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Maharashtra State Electricity Board Vs. Madhusudandass and Brothers - Court Judgment

LegalCrystal Citation
SubjectElectricity
CourtMumbai High Court
Decided On
Case NumberA.F.O.D. No. 139 of 1963
Judge
Reported inAIR1966Bom160; (1965)67BOMLR919; ILR1966Bom585
ActsElectricity (Supply) Act, 1948 - Sections 24, 26, 46 and 70; Code of Civil Procedure (CPC), 1908 - Order 6, Rule 2; Electricity Act, 1910 - Sections 24
AppellantMaharashtra State Electricity Board
RespondentMadhusudandass and Brothers
Appellant AdvocateM.N. Phadke, ;M.W. Puranik and ;V.M. Golwalkar, Advs.
Respondent AdvocateJ.M. Thakar and ;C.J. Thakar, Advs.
Excerpt:
.....24(1)--whether section 24(1) of act ix of 1910 applies to a board.;the effect of section 26 of the electricity (supply) act, 1948, is that if the board has laid supply mains and has commenced to supply the energy then it becomes a licensee to that extent and acquires all the powers and obligations under the indian electricity act, 1910, and all the provisions of the latter act apply except such as are excluded. section 24 is not excluded and, therefore, section 24(1) applies to the case of a supply of electrical energy by the board to a consumer and the board can discontinue the supply only if the conditions of section 24(1) are satisfied, i.e. there must be neglect on the part of the consumer to pay the electrical charges. - - this clearly cannot mean that the board acted ultra vires..........it is not possible to accept this contention section 49 itself provides that the board may supply electricity to any person subject of the provisions of the act and of the regulations made in this behalf and one of the provisions of the act is s. 26 under which it has got the same powers and the obligations of as a licensee we cannot be s disregard the word 'obligation' in s. 26. once it has laid the main and stared the supply it is obliged to the continue of the so as licensee section 24(1) therefore applies to the case toe supply of electrical energy byte the board to a a consumer and if that is so it can discontinue the supply only if the condition of s. 24(1) are satisfied i.e. there must be neglect on therapy of the consumer to pay the electrical charges. if clause 34 gave.....
Judgment:

Patel, J.

XX XX XX

(1) The question is whether the revision of the tariff for the supply of the engorge of the different principle is ultra vires of the act and/or the rules under the act. The contention of is to be found in paragraph 11 (a) of the written statement of where these words are used. Mr. Thakar was not able to show how that the revised tariffs were in contravention of the provisions of the act. When pressed to clarify his contention is said the tariff were not fixed in accordance with the regulations which is entirely a different matter the regulations which is entirely a different matter. This clearly cannot mean that the Board acted ultra vires when the maker of the act has no power or jurisdiction to do in the thing. If the maker hangout the jurisdiction of doing the things, but if it is done in contravention of the rules one speaks of the though an allegation was made in para 11 of the written statement in this connection, 'twas vague was no particular regulation was alleged to have been violated. Mr. Thakar hasn't been able to below show in what manner any provisions of any of there gelatinous has been violated plaintiff board examined an engineer on this behalf but on question have been put to him in support oft allegations that any provision of the regulations was violated while fixing the tariff. There is on substance, therefore in this contention of Mr. Thakar.

(2) Mr. Thakar contends that even if the Board has rightly revised the tariffs, the same round not be applied to the defendants because of the contract that the unilateral power given to the Board by Claus 30 to increase or decrease the charges for the supply was vague and indefinite and was therefore void., that such power which gave one of the parties to the contract to do something arbitrary was unenforceable to and therefore the Board was not entitled to charge according to the new tariff for the supply and verged indefinite and was therefore void, the therefore Board and was not entitled to charge according to the new tariffs for the supply of the energy. In any case it is argued that is cannot claim the minimum demands charge under clauses 34 of the contract as it has claimed up expired as it has claimed for the 1-2-1961 to 6-5-1962 the Board having unjustifiably cut off the supply. He further contends that even off if the Board were entitled to claim the minimum charges, under Clause 22 - A of the contract the defendants is liable to pay Rs. 3281 - 4 - 0 only annually.

(3) Mr. Thakar laid emphasis on Clauses 30 of the contract as was done in the trial court. He also referred to some other clauses which give the Board large powers and relied upon Bennett v. Bennett 1952 1 All ER 413 and Goodinson v. Goodinson 1954 2 All ER 255 in support of his contention that the clauses are void. We are only concerned with C1 30 and not when others since the Board is not trying to enforce other clauses.

(4) Much reliance was placed on Clause 30 in the trial court and by Mr. Thakar even here. Clause 30 (a) runs as follows:

'The rats another charges set outing the schedule referred to in Clause 20 hereof and the miscellaneous charges in the conditions of supply are those in force at the time of executing the agreement in the Southern Grid area. The Consumer shall be eligible for what reduction in or rebate from these rates and/or in charges in granted byte Boards and will be liable as may fro m these rate and/or in charge liable for whatever surcharge or increase upon the them as may from time to time be charged by the Board or be liable to pay any new rule or tariff or amount which the Board may in its discretion deem fir to charge in lieu of the payments of fixed under this agreement'

Surprisingly enough, the words of Clause 20 have been overlooked Clause 20 runs as follows:

'The consumer shall pay to the Board every month charges for the electrical energy supplied to the consumer during the proceedings month at the Board's tariff applicable for the southern Grid, area, to the class service and in force from time and time. A Copy of the current H.T. tariff No.11 Slab Tariff of Notification No.5-9214 - 2 dated 1-12-1952 applicable to the consumer is set out in schedule attached to this agreement.

(5) This clause provides in essence that consumer would be liable to pay to the Board every month according to the tariff in force from time to time is that prescribed tariff then in force. It is clear that C1. 30 (a) insetting but a corollary to the liability created between the parties under Clause 20. It only prescribes the consequences of what ran happen it the tariff are changed. The consumer would-be entitled to reduction in the other hand, the consumer had pay a higher charge if the tariff rate increased. The real from time to time is created under Clause 20 itself which prescribes the charges.

(6) The First question is weather the power given to the Board to change the tariffs is so arbitrary that it should be held to be unenforceable. Clause 30 haste be read with clause 20 of the consumer must pay for the energy supplied at the permits be tariff rates. The act and the rules fixing the same. Tariff is not to be fixed for a particular individual but for all to whom the energies supplied. It is, therefore impossible to hold that clause 30 read with Clause 20 gives arbitrary powers to the Board to very the contract unilaterally and therefore is rendered void. It is not necessary to consider the matter in greater details as in Amalgamated Electricity Co. Ltd v. N.S. Bathena : [1964]7SCR503 a similar provision in a contract between a license and a consumer was upheld by the supreme Court. In the case the Judgment of J.C. Shah, J, in this court in Babulal Chhaganlal v. Chopda Electricity supply Co. Ltd : AIR1955Bom182 where is was held that a term. Such as this which gave right to a licensee to very the charges for the supply unilaterally could not be enforced, was considered ands disapproved by the supreme Court. The conditions prescribed by the for the exercise of the power of fixing the tariff or for revising it obtaining in that case are applicable in the present case as well. The Board has not be got unbridled discretion of the fixing the tariff. Under S. 46 of the Electricity (supply) Act 1948. of tariff has to be fixed or revised in accordance with the regulations framed under S. 79 of the Act and it is to be done on the basis of certain principles. Having regard to the provisions of the Act is cannot to said that the provisions oft consumer to pay according to the tariff which may be in force from time to time is illegal ovoid and if these so it is impossible to hold that clauses 30 (a), which is merely a corollary in to Clause 20 can be void and unenforceable. In view of this it is not necessary to consider the other case cited on behalf of the defendants by Mr. Thakar He referred so the decision of the Supreme Court in Keshavlal Lallubhai v. Lalbhai Trikamlal Mills Ltd. : [1959]1SCR213 the relevance of observation of being in paragraph 8. The principle of this case has no application to the present case. In the present case the plaintiff is statutory body which has no unbridled power to fix the tariffs according to its abridged well as the choice. It has to be fixed according to the well as the regulations framed and the observation therefore made in that and have no possible application of to the present case.

(7) Mr. Thakar then contended that under clause 20 and 30 of the contract he is not liable to pay the demand charges. He argues that even it the charges for the supply could be varied by the Board of the principle of the charges must remain in the same and the Board would haven power to change the principle. In other words he contends that the system of charging cannot be changed. There might have been some substances in the contention if the minimum billing demands chug were not a part of the tariff. In order to see whether the 'damned charges' is part of the Board to fix the Grid tariff from time to time. Sub - section (3) of the Electricity (supply) Act, 1948 says:

'The Grid Tariff shall be so framed as to include as part of the charge and show separately a fixed kilowatt charges component and a running charges component:

Provided that if in respect of any area the electricity to be sold by the Board is wholly or substantially derived from hydroelectric sources the running charges component may be omitted'. Sub - section (4) says:

'The Fixed Kilowatt charge component in the Grid Tariff may be framed so as to way with the magnitude of maximum demand.'

'The Grid Tariff may contain provisions for-

(A) adjustment of price having regard to the power factor of supply taken or the cost oft or both.

(B) a minimum charge related to apart or prospective demands of a licensee on the Board' Having regard to the terms of section 46. It must be held that the demand charge of is part of tariff and if that the so by clause 20, the defendants is bound to pay this clauses energy consumed.

(8) it is then contended by Mr. Thakar that in any event, after discontinuation of the supply the defendants was not liable to pay either the minimum charge fixed by the contract or any amount as the discountenances of supply was not justified. He contends that as there was a bona fide dispute between them in that the defendants was contending on the had that it should be charged at the contractual rate, while the Board was insisting on applying the new Tariff rate the non - payment of the bill did not justify the Board in disconnecting the supply under section 24(1) of the Indian Electricity Act 1910 and that the disconnection of supply being wrongful in could not claim the minimum charge of Mr. Phadke seriously has not been raised in the such a contention of and as the question as to whether there was a bona fired dispute between the parties not the or is a question of face the some ought not to be allowed to the be raised now secondly the contends that section 24(1) of the India Electricity act is not application in the case of the Board and if that is for it acted only under clauses 34 of he contract under which the defendants having filed to pay the to discontinue the same and to demands the minimum charges which was the minimum demand charges fixed under the new tariff.

(9) It is difficult to appreciate the contention that the question as to whether or not the supply was property discontinued has not been raised in the pleadings. The defendants contention was all along was the he was prepared to pay the charge according for the contractual rate the contract was for a period of five years and the Board of the had no rights to charges under the new tariff rationed the charge under the new tariff were excessive. In para 1 of the written statement the defendants alleges that the disconnection of he supply on all these occasion of as wrongful. As to the minimum charges in para 2 (b) of the written statement it say that the wrongfully cutoff the supply and hence it was not entitled to claim he minimum charge. True that it is not contended the Board was not entitled to discontinue and supply under Section 24 of the Electricity Acts there was dispute between the patties. But then law need not be pleaded it asset duty to apply the law of the facts provided and the found. Though therefore the point was and not argued in the court below we would not argued in the court below we would to be justified in not allowing the defendants to argue the point.

(10) The question is whether there was a bona field to pay for the supply of energy and the supply was unjustifiable cut off. It is undoubtedly true was that no two prior occasion when the supply was discontinued the defendant made full payment oft arrears and obtained reconnection of the supply. Even so, it cannot be denied in the present case that the was Apennine dispute between the parties. The defendants had entered into an agreement to take the supply and the plaintiff had agreed to take the supply plaintiff had agreed to supply the electrical energy for a period of five years. No doubt, clause 20 a period prescribes the rates shows that the rates were flexible in the sense that they were payable according to the tariff fixed by the Board from time to time. Even so having regard to the time of contract and having regard to the fact that the system of charging was changed by the new tariff it could note said that he defendants could not be entitled to charge according to then tariffs. Mr. Phadke contended that the defendants did not raise this dispute until after the last notice Exh. 48 was given on the 4th January 1960. But them, ever prior of the defendants had by Exh. 47 challenged the rights of the Board of levy the new tariff, similarly therefore by Exh. P. 52 the defendants the had already challenged the rights of the Board to revise the rates Moreover, the decision of this claim court in Babulal Chhangalal, : AIR1955Bom182 supported this stand. In view of the bona fide dispute between that parties it cannot be said that the Board was justified in cutting off the electric supply.

(11) In corporation of the City of Nagpur v. Nagpur Electric light and power Co. Ltd : AIR1958Bom498 it was held that if there was a bona fed dispute between the parties a to as to what dispute payable, the failure to pay the dues does not amounts to a neglect of pay within the meaning of section 24(1) and action under S. 24(1) could not be taken by electrical undertaking in such a under S. 24(1) then in view of the dispute between the parties, it could be said that the Board was not justified in cutting off the supply. The question is whether S. 24(1) is applicable to the Board.

(12) Section 26 of the Electricity [supply] act, 1948 applies some of the provisions of the Indian Electricity Act, 1910 to board and is as follows:

'26 subject to the provisions of his act. He board shall in respect of the whole state, have all the powers and obligation of licensee under the India Electricity Act 1910 [9 of 1910] and the India shall be deemed to be the license of the Board for the purposes of that act.'

(13) The first proviso excludes that application of certain sections and some clauses in the scheme to the Electricity Act 1910 the section being 3 to 11, and sub - section (2) and (3) of S. 21 and Ss. 22, 23 and 27 and that Act and Clauses 1 to V. VII and IX to XII of the schedule to that Act. The second proviso applies clause VI of the schedule in the Electricity Act to the Board in respect in an area where in distribution mains have been laid byte Board and the supply of energy through any of them has commenced. The effect of s. 26 is that if the Board has had laid supply main and the has commenced to supply the energy then if becomes a license of that extent and acquires all the powers and obligations and under that act [Electricity act of 1910] and the all the provisions it must apply to the Board and it has to act strictly in accordance's with the same.

(14) Mr. Phadke contends that the Board cannot be tied down to limited power of the cutting of the supply contained in S. 24 because it is not obligatory in it to supply electrical energy Mr. Phadke relies on S. 70 of the Electricity (supply) Act which, he says exempts the application of the Electricity of act 1910, It only under say that no provision of the Indian Electricity Act 1910 or of any rules made thereunder of the any instruments having effect of the virtue of such law or rule shall so far as it is consistent with any of the provisions of the Act have any effect.

(15) In order that the section which are expressly applied by S. 26 should be excluded by S. 70 of this act the provisions there of must be shown to be inconstant with the provisions of Electricity (supply) act. It is said that S. 49 of the Electricity (supply) Act 1948 vest s as discretion in the Board to supply electric vest energy to a consumer and is therefore in conflict with S. 24 ought not to be applied. It is not possible to accept this contention section 49 itself provides that the Board may supply electricity to any person subject of the provisions of the Act and of the regulations made in this behalf and one of the provisions of the act is S. 26 under which it has got the same powers and the obligations of as a licensee we cannot be s disregard the word 'obligation' in S. 26. Once it has laid the main and stared the supply it is obliged to the continue of the so as licensee section 24(1) therefore applies to the case toe supply of electrical energy byte the Board to a a consumer and if that is so it can discontinue the supply only if the condition of S. 24(1) are satisfied i.e. there must be neglect on therapy of the consumer to pay the electrical charges. If clause 34 gave wider power to Board, to that extent, that power would be ineffective.

(16) It is not correct to say that the Board acted only under clause 34 of the contract. When the defendants called upon the Board to refer the dispute to arbitration in accordance's with the contract by Exh. 47, Board gave notices by Exh 48 Under S. 24(1) of the supply if the bills were not cleared. This show that the Board itself acted in exercise the powers vested in it under S,. 24 of the Electricity act.

(17) Order accordingly.


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