Rajasthan High Court
B.P. Beri Ag. C.J. & M.L.Joshi, J.
Maharana Bhupal Electric Supply Co., Ltd. - Appellant
Versus
State of Rajasthan - Respondents
D.B. Civil Regular First Appeal No. 18 of 1960
Decided On : October 27, 1972
Having regard to the documents to this dispute it was no case of delivery of any goods, the price for which had already been settled. The price was under dispute and the bills were sent provisionally. The determination of the price was dependent on the report of the Rating Committee constituted pursuant to the agreement in Ex. 13. It would be equally erroneous to say that the goods were sold on credit. If the Rating Committee had decided against the increase of the electricity there would have been probably the end of the matter. As a matter of fact the goods was sold and the price remained to be determined by an appointed party. In fact the present suit partook of the nature of the suit for recovering money by way of price arising out of an award made by the Rating Committee. We have not been shown any specific article governing such a suit and therefore it will be regulated by Art. 120 of the Limitation Act. (para 8)
Held = Prior to the coming into force of the Supplies Act the Company had a right under the licence clause granted under the Indian Electricity Act, 1919 to raise the rate upto eight annas a unit. After the coming into force of the Supplies Act it was unilaterally entitled to raise its rates upto the limit of the reasonable return as envisaged by the 6th Schedule of the Supplies Act without reference to the Rating Committee. The Rating Committee was constituted merely to ascertain whether the claim made by the Company fell within the ambit of reasonable return. It was agreed that if it did the Company would be entitled to charge such a rate with effect from 1-2-1953. Such an agreement is certainly not hit by sec. 57(2)(c) for the simple reason that the rate recommended was identical with the rate claimed. If the Company could increase the rate without reference to the Rating Committee and the Rating Committee was only appointed with a view to make a post-facto examination of reasonableness then such a term that the Company could charge rates retrospectively in our opinion is not hit by sec. 57 and, therefore, the contract was not void under sec. 23 of the Indian Contract Act. (paras 13 and 14)
The circumstances which it is necessary to notice for the disposal of this appeal succinctly stated are these: Maharana Bhupal Electric Supply Go. Ltd., Udaipur (hereinafter called "the Company") was licensee under the Indian Electricity Act, 1910. It was to provide electrical energy in the town of Udaipur. The Company was charging annas six per unit of electricity for domestic purpose from its consumers. It is said that it was running in losses and therefore with effect from February 1, 1951 it increased the rate to annas eight per unit of electricity for domestic use. It justified this increase on the ground that the licence dated 31st, December, 1948, clause (8) entitled it to make this increase. The increase in the rate was resented to by consumers and they desired to get its justification examined. The plaintiff continued charging this rate upto July 1951. By that date the Indian Electricity Supply Act, 1948 (Act 54 of 1948) (hereinafter called the "Supply Act") had come into force in the State of Rajasthan with effect from April 1, 1951, by virtue of the provisions contained in the Part B States Adaptation of Laws Act. In view of the provisions of the Supply Act the consumers and the Minister of the Government and the Company entered into an agreement which is contained in Schedule A annexed to the plaint whereby it was agreed that the plaintiff shall provisionally charge at the rate of annas six per unit and a Rating Committee shall be constituted for determining the reasonableness of the charge claimed by the Company and the rate determined shall be charged from 1-2-1951. The agreement was signed on September 14, 1952. It is Exhibit 13. The Company pursuant to the agreement provisionally collected electricity charges for domestic use at the rate of annas six per unit. The Rating Committee reported that the reasonable return worked out accordding to the Sixth Schedule of the Supply Act, justified Companys charging annas eight per unit for domestic use. The report was published in the gazette and the rate was permitted to be charged with effect from July 1, 1953. According to the Company, the Government as a consumer paid a sum of Rs. 1,00,006 - less than what it should have paid pursuant to the tripartite agreement dated September 8, 1952 and after necessary notice it instituted a suit for the recovery of the said amount. The State of Rajasthan as a defendant half-heartedly denied even the existence of the tripartite agreement Ex. 13 to which a Minister was a party and urged that even if such an agreement existed it was contrary to the provisions of Sec. 57 of the Supply Act and therefore not binding on the State and besides the suit was barred by time. It was also urged that a dispute such as this should have been decided by arbitration and that the Company had a statutory obligation to treat all consumers alike and it was erroneous for it to claim enhanced rates only from the Government as a consumer.
3. The learned Civil Judge framed nine issues arising out of the rival contentions of the parties and held that the tripartite agreement amounted to a contract; but it was not proved that a sum of Rs. 1,00,006/- was payable by the defendant that the suit was barred by limitation under Art. 52 of of the Indian Limitation Act, 1908 excepting for a period of two months; that issues Nos. 6, 8 and 9 were not pressed and he held that sec. 57 barred the contract. Aggrieved by this judgment the plaintiff has come up in appeal.
4. Mr. Hastimal, learned consel for the appellant, urged that under the licence which was granted to the Companys predecessor-in-title in 1949 the licensee was entitled to charge upto a maximum of eight annas per unit for the domestic supply and that being the ceiling he could have gone upto it under the Indian E
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