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1978 Supreme(Ker) 14

Kerala High Court
V.P.GOPALAN NAMBIYAR,G.BALAGANGADHARAN NAIR
Travancore-Cochin Chemicals limited - Appellant
Versus
Kerala State Electricity Board - Respondent
Decided On : 01/18/1978

Advocates:
Menon and Pai for Appellants in all the appeals. N. Raghava Kurup and M. S. N. Pillai (for Nos. 1 to 5) in W. A. No. 466 of 1976, (for Nos. 1 to 4) in W. A. Nos. 493 and 494 of 1976 and Govt. Pleader (for No. 6) in W. A. No. 466 of 1976 (for No. 5) in W. A. Nos. 493 and 494 of 1976, for Respondents.

The specific clauses in agreements between the electricity board and consumers can confer the right of revising tariffs on the board, making such revisions binding on the consumers and limiting the board's power to unilaterally revise tariffs.

Headnote:

Tariffs - Validity of Tariff Revision - Electricity (Supply) Act, 1948, Kerala State Electricity Board (General Tariff) Regulations 1976 - The court discussed the validity of the revision of tariffs by the Kerala State Electricity Board under the powers conferred by S. 49 of the Electricity (Supply) Act, 1948, and the Kerala State Electricity Board (General Tariff) Regulations 1976. The court emphasized the importance of agreements between the Board and consumers in fixing special tariffs and the limitations on the Board's power to unilaterally revise tariffs. The judgment highlighted the specific clauses in the agreements and their impact on the Board's power to revise tariffs.

Fact of the Case:

The Writ Appeals raised the question of the validity of the revision of tariffs by the Kerala State Electricity Board. The appellant, Travancore-Cochin Chemicals Limited, challenged the Board's power to revise tariffs under the agreements executed between them.

Finding of the Court:

The court found that the specific clauses in the agreements between the Board and the appellant conferred the right of revising tariffs on the Board, making such revisions binding on the appellant. The court emphasized the impact of the agreements on the Board's power to unilaterally revise tariffs.

Issues: The key issue was whether the Kerala State Electricity Board had the power to revise tariffs under the agreements executed with consumers.

Ratio Decidendi: The court's decision was influenced by the specific clauses in the agreements, which conferred the right of revising tariffs on the Board and made such revisions binding on the consumers. The judgment emphasized the importance of agreements in fixing special tariffs and the limitations on the Board's power to unilaterally revise tariffs.

Final Decision: The appeals were dismissed with no order as to costs, and it was agreed that the other Writ Appeals would abide and follow the fate of the first appeal.

Judgement

GOPALAN NAMBIYAR C.J. :- These Writ Appeals raise the same question in regard to the validity of the revision of tariffs effected by the Kerala State Electricity Board. By way of example, it would be enough to refer to the facts in W. A. No. 466 of 1976. The facts in the remaining cases are, it was admitted, practically the same, and need not be repeated.

W. A. No. 466 of 1976

The appellant in this Writ Appeal is the Travancore-Cochin Chemicals Limited, Eloor. Udyogamandal. The agreement executed by it with the Electricity Board is Ext. P2 dated 26-3-1974. Clause 9 of the agreement is as follows :

"9. The cosumer shall pay for all electrical energy supplied to him by the Board and ascertained as hereinbefore provided an amount calculated at the rate and in accordance with the terms given in the Schedule.

The rates, shown in the Schedule, are liable to revision by the Board from time to time in which case the revised rate/rates shall be binding on the consumer and the levy of charges for electricity consumed shall be at the revised rate or rates."

By cl. 12, the agreement was to be in force for a period of 10 years from 25-11-1970, which was the date on which the previous agreement dated 7-9-1967 expired. After the said period of 10 years, the agreement may be renewed on such terms and conditions as the parties may mutually agree upon. The Schedule to the agreement is as follows :

SCHEDULE

1. Description of the premises at which the supply is to be given.

The Travancore-Cochin Chemicals, Ltd., Udyogamandal.

Power and lighting.

3. Rate for supply. Rs.100 per KW/ year of maximum demand, exclusive of electricity duty leviable by Government and surcharges if any imposed from time to time.

4. Maximum Electrical Power required by the consumer.

2. Purpose for which the supply is to be given.

10000 K W at 66,000 Volt 5.

5. Minimum revenue per year guaranteed by the consumer.

Rs. 6,33,340/-

Ext. P3 dated 21-12-1974 was another agreement between the Board and the Company. Clause 9 is identically worded. The Board promulgated Ext. P8 notification on 27-5-1975 revising tax for the supply of electricity effected from 1-1-1970. The revision was under the powers conferred by S. 49 of the Electricity (Supply) Act, 1948, and also by the Kerala State Electricity Board (General Tariff) Regulations 1976, and the Kerala State Electricity Board (General Tariff) (Amendment) Regulation 1969 and other enabling provisions in the statutes. Ext. P8 is a copy of the notification issued by the Board. Clause 7 of the notification dealt with the revision of the rates of tariffs applicable to extra high tension consumers and provided that it shall be according to the "Two part tariff" given below. The details of the Two part tariff were indicated in the clause at some length. The question debated in the appeal is whether in the face of Exts. P2 and P3 noticed, the Board had power to revise tax as under Ext. P8.

2. For the appellant reliance was placed on Indian Aluminium Co. v. K. S. E. Board (AIR 1975 SC 1967). In the said decision, explaining the scope of Section 49 of the Electricity (Supply) Act, it was pointed out by the Supreme Court: (at P. 1973).

"It would, therefore, seem clear that the Board can, in exercise of the power conferred under sub-sec. (3) of S. 49, enter into an agreement with a consumer stipulating for a special tariff for supply of electricity for a specific period of time. Such a stipulation would amount to fixing of special tariff and it would clearly be in exercise of the power to fix special tariff granted under sub-sec. (3) of 5. 49. Indeed, if the power to fix special tariff through the modality of an agreement with the consumer were not there in sub-sec. (3) of S. 49, it cannot be found in any other provision of the Supply Act and in such a case it would be impossible for the Board to enter into any agreement with a consumer binding itself to supply electri









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