S. RAJENDRA BABU, J. ( 1 ) THESE petitions are filed under Article 225 of the constitution of India calling in question the validity of the electric power tariff, 1992 so far as it relates to tariff schedule ht-2 (industrial, non-industrial, commercial and non-commercial ). The rate schedule thereof is as follows: rate schedule demand charges: Rs. 75/- per kva per month of billing demand. Plus energy charges: 135 paise per unit upto 1 lakh units consumed in the month. 150 paise per unit above 1 lakh units and upto 2 lakhs units consumed in the month. 160 paise per unit for balance of units consumed in the month. Note:1. The above tariffs arc applicable even if the existing supply is at 2. 3 kv/4. 6 kv. ( 2 ) ENERGY supplied may be utilised for All purposes associated with theworking of the installation such as offices, stores, canteens, yard lighting, water pumping and advertisement within the premises. ( 3 ) ENERGY can be used in the factory for construction, modification andexpansion purposes also. " the petitioners are also seeking for certain other incidental reliefs. 2. The petitioners contend that there have been periodical increases in the power tariff and the last of the revisions was made in 1990 with the rate schedule being demand charges at Rs. 50. 00 per kva per month of billing demand plus energy charges at 115 paise per unit for All the units consumed in the month. It is submitted that the power tariff does not give due bonus to the power factor even when it comes within chapter vi of the Karnataka electricity supply regulations, 1988 (hereinafter referred to as 'the regulations') and particularly when there is an obligation on the part of the board to prescribe such bonus if a higher power factor is maintained by the consumer. The power factor is a ratio of useful power to the total power and the total power has got two components, namely, active component and reactive component. The vector sum of the active component and the reactive component is the total power and the reactive component could be reduced by installation of capacitors and, in this context, rely upon the standard works on the subject, viz. The vector sum of the active component and the reactive component is the total power and the reactive component could be reduced by installation of capacitors and, in this context, rely upon the standard works on the subject, viz. , electrical technology, 6th edition by h. Cotton at page 516 and a course in electrical power by soni, gupta and bhatnagar, 8th edition, chapter iii relating to rate making and economic considerations and the chapter relating to extra high voltage. It is submitted that the capacitors will be installed to maintain the useful power to its optimum. To encourage energy conservation and reduce transmission losses and to increase generation output power factor bonus was introduced and the power factor rebate is provided so as to encourage the industries to invest in the installation of capacitors. It is submitted that on account of installation of capacitors; supply and consumption of power was economically made use of and therefore, the board should not have adopted the policy of discontinuing the bonus or rebate given in respect of power factor. It is also submitted in this connection that under section 79-j of the electricity supply Act, chapter iv of the regulations have been framed and the ht consumer has an obligation to determine the capacity of the power factor connection apparatus in consultation with the manufacturers or suppliers and maintain an average power factor of not less than 0. 85 lag and in case the same is not maintained, surcharge will be levied at prescribed rates from time to time. In the event the proper power factor is maintained, the consumer would be entitled to bonus therefore, it is submitted that the board has not properly taken note of these factors. 3. On this question of power factor tt is necessary to notice what the committee on power tariffs reported in april, 1990. The committee identified the prescription of levels of bonus or penalty for power factors which are different from 0. 85 lag. On this aspect of the matter, the committee stated as follows: " the third issue studied by the committee is the rebate that is being extended by keb for higher power factor. Higher power factor is generally encountered when the capacity utilisation is low. At that time, the losses of keb lines or voltage drop will be minimal. 85 lag. On this aspect of the matter, the committee stated as follows: " the third issue studied by the committee is the rebate that is being extended by keb for higher power factor. Higher power factor is generally encountered when the capacity utilisation is low. At that time, the losses of keb lines or voltage drop will be minimal. Hence, the committee is of the view that there is no need to give any rebate for power factor higher than 0. 85. It is also known that the benefit that accrues from higher power factor in terms of reduced line losses, diminishes as the power factor goes up. Further, if the consumer maintains a higher power factor he derives some benefit from reduced demand charges. For example, if the consumer draws 100 kw from keb at 0. 85 pf, his demand charge will be for 118 kva, whereas this will come down to 111 kva, if he maintains a power factor of 0. 90. In the latter case, his demand charge will come down by Rs. 280/month at Rs. 40 per kva per month. Therefore, this becomes a commercial proposition for him and it is better to leave the discretion to him. As mentioned earlier, the consumer is likely to operate at high power factor during light loads and under the existing arrangement when the load comes down, gets a rebate without commensurate benefit to keb in terms of line losses. For these reasons, the committee has recommended that the bonus concept be done away with. This will incidentally simplify the tariff structure too. " (emphasis supplied) the tariff committee of 1990 also considered in detail as to the continuation of high voltage rebate. For these reasons, the committee has recommended that the bonus concept be done away with. This will incidentally simplify the tariff structure too. " (emphasis supplied) the tariff committee of 1990 also considered in detail as to the continuation of high voltage rebate. It was stated therein that though keb saves on investment on the sub-section and consequential o and m and other revenue charges, if power supply is given at higher voltage and the transformer losses go to the account of the consumer when the consumer puts up his own sub-section, the consumer has no choice except to take power at a high voltage beyond certain contract demand and therefore, the question of rebate in that case would not be valid as most of the sub-stations have been installed by the concerned industries or factories for their own convenience several years ago at a relatively low cost and with the tariff escalating almost every two years, the proportion of rebate in relation to the investment on sub-station has been steadily increasing and in many cases, costs of tariff have been fully recovered. It is on that basis, recommendation was made to restrict such rebate to the new installations for a period of five years and not to give to the existing industries which have availed the benefit for more than five years. ( 4 ) THE government of Karnataka while accepting the recommendations of thetariff committee for 1990 stated on this aspect as follows:"4. Government have also examined the recommendation of the board regarding reduction of rebate for extra high voltage consumers and have ordered that these benefits should be allowed only in respect of new industries for a period of five years and that in case of other industries which have availed the benefit for more than 5 years, the benefit should be discontinued. " ( 5 ) THE policy adopted by the board on this aspect was one of 'stick and carrot'. while on one hand, when the power factor was maintained at higher than 0. 85 lag, rebate or bonus was being given and when it fell short of the same, surcharge was levied. " ( 5 ) THE policy adopted by the board on this aspect was one of 'stick and carrot'. while on one hand, when the power factor was maintained at higher than 0. 85 lag, rebate or bonus was being given and when it fell short of the same, surcharge was levied. Now, the whole policy has been changed and the rebate is altogether done away with except for the initial period of five years when the industry commences its activities and the committee took the view that it would be adequate to levy a surcharge on the energy consumed which incidentally has a relation to losses incurred by keb on its distribution lines and the extent of surcharge to be levied would be levied when the power factor goes far below the 0. 85 lag and proposed a surcharge in paise instead of percentage. ( 6 ) WHEN it is a matter of policy with the board to allow surcharge in a particularcase or not, neither section 79-j of the act nor regulation 23. 01 (c) of the regulations will come in the way of the board to do away with power factor bonus or higher voltage rebate. This contention is therefore rejected. ( 7 ) SRI gururajan, learned counsel for the petitioners, however, contended that thepetitioners have installed capacitors at a very heavy cost and if one of the purposes for which such installations were made was to avail of the high voltage rebate or the power factor bonus but is (sic) abolished now, the same would result in seriously affecting the business of the petitioners particularly in view of the fact that the petitioners having altered their position to their disadvantage, respondents are estopped from changing their promise of granting such power factor bonus or high voltage rebate. ( 8 ) IN none of the petitions, the petitioners have laid any factual foundation on thisaspect of the matter. They do not say that a consumer in order to maintain higher power factor has installed capacitors for the purpose of deriving the bonus alone. ( 8 ) IN none of the petitions, the petitioners have laid any factual foundation on thisaspect of the matter. They do not say that a consumer in order to maintain higher power factor has installed capacitors for the purpose of deriving the bonus alone. An examination of the facts would reveal that if the consumer maintains a higher power factor, he derives the benefit of reduced demand charges and consequently it becomes commercially beneficial to him to instal a capacitor and the learned counsel for the petitioners has also set out the extent of benefit the consumer gains by investing on capacitors and it is conceded that the benefit would be only marginal or be a very smaller proportion when compared to the cost of the capacitors installed. Therefore, for both lack of plea in the petitions and also that there is no merit in the argument, the contention raised by the petitioners based on promissory estoppel is also rejected. ( 9 ) THE petitioners contend that in the electric power tariff of 1990 a separateschedule had been set down in respect of colonies attached to any industry. The petitioners were charged at a different rate for the bulk supply to the colony and it is contended that bringing the residential area under ht-2 is arbitrary and discriminatory and residential colonies cannot be treated as ht consumers. It is submitted that the colonies consist of only residential houses and power is being used only for domestic purpose and they cannot be charged at higher rates. On this aspect of the matter, it is submitted that the housing colonies coming under the ht industrial consumers form a class by themselves and cannot be compared with ordinary residential consumers unattached to factories as these colonies are supplied by ht lines and such supplies have advantages of better quality of power and uninterrupted supply. ( 10 ) IT is no doubt true that in the power tariffs prescribed in 1990, tariff schedulelt-2 (b) refer to colony bulk supply as being applicable to colonies and residential quarters of the industries, factories and workshops. The energy charge was fixed at 90 paise per unit for All the units consumed in the month and power supply to colonies is availed of on ht basis independently and a rebate of 3 paise was allowed on lt-2 tariff. The energy charge was fixed at 90 paise per unit for All the units consumed in the month and power supply to colonies is availed of on ht basis independently and a rebate of 3 paise was allowed on lt-2 tariff. But, the present rate includes All residential colonies both dependently and independently serviced and the rate of tariff for non-commercial, combined lighting and heating, is fixed charges at Rs. 5 per kw or part thereof sanctioned load subject to a minimum of Rs. 15 per month plus energy charges at 100 paise per unit upto 200 units; 150 paise per unit above 200 units and upto 400 units; 200 paise per unit for the balance of the units. The present rates are different in ht-2 wherein the demand charges plus energy charges is Rs. 75/- per kva per mouth of billing demand and energy charges range from 135 paise to 160 paise. A comparison of these rates itself would disclose that it cannot be said on the face of it that the present rates are in any way discriminatory and disadvantageous to the categories coming under colonies attached to industries or workshops and residential units. Indeed classification of the colonies attached to industries as separate and distinct from ordinary residential units has been upheld in the decision reported in AIR 1985 Andhra Pradesh 299. It is also elaborated in that decision that the colonies of ht-2 consumers fonn a class by themselves and cannot be compared with ordinary consumers unattached to factories. The reasoning adopted by the Andhra Pradesh high court, with respect, appeals to me and I respectfully adopt the same for the purpose of this case. Therefore, I do not find any justification in the arguments advanced on behalf of the petitioners that the application of ht-2 tariff to electricity supplied to residential colonies attached to ht-2 industries is violative of Article 14 of the constitution and therefore illegal. ( 11 ) ALTHOUGH several other conteutions are urged in the petition, the learnedcounsel confined his arguments only to some of them. It is contended that the respondents not only collect energy charges but also demand charges and it is submitted that there is no basis at All for tariff revision and the tariff committee report of 1990 was totally irrelevant for revision. It is contended that the respondents not only collect energy charges but also demand charges and it is submitted that there is no basis at All for tariff revision and the tariff committee report of 1990 was totally irrelevant for revision. The learned counsel was at great pains to explain to me that there was hardly any material before the board nor due consideration has been given to All the relevant factors before increasing the energy charges. ( 12 ) IT is contended on behalf of the respondents that the fixation of rates or powertariffs is a legislative act and no rule of natural justice is applicable to any such action. The law is well-settled now as laid down in AIR 1990 SC 1277 , M/s. Sri seetharam sugar company v union of India that though fixation of rate or price in respect of commodity, goods or services is a legislative act and principles of natural justice are not applicable to the same, the action of the authority should be based on reason and the rates cannot be arbitrarily fixed on extraneous considerations and the courts can enquire into the question in appropriate cases whether relevant considerations have gone in and irrelevant considerations are kept out of the determination of price fixation. The factors borne in mind by the respondents were to rationalise the rate tariffs and to earn a surplus of atleast 3 per cent of the value of fixed assets of the board as provided in section 59 of the act. No tariff committee was constituted before making revision in 1992. However, the respondents submit that the cost of generation and distribution of power has increased. The quantum of energy generated within Karnataka is about 42 million units per day, while the demand is about 62 million units and in order to make good the deficiency thereof, the board has to purchase additional energy from central projects in addition to the state's entitlement of energy therefrom and the cost of purchase has not remained static and has been escalating due to the increase in fuel and other generation costs. The main supplier of power to the board is the Karnataka power corporation and its price also has gone upward. The cost of distribution has also been on the increase. The expenditure on account of salaries, wages and other overheads have gone up. The main supplier of power to the board is the Karnataka power corporation and its price also has gone upward. The cost of distribution has also been on the increase. The expenditure on account of salaries, wages and other overheads have gone up. The factors that were borne in mind by the board are those set out in tariff committee report, additional cost of energy purchased by them, the cost of generation of electricity and the cost to be paid to the Karnataka power corporation plus the wage bill. ( 13 ) IN order to satisfy myself as to whether All the relevant considerations andfactors have been taken note of by the board or not, i. Called upon the board to produce necessary files in this regard. A perusal of the same would reveal that the proposals made to the government set out in detail the factors borne in mind by the board in increasing the tariffs. The government, while revising the tariffs in 1990, stipulated that the tariffs would be in force upto 31-3-1992 and the board could undertake annual revision with the approval of the state government and therefore, the existing tariffs were due for revision in 1992-93. Section 59 of the electricity supply Act, 1948 requires that the board should, after taking credit for any subvention from the state government under section 63, carry on its operations under the act and adjust its tariffs so as to ensure that the total revenue in any year of account, after meeting All expenses, shall leave the surplus of not less than 3% or higher as the state government may specify in that behalf, of the value of the fixed assets of the board in service at the beginning of the year. What weighed with the government is the financial covenant fixed by the world bank under the loan agreement to the effect that the keb should achieve the statutory minimum of 3% of the value of the fixed assets of the board, failing which the world bank would suspend the loan assistance and the same would have an adverse effect on the keb. There is a further covenant with the power finance corporation ltd. , new Delhi, from whom the keb has availed of loan assistance, that it should achieve 3% rate of return every year. There is a further covenant with the power finance corporation ltd. , new Delhi, from whom the keb has availed of loan assistance, that it should achieve 3% rate of return every year. As per the estimated results for the year 1992-93, the revenue realisation is of the order of Rs. 980. 51 crores with an expenditure of Rs. 1,237. 68 crores resulting in a deficit of Rs. 257. 17 crores, on the basis of existing tariffs. The board also had to meet the additional burden arising out of free supply of power to ip sets of 10 hp and below which was estimated at Rs. 20. 40 crores. The board had to mobilise additional resource to an extent of Rs. 306. 52 crores in order to fulfil the covenants of the world bank and power finance corporation ltd. The government had given a subvention of about Rs. 50 crores and after taking this factor into account, additional amount required to obtain 3% rate of return would be about Rs. 56 crores. The recommendations made in 1990 tariff committee were also borne in mind and there has been further rationalisation and categorisation of installations in certain cases and the comparative statement of the existing charges and the proposed charges were in detail worked out. On the recommendations made by the board, a cabinet sub-committee was constituted with the present chief minister, who was then minister for education, and the minister for agriculture, minister for housing and urban development, minister for major and medium irrigation, minister connected with industries department, energy and the commissioner and secretary for energy department. The sub-committee met several times and thereafter, the necessary proposals and recommendations were considered and accepted by the cabinet. It is only there after, the board gave effect to the proposals now made and impugned herein. In this background, I cannot say that the board has not taken into consideration All the relevant factors before arriving at the various figures. ( 14 ) WHENEVER any fiscal measure is adopted and there is an increased burden,there is bound to be challenge. But, in assessing the tenability of such challenge, the courts will have to take into consideration not the wisdom thereof, but only the question whether the authority making such a revision has power to do so and whether it has taken All relevant factors into consideration. But, in assessing the tenability of such challenge, the courts will have to take into consideration not the wisdom thereof, but only the question whether the authority making such a revision has power to do so and whether it has taken All relevant factors into consideration. In what manner adjustment should be made, the court cannot impose any terms and in fixing the rates as long as the board adopts a broadly fair policy not resulting in discrimination for the purpose of Article 14 of the constitution and is not irrational or arbitrary, the courts would not interfere with such actions. The arguments advanced on behalf of the petitioners that the board has arbitrarily acted in fixing the tariffs are devoid of merit. ( 15 ) THE learned counsel for the petitioners though has raised an argument inrelation to fuel adjustment charges or fuel escalation charges, has not pursued with the same and has reserved the contentions to be advanced after appropriate demands are raised by the respondents. Therefore, I do not propose to consider the same and leave it open to the petitioner to challenge the same as and when necessary. ( 16 ) THE categorisation of ht consumers as a separate class is called in questionby the petitioners. When an identical question came up for consideration before this court in writ petition no. 22738 of 1990 and connected matters, this court rejected such a contention by stating that the board has power to make classification of consumers into different categories for fixing the tariffs and categorisation by itself has no relevance or meaning in the matter of fixing of tariffs, it they ignore the rates. While classifying an establishment for purpose of rates depending upon the nature of the activity carried on by it, the court would not interfere. This view has been upheld in the writ appeal and thereafter by the Supreme Court by rejecting the special leave petition filed by the petitioners therein. In the circumstances, the contention raised by the petitioners on the classification also does not survive. ( 17 ) SOME of the petitioners had been granted interim orders staying the collection of tariffs under the revised charges, subject to payment of the charges under the old tariff. In the circumstances, the contention raised by the petitioners on the classification also does not survive. ( 17 ) SOME of the petitioners had been granted interim orders staying the collection of tariffs under the revised charges, subject to payment of the charges under the old tariff. It would be reasonable to direct the respondents to give reasonable time to the petitioners to make such payment on the difference of charges arising as a result of the interim orders granted by this court, of course, by collecting the interest payable thereof as provided under the regulations. The interim order thus stands vacated. ( 18 ) FOR the reasons stated above, these petitions shall stand dismissed. Ruledischarged. --- *** --- .