Municipal Council can revise electricity rates without prior State Government approval if within license limits.

1. This is an appeal against the judgment of the Subordinate Judge, Vijayawada in A.S.No.102 of 1958 by which the plaintiffs were given partial relief in the matter of a declaration they sought about the levy of enhanced rates charged by the Municipal Council, Vijayawada for consumption of electricity for domestic and industrial uses.

2. Cross - objections are preferred by the Municipal Council in so far as the judgment struck down the duty of half anna per unit in addition to the usual rates of tariff as illegal for want of sanction of the State Government.

3. The facts giving rise to this litigation are these: The Municipal Council, Vijayawada, is the licensee for the supply of electric energy under the Indian Electricity Act of 1910 within the municipal limits of Vijayawada under a licence granted by the State Government in its order dated 22/11/1927. The licence was termed as "the Bezwada Electric Licence, 1927, and was subject to the provisions of the Indian Electricity Act, 1910 . The licence, a certified copy of which is filed as Ex. B - 3, embodies the terms and conditions of the licence which inter alia provided for the limits of the prices to be charged in respect of the supply of energy. An annexure appended to the licence stated the maximum charges. If the licensees failed to comply with the terms and conditions of the licence, the licence is revocable by the State Government. It is pertinent to note the stipulations as to the limits of prices to be charged in respect of the supply of energy.

4. Clause 10 relating thereto is in these terms: -
''Limits of prices to be charged in respect of the supply of energy. The prices to be charged by the licensees for energy supplied by them shall not exceed those stated in that behalf in the third annexure or in the case of a method of charge approved by the Government of Madras in accordance with the clause X of the Schedule to the Act, such maximum as the Government of Madras may fix on approving the method; nevertheless the licensees may enter into special contracts subject to S.22 and S.23 of the Act, for the supply of energy."

5. The main contention relates to these charges. We would scrutinise this provision elaborately in the appropriate context. We would now pass on to the narration of further facts.

6. The Municipal Council was supplying electricity to consumers at certain rates. The rates which were charged from consumers prior to the enhancement now impugned, had come into effect from 01/04/1940. The Municipal Council had published a booklet, Ex. A - 1 entitled "Conditions and Rates of Supply of the Vijayawada Municipal Electricity Department".

7. Condition No.15 related to the method of charging for current which is in these terms :
"The price and method of charging for current supplied shall be such as may from time to time be fixed by the licensee, in accordance with the provisions of the Act and of his licence, or such as may be made the subject of special agreement between the consumer and the licensee".

8. While the rates as were embodied in Ex. A - 1 were being collected from the consumers, the Municipal Council passed a resolution on 30/04/1956 enhancing the rates payable for domestic and industrial uses, and further levying a duty of 6 pies per unit per month for domestic use and fuel cost surcharge.

9. The Council's resolution No.33 dated 30/04/1956, Ex. A - 6 is in these terms :
''Read : Resolution of the Budget Committee dated 31/03/1956 and note of the Commissioner revising the Electricity Tariff of Parts II, III and IV of present Booklet of conditions and rates of supply.
(A copy of the revised conditions and rates i