- (1.) THESE petitions under Article 226 of the Constitution raise common questions and can be disposed of by a common judgment. They challenge an increase in the rate of electric energy supplied by respondent No. 2 to the petitioners. Petitioners include associations and individual consumers. The enhancement in rates of electric energy charges has been made under a notification of the State Government dated 24th May, 1972 issued under Section 3 (2) (aa) of the U. P. Act No. 6 of 1947 published on 3rd June, 1972, and by a notice of respondent No. 2 dated 9. June 1972 published in the 'Amar Ujala' dated 11th June, 1972. Notification dated 24th May, 1972 is Annexure A-2 to the petition. The notification is sought to be quashed by a writ of certiorari but no prayer has been made for the quashing of the notice published in the 'Amar Ujala' dated 11th June, 1972.
(2.) RESPONDENT No. 2 is a licensee under the Indian Electricity Act 1910 for the supply of electric energy within the Municipal Board and Cantonment Board, Bareilly. It purchases electric energy from the U. P. State Electricity Board. In the year 1947 U. P. Act No. 6 of 1947 was passed regulating the production, supply and distribution of electric energy by a licensee under the Indian Electricity Act 1910. In the year 1948, the Central legislature passed the Electricity Supply Act 1948 being Act. No. 54 of 1948 (hereinafter referred to as the Supply Act). This Act provides for rationalisation of production and supply of electric energy and for taking measures conducive to electrical developments. By Section 57 of the Supply Act provision has been made for enhancement of rates of electric energy supplied by the licensee to the consumer. That provision states that VIth and VIIth Schedules of the Act shall be deemed to be incorporated in the lincence of every licensee. VIth Schedule deals with the rates of electric energy. It allows an enhancement in the charges and provides for a reasonable return on the outlay of the licensee. "Reasonable return" has been explained in paragraph xvii (9) of the Schedule as follows : "Reasonable return" means - In respect of any year of account the sum of the following :- (a) the amount found by applying the standard rate to the capital base at the end of that year; (b) the income derived from investments other than those included in the capital base under the provisions of clause (d) of sub-para (1); (c) an amount equal to one-half of one per centum on any loans advanced by the Board; (c-1) an amount equal to one-half of one per centum on the amounts borrowed from organisations or institutions approved by the State Government; (c-2) an amount equal to one-half of one per centum on the amounts realised toy the issue of debentures; (d) an amount equal to one-half of one per centum on the accumulations in the Development Reserve created under para V-A of this Schedule; (e) such other amount as may be allowed by the Central Government having regard to the prevailing tax structure on the country. A licensee intending to increase the rates of electricity has to follow the procedure provided under the sixth Schedule which requires the giving of a notice in writing of not less than sixty clear days to the State Government and to the Board for such an intention. The third proviso to para 1 of the Schedule provides for such a notice. The notice has to be accompanied by such financial and technical data in support of the proposed enhancement as the State Government may, by general or special order specify. The furnishing of the data is required by paragraph (1-A) of the sixth Schedule. If the State Government or the Board do not agree with the proposal, the matter has to be referred to a rating committee constituted under Section 57-A of the Supply Act. The rating committee is a high powered body of three members. It examines the proposal after giving the licensee a reasonable opportunity of hearing. After taking into consideration the efficiency of operation and management and the potentialities of the undertaking, it submits a report to the State Government within three months of the date of its constitution, making recommendations regarding charges of electricity. The State Government then publishes the report in the official gazette and makes an order fixing the licensee' charges for the supply of electricity. The provisions of Sections 57 and 57-A and the sixth Schedule thus lay down an exhaustive procedure regarding the fixation of charges of electricity supplied by the licensee to the consumer. On 29th December, 1971 the U. P. State Electricity Board revised its grid tarrif in respect of sales of electricity to the licensees with effect from January 1, 1972. A copy of the letter of the Secretary of the Board is appended as Annexure 'D' to the counter-affidavit of Sri N. L. Bhuwania, respondent No. 2, was required under it to pay higher charges for the purchase of electricity from the Board. The State Government by a notification dated 12th February. 1972 notified that all private Electric Supply Undertakings could enhance their rates after following the procedure provided in the sixth Schedule of the Supply Act. Respondent No. 2 thereafter on the 1st March, 1972 gave the required notice under the third proviso to paragraph 1 of the sixth Schedule. It gave the financial and technical data in support of the proposed enhancement as required by paragraph (1-A) of the Schedule. The notice stated that as the tarrif of the Board had been enhanced with effect from 1st January, 1972, the licensee intended to raise the rates as proposed in Appendix VI (a) and VI (b) of the letter from that date. It was clearly stated that this was a notice under the third proviso to paragraph 1 of the sixth Schedule.
(3.) IT would be clear from a reading of this letter that the enhancement was proposed in accordance with the terms of the Schedule, under instructions from the State Government. The State Government after a close scrutiny of the financial and technical data furnished, approved of the enhancement in the rates. The statements made in respect of the reasonable return in the counter-affidavit of Sri N. L. Bhuwania have not been falsified by the rejoinder-affidavit. No counter figures have been given in it. The counter- affidavit of Sri G. R. Sonkar, on behalf of respondent No. 1. in paragraph 40, states that so far as the State Government was concerned they were satisfied that the licensee was not earning a reasonable return and was entitled to enhance the rates from 1st January, 1972. It is, therefore, clear that the State Government was satisfied that the enhancement proposed was in accordance with the provisions of the VIth Schedule of the Supply Act. Sanction accordingly was accorded and the State Government published the impugned notification dated 24th of May, 1972 (Annexure A-2). The licensee Company thereafter gave a public notice dated 9th of June 1972 in respect of its revised rates by publication in Amar Ujala on 11-6-72. The petitioners continued to pay the enhanced charges from June, 1972 to December, 1972. On the 3rd of January, 1973, these petitions were filed challenging the enhancement.;