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Fixing higher tariff for Self-Financing Educational Institutions are valid as they are categorized

KERALA STATE ELECTRICITY BOARD Vs PRINCIPAL SIR SYED INSTITUTE BY ITS SECRETARY & ANR.  FOR TECHNICAL STUDIES & ANR.REP., CIVIL APPEAL NO. 8350 OF 2009 – 20th February, 2020

The judgment was pronounced by Hon’ble justice Deepak Gupta and Hon’ble justice  Aniruddha Bose.

Facts

The legality of a part of a tariff notification issued by the Kerala State Electricity Regulatory Commission (“Commission”) segregating Self-Financing Educational Institutions (SFEI) from Government run and Government Aided Private Educational Institutions and subjecting the former to a higher category of tariff is the only question involved in this batch of appeals.

Learned counsel for the SFEIs, being the writ petitioners have asserted that the purpose of both Government or Government Aided Institutions and Self-financing Institutions is the same, which is imparting education and discrimination between these two sets of institutions is not permissible under Section 62(3) of the Act.

The question we shall address now is whether preference shown by the Commission to the State run and aided educational institutions in fixing tariff was justified having regard to the purpose for which supply was required.

The expression “purpose” means, as per the Concise Oxford English Dictionary, Tenth Edition, published by Oxford University Press: – “1. the reason for which something is done or for which something exists. 2. resolve or determination.” While we construe the meaning of the expression “purpose” under sub-section (3) of Section 62 of the 2003 Act, we are of the opinion that for the purpose of settling the tariff question, who is serving the “purpose” and for whom such “purpose” is being served have to be factored in.

The Court further observed that;

We also have to take into account that the nature of service rendered by them cannot be the sole determinant for the tariff-fixing exercise. The State run and State aided institutions are funded by the tax payers, which is also a material factor in making distinction between the aforesaid categories of the institutions. The expression “purpose” has to be understood in the context of the character or feature of the entity which is undertaking the activity of imparting education. While funding educational institutions, the State undertakes to discharge one of its essential welfare measures.

The Court held that “in our opinion, no error was committed by them in fixing higher tariff for the Self-Financing Educational Institutions categorizing them as commercial entities. No undue preference has been given to the State run and State aided institutions in the tariff notification”.

Thus, the appeals are allowed in the above terms.

– Aarthy K

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