TMI Blog1968 (3) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ra became a partner in the said Company. The Zalawad Electric Power Supply Company who is the appellant in this case purchased the said Wadhwan State Electric Power Distributing Company in the year 1950. According to the plaintiff the appellant company had purchased all the rights and obligations of Wadhwan State Electric Power Distribution Company. After the date of the purchase the Wadhwan State Electric Power Distributing Company ceased functioning and the appellant company continued to supply electric energy to consumers including the respondent municipality. Some time in the month of May 1952 the appellant company published revised charges for the supply of energy and thereby increasing the rate at which the energy was supplied to the consumers. The respondent municipality objected to the proposed revised charges. There was correspondence between the parties and the appellant company assured the respondent municipality that the agreements under which the electricity was supplied to the respondent municipality were not affected by fixation of revised charges and the energy would be supplied to the respondent municipality according to the terms and conditions of the said agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant company from discontinuing the supply of the electric energy to the municipality. restraining the defendant company from interfering with the supply of electrical energy directly or indirectly and restraining the appellant company from making demands at the revised rates. ( 2. ) The appellant company filed its written statement and contended that they had not purchased the liabilities of Wadhwan State Electric Power Distributing Company. The contention was that they had purchased only the assets of the company and therefore the agreements between the municipality and the Wadhwan State Electric Power Distributing Company were not binding to them. It also contended that the company was within its rights In preferring bills at the revised rates for the consumption of the energy by the municipality. According to the defendant the umpire was appointed by the consumers including the municipality and the company and the award given by the umpire was binding on the municipality. As the municipality did not pay up the arrears the company had the right to take action under sec. 24 of the Indian Electricity Act and cut off the supply of the energy. ( 3. ) The learned trial j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in Amalgamated Electricity Co. Ltd. v. N. S. Bathena and others A.I.R. 1964 S.C. page 1598 and contended that the decision in Babulal Chhaganlal Gujerathi (Supra) has now been over-ruled by the Supreme Court and therefore the judgment and decree passed by the Extra Assistant Judge Surendranagar were erroneous. ( 5. ) In order to appreciate the argument of Mr. Daru it is necessary to refer to certain provisions of the Indian Electricity Act 1910 and the Electricity Supply Act 1948 By sub-sec. (1) of sec. 3 of the Indian Electricity Act 1910 it is provided that the State Government may grant to any person a licence to supply electrical energy in any specified area. In respect of every licence granted under sub-sec. (1) of sec. 3 certain provisions made in sub-sec. (2) are necessary to be noticed. Two out of these provisions are that a license granted under sub-sec. (1) of sec. 3 may prescribe such terms as to the limits within which and the conditions under which the supply of energy is to be compulsory or permissive and as to the limits of price to be charged in respect of the supply of energy. The other relevant provision of the Act is that the provisions conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Annas 2 per unit. The defendant company assuming that by the Electricity (Supply) Act 1948 restrictions which were placed under the license and by the Electricity Act 1910 upon the right of the licensee to levy rates and charges from consumers of electrical energy were abrogated issued a notice to the consumers informing them of revised charges for the supply of electrical energy at increased rates. Babulal Gujerathi who was one of the consumers challenged this right of the electric company of revising the rates and ultimately filed a civil suit for a declaration that the revised rates fixed by the Electric Supply Company were contrary to law and for injunction restraining the electric supplying company from discontinuing the supply of electricity for nonpayment of the charges. The plaintiff succeeded In his suit but lost in the appeal in the District Court. A second appeal was filed in the High Court and the High Court took the view that the Electricity Company had no power to revise the rates so as to exceed the maxima fixed by the Government while granting license under the Indian Electricity Act 1910 The High Court held that provisions of sub-sec. (1) of the sec. 57 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 956 expressly provided that provisions of the VI Schedule shall be deemed to be incorporated in the license of every licensee and that the provisions of the Indian Electricity Act 1910 and the license granted thereunder and any other law agreement or instrument applicable to the licensee shall be void and of no effect in so far as they are inconsistent with the provisions of the section and the said Schedule. Read in the light of sec. 70 of the Supply Act it would follow that if any restriction incorporated in the license granted under the Electricity Act 1910 is inconsistent with the rate which a licensee might charge under Para I of Sch. VI of the Supply Act 1948 the former would to that extent be superseded and the latter would prevail. Para I of Sch. VI both as it originally stood and as amended as seen already empowered the licensee to adjust his rates so that his clear profit in any year shall not as far as possible exceed the amount of reasonable return. We shall reserve for later consideration the meaning of the expression so adjust his rates. But one thing is clear and that is that the adjustment is unilateral and that the licensee has a statutory right to adjust his ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supply) Act 1948 The right to amend the license is conferred by the Indian Electricity Act 1910 upon the State Government and that right is not affected by the Electricity (Supply) Act 1948 With great respect to the learned Judge we are unable to agree with this decision for in our opinion the provisions of the Supply Act 1948 to which we have adverted are too strong to permit the construction that the maxima prescribed under the Electricity Act of 1910 survives as a fetter on the rights of the licensee under paragraph I of the VI Schedule. If there was any room for any argument of this kind on the terms of para I of Sch. VI as originally enacted the matter is Placed beyond possibility of dispute by the amendment affected by Act 101 of 1956 to the VI Schedule where the opening paragraph commences with the words notwithstanding anything contained in the Indian Electricity Act and the provisions in the licence of a licensee. ( 8. ) Mr . Nanavati faintly argued that the decision In Babulal Chhaganlal Gujerathi (Supra) was not over-ruled by the latter decision of the Supreme Court in Amalgamated Electricity Co. Ltd. v. N. S. Bathena (Supra). The observations cited above from the jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case exercise the said authority under the said Schedule and has fixed the rates to be charged from August 1 1952 in respect of the water work motors and from August 30 1958 in respect of the street lights. This action of the appellant company cannot be said to be illegal as the company had the power to charge the rates unilaterally. ( 9. ) Mr . Nanavati then contended that there is difference between the terms of the contract being inconsistent with the provisions of the Schedule and the agreement being inconsistent with the action taken by a party under the Schedule. It is difficult to appreciate this argument. What sec. 57 of the Electricity (Supply) Act 1948 provides is that if a term of a contract is inconsistent with the provisions of the first clause of Schedule VI then the provisions of Schedule VI must prevail. In exercise of the powers conferred on the appellant company by the first clause of Schedule VI the company charged the consumers the revised rates for the supply of energy. The terms of the contract fixing the rates at a particular amount were inconsistent with the provisions of revision of rates as provided in the first clause of Schedule VI and that being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom time to time. The appellant company also addressed another letter Ex. 72 dated June 5 1952 to the Secretary of the respondent municipality in reply to the letters Ex. 70 and 71 and informed the municipality that the municipality was their consumer for connections such as Gangavav and Madhavav to which the revised rates were applicable as per notice already given. The respondent municipality addressed a letter Ex. 74 dated June 26 1952 to the appellant company inquiring from the company as to whether the revised rates were applicable to the street lights and water work motors. The appellant company by their letter Ex. 75 dated July 15 1952 informed the municipality that the revised rates which were to come in force from August 1 1952 were not applicable to the energy supplied under the special agreements. It must be noted that aforesaid correspondence excePt Ex. 74 related only to the revisions of rates in resPect of the supply of electric energy to the water work motors. On the basis of this correspondence the argument advanced by Mr. Nanavati was that the appellant company bad specifically agreed that the revised rates were not applicable to the municipality with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of the consumption for water work motors and street lights after the revised rates were fixed by the umpire. The assurance given by the company in Ex. 75 was only in respect of rates notified in Ex. 69 and in respect of revised rates mentioned in Ex. 83. Under the circumstances the company was justified in making a demand for the consumption of the electrical energy at the rates fixed by the umpire and adopted by the company under the provisions of sec. 57 read with clause 1 of the Schedule VI. The correspondence referred to above clearly indicates that the company at a later stage i.e. after the rates were fixed by the umpire had decided to charge the municipality with the revised rates as fixed by the umpire. The assurance which was given by the appellant company not to charge revised rates was in respect of the rates fixed in Ex. 69. There is nothing on the record to show that the company continued the said assurance in respect of the rates fixed by the umpire on September 3 1952 Ex. 72 clearly shows the intention of the appellant company because It was stated therein in categorically terms that the company had the right to make a demand as per rates mentioned in the notice E ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
