SC dismisses appeal of K-Electric on subsidy withdrawal

ISLAMABAD: The Supreme Court on Thursday dismissed the appeal of K-Electric and held that it was up to the federal government to provide or withdraw subsidies.

A three-member bench of the apex court, headed by Chief Justice Umer Ata Bandial and comprising Justice Syed Mansoor Ali Shah and Justice Ayesha A Malik, dismissed the appeal of K-Electric.

K-Electric had challenged before the apex court the judgment of Sindh High Court (SHC), quashing the corrigendum dated January 22, 2020 regarding tariff policy. The SHC on 28 September 2020 had declared the corrigendum illegal, void, issued in excess of authority; hence, quashed. The court had directed K-Electric to charge the tariff from its industrial consumers.

On Thursday, the court dismissed K-Electric's appeal with the observation that it was the job of the federal government either to provide or withdraw subsidies. Justice Syed Mansoor Ali Shah observed that the Ministry of Energy was interfering in the affairs of NEPRA, therefore, next time, the ministry should not ignore the regulator (NEPRA).

In pursuance of the court’s last order, secretary Ministry of Energy and Power Division appeared before the court and submitted that K-Electric was provided subsidy in tariff which was withdrawn as per law.

Chief Justice Umer Ata Bandial observed that the regulator (NEPRA) be enabled to do its work adding that next time the ministry should take care about this. The chief justice asked as to when the K-Electric did not object to the subsidy it was granted, then why it was opposing the withdrawal.

NEPRA was not taken into confidence while offering it the subsidy while the industrial units and K-Electric did not mind it, the chief justice added. Secretary Energy and Power Division told the court that the prime minister has reduced the power tariff by Rs5 per unit through an executive order, which has nothing to do with NEPRA tariff.

Justice Mansoor Ali Shah, however, observed that public should be given relief by offering subsidies on main commodities. "But the court should be informed under what law the subsidy was being offered”, the judge added.

Secretary Energy and Power Division, however, told the court that the federal cabinet, while exercising its powers, offers subsidy to which Justice Mansoor Ali Shah said that the Federal Cabinet also functions as per law.

Secretary Energy and Power Division told the court that subsidy was being offered as given on the Utility Stores adding that K-Electric should charge the tariff from industrial consumers. He further submitted that if the amount of subsidy was taken from the ministry, then the ordinary consumer would be further burdened.

To a court’s query, the secretary Power Division told the court that subsidy was offered according to budget and after the approval of Parliament adding that some time it was released from supplementary grant as well.

The official further submitted that the government had spared the share of Rs330 million for K-Electric adding that the power consumers were divided into seven to eight categories while the tariff was determined according to the categories of consumers.

The secretary Power Division further told the court that the tariff of K-Electric was less than national tariff. Meanwhile, the court, after hearing the explanation of secretary Energy and Power Division, dismissed the appeals.