Chandigarh, December 7
The Punjab Government’s decision to give free power to tubewells in the state suffered a setback today after a Division Bench of the Punjab and Haryana High Court directed the Punjab State Electricity Board to manage its affairs in view of Section 59 of the Electricity (Supply) Act specifying a 3 per cent rate of return.
In a ruling on a petition filed by a human rights body, Lawyers Initiative, and three other engineers, the Bench, comprising Mr Justice G. S. Singhvi and Mr Justice M.M. Kumar, also granted PSEB six months’ time to comply with the directions.
The judgement is significant as, according to the petitioners, the board was unable to achieve the stipulated 3 per cent rate of return because of the government’s decision to give free power to the agriculture sector.
As per the Act, Section 59 specifies that the board shall “carry on its operations under the Act and adjust its tariff so as to ensure that the total revenue in any year of account shall, after meeting all expenses properly chargeable as revenue, including operating, maintenance and management expenses, taxes (if any) on income and profits, depreciation and interest payable on all debentures, bonds and loans, leave a surplus that is not less than 3 per cent, or such higher percentage, as the state government may, by a notification in the official gazette, specify in this behalf, of the value of the fixed assets of the board in service at the beginning of such year”.
Claiming that the decision was violative of the section, the petitioners had earlier contended that the board, running at a loss, was unable to achieve the stipulated 3 per cent rate of return. Terming the decision as illegal, counsel for the petitioners had added that the board had suffered a loss of Rs 1473.1 crore in 1997-98 by giving free power to the agriculture sector.
Going into the background of the case, counsel had asserted that the state government, in order to secure the votes, had promised free electricity to farmers. After the ruling party came into power, the populist promise was fulfilled without realising its illegality “and free electricity was given to the tubewell consumers”.
