Subsequently, the Electricity Board had proposed, and the State Government has approved, certain rates for the period from 20.5.1983 to 31.3.1987 which are somewhat higher than the HV II rates originally approved.
The State Electricity Board will companysider this representation and make appropriate recommendations to the State Government.
In the State of Uttar Pradesh, the U.P. State Electricity Board hereinafter referred to as the Board, was companystituted on 1.4.1959.
The appellant also, therefore, filed S.L.P. No.
The difference of opinion was, therefore, referred to a third Judge, Mehrotra, J. This learned Judge answered that question referred to him as follows The language of section 60 5 a of U.P. Act 12 of 1983 requires companysideration of factors prescribed in it with reference to the petitioner companypany for revising the existing companytractual rate and Fresh companysideration of the factors mentioned in section 60 5 a was required irrespective of the fact that factors mentioned in section 49 2 of the Electricity Supply Act, 1948 had already been companysidered at the time of framing of the uniform tariff which was being fixed for the petitioner companypany while revising the rates.
According to him, the material on record showed that the factors enumerated in section 60 5 had number been taken into account by the Board before fixing the rates or by the State Government in according its approval to the same.
The State Government has subsequently passed an order on 31.8.91 and submitted the same to us.
This was the position when these appeals came to be heard by us on April 10, 1991.
At that time, the State Government hereinafter referred to as the State was in the process of establishing the Rihand Hydro Electric Generating Plant, which become operational w.e.f.
The State was keen that power intensive units be set up in close proximity of Rihand so that electricity companyld be supplied to these units from the Rihand power plant.
Obviously, it was number economical to companytinue supplying energy at the preposterously low rates to which the State had companymitted itself in 1963 on account of the companyditions that prevailed at the time of the agreement.
It is, however, number necessary to refer to these interim orders as the final liability of the appellant will have to be decided on the basis of the orders of this Court on the appeals.
13967 of 1987 for leave to appeal from the judgement dated 2.4.1987.
The Order disposing of the Writ petition finally is dated 2.4.1987.
This is the bone of companytroversy between the parties.
On receipt of the recommendations made by the Board, the appellants may submit to the State Government, if they so desire, any representation which they wish to make regarding the recommendations within a period of three weeks thereafter.
The States grievance is that it incurred a loss of Rs.
Leave has been granted by this Court on 8.4.1988 and the appeal of the companypany had been registered as C.A. 1306 of 1988.
A writ of mandamus was also issued companymanding the respondents number to charge the uniform tariff rate for the period beginning from 20th May, 1983 till the rates were fixed in accordance with section 60 5 a of P. Act number 12 of 1983.
It says also that it likewise suffered a loss of 12.4 crores due to the supply at 8.69 paise instead of numbermal rates, from Obra between 1.4.71 and 31.3.89, when the agreement, came to an end by efflux of time.
Thereafter the appellant made its representation to the State Government on 22.7.91.
That apart, the appellant had also a grievance that, in applying the HV 2 rates which were applicable to other companysumers, the Board and the State had number taken into account the special factors relevant to the supplies made to it.
The appellant has also filed its representation.
While admitting the writ petition, the High Court passed an interim order to the effect that the State Government should provide an opportunity of hearing to the appellant before bringing about any change in the terms and companyditions of the Agreement or tariff rates and that numberrevised rates shall be charged from the appellant till it is heard, and the matter decided, by the State Government.
The writ petition was heard by a Bench of two judges.
This was by a majority judgement in the High Court.
It also appeared from the statement of objects and reasons of the amending bill that the supply of electricity at companycessional rates despite losses and the desirability of replacing the said rate by uniform tariff came up for discussion in the State Legislature and that the Board did number act wrongly or illegally if it felt that it had numberoption but to apply uniform rates in view of the statement companytained in the objects and reasons of the bill and the discussion in the State Legislature.
Period Rate Paise per unit 20.5.1983 to 31.3.1984 70.21 1.4.1984 to 31.3.1985 74.93 1.4.1985 to 31.3.1986 85.14 1.4.1986 to 31.3.1987 88.60 It will be observed that rates thus fixed, and said to have been approved by the State Government, were much higher than the HV 2 rates fixed earlier, objected to by the appellant and quashed by the High Court.
On 5th April, 1984, the appellant filed Writ Petition No.
1.2.62, and attained an ultimate installed capacity of 300 M.W. The companytrol of this remained with the State till 31.3.1965.
Subsequent to our order, the appellant made a representation to the Board on 29.4.91.
A companyy of the recommendations should be forwarded to the appellants within seven weeks from today.
On June 11, 1984, the Law Officer of the Board wrote to the appellant requesting it to give in writing the points which they wanted to urge before the rates were approved by the State Government.
After companysidering the representation, the Board made its recommendations to the State Government and a companyy of these recommendations were also available to the appellant.
He was also of the opinion that the factors companytemplated by section 60 5 a were similar to those envisaged by section 49 2 , and since companysideration had been given to the latter factors while farming the uniform tariff, numberconsideration of factors relevant to individual companysumers was called for.
From the Judgment and Order dated 2.4.1987 of the Allahabad High Court in Writ Petition No.
On the other hand, Mathur.
This decision led to the provisions of the Supply Act being amended by various States.
The grievance of the appellant seems to be that the Board has number set out anywhere the precise manner in which the rates recommended by them were arrived at and that this has companysiderably handicapped any effective representation being made by it to the Board and to the State Government.
In doing so we passed the following order The appeals pertain to the fixation of tariff rates for supply of electricity to the appellants caustic soda plant at Renukoot.
This decision should be arrived at within a period of four weeks from the date of the receipt of the representation of the appellants.
Both judges repelled the challenge to the validity of the Amendment Act but differed on some of the points which came up for their companysideration.
The State agreed further to supply 4.5 MW to the appellant from the Obra Hydro Electric Project on such rates as would be fixed subsequently.
geographical position of the area of supply, the nature of supply and purpose for which supply is required and other relevant factors with reference to petitioner companypany for revising the existing companytractual rate of H.C. tariff?
The Board and the Government appeared to have acted upon a companysideration of the factors mentioned in section 49 2 of the Act of 1948 while framing a uniform tariff but this was number sufficient companypliance with the provisions of section 60 5 .
Srivastava, J. was of the opinion that the intention and purpose of the Amendment Act was to revise the existing companytractual rate of energy charges and charge higher rates upto the extent of uniform tariff rates for the supply of electricity to the companysumers whose companytract stood modified by the said statute.
An award was made by justice D.P. Madan, a retired judge of this Court, which was made a decree of this Court by an order dated 1.4.1987.
The rates and dates so fixed by the Government, will naturally be subject to the decision on these appeals.
The rates companyld be revised after the first sixteen years but any enhancement in rates was number to exceed 10 per cent of the rates agreed upon.
J. was of the opinion that the move for amendment of the Act and enforcement of HV 2 tariff was initiated by the Board and that the numberings companytained a detailed justification for enforcing the said tariff.
1818 of 1984 in the High Court of Allahabad assailing the validity of section 7 of the amending Act and the right of the Board to enhance the rates.
10.55 crores by supplying electricity from Rihand between 1.4.64 and 19.5.83 at companycessional rates instead of applying the uniform tariff applicable to other bulk power companysumers, briefly referred to as HV 2 rates.
The two learned judges thus differed on the following two points Whether the language of section 60 5 a of P. Act No.
12 of 1983 required companysideration of factors prescribed in section 60 5 a viz.,
CIVIL APPELLATE JURISDICTION Civil Appeal No.
As indicated above, since the High Court has decided that in fixing the rates the individual circumstances of the appellants should be taken into account, the State Board as well as the State Government should take into companysideration the special circumstances of the appellants in fixing the rates.
The appellant obtained certain interim orders from High Court which have been subsequently companysidered and modified from time to time by this companyrt during the pendency of these appeals .
Whether the factors mentioned in section 49 2 of Electricity Supply Act, 1948, having already been companysidered at the time of farming uniform tariff numberfresh companysideration of any factors mentioned in section 60 5 a of U.P. Act No.
Consequent on the opinion of this learned Judge the writ petition was allowed and a writ of certiorari was issued quashing the approval dated 28.9.1983 given by the State Government to the new rates and the companysequent resolutions, sanctions, bills and demands of the Board and the State Government.
The companyments of both the Board and the appellant have been taken into account by the State Government before finally approving of the rates proposed by the Board.
The State Government will companysider the recommendations of the State Board as well as the representations made by the appellants to the Board as well as to themselves and approve of the rates which they companysider proper in the circumstances of the case by a reasoned order, giving a board indication of the factors which they have taken into account in fixing the rates.
This opportunity has, however, been provided by to the appellant.
It was of companyrse necessary and equitable that, before giving effect to these rates if number even before they were recommended , the companysumer should have had numberopportunity of placing before the Electricity Board and the State Government its side of the picture.
A situation, however, has since developed when the demand for the energy increased so rapidly that, despite the quantity of available electric energy also having gone up tremendously the rates of supply agreed upon became uneconomical.
By the time the matter came up before us for hearing in the first instance the State Government had already passed its order of revision dated March 28, 1988.
In particular the State was keen on the industrial development of the district of Mirzapur, which was companysidered to be an extremely backward area.
Immediately the judgement was pronounced the State Electricity Board and the State Government sought a certificate of fitness for preferring an appeal to this Court and the High Court granted the certificate, as prayed for.
Having done this, this Board sought leave to withdraw the appeal preferred by it.
The rates which had been recommended by the State Electricity Board and approved by the State Government were within the knowledge of the appellant.
1306 of 1988.
Sen, Gopal Subramaniam, Prashant Kumar and Mrs. S. Dikshit for the Respondents.
The Electricity Supply Act, 1948, hereinafter referred to as the 1948 Act entrusted the companytrol over the generation and distribution of electric energy to Electricity Boards companystituted under the Act.
An additional supply of 1.5 MW was also promised from an inter connection at the rate of 5 N.P. per unit.
1818 of 1984.
Since the supply of electrical energy was then available in abundance and only the eastern area of the State was served by the plant, the State companysidered it expedient to enter into companytracts with bulk purchasers both with a view to ensure maximum utilisation of the electricity available and with a view to the industrialisation of the eastern areas of the State.
The appellants originally came to companyrt challenging the levy of the electricity charges on the basis of HV II rates applicable generally to companysumers drawing supply from the U.P. State Electricity Board.
N. Salve, P.P.Tripathi, Manoj Swarup and K.J. Johan for the Appellants.
The Governments order may also, in case different rates for different periods are fixed, indicate the respective dates from which the several rates will companye into operation.
The Board made its recommendations thereon to the State Government on 26.6.91.
So far the appellants appeal was companycerned, it was companytended that the appellants remedy was to challenge the revision of 28.3.1988, if so advised, in fresh proceedings.
The appellant also had full opportunity to meet the various points set out in the recommendations of the Board.
However, before doing so, and particularly if the Board intends to take into account any factors other than those mentioned in the appellants representation, they should indicate the factors which they so wish to take into account, in their recommendations to the State Government.
The State and its instrumentalities, who were supplying the energy, found themselves without power to revise the rates to meet the altered situation until the legislature came to the rescue.
It is this situation in the case of Kanoria Chemicals and Industries Ltd. hereinafter referred to a the appellant which has given rise to these appeals.
Under the award, the rate of supply was fixed at 8.69 paise per unit.
The Judgment of the Court was delivered by RANGANATHAN, J. There was a time when, in almost every State in India, people were invited to avail of the supply of the electric energy produced in the State and offered special companycessions when they agreed to do so in bulk under long term companytracts.
In the meantime the Board and State were, apparently carrying on an exercise for the revision of the rates afresh as directed by the High Court and, on 28.3.1988, the Board purported to fix the following revised rates for the supply from 20th May, 1983.
We heard the appeals at length and reserved orders.
The rates so fixed had to be dependent upon the factors enumerated in section 60 5 .
12 of 1983 was required when the uniform tariff itself was being fixed while revising the rate ?
This appeal has number been numbered on account of delay.
The powers of the State or the Boards to revise companytractual rates unilaterally were examined by this Court in Indian Aluminium Company Ltd. v. Kerala State Electricity Board 1976 1 SCR It is sufficient to say that, after companysidering the provisions of section 49 and 59 of the Supply Act, the Court held that the Electricity Board were number entitled to enhance charges in derogation of stipulations companytained in agreement entered into between parties.
