Judgment

SHINGHAL, J.:- These appeals by special leave arise from the judgment of the Allahabad High Court dated April 27, 1978. While Civil Appeal No. 921 of 1978 has been filed by the State of Uttar Pradesh, the U. P. State Electricity Board and the Executive Engineer of the Rihand Power Station, hereinafter collectively referred to as the State, Civil Appeal No. 425 of 1979 has been filed by the Hindustan Aluminium Corporation Ltd., its Vice-President and Chief Accountant, hereinafter referred to as, the company. We have heard the two appeals together and will dispose them of by a common judgment.

2. The controversy relates to the supply of electrical energy (for short energy) for the production of aluminium, which is the most modern of the common metals. Unlike the other common industrial metals like iron, copper, zinc and lead, pure aluminium is not produced by the direct smelting of its ores. The metal is now produced by the modern electrolytic method under the influence of direct current. It takes about 10 kilowatt-hours of Electricity to produce a pound of aluminium, and the supply of cheap electric power is therefore an essential requisite or raw material for its production. The metal has many advantages and uses and has gained such importance that it is an essential commodity under the Essential Commodities Act and its production is one of the scheduled industries under the Industries (Development and Regulation) Act. While the State feels aggrieved because the High Court has interfered with the Uttar Pradesh electricity (Regulation of Supply, Distribution, Consumption and Use) Order, 1977, dated September 19, 1977, hereinafter referred to as the Order, which it made under Section 22B of the Electricity Act, 1910, (for short the Act), the Companys grievance is that the High Court has not granted all the reliefs which it had claimed in its petition under Art. 226 of the Constitution. The Courts record is much too voluminous, but it appears to us that the appeals can be adequately disposed of on the basis of the important averments in the lists of dates drawn up by counsel for the parties about which there is no dispute before us.

3. When the question of establishing a new aluminium factory arose for consideration by the Government of India, it took into consideration the consent of the Government of Uttar Pradesh to make energy available for the factory from the Rihad Hydro-electric Scheme which was expected to go into operation by the end of 1960, and granted an industrial licence to the Company on September 26, 1959, for the manufacture of 20,000 metric tons of aluminum ingots per year at Rihand. An agreement was also entered into between the State of Uttar Pradesh and the Company on October 29, 1959 for the supply of 55 m. w. of power on a firm, continuous and uninterrupted basis at a rate of 1.997717 paise per unit for a period of 25 years from the date of commencement of the supply.

4. The company set up and commissioned its aluminium plant at Renukoot (near Rihand Dam) with an installed capacity of 20,000 metric tons per annum in April 1962. It was granted a further licence for the expansion of its installed capacity by 40,000 metric tons per annum. As the State was unable to meet the extra requirement of energy, sanction under Section 28 of the Act was granted to the Company, at its request, on November 12, 1964, to set up a generating station at Renusagar, near Renukoot, through its subsidiary the Renusagar Power Company Ltd. It had two generating units of 67.5 m.w. each. The first unit started generating power in 1967 and the other in 1968. The 40,000 metric tons expansion unit was commissioned in 1968. In the meantime the Company was granted a licence in December 1966 for effecting a further expansion of 60,000 metric tons per annum in its installed capacity for the production of aluminum.

5. The Company thought of setting up the plant of the production of 60,000 metric tons of aluminium in Gujarat State as it