TMI Blog1964 (3) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the rate at which the supply of electricity had to be charged against the consumers. The impugned orders have purported to increase this rate, and the appellants contend that the respondent had no authority to change this important term of the contract to their prejudice by taking recourse to Section 3(l) and issuing notified orders in that behalf. That, in substance, is the nature of the controversy between the parties before us. 2. It appears that the Government of Madras, and subsequently, its successor, the respondent, had a single power grid system for the whole State comprising Tungabhadra and Machkund Hydro Electric Systems and the Thermal Systems of Nellore. The entire energy was integrated into one power system. The Government of Madras entered into agreements with several consumers in the State, including the appellants, for the supply of energy in bulk at the specified rates which were called tariffs, for the years 1951 and 1952. These agreements were to be in operation for ten years. It is common ground that these agreements did not contain any provision authorising the Government to increase the rates during their operation. The charges fixed were calcul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the result, the writ petitions filed by some of the appellants before us were allowed and an appropriate order was issued against the respondent restraining it from enforcing the revised tariff rates. 4. These decisions were challenged by the respondent by preferring several Letters Patent Appeals. The Division Bench which heard these Letters Patent Appeals took a different view; it held that on its fair and reasonable construction, Section 3 did confer authority on the respondent to issue the impugned orders, and so, the challenge made to the validity of the said orders could not be sustained. That is why the Letters Patent Appeals preferred by the respondent were allowed and the writ petitions filed by the appellants were dismissed. It is against these orders that the appellants have come to this Court with a certificate issued by the said High Court. 5. After the Division Bench had pronounced its decision on this point, several other writ petitions were filed by other consumers, and naturally the Single Judge who heard them followed the decision of the Division Bench and dismissed the said writ petitions. The consumers who were aggrieved by these decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concerned in the present appeals. After the respondent State was created under the Scheme of Reorganisation of States, it passed act 1 of 1955 and this act received the assent of the President on the 21st of January, 1955. By this Act, the Legislature of the respondent State virtually adopted the Madras Act. As a result, the impugned orders are, in substance, referable to Section 3 of the Madras Act. 7. Before we part with this topic, it may be mentioned that when the Madras Act was passed, its Schedule gave a list of the essential articles as defined by Section 2(a) and these articles were 12 in number. When the Andhra Legislature passed Act l of 1955 and adopted the Schedule of essential articles for its purpose, the number of these articles was reduced to two; they are charcoal and electrical energy. The Andhra Act was originally intended to be in operation until 25th January, 1956, but it was later continued from time to time. It is common ground that when the impugned orders were passed, Section 3 of the Act was in operation and the present appeals have been argued on the basis that the said section is constitutionally valid, so that the main point which calls fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties. If, after reading all the relevant provisions of the statute, the Court is satisfied that by necessary implication the obligation imposed by the statute should be enforced against the State, that conclusion must be adopted. If there are express terms to that effect, there is, of course, no difficulty. In dealing with this vexed question, sometimes it is necessary also to enquire whether the conclusion that the State is not bound by the specific provision of a given statute, would hamper the working of the statute, or would lead to the anomalous position that the statute may lose its efficacy, and if the answer to either of these two questions indicates that the obligation imposed by the statute should be enforced against the State, the Court would be inclined to infer by necessary implication that the State, in fact, is bound by the statute. 10. Where, however, the question is not so much as to whether the State is bound by the statute, but whether it can claim the benefit of the provision of a statute, the same rule of construction may have to be applied. Where the statute may be for the public good, and by claiming the benefit conferred on it by its provisions th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of essential articles made by one citizen to another. The State had not then entered commercial activities on a large scale and when Section 3(1) contemplated notified orders issued for the purpose of securing equitable distribution and availability at fair prices of essential articles, the legislature could not have in its mind supply of essential articles made by the State itself. That is one point in favour of Mr Setalvad's construction. If we examine the scheme of the Act, it may also have to be conceded that some of the provisions may not be applicable to the State. Take, for instance, the provision of section 4 which relates to the powers of requisitioning and acquistion of properties, and the subsequent two sections that deal with payment of compensation and release from requisition respectively; these provisions may not be applicable to the State. Take, again, the control of agriculture which is contemplated by Section 7; it would not be applicable to the State. Section 12 which deals with penalties may also be inapplicable to the State, and so, would Section 13 be inapplicable, because it deals with abetment and assistance of contravention of the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a private licensee and is then supplied to the consumers, such a supply would fall within the mischief of Section 3(l), and the terms on which it can and should be made to the consumers can be regulated by a notified order. There can also be no serious dispute that terms of contract entered into between a private supplier of electrical energy and the consumer could be modified by notified order. Section 3(1) undoubtedly confers power on the State Government to vary and modify contractual terms in respect of the supply or distribution of essential articles. If that be so, on a plain reading of Section 3(l) it seems very difficult to accept the argument that the supply of electrical energy which is included in Section 3(1) if it is made by a private producer should go outside the said section as soon as it is produced by the State Government. The emphasis is not on who produces and supplies, but on the continuance of the equitable distribution and supply of essential articles at fair prices. If the object which Section 3(l) has in mind is such equitable distribution and availability at fair prices of essential articles, and that object would still continue to attract the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hy this clause cannot take in articles which may be purchased or sold by the State. The clause is so worded that the transactions of sale and purchase of all essential articles would be included in it. It is true that where the State wants to sell its essential articles, it may be able to regulate the prices and control them by means of an executive order; but that is not relevant and material in construing the effect of the words; if the words take within their sweep essential articles sold by the State, there is no reason why it should not be competent to the State to issue a notified order controlling the prices in that behalf. 19. In regard to the purchase of essential articles by the State, the position is still clearer. If the State wants to purchase essential articles, power to regulate the prices of such articles, would seem to be clearly included in Section 3(2)(b). Indeed, during the course of his arguments, Mr Setalvad did not seriously dispute this position. Therefore, when the State wants to purchase essential articles it can regulate the prices in that behalf by means of a notified order issued under Section 3(l) and that shows that in the cases of both sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y at the rates specified in the agreements is a right which falls within Article 19(i)(f) or (g). Even so, can it be said that the impugned notified orders are not reasonable and in the interests of the general public? That is the question which calls for an answer in dealing with the present contention. It is true that by issuing the impugned notified orders, the respondent has successfully altered the rates agreed between the parties for their respective contracts and that, prima facie, does appear to be unreasonable. But, on the other hand, the evidence shows that the tariff which was fixed several years ago had become completely out of date and the reports made by the Accountant-General from time to time clearly indicate that the respondent was supplying electricity to the appellants at the agreed rates even though it was incurring loss from year to year. Therefore, it cannot be said that the impugned notified orders were not justified on the merits. The prices of all commodities and labour charges having very much increased meanwhile, a case had certainly been made out for increasing the tariff for the supply of electrical energy. But it would not be possible to hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56. In that writ petition, one of the petitioners stated that the rate prescribed under the agreements had not changed and had remained stationary as far as consumers under the State Government's licensees were concerned. The affidavit appears to concede that certain other licensees had increased their rates, but that increase, it is claimed, was negligible or nominal; and so, the argument was that the rates which are widely divergent between consumer and consumer constitute a contravention of Article 14. Mr Setalvad fairly conceded that these allegations are vague and indefinite and no other material has been produced either by the petitioner who had made this affidavit, or by any of the other petitioners who moved the High Court for challenging the validity of the impugned orders. In fact, we do not know what the rates charged by other licensees are and have been, and how they compare with the rates prescribed by the original contracts as well as the rates enchanced by the impugned notified orders. We ought to add that the Division Bench of the High Court appears to be in error when it assumed that the respondent was the sole supplier of electrical energy in the State of Andh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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