JUDGMENT - Bharucha S.P., J.-The effect of a power cut upon the minimum demand charge payable by a consumer of electricity to the supplier thereof has to be determined in this writ petition.

2. The petitioners Mukand Iron and Steel Works Ltd., are manufacturers of iron and steel products. They have a plant at Kalwe, Thane. They are large consumers of electricity supplied to them by the 1st respondent the Maharashtra*State Electricity Board. On 3rd August 1965 the Board entered into an agreement with the company. Clause 3 of the agreement states that the Board shall supply to the company and the company shall take from the Board all the electrical energy required at its plant at Kalwe upto a maximum of 15,000 K. V. A. (kilo volt amperes), which quantum is referred to as the “contract demand”. Under clause 7 (a) the company is entitled to apply to the Board for supply in excess of the contract demand and the Board is obliged to make it available within the stated period provided it has the additional energy available and it is economical to do so. Under clause 7(c), if additional supply is made available, the contract demand specified in clause 3 is increased to that extent. (It must here be stated that the contract demand was in fact raised at the company's request to 48,500 K. V. A.). Under clause 8(a) the company is obliged to pay to the Board every month charges “for electrical energy supplied to the consumer during the preceding month at the rates specified in the suppliers' standard tariff schedule”, which is attached to the agreement, and in force from time to time. If, during the “currency of this agreement the above referred standard tariff schedule is revised, increased or decreased, such revised, increased or decreased, tariff from the date specified shall apply to the consumer during and for the unexpired period of the present agreement”. Under clause 9, the agreement is to operate for a minimum period of 7 years and from year to year thereafter terminable by six months' notice on either side. Under clause 10, if the supplier discontinues electrical supply in consequence of any breach or default on the part of the company entitling the Board to do so, the amount of charges for electrical energy already supplied and all other moneys then payable under the agreement become due and recoverable forthwith, and during the period of such discontinuance the company continues to remain liable “to pay the minimum charges and minimum guarantee payable hereunder”. Under the terms of the tariff annexed to the agreement the “demand charge” is stated to be Rs. 16.00 per month per K.V.A. of the billing demand. The “energy charge” is separately stated. The tariff states that for consumers opting for payment of monthly minimum charges, demand charges based on the K. V. A. of the billing demand would be the minimum bill. A minimum annual bill at Rs. 240.00 per K. V. A. demand would be charged on the actual highest demand established by the [consumer during the 12 month period or 75% of the contract demand. “Maximum demand” is defined to mean the average KW/KVA supplied during the 30 minutes' period (or any such shorter period as may be prescribed by the Board) of maximum use. “Contract demand” is defined to mean the maximum KW/KVA for the supply of which the Board undertakes to provide facilities from time to time. “Billing demand” is defined to mean the demand used for billing purposes and is computed as the highest of the following : the maximum demand established during the month; 75% of the contract demand.

3. It will be seen that for the purposes of billing a two-tier system is adopted. For the units of energy supplied there is one form of charge based on the kilo watt hours (KWH) of supply and for the energy demand there is a rate of charge based upon the K. V. A. The contract sets out the contract demand; the Board is obliged to supply to the company the contract demand and the company is liable to pay to the Board a minimum of 7

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