- (1.) -This appeal, by special leave, is directed against the order of the High court of orissa allowing a writ petition filed by the first respondent for quashing a press note dated 1/02/1971 levying a coal surcharge at 0-62 p. per unit of electricity supplied by the orissa State Electricity Board to the first respondent. The writ petition came to be filed by the first respondent in the following circumstances.
(2.) The first respondent is a limited liability company carrying on business of manufacturing aluminium. It has several factories at different places in the country where it carries on one or the other processes involved in the manufacture of aluminium. It was desirous of setting up another factory and for that purpose it was looking for a place where it would be able to secure at reasonable rates electrical energy which is a primary raw material in the method of electrolysis employed for the purpose of converting alumina into aluminium. The State of orissa had, about this time, commissioned hydroelectric station at the site of Hirakud Dam with a view to step up the production of electricity and making it available for industrial purposes. It offered to supply electricity to the first respondent at reasonable rates if the first respondent set up its factory at Hirakud in the district of Sambhalpur within the territories of the State. A contract dated 3/06/1957 was accordingly entered into between the first respondent and the State of orissa for supply of electricity at certain mutually agreed rates for a period of 25 years with an option of renewal in favour of the first respondent for a further period of 25 years. Inview of this contract, the first respondent established a factory at Hirakud for the manufacture of aluminium and the State of orissa supplied electricity to the first respondent from the Hirakud hydro-power station at the rates stipulated in the contract. Some time after the factory of the first respondent had been in production, it was found that additional electric power was necessary for expansion of its operations. Another contract dated 11/02/1960 was, therefore, entered into between the first respondent and the State of orissa whereby the State agreed to supply to the first respondent additional electric power at the rates and on the terms and conditions set out in this contract. The duration of this contract was also co-extensive with that of the earlier contract. Thus there were two contracts between the first respondent and the State of orissa under which the State supplied electricity to the first respondent.
(3.) In or about 1962, the State government, by a notification issued under S. 5, Ss. (1) of the Electricity (Supply) Act, 1948 (hereinafter referred to as the Supply Act) constituted orissa State Electricity Board (for shortness called the Board). S. 60 of the Supply Act provides inter alia that All contracts entered into by, with. . the State government for any of the purposes of this Act before the first constitution of the Board shall be deemed to have been. . entered into. . by, with. . the Board. Therefore, as soon as the Board was constituted, the two contracts, dated 3/06/1957 and February II. 1960 were deemed to have been entered into by the first respondent with the Board and for all the purposes of the Supply Act, they were to be treated as contracts entered into with the Board. The Board in its turn supplied electricity to the first respondent from the Hirakud hydro-power station at the rates and in accordance with the terms and conditions set out in these contracts.;