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1972 Supreme(All) 220

Allahbad High Court
SATISHCHANDRA,A.BANERJI
Hari Shankar - Appellant
Versus
U.P. State Electricity Board - Respondent
Decided On : 09/21/1972

Advocates:
K.L. Grower, for Petitioners; V.K. Mehrotra and Standing Counsel, for Respondents.

Headnote:

ELECTRICITY (SUPPLY) ACT, 1948 - SECTION 49 - TARIFF - INCLUDES POWER TO FIX MINIMUM GUARANTEED CHARGES - AGREEMENT BETWEEN CONSUMER AND BOARD - AUTHORISES BOARD TO MODIFY TERMS AND RATES - NOTIFICATION INCREASING MINIMUM GUARANTEE CHARGES - VALID - RETROSPECTIVE EFFECT - NOT INVALID IF IT GRANTS RELIEF TO CONSUMERS - TARIFF FIXED BY BOARD - NOT BAD IF IT HAS BEEN FIXED AFTER CONSIDERING FACTORS MENTIONED IN SECTION 49(2)(B) AND (D).

Fact of the Case:

Petitioners entered into an agreement with the U.P. State Electricity Board for the supply of electrical energy for small scale industry purposes. The agreement provided that the petitioners will pay a minimum guarantee at the rate of Rs. 66/- per year per B.H.P. The Board increased the minimum guarantee charges to Rs. 96/- per year per B. H. P. and then to Rs. 120/- per year per B.H.P. Petitioners challenged the validity of the notifications increasing the minimum guarantee charges.

Finding of the Court:

The court held that the term 'tariff' in Section 49(1) of the Electricity (Supply) Act, 1948 includes the power to fix minimum guaranteed charges. The agreement between the consumer and the Board authorises the Board to modify the terms and rates for the supply of electrical energy including the minimum guaranteed payment therefor. The notification increasing the minimum guarantee charges was valid. The notification dated 27th November, 1968 was not invalid because it varied the rate of minimum guarantee charges with retrospective effect as it granted relief to the consumers. The tariff fixed by the Board was not bad as it had been fixed after considering the factors mentioned in Section 49(2)(b) and (d) of the Electricity (Supply) Act, 1948.

Issues: Whether the term 'tariff' in Section 49(1) of the Electricity (Supply) Act, 1948 includes the power to fix minimum guaranteed charges. Whether the agreement between the consumer and the Board authorises the Board to modify the terms and rates for the supply of electrical energy including the minimum guaranteed payment therefor. Whether the notification increasing the minimum guarantee charges was valid. Whether the notification dated 27th November, 1968 was invalid because it varied the rate of minimum guarantee charges with retrospective effect. Whether the tariff fixed by the Board was bad as it had been fixed after considering the factors mentioned in Section 49(2)(b) and (d) of the Electricity (Supply) Act, 1948.

Ratio Decidendi: The term 'tariff' in Section 49(1) of the Electricity (Supply) Act, 1948 includes the power to fix minimum guaranteed charges. The agreement between the consumer and the Board authorises the Board to modify the terms and rates for the supply of electrical energy including the minimum guaranteed payment therefor. The notification increasing the minimum guarantee charges was valid. The notification dated 27th November, 1968 was not invalid because it varied the rate of minimum guarantee charges with retrospective effect as it granted relief to the consumers. The tariff fixed by the Board was not bad as it had been fixed after considering the factors mentioned in Section 49(2)(b) and (d) of the Electricity (Supply) Act, 1948.

Final Decision: The writ petitions were dismissed with costs.

Judgement

SATISH CHANDRA, J. :- A learned Single Judge felt doubtful about the correctness of the view taken by Hon'ble G.C. Mathur, J., in Civil Misc. Writ Petn. No. 6428 of 1970 Zila Power Upbhokta Sangh v. Union of India (decided on 26-4-1972) (All) about the construction of term traiff contained in Section 49 of the Electricity (Supply) Act, 1948. He referred the entire writ petition to a larger Bench although the writ petition raises several other questions as well.

2. The petitioners entered into an agreement with the U.P. State Electricity Board for the supply of electrical energy for small scale industry purposes. The agreement provided that the petitioners will pay a minimum guarantee at the rate of Rs. 66/- per year per B.H.P. On 25th June, 1968, the State Electricity Board published a notification increasing the minimum guarantee rate to Rs, 96/- per year per B. H. P. By another notification of November 27, 1968 the minimum guarantee charges were further increased to Rs. 120/- per year per B.H.P. The petitioners did not pay the minimum guarantee charges demanded by the Board, as a result whereof the Board started proceedings for its recovery as arrears of land revenue. Thereafter, the petitioners have come to this Court. They have challenged the validity of the notification increasing the minimum guarantee charges.

3. It was argued on behalf of the petitioners that the payment for the supply of electricity was regulated by the contract between the parties. Paragraph 4(3) of the agreement entitled the Board to charge guaranteed minimum payment at the rate of Rs. 66/- per year per B. H. P. The Board had no power to vary the rate unilaterly. Paragraph 4(1) of the agreement provides :

"The consumer shall pay for an the electrical energy supplied at the rates and in accordance with the terms in force for the time being and the signing of this agreement shall be held to imply the consumer concurrence to the terns and the rates hi force for the time being and in any subsequent modifications or alterations thereof."

The phrase 'terms and the rates in force' in relation to the supply of electrical energy would in our opinion, include the term mentioned in paragraph 4(3) of the agreement relating to guaranteed minimum charges. That being so, paragraph 4(1) authorises the Board to modify or to alter the terms and the rates in force and such modification or alteration will be deemed to have been done with the concurrence of the consumer. The agreement authorises the Board to modify the terms in regard to the supply of electrical energy including the minimum guaranteed payment therefor.

4. It was then urged that Section 49 of the Electricity (Supply) Act, 1948 does not entitled the Board to vary the minimum guaranteed charges. Even so, the Board having power to vary those charges under the agreement the petitioner can make no grievance about it. Section 49 empowers the Board to supply electricity to any person other than a licensee upon such terms and conditions as may be fixed by it from time to time. It has also been authorised to frame uniform tariff for the purposes of such supply. It was submitted that the term 'tariff' would entitle the Board to fix the rates of charges for the supply of the electrical energy and this term will not cover the fixation of any guaranteed minimum charges.

5. The word tariff has been defined in the Webster's Third New International Dictionary, Vol. II, page 2341 as, inter alia, published schedule of rates, rating or charges with society, rules, regulations, routes and information issued by the carriers or their agents and filed with a public regulatory agency. Thus the term tariff' includes within its ambit not only the fixation of rates but also the rake and regulations relating to it. When the electrical supply is being made on the footing that the consumer will pay the minimum guaranteed charges, this charge it one of the terms or conditions for the supply. By it the supplier ensures the receipts o






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