Allahbad High Court
D.S.MATHUR,S.N.SINGH
City Board, Mussoorie - Appellant
Versus
State Electricity Board - Respondent
Decided On : 08/13/1970
ELECTRICITY - GRID TARIFF - FIXATION - REGULATIONS - MANDATORY OR DISCRETIONARY - GRID TARIFF - PRINCIPLES GOVERNING - ADDITIONAL CHARGES - COAL CHARGES - DEMAND CHARGES - SURCHARGE - DISCRIMINATION - INCREASE IN RATES TO CONSUMERS - PRINCIPLES.
Fact of the Case:
The petitioner, City Board, Mussoorie, challenged the validity of two Notifications dated 24-4-1962 and 30-9-1967, issued by the State Electricity Board, Lucknow, and the Central Electricity Authority, New Delhi, which fixed the Grid Tariff and imposed a surcharge of 20%. The petitioner contended that the Grid Tariff was invalid as it was not framed in accordance with the regulations made under Section 79 of the Electricity (Supply) Act, 1948 (the Act), and that the additional charges and coal charges were illegal. The petitioner also sought a direction to the respondents to permit it to increase the charges to consumers by 20%.
Finding of the Court:
The Court held that the provisions of Section 79 of the Act were directory and not mandatory, and that the Board could fix the Grid Tariff in the absence of regulations. The Court further held that the Grid Tariff was framed in accordance with the principles laid down in Section 46 of the Act, and that the additional charges and coal charges were not illegal. The Court also held that the imposition of a 20% surcharge on both the fixed kilowatt charges component and the running charges component was arbitrary and illegal, but that the petitioner was not entitled to increase the charges to consumers by 20% as it had not furnished sufficient data to justify such an increase.
Issues: 1. Whether the provisions of Section 79 of the Electricity (Supply) Act, 1948, are mandatory or directory? 2. Whether the Grid Tariff can be fixed in the absence of regulations made under Section 79 of the Act? 3. Whether the Grid Tariff was framed in accordance with the principles laid down in Section 46 of the Act? 4. Whether the additional charges and coal charges imposed by the Board were illegal? 5. Whether the petitioner was entitled to increase the charges to consumers by 20%.
Ratio Decidendi: 1. The provisions of Section 79 of the Act are directory and not mandatory. The Board can fix the Grid Tariff in the absence of regulations. 2. The Grid Tariff can be fixed in the absence of regulations made under Section 79 of the Act, provided that it is in accordance with the principles laid down in Section 46 of the Act. 3. The Grid Tariff was framed in accordance with the principles laid down in Section 46 of the Act. 4. The additional charges and coal charges imposed by the Board were not illegal. 5. The petitioner was not entitled to increase the charges to consumers by 20% as it had not furnished sufficient data to justify such an increase.
Final Decision: The Special Appeal was partly allowed and partly failed. The first para of Clause (2) of the two impugned Notifications dated 24-4-1962 and 30-9-1967 was declared illegal and quashed. The Government Order contained in Annexure 6' to the counter-affidavit and also the subsequent action taken by the Board on the basis of this G. O. were also quashed. The matter of the rates at which the petitioner could supply electricity to the consumers was to be considered again and final orders passed in accordance with the law.
JUDGMENT :- This is a Special Appeal by the City Board, Mussoorie, against the order of the learned Single Judge dismissing with costs its petition under Article 226 of the Constitution of India. The Writ Petition is against the State Electricity Board, Lucknow (to be referred hereinafter as the Board), the State of Uttar Pradesh and the Central Electricity Authority, New Delhi (to be referred hereinafter as the Authority), with the prayers that a writ of certiorari be issued to quash the two Notifications dated 24-4-1962 and 30-9-1967, Annexures "A" and "B" to the Writ Petition, and also for a writ of mandamus to direct respondents Nos. 1 and 2 not to enforce the said Notifications against the petitioner and further to direct respondent No. 1 not to realize 7½% for supply of electric energy at a lower voltage of 6,600 volts, and 20% surcharge imposed under the second Notification, and also the coal charges from the petitioner. A prayer was also made for the issue of a writ of mandamus to direct respondent No. 1 to make the demand charges on the basis of the maximum demand, and not on the basis of the chargeable demand as contemplated by the two Notifications. In the end, it was prayed that if the Grid Tariff framed by respondents Nos. 1 and 2 was not declared invalid, the petitioner be permitted to make additional charge from all its consumers and further there be no discrimination and respondents Nos. 1 and 2 should charge from the consumers at the same rates as was permitted to be charged by the petitioner.
2. The material facts of the case are that the petitioner. City Board, Mussoorie, has its generating station and supplies electricity to consumers in the cities of Mussoorie and Dehradun as a licensee under the Indian Electricity Act, 1910. As the demand for electric energy by the consumers increased, the petitioner approached the Electricity Department of the State of Uttar Pradesh, who agreed to supply to the Petitioner electric energy in bulk at certain rates. The supply was taken by the petitioner at Patel Road Sub-Station at 6,600 volts. Soon after this agreement with the Electricity Department the Board was constituted and it took over from the State Government the supply of electric energy to the petitioner. The petitioner is being supplied electric energy by the Board from the Ganga/ Sarda Grid.
3. In exercise of its powers under Section 46 of the Electricity (Supply) Act 1948 (to be referred hereinafter as the Act), the Board fixed a Grid Tariff applicable to all the licensees situated in the Ganga/Sarda Grid Area and taking supply in bulk from the Board. The Grid Tariff was so fixed under the Notification dated April 24, 1962, Annexure "A" to the Writ Petition. It was under another Notification dated September 30, 1967, Annexure "B", that the rates mentioned in the Grid Tariff were enhnaced by 20%.
4. In so far as the petitioner is concerned, the enhanced rates came into effect from December 1, 1967. The petitioner is a licensee as defined in Section 2(6) of the Act, and being a local authority governed by Section 58 of the Act, could not raise its tariff without the sanction of the Board. The petitioner, therefore, moved the State Goverment for permission to enhance the rates for supply of electric energy to consumers by 20%. No such sanction was given by the time the present Writ Petition was filed, but subsequently, on 20-4-1968, the petitioner was permitted to raise the charges for light and fan by two Paisas per unit which came to 6 or 7% of the original rates, and 10% for electric energy supplied for
other purposes.
5. The validity of the Notifications, that is, the Grid Tariff framed by the Board under Section 46 of the Act, is challenged on many grounds which shall be commented upon one by one. At the same time it is contended that the petitioner should have been permitted to raise the charges for the supply of electric energy by 20%. It was mentioned that respondent no. 1 itself supplied electric
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