Ayesha A. Malik, J: This judgment decides upon the issues raised in the instant Petition as well as connected Petitions detailed in Schedule "A" as all Petitions raise common questions of law and facts.
2. The Petitioners have challenged the imposition of quarter tariff adjustment ("QTA") in the electricity bills issued by the relevant distribution company , who are the Respondents in these petiti ons. The Petitioners have also challenged the decision dated 14.6.2019 issued by the National Electric Power Regulatory Authority ("NEPRA ") and the Notification dated 28.6.2019 issued by the Federal Government.
3. The basic relief sought for by the Petitioners is that the Respondents be restrained from recovering QTA on the consumption of electricity through their electricity bills. The Petitioners before the Court are all consumers of electricity who are aggrieved by the imposition of QTA in their bills on the basis of which the tariff has been adjusted retrospectively . Learned counsel for the Petitioners argued that as per the billing mechanism, the distribution company , on the basis of the monthly readings, issues bills to consumers in accordance with the tariff notified by the Federal Government. Once the bill is paid, it becomes a past and closed transaction as the Petitioners have paid the bill along with all relevant taxes and on the basis thereof have built that payment into their costs for the purposes of their business. Furthermore once the bill has been paid, there is no justification to seek any adjustment against a paid bill nor does the law provide for the same.
4. Learned counsel further argued that the tariff was first determined on 8.3.2016 being a multi year consumer end tariff for the years 2015 to 2020. Against this tariff, LESCO filed a motion leave to review which was dismissed by NEPRA vide order dated 19.5.2016. The Federal Government made a request to reconsider the tariff which was also dismissed on 1.7.2016 by NEPRA. The Respondent distribution companies approached the Hon'ble Islamabad High Court through various different petitions, consequent to which the matter was remanded to NEPRA to re-determine the tariff for the financial year 2015-16 to 2019-20. On 23.10.2017 NEPRA on its own made some adjustments to the tariff for the financial year 2016-17 and for the first time notification for the financial year 2015- 16 and 2016-17 was issued on 22.3.2018. In the meantime on 27.4.2018, Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 ("the Act") was amended, such that several amendments were made to Section 31 of the Act of which Section 31(4) is relevant for the purposes of the dispute before the Court. The Federal Government made a request before NEPRA for making uniform tariff and NEPRA issued its decision on 19.12.2018 for the financial year 2016-17 and 2017-18. This was notified on 1.1.2019. On 14.6.2019 NEPRA made its second decision whereby adjustments were made in the tariff that had already been notified on 1.1.2019. These adjustments were notified on 28.6.2019 after following the requirements of law for public notices and calling for objections. Learned counsel further argued that all adjustments made are in violation of Section 31(2)(a), 31(2)(c), 31(3)(a) and 31(3)(d) of the Act. Learned counsel further argued that the decision was taken by only three members of NEPRA without any Chairman, which is against law. Reliance is placed on "Sh. Rahmatullah v. The Deputy Settlement Commissioner , Centre, 'A' Karachi and others" (PLD 1963 SC 633),"Sheikh Fazal Ahmad v. Raja Ziaullah Khan and another" (PLD 1964 SC 494), "Islamic Republic of Pakistan through the Secretary , Ministry of Commerce and Local Government (Commerce Divis ion), Islamabad" (1977 SCMR 509), "Imtiaz Ahmad and others v. Punjab Public Service Commission through Secretary , Lahore and others" (PLD 2006 SC 472), "Province of Punjab through Secret ary to the Government v Dr. Muhammad Zafar Iqbal and 10 others" (2018 PLC (C.S) 152) and "Syeda Shazia Irshad Bokhari v. Government of Punjab through Secretary Health and another" (PLD 2005 Lahore 428 ).
5. Report and parawise comments have been field by the Respondent LESCO. Learned counsel for the LESCO stated that the Respondents are Distribution Licensees who filed petitions before NEPRA for determination of consumer end tariff in accordance with the National Electric Power Regulatory Authority (Tariff Standards and Procedure) Rules, 1998 ("1998 Rules "). A public hearing is always given when adjustments are made and any member of the public can raise objections at the hearing. Quarterly adjustments are made on account of the variations in the components of the Power Purchase Price ("PPP") which includes transmission and distribution losses amongst other components. LESCO challenged the determination made on 8.3.2016 and ultimately the matter went to the Hon'ble Islamabad High Court wherein the issue of tariff determination was remanded to NEPRA in terms of the judgment cited at Lahore Electric Supply Company Limited (LESCO) and others v.
National Electric Power Regulatory Authority and others (PLD 2018 Islamabad 20). Learned counsel argued that NEPRA issued the tariff and made all adjustments as per the rules; that it has not violated any provision of the Act, the Rules or the National Electric Power Regulatory Authority Guidelines for Determination of Consumer End Tariff (Methodology and Process) 2015 ("the Guidelines") and that in fact this issue has been decided several times all the way up to the august Supreme Court of Pakistan. Learned counsel further stated that the Petitioners have no vested right to challenge the tariff. He argued that a public hearing is given and any objection that the Petitioners have to the prudency of the costs should be raised at that time and that such matter cannot be challenged in Constitutional petition. Learned counsel places reliance on ICC Textiles Limited through Authorized Representative and 31 others v. Water and Power Development Authority (WAPDA), WAPDA House, Lahore through Chairman and 15 others (2009 CLC 1343), Flying Board and Paper Products Ltd. and others v.
Government of Pakistan through Secretary Cabinet Division and others (2010 SCMR 517) and in WP No.25437/2015 titled Hameed Steel etc. v. LESCO etc. vide order dated 2.9.2015. He further clarified that essentially QTA has always been made, however, it is for the first time that this has been depicted in a separate box in the bill in terms of the requirements stipulated in the Notification dated 28.6.2019 issued by the Ministry of Energy (Power Division), Islamabad. On the issue of the number of the members who can take a decision with respect to tariff he stated that the matter in issue stands decided by the august Supreme Court of Pakistan in "National Electric Power Regulatory Authority v. Faisalabad Electric Supply Company Limited" (2016 SCMR 550) hence this objection cannot be raised before this Court.
6. Report and parawise comments have also been filed by the Respondent NEPRA. Learned counsel for the Respondent NEPRA argued that NEPRA is statutory body established under the Act for the regulation of provision of electric power service in Pakistan. In terms of the Act, NEPRA is responsible for the determination of tariff. Every distribution licensee files a petition before NEPRA seeking determination of consumer end tariff in accordance with the provision of the 1998 Rules. The salient features of the petitions are published in the newspaper inviting comments, objections and interveners and a public hearing is granted. Subsequ ently, the tariff determination is made by NEPRA. In the case before the Court a multiyear consumer end tariff was determined for LESCO for a period of five years from 2015 to 2020. Essentially the determination was made on 08.08.2016 after carrying out a public hearing, however , LESCO was aggrieved by this determination, hence it filed a motion for leave for review , which was decided by NEPRA on 19.05.2016. Subsequently , reconsideration request was filed by the Federal Government, which was decided on 01.07.2016. LESCO being aggrieved filed a petition before the Hon'ble Islamabad High Court, Islamabad, which ultimately remanded the matter to NEPRA for reconsideration in terms of PLD 2018 Islamabad 20 (supra) . Learned counsel stated that tariff methodology for determining PPP and quarterly adjustment are provided for in the Guidelines. The consumer end tariff is determined to ensure recovery of the revenue requirements of the distribution company in accordance with the Act and 1998 Rules. The Petitioners before the Court had efficacious remedy available to them under the Act in the form of an appeal, which remedy has not been availed by them. Furthermore, they can always participate in the public hearing if they have any objection or comments with respect to the quarterly adjustment. However , the contention that the quarterly adjustments are against the mandate of the law or that they are applied retrospectively is totally without basis as it is part of the mechanism for tariff determi nation which is prescribed under the law and which has been followed by NEPRA regularly . He explained that quarterly adjustment can only be made after the actual consumption of electricity , hence the Guidelines prescribes for adjustment to be made at end of each quarter , once the actual figures are available. With respect to the arguments made on the composition of NEPRA and the fact that only three members were available at the time when the decision was taken, learned counsel stated that the matter in issue has already been decided by the august Supreme Court of Pakistan in 2016 SCMR 550 (supra ), hence the said issue cannot be raised again before this Court.
7. Report and parawise comments have also been filed by the Respondent FESCO, GEPCO and IESCO. They have adopted the arguments raised by the learned counsel for the Respondent LESCO and NEPRA. On behalf of Federal Government, learned Deputy Attorney General for Pakistan also adopts the arguments made on behalf of NEPRA.
8. Heard and record perused. The impugned decision dated 14.06.2019 by NEPRA is related to the periodical adjustment in Tariff for the 1 and 2 Quarters of the FY 2017-18. As per the decision, XWDISCOs filed their quarterly adjustment request on account of the variation in the PPP, which includes the impact of transmission and distribution losses for the first and second quarters being July to September, 2018 and October to September, 2018.
A public hearing was held on 13.03.2019 and subsequently NEPRA gave due consideration to the comments, objections and interveners. A decision was made on 14.06.2019, which was communicated to the Federal Government for notifying in the official Gazette. The Petitioners are aggrieved by this decision on the ground that it is not in accordance with the Act; that it has retrospective effect and that the NEPRA was not duly constituted at the time. They rely on Section 31 of the Act to urge their point of illegality and being against the mandate of the law.
9. The basic frame work of the law for tariff determination falls under the Act. Sectio n 7 provides for the powers and functions of the Authority , wherein Section 7(2)(i) prescribes that the Authority shall issue guidelines and standard operating procedures for tariff determination. Section 7(3)(a) prescribes that NEPRA shall determine tariff, rates, charges and other terms and conditions for supply of electric power service by the generation, transmission, and distribution companies and recommend to the Federal Government for its notificati on. Section 31 provides that the Authority shall in the determination, modification or revision of rates, charges and terms and conditions for the provision of electric power service be guided by the national electricity policy , the national electricity plan and such guidelines as may be issued by the Fede ral Government in order to give effect to the national electricity policy and national electricity plan. In terms of Section 31(3) the general guidelines applica ble for tariff determination have been provided in which it is stated that tariff should allow the licensees the recovery of any and all cost prudently incurred to meet the demonstrated needs of their customers. Section 31(4) provides that NEPRA shall determine a uniform tariff for distribution licensees on the basis of their consolidated accounts. Once the tariff has beenst nd approved, it has to be notified by the Federal Government in the official Gazette under Section 31(7). The Act also provides for an appeal under Section 12G against any decision or order of the Authority and the quorum of the Appellate Tribunal is in terms of Section 12E. The 1998 Rules prescribes for the procedure to be followed by the Distribution Licensees when filing its tariff petitions such that Rule 5 of the 1998 Rules requires publication and service of notices for a public hearing and in terms of Rule 9 the hearing is given by the Authority . Rule 17 of the 1998 Rules provide for the standards and guidelines on the basis of which tariff shall be determined and again in terms of Rule 17 (3)(i) of the 1998 Rules tariff should allow licensees the recovery of any and all costs prudently incurred to meet the demonstrated needs of their customers.
10. In exercise of power under Section 7(2)(i) of the Act, NEPRA has issued Guidelines which provides for the methodology to be adopted with reference to tariff determination. In terms of Guideline 49 quarterly and bi-annual PPP adjustments are prescribed with reference to the PPP components being adjustments pertaining to the capacity and transmission charges, the impact of T&D losses and adjustment of variable O&M. Each component of the PPP is provided for in the revenue requirement of the distribution licensees on the basis of projected figures which are subject to adjustment as per actual figures as it is a pass through item. Also since there is a requirement for a uniform consumer and tariff at a national level, this is determined by NEPRA and notified by the Federal Government. The XWDISCOs file their adjustment requests on account of PPP variation in terms thereof. The objective of quarterly adjustment is to ensure that all pass through costs are factored into the tariff as per the requirement of the Act and 1998 Rules. The Distribution Companies does not have to bear these costs and is entitled to recover all prudently incurred costs. Hence the requirement of quarterly or bi annual adjustment. It is noted that as per the Guidelines only fuel adjustment is made on a monthly basis.
11. NEPRA determines tariff as per Section 31 of the Act after a distribution licensees file the petitions as per the 1998 Rules and the Guidelines. NEPRA determines the consumer end tariff for each distribution licensee after assessing the different components of its revenue requirements. In this context, there is a public hearing, which is duly published in the newspapers inviting all comments, objections and interveners request. The formulas and principals for determining the revenue requirement is provided under the Guidelin es. The Guideline prescribes for quarterly adjustment of capacity and transmission charges, the impact of transmission and distribution losses and the adjustment of variable O&M. As per the Guidelines, fuel adjustment is made on a monthly basis whereas the costs, charges and losses are made on a quarterly basis. This is necessitated because every tariff determination is based on presumptive figures at the beginning of the financial year, which figures have to be actualized on the basis of actual data. This exercise is carried out periodically on a quarterly basis after holding a public hearing. In this way every tariff determination is for a fixed period and every quarterly adjustment is also for a fixed quarter .
Hence QTA is as per the prescribed methodology and falls within the frame work of the Act. These are technical issues, based on projections and data for which NEPRA has laid out a transparent and comprehensive procedure, which should be followed. Therefore, the contention of the Petitioners with reference to QTA is without basis as the structure of the Act read with 1998 Rules and the Guidelines clearly provides for periodical adjustment of the PPP components which have to be determined based on actual costs incurred.
12. Consequent to the decision given by the Hon'ble Islamabad High Court, PLD 2018 Islamabad 20 (supra), NEPRA set out to re determine the tariff for the FY 2015-16 which included costs and adjustments pertaining to the entire financial year. A public hearing was held for the benefit of all stakeholders and the prudency of all costs claimed for that quarter were duly considered. At the time, NEPRA decided to include the impact of the component of the PPP for the entire FY 2015-16 as considerable period had lapsed from when tariff was earlier determined and when the matter was remanded to NEPRA vide the decision of the Hon'ble Islamabad High Court. Since there was a public hearing, the Petitioners should have participated in the same and could should have raised their objections at the time with respect to the prudency of the costs being claimed. At this stage, raising these objections before this Court in Constitutional jurisdiction is without basis as there is no vested right in favour of the Petitioners which they seek to enforce nor is there any basis on which they can claim that the periodical adjustments are illegal or have been even given retrospective effect. The periodical adjustments are in terms of the prescribed procedure under the scheme of the Act, hence no illegality is made out. Furthermore, remedy of appeal is provided under the Act, which was never availed by the Petitioners.
13. So far as the Petitioners, objection with respect to the composition of the autho rity and the fact that at the time they were only two members and one Vice Chairman, it is noted that this matter has already been decided by the august Supreme Court of Pakistan in "National Electric Power Regulatory Authority v. Faisalabad Electric Supply Company Limited" (2016 SCMR 550 ), hence no grievance is made out in this respect before this Court.
14. In view of the aforesaid, this petition as well as all connected petitions are dismissed . At this stage learned counsel for the Petitioners requested that in the event that their prayer is not accep ted by the Court, NEPRA should be directed to make installments for the sake of payment of QTA. It is observed that in this regard any request for installment should be raised before NEPRA or the Distribution Companies.