JUDGMENT

P. K. GOSWAMI, J.:—This judgment will govern both the above mentioned appeals.

2. We may take the facts briefly from Civil Appeal No. 107 of 1975.

3. The Orissa Textile Mills Limited is a public limited company (briefly the company) and is engaged in manufacture of textile articles. It is located at Choudwar in the District of Cuttack (Orissa). On May 12, 1960, the company (described in the agreement as Consumer) entered into an agreement with the State of Orissa (described in the agreement as the Supplier) for supply of electric power. The contract was for a period of five years from the date of supply of electric power, namely, February 1, 1963 and it was thereafter to so continue unless and until the same was determined by either party giving to the other six calendar months notice in writing of the intention to terminate the agreement. It is common ground that the agreement has not been terminated.

4. It may be appropriate at this stage to refer to a few clauses in the agreement. Clause 12 provides for charges to be paid by the consumer as well as about maximum demand. Clause 13 reads as follows :

"The tariff and conditions of supply mentioned in this agreement shall be subject to any revision that 129 may be made by the supplier from time to time."

Clause 23 deals with extra charge regarding domestic lighting, fans, domestic power and street lighting, etc, in the colony of the Mills. Cl. 23 reads as follows:-

"Any dispute or difference arising between the Consumer and the Supplier or their respective Electrical Engineers as to the supply of electrical energy hereunder or the pressure thereof or as to the interpretation of this Agreement or the right of the Supplier or the consumer respectively to determine the same or any other question, matter or thing arising hereunder shall be referred to a single arbitrator who shall be mutually agreed upon by both parties. The arbitrator s decision thereon shall be final and the provisions of the Arbitration Act of 1940 (X of 1940) or of any other statutory modification thereof for the time being in force shall apply to any such reference."

5. On April 1, 1962, the Orissa State Electricity Board. (briefly the Board) was constituted by the State Government under Section. 5 of the Electricity (Supply) Act, 1948 (briefly the Act). Under Section 60(1). of the Act " all debts and obligations incurred, all contracts entered into and all matters and things engaged to be done by, with or for the State Government for any of the purposes of this Act before the first constitution of the Board shall be deemed to have been incurred, entered into or engaged to be done by, with or for the Board........." By this section, therefore, the Board assumed all obligations of the State Government in respect of matters to which the Act applied. It is common ground that the contract entered between the company and the State Government is binding on both.

6. The Board decided to levy a surcharge of 10 per cent on the power tariff then in force with effect from July 1, 1972, and a Press Note was issued accordingly. The material portion of the Press Note may be extracted :

" The Orissa State Electricity Board has decided to levy a general and uniform surcharge of 10 per cent on the power tariff now in force except on the following categories of consumers who will pay the existing tariff : -

(1) Power Intensive Industries which are governed by Special Agreements.

(2) Domestic power and lighting.

In respect of irrigation loads (pumping and agriculture) the power tariff will be Re. 0.16 P. (sixteen paise) per unit (Kwh) with a rebate of Re. 0.01 (one paise) per unit Kwhp for timely payment. . . . . .. . . . . .

The above levy of surcharge of 10 per cent is also applicable to the power supply to the Hindustan Steel Ltd., Rourkela and Kalinga Iron Works, Barbil.

The levy of 10 per cent surcharge will be on demand charges, unit charges, maximum and minimum charges and reservation charges.

x x x x x

The levy of sur