The Board had the power to revise the tariff under Section 49 of the Electricity (Supply) Act, 1948, and the minimum consumption guarantee charge was correlated to the energy charge and demand charge, with adjustments made to ensure that consumers paid a minimum amount of money to the Board over the span of a year.

K. N. SETH, J. :- The petitioners entered into separate but identical agreements with the U.P. State Electricity Board for supply of electrical energy for industrial purposes. At that time the rate schedule of 1972 framed by the Board under S.49 of the Electricity (Supply) Act, 1948 (hereinafter referred to as the Act) was in force. The relevant rate schedule applicable to the petitioners was Rate Schedule HV-28. By a notification dated Oct. 12, 1974 the Board, in exercise of powers under S.49 of the Act, issued revised rate schedules for supply of electricity. Besides revising the rates for demand charge, energy charge etc., a charge called minimum consumption guarantee charge was introduced for large and heavy consumers, the category to which the petitioners belong. In these petitions validity of the revised rates in the tariff as also imposition of the minimum consumption guarantee charge has been challenged. During the course of hearing it was conceded that the dispute regarding charges other than minimum consumption guarantee charge was covered by the arbitration clause of the agreement and only the validity of the minimum consumption guarantee charge was pressed for consideration.

2. In the revised tariff of 1974 the minimum consumption guarantee charge was fixed at Rs. 360/- per KVA per annum of the contracted demand (including fuel cost variation adjustment) chargeable at the rate of Rs. 30/- per KVA per month of the contracted demand. It also provided that the demand charge and the additional charge on excess demand drawn over and above the contracted demand shall not be taken into account towards the aforesaid amount guaranteed. It was urged that this imposition was invalid as it was not warranted by the agreement between the parties which alone governed the terms and conditions of supply of electrical energy to the petitioners. It was further urged that since the Board was not in a position to supply electricity in accordance with the terms of the agreement the imposition of a minimum guarantee charge was unjustified. It was last contended that the exercise of power under S.49 of the Act in fixing a minimum charge was an arbitrary exercise of power and wholly untenable.

3. The agreement between the parties, by cl.(2), provided that the agreement shall be read and construed in all respects in conformity with all provisions of the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 or any subsequent amendments thereof and the rules and regulations made thereunder from time to time. By cl.(8) it was provided that the consumer shall pay for the supply of electrical energy in accordance with rate schedule attached to the agreement. In cl.(13) it was provided that the rates stipulated in the agreement were subject to revision by the State Electricity Board from time to time under the provisions of the Act. As noted earlier, the agreement was entered into when the rate schedule of 1972 was in force. By notification dated October 12, 1974 the rate schedule of 1974 framed in exercise of powers under S.49 of the Act was brought into force. It was issued in supersession of all previous notifications, orders and instructions on the subject. Paragraph 2 of the notification provided that the rates of charges, conditions of supply and other, matters specified in the schedules shall replace the existing rates of charges and the corresponding provisions in the existing schedules and in the existing agreements, if any, with effect from Oct. 12, 1974.

4. Section 49 of the Act empowers the Board to lay down terms and conditions, popularly known as tariffs, for supply of electricity to persons other than licensees. Under S.49(1)(2) uniform tariffs are framed covering various categories of consumers. Sub-Sec. (3) provides for framing different and special tariffs for a consumer or a class of consumers. Under the aforesaid provision the Board, is empowered to lay down rate schedules from time to time. The notificatio