Hari Shankar and ors. Vs. U.P. State Electricity Board and anr. - Court Judgment

Satish Chandra, J.

1. A learned Single Judge felt doubtful about the correctness of the view taken by Hon'ble G. C. Mathur, J. in Civil Misc. Writ Petn. No, 6428 of 1970 Zila Power Upbhokta Sangh v. Union of India (decided on 26-4-1972) (All) about the construction of term 'traiff contained in Section 49 of the Electricity (Supply) Act, 1948. He referred the entire writ petition to a larger Bench although the writ petition raises several other questions as well.

2. The petitioners entered into an agreement with the U. P. State Electricity Board for the supply of electrical energy for small scale industry purposes. The agreement provided that the petitioners will pay a minimum guarantee at the rate of Rs. 66/-per year per B. H. P. On 25th June, 1968, the State Electricity Board published a notification increasing the minimum guarantee rate to Rs. 96/- per year per B. H. P. By another notification of November 27, 1968 the minimum guarantee charges were further increased to Rs. 120/- per year per B. H. P. The petitioners did not pay the minimum guarantee charges demanded by the Board, as a result whereof the Board started proceedings for its recovery as arrears of land revenue. Thereafter, the petitioners have come to this Court. They have challenged the validity of the notification increasing the minimum guarantee charges.

3. It was argued on behalf of the petitioners that the payment for the supply of electricity was regulated by the contract between the parties. Paragraph 4 (3) of the agreement entitled the Board to charge guaranteed minimum payment at the rate of Rs. 66/-per year per B. H. P. The Board had no power to vary the rate unilaterally. Paragraph 4 (1) of the agreement provides:

'The consumer shall pay for all the electrical energy supplied at the rates and in accordance with the terms in force for the time being and the signing of this agreement shall be held to imply the consumers concurrence to the terms and the rates in force for the time being and in any subsequent modifications or alterations thereof.'

The phrase 'terms and the rates in force' in relation to the supply of electrical energy would in our opinion, include the term mentioned in paragraph 4 (3) of the agreement relating to guaranteed minimum charges. That being so, paragraph 4 (1) authorises the Board to modify or to alter the terms and the rates in force and such modification or alteration will be deemed to have been done with the concurrence of the consumer. The agreement authorises the Board to modify the terms in regard to the supply of electrical energy including the minimum guaranteed payment therefore.

4. It was then urged that Section 49 of the Electricity (Supply) Act, 1948 does not entitled the Board to vary the minimum guaranteed charges. Even so, the Board having power to vary those charges under the agreement the petitioner can make no grievance about it. Section 49 empowers the Board to supply electricity to any person other than a licensee upon such terms and conditions as may be fixed by it from time to time. It has also been authorised to frame uniform tariff for the purposes of such supply. It was submitted that the term 'tariff' would entitle the Board to fix the rates of charges for the supply of the electrical energy and this term will not cover the fixation of any guaranteed minimum charges.

5. The word 'tariff' has been defined in the Webster's Third New International Dictionary, Vol. II, page 2341 as, inter alia, published schedule of rates, rating or charges with society, rules, regulations, routes and information issued by the carriers or their agents and filed with a public regulatory agency. Thus the term 'tariff' includes within its ambit not only the fixation of rates but also the rules and regulations relating to it. When the electrical supply is being made on the footing that the consumer will pay the minimum guaranteed charges, this charge is one of the terms or conditions for the supply. By it the supplier ensures the receipts of a minimum amount for the supply of electricity. In a sense the fixation of this charge would be included in the fixation of rates for the supply of electricity. The word 'tariff' in Section 49(1) appears to us to include the power to fix minimum guaranteed charges. We are in agreement with the view taken by Hon'ble G. C. Mathur. J. in the case of Zila Power Upbhokta Sangh. C. M. W. P. No. 6428 of 1970, D/- 26-4-1972 (All) mentioned above

6. The next point urged by learned counsel for the petitioners was that petitioner No. 4 had in March, 1969 applied for disconnection of the electrical supply. After he had paid the necessary disconnection charges the same was disconnected and yet the Electricity Board is demanding payment of minimum guaranteed charges for a period subsequent to the disconnection. This is without jurisdiction. In the counter-affidavit it has been stated that a sum of Rs. 323.40 was due from petitioner No. 4 which he failed to payand a notice for disconnection was thereupon served upon him on March 15, 1969. On the failure of petitioner No. 4 to pay the said amount even after the said notice, his energy was disconnected on April 2, 1969. The agreement which was entered into by the petitioner No. 4 with the Board still subsisted and petitioner No. 4 was, therefore, liable for payment of the guaranteed minimum amount for successive periods. In the rejoinder affidavit the petitioner has disputed the correctness of the respondent's case that a sum of Rs. 323.40 was due against him. It is obvious that the facts are in controversy, the resolution whereof would require going into evidence of which sufficient material is not in the record of the writ petition. Since the petitioners have an adequate alternative remedy of arbitration we are not inclined to go into this disputed question of fact.

7. In the connected writ petition filed by Messrs. Shanker Rice Mills and others it was in addition urged that the notification dated 27tb November, 1968 was invalid because it varied the rate of minimum guarantee charges with retrospective effect. Though the notification was published on 27 November, 1968 it made the amendments effective from July 1, 1968. In the counter-affidavit it has been explained that since the Board wanted to give relief to the consumers it decided to give this relief with retrospective effect. It has been explained that prior to the notification dated 27th November, 1968 the consumers had to pay the minimum guarantee charges at the rate of Rs. 96/- per year per B. H. P. in addition to the unit charges. The minimum charge was fixed on the basis of working of two and a half hour per day. On that basis a consumer would have to pay Rs. 163.89 (Rs. 96/-fixed charge and Rs. 67.89 as charges for units consumed). Under the notification of November 27, 1968 a consumer has to pay a minimum of Rs. 120/- inclusive of the unit charges for working for two and a half hours. Thus, he has been granted a relief of Rs. 43.89. This assertion has not at all been dealt with in the rejoinder-affidavit. It has not been asserted that in fact the petitioners are not getting any relief as a result of the change in the rates of minimum guaranteed charges. It is not open to a consumer to challenge the validity of the notification when it does not in fact adversely affect it.

8. It was then urged that the 'tariff' fixed by the Board is bad because it has not been fixed after considering the factors mentioned in Clauses (b) and (d) of Sub-section (2) of Section 49 of the Electricity (Supply) Act, 1948 under which the Board while fixing the uniform 'tariff' should have regard to the co-ordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licenseeand the extension and cheapening of supplies of electricity to sparsely developed areas. The vague allegations made in the writ petition in this regard have been controverted in the counter-affidavit. It is stated that the Board has fixed the tariff after taking into consideration the factors mentioned in Sub-clause (2) of Section 49. The actual expenditure per B.H.P. comes to Rs. 175.04 and the minimum guarantee has been fixed at Rs. 120/- per B.H.P. Further in giving connection to consumers of backward areas like Banda, the Board has relaxed the limit of expenditure to Rs. 800/- per H.P. from Rs. 600 per H.P. to eastern districts in comparison to western districts. The fact that the Board is incurring expenses shows that it has taken into consideration the factors mentioned, inter alia, in Clauses (b) and (d) of Sub-section (2) of Section 49 of the Electricity (Supply) Act, 1948.

9. In the result we find no merit in either of the two writ petitions which are accordingly dismissed with costs.