S. RAJENDRA BABU, J. ( 1 ) THE appellants in this batch of cases are industries utilising high tension electricity. They are calling in question the validity of 'fuel escalation' or fuel cost adjustment' or 'fuel adjustment' or adjustment on account of variation in price or heat value of fuels for the years 1985 to 1992. ( 2 ) THE board had been levying charges for electrical energy supplied to h. t. consumers as per terms of the tariff rates introduced in different years. In prescribing the rates for power supply at high voltage for the years 1985 to 1987 under the heading 'fuel adjustment charges' it is stated as follows:"adjustment 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". electric power tariffs for the year 1990 for high tension supply provided under heading 'fuel adjustment charges' reads:"adjustment in fuel escalation charges and other increases due to operational expenditure etc. Will be made by the board as and when required which shall be recovered from all h. t. consumers". general conditions for electric power tariffs for the year 1992 under high tension supply provided as follows:"fuel adjustment charges, etc. : Adjustment of fuel escalation charges and other increases due to operational expenditure etc. , Will be made by the board as and when required, which shall be recovered in addition to the rates specified in the h. t. schedule of rales from all h. t. consumers, except h. t. 3 category". ( 3 ) THE tariffs were revised on the basis of the recommendations made by a tariff committee. In the report made by the tariff committee in 1985 it had recommended that fuel surcharge may be imposed by the board on h. t. and l. t. industrial consumers whenever the price for power from the thermal stations is increased on account of the escalation in the fuel cost. In the report for the year 1987 it is stated that the board could make adjustment in the fuel escalation charges based on accepted formula for power from thermal stations as and when required and recover the same from the industrial consumers. In the report for the year 1987 it is stated that the board could make adjustment in the fuel escalation charges based on accepted formula for power from thermal stations as and when required and recover the same from the industrial consumers. ( 4 ) THE appellants contended that for the power received by the board from the Karnataka power corporation the price paid by the board is inclusive of fuel escalation charges; that when the surcharge of 10 paise per unit was imposed on 10-1-1986, the board would have taken into consideration the escalation due to fuel surcharge paid by it to the national thermal power corporation; when the rates were increased from may 1987 by 48% over the previous rate such increase was based on the cost of energy paid by the board to the national thermal power corporation which included fuel escalation charges charged by and paid to the national thermal power corporation; the power purchased from the national thermal power corporation supplements the energy generated within the state by the board or by the Karnataka power corporation and is supplied to all the consumers in the state irrespective of the category in which the consumer has been classified by the board; the imposition of surcharge is only on one class of consumers and therefore it is arbitrary and discriminatory, as it is h. t. consumers alone who are subjected to maximum imposition of power cut resulting in their receiving less than the quantum of energy generated within the state; that the l. t. consumers, the agricultural consumers and the domestic consumers do not suffer any power cuts issued by the state government under Section 22-b of the Indian electricity act and therefore any increase due to the purchase of power should be equally imposed prorata on all the consumers and not on one class of consumer; from 1983 to 2-5-1987 the state government and the board introduced the concept of high cost energy to industrial consumers which was initially in addition to the normal entitlement at the option of the consumer but later adjusted into the normal entitlement; there have been energy cuts introduced by the state government from time to time; on 29-9-1983 energy cut of 45% and demand cut of 331/3% were imposed on h. t. consumers having contract demand of 1000 kva and above; the l. t. consumers were exempted from the same; that h. t. s. 16 is not an industrial installation as it supplies power to the housing colony as also h. t. s. 36 which supply power to the pollution control plant; the supply of power to the housing colony is not from the h. t. main of the smelter plant complex but is drawn from the same source as is supplying power to the residence in belgaum city; under the agreement it is specifically provided that the charges for supply to the housing colony shall be at the standard rates applicable to that category of consumers; h. t. s. 36 which supplies power to the pollution control plant is not an industrial installation as no industrial activity is carried out by the pollution control plant and the installation though for convenience draws power from the smelter complex is nevertheless a separate installation and being a non-industrial activity it cannot be subjected to fuel escalation charges. ( 5 ) SIMILAR writ petitions came up before this court in a batch of cases and a learned single judge of this court disposed of the matter as in the case of Mysore Kirloskar Limited, Hubli v Karnataka Electricity board, Bangalore and another. The learned single judge was of the view that h. t. consumers and l. t. consumers are not similar and classification is based on intelligible differentia and in the same manner consumers falling under h. t. 2 and h. t. 3 are not comparable with the consumers falling under h. t. 1-a or h. t. l-b (l) or h. t. 1-b (2) because the energy consumed and purpose being different. It was also found that recovery of fuel escalation charges from industrial installations is not discriminatory and does not give rise to any preferential treatment to other consumers and therefore it is not violative of article 14 of the constitution. Condition No. 8 in respect of h. t. consumers as was in force prior to 23-6-1987 was valid and even after amendment condition No. 8 is not discriminatory or unreasonable and being in conformity with Section 49 (4) of the Electricity (Supply) Act, 1948. The learned single judge explained the 'accepted formula' in condition No. 8 and explained the connotation 'fuel escalation charges' and also laid down that Karnataka electricity board is entitled to recover fuel escalation charges from industrial installations as and when the same is recovered by the national thermal power corporation based on the formula accepted by the Karnataka electricity board and the national thermal power corporation. It was also held that Karnataka electricity board was entitled to collect fuel escalation charges on the units of power consumed by the pollution controlling unit and the housing colony. 10 paise surcharge per unit was not on account of fuel escalation charges but in respect of the power purchased from neighbouring states. Further it was noticed that the determination of the fuel escalation charges is immaterial as high cost energy is availed of or not and the basis for recovery of fuel escalation charges was elaborated. The court also noticed the fuel escalation charges paid by national thermal power corporation by Karnataka electricity board at 2. Further it was noticed that the determination of the fuel escalation charges is immaterial as high cost energy is availed of or not and the basis for recovery of fuel escalation charges was elaborated. The court also noticed the fuel escalation charges paid by national thermal power corporation by Karnataka electricity board at 2. 83 paise per unit from 2-5-1987 under the tariff prevailing in 1987 plus 22% of power loss during the course of transmission and distribution of power to high tension consumers. The appellant having lost practically on all contentions have come up by these appeals. ( 6 ) IT is urged before us reiterating the contentions urged in either case before the learned single judge. The findings recorded therein are attacked seriatim. ( 7 ) THE appellants attacked the finding recorded in regard to the classification of h. t. and l. t. consumers. It is stated that it was not in dispute that they fall into two different classes, but what is urged is that the levy of fuel surcharge should be on all industrial consumers who are similarly situated. Leaving out one set of industrial consumers on the ground that quantum of consumption of electricity being lower than that of the h. t. consumer is not a valid ground for classification. Leaving out one set of industrial consumers on the ground that quantum of consumption of electricity being lower than that of the h. t. consumer is not a valid ground for classification. ( 8 ) IT is urged that the levy of fuel surcharge only on h. t. industrial consumers would violate article 14 of the constitution, as the object of levy is to burden all consumers of electricity who purchase for industrial activity; the electricity consumed by the housing colony of some of the appellants could not be subjected to fuel surcharge as h. t. industrial consumers and the learned single judge should have noticed that the user was domestic though the supply of electricity was in bulk and was not a user for commercial purpose and therefore the imposition of fuel surcharge is illegal; the power of the board to levy fuel escalation charges is based on condition No. 8 of the tariff conditions which empowered recovery of fuel escalation charges from industrial installations and merely because the supply is h. t. for the housing colony, it does not become an industrial installation; the finding in regard to the levy of fuel surcharge only on h. t. consumers being valid is attacked on the ground that it has no nexus to the object sought to be achieved, namely, the exclusion of non-industrial consumers of electricity; the learned single judge was not right in allowing the board to include the transmission and distribution losses incurred by the board as part of fuel surcharge to be levied on h. t. consumers and in that connection has pointed out that the same is erroneous on three aspects, namely, (1) this court has sought to legislate by permitting the board to include the transmission and distribution charges as fuel surcharge; (2) this court could not have included in a levy which is specific in purpose by another levy which is alien to fuel surcharge; (3) transmission and distribution losses like fuel surcharge was already provided for in the revised tariffs and unless there is an increase in the percentage of the said losses pertaining to the national thermal power corporation supply it could not be included in the fuel surcharge. ( 9 ) IT is also urged that this court, in directing the inclusion of the transmission and distribution losses ought to have seen that the said losses have been constant in the state and this has to be taken into account while fixing the tariff for the consumers; by directing the inclusion of the transmission and distribution losses there are contradictory findings; the fuel surcharge is levied only as an additional charge to meet the increased cost in generation and purchase of electricity and this court ought not to have permitted the board to levy transmission and distribution losses, which is not an escalating factor and permitting to do so would be putting a premium on inefficiency of the board. ( 10 ) IT is strongly contended that the levy of fuel charge on h. t. consumer is arbitrary and in violation of article 14 of the constitution; while fuel surcharge is levied on all h. t. consumers, it is not levied on commercial and industrial l. t, consumers whose profit motive is same as those of the h. t. consumers; it is this exemption of levy of fuel surcharge on the commercial and industrial l. t. consumers that was in challenge in the writ petitions as having no nexus to the object of levying fuel surcharge; the learned single judge failed to notice that the quantum of power consumed by a consumer is irrelevant to the levy of fuel surcharge and it is only for the purpose the electricity is consumed, which is relevant and therefore all industrial consumers should be levied fuel surcharge. ( 11 ) IT is criticised that the learned judge could not have recognised the purpose for which the energy consumed is an essential criteria for levying of fuel surcharge and therefore it was beyond the competence of the board to exempt one class of industrial consumers from the levy of fuel surcharge; the learned judge wrongly took note of the fact that there are large number of l. t. consumers and that the board and the state are entitled to exempt them from fuel surcharge, though the number may be large, the purpose of levy is to make the payment of the fuel surcharge to the national thermal power corporation by the board for supply of electricity and therefore all the consumers should have been billed alike. ( 12 ) IT is very strongly contended that the learned judge erred in concluding that the quantum of electricity consumed by the h. t. consumers is large, they are liable to pay fuel surcharge levied by the board and on that basis agricultural Section which also consumes large quantity of electricity could not have been exempted from the same and the learned judge ought to have noticed that the reason given by the board in this regard is irrational and illegal; this court could not have placed reliance on the decision in the case of M/s. Rohtas Industries Limited and another v Chairman, Bihar State Electricity board and others, to hold that fuel surcharge is leviable on h. t. consumers inasmuch as in that case the difference in the tariff rate paid by the high tension consumers was disproportionately low as compared to the tariff paid by other classes of consumers and hence the said decision has no application to the facts of the present case where the difference in tariff rates, if any, was only marginal and will be wiped out by the levy of fuel surcharge. ( 13 ) IT is urged that no special benefits arose to h. t. consumers under the heads 'power factor bonus' or 'high voltage rebate' and they are only a part of the cost of the component which the board gains, if the power is supplied to h. t. consumers; when the board supplies electricity to l. t. consumers, because of the low power factor and voltage, the board in the process of supplying electricity to these l. t. consumers, a large amount of power is lost by way of transmission loss, in fact the board gets the benefit by supplying power at high voltages to the h. t. consumers, hence it would not be correct that h. t. consumers enjoy the benefits and these benefits have been withdrawn in the new tariff system introduced; the learned judge could not have held that power being supplied from the same h. t. line, the pollution control unit must be an industrial installation and therefore liable to be subjected to fuel escalation charges nor he could have held that it is a necessary adjunct to the industrial activity inasmuch as the factory could not be run even without that; what could have been considered by this court was whether the pollution control unit itself could have been considered as an independent installation constituting an industry; the finding recorded that the purchase and supply of high cost energy by the board to the consumers has nothing to do with the supply of energy purchased from the national thermal power corporation, inasmuch as large part of the energy imported by the board was consumed by those consumers who opted for the high cost energy supply, fuel escalation charges demanded by the national thermal power corporation and paid for by the board ought to have been exclusively collected from those consumers to the extent of their consumption. ( 14 ) ON behalf of the respondents each one of these contentions are refuted and the order under appeals is fully supported. ( 15 ) SUBSEQUENTLY, this very question was raised in another form in another batch of cases decided in Indian Aluminium Company Limited v Karnataka Electricity Board. Once again the view taken in Mysore kirloskar limited's case, supra, was reiterated and accepted. That matter is also in appeal before us. ( 15 ) SUBSEQUENTLY, this very question was raised in another form in another batch of cases decided in Indian Aluminium Company Limited v Karnataka Electricity Board. Once again the view taken in Mysore kirloskar limited's case, supra, was reiterated and accepted. That matter is also in appeal before us. One particular aspect as to whether the fuel surcharge had been included in the matter of fixation in the tariff was explained. It was noticed that because the entire cost which Karnataka electricity board incurred in purchasing power from national thermal power corporation had gone into the revision of general tariff, the learned single judge held that the board can collect the further escalated charges and the decision in Mysore kirloskar limited's case, supra, has not laid down a definite proposition of universal application that under all circumstances, the board has to necessarily merge the existing fuel escalation charges in the general tariff while revising it and gave a finding that while revising the general tariff rate in the year 1990 and then in the year 1992 the board did not consider it fit to neutralise the fuel escalation charges as on the respective dates of revision and it would not be in the larger interest of the public to deny the right of the Karnataka electricity board to reimburse itself of the escalated costs by charging them on the h. t, consumers. ( 16 ) WE shall now examine each one of the contentions raised on behalf of the appellants with reference to the decisions and other materials that have been placed before us. ( 17 ) THE power of the electricity board is to prescribe tariffs arising under Section 49 of the Electricity (Supply) Act of 1948. Section 49 (2) thereof provides, while in fixing the uniform tariffs, the board will have to bear in mind, the following factors: (a) the nature of the supply and the purposes for which it is required; (b) the co-ordinated development of the supply and distribution of electricity within the state in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee; (c) the simplification and standardisation of methods and rates of charges for such supplies; (d) the extension and cheapening of supplies of electricity to sparsely developed areas. It is made clear in sub-clause (3) thereof, if it deems fit, the board may 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. The obligation of the board in fixing the tariff and terms and conditions for supply of electricity is not to show undue preference to any person. By clause (7) it is made clear that uniform tariff framed under the Provisions could be modified from time to time. ( 18 ) IN this background of the general power of the board to fix the tariff we have to examine the questions raised before us. ( 19 ) THE first of the questions raised before us is whether condition No. 8 of the general conditions pertaining to h. t. consumers prior to 23-6-1987 is valid and opposed to Section 49 (4) of the Electricity (Supply) Act or whether it is violative of article 14 of the constitution. ( 20 ) WE have already set out the various Provisions regarding adjustment in fuel escalation charges. ( 21 ) WHEN the board wanted extra power it entered into a certain arrangement not only with national thermal power corporation but also with Karnataka power corporation for such supply. The fuel escalation charges has been recovered as and when the national thermal power corporation or Karnataka power corporation sought to recover the same from Karnataka electricity board. Indeed this question was examined by the tariff committee, which submitted its report in the year 1985, subsequent to which the tariffs were revised. The tariff report of 1985 reads as follows:"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 additional 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 additional 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 Karnataka electricity board 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 re. 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 majority view of the committee it was not considered proper to extend relief to them by way of preferential tariff. Xxx xxx xxx 12. 13 fuel surcharge: fuel surcharge may be imposed by Karnataka electricity board per kwh sold to all h. t. and l. t. industrial consumers (whenever purchase rates for thermal power from Karnataka power corporation and national thermal power corporation 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". ( 22 ) THE tariff report for 1985 made it clear that the fuel charges were to be charged by the Karnataka electricity board at kwh on all h. t. and l. t. industrial consumers, whenever purchase rate for thermal power from national thermal power corporation or Karnataka power corporation go up on this account, to the extent of the 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. However, the fuel escalation charges were recovered only from h. t. consumers and not from l. t. consumers. Therefore this question is raised to contend that excluding l. t. consumers is discriminately violative of article 14 of the constitution. Again it is urged that it is not in terms of Section 49 (4) of the Electricity (Supply) Act which provides that there shall be no preferences in respect of any consumer of electricity. ( 23 ) THE scope of Section 49 has been considered by the Supreme Court in more than one decision. For this purpose it is suffice to refer to M/s. Rohtas industries case, supra. The Supreme Court summed up the position in law that Section 49 (3) expressly authorise 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 factors. The power to classify the consumers into different categories and to fix differential tariffs have thus been conferred upon the board by the section itself. If the board has levied fuel surcharges by its tariff notification on the consumers receiving h. t. supply to their factories, while other consumers were left unaffected by such burden, the imposition of such surcharge on h. t. consumers cannot be said to be violative of article 14 of the constitution. In that case, of course, it was noticed that the board was selling the energy at much lower than the cost incurred by it per unit of production, notwithstanding the mandatory Provisions of Section 59, the tariff fixation effected by the board could not be said to be arbitrary and liable to be interferred by this court and it is also made clear that the categorisation of different consumers must be left to the board itself. In matters of this nature the best test that can be borne in mind is what was stated by Justice cardozo in Mississippi Valley Barge Line Company v United States of America:"the structure of rate schedule calls in peculiar measure for the use of that enlightened judgment which the commission by training and experience which if is qualified to form. . . It is not the province of the court to absorb this function to itself. . . . . It is not the province of the court to absorb this function to itself. . . The judicial function is exhausted when there is found to be rational basis for the conclusion approved by the administrative body". it is on this principle none of the arguments advanced on behalf of the petitioners in this regard do not stand close scrutiny. It is an admitted fact before us that the h. t. consumers fall into a separate category. As long as they stand a separate category as to why different rates of tariff could not be fixed insofar as they are concerned does not stand to reason. When the expenditure of supply of power has enormously increased and revenue thereof is far below the requirements and board needs to raise the revenue, in what manner, on what different categories of consumers and what rates must be left to the board. Such a matter clearly falls within the scope of Section 49 of the act. Classification for distribution of burden of levy is made not only on financial capacity of the particular consumer but also extent of utilisation of power, the nature of the activity carried on by persons and the type of power that is used. How the burden should be distributed amongst different consumers should be left to the board. As long as there is broad classification, which is discernible, such exercise cannot be termed as violative of article 14 of the constitution. Merely because the board thought that the escalation charges could be properly collected only from h. t. consumers cannot be stated to be a bias against any particular category of consumers because h. t. consumers fall into separate category. It is not demonstrated before us that they cannot pass on the burden of escalation charges to their customers, but on the other hand burden will be passed on by them to the consumers to whom their products are sold. In that view of the matter we do not think that there is any justification for the petitioners to contend that the said Provisions are bad. The levy is therefore neither opposed to Section 49 (4) of the act nor article 14 of the constitution. This contention is therefore rejected and we affirm the view expressed by the learned single judges both in Mysore kirloskar's case and in Indian aluminium company's cases, supra. The levy is therefore neither opposed to Section 49 (4) of the act nor article 14 of the constitution. This contention is therefore rejected and we affirm the view expressed by the learned single judges both in Mysore kirloskar's case and in Indian aluminium company's cases, supra. ( 24 ) IN M/s. Hindustan Zinc Limited v Andhra Pradesh State Electricity Board and others , the Supreme Court noticed that the classification of consumers into different categories and applying charges only to h. t, consumers has been upheld and therefore the arguments that were available earlier were not available any longer now. In fact this is how the Supreme Court summed up the position:"it was also contended on behalf of the appellants that the generation of electricity by the Andhra Pradesh electricity board is both thermal as well as hydro, the quantity from each source being nearly equal and the entire electricity generated is fed into a common grid, from which it is supplied to all categories of consumers. On this basis, it was argued 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 the h. t. consumers. In our opinion, this argument has no merit. The h. t. consumers, including the power intensive consumers, are known power guzzlers and in power intensive industries, electricity is really a raw material. This category of consumers, therefore, forms a distinct class separate from other consumers like l. t. consumers who are much smaller consumers. There is also a rational nexus of this classification with the object sought to be achieved. Moreover, the power intensive consumers have been enjoying the benefit of a concessional tariff for quite sometime, which too is a relevant factory to justify this classification. Placing the burden of fuel cost adjustment on these power guzzlers, who had the benefit of concessional tariff for quite sometime and have also a better capacity to pay cannot, therefore, be faulted since the consumption in the power intensive industries accounts for a large quantity". again, this position is reiterated in real Food Products Limited and others v Andkra Pradesh State Electricity Board and others and held that h. t, consumers fall into a separate class. again, this position is reiterated in real Food Products Limited and others v Andkra Pradesh State Electricity Board and others and held that h. t, consumers fall into a separate class. ( 25 ) THE next contention to be considered is whether the said condition after 23-6-1987 in relation to h. t. consumers is in conformity with Section 49 (4) of the Electricity (Supply) Act and is whether violative of article 14 of the constitution. The same argument and the same answer stated above holds good. All that is sought to be urged before us is that even the l. t. consumers are carrying on industries and they cannot be put into a separate category from h. t. consumers and therefore the classification is irrational. We do not think so. Even amongst industries there may be different classes of industries and depending on their activities as stated earlier directed different rates of tariffs and therefore we do not think that the approach of the petitioners in this regard is justified. ( 26 ) IT is urged on behalf of the petitioners that there is no agreement between the consumers and the Karnataka electricity board regarding the formula on the basis of which the power escalation charges are to be charged and recovered. This contention also has been rejected by the learned single judge. In this regard it has been contended that the power is supplied to the consumers under an agreement entered into between h. t. consumers and the Karnataka electricity board. Fuel adjustment charges can be charged and recovered only by way of another agreement and not by unilateral action of the Karnataka electricity board. It was contended before the learned single judge that the expression 'accepted formula' used in condition No. 8 of general conditions relating to h. t. consumers may be the basis for the formula on which fuel escalation charges are claimed by the national thermal power corporation, which supplies the power to the Karnataka electricity board and it is accepted by the Karnataka electricity board. It is also further submitted that there is no option left to the Karnataka electricity board but to accept the formula which the national thermal power corporation prescribes for collecting the fuel escalation charges. The board has also made available to us the agreement entered into between Karnataka electricity board and national thermal power corporation. It is also further submitted that there is no option left to the Karnataka electricity board but to accept the formula which the national thermal power corporation prescribes for collecting the fuel escalation charges. The board has also made available to us the agreement entered into between Karnataka electricity board and national thermal power corporation. It is not necessary to examine in detail the method or manner in which they arrived in adjustment of the tariff. The fact that there is an agreement between national thermal power corporation and the board, there is no option left to the Karnataka electricity board for disputing the correctness of the fuel escalation charges claimed by the national thermal power corporation on the basis of the formula worked out by them. Thus, when according to the accepted formula, as contained in condition No. 8 it cannot be interpreted to mean the formula as has been accepted between the parties. Fuel escalation charges are recovered long after the supply of energy and consumption of the same and if the agreement has to be arrived at between the consumers and the Karnataka electricity board regarding fuel escalation charges it would lead to anomalous results. Bearing this aspect in mind and general condition No. 5 which provides that tariffs are subject to revision or levy of fuel adjustment charges as may be decided from time to lime and the same are recoverable based on the accepted formula for power from thermal stations would enable the board to recover such amount. It is difficult to accept that there is no agreement in this regard between the parties to pay such tariffs. Once there is an agreement to pay such tariff, in what manner or method, the fuel escalation charges will have to be levied and collected is the discretion of the board and therefore it is not open to the petitioners to contend that the board has no power to determine the power tariff in this regard. In rohtas industries' case, supra, in fact the formula was examined and the same was set-out at para 10. In rohtas industries' case, supra, in fact the formula was examined and the same was set-out at para 10. After setting out the formula the court noticed increase in the average unit rate of purchase of energy from Uttar Pradesh state electricity board during the year for which surcharge is to be calculated, the said increase to be calculated with respect to the base year 1977-78 and the units purchased from Uttar Pradesh state electricity board and thereafter it was observed that the court sees no force in the contentions put forward on behalf of some of the petitioners that the words 'increase in average unit rate of purchase of energy' used in column 1 below paragraph 16. 7. 2. Further it was observed by the court that the entire increase in cost incurred in the purchase of energy from the d. v. c. and the Uttar Pradesh state electricity board has to go into the computation of the surcharge leviable under paragraph 16. 7. That is the intention of clauses (a) to (d) of Section 49 (2) to fix the escalation charge payable by the consumers based on the claim made by the national thermal power corporation or the Karnataka power corporation. There is hardly any justification to say that there has been separate agreement between the board and the appellants. Therefore we do not think that the appellants are justified in their contention. In this regard also we have to affirm the view taken by the learned single judge. ( 27 ) IT is next contended that the power consumed by the pollution controlling unit in the housing colony would not be charged fuel escalation charges. The contention put forth before us is that the pollution controlling unit is not an industry by itself and therefore tariff could not be levied at the same rate nor the fuel escalation charges collected from them. It is also urged that such levy could not be collected in respect of supply made to housing colony. The tariff schedule in this regard reads as follows:"tariff schedule h. t. 1 (industrial, non-industrial and commercial purposes): applicable to bulk power at voltages of 11 k. v. and above at standard high voltages or extra high voltages available in the locality at the discretion of the chief engineer, electricity (general) of the board or his authorised representative to all category of consumers. The minimum contract demand shall be 100 k. v. a. this schedule is also applicable to bulk supply availed by private industrial estates with a provision to distribute to all industries located within the estate and bulk supply to multistoried buildings and tenements subject to the condition that all distribution of power will be done at the cost of the consumer and charges/rates charged to individual units /tenements shall be just adequate to cover power charges plus actual cost of distribution. The bulk consumer shall satisfy the board that rates charged by them are reasonable". ( 28 ) THE tariff schedule h. t. 1 relates to power supply to industrial, non-industrial and commercial purposes. A comparison of the rates would itself 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 the colonies at which workshop and residential units are situate. Indeed the classification of colonies, industries or residential units are upheld by the decision in nava bharat ferro alloys Limited, Hyderabad v Andhra Pradesh State Electricity Board, hyderabad. This view expressed by the Andhra Pradesh high court was approved by the Supreme Court in M/s. Hindustan zinc limited's case, supra. There is no necessity to examine this matter any further in detail. The view expressed by the learned single judge is therefore affirmed. ( 29 ) THE next question that arises for consideration is whether the electric power tariffs, 1985 and 1987 have taken into account the fuel escalation charges upto the dates at which they came into force and if so whether it is open to the Karnataka electricity board to charge and recover fuel escalation charges from the date the tariffs came in. The appellants contended that the electric power tariffs introduced in 1985 and also in the year 1987 included the fuel escalation charges incurred by the national thermal power corporation till the date of determination of the tariffs and therefore the board is not entitled to claim fuel escalation charges separately since the same had already been included in the formulation of the tariff. The fuel escalation charges have been recovered from 1-10-1985. Thus the escalation that has taken place in fuel charges subsequent to coming into force of the 1985 tariffs, board could not have been taken into account when 1985 tariffs were commenced. The fuel escalation charges have been recovered from 1-10-1985. Thus the escalation that has taken place in fuel charges subsequent to coming into force of the 1985 tariffs, board could not have been taken into account when 1985 tariffs were commenced. Then in the tariff report of 1985 it was noticed that the fuel surcharge may be included by the Karnataka electricity board per kilo watt sold to h. t. and l. t. industrial installations, whenever the purchase rates for thermal power from Karnataka power corporation and national thermal power corporation 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. consumers. However, when the government accepted the report imposed a condition that the board should make an adjustment in fuel escalation charges based on accepted formula for power from thermal stations imported by the board as and when required and recovered from the industrial consumers. Pursuant to this condition imposed by the state government vide order dated 27-9-1985 the power tariffs were introduced for the year 1985 and condition No. 8 was incorporated. It is therefore clear that from October 1985 what was being recovered is the escalation that has taken place from October 1985 because prior to October 1985, it was not the case of the appellants that any amount was recovered by the Karnataka electricity board towards escalation charges. Escalation charges were collected from October 1985. Therefore, the period from 1985 till 1987, tariffs came into force, it is not possible to hold that what was recovered was more than what was recovered by the national thermal power corporation from Karnataka electricity board. It was further held by this court regarding fuel escalation charges collected from 2-5-1987 was being collected under the heading 'fuel escalation charges' since escalation has taken place after the coming into force of 1987 power tariff or the amount inclusive of the fuel escalation charges that was being collected prior to 2-5-1987. This aspect was considered and it was held that it was not open to the petitioners to challenge the determination that has gone in. This aspect was considered and it was held that it was not open to the petitioners to challenge the determination that has gone in. While determining the power tariff the tariff committee has taken into account the cost of the energy generated in the state as well as imported from the neighbouring state and also from national thermal power corporation and the power loss in the transmission and distribution of energy and all other relevant factors which go to determine the cost and on that basis this court took the view as stated earlier, which is demonstrated under various documents produced before the court. On the basis of the submissions made on behalf of the board this court drew an inference that such escalation charges had gone into the calculation of the tariff's at that time. This court after noticing various contentions has ultimately noticed that it is not in dispute that the fuel escalation charges are recovered from the petitioners not taking the basic figure of fuel escalation charges as 2. 83 paise per unit plus transmission and distribution loss, but it has claimed the amount as and when claimed by the national thermal power corporation as per the details of fuel adjustment charges paid by the Karnataka electricity board upto 1985. It was noticed that from 26-3-1987 onwards Karnataka electricity board is also entitled to recover by way of additional charges not only under the heading 'fuel escalation' but also under the heading 'other increase due to operation expenses etc. '. The board did not contend that in the bills raised by it the specific figure had been given in relation to the operation expenses, therefore this court directed the Karnataka electricity board now to recalculate the fuel escalation charges payable by the appellants from may 1987 onwards keeping the base figure of fuel escalation charges as 2. 83 paise per unit. Anything over and above 2,83 paise claimed by the national thermal power corporation and paid by the Karnataka electricity board plus 22% of the power loss incurred during the course of transmission and distribution in the power imported from the national thermal power corporation and other states is sought to be adjusted against other dues. 83 paise per unit. Anything over and above 2,83 paise claimed by the national thermal power corporation and paid by the Karnataka electricity board plus 22% of the power loss incurred during the course of transmission and distribution in the power imported from the national thermal power corporation and other states is sought to be adjusted against other dues. ( 30 ) IN rohtas industries' case, supra, it was noticed that the mechanics of price fixation should be necessarily left to the judgment of the administrative body unless it is patent that there is hostile discrimination against a class of persons, the processual basis of price fixation has to be accepted in the generality of cases as valid. Thus, it was concluded that it was not the case of the Karnataka electricity board that demands were under the heading 'other increase due to operation expenses etc. ', but, the same were under the heading 'fuel escalation charges'. Therefore, this court answered that point as fuel escalation charges claimed from October 1985 and not covered by the power tariff, 1985. The charges claimed under the heading 'fuel escalation' upto the coming into force of the power tariff with effect from 2-5-1987 are valid and cannot be interfered with. The fuel escalation charges claimed for the period subsequent to may 1987 are not made on the basis that fuel escalation of 2. 83 paise per unit had gone into the determination of the power tariff, 1987 and it was to be made the basis for determining the fuel escalation charges from 2-5-1987 and any amount paid over and above 2. 83 paise per unit by way of fuel escalation to the national thermal power corporation by the Karnataka electricity board plus 22% of the transmission and distribution loss only is entitled to be recovered by the Karnataka electricity board from h. t. consumers, inasmuch as the demands had not been made on that basis and they are required to be revised on the basis indicated therein. That part of the order made by the learned judge was not in challenge before us by the board. That part of the order made by the learned judge was not in challenge before us by the board. On the other hand, appellants contend that inasmuch as the said escalation charges had already gone into the determination of the tariffs, on examination of the factual aspect of the matter it is no longer open to the board to contend and claim fuel escalation charges in excess of the same. In this context they relied upon the further reports made by the tariff committee and orders of the government made therein stating that regarding fuel escalation charges the existing system would continue and contend that inasmuch as the fuel escalation charges has already gone into the determination of the power tariff it is not open to the board to charge the same separately. Whatever may be the position prior to 30-3-1987, the position noticed by the learned judge has become final, inasmuch as the board has not appealed against that part of the order. What needs to be examined is whether the same position prevailed in subsequent year. On this aspect of the matter, it is necessary to refer to another set of writ petitions where a decision has been rendered by this court in Indian aluminium company limited's case, supra. In that matter the learned judge after referring to this position noticed in paragraph 32 of the order as follows:"reverting back to Mysore kirloskar's case, supra, the basic fact found by the court at page 2148 is quite relevant, because the entire cost which Karnataka electricity board incurred in purchasing power from national thermal power corporation etc. , Had gone into the revision of general tariff, court held that, thereafter, the board can collect only the further escalated costs". it was noticed thereafter that the said decision was not laying down a definite proposition of universal application that under all circumstances, the board has to necessarily merge the existing fuel escalation charges in the general tariff rate, while revising it. ( 31 ) THE question therefore that arises for consideration is, while fixing the general power tariffs for subsequent years the fuel escalation charges were included or not. ( 31 ) THE question therefore that arises for consideration is, while fixing the general power tariffs for subsequent years the fuel escalation charges were included or not. On that aspect of the matter no foundation is laid by the appellants except to contend that inasmuch as in earlier years fuel escalation charges had merged in the power tariff it is the legitimate expectation that that position continued to be the position and even after the judgment was rendered by this court in September 1990 interpretation of fuel escalation or any clarification thereto had not been issued by the board informing the consumers that escalation charges will be with reference to the basic year 1985 and when the board had complied with the judgment of this court with respect to the tariffs prevalent as on 2-5-1987 it was appropriate for the appellant to presume that even in 1992 that position continued and in this context reliance is placed on the decisions in Sri Srinivasa theatre and others v Government of Tamil Nadu and others and Union of India and others v Hindustan development corporation and others. ( 32 ) THOUGH the doctrine of legitimate expectation is sought to be relied upon by the appellants, what is necessary for consideration in this case is not the question that appellants could reasonably expect that that position would continue for over a period unless any clarification had been issued by the board, but what is required to be noticed is whether the action taken by the respondents is arbitrary or not. As long as action is taken by the authority that tariff is shown to include or not to include escalation charges and that aspect would be determined without reference to the doctrine of legitimate expectation it is unnecessary in detail to examine that aspect of the matter when a categorical statement has been made on behalf of the respondents that in determining the power tariffs in subsequent years fuel escalation charges have not been taken and they have already set-out the basis upon which they have arrived at the various figures particularly after the tariff reports had been submitted from time to time. When the said charge has not gone into the determination of the tariff it is idle to contend that it was the legitimate expectation of the appellants that said tariff must have gone into the determination of the tariff and therefore they cannot make demand in that regard. If that was the matter, we do not think there is any justification to accept the contention offered on behalf of the appellant in these appeals. ( 33 ) ONE of the arguments advanced is that Karnataka electricity board is not put to any loss for they have generated funds for the subsequent years. Figures placed before us show very sorry State of affairs because in each of the years they had approached the government for subsidy in order to get over the parameters of Section 59 of the Electricity (Supply) Act. Thus, it is clear that the tariffs collected by them was within the parameters thereof and the financial position did not improve at all except by way of collecting subsidy from the government. Therefore, we do not think there is hardly any justification to accept this argument. We affirm the view expressed by the learned judge that in subsequent years there was no question of power tariff including escalation charges in determining the power tariff, on the other hand the tariff did not include the escalation charges. Thus, -they had to make separate claims thereof. ( 34 ) ONE of the arguments advanced before us is that the board could not have recovered the transmission losses, inasmuch as in determining the tariff, transmission losses had already been taken into consideration and does not amount to increase in operational expenses in fixing the tariff, particularly when they are revised from time to time. This argument is really academic in our view. The transmission losses are not added to the escalation charges. The position as explained earlier is that under condition No. 8 or condition No. 5 it is provided that such charges could not be recovered. When such charges could not be recovered, ultimately what could be recovered by the board is the amount it had incurred by way of expenditure for the purpose of supply of electricity to each of the consumers and that include certainly transmission losses, which would in turn amount to operational expenses. When such charges could not be recovered, ultimately what could be recovered by the board is the amount it had incurred by way of expenditure for the purpose of supply of electricity to each of the consumers and that include certainly transmission losses, which would in turn amount to operational expenses. Therefore, it cannot be said that that goes out of the category of operational expenses. Therefore, we do not find any substance in this argument. ( 35 ) THE learned counsel appearing for the appellant referred to certain standard books such as electric utility, rate economics by russell and e cay wood, pages 38 and 53, in particular in relation to the price philosophy and to Indian standards electro technical vocabulary part-xxxvii tariffs for electricity and sought to advance certain arguments as to the concept of fuel escalation'. In rohtas industries case, supra, the Supreme Court has explained at page 661 as to what the concept would mean. Therefore, it would be unnecessary for us to refer to any of the standard books relied upon by the learned counsel for the appellant. Thus, we do not think that part of the argument would advance the case of the appellants to any further. ( 36 ) THUS, the appellants having failed on all the contentions these appeals are liable to be dismissed. ( 37 ) THE appellants have been granted interim order staying collection of the fuel escalation demand subject to certain conditions. Therefore, it would be reasonable to give sometime to the appellants to make such payment on the difference of the amount due by it as a result of the interim order getting dissolved now, of course, by allowing the board to collect such interest under the regulation or any other law or contract, as the case may be. The reasonable time in our opinion is three months. ( 38 ) THE appeals are accordingly dismissed. --- *** --- .