2000 Supreme(SC) 1840

2000(8) Supreme 185
SUPREME COURT OF INDIA
(From Madhya Pradesh High Court)
B.N. Kirpal, Doraiswamy Raju and K.G. Balakrishnan, JJ.
M/s. Raymond Ltd. & Anr. etc. etc. -Appellants
versus
Madhya Pradesh Electricity Board & Ors. etc. etc. -Respondents
Civil Appeal Nos. 4218-4219 of 1998
With
(Civil Appeal Nos. 4220-4221, 4222, 4223, 4224, 4226, 4227, 4228, 4229, 4230, 4231, 4233, 4239-4240, 4243, 4244-4245, 4246, 4250, 4252, 5913 and 5928 of 1998, 3809 of 1999, 3124 and 4831 of 2000)
Decided on 16-11-2000
Counsel for the Parties :
For the Appearing Parties : G.L. Sanghi, C.S. Vaidyanathan, M.L. Jaiswal, Bhimrao, N. Naik, Ravindra Shrivastava, A.K. Chitale, Sr. Advocates, U.A. Rana, Rajesh Nair, A.K. Sanghi, S.K. Agnihotri, Ms. Yogmaya, Vivek Gambhir, Bharat Sangal, Anand Pandey, Ms. Asha Pathak, Prakash Shrivastava, Prem Francis, Niraj Sharma, Ms. Shilpa Chitale, S. Ganesh, Advocates.

Headnote:(i) Electricity Supply Act-Agreement for supply of electricity-Minimum guarantee charge-Legality of-Minimum guarantee clause in contract providing for minimum consumption of 40 load factor of contract demand-Payment to be made on minimum monthly consumption plus demand charges on billing irrespective of or consumption of energy -No corresponding duty on E.B. to supply 40 of contract demand load every month-High Court s holding that whenever contract supply falls short of 40 of contract load E.B. would be entitled to charge for reduced energy actually supplied and would not be entitled to charge 40 contract load-High Court gave effect to interpretation to contract prospectively from date of order-Held, stipulation for payment of minimum guarantee charge unexceptionable-Contract for supply of electrical energy cannot be treated on par with any other contract of mutual rights and obligation-Minimum guarantee charges inbuilt in tariff system-Right of E.B. to demand minimum guarantee charges depends upon corresponding duty impliedly undertaken to supply electrical energy at least minimum contract demand-High Court correct in its conclusion-Law declared shall be for future application only and not for earlier period.

       The terms and conditions of supply, as envisaged in the contract and the statutory provisions and general conditions have been standardised for uniform application among consumers with variations merely necessitated by the different class or categories of consumers and there is no scope otherwise for expecting any scope for individual or free bargaining right in this regard by each consumer with the Board. Therefore, it is futile for a consumer to contend that the Board was at the dictating end and the parties were not equally positioned in settling the terms of the contract. The further attempt made to contend that the failure on the part of the Board to effect supply up to the contract demand level relieved the consumers from the obligation undertaken to pay a minimum guaranteed sum per month, as though the contract demand is the minimum guaranteed for supply, not only lack any basis in law or on the terms of the contract governing the supply but also directly runs counter to the terms in the contract which makes different stipulations relating to contract demand and the minimum guarantee in the form of a portion or percentage of the contract demand, only. The question of exonerating the consumer from the liability undertaken to pay minimum guaranteed charges for a month and billing only for the actual consumption of energy or allowing a consumer to pay the rates on the actual consumption of electricity measured in units will and can arise and has also been considered for determination only in case the supply by the Board itself fell short of the minimum of energy, the consumption of which go to make up the minimum guaranteed sum. It is well settled and there could be no controversy over the position that if only the supply was available for consumption but the consumer did not consume so much of energy up to the extent of the obligation cast upon him to pay the minimum charge, there is no escape from the payment of the minimum guaranteed charges, except in very exceptional cases envisaged under clause 23 of the contract and that too subject to the stipulations and restrictions contained therein. (Para 16)

       The payment by the consumer is to be on the electrical energy supplied during the preceding month. The parties have also agreed that the maximum demand of the supply is to be measured with reference to the month at the point of supply of the consumer and will be determined on the basis of the supply during any consecutive thirty minutes in that month as recorded by the trivector meter. The power factor, according to the statutory conditions of supply which form part and parcel of the supply of energy to a consumer, is also to be determined with reference to the supply of energy to a consumer, and that factory is also to be determined with reference to the supply of electrical energy made during a month. The minimum consumption of energy guaranteed, as per the tariff notification, is also in terms of a monthly minimum. While that be the position, it is futile for the consumers to contend that they will not be liable to abide by the minimum guaranteed charges undertaken, unless on every day of the month/year and during the twenty four hours or round the clock the load factor and power supply agreed to be made, at one and is the same level without any shortfall, tripping or low voltage. The provisions of Section 56 of the Contract Act, 1872 sought to be relied upon have no relevance or application to the cases on hand. Countenancing of such claims would not only defeat the very purpose, object and aim of providing for a minimum charges guarantee clause but would ultimately result in mutilation of the very fabric of tariff structure rendering thereby the schemes of generation and supply of power at the agreed concessional rates uneconomical and non-viable for the Board. This would also result in the re-writing of many of the clauses in the contract and rendering nugatory the tariff pattern and system itself throwing into disarray and disharmony the efficient execution of the power supply schemes. (Para 17)

       As a matter of general principle, any stipulation for payment of minimum guarantee charges is unexceptionable, in a contract of this nature wherein, the Board which undertakes generation, transmission and supply of electrical energy has to, in order to fulfil its obligation lay down lines and install the required equipment and gadgets and constantly keep them in a state of good repair and condition to render it possible for the consumer to draw the supply required at any and all times. These commitments are irrespective of the capacity of the Board to generate at a given point of time or during a relevant period the total quantum required for the consumption of all consumers of various categories or even during the days of breakdown envisaged or staggering necessitated on account of orders of Government regulating the distribution and consumption of energy as well as during periods when for reasons personal or peculiar to the consumers or even beyond their control the consumption is not and could not be of the mutually agreed extent. The Board undertakes to generate and supply energy, in public interest also at concessional rates of varying nature and it cannot be stated that the rates so fixed invariably are to meet the expenditure incurred by the Board for generation and supply of energy, to the last pie. Consequently, if either in the general conditions and terms of supply or the contract or the tariff rates as the case may there be any stipulation, in clear and unmistakable terms that the liability relating to the payment of guaranteed minimum charge could or will be enforced irrespective of the actual consumption rate of the consumer or even dehors the capacity or otherwise of the Board to supply even the minimum of the contract demanded energy, there could be no valid objection in law for any such stipulation being made and the consumer will be bound to honour such commitment. The contract for the supply of electrical energy cannot be treated on par with any other contracts of mutual rights and obligations, having regard to the peculiar problems involved in the generation, transmission and supply which invariably depend upon the vagaries of monsoon as well short supply to then of the required coal and oil in time and similar other problems over which the Board cannot have any absolute control. The recurring commitments relating to constant and periodical maintenance of supply lines and other installations cannot be anytheless even during such times and such onerous liabilities cannot be left to fall exclusively upon the Board and it is only keeping in view all these aspects, payment of minimum guaranteed charges is necessarily in built in the tariff system of the Board and the reasonableness or legality of the same cannot be considered either in the abstract or in isolation of all these aspects. It is for this reason that all over and the consumer is also made to share the constraints on Board s economy even during such periods. In fact the tariff inclusive of such a provision for payment of a minimum guaranteed sum irrespective of the supply/consumption factor appears to be the consideration for the commitments undertaken by the Board as a package deal and it is not possible or permissible to allow the consumer to wriggle out of such commitments merely on the ground that the Board is not able to supply at any point of time or period the required or agreed quantum of supply or even supply up to the level of the minimum guaranteed rate of charges. Tinkering with portions of contracts for any such reasons, merely on considerations of equity or reasonableness pleaded for and vis-a-vis one party alone will amount to mutilation of the whole scheme underlying the contract and render thereby the very generation and supply of electrical energy economically unviable for the Board. Consumers, who enter into such commitments openly and knowing fully well all these hazards involved in the generation, transmission and supply, will be estopped from going behind the solemn commitment and undertaking on their/its part under the contract. The High Court does not seem to have properly appreciated the ratio of the several decisions noticed except merely referring to them in extenso, and yet ultimately just, arrived at a conclusion merely for the reason and the court considered it to be more equitable, just and reasonable to do so. (Para 20)

       Even going by the tariff notification which prescribes also a minimum entitling the Board to collect it [vide clause 21 (b)] it merely casts liability on the consumer to "guarantee a minimum monthly consumption equivalent to 40 load factor of the contract demand". Consequently, for the consumer to honour his/its commitment so undertaken to give a minimum consumption there should essentially be corresponding supply by the Board at least to that extent, without which the consumption of the agreed minimum is rendered impossible by the very lapse of the Board. The minimum guarantee, thus, appears to be not in terms of any fixed or stipulated amount but in terms of merely the energy to be consumed. The right, therefore, of the Board to demand the minimum guaranteed charges, by the very terms of the language in the contract as well as the one used in the tariff notification is made enforceable depending upon a corresponding duty, impliedly undertaken to supply electrical energy at least to that extent, and not otherwise. It is for this and only reason we find that the ultimate conclusion arrived at by the Full Bench of the High Court does not call for any interference in these appeals. (Para 21)

       The peculiar facts and circumstances of these cases and the interests of justice, in our view, necessitate the application of the Law declared therein only prospectively. The electricity Board is a public authority of the State engaged in the generation and supply of electrical energy at concessional rates to different class and category of consumers in the State. The construction placed by us is likely to have serious and adverse impact upon the finances and the economic viability of the scheme underlying tariff and minimum guarantee charges already determined. It is impossible for the Board, at this point of time to make up or change the pattern of tariff retrospectively to retrieve itself in this regard for the past period. The construction and execution of various developmental schemes and works are likely to suffer thereby a serious set back also. Keeping in view all these aspects we will be justified in declaring that the law declared in these cases shall be for future application only and not for the earlier period. (Para 24)

       (ii) Prospective overruling - Principles of-Powers of High Court to apply-Supreme Court s jurisdiction/powers-Explained.

       Apart from the fact that the writ jurisdiction conferred upon High Courts under Article 226 of the Constitution does not carry any restriction in the quality and content of such the powers, this Court could always have recourse to the said doctrine or principle or even dehors the necessity to fall back upon the said principle pass such orders under powers which are inherent in its being the highest court in the country whose dictates, declaration and mandate runs throughout the country and binds all Courts and every authority or persons therein and having regard to Articles 141 and 142 of the Constitution of India. The Appellate powers under Article 136 of the Constitution itself would also be sufficient to pass any such orders. This Court has been from time to time exercising such powers whenever found to be necessary in balancing the rights of parties and in the interests of justice. (Para 23)