Fixing of commercial tariff for self-financed Educational Institutions legally valid

Aditi Reddy M | Symbiosis Law School, Hyderabad | 24th February 2020

Kerala State Electricity Board rep. by its secretary & anr v. Principal sir Syed Institute for Technical Studies & Anr

Background:

• The Kerala State Electricity Regulatory Commission had issued a notification which was dated on the 26^th of November 2007 categorising that the SFEIs under the head of Low Tension VII(A) Commercial.
• The Government run or aided private educational institutions have been placed under the Low Tension VI Non-Domestic tariff category. The commission here is the appellant before us in these set of appeals.
• So such a tariff notification was published in the Kerala State Electricity Regulatory Commission Regulations,2006.
• Subsequently there were several writ petitions filed by different SFEIs questioning the legality of such a segregation which in effect had created high tariff regime for them. Altogether there were 52 writ petitions filed in the Kerala High Court.
• The learned council had opined that the tariff order was to be valid by considering the decision of the bench in the T.M.A Pai Foundation vs State of Karnataka.

Issues:

• Whether under the 2003 Act, the differentiation of SFEIs from the other set of educational institutions for the purpose of fixing of tariff was arbitrary discrimination and antithetical to principles of natural justice.

Held:

• The Supreme court had allowed the appeal and had held that the Commission was acting within its right as a tariff fixing body to distinguish the “purpose” of respective categories of educational institutions as the means to have an end was not similar in terms of its nature for both the institutions.
•  While both imparted education, the State run & aided institutions were also discharging their duties of welfare of its citizens.
• The expression “purpose” has to be comprehended in a way that the character of the body which is taking up the activity of imparting education. While funding educational institutions, the State undertakes to discharge one of its essential welfare measures.
• The Bench further emphasized that fixing higher tariffs is specifically for the SFEIs and not on the State running educational institutions would not amount to giving “undue preference” to State aided institutions in terms of the tariff notification as the purposes of both the entities might be clearly and duly differentiated.
• The court further deliberated that “The fact that SFEIs have been clubbed together with several commercial service providers wholly unrelated to education becomes insignificant once we find that purpose of the SFEIs could be differentiated from the Government run and Government aided educational institutions”
• Finally the judgements held that the tariff fixing body was not required to proceed solely on the basis of “nature of service” rendered by the Institution while fixing tariifs.