Prem Prakash, J. - (1.) THIS special appeal arises from the decision of a learned single Judge of this Court in Writ Petition No. 1026 of 1969, brought by Smt. Lakshmi Devi Sehgal (hereinafter referred to as the consumer) against the U. P. State Electricity Board (to be described hereinafter as 'the Board'), directing it by a writ in the nature of mandamus to replace at its cost, the stolen transformer, cost of which the Board by its order dated 24-10-69 had directed the consumer to deposit, to maintain and continue the supply of electricity. in terms of the agreement between the Board and the consumer, as amended by the Board's memorandum dated 12-12-1968 adding to the conditions of supply, a fresh condition No. 23 (a) providing: If in any case the transformer in rural area outside the premises of a consumer from which he is receiving supply is stolen then the consumer will have to bear the cost of its replacement, If however, there are more than one consumer then cost will be shared in proportion to the H.P. contracted by each." The fresh condition was added to the agreement, because Condition No.10 (1) of the Agreement stipulates that the consumer shall "abide by the Electricity Board conditions of supply now in force and by any subsequent modification or alteration thereto, as if the same had been in corporated in this Agreement."
(2.) THE consumer has an agricultural farm on the Lucknow-Barabanki Road; she has a tube well on the farm; she requisitioned the supply of electric energy to enable her to run the tube-well and upon her entering into the agreement on 30-8-1968 her premises were connected with the main. THE electric motor of the tube-well stopped working in the first week of October and upon enquiry she was told that the transformer situate at a distance from her tube-well had been stolen. When she presented an application to replace the stolen transformer, the Board insisted her to bear the replacement cost and hence the writ petition. THE Board contended that the consumer having agreed to abide by the subsequent modifications or alterations made by the Board in the Conditions of Supply and Condition No. 23 (a) added by the Board making it obligatory upon the consumer to bear the cost of the stolen transformer, the latter cannot turn round and ask the Board to resume the supply of energy without her performing her part of the contract. Finally, it was maintained that the rights of the parties flow from a contract, they cannot be enforced by invoking the extraordinary jurisdiction of the Court under Art. 226 of the Constitution. The learned single Judge held that the petitioner was under no legal liability to bear the replacement cost of the transformer, it being not the part of service line as defined by S. 2 (1) of the Indian Electricity Act, 1910. A transformer, in the opinion of the learned single. Judge, is a part and parcel of the main transmission line as defined by S. 2 (7) of the Electricity (Supply) Act, 1948. As regards the plea that contractual rights and liabilities cannot be enforced, the learned single Judge held that the obligation which the Board sought to fasten upon the consumer was in contravention of Cl. (vi) of the Schedule 7 to Indian Electricity Act, 1910, the remedy for statutory breach could be availed of by the consumer and the Court can grant writ to her. Accordingly, the writ petition succeeded and the rule was made absolute. Being aggrieved from that order, the Board has come up in appeal.
(3.) THE Board is a body corporate which has been endowed with power to acquire and hold property, both movable and immovable, by S. 12 of the Electricity Supply Act, 1948. THE Board is constituted by a notification made under S. 5 of that Act. It being thus a statutory corporation, it would be necessary at the outset to consider its nature and character and the extent of the powers which it may in its relationship with the consumer lawfully exercise. THE right to conduct its business in the form of a corporation and as such to enter into contracts with consumers, is not its natural or fundamental right. It is a creature of the law and the statute in authorising its own corporations to carry on business, may qualify that privilege by imposing such conditions and duties as reasonably may be deemed expedient in order that its activities may not operate to the injury of the rights of the public with whom it may come in contact. We would do no 'better than quote the following from the opinion of Chief Justice Taney in the well-known case of THE Bank of Augusta v. Earle (U. S. Supreme Court reports (1842) 10 Law Ed (Peters) (519)) at p. 586:- "In the case of Head and Amory v. THE Providence Insurance Co. ((1808) 2 Cranch 127), Chief Justice Marshall, in delivering the opinion of the Court, said, without ascribing to this body which in its corporate capacity is the mere creature of the Act to which it owes its existence, all the qualities and disabilities annexed by the common law to ancient institution of this sort, it may correctly be said to be precisely what the incorporating Act has made it - to derive all its powers from that Act, and to be capable of exerting its faculties only in the manner which that Act authorises. To this source of its being, then, we must recur to ascertain its powers, and to determine whether it can complete a contract by such communications as are in this record." In the case of Dartmouth College v. Woodward ((1819) 4 Wheat 629 (636)), the same principle was again decided by the Court. "A corporation, said the court, is an artificial being, invisible, intangible and existing only in contemplation of law. Being a mere creature of the law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence." And in the case of the Bank of the United States v. Dandridge ((1827) 12 Wheat 64), where the questions in relation to the powers of corporations and their made of action were very carefully considered, the court said: "But whatever may be the implied powers of aggregate corporations by the common law, and the modes by which those powers are to be carried into operation, corporations created by statute must depend both for their powers and the mode of exercising them, upon the true construction of the statute itself." THE Supply Act charges the Board with the general duty of supply and distribution of electricity in the most efficient and economical manner. It confers the power upon the Board to frame tariffs, and to supply electricity to any person not being a licensee upon such terms and conditions as it thinks fit. (See Section 49). THE Board by S. 26 has been given all the powers and obligations of a licensee under the Indian Electricity Act, 1910. THE section declares that the Act shall be deemed to be the licence of the Board for the purposes of that Act. THE Second Proviso states further "that the provisions of Cl. VI of the Schedule to that Act shall apply to the Board in respect of that area where distribution mains have been laid by the Board and the supply of energy through any of them has commenced." Thus the Electricity Supply Act not only brought into existence a corporate body designated as the Board but also conferred upon it the licence for the purposes of Indian Electricity Act, 1910. It made Cl. VI of the Schedule of the latter Act applicable to the Board, without laying down in the Act, fresh Conditions of Supply to which the Board would adhere, in its relationship with the consumers serving upon it the requisition for supply of electricity in the area where the distribution mains have been laid by it and the supply of energy through any of them has commenced. That brings us to Cl. VI of the Schedule to the Indian Electricity Act, 1910. It is as follows:- "(1) Where (after distributing mains have been laid down under the provisions of Cl. IV or Cl. V and the supply of energy through those mains or any of them has commenced) a requisition is made by the owner or occupier of any premises situate within (the area of supply) requiring the licensee to supply energy for such premises, the licensee shall within one month from the making of the requisition (or within such longer period as the Electrical Inspector may allow) supply, and save in so far as he is prevented from doing so by cyclones, floods, storms or other occurrences beyond his control, continue to supply energy in accordance with the requisition: Provided, first, that the licensee shall not be bound to comply with any such requisition unless and until the person making it- (a) within fourteen days after the service on him by the licensee of a notice in writing in this behalf, tenders to the licensee a written contract in a form approved by the (State Govt.) duly executed and with sufficient security, binding himself to take a supply of energy for not less than two years to such amount as will (assure to the licensee at the current rates charged by him, on annual revenue not exceeding fifteen per centum of the cost of the service line required to comply with the requisition) and (b) if required by the licensee so to do pays to the licensee the cost of so much of any service line as may be laid down or placed for the purposes of the supply upon the property in respect of which the requisition is made, and of so much of any service line as it may be necessary for the said purposes to lay down or place beyond one hundred feet from the licensee's distributing main, although not on that property." Sub-clause (2) of Cl. VI provides that any service line laid for the purpose of supply in pursuance of a requisition under sub-cl. (1) shall, notwithstanding that a portion of it may have been paid for by the person making the requisition be (maintained by the licensee who shall also have the right to use it for the supply of energy to any other person).;