Holding

Clause (c) creates a two‑part tariff requiring the sum of demand charges and energy charges, and clause (d) only establishes a minimum bill without modifying clause (c).

Summary

The Municipal Corporation of Delhi (MCD) supplied electricity to Asian Art Printers Ltd. under a "Mixed Load (HT)" tariff. The tariff booklet contained clause (c) stating demand charges plus energy charges and clause (d) prescribing a minimum bill. The consumers argued that the payable amount should be whichever is higher of demand or energy charges, while MCD contended that the total payable is the sum of both charges. The Supreme Court examined the language of the clauses and held that clause (c) creates a two‑part tariff where demand and energy charges are added together, and clause (d) merely sets a minimum demand charge without altering the formula in clause (c). The Court also ruled that the observations in Ashok Soap Factory were inapplicable due to different wording. Consequently, the appeals were allowed, the High Court judgments were set aside, and MCD was awarded costs.

Issues considered

The proper interpretation of clause (c) of the tariff for Mixed Load HT – whether it mandates payment of demand charges plus energy charges or only the higher of the two.
The effect of clause (d) (Minimum Bill) on the calculation of tariff under clause (c).
Whether the precedent set in Ashok Soap Factory v. MCD is applicable to the present tariff provisions.
The relevance of the arbitration proceedings ordered by the Delhi High Court.

Legislation cited

Delhi Municipal Corporation Act, 1957s. 283
Indian Electricity Act, 1910s. 21(2), s. 22

Subjects

tariff interpretationelectricity chargesdemand chargesenergy chargesminimum billtwo‑part tariffstatutory constructionDelhi Municipal Corporation Actarbitration

Judgment

A MUNICIPAL CORPORATION OF DELHI
v.
THE ASIAN ART PRINTERS (P) LTD. AND ORS. ETC.: ETC.
I

AUGUST 31, 1994

B [B.P. JEEVAN REDDY AND SUHAS C. SEN, JJ.]

The Delhi Municipal Corporation Act, 1957 :

Section 283'--Electricity-Charges for supply-Non-residential
C premises-Mixed Load (HT) connection-Tariff rate--Non-Domestic (Mixed
Load HT) Tariff-Clauses (c) and (d)-/nterpretation of-Held, the clauses
provide for a two-part tariff-Charges payable would be a sum of demand
charges ''plus" energy charges,· and not the amount whichever is higher of the
two-Clause (d), i.e. the minimum Bill clause, does not have the effect of
modifying or cutting down the meaning or purport of fonnula contained in
D clause (c).
The respondent was a consumer of electricity under the appellant-
Corporation (supplier). It had applied for a "Mixed Load(HT)" connection
for "non-residential premises". For the purpose of tariff, the premises fell
E in the category of "Non· Domestic (Mixed Load HT) tariff'. The relevant
provisions i.e. clause (c) mentioned tariff as "Demand charges: Rs. 40 per
month per KVA or part thereof of the commuted load (as per load in the
test report) plus Energy charges: 67 paise per unit": It was further
provided that these charges would be without prejudice to the minimum
demand as laid down in clause (d) and adjustment dause at (xviii) under
F General Conditions of Application. A dispute arose between the parties
with respect to tariff amount/charges. payable by the respondent each
month. The respondents and other consumers filed petitions under section
20 of the Arbitration Act, which were allowed by the single judge of the
High Court. The appeals filed by the Corportion and the cross-objections
G filed by the consumers were dismissed by the Division Bench of the High
Court. Aggrieved, the Corporation filed the appeals by special leave.

The respondents contended that clause (c) of the "Mixed Load HT"
provides that first the demand charges @ Rs. 40 per month per KVA would
be ascertained and then the energy charges @ 67 paise per unit would be
H calculated and whichever was higher would be payable, and in the event of
8
M.C.D. v. ASIAN ART PRINTERS LTD. 9
both • the demand charges and the energy charges • being equal, the A
demand charges would be payable. The contention of the appellant was
that a sum of both the demand charges and the energy charges-calculated
according to the formula provided in clause (c) was the tariff payable by
the consumers•
••
Allowing the appeals, this Court B

HELD : 1.1. The tariff rate for the Mixed Load HT (other than
industrial load) in clauses (c) and (d) provide for a two· part tariff. The
first part comprises of demand charges and the second part of energy
charges. The tariff amount shall be determined as an amount which is the c
total of demand charges plus energy charges, calculated according to the
•• formula given in clause (c). This is evident from the word "plus" occurring
between the two items i.e. between demand charges and energy charges.
When clause (c) says that the charges payable are demand charges plus
energy charges, it means just that; it cannot mean demand charges or
energy charges whichever is higher. Clause (c) is not capable of any other D
interpretation, and it admits of no ambiguity whatsoever. The language is
clear and not susceptible of any reasonable doubt. The words in clause (c),
"the above shall be 'without prejudice' to the minimum demand as laid
down in (d)" indicate that the formula given in clause (c) is unaffected by
what is stated in clause (d). [14-C-FJ E
1.2. Clause (d) with the heading "Minimum Bill" states, "the amount
t.
of the demand charges based upon the KVA of billing demand", meaning
thereby that even in case there is no consumption, the minimum bill shall
be the demand charges based upon the KVA of the billing demand. In view
of the language of clause (c) it is not possible to read clause (d) as F
modifying or cutting down the meaning or purport of the formula con·
tained in clause (c). All that it says is that the demand charges based upon
the KVA of the billing demand shall at any rate represent the minimum
bill. [15-G-H, 16-A-B]
G
1.3. The observation in Ashok Soap Factory* have no application to
~
the tariff condition relevant in the instant appeals because of the substan-
tial difference in the language employed in the tariff conditions considered
in that decision and-those concerned in the instant appeals. [22-A-B]

*Ashok Soap Factory v. Municipal Corporation of Delhi, [1993) 3 SCC H
10 SUPREME COURT REPORTS [19~4\ SUPP. 3 S.C.R.

A 37, inapplicable.
Guiab Rao v. Municipal Corporation of Delhi, AIR {1990) Delhi 249
and Texmaco Ltd. and Anr. v. The Chief Secretary Delhi Administration,
CWP No. 1315/91 decided by Delhi High Court on 24.4.91, referred to.

B 2. The very refernce to arbitration by the High Court pertains
precisely to the interpretation of the tariff condition occurring in clauses •
(c) and (d) ·applicable to under "Mixed Load HT" Category. Since the
controversy has been decided on merits, the reference to arbitration must
be deemed to have become unecessary and infructuous. [22-C]
c CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5826-33
& 5834-36 of 1994.

From the Judgment and Order dated 25.4.91 & 24.7.91 of the Delhi ....
High Court in F.A.O. (OS) Nos. 223-30/90 & Suit Nos. 2385, ~93 & 2896
D of 1990.

M.K Banerjee, Attorney General, Ashwani Kumar, Praveen Kumar
and Virender Kaushal for the Appellant.

H.N. Salve, Harish Malhotra, S.P. Sharma and R.P. Sharma for the
E Respondents.

The Judgment of the Court was ·delivered. by

B.P. JEEVAN REDDY, J. Leave granted. Heard the learned Attor-
ney General and Sri Ashwini Kumar for the appellant and Sri Barish Salve
..
F for the respondents.

C':Jmmca <;_Jestions arise in these appeals. For the sake of con-
venience, we would refer to the facts in civil appeal arising out of S.L.P.
(C) Nos. 14140-47 of 1991. The appeal is directed against the judgment
and order of a Division Bench of the Delhi High Court dismissing the
G appeal preferred by the appellant, Municipal Corporation of Delhi
(DESU) - as well as the cross objections preferred by the respondent. The
appeal and cross objections were preferred against the judgment of a
learned Single Judge of the Delhi High Court dated 21st Novermber, 1990
allowing the petition - and a large number of similar petitions - filed by the
H respondent - and other consumers - under Section 20 of the Arbitration
M.C.D. v. ASIAN ART PRINTERS LTD. [JEEVANREDDY,J.) 11

Act and referring the dispute between the parties to arbitration. The A
learned Single Judge directed further that pending the arbitration proceed-
ings before the Arbitrator, the consumer shall not be made to deposit the
disputed amount. It was, however, observed that in case it is ultimately held
that the consumer is liable to pay the said disputed amount, he shall pay
the same with interest@ 12% p.a.
B
The respondent is a consumer of electricity. He had applied' for
Mixed Load (HT) Connection for 'non-industrial' purposes. The dispute
between the parties is with respect to the calculation of the tariff
amount/consumption charges payable by the respondent each month. In
short, the dispute p~rtains to interpretation of the relevant tariff condition C
in the Tariffs noti.tied under Section 283 of the Delhi Municipal Corpora-
... tioi: Act by the Municipal Corporation of Delhi (DESU) for the year ,
1990-91. The same are supplied to us, as a printrd booklet, by the learned
Attorney General, appearing for the appellant. We shall briefly refer to the
relevant provisions therein. D

Under the sub-heading "premises", three expressions, viz., "premises",
"industrial premises" and ''non-industrial premises" are defined. The
respondent's premises are admittedly 'non- industrial premises'. Under the
sub-heading "General Conditions of Applications", besides providing cer-
tain general conditions, a few more expressions are defined. Clause (i) of E
the General Conditions says that supply of electricity in all cases is subject
to the execution of agreements including compliance of commercial for-
malities. Clause (ii) says that "these tariffs are subject to the provisions of
the 'Conditions of supply' and 'Scale of miscellaneous charges' relating to
the supply of ekctricity issued by the Undertaking or any modification F
thereof as :-.1.: enforced from time to time and the Rules and Regulations
made or any order issued thereunder or any subsequent amendments or
modifications thereof so far as the same are applicable." Clause (iii) says
that all loads above 100KW under any category of supply shall be given on
H.T. Clause (~v) clarifies that "the minimum charges/demand charges ex- G
elude meter n:nt, electricity taxes and other charges which shall be charged
separately as in force from time to time depending upon the character of
service". Clauses (v) to (viii) define the expressions "connected load",
"sandioned load", "contract demand" and "maximum demand" respectively.
Clause (ix) provides that wherever the contract demand has been given in
KW, the contract demand in KVA for tariff purposes shall be determined H
u SUPREME COURT REPORTS [1994)SUPP. 3 S.C.R.

A by adopting the power factor as 0.85. For the purpose of tariff rates, th~
consumers are divided into domestic, non-domestic, mixed load HT, small
industrial power (SIP) and large industrial power (LIP) categories. Besides
the· above, separate tariff rates are notified for agriculturists and certain
other consumers Ni.th whom we are not concerned. So far as domestic
supply is concerned, the character of service is single phase 230V or three
B phase 400V. The tariff prescribed is what may be called 'single part tariff'.
It is @ .27p per unit on first 100 units per month, thirty two paise per unit
on next 100 units per month and seventy five paise per unit on all consump-
tion above 200 units per month. This is, of course, subject to minimum
charges prescribed therein. In the case of non-demestic L.T. supply, dif-
c fernet rates are fixed which we need not refer to.

Now coming to the Mixed Load HT with which we are concened, ...
this is "available to consumers having connected load (other than Industrial
Loads) above lOOKW, for lighting, fan, heating and power appliances in all
Non-Domestic establishments as categorised in Non-Domestic (Mixed
D Load HT) tariff'. The character of service is AC. 50 cycles, 3 phase, llKV.
The tariff mentioned under clause ( c) and the 'minimum bill' mentioned
in clause ( d) may now be set out in full from page 13 of the booklet* :

"(c) Tariff:
E
Demand Charges :
Rs. 40.00 per month per KVA or part thereof of the committed
load (as per load in the test report) ·

Plus
F
Energy Charges;

67 paise per unit;

G The above shall be without prejudice to the minimum demand as
laid down in ( d) below and adjustment clause at (xviii) under
General Conditions of Application.
We are referring to the pages of the booklet bacause of the confusing manner in which
the several tariff conditions are enumerated. This is being done to avoid any confusion
or mix-up between tariffs applicable to 'Mixed Load HT' and the tariffs application to
H 'Large industrial Power' (L.1.P.)
M.C.D. v. ASIAN ART PRINTERS LTD. [JEEVAN REDDY, J.) 13

(d) Minimum Bill : A
The amount of the demand charges based upon the KVA of billing
demand."

It is the interpretation of above two clauses - ( c) and (d) - which falls
for consideration in these appeals. Though it is not strictly relevant for the B
purpose of these appeals, it has become necessary to notice the tariff rate
prescribed for large industrial power category inasmuch as a decision
rendered by this court with reference to a Note appended to the L.I.P.
tariff rates (affirming the decision of the Delhi High Court) is made the
sheet-anchor of the respondents' case which has been upheld by the
learned Single Judge and affirmed by the Division Bench of the Delhi High C
• · Court in the orders under appeal herein. In the case of Large Industrial
.Power (L.I.P.) also, the character of service is A.C.50 cycles, 3 phase,
llKV. The tariff for LIP category is mentioned in clauses (c) and (d),
occurring at page 16 of the booklet. They read as follows :

"(c) Tariff: D

Demand Charges :

Rs. 40 per month per KVA· or part thereof of the committed load
(as per load in the test report)
E
plus

Energy Charges :

(i) First 5,00,000 units per months at 85 paise per Unit.
F
(ii) All above . , .,Jr··• unit:, ;1er month at 84 paise per unit.

Subject> to :-

a maximum over all rate of Rs. 1.10 per KWH only for
bonafide use of supply without prejudice to minimum pay- G
ment as laid down in item (d) below and adjustment clause
at '(xviii) above under General Conditions of Application.

( d) Minimum Bill :

The amount of demand charges will be based upon the KVA of H
14 .SUPREME COURT REPORTS (1994) SUPP. 3 S.C.R.

A the committed load (as per load in the test report)."

A Note is appended to the above provisions. It is applicable to
furnaces only. It reads :

"Note - In the case of furnaces, the above tariff and stipulations of
'B LIP will also be applicable with further provision of clause of
Minimum Consumption Guarantee @ Rs. 340 per KVA or part
thereof per month." (Printed at page 18 of the booklet)

Now coming back to the tariff rate for the Mixed Load HT (other
that industrial load) with which we are concerned herein clauses (c) and
C (d) set out hereinbefore (at page 13 of the booklet) provide for a two-part
tariff. The first part comprises of demand charges ·and the second part of
energy charges. The demand charges are calculated @ Rs. 40 per month ·
for KVA or part thereof of the committed load. (as per load in the test
report) while the energy charges are calculated @ 67 paise per unit. In
D · other words, the tariff amount shall be determined as an amount which is
the total of demand charges plus energy charges. This is evident form the
· word "plus" occurring between the two items, i.t., between demand charges
and energy charges. Having so set out the above formula, clause (c) further
says that "the above shall be without prejudice to the minimum demand as
E,; laid down in ( d) below and adjustmant clause at (xviii) under General
Conditions of Application." it is agreed between the parties that the adjust-
ment clause at (xviii) under General Conditions of Application is not
relevant for our purposes. Nov what do the words "the above shall be
Mthout prejudice to the minimum demand as laid down in ( d) below"
signify? The words "without prejudice" indicate that the formula indicated
F in clause (c) is unaffected by what is stated in clause ( d). Clause ( d) reads:
"Minimum Bill : The amount of the demand charges based upon the KVA
of billing demand".

The main dispute between the parties revolves around the meaning
d' and purport of clause ( c). According to the Respondents- consumers, it
says- 'first ascertain the demand charges @ Rs 40 per month per KVA;
then ascertain the energy charges @ 67 paise per unit actually consumed;
if the energy charges are le$S than the demand charges, demand charges
in full are payable; if the energy charges and demand charges are equal,
only the demand charges are payable; if, however, the energy charges
H . exceed the demand charges, then only the energy charges are payable
M.C.D. v. ASIAN ART PRINTERS LTD. [JEEVAN REDDY, J.] 15

inasmuch as demand charges get merged with energy charges'. A
On the other hand, the appellant-supplier says that clause (c)
provides for a two-part tariff; both the demand charges and energy charges
have to be calculated according to the formula prescribed in clause (c) and
then both have to be added together; the total so arrived at is the tariff
charges payable by the consumer; this is the plain meaning of the clause B
as disclosed by the use of the word "plus" between demand charges and
energy charges.

It would be seen immediately that the interpretation placed by the
respondents-consumers on clause (c) has the effect of completely over- C
looking and nullifying the expression "plus" in clause (c). According to the
respondents' interpretation, it ceases to be a two-part tariff. It indeed
amounts to re-writing the clause. If the respondents' interpretation is to be
accepted, the clause should read like this :

"Demand Charges : D
Rs. 40.00 per -month per KVA or part thereof of the committed
load (as per load in the test report)

or
E
Energy Charges :

67 paise per unit,

whichever is higher."
F
We do not think that such a course is permissible to us. When clause
(c) says that the charges payable are demand charges plus energy charges,
it means just that; it cannot mean demand charges or energy charges
whichever is higher. The words in clause (c) to the effect "the above shall
be without prejudice to the minimum demand as laid down in ( d) below...." G
make no difference to the above understanding. Clause ( d) carries the
heading "Minimum bill". It reads : "the amount of the demand charges
based upon the KVA of billing demand". This only means that even in
case there is no consumption, the minimum bill shall be the demand
charges based upon the KVA of the billing demand. It may be reiterated
that according to clause (c), the formula prescribed therein (demand H
16 SUPREME COURT REPORTS [1994) SUPP. 3 S.C.R.

A charges plus energy charges) is "without prejudice to the minimum demand
as laid down in (d) below''. In the face of these words, it is not possible
to read clause ( d) as modifying or cutting down the meaning or purport of
the formula contained in clause (c). Clause (d) does not purport to do any
such thing. All that it says is that the demand charges based upon the KVA
of the billing demand shall at any rate represent the minimum bill. We are,
B therefore, of the opinion that clause (c) of the Mixed Load HT is not
capable of any other interpretation than the one placed by us and that it
admits of no ambiguity whatsoever. The language is clear and not suscep-
tible of any reasonable doubt.

C The case of the repondents-consumers is based not upon the lan-
guage of clauses ( c) and ( d) but entirely upon certain observations made •
by the Division Bench of the Delhi High Court iii Guiab Rai v. Municipal
Corporation of Delh~ A.LR. (1990) Delhi 249=42 (1990) D.L.T. 121, and
the decision of this Court inAshok Soap Factory v. Municiapl Corporation
D of Delh~ [1993] 3 S.C.C. 37, affirming the same on appeal. It has, therefore,
become necessary to examine the said decisions - in particular the decision
of this Court - closely to ascertain their ratio and the principles enunciated
therein. For the sake of convenience, we shall refer to the decision of this
Court in Ashok Soap Factory.

E The challenge in the writ petitions (filed in the Delhi High Court)
was to the resolution of the Municipal Corporation of Delhi whereby it
approved the proposal of the Delhi Electricity Supply Committee (DESU)
to enhance 'minimum consumption guarantee charges' from Rs. 40 per
KVA to Rs. 340 per KVA in respect of arc/induction furnaces. Arc/induc-
F tion furnaces are necessarily units having Large Industrial Power connec-
tions. Arc furnaces consume electricity in bulk, i.e. in very large quantities.
Many of these furnances were indulging in several fraudulent practices and
were showing very low consumption than their capacity and working war-
ranted. It had become necessary to check these mal-practices which were
G causing substantial financial loss to the Corporation. With a view to remedy
the situation, the demand charges in the case of furnaces alone was raised
from Rs. 40 per KVA to Rs. 340 per KVA by virtue of the note referred
to above. In the case of all other LIP service holders, the said enhancement
was not applicable. It is the said enhancement which was questioned by the
, furnance-holders in writ petitions filed in Delhi High Court. The conten-
H tions raised by them, as may be culled out from the judgment of this Court
M.C.D. v. ASIAN ART PRINTERS LID. [JEEVAN REDDY, J.) 17

in Ashok Soap Factory, are the following : A
(1) The decision to increase minimum charges, i.e., demand charges
is contrary to Section 21(2) of the Indian Electricity Act, 1910. Without the
approval of the State Government, no such enhancement could have been
effected (vide paras 16 and 17). The contention was rejected by this court
in paragraphs 22 and 23 holding that. where the licencee is the local B
authority, the said requirement is not attracted.

(2) The minimum guarantee charges can only be levied under the
proviso to Section 22 of the Indian Electricity Act, 1910. In other words,
the licencee can only charge that amount which will give him a reasonable C
return on the capital expenditure and covers standing charges incurred by
it in order to meet the possible miximum demand. The Corporation has
failed to satisfy that the said enhancement from Rs. 40 to Rs. 340 was
required for the above purposes (vide para 18). This contention was
rejected in paragraphs 24 and 25 by pointing out that none of the writ
petitions can invoke Section 22 inasmuch as the proviso to said section D
"talks about a separate supply unless he has agreed with the licencee to
pay him such minimum annual sum". This court pointed out that in the case
before them "there is no question of any separate supply or any agreement
in relation to minimum annual sum" and hence, Section 22 is wholly
inapplicable. E
(3) The third contention was based on Article 14 of the Constitution
of India. It was argued that singling out furnaces from out of the class of
L.I.P. consumers amounts to invidious discrimination and is, therefore, bad
(Para 32). This contention was also rejected.
F
What is significant to notice is that the interpretation of the tariff
condition relating to L.I.P. category - prescribed in clauses (c) and (d) at
page 16 of the booklet - was not in issue in the said writ petitions or in the
appeals before this Court. Neither _party raised any contention as to the
method of calculating the tariff charges in the case of L.l.P. consumers.
The only question was as to the validity of the said Note which enhanced G
the Minimum Consumptinn guarantee in the case of furnances from Rs. 40
per KVA to Rs. 340 per KVA. This Court, however, while dealing with the
second contention aforementioned and after rejecting the said contention
made the following further observations, with respect to the meaning and
purport of the two-part tariff provided in the case of L.l.P. category, in ,H
18 SUPREME COURT REPORTS [1994) SUPP. 3 S.C.R.

A paragraph 26 :

"In the present case, on facts, the challenge is to the tariff. As
stated above, the tariff is the two-part tariff system. The two-part
tariff system is comprised of two charges- (i) minimum consump-
tion guarantee charges called demand charges and (ii) energy
~ ....
B charges for the actual amount of energy consumed. Under this
system an LIP consumer pays minimum guarantee consumption
charges at the rate fixed by the D.M.C. If the LIP consumer does
not consume the specified minimum quantity of electricity or no
energy at all even then he has to pay minimum consumption
c guarantee charges. But in case the consumer consumes more
electricity than the minimum, then the consumer pays the
~

electricity charges for the actual consumption of electricity beyond
the minimum consumption guarantee charges, in such a manner
that minimum consumption guarantee charges are merged in the \
total bill for electricity consumed. In other words, if a consumer
D consumes more than the specified minimum quantity of electricity
then, in effect, he will pay for electricity which is actually consumed
by him. As stated earlier, the appellants have obtained licences for
·the supply of electricity to a sanctioned load or more than 100 KW
and they fall in the category of LIP and the two-part tariff is
E applicable to them. For the period 1985-86 to 1988-89 the respon-
dents had fixed rates of minimum consumption guarantee charges
at the rate of Rs. 40 per KVA and Rs. 38 per KVA for consumption
above lOOOKVA." ' '·

F It is the above observations which were made with reference to the
tariff condition relating to L.I.P. category (occurring at page 16 of the
booklet) that are relied upon by the respondents-consumers as concluding
the issue relating to interpretation of clauses (c) and (d) applicable to
"Mixed Load HT", non-industrial connections (occurring at page 13.of the
booklet) as well. We do not find it possible to agree for more than one
G reaso~ Firstly, the relevant tariff condition (tariff condition applicable to
......._,
L.I.P. Ca.tegory, printed at page 16 of the booklet) is not correctly quoted '
(in para 7 of the judgment). The all-important word "plus" in between the
Demand Charges and ~nergy Charges is omitted in the tariff condition as
extracted in para 7. This may be because the interpretation of the tariff
H condition was not in issue in the appeals. Apparently, the said clauses (c)
M.C.D. v. ASIAN ART PRINTERS LTD. [JEEVAN REDDY, J.) 19

and (d) were taken from the High Court judgment in Guiab Rai where too A
the said clauses are extracted with the same significant omission. The tariff
conditions - clauses (c) and ( d) - as extracted in paragraph (7) of the
judgment of this Court read thus :

"(d) Tariff
B
Demand Charges

First 1000 KVA of Billing Rs. 40.00 per KVA or
demand for for the month thereof
All above lOOOKVA of billing Rs. 38.00 per KVA or C
demand for the month part thereof

First 5,00,000 units per month at 85 paise per unit Subject to :

a maximum overall rate of Rs. 1.10 per KVA without prejudice to
the minimum payment as laid down in item (g) below and adjust- D
ment clause at (xvii) above under .General Conditions of Applica-
tions."

Item (g) of the said tariff prescribed that the minimum bill would
be amount of the demand charges based upon the KVA of billing E
demand. Item (g) reads as under :

"(g) Minimum Bill

The amount of the demand charges based upon the KVA of
bill demand." F
Not only is the all-important word "plus" is missing but the small
sub-heading "Energy charges" is also missing before the words "First
5,00;000 units per month..... ". Evidently, the observations in para (26) are
coloured by and based upon the said accidental incorrect rendering of the
relevant tariff condition. As a matter of fact, the observations in para 26 G
are in affirmation of the observations to the same effect in the judgment
of the Delhi High Court in the judgment under appeal therein. The Delhi
High Court judgment under appeal in Ashok Soap Factory is reported as
Guiab Ram v. M.C.D., in A.LR. (1990) Delhi 249 - a decision rendered by
B.N. Kirpal and C.L. Chaudhary, JJ. H
20 SUPREME COURT REPORTS [1994) SUPP. 3 S.C.R.

A' Se_conclly, it may be noticed that the tariff condition in the case of
Large llldustrial Power category contains a ceiling which is not found in
the case of Mixed Load HT (non-industrial) category. In the case of LIP
category, the ceiling is provided in the following words occurring in clause
(c): ".....subject to a maximum over-all rate of Rs. 1.10 per KWH only for
bona fide use of supply without prejudice to minimum payment as laid
B down in item (cl) below and adjustment clause at (xviii) above under
General Condit~ons of Applications". That the said 'ceiling' was strongly
relied upon by the appellant:consumer in Ashok Soap Factory is evident
from para (8) where the contention of the appellant was noted in the
following words :
c
"In terms of the tariff, the maximum charges cannot be more than
the overall rate. of Rs.1.10 per unit ·consumed. Therefore, 80,000
units consumed would be chargeable at the maximum rate of Rs.
1.10 per unit which works out lo Rs.88,000. Since the amount of
Rs.1,08,000 is higher than Rs. 88,000 i.e. by Rs. 20,000 a rebate of
D
Rs.20,000 would be given to the consumer and the consumer would
be billed only for Rs. 88,000. It would be evident from the above
illustration that the consumer, in any event, has to pay the minimum
guarantee charge even if the value/price of the energy actually
consumed is more than the minimum consumption guarantee char-
E ges, the amount of the minimum consumption guarantee gets
merged into/with the energy _charges".

As pointed out hereinabove, neither the words (imposing a ceiling)
1_1or any words to that effect are to be found in the tariff condition (at page
F 13 of the booklet) with whic1 we are concerned in these appeals. In our
respectful opinion, the observations in para (26) of this court's judgment
in Ashok Soap Factory are attributable to the said "ceiling"- coupled with
the omission of the all-important word "plus" in the tariff conditions as
placed before this court.

G In this context, it is relevant to notice another Deivision Bench
decision of the Delhi High Court rendered by B.N. Kirpal and DK Jain,
JJ. in Taxmaco Ltd. & Anr. v. The Chief Secretary, Delhi Administration,
CWP No. 1315/91 decided on April Z4, 1991. (B.N. Kirpal is also the
member of the Division Bench which rendered the decision in Guiab Rai).
H Taxmaco was concerned with the tariff condition applicable to L.I.P.
1
I

M.C.b. v. ASIAN ART PRINTERS LID. [JEEVAN REDDY, J.] 21

c<insumers for the year 1991-92. In the tariffs notified for the said year, the A
words 'subject to a maximum over~all rate of Rs. l.lOp per K. VA ...'
occurring in cluase ( c) applicable to L.I.P. category were deleted. In view
of the said deletion, it was held.by the Division. Bench in Taxmaco that
unlike during the previous year, for ~he year 1991-92 demand charges are
payable in addition to energy charges. The following two paragraphs from B
the judgment are appo;;ite : .

'For the immediately preceding year, for the large industrial power
users like the petitioners tariff was, inter alia, being charged on the
basis of demand charges plus energy charges. For the year 1990-91,
it was further prescribed that the maximum overall rate would be C
Rs. 1.10 per KWl;I. The effect of the tariff for the year 1990-91
was that the consumers had to pay atleast minimum demand
charges. In case the consumption was below the sanctioned load
but was in excess of the connected load, then it is in effect, the
. actual consumption of which payment was being made.
D
The position in the year viz. 1991-92 is same to the extent that
there is a levy of demand charges plus energy charges. In this year·
also, the minimun. payable ls the demand charges if the energy is
not consumed upto the connected.load. The only difference in this
year is that whereas for the year 1990-91, there was mamnum E
overall rate of Rs.1.10 per KWH, this year that maximum has been
done away with. 17ze effect may be that in addition to the demand
charges, the energy charges have also to be paid.•

(emphasis added)
F
It is thus clear from the decision of the Delhi. High Court that its
earlier decision in Guiab Rai was mainly because of the said words of
'ceiling'; when the ceiling was removed, it was held that in addition to
demand charges energy charges are also payable. We may reiterate in the
case of tariff condition applicable to 'Mixed Load HT', with which we are G
concerned in these appeals, there are no words of ceiling. We muSt,
however, hasten to add that we may must not be understood as holding or
affirming that the said words of 'ceiling' to mean that only the highest of
the two charges (demand charges and energy charges) alone is payable.
We need express no opinion on the said question in these appeals for the 1
simple reason that that question does not fall for our consideration. H
22 SUPREME COURT REPORTS (1994) SUPP. 3 S.C.R.

A For all the above reasons, it must be held that the observations in
paragraph (26) in Ashok Soap Factory have no application to the tariff
condition with which we are. concerned because of the substantial dif-
ference in the language employed in the relevant tariff conditions con-
·sidered in these appeals. No relief can be granted to the respondents-
consumers herein on the basis of the said observations. The same comment
B
holds good for the decision of the Delhi High Court in Guiab Rai.

Now the very reference to arbitration by the Delhi H~gh Court in
these and other connected matters pertains precisely to the interpretation
of the tariff condition occurring in clauses (c) and (d) applicable to under
c "Mixed Load HT" category. Since we have answered the question on
merits, the reference !co arbitration must be deemed to have become
unnecessary and infruct:uous. The restraint order/stay order passed by the
High Court pending disposal of the arbitration proceedings also falls to
ground and is vacated herewith. ·

D The appeals are accordingly allowed and the judgment· of both the
learned Single Judge and the Diyision Bench of the Delhi High Court
affirming it - which are the subject matter of these appeals - are set aside.
The appellant shall be entitled to their costs. Appellant's costs assessed at
Rs. 20,000 consolidated.

E R.P. Appeals allowed.

.._