w w w . L a w y e r S e r v i c e s . i n

Magna Electro Castings Ltd. v/s The State of Tamil Nadu & Others

    Writ Appeal No. 1513 of 2004

    Decided On, 23 August 2005

    At, High Court of Judicature at Madras


    For The Appellant : Nalini Chidambaram Senior Counsel For M.Kamalanathan, R.S.Pandiyaraj, M.Md.Ibrahim Ali, S.Sivanandam, Hemalatha, T.S.Sivagnanam, S.Silambanan, Palani Selvaraj, S.N.Kirubanandam, K.Jayachandran, V.Sanjeevi, P.Jagadeesan, C.S.Krishnamurthy, V.Bharathidasan, G.Jermiah, S.Kamadevan, S.K.Nachimuthu, D.Navin Durai Babu, V.Ramajajadeesan and Mr.M.Mohammed Riyaz, Advocates. For The Respondents: R.Muthukumarasamy, Addl.Advocate General Assisted by G.Vasudevan and N.Srinivasan, Advocates.

Judgment Text

(Appeal filed under Clause 15 of the Letters Patent against the order passed in W.P.No. 1763 of 2003 dated 06.11.2003.)

Markandey Katju, C.J.

This batch of writ appeals and writ petitions involve common questions of fact and law and they are therefore disposed off by this common judgment.

2. The challenge in these cases is to the levy of peak hour charges at 20% etc per unit over and above the normal rate for consumption of electricity consumed by High Tension consumers during peak hours i.e. between 6.00 a.m. and 9.00 a.m. and 6.00 p.m. to 9.00 p.m.

3. The writ appeals have been filed against the impugned judgment of the learned single Judge of this Court dated 06.11.2003.

4. Heard learned counsel for the parties, and perused the record.

5. The petitioner in W.P.No. 1763 of 2003 (which we have treated as the leading case), namely, M/s.Magna Electro Castings Limited has prayed for a writ of declaration to quash clause ‘d ‘ of the High Tension Tariff I to the schedule of the Tamil Nadu Electricity Revision of Tariff Rates on Supply of Electrical Energy Act, 1978 (hereinafter referred to as the ‘Tamil Nadu Act of 1978’) by which peak hour charges have been imposed as null and void and for a mandamus directing the respondents to refund to the petitioner the peak hour charges said to have been illegally collected so far from the month of August 1997 or adjust the same in future bills.

6. The petitioner in W.P.No. 1763 of 2003 is a Public Limited Company and is a consumer from the Tamil Nadu Electricity Board having service connection No.176 within Udumalpet Electricity Distribution Circle. The service connection is high tension having a load of 1750 KVA. The petitioner is engaged in manufacturing iron castings.

7. The petitioner is a manufacturing industry, which obtained high tension power connection under Tariff I as per the schedule to the Tamil Nadu Act of 1978.

8. The legislative entry relating to electricity is Entry 38 List – III of the 7th Schedule to the Constitution. Hence both Parliament and the State Legislature can enact laws relating to electricity.

9. Section 49(1) of the Electricity (Supply) Act, 1948, which is a parliamentary law, provided for the respective State Electricity Boards to fix uniform tariffs. However, the Tamil Nadu Act of 1978 which was passed subsequently by the Tamil Nadu Legislature, and received the assent of the President of India on 25.02.1997 also provides for fixing the electricity tariff (in Tamil Nadu), and hence it prevails over the provisions of Section 49 of the Electricity (Supply) Act, 1948 in view of Article 254(2) of the Constitution.

10.Sections 3 and 4 of Tamil Nadu Act of 1978 state as follows: -

“ 3. Tariff rates for consumption of electrical energy. Notwithstanding anything contained in the Tamil Nadu Essential Articles Control and Requisitioning (Temporary Powers ) Act, 1949 (Tamil Nadu Act XXIX of 1949),the tariff rates payable to Tamil Nadu Electricity Board by any consumer on the electrical energy supplied by the Board shall be as specified in the schedule to this Act.

4. Power of the State to amend the Schedule: - The State Government may after taking into account the cost of production of energy, and such other matters as may be prescribed, by notification, amend the provisions of the Schedule to this Act.”

11. Part – A of the Schedule to Tamil Nadu Act of 1978 mentions the electricity tariff relating to high tension supply as envisaged in Section 3. In exercise of the power conferred on the State Government by Section 4 of the Tamil Nadu Act of 1978, the State Government issued G.O.Ms.No.17 dated 14.2.1997, which amended the High Tension tariff by inserting the following clause: -

“ High Tension Tariff: -

(d) For the High Tension Industrial Consumers, Time of the Day meter shall be provided. On installation of Time of the Day meters, the High Tension Industrial Consumers shall be billed at 20 per cent extra on the energy charges for the energy recorded during peak load hours. The duration of peak load hours shall be as under: -

(1)6.00 a.m. to 9.00 a.m.

(2)6.00 p.m. to 9.00 p.m.”

12. The aforesaid amendment to the schedule by G.O.Ms.No.17 dated 14.2.1997 has been challenged in these petitions/appeals.

13. It is alleged by the petitioners/appellants that peak hour extra charge at 20% during the peak hours mentioned in clause ‘d ‘ to High Tension Tariff is highly arbitrary, illegal and discriminatory.

14. It is alleged that the petitioner industry is a power oriented factory and the main raw material itself is the high tension power and the industry has to be operated continuously for 24 hours a day. The manufacturing process is a continuous uninterrupted process and hence classification of peak hours and the extra charges of 20 % for the petitioner industry is illegal. It is alleged that the classification of high tension and low tension is permitted and the further classification of Tariff I to V is also permitted. However, it is contended that 20% extra charge for peak hours consumption to the High Tension tariff I is not permitted under law and is discriminatory and is highly arbitrary. It is alleged that the peak hour charge causes great financial burden on the petitioner, which it is unable to bear.

15. We have also perused the common counter affidavit filed on behalf of the first respondent in the writ petitions.

16. In paragraph-12 of the counter affidavit it is stated that the peak load mainly occurs due to usage of load by domestic consumers and agricultural consumers during 6.00 a.m. to 9.00 a.m. and mainly by lighting loads of domestic consumers and commercial establishments during 6.00 p.m. to 9.00 p.m. These usages are meant for the self consumption of the users and cannot be postponed or rearranged. It is contended that the only possible way to deal with this heavy load at peak hours is to regulate the usage of industrial consumers who avail supply throughout. Also, the industrial consumers use electricity for production of certain commodities which bring profit to them and hence the usage by this category could be rearranged or they have to pay more for their use during the peak hours. It is stated that already there is peak load restriction for the Low Tension power loads during evening peak hours i.e., from 18.00 hrs to 22.00 hrs. It is contended that instead of restricting the usage of electricity by the High Tension Industrial Consumers, they have been levied with additional peak load charges, so that if they want they can use the power by paying increased rate or they may postpone the usage to the non peak hour. The levy of peak hour charges will therefore act as a disincentive for usage of electricity during peak hours.

17. It is further stated in the counter affidavit that the demand of the grid varies during the day depending on the electricity consumed by various categories of consumers. While the Industries consume electricity throughout the day, the additional demand that occurs due to pumping load, the domestic consumption and commercial activities requires electricity during limited specified hours of the day. The single shift industries and two shift industries also contribute to the increase in demand during their period of operation. The grid demand also varies with the season such as festival season and monsoon season. During summer months, the demand is more due to irrigation demand, air conditioning load, longer duration of domestic load due to examinations, special programme in Television and the usage of fans etc.

18. On a consideration of these facts it appears that the purpose of levying peak hour charges is to make the load curve uniform, and for this the usage during peak hours has to be curbed and usage during off peak hours has to be encouraged.

19. In paragraph 21 of the counter affidavit it is stated that during peak hours pumped storage schemes and high cost generating plants are brought into service with maximum import from other feeding sources (Central Generating Stations and Import from other States) to meet out the peak load demand. It is stated that this involves additional expenditure. It is further stated that to meet this demand 20% extra levy is imposed on the consumers on the consumption at peak hours so as to transfer the burden to other class of consumers who are not bulk consumers of electricity. This is also to induce the consumers to avail load during non peak hours which will help the Board to restrict the import of electricity from other States and Central Generating Stations and to desist from the operation of high cost pumped storage generating stations.

20. In paragraph 22 of the counter affidavit it is stated that during peak hours supply cannot be maintained at the desired frequency to all consumers with inherent generation alone. Power has to be imported from other sources (from other State’s Generating Stations and from Central Generating Stations) to supply power at the desired frequency to all consumers. This involves more expenditure. Based on the Government Order No.17 dated 14.2.97, even continuous process industries are not exempted and they have to pay the peak hour charges for their consumption.

21. In paragraph-23 of the counter affidavit it is stated that the Tamil Nadu Electricity Regulatory Commission, in its first tariff order issued on 15.3.2003 has ruled that peak demands during morning and evening peak hours occur in Tamil Nadu Electricity Board’s transmission grid. The peak demand determines the capacity of generation requirement. A reduction in peak demand would allow the Tamil Nadu Electricity Board to reduce power purchase, generation costs and reduce the overall cost of supply. The Commission felt that the current disincentives in the tariff rates to avail supply during peak hours should continue and incentives to avail supply during non peak hours should be introduced. Accordingly, the Commission in its Tariff Order dated 15.3.2003 has ordered to bill 20% extra on the energy charges for the peak hour consumption and introduced a rebate of 5% for High Tension Industrial Consumers for consumption during 2200 to 0500 hrs (off peak period).

22. It is alleged in paragraph 25 of the counter affidavit that if the Tamil Nadu Electricity Board is not allowed to collect peak hour charges it will end up with huge losses. Unless peak hour charges are permitted the petitioners and other consumers similar to them will use the energy during peak hours causing hardship to the public for getting electricity at the desired frequency.

23. From the facts stated above, it appears that during the period between 6.00 a.m. to 9.00 a.m. the usage of electricity rises significantly because of the use by domestic and agricultural consumers, and similarly during the period between 6.00 p.m. to 9.00 p.m. the usage of electricity rises due to usage by domestic and commercial consumers. The purpose of levying peak hour charges is to act as a disincentive for usage of electricity during peak hours by high tension consumers who consume the major portion of electricity. Hence a separate tariff has been envisaged to reduce the demand during this period.

24. Learned counsels for the appellants submitted that G.O.Ms.No.17 dated 14.2.1997 was illegal as it did not receive the assent of the President of India under Article 254(2) of the Constitution of India.

25. In our opinion there is no merit in this contention. It has been held by a Constitution Bench of the Supreme Court in K.S.E.Board v. Indian Aluminum Co., (AIR 1976 SC 1031) (vide paragraph 12) that Article 254(2) does not contemplate Presidential Assent to notifications issued under the Act. The Article contemplates Presidential Assent only to laws made by the legislature of a State.

Some learned counsel pleaded promissory estoppel but this plea has been rejected by a Division Bench of this Court in Shanmugaraja Spinning Mills (P) Ltd, Rep. by P.S.K.Shanmugarajan, its Managing Partner v. The Superintending Engineer (i/e) Periyar Electricity System, Erode and Others, 2002 I MLJ 285

26. Learned counsel for some of the petitioners contended that under Section 4 of the Tamil Nadu Act of 1978, the State Government has to take into account the cost of production. It is submitted that since the cost of production is the same through out the day there cannot be any justification for levying peak hour charges. In our opinion, there is no merit in this contention also. The purpose of levying peak hour charges is to act as a disincentive to use of electricity during peak hours. The alternative would be to impose power cut as the consumption rises during peak hours. However instead of resorting to power cut the Government and the Board decided to reduce the consumption during peak hours by imposing peak hour charges. In our opinion, this is a policy decision of the State, and this Court cannot interfere with such policy decisions.

27. In M/s.Hindustan Zinc Limited v. Andhra Pradesh State Electricity Board, AIR 1991 SC 1473 (vide paragraph 24), a similar argument was raised before the Supreme Court that there was discrimination since the burden of the rise in fuel cost was placed only on the High Tension Consumers. The Supreme Court rejecting the submission observed that high tension industries are known power guzzlers, and hence they form a distinct class separate from other consumers like low tension consumers, and there is rational nexus to the object sought to be achieved. Hence there was no discrimination.

28. Similarly in A.C.Mills v. A.P.S.E Board, AIR 1976 SC 2414 the Supreme Court observed that there can be reasonable classification for fixing electricity tariff and there is no violation of Article 14 of the Constitution. It was observed that equality before law does not mean that things which are different shall be treated as though they were the same.

29. Similarly in Association of Industrial Electricity Users v. State of A.P., (2002) 3 SCC 711, the Supreme Court observed: -

“ We are also unable to agree with the learned counsel for the appellants that the Act does not envisage classification of consumers according to the purpose for which electricity is used. Sub-section (9) of Section 26 does state that the tariff which is fixed shall not show undue preference to any consumer of electricity but then the said sub section itself permits differentation according to the consumer’s load factor or power factor, consumer’s total consumption of energy during the specified period, time at which the supply is required or paying capacity of category of consumers and the need for cross-subsidisation or such tariff as is just and reasonable and be such as to promote economic efficiency in the supply and consumption of electricity and the tariff may also be such as to satisfy all other relevant provisions of the Act and the conditions of the relevant licence.”

30. It was then contended that high tension industries should not have been singled out for discriminatory treatment. In our opinion, since high tension industries are the major consumers, the Government can make a distinction between high tension industries and low tension industries. As already stated above, this does not violate Article 14 of the Constitution.

31. It was then contended that under Section 4 power has been vested with the Government to change the tariff, but the peak hour charge is not the same as change of tariff. We do not agree. The peak hour charges is certainly a form of tariff imposed on the high tension consumers and it is well within the scope of Section 4 of Tamil Nadu Act of 1978. It is not the nomenclature but the substance of the matter which has to be seen.

32. It may be mentioned that the Electricity Regulatory Commission Act, 1998 was passed by Parliament for establishing Central and State Regulatory Commissions. Under Section 17 of the said Act the Tamil Nadu Electricity Regulatory Commission was constituted and under Section 29 of the Act the Commission was empowered to determine the tariff. By order dated 16.3.2003 the Tamil Nadu Regulatory Commission passed orders approving the levy of peak hour charges at 20% for consumption during peak hours.

33. Mrs.Nalini Chidambaram, learned senior counsel appearing for some of the appellants/petitioners submitted that G.O.Ms.No.17 dated 14.2.1997 is not conditional legislation, but delegated legislation. In our opinion, even if it is delegated legislation that will not help the case of the appellants/petitioners.

34.It may be noted that Article 254(2) of the Constitution states: -

“ Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provision of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State:

Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.”

35. Thus a perusal of the bare language of Article 254 (2) shows that it deals with subsequent laws made by the State Legislature and not delegated legislation. It is the subsequent law made by the State Legislature which requires the assent of the President of India if it is repugnant to a parliamentary law. This aspect has been clearly stated by the Supreme Court in K.S.E.Board v. Indian Aluminum Co.,(supra) . Hence the submission of Mrs.Nalini Chidambaram can be of no avail to the appellants/petitioners. In our opinion, G.O.Ms.No.17 dated 14.2.1997 is not a law made by the State Legislature, but it is delegated legislation, and hence Article 254(2) of the Constitution has no application. Hence it does not require the assent of the President of India. The notification dated 14.2.1997 has been given effect to only from 15.2.1997 and hence there is no question of retrospective operation of the same.

36. Apart from the above, it may be stated that on 16.03.2003 the Tamil Nadu State Regulatory Commission fixed the tariff for various consumers under the Electricity Regulatory Commission Act, which came into effect from 16.3.2003. The tariff determined by the Electricity Regulatory Commission also contains peak hour charges for industrial consumers which was challenged in appeal before this Court, but the said challenge was rejected by a Division Bench of this Court in Coimbatore Stock Exchange Ltd. v. Tamil Nadu Electricity Regulatory Commission, 2003 (4) CTC 385 . We are in entire agreement with the aforesaid decision of the Division Bench, and moreover the said decision is binding on us.

37. It was then contended by some of the learned counsels for the appellants/petitioners that the imposition of peak hour tariff is unreasonable, arbitrary and is in violation of Article 14 of the Constitution. We have already repelled this submission in our observations made above. In our opinion, there is reasonable classification between high tension consumers and low tension consumers as has been pointed out by the Supreme Court in M/s.Hindustan Zinc Limited v. Andhra Pradesh State Electricity Board,(supra). Hence there is no merit in this submission.

38. As regards High Tension industrial consumers who generate power from their own wind mills and supply electricity generated by them to the Board, the learned single Judge has dealt with this aspect in paragraphs 25 and 26 of his judgment, and we entirely agree with his reasoning. Hence, we are not repeating the same.

39. Before concluding we may mention that G.O.Ms.No.17 dated 14.2.1997 lays down a policy decision and ordinarily this Court cannot interfere with policy decisions of the administration unless they are clearly in violation of some statutory or constitutional provision or is shockingly arbitrary in the Wednesbury sense vide Tata Cellular Vs. Union of India, AIR 1996 SC 11, Om Kumar Vs. Union of India, AIR 2000 SC 3689, Union of India Vs. S.B.Vohra, 2004 (2) SCC 150, Tamil Nadu Electricity Board Vs. Tamil Nadu Electricity Board Engineers’ Association, 2005 LIC 1579=2005 (1) MLJ 507, S.Ramamirtham Vs. Somesuvarapuram Girama Vivasaya Nala Pathukappu Sangam, 2005 WLR 451, Damoh Panna Sagar Rural Regional Bank Vs. Munna Lal Jain, 2005 (1) LLJ 730, Union of India Vs. International Trading Company, JT 2003 Vol.4 SC 549 (para-17)= 2003 AIR SCW 2828 (para-18), Delhi Development Authority Vs. Vijaya C.Gurshaney (Mrs.), 2003 (7) SCC 301, Krishnan Kakkanth Vs. Government of Kerala, 1997 (9) SCC 495, O.N.G.C. Madras Port Contract Employees’ Union Vs. The Management of O.N.G.C. Ltd., 2005 (2) MLJ 90, etc.

40. In our opinion the G.O.Ms.17 dated 14.2.1997 does not violate any statutory or constitutional provision, nor can it be said to be shockingly arbitrary.

41. In Haryana Financial Corporation and Another v. M/s Jagdamba Oil Mills and another (2002) 1 UPLBEC 937=AIR 2002 SC 834 (vide paragraph 10) the Supreme Court observed:

“If the High Court cannot sit as an appellate authority over the decisions and orders of quasi-judicial authorities, it follows equally that it cannot do so in the case of administrative authorities. In the matter of administrative action, it is well known that more than one choice is available to the administrative authorities. They have a certain amount of discretion available to them. They have “a right to choose between more than one possible course of action upon which there is room for reasonable people to hold differing opinions as to which is to be preferred”. (per Lord Diplock in Secretary of State for Education and Science V. Metropolitan Borough Counsel of Tameside, 1977 AC 1014). The Court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, the Court can intervene. To quote the classic passage from the judgment of Lord Greene M.R. in Associated Provincial Picture Houses Ltd. V. Wednesbury Corporation, 1947 (2) ALL ER 680:

“It is true the discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with the discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters, which he is bound to consider. He must exclude from his consideration matters, which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably.' Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority”.

42. In Tata Cellular vs Union of India AIR 1996 SC 11 (vide paragraph 113) the Supreme Court observed:

(1) The modern trend points to judicial restraint in administrative action.

(2) The Court does not sit as a court of appeal over administrative decisions but merely reviews the manner in which the decision was made.

(3) The court does not have the expertise to correct an administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible.”

43. In the same decision the Supreme Court observed that judicial review is concerned with reviewing not the merits of the decision but the decision making process. (See also Pramod Kumar Misra vs. Indian Oil Corporation 2002 (4) AWC 3221, State of Kerala vs. Joseph Antony 1994 (1) SCC 658, etc.)

44. As Lord Denning observed:

“This power to overturn executive decisions must be exercised very carefully, because you have got to remember that the executive and the local authorities have their very own responsibilities and they have the right to make decisions. The courts should be very wary about interfering and only interfere in extreme cases, that is, cases where the Court is sure they have gone wrong in law or they have been utterly unreasonable. Otherwise you would get a conflict between the courts and the government and the authorities, which would be most undesirable. The courts must act very warily in this matter.”

( See 'Judging the World' by Garry Sturgess and Philip Chubb).

45. In our opinion judges must maintain judicial self-restraint while exercising the powers of judicial review of administrative or legislative decisions.

“In view of the complexities of modern society,” wrote Justice Frankfurter, while Professor of Law at Harvard University, “and the restricted scope of any man's experience, tolerance and humility in passing judgment on the worth of the experience and beliefs of others become crucial faculties in the disposition of cases. The successful exercise of such judicial power calls for rare intellectual disinterestedness and penetration, lest limitation in personal experience and imagination operate as limitations of the Constitution. These insights Mr. Justice Holmes applied in hundreds of cases and expressed in memorable language:

“It is a misfortune if a judge reads his conscious or unconscious sympathy with one side or the other prematurely into the law, and forgets that what seem to him to be first principles are believed by half his fellow men to be wrong.'”

(See Frankfurter's 'Mr. Justice Holmes and the Supreme Court').

46. In our opinion the administrative authorities must be given freedom to do experimentations in exercising powers, provided of course they do not transgress the legal limits or act arbitrarily.

47. The impugned G.O.Ms.No.17 dated 14.2.1997 is an experiment made by the State Government to curb peak hour demand. In our opinion, the said experiment is well within the scope and ambit of Section 4 of the Tamil Nadu Act of 1978. No doubt the State Government could have resorted to other methods of curbing peak hour demand (e.g. power cuts during peak hours), but it is not for this Court to tell the Government which option would have been better. Within the wide parameters of the law the administration has several choices, and as long as the choice does not break the law nor is shockingly arbitrary this Court will not interfere.

48. The function of a judge has been described thus by Lawton LJ: “ A Judge acts as a referee who can blow his judicial whistle when the ball goes out of play, but when the game restarts he must neither take part in it nor tell the players how to play” vide Laker Airways Ltd. v. Department of Trade (1977) QB 643 (724).

49. In our opinion adjudication must be done within the system of historically validated restraints and conscious minimisation of the judges preferences. The Court must not embarrass the administrative authorities and must realise that administrative authorities have expertise in the field of administration while the Court does not. In the words of Chief Justice Neely:

“ I have very few illusions about my own limitations as a Judge. I am not an accountant, electrical engineer, financer, banker, stockbroker or system management analyst. It is the height of folly to expect Judges intelligently to review a 5000 page record addressing the intricacies of a public utility operation. It is not the function of a Judge to act as a super board, or with the zeal of a pedantic school master substituting its judgment for that of the administrator.”

50. In administrative matters the Court should therefore ordinarily defer to the judgment of the administrators unless the decision is clearly illegal or shockingly arbitrary.

51. In this connection Justice Frankfurter while Professor of Law at Harvard University wrote in 'The Public and its Government' --

“ With the great men of the Supreme Court constitutional adjudication has always been statecraft. As a mere Judge, Marshall had his superiors among his colleagues. His supremacy lay in his recognition of the practical needs of government. The great judges are those to whom the Constitution is not primarily a text for interpretation but the means of ordering the life of a progressive people.”

In the same book Justice Frankfurter also wrote---

“ In simple truth, the difficulties that government encounters from law do not inhere in the Constitution. They are due to the judges who interpret it. That document has ample resources for imaginative statesmanship, if judges have imagination for statesmanship.”

52. In Keshvananda Bharati v. State of Kerala, AIR 1973 SC 1461 ( vide para 1547) Khanna, J. observed:

“In exercising the power of judicial review, the Courts cannot be oblivious of the practical needs of the government. The door has to be left open for trial and error.”

53. In Indian Railway Construction Co. Limited vs. Ajay Kumar (2003) 2 UPLBEC 1206 (vide para 14) the Supreme Court observed that there are three grounds on which administration action is subject to control by judicial review. The first ground is illegality, the second is irrationality and the third is procedural impropriety. These principles were highlighted by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service 1984 (3) All ER 935. The Supreme Court observed that the Court will be slow to interfere in such matters relating to administrative functions unless the decision is tainted by any vulnerability enumerated above, like illegality, irrationality and procedural impropriety. The famous case, commonly known as the 'Wednesbury's case', is treated as the landmark in laying down various principles relating to judicial review of administrative or statutory discretion.

54. Lord Diplock explained irrationality as follows:

“ By irrationality I mean what can be now be succinctly referred to as Wednesbury unreasonableness. It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it.”

55. In our opinion the impugned G.O.Ms.No.17 dated 14.2.1997 cannot be said to be so outrageous in its defiance of logic or of accepted moral standards that no sensible person could have arrived at it.

56. It is well settled that in policy matters this Court has a very limited scope of interference vide Union of India vs. International Trading Co., J.T. 2003 (4) SC 549 (para 17), State of Punjab vs. Ram Lubhaya, 1998 (4) SCC 117, Krishnan Kakkanth vs. Government of Kerala 1997 (9) SCC 495, G.B. Mahajan vs. Jalgaon Municipal Council AIR 1991 SC 1153, Federation of Railway Officers Association vs. Union of India, 2003 (4) SCC 289.

57. In Union of India vs. International Trading Co. 2003 (51) ALR 598 (vide paragraph 17) the Supreme Court observed:

“The Courts as observed in G.P. Mahajan v. Jalgaon Municipal Council, AIR 1994 SC 988 are kept out of the lush field of administration policy except where the policy is inconsistent with the express or implied provision of a statute which creates the power to which the policy relates, or where a decision made in purported exercise of power is such that a repository of the power acting reasonably and in good faith could not have made it. But there has to be a word of caution. Something overwhelming must appear before the Court will intervene. That is and ought to be a difficult onus for an applicant to discharge. The Courts are not very good at formulating or evaluating policy. Sometimes when the Courts have intervened on policy grounds the Court's view of the range of policies open under the statute or of what is unreasonable policy has not got public acceptance. On the contrary, curial views of policy have been subjected to stringent criticism.

As Professor Wade points out (in Administrative Law by H.W.R. Wade, 6th Edition), there is ample room within the legal boundaries for radical differences of opinion in which neither side is unreasonable. The reasonableness in administrative law must therefore distinguish between proper course and improper abuse of power. Nor is the test the Court's own standard of reasonableness as it might conceive it in a given situation. The point to note is that the thing is not unreasonable in the legal sense merely because the Court thinks it to be unwise.”

58. In Tamil Nadu Education Dept., Ministerial and General Subordinate Services Association vs. State of Tamil Nadu and others, AIR 1980 SC 379, the Supreme Court while examining the scope of interference by the Courts in public policy held that the Court cannot strike down a circular / Government Order or a policy merely because there is a variation or contradiction. The Court observed: “Life is sometimes contradiction and even inconsistency is not always a virtue. What is important is to know whether mala fides vitiates or irrational and extraneous factors fouls”.

In that decision the Court also observed:

“Once, the principle is found to be rational, the fact that a few freak instances of hardship may arise on either side cannot be a ground to invalidate the order or the policy. Every cause claims a martyr and however, unhappy we be to see the seniors of yesterdays becoming the juniors of today, this is an area where, absent arbitrariness and irrationality, the Court has to adopt a hands-off policy.”

59. In Maharashtra State Board of Secondary and High Secondary Education and others vs. Paritosh Bhupesh Kumarsheth, AIR 1984 SC 1543, the Supreme Court considered the scope of judicial review in a case of policy decision and held as under:-

“The Court cannot sit in judgment over the wisdom of the policy evolved by the Legislature and the sub-ordinate regulation making body. It may be a wise policy, which will fully effectuate the purpose of the enactment or it may be lacking in effectiveness and hence calling for revision and improvement. But any drawbacks in the policy incorporated in a rule or regulation will not render it ultra vires and the Court cannot strike it down on the ground that in its opinion, it is not a wise or prudent policy but is even a foolish one, and that it will not really serve to effectuate the purpose of the Act. The legislature and its delegate are the sole repositories of the power to decide what policy should be pursued in relation to matters covered by the Act and there is no scope for any interference by the Courts unless the particular provision impugned before it can be said to suffer from any legal infirmity in the sense of its being wholly beyond the scope of the regulation-making power or it being inconsistent with any of the provisions of the parent enactment or in violation of any of the limitations imposed by the Constitution.”

60. A similar view has been reiterated in Delhi Science Forum and others vs. Union of India and another, AIR 1996 SC 1356 ; U.P. Kattha Factories Association vs. State of U.P. and others, (1996) 2 SCC 97; and Rameshwar Prasad vs. Managing Director, U.P. Rajkiya Nirman Nigam Limited and others (1999) 8 SCC 381.

61. In Netai Bag and others vs. State of West Bengal and others, (2000) 8 SCC 262 (vide para20), the Supreme Court observed:

“The Court cannot strike down a policy decision taken by the government merely because it feels that another decision would have been fairer or wiser or more scientific or logical.”

62. Hence we cannot strike down G.O.Ms.No.17 dated 14.2.1997 on the ground that there could be a better method of curbing or reducing the peak hour demand.

63. The Court may feel that a better decision could have been taken or some other course of action could have been adopted by the legislature or executive to curtail the peak hour demand, but on this ground it cannot strike down the law or the administrative decision. The legislature and the executive authorities in their wisdom are free to choose different methods of solving a problem and the Court cannot say that this or that method should have been adopted. As Mr. Justice Cardozo of the U.S. Supreme Court observed in Anderson vs. Wilson, 289 U.S. 20:

“We do not pause to consider whether a statute differently conceived and framed would yield results more consonant with fairness and reason. We take this statute as we find it.”

64. The Government is entitled to make pragmatic adjustments and policy decisions which may be necessary or called for under the prevalent peculiar circumstances. In Netai Bag v. State of W.B (supra), the Court referred to and relied upon its earlier judgments in State of Madhya Pradesh vs. Nandlal Jaiswal, AIR 1987 SC 251 and Sachidanand Pandey vs. State of West Bengal, AIR 1987 SC 1109, wherein the Court held that judicial interference with policy decision is permissible only if the decision is shown to be patently arbitrary, discriminatory or mala fide. A similar view has been reiterated in Union of India and others vs. Dinesh Engineering Corporation and another, (2001) 8 SCC 491.

65. In Ugar Sugar Works Ltd. vs. Delhi Administration and others, (2001) 3 SCC 635, it has been held that in exercise of their powers of judicial review, the Courts do not ordinarily interfere with policy decisions of the executive unless the policy can be faulted on the ground of mala fide, unreasonableness, arbitrariness or unfairness etc. If the policy cannot be touched on any of these grounds, the mere fact that it may affect the interests of a party does not justify invalidating the policy.

66. In State of Himachal Pradesh and another vs. Padam Dev and others (2002) 4 SCC 510, the Supreme Court held that unless a policy decision is demonstrably capricious or arbitrary and not informed by any reason or discriminatory or infringing any statute or the Constitution it cannot be a subject of judicial interference under the provisions of Articles 32, 226 and 136 of the Constitution. Similar view, has been reiterated in State of Rajasthan and others vs. Lata Ar4run, (2002) 6 SCC 252.

67. This Court cannot ordinarily interfere in administrative matters, since the administrative authorities are specialists in matters relating to the administration. The court does not have the expertise in such matters, and ordinarily should leave such matters to the discretion of the administrative authorities. It is only in rare and exceptional cases, where the Wednesbury principle applies, that the Court should interfere, vide Tata Cellular vs. Union of India, (1994) 6 SCC 651, Om Kumar vs. Union of India, 2001 (2) SCC 386. In U.P., Financial Corporation V. M/s Naini Oxygen & Acetylence Gas Ltd. J.T. 1994 (7) S.C.551 (vide para 21) the Supreme Court observed:

“ However, we cannot lose sight of the fact that the Corporation is an independent autonomous statutory body having its own constitution and rules to abide by, and functions and obligations to discharge. As such, in the discharge of its function it is free to act according to its own light. The views it forms and the decisions it takes are on the basis of the information in its possession and the advice it receives and according to its own perspective and calculations. Unless its action is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the Courts or a third party to substitute its decision, however more prudent, commercial or business like it may be , for the decision of the Corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of the Corporation, the same cannot be assailed by making the Corporation liable.”

68. In Krishnan Kakkanth Vs. G

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overnment of Kerala, (1997) 9 SCC 495 the Supreme Court observed:- “To ascertain unreasonableness and arbitrariness in the context of Article 14 of the Constitution, it is not necessary to enter upon any exercise for finding out the wisdom in the policy decision of the State Government. It is immaterial whether a better or more comprehensive policy decision could have been taken. It is equally immaterial if it can be demonstrated that the policy decision is unwise and is likely to defeat the purpose for which such decision has been taken. Unless the policy decision is demonstratably capricious or arbitrary and not informed by any reason whatsoever or it suffers from the vice of discrimination or infringes any statute or provisions of the Constitution, the policy decision cannot be struck down. It should be borne in mind that except for the limited purpose of testing the public policy in the context of illegality and unconstitutionality, courts should avoid “embarking on uncharted ocean of public policy”. 69. As observed by the Supreme Court in M.H.Qureshi Vs. State of Bihar, AIR 1958 SC 731, the Court must presume that the legislature understands and correctly appreciates the needs of its own people. The legislature is free to recognize degrees of harm and may confine its restrictions to those where the need is deemed to be the clearest. In the same decision it was also observed that the legislature is the best judge of what is good for the community on whose suffrage it came into existence. In our opinion, the same principle also applies to the executive decisions, as the executive is accountable to the legislature in a democracy. 70. One of the earliest scholarly treatments of the scope of judicial review is Prof. James Bradley Thayer’s article “The Origin and Scope of the American Doctrine of Constitutional Law”, published in 1893 in the Harvard Law Review. This paper is a singularly important piece of American legal scholarship, if for no other reason than that Justices Holmes and Brandeis of the U.S.Supreme Court, among modern judges, carried its influence with them to the Bench, as also did Mr. Justice Frankfurter. Thayer, who was a Professor of Law at Harvard University, strongly urged that the courts must be astute not to trench upon the proper powers of the other departments of government, nor to confine their discretion. Full and free play must be allowed to “that wide margin of considerations which address themselves only to the practical judgment of a legislative body or the executive authorities”. Moreover, every action of the other departments embodies an implicit decision on their part that it was within their constitutional power to act as they did. The judiciary must accord the utmost respect to this determination, even though it be a tacit one. This meant for Thayer, and he attempted to prove that it had generally meant to the courts, that a statute or a policy decision could be struck down as unconstitutional only “when those who have the right to make it have not merely made a mistake, but have made a very clear one, so clear that it is not open to rational question”. After all, the Constitution is not a legal document of the nature of a title deed or the like, to be read closely and construed with technical finality, but a complex charter of government, looking to unforeseeable future exigencies. Most frequently, reasonable men will differ about its proper construction. The Constitution leaves open “a range of choice and judgment,” and hence constitutional construction ‘involves hospitality to large purposes, not merely textual exegesis’. 71. In Lochner Vs. New York, 198 U.S. 45 (1905), Mr.Justice Holmes, the celebrated Judge of the U.S. Supreme Court in his classic dissenting judgment pleaded for judicial tolerance of state legislative action even when the Court may disapprove of the State Policy. Similarly, in his dissenting judgment in Griswold Vs. Connecticut, 381 U.S. 479, Mr.Justice Hugo Black of the U.S. Supreme Court warned that “unbounded judicial creativity would make this Court a day-to-day Constitutional Convention”. Justice Frankfurter has pointed out that great judges have constantly admonished their brethren of the need for discipline in observing their limitations (see Frankfurter’s ‘Some Reflections on the Reading of Statutes’). 72. In view of the above, we find no merit in these writ appeals and writ petitions and they are accordingly dismissed. No costs. Consequently, W.P.M.Ps and W.A.M.Ps are also dismissed.