Karnataka High Court: Denying Power Subsidy To Registered Farmer Societies On Exceeding Collective Consumption Limit Is Unconstitutional

The Karnataka High Court held that the denial of power subsidy to registered farmer societies solely on the ground of exceeding the collective consumption limit is unconstitutional.

The Dharwad Bench held thus in a Writ Petition filed by the Secretaries of the respective Cooperative Societies.

A Single Bench of Justice Sachin Shankar Magadum observed, “The denial of power subsidy to registered farmer societies, solely on the ground that their collective consumption exceeds a prescribed limit, is hereby declared unconstitutional and arbitrary. This practice is discriminatory and fails to align with the core objectives of agricultural subsidies, which are intended to support small and marginal farmers, promote equitable access to resources, and encourage sustainable farming practices.”

The Bench added that the practice of differentiating between individual farmers and societies, based purely on collective consumption, is inconsistent with the constitutional mandate of equality before the law under Article 14 of the Constitution of India, which is based on an irrational classification that arbitrarily penalizes farmers for forming societies aimed at improving efficiency and sustainability.

Advocate Shridhar Prabhu represented the Petitioners while AGA Ashok T. Kattimani represented the Respondents.

Brief Facts

The Petitioners were the Secretaries of the societies registered under the Karnataka Societies Registration Act, 1960. They were the registered consumers of HESCOM Limited-Respondent. It was asserted that both societies were assigned with respective meter numbers as serviced under HT-3A(II) as TA Tariff Category. HESCOM accordingly sanctioned power supply to both and the said societies constructed the lift irrigation project (scheme) on river Krishna for the benefit of 200 acres of land and 103 acres of land in Parthanahalli and Madhabhavi villages of Athani Taluk at approximate cost of Rs. 5,79,65,417/-. The Petitioners citing Section 55 of the Electricity Act, 2003 contended that there is statutory duty on HESCOM to supply power only through the metered installation.

It was further alleged that no distribution licencee in the State including HESCOM is following the same for the reasons known to them. It was also contended that despite this, the Karnataka Electricity Regulatory Commission (KERC) has been permitting disbursement of subsidy by the State to unmetered installations through its tariff order. The primary grievance of the Petitioners was that, though provisions of the Act were aimed to provide water to the farmers, it is constitutional responsibility of the State to ensure the same. They alleged that there is discriminating denial of agricultural power tariff subsidy to the societies formed by marginal farmers, despite the same being available to the individual farmers and therefore, violates Article 14 of the Constitution.

Reasoning

The High Court in view of the facts and circumstances of the case, directed, “The Government and the concerned authorities are directed to review and amend the current policy to extend power subsidies to registered farmer societies, with criteria based on per capita consumption, landholding, or aggregate power consumption per member, rather than penalizing the society as a whole for exceeding a prescribed power consumption limit.”

Furthermore, the Court directed the authorities to ensure that the objectives of agricultural subsidies including supporting marginal farmers, promoting cooperative farming, and ensuring equitable access to resources are upheld, and that no policy or regulation is allowed to inadvertently discourage collective action or undermine the potential benefits of cooperative farming.

“The Government is further directed to issue necessary guidelines to ensure that farmer societies that operate with legally established agreements and intended to promote collective agricultural practices are treated equitably, in line with both the statutory framework and the broader goal of agricultural sustainability”, it added.

The Court said that the Petitioners are entitled to submit their detailed representation seeking subsidy benefits in accordance with the revised policy, after settling any pending arrears as per the existing agreements, and HESCOM shall process these applications expeditiously once the arrears have been cleared.

“Writ of Mandamus is hereby issued, declaring that the exclusion of the petitioners registered farmer societies from the eligibility for receipt of agricultural power subsidy under the Government Order Bearing No. EN 55 PSR 2008 dated 4th September 2008 (produced as Annexure-B) is arbitrary, discriminatory, and violative of Article 14 of the Constitution of India”, it also held.

Moreover, the Court held that the practice of differentiating between individual farmers and collective societies, solely on the basis of aggregate consumption exceeding a prescribed limit, constitutes an irrational and unreasonable classification.

“Such classification penalizes collective and cooperative efforts among marginal and small farmers and defeats the very purpose of the agricultural subsidy, namely, to promote access to irrigation, enhance agricultural productivity, and encourage sustainable and efficient farming practices”, it noted.

The Court observed that the impugned Government Order, in so far as it excludes societies formed by farmers from subsidy benefits merely on account of their collective horsepower (HP) consumption, fails to satisfy the twin tests laid down under Article 14, namely, (i) intelligible differentia, and (ii) rational nexus with the object sought to be achieved.

“The classification is based on irrelevant considerations and leads to hostile discrimination against farmers exercising their constitutional right to associate and operate collectively. … Consequently, it is declared that the impugned Government Order No. EN 55 PSR 2008 dated 4th September 2008 (Annexure-B) is unconstitutional, in so far as it denies the benefit of power tariff subsidy to farmer societies purely on the ground of collective consumption exceeding the specified horsepower limit”, it remarked.

Conclusion

The Court, therefore, directed the State Government and the concerned distribution companies (including HESCOM) to review, reconsider, and amend the existing policy framework governing agricultural power subsidies, ensuring that farmer societies are treated at par with individual farmers.

“The eligibility for subsidy shall be determined based on per member consumption, total landholding served, or aggregate HP entitlements of the member farmers, rather than by the arbitrary threshold of total connected load. … It is further directed that the authorities must frame and notify appropriate guidelines within a reasonable period (preferably within six months) to extend power tariff subsidies to registered farmer societies, in a manner that aligns with the principles of equality, promotes cooperative farming, and advances the broader goals of sustainable agricultural development”, it also ordered.

The Court further directed that the authorities must frame and notify appropriate guidelines within a reasonable period and the Petitioners shall pay the pending arrears to HESCOM.

Accordingly, the High Court partly allowed the Writ Petition and declared the impugned Government Order as unconstitutional, in so far as it denies the benefit of power tariff subsidy to farmer societies purely on the ground of collective consumption exceeding the specified horsepower limit.

Cause Title- Shrishail Irappa Kempwad & Anr. v. State of Karnataka & Ors. (Neutral Citation: 2025:KHC-D:7109)

Appearance:

Petitioners: Advocate Shridhar Prabhu

Respondents: AGA Ashok T. Kattimani, Advocates B.S. Kamate, and Shivaraj P. Mudhol.

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