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1971 Supreme(Online)(All) 10

ALLAHABAD HIGH COURT
D. S. Mathur, S. N. Singh, JJ.
City Board, Mussoorie – Appellant
Versus
State Electricity Board, Lucknow – Respondent
Special Appeal



The absence of regulations does not invalidate the Board's authority to set Grid Tariffs under the Electricity (Supply) Act, provided such tariffs adhere to the principles outlined within the Act.

Headnote:(A) Electricity (Supply) Act, 1948 - Sections 46, 47, 58, 76(1) and 79 - Special Appeal regarding validity of Notifications fixing Grid Tariff and imposing additional charges; Board's authority to set tariffs against the petitioner as a licensee; challenge based on absence of regulations governing tariff setting. (Paras 1-3, 20-21)

(B) Judicial Review - Scope and Limitations - High Court's jurisdiction under Article 226 does not extend to usurping the functions of a Court of Appeal; interference only permissible in cases of jurisdictional error or arbitrariness. (Paras 7)

(C) Regulatory Framework - Discretion of the Board under Sections 46 and 79 of the Act; prohibition of arbitrary actions in tariff fixing amidst absence of regulations, but still allowing for guidance under statutory provisions. (Paras 18-29)

(D) Legal Principles - Board must apply due consideration to costs and reasonable adjustments of supply rates; requirements for fairness and non-discrimination emphasized in tariff setting, and the necessity for oversight by the State Government. (Paras 10, 21) (E)

Findings of Court:
Notifications are partially quashed; Board retains the authority to charge based on actual incurred costs for supply but must comply with statutory regulations and equitable standards. (Paras 44) (F)

Issues: Legality of Notification sequences regarding Grid Tariff adjustments and additional costs imposed on the petitioner; whether the Board acted within its authority in tariff determination and alterations. (Paras 4, 10) (G)

Ratio Decidendi: The absence of regulations does not invalidate the Board's authority to set Grid Tariff if such setting adheres to the principles outlined in the Act; the Board's discretion in tariff charging having necessary checks against arbitrary increases emphasized. (Paras 27-29) (H)

Result: Special Appeal partly allowed; the first part of the clause regarding additional charges declared illegal while upholding the Board's right to adjust charges reflecting real costs. (Para 44)

Table of Content
1. special appeal against dismissal of writ petition. (Para 1 , 2)
2. fixation of grid tariff under s.46 of the act. (Para 3 , 4)
3. challenge to the validity of notifications. (Para 5 , 6 , 8)
4. interpretation of s.79 provisions. (Para 7 , 9 , 10)
5. regulations and discretionary powers of the board. (Para 18 , 19)
6. safeguards against arbitrary power of the board. (Para 20 , 21)
7. guiding principles in fixing the grid tariff. (Para 22 , 23 , 24)
8. common grid tariff subject to legislative intent. (Para 29 , 30)
9. imposition of additional charges for different voltage supply. (Para 32 , 33 , 34)
10. coal charges and running charges component. (Para 35 , 36)
11. adjustment of tariff based on generation costs. (Para 37 , 38)
12. ruling on the legality of imposed charges. (Para 44)
13. final order of the court. (Para 45)

1. This is a Special Appeal by the City Board, Mussoorie, against the order of the learned Single Judge dismissing with costs its petition under Art.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 7% 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 S.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 S.2(6) of the Act, and being a local authority governed by S.58 of the Act, could not raise its tariff without the sanction of the Board. The petitioner, therefore,











































































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