In both the petitions, the petitioners have assailed the authority of respondents in billing the energy charges from domestic consumers, commercial and industrial units, in Mirpur City; (i) for their being in excess to reasonable and rational rates of charges, derogatory and flagrantly violative of actual costs of production of energy coupled with necessary expenditure; _ (ii) for the action of the respondents being discriminatory and malicious in charging the consumers of electricity in different cities of Azad Kashmir, including Mirpur; and (iii) for their acting in excess to their prescribed authority and jurisdiction.
2. Since the legal and factual points raised in both the petitions are common and identical, it is, therefore, deemed, expedient , to dispose of the petitions by common order.
3. Nafees Bakers is a business enterprise in Mirpur City, with its premises at Mian Muhammad Road.
It is the continuous consumer of electricity w.e.f.. 1980. It was averred that on May 26, 1993, the petitioner received a notice from respondents Nos. 4 and 5, containing direction that on account of enhanced load of power, it was necessary to install another transformer, to supply the energy to the petitioner. The petitioner was asked to deposit a sum of Rs.59,756.00 for the purpose. The petitioner paid the amount and transformer was accordingly installed. It was alleged that the respondents, instead of charging the legal rates for the use of energy, have burdened the petitioner with additional charges under the heads: (i) fuel adjustment surcharge; (ii) electricity duty charge; (iii) education cess; (iv) tariff surcharge; and (v) income-tax. It was averred that all these charges are being imposed on the petitioner without lawful authority and legal sanction.
4. It was explained that Mirpur City was raised on the construction of Mangla Dam. The inhabitants of the city being mostly Mangla Dam affected and displaced persons, were promised at time of construction of Mangla Dam, their displacement and shifting to New Mirpur Town that Mangla Dam affected persons shall be provided the facility of free supply of energy, in addition to various other facilities, promised at the relevant time. Instead of honouring the commitment made at the time of displacement of Mangla Dam affected persons of supplying free energy, it was alleged that the respondents have burdened the Mangla Dam affected persons, including the petitioner by imposing and adding undue charges. It was a flagrant violation of the commitment made by the Government at the relevant time. Thus, instead of supplying free energy, the petitioner and other residents of Mirpur were burdened with undue charges, included in the bills issued by respondents Nos.4 and 5.
5. In second petition preferred by Mir Khalid Bashir, the allegations are identical to the aforesaid averments. It is further averred that the respondent/Electricity Department of Azad Jammu and Kashmir, has chosen to charge the consumers of domestic, commercial and industrial units in Azad Jammu and Kashmir, including Mirpur, in a discriminatory shape. Reference was made to two consumers' bills issued at Muzaffarabad and Dhirkot (Poonch), wherein charges of supply of electricity were quite distinct and lower in rate as compared to the charges entered in the bills delivered to the petitioner.
Reference was also made to an agreement between the Azad Kashmir Government and Pakistan Government, purported to be executed on June 24, 1967, whereby Azad Government of the State of Jammu and Kashmir agreed to allow the construction of Mangla Dam Project and other works in Azad Jammu and Kashmir territory, subject to terms and conditions described therein.
6. In both the petitions, it was prayed that the action of the respondents in charging the petitioners for electricity in Mirpur City in excess to the legitimate and reasonable rate, be declared illegal, discriminatory and malicious and that the respondents may be directed to refrain from rendering the bills of electricity to the petitioners in a discriminatory shape and further that the respondents may be directed to refrain from charging the petitioners undue rates of electricity supplied to them.
7. The respondents in their written statement, denied the allegations ascribed by the petitioners, to their actions pertaining to payment of bills, as illegal and without lawful authority. However, various 'heads' under which bills were issued to the petitioners and payment received from them from time to time, under various 'heads', was not repudiated. The respondents justified their action by referring to WAPDA Tariffs pertaining to: (i) domestic consumers; (ii) commercial units; and (iii) industrial units. The defence was further supported by reference to Government Notification No. 8311-14 dated November 22, 1991, letter of Collector, Income Tax No. Tax/12848-55/92 of July 14, 1992 and Chief Engineer's Order No. 12327-49/Electricity/93 dated August 26, 1993.
8. The learned counsel for the petitioners contended that the respondents transgressed their authority by enforcing undue charges under the 'heads' described above and forced the petitioners to pay the same under threat of stopping of supply of energy. Reference was made to the provisions of section 23(3) of the Electricity Act, section 25(2) of WAPDA Act, 1958 and PLD 1990 Lahore 330. It was elaborated by reference to the bills appended with the petitions that, the respondents indulged in discriminatory actions by applying different rates for the use of electricity in different areas of Azad Jammu and Kashmir. Reference was also made to bills appended with the petition of 'Nafees Bakers', pertaining to Karachi City. It was argued that the respondents were not eligible to impose exrtra liability of tariff surcharge unless the bill was not cleared within due time.
9. The historical background of Mirpur City refers back to construction of Mangla Dam, displacement of residents of area earmarked for reservoir and ancillary works of the Project. The Project was designed in early fifties and actual construction was started in late fifties. The State of Jammu and Kashmir including the liberated territories being disputed and Pakistan Government being party to the dispute, the construction of Dam was seriously opposed by the people of Mirpur.
The construction was opposed as in the best estimation of objectors, it was likely to disrupt the status quo of Kashmir dispute and thereby deprive the displaced persons of their legitimate right to vote at the time of plebiscite in the State as promised in UNCIP Resolutions. The other objection confined to inconvenience likely to be caused to the residents of the area by their shifting to rehabilitation places. It was likely to bring a tremendous effect on the values of living conditions, local customs, - social status by putting an end to their centuries old civilization. It was also likely to result in division of families and communities. Settlement at scattered places was likely to expose them to new problems in unfamiliar atmosphere. In brief, the affected and displaced persons were likely to be exposed to unknown and unforeseen problems, miseries resulting in psychological depression and physical changes. It was, therefore, tremendous self-sacrifice on the part of affected and displaced families. Its magnitude may be appreciated by comparison to people of Sindh, Balochistan and N.-W.F.P. who are unaninmously opposed to the construction of Kala Bagh Dam.
10. Mangla Dam reservoir spreading over 100 sq. miles was likely to affect the Mirpur City, Dadyal Town and 122 villages located within the marked area of the reservoir. In fact, a civilization was likely to be submerged under the blue water of the lake. It was likely to cause tremendous and huge human problems next to movement of refugees in 1947, at the time of emergence of Pakistan. In that background, it was deemed expedient and moral to promise payment' of adequate compensation for the property under acquisition, disturbance allowance, rehabilitation in New Mirpur Town and hamlets, on the periphery. It was promised that land shall be allotted to the farmers in Punjab. New Mirpur Town and Hamlets shall be raised and developed at the Government expense and residents shall be made liable to pay reasonable prices. It was in that situation when Heads of the State and Government in Azad Jammu and Kashmir and Pakistan and other concerned authorities made promise to provide modern facilities in New Mirpur Town and Hamlets.
The Mirpur City was to be linked with other parts of Pakistan by roads, railways and airport. It was also promised to provide the facility of Sui gas. Electric energy was promised to be supplied to Mirpur Town and hamlets and villages at periphery, free of costs and on priority basis.` The rehabilitation scheme in Mirpur City and hamlets was framed in the aforesaid manner. The old scheme of allotment of plots and development of the towns bear the testimony to these observations.
11. In unique political and customary fashion the promises made. by politicians or rulers, seldom saw the light of the day. On the same patron, the residents of Mirpur Town and Hamlets could not get what they, were promised by the Governments and the rulers of the time., It is undeniable that despite passage of 28 years, hundreds of Mangla Dam affected persons including widows and orphans still await for the allotment of piece of land in Mirpur Town and Hamlets for their residence.
Their anguish in misery has not ended. The Mangla Dam authorities under the direction of rulers of the time, of course, lavishly allotted plots to influential non-State Subjects, ineligible for the allotment. They resold the plots to citizens of Mirpur in black-market by receiving exorbitant prices, 500 times more than the actual price. Thus, it opened the floodgate of corruption and political manipulation. Be that as it may, the fact remains that Mangla Dam affected and displaced persons given fancy promises were still awaited to be honoured and fulfilled by the authorities at helm of affairs.
12. At the time of construction of Mangla Dam, an agreement was reached between the Azad Government of the State of Jammu and Kashmir and Pakistan Government. That agreement was executed in late fifties. As announced at the relevant time, publicly and in media, supply of free electricity to Mirpur Town and hamlets was promised by the authorities. That agreement appears to have been suppressed or replaced. The construction of Mangla Dam was completed in 1966. Its inaugural ceremony took place in 1967. Ordinarily, the agreement was believed to be made at the time of designing the Project or at the late, at the commencement of construction of the Project.
The copy of the agreement appended with the petition does not seem to be the real agreement as it is merely in the shape of clearance letter of Chief Secretary to Government of Pakistan. Therefore, the averments made in the petitions pertaining to supply of free electricity, find no mention in the said documents. Prima facie, it is distortion of the actual terms and conditions of the agreement.
Next, let the proposition may be examined on merits.
13. The Azad Jammu and Kashmir Interim Constitution Act, -1974, contain the scheme of two legislative forums in respect of the affairs of Azad Jammu and Kashmir. These are: (i) the Azad Jammu and Kashmir Legislative Assembly; and (ii) the Azad Jammu and Kashmir Council. The scope of executive authority of the Government of the State of Azad Jammu and Kashmir confines to the subjects which are excluded from the scope of authority of Jammu and Kashmir Council, in addition to subjects postulated under sections 31(3) and 56 of the Act. The structure of Azad Jammu and Kashmir Council has been described under section 21 of the Act and its area of authority is provided under section 31(2) read with Third Schedule. That includes the Department of electricity under Serial No. 35. Thus, under the Constitution, the Department of Electricity falls within the scope of authority of the Council, but practically, it is being administered and controlled by Azad Jammu and ,Kashmir Government.
14. The Mangla Dam Reservoir and energy production are under the control of WAPDA which is controlled by the Government of Pakistan. Thus, the generation and supply of energy is under the direct control of WAPDA. WAPDA supplies the electricity to Azad Kashmir Government and thereafter, the Azad Kashmir Government supplies the electricity to domestic consumers, commercial units and industrial units, as the case may be.
15. Ordinarily, it is wrong to suggest that the Electricity Department in Azad Jammu and Kashmir is empowered to levy charges under various 'heads', in the light of tariff, for general supply, prescribed by WAPDA. WAPDA not being under the supervision and control of Azad Kashmir Council or Azad Kashmir Government, cannot, under law, prescribe rates - for the use of electricity in Azad Jammu and Kashmir. The area of its authority confines to Pakistan, excluding Karachi. In Azad Jammu and Kashmir, the Azad Jammu and Kashmir Council or Assembly, as the case may be, alone are competent to legislate and prescribe the rates of charges to be levied against the consumers of electricity. These rates, of course, have to be uniformed and indiscriminate, enforceable in alike and equal manner in alike cases, throughout Azad Jammu and Kashmir. This is not even disputed by the respondents.
16. The learned counsel for the respondents referred to the letter of the Chief Engineer of August 26, 1993, whereby it is disclosed that in Azad Jammu and Kashmir, the consumers of electricity shall be liable to pay for the consumption of energy in the light of tariff prescribed by WAPDA. In his letter, the Chief Engineer has made reference to the order of the Government No. 939-45/Works/77 dated May 18, 1977. The original order of the Government is not placed on the file, as such, it is not ascertainable as to what is legal sanction under which the Government has issued the aforesaid order, to levy the charges at the rates as prescribed by WAPDA. The fact of the matter is that the Government of Azad Jammu and Kashmir is not empowered to issue such orders as it is administering the Department of Electricity on behalf of the Council. Thus, the Council alone is competent to prescribe the rates leviable on the consumers of electricity in Azad Jammu and Kashmir. The order of the Chief Engineer of August 26, 1993, carries no legal sanction for its compliance. An identical is the position of Government Order No. 8311-14 of November 22, 1991, Annexure D-7.
17. Respondents were unable to justify their action, even in the light of Tariffs, prescribed by WAPDA.
A perusal of tariffs A-1, A-2 and A-3 reflects that domestic consumers are liable to pay energy charges Q 54 paisa per unit up to 50 units, 68 paisa per unit for 51 to 150 units; 77 paisa per unit for 151 to 300 units and 110 paisa per unit for 301 to 1,000 units. Likewise, fusl adjustment surcharges also explicitly vary Q 7 paisa to 70 paisa per unit for the use of aforesaid units respectively.
18. Section 3, under definition clause, Tariff A-1 discloses that supply charges under the tariff include energy charges and fuel adjustment surcharge where applicable. J'he term "where applicable", as defined, discloses that charge under the head, "fuel adjustment surcharge" is not universal as it is not applicable throughout Pakistan but it is applicable to specific areas. This leads to inevitable conclusion that the charges under this 'head' are leviable to only such areas where Thermal energy is supplied; for it is accepted to the respondents that the cost of production of Thermal energy is much higher than the hydle ` production. In case of the petitioners, the electricity is supplied and distributed from hydle power generation, as such, the charge under this head may not be leviable to them. Section 5, again, reflects that fuel adjustment surcharge is to be added in the bills to recover the fuel cost except those exempted from fuel adjustment surcharge. Likewise, surcharge is levied only in'' such cases where the consumer falls to make payment on due date. When payment is made by the consumer in full in due time, no surcharge can be levied against him.
19. In the case of Nafees Bakers, another point was canvassed in support of the allegations and it was emphasised that it was supplied 3-phase connection and it consumed more than 400 volts electricity. As such, according to Tariff A-2, section 1, under head "Other Special Conditions of Supply", the petitioner, was governed by the provisions of tariff applicable to industrial units. Under Tariff B-1, pertaining to industrial units, the rate of energy charges per unit payable by the consumer was 119 paisa up to 70 Kilowatts. In this view of the position, the charges levied by the respondents in the case of the petitioner were unenforceable.
20. It is noticed that Tariffs A-1 and A-2 do not include the head "electricity duty". The respondents in the present case, are found to have levied the electricity duty. The electricity duty appears to have been imposed in an arbitrary manner, having no legal sanction behind it.
21. It was argued that the item of 'surcharge' was a separate head, as described.. in Annexure D-5.
Therefore, it was leviable under all conditions, irrespective of timely payment by consumers. The contention does not find support from Annexure D-5. Reference to account of 'surcharge' is applicable to consumers of energy supplied by WAPDA, but it was excluded in the cases of supply of energy to Provincial Governments etc. Since Azad Kashmir falls. within the purview of the Provincial status and it is dealt as such in Pakistan, therefore, the contention does not hold good.
22. The Electricity Department has been receiving the additional amount under the head, "Education Cess" and "Income Tax". Income Tax is leviable in respect of total income of an individual for the previous year. It is also leviable on every firm, association of persons or partner of the firm or members of the association individually. In brief, the income-tax is leviable at prescribed rate in respect of total income of the previous year and not otherwise. This view finds support from section 3 of the Income Tax Act. The term "income-tax" is further defined in Black's Law Dictionary: "A tax on the yearly profits arising from property, business pursuits, professions, trades, or offices. A tax on a person's income, wages, G salary, commissions, emoluments, profits, and the like, or the excess thereof over a certain amount."
It is evident from the aforesaid meaning and significance of the term "income tax" that it is charged on the yearly profits, arising from the property, business, professions, trades, or offices. It includes wages, salary and profits. The learned counsel for the respondents was unable to convince as to how income-tax was chargeable from the consumers of electricity. The consumer has to pay the amount for the use of energy and in case, in commercial or industrial D units, by use of energy one earns profits, that amount of profit for the previous year is subject to income-tax. Thus, disbursement as cost of energy, cannot be subjected to charge of income-tax. That is patently flagrant violation of provisions of Income Tax law itself. Thus, levy of income-tax on the consumer of electricity is not only arbitrary exercise of authority, rather it is an abuse of authority and violation of law of income-tax. Identical position is that of education cess'. It is levied on the consumers in derogation to the scheme of law, and without legal sanction.
23. The last limb of the arguments raised by the learned counsel for the petitioners pertain to discriminatory charges of electricity in Mirpur City. It was emphasised that ordinarily, it was enjoined upon the Electricity Department and the Government to enforce uniform rate for supply and use of energy throughout Azad Jammu and Kashmir, in case of domestic consumers, commercial units and industrial units. But different rate was applied at different places.
24. The claim of the petitioners find ample support from the comparative study of the bills issued to the petitioners, appended. with the petitions and bills issued at Muzaffarabad and Dhirkot (Poonch). Mir Khalid Bashir, petitioner was issued bill Exh. PA for the month of November 1993. It is a domestic consumer's bill. In that bill, respondents added charges for "Fuel Adjustment Surcharge".
'Education Duty', 'Tariff Surcharge', 'Minimum charge' and 'Meter Rent Service'. As compared to that, Khawaja Abdus Samad, a Retired Judge, now practising at Muzaffarabad, was given bill for domestic use of electricity under Account No. 314, for November, 1993. He consumed 207 units. The charges payable for 207 units were described as Rs.224 and Meter Rent Service, Rs.10. The total amount was Rs. 234, payable by December 20, 1993. He was neither charged for ' FAS' , ' Electricity Duty', education Cess', 'Tariff Surcharge' or ' Minimum Charge'. An indentical position- is in the case of another bill, Exh. ' PD' , issued in the name of Sardar Maroof Akhtar Abbasi of Chamyati (Dhirkot), District Bagh. He consumed 33 units for which he was charged Rs.23. Meter Rent was added as Rs.10. The bill was issued for the month of July 1993, payable by August 23, 1993. In that bill, arrears were also shown in the sum of Rs.112. Be that as it may, the fact remains that all additional heads for which the petitioners were made liable to pay, were not added in the aforesaid bills of Kh. Abdus Samad and Maroof Akhtar Abbasi. That leads to the conclusion that the Electricity Department in Azad Jammu and Kashmir has adopted different yardsticks and standards of payment of charges for the use of electricity in Mirpur City. The disparity and discrimination is not explained by the respondents. Subsection (15) of section 4 of the Azad Jammu and Kashmir Interim Constitution Act, 1974, postulates that all State Subjects are equal before law and are entitled to equal protection of law. The rule of equality before law and equal protection of law is enforceable in the present case.
The facts listed above, therefore, squarely bring the case of the petitioners within the purview of rule of equality and they have rightly claimed that the respondents failed in their duty to charge the cost of consumption of electricity by common rates enforced throughout Azad Jammu and Kashmir. ,
25. The bills issued to Kh. Abdus Samad in Muzaffarabad City and Maroof Akhtar Abbasi in Chamyati (Dhirkot), District Bagh, reflect that, in fact, the Electricity Department in Azad Jamu and Kashmir has been empowered under law to charge the cost of energy actually used and not to charge under the heads, (i) 'fuel adjustment surcharge', (ii) 'Electricity duty', (iii) 'Education cess',
(iv) 'Tariff surcharge' and (v) 'Income-tax'. The extra charges listed under the aforesaid heads, are not found legitimate and permissible under law. The discrimination in the case of consumers of Mirpur City is quite evident. Therefore, action of the respondents in receiving discriminatory charges from the consumers of Mirpur City inclusive of petitioners, is without lawful authority and jurisdiction. The action of respondents is patently illegal and mala fide. .
26. The aforesaid reasons lead to the conclusion that the respondents have been acting in enforcing the charges of consumption of electricity in Mirpur City, particularly in case of the petitioners, in discriminatory manner, arbitrarily, maliciously and without lawful authority. The respondents are, therefore, directed to refrain from receiving the cost of electricity supplied, under the aforesaid unauthorised heads and in future issue bills to the petitioners for the actual energy consumed, by excluding charges under the heads, (i) Fuel adjustment surcharge; (ii) Electricity duty; (iii) Education Cess, (iv) Tariff surcharge; (v) Minimum charges; and (vi) Income Tax charges.
Further, in case of Nafees Bakers, petitioner, the respondents shall apply the rate of industrial tariff as enforceable under law, in Azad Jammu and Kashmir and shall refrain from charging in excess to the aforesaid prescribed rate. The petitions are accepted accordingly, with costs.
Note:-- The files shall be sent to the Registrar Circuit Bench, Mirpur, for announcement of the judgment in presence of the -parties or their Counsel.