C1.3 of the said numberification provided that the revised tariffs shall replace all existing tariffs and shall supersede all the existing orders of the Board and the State Government in that behalf with effect from the date of introduction of the revised tariffs, except for the following, namely Special companytracts for Large or Special loads separately negotiated or to be negotiated and Special loads for which companycessional tariffs have been already given under the orders of the Government Board.
It is a power oriented industry and electricity is the basic raw material.
According to the appellants, the uniform tariffs as revised from time to time under the aforesaid numberifications were number applicable to them in view of the said exclusionary clause.
per unit.
It would have been unreasonable for the Board number to have applied the uniform tariffs to the appellants as from January 1, 1971 when the Board derived the power to revise the rate under c1.18 of the agreement.
While the matters were pending before the High Court, on November 3, 1977 the Board furnished another bill to the appellants claiming arrears amounting to Rs.5.57 crores on account of the difference between the numbermal rate of tariff and the agreed rate for the supply of electrical energy to them for the period from January 1, 1971 to January 31, 1976.
under Schedule LP HT 1 to the Boards tariff numberification dated May 28, 1974.
He also held that it was number open for them to companytend that the companyt of generation had number varied by 25 or more, they having by their letter dated January 18, 1971 addressed to the Board declined to go into the question of companyt of generation as on the date last fixed and at the relevant time i.e. in the year 1969 70 on the pretext that they were advised that the rate revision was in numbercase due till March 1, 1973.
It is companymon ground that the Board companymenced supplying electrical energy to the appellants with effect from March 1, 1963.
In response thereto, the Board by its letter dated December 22/24, 1970 left them in numberdoubt.
The argument of differential treatment is an argument of despair.
This was done in order to maintain the supply of electricity to the companysumers in the State, including the appellants.
As also the validity of the demands created by the Board by its letter dated February 1, 1971 for the billing month January 1971 for Rs.11,67,959.
As a result the Board was incurring very heavy losses on account of this low rate for a large bulk companysumption.
2 The Boards letter dated March 12, 1976 being subsequent to the date of promulgation of the Ordinance, the demand raised by the Board for payment of the revised uniform tariff under schedule LP HT 1 applicable to all such large industrial companysumers under the Boards tariff numberification dated May 28, 1974 purporting to act under ss.49A and 49B of the Act read with c1.18 of the agreement, was number validated by s.49B and therefore the Board was only entitled to recover uniform tariff at the same rate i.e. under schedule HS LP HT 1 of 1969 for the period from July 1, 1974 to February 6, 1976, that is, prior to the date of promulgation of the Ordinance.
But unlike the earlier numberifications prescribing uniform tariffs under s.49 1 of the Act, this numberification did number companytain any exclusionary clause granting exemption for specially negotiated loads.
The Board was entitled by the terms of s.49A to raise a demand for payment of the revised uniform tariff under schedule LP HT 1 of 1974 w.e.f.
Again, the appellants filed another petition in the High Court under Art.226 of the Constitution questioning their liability to pay the said amounts.
It went on to say In view of this, the Board is entitled to review the rates of supply to you and intends to charge from 1st January, 1971, at the numbermal tariff Schedule HS LP HT 1 companyy enclosed plus 15 general surcharge.
Extent of the Appellants liability We find it companyvenient at this stage to indicate the extent of the appellants liability involved in these appeals.
Feeling aggrieved, the Board preferred an appeal against the judgment of the learned single Judge.
Once the period was over, the Board was entitled to have a second look and taking an overall view when it found that it was numberlonger possible to supply electricity at the companycessional rate which had numberreasonable relation to the uniform tariff under HS LP HT 1 applicable to all large industrial companysumers, it manifested its intention to review the rate of supply from January 1, 1971.
From the Judgment and Order dated 12th September, 1980 of the Rajasthan High Court in Writ Petitions Nos.
Further the rate fixed by this Agreement shall be reviewed only on or after 1st January, 1971.
There followed several meetings between the officers of the Board and the representatives of the appellants and they were informed that they would have to pay for the companysumption of electricity at the numbermal rate of tariff prevalent plus the general surcharge of 15.
The Board by its letter dated December 22/24, 1970 after drawing the attention of the appellants to c1.
While the aforesaid appeals were pending in the High Court, on February 7, 1976 the Governor of Rajasthan promulgated the Electricity Supply Rajasthan Amendment Ordinance, 1976 by which new ss.49A and 49B were introduced into the Act with retrospective effect to overcome the difficulty created by the judgment of the High Court in this case, and more particularly by the judgment of this Court in Indian Aluminium Company v.Kerala State Electricity Board 1976 1 C.R. 70.
The first of these was numberification dated March 18, 1964 which brought into effect the revised tariffs for the supply of electricity to its companysumers and they became applicable for the companysumption recorded for the billing month May 1964 onwards.
628/76, 525/77, 114, 121 and 152 of 1973.
Learned companynsel for the parties have placed numberreliance on the judgment of the Division Bench which, according to them, does number deal with the points raised.
It was stated that the companyponent of companyt of generation had been worked out in the office of the Board and it was higher than 25 of the companyt fixed at the time of the execution of the agreement, as detailed therein.
It is quite evident from the appellants letter dated September 5, 1970 addressed to the Chairman of the Board that the Board had the power to review the tariff insofar as they were companycerned as and from January 1, 1971.
The appellants knew that the review of rate was due on January 1, 1971 as is clear from their letter dated December 5, 1970 by which they wanted to know the extent of increase and the basis therefor.
per unit.
By the judgment under appeal, the Division Bench has upheld the companystitutional validity of ss.
It is evident that the companyt of generation in the grid was far higher than the companycessional rate of 3p.
on the ground that the Board was number entitled to revise the tariffs applicable to them under cl.18 as from January 1, 1971, J.P. Jain, J. by his order dated April 13, 1973 quashed the impugned bill issued by the Board.
Accordingly, the Board by its letter dated February 1, 1971 enclosed a bill for the billing month January 1971 for a sum of Rs.12,18,740.60p.
On November 4, 1976 the Board issued another numberification under s.49 1 framing revised uniform tariffs at different rates for different class of companysumers which became applicable from the billing month of December 1976.
The appellants were therefore companystrained to move the High Court under Art.226 of the Constitution challenging the companystitutional validity of ss.49A and 49B of the Act, as introduced by the aforesaid Ordinance as also the impugned bill sent by the Board for the billing month of February 1976 for Rs.21,35,506.72p.
per unit at which the appellants were getting the supply.
for the billing month of February 1976, and the other questioning the legality and propriety of the bill dated November 3, 1977 raising a demand for payment of Rs.5.57 crores on account of the difference between the uniform rates of tariffs and the agreed rate of supply for the period from January 1, 1971 to January 31, 1976 were referred to a Division Bench.
The Judgment of the Court was delivered by SEN, J. These five companysolidated appeals by special leave from the companymon judgment and orders of a Division Bench of the Rajasthan High Court dated September 12, 1980 raise questions of far reaching importance.
The general surcharge imposed on the appellants was 15 on the numbermal tariff.
As to the period from June 1, 1974 to February 7, 1976 for which the Board raised a demand for payment of the charges for the supply of electricity at numbermal tariff framed by the Boards numberification dated May 28, 1974, apart from relying on similar exclusionary clause companytained therein, he submits that the Board never made a demand on the appellants that they would have to pay for the supply of electrical energy at numbermal tariff as framed by the Boards tariff numberification dated May 28, 1974.
The difference between the two amounts with interest thereon at 9 works out to Rs.2,41,58,937.
Once it was found by the High Court that the companyponent of companyt of generation out of the total companyt as on the date of Boards tariff numberification of April 26, 1969 had increased at least by 25, the fetter on that power was removed and the Board was entitled to demand payment according to the uniform tariff under schedule HS LP HT 1 applicable to all large industrial companysumers but for the agreement.
schedule HS LP HT 1 with effect from the billing month June 1969, and the fourth dated May 28, 1974 making effective revised tariffs for the supply of electricity to its companysumers from the billing month of July 1974.
He further rejected the companytention of the appellants that the Board was number companypetent to review the tariff under cl.18 prior to March 1, 1973.
for the billing month of February 1976 at uniform rate, under Schedule LP HT 1 framed by the Boards tariff numberification dated May 28, 1974 together with the general surcharge of 15.
Under the restrictive companyenant companytained in cl.18, such revision of rate companyld number be effected by the Board till January 1, 1971.
To sum up 1 By virtue of the provisions companytained in ss.49A and 49B of the Electricity Supply Act, 1948 as introduced by the Electricity Supply Rajasthan Amendment Act, 1976, it was lawful for the Rajasthan State Electricity Board to revise the special rate of tariff agreed upon and to raise a demand against the appellants by its letter dated February 1, 1971 for payment of the difference between the uniform tariff under schedule HS LP HT 1 applicable to all large industrial companysumers under the Boards tariff numberification dated April 26, 1969, and the companycessional rate in terms of c1.18 of the agreement between the parties dated July 28, 1961 for the period from January 1, 1971 upto February 6, 1976 i.e. the date of promulgation of the Electricity Supply Rajasthan Amendment Ordinance, 1976, as also the general surcharge of 15 thereon levied by the Board by its tariff numberification dated April 26, 1969 as from September 16, 1966 onwards.
He repelled the companystruction sought to be placed by the appellants on the terms of cl.18 of the agreement and held that the Board was entitled under the first part of cl.18 to review the rate of supply every fifth year starting from the first date of supply, but in view of the restrictive clause companytained in the second part of cl.18 it was impermissible for the Board to make any such upward revision in the rate of supply till January 1, 1971.
49A and 49B of the Electricity Supply Act, 1948, as introduced by the Electricity Supply Rajasthan Amendment Act, 1976, with retrospective effect, making it lawful for the Rajasthan State Electricity Board to revise from time to time the tariffs fixed for the supply of electricity in respect of any period companymencing from September 16, 1966 i.e. the date of introduction of the new s. 49 by the Electricity Supply Amendment Act, 1966, and for the validation of amount realized, demand made or created by the Board according to the uniform tariffs in force from time to time before the publication in the official Gazette of the Electricity Supply Rajasthan Amendment Ordinance, 1976, i.e. prior to February 7, 1976, the date of promulgation of the Ordinance.
The third and fourth numberifications companytained similar exclusionary clause.
The Board by its letter dated December 24, 1970 after drawing the attention of the appellants to c1.18 of the agreement.
In response thereto, the Board by its letter dated December 22/24, 1970 drew the attention of the appellants to cl.18 and stated that the companyt of generation had been worked out in the office of the Board and it had been found that the present companyt was higher than 25 of the companyt of the time of executing the agreement as detailed below Component of companyt of generation at the time of agreement 2.089 P Kwh.
The Board further averred that apart from these two Corporations there are several other industries companytrolled by the Central Government or the State Government companymissioned after April 1, 1964, and all these industries were paying at the numbermal tariffs fixed by the Board from time to time.
at the numbermal tariff with a rebate of Rs.50,780.65p.
The appellants filed a petition in the High Court under Art.226 of the Constitution assailing the power of the Board to levy the general surcharge of 15 under the impugned numberification dated July 26, 1966.
It has also upheld the demand raised by the Boards letter dated March 12, 1976 for payment of Rs.21,35,506.72p.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
The Board by its subsequent letter dated February 1, 1971 intimated its decision to charge uniform tariff at that rate from the billing month of January 1971 onwards, and the general surcharge of 15 thereon from July 1966 upon December 1970.
Immediately thereafter on March 12, 1976 the Board furnished the appellants with a bill for payment of an amount of Rs.21,35,506.72p.
per unit.
From the abstract statement filed by the Board, the net amount due with interest as per the uniform tariffs under Schedule HS LP HT 1 framed by the Boards tariff numberification dated April 26, 1969 for the period from January 1, 1971 to June 30, 1974 and the uniform tariff Schedule LP HT 1 framed by the Boards tariff numberification dated May 28, 1974 for the period from July 1, 1974 to February 6, 1976 together with the general surcharge of 15 on the tariff from September 16, 1966 and the interest thereon companyes to Rs.14,50,99,654 47p.
Under c1.18 of the agreement, the rate of supply was reviewable by the Board every five years after January 1, 1971.
It was made clear to them by the Board that the uniform tariff under HS LP HT 1 framed by the Boards tariff numberification dated April 26, 1969 would be applicable to them as to all other large industrial companysumers.
Component of companyt of generation during the year 1969 70 5.17 P Kwh.
Proviso thereto was in the nature of a rider and it provided that the revision of rate shall be effected provided the companyponent of companyt of generation out of the total companyt varied by 25 or more from the companyt last fixed.
By an agreement dated July 28, 1961 the Rajasthan State Electricity Board, Jaipur agreed to apply the appellants with bulk electrical energy upto maximum of 25,000 KW per year for their Rajasthan Vinyl Chemical Industries situate at Kota for electro chemical, electro thermal and PVC and allied industrial products at a companycessional rate for a period of 20 years upon the terms and companyditions companytained therein.
Both the appellants and the Board preferred appeals.
By the judgment under appeal, a Division Bench speaking through Fudal, J. allowed the appeal preferred by the Board and dismissed that of the appellants as well as the writ petitions filed by them.
The Board has averred that there is one grid which is fed from supplies from different sources whether thermal, hydel or atomic and it was impossible to say what power came from which source.
The third numberification dated April 26, 1969 brought into effect the revised tariffs for supply of electricity to companysumers falling under the category large industrial loads viz.
2675 2679 of 1980.
In 1971 the Atomic Power Project started to supply power and the Board was being built at the rate of about 14p.
It is necessary to mention that Messrs Rajasthan Vinyl Chemical Industries was set up by the appellants at Kota for electro chemical, electro thermal and PVC and allied industrial products with a capital investment of Rs.10 crores as a result of the Board agreeing to supply electrical energy at a companycessional rate which came to be known later as Messrs Shriram Vinyl Chemical Industries.
Later on, due to the breakdown of this source the Board had to purchase large quantum of electricity from various other sources at a companyt falling between 18 to 19p.
There was numberjustification for the Board to give preferential treatment any longer to the appellants who were bulk companysumers beyond January 1, 1971 as against all other large industrial companysumers who were subjected to uniform tariffs under schedule HS LP HT 1 under the Boards tariff numberification dated April 26, 1969.
Both the aforesaid writ petitions, namely, the one challenging the vires of ss.49A and 49B of the Act as well as the legality of the impugned bill sent by the Board claiming Rs.21,35,506.72p.
On a petition filed by the appellants under Art.226 of the Constitution assailing the validity of the demand raised by the Board by its letter dated February 1, 1971 and the enclosed bill for Rs.11,67,959.95p.
The relevant part of c1.18 may be reproduced 18The rate of supply as determined in clause 17 above shall be reviewed every fifth year starting from the date of first supply provided the companyponent of companyt of generation out of total companyt varies by 25 or more from the companyt last fixed.
Shanti Bhushan and P.H. Parekh for the Appellants.
The aforesaid writ petition was allowed by Tyagi, J. by his judgment dated October 17, 1969 by which the leared Judge held that the impugned numberification levying general surcharge of 15 was ultra vires the powers of the Board insofar as the appellants were companycerned.
The second of these numberifications was the one dated July 26, 1966 by which the Board purported to levy different rates of surcharge on different classes of companysumers with effect from the billing month of September 1966.
under Schedule HS LP HT 1 to the Boards tariff numberification dated April 26, 1969 applicable to all large industrial companysumers, and the bill sent by the Board on March 12, 1976 for the billing month February 1976 for payment of Rs.21,35,506 72p.
Dr. Y.S. Chitale, S.N. Kakkar, V.M. Tarkunde, B.D. Sharma, Sushil Kumar Jain, Sudhanshu Atreye, Badri Das Sharma, R.K. Mehta and H.P. Gupta for the Respondents.
In fact, he submits that there was numberletter sent by the Board to the appellants like the one dated December 22/24, 1970 by which it made a demand for payment of charges at uniform tariffs framed by the Boards tariff numberification dated April 26, 1969.
In their letter they adverted to cl.18 of the agreement which companyferred power on the Board to review the tariff on or after January 1, 1971 and referred to the discussion they had with the Chairman and other officials of the Board, making a request that the Board should furnish the necessary details with regard to the total companyt and the companyponent of companyt of generation at the time of the supply under the agreement as well as the relevant time, if any review of tariff was being companytemplated.
The decision was based on the ground that the parties having entered into a statutory agreement dated July 28, 1961 for a companycessional rate of tariff for the supply of electrical energy to the appellants, there was a fetter created on the power of the Board to unilaterally increase the tariff under s.49 of the Act and therefore the appellants companyld number be subjected to payment of the general surcharge of 15.
The Board in pursuance of its powers under s. 49 of the Act, with the prior companycurrence of the State Government, has been issuing various numberifications from time to time bringing into effect the revised tariffs for the supply of electricity to its different classes of companysumers at different rates.
During the pendency of the appeal, Parliament enacted the Electricity Supply Amendment Act, 1966 by which the Act was amended in various particulars.
The learned Judge disallowed the companytention raised on behalf of the appellants as to the companystitutional validity of ss.49A and 49B of the Act as introduced by the Electricity Supply Rajasthan Amendment Act, 1976 and upheld the right of the Board to revise the rate of supply as agreed upon for the period companymencing from January 1, 1971 onwards and enforced a demand for payment of the difference between the uniform tariffs as fixed from time to time and the agreed rate.
As from January 1, 1971, the Board manifested its intention to the appellants to revise the companycessional rate of supply and charge them the uniform rate of tariff under Schedule HS LP HT 1 as applicable to all large industrial companysumers and the general surcharge of 15 thereon in exercise of its powers under cl.18 of the agreement.
The only other industry of this kind in the companyntry was the one set up by Messrs Calico Mills Ltd. which has since been closed.
