NDLI: Kanoria Chemicals and Industries Ltd. and Anr. Vs. State of U. P. and Ors. and Vice Versa

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Electricity (Supply) Act 1948
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Electricity Laws (uttar Pradesh Amendment) Act, 1983 (12 of 1983) Electricity (supply) Act, 1948 (54 of 1948)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Electricity (Supply) Act, 1948: Section 60 (As introduced by section 7 of Electricity Laws (U.P. Amendment) Act, 1983. Company-Electricity Board-Contract for supply of electricity at concessional rates on special considerations-Power of Electricity Board to revise rates-V.P. Gazette Notification dated 29.10.82--Schedule-Levy of HV-2 rates i.e. uniform tariff applicable to "bulk power" consumers in substitution of contracted rates-Validity of-Held fixation of rates was not vitiated-Revision of rates can be given retrospective effect-Failure to specify the precise manner in which the rates were arrived at does not vitiate the rates fixed-Power to revise tariff can be exercised more than once-Electricity Board can fix rates higher than HV-2 rates-But levy of rates higher than HV-2 rates on the Company held not justified under the circumstances. ) Section 49-Electricity Board-Revision of rates-Factors to be taken into account-Distinction between section 49 and 60 explained. Electricity Laws (U.P. Amendment) Act, 1983 (Act 12 of 1982): Section 7-Difference in English and Hindi version of Act, Absence of words "for the first time" in Hindi version of Act-Effect of The appellant-company set up a caustic soda industry at Renukoot involving the use of electricity as the main raw material. On 30.9.63 it entered into a contract with the State of Uttar Pradesh for supply of electricity for a period of 25 years from 1.4.64, to the extent of 6.5 NW from the Rihand Hydel station at a fixed rate of 2.5 paise per unit and an additional supply of 1.5 NW from an inter-connection at the rate of 5 NP per unit. The terms of the contract provided that the transmission and distribution losses were to be borne by the company and that the rates could be raised after sixteen years but any enhancement in rates was not to exceed 10 per cent of the rates agreed upon. Subsequently, the UP Government enacted the Electricity Laws (Uttar Pradesh Amendment) Act, 1983 which came into force from 20.5.1983. Section 7 of the said Act amended section 60 of the Electricity Supply Act, 1948 by inserting sub-sections (3) to (5) with retrospective effect from April 1, 1965. The Amended Act enabled the State and the Board to modify the rates of supply of Electricity to appellant under the contract of 30.9.63. Simultaneously the Parliament also amended Section 59 of the Electricity Supply Act by the Act 18 of 1983 enabling the Electricity Board to fix the tariff in such a way so as to build up a statutory surplus fixed by the State Government. On the passing of the Amendment Act, the Electricity Board informed the appellant-company that the rates were proposed to be revised and later it informed the appellant-company that on 28.9.83 the State Government, by its Gazette Notification dated 29th October, 1982, had approved the levy of HV -2 rates (i.e. uniform tariff applicable to 'Bulk power' consumers) in substitution of the rates mentioned in the ·agreement of 30th September, 1963. The effect of the revision was to oblige the appellant-company to pay 57.71 paise per unit for 1983-84 and 61.60 paise per unit for 1984-85. Accordingly, supplementary bills were raised demanding Rs. 3.07 crores from the appellant-company. The appellant filed a writ petition in the High Court of Allahabad assailing the Validity of section 7 of the amending Act and the right of the Board to enhance the rates. By its order dated 2.4.87 the High Court allowed the writ petition and quashed the approval dated 28.9.83 given by the State Government to the new rates and the consequential demands of the Electricity Board but left it to the Board and State to fix revised rates afresh by directing the respondents (1) not to charge the uniform tariff rate for the period beginning from 20th May, 1983 till the rates were fixed in accordance with section 60(5) (a); and (ii) that the rates applicable to the appellants should be determined having regard to the individual circumstances of the appellant. The Electricity Board and the State Government preferred an appeal to this Court. Aggrieved by the fact that in applying the HV -2 rates the Board and the ·State had not taken into account the special factors relevant to the supplies made to it, the appellant also filed an appeal in this Court. In the meantime, pursuant to the directions of the High Court the Board fixed the revised rates on 28.3.88 for the supply from 20th May, 1983 which were much higher than the HV-2 rates fixed earlier and quashed by the High Court. The appeals came to be heard by this Court on April 10, 1991 when this Court directed that the appellant should make a representation to the State Electricity Board setting out the individual factors which should be taken into account in fixing the rates applicable to them within the meaning of section 60(5) (a) of the 1948 Act and that the State Government should reconsider the fixation after considering the recommendations made by the Board as well as the representations of the appellant. Accordingly the State reconsidered the matter and by its order dated 31.8.92 approved the rates fixed by the State Government on 28.3.88. The appellant challenged the validity of the rates fixed contending that (i) the fixation of rates as on 31.8.1992 was not valid because (a) the respondents have not complied with this court's directions dated 10.4.1991 as they have neither disclosed the factors based on which the rates were revised in March 1988 nor indicated the monetary incidence or impact of the factors taken into account; (b) in the process of refixation of the rates there was no genuine exercise to consider relevant factors in determining the rate under section 60 (5) (a); (c) that the Board had not set out anywhere the precise manner in which the rates recommended by them were arrived at; (ii) Section 60 cannot be interpreted so as to give power to the Board to fix rates retrospectively because (a) such an interpretation precludes the Board and the State from revising the rates prospectively; (b) if the power is held exercisable more than once, it will permit successive revisions each superseding the earlier one, a position that could lead to harrassment; (c) that the Hindi version of the Amendment Act is differently worded and does not contain the words "for the first time" found in the English version and in case of a conflicting version between Hindi and English version the Hindi text should be the key to find out the true intention of the Legislature; and (iii) in view of the facts (a) that the company established its industry in a backward area at the request of the State and in public interest; (b) the transmission and distribution losses are borne by the appellant and (c) electricity is one of the raw materials needed for its industry the appellant should be charged less than the HV-2 rates. On behalf of the Electricity Board it was contended that the demand or rates higher than HV ·2 rates was justified because (a) the Company has been getting substantial supplies or electricity at nominal rates from 1963 to.1983; (b) The Board has incurred heavy losses over the years by supplying electricity at concessional rates; and (c) there was a necessity to build up a statutory surplus prescribed by section 59.
Judge	Hon'ble Mr. Justice S. Ranganathan
Neutral Citation	1992 INSC 11
Petitioner	Kanoria Chemicals And Industries Ltd. And Anr.
Respondent	State Of U. P. And Ors. And Vice Versa
SCR	[1992] 1 S.C.R. 151
Judgement Date	1992-01-16
Case Number	1306

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