{"id":193933,"date":"1986-03-12T00:00:00","date_gmt":"1986-03-11T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/delhi-cloth-general-mills-vs-rajasthan-state-electricity-on-12-march-1986"},"modified":"2017-03-20T23:50:43","modified_gmt":"2017-03-20T18:20:43","slug":"delhi-cloth-general-mills-vs-rajasthan-state-electricity-on-12-march-1986","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/delhi-cloth-general-mills-vs-rajasthan-state-electricity-on-12-march-1986","title":{"rendered":"Delhi Cloth & General Mills … vs Rajasthan State Electricity … on 12 March, 1986"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Delhi Cloth & General Mills … vs Rajasthan State Electricity … on 12 March, 1986<\/div>\n
Equivalent citations: 1986 AIR 1126, \t\t 1986 SCR (1) 633<\/div>\n
Author: A Sen<\/div>\n
Bench: Sen, A.P. (J)<\/div>\n
           PETITIONER:\nDELHI CLOTH & GENERAL MILLS COMPANY LTD. & ANR.\n\n\tVs.\n\nRESPONDENT:\nRAJASTHAN STATE ELECTRICITY BOARD & ANR.\n\nDATE OF JUDGMENT12\/03\/1986\n\nBENCH:\nSEN, A.P. (J)\nBENCH:\nSEN, A.P. (J)\nMADON, D.P.\n\nCITATION:\n 1986 AIR 1126\t\t  1986 SCR  (1) 633\n 1986 SCC  (3) 431\t  1986 SCALE  (1)416\n CITATOR INFO :\n RF\t    1986 SC1999\t (6)\n RF\t    1988 SC1989\t (9)\n RF\t    1992 SC2169\t (12)\n\n\nACT:\n     Electricity Supply\t Act, 1948  - SS.  49A and  49B\t (as\nintroduced by  Electricity  (supply)  (Rajasthan  Amendment)\nAct, 1976)  - Scope  of -  Electricity Board - Power of - To\nframe uniform  tariffs\tunilaterally  -\t Raise\tdemands\t for\npayment of difference between uniform tariffs plus surcharge\nand agreed  tariffs  with  retrospective  effect  -  Whether\npermissible -  Whether s.49 of the Act is violative of Arts.\n14, 19(1)(f)  & (g) and 31 (2) of the Constitution - Whether\ndoctrine of Promissory estoppel attracted.\n     Words and Phrases -\n     'Escalation  clause',   'Review',\tand   'Surcharge'  -\nMeaning of.\n\n\n\nHEADNOTE:\n     By an  agreement dated  July 28,  1961, the Respondent-\nState Electricity Board agreed to supply the appellants with\nbulk electrical\t energy for their power oriented industry at\na concessional\trate for  a period of 20 years. Under cl. 18\nof the\tagreement, it  was provided  that the rate of supply\nwas reviewable\tby the Board every five years after January,\n1971, and the revision of rate was to be effected if to rise\nin the\tcost of\t generation out\t of the total cost varied by\n25% or\tmore from  the\tcost  last  fixed.  It\twas  further\nenvisaged by cl.34(b) that the mutual rights and obligations\nof the\tparties would  be subject  to alteration  by further\nlegislation  relating\tto   supply   and   consumption\t  of\nelectricity enacted  during the period of the agreement. The\nBoard  commenced   supplying  electrical   energy   to\t the\nappellants with\t effect from March 1, 1963. The Board issued\nvarious notifications from time to time bringing into effect\nthe revised  tariffs for  the supply  of electricity  to its\ndifferent  classes  of\tconsumers  at  different  rates.  By\nNotification dated  July 26, 1966, the Board imposed general\nsurcharge on the appellants at the rate of 15% on the normal\ntariff.\n634\n     The appellants  filed  a  petition\t under\tArticle\t 226\nchallenging the\t power of the Board to levy the general sur-\ncharge of  15%. The High Court allowed the petition and held\nthat the  levy of general surcharge of 15% on the appellants\nwas ultra  vires the  Board insofar  as the  appellants were\nconcerned  because   the  parties   having  entered  into  a\nstatutory agreement  dated July 28, 1961, there was a fetter\ncreated on  the power  of the Board to unilaterally increase\nthe tariff under s. 49 of the Electricity (Supply) Act, 1948\nand there-fore\tthe appellants\tcould not  be  subjected  to\npayment of the general surcharge of 15%. The Board preferred\nan appeal against the judgment of the Single Judge.\n     From January 1, 1971, the Board intimated its intention\nto the\tappellants to revise the concessional rate of supply\nand charge  them the  uniform rate  of tariff under Schedule\nHS\/LP\/HT-1 as  applicable to  all large industrial consumers\nand the\t general surcharge of 15% thereon in exercise of its\npowers under cl. 18 of the agreement. Accordingly, the Board\nby its\tletter dated  February 1,  1971 forwarded a bill for\nthe billing  month January  1971, raising  a demand  on that\nbasis.\n     The appellants  thereupon filed  a writ  petition under\nArticle 226.  A Single\tJudge of  the High Court quashed the\nimpugned bill  and held:  (i) that  the Board  was  entitled\nunder the  first part  of cl.18 to review the rate of supply\n'every fifth  year starting  from the first date of supply',\nbut in\tview of\t the restrictive  clause  contained  in\t the\nsecond part  of cl.18  it was  impermisible for the Board to\nmake any  such upward  revision in  the rate  of supply till\nJanuary 1,  1971; (ii)\tthat in\t the circumstances it can be\ninferred that  the rise\t in the\t cost of  generation was  at\nleast 25%  and accordingly  the Board was entitled to revise\nthe rate  of supply  by 25%  and (iii)\tthat  if  the  Board\nclaimed a  further rise, it would have to establish that the\nrise in\t the cost of generation was more than 25% and it had\nto for\tthat purposes  get the\tpercentage in  the  cost  of\ngeneration  determined\teither\tby  mutual  dialogue  or  by\nreference to arbitration.\n     During the\t pendency of  the appeals  preferred both by\nthe appellants\tand the\t Board,\t on  February  7,  1976\t the\nGovernor of  Rajasthan promulgated  the Electricity (supply)\n(Rajasthan Amendment) Ordinance, 1976, by which new sections\n49-A and\n635\n49-B were  introduced into the Act with retrospective effect\nto overcome  the difficulty  created by\t the judgment of the\nHigh Court  in this  case,  and\t more  particularly  by\t the\njudgment of  this court\t in Indian  Aluminium Co.  v. Kerala\nState Electricity Board, [1976] 1 S.C.R. 70. By the use of a\nnon obstante  clause in\t sub-s.(1) of s. 49A the Legislature\nmade it\t lawful for  the Board to revise, from time to time,\nthe tariffs  fixed for\tthe supply of electricity to persons\nother than  licensees and  to frame  uniform tariffs for the\npurpose of  such supply.  Sub-s.(2) thereof provided that in\nrevising or framing tariffs under sub-s.(1), the Board shall\nbe guided by the principles set out in s. 59 and as respects\nany period  commencing on  and from  September 16, 1966 i.e.\nthe date  on which the new s. 49 of the Act was brought into\nforce, by  the provisions  laid down in sub-ss. (2), (3) and\n(4) of s. 49-A notwithstanding anything contained in the Act\nor in  any agreement,  undertaking, commitment or concession\nmade before  the first day of April, 1964 i.e. the date when\nthe uniform  tariffs were  first framed\t by the\t Board. Sub-\ns.(3)  of   s.\t49A   provided\tthat  all  such\t agreements,\nundertakings, commitments  or concessions as are referred to\nin sub-s.(1),  shall, insofar  as they are inconsistent with\nthe provisions\tof sub-ss.(1)  and (2)\tand to the extent of\nthe tariffs  fixed  or\tprovisions  made  therein  for\tsuch\nfixation, be  void and\tshall be  deemed always to have been\nvoid. Section  49A (3) thus had the effect of nullifying the\nagreement entered  into by  the appellants  with  the  Board\nunder s.49  for supply\tof electricity at concessional rate.\nSimilarly by  use of  a non obstante clause, s. 49B provided\nthat any  amount realised  or demand  made or created by the\nBoard or  the Government,  etc.\t according  to\tthe  uniform\ntariffs in  force from\ttime to\t time or  against any person\nclaiming any  special  tariffs\tunder  any  such  agreement,\nundertaking or\tconcession made before February 7, 1976, the\ndate of\t promulgation of  the Ordinance,  shall be deemed to\nhave been validly realised, made or created under the Act as\namended by the Ordinance.\n     Immediately thereafter  on March  12, 1976,  the  Board\nfurnished the  appellants with\ta bill for the billing month\nof February  1976 at  uniform rate,  under Schedule  LP\/HT-1\nframed by the Board's tariff Notification dated May 28, 1974\ntogether with the general surcharge of 15%.\n     The appellants,  therefore, filed\tpetition under\tArt.\n226\n636\nchallenging the\t constitutional validity  of ss. 49A and 49B\nof the\tAct, as introduced by the Amending Ordinance as also\nthe impugned bill sent by the Board for the billing month of\nFebruary, 1976.\n     On\t November   4,\t1976   the  Board   issued   another\nNotification under  s.49(1) framing  revised uniform tariffs\nto be  applicable for  the billing  month of December, 1976.\nBut unlike  the earlier notifications, this notification did\nnot contain  any exclusionary  clause granting exemption for\nspecially negotiated  loads. On\t November 3,  1977 the Board\nfurnished another  bill to  the appellants  claiming arrears\namounting to  Rs. 5.57\tcrores on  account of the difference\nbetween the  normal rate  of tariff  and the agreed rate for\nthe supply  of electrical energy for the period from January\n1, 1971 to January 31, 1976.\n     The appellants filed another petition under Article 226\nquestioning their liability to pay the said amount.\n     The High  Court upheld  the constitutional\t validity of\nss. 49A\t and 49B of the Act as introduced by the Electricity\n(Supply) (Rajasthan  Amendment) Act, 1976 and also the right\nof the Board to revise the rate of supply as agreed upon for\nthe period  commencing from  January  1,  1971\tonwards\t and\nenforce a  demand for  payment of the difference between the\nuniform tariffs\t as fixed  from time  to time and the agreed\nrate.\n     In\t the   appeals\tto  the\t Court,\t the  questions\t for\nconsideration were  : (i)  Interpretation of  the  terms  of\nagreement  between   the  parties   dated  July\t  28,  1961,\nparticularly cl.  18 and  34(b) thereof; (ii) Interpretation\nof ss. 49A and 49B of the Act; and (iii) whether the demands\nraised by  the Board  for payment  of the  difference by the\nimpugned bills\tdated February\t1, 1971\t and March  12, 1976\nwhich  involved\t  the  imposition  of  a  liability  on\t the\nappellants by  the retrospective conferment of a prospective\npower under  s.49A and\tthe validation\tof such\t power under\ns.49B was  wholly arbitrary  and irrational, confiscatory in\nnature and  amounted  to  deprivation  of  property  without\npayment of  compensation and was thus violative of Arts. 14,\n19(1)(f) and (g) and 31(2) of the Constitution.\n637\n     On behalf of the appellants it was contended : (i) that\ncl.18 was  an escalation  clause and therefore the Board was\nnot entitled  to unilaterally  frame uniform  tariffs as due\nand payable  by the appellants but the rate of increase must\nbe in  proportion to, or correlated with, the actual rise in\nthe  cost  of  generation;  (ii)  that\tthe  stipulation  in\ncl.34(b) cannot\t be regarded as a contractual stipulation at\nall and\t that in  no case  cl.34(b)  can  possibly  be\tmade\napplicable  to\t any  purported\t alteration  of\t contracting\nparties' right\tfor a  past period by means of retrospective\nlegislation; all  that the parties contemplated was that the\nmutual rights  and obligations\twould be  subject to  future\nlegislations on\t supply and  consumption of  electricity but\nsuch legislations  necessarily had  to be valid legislations\nand  if\t  cl.34(b)  was\t to  be\t treated  as  a\t contractual\nstipulation providing  that the\t rights\t stipulated  in\t the\nagreement  were\t  subject  to\tany  modification   by\t any\nlegislation, valid  or invalid,\t cl.34(b) will\thave  to  be\nstruck down  as a totally uncertain clause which cannot find\nplace in  any contract;\t (iii) that  while  the\t concessions\nstipulated by  the agreement  under s.49(1)  could have been\naltered in proportion to the rise in the cost of generation,\nsuch concession could not have been altogether eliminated as\nthat would  amount to  a  total\t disregard  of\tthe  guiding\nprinciples contained  in section  49(3) and thus contrary to\nthe mandate  of s.49(2) of the Act; (iv) that ss.49A and 49B\nwere integrally\t connected and\twere intended  and meant  to\nachieve a joint purpose which was merely to validate such of\nthe past  actions of  the Board\t as would have been valid if\ns.49A had already been in force at the relevant time and the\ndemand to be validated had to be raised prior to February 7,\n1976 and  not on  a date  subsequent thereto; since the bill\ndated  March   12,  1976  was  subsequent  to  the  date  of\npromulgation of\t the Ordinance,\t the same  was not validated\nunder s.49B;  it was  not open to the Board to make a demand\nfrom the  appellants for  payment of  charges for the period\ncommencing from\t June 1,  1974 and  ending with\t February 6,\n1976 according\tto the\tuniform tariff of 1974; and (v) that\nthe demand  raised by  the Board  against the appellants for\npayment of  the difference  between the\t uniform tariffs and\nthe agreed rate for the period subsequent to January 1, 1971\nwas violative  of Arts.\t 14, 19(1)(f)  and (g), and 31(2) of\nthe Constitution.\n     On behalf of the Respondent-Board it was contended: (i)\nthat cl. 18 is not an escalation clause; (ii) that cl.34(b)\n638\nmakes the  contract subject  to any  legislation;  that\t the\nrights which  the parties  derived under  the agreement\t for\nsupply of  electricity at  a concessional rate under s.49 of\nthe Act\t was defeasible;  and that  being so, ss.49A and 49B\nhad to\tbe read\t into the  contract and\t therefore became  a\ncontractual term; that the appellants derived a right to get\nelectricity at a concessional rate only for a limited period\ntill January  1, 1971  and thereafter  the Board derived the\npower to  revise the  rate of supply under cl.18 and it was,\ntherefore competent  for the  Legislature  to  enact  a\t law\nproviding for application of uniform tariffs notwithstanding\nany  such  commitment,\tundertaking  or\t concession  to\t the\ncontrary made during any period prior to April 1, 1964.\n^\n     HELD :  1.\t By  virtue  of\t ss.  49A  and\t49B  of\t the\nElectricity  (Supply)\tAct,  1948   as\t introduced  by\t the\nElectricity (Supply) (Rajasthan Amendment) Act, 1976, it was\nlawful for  the Respondent-Board  to revise the special rate\nof tariff  agreed upon\tand to\traise a\t demand against\t the\nappellants by  its letter dated February 1, 1971 for payment\nof the\tdifference between the uniform tariff under Schedule\nHS\/LP\/HT-I applicable  to  all\tlarge  industrial  consumers\nunder the  Board's tariff  notification dated April 26, 1969\nand the concessional rate in terms of cl.18 of the agreement\nbetween the  parties dated July 28, 1961 for the period from\nJanuary 1,  1971 upto  February 6,  1976, i.e.\tthe date  of\npromulgation  of   the\t Electricity   (Supply)\t  (Rajasthan\nAmendment) Ordinance, 1976, as also the general surcharge of\n15% thereon  levied by\tthe Board by its tariff notification\ndated April  26, 1969  as from\tSeptember 16,  1966 onwards.\n[689 C-E]\n     2. The  Board's  letter  dated  March  12,\t 1976  being\nsubsequent to  the date of promulgation of the ordinance the\ndemand raised  by the  Board  for  payment  of\tthe  revised\nuniform tariff under Schedule LP\/HT-I applicable to all such\nlarge  industrial   consumers  under   the  Board's   tariff\nnotification dated  May 28, 1974 purporting to act under ss.\n49A and 49B of the Act read with cl.18 of the agreement, was\nnot validated  by s.49B\t and, therefore,  the Board was only\nentitled to  recover uniform  tariff at\t the same  rate i.e.\nunder Schedule\tHS\/LP\/HT-1 of  1969 for the period from July\n1,  1974  to  February\t6,  1976,  that\t is,  prior  to\t the\npromulgation of the Ordinance. [689 E-G]\n639\n     3. The  Board was\tentitled by  the terms\tof s.49A  to\nraise a\t demand for  payment of\t the revised  uniform tariff\nunder Schedule LP\/HT-I of 1974 w.e.f.\tFebruary 7, 1976 and\nthereafter as  per the\trevised uniform\t tariffs framed from\ntime to time as applicable to all large industrial consumers\nin terms of c1.18 of the agreement. [689 G-H; 690 A]\n     4. An  \"escalation clause\"\t according to  its  accepted\nlegal connotation  means a  clause which  takes care  of the\nrise and  fall of prices in the market, whereas the right to\nreview confers\tthe power to revise the rate of supply. [666\nD-E]\n     5. The  word 'review'  in c1.18 necessarily implies the\npower of  the Board  to have  a second look and to so adjust\nfrom time  to time its charges as to carry on its operations\nunder the Act without sustaining a loss. The parties clearly\ncontemplated by\t c1.18 for a fresh revision of the rate once\nin a  block of\tfive years.  The only fetter on the power of\nthe review  is that  contained\tin  the\t proviso  to  c1.18,\naccording to  which power  of review shall be exercisable if\nthe component  of cost\tof generation  out of the total cost\nvaries by  25% or  more and  that such\tpower shall  not  be\nexercisable by\tthe Board  till January\t 1, 1971. Therefore,\nc1.18 cannot be regarded to be an escalation clause. [666 F-\nH]\n\t  Butterworths'\t  Encyclopadeia\t   of\tForms\t and\n\t  Precedents,  4th   Edn.,  Vol.3,  p.148;  Hudson's\n\t  Building and\tEngineering  Contracts,\t 10th  Edn.,\n\t  Keating's  Buiding  Contracts,  4th  Edn.,  p.498;\n\t  Black's Law  Dictionary, 4th Edn., p.639; American\n\t  Jurisprudence, 2nd  Edn., Vol.17, p.786 and Corpus\n\t  Juris Secundum, Vol.17, p.806, referred to.\n     6. The  true object and purpose of the enactment should\nnot be\tignored and  due  effect  should  be  given  to\t the\nprovisions of ss.49A and 49B of the Act with a retrospective\neffect which  clothed the  Board  with\tpower  to  make\t the\nuniform\t tariffs  applicable  to  bulk\tconsumers  like\t the\nappellants who\tunder agreements entered into with the Board\non July 28, 1961, that is, before April 1, 1964, the cut-out\ndate mentioned\tin sub-s.(1) of s.49A had been, to the great\nfinancial detriment  of the  Board, enjoying  a concessional\nrate of supply which had no relation to the existing cost of\ngeneration, with the\n640\nresult that the burden of this cost had to be passed over to\nother consumers.  As is\t clear from the Statement of Objects\nand  Reasons   of  the\tBill,  the  Legislature\t thought  it\nexpedient to amend the Act so as to cover the rising cost of\ngeneration from\t time to  time, notwithstanding\t any special\ncontract, undertaking  or concession  to the  contrary.\t The\nlegislative mandate  contained in  ss.49A and 49B of the Act\nas  introduced\t by  the   Rajasthan  Electricity   (Supply)\nAmendment Act, 1976, subserves the public interest to ensure\nthat the  Board shall  not, as\tfar  as\t practicable,  after\ntaking credit  for any\tsubvention from the State Government\nunder s.63, carry on its operations under the Act at a loss.\n[672 A-E]\n     7.1 It  is not  uncommon  for  statutory  contracts  to\ncontain a  term\t like  c1.34(b)\t which\tmakes  the  contract\nsubject to  future legislation. Such a clause can usually be\nfound in forest or excise contracts relating to the grant of\na privilege which subjects the mutual rights and obligations\nflowing from  such a  contract to be liable to be altered or\nmodified by subsequent legislations. [669 A-B]\n     7.2  In   the  instant   case,  the  rights  which\t the\nappellants  derived   under  the  agreement  for  supply  of\nelectricity at a concessional rate under s.49 was defeasible\ninasmuch as  on a fair construction of the terms of c1.34(b)\ntaken in  conjunction with the conduct of the parties, it is\nclear that  the parties\t had contemplated  that\t the  mutual\nrights and  obligations under  the contract would be subject\nto alteration  by future  legislation. That being so, ss.49A\nand 49B\t have  to  be  read  into  the\tcontract  and  these\nprovisions  by\tvirtue\tof  c1.34(b)  became  a\t contractual\nstipulation. [668 E-F; 670 H; 671 A-B]\n     8.\t The   State  Legislature  under  Entry\t 38  of\t the\nConcurrent  List   was\tcompetent  to  enact  the  Rajasthan\nElectricity (Supply)  Amendment Act, 1976 and introduced the\nimpugned  ss.49A   and\t49B  with  retrospective  effect  to\novercome the  difficulty created  by the  decision  of\tthis\nCourt in  Indian Aluminium  Company's  case  (Supra).  There\nbeing a\t change in the law brought about by the introduction\nof ss.49A and 49B of the Amending Act, the Court is bound to\ngive effect  to these  provisions  notwithstanding  anything\ncontained in  the Act  or  in  any  agreement,\tundertaking,\ncommitment or  concession to  the contrary made by the Board\nbefore the first day of April,\n641\n1964, or  the decision\tof this\t Court in  Indian  Aluminium\nCompany's case (supra). [673 D-D]\n     Indian Aluminium  Company v.  Kerala State\t Electricity\nBoard,<\/a> [1976] 1 S.C.R. 70 referred to.\n     9. A  combined reading  of the  provisions contained in\nss.49A and  49B shows  that the\t Board is  relieved  of\t the\nshackles of  the contractual  obligations flowing  from\t the\nagreements relatable  to s.49(3), and the Board is empowered\nin terms  of s.49A  to revise  the tariffs  or frame uniform\ntariffs with  respect to consumers enjoying special benefits\nas from\t September 16, 1966. However, the Board could not on\nthe strength  of s.49A\talone recover the difference between\nthe uniform  tariffs fixed  from time to time and the agreed\nrate of\t supply from  the appellants  for  the\tperiod\tfrom\nJanuary 1,  1971 to  February 6,  1976 without\tthe  aid  of\ns.49B. [677 F-H; 678 A]\n     10. Section  49B on its terms has no application unless\nthere was  a demand  raised or\tcreated prior to February 7,\n1976, the  date of  promulgation of the ordinance. There is,\ntherefore,  insuperable\t barrier  in  applying\tthe  uniform\ntariff under  Schedule LP\/HT-I\tframed by the Board's tariff\nnotification dated  May 28,  1974 from\tthe billing month of\nJuly 1974  i.e. from  June 1,  1974 to February 6, 1976. The\nBoard never intimated the appellants that they would have to\npay charges  for the  supply of\t electricity to them at that\nrate. Therefore,  the appellants  would be  liable for\tthat\nperiod to  pay charges at the uniform tariff as per Schedule\nHS\/LP\/HT-I framed by Board's tariff notification dated April\n26, 1969. [678 A-D]\n     11. The  word \"surcharge\"\tis not\tdefined in  the Act.\nPlainly, it  means an additional or extra charge of payment.\nA surcharge  is in  substance an  addition to the stipulated\nrates of  tariff. The  general surcharge of 15% as also that\nthe uniform  tariff were part of the general burden borne by\nall consumers  alike. Whatever\tmay have  been the  position\nunder the  old s.49,  the new  section as substituted by the\nAmendment Act  30 of 1976, makes it plain that the Board can\nfix uniform  tariffs. The  power to fix uniform tariffs must\nnecessarily  include  power  to\t make  uniform\tincrease  in\ntariffs. Section  49A had  the effect  of removing the Board\nfrom the  shackles of the agreement to supply electricity as\na concessional rate entered\n642\ninto under  s.49. The  effect of  the non\/obstante clause in\nsub-s.(1) of  s.49A was\t to nullify the agreement. [678 E-F;\n679 G-H; 680 A-B]\n     Bisra Stone  Lime Co.  Ltd. v. Orissa State Electricity\nBoard,<\/a> [1976]  2 S.C.R.\t 307;  and  Shorter  Oxford  English\nDictionary, p. 2199 relied upon.\n     Indian Aluminium Co. v. Kerala State Electricity Board,\n[1976] 1 S.C.R. 70; and Titagarh Papers Mills Ltd. v. Orissa\nState Electricity Board & Anr., [1975] 2 S.C.R. 436 referred\nto.\n     12. Where a law does not, in reality, affect a transfer\nof ownership  or possession, Art. 31(2) cannot be attracted.\nIn order  to constitute\t acquisition within  the meaning  of\nArt. 31(2),  there must be transfer of ownership of property\nto the\tState or to a Corporation owned or controlled by the\nState. [683 F-G]\n     13. Unless\t the taking  of property  had taken place in\neither of  the two way i.e. \"acquisition or requisitioning\",\nthere was  no  obligation  to  pay  compensation  under\t the\nConstitution. The  extinction of the right of the appellants\nunder the  contract with the Board to get electric supply at\na concessional\trate under  cl.18 of  the agreement  for the\nperiod after January 1, 1971 when revision of tariff was due\nunder cl.  18 thereof,\thad not\t amounted to  acquisition of\nproperty under Art. 31(2). Further, there was no question of\nany transfer  of money\trepresenting any  debt owned  by the\nBoard from the appellants which stood extinguished by reason\nof ss.49A  and 49B  of the  Act. All that the appellants had\nunder their  contracts with the Board was a defeasible right\nby reason  of cl. 34(b) of the agreement. The appellants had\ncontracted themselves  by cl.  34(b) to\t be subject  to\t any\nsubsequent legislation,\t and s. 49A of the Act struck at the\nagreement. It  is an  enabling provision  and  empowers\t the\nBoard to  revise the  tariffs for supply of electricity to a\nclass of  consumers enjoying special benefit under agreement\nentered into  under s.\t49(3). The  Board was  competent  to\nreview the  tariff in  terms of\t cl. 18\t of the agreement as\nfrom January  1, 1971.\tSection 49A liberates the Board from\nthe constraints\t of the\t agreed\t rate  under  the  agreement\nentered into  by the Board with the appellants under s.49 of\nthe Act and empowers the\n643\nraising of  demand according  to the  uniform tariffs. Here,\nthere was no debt due or owing to the State or a Corporation\nowned or controlled by the State. Article 31(2) was thus not\nattracted. [683 G-H; 684 A-B; 683 C-F]\n     14. The  concept of  \"property\" in\t Art. 31  is  not  a\nnarrow concept\tand is\tused in\t a comprehensive  sense. Any\nlegal right which can be enforced through a Court is a right\nin the\tnature of  property within  the meaning\t of Art. 31.\n[682 G-H; 683 A]\n     Indian Aluminium Co. v. Kerala State Electricity Board,\n[1976] 1  S.C.R. 70;  Madan Mohan  Pathak v. Union of India,<\/a>\n[1978] 3  S.C.R. 334; H.H. Maharajadhiraja Madhav Rao Jiwaji\nRao Scindia  Bahadur v.\t Union of  India,<\/a> [1971] 3 S.C.R. 9;\nand State  of M.P.  v. Rajojirao Shindi, [1968] 3 S.C.R. 489\ndistinguished.\n     15. The  contention based\ton  Art.  19(1)(f)  and\t (g)\ncannot prevail.\t The present case concerns only with sale of\ngoods i.e.  electricity and  price to  be paid therefor, for\n\"tariff\" is  nothing but  the  price.  The  contract  itself\nprovided for  revision\tof  the\t rate  under  c1.18  of\t the\nagreement after\t January 1,  1971. The\tBoard was within its\npowers in  applying the\t uniform tariffs  to the  appellants\nafter the  period stipulated  for  had\texpired.  There\t was\nnothing unreasonable  for the  Board to\t have  enforced\t the\nuniform tariffs as against the appellants as from January 1,\n1971.  Reasonableness\tof  the\t  increase  in\t tariff\t  is\nestablished by\tthe fact  that the  Board was  not bound  to\nsupply electricity  to the appellants at a concessional rate\nby incurring operational losses beyond that date. [687 D-F]\n     16. The  appellants have  not shown  nor  produced\t any\nmaterial to show that they have suffered any loss on account\nof the increase in tariff. There is nothing to show that the\nappellants had\tnot the\t capacity  to  bear  the  burden  of\nuniform tariffs.  It cannot be said that the impugned demand\nmade  by   the\tBoard\tas  against   the  appellants\twere\nconfiscatory  in  nature.  When\t all  the  large  industrial\nundertakings including the public sector undertakings of the\nGovernment of India and the State Government were paying for\nthe supply of electricity at uniform tariffs fixed from time\nto time, the appellants had no right to claim immunity. [687\nF; 688 D-E]\n644\n     17. It  is evident\t that the  cost of generation in the\ngrid was  far higher than the concessional rate at which the\nappellants were\t getting the  supply. As  a result the Board\nwas incurring  very heavy losses on account of this low rate\nfor  a\t large\tbulk   consumption.  It\t  would\t have\tbeen\nunreasonable for  the Board  not to have applied the uniform\ntariffs to  the appellants  as from January 1, 1971 when the\nBoard derived  the power  to revise  the rate under c1.18 of\nthe agreement.\tThe component  of cost\tof generation worked\nout by\tthe Board  shows that  the appellants  were  getting\ntheir electricity  free of  all\t charge.  Even\tthe  uniform\ntariff under HS\/LP\/HT-I was very much less than the price at\nwhich the Board was getting its supply. Therefore, there was\nno reason why the appellants should not be treated alike wit\nall other  large  industrial  undertakings  which  were\t all\nsubjected to  payment of  uniform tariffs fixed from time to\ntime. The  contention based  on Art.14 must, therefore fail.\n[686 D-F; H; 687 A-C]\n     18. There\twas no\tquestion of any estoppel against the\nBoard inasmuch\tas the\tappellants did\tnot open  their\t PVC\nplant on  account of  any assurance or promise by the Board.\nThe appellants\tapproached the\tBoard  for  supply  of\thigh\ntension ower  for their\t industrial complex  and  the  Board\ncomplied with  the request.  Even otherwise,  the appellants\nhave not  made out  that but  for the statutory contract for\nsupply of electricity at a concessional rate under s.49 they\nwould not have established their industry. There were number\nof  incentives\t offered  by   the   State   Government\t  to\nenterpreneurs to  set up  their industries in the State. The\nBoard is  not the  Government and the appellants cannot rely\non promissory  estoppel for  the incentive  offered  by\t the\nGovernment. [688 F-H; 689 A-B]\n     19.  All  the  appeals,  except  CA.  No.\t2675\/80\t are\ndismissed. Civil  Appeal No.  2675\/80  arising\tout  of\t the\njudgment and  order of\tthe Division Bench of the High Court\ndated September\t 12, 1980  dismissing S.B. Writ Petition No.\n8579\/80 filed  by the appellants challenging the validity of\nthe bill  dated March  12, 1976,  for payment  of Rs. 21,35,\n506.70p. for  the billing  month of February 1976, is partly\nallowed to the extent that the said bill is quashed with the\ndeclaration that  the Respondent Board is empowered in terms\nof s.49A of the Electricity (Supply) Act, 1948 as introduced\nby the\tElectricity (Supply) (Rajasthan Amendment) Act, 1976\nto\n645\nraise a\t fresh demand  for payment under Schedule HS\/LP\/HT-1\nof 1969 for the period from July 1, 1974 to February 6, 1976\nand further  that the  Board is entitled to recover from the\nappellants charges  under Schedule  LP\/HT\/1 of\t1974 as from\nFebruary 6,  1976 and  thereafter as per the revised uniform\ntariffs, framed from time to time as applicable to all large\nindustrial consumers  together with general surcharge of 15%\nthereon in  terms of c1. 18 of the agreement.  [690 E-H; 691\nA-B]\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2675-
\n2679 of 1980.\n<\/p>\n
     From the  Judgment and Order dated 12th September, 1980
\nof the\tRajasthan High\tCourt in Writ Petitions Nos. 628\/76,
\n525\/77, 114, 121 and 152 of 1973.\n<\/p>\n
     Shanti Bhushan and P.H. Parekh for the Appellants.
\n     Dr. Y.S.  Chitale, S.N.  Kakkar,  V.M.  Tarkunde,\tB.D.
\nSharma, Sushil\tKumar  Jain,  Sudhanshu\t Atreye,  Badri\t Das
\nSharma, R.K. Mehta and H.P. Gupta for the Respondents.\n<\/p>\n
     The Judgment of the Court was delivered by
\n     SEN, J.  These five  consolidated\tappeals\t by  special
\nleave from  the common\tjudgment and  orders of\t a  Division
\nBench of  the Rajasthan\t High Court dated September 12, 1980
\nraise questions\t of far-reaching importance. By the judgment
\nunder  appeal,\t the   Division\t  Bench\t  has\tupheld\t the
\nconstitutional\tvalidity   of  ss.   49A  and\t49B  of\t the
\nElectricity  (Supply)\tAct,  1948,  as\t introduced  by\t the
\nElectricity (Supply)  (Rajasthan Amendment)  Act, 1976, with
\nretrospective effect,  making it  lawful for  the  Rajasthan
\nState Electricity  Board to  revise from  time to  time\t the
\ntariffs fixed  for the\tsupply of  electricity in respect of
\nany period  commencing from September 16, 1966 i.e. the date
\nof introduction of the new s. 49 by the Electricity (Supply)
\n(Amendment) Act,  1966, and  for the  validation  of  amount
\nrealized, demand  made or  created by the Board according to
\nthe uniform  tariffs in\t force from  time to time before the
\npublication in\tthe  official  Gazette\tof  the\t Electricity
\n(Supply) (Rajasthan  Amendment) Ordinance,  1976, i.e. prior
\nto February  7,\t 1976,\tthe  date  of  promulgation  of\t the
\nOrdinance.\n<\/p>\n
646<\/span><\/p>\n
     Upon that\tview, the  Division Bench  has reversed\t the
\njudgmemt and  order of\tTyagi, J. dated October 17, 1969 and
\nupheld the  impugned notification dated July 26, 1966 issued
\nby the\tBoard for  the levy of a general surcharge of 15% of
\nthe normal  tariff as  also the\t judgment and  order of J.P.
\nJain, J.  dated April  13, 1973\t holding that  the Board was
\nentitled to  recover  from  the\t appellants  the  difference
\nbetween the  normal rate  of tariff  and the special rate of
\ntariff agreed  upon  between  the  parties  in\tterms  of  a
\nstatutory agreement  dated July\t 28, 1961  under s.49 of the
\nAct as\tit then\t stood, by  virtue of ss. 49A and 49B of the
\nAct read  with cl.18  of the  agreement as from January 1971
\nonwards\t for   the  supply   of\t electrical  energy  to\t the
\nappellants for\tthe  electro-chemical,\telectro-thermal\t and
\npoli-vinyl chloride industry known as Messrs Shriram Vinyl &
\nChemical Industries, Kota, formerly known as Rajasthan Vinyl
\n& Chemical  Industries, and to levy the general surcharge of
\n15% thereon  contrary to  the terms  and conditions  of\t the
\naforesaid agreement for the supply of such electrical energy
\nto the\tappellants at a concessional rate for a periot of 20
\nyears. Pursuant\t thereto, the  Division Bench has upheld the
\ndemand raised  by the  Board by its letter dated February 1,
\n1971 for  payment of Rs.11,67,959.95p. for the billing month
\nJanuary 1971 onwards at normal tariffs together with general
\nsurcharge  of\t15%  thereon   under  Schedule\t HS\/LP\/HT-1,
\napplicable to  all  large  industrial  consumers  under\t the
\nBoard’s tariff\tnotification dated  April  26,\t1969,  under
\nc1.18 of the agreement i.e. prior to the promulgation of the
\nOrdinance. It  has also\t upheld the  demand  raised  by\t the
\nBoard’s\t letter\t  dated\t March\t 12,  1976  for\t payment  of
\nRs.21,35,506.72p. for  the billing  month February  1976  at
\nnormal tariff  plus the\t general surcharge  of\t15%  thereon
\nunder Schedule\tLP\/HT-1 applicable  to all  large industrial
\nconsumers under\t the Board’s  tariff notification  dated May
\n28, 1974  purporting to act under ss. 49A and 49B of the Act
\nread with  c1.18 of  the agreement for the period subsequent
\nto the promulgation of the Ordinance.\n<\/p>\n
     The principal  question in\t controversy is\t whether ss.
\n49A and\t 49B of\t the Act were integrally connected with each
\nother;\tand   if  so,  the  retrospective  conferment  of  a
\nprospective power  validated any  amount realized, or demand
\nmade or\t created by  the Board,\t according  to\tthe  uniform
\ntariffs from time to time,
\n647<\/span>
\nfrom or\t against any  person claiming  any  special  tariffs
\nunder any  agreement, undertaking, commitment or concessions
\nmade, before  the first day of April 1964 i.e. the date when
\nthe uniform  tariffs were  first  framed  by  the  Board  at
\ndifferent rates\t for different\tclasess of  consumers by its
\nnotification dated  March 18, 1964, notwithstanding anything
\ncontained in  the Act or in any such agreement, undertaking,
\ncommitment or  concessions so made. This question turns on a
\nconstruction of\t the provisions contained in ss. 49A and 49B
\nof the\tAct, the  constitutionality of\twhich has  not\tbeen
\nchallenged before us.\n<\/p>\n
     Sub-s. (1)\t of s.\t49A of\tthe Act\t by  the  use  of  a
\nnonobstante clause  has the  effect of\tnullifying all\tsuch
\nagreements, undertakings  or  commitments  made\t before\t the
\nfirst day  of April  1964 by  the Board or the Government of
\nRajasthan or  the Government  of any  covenanting  State  of
\nRajasthan or  in any  judgment and  order of  any court, and
\nprovides that  it shall\t be lawful  for the Board to revise,
\nfrom time  to time,  the tariffs  fixed for  the  supply  of
\nelectricity to\tpersons other  than licensees  and to  frame
\nuniform tariffs for the purpose of such supply in respect of
\nany period  commencing on  and from  September 16, 1966, the
\ndate when  new s.  49 had  come in force. Sub- s.(2) thereof
\nprovides that  in revising  the tariffs\t or framing  uniform
\ntariffs under  sub-s.(1), the  Board shall  be guided by the
\nprinciples set\tout in\ts.59  and  as  respects\t any  period
\ncommencing on  and from\t September 16,\t1966 i.e.  after the
\nintroduction of\t the new s. 49 of the Act, by the principles
\nlaid down  in sub-ss. (2), (3) and (4) of s. 49. Sub- s. (3)
\nof s.  49A provides  that all  such agreements, undertaking,
\ncommitment or  concessions as  are referred to in sub-s.(1),
\nshall, insofar\tas they are inconsistent with the provisions
\nof sub-ss.(1) and (2) and to the extent of the tariffs fixed
\nor provisions  made therein  for such  fixation, be void and
\nshall be deemed always to have been void. One of the crucial
\nquestions is  whether the demand to be validated in terms of
\ns. 49B\tof the\tAct, had  to be\t raised prior to February 7,
\n1976 and  not on a date subsequent thereto and therefore the
\nappellants were\t liable to  pay the  revised uniform  tariff
\nunder Schedule\tLP\/HT-1 of  the Board’s\t tariff notification
\ndated May  28, 1974  w.e.f. July  1, 1974. The contention on
\nbehalf of  the appellants is that s. 49B of the Act in terms
\ndoes not  have the effect of validating the demand raised by
\nthe Board  by its letter dated March 12, 1976 for payment of
\ncharges for the
\n648<\/span>
\nsupply of electrical energy to them at uniform tariff framed
\nby the\taforesaid Board’s  notification dated  May 28, 1974,
\nsuch a demand having been made after the promulgation of the
\nOrdinance i.e.\tafter February\t7, 1976;  and if that be so,
\nwhether the  Board was\tonly entitled  to recover  from\t the
\nappellants uniform  tariff under  Schedule HS\/LP\/HT-1 framed
\nby the\tBoard’s tariff\tnotification dated April 26, 1969 as
\nfrom January 1971 onwards. Various subsidiary questions also
\narise, viz.  whether the  demands so raised are violative of
\nArt.14,\t Art.19(1)(f)\tand  (g)   and\tArt.31(2)   of\t the
\nConstitution.\n<\/p>\n
\t\t\t The Facts
\n     Facts giving  rise to  these appeals  are these.  By an
\nagreement  dated   July\t 28,   1961  the   Rajasthan   State
\nElectricity Board,  Jaipur agreed  to apply  the  appellants
\nwith bulk  electrical energy  upto maximum  of 25,000 KW per
\nyear for their Rajasthan Vinyl & Chemical Industries situate
\nat Kota\t for electro-chemical,\telectro-thermal and  PVC and
\nallied industrial  products at\ta concessional\trate  for  a
\nperiod of  20 years  upon the terms and conditions contained
\ntherein. Cl.17\tof the agreement provides for a special rate
\nof tariff  as negotiated between the parties and is in these
\nterms :\n<\/p>\n
\t  “17. The  consumer shall  pay to  the Board  every
\n\t  month charges\t for the  electrical demand  made by
\n\t  the consumer\tduring the  preceding month  at\t the
\n\t  rate of  201.04\/12 =\tRs. 16.753  per KVA  of\t the
\n\t  demand  assessed  which  shall  be  calculated  as
\n\t  defined in clause 19.”\n<\/p><\/blockquote>\n
We are informed that this works out roughly to 3p. per unit.\n<\/p>\n
     Under c1.18  of the  agreement, the  rate of supply was
\nreviewable by  the Board  every five  years after January 1,
\n1971. Proviso  thereto was  in the  nature of a rider and it
\nprovided  that\tthe  revision  of  rate\t shall\tbe  effected
\nprovided the  component of  cost of  generation out  of\t the
\ntotal cost  varied by  25% or more from the cost last fixed.
\nThe relevant part of c1.18 may be reproduced :\n<\/p>\n
\t  “18………The rate\tof supply  as determined  in
\n\t  clause 17 above shall be reviewed every fifth year
\n649<\/span>
\n\t  starting from\t the date  of first  supply provided
\n\t  the component\t of cost  of generation out of total
\n\t  cost varies  by 25%  or more\tfrom the  cost\tlast
\n\t  fixed. Further  the rate  fixed by  this Agreement
\n\t  shall be  reviewed only  on or  after 1st January,
\n\t  1971.”\n<\/p><\/blockquote>\n
It  is\t not  necessary\t to  set  out  c1.31  which  is\t the
\narbitration clause.  C1.34(b) of  the agreement\t which has a
\nmaterial bearing upon these appeals reads as follows :\n<\/p>\n
\t  “34(b) Nothing  contained in this Agreement or any
\n\t  amendment  thereof   shall  restrict\tany  rights,
\n\t  obligations and discretions which the Board or the
\n\t  Consumer  has\t  derived  under   any\t legislation
\n\t  relating to  supply and consumption of Electricity
\n\t  enacted during the period of this Agreement.”<\/p><\/blockquote>\n
     It is  necessary to mention that Messrs Rajasthan Vinyl
\n& Chemical  Industries was  set up by the appellants at Kota
\nfor electro-chemical,  electro-thermal and  PVC\t and  allied
\nindustrial products  with  a  capital  investment  of  Rs.10
\ncrores\tas   a\tresult\tof  the\t Board\tagreeing  to  supply
\nelectrical energy  at a\t concessional rate  which came to be
\nknown later  as Messrs\tShriram Vinyl & Chemical Industries.
\nIt is a power oriented industry and electricity is the basic
\nraw material.  The only\t other industry\t of this kind in the
\ncountry was the one set up by Messrs Calico Mills Ltd. which
\nhas since been closed.\n<\/p>\n
     It is  common ground that the Board commenced supplying
\nelectrical energy  to the  appellants with effect from March
\n1, 1963. The Board in pursuance of its powers under s. 49 of
\nthe Act, with the prior concurrence of the State Government,
\nhas been  issuing various  notifications from  time to\ttime
\nbringing into  effect the  revised tariffs for the supply of
\nelectricity  to\t  its  different  classes  of  consumers  at
\ndifferent rates.  The first  of these was notification dated
\nMarch 18, 1964 which brought into effect the revised tariffs
\nfor the\t supply of  electricity to  its consumers  and\tthey
\nbecame applicable  for\tthe  consumption  recorded  for\t the
\nbilling\t month\t May  1964   onwards.  C1.3   of  the\tsaid
\nnotification provided that the revised tariffs shall replace
\nall existing  tariffs and  shall supersede  all the existing
\norders of  the Board and the State Government in that behalf
\nwith effect  from the  date of\tintroduction of\t the revised
\ntariffs, except for the following, namely :\n<\/p>\n
650<\/span><\/p>\n
\t  “(i) Special\tcontracts for Large or Special loads
\n\t  separately negotiated or to be negotiated; and\n<\/p><\/blockquote>\n
\t  (ii) Special\tloads for which concessional tariffs
\n\t  have been  already given  under the  orders of the
\n\t  Government\/Board.”<\/p><\/blockquote>\n
     The second\t of these  notifications was  the one  dated
\nJuly 26, 1966 by which the Board purported to levy different
\nrates of  surcharge on\tdifferent classes  of consumers with
\neffect from the billing month of September 1966. The general
\nsurcharge imposed  on the  appellants was  15% on the normal
\ntariff. The  third notification dated April 26, 1969 brought
\ninto effect the revised tariffs for supply of electricity to
\nconsumers  falling  under  the\tcategory  ‘large  industrial
\nloads’ viz. schedule HS\/LP\/HT-1 with effect from the billing
\nmonth June  1969, and  the fourth  dated May 28, 1974 making
\neffective revised  tariffs for\tthe supply of electricity to
\nits consumers from the billing month of July 1974. The third
\nand  fourth  notifications  contained  similar\texclusionary
\nclause. According  to the appellants, the uniform tariffs as
\nrevised from  time to time under the aforesaid notifications
\nwere not applicable to them in view of the said exclusionary
\nclause.\n<\/p>\n
     The appellants filed a petition in the High Court under
\nArt.226 of the Constitution assailing the power of the Board
\nto levy\t the general  surcharge of  15% under  the  impugned
\nnotification  dated   July  26,\t 1966.\tThe  aforesaid\twrit
\npetition was  allowed by  Tyagi, J.  by his  judgment  dated
\nOctober 17,  1969 by  which the\t leared Judge  held that the
\nimpugned notification  levying general\tsurcharge of 15% was
\nultra  vires   the  powers  of\tthe  Board  insofar  as\t the
\nappellants were\t concerned. The\t decision was  based on\t the
\nground that  the parties  having entered  into\ta  statutory
\nagreement dated\t July 28,  1961 for  a concessional  rate of
\ntariff\tfor   the  supply   of\telectrical   energy  to\t the
\nappellants, there  was a  fetter created on the power of the
\nBoard to  unilaterally increase the tariff under s.49 of the
\nAct and\t therefore the\tappellants could not be subjected to
\npayment of  the general surcharge of 15%. Feeling aggrieved,
\nthe Board  preferred an\t appeal against\t the judgment of the
\nlearned single Judge.\n<\/p>\n
     As from January 1, 1971, the Board manifested its
\n651<\/span>
\nintention to  the appellants to revise the concessional rate
\nof supply  and charge  them the uniform rate of tariff under
\nSchedule HS\/LP\/HT-1  as applicable  to all  large industrial
\nconsumers and  the  general  surcharge\tof  15%\t thereon  in
\nexercise of  its powers\t under cl.18 of the agreement. There
\nfollowed several  meetings between the officers of the Board
\nand the\t representatives of  the appellants  and  they\twere
\ninformed that  they would have to pay for the consumption of
\nelectricity at\tthe normal rate of tariff prevalent plus the
\ngeneral surcharge  of 15%.  It is  quite  evident  from\t the
\nappellants’ letter  dated September 5, 1970 addressed to the
\nChairman of the Board that the Board had the power to review
\nthe tariff  insofar as\tthey  were  concerned  as  and\tfrom
\nJanuary 1,  1971. In  their letter they adverted to cl.18 of
\nthe agreement  which conferred\tpower on the Board to review
\nthe tariff  on or  after January 1, 1971 and referred to the
\ndiscussion they had with the Chairman and other officials of
\nthe Board,  making a  request that  the Board should furnish
\nthe necessary  details with regard to the total cost and the
\ncomponent of  cost of  generation at  the time of the supply
\nunder the  agreement as\t well as  the relevant\ttime, if any
\nreview\tof   tariff  was  being\t contemplated.\tIn  response
\nthereto, the  Board by its letter dated December 22\/24, 1970
\ndrew the  attention of\tthe appellants\tto cl.18  and stated
\nthat the  cost of  generation had  been worked\tout  in\t the
\noffice of  the Board  and it had been found that the present
\ncost was  higher than  25%  of\tthe  cost  of  the  time  of
\nexecuting the agreement as detailed below :\n<\/p>\n
     “Component of cost of generation
\n      at the time of agreement :\t       2.089 P\/Kwh.<\/p><\/blockquote>\n
\n     Component of cost of generation\n     during the year 1969-70 :\t\t       5.17 P\/Kwh.\"\nIt went on to say :\n<\/pre>\n
\t  “In view  of this, the Board is entitled to review
\n\t  the rates  of supply\tto you and intends to charge
\n\t  from 1st  January,  1971,  at\t the  normal  tariff
\n\t  Schedule  HS\/LP\/HT-1\t (copy\tenclosed)  plus\t 15%
\n\t  general surcharge.”<\/p><\/blockquote>\n
     Accordingly, the Board by its letter dated February 1,
\n652<\/span>
\n1971 enclosed  a bill for the billing month January 1971 for
\na sum  of Rs.12,18,740.60p.  at the  normal  tariff  with  a
\nrebate\t of    Rs.50,780.65p.\twhich\t worked\t   out\t  to
\nRs.11,67,959.95p. It  was stated that the rate of supply had
\nbeen reviewed  by the  Board under  cl.18 of  the  agreement
\nw.e.f. January\t1, 1971\t and  the  rate\t charged  was  under
\nSchedule  HS\/LP\/HT-1  applicable  to  all  large  industrial
\nconsumers. We  are informed  that this\tworks out to 7.67 p.
\nper unit  exclusive of\tthe general  surcharge of 15% and to
\n8.73p. inclusive  thereof and  this more or less represented
\nthe actual cost of generation.\n<\/p>\n
     On a  petition filed by the appellants under Art.226 of
\nthe Constitution assailing the validity of the demand raised
\nby the\tBoard by  its letter  dated February 1, 1971 and the
\nenclosed bill  for Rs.11,67,959.95p.  on the ground that the
\nBoard was  not entitled\t to revise the tariffs applicable to
\nthem under  cl.18 as  from January 1, 1971, J.P. Jain, J. by
\nhis order  dated April\t13, 1973  quashed the  impugned bill
\nissued by  the Board. He repelled the construction sought to
\nbe placed  by the  appellants on  the terms  of cl.18 of the
\nagreement and  held that  the Board  was entitled  under the
\nfirst part  of cl.18  to review\t the rate  of supply  ‘every
\nfifth year  starting from  the first date of supply’, but in
\nview of\t the restrictive clause contained in the second part
\nof cl.18 it was impermissible for the Board to make any such
\nupward revision\t in the rate of supply till January 1, 1971.
\nHe further  rejected the  contention of\t the appellants that
\nthe Board was not competent to review the tariff under cl.18
\nprior to  March 1,  1973. He  also held that it was not open
\nfor them  to contend  that the\tcost of\t generation had\t not
\nvaried by  25% or  more, they  having by  their letter dated
\nJanuary 18,  1971 addressed to the Board declined to go into
\nthe question of cost of generation as on the date last fixed
\nand at\tthe relevant  time i.e.\t in the\t year 1969-70 on the
\npretext that they were advised that the rate revision was in
\nno case\t due till March 1, 1973. The learned Judge next held
\nthat in\t the circumstances  he would  infer that the rise in
\nthe cost  of generation was at least 25% and accordingly the
\nBoard was  entitled to\trevise the  rate of supply by 25% of
\nthe rate  specified in\tcl.17 upon the basis that the upward
\nrevision in  the rate  of supply  under\t cl.18\tmust  be  in
\nproportion to,\tor correlated  with, the  actual rise in the
\ncost of\t generation. In\t that view,  he held  that the Board
\ncould not unilaterally impose the normal tariff in disregard
\nof the agreement, and added :\n<\/p>\n
653<\/span><\/p>\n
\t  “Sub-s.(3) of\t s.49 of  the Electric\tSupply\tAct,
\n\t  1948 clearly\tempowers the  Board to fix different
\n\t  tariffs if  it considers it necessary or expedient
\n\t  for the  supply of electricity to any non-licensee
\n\t  having regard\t to the geographical position of the
\n\t  area, the nature of the supply is required and any
\n\t  other relevant  factor. The  petitioner company is
\n\t  admittedly the  biggest consumer  in the State and
\n\t  the Board  at one  time under the agreement agreed
\n\t  to give  it an  exceptional rate.  Sub-s.(3) is an
\n\t  exception to\tsub-s.(1) which\t lays down  that the
\n\t  Board shall  frame uniform tariff. Sub-s.(4) again
\n\t  prescribes a\tlimitation  to\tsub-s.(3)  that\t the
\n\t  Board shall  not give undue preference. It has not
\n\t  been the  case of  the Board that by executing the
\n\t  agreement any\t undue preference  was shown  to the
\n\t  petitioner company.”\n<\/p><\/blockquote>\n
In conclusion,\tthe learned  Judge held\t that if  the  Board
\nclaimed a  further rise, it would have to establish that the
\nrise in\t the cost of generation was more than 25% and it had
\nto for\tthat purpose  get the  percentage  in  the  cost  of
\ngeneration determined either by mutual dialogue or reference
\nto arbitration.\n<\/p>\n
\t  Promulgation of the Electricity
\n\t  (Supply) (Rajasthan Amendment)
\n\t  Ordinance, 1976 :\n<\/p>\n
\t  Introduction of Sections 49A
\n\t  And 49B into the Act.\n<\/p>\n
     Both the  appellants and  the Board  preferred appeals.
\nWhile the  aforesaid appeals were pending in the High Court,
\non February  7, 1976  the Governor  of Rajasthan promulgated
\nthe Electricity\t (Supply) (Rajasthan  Amendment)  Ordinance,
\n1976 by\t which new  ss.49A and\t49B were introduced into the
\nAct with  retrospective effect\tto overcome  the  difficulty
\ncreated by  the judgment of the High Court in this case, and
\nmore particularly  by the  judgment of\tthis Court in Indian
\nAluminium Company  v.Kerala State Electricity Board [1976] 1
\nS.C.R. 70.  By the use of a non-obstante clause in sub-s.(1)
\nof s.49A  the Legislature  made it  lawful for\tthe Board to
\nrevise, from  time to time, the tariffs fixed for the supply
\nof electricity to persons other
\n654<\/span>
\nthan licensees\tand to frame uniform tariffs for the purpose
\nof such supply. Sub-s. (2) thereof provided that in revising
\nor framing tariffs under sub-s.(1) the Board shall be guided
\nby the principles set out in s.59 and as respects any period
\ncommencing on  and from\t September 16, 1966 i.e. the date on
\nwhich the new s.49 of the Act was brought into force, by the
\nprovisions laid\t down in  sub-ss.(2), (3)  and (4)  of s.49A
\nnotwithstanding anything  contained in\tthe Act\t or  in\t any
\nagreement, undertaking, commitment or concession made before
\nthe first  day of April 1964, i.e. the date when the uniform
\ntariffs were  first  framed  by\t the  Board  by\t its  tariff
\nnotification dated  March 18,  1964.  Sub-s.  (3)  of  s.49A
\nprovides that all such agreements, undertakings, commitments
\nor concessions\tas are\treferred to  in sub-s.\t(1),  shall,
\ninsofar as they are inconsistent with the provisions of sub-
\nss.(1) and  (2) and  to the  extent of\tthe tariffs fixed or
\nprovisions made therein for such fixation, be void and shall
\nbe deemed  always to  have been\t void. The agreement between
\nthe parties  thus had the effect of nullifying the agreement
\nbetween the  parties entered  into by  the  Board  with\t the
\nappellants  under   s.49  of  the  Act\tfor  the  supply  of
\nelectricity at\ta concessional\trate  for  their  industrial
\nundertaking. Similarly,\t by the use of a non obstante clause
\ns.49B provided\tthat notwithstanding  anything contained  in
\nthe Act\t or in\tany agreement,\tundertaking or concession as
\nare referred  to in  sub-s.(1) of s.49A, any amount realized
\nor demand  made or  created by\tthe Board  or the Government
\netc. according\tto the uniform tariffs in force from time to
\ntime from or against any person claiming any special tariffs
\nunder any  such agreement,  undertaking or  concession\tmade
\nbefore February\t 7, 1976,  the date  of promulgation  of the
\nOrdinance, shall  be deemed  to have  been validly realized,
\nmade or\t created under\tthe Act as amended by the Ordinance.
\nIt is necessary to reproduce s.49A in its entirety and s.49B
\ninsofar as relevant, which read:\n<\/p>\n
\t  “49A. Power of the Board to revise certain tariffs
\n\t  :-\n<\/p><\/blockquote>\n
\t  (1) Notwithstanding anything contained in this Act
\n\t  or in\t any agreement,\t undertaking, commitment  or
\n\t  concessions made,  before the\t first day of April,
\n\t  1964 by  the Rajasthan  State Electricity Board or
\n\t  the Government of Rajasthan or by the ruler or
\n655<\/span>
\n\t  Government of\t any covenanting State of Rajasthan,
\n\t  or in any judgment or order of any court, it shall
\n\t  be lawful  for the said Board to revise, from time
\n\t  to time,  the tariffs\t fixed\tfor  the  supply  of
\n\t  electricity to persons other than licensees and to
\n\t  frame uniform\t tariffs for  the  purpose  of\tsuch
\n\t  supply.\n<\/p><\/blockquote>\n
\t  (2) In  revising the\ttariffs or  framing  uniform
\n\t  tariffs under\t sub-section  (1),  the\t said  Board
\n\t  shall be  guided by  the  principles\tset  out  in
\n\t  section 59  and as  respects any period commencing
\n\t  on and  from the  16th day  of September, 1966, by
\n\t  the principles  laid down in sub-sections (2), (3)
\n\t  and (4) of section 49.\n<\/p><\/blockquote>\n
\t  (3) All such agreements, undertakings, commitments
\n\t  or concessions  as are  referred to in sub-section
\n\t  (1), shall,  in so  far as  they are\tinconsistent
\n\t  with the  provisions of  sub-sections (1)  and (2)
\n\t  and  to   the\t extent\t of  the  tariffs  fixed  or
\n\t  provisions made therein for such fixation, be void
\n\t  and shall be deemed always to have been void.
\n\t  49B. Validation of certain tariffs etc. –
\n\t  Notwithstanding anything  contained in this Act or
\n\t  in  any   agreement,\tundertaking   or  concession
\n\t  referred to  in sub-section  (1) of secton 49A, or
\n\t  in any judgment or order of any Court –\n<\/p><\/blockquote>\n
\t  (a)  any   amount  realized,\tor  demand  made  or
\n\t  created, by the Rajasthan State Electricity Board,
\n\t  or the  Government of\t Rajasthan or  the ruler  or
\n\t  Government of\t any covenanting State of Rajasthan,
\n\t  according to\tthe uniform  tariffs in\t force\tfrom
\n\t  time to  time, from or against any person claiming
\n\t  any special  tariffs\tunder  any  such  agreement,
\n\t  undertaking or  concession before the publications
\n\t  in the  official Gazette of the Electricity Supply
\n\t  (Rajasthan Amendment)\t Ordinance, 1976,  shall  be
\n\t  deemed to  have been\tvalidly\t realised,  made  or
\n\t  created under\t this Act  as amended  by  the\tsaid
\n\t  Ordinance.”<\/p><\/blockquote>\n
656<\/span><\/p>\n
     Immediately thereafter  on March  12,  1976  the  Board
\nfurnished the  appellants with\ta bill\tfor  payment  of  an
\namount\tof   Rs.21,35,506.72p.\tfor  the  billing  month  of
\nFebruary 1976 at uniform rate, under Schedule LP\/HT-1 framed
\nby the\tBoard’s\t tariff\t notification  dated  May  28,\t1974
\ntogether with the general surcharge of 15%.\n<\/p>\n
     The appellants  were therefore  constrained to move the
\nHigh Court under Art.226 of the Constitution challenging the
\nconstitutional validity\t of ss.49A  and 49B  of the  Act, as
\nintroduced by  the aforesaid  Ordinance as also the impugned
\nbill sent  by the  Board for  the billing  month of February
\n1976 for  Rs.21,35,506.72p. On\tNovember 4,  1976 the  Board
\nissued another\tnotification under  s.49(1) framing  revised
\nuniform tariffs\t at different  rates for  different class of
\nconsumers which\t became applicable from the billing month of
\nDecember  1976.\t  But  unlike\tthe  earlier   notifications
\nprescribing uniform  tariffs under  s.49(1) of the Act, this
\nnotification  did   not\t contain   any\texclusionary  clause
\ngranting exemption for specially negotiated loads. While the
\nmatters were  pending before  the High Court, on November 3,
\n1977 the  Board furnished  another bill\t to  the  appellants
\nclaiming arrears  amounting to\tRs.5.57 crores on account of
\nthe difference\tbetween the  normal rate  of tariff  and the
\nagreed rate  for the supply of electrical energy to them for
\nthe period from January 1, 1971 to January 31, 1976.\n<\/p>\n
     Again, the\t appellants filed  another petition  in\t the
\nHigh Court  under Art.226  of the  Constitution\t questioning
\ntheir liability\t to pay the said amounts. Both the aforesaid
\nwrit petitions,\t namely, the  one challenging  the vires  of
\nss.49A and  49B of  the Act  as well  as the legality of the
\nimpugned bill  sent by\tthe Board claiming Rs.21,35,506.72p.
\nfor the\t billing month\tof  February  1976,  and  the  other
\nquestioning the\t legality and  propriety of  the bill  dated
\nNovember 3,  1977 raising  a demand  for payment  of Rs.5.57
\ncrores on  account of  the difference  between\tthe  uniform
\nrates of  tariffs and  the agreed  rate of  supply  for\t the
\nperiod from  January  1,  1971\tto  January  31,  1976\twere
\nreferred to a Division Bench.\n<\/p>\n
     By the judgment under appeal, a Division Bench speaking
\nthrough Fudal, J. allowed the appeal preferred by the Board
\n657<\/span>
\nand dismissed  that of\tthe appellants\tas well\t as the writ
\npetitions filed\t by them.  The learned\tJudge disallowed the
\ncontention raised  on behalf  of the  appellants as  to\t the
\nconstitutional validity\t of ss.49A  and 49B  of the  Act  as
\nintroduced by the Electricity (Supply) (Rajasthan Amendment)
\nAct, 1976  and upheld  the right  of the Board to revise the
\nrate of supply as agreed upon for the period commencing from
\nJanuary 1, 1971 onwards and enforced a demand for payment of
\nthe difference\tbetween the  uniform tariffs  as fixed\tfrom
\ntime to\t time and  the agreed  rate. Learned counsel for the
\nparties have  placed no\t reliance on  the  judgment  of\t the
\nDivision Bench\twhich, according to them, does not deal with
\nthe points raised.\n<\/p>\n
\t     Extent of the Appellants liability
\n     We find  it convenient  at this  stage to\tindicate the
\nextent\tof  the\t appellants’  liability\t involved  in  these
\nappeals. From the abstract statement filed by the Board, the
\nnet amount  due with  interest as  per the  uniform  tariffs
\nunder Schedule\tHS\/LP\/HT-1  framed  by\tthe  Board’s  tariff
\nnotification dated  April  26,\t1969  for  the\tperiod\tfrom
\nJanuary 1,  1971 to  June 30,  1974 and\t the uniform  tariff
\nSchedule LP\/HT-1  framed by  the Board’s tariff notification
\ndated May  28, 1974  for the  period from  July 1,  1974  to
\nFebruary 6,  1976 together with the general surcharge of 15%
\non the\ttariff from  September 16,  1966  and  the  interest
\nthereon comes  to Rs.14,50,99,654-47p. On the other hand, if
\nthe appellants\tcontention regarding the in applicability of
\nthe uniform  tariffs under  Schedule LP\/HT-1 of 1974 were to
\nprevail on  the ground\tthat the Board had failed to raise a
\ndemand for payment of electricity charges at that rate prior
\nto February  7,\t 1976,\tthe  date  of  promulgation  of\t the
\nOrdinance, the\tnet amount due on account of this difference
\nfor  the   aforesaid  period  applying\tthe  uniform  tariff
\nSchedule HS\/LP\/HT-1  of 1969  comes to\tRs.12,10,51,510-46p.
\nThe  resultant\tsums  have  been  arrived  at  after  making
\nadjustment of  various payments\t made by the appellants from
\ntime to time towards the bills submitted by the Board as per
\nthe interim  orders passed  by the  High Court\tfrom time to
\ntime together with interest, as also under the interim order
\nof this\t Court dated  October 6, 1980 while granting special
\nleave and  stay of the operation of the judgment of the High
\nCourt. We  may state  that the figures given in the abstract
\nstatement filed by the
\n658<\/span>
\nBoard more  or less  correspond with  those in the statement
\nfiled by  the appellants.  The difference  between  the\t two
\namounts\t with\tinterest  thereon   at\t9%   works  out\t  to
\nRs.2,41,58,937. That  is the magnitude of the claim in these
\nappeals.\n<\/p>\n
     We had  the benefit  of  hearing  Shri  Shanti  Bhushan
\nappearing for the appellants and Dr. Y.S. Chitale, on behalf
\nof the\tBoard. At  the\tvery  outset  Shri  Shanti  Bhushan,
\nlearned counsel\t for the appellants with all fairness stated
\nthat he\t does not  challenge the  constitutional validity of
\nss.49A and 49B of the Act.\n<\/p>\n
\t\t The nature of controversy.\n<\/p>\n
     The controversy  in these\tappeals can  be viewed\tfrom
\nthree aspects.\tFirst rests  on the  interpretation  of\t the
\nterms of  the agreement\t between the  parties dated July 28,
\n1961 and  the various  clauses thereof, particularly clauses
\n18 and\t34(b) which both have a material bearing. The second
\non the\tconstruction of ss.49A and 49B of the Act, the scope
\nand  effect  of\t s.49A\twhich  by  the\tnon-obstante  clause
\nnullifies the  agreement for the supply of electrical energy
\nat a concessional rate to the appellants and makes it lawful
\nfor  the   Board  to   charge  the   uniform   tariff\twith
\nretrospective effect  from September  16, 1966 i.e. the date
\non which  the new  s.49\t was  introduced,  and\ts.49B  which
\nvalidates the  making  of  such\t demand\t with  retrospective
\neffect. As  also the  validity of the demands created by the
\nBoard by  its letter  dated February 1, 1971 for the billing
\nmonth January  1971 for\t Rs.11,67,959. 95p.  under  Schedule
\nHS\/LP\/HT-1 to  the Board’s  tariff notification\t dated April
\n26, 1969  applicable to\t all large industrial consumers, and
\nthe bill sent by the Board on March 12, 1976 for the billing
\nmonth February\t1976 for  payment of Rs.21,35,506-72p. under
\nSchedule LP\/HT-1  to the  Board’s tariff  notification dated
\nMay 28,\t 1974. The  third comprises  of\t various  subsidiary
\nissues as  to whether the Board is precluded by the doctrine
\nof promissory  estoppel from  raising these demands, as also
\nwhether such demands are violative of Arts. 14, 19(1)(f) and\n<\/p>\n
(g) and\t 31(2) of the Constitution. We shall deal with these
\ncontentions in seriatim.\n<\/p>\n
659<\/span><\/p>\n
     In order  to appreciate  the  issues  involved,  it  is
\nnecessary to  deal with\t the legislative changes. Under s.49
\nof the Act as it stood at the relevant time i.e. on July 28,
\n1961, the  date of  agreement, a general power was conferred
\non the\tBoard to  supply electricity  upon  such  terms\t and
\nconditions as  it may,\tfrom time to time, fix having regard
\nto the\tmatters referred  to in that section and the proviso
\nthereto directed  the Board  not to show undue preference to
\nany person  in fixing  the tariffs.  The section  was in the
\nfollowing terms :\n<\/p>\n
\t  “49. Provision  for the sale of electricity by the
\n\t  Board to persons other than licensees :
\n\t  Subject to  the provisions  of this Act and of any
\n\t  regulations made  in this  behalf, the  Board\t may
\n\t  supply electricity  to  any  person  not  being  a
\n\t  licensee upon\t such terms  and conditions  as\t the
\n\t  Board may  from time\tto time fix having regard to
\n\t  the nature and geographical position of the supply
\n\t  and the purposes for which it is required :
\n\t  Provided  that   in  fixing  any  such  terms\t and
\n\t  conditions  the   Board  shall   not\tshow   undue
\n\t  preference to any person.”<\/p><\/blockquote>\n
     It appears\t that a\t view was  taken by  the Bombay High
\nCourt in  a case relating to the Kalyan Borough Municipality
\nthat s.49  of the  Act as  it then stood, did not permit the
\nBoard to  frame uniform\t tariffs for  consumers\t in  compact
\nareas as well as consumers in sparse areas, so as to require
\nthe former  to pay a part of the cost involved in the supply
\nof electricity\tto the\tlatter i.e.  so as  to cast a higher
\nburden on  the consumer in a compact area, where the cost of
\nsupply was  less. An  appeal was  brought by the Maharashtra
\nElectricity Board  to this Court. During the pendency of the
\nappeal,\t Parliament   enacted\tthe   Electricity   (Supply)
\nAmendment Act,\t1966 by which the Act was amended in various
\nparticulars. It\t is only  necessary to refer to two sections
\nof  the\t  Amendment  Act  viz.\tss.11  and  24.\t Section  11
\nsubstituted, with  retrospective effect,  new s.  49 in\t the
\nplace of  old s.49,  and s.24  of the amending Act validated
\nthe imposition\tand collection\tof charges for the supply of
\nelectricity, preventing\t any person  from claiming refund of
\nany amount paid by him in excess of
\n660<\/span>
\nthe amount  due under  the Act. The new s.49 of the Act runs
\nas follows :\n<\/p>\n
\t  “49. Provision  for the sale of electricity by the
\n\t  Board to persons other than Licensees :
\n\t  (1) Subject  to the  provisions of this Act and of
\n\t  regulations, if  any, made  in  this\tbehalf,\t the
\n\t  Board may  supply electricity\t to any\t person\t not
\n\t  being a licensee upon such terms and conditions as
\n\t  the Board  thinks fit\t and may for the purposes of
\n\t  such supply frame uniform tariffs.\n<\/p><\/blockquote>\n
\t  (2) In fixing the uniform tariffs, the Board shall
\n\t  have\tregard\tto  all\t or  any  of  the  following
\n\t  factors, namely :-\n<\/p><\/blockquote>\n
\t  (a) the  nature of the supply and the purposes for
\n\t  which it is required;\n<\/p><\/blockquote>\n
\t  (b) the  coordinated development of the supply and
\n\t  distribution of  electricity within  the State  in
\n\t  the most  efficient and  economical  manner,\twith
\n\t  particular reference\tto such development in areas
\n\t  not for the time being served or adequately served
\n\t  by the licensee;\n<\/p><\/blockquote>\n
\t  (c) the  extension and  cheapening of\t supplies of
\n\t  electricity to sparsely developed areas.
\n\t  (3) Nothing  in the  foregoing provisions  of this
\n\t  section shall derogate from the power of Board, if
\n\t  it considers\tit necessary  or  expedient  to\t fix
\n\t  different tariffs for the supply of electricity to
\n\t  any person  not being a licensee, having regard to
\n\t  the geographical  position of any area, the nature
\n\t  of the  supply and  purposes for  which supply  is
\n\t  required and any other relevant factors.
\n\t  (4) In  fixing the tariff and terms and conditions
\n\t  for the supply of electricity, the Board shall not
\n\t  show undue preference to any person.”<\/p><\/blockquote>\n
661<\/span><\/p>\n
     In\t Maharashtra   State  Electricity  Board  v.  Kalyan
\nBorough Municipality  & Anr.<\/a> [1968] 3 S.C.R. 137, this Court
\nreversed the  decision of  the Bombay  High Court and it was
\nheld that  the levying\tof uniform  tariff on  the consumers
\nirrespective of\t whether they  were in\tsparse areas  or  in
\ncompact areas, which was not directly related to the cost of
\nsupply, did  not amount\t to a  colourable exercise of taxing
\npower by Parliament.\n<\/p>\n
     The   Electricity\t  (Supply)   (Rajasthan\t  Amendment)
\nOrdinance was  first promulgated  on February 7, 1976, later
\nreplaced by  the Electricity  (Supply) (Rajasthan Amendment)
\nAct, 1976  introducing ss.49A and 49B to the Act, to obviate
\nthe difficulty\tcreated by the judgment of the High Court in
\nthis case  as also by the decision of this Court in the case
\nof the\tIndian Aluminium Company v. Kerala State Electricity
\nBoard<\/a> [1976]  1 S.C.R. 70. In the Indian Aluminium Company’s
\ncase, the  Court speaking  through Bhagwati,  J.  held\tthat
\nagreements for\tsupply of electricity to the consumers for a
\nspecified period  at a\tspecial tariff\tare  the  result  of
\nnegotiations between the Board and the consumers and hence a
\nmatter of  agreement between  them. Such  agreements for the
\nsupply of  electricity to  the consumers  must therefore  be
\nregarded as  having  been  entered  into  by  the  Board  in
\nexercise of the statutory powers conferred under s.49(3) and
\nthus there  could be  no question  of such stipulation being
\nvoid as\t fettering the\texercise of  the statutory powers of
\nthe Board  under s.49(1). The learned Judge observed that in
\nfact such  agreements under s.49(3) represented the exercise
\nof the statutory powers and the Board could not unilaterally
\nframe uniform tariffs under s.49(1) of the Act in derogation
\nof such\t agreements entered  into under\t s.49(3). Upon\tthat
\nbasis, the learned Judge further observed that the Board was
\nnot competent  to enhance  the charges\tunder the  guise  of
\nfixing uniform tariffs because, sub-s.(1) of s.49 is subject
\nto sub-s.  (3); and  once special  tariffs were\t fixed under
\nsub-s.(3) there\t could be  no  question\t of  fixing  uniform
\ntariffs applicable to such consumers under sub-s.(1). Such a
\npower could not be exercised in violation of the stipulation
\nfixing special tariffs under sub-s.(3).\n<\/p>\n
     According to  s.59 of the Act, the Board is required to
\ncarry on  its operations  without incurring any loss. In the
\nIndian Aluminium  Company’s case, however, the learned Judge
\nrepelled the  contention of  the Board\tthat  since  it\t was
\noperat-\n<\/p>\n
662<\/span><\/p>\n
     ing at  a loss  it was bound under s.59 to readjust its
\ncharges to  avoid the  loss. It\t was said that s.59 does not
\ngive a charter to the Board to enhance its charges in breach
\nof a  contractual obligation. The view taken by the Court in
\nthat case would have had a disasterous effect in some of the
\nStates if  new ss.49A  and 49B\twere not  introduced by\t the
\nOrdinance. In  the State  of  Rajasthan,  not  only  special
\nagreements or concessions in tariffs were made several years
\nago by\tthe covenanting States, but also by the old State of
\nRajasthan after its formation as a Part B State; and if they
\nwere allowed  to continue, they would not cover the existing
\ncost of\t generation with  the result that the burden of this
\ncost would  have to  be passed\ton to other consumers who do
\nnot,  in  any  way,  benefit  from  such  special  contracts
\nproviding  concessional\t  tariffs.  It\t would\t have\tbeen
\nmanifestly  unjust  and\t discriminatory\t that  one  consumer
\nshould benefit\tat the\tcost of\t other consumers  or general
\ntax-payers. It\twas therefore thought expedient to amend the
\nAct with  retrospective effect\tso as to enable the Board to
\nrevise the  contractual rates  in order to cover the cost of
\ngeneration from\t time to  time, nothwithstanding any special
\ncontract, undertaking  or concession  to the  contrary.\t See
\nStatement of  Objects & Reasons for the Electricity (Supply)
\n(Rajasthan Amendment) Bill, 1976.\n<\/p>\n
\t  Purport and effect of ss. 49A and 49B of the Act.
\n     It is a well-known principle that for the validation of
\nan invalid  act done  under an Act, it is essential that the
\nsubsequent validating  statute must  confer  power  for\t the
\ndoing of the Act at the time it was done, and that the power
\nshould\talso   be  exercised.\tIn  the\t  absence  of\tsuch
\nauthorisation for the doing of the Act, the validation would
\nbe futile as that would only amount to attempt to exercise a
\npower  which  exhypothesi  did\tnot  exist.  This  has\tbeen
\nachieved by  the Legislature  by enacting  s.49A of the Act.
\nThe purport and effect of s.49A of the Act is to nullify the
\njudgment  of  the  High\t Court\tand  more  particularly\t the
\ndecision of  this Court\t in Indian  Aluminium Company’s case
\nlaying down  that sub-s.(1) of s.49 was subject to sub-s.(3)
\nand therefore the Board could not unilaterally frame uniform
\ntariffs under s.49(1) with respect to the class of consumers
\nwho were  entitled to the supply of electricity at a special
\nrate by\t virtue of agreements entered into by the Board with
\nthem under sub-s.(3) of s.49. By the
\n663<\/span>
\nuse of\tthe non-obstante clause in s.49A(1), the Legislature
\nhas removed  the hurdle\t placed on the Board against framing
\nof uniform  tariffs with  respect to such class of consumers
\nand by\tthe retrospective  conferment of a prospective power
\nempowered the  Board to\t raise a  demand for  payment of the
\ndifference between the uniform tariffs in force from time to
\ntime and the special rates as respects any period commencing
\non and\tfrom September\t16, 1966  i.e. the date when the new
\ns.49 of\t the Act  was  brought\tinto  force.  On  its  plain
\nconstruction, s.49A makes it lawful for the Board to revise,
\nfrom time  to time,  the tariffs  fixed for  the  supply  of
\nelectricity to\tall such consumers who were enjoying special
\nbenefits by  virtue of\tthe agreements entered into with the
\nBoard under  s.49(3) of\t the Act,  and also to frame uniform
\ntariffs for  the purpose  of  such  supply,  notwithstanding
\nanything contained in any agreement, undertaking, commitment
\nor concession  to the  contrary made by the Board before the
\nfirst day  of April  1964. The non-obstante clause contained
\nin  s.49(1)   has  clearly  the\t effect\t of  overriding\t the
\nagreement between the parties.\n<\/p>\n
     Section 49B  of the  Act  by  the\tnon-obstante  clause
\nprovides that  notwithstanding anything contained in the Act
\nor in  any agreement,  undertaking or concession referred to
\nin sub-s.(1)  of s.49A,\t or in\tany judgment or order of any
\nCourt, any amount realized, or demand made or created by the
\nBoard, according  to the  uniform tariffs in force from time
\nto time,  from or  against any\tperson claiming\t any special
\ntariffs\t  under\t  any\tsuch   agreement,   undertaking\t  or
\nconcessions, before  the publication in the official Gazette
\nof the\tOrdinance i.e.\tbefore February\t 7, 1976,  shall  be
\ndeemed to  have been validly realized, made or created under
\nthe Act,  as amended by the Ordinance. A combined reading of
\nss.49A and  49B seeks to achieve a two-fold object. S.49B in
\nterms validates the demands raised by the Board by virtue of
\nits powers  under s.49A\t against the appellants prior to the
\npromulgation of\t the  Ordinance\t on  February  7,  1976\t for
\npayment of  the difference  between the\t uniform tariffs  in
\nforce from  time to  time and  the  special  rates  as\tfrom
\nJanuary 1,  1971. The  other legal  consequence is  that the
\nappellants who\twere entitled  to supply of electricity at a
\nconcessional rate  under the  agreement between the parties,
\nbecame subject\tto payment  of uniform tariffs in force from
\ntime to\t time and  it became lawful for the Board to raise a
\ndemand upon that basis subsequent to the promulgation
\n664<\/span>
\nof the\tOrdinance and  also to\trevise the tariffs fixed for
\nthe supply  of electricity  to them.  The appellants  do not
\ndispute their liability to pay for the supply of electricity
\naccording  to  the  uniform  tariffs  fixed  for  all  large
\nindustrial consumers  as  from\tFebruary  7,  1976  and\t the
\ndispute only  relates to  the power  of the Board to raise a
\ndemand for payment of the difference for the past period.
\n\t\tContentions of the parties.\n<\/p>\n
     It is  in this  setting and the factual background that
\nwe are required to consider the submissions addressed to us.
\nAs already  stated, the\t controversy in these appeals can be
\nviewed from three aspects, namely, (i) Interpretation of the
\nterms of  the agreement\t between the  parties dated July 28,
\n1961,  particularly   cls.  18\t and  34(b)   thereof;\t(ii)
\nInterpretation of  ss.49A and  49B of  the  Act;  and  (iii)
\nWhether the  demands raised  by the Board for payment of the
\ndifference by  the impugned bills dated February 1, 1971 and
\nMarch 12,  1976 which involved the imposition of a liability
\non the\tappellants by  the  retrospective  conferment  of  a
\nprospective power  under s.49A\tand the\t validation of\tsuch
\npower under  s.49B  was\t wholly\t arbitrary  and\t irrational,
\nconfiscatory  in  nature  and  amounted\t to  deprivation  of
\nproperty  without  payment  of\tcompensation  and  was\tthus
\nviolative of  Arts.14, 19(1)(f)\t and (g)  and 31(2)  of\t the
\nConstitution. It  would be convenient to deal with the first
\nand third aspects together.\n<\/p>\n
\t  Interpretation of the agreement
\n\t  between the parties :\n<\/p>\n
\t  Clause 18 of the agreement.\n<\/p>\n
     As to  the construction  of the  terms of the agreement
\nbetween the  parties we\t may  first  deal  with\t cl.18.\t The
\nappellant’s submission is that on a true construction of the
\nagreement, cl.18  is nothing  but an  escalation clause\t and
\ntherefore the  Board was  not entitled to unilaterally frame
\nuniform tariffs as due and payable by the appellants but the
\nrate of\t increase must\tbe in  proportion to,  or correlated
\nwith, the  actual rise in the cost of generation. It is said
\nthat in every case, the function of the Court is to find the
\ncontractual intention  by placing  a construction of what is
\njust and reasonable. The agreement was for the sale and
\n665<\/span>
\npurchase of electricity and the prices had been specifically
\nstipulated by  the parties  in cl.17.  A perusal of cl.17 of
\nthe agreement  which fixes the rate of supply at the rate of
\n201.04\/12 =  Rs. 16.753 per KVA of the demand assessed shows
\nthat the  rate had been worked out by the parties jointly on
\nthe basis  of some calculation with reference to the cost of
\ngeneration. The\t only reasonable construction should be that
\nclear  co-relation   between  the  cost\t of  generation\t and
\nincrease in  the rate  of supply had been stipulated, as was
\nthe view  expressed by Jain, J. On re-determination the rate
\nof supply  could be  increased only  to the  extent that the
\ncost of\t generation had\t gone up  and not  to any  arbitrary
\nextent. C1.18  is not  susceptible of  a construction  which
\ncould make  the price  of the  goods totally  uncertain\t and
\ndependent on  the arbitrary  volition of  one party  to\t the
\ncontract. In this connection, the appellants placed reliance
\non the following passages from Anson’s Law of Contract, 25th
\nEdn., p.61:\n<\/p>\n
\t  “On the  other hand,\ta transaction which at first
\n\t  sight seems  to have\tsome essential\tterm of\t the
\n\t  bargain undetermined\tmay, by\t implication, if not
\n\t  expressly, provide  some method  of  determination
\n\t  other than a future agreement between the parties.
\n\t  In that event, since it is a maxim of the law that
\n\t  id certum  estquod certum reddi potest, there will
\n\t  be a\tgood contract. In every case the function of
\n\t  the Court  is to  put a  fair construction on what
\n\t  the parties have said and done, though the task is
\n\t  often a  difficult  one  when\t an  instrument\t has
\n\t  attempted  to\t record\t some  complicated  business
\n\t  bargain.  The\t  parties  making   such  a  bargain
\n\t  naturally assume  that it  will be carried out and
\n\t  therefore  do\t not  always  express  it  with\t the
\n\t  exactness  of\t  terminology  that  lawyers,  whose
\n\t  profession   leads   them   to   contemplate\t the
\n\t  possibility  of   future  disputes,\tmight\thave
\n\t  employed.”<\/p><\/blockquote>\n
     It is  accordingly urged  that cl.18  was an escalation
\nclause and  therefore the-power\t of the\t Board to revise the
\nrate of\t supply arises\tas and\twhen the  cost of generation
\ngoes up, and therefore the rate must be in proportion to, or
\ncorrelated with,  the actual rise in the cost of generation.
\nLearned
\n666<\/span>
\ncounsel for the appellants tried to draw sustenance from the
\nfollowing extract from the Statement of Objects & Reasons of
\nthe Rajasthan Electricity (Supply) Amendment Bill, 1976 :\n<\/p>\n
\t  “Such special\t agreement or  concessions in tariff
\n\t  were made  several years ago by covenanting States
\n\t  and if  they were  allowed to continue, they would
\n\t  not cover  the existing  cost of  generation, with
\n\t  the result that the burden of this cost would have
\n\t  to be passed over to other consumers……. ”
\n\t  “It was, therefore, expedient to amend the Act….
\n\t  so  as   to  enable\tthe  Board   to\t revise\t the
\n\t  contractual rates  in order  to cover\t the  rising
\n\t  cost\t of    generation   from   time\t  to   time,
\n\t  notwithstanding any  special contract, undertaking
\n\t  or concession to the contrary.”<\/p><\/blockquote>\n
     We find  it difficult  to subscribe  to the  contention
\nadvanced by learned counsel for the appellants that c1.18 is
\nan escalation  clause and  therefore the  Board’s  power  to
\nrevise the  rate of  supply must be restricted to the actual
\nrise in\t the component\tof cost\t of generation.\t As  rightly
\npointed out  by learned\t counsel appearing  on behalf of the
\nBoard, an  ‘escalation clause’\taccording  to  its  accepted
\nlegal connotation  means a  clause which  takes care  of the
\nrise and  fall of prices in the market, whereas the right to
\nreview confers the power to revise the rate of supply. It is
\nsubmitted that\tc1.18 in  terms provides  that the  rate  of
\nsupply as determined in c1.17 shall be ‘reviewed every fifth
\nyear starting  from the\t date of  first\t supply’.  The\tword
\n‘review’ in c1.18 necessarily implies the power of the Board
\nto have a second look and to so adjust from time to time its
\ncharges as  to carry on its operations under the Act without
\nsustaining a loss. The parties clearly contemplated by c1.18
\nfor a  fresh revision  of the  rate once  in a block of five
\nyears. The  only fetter\t on the\t power\tof  review  is\tthat
\ncontained in the proviso of c1.18. The limitations placed on
\nsuch power  are two-fold  in nature.  The first\t of these is
\nthat such  power of  review  shall  be\texercisable  if\t the
\ncomponent of cost of generation out of the total cost varies
\nby 25%\tor more.  The second is that such power shall not be
\nexercisable by\tthe Board  till\t January  1,  1971.  If\t the
\nparties intended  c1.18 to be in the nature of an escalation
\nclause,
\n667<\/span>
\nthe language  would have  been different. In that event, the
\nrate of\t supply being  linked with  the component of cost of
\ngeneration  would   keep  on  progressively  increasing.  In
\nsupport of  his submissions,  learned counsel  for the Board
\nreferred  to  us  Butterworths’\t Encyclopaedia\tof  Forms  &
\nPrecedents,  4th  edn.,Vol.3,  p.148,  Hudson’s\t Building  &
\nEngineering  Contracts,\t  10th\tedn.,\tKeating’s   Building
\nContracts, 4th\tedn., p.498  and Black’s Law Dictionary, 4th
\nedn., p.639  giving different  forms of\t ‘rise and  fall’ or
\nescalator clause  in building  or commercial  contracts, and
\nthe accepted  meaning thereof.\tThe  expression\t ‘escalation
\nclause’ has  a well  defined meaning.  This is\tbrought\t out
\nsuccinctly in  American\t Jurisprudence,\t 2nd  edn.,  vol.17,
\np.786 in these terms :\n<\/p>\n
\t  “In some  contracts, there  is what is known as an
\n\t  escalator or\tfluctuation clause, which is defined
\n\t  as one  in which  the contract  fixes a base price
\n\t  but contains\ta provision  that in  the  event  of
\n\t  specified cost increases, the seller or contractor
\n\t  may raise the price upto a fixed percentage of the
\n\t  base, and  such escalator  clauses  are  generally
\n\t  held to be sufficiently definite for enforcement.”<\/p><\/blockquote>\n
     In Corpus Juris Secundum, vol.17, p.806, the law on the
\nsubject is stated thus :\n<\/p>\n
\t  “(A) contract\t giving one of the parties the right
\n\t  to vary the price is not unenforceable for lack of
\n\t  mutuality where the right is not an unlimited one,
\n\t  as where  its exercise  is subject  to express  or
\n\t  implied limitation,  such as\tthat  the  variation
\n\t  must\tbe   in\t proportion   to  some\t objectively
\n\t  determined base,  or must  be reasonable; and this
\n\t  rule has  been applied to contracts containing so-
\n\t  called “escalator” clauses.”<\/p><\/blockquote>\n
     These considerations  however do  not apply  as on\t its
\ntrue  construction.  Cl.18  cannot  be\tregarded  to  be  an
\nescalation clause.  There is  therefore\t no  basis  for\t the
\nsubmission that\t there could  only be proportionate increase
\nkeeping in  view the  increase in  the component  of cost of
\ngeneration.\n<\/p>\n
\t  The effect of cl.34(b) of the Agreement
\n668<\/span>
\n     Turning next  to cl.34(b), the rival contentions may be
\nset out.  The appellants’  contention is  that firstly,\t the
\nstipulation in\tcl.34(b) cannot be regarded as a contractual
\nstipulation at\tall and\t secondly, that\t in no case cl.34(b)
\ncan possibly  be made applicable to any purported alteration
\nof contracting parties’ rights for a past period by means of
\nretrospective legislation.  It was said that cl.34(b) cannot
\nbe construed  in a  manner favourable to the Board; all that
\nthe parties  contemplated was  that the\t mutual\t rights\t and
\nobligations would  be  subject\tto  future  legislations  on
\nsupply and  consumption of electricity but such legislations
\nnecessarily had to be valid legislations and if cl.34(b) was
\nto be  treated as  a contractual  stipulation providing that
\nthe rights  stipulated in  the agreement were subject to any
\nmodification by\t any legislation, valid or invalid, cl.34(b)
\nwill have  to be  struck down  as a totally uncertain clause
\nwhich cannot  find place  in any  contract and\tsuch clauses
\nhave been  described as\t meaningless terms in Anson’s Law of
\nContract, 25th edn., p.63 :\n<\/p>\n
\t  “Finally, we\tshould note  that  if  the  contract
\n\t  contains an  indefinite, but subsidiary provision,
\n\t  the courts  have felt\t at liberty to strike it out
\n\t  as being  without significance, and to give effect
\n\t  to  the   rest  of   the  contract   without\t the
\n\t  meaningless term.”<\/p><\/blockquote>\n
     The contention  to the  contrary on behalf of the Board
\nis that\t a plain  reading of  cl.34(b)\tmakes  the  contract
\nsubject to  any legislation.  The right\t which\tthe  parties
\nderived under  the agreement  for supply of electricity at a
\nconcessional rate  under  s.49\tof  the\t Act  was  therefore
\ndefeasible. That  being so, it would be as if ss.49A and 49B
\nof the\tAct had\t to be\tread into the contract and therefore
\nbecame a  contractual  term.  The  submission  is  that\t the
\nappellants  derived   a\t right\t to  get  electricity  at  a
\nconcessional rate  only for a limited period till January 1,
\n1971 and  thereafter the  Board derived\t the power to revise
\nthe rate  of supply  under cl.18.  It was  competent for the
\nLegislature to\tenact a\t law providing\tfor  application  of
\nuniform\t tariffs   notwithstanding  any\t  such\t commitment,
\nundertaking or\tconcession to  the contrary  made during any
\nperiod prior  to April\t1, 1964.  There is,  in our opinion,
\nconsiderable force  in the submissions advanced on behalf of
\nthe Board.\n<\/p>\n
669<\/span><\/p>\n
     It is not uncommon for statutory contracts to contain a
\nterm like  cl.34(b) which  makes the  contracts\t subject  to
\nfuture legislations.  Such a  clause can usually be found in
\nforest or  excise contracts  relating  to  the\tgrant  of  a
\nprivilege which\t subjects the  mutual rights and obligations
\nflowing from  such a  contract to be liable to be altered or
\nmodified by  subsequent legislations.  Although there was no
\nsuch term  in the  Indian Aluminium Company’s case, even so,
\nthe Court speaking through Bhagwati, J. observed :\n<\/p>\n
\t  “(A) case may conceivably arise where there may be
\n\t  an overriding\t statutory provision which expressly
\n\t  or by\t necessary implication authorizes the public
\n\t  authority to\tset  at\t naught,  in  certain  given
\n\t  circumstances,  a   stipulation  though   made  in
\n\t  exercise of a statutory power. Where there is such
\n\t  a  statutory\t provision,  the  stipulation  would
\n\t  certainly be binding…”<\/p><\/blockquote>\n
     On a  plain construction of the terms of the agreement,
\nthe appellants\twere  no  doubt\t guaranteed  the  supply  of
\nelectricity for\t a period  of 20  years but the right to get
\nthe supply at the concessional rate was subject to the power
\nof the\tBoard to  effect a  revision of\t the rate  of supply
\nevery fifth  year starting  from the  date of  first  supply
\nsubject to the only restriction that such revision could not
\nbe effected  before January  1, 1971. The Board’s contention
\nthat  the   right  of\tthe  appellants\t to  the  supply  of
\nelectricity at\ta  concessional\t rate  under  the  agreement
\nentered into  by the  Board with  them under s.49 of the Act
\nwas defeasible,\t is clearly  well-founded and  must be given
\neffect to.  It\tfollows\t that  the  rights  derived  by\t the
\nappellants  under     the   contract  were  subject  to\t the
\nstipulation contained  in cl.34(b)  which  made\t the  mutual
\nrights\tand  obligations  of  the  parties  subject  to\t any
\nlegislation  relating\tto   supply   and   consumption\t  of
\nelectricity enacted during the period of the agreement.\n<\/p>\n
     It was  rightly contended\ton behalf  of the Board that
\nwhile the Board under the agreement had undertaken to supply
\nthe appellants\t25MW power  for a  period of  20 years,\t the
\nconcessional rate  of supply  was assured  to them only till
\nJanuary 1, 1971 and could not be had for ever. The scheme of
\nthe Act\t is that  the Board  is required to function without
\nloss
\n670<\/span>
\nand to\tachieve the  said purpose,  the Board is vested with
\npower to  adjust its charges from time to time. There was no
\njustification for  the Board  to give preferential treatment
\nany longer  to the appellants who were bulk consumers beyond
\nJanuary 1,  1971  as  against  all  other  large  industrial
\nconsumers  who\twere  subjected\t to  uniform  tariffs  under
\nschedule HS\/LP\/HT-1  under the\tBoard’s tariff\tnotification
\ndated April  26, 1969.\tOnce it\t was found by the High Court
\nthat the  component of\tcost of\t generation out of the total
\ncost as\t on the date of Board’s tariff notification of April
\n26, 1969  had increased\t at least by 25%, the fetter on that
\npower was  removed and\tthe Board  was\tentitled  to  demand
\npayment according  to  the  uniform  tariff  under  schedule
\nHS\/LP\/HT-1 applicable  to all large industrial consumers but
\nfor the agreement.\n<\/p>\n
     Under the restrictive covenant contained in cl.18, such
\nrevision of  rate could\t not be\t effected by  the Board till
\nJanuary 1,  1971. Once\tthe period  was over,  the Board was
\nentitled to  have a  second look  and taking an overall view
\nwhen it\t found that  it was  no longer\tpossible  to  supply
\nelectricity at the concessional rate which had no reasonable
\nrelation to  the uniform  tariff under HS\/LP\/HT-1 applicable
\nto  all\t  large\t industrial  consumers,\t it  manifested\t its
\nintention to review the rate of supply from January 1, 1971.
\nThe appellants\tknew that  the review  of rate\twas  due  on
\nJanuary 1, 1971 as is clear from their letter dated December
\n5, 1970\t by which they wanted to know the extent of increase
\nand the\t basis therefor.  In response  thereto, the Board by
\nits letter dated December 22\/24, 1970 left them in no doubt.
\nIt was\tmade clear  to them  by the  Board that\t the uniform
\ntariff\tunder\tHS\/LP\/HT-1  framed  by\tthe  Board’s  tariff
\nnotification dated  April 26,  1969 would  be applicable  to
\nthem as\t to all\t other large industrial consumers. The Board
\nby its\tsubsequent letter  dated February  1, 1971 intimated
\nits decision  to charge uniform tariff at that rate from the
\nbilling month  of January  1971\t onwards,  and\tthe  general
\nsurcharge of  15% thereon from July 1966 upon December 1970.
\nAt no  stage, did  the appellants  contend that c1.18 was an
\nescalation clause  and\tthe  rate  should  be  increased  in
\nproportion to  the rise in the cost of generation. They only
\nasserted that  it should  be ‘reasonable’  and the extent of
\nincrease determined.\n<\/p>\n
     On a  fair construction  of the terms of c1.34(b) taken
\nin  conjunction\t  with\tthe  conduct  of  the  parties,\t the
\nconclusion is
\n671<\/span>
\nirresistible that  the parties\thad  contemplated  that\t the
\nmutual rights  and obligations\tunder the  contract would be
\nsubject to  alteration by future legislation. That being so,
\nss.49A and  49B of the Act have to be read into the contract
\nand  these   provisions\t by  virtue  of\t c1.34(b)  became  a
\ncontractual stipulation.\n<\/p>\n
\t  Whether the  raising of  demand for payment of the
\n\t  difference between  the uniform  tariffs  and\t the
\n\t  agreed  rate\twas  in\t disregard  of\tthe  guiding
\n\t  principles contained\tin s.49(3)  contrary to\t the
\n\t  mandate of s.49A(2) of the Act.\n<\/p>\n
     Faced with\t the difficulty,  learned  counsel  for\t the
\nappellants contended  that the Board in raising the impugned
\ndemands\t against  the  appellants  for\tpayment\t of  charges
\naccording to the uniform tariffs framed under s.49(1) of the
\nAct from  time to  time, as  per its  letter of demand dated
\nFebruary 1,  1971 for  payment of  Rs.11,67,959.95p. for the
\nbilling\t month\t of  January  1971  onwards  under  schedule
\nHS\/LP\/HT-1 under the Board’s tariff notification dated April
\n26, 1969 and its subsequent letter of demand dated March 12,
\n1976 for  payment of Rs.21,35,506.72p. for the billing month
\nof February  1976 under\t schedule LP\/HT-1  under the Board’s
\ntariff notification  dated May\t28, 1974  purporting to\t act
\nunder ss.49A  and 49B  of the  Act read\t with c1.18  of\t the
\nagreement, had\tnot any\t regard to the special circumstances
\non the\tbasis of  which the  appellant’s set up its industry
\nwhich required\telectricity at very reasonable rate in order
\nto be  able to\tsustain its  operations. It is further urged
\nthat while  s.49A of the Act might have enabled the Board to
\nincrease the  special tariff  applicable to  the  appellants
\neven  in  disregard  of\t the  limitations  imposed  on\tsuch
\nrevision by  c1.18 of the agreement, the special position of
\nthe appellants’\t industry could\t not be totally disregarded.
\nIn other  words, while\tthe concessions\t stipulated  by\t the
\nagreement under\t s.49(1) of  the Act could have been altered
\nin proportion  to the  rise in\tthe cost of generation, such
\nconcession could not have been altogether eliminated as that
\nwould amount  to a total disregard of the guiding principles
\ncontained in  s.49(3) and  thus contrary  to the  mandate of
\ns.49A(2) of  the Act.  Sub-s.(2) of  s.49A further  provides
\nthat in\t revising such tariffs or framing uniform tariffs as
\nrespects any  period commencing\t on and\t from September\t 16,
\n1966<\/span>
\n672<\/span>
\nthe Board  shall be  guided by\tthe principles\tlaid down in
\nsub-ss. (2),  (3) and  (4) of  s.49A of\t the Act.  At  first
\nblush, this  argument plausible\t though it  appears,  is  on
\ncloser scrutiny not well-founded. It ignores the true object
\nand purpose of the enactment and fails to give due effect to
\nthe  provisions\t of  ss.49A  and  49B  of  the\tAct  with  a
\nretrospective effect  which clothed  the Board with power to
\nmake the  uniform tariffs  applicable to bulk consumers like
\nthe appellants\twho under  agreements entered  into with the
\nBoard on  July 28,  1961 i.e.  before April 1, 1964, the cut
\nout date  mentioned in\tsub-s.(1) of  s.49A had\t been to the
\ngreat  financial   detriment  of   the\tBoard\tenjoying   a
\nconcessional rate  of supply  which had\t no relation  to the
\nexisting cost of generation, with the result that the burden
\nof this cost had to be passed over to other consumers. As is
\nclear from the Statement of Objects and Reasons of the Bill,
\nthe Legislature\t thought it expedient to amend the Act so as
\nto cover  the rising  cost of  generation from time to time,
\nnotwithstanding\t any   special\tcontract,   undertaking\t  or
\nconcession  to\t the  contrary.\t  The  legislative   mandate
\ncontained in  ss.49A and 49B of the Act as introduced by the
\nRajasthan Electricity (Supply) Amendment Act, 1976 subserves
\nthe public  interest to\t ensure that the Board shall not, as
\nfar as\tpracticable, after  taking credit for any subvention
\nfrom  the   State  Government\tunder  s.63,  carry  on\t its
\noperations under the Act at a loss.\n<\/p>\n
\t  Power of  the Board  to unilaterally frame uniform
\n\t  tariffs under\t sub-s.(1) of  s.49 of\tthe  Act  in
\n\t  derogation of the agreement under s.49(3):
\n     Placing strong  reliance on  the decision of this Court
\nin the\tIndian Aluminium Company’s case, learned counsel for
\nthe appellants\tdrew our  attention to\tvarious observations
\nmade by\t Bhagwati, J.  during the  course  of  his  judgment
\nlaying down that under the scheme of the Act the Board could
\nnot unilaterally  frame uniform tariffs under s.49(1) of the
\nAct in\tderogation of  such agreements\tentered\t into  under
\ns.49(3) and  therefore was  not\t competent  to\tenhance\t the
\ncharges under  the guise  of fixing  uniform tariffs because
\nsub-s.(1) of  s.49 is subject to sub-s.(3) and, once special
\ntariffs were  fixed  under  sub-s.(3),\tthere  could  be  no
\nquestion  of  fixing  uniform  tariffs\tapplicable  to\tsuch
\nconsumers under sub-s.(1) and that
\n673<\/span>
\nsuch a\tpower could  not be  exercised in  violation of\t the
\nstipulation fixing special tariffs under sub-s.(3). Emphasis
\nwas particularly laid on the observations of Bhagwati, J. in
\nthe Indian Aluminium Company’s case where after referring to
\nthe  earlier  decision\tof  this  Court\t in  Kalyan  Borough
\nMunicipality’s case,  supra, the learned Judge observed that
\n: (i)  the cost was not the sole criterion in fixing tariffs
\nunder  s.49(1)\t and  (ii)  where  the\tBoard  was  under  a
\ncontractual obligation\tnot to\tcharge under  a\t stipulation
\nvalidly made  under s.49(3)  anything more  than a specified
\ntariff for  a specified\t period, it would not be practicable
\nfor it to enhance its rates of charges even if it finds that
\nit is incurring operational loss. That view expressed by the
\nlearned Judge  proceeded on  the hypothesis,  to use his own
\nwords, that ‘Section 59 does not give a charter to the Board
\nto  enhance   its  charges  in\tbreach\tof  its\t contractual
\nstipulation’. We  are afraid, the contention cannot prevail.
\nNor are\t the appellants\t entitled to any relief on the basis
\nof the\tdecision of this Court in Indian Aluminium Company’s
\ncase. The State Legislature under Entry 38 of the Concurrent
\nList  was  competent  to  enact\t the  Rajasthan\t Electricity
\n(Supply) Amendment  Act, 1976  and  introduce  the  impugned
\nprovisions contained  in ss.49A\t and 49B  with retrospective
\neffect to overcome the difficulty created by the decision of
\nthis  Court   in  Indian  Aluminium  Company’s\tcase.  These
\nprovisions so  enacted confer an enabling power on the Board
\nto revise  the tariffs from time to time notwithstanding any
\nprovision of  the  Act\tor  any\t agreement,  undertaking  or
\nconcession to  the  contrary,  and  also  to  frame  uniform
\ntariffs with  respect to  the class  of\t consumers  enjoying
\nspecial benefits  under agreements  entered  into  with\t the
\nBoard under s.49 of the Act. There being a change in the law
\nbrought about  by the introduction of ss. 49A and 49B of the
\nAct by\tthe Electricity\t (Supply) (Rajasthan Amendment) Act,
\n1976, the  Court is bound to give effect to these provisions
\nnotwithstanding anything  contained in\tthe Act\t or  in\t any
\nagreement, undertaking,\t commitment  or\t concession  to\t the
\ncontrary made  by the  Board before  the first\tday of April
\n1964, or  the decision\tof this\t Court in  Indian  Aluminium
\nCompany’s case.\n<\/p>\n
\t  Scope and  effect of\tSections 49A  and 49B of the
\n\t  Act: Power  of the  Board  to\t raise\tdemands\t for
\n\t  payment of  the  difference  between\tthe  uniform
\n\t  tariffs and  the agreed  rate\t with  retrospective
\n\t  effect and the validation thereof
\n674<\/span>
\n     Turning next  to the second aspect, question is whether
\nthe Board  was entitled\t to recover  from the appellants the
\ndifference between  the uniform\t tariffs and the agreed rate
\nfor the\t supply of  electricity to  them with  retrospective
\neffect by  virtue of the powers derived under ss.49A and 49B
\nof the Act read with c1.18 of the agreement. That depends on
\nthe construction  of ss.49A and 49B of the Act. The question
\npertains to  two periods  : (i)\t from January 1, 1971 to May
\n31, 1974  and (ii)  from June  1, 1974\tto February 6, 1976.
\nAccording to its plain terms, s.49A has been structured in a
\nmanner to  attain a two-fold object. In the first place, the
\nnon-obstante caluse  in sub-s.(1) of s.49A has the effect of
\noverriding the\tprovisions of  the Act\tand  nullifying\t the
\njudgment of  the High  Court and  more particularly  of this
\nCourt in  Indian Aluminium  Company’s case which invalidated
\nthe framing  of uniform\t tariffs by  the Board under s.49(1)
\nwith respect to consumers who were entitled to the supply of
\nelectricity at\ta special  rate by  virtue of the agreements
\nentered into  by the Board with them under sub-s.(3) of s.49
\nof the\tAct. Sub-s.(1)\tof  s.49A  is  clearly\tan  enabling
\nprovision and  makes it\t lawful for  the Board\tnot only  to
\nrevise from  time to  time the\ttariffs applicable  to\tsuch
\nclass  of  consumers  but  also\t to  frame  uniform  tariffs
\napplicable to  them as respects any period commencing on and
\nfrom September\t16, 1966 i.e. the date when the new s.49 was
\nbrought into  force.  Sub-s.(2)\t thereof  provides  that  in
\nrevising the  tariffs or  framing uniform tariffs, the Board
\nshall be  guided by  the principles  set  out  in  s.59.  It
\nfurther provides  that as  respects any period commencing on
\nand from  September 16, 1966, it shall also be guided by the
\nprinciples laid\t down in  sub-ss. (2),\t(3) and (4) of s.49.
\nSuch powers  of revising  the  tariffs\tor  framing  uniform
\ntariffs were  exercisable notwithstanding anything contained
\nin the Act or in any agreement, undertaking or concession to
\nthe contrary made by the Board before the first day of April
\n1964 or\t the judgment  and order of any Court. Sub-s. (3) of
\ns.49A  provides\t that  all  such  agreements,  undertakings,
\ncommitments or\tconcessions as are referred to in sub-s.(1),
\nshall, insofar\tas they are inconsistent with the provisions
\nof sub-ss.(1) and (2) and to the extent of the tariffs fixed
\nor provisions  made therein  for such  fixation be  void and
\nshall be  deemed always\t to have  been void.  Secondly, sub-
\ns.(1) of  s.49A as  construed prospectively  makes it lawful
\nfor the Board to revise the tariffs from time to time and to
\n675<\/span>
\nframe  uniform\t tariffs  with\trespect\t to  such  class  of
\nconsumers on or after February 7, 1976, the date on which it
\nwas brought into force.\n<\/p>\n
     According\tto  its\t plain\tlanguage,  the\tnon-obstante
\nclause in  sub-s.(1) of\t s.49B has  the effect of overriding
\nthe provisions\tof the\tAct or any agreement, undertaking or
\nconcession  referred   to  in\tsub-s.(1)  of\ts.49A.\t The
\nconsequence that ensues is this. Sub-s.(2) of s.49B provides
\nthat any  amount realized  or demand  made or created by the
\nBoard, according  to the  uniform tariffs in force from time
\nto time,  under s.49 from or against any person claiming any
\nspecial\t tariffs  under\t any  such  agreement,\tundertaking,
\ncommitment or  concession made\tbefore February 7, 1976, the
\ndate of\t promulgation of  the  Ordinance,  contrary  to\t the
\ndecision of this Court in Indian Aluminium Company’s case or
\nof the\tHigh Court,  shall be  deemed to  have been  validly
\nrealized, made\tor created  under the Act. The appellants do
\nnot dispute  their liability  to pay  uniform tariffs  fixed
\nfrom time  to time as from February 7, 1976. The controversy
\nis only\t with regard  to  their\t liability  to\tpay  uniform
\ntariffs fixed  from time to time for the past period and the
\nextent of their liability.\n<\/p>\n
\t  Liability of the appellants to pay uniform tariffs
\n\t  framed by  the Board from time to time under s.49A
\n\t  read with  s.49B for\tthe period prior to February
\n\t  7, 1976  and the  corresponding right of the Board
\n\t  to raise such demands.\n<\/p>\n
     Shri Shanti  Bhushan contends  that ss.49A and 49B were
\nintegrally connected  and were intended and meant to achieve
\na joint\t purpose which\twas merely  to validate\t such of the
\npast actions  of the Board as would have been valid if s.49A
\nhad already  been in force at the relevant time. He contends
\nthat if\t the Board’s  uniform tariff notifications dated May
\n18, 1964,  April 26, 1969 and May 28, 1974 had not contained
\nan exclusionary\t clause (3) set out above, for the exclusion
\nof all\tconsumers who  were governed by specially negotiated
\ntariff, any  demand raised  under s.49A\t of the\t Act on\t the
\nbasis of  such uniform tariffs fixed from time to time prior
\nto February  7, 1976  would have  been validated under s.49B
\nnotwithstanding that  the said\tdemands when  made were\t not
\nauthorized in  view of\tthe stipulations  contained  in\t the
\nagree-\n<\/p>\n
676<\/span><\/p>\n
ment. As to the claim for the period from January 1, 1971 to
\nMay 31,\t 1974, the  learned counsel  urges that the Board is
\nseeking to  recover from  the  appellants  charges  for\t the
\nsupply of  electricity as per normal tariff prescribed under
\nthe Board’s notification dated April 26, 1969. As to this he
\nmainly relies  on the  exclusionary clause  (3) of  the said
\ntariff notification.  As to  the period from June 1, 1974 to
\nFebruary 7,  1976 for  which the  Board raised\ta demand for
\npayment of  the charges\t for the  supply of  electricity  at
\nnormal tariff  framed by  the Board’s notification dated May
\n28, 1974,  apart from relying on similar exclusionary clause
\ncontained therein,  he submits\tthat the  Board never made a
\ndemand on the appellants that they would have to pay for the
\nsupply of  electrical energy  at normal\t tariff as framed by
\nthe Board’s tariff notification dated May 28, 1974. In fact,
\nhe submits that there was no letter sent by the Board to the
\nappellants like\t the one dated December 22\/24, 1970 by which
\nit made\t a demand  for payment of charges at uniform tariffs
\nframed by  the Board’s\ttariff notification  dated April 26,
\n1969. The  learned counsel  urges that\tas is clear from the
\nterms of s.49B of the Act, the demand to be validated had to
\nbe raised  prior to  February 7,  1976 and  not\t on  a\tdate
\nsubsequent thereto.  He submits\t that it  was therefore\t not
\nopen to\t the Board  to make a demand from the appellants for
\npayment of  charges for\t the period  commencing from June 1,
\n1974 and  ending with  February 6,  1976  according  to\t the
\nuniform\t tariff\t  of  1974.   There  is,   in  our  opinion,
\nconsiderable force in the argument.\n<\/p>\n
     Dr. Chitale  tried to impress upon us that s.49A of the
\nAct must after February 7, 1976, the date of promulgation of
\nthe Ordinance,\toperate on  its own  force and therefore the
\nBoard was entitled to raise demands at uniform tariffs under
\nschedule LP\/HT-1 under the Board’s tariff notification dated
\nMay 28,\t 1974 from  that date  till  November  4,  1976\t and
\nthereafter as  per the\trevised uniform tariffs as framed by
\nthe Board’s  notification dated November 4, 1976. As regards
\nthe past  period i.e. as from January 1, 1971 to February 6,
\n1976 he\t contends that\ts.49A could still be had recourse to
\nby the\tBoard  without\tthe  aid  of  s.49B.  The  submssion
\nproceeds  upon\tthe  basis  that  the  power  of  the  State
\nLegislature to\tmake a law under Entry 38 of List III of the
\nSeventh Schedule carries with it the ancillary power to make
\na law with retrospective
\n677<\/span>
\neffect. It  could therefore  enact a  provision like  s. 49A
\nprescribing a  rate of\tuniform tariff\tunder  s.49(1)\twith
\nretrospective\teffect\t  as   from    January\t 1,    1971,
\nnotwithstanding anything  contained in\tthe Act\t or  in\t any
\nagreement, undertaking,\t commitment  or\t concession  to\t the
\ncontrary entered  into by  the Board  after the first day of
\nApril 1964.  We find  it  rather  difficult  to\t uphold\t the
\ncontention. The\t question does\tnot really arise because the
\nLegislature has\t not framed  a law  for\t the  imposition  of
\nuniform tariffs\t on  consumers\twith  retrospective  effect.
\nS.49A is primarily enacted to override the provisions of the
\nAct  or\t  of  any   agreement,\tundertaking,  commitment  or
\nconcession  to\tthe  contrary  made  by\t the  Board  or\t the
\nGovernment prior  to the  first day  of April  1964 for\t the
\nsupply of  electricity to  consumers at\t a concessional rate
\nrelatable to s.49(3) of the Act. That is the clear effect of
\nthe non-obstante  clause  which\t removes  the  legal  hurdle
\nplaced in the way of the Board framing uniform tariffs under
\ns.49(1) of the Act for such class of consumers. Sub-s.(1) of
\ns.49A provides\tthat it\t shall be  lawful for  the Board  to
\nrevise the  tariffs from  time to  time and to frame uniform
\ntariffs for  the supply\t of electrical energy. The words ‘it
\nshall be  lawful’ used\tin s.49A  (1) are essentially in the
\nnature of  conferment  of  a  prospective  power.  Sub-s.(2)
\nthereof however\t further states\t that in revising or framing
\nsuch tariffs  under sub-s.(1),\tthe Board shall be guided by
\nthe principles\tset out\t in s.59 of the Act. It then goes on
\nto say\tthat as\t respects any  period commencing on and from
\nSeptember 16,  1966 the\t Board shall also be governed by the
\nprinciples laid\t down in  sub-ss.(2), (3)  and (4) of s.49A.
\nSub-s.(3)   makes   all\t  such\t agreements,   undertakings,
\ncommitments or\tconcessions as are referred to in sub-s.(1),
\ninsofar as they are inconsistent with the provisions of sub-
\nss.(1) and  (2) and  to the  extent of\tthe tariffs fixed or
\nprovisions made therein for such fixation, be void and shall
\nalways be  deemed to  have been\t void. A combined reading of
\nthese provisions  shows that  the Board\t is relieved  of the
\nshackles of  the contractual  obligations flowing  from\t the
\nagreements relatable  to s.49(3), and the Board is empowered
\nin terms  of s.49A  to revise  the tariffs  or frame uniform
\ntariffs with  respect to consumers enjoying special benefits
\nas from September 16, 1966.\n<\/p>\n
     As already\t stated, the Board could not on the strength
\nof s.49A alone recover the difference between the uniform
\n678<\/span>
\ntariffs fixed  from time  to time  and the  agreed  rate  of
\nsupply from  the appellants  for the  period from January 1,
\n1971 to\t February 6, 1976 without the aid of s.49B. S.49B on
\nits terms  has no  application unless  there  was  a  demand
\nraised or  created prior  to February  7, 1976,\t the date of
\npromulgation  of   the\t Ordinance.   There   is   therefore
\ninsuperable barrier  in applying  the uniform  tariff  under
\nschdule LP\/HT-1\t framed by  the Board’s\t tariff notification
\ndated May  28, 1974 from the billing month of July 1974 i.e.
\nfrom June  1, 1974 to February 6, 1976. Although the uniform
\ntariff under schedule LP\/HT-1 of 1974 was brought into force
\nfrom the  billing month\t of July  1974 i.e. with effect from
\nJune 1,\t 1974 the  Board never intimated the appellants that
\nthey would have to pay charges for the supply of electricity
\nto them\t at that  rate. Undoubtedly,  no letter like the one
\ndated December\t22\/24, 1970 demanding payment of charges for
\nthe supply  of electricity  was however written by the Board
\nto  the\t appellants  intimating\t them  that  they  would  be
\ngoverned by  the schedule  LP\/HT-1  framed  by\tthe  Board’s
\ntariff notification  dated May\t28, 1974. That being so, the
\nappellants would now be liable for the period in question to
\npay charges at the uniform tariff as per schedule HS\/LP\/-HT-
\n1 framed  by the  Board’s earlier  tariff notification dated
\nApril 26, 1969.\n<\/p>\n
\t  Liability to pay the general surcharge.\n<\/p>\n
     That takes\t us to the question whether the Board had no
\npower  under   the  Act\t  to  levy  a  surcharge.  The\tword
\n‘surcharge’ is\tnot defined  in the  Act. Plainly,  the word
\n‘surcharge’ means  an additional or extra charge or payment:
\nShorter Oxford\tEnglish Dictionary,  p.2199. As held by this
\nCourt in  Bisra Stone  Lime Company  Ltd. &  Anr. v.  Orissa
\nState Electricity  Board  &  Anr.<\/a>  [1976]  2  S.C.R.  307  a
\nsurcharge is  in substance  an addition\t to  the  stipulated
\nrates of  tariff and  enhancement of  the rates\t by  way  of
\nsurcharge is  well within  the power  of the Board to fix or
\nrevise the  rates of tariff under the provisions of the Act.
\nIn the\tIndian Aluminium Company’s case, supra, there was no
\nprovision in  the agreement  with regard  to the revision of
\ntariff, such  as we  find in cl.18 of the agreement. We must
\nhowever refer to the decision of this Court in M\/s. Titagarh
\nPaper Mills  Ltd. v.  Orissa State  Electricity Board & Anr.<\/a>
\n[1975]\t2   S.C.R.  436\t  where\t the   Court   taking\tinto
\nconsideration cl.13 of the agreement therein which was in
\n679<\/span>
\nterm similar  to cl.18, had to consider the scope and effect
\nof ss.49 and 59 of the Act and following the decision in the
\nIndian Aluminium Company’s case stated:\n<\/p>\n
\t  “Neither s.  49 nor s. 59 confers any authority on
\n\t  the Board  to\t enhance  the  rates  of  supply  of
\n\t  electricity  where   they  are   fixed   under   a
\n\t  stipulation made in an agreement. The Board has no
\n\t  authority under  either of  these two\t sections to
\n\t  override a  contractual  stipulation\tand  enhance
\n\t  unilaterally\tthe   rates  for   the\t supply\t  of
\n\t  electricity.”\n<\/p><\/blockquote>\n
The Court  accordingly in  Bisra Stone\tLime Company’s\tcase
\nheld that  the power of revision of rates of the Board under
\ns.49(1) and (2) as also under s.59 of the Act remained under
\nsuspended animation  during the\t subsistence of\t a statutory
\nagreement entered  into in  conformity with  s.49(3) of\t the
\nAct. But  this pro  tempore ban\t on revision  of rates could
\nonly last  till the legislature introduced ss.49A and 49B of
\nthe Act\t empowering the\t Board to revise the rates and frame
\nuniform\t tariffs   with\t retrospective\t effect.  This\t was
\nconstitutionally permissible as indicated by Bhagwati, J. in
\nthe Indian Aluminium Company’s case in these words :\n<\/p>\n
\t  “(A) case may conceivably arise where there may be
\n\t  an overriding\t statutory provision which expressly
\n\t  or by\t necessary implication authorises the public
\n\t  authority   to    set\t  at\tnaught,\t  in   given
\n\t  circumstances,  a   stipulation  though   made  in
\n\t  exercise of a statutory power.”<\/p><\/blockquote>\n
     The Board\twas therefore  well  within  its  rights  in
\nraising a  demand by  its letter dated February 1, 1971 that
\nthe appellants\twould be subject not only to uniform tariffs
\nunder Schedule HS\/LP\/HT-1 applicable to all large industrial
\nconsumers as  from January  1, 1971 in terms of cl.18 of the
\nagreement but  also be\tsubject to  the general surcharge of
\n15% for\t the period  commencing on  and from  September\t 16,
\n1966, the  date mentioned in sub-s.(2) of s.49A. The general
\nsurcharge of 15% as also the uniform tariff were part of the
\ngeneral burden\tborne by  all consumers\t alike. Whatever may
\nhave been  the position\t under the old s.49, the new section
\nas substituted by
\n680<\/span>
\nthe Amendment  Act 30 of 1966, makes it plain that the Board
\ncan fix\t uniform tariffs.  The power  to fix uniform tariffs
\nmust necessarily  include power\t to make uniform increase in
\ntariffs. S.49A had the effect of removing the Board from the
\nshackles  of   the  agreement\tto  supply   electricity  at
\nconcessional rate entered into under s.49. The effect of the
\nnon-obstante clause in sub-s.(1) of s.49A was to nullify the
\nagreement.\n<\/p>\n
\t     Subsidiary issues : Article 31(2)
\n     Finally, there  still remains the third aspect. Various
\nsubsidiary issues  were raised,\t namely, whether  the demand
\nraised by  the Board  against the  appellants for payment of
\nthe difference\tbetween the  uniform tariffs  and the agreed
\nrate for  the period  subsequent  to  January  1,  1971\t was
\nviolative of  Art.14, Art.19(1)(f)  and (g) and Art.31(2) of
\nthe Constitution. Of these, the main contention put forth by
\nShri Shanti Bhushan, is that the extinguishment of the right
\nwhich the  appellants had to get electricity at concessional
\nrate for  a period of 20 years which was enforceable against
\nthe Board  as held in the Indian Aluminium Company’s case by
\ns.49A, and  the conferral  of a corresponding benefit to the
\nBoard to  revise the  tariffs from time to time and to frame
\nuniform\t tariffs  for  supply  of  electricity\tto  them  as
\nrespects any  period subsequent\t to September 16, 1966 (here
\nwe are\tconcerned with\tthe period  subsequent to January 1,
\n1971), amounted\t to deprivation\t of property without payment
\nof compensation\t and in\t contravention of Art.31(2). He goes
\nto the\textent of contending that the matter is concluded by
\nthe seven-Judges’  decision of\tthis Court  in the  case  of
\nMadan Mohan  Pathak v.\tUnion of  India<\/a> [1978]\t3 S.C.R. 334
\nwhere the  majority held  that the  concept of\tproperty  in
\nArt.31 is  not a  narrow concept  and at p.359 of the Report
\naccepted the  view expressed by Hegde, J. in the Privy Purse
\ncase [1971]  3 S.C.R. 9 that any right which was enforceable
\nthrough courts\twas property.  We were\treferred to  several
\npassages in the judgment delivered by Bhagwati, J. to derive
\nhome the  point that  it was  not necessary  for the  law to
\nprovide in  so many  words that\t property was transferred to
\nthe State  or to  a Corporation\t owned or  controlled by the
\nState  for   attracting\t the  provisions  of  Art.31(2)\t and
\nparticularly emphasis was laid on the following observations
\n:\n<\/p>\n
\t  “Where by reason of extinguishment of a right or
\n681<\/span>
\n\t  interest of  a person,  detriment is\tsuffered  by
\n\t  him, and  a corresponding  benefit accrues  to the
\n\t  State, there\twould be  transfer of  ownership  of
\n\t  such right  or interest to the State. The question
\n\t  would always\tbe :  who is  the beneficiary of the
\n\t  extinguishment   of\t the   right   or   interest
\n\t  effectuated by  the law ? If it is the State, then
\n\t  there would  be transfer of ownership of the right
\n\t  or interest  to the  State, because what the owner
\n\t  of the right or interest would have lost by reason
\n\t  of the extinguishment would be the benefit accrued
\n\t  to the State.”<\/p><\/blockquote>\n
     The Court\tobserved in  M.M.  Pathak’s  case  that\t the
\ndirect effect  of the  impugned Act was to extinguish or put
\nan end\tto the debts due from the Life Insurance Corporation
\nto class  III and  Class IV employees. This was not disputed
\non  behalf   of\t the  Life  Insurance  Corporation  and\t the
\ncontroversy was\t whether the  extinguishment of\t these debts
\ninvolved any  transfer of  ownership of property to the Life
\nInsurance  Corporation.\t It  was  conceded  by\tthe  learned
\nAttorney-General on behalf of the Life Insurance Corporation
\nas a  proposition of  law that\tan illegal  deprivation of a
\npecuniary benefit  to which any person is entitled under any
\nlaw amounts to deprivation of property within the meaning of
\nArt.31(2). He  however sought  to make a distinction between
\nextinguishment and  transfer of\t ownership  of\ta  debt\t and
\ncontended that\twhen ownership\tof a debt is transferred, it
\ncontinues to exist as a debt in the hands of the transferee,
\nbut when a debt is extinguished it ceases to exist as a debt
\nand it is not possible to say that the debtor has become the
\nowner of the debt. In dealing with the contention, the Court
\nobserved at  p.368 of  the Report,  that where\tby reason of
\nextinguishment of a right or interest of a person, detriment
\nis suffered  by him,  and a corresponding benefit accrues to
\nthe State,  there would\t be transfer  of ownership  of\tsuch
\nright or  interest to  the State.  The Court stated that the
\nquestion would\talways be  : who  is the  beneficiary of the
\nextinguishment of  the right  or interest effectuated by the
\nlaw ?  If it  is the  State, then there would be transfer of
\nownership of  the right\t or interest  to the  State, because
\nwhat the  owner of  the right or interest would have lost by
\nreason of the extinguishment would be benefit accrued to the
\nState. It  referred to\tthe view  expressed by\tHegde, J. in
\nState of Madhya Pradesh v. Ranojirao Shinde,<\/a>
\n682<\/span>
\n[1968] 3  S.C.R. 489,  that it\twas  possible  to  view\t the
\nabolition of  cash  grants  under  the\tMadhya\tPradesh\t law
\nimpugned in  that case\tas a statutory transfer of rights of
\nthe grantees to the State and extended the same principle in
\njudging the validity of s.3 of the impugned Act, and added :\n<\/p>\n
\t  “When a  debt due  and owing\tby the\tState  or  a
\n\t  corporation owned  or controlled  by the  State is
\n\t  extinguished\tby   law,  there   is  transfer\t  of
\n\t  ownership of\tthe money representing the debt from
\n\t  the  creditor\t  to  the   State   or\t the   State
\n\t  owned\/controlled corporation.\n<\/p><\/blockquote>\n
\t  ***\t ***\t***    ***    ***
\n\t  The extinguishment  of the  debt of  the  creditor
\n\t  with corresponding  benefit to  the State or State
\n\t  owned\/controlled  corporation\t would\tplainly\t and
\n\t  indubitably involve  transfer or  ownership of the
\n\t  amount representing  the debt\t from the  former to
\n\t  the  latter.\t This  is   the\t  real\t effect\t  of
\n\t  extinguishment of  the debt  and by  garbing it in
\n\t  the form  of extinguishment,\tthe State  or  State
\n\t  owned\/controlled corporation cannot obtain benefit
\n\t  at the  cost of  the creditor\t and yet  avoid\t the
\n\t  applicability of Art.31, clause(2).”\n<\/p><\/blockquote>\n
The Court  also observed that the verbal veil constructed by
\nemploying the  device of  extinguishment of  debt cannot  be
\npermitted  to  conceal\tor  hide  the  real  nature  of\t the
\ntransaction.\n<\/p>\n
     We fail  to appreciate the relevance of the decision in
\nM.M.  Pathak’s\t case  to  the\tinstant\t case.\tThe  fallacy
\nunderlying  the\t  agreement  is\t that  it  proceeds  on\t the
\nassumption that\t there is by reason of ss.49A and 49B of the
\nAct an illegal deprivation of any pecuniary benefit to which
\nthe appellants\twere entitled  and the extinguishment of the
\nright they  had to the supply of electricity at concessional
\nrate for  a period  of\t20  years  in  accordance  with\t the
\nagreement amounted  to a deprivation of property withing the
\nmeaning of  Art.31(2) of  the Constitution. While it is true
\nthat the  concept of  ‘property’ in  Art.31 is\tnot a narrow
\nconcept and is used in a comprehensive
\n683<\/span>
\nsense, any legal right which can be enforced through a court
\nis a  right in\tthe nature of property within the meaning of
\nArt.31. According  to the Court in M.M. Pathak’s case, ‘Even
\nan actionable  claim is\t ‘property’ in\tArt.31\tand  can  be
\ncompulsorily acquired  under cl.2  thereof’. But  it is\t not
\nnecessary to  enter upon the controversy whether the State’s
\npower of  acquisition of property under Art.31(2) extends to
\nchoses of action for purposes of this case. All that we need
\nnotice is  that the majority in M.M. Pathak’s case, accepted
\nthe view of Hegde, J. in the Privy Purse case that any right
\nwhich was  enforceable through courts was ‘property’, but it
\ndoes not  logically follow  that the  extinguishment of\t the
\nright to  get electricity  at concessional rate by reason of
\nss.49A and  49B of  the Act  for the  period  subsequent  to
\nJanuary 1,  1971 necessarily  attracted Art.31(2).  All that
\nthe appellants had under their contract with the Board was a
\ndefeasible right  by reason  of cl.34(b) of the agreement as
\npointed out  by us  above.  The\t appellants  had  contracted
\nthemselves by  cl.34(b) to  be\tsubject\t to  any  subsequent
\nlegislation. All  that s.49A of the Act does is to strike at
\nthe  agreement\tbetween\t the  parties.\tIt  is\tan  enabling
\nprovision and  empowers the Board to revise the tariffs from
\ntime to\t time and  to frame  uniform tariffs  for supply  of
\nelectricity to a class of consumers enjoying special benefit
\nunder  agreement  entered  into\t under\ts.49(3).  The  Board
\nundoubtedly was\t competent to  review the tariff in terms of
\ncl.18 of  the agreement\t as  from  January  1,\t1971.  S.49A
\nliberates the  Board from the constraints of the agreed rate
\nunder the  agreement entered  into by  the  Board  with\t the
\nappellants under s.49 of the Act and empowers the raising of
\ndemand according  to the uniform tariffs. Here, there was no
\ndebt due  or owing  to the  State or  a Corporation owned or
\ncontrolled by the State.\n<\/p>\n
     Where a  law does not, in reality, affect a transfer of
\nownership or  possession, Art.31(2)  cannot be attracted. In
\norder  to  constitute  acquisition  within  the\t meaning  of
\nArt.31(2), there  must be  transfer of ownership of property
\nto the\tState or to a Corporation owned or controlled by the
\nState. Cl.2(A)\tto Art.31  introduced  by  the\tConstitution
\n(Fourth Amendment)  Act, 1955  made clear  what was meant by
\n‘acquisition  or   requisitioning’  within  the\t meaning  of
\ncl.(2). Unless\tthe taking  of property\t had taken  place in
\neither of  the two  ways, there\t was no\t obligation  to\t pay
\ncompensation under
\n684<\/span>
\nthe Constitution.  It  can  hardly  be\tsuggested  that\t the
\nextinction  of\tthe  right  the\t appellants  had  under\t the
\ncontract  with\tthe  Board  to\tget  electric  supply  at  a
\nconcessional rate  under c1.18\tof  the\t agreement  for\t the
\nperiod after January 1, 1971 when revision of tariff was due
\nunder c1.18  thereof, amounted\tto acquisition\tof  property
\nunder c1.31(2).\t Further,  there  was  no  question  of\t any
\ntransfer of  money representing\t any debt  owed by the Board
\nfrom the  appellants which  stood extinguished\tby reason of
\nss.49A and  49B of  the Act.  We are  clearly of the opinion
\nthat the  principles laid  down in M.M. Pathak’s case are in
\nno way attracted to the present case.\n<\/p>\n
\t\t\t Article 14
\n     The contention based on Art.14 and Art.19(1)(f) and (g)
\nneed not  detain us  for long. Taking up the contention that
\nthe raising  of demand\tby the\tBoard by  its  letter  dated
\nFebruary 1,  1971 for Rs.11,67,959.95p. at normal tarrif for
\nthe billing  month January  1971 under\tSchedule  HS\/LP\/HT-1
\napplicable to  all large  industrial consumers\tas  per\t the
\nBoard’s tariff\tnotification dated  April 26,  1969 together
\nwith general  surcharge of  15% thereon,  and by  its letter
\ndated March 12, 1976 for Rs.21,35,506.72 p. at normal tariff
\nfor the\t billing month\tFebruary 1976 under Schedule LP\/HT-1
\napplicable to such large inddustrial consumers framed by the
\nBoard’s tariff notificition dated May 28, 1974 together with
\ngeneral surcharge  of 15%  thereon, was\t violative of Art.14
\nand therefore constitutionally impermissible inasmuch as the
\npublic sector  undertakings in\tthe State like the Hindustan
\nZinc  Limited\tand  Hindustan\tCopper\tLimited\t which\twere
\nsimilarly circumstanced\t were  not  subjected  to  any\tsuch
\nliability and  such differential  treatment was\t without any
\nreasonable classification.  The contention  must be rejected
\nat the\tvery threshold.\t There is  no averment\tmade by\t the
\nappellants in  any of  the petitions  filed before  the High
\nCourt that  while the  Board purported\tto raise  or  create
\ndemands\t as  against  the  appellants  for  payment  of\t the
\ndifference between  the uniform\t tariffs and the agreed rate
\nas respects  the period\t beginning from\t January 1,  1971 by
\nmaking the  uniform tariffs  of 1969  and 1974 applicable to
\nthem together with the general surcharge of 15% thereon, the
\nlarge public  sector undertakings  viz. the  Hindustan\tZinc
\nLimited and  the Hindustan  Copper Limited  were allowed the
\nprivilege of a concessional rate for the supply of
\n685<\/span>
\nelectricity to\tthem by\t virtue of  agreements entered\tinto
\nunder s.49.  On the  contrary, the  Board  in  its  counter-
\naffidavits specifically\t pleaded that  all large  industrial
\nundertakings with  capital investments\tseveral\t times\tmore
\nthan that  of the  appellants were  paying for the supply of
\nelectricity at\tthe normal  tariff. The\t Board\tparticularly
\ngave the  instances of\tthe two\t public sector\tundertakings
\nHindustan Copper  Ltd. and  Hindustan Zinc  Ltd., which were
\nboth industries\t controlled by\tthe Government\tof India and
\nwere taking  heavy loads  with huge investments, were paying
\nat the\tnormal tariff.\tFor instance,  Hindustan Copper Ltd.
\nwhose investments  were to  the tune  of over  Rs.100 crores
\nwere  paying  for  the\tconsumption  at\t the  normal  tariff
\nalthough the load of that industry was 31,000 KVA comparable
\nwith the load of the industry set up by the appellants which
\nwas 29,412  KVA. The  same was\tthe case with Hindustan Zinc
\nLtd. We may set out the relevant averment which goes thus :\n<\/p>\n
\t  “It is wrong to say that 1.4.64 has been appointed
\n\t  as the date to give any benefit to any Corporation
\n\t  owned or  controlled by the Central Government. So
\n\t  far as  the Corporations controlled by the Central
\n\t  Government are  concerned, it\t is  submitted\tthat
\n\t  Hindustan  Copper,   which  is   equally  a  large
\n\t  consumer as  the petitioner  company, did  not get
\n\t  any supply of electricity at a rate different from
\n\t  what is  fixed by  the uniform  tariff. As for the
\n\t  other\t concern   namely  Hindustan  Zinc,  it\t was
\n\t  commissioned in January 1968 and ever since it was
\n\t  charged at  the uniform tariff framed in 1964 plus
\n\t  general surcharge  of\t 15%  imposed  in  1966.  No
\n\t  concession was  given to  it at  the time  when it
\n\t  started functioning. The only concession given was
\n\t  that in  1969 when  the rates\t were  revised,\t the
\n\t  revised rates\t were not  applied to Hindustan Zinc
\n\t  and it  was continued to be charged at the uniform
\n\t  tariff of  1964 plus\t15%  surcharge\ttill  April,
\n\t  1974. Since  May 1974 the increased tariff of 1969
\n\t  was applied  to Hindustan  Zinc also\tand the\t new
\n\t  tariff of 1974 ever since its coming into force is
\n\t  applied  to\tit.  It\t is,  therefore,  absolutely
\n\t  incorrect to\tsay that 1.4.64 is fixed in order to
\n\t  give any benefit to the Corporations controlled by
\n\t  the Central Government because
\n686<\/span>
\n\t  Hindustan Zinc started production sometime in 1968
\n\t  and Hindustan\t Copper much  later. The date 1.4.64
\n\t  is therefore\tmore reasonable\t being the  date  on
\n\t  which the  uniform  tariffs  were  framed  by\t the
\n\t  Board.”<\/p><\/blockquote>\n
     The Board\tfurther averred\t that apart  from these\t two
\nCorporations there  are several\t other industries controlled
\nby  the\t  Central  Government\tor  the\t  State\t  Government
\ncommissioned after  April 1,  1964, and all these industries
\nwere paying  at the  normal tariffs  fixed by the Board from
\ntime to time.\n<\/p>\n
     The argument  of differential  treatment is an argument
\nof despair.  The Board\thas averred  that there\t is one grid
\nwhich is  fed from  supplies from  different sources whether
\nthermal, hydel\tor atomic  and it was impossible to say what
\npower came  from which\tsource. In  1971  the  Atomic  Power
\nProject started\t to supply  power and  the Board  was  being
\nbuilt at  the rate  of about 14p. per unit. Later on, due to
\nthe breakdown of this source the Board had to purchase large
\nquantum of  electricity from various other sources at a cost
\nfalling between\t 18 to 19p. per unit. This was done in order
\nto maintain  the supply\t of electricity\t to the consumers in
\nthe State,  including the appellants. It is evident that the
\ncost of\t generation in\tthe grid  was far  higher  than\t the
\nconcessional rate  of 3p.  per unit  at which the appellants
\nwere getting the supply. As a result the Board was incurring
\nvery heavy  losses on  account of  this low rate for a large
\nbulk consumption.  It would  have been\tunreasonable for the
\nBoard not  to  have  applied  the  uniform  tariffs  to\t the
\nappellants as  from January  1, 1971  when the Board derived
\nthe power  to revise  the rate under c1.18 of the agreement.
\nThe Board  by its  letter  dated  December  24,\t 1970  after
\ndrawing the  attention of  the appellants  to c1.18  of\t the
\nagreement. The\tBoard by  its letter  dated December  22\/24,
\n1970 after drawing the attention of the appellants to c1. 18
\nof the\tagreement, intimated  that they\t would be charged as
\nfrom January 1, 1971 at the normal tariff schedule HS\/LP\/HT-
\n1 fram ed by the Board’s tariff notification dated April 26,
\n1969 plus  15% general surcharge thereon. It was stated that
\nthe component  of cost\tof generation had been worked out in
\nthe office  of the  Board and  it was higher than 25% of the
\ncost fixed at the time of the execution of the agreement, as
\ndetailed therein. The component of cost of generation during
\nthe year  1969-70 was  5.17p.\/Kwh. This,  we  are  informed,
\nworks
\n687<\/span>
\nout to 7.67 p. per unit without the general surcharge of 15%
\nand  to\t  8.73p.  per  unit  including\tthe  surcharge.\t The
\nconcessional rate  as stipulated  in c1. 17 of the agreement
\nwas more  or less  3p. per  unit. The uniform tariff of 1969
\nworks out  approximately to  7.67p. per\t unit,\tthe  uniform
\ntariff of  1974 at  14.64p. per\t unit, the uniform tariff of
\n1976 at\t 16.01p. and  the uniform  tariff of 1978 at 18.83p.
\nThe  appellants\t  were\tthus   practically   getting   their
\nelectricity free  of all  charge. Even\tthe  uniform  tariff
\nunder HS\/LP\/HT-1  was very much less than the price at which
\nthe Board was getting its supply. In the premises, there was
\nno reason  why the  appellants should  not be  treated alike
\nwith all  other large industrial undertakings which were all
\nsubjected to  payment of the uniform tarrifs fixed from time
\nto time. The contention based on Art.14 must therefore fail.\n<\/p>\n
\t\t Article 19(1)(g) and (g).\n<\/p>\n
     The next  contention  based  on  Art.19(1)(f)  and\t (g)
\ncannot obviously  prevail. The\tpresent case  concerns\tonly
\nwith sale of goods i.e. electricity and the price to be paid
\ntherefor,  for\t‘tariff’  is  nothing  but  the\t price.\t The
\ncontract itself\t provided for  revision of  the\t rate  under
\nc1.18 of  the agreement after January 1, 1971. The Board was
\nwithin its  powers in  applying the  uniform tariffs  to the
\nappellants after  the period  stipulated  for  had  expired.
\nThere  was  nothing  unreasonable  for\tthe  Board  to\thave
\nenforced the  uniform tariffs  as against  the appellants as
\nfrom January  1, 1971.\tReasonableness of  the\tincrease  in
\ntariff is  established by  the fact  that the  Board was not
\nbound  to   supply  electricity\t  to  the  appellants  at  a
\nconcessional rate  by incurring\t operational  losses  beyond
\nthat date.  The appellants  have not  shown nor produced any
\nmaterial to show that they have suffered any loss on account
\nof the increase in tariff. A grievance was made on behalf of
\nthe Board  that the  appellants\t had  not  despite  repeated
\nrequests  produced   the  balance-sheets  to  show  how\t the
\nincrease in  tariff made serious in-roads on their business.
\nAt the hearing before us, learned counsel for the appellants
\nplaced the annual reports of the Delhi Cloth & General Mills
\nLtd. for  the years  1978-79 to\t 1983-84, and the profit and
\nloss account  of Messrs\t Shriram Vinyl & Chemical Industries
\nfrom the  years 1965-66\t to 1982-83.  In these reports it is
\nstated that  the claim\tof the\tBoard  for  payment  of\t the
\ndifference between
\n688<\/span>
\nthe uniform  tariffs and  the agreed rate had been upheld by
\nthe High  Court and  that the  Company had preferred appeals
\nbefore this  Court. It\tis further stated that in compliance
\nwith this  Court’s interim  order directing them to pay Rs.3
\ncrores on  account  of\tthe  difference\t in  five  quarterly
\ninstalments commencing\tfrom December  1980, it had paid the
\ninstalments as\tdirected which\twere debited to the Profit &
\nLoss  Account\tand  treated   as  allowable  deduction\t for
\ncomputing the  provision  for  taxation\t in  the  respective
\nearlier years.\tIt is  also stated  that as at June 30, 1984
\nthere was  an unprovided  liability on\tthis account  of  12
\ncrores 16.44 lakhs which includes interest of 5.09 crores. A
\nmemorandum of  hypothecation had  been executed\t creating  a
\ncharge on  the whole  of the  movable plant,  machinery\t and
\nequipment of  the PVC  plant at\t Kota in favour of the Board
\nfor an\tamount of Rs.4.57 crores for which Rs.60.92 lakhs in
\nfixed deposit  accounts with  the banks\t had been  given  as
\nsecurity. The  Profit &\t Loss Account  of the  PVC plant  at
\nKota, it  is stated  in foot note 4 : From the year 1980-81,
\n100% payment  to RSEB  has been made on the basis of uniform
\ntariff, under  orders of the Supreme Court. There is nothing
\nto show that the appellants had not the capacity to bear the
\nburden of  uniform tariffs.  It\t cannot\t be  said  that\t the
\nimpugned demands made by the Board as against the appellants
\nwere confiscatory  in nature.  When all the large industrial
\nundertakings including the public sector undertakings of the
\nGovernment of India and the State Government were paying for
\nthe supply of electricity at uniform tariffs fixed from time
\nto time,  the appellants had no right to claim immunity from
\nit.\n<\/p>\n
\t\t    Promissory estoppel.\n<\/p>\n
     Question of  promissory estoppel  does not really arise
\nand, in\t our opinion,  rightly not  pressed. The  appellants
\nhave laid  no foundation in the pleadings for application of
\nthe doctrine of promissory estoppel. There is no question of
\nany estoppel  against the  Board inasmuch  as the appellants
\ndid not\t open their PVC plant on account of any assurance or
\npromise by  the Board.\tThe opening  part of  the  agreement
\nitself shows  that the\tappellants approached  the Board for
\nsupply of  high tension\t power for  their industrial complex
\nand the\t Board complied\t with the request. There was thus no
\nquestion of any promise. Even otherwise, the appellants have
\nnot made out that but for the
\n689<\/span>
\nstatutory  contract   for  supply   of\telectricity   at   a
\nconcessional rate under s.49 they would not have established
\ntheir industry.\t It is\tsignificant to\tnote that there were
\nnumber of  incentives offered  by the  State  Government  to
\nenterpreneurs to  set up their industries in the State, such
\nas, land at concessional rates, reduced development charges,
\nfacilities of  railway siding free of cost and free of rent,
\nreduced charges\t for industrial\t water, special\t arrangement
\nregarding disposal of affluence, loan for subsidiary housing
\nschemes, etc.  In any event, the Board is not the Government
\nand the\t appellants cannot  rely on  promissory estoppel for
\nthe incentives offered by the Government.\n<\/p>\n
     To sum  up :  (1) By virtue of the provisions contained
\nin ss.49A  and 49B  of the Electricity (Supply) Act, 1948 as
\nintroduced by the Electricity (Supply) (Rajasthan Amendment)
\nAct, 1976, it was lawful for the Rajasthan State Electricity
\nBoard to  revise the  special rate of tariff agreed upon and
\nto raise a demand against the appellants by its letter dated
\nFebruary 1,  1971 for  payment of the difference between the
\nuniform tariff\tunder schedule\tHS\/LP\/HT-1 applicable to all
\nlarge  industrial   consumers  under   the  Board’s   tariff
\nnotification dated April 26, 1969, and the concessional rate
\nin terms of c1.18 of the agreement between the parties dated
\nJuly 28,  1961 for  the period\tfrom January  1,  1971\tupto
\nFebruary 6,  1976 i.e.\tthe  date  of  promulgation  of\t the
\nElectricity (Supply)  (Rajasthan Amendment) Ordinance, 1976,
\nas also\t the general  surcharge of 15% thereon levied by the
\nBoard by  its tariff  notification dated  April 26,  1969 as
\nfrom September\t16, 1966  onwards. (2)\tThe  Board’s  letter
\ndated March  12,  1976\tbeing  subsequent  to  the  date  of
\npromulgation of\t the Ordinance,\t the demand  raised  by\t the
\nBoard for  payment  of\tthe  revised  uniform  tariff  under
\nschedule LP\/HT-1  applicable to\t all such  large  industrial
\nconsumers under\t the Board’s  tariff notification  dated May
\n28, 1974  purporting to\t act under ss.49A and 49B of the Act
\nread with c1.18 of the agreement, was not validated by s.49B
\nand therefore the Board was only entitled to recover uniform
\ntariff at  the same  rate i.e.\tunder schedule HS\/LP\/HT-1 of
\n1969 for  the period  from July 1, 1974 to February 6, 1976,
\nthat is, prior to the date of promulgation of the Ordinance.
\n(3) The\t Board was entitled by the terms of s.49A to raise a
\ndemand for  payment of\tthe  revised  uniform  tariff  under
\nschedule LP\/HT-1 of 1974 w.e.f. February 7, 1976
\n690<\/span>
\nand thereafter\tas per\tthe revised  uniform tariffs  framed
\nfrom time  to time  as applicable  to all  large  industrial
\nconsumers in  terms of\tc1.18 of  the agreement.  All  other
\ncontentions viz. that the impugned demands were violative of
\nArt.14,\t Art.19(1)(f)\tand  (g)   and\tArt.31(2)   of\t the
\nConstitution stand rejected.\n<\/p>\n
     In that  view of  the matter, the bill furnished by the
\nRajasthan State\t Electricity  Board  dated  March  12,\t1976
\nrequiring   the\t   appellants\tto    pay   an\t amount\t  of
\nRs.21,35,506.72p. for  the billing month of February 1976 at
\nthe revised  uniform tariff under schedule LP\/HT-1 framed by
\nthe Board’s  tariff notification dated May 28, 1974 together
\nwith the  general surcharge  of 15% must be quashed, and the
\nBoard shall  instead raise  a fresh demand on the appellants
\nto pay uniform tariff under schedule HS\/LP\/HT-1 framed under
\nthe Board’s tariff notification dated April 26, 1969 for the
\nperiod from  July 1,  1974 to February 6, 1976 together with
\n15% general surcharge thereon. It is declared that the Board
\nwas entitled  under s.49A  of the  Act\tto  raise  a  demand
\nagainst the  appellants for  payment of\t the revised uniform
\ntariff under  schedule LP\/HT-1\tof 1974\t w.e.f. February  7,
\n1976 and  thereafter as\t per the  revised  uniform  tariffs,
\nframed from  time  to  time,  as  applicable  to  all  large
\nindustrial consumers  together with the general surcharge of
\n15% thereon in terms of c1.18 of the agreement.\n<\/p>\n
     The result\t therefore is  that all\t the appeals, except
\nC.A.No. 2675\/80,  must fail  and are dismissed. Civil Appeal
\nNo.2675\/80 arising  out of  the judgment  and order  of\t the
\nDivision Bench\tof the\tHigh Court  dated September 12, 1980
\ndismissing  S.B.  Writ\tPetition  No.8579\/80  filed  by\t the
\nappellants challenging\tthe validity  of the  aforesaid bill
\ndated March 12, 1976 sent by the Rajasthan State Electricity
\nBoard for payment of Rs.21,35,506.72p. for the billing month
\nof February  1976 is  partly allowed. The said Writ Petition
\nis allowed  to the  extent that\t the  bill  for\t payment  of
\nRs.21,35,506.72p. for  the billing month of February 1976 at
\nthe revised uniform tariff under schedule LP\/HT-1 of 1974 is
\nquashed for  the  reasons  stated  above.  It  is,  however,
\ndeclared that  the  Rajasthan  State  Electricity  Board  is
\nempowered in terms of s.49A of the Electricity (Supply) Act,
\n1948, as  introduced by\t the Electricity (Supply) (Rajasthan
\nAmendment) Act, 1976 to
\n691<\/span>
\nraise a\t fresh demand  for payment under schedule HS\/LP\/HT-1
\nof 1969\t for the  period from  July 1,\t1974 to\t February 6,
\n1976. It  is further  declared that the Board is entitled to
\nrecover from  the appellants  charges under schedule LP\/HT-1
\nof 1974\t as from  February 6, 1976 and thereafter as per the
\nrevised uniform\t tariffs,  framed  from\t time  to  time,  as
\napplicable to  all large  industrial consumers together with
\nthe general  surcharge of  15% thereon\tin terms of c1.18 of
\nthe agreement.\n<\/p>\n
     The appellants  having substantially  failed  must\t pay
\ntwo-thirds of  the costs  of these  appeals to the Rajasthan
\nState Electricity  Board. The  State of\t Rajasthan will bear
\nits own costs.\n<\/p>\n
A.P.J.\t       Civil Appeals Nos. 2676 to 2679\/80 dismissed.\n<\/p>\n
\t       Civil Appeal No. 2675 of 1980 partly allowed.\n<\/p>\n
692<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Delhi Cloth & General Mills … vs Rajasthan State Electricity … on 12 March, 1986 Equivalent citations: 1986 AIR 1126, 1986 SCR (1) 633 Author: A Sen Bench: Sen, A.P. (J) PETITIONER: DELHI CLOTH & GENERAL MILLS COMPANY LTD. & ANR. Vs. RESPONDENT: RAJASTHAN STATE ELECTRICITY BOARD & ANR. DATE OF […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-193933","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nDelhi Cloth & General Mills ... vs Rajasthan State Electricity ... on 12 March, 1986 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/delhi-cloth-general-mills-vs-rajasthan-state-electricity-on-12-march-1986\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Delhi Cloth & General Mills ... vs Rajasthan State Electricity ... on 12 March, 1986 - 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