Civil Appeal No 325 of 1970
From the Judgment and order dated 28th March 1969 of the Madras High Court in Writ Appeal No 49068
K section Ramamurthy K Jayaram and R Chandrashekhar for the Appellant
L N Sinha Solicitor General of India section N Prasad and Girish Chandra for the Respondents
The Judgment of the Court was delivered by RAY J
This appeal is by certificate from the judgment dated 28 March 1469 of the High Court of Madras
The question in this appeal is whether the appellant in a writ petition can challenge the telephone rates and charges and obtain any relief in that behalf
The appellant is a retired District Manager Telephones Madras
He filed a writ petition in the High Court for a writ of prohibition directing the General Manager Telephones Madras to forbear from preferred to the Appellate Tribunal but that too proved abortive
The Tribunal however referred the following question of law for the opinion of the High Court 11966 487 enforcing the revised Telephone Tariff as per the Indian Telegraph Amendment Rules 1966
Under the rules the rental and call charges were increased by 50 per cent and Trunk call charges by about 30 to 35 per cent
The petitioner alleged that the telephone system is a public utility service and not a Revenue earning establishment and the charges can be only in the nature of a fee which must be commensurate with the cost of rendering the service
The petitioner further alleged that the loss incurred by the Government in another establishment service is not a legitimate ground for raising telephone rates
The Trial Court held that Telephone Tariff was unjust and unreasonable
The Trial Court allowed the writ petition
The High Court on appeal held that the High Court could not interfere with the Tariff
The High Court said that the principal upon which public utility rates regulation as has developed in the United States is not applicable here in our country
It should be said at the outset that there was some discussion in the judgment on Article 19 but counsel for the appellant properly abandoned any reference to Article 19
The appellant s contentions are three
First the expression
rates in section 72 of the Indian Telegraph Act means rates which are to be determined should be fair just and reasonable from the point of view of both the consumer and the producer
Second the Court has jurisdiction to determine whether the rates filed by the Government are reasonable
Third the rates are increased expressly for the purpose of off setting the E losses in the Post and Telegraph Services
If a proper allocation
is made according to proper commercial accounting it will be found that there is a wrongful deduction of crores of rupees as revenue expense and unlawful debit
These errors in the accounting have resulted in reducing the profits earned by the Telephones
There are three principal reasons why the writ petition is incompetent and not maintainable and the appeal should fail
First when any subscriber to a telephone enters into a contract with the State the subscriber has the option to enter into a contract or not
If he does so he has to pay the rates which are charged by the State for installation
A subscriber cannot say that the rates are not fair
No one is compelling one to subscribe
Second
Telephone Tariff is subordinate legislation and a legislative process
Under Indian Telegraph Act section 7 empowers the Central Government to make rules inter alia for rates
These rules are laid before each House of Parliament
The rules take effect when they are passed by the Parliament
Third the question of rates is first gone into by the Tariff Enquiry Committee
The Committee is headed by non officials
The Tariff rates are placed before the House in the shape of Budget proposals
The Parliament goes into all the Budget proposals
The rates are sanctioned by the Parliament
The rates
therefore become a legislative policy as well as a legislative process
488 The Courts have no jurisdiction under Article 226 to go into reasonableness of rates
These rates are decided as policy matter in fiscal planning
There is legislative prescription of rates
Rates are a matter for legislative judgment and not for judicial determination
The appeal is dismissed
There will be no order as to costs
SR Appeal dismissed


Summary:
The appellant challenged under article 226 the reasonableness of the increase in the telephone rental and call charges brought about by the Indian Telegraph Amendment Rules
1966 on the ground that 1 The telephone system is a public utility service and the charges can be only in the nature of a fee which must be commensurate with the cost of rendering the service and 2 The loss incurred by the Government in another establishment service is not a legitimate ground for raising the rates
The writ petition was accepted and on appeal the judgment was reversed holding that 1 the High Court could not interfere with the tariff
and 2  the principle upon which the public utility rates regulation as developed in the United States is not applicable in our country
Dismissing the appeal by certificate the Court  HELD I The courts have no jurisdiction under Article 226 to go into the reasonableness of rates
These rates are decided as policy matters in fiscal planning
There is legislative prescription of rates
Rates are a matter for legislative judgment and not for judicial determination
488A