A.K.MATHUR, C.J. - (1.)This is a Letters Patent Appeal directed against judgment and order dated 7-2-1997 passed by learned single Judge in W.P. No. 2826 of 1996.
(2.)Brief facts giving rise to this appeal are that the appellant No. 1 M/s. Jindal Straips Limited is a Company incorporated under the Indian Companies Act, 1956 and the appellant No. 2 is its share-holder. Appellant M/s. Jindal Straips Limited (for short hereinafter referred to as the Company) has a plant in which sponge iron, steel slabs and blooms are manufactured. The appellant Company made a request to the respondent Madhya Pradesh Electricity Board (for short 'the Board') for permission for installation and running of a generating set in parallel with the Board, grid and supply of excess energy to the Board. In response to the said letter of the appellant Company, the respondent Board wrote on 26th May, 1993 that permission under Section 44 of the Electricity (Supply) Act, 1948 (for short Act of 1948) is accorded to establish and run 15 M.W. turbogenerator set in parallel with the Board's system. The appellant-Company further made a request for extension of said permission and by letter dated 23rd April, 1994 (Annex-A1), the Executive Director (Commercial) of the Board wrote to the Company that it has been decided to permit the Company to run 2 numbers D.G. sets of 4375 KVA each in parallel with Board's system for which permission for standby use was earlier accorded. The said letter further stated that the request of the Company to accord permission to feed energy generated by it in excess of its requirement into Board's system has been accepted subject to certain terms and conditions enumerated in the letter. Letter dated 23-4-1994 Annex.-A1 which is of great significance reads as under :No. 5/CG/115/1928Jabalpur/dated 23-3-94To,M/s. Jindal Strips Limited,Kharsia Road,Post Box No. 16,Raigarh-496 001 (M.P.)Sub : Permission for installation and running of Generating sets in parallel with MPEB grid and supply of excess energy generated by you to Board's system.Ref. : Your letter No. JSL : 94 dated 5-2-1994 addressed to Hon'ble Minister of Energy, Govt. of M.P., Bhopal.Dear Sirs,Please refer to this office letter No. 5/CG/1115/2273, dated 26-5-1993 vide which permission under Section 44 of the Electricity (Supply) Act, 1948 to instal and run one No. 15 M.W. Turbo-Generating Set in parallel with Board's system was accorded subject to the terms and conditions contained therein.2A. On the request made vide your letter cited under reference, the matter has been further considered by the Board and it has been decided to extend the aforesaid permission. It has also been decided to permit you to run 2 Nos. D.G. sets of 4375 KVA each, in parallel with Board's system; for which permission for standby use was earlier accorded. The aforesaid permission is subject to the conditions contained in this letter hereafter.3 Your request to accord permission to feed energy generated by you in excess of your requirement into Board's system has also been considered by the Board and it has been decided that parallel operation of your sets with the Board's system would be subject to the terms and conditions contained hereunder :(i) You shall be required to fulfill all the technical conditions such as protection, metering, meter-reading etc. as may be specified by our C.E. (T and P), MPEB, Jabalpur.(ii) You will be required to guarantee a minimum consumption of 27 lacs units per month for the period from April to October and 18 lacs units per month from November to March, each year. The aforesaid minimum guaranteed consumption would be subject to review whenever the tariff minimum under the relevant tariff is revised in future. The conditions of minimum guaranteed consumption, as aforesaid shall come into force w.e.f. 1-12-1993 i.e. the date of commissioning of T.G. set of 15 MW by you.(iii) The energy supplied from Board's system to your installation and that supplied back from your captive generating sets into Board's system would be accounted for separately for the periods 10 p.m. to 6 a.m. and 6 a.m. to 10 p.m. and would be on net basis for the aforesaid two periods. For determining the energy supplied back from your system to the Board's system, 10% of the energy exported would be deducted towards wheeling and losses.(iv) Determination of net supply from the Board to you during the period 10 p.m. to 6 p.m. would be as per illustration given below :Let, energy of the Board fed into your system'A' unitsEnergy from your system fed into Board's system'B' unitsThen, the net supply from the Board to you would be :A-C.9 B = X units.(v) Determination of net supply from the Board to you during the period 6 a.m. to 10 a.m. would be as per illustration given below :Let, energy of the Board fed into your system'C' unitsEnergy from your system fed into Board's system'D' unitsThen, the net supply from the Board to you would be :C-O.9 D = Y units.(vi) During any month you would be required to pay for X + Y units provided, however, that negative values of X and Y would be ingored. In other words, you would be required to pay for sum of positive values of X and Y at Board's tariff applicable to you. This is also subject to the condition that if sum of A and C units is less than the guaranteed minimum consumption as in para 3(ii) above, you would also be required to pay for the difference of (A+C) units and the guaranteed minimum consumption. Accounting would be done on month to month basis only.(vii) If the value of X units is negative, the same shall be paid for by the Board @ 80 paise per unit. In case of increase in fuel cost adjustment charges (applicable to you) from the present level of 15 paise per unit, the same increase will be applicable to the aforesaid rate of 80 paise per unit. Similarly, in case of increase in HT tariff applicable to you, proportional increase shall also be applied to the rate at which payment is made by the Board to you during 10 p.m. to 6 a.m. for supply made by you. For example, if increase in tariff (overall including the PCA) is N %, the rate for supply made by you would be 80 (1 + N) paise per unit. 100(viii) The modalities of accounting, in the event of value of Y being negative, would be decided separately.Please acknowledge receipt of this letter and convey your acceptance to all the above mentioned terms and conditions within a period of two months from the date of receipt of this letter failing which it will be presumed that you have not agreed to the aforesaid terms and conditions and in that event, the above permission would automatically stand withdrawn.Yours faithfully,(P. N. Pandey)Executive Director(Commercial)By this letter dated 23-4-1994 (Annexure-A1) the Executive Director (Commercial) of the Board asked the appellant Company to acknowledge receipt and convey its acceptance about the terms and conditions within a period of two months. Thereafter, the appellant Company again wrote to the Chairman of the Board vide letter dated 23rd May, 1994 accepting the terms and conditions but made certain suggestions and modifications by the said communication. This was examined by the Board and the Board by its communication dated 5th August, 1994 (Annex-A3) wrote back dealing with the points raised by the Company and mentioning the views of the Boards.3A. The above communication of the Board was replied to by the appellant Company by letter dated 26-12-1994 agreeing in principle the terms and conditions contained in communication dated 23-4-1994 (Annex-A1) and subsequent communication dated 5th August, 1994 (Annex-A3). Letter of the Board dated 5-8-1994 is reproduced as under :-MADHYA PRADESH ELECTRICITY BOARDP. B. No. 34Jabalpur.No. 5/G.C./115/4317 Jabalpur, D/- 5-8-1994To,M/s. Jindal StripsLimited,Kharsia Road,Post Box No. 16,Raigarh-496 001 (M. P.).Sub : Permission for installation and running of generating sets in parallel with M. P. E. B. and supply of excess energy generated by you to Board's system.Ref. : This office letter No. 5/GC/115/1928 dated 23-4-94.Dear Sirs,Please refer to your letter No. JSL/94 dated 25-5-1994 addressed to the Chairman M. P. E. B., in response to this office letter under reference. The issues raised in your abovesaid have been considered. The Board's views thereon are as hereunder :Issue raised by M/s. Jindal stripsLimitedBoard's views thereon.
1. In condition No. (ii) on page-2, following phrase be added after the words from November to March each year.1. M/s. Jindal StripsLimited Are required to guarantee a minimum consumption of 27 lacs units per month from the period from April to October and 18 lacs units per month for the period from November to March each year. The aforesaid minimum guaranteed consumption would be subject to review whenever the tariff minimum under the relevant tariff is revised in future."except for the period when the power cut is imposed by the Board, for the period during which power cut remains in force, minimum units will be proportionately reduced.The condition of minimum monthly guaranteed consumption to the extent of 27 lacs (from April to October) and 18 lacs (from November to March) has been incorporated after having taken into consideration all the relevant factors such as pattern of your consumption in the past, powers regulatory measures etc. as such, no change in what has already been conveyed is felt necessary.2 In condition No. (iii) on page-2, in the last line word 'Banking' may please be added after the word 'wheeling'.

2. Banking is acceptable for accounting within month. In fact, this is inherent in system of accounting conveyed to you.

(3.)In the event of excess supply of units from Jindal StripsLimited to M.P.E.B., the condition of 10% deduction in energy exported to M.P.E.B. may not be applied. Thus, in case when the values of X and Y are negative, M.P.E.B. may please pay for X/0.9 units and Y/0.9 units to us as the case may be.3. This request has not been found feasible to accept.