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High Court Of Delhi
GULAB RAI - Appellant
Versus
MUNICIPAL CORPORATION OF DELHI - Respondent
Civil Writ 1740 of 1989
Decided On : 03/31/1990
The Delhi Electric Supply Committee (DESC) approved the proposal of the Delhi Municipal Corporation (DMC) to enhance minimum consumption guarantee charges from Rs. 40 per KVA to Rs. 340 per KVA in respect of Arc/induction furnaces. Petitioners, who are owners of arc/induction furnaces, challenged the increase in charges, contending that it was contrary to section 21(2) of the Indian Electricity Act, 1910, and that the DESC did not have the authority to increase the charges without the prior sanction of the State Government.
Fact of the Case:
The petitioners, who are owners of arc/induction furnaces, challenged the increase in charges, contending that it was contrary to section 21(2) of the Indian Electricity Act, 1910, and that the DESC did not have the authority to increase the charges without the prior sanction of the State Government.
Finding of the Court:
The court held that the increase in minimum consumption guarantee charges was not contrary to section 21(2) of the Indian Electricity Act, 1910, and that the DESC had the authority to increase the charges without the prior sanction of the State Government.
Issues: 1. Whether the increase in minimum consumption guarantee charges was contrary to section 21(2) of the Indian Electricity Act, 1910? 2. Whether the DESC had the authority to increase the charges without the prior sanction of the State Government?
Ratio Decidendi: 1. Section 21(2) of the Indian Electricity Act, 1910, applies only where the licensee has been granted a licence pursuant to an application made under the Act and as the licence in the present case was granted to the DMC without any such application having been filed, the said provision is not applicable. 2. The DESC had the authority to increase the charges without the prior sanction of the State Government because the agreement between the petitioners and the DESC contained a clause providing for payment of a minimum guarantee, and the increase in charges was made in accordance with the terms of the agreement.
Final Decision: The writ petitions were dismissed with costs.
( 1 ) THE challenge in this bunch of writ petitions, which are being decided by this common judgment, is to the resolution of the Municipal Corporation of Delhi whereby it approved the proposal of the Delhi Electric supply Committee to enhance minimum consumption guarantee charges from Rs. 40 per KVA to Rs. 340 per KVA in respect of Arc/induction furnaces.
( 2 ) THE petitioners have set up/installed furnaces for the manufacture of castings and have their factories m Delhi. These furnaces have been set up after having obtained valid licences from the respondent-Corporation for the manufacture of castings.
( 3 ) ONE of the important raw-materials for the petitioners is electricity. Each of the petitioner has obtained electricity from the respondents and the sanctioned load is more than 100 KWS. The exact sanctioned load varies, depending upon the size and capacity of the furnaces set up by the different petitionters, but each one of them has a sanctioned load of more than 100 KWS.
( 4 ) ACCORDING to the petitioners, section 283 of the Delhi Municipal Corporation Act, 1957, hereinafter referred to as "the Corporation Act , empowers the respondent No. I to levy charges for the supply of electricity on such rates as may be fixed from time to time by the Corporation in accordance with law. For the purpose of charging the consumers, respondent No. I has divided the consumers in different categories/classes providing for different tariffs for each category The categories are (I) domestic, (II) non-domestic, (III) small industrial power (IV) Large Industrial power (LIP) and (V) Agricultural.
( 5 ) THE consumers who have a sanctioned load of -100 KWS fall in the category of large industrial powers. The petitioners fall under this category as eachh one of them has" a sanctioned load of more than 100 KWS. For the levy of charges for the supply of electricity there are two systems of tariff which are followed, one is the flat rate system and the other is known as two-part tariff system. Under the former, a flat rate is charged on the units of energy consumed while the latter system is meant for big consumers of electricity i. e. industrial power, and it is comprised of two charges, (1) minimum consumption guarantee charges (called demand charges), and (2) energy charges for the actual amount of energy consumed.
( 6 ) IT is the two-part tariff system which is applicable to the petitioners, who are large industrial power consumers. Under this system an LIP consumer pays 3 minimum guarantee consumption charges at the rate fixed by the respondent If the LIP consumer does not consume the specified minimum quantity of electricity or no energy at all even then he has to pay the minimum guarantee charges. But in case the consumer consumes more electricity than what is prescribed by the minimum guarantee charges then the consumer pays the minimum guarantee charges and also pays the electricity charges for the actual consumption of electricity, beyond the minimum guarantee charges, in such a manner that the minimum guarantee charges are merged in the total bill for electticity consumed and a rebate is given to the consumer. In other words, if a consumer consumes more than the specified minimum quantity of electricity then, in effect, he will pay for electricity which is actually consumed by him.
( 7 ) FOR the period from 1985-86 to 1988-89 the respondents had fixed rates of minimum consumption guarantee charges at the rate of Rs. 40 per KVA for 1000 KVAand Rs. 38 per KVA above 1000 KVA. The tariff for the UP consumers in respect of the aforesaid period, including the minimum guarantee charges, as fixed by the respondents was as follows : " (d) Tariff Demand charges Rs. 40. 00 per KV-A First 1000 KVA of billing or part thereof. demand for the month. All above 1000 KVA of Rs. 38. 00 per KVA biling demand for the or part thereof. month. Energy charges First 5,00,000 units per month at 85 paise per unit. All above 5,00,000 units per mo
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