Judgment

VENKATARAMIAH, J. : - These two appeals by special leave are filed against the judgment dated, August 13, 1970 of the High Court of Allahabad in Special Appeal NO. 34 of 1969 (City Board, Mussoorie v. State Electricity Board, AIR 1971 All 219) by the Uttar Pradesh Electricity Board (hereinafter referred to as the Electricity Board) constituted under the Electricity (Supply) Act, 1948 (hereinafter referred to as the Act) and the City Board, Mussoorie, a local authority (hereinafter referred to as the City Board) respectively.

2. The City Board as a licensee under the Indian Electricity Act, 1910 used to get bulk supply of electric energy from the Electricity Board from the Ganga-Sarda Grid and in its turn was distributing it to the consumers within its jurisdiction. In the year 1962, under a notification dated April 24, 1962 issued under Section 46 of the Act, the tariff payable by the City Board and other licensees in the Ganga Sarda Grid was fixed by the Electricity Board. The relevant portion of the Tariff was as follows:

"1. Applicability - This rate schedule is applicable to all licensees situated in Ganga Sarda Grid area and taking supply in bulk from the Board.

2. Character of service - A.C. 3, Phase, 50 cycles, 11,000 volts, Alternatively, the supply can be given at a voltage lower than 11 KV in which case an additional charge at 71/2 per cent on the total amount of the bill will be levied.

If the consumer takes supply at a standard voltage above 11 KV, a rebate of 5% will be allowed to him by the Board on the total amount of the bill calculated at the rates prescribed for supply at KV.

3. Rate :-

(a) Demand Charges -

First 500 KVA of chargeable demand during the month at the rate of. Rs. 12.75 per KVA Next 1500 KVA of the charge-demand during the month at the rate of., Rs. 10.00 KVA All above 2000 KVA of the chargeable demand during the month at the rate of .. .. ...

..Rs. 8.50 KVA

PLUS

(b) Energy Charges -

First 170 KWH, per KVA of chargeable demand consumed during the month at the rate of .. .. .. .. .. .. 5 P. per Kwh Next 170 Kwh, per KVA of chargeable demand consumed during the month at the rate of.. .. 4 P. per Kwh Remaining Kwh, per KVA of the chargeable demand consumed during the month at the rate of.. ... ... .. .. .. 3 P. per Kwh

4. (i) Chargeable Demand - The chargeable demand for the month shall be defined as the actual demand during the month or 60 per cent of the contracted demand or 75 per cent of the highest demand which occurred during the preceding 11 months whichever is the highest.

(ii) Coal Clause - The above rates shall be subject to a coal price adjustment at the rate of 0.001 per Kwh. increase or decrease for every one P. of variation above or below Rs. 40 per tonn of coal delivered at the bunkers in the Harduaganj Generating Station ......

5. Determination of Demand :- Demand measurement shall be made by suitable instruments at the point of delivery. The demand for any month shall be defined at the highest average load measured in Kilovoltamperes during any 30 consecutive minutes period of the month."

3. The tariff so fixed was enhanced by another notification dated September 30, 1967 by twenty per cent and the enhanced rate came into force on December 1, 1967. Under Section 58 of the Act, the Electricity Board or where no such Board was constituted, the State Government had the power to direct the amortisation and tariffs policies of any licensee, being a local authority, with respect to its licensed undertaking in such manner as the Electricity Board or the State Government, as the case may be, after giving the local authority a reasonable opportunity of being heard, considered expedient for the purposes of the Act. The licensee, being a local authority the provisions of any other law or of any rules made or directions given thereunder notwithstanding, was bound to give effect to any such directions of the Electricity Board or the State Government, as the case may be. The Electricity Board, however,