial h. t. consumers. Therefore the contention of the keb is that as the power supplied for the purpose of irrigation and agricultural farm and rural electrification cannot be judged on the same basis on which the power supplied to industrial, noa-industrial and commercial units because there is no comparison between the two groups. Thus the contention is that the industrial installations stand as a separate class and it is they who consume about 50% of the energy even though their number is about two thousand only, whereas the number of consumers belonging to other categories is more than 45 lakhs. As the other consumers and also the consumers who fall under h. t. 2 and h. t. 3 viz. , Irrigation and agricultural farm and rural electrification cannot be compared with the industrial h. t. consumers, the classification made for the purpose of charging and recovering the fuel escalation charges from industrial installations during the period from October 1985 to March 1987 is not discriminatory. According to the memo dated 18-12-1989 the fuel escalation charges were recovered from h. t. consumers falling under tariff schedule h. t. 1-a public water supply and h. t. l-b (l) industrial, non-industrial and commercial purposes. The other h. t. consumers who are excluded from the liability to pay fuel adjustment charges are those who fall under tariff schedule h. t. 2 - irrigation and agricultural farm, tariff schedule, h. t. 3 rural electric co-operative societies. The other h. t. consumers who are excluded from the liability to pay fuel adjustment charges are those who fall under tariff schedule h. t. 2 - irrigation and agricultural farm, tariff schedule, h. t. 3 rural electric co-operative societies. About these two categories, it is already pointed out that they form separate category and even though they are h. t. consumers, they cannot be included in the category falling under h. t. 1 (a), h. t. 1-b (1) and h. t. 1-b (2 ). The classification is based on the intelligi ble differentia inasmuch as both the consumers falling under h. t. 2 and h. t. 3 are not comparable with the consumers falling under h. t. 1-a, h. t. 1-b1 and h. t. 1-b2. In other words, they form different category from those falling under h. t. 1-a, h. t. l-b (1) and h. t. 1-b (2), both from point of view of the quantity of energy consumed and also from the point of view of the purpose of which the energy is consumed. In the case of h. t. 1-a, h. t. 1 (b)1 and h. t. 1-b (2), the consumption of electric power is purely for industrial and commercial purposes whereas the consumption of energy by the consumers falling under h. t. 2 and h. t. 3 is for agricultural purpose and for rural electrification. In the first category viz. , H. t. 1-a, h. t. 1 (b) 1 and h. t. 1 (b) 2, the individual profit motive assumes main role, whereas in the second category, agricultural farm and rural electric co-operative society, the energy is consumed for the benefit of the general category of agriculturists and rural electrification which, in the ultimate analysis, serve greater and larger public interest. I shall not be understood as holding that consumption of electrical energy by the consumers falling under h. t. 1 (a), h. t. 1-b (1) and h. t. 1-b (2), is opposed to public interest. But the consumption of energy by these consumers is for making profit. Therefore, I am of the view that the classification is based on the intelligible differentia. Hence it is not possible to hold that the recovery of fuel escalation charges from industrial installations is in any way discriminatory and is viola tive of Article 14 of the constitution. But the consumption of energy by these consumers is for making profit. Therefore, I am of the view that the classification is based on the intelligible differentia. Hence it is not possible to hold that the recovery of fuel escalation charges from industrial installations is in any way discriminatory and is viola tive of Article 14 of the constitution. ( 8 ) AT this stage, I may also refer to a decision of the Supreme Court in the adonecotton mills Ltd. V Andhra Pradesh state electricity board, AIR 1976 SC page 2414. Referring to the argument relating to discrimination while considering Section 49 (4) of the supply act the Supreme Court observed thus:"the contentions of the appellants are unsound. Section 49 (4) 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 the 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 are similar in principle. It is the principle of equality or non-discrimination. "again in mis. Rohtas industries Ltd. V the chairman, btfiar state electricity board and. Others, AIR 1984 SC 657 while considering the question as to whether the fuel escalation charges could be recovered from the h. t. consumers only, it has been observed thus:"in our opinion, the board was perfectly within its rights in deciding to restrict the levy of fuel surcharge to those categories of consumers who were enjoying the benefit of a concession in the general rate and in sparing smaller type of consumers such as the agricultural, irrigation and commercial consumers from being subjected to that burden, in view of the fact that they were already being subjected to a basic levy at substantially higher rates. The true consequence of the action so taken by the board is only to effect a reduction in the quantum of concession that was being enjoyed by the consumers belonging to the industrial and railway traction categories. The true consequence of the action so taken by the board is only to effect a reduction in the quantum of concession that was being enjoyed by the consumers belonging to the industrial and railway traction categories. A classification which is legally valid and permissible for the grant of a concession in the basic rates of a subsequent scheme of distribution of the burden in the form of fuel surcharge. In this context, it is also relevant to remember that the levy of surcharge was necessitated by reason of the extra expenditure which the board had to incur in the generation of electricity in the two power stations run by the board and the purchase of power from the two outside sources, namely, the d. v. c. and the U. P. state electricity board and 63% of the total quantity of energy supplied by the board is consumed by the industrial and railway traction consumers. A classification of these bulk consumers has a rational nexus with the object and purposes of the levy of surcharge. Having regard to all these facts and circumstances, we find no substance in the contention advanced by some of the appellants that the imposition of the fuel surcharge under paragraph 16. 7 of the 1979 tariff is arbitrary and violative of Article 14 of the constitution. " ( 9 ) THE similar benefit is also enjoyed by the high voltage consumers under the heads power factor bonus and high voltage rebate. The benefit enjoyed by them is substantial and it has been worked out with reference to W. P. Nos. 6947 to 49/1989 of Indian aluminium company for the quarter ending December 1989, which is as follows: ( 21 ) IT is already pointed out that 10 ps. Surcharge per unit was not on account of escalations in fuel charges in respect of power supplied by the ntpc to the keb but it was in respect of the power purchased from neighbouring states. Power supplied by the ntpc does not fall under the category of power supplied from the neighbouring states. Ofcourse in the notification dated 4-9-1986 issued by the keb the expression used is 'neighbouring systems'. Whereas in the government order dated 27-8-1986, pursuant to which the notification dated 4-9-1986 was issued, the words used were 'purchase of power from the neighbouring states'. Ofcourse in the notification dated 4-9-1986 issued by the keb the expression used is 'neighbouring systems'. Whereas in the government order dated 27-8-1986, pursuant to which the notification dated 4-9-1986 was issued, the words used were 'purchase of power from the neighbouring states'. ( 22 ) IT is urged on behalf of the petitioners on the basis of the different expressions used in the government order and the notification issued by the keb, that ntpc supplies power to the keb from ramagundam power station. Therefore, it is also another system of power generation which is situated in the neighbouring state. Henoe the notification issued imposing surcharge at the rate of 10 ps. Per unit must be held to have taken into consideration the escalation in the fuel charges. In the light of the dear words contained in the government order qn the basis of which the notification in question is issued by the keb, it is not possible to hold that while imposing 10 ps. Surcharge per unit, escalation, if any, in the fuel charges in respect of the power supplied by the ntpc was one of the considerations. Hence it is not possible to hold that because of imposing 10 ps. Surcharge per unit with effect from 1-9-1986 upto 2-5-1987, the keb was not entitled to recover fuel escalation charges from all h. t. consumers. Point No. 3 (b) is accordingly answered against the petitioners. ( 23 ) POINT No. 3 (c) relating to high cost energy; the supply of high cost energy was in vogue upto 2-5-1987. The contention of the petitioners is that those who have used the high cost energy should alone be made payable the fuel escalation charges. It is they who have used the energy more than they were entitled to as a result of power cut it appears to me that it is not possible to accept this contention. Annexures d and e produced by the petitioners dated 29th september, 1983 and 10th september, 1984 are relevant to be noticed in this regard. In para 5 of the notification dated 19th september, 1983, Annexure-D issued by the keb regarding high cost energy it is stated thus:the, high cost energy imported from the neighbouring systems will be available to those consumers who are desirous of having this energy. In para 5 of the notification dated 19th september, 1983, Annexure-D issued by the keb regarding high cost energy it is stated thus:the, high cost energy imported from the neighbouring systems will be available to those consumers who are desirous of having this energy. A request for the quantum required shall be registered with the board within 15th october, 1983 and this quantum shall be on a monthwise basis for a minimum period of 3 months i. e. , upto 31st december, 1983. On receipt of such a request, the energy will'be allocated to the consumer subject to availability and once the allocation is made, the entire allocation so made will be billed on first charge basis, irrespective of the fact whether additional energy is consumed or not. The rate chargeable for the high cost energy will be determined by the board from time to time. As an incentive as additional energy allocation equivalent to 1/5 of the high cost energy taken will be allowed to the purchasers of high cost energy. " ( 24 ) IN the notification dated 10th september, 1984, nothing is stated about the high cost energy. However, what is stated in the notification dated 29th september, 1983 is also not superseded. In the additional statement filed by the keb on 14-9-1990, it is stated that the quantity of electric energy generated within the state at the relevant time was not sufficient; therefore, the board through the state government endeavoured to get a little more supply than they were getting earlier from the neighbouring maharashtra state at 65 paise per unit during the relevant period. Taking note of the cost of purchase at the point of entry into the state, the wheeling charges, transmission losses within the state, administrative and other expenses involved, it would not have been workable to supply energy at the uniform tariff then in force. Therefore, it was proposed to make available high cost energy chargeable to those consumers who were in need of it if they were prepared to purchise-such high cost energy. This high cost energy was in addition to the quantity of energy to which they were eligible under the power cut orders then in force. Those who availed the high cost energy were liable to purchase it on first charge basis. This high cost energy was in addition to the quantity of energy to which they were eligible under the power cut orders then in force. Those who availed the high cost energy were liable to purchase it on first charge basis. ( 25 ) IN the additional reply statement filed by the petitioners on 17-9-1990, this aspect has been denied. ( 26 ) THE fact remains-that energy generated in the state and also obtained from the ntpc by the keb was not sufficient to meet the demand. It was because of this power cat was introduced in order to save the industries from the adverse effects of power cut and to see that they some how cany on their production, the keb and the state government imported additional energy from the neighbouring states such as maharashtra, Kerala and andhra pradesh. The additional energy imported from these states was on higher rate. Naturally the keb could not have afforded to supply the said energy to all on the rates prescribed in the tariff. Hence, the system of high cost energy was introduced. The keb first obtained the approval of those consumers who wanted to have additional energy on a high cost and on the basis of their demand energy was imported and supplied. Thus, it is clear that the purchase and supply of high cost energy by the keb to the consumers has nothing to do with the supply of energy with the purchase and supply of power from ntpc. The fuel escalation charges are recovered on the ground that ntpc has been demanding fuel escalation charges from time to time. It is the contention of such of those petitioners who have not availed the high cost energy that they are not liable to pay the fuel escalation charges. It is relevant to point out mat the energy imported from ntpc and generated within the state was found to be insufficient and therefore, high cost energy was imported. The contention that the energy consumed by the petitioners who have not availed the high cost energy is within the extent of the energy generated in the state and imported from the ntpc therefore, they are not liable to pay the fuel escalation charges has no rational basis. The contention that the energy consumed by the petitioners who have not availed the high cost energy is within the extent of the energy generated in the state and imported from the ntpc therefore, they are not liable to pay the fuel escalation charges has no rational basis. The fuel escalation charges are claimed on the basis that ntpc is demanding from tune to time the fuel escalation charges in respect of the energy supplied by it to the keb. Therefore, it does not make any difference whether one has availed the high cost energy or not for the purpose of determining the fuel escalation charges. Hence, the contention of the petitioners that those who have not availed the high cost energy are not liable to pay the fuel escalation charges is without any basis. It is accordingly rejected. Point No. 3 (c) is accordingly answered against the petitioners. ( 27 ) POINT No. 4: the contention of the petitioners is that electric power tariffs introduced in the year 1985 with effect from 27-9-1985 and also the power tariffs introduced in the year 1987 with effect from 2-5-1987 included the fuel escalation charges incurred by the ntpc till the date of determination and coming into force of the power tariff and as such the keb is not entitled to claim the fuel escalation charges which was included in the power tariffs for the period prior to coming into force of the power tariffs 1985 and 1987. As far as the power tariffs 1987 is concerned it has been brought into force with effect from 2-5-1987. Tee fuel escalation charges are being recovered from 1st october, 1985. Therefore, the escalation that has taken place in fuel charges subsequent to coming into force of 1985 tariff could not have been taken into account when 1985 tariff was introduced. On the contrary, in the tariff report of 1985 it was specifically stated that the fuel surcharge may be imposed by keb per kwh sold to all h. t. and l. t. industrial consumers (whenever purchase rates for thermal power from kpc and ntpc go up on this account) to the extent of the additional power purchase, payment on this account divided by the number of units sold to h. t. and l. t. industrial consumers. However the state government while accepting the report put a condition that keb should make an adjustment in fuel escalation charges based on accepted formula for power from thermal station imported by the board as and when required and recovered from the industrial consumers. Pursuant to this condition imposed by the state government in its order dated 27th september, 1985, the power tariffs introduced for the year 1985 incorporated the same as condition No. 8 of the general conditions pertaining to h. t. consumers. Thus, it is clear that from October 1985, what is being recovered is the escalation that has taken place from October 1985 because prior to October 1985, it is not the case of the petitioners that any amount was recovered by the keb towards escalation charges. The escalation charges are being collected only with effect from October 1985. Therefore, the period from October 1985 to the date 1987 tariffs came into force i. e. , upto 2-5-1987, it is not possible to hold that what was recovered was more than what was collected by the ntpc from the keb by way of escalation charges. ( 28 ) REGARDING fuel escalation charges collected for the period from 2-5-1987, it is now to be seen whether what is being collected under the heading fuel escalation charges is only the escalation that has taken place from the date 1987 tariffs came into force or the amount inclusive of the fuel escalation charges that was being collected prior to 2-5-1987. As per general condition No. 8 in electric power tariffs, 1985, and electric power tariffs, 1987, there is no doubt that what the keb is entitled to is to collect only fuel escalation charges. Ofcourse, with effect from 26-3-1987, the general condition No. 8 has been amended and the amended general condition No. 8 specifically provides thus:"adjustments in fuel escalation charges and other increase due to operation expenses etc. , Will be made by the board as and when required and recovered from all the h. t. consumers. "a reading of condition No. 8 does not leave any doubt that what the keb is entitled to recover by way of fuel escalation charges is the increase in the fuel escalation charges that has taken place after the coming into force of the power tariff, 1987. "a reading of condition No. 8 does not leave any doubt that what the keb is entitled to recover by way of fuel escalation charges is the increase in the fuel escalation charges that has taken place after the coming into force of the power tariff, 1987. ( 29 ) IT is contended by Sri Sundara Swamy, learned counsel for the keb that it is not open to the petitioners to challenge the correctness of the amount claimed by the keb because it is no part of the jurisdiction of this court to go into the statistics and determination as to whether the amount claimed by the keb by way of fuel escalation charges is 'correct or not. The learned counsel has placed reliance on the observations made in M/s. Rohtas industries Ltd. and another v chairman, b. s. e. b. and others, AIR 1984 SC 657 in para 9 which are as follows:"the next argument advanced on behalf of the appellants was that even if the board is legally entitled to levy the fuel surcharge, that can only be for the purpose of recouping the amount actually paid by the board by way of 'fuel surcharge' to the damodar valley corporation and the U. P. state electricity board for the quantities of energy purchased by the board from those sources and the extra cost that the board had actually to incur on fuel consumed in those two generating stations at patratu and barauni. From the counter affidavit filed on behalf of the board, it is seen that in respect of the increase in the cost of production of electricity in the two generating stations of the board, the fuel surcharge has taken into account only that part of the increase in cost which is relatable to the increased price of the coal and oil i. e. , fuel alone. The increase in expenditure referable to the enhancement in cost of the energy generated on other accounts such as wages, maintenance, etc. , Has not been taken into account in the fuel surcharge. Such increase in cost of production on account of those other factors has been off-set by a revision of the basic general tariff by 16. 5 per cent payable not only by the industries but by all classes except the agriculturist class. , Has not been taken into account in the fuel surcharge. Such increase in cost of production on account of those other factors has been off-set by a revision of the basic general tariff by 16. 5 per cent payable not only by the industries but by all classes except the agriculturist class. In respect of the energies purchased by the board from outside sources, namely, the damodar valley corporation and the up state electricity board, the increase in cost per unit incurred by the board has been included in the computation of the fuel surcharge. We see no substance whatsoever in the contention advanced by the appellants that only such amounts, if any, as might have been paid by the board to the dvc and the up state electricity board as and by way of fuel surcharge can go into the the computation of the fuel surcharge levied by the board under paragraph 16. 7 of the 1979 tariff. Though the nomenclature given to the levy is "fuel surcharge" it is really a surcharge levied to meet the increased cost of generation and purchase of electricity and this is made absolutely clear in the formula given in para 16. 7. 2. In para 11 of the judgment after noticing the formula on the basis of which fuel surcharge was imposed and recovered the court further observed thus:"from a reading of these Provisions it is abundantly clear that the entire increase in cost incurred in the purchase of energy from the dvc and the up state electricity board has to go into the computation of the surcharge leviable under paragraph 16. 7. The contention to the contrary advanced by the appellants is, therefore, only to be rejected. There is no ambiguity whatever in the words used in c1 so as to require us to take light from paragraph 16. 7. 3 for the purpose of understanding their scope and meaning". therefore, it is clear that the court on the basis of the formula provided found that what was being recovered was only an increase in the cost incurred in purchasing energy from the dvc and up state electricity board. 7. 3 for the purpose of understanding their scope and meaning". therefore, it is clear that the court on the basis of the formula provided found that what was being recovered was only an increase in the cost incurred in purchasing energy from the dvc and up state electricity board. Therefore, it is not possible to hold that the observations made in para 9 of the judgment exclude the jurisdiction of the court to go into the question as to whether what is being recovered under the head 'fuel escalation charges' is really the amount equivalent to escalation that has taken place subsequent to coming into force of power tariffs, 1987 or it is inclusive of the escalation charges claimed prior to coming into force of the power tariffs 1987. i have already pointed out that in general condition No. 8, pertaining to h. t. consumers, whether prior to 1987 or subsequent thereto what the keb is entitled to recover under the heading fuel escalation charges, is only the escalation in the fuel charges that has taken place after the coming into force of the tariffs and notthose escalations which were in existence on the date the power tariff was introduced because in the determination of the power tariff, the entire increase in cost which the keb incurred in purchasing power from ntpc, other systems and other states had gone into it. In fact, in para 12 of the judgment in M/s. Rohtas industries, it has been observed thus:"it was strongly urged on behalf of the appellants that the provision in cl for increase in the average rate of price of energy from the dvc to be calculated with respect to the base year 1977-78 is arbitrary inasmuch as in fixing the basic tariff as per the impugned notification of 1979, the difference in cost between year 1977-78 and the current year 1979-80 has already been taken into account from the counter affidavit and the statements filed in the high court on behalf of the respondent board which form part of the record before us in these appeals, it is seen that only the fuel surcharge accrued during the year 1977-78 had been merged while fixing the revised rates for energy and it was specifically mentioned in paragraph 2. 5 of the resolution of the board containing the proposals for the tariff revision, 1979, which the board forwarded to the state government that only the fuel surcharge that had accrued during 1977-78 was being merged in the revised tariff rates and that "the subsequent increase or decrease in the cost of fuel or the cost of imported energy will, therefore, reflect in the fuel surcharge hereafter. Similar is the position with respect to the tariff revision effected in 1981. Hence there is no factual foundation for the argument that there has been a double neutralisation of the increase in the fuel surcharge in respect of the energy purchased by the board from outside sources. (emphasis supplied) therefore, in addition to this, the wording in general condition No. 8 pertaining to h. t. consumers is also to the effect that what the keb is entitled to recover under the heading fuel escalation charges is only the additional expenditure or escalation that takes place after the introduction of the power tariffs, 1987. ( 30 ) HOWEVER, it is tried to be contended on behalf of the keb that in determining electric power tariffs, 1987, the fuel escalation charges had not been taken into account even upto the date of determining the power tariff. In the power tariff report 1987, at para 7, it is stated that the adjustment in fuel escalation charges based on accepted formula for power from thermal station will be made by the keb as and when required and recovered from the industrial consumers. This observation also goes to show that escalation as and when required may be charged and recovered. It means the escalation that takes place subsequent to the introduction of the power tariff should alone be recovered. While determining the power tariff also the tariff committee has taken into account the cost of the energy generated in the state as well as imported from the neighbouring states and also from ntpc and the power loss in the transmission and distribution of energy and all other relevant factors which go to determine the cost of energy and has also further provided certain amount of profit which the keb is required to make statutorily. This is demonstrated from the various annexures annexed to the power tariff committee report of 1987. This is demonstrated from the various annexures annexed to the power tariff committee report of 1987. ( 31 ) IT is the contention of Sri Sundara Swamy, learned counsel for the KEB that no doubt from the ntpc agreement, the keb gets the energy at the rate of 43 paise per unit fixed charge. To this, the escalation charges of 7 paise per unit is added by way of fuel escalation charges because of the increase in the cost of the fuel used by the ntpc for production of the energy, whereas there is a loss of 22% energy hi transmission and distribution from the stage onwards at which ntpc delivers, and the power is supplied to the consumers and this has not been taken into account while determining the power tariff. The tariff report 1985 has noticed the transmission and distribution loss of 22% and similarly the tariff report 1987 has also noticed this aspect it is clear from Annexure-A to the 1987 tariff report that the committee has noticed that the energy available to the board at the receiving station was to the extent of 9,536 million units in the year 1985-86, 10,028 in the year 1986-87 and 10,286 in the year 1987-88. The energy available for sale after transmission and distribution loss at 22% has been shown in the respective years at 7,257,7,805 and 9,563. Thus, the committee has noticed the transmission loss. As observed by the Supreme Court in para 12 of the judgment in rohtas case power tariff is determined on taking into consideration the actual cost that will be incurred by the board for supplying the energy to the consumers and also the profit it is required to make. ( 32 ) THE contention that though the committee has noticed the transmission and distribution loss of energy to the tune of 22%, it has not taken into account this loss while suggesting the power tariff. No part of the report is brought to my notice to show that the said aspect has not been taken into account by the committee in determining the power tariff. When the committee was appointed for the purpose of recommendation for determining the power tariff, transmission and distribution loss being one of the vital considerations, it is not possible to hold that the committee failed to take this vital and glaring aspect into consideration in making its recommendations. When the committee was appointed for the purpose of recommendation for determining the power tariff, transmission and distribution loss being one of the vital considerations, it is not possible to hold that the committee failed to take this vital and glaring aspect into consideration in making its recommendations. Therefore, it is not possible to hold that the power tariff recommended by the tariff committee was exclusive of the transmission and distribution loss on the date the report was made. ( 33 ) HOWEVER, it is contended by Sri Sundara Swamy, learned counsel for the KEB that the fuel escalation charges are recovered by the ntpc on the basis of the number of units supplied by it; but by the time the energy purchased from the ntpc reaches the consumers, there is a loss to the tune of 22% in transmission and distribution of the power, therefore, the keb is entitled to recover that loss under the fuel escalation charges because it has paid the fuel escalation charges on the power that has been lost in the transmission and distribution. There is no doubt that keb is entitled to recover the fuel escalation charges as paid by it to the ntpc. Therefore, whatever the loss that occurs in the number of units during the transmission and distribution of power to the consumers that loss also has to be taken into account while determining the fuel escalation charges payable by each of the h. t. consumers. The keb has placed before the court a chart containing the details of fuel adjustment charges paid to ntpc from October 1985. The said chart is as follows: details of fuel adjustment charges paid to ntpc from October 1985