Decided on April 11,1966


Cited Judgements :-



J.B.MEHTA - (1.)These two Second Appeals have been filed by the Godhra Electricity Company Ltd. ( hereinafter referred to as the company ) as both the Courts had decreed the suits filed by the consumers. Both these appeals raise common questions of law and so they are disposed off by this common judgment.
(2.)The short facts which have given rise to these appeals are as under :-
The Godhra Electricity Company was issued a licence on 17th October 1922 by the Government under the Indian Electricity Acts 1910 hereinafter referred to as the Electricity Act to Lady Sulochana Chinubhai. The present company is the successor of the said licensee. It appears that after the Electricity (Supply) Act 1948 hereinafter referred to as the Supply Act had come into force a rating committee was constituted at the request of the company on 19th January 1950 under sec. 57(2) of the Supply Act. The rating committee had submitted its report on 5th November 1951 at Ex. 42 and thereafter an order was issued by the Government under sec. 57(2)(c) fixing the charges to be made for the supply of electricity from the consumers with effect from 1st February 1952 No time limit was specified in the said order as there was no provision for fixing any time limit under sec. 52(2)(c) as it stood before its amendment in 1956 hereinafter referred to as 1956-amendment. Under the said order the company was to charge 0-7-9 per unit for the electric energy supplied for the purposes of lights and fans in the area of supply with minimum installation charges of Rs. 3.00 per month. As for energy supplied for motive power the charge fixed was O-4-0 per unit with minimum installation charge of Rs. 4-8-0 per unit for each installation. It appears that thereafter it was the case of the plaintiffs consumers that in January 1963 intimating the consumers about the intention of the company to increase the rate for the purpose of light and fans and for the purpose of motive power. It was the case of the plaintiffs that this pamphlet was withdrawn while it was the case of the company that it was not implemented in respect of lights and fans but for motive power the increase was made from 1st January 1963. Finally the company by another pamphlet dated 29th June 1963 announced new rates with effect from 1st July 1963. The rates for lights and fans were increased with effect from 1 July 1963 at the rate of 0-70 nP. per unit and the minimum charge per installation was increased from Rs. 3.00 to 5/- per month. The charges for motive power were already increased as per the first pamphlet with effect from 1-1-1963 and the rate was increased to 0-35 nP per unit for the motive power and the minimum charge per installation was increased from Rs. 4-8-0 per month to Rs. 7.00. The plaintiffs thereafter gave notices to the company protesting against this unilateral increase of rates notwithstanding the operation of the Government order fixing the charges for electrical energy...Thereafter the plaintiffs fixing two representative suits for declaration that the defendant-company was not entitled to increase the rates beyond the rates fixed by Government in 1951 November on the recommendations of the rating committee and they also prayed for a permaneat injunction restraining the company from cutting off any connection so long as the consumers were ready and willing to pay the rates as fixed by the Government on the recommendations of the rating committee. Appeal No. 16 of 1966 deals with the suit in which the question was regarding the increase of rates for lights and fans while appeal No. 17 of 1966 arises from the suit in which the question raised was as regards the increase in respect of the charges for motive power. In both these suits both the lower Courts came to the conclusion that the company was not entitled to increase these rates unilaterally so long as the order of the Government issued in November 1951 continued to remain in force as it was clearly for an indefinite period. The plaintiffs representative suits under 0. 1 R. 8 were therefore decreed by both the Courts. Therefore the company has filed the present two appeals.

(3.)As far as the scheme of the two Acts is concerned as regards the increase or fixation of rates I need not consider the whole scheme elaborately as the relevant sections have been considered by the Supreme Court in Amalgamated Electricity Co. Ltd. v. N. 5. Bathena A I. R. 1964 S. C. 1958 His Lordship Ayyangar J. speaking for himself and Dasgupta J. had observed that they were unable to agree with the decision of the Bombay High Court in Babulal Chhaganlal v. Chopda Electric Supply Co. Ltd. A.I.R. 1955 Bom. 182. Their Lordship had observed that it was clear from para 1 of Schedule VI of the Supply Act as it originally stood and as amended that the adjustment of rates might by unilateral and that the licensee had a statutory right to adjust his rate provided he conformed to the requirements of that paragraph viz. the rate changed did not yield a profit exceeding 15% and the amount of reasonable return. In their Lordships opinion the provisions of the Supply Act were too strong to permit the construction that the maxima prescribed under the Electricity Act of 1910 survived as a fetter on the rights of the licensee under paragraph I of the VIth Schedule. It was further held that if there as any room for any argument of that kind on the terms of para I of the VIth Schedule as originally enacted the matter was placed beyond possibility of dispute by the 1956 amendment by the use of non-obstante clause as the opening paragraph provided that notwithstanding anything contained in the Indian Electricity Act and the provisions in the licence of a licensee the licensee could adjust the rates. It was therefore held that the provisions of paragraphs 1 and 2 of VIth Schedule gave a unilateral power to the licensee to adjust the rates and the only obligation which was imposed was the one in the proviso (4) under which if the licensee took a risk and it was ultimately found that the rates of supply fixed in pursuance of the recommendation of the rating committee constituted under sec. 57A were lower than these notified by the licensee the licensee was bound to refund to the consumers the excess amount recovered by him from them. The third Judge His Lordship Sarkar J. (as he then was) took the same view of this non-obstante clause in the commencement of para 1. As the Bombay decision was prior to this amendment it was not considered necessary to express any opinion as regards the said decision. The settled position of law therefore in view of this decision is that if there was any restriction or a fetter in any of the provisions of the Electricity Act by reason of the maximum prescribed in the licence or by reason of some conditions imposed by an order issued under the Electricity Act those restrictions no longer operated after the Supply Act. All those restrictions deemed to be incorporated in the licence granted under the Electricity Act 1910 which were inconstitent with the rate which a licensee could charge under para 1 of Schedule VI of the Supply Act would be superseded and the provisions of the Supply Act would prevail. This decision only settles the question of the right of the licensee for making a unilateral increase in accordance with the para I of Schedule VI notwithstanding any fetter imposed by the Electricity Act. The question which still remains for consideration and which has arisen in these appeals is as to whether the licensee is still bound by the fetter imposed by sec. 57 or the newly substituted sec. 57A of the Supply Act itself under which the Government is empowered to fix the charges to be made by the licensee on the recommendations of the rating committee.

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