Holding

The Board had legal authority to levy and collect the surcharge of 5.5 paise per unit for electricity supplied in excess of the authorized limit, under s.22B of the Indian Electricity Act, 1910 and s.49(3) of the Electricity Supply Act, 1948.

Summary

The New Central Jute Mills Ltd. challenged a surcharge of 5.5 paise per unit imposed by the Uttar Pradesh Electricity Board for electricity drawn in excess of the 70 % limit authorized by the State Government under section 22B of the Indian Electricity Act, 1910. The company argued that the Board lacked authority to levy the surcharge without the one‑month notice stipulated in their supply agreement and that the levy was retrospective. The Supreme Court held that the Board was empowered by section 49(3) of the Electricity Supply Act, 1948 to fix a different tariff when electricity is supplied beyond the authorized quota, especially in a shortage situation, and that the agreement was silent on such a scenario. Consequently, the surcharge was deemed lawful and not a retrospective tariff alteration. The appeal was dismissed, leaving the Board’s levy intact.

Issues considered

Whether the Uttar Pradesh Electricity Board could levy a surcharge of 5.5 paise per unit for electricity drawn beyond the 70 % limit authorized under s.22B of the Indian Electricity Act, 1910.
Whether the supply agreement’s requirement of one month’s notice before changing rates barred the Board from imposing the surcharge.
Whether the surcharge amounted to a retrospective alteration of tariff contrary to law.

Legislation cited

Electricity (Supply) Act, 1948s. 49(3)
Indian Electricity Act, 1910s. 22B

Subjects

surchargeelectricity supplystatutory authoritytariffretrospective levynotice clauseIndian Electricity ActElectricity Supply Actshortage of electricity

Judgment

; NEW CENTRAL JUTE MILLS CO. LTD.
v. A
UTIAR PRADESH ELECTRICITY BOARD, LUCKNOW & ORS.

NOVEMBER 19, 1986

[M.P. THAKKAR AND B.C. RAY, JJ.] B
Indian Electricity Act, 1910 s. 22(B)and Electricity Supply Act, s. 49(3}-
E/ectricity drawn in excess of the permissible limit-Levy of surcharge at the
rate of 5.5 paise per unit-Validity and legality of

The Appellant-Company, in a writ ;>etition, challenged the order passed
by th.e respondent-Electricity Board levying surcharge of 5.5 paise per unit on C
electricity drawn by the Company in excess of the permis..ible 70% authorised
by the State Government. The writ petition having been dismissed by a Single
Judge of the High Court and the Division Bench having confmned the decision,
the appellant appealed to this Court.
D
In the appeal, it was contended; (i) that the Electricity Board had no
authority to charge 5.5 paise per unit in excess of the agreed rate without giving
one month's notice as contemplated by the agreement; and (ii) that the levy of
the surcharge resulted in retrospective levy and was therefore not in accordance
with law.
E
Dismissing the appeal,

HELD: 1. The Electricity Board had the legal authority to levy and
collect surcharge of 5.5 paise per unit from the appellant in regard to the supply
of electricity in excess of the 70% authorised in the context of s. 22-B of the
Indian Electricity Act, 1910. [334 CJ F

-'\ 2.· The agreement itself does not envision the supply of electricity in
·· · - violation of the ban imposed by the State Government in exercise of the power
..l. under. s. 22B of the Act. [333 G-H]

3.1 Section 49(J) of the Electricity Supply Act authorises JI Board to G
supply electricity by charging different tariff having regard to the geographical
position of the area, the nature of the supply, purpose for which the supply is
required and any other relevant factors, and is wide enough to cover a situation
where electricity in excess of the authorised quantum is drawn in disregard of
the ban imposed in view of the shortage of the supply under s. 22-B of the Indian
Electricity Act, l910 as also to cover a situation where at the express request of H

331
332 . SUPREME COURT REPORTS [1987] l S.C.R.

A the consumer electricity is purchased from some other authority and is )(
supplied. [334 D, BJ

3.2 The combined effect of s.49 "nd the terms and conditions of supply is
that having regard to the nature af supply and other relevant factors
particularly when there is shortage of electricity the Board has the power to
B enhance the rates. If there is shorta·~e of electricity there is justification to
impose restriction on supply. The Board can also impose higher rates hy way of
sanction if the quota is exceeded. [334 EJ

Adoni Cotton Mills etc. v. The Andhra Pradesh State Electricity Board
and Others, [1977] 1 SCR 133, relied upon. )- . ~
c
In the instant case, having reg:ll'd to the fact that the supply was made
after obtaining it from the Damodar Valley Corporation at a higher rate and
having further regard to the fact that 1the impost of the surcharge is construed as
having been made under the statutory authority, the stipulation in the
agreement does not come into play. [335 A-BJ
D
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 812of1973.

From the Judgment and Ord•:r dated 18.2.1970 of the Allahabad High
Court in Sp!. Appeal No. 1032 of 1968 .
•
E G.L. Sanghi, K.K. Jain, Pramod Dayal, A.O. Sangar and Bishambar ~
Lal for the Appellant.

Gopal Subramanium and M·cs. Shobha Dikshit for the Respondents.
.•
The Judgment of the Court was delivered by
F
THAKKAR, J. The appellant invoked the extraordinary jurisdiction of ~
the High Court under Article 226 of the Constitution of India in order to ~
challenge the order passed by the reipondent-U.P. Electricity Board levying a
surcharge of 5.5 paise per unit of electricity drawn by the appellant in excess of
the permissible 70 per cent authorised by the State Govervment. State
G Government had imposed a ban on drawing electricity in excess of70% per cent
of the consumption in exercise of powers under Section 22B of the Indian
Electricity Act of 1910 having regard to the fact that on account of short-fall of
rain the generation of electricity had been adversely affected and it was not -f
possible to supply electricity to the consumers as per the demand. The learned
Single Judge of the High Court dismissed the Writ Petition inter alia on the
H
N.C. JUTE MILJ .•· ELE_CTRICITY BOARD CTHAKKAR, J.) 333

ground that the equities were against the appellant (writ petitioner) in view of
A
the fact that the respondent-Board had purchased electricity from the Damodar
Valley Corporation (D.V.C.) at the rate of 4.57 per unit in order to make
available the electricity as per the demand of the. appellant and other industrial ·
units at their request. Says the learned Single Judge:-
l
"It appears to me that there are no equities in favour of the B •
petitioner, and on this ground iilso, the petitioner is not entitled
to any relief. The petitioner factory· and other industries had
requested the State Government and the Board to augment
supply of electrical energy by obtaining it from the Damodar
Valley Corporation and other sources and has offered to pay
additional expenses which the State Government or the Board C
might have to incur for it. In order to accommodate the
petitioner factory and other industries the State Government
and the Board did not exercise the power to disconnect their
·connections and obtained electrical energy from the Damodar
Valley Corporation and had to pay certain sums of money
therefore. They were certainly entitled to recover those amounts . D
from the petitioner factory and other industries. It does not lie in
the mouth of the petitioner now to say that the Board is not
entitled to levy a surcharge for recovery of the amount which.
they have spent in obtaining extra electrical energy from the
Damodar Valley Corporationft. ·

.E
The Division Bench has confirmed the decision of the learned Single
Judge. '

Two contentions have been urged in support of this appeal The first
contention is that the Electricity Board had no authority to charge 5.5 paise per.
unit in exoess of the agreed rate without giving one month's notice as F
contemplated by the agreement. The second contention is that the levy of the
surcharge resulted in a retrospective levy and therefore, it was not in.accordance
with law... / ·· .,

So for as the principal contention is concerned ~e are unable to accede to
the submission that the Board had no legal authority to levy 5.5 paise surcharge G
in respect of the supply in exoess of the 70 per cent authorised by the State
Government The agreement it~elf does not envision the supply of electricity in
violation of the ban imposed by the State Government in exercise of the power
under section 22-B of the Indian Electricity Act, 1910. Nor does the agreement
stipula'e the rate e.t wl,ie'i sach Sl'j>ply shoeld be charged if not-withstanding
the ban against the supply, a. consumer draws electricity in oxcess of the H.
334 SUPREME COURT REPORTS [1987] l S.C.R.

A permissible quantity. Thus the agreement is silent on this aspect. Therefore, the x
Board was justified in invoking its power under section 49(3) of the Electricity
Supply Act, 1948 which authorises a Jloard to supply electricity by charging a
different tariff having regard to the geographical position of the area, the nature
of the supply, purpose for which the npply is required and 'any other relevant
factors'. Section 49 (3) of the Act is wide enough to cover a $ituation where
B electricity in excess of the authorised quantum is drawn in disregard of the ban
~
imposed in view of the shortage of the supply position in the face of the ban
imposed under Section 22-B of the Indian Electricity Act, 19!0 as also to cover
a situation where at the express request of the appellant (as per the averment
contained in the affidavit filed on behalf of the respondent) electricity is ;
purchased from some other authority (in the present case from D.V.C.) and is J-c~
.. c supplied to the consumers. We are, t 1erefore, of the view that the electricity

•• • Board had the legal authority to levy and collect surcharge of 5.5 paise per unit
from the appellant in regard to the supply in excess of the 70 per cent authorised
in the context of section 22-B of th' Indian Electricity Act, 19!0. We are
.)-

buttressed in this view by a decision of this Court in Adoni Cotton Mills etc: v.
The Andhra Pradesh State Electricity Board & Ors., [1977] l S.C.R. page:l33.
D In Adoni Cotton Mills'case the view has been taken that the power to en1*nce
the tariff is included in section 49 of the 1948 Act and that section 49(3)
authorises a Board to fix different tariffs for th.e supply of electricity having
regard to the geographical position etc and any other relevant factors. The
expression 'any other relevant factors' is not to be construed ejusdem generis
and that the combined effect of Section 49 and the terms and conditions of
E supply is that having regard to the nature of suply and other relevant factors
particularly when there js shortage of electricity the Board has the power to
""'·
enhance the rates. If there is shortage of electricity there is to be restriction on
supply and the Board can disconnect sopply if the quota is exceeded. The Board
can also impose higher rates if the quota is exceeded. The imposition of higher
rates is only to "sanction the rigour of:ation by making persons who exceed the
F _),
quota liable to pay higher rates." We are, therefore, of the opinion that so far as
the first point is concerned the view taken by the High Court cannot be taken
exception to. With regard to the retrospective effect argument, the electricity \
was supplied from November, 1966 till February 20, 1967 on which date the
notification imposing the levy was issued. It was, therefore, urged that so far as
the period anterior to February 20, 1967 is concerned the effect of the levy
G would be retrospective. The High Court has taken the view that it does not
amount to making the tariff retrospective but the effect of the notification is to
recover the surcharge in respect of the energy which was supplied in excess of -{
the permissible quota. It was also urged on behalf of the respondents that in so
far as the period anterior to February 20, 1967 was concerned the appellant was
not entitled to make the recovery as it would amount to altering the tariff. This
H argument was advanced in the context of the stipulation in the agreement that
N.C. JUTE MILLS v. ELECTRICITY BOARD [THAKKAR, J.] 335

one month's notice would be given before increasing the tariff. Since we are of A
the view that the Board had the statutory authority to impose the surcharge in
respect of the electricity supplied in excess of the permissible quota and having
regard to the fact that the supply was made after obtaining it from the D.V.C. at
a higher rate and having further regard to th~ fact that the inipost of the
surcharge is construed as having been made under the statutory authority the
8
stipulation in the agreement does not come into play. Under the circunistances,
we do not see any good ground to disturb the findings recorded by the High
Court. The appeal therefore, fails and is dismissed. There will be no order as to
costs.
~.)
I A.P.J. Appeal dismissed.
c

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