' QAZI FAEZ ISA, C J.---These petitions assail the 'fuel price adjustment' ("FPA") and the 'equalization surcharge' imposed in the electricity bills of the petitioners, who contend that the FPA and the said surcharge are illegal and unconstitutional. The petitioners are the customers of Quetta Electricity Supply Company Limited ("QESCO") which bills them for the electricity consumed by them.
2. We shall first attend to the fuel price adjustment, which was brought about vide Finance Act, 2008 (Act No. 1 2008) through which a second proviso was added to subsection (4) of section 31 of .The Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (hereinafter referred to as "the second proviso" and "the Act" respectively); the second proviso is reproduced hereunder: "Provided further that' the Authority shall, on a monthly basis, review and revise the approved tariff on account of any variations in the fuel charges and policy guidelines as the Federal Government may issue in this behalf and recommend the tariff so revised to the Federal Government in the official Gazette."
' However, the second proviso has undergone changes from time to time. It was amended by the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Ordinance, 2009 (Ordinance No. XVIII of 2009) as under: "Provided further that the Authority shall, on a monthly basis and not later than a period of seven days, review the fuel charges in the approved tariff on account of any variation whatsoever and notify such revision in the official Gazette for the purposes of approved tariff applicable with effect from the said notification."
' That, since the life span of Presidential Ordinances is four months, the said Ordinance was re- promulgated by the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Ordinance, 2009 (Ordinance XXIX of 2009) and the second proviso contained in the re-promulgated Ordinance is reproduced hereunder: "Provided further that the Authority, shall, on a monthly basis and not later than a period of seven days, review the fuel charges in the approved tariff on account of any variation whatsoever and notify such revision in the official gazette for the purposes of approved tariff applicable with effect from the said notification."
' The aforesaid Ordinance was in turn re-promulgated by the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Ordinance, 2010 (Ordinance No.XIV of 2010) and the second proviso contained therein is reproduced hereunder: "Provided further that the Authority shall, on a monthly basis and not later than a period of seven days, review the fuel purposes of approved tariff applicable with effect from the said notification."
' Thereafter, the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Act, 2011 (Act No. XVII of 2011) (hereinafter referred to as "the Act of 2011") was enacted wherein the second proviso was slightly amended to read as under: "Provided further that the Authority may, on a monthly basis and not later than a period of seven days, make adjustments in the approved tariff on account of, any variations in the fuel charges and, policy guidelines as the Federal Government may issue and, notify the tariff so adjusted in the official Gazette."
3. That, initially the power to issue notification under the second proviso was with the Federal Government whereafter in the above mentioned three Ordinances (two of the year 2009 and one of 2010) and the Amendment Act of 2011 the power to issue notification was transferred to the National Electric Power Regulatory Authority ("NEPRA"). The other changes made to the second proviso in the Amendment Act of 2011, was to substitute the word 'shall' with the word 'may'.
4. That with a view to better understand the matter it would be appropriate to reproduce section 31 of the Act as it presently exists: "3 1 . Tariff.
(1) As soon as may be, but not later than six months from the commencement of this Act, the Authority shall determine and prescribe procedures and standards for determination, modification or revision of rates, charges and terms and conditions for generation of electric power, transmission, interconnection, distribution, services and power sales to consumers by licensees and until such procedures and standards are prescribed, the Authority shall determine, modify or revise such rates, charges and terms and conditions in accordance with the directions issued by the Federal Government.
(2) The Authority while determining the standards referred in subsection (1) shall --
(a) protect consumers against monopolistic and oligopolistic prices;
(b) keep in view the research, development and capital investment program costs of licensees;
(d) encourage economic efficiency in the electric power industry;
(e) keep in view the economic and social policy objectives of the Federal Government; and
(t) determine tariffs so as to eliminate exploitation and minimize economic directions.
(3) The procedures established under subsection (1) shall include--
(a) time frame for decisions by the Authority on tariff applications:
(b) opportunity for customers and other interested parties to participate meaningfully in the tariff approval process; and
(c) protection for refund, if any, to customers while tariff decisions are pending.
(4) Notification of the Authority's approved tariff, rates, charges, and other terms and conditions for the supply of electric power services by generation, transmission and distribution companies shall be made, in the official Gazette, by the Federal Government upon intimation by the Authority: ' Provided that the Federal Government may, as soon as may be, but not later than fifteen days of receipt of the Authority's intimation, require the Authority to reconsider its determination of such tariff, rates, charges and other terms and conditions. Whereupon the Authority shall, within fifteen days, determine these anew after reconsideration and intimate the same to the Federal Government: ' Provided further that the Authority may, on a monthly basis and not later than a period of seven days, make adjustments in the approved tariff on account of, any variations in the fuel charges and, policy guidelines as the Federal Government may issue and, notify the tariff, so adjusted in the official Gazette.
(6) Each distribution company shall pay to the Federal Government such surcharge as the Federal Government, from time to time, notify in respect of each unit of electric power sold to the consumers and any amount paid under this subsection shall be considered as a cost incurred by the distribution company to be included in the tariff determined by the Authority."
' The referred to prescribed procedures and standards mentioned in subsection (1) of section 31 are the National Electric Power Regulatory Authority (Standards and Procedures) Rules, 1998.
5. Mr. Muhammad Aamir Rana, the learned Advocate for the petitioners, assailed the second proviso on the following grounds:
(a) That the same is in contravention of the Act;
(b) That once the tariff has been determined pursuant to subsections (1), (2) and (3) of section 31 the matter concludes and no additional levy can be imposed on account of variation in the fuel charges;
(c) That the application of the second proviso is retrospective in effect;
(d) That commercial consumers cannot pass on the fuel price adjustment to their respective consumers as billing in respect of FPA is made in future bills;
(e) That under Article 157(2) of the Constitution of the Islamic Republic of Pakistan, 1973 ("the Constitution") only the Government of Balochistan can determine tariff; and
(t) That the Eighteenth Amendment to the Constitution has done away with the Concurrent Legislative List from the Constitution, wherein the subject of 'electricity' was mentioned, therefore, the Federation/NEPRA cannot fix the price of electricity, including FPA and the equalization surcharge.
' Reliance was also placed upon the case of Government of Pakistan v. Village Development Organization (2005 SCMR 492) to contend that only those orders and notifications which are beneficial are permitted to have retrospective effect, but not those which invade upon vested rights of citizens. Learned counsel also relied upon the unreported judgment dated 17th December 2013 of a Division Bench of the Peshawar High Court in the case of S.S. Polypropylene (Pvt) Ltd v PESCO (W.P.456-P/2012) wherein the FPA was declared to be ultra vires the Constitution, and the judgments of learned single judges respectively of the Lahore and Islamabad High Courts in the cases of Pakistan Flour Mills Association v. WAPDA (PLD 2013 Lahore 182) and Karachi Steel Mills v.
WAPDA (2013 CLC 141).
6. Mr. Muhammad Shafiq, the learned counsel for NEPRA, opposed the petitions and stated that.
Parliament has enacted the second proviso which is being implemented by NEPRA in letter and spirit and no case has been made out which undermines the legality and tariff under subsections (1), (2) and (3) of section 31 is annually determined, however, as the cost of fuel frequently fluctuates therefore its cost cannot be determined in such tariff and it is to address the fluctuation in, the cost of fuel that Parliament had inserted the second proviso to subsection (4) of section 31 of the Act. He further stated that the petitioners have assumed that the fuel price adjustment is always an increase in the price, however, there have been cases when the electricity distribution companies (also referred to as "DISCOS"), of which QESCO is one of nine, have been directed to reduce the price and pass on the benefit to the consumer in case the cost of fuel was reduced.
7. Mr. Muhammad Shafiq systematically explained the mechanism that is used by NEPRA before issuing a FPA notification pursuant to the second proviso. In this regard he stated that NEPRA is informed about the price of fuel that has been purchased from the Central Power Purchasing Agency ("CPPA") which is a component of the National Transmission and Dispatch Company Limited (NTDC), a 100% government owned company, and upon receipt of the same NEPRA issues public notices which are published in leading newspapers and fixes the date of pubic hearing, whereafter the members of NEPRA after hearing the objections, if any, take a decision and only thereafter issue a FPA notification. He further stated that if anyone is aggrieved by the decision or the notification issued by NEPRA a review can be preferred under section 7 of the Act read with Rule 16 of NEPRA Tariff Rules. He stated that the present petitioners did not object to the imposition of the fuel price adjustment and also did not seek its review, therefore, on this ground alone the petitions are not maintainable for not availing the alternate available remedy. Mr. Muhammad Shafiq further stated that the FPA is not in the nature of a tax or a levy, but is the amount actually incurred in the generation of electricity and as such its recovery can be made. He placed reliance upon the case of Noorani Steel Mills v. Federation of Pakistan (2010 YLR 2872) and the interlocutory order passed by the Divisional Bench of the Lahore High Court in the pending Intra Court Appeal filed against the judgment of a learned single judge in the reported case pf Pakistan Flour Mills Association v.
WAPDA (PLD 2013 Lahore 182). In the Pakistan Flour Mills Association case a learned single judge had stopped the imposition of fuel price adjustment on consumers consuming less than 350 units per month, which part of the judgment was suspended by the Division Bench. Mr. Shafiq stated that the case of LESCO v. North Star Textile Mills (2014 CLC 28) was a Divisional Bench of the Islamabad High Court which had set aside the judgment of the learned single judge in the case of Karachi Steel Mills (above) wherein the 'retrospective' application of the purported fuel adjustment 'charge' was declared to be unconstitutional. The judgment of assailed before the Hon'ble Supreme Court and leave has been granted therein by the Hon'ble Supreme Court in the case titled Disposable Utensils Industries (Pvt.) Ltd. v North Star Textile Mills Ltd. Mr.Shafiq stated that the Hon'ble Supreme Court has not suspended the fuel price adjustment and the only relief that was granted to the petitioners was to permit them to make payment in installments.
8. Mr. Muhammad Shafi contended that the constitutional challenge to the FPA/the second proviso is also not sustainable, since the Eighteenth Amendment to the Constitution whilst omitting the Concurrent Legislative List inserted 'electricity' in the Federal Legislative List in Item 4, of Part II of the Fourth Schedule, therefore, no unconstitutionality is committed if Parliament inserted the second proviso in subsection (4) of section 31 of the Act. As regards Article 157(2) of the Constitution the learned counsel that it is not attracted in the present case and the contention that only the Government of Balochistan can now determine tariff is misplaced. Reliance was placed upon the case of Gadoon Textile Mills v. WAPDA (1997 SCMR 641).
9. That, let us begin by examining the judgment of the Division Bench of the Peshawar High Court and the two judgments of the learned single judges of the Lahore and Islamabad High Courts which Mr. Rana states have determined that the imposition of FPA is unconstitutional. The judgment of the Peshawar High Court in the case of S.S. Polypropylene (above) concerns itself with the Province of Khyber Pakhtunkhwa and the generation of electricity through water (hydel power).
The Peshawar High Court held that since in the Province electricity is generated by hydel power, and not by burning fossil fuels, therefore, the fuel price adjustment should not be imposed on the consumers in the Province. The same however is not the position with regard to the Province of Balochistan. The Hon'ble Supreme Court has suspended the judgment of the Peshawar High Court vide order dated 1st April 2014 in civil petitions for leave to appeal filed by Peshawar Electric Supply Limited (Civil Petitions Nos.312, 323 to 393, 426 and 476 of 2014), however, the decision of the Hon'ble Supreme Court is awaited.
' In the Pakistan Flour Mill's case a learned Single Judge of the Lahore High Court had stopped the imposition of FPA on consumers who consume less than 350 units of electricity per month. The learned judge calculated the number of units presumably consumed by a family (in paragraph 47 of the judgment) and then proceeded to state that, "a family whose earning is only Rs.10,000/- or less than Rs.15,000/- per month and if they 'are burdened with fuel adjustment price it will become entitled to get the energy at subsidized rates" (paragraph 48 of the judgment). With utmost respect to the learned judge it is our considered opinion that it is not within the constitutional mandate of the High Court to determine whether any particular category of consumer should receive a subsidy or not. Moreover, subsidy is not a right, but a benefit, and in our opinion cannot be claimed as of right or as a fundamental right that A can be agitated under Article 199 of the Constitution. Be that as it may none of the petitioners herein are domestic consumer consuming less than 350 electricity units per month.
' With regard to the case of Karachi Steel Mills a learned judge of the Islamabad High Court concluded that the second proviso contained in section 31(4) of the Act is not unconstitutional (paragraph 15 of the judgment). The learned judge however referred to the fuel price adjustment as "fuel adjustment surcharge" and after categorizing it as a tax proceeded to state that interpretation of fiscal statute is to be made in favour of the taxpayer. However, the said fuel price adjustment is not a tax, but is a price adjustment that takes into account the variation in the price of the fuel, and in respect whereof, from time to time, NEPRA issues fuel price adjustment notifications. The second proviso itself states that it is with regard to making, "adjustments in the approved tariff on account of, any variations in the fuel charges." Moreover, none of the petitioners have produced any material whereby it could be assumed that the FPA is being imposed as a tax, and not as a fuel price adjustment. The learned judge further held that, "the levy and demand of fuel adjustment Charges as arrears with retrospective effect is declared as unconstitutional", however, as noted the adjustment is not a "fuel adjustment charge" but a fuel price adjustment. As regards the contention that it is retrospectively applied the learned judge posed a question (in paragraph 16 of his judgment), that, "Whether any taxpayer can be taken by surprise and required to adjust cost of any product which had already been reached to consumer?" He then proceeded to answer the question by stating that it could not, because "it looks not only ridiculous but unjust as well". Respectfully, we cannot bring ourselves to agree with either, the assumption that was drawn by the learned judge, nor the conclusion that he arrived at. If either the assumption or the conclusion were accepted then electric companies would also not be able to charge for the electricity that had already been consumed because electricity billing follows its consumption by the consumer. The usual practice is to generate monthly bills, after meter readings are taken which indicate the amount of electricity that has been consumed. The actual date of consumption of electricity is not the date of the bill. Even in common trade goods are often purchased on credit.
The question for our consideration is whether, something is being billed which has not been consumed, and not when it is being billed.
10. That, the said second proviso stipulates that the fuel price adjustment is required to be made, "not later than a period of seven days", but it does not stipulate when the said period commences.
The learned counsel for NEPRA stated that, before NEPRA issues a FPA notification it invites public objections and provides an opportunity of a hearing, therefore, it is not possible to issue the FPA notification within seven days from the date of receipt of intimation of price variation from CPPA. It was lastly contended that no consequences follow for not determining the matter within the said period of seven days and as such the period stipulated in the said second proviso is directory and not mandatory; reliance in this regard was placed on the cases of Niaz Muhammad Khan v. Fazal Raqib (PLD 1974 Supreme Court 134) and Noor-ul-Haq v Ibrahim Khalil (2000 SCMR 1305). Mr. Muhammad Shafiq further stated that the delay does not occur at NEPRA and immediately after CPPA informs NEPRA about the variation in fuel price NEPRA fixes the date of hearing within seven days, but as stated with a view to protect the public the matter cannot be determined within seven days. Undoubtedly, the said second proviso does not contain any consequences for non- compliance with the seven days provision. Moreover, if the price adjustment is not done within seven days the consumer does not suffer in any manner. The consumer will have to pay the same amount of the fuel price adjustment later rather than earlier (in case it has been increased). In any event fixing a date for hearing and providing an opportunity to consumers to submit their objections to the proposed price variation is to the consumers' advantage. Therefore, objection cannot be taken by the petitioners on this score.
10. That we now attend to Mr. Rana's contention that after omitting the Concurrent Legislative List, which included 'electricity' (item 34), NEPRA, which is a Federal authority, cannot fix tariffs or issue FPA notifications and the Government of Pakistan cannot determine the equalization surcharge.
The Concurrent Legislative List was omitted by the Eighteenth Amendment to the Constitution, but 'electricity' was also inserted into the Federal Legislative List (item 4 in Part II of the Fourth Schedule) by the Eighteenth Amendment, therefore, it cannot be contended that Parliament, the Government of Pakistan and or a Federal authority (NEPRA), as the case may be, cannot determine electricity tariff and other matters pertaining thereto.
11. That as regards the contention, that tariff can only be determined by the Government of Balochistan as purportedly stipulated in Article 157(2) of the Constitution is also misplaced. Article 157(2) provides as under: "157 (2) The Government of a Province may ---
(a) To the extent electricity is supplied to that province from the national grid, require supply to be made in bulk for transmission and distribution within the Province:
(b) levy tax on consumption of electricity within the Province:
(c) construct power houses and grid stations and lay transmission lines for use within the Province; and
(d) determine the tariff for distribution of electricity within the Province."
' That Mr. Tariq Ali Tahir, the learned Additional Advocate General, was correct in stating that the Government of Balochistan can only determine the tariff for distribution of electricity within the Province if electricity was supplied to it or it had purchased electricity from the national grid and on such electricity it could also levy tax. The said provision is applicable only if "electricity is supplied" to the Province and if it is supplied then the Province can transmit and distribute it within the Province, levy tax thereon, determine tariff, construct grid stations and lay transmission lines. Article 157(2) of the Constitution is an enabling provision, and as held by the Hon'ble Supreme Court in the case of Gadoon Textile Mills (above); "The Federal Government and the Government of a Province have discretion either to act under the above Article or not to act. In'other words, there is no Constitutional obligation to carry out works or to take action mentioned in the above Article."
' The learned counsel for the petitioners is therefore not correct in stating that in respect of the electricity supplied by QESCO to the petitioners only the Government of Balochistan can determine tariff.
13. We now turn to the remaining matter of the 'equalization surcharge' which is referred to as 'EQ' surcharge in the bills. Mr.Muhammad Shafiq stated that NEPRA does not impose the equalization surcharge. The learned counsel for QESCO and the learned DAG stated, that, the same was imposed vide Notification S.R.O. 233(1)/2011 dated 15th March 2011 by the Government of Pakistan; the operative part of the said notification is reproduced hereunder: "S.R.O. 233(1)/2011. In pursuance of subsection (4) of section 31 of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997), and in supersession of its Notification No. S.R.P. No. 1125(1)/2009, dated the 21st December, 2009, the Federal Government is pleased to notify the National Electric Power Regulatory for the quarter July-September, 2010 with effect from the 1st October, 2010 and applicable tariff as per Schedule-II to this notification, in respect of the QESCO and it is notified that QESCO shall receive payments from its consumers at the rates as per Schedule-II. The difference between the relevant rates determined by NEPRA as per Schedule-I and the rates charged from the consumers as per Schedule-II shall be paid to QESCO by the Federal Government: ' Provided that there shall be levied a surcharge @ 2% on the consumption of electricity by every category of electricity consumer mentioned in Schedule-II except consumption up to 300 units "Residential-Al".
' Subsequently, the rate was enhanced from 2 to 4 % vide Notification S.R.O. 360(1)/2011 dated 6th May 2011, which was further revised vide Notification S.R.O. 698(1)/2013 dated 5th August 2013, wherein on all consumers consuming more than 50 units of electricity were subject to a levy at the rate of 10 paisas per kilowatt hour and industrial consumers were levied at the rate of 81 paisas per kilowatt hour. We were told that NEPRA would determine the tariff in respect of each of the electricity distribution companies, including QESCO, and the Government of Pakistan would usually take the lowest tariff so determined and notify the same in Schedule II of the tariff notification and notify the rates determined by NEPRA in Schedule 1; the difference between the two rates was a subsidy that the Government of Pakistan granted to the respective distribution companies. The equalization charge attempted to reduce the effect the financial impact of the subsidy granted by the Government of Pakistan. It is further stated that QESCO is one of E the most inefficient units and receives the largest subsidy from the Government of Pakistan, whereas the equalization surcharge was uniformly applied throughout Pakistan, thus the QESCO consumers had a lesser financial impact than those in other provinces. The equalization surcharge however has been discontinued with effect from 1st October, 2013 (reference Notification S.R.O. 911(1)/2013 dated 11th October, 2013 issued by the Government of Pakistan). The equalization surcharge was the difference between the two rates as mentioned above, the F Government of Pakistan first granted a subsidy and then sought to reduce the financial impact thereof by imposing the equalization surcharge, therefore, it would not be correct to categorise the equalization surcharge as an additional imposition. The financial gymnastics resorted to by the Government was probably to cover the real price of electric power borne by the consumer.
14. We therefore conclude that the fuel price adjustment and the Moreover, by the imposition of FPA and equalization surcharge QESCO did not seek to recover anything beyond the cost of the electricity G consumed by the petitioners. Therefore, we are constrained to dismiss these petitions, but with no order as to costs. We had however passed interlocutory orders restraining QESCO from the recovery of the fuel price adjustment and equalization surcharge and it may work hardship on the petitioners if they are required to make immediate payment thereof. Therefore, following the precedent of the interim relief granted by the Hon'ble Supreme Court, the said amounts may be recovered by QESCO in twelve equal monthly installments. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.