SABYASACHI MUKHARJI - (1.) THIS appeal by special leave is from the judgment and order of the High Court of Allahabad, dated 21/07/1987. The High Court has set aside the award of the Umpire. To appreciate the decision and the contentions urged, a few facts are necessary.
(2.) ON or about 20/10/1962 there was a Bulk Supply Agreement entered into between Agra Electric Supply Co. Ltd. and the appellant herein, for supply of electrical energy to the latter's hotel, inter alia, containing terms of rates, discounts, minimum sum payable and increase in the rates and sums payable once a year on account of increase in cost of production and distribution of electrical energy. Clause 9 of the said agreement contained terms of the rate of supply and the contingencies in which such rates could be increased. The said Clause provided as follows: "The consumer shall, subject to the provisions hereinafter contained, pay to the Company for all electrical energy supplied and registered or estimated as herein provided at the rate of Rs. 0.20 (Rupees zero decimal two zero) per unit per month for all energy so supplied and registered and/or estimated in the case of a defective meter installation in accordance with the proviso to clause 6 thereof. The charge for all energy shall be subject to the scale of special discounts in accordance with the schedule annexed thereto. Provided That, (without regard to the quantity of units supplied) if the payment made or to be made for any one English Calender year ending 31st March in respect of the electricity consumed shall fall short of a minimum sum of Rs. 38640.00 (Rs. Thirty eight thousand six hundred and forty) the consumer shall nevertheless pay to the Company such amount in addition to the payments already made in respect of the electricity consumed for such Calendar year as will, being the total payment made in this respect to the said minimum of Rs. 38640.00 (Rs. Thirty eight thousand six hundred and forty). Provided Further that, in the event of the first and last years of this Agreement not being complete calender year as aforesaid the Company shall make a proportionate reduction on the aforesaid annual Maximum Demand and Minimum charges in respect of the period for which the said first and last year as the case may be shall be less than a complete calendar year. Provided Also That, if and whenever during the subsistence of this Agreement the Company is satisfied that there has been an increase in the cost of production and distribution of electrical energy it shall be at liberty (but not more than once in any year of accounts) to increase the rates and sums payable by the Consumer under the foregoing provision of this present clause 9 by such amount as it shall in its sole and absolute discretion decide." There was a clause providing for arbitration i.e. clause 18 which read as follows : "If any question or difference whatsoever shall arise between the parties to these presents as to the interpretation or effect of any provision or clause herein contained or the construction thereof or as to any other matter in any way connected with or arising out of these presents or the operation thereof or the rights, duties or liabilities of either party in connection therewith, when unless the means for deciding any such question or difference is provided for by the Indian Electricity Act, 1910 or the Electricity (Supply) Act, 1948 as the case may be, or by the rules made respectively under the said Acts or by a specific provision of this Agreement, in every such case the matter in difference shall be referred to the Arbitration of two Arbitrators, one to be appointed by each party hereto, and an Umpire to be appointed by the Arbitrators before entering upon the reference and the decision or award of the said Arbitrators or Umpire shall be final and binding on the parties hereto and any reference made under this clause shall be deemed to be a submission to arbitration under the Indian ARBITRATION AND CONCILIATION ACT, 1940 (Act X of 1940) or any statutory modification or re-enactment thereof for the time being in force. The Arbitrators or the Umpire giving their or his decisions shall also decide by which party the cost of the Arbitration and award shall be paid and if by both parties in what proportion."
(3.) ON or from 26/09/1973 the Agra Electric Supply Co. Ltd. increased per unit rate of electricity from 0. 20P or 21.5P in terms of clause 9 of the said agreement. Thereafter, the bills were sent @21.5P per unit, after giving discounts and rebates as per the agreement. ON or about 17/ 18/12/1973, the respondent herein took over the undertaking of the Agra Electric Supply Co. Ltd. ON or about 16/01/1974, the respondent informed the appellant by a written communication that consequent upon the expiry of licence granted to Agra Electric Supply Co. Ltd. to generate and supply electricity the respondent had taken it over and would supply electric energy to the hotel and that the Bulk Supply Agreement with Agra Electric Supply Co. Ltd. will continue to be in force with the respondent until such time the agreement is determined in accordance with its relevant provisions. All bills received subsequent to the take over were billed at the agreed rate allowing discounts and rebates.;