The court upheld the Electricity Board's right to charge a minimum demand despite circumstances limiting actual consumption, affirming the principles of reasonableness and fairness under statutory obligations.

1. Petitioner No. 1 - The Century Textiles and Industries Limited - is a company and petitioner No. 2 is a shareholder of the company. The issue raised in the petition is as to whether the Maharashtra State Electricity Board is entitled to charge for supply of electrical energy in accordance with the tariff for the supply of electricity at high tension in accordance with the provisions of clause 1 entitled "Minimum Bill" at the rate of 75% of the contract demand even when no demand is registered or the actual demand registered is much less than 75% of the contract demand owing to the circumstances beyond the control of the company like strike, lock - out etc.

2. Prior to 1st July, 1980, the company was receiving electrical energy at its divisions known as "Century Rayon, Rayon Division, Century Rayon Tyre Cord Division and Century Chemicals Divisions" situate at Shahad, Dist. Thane, from the Tata Electric Supply Company Ltd. As and from the midnight of 30th June / 1st July 1980, the supply of electrical energy to certain areas which was being supplied by the Tata Electric Supply Company Ltd. was taken over by the Maharashtra State Electricity Board by a public notice dated 26th May, 1980. The terms and conditions under which the Maharashtra State Electricity Board supplied electrical energy were contained in the "Conditions and Miscellaneous Charges for supply of Electrical Energy." Those conditions were effective from 1st January, 1976. It further appears that respondent No. 1 framed tariffs under S.49 of the Electricity (Supply) Act , 1948. Under clause v(2) of the Tariff, "Contract Demand" is defined as follows: -
"Contract Demand means the maximum KW / KVA for the supply of which the Board undertakes to provide facilities from time to time. "
Under clause v (4) of the Tariff, "Billing Demand" is defined as follows: -
"Billing Demand" means the demand used for billing purposes and computed as the highest of the following:
(i) the maximum demand established during month as defined above;
(ii) 75% of the Contract Demand as defined above;
(iii) 50 KVA, or such other lower figures as may be approved by the Chief Engineer in the case of the licencees ........"
The contract demand in the case of petitioner No. 1 during the relevant period was fixed at 27,750 KVA. During the relevant period, there was power cut of 221/2% imposed by the State of Maharashtra and thereby the contract demand was reduced to 21,080 KVA.

3. It is asserted by the petitioners that on or about 30th April, 1982 the management of the company was forced to declare a lock - out at the company's aforesaid divisions. Consequently, the company was not able to utilise its normal contract demand quota as the manufacturing activities at the aforesaid divisions came to a standstill. The actual demand registered by the company from 30th April, 1982 onwards was reduced to approx. 2000 KVA. The company requested the Board to waive its demand charges for the unutilised demand during the lock - out period and to charge it for the actual demand registered by it. The respondents rejected the said request of the company. The respondent Board informed that there is no provision under the Tariff for waiver of demand charges. By further letter dated 14-06-1982 the company pointed out that there was a power cut of 221/2% and the company was not in a position to utilise its contracted demand and the Board could profitably divert the unutilised demand to other units and, as such, no loss would be caused to the Board