# ADONI COTTON MILLS ETC. ETC v. THE ANDHRA PRADESH STATE ELECTRICITY BOARD & OTHERS

- **Citation:** [1977] 1 S.C.R. 133
- **Court:** Supreme Court of India
- **Decided:** 1976-08-06
- **Bench:** A. N. Ray, V. R. Krishna Iyer, Jaswant Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/adoni-cotton-mills-etc-etc-v-the-andhra-pradesh-state-electricity-board-others-6897
- **Pages:** 13

## Headnote

B.
indian E/eC'tricity Act !9110---Secfion 22B-Electricity Supply Act 1948ScctiOII 18, 49 and 79(j)-Whethcr Sectio'n 49 invalid for excessive deJcgtJtion-
,Whetlzer ElectJ•icitY Board can reduce the quota of consumption if tire. Sfafr!
Government has done so-Board having determined the quota,
whether can
further reduce it-Whether Board can (rx the quota without framing regulationsPractice and proaedure-Whether appellant can be allowed to raise a·.new que!ltion of facts for tile first rlrne.
Section 22B of the Electricity Act, 1910, authorises tho State Government
if it is of the opinion that it is necessary or expedient so to do for maintaining
the supply and securing equitable distribution of energy to; provide by an order
for regul.ating the supply, distribution, consumption or use of the electricity.
Section 18 of the El,ectricity SUpply Act, 1948 provides that it shall oo
the duty of the Board to provide electricity as soon as practicable to persons
requiring such supPly.
·
Under section 49 subject to the provisions of the Act and the regulations
if any made, the Board may supply el~tricity to any persoh upon such terms
and conditions as the Board tb.inh fit. It further provides that in fixing the
tariffs and terms and conditions for the supply of electricity ~ Board shall
not show undue preference to any persoh.
Under the prescribed agreement the Board is given unilateral right to
vary from time to 'time the terms and conditions of supply under the agree.
ment by spechil or general proceedings.
The State Government made an order under s. 228 providing that the
maximum demand limit will be 75 per cent of the average monthly maximum
demand over a certain period. It further Provided that the supply to cons·umers who violated the restrictions was liable to be cut off without
notice.
Without prejudice to the right tP disconnect the supply the· Board was also
authorised ta bill tbe energy and maximum demahd utilised in excess of tll.e
limits prescribed at double the tariff ratcg. The Order of the State Govern·
men) was occasioned because the water position in the Hydro Eleotric Reservoirs in the State became very unsatisfactory because of failure of monsoon.
Secondly, sufficient power was not available to meet the needs of the State and
thirdly it became necessary to conserve available water with a. view to ensure
regula: and uniform supply of electrical energy dnrihg the coming months.
The State Electricity Board fixed quotas for cOnsumption because power
generated was not adequate to meet the requirements. An extra charge for
consumption of energy bcyQod the limits of quotas was also introduced by the
Board. The Board further cut the quota and enhanced the extra charg~.
c
D
E
JJ
Thereafter, the Board passed an order increasing the power cuts at different percentage in different industries. The Board .also increased r.harges to
be paid for the. excess consumption. This action of the Board was necessitated
G~
because of great depletioh of levels in the Hydel reservoirs and: because no
assistance was forthcoming from the neighbouring States and hecause there
was a heavy increase of agricultural loads.
'The appellants filed writ petitions in the Hi.gh Court praying for a writ
or direction that the respondent should be ordered not to collect from the
H.
appellants more thah normal charges for cOnsumption of electricity and not
to disconnect 1heir supply and for a declaration that the restrictions with regard
to the imposition of quota and the levy of penalty charg~s was illegal.
134
SUPREME COURT REPORTS
[1977] 1 S.C.R.
A
The High Court held that the Board has power to fix quotas or otherwise
to restrict consumption of electrical energy and coll~ct charges at ~ times the
normal rates.
B
c
The appellaot5 obtained special leave limited to the question whether under
s. 22B of the El~ctricity Act, 1910, it is open to the Board to reduce t.be supply
to anything Jess than 75 per cent and levy extra charges for excess supply.
In an appe

## Text

133
ADONI COTTON MILLS ETC. ETC.
v.
THE ANDHRA PRADESH STATE ELECTRICITY BOARD &
OTHERS
August 6, 1976
A
[A. N. RAY, C.J., V. R. KRISHNA IYER AND JASWANT SINGH, JJ.]
B.
indian E/eC'tricity Act !9110---Secfion 22B-Electricity Supply Act 1948ScctiOII 18, 49 and 79(j)-Whethcr Sectio'n 49 invalid for excessive deJcgtJtion-
,Whetlzer ElectJ•icitY Board can reduce the quota of consumption if tire. Sfafr!
Government has done so-Board having determined the quota,
whether can
further reduce it-Whether Board can (rx the quota without framing regulationsPractice and proaedure-Whether appellant can be allowed to raise a·.new que!ltion of facts for tile first rlrne.
Section 22B of the Electricity Act, 1910, authorises tho State Government
if it is of the opinion that it is necessary or expedient so to do for maintaining
the supply and securing equitable distribution of energy to; provide by an order
for regul.ating the supply, distribution, consumption or use of the electricity.
Section 18 of the El,ectricity SUpply Act, 1948 provides that it shall oo
the duty of the Board to provide electricity as soon as practicable to persons
requiring such supPly.
·
Under section 49 subject to the provisions of the Act and the regulations
if any made, the Board may supply el~tricity to any persoh upon such terms
and conditions as the Board tb.inh fit. It further provides that in fixing the
tariffs and terms and conditions for the supply of electricity ~ Board shall
not show undue preference to any persoh.
Under the prescribed agreement the Board is given unilateral right to
vary from time to 'time the terms and conditions of supply under the agree.
ment by spechil or general proceedings.
The State Government made an order under s. 228 providing that the
maximum demand limit will be 75 per cent of the average monthly maximum
demand over a certain period. It further Provided that the supply to cons·umers who violated the restrictions was liable to be cut off without
notice.
Without prejudice to the right tP disconnect the supply the· Board was also
authorised ta bill tbe energy and maximum demahd utilised in excess of tll.e
limits prescribed at double the tariff ratcg. The Order of the State Govern·
men) was occasioned because the water position in the Hydro Eleotric Reservoirs in the State became very unsatisfactory because of failure of monsoon.
Secondly, sufficient power was not available to meet the needs of the State and
thirdly it became necessary to conserve available water with a. view to ensure
regula: and uniform supply of electrical energy dnrihg the coming months.
The State Electricity Board fixed quotas for cOnsumption because power
generated was not adequate to meet the requirements. An extra charge for
consumption of energy bcyQod the limits of quotas was also introduced by the
Board. The Board further cut the quota and enhanced the extra charg~.
c
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E
JJ
Thereafter, the Board passed an order increasing the power cuts at different percentage in different industries. The Board .also increased r.harges to
be paid for the. excess consumption. This action of the Board was necessitated
G~
because of great depletioh of levels in the Hydel reservoirs and: because no
assistance was forthcoming from the neighbouring States and hecause there
was a heavy increase of agricultural loads.
'The appellants filed writ petitions in the Hi.gh Court praying for a writ
or direction that the respondent should be ordered not to collect from the
H.
appellants more thah normal charges for cOnsumption of electricity and not
to disconnect 1heir supply and for a declaration that the restrictions with regard
to the imposition of quota and the levy of penalty charg~s was illegal.
134
SUPREME COURT REPORTS
[1977] 1 S.C.R.
A
The High Court held that the Board has power to fix quotas or otherwise
to restrict consumption of electrical energy and coll~ct charges at ~ times the
normal rates.
B
c
The appellaot5 obtained special leave limited to the question whether under
s. 22B of the El~ctricity Act, 1910, it is open to the Board to reduce t.be supply
to anything Jess than 75 per cent and levy extra charges for excess supply.
In an appeal by special leave the appellants contended :
1. Section. 22B of 1910 Act empom:rs the Slate Govt. to control the distribution abd consumption of energy. The Stllte Gover0111ent exercised
its powers and reduced tbe quota to 75%. Ther-efore, any further
reduction by the Board would be illegal.
2. Section 49 of the 1948 Act does nOL confer power on the Board to
ellect rationing of supply because that would rnvo\ve exceo;.sivc delegation of legislative power. Tlrere is no guideline in s. 49 to reduce the
supply ahd fuerefore, section is bad.
3. In the alternative, the contention was that unless the
Board made
r-egulations under s. 79{j) it could not ration the supply in e~rcisc of
powers under s. 49.
4. The Board cannot fix different percehtae;es of cuts in the supply to
<tifferent consumers nor can the Board impose penalty.
D
Dismissing t1re appeal,
E
F
H
HELD : ( 1) Section 49 which requires the Board nOt to show undue preference to any person embodies the principle enumerated in Article 14 of tho
Constitution. It is the principle of equity or non-discrimination. However, it
is fairly settled tllat equality before law does not me:~n that tho things whic;h
were different will be treated as tbou&h they were the same. It does not mean
an economical equal treatment. It would be justifiable to rreat
different
industries and iJlStitutiOns with reference to their urgency, social utility and also
the impact on the ronservatioh and economies in the available strpply of electric
power. [142 B-E]
(2) The recognition of the fact thab the Board can introduce rationing bY
making a regulation under s. 79(j) of the 1948 Act necessarily involves
a
conCI!s'sio'n tJrat the Board has a power to enforce rationing and to enunciate
the principle and scheme of such. rationing. The making of a regulation is
not a new source of power but is the exercise of power which exists.
The
langua{!e of s. 48 "if any" shows that the power can be e:-;ercised without
making any regulation. The powers conferred on the State Government under
s. 22B do not exhaust the power of the Board under s. 49 of the 1948 Act.
There is' no conflict in the existence of power at different levels. The higher
authority may have the power to ovcnide the order of the lcwer authority.
Powers under s. 22B of the 19'10 Act and s. 49 of the 1948 Act mav l1ave 'SOme
overriding features.
Section 49', ho~ver, contains a much larger power because the Board is the authority primarily charged with all aspects of development and supply under the 1948 Acl [142 E.G, 143 A-D]
(3) The appellants cannot bo allowed to raise the COntention which was
not raised in the High Court that the cut imposed by the State Govcrnmeht
under s. 22B was effective throughout. If such facts were pl-eaded in the H i~h
Court. the Board could have produced materials denying such allegations. [143D-Fl
(4) The crders of the Government and the Board wcr;: cumulative and
not contradictory. The Board is empowered to fix different rates
"h ~1.vi·n,
regard to" the peographical position of any area, the nature of the supply and
purpose for which supply is required and any ocher relevant factors.
The
expressiorv "anv other relevant factors" is not to be constnted <'imdem
r:cncris
because there is no genus o( the relevant factors. 1144 B·O, E-F]
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ADONI coTTON MILLS V. ANDHRA PRADESH (Ray, C.J.)
lJ S
(5) lf there is. shortage of clect:icity. there ha.s to be rewictiun on supply.
A
·
Board can d1sconne~t supplY' If .the quota IS exceeded. The Board can
'fhe impose higher rat~s If the ~uota IS exceeded. The imposition of higher
3150 is only to sanction the ngour
of ration
by making
persons who
ratesd the quota liable to pay higher rates.
[144 G-H, 145 A]
excce
CIVIL APPELLATE JURISDICTION : CiviL APPEALS
NOS : 1241,
1245 1506-1525 & 1770-1771/75-(Appeals by Special Leave from
the iudgment and. Ord~r. dated 26.8.1975 of the Andhra
Pradesh
B
High Court in Wnt Petitions Nos : 874/75, 5894175, 7068174, 876/
75, 1661, 930, 2326, 149, 3385175, 6891174, 825, 2247,
2409,
3021 6931/75, 6932, 7106, 7178174, 123, 133, 235, 2241, 7170,
731/75 respectively) and
CIVIL APPEALS NOS :-1242,
. 1253,
1443,
1456-1461
1664-1666, 1772, 1774-1775, 1995-1996175
&
164-165176:-
c
(Appeals by Special Leave from the Judgment and Order
dated
26.8.1975 of the Andhra Pradesh High Court in Writ Petitions Nos :-
6796174, 5886/74, 732175, 1583/75, 7297/74, 512/75, 6121/ 74,
6902/74, 6791174, 215175, 6287/ 74, 5854/74, 2871175, 2871175,
6890175, 1634/75, 525175, 5843174, 1635175, 2053/ 75, 159. 311,
2298/75, 6478174, 2218175, 3360175, 1509, 2040, 202,
244175, .
respectively) and
D
CtVJL APPEALS NOS : 1244, 1462-1465, 1467-1498, 1500-1505,
1662, 1667, 1776-1780, 1991-1994/75 ... ~ 166/ 76 : (Appeals
by
Special Leave from the Judgment and Order dated 26.8.1975 of the
Andhra Pradesh High Court itl writ Petitions Nos. 5890/74, 5109/74
6859174, 185/ 75, 554175, 1274, 1943, 2366, 2254,
1015.
1114,
764, 296, 2584175, 6952, 5880j74, 6505, 2272175, 6922174, 205,
E
114,251, 6318, 194, 2365, 1567, 6482, 897, 620/75, 6520, 6753/ 74,
673, 2409, 1395175, 6724174, 2760, 231, 1603/ 75, 6082/74, 2245/
75, 29175, 29175, 356/75, 7042, 1649175, 29, 2113, 707,
1603,
1194, 1194, 3354/75, 6836/ 74, 2670/75, 5889/ 74 respectively) and
CIVIL APPEALS Nos:
1526-1530, 1663 & 1997 OF 1975 (Appeals by Special Leave from the Judgment and Order dated 26.8.1975
F
of the Andbra Pradesh High Court in Writ Petitions
Nos :-230,
276, 354, 355, 596, 230 and 230/ 75 respectively.
CIVIL APPEAL NO. 1532 OF 1975 (Appeal by special Leave
from the Judgment and Order dated 26.8.1975 of the Andhra Pradesh
High Court in Writ Petition No. 4320174).
CIVIL APPEAL NO. 1533 OF 1975
(Appeal by special Leave
G
fr?m the Judgment and Order dated 26.8.1975 of the Andhra Pradesh
H1gh Court in Writ Petition No. 2311175).
CIVIL APPEAL NOS. 1534 & 1661 OF 1975 (Appeals by Special
leave from the Judgment ami order dated 26.8.1975 of the Andhra
Pradesh High Court in Writ Petitions Nos. 6926174, and 2019!75).
.1· K. Sen, (In CA. 1245/ 75), B. Sen (In CA
1506/75)
K.
~rtmvammurthy, Naunit L{l/ and (Miss) Lalita Kohli for the appellants
10 Cas. 1241, 1245, 1506-1525, 1770-1771175.
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136.
SUPREME COURT REPORTS
[19771 1 s.c.R.
M. C. Bhandare (InCA 1242!75), Eswara Prasad (InCA 14431446), A. L. Lakshminarayana (In 1243, 1447-1451/75), A. Panduranga Rao (In CA. 1460-1461, 1995-1996/75), D. Sudhakar Rao
(In CA 1242/75) B. Kanta Rao for tbe Appellants in CAs. 1242,
1243, 1443-1454, 1456-1461, 1664, .1666,_ 1772, 1774-1775, 19951996!75 and 164-165/76. ·
B. Sen (C.A. 1462!75) Sachin Chaudhry (CA 1244/75) for the
appellants in C.A. Nos. 1244, 1462-1465, 1467-1498,
1500-1505,
1662, 1667, 1776-1780, 1991-1994/75 and 166/76.
Subodh Markandaya for the appellants in Cas 1526-1530, 1663
and 1997/75.
A. V. Rangam and (Mi;s) A. Subhashani, for the Appellant in
C.A. 1532/75.
.
A. K. Sanghi for the Appellant inCA 1533/75.
A.' Subba Rao for the App_ellants in Cas. Nos. 1534 and 1661/75.
Lal Nara.in Sinha, Sol. Gen. T. Anatha Babu, K; R. Chaudhary,
S .. L. Setia and (Mrs. V eena Khanna for the Respondents in all the
appeals.
·
. The Judgment of the Court was delivered by
RAY, C.J . .:_These appeals 'are by special leave from the judgment
dated 26 August, 1975 of the High Court of Andhra Pradesh.
The special leave was granted as follows :-
"During the period in question there was an order of
the State Government under section 22-B of the Electricity Act, 1910 limiting the ·supply of electridty to 75 per
cent of the previous consumption.
The quotas fixed by .the
Board are very often below 7 5 per cent and sometimes as
low as 30 per cent.
Special leave should
be granted
limited to the question whether in the facts of the order
under section 22-B it is open to reduce the supply to anything less. than-75 per cent and charge penalty of
extra
charges for that quantity."
· The State· Electricity Board referred to for brevity as the Board
supplies electricity of two varieties.
One is
high
tension. . The
other is low tension.
Power is generated by hydro electrical inethod
by use of river waters and also by thermal. method using coal. The
Board fixed quotas for consumption with effect from March 1972
because power generated was not adequate to meet the requirements. ·
For a shortperiod between 7·Juty, 1972 and 16 August, 1972 these
quotas were lifted.
The restrictions were re-imposed.
An extra
charge for consumption of energy beyond the limits of quotas
was
introduced on 25 February, 1973. . The charge was double the usual
rate.
This continued till 1 August, 1974.
The Board introduced
on _29 J:uly,. 1974 a further cut in quotas . and enhanced t~e extra
charges.
The extra charges were double the usualrates, if the excess
consumption was 20 per cent or below that limit over the newly intra-
•
j
y
'
·~
ADONl COTTON MILLS V. ANDilRA PRADESH (Ray, C.J.)
137
duced quotas.
If the total consumption was in excess of 20 per
cent, the extra charge w.as four times the total exces~ consumption.
The Board on 20 March, 1973 reduced the quotas still further retaining the pattern of extra charges.
Weekly quotas instead
of
monthly ones, were introduced.
A restriction was imposed to the
effect that for every 5 per cent ~f excess consumption there would be
one day's cut
It may be stated here that on 29th April, 1971 the usual tariffs
both (or high tension and low tension energy were enhanced.
The
Board on 1 June, 1974 removed the slab system and a uniform rate
of 14 nP per unit was introduced.
The appellants filed writ petitions in the High Court for a writ,
direction or order to collect from the appellants normal charges for
consumption of electricity and · not to disconnect their supply
and
further order declaring the restrictions with regard to imposition of
quota and the levy of penalty charges as iUegal.
The High Court .
held that the Board has power to fix quotas or otherwise
restrict
consumption of electrical energy and collect charges at four times the
normal rates.
The appellants obtained leave limited to the question whether
under section 22-B of
the
Electricity Act,
19 I 0 re[errcd
to
as the_1910 Act it is open to the Board to reduce the supply to anything less than 75 per cent and levy extra charges for excess supply.
The State Government on 6 April, 1972 made an order under ·
section 22-B of the 1910 Act, inter alia, as fo1lows :-
. "AU consumers of electricity (both high tension and low
tension) being billed under high tension ca.tegories I (both
normat and alternative tariffs) II and Ill and Jow Tension
category \' shall so r"egu!ate ~h~ir u.se of electricity as not
to exceed m any month, the lrmrts of maximum demand and
energy specified hereunder :
The maximum demand limit wrll be 75% of the average
monthly maximum demand over the period from
March
1~71 to February 1972.
The Jimit for energy consumption
wrJI be 75% of the average monthly consumption (number
of units) over tile period from March, 1971 to February,
1972.
The supply to consumers who violate the restrictions being imposed hereunder will be liable to be cut off
without notice.
Without prejudice to the right to disconnect supply, the ~oard. will also bill the energy and maxim~m demand utihsed rn excess of the limits above prescnb7d, at do~~le th<: tariff . rates.
Consumers of
High
tensron electrrcrty betng
btlled
under
alternative
tariff
und~r Category I will further pay for the excess energy consumed, energy charges at the rate of 20 paise per unit and
M.D. charges at twice the tariff rate.
X
X
X
11- 1003 SCf/76
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138
SUPREME COURT REPORTS
(1977] 1 S.C.R.
A
The restrictions shall not apply to (i)
Railways, (ii)
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Hospitals including nursing homes and
Doctors
Clinics,
(iii) water supply, (iv) for sanitary arrangements for the ·
public, (v) Radio Stations (vi) Telephone Exchanges and
other categories totalling 15 in number.
X
X
X
X
X
X
In the case of consumers who have not availed supply
during the entire period of March, 1971 to February, 1972
because their loads were seasonal or for some other reason,
the average monthly limits for maximum demand and energy
will be computed with reference to the period between March,
1971 and February 1972 during which supply was availed
of."
This order of the State Government in 1972 was occasioned by
three features as recited in the order. First, the water position· in the
Hydro-Electric reservoirs in the State became very unsatisfactory because of failure of monsoon.
Second, sufficient power was · not
available to meet the needs of the State.
Third, it became necessary
to conserve the available water with a view to ensuring regular and
uniform supply of electrical energy during the coming months.
On 8 August, 1975 the State Government stated that the Government issued several orders commencing 6 April, 1972 and ending
31 July, 1975 placing certain restrictions on the consumption . of
electricity "in view of the critical power supply position."
There
were several orders on 6 April 1972, 3 May 1972, 16 May 1972, 22
May 1972, 29 May 1972, 9 June 1972 and 22 September 1972. The
Government cancelled these orders on 8 August 1975 with effect from
7 July, 1972.
·
On 20 March, 1915 the Board in its order of that date referred
to its previous orders in the years 1973 and 1974 and the order of
2 January, 1975 and stated as follows : Because of greatly depleted
levels in the Hydel Reservoirs on account of the low rainfall in the
catchment a£eas the hydel generation in the Andhra: Pradesh grid has
come down very much.
No assistance was forthcoming from the
neighbouring State as from the monsoon of 1974.
Two new sets
of Kothagudem Thermal Power Station have not stabilised. Besides,
normal load there bas been heavy increase of agricultural loads during
the last month due to the onset of summer.
This has resulted in
the load going far beyond the system capability.
The graded tariff
which was introduced expecting it to act as a sufficient deterrant to
the consumers against exceeding the quotas fixed has not given relief
to the extent expected.
It has become impossible to meet the agricultural demand and save the standing crop at this crucial stage. The
Board in this background decided to raise power cuts on demattd and
energy consumption and ordered that all high tension and low tension consumers should so regulate their use of electricity as not to
exceed in any month the limits of maximum demand and energy
specified against each category.
·"'·
ADONI COTTON MILLS V. ANDHRA PRADESH (Ray, C.J.)
139
Categories mentioned in the order of the Board dated 20 March,
197 5 are the Priority Industries, Continuous Process Industries, Other
·Industries, Essential Services, Low tension Category-Domestic Supply,
Low Tension Category non-Domestic Supply and Public Lighting. The
industries which had been exempted from power cut before like Fertilizer Industries, Oil Refineries, Pesticides Manufacturing Industries, All
India Radio were also subjected to 20 per cent cut both on maximum
demand and energy consumption.
The cem.ent industry which was
havinw 100 per cent quota was subjected to 20 per cent cut.
The
sugar mills and rice and RoUer Flour Mills continued to be subjected
to 10 per cent cut both on maximum demand and energy consumption
For closer control over consumption and for disconnecting those that
exceed the quotas, the system of weekly quotas was revived <.tnd was to
be implemented.
The proportional quota for the week would be onefourth of the monthly quota already fixed.
Besides the penal charges·
alre?dy existing, the Board decided that the services of the consumers
would be liable to be discol)nected if they exceeded the quotas fixed by
anything beyond 5 per cent.
For every 5 per cent of excess over
the quota the disconnection would be fqr one day.
The Board did not subject the low tension domeStic supply category to any restriction.
In priority industries the existing quota of
70 per cent was reduced to 55 per cent.
In food products industries
the maximum demand of 50 per cent was not reduced but the energy
consumption was reduced from 60 to 50 per cent.
In Continuous
Process.Industries the maximum demand and energy consumption were
reduced from 65 per cent to 55 per cent.
In other industries not
covered bY. those categories the existing cut of 50 per cent was not
subjectc~ . to further cut.
The appellants contend as follows: First, section 22-B of the 1910
Act gives powers to the State Government to .control the distribution
and consumption of energy.
The State Government exercised
its
powers under section 22-B of the 1910 Act and reduced the quota to
75 per cent on 6 April, 1972.
Therefore any further reduction by
the Board would be illegal.
Second, section 49 .of the Electricity
Supply Act, 1948 referred to as the 1948 Act does not confer power
on the Board to effect rationing of supply because that would involve
excessive delegation of legislative powe~.
Further, there is no guidance in section 49 of t}le 1948 Act to reduce the supply, and therefore, section 49 is bad.
The alternative contention of the appellants
is that unless. the Board mad~ Regulations under section 79 (J) ofi the
1948 Act it could not ration the supply in exercise of powers under
section 49 of the Act
The appellants contend that the Board had to
lay down the principles in the regulations which the Board is empowered to make under section 79 (J) of the 1948 Ad and) unless the
regulaions lay down the principles under section 79 (J) of the 1948
Act the Board cannot exercise power under section 49 of the 1948
Act.
~:
The appellants also contend that the State Government notification
dated 6 April, 1972 regulating and restricting the consumption
of
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140
SUPREME COURT REP.ORTS
-(1977] 1 S.C.R.
electricity on the basis of 75% of the average maximum demand of a
consumer between the period March 1971 and February 1972 remained
in force till 2 August 1975, and, therefore, the Board could not exercise
the power .of regulating and controlling supply and consumption of
electricity because it was e~erciscd by the State.
The relevant provisions of the 1948 Act are as follows:-
Section ·18: "General duties of the Board : Subject to the
provisions of this Act the Board shall be charged with
gcneraly duty .. and it shall be the duty of the Board .... (c)
td supply electricity as soon as practicable to aoy other licensees or persons requiring such supply and whom the Board
may be competent under this Act so to supply.'_'
Section 49: "(1) Subject to the provisions of this Act and
of regulations, if any, made in this behalf, the Board may
supply e1ectricity to any person ...... upon such terms and
conditions as the Board thinks fit. . . . . . . . . . . . . . ( 4) In·
fixing the tariff and terms and conditions for the-supply
of
electricity, the Board shall not show undue preference to any
person.''
Section 59 : "The Board shall not as far as practicable ....
carry ou its operations under this Act at a loss and shall
adjust its charges accordingly from time to time."
It is also appropriate at this stage to refer to the provisions in the
Andhra Pradesh State Electricity Board Power Tariffs contained in Part
F dealing with general terms and conditions of supply.
The relevant
provisions are claus~s 6.7 and 6.8 of Power Tariffs which are set out
hereunder:-
·
Clause 6.7: "The Board shall have the unilateral rigb,t to
vary from time to time, the terms and conditions of supply
by special or general proceedings.
In particular, the Board
shall have the right to enhance the rates chargeable for
supply of electricity according to exigencies.''.
Clause 6.8: "The Board ~hall endeavour to afford continuous supply and to restore interrupted supply as early as
possible.
. The Board shall have the right to stagger consumer or consumers according to operational and other exigencies.
The Board shall not be responsible for any loss or
incovcnience occasioned to any consumer, by any interruption of supply of any kind,
whatever
be
the
reason
therefor, unless the interruption is exclusively attributable
to the negligence of the Board."
Reference is also necessary to the form of agreement for purchase
of electricity supply consumption.
There are forms and agreements
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ADONI COTTON MILLS v. ANDHRA PRADESH (Ray, C.J.)
141
for high tension as well as low tension.
The relevant terms in the
form of high tension agreement are as follows:-
"Clause 5 : Obligation to comply with requirements of Acts,
and Terms and Conditions of supply:
IjWe further undertake to comply with all the requirements
of the Indian Electricity Act, the Electricity (Supply) Act,
1948, the Rules thereunder and the terms and conditions
of supply notified by the Board from time to time."
"Clause 10 : Board's right to vary terms of Agreement :
IIWe agree that the Board shall have the unilateral right to
vary, from time to time, the terms and conditions of supply
under tllis agreement by special or general proceedings."
The Low Tension agreement contained inter alia the following:
Clause 9: "Obligation of consumer to pay all charges levied
by Board:
From the date tllis agreement comes into force, IIWe shall
be bound by and shall pay the Board maximum demand
. charges, energy charges, surcharges, meter rents and other
. charges, if any, as prescribed in the terms and conditions
of supply notified by the Board: from time to time for the
particular class of consumer to which I/We belong.
"In particular, the Board shall have the right to enhance
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th~ rat~s ~?argeable for supply of electricity according to
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exigencies.
Clause 10: ·"Board's right to vary terms of Agreement:
l/We agree that the Board shall have the unilateral right
to vary, from time to time the terms and conditions of supply
under thi~ agreement by special or general proceedings."
These provisions indicate that the Board is under· a duty to supply
electricity to consumers who enter into contracts with the Board. The
duty to supply however is inherently limited by its capacity. . If the
Board is unable to supply electricity to meet the full demand of consu·
mers thep necessarily it can only make limited supply.
Clause 6.8 of the Terms and Conditions of the
Power Tariffs
establishes these features. The first part of clause 6.8 speaks of the
dutv of the Board to make all endeavours to meet the whole demand
of the consumers.
Clause 6.8 also confers power on the Board to
stagger supply.
It is' obvious tbat if the Board cannot generate the
energy required to meet the full demand of the consumer it will have
to curtail the supply.
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The appellants realise that the Board has power to curtail supply.
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But the appellants contend that the Board has no power to exempt
certain categories of consumers and impose different percentage o£
cut.
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SUPREME COURT REPORTS
(1977) 1 S.C.R.
The appellants contend that the Board has no power under section
49 of the 1948 Act either to impose different percentage of cuts in the
·supply to consumers or to impose penalty.
The appellants contend
that only if the Board· introduced principles by making
regulations
undet section 79 (j) of the 1948 Ac't then the Board could have applied
these principles in imposing cuts.
The contentions of the appellants are unsound.
Section 49 ( 4)
of the 1948 Act states ·that in fixing the tariffs and terms and conditions for the supply of electricity the Board shall not show undue
preference to any person.
This section embodies the same principle
which is enunciated in Article 14 of our Constitution.
The Board
is a State for the pupose of Part III of our Constitution.
In
the
present case, we, are, however, not concerned with the application of
Article 14.
All that requires to be appreciated is that the provisions
of Article 14 of our Constitution and section 49(4) of the 1948 Act
are similar in principle.
It is the principle of equality or non-discrimination.
Section 49(4) of the 1948 Act does not mean a mechanical equal treatment,
It is fairly settled that equality before the law
does not mean that things which are different shall be treated as though
they were the same.
The obligation not to discriminate involves
both the right and the obligation to make reasonable classification on
the basis of relevant factors.
To illustrate, cutting down 50 per. cent
of the needs of a hospital and the needs of industries producing consumer goods cannot be treated on the same footing.
It would be justifiable to treat them with reference to their urgency, their social utility
and also the impact on the conservation and economics in the available
supply of electric power.
The guidance is clearly furnished by the
principles embodied in section 49 ( 4) of the 1948 Act similar to Article 14 of our Constitution.
The~ recognition of the fact that the Board can introduce rationing
by making a regulation under section 79 (j) of the 1948 Act necessarily
involves a concession that' the Board bas the power to enforce rationing and to enunciate the principle for determining the scheme of such
rationing.
A regulation can be made only in the exercise of a power
which exists in the Act.
The making of a regulation is not a new
source of power but regulates the exeq::ise of power which exists.
Section 49(1) of the 1948 Act therefore gives a general power which
could be regulated by making of a regulation.
The language
of
section 49 of the 1948 Act shows that the power can be exercised
without making any regulation.
The expression "regulation" occurring in section 49(1) is qualified by the expression "If any".
It is,
therefore, manifest that if the power is existing, it must be exercised
according to valid principles consistent with the provisions of section
49 ( 4) of the 1948 Act.
This Court rejected the suggestion that the
President or the Governor cannot settle terms and conditions of the
public servants without making rules under Article 309 of the Constitution_.
If regulations were made, such regulation would have to be
in conformity with section 49 ( 4) of the 1948 Act and in the exercise of its power the Board would have to abide by regulations.
>
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ADONI COTTON MILLS V. ANDHRA PRADESH (Ray, C.J.)
143
The argument of the appellants that section 22-B of the 1910 ActA
which confers power on the State Government to form an opinion as
tp the necessity or expediency of taking action for the maintenance of
the supply and securing the equitable distribution of energy, exhausts
~e power of distribution of energy and the Board has no power under
section 49 of the 1948 Act to operate upon the field of supply o~ ·
e)ectdcity is unsound.
Section 22-B of the 1910 Act is only enabling
while the Board must inevitably curtail supplies. If the Board must
curtail supplies it is curious to suggest that the cuts must not be based
Qn rational equitable basis consistent with principles of reasonable
classification within the meaning of section 49 ( 4) of the 1948 Act.
Section 22-B of the 1910 Act was introduced in 1959.
It did not
expressly .or impliedly repeal or cut down the content of the power of
the Board in section 49 of the 1948 Act which was enacted in 1948
and r,eproduced · in 1966.
There is no conflict in the existence of
power at different levels.
The higher authority may have the power
to override the order of the lower authority.
Powers under section
22-B of the 1910 Act and under Section 49 of the 1948 Act may have
some overlapping features.
Section 49 contains a much larger power
because the Board is the authority primarily charged with all aspects of
development and supply under sections 18 and 49 of the 1948 Act.
It may be stated here that on 6 April, 1972 the State order effected
cut in supply.
The Board also fixed quotas from
March,
1972.
Betweeq 7 July, 1972 and 16 August, 1972 there was no cut in supply.
The order under' section 22-B of the 1910 Act was not effective after
the month of July, 1972.
The orders of the Board effecting cut in
supply were effective prior to July, 1972 and also from August, 1972.
The appellants enjoyed unrestricted supply of electricity at ordinary
rates from 7 July, . 1972 to 16 August, 1972.
The appellants did
not raise any contention in the High Court that the State order of April,
1972 was effective all throughout.
If · such facts had been challenged the Board would have given proper materials by way of facts
to show tl1at the Board order was to the knowledge~ of everybody not
effective after the month of July, 1972.
When the Board on 7
July, 1972 decided to remove all the restrictions imposed earlier it
is manifest that the Board tried best to maintain the tenns and conditions mentioned in clause 6.8 of the Power Tariffs of the State Electricity Board. The Board filed in the High ·court the statement showing
consumer requirement of energy in one column, actual generation in
another column, consumers' requirement of demand in· Mega Watts
in another column and actual demand in Mega Watts in still another
column from tha month of February 1973 ·right! upto June, 1975.
The High Court held that the correctness of the statement was not
disputed by the appellants and the High Court did not doubt
the
accuracy of the statement. . The High Court held that tbe actual
consumer requirement has all throughout been more than the actual
generation.
The fact that the actual generation has been lower than
the consumers requirements shows that the Board has in a fair and
just manner imposed cuts whenever situation merited the same.
There is no conflict between the order of the Government in
April, 1972 and the orders of .the Board in the year 1975 for these
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144
SUPREME COURT REPORTS
[1977) 1 S.C.R.
reasons.
The restrictions imposed by the Government ceased
on
7 July 1972 when in the opinion of the Government scarcity conditions disappeared.
This is manifest from the G?vernment Order
dated 2 August, 1975.
The appellants cannot be allowed to urge
that the Government Order of the year 1972 continued after 7 July,
1972.
The appellants acted upon the footing that the restrictions
had been lifted and consumption was even more th(l1.a their normal
maximum demand on normal rates.
Even if the Government Order
of 1972 continued the restrictions imposed by the Government Order
and the Board Order were cumulative and not contradictory.
The
Government Order was addressed to the consumers not to consume
in excess of 75 per cent of their normal maximum demand.
If the
appellants sought any relief in respect of consumption in violation ~f
the order under section 22-B of the 1910 Act it would be an offence
under section 41 of the 1910 Act.
Such a contention cannot be
allowed to be raised.
·
·
Section 49 ( 4) of the 1948 Act casts a duty on the Board not to
show any undue preference in fixing the tariff and terms and condition.
Clauses 6.7. and 6.8 of the Power Tariffs show that the Board
shall have the right to stagger or curtail supply of electricity to &ny
consumer according to operational and other exigencies. The Board
can therefore release supply or block the same areawise and has no
means of enforcing the quota except
through sanctions.
Such
sanctions can take any reasonable form either disconnection in case
of gross and persistent defaults or the lesser sanction of enhanced
tariff.
The power to enhance the tariff is included in section 49 of the
1948 Act.
The expression that the Board "may supply electdcity
on such terms and conditions as the Board thinks
fit" in section
49 ( 1) is related to the terms and conditions of the agreement referred
to above.
Section 49 of the 1948 Act in sub-section (1) confers
power on the Board to supply electricity to any person not being · a
licensee upon such terms and
conditions as
the Board thinks fit.
This
power contains the power. to regulate and ration supply. The
terms and conditions to which reference has been made make explicit
what is implicit in the power.
The terms and conditions contain the power of the Board to enhance
the dates.
Section 49(3) of the 1948 Act states that the Board has
power to fix different tariffs for the supply o( electricity having regard
to ·the geographical position of any area, the nature of the supply and
purpose for whicl1 supply is required and any other relevant factors.
The expression "any other relevant factors" is not to be con!>trued
ejusdem generis because there is no genus of the relevant factors.
The combined effect of section 49 of the 1948 Act and the terms and
conditions of supply is that having regard to the nature of supply and
other relevant factors particularly when there is shortage of electricity the Board has power to enhance the rates. If there is shortage
of electricity there is to be restriction on supply.
The Board can
disconnect supply if the quota is exceeded.
The Board can also
impose higher rates if the quota is exceed~.
The imposition
of
.......
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ADONI COTTON MILLS v. ANDHRA PRADESH (Ray, C.J.)
145
· higher rates is only to sanction the rigour of ration by making perA
sons who exceed the quota liable to pay higher rates.
The High Court upheld the content of the power of the Board
under section 49 of the 1948 Act and also to charge enhanced tariff
for exceeding the allotted quota.
It is manifest that the requisite
power exists in the Board and this Court did not permit the finding
of the High Court to be: re-examined; nor the question whether the
B
power had been properly exercised within the limits of section
49
and· the terms of the agreement because the terms were directly corelated to the availability of electricity for being supplied.
From
7 July, 1972 up to 16 August, 1972 the appellants enjoyed unrestricted supply at ordinary rates.
The appellants took advantage
of it.
Section 22-B order to the knowledge of everybody was not
effective after July, 1972. The appellant cannot assert .the authoC
rity that the Government Order of April 1972 was effective.
(See
Southeastern Express Company v. W. l. Miller( I).
There is no question of exessive delegation
because power
is
conferred by the statute.
In Indian Aluminium Company etc. v. Kerala State
Electricity
Board(?') this Court held that under section 49(3) of the 1948 Act
D
the Board stipulates· for special tariff for supply of electricity at specified
,..
rates from time to time.
For the foregoing reasons the conclusion is that the Board has
power under section 49 of the 1948 Act to regulate supply and also
to fix higher rates for consumpti~n on excess of quota.
There is
no con.fl ict between section 22-B of the 1910 Act and section 49 of
E
the 1948 Act with regard to
regulating or restricting highter consumption.
The appeals are therefore dismissed.
There will be no order as
"'
to costs because the High Court n:ade similar order.
\
P.IfP.
Appeal dismissed.
(1) ·68 L. Ed. 541.
(2) [1976] 1 S.C.R. 70.