- (1.) On August 17, 1934 the Governor-in-Council of the then United Provinces, in exercise of powers under Section 3(1)of the Indian Electricity Act, IX of 1910 issued three licences to M/s. Alopi Parshad and Sons Ltd., for the supply of electrical energy within the tahsil areas of Firozabad in the district of Agra, Shikohabad in the district of Mainpuri and Etawah in the district of Etawah. The licences inter alla provided that the licensee would be supplied electrical energy in bulk by the Public Works Department, U. P. and the licensee in its turn should transmit the same on their own high tension mains within the areas of the licences. The licences also provided that the responsibility for the maintenance of supply of electrical energy in the licensee's plant shall be borne entirely by the Public Works Department and thereafter by the licensee. In 1937 the licences were assigned by the said M/s. Alopi Parshad and Sons Ltd., to the petitioner company with the consent of the Government. The petitioner company has since then been supplying under the said licences electricity to consumers within the said areas of the licences. It is an admitted positional that though the petitioner company had the said licences assigned to it did not acquire any exclusive or monopolistic right of supplying electrical energy within the said areas. Clause (e) of Section 3 (2) of 1910 Act which governed the said licences provides that the grant of a licence thereunder shall not in any way hinder or restrict the grant of a licence to another person within the same area of supply for a like purpose.
(2.) The Electricity (Supply) Act, LIV of 1948 (hereinafter referred to as 1948 Act) by Section 5 (1) enjoins upon the State Government to constitute a State Electricity Board. Section 19 (1) provides that the Board may, subject to the provisions of this Act, supply electricity to any licensee or person requiring such supply in any area in which a scheme sanctioned under Chap. V is in force. The proviso to Section 19 (1) however, lays down that the Board shall not :- " (b) supply electricity [or any purpose to any person, not being a licensee for use in any part of the area of supply of a licence without the consent of the licensee, unless the maximum demand of the licensee, being a distributing licensee and taking a supply of energy in bulk is, at the time of the request, less than twice the maximum demand asked for by any such person; or the licensee is unable or unwilling to supply electricity for such purpose in the said part of such area on reasonable terms and conditions and within a reasonable time. " Section 26 provides that "Subject to the provisions of this Act, the Board shall, in respect of the whole State, have all the powers and obligations of a licensee under the Indian Electricity Act, 1910, and this Act shall be deemed to be the licence of the Board for the purposes of that Act." The definition of a licensee in Section 2 (6) of 1948 Act, however, states that it would not include the Board. Though the Board is not a licensee for the purposes of the 1948 Act the Act being deemed to be the licence for the Board under Section 26 it is licensee under, the 1910 Act. Section 26 however is subject to the provisions of the Act which means that it is inter alia subject to the provisions of Section 19. Therefore, in the absence of a scheme under Chap. V, the Board, though a licensee under the 1910 Act, was not competent to supply directly electrical energy to consumers such as the 3rd respondent. This was the position until 1961, when the U. P. Legislature to remove this disability of the Board, passed the Indian Electricity (U. P.) Amendment Act, XXX of 1961. Section 2 of the Amendment Act substituted the following for Clause (e) of Section 3 (2) of the 1910 Act : "(e) grant of a licence under this Part for any purpose shall not in any way hinder or restrict- (i) the grant of licence to another person within the same area of supply for a like purpose, or (ii) the supply of energy by the State Government or the State Electricity Board within the same area, where the State Government deems such supply necessary in Public interest." It also added after sub-section (2), the following sub-section (3) : "(3) Where the supply of energy in any area of the State Electricity Board is deemed necessary under sub-clause (ii) of clause (e) of sub-section (2), the Board may, subject to any terms and conditions that may be laid down by the State Government, supply energy in that' area notwithstanding any thing to the contrary contained in this Act or the Electricity Supply Act, 1948." Section 3 of the Amendment Act also added new sub-section (1-B) in Section 28 of the 1910 Act. The new sub-section reads as under :- "(1-B). The State Government may notwithstanding that sanction for engaging in the business of supplying energy to the consumers in an area has been given to any person under sub-section (1), whether before or after coming into force of the Indian Electricity, (U. P. Sanshodhan) Adhiniyam, 1961, give direct supply, or authorise the State Electricity Board to give direct supply in the same area" This sub-section has no application to the licensees, for, it empowers the State Government either to supply directly or authorise the Board to directly supply energy even in an area for which it has given sanction to a person other than a licensee to engage in the business of supplying energy to the public in such area.
(3.) A perusal of these provisions makes it clear that the Board can directly supply electricity to the consumers and the State Government also can authorise the Board to do so provided the State Government deems it necessary in public interest that it should be so done. The condition precedent for the direct supply by the Board to the consumers in the area where a licence has been granted to a licensee is that such supply by the Board must be deemed necessary by the State Government in public interest.;