The prevailing rate of interest was considered to be in the realms of regulation by the State, and the court adopted the return on a fixed deposit for the usual period of 63 months as a reasonable anticipated return on a long-term basis on a safe and prudent investment.

1. A question of some general importance arises for decision in these petitions. These are revisions by the Kerala State Electricity Board against orders passed in various petitions filed under S.10 and 16 of the Indian Telegraph Act, 1885 before the District Courts. The courts below have evidently followed the decision of this Court in Electricity Board v. Thomas, 1961 KLT. 238, and have determined compensation in the manner it was determined in that decision. The Division Bench is that case considered the question of the proper rule for determining compensation and laid down the principle that compensation payable is to be the present value of an annuity which yields a fair return at the rate of 5 per cent per annum. That the appropriate rule to be applied for determining compensation is that of determining the present value of an annuity yielding fair return is not a matter in controversy. But such fair return was taken as 5% when the Division Bench rendered the decision in 1961. One of us, Justice Poti, had occasion to consider this question recently in K S.F. Board v Williams, 1981 KLT. 95. It was noticed in that case that today fair return, noticing the relevant economic situation in the country, would not be 5% but more. There was no occasion to decide in that case what exactly would be such fair return The correctness of the decision in 1961 KLT. 238 was not doubted in that case. The principle to be adopted in determining compensation was rightly pointed out by the Division Bench in Electricity Board v. Thomas. But the rate of reasonable return on an investment which was determined at 5% in that case need not be true for all times. That would call for determination in each case independently, considering various factors bearing on the question of reasonable return on 3 proper investment. That is what was said in the decision in K.S E. Board v. Williams, 1981 KLT. 95.

2. When one of these revisions, CRP. 2803 of 1978, came up before our learned brother Viswanatha Iyer J., the learned judge noticed that the decision in Electricity Board's case, 1961 KLT. 238, was being questioned and therefore he referred the case to a Division Bench. Since the decision in Electricity Board's case was by a Division Bench the matter came up before a Full Bench on reference by the Division Bench.

3. Having heard counsel appearing in all these cases let us state at the very outset that the principle adopted by the learned judges in Electricity Board's case (1961 KLT. 238) concerning the mode of determining compensation is not under challenge here and it is agreed on all sides that the said principle is unexceptionable We are concerned in these cases only with a limited enquiry, our decision may be of considerable consequence as it would have impact upon similar cases relating to compensation. For a long time past compensation was being determined as if at all times the reasonable return on investment should be taken as 5%, which was the rate adopted in 1961 KLT. 238. Perhaps it was the decision in K S. E. Board v. Williams (1981 KLT. 95) which inspired the Board to raise the contention that the rate of return at 5% need not be true for all times.

4. S 51 of the Indian Electricity Act, 1910 confers on the State Government power to authorise any Public Officer, licensee or any other persons engaged in the business of supplying energy to the public under the Indian Electricity Act to exercise any of the powers which the Telegraph authority possesses under the Act with respect to the placing of telegraph lines and posts for the purposes of a telegraph established or maintained by the Government or to be so established or maintained. S.42 of the Electricity (Supply) Act, 1948 enables the Electricity Board to exercise all powers which the telegraph authority possessed under Part 111 of the Indian Telegraph Act, 1885 Thus the power to be exercised in this behalf is defined in terms of the relevant provisions of the Telegraph Act. S 10 (d)