# El«trrt.il' Board v. Ba.,,1alo'' W, 0!11n

- **Citation:** [1963] Supp. 2 S.C.R. 127
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Case number:** Civil Appeals Nos. 629 to 632 of 1961
- **Bench:** S. K. Das, J. L. Kapur, A. K. Sarkar, M. Hidayatullah, Raghubar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/el-trrt-il-board-v-ba-1alo-w-0-11n-2761
- **Pages:** 36

## Headnote

Ekdricily-Revi8ion of rate8 of supply by Government
afltr expiry of aureemenl-Di8pule raised by C0118Umer-lf
liable to arbitration-Electricity (Supply) Act, 1948 (54 of 1.948)
8, 76,49,60, Indian Eledricily Act, 1910 (9 of 1910), 8. 62.
Disputes arose between the respondent mills and the
appellant Board relating to the payment of revised rates to the
appellant or its predecessor, the Government of Mysore under
the Electricity (Supply)-Act, 1948. Prior to the constitution of
the Board under that Act in September, 1957, the Government
of Mysore was generating and supplying electricity under the
Electricity Ac\ of 1910. In 1945 agrccmcnts were entered into
between the Government and the respondents for supply of eler,.
tricity to them at'ccrtain rates for a period of five years. The
agreements expired in 1949-50, In March, 1953, the Government increased the ,rates. It again increased the rates from
April, 1956.
These revisions were not made by the Government under s. 49 of the 1948 Act as that section came into
force in 1957. The respondents did not pay at the enhanced
rates and moved the High Court under '1rt. 226 of the Constitution for restraining the Government as also the Board, which
after its constitution was added as a party, from levying at the
increased rates. It was urged on their behalf that the State Government was not entitled to increase the rates and that the dispute
between them on the one hand and the Government and the
Board on the other with regard to increased rates was liable to
be decided by arbitration under s ... 76 of the Act of 1948, ~which
had come into force in the State of Mysore on December 30,
1956. The High Coult decided the first point in favour of the Government but did not l:lecide the second. The respondents did not
pay the arrears at the revised rates and the Board threatened to
cut oft' the supply. The respondents then nominated their
arbitrator under s. 76 of the Act. The Board filed applications
before the DistrietJudgc under s. 33 of the Arbitration Act for
a dei:l..-tion t!Mt tbe difp11te was not refcm1blc to 'P'bitratioll
1962
N ....... r.15
1962
M"μtm Sta11
El«trrt.il' Board
v.
Ba.,,1alo'' W, 0!11n,
Collon & Silk
Mills Ltd.
128 SUPREME COURT REPORTS [1963] SUPP.
under s. 76 of the Electricity (Supply) Act. The additional
District Judge who heard the matter held in favour of the
Board. The respondents moved the High Court in revision.
That Court held that s. 76 applied and the respondents
were entitled to call for an arbitration. The Board appealed
to this Court. It was urged on its behalf that in view of the
decision of the High.Court on the writ petition, the claim of
reference to arbitration under s. 76 of the Act was barred by
res judicata and that the expression "other person'' in sttb-s. (I)
of that section, read ejusdem generis could not include a consumer of electrical energy nor was such a consumer entitled to
the benefit of sub-s. (2) of that section as no provision of the
Act of 1948 read with the Act of 1910 authorised reference of
such a dispute to arbitration.
Held, th&t it was well-settled that in order to judge
whether a decision in an earlier litigation operated as res
judicata the court must consider the nature of the litigation,
the issue raised in it and the actual decision. The right of the
Government or the Board to revise the rates and the right of
the respondents if any, to raise a dispute as to the revised rates
and seek arbitration thereupon, a question which was expressly
left open by the High Court, were two different matters and
the decision on the former could not operate as res judicata in
respect of the latter.
The relevant provisions of the Act of 1910 and the Act
of 1948, read together, made it clear. that the Mysore State
Government in the years 1953-56 was free to contract with the
consumers of electricity to supply at such rates as it thought fit.
When therefore the agreements with the respondents came to
an end in 1949-50 it was not bound to contin

## Text

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2 S.C.R.
SUPREME COURT REPORTS
127
THE MYSORE STATE ELECTRICITY BOARD
f),
BANGALORE WOOLLEN,
COTTON
AND SILK MILLS LTD. & ORS.
(S. K. DAS, J. L. KAPUR,
A. K. SARKAR,
M. HIDAYATULLAH and RAGHUBAR DAYAL, JJ.)
Ekdricily-Revi8ion of rate8 of supply by Government
afltr expiry of aureemenl-Di8pule raised by C0118Umer-lf
liable to arbitration-Electricity (Supply) Act, 1948 (54 of 1.948)
8, 76,49,60, Indian Eledricily Act, 1910 (9 of 1910), 8. 62.
Disputes arose between the respondent mills and the
appellant Board relating to the payment of revised rates to the
appellant or its predecessor, the Government of Mysore under
the Electricity (Supply)-Act, 1948. Prior to the constitution of
the Board under that Act in September, 1957, the Government
of Mysore was generating and supplying electricity under the
Electricity Ac\ of 1910. In 1945 agrccmcnts were entered into
between the Government and the respondents for supply of eler,.
tricity to them at'ccrtain rates for a period of five years. The
agreements expired in 1949-50, In March, 1953, the Government increased the ,rates. It again increased the rates from
April, 1956.
These revisions were not made by the Government under s. 49 of the 1948 Act as that section came into
force in 1957. The respondents did not pay at the enhanced
rates and moved the High Court under '1rt. 226 of the Constitution for restraining the Government as also the Board, which
after its constitution was added as a party, from levying at the
increased rates. It was urged on their behalf that the State Government was not entitled to increase the rates and that the dispute
between them on the one hand and the Government and the
Board on the other with regard to increased rates was liable to
be decided by arbitration under s ... 76 of the Act of 1948, ~which
had come into force in the State of Mysore on December 30,
1956. The High Coult decided the first point in favour of the Government but did not l:lecide the second. The respondents did not
pay the arrears at the revised rates and the Board threatened to
cut oft' the supply. The respondents then nominated their
arbitrator under s. 76 of the Act. The Board filed applications
before the DistrietJudgc under s. 33 of the Arbitration Act for
a dei:l..-tion t!Mt tbe difp11te was not refcm1blc to 'P'bitratioll
1962
N ....... r.15
1962
M"μtm Sta11
El«trrt.il' Board
v.
Ba.,,1alo'' W, 0!11n,
Collon & Silk
Mills Ltd.
128 SUPREME COURT REPORTS [1963] SUPP.
under s. 76 of the Electricity (Supply) Act. The additional
District Judge who heard the matter held in favour of the
Board. The respondents moved the High Court in revision.
That Court held that s. 76 applied and the respondents
were entitled to call for an arbitration. The Board appealed
to this Court. It was urged on its behalf that in view of the
decision of the High.Court on the writ petition, the claim of
reference to arbitration under s. 76 of the Act was barred by
res judicata and that the expression "other person'' in sttb-s. (I)
of that section, read ejusdem generis could not include a consumer of electrical energy nor was such a consumer entitled to
the benefit of sub-s. (2) of that section as no provision of the
Act of 1948 read with the Act of 1910 authorised reference of
such a dispute to arbitration.
Held, th&t it was well-settled that in order to judge
whether a decision in an earlier litigation operated as res
judicata the court must consider the nature of the litigation,
the issue raised in it and the actual decision. The right of the
Government or the Board to revise the rates and the right of
the respondents if any, to raise a dispute as to the revised rates
and seek arbitration thereupon, a question which was expressly
left open by the High Court, were two different matters and
the decision on the former could not operate as res judicata in
respect of the latter.
The relevant provisions of the Act of 1910 and the Act
of 1948, read together, made it clear. that the Mysore State
Government in the years 1953-56 was free to contract with the
consumers of electricity to supply at such rates as it thought fit.
When therefore the agreements with the respondents came to
an end in 1949-50 it was not bound to continue the supply at
the old rates. The matter rrsted in the region of contract;
express or implied, and could not i'aise a question under the
Electricity (Supply) Act of 1948 so ano attract s. 76 of that
Act.
It was not correct to say that ss. 49 and 60 of the Act of
1948 brought the dispute within the purview of the Aci and
that, therefore, it was to be determined by'arbitration under
s. 76(1) of the Act. The revision of the rates could not be
said to be for any of the purposes of the 1948 Act as required
by s. 60 of the Act nor did s. 49 of the Act, properli construed,
attracts. 76(1).·
Ryota of Garbandlw v. Zamindar oJ Parlakimedi (1943)
L. R. 70 I. A 129, referred to.
28.C.R.
SUPREME COURT REPORTS
129
None of the provisions of the 1910 Act or the 1948 Act
under which certain questions were to be determined by arbitration, mention the present dispute as a matter for arbitration
either under s. 52 of the former or s. 76 (2) of the later.
Although the words used by s. 76 ( 1) were of wide ampli·
tude, it obviously implied that the question must be one that
arose under the Act or had relation to it.
It would be
anomalous to hold that a dispute regarding revision of rates
made by the Government before the Board was constituted was
one under the .~ct of 1948.
Since the dispute could not be said to have arisen .under
the Act of 1948, it was not neceosary to decide whether the
rule of ejrudtm (1t"'ria applied in interpreting the expression
"other person" ins. 76(1) of the Act.
Per Hidayatullah, J.-The dispute relating to revision
of rate~ was not one that could be referred to arbitration under
s. 76 of the Electricity (Supply) Act, 1948. It was not necessary to invoke the rule of ejmdem gtneria to interpret the
expression "other person" in that section so as to bring a con·
!!Umer disputing the rates there_under since no provision in the
Act permitted such inclusion.
William v. Golding, (1865) L. R. 1 C. P. 69, held inapplicable.
Although s. 76 of the Act is very wide in its language, a
qualification has to be read into it that the dispute it contemplates must be one relating to a matter with the purview
of the Act. The Electricity Act of 1910 and the Electricity
(Supply) Act of 1948, read together, clearly show that a dis··
pute bet"''een the Government or the Board on the one hand
and a consumer on the other relating to rates of supply, apart
from any contract entered into, cannot at all arise nnder the Act
of 1948.
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos. 629 to 632 of 1961.
Appeals from the judgment and orders dated
August 19, 1960, of the Mysore High Court in C.R.P.
Nos. 6ll to 613 and 622 of 1959.
M. C. Setalvad,
Attorney-General for India.
T. Rangaswarni Ayyangar, B. R. L. Iyengar and
P. D. Menon, for the appellants.
1962
M,IOll Sl•ll
El«ltiril)I BH"
••
B-'-11 w,.11,.,
Coll"' ti Silk
Mids Lid.
/
1962
Mp11 S1111
El«lrltil)I S.v J
v.
a..,.i.,, woo1i..
C.1100 Iii Sill:
MU/1 Lli.
O.s, I.
130 SUPREME COURT REPORTS [1963] SUPP.
A. V. Visimnatha Baatri, D. N. Mukherju and
B. N. Ghosh. for respondent No. 1 (in C. A. No.
629/61).
N. C. Chatterjee, V. L. Narasimhamoorthy and ·
S. S. Slmlcl,a, for respondent No. 1 (in C. A. No.
630/61).
V. L. Narasi,mhamoorthy and S.S. Shukla, for
respondent No. 1 (in C. A. Nos. 631 and 632/61).
1962. November 15. The Judgment of S. K.
Das, Kapur, Sarkar and Dayal, JJ., was delivered
by S. K. Das, J., Hidayatullah, J., delivered a
separate Judgment.
S. K. DAS, J.-These are four appeals on a
certificate of fitness granted by the High Court of
Mysore under Art. 133(l)(c) of the Constitution. The
appeals have been heard together and this judgment
will govern them all. The appellant is the Mysore
State Electricity Board, Bangalore (hereinafter referred to as the Board) in all the four appeals. The
respondents are four textile mills, each mill being
respondent in one of the appeals. These four textile
mills are : (I) the Bangalore Woollen, Cotton and
Silk Mills Ltd., Bangalore, (2) the Minerva Mills
Ltd., Bangalore, (3) Sri Krishna Rajendra Mills
Ltd., Mysore, and (4) the Mysore Spinning and
Manufacturing Co. Ltd., Bangalore.
The appeals raise a common qu.~tion of Jaw,
viz., whether under s. 76 of the Electr1c1ty (Supply)
Act, 1948 (LIV of 1948), the respondents are entitled to call for an arbitration in respect of an alleged
dispute between
them and
the Board relating
to the revision of rates payable by them for electric
energy supplied by the appellan• or its predecessor.
The provisions of two Acts, the Indian Electricity
Act, 1910 (IX of 1910) and the Electricity (Supply)
2 S.C.R.
SUPREME COURT REPORTS
131
Act, 1948 (LIV of 1948), have to be considered.in
these appeals, and it will be convenient to cite the
Indian Electricity Act, 1910, as the 1910 Act and
the Electricity (Supply) Act, 1948, as the 1948 Act.
We proceed first to state the facts which have
led to these four appeals. The 1910 Act and the
1948 Act were extended to the State of Mysore on
April 1, 1951, by the Part B States (Laws) Act, 1951
(III of 1951 ). But the sections of the two Acts did not
come into force in the State of Mysore all at once.
Some sections of the 1948 Act came into force at once,
and some came into force on later dates. It is suffici·
ent for our purpose to know thats. 76 of the 1948 Act
came into force in Mysore on December 30, 1956;
and s. 5 thereof came into force on September 30,
1957. The Board was constituted under s. 5 by a
Government notification dated September 27, 1957,
to come into effect from September 30, 1957. Prior
to the constitution of the Board. the Government of
Mysore was generating electric energy and supplying
it to consumers of both high tention and low tension
power. On different dates in the year 1945, written
agreements were entered into between the Govern·
ment of Mysore and the four textile mills for the
supply of electric energy to these textile mills at the
rate of 0. 55, of an anna per unit of day power and
0. 35 of an anna per unit of night power, subject
to the payment of certain monthly minimum charges.
These agreements were for a period of five years and
expired on different dates in 1949-50.
By an order
dated March 23, 1953, the Government of Mysore
revised the rates for the supply of electric energy and
increased the same to 0. 65 of an anna per unit of
day power and O. 45 of an anna: per unit of night
power. Subsequently, an expert committee, under
the Chairmanship of Prof. M. S. Thacker, the then
Director of the Institute of Science, Bangalore, was
appointed to go into the question of rationalisation
of the rates for power supply in the State of Mysore.
Mysor1 Stot1
El1clricit1 Boilrd
•.
Banialore Wiwlla,
CotlM & Silk
Mills I.Jd.
Das,J
19f2
M..1"" SI/Ill
El#lri<il,1 Bo¢
y.
,,_.,.,. w..i1..,
C'oUo• Ill Sill;
M.ills LU.
Dos, J.
132 SUPREME COURT REPORTS (1963) SUPP.
On the recommendation of that Committee, the rates
for the supply of electric energy were again revised
with effect from April l, 1956. This was done by
means of an order dated March 1, 1956. On April
26, 1956, the four textile mills filed four writ petitions in the High Court of Mysore in which they
prayed that the State Government and the Board
(which Board, after its constitution in 1957, was
added as the second respondent to the pending writ
petitions) be restrained from levying or collecting the
increased rates as per the order of March l, 1956,
and that they be directed to continue to levy the
same rates for the supply of electric energy as were
agreed to between the parties in the agreements of
1945. Two points were urged in support of these writ
petitions. One was that the State Government was
not legally competent to increase the rates for the
supply of electric energy. The second point urged was
that there was a dispute between the textile mills
and Government and later the Board, with regard
to the rates for the supply of electric energy and
such a dispute must be
decided by arbitration
as
provided under s. 76
of the
1948
Act.
We shall read s. 76 of the 1948 Act at a later
stage. We may here observe that of the two points
urged in support of the writ petitions, the High
Court dealt only with the first point and held that
the Government of Mysore was legally competent
to revise the rates for the supply of electric energy.
The second point arising out of s. 76 of the 1948
Act the High Court did not decide. It said that
it expressed no opinion as to "whether or not the
contention of the textile mills that the dispute was
covered by s. 76 of the 1948 Act and should be
determined by arbitration" was sound. The High
Court expressed the view that that question would
have to be determined if and when the textile mills
wanted to enforce their rights under the procedure
laid down under the Arbitration Act, 1940 (X of
1940). On the
findin~ that the Government of
2 s.c.R.
suPREME COURT REPORTS
133
Mysore was legally competent to revise the rates, the
four writ petitions were dismissed on January 29,
1958. By March 31, 1958, the four textile mills
were in heavy arrears with regard to the payment of
the increa:sed -rates for the supply of electric energy
to them, though they had' paid in full according to
the old rates. After the constitution of the Board
in
September, 1957, the Board made repeated
demands on ··the ' basis of the increased rates and
asked the textile mills~ to clear all arrears due by
them according to the revised rates.
The textile
mills having failed to do so, they were informed
that the Board would cut off the supply in exercise
of its power under s. 24 of the 1910 Act. The
textile mills thereupon contended that a dispute
had arisen between them on one side and the Board
on the other and the dispute had to be submitted to
arbitration under the provisions of s. 76 of the 1948
Act. The four textile mills then nominated
their
arbitrator. On November 13, 1958, the ·Board
filed four applications before the District Judge,
Bangalore, under s. 33 of the Arbitration Act, in
which it asked for a declaration that the dispute
between the four textile mills and the Board was not
liable to be referred to arbitration under s. 76 of the
1948 Act and also for a direction to restrain the
four textile mills from seeking arbitration in respect
of the alleged dispute. These four applications gave
rise to four miscellaneous cases which were dealt
with
by the learned Additional District Judge,
Bangalore, by a common order. The learned Additional District Judge allowed the petitions and held
that the four textile mills were not entitled to the
benefit of s. 76 of the 1948 Act, because the dispute
between the Board and the four textile mills as to
the rates for the supply of electric energy was not
liable to be referred to arbitration under that section.
The order of the learned Additional Dis rict Judge
by which he dispcsed of the four petitions twas dated
April 17, 1959.
From that order the textile mills
19'2 -
M:J,,,,. Sl•I•
Ehelri<ilJ BHri
v.
a..,.111r1 lv;.iltn,
Co1r.. &.Sill<
MUh LI'-
Du, J.
1962
M,pm $11111
E11~triii1J 8-J
v.
s .. ,.. Wooll<n,
Cotto• (if sui.
Mills I.ti.
Du, J.
134 SUPREME COURT REPORTS [1963) SUPP.
preferred petitions in revision to the High Court of
Mysore.
Four such petitions were filed in respect
of the four miscellaneous cases. By a common order
dated August 19, 1960, the High Court allowed
the petitions in revision holding that s. 76 of the
1948 Act applied, and the respondent textile mills
were entitled to call for an arbitration fo respect of
the dispute between them and the Board in the
matter of the revised rates. The Board then asked
for and obtained a certificate of fitness from .the
High Court and on that certificate of fitness, these
four appeals have come to this court from the aforesaid order of the High Court dated August 19, 1960.
It may perhaps
be stated
here that after, the
constitution of the Board in 1957, anothere xpert
committee was appointed to rationalise the various
tariffs prevailing in the State of Mysore with regard
to the supply of electric energy and on the recommendations of this Committee the rates were
revised a third time. But these last revised rates
came into effect from July 1, 1959, when presumably the revision petitions in the High Court were
pending.
Before we embark on a discussion of the
principal question involved in these appeals, it is
perhaps necessary to say a few words about the interrelation of the two Acts, the 1910 Act and the 1948
Act. Section 70 of the 1948 Act indicates that
relation. It states inte1· alia that no provision of the
1910 Act or any rules made thereunder shall have
any effect so far as it is inconsistent with any of the
provisions of the 1948 Act; where, however, the provisions of the two Acts are not inconsistent, the
provisions of the 1948 Act shall be in addition to,
and not in derogation of, the 1910 Act. It would,
therefore, be necessary for us to refer to the relevant
provisions of the two Acts on two points which bear
upon the principal question mooted before us. These
two points are-( a) what are the powers of the Board
•
2 s.c.R.
SUPREME COURT REPORTS
135
or its predecessor Government to revise the rates for
the supply of electric energy and can a dispute be
raised by the textile mills with regard to such revision; and (b) what are the provisions in the two Acts
for the settlement of disputes by arbitration and who
are the persons who can be parties to such a dispute ?
In considering the aforesaid two points, a distinction
has to be kept in mind. · We are concerned in this
case with two periods. The first period is from 1953
to September 30, 1957, when the Board was constituted. The second period is the period of the Board
commencing from September 30, 1957, till November
13, 195t8, when the applications under s. 33 of the
Arbitraion Act were made.
As we have stated
earlier, the revision which is in dispute in these cases
took place in the· first period, that is, before the
constitution of the Board. We have pointed out
earlier that the third revision of rates took effect
from July 1, 1959, when the revision petitions in the
High Court were pending.
We think it advisable and convenient to refer
to the relevant provisions of the two Acts at a later
stage and in their relation to the points which we
have stated above. We do not think that quoting
the sections at this stage and out of relation to the
two points which fall for consideration will serve
any useful purpose.- We, therefore, desist from
quoting the relevant sectiom at this stage, but are
content to refer here to the difference in the scheme
of the two Acts, namely, the 1910 Act and the 1948
Act.
Very briefly put, the scheme of the 1910 Act
was to empower the State Government, on an application made in the prescribed form and on payment
of the prescribed fee, if any, to grant a license to any
person to supply electric energy in any specified
area.
A person holding such a license was called
the licensee. The State Government had certain
powers to give directions to the licensee in regard to
1"2
M;Jrrl S1.11
Ell<lrici1, B-d
••
0 .. ,.1,,1 WHll1n,
C•ll••f Iii Silk
Mil/1 Lti.
D111,J.
Du, r.
136 SUPREME COURT REPORTS[l963] SUPP.
:-
the supply of electric energy, and to control the distribution and consumption of electric energy etc.
Section 28 of the 1910 Act laid down that no person
other than a licensee shall engage in the business of
supplying energy to the public except with the previous sanction of the State Government and in
accordance with such conditions as the State Government may fix in that behalf. Therefore, under the
1910 Act there were two classes of persons who
could supply electric energy, a licensee and a sanction holder. The 1948 Act made some radical
changes in the scheme. One such change was that
the expression 'licensee' was given an extended
meaning to take in not merely a licensee licensed
under Part II of the 1910 Act but also a person who
had obtained sanction under s. 28 of the 1910 Act.
The expression did not, however, include the State
Electricity Board which was constituted for the first
time under the 1948 Act.
Next, the 1948 Act brought into existence two important authorities, one
called the Central Electricity Authority under s. 3
of the Act and the other the State Electricity Board
constituted under s. 5 of the Act. Section 26 of the
1948 Act, to which a detailed reference will be made
later, lays down that subject to the provisions of the
1948 Act, the Board shall, in respect of the whole
State, have all the powers and obligations of a
licensee under the 1910 Act, and the 1948 Act shall
be deemed to be the license of the Board for the
purposes of the 1910 Act. There is a proviso which
excepts the Board from the obligation of certain provisions of the 1910 Act. Chapter V of the 1948 Act
contains provisions indicating the nature of the
works which the State Electricity Board may undertake and its trading procedure; it includes provisions
giving the Board power to establish its own generating stations to supply electric energy to licensees and
to other persons requiring such supply. Under the
1948 Act, every licensee has to comply with such
reasonable directions as the Board from time to time
1 ...
>.'-~--
~""
2 S.C.R
SUPREME COURT REPORTS
137
may give for the purpose of achieving the maximum
economy and efficiency in the operation of the undertaking. Chapter VI deah with the Bo<1rd's finance,
accounts and audit and in it occurs s. 60 which says
inter alfo that all debts and obligations incurred, all
contracts entered into and all matters and things
engaged to be done by, with or for the State Government for any of the purposes of the 1948 Act before
the first constitution of the Board shall be deemed to
have been incurred, entered into or engaged to be
done by, with or for the Board etc. Chapter VII
deals with miscellaneous provisions one of which is
arbitration under s. 76, a section which we shall
quote so far as it is relevant for our purpose.
"76. ARBITRATION.-(l)
All questions
arising between the State Government or the
Board.and a licensee or other person shall be
determined by arbitration.
(2) Where any question or matter is, by this
Act, required to be referred to arbitration,
it shall be so referred-
(a) in cases where the Act so provides, to the
Authority and on such
reference the
Authority shall be deemed to have been
duly appointed . as Arbitrators, and the
award of the Authority shall be final and
conclusive; or
(b) in other cases, to two arbitrators, one to
be appointed by each party to the dispute.
(3). Subject to the provisions of this section,
the proVIsions of the Arbitration Act, 1940 (10
of 1940) shall apply to the arbitrations under
this Act.
xx
xx
xx
xx
xx."
1962
MJSOfl s,.,,
Eltdridt1 B•rl
v.
BfJlllo/IWI Woollln,
Collon & Sil•
Mills Lid.
Dos, J.
1162
MJS011 StDl8
El1drki,, Board
v.
Bonza11J11 Woolhn,
Collon & Silk
Mills Ltd.
Das, J.
138 SUPREME COURT REPORTS (1963] SUPP.
The arguments presented before us on behalf
of the appellant may be put in two categories: (I)
the first line of argument is that the question of the
power to revise the rate for the supply of electric
energy to the four textile mills during the first period
(1953 to 1956) by the Government of Mysore having
been decided against the respondents by the High
Court on the writ petitions, that decision is binding
on them and the respondents cannot raise a dispute
as to it by reason of the application of the principle
of res judicata, (2) the second line of argument is
that on a proper construction of sub-section (1) of
s. 76, it should be held that the words "other person"
occurring therein must be read ejusdem generia or
noseitur a sociis with 'licensee' and so read, a consumer of electric energy will not be entitled to the
benefit of that sub-section; furthermore, sub-s. (2) of
s. 76 will not help the respondents, because no provision of the 1948 Act read with the 1910 Act requires to be referred to arbitration a dispute of the
nature which is alleged to have arisen in the present
case between the Government or the Board on one
side and the textile mills on the other.
We shall now deal with these two arguments
in the order in which we have stated them. First,
as to the argument based on the principle of res
judicata. We may first refer to the pleadings in the
writ petitions. In paras. 7 and 8 of the affidavits
which the textile mills filed in support of the writ
petitions, they raised two main contentions : (a)
firstly,· that the Government of Mysore had "no
right to increase the rates for supply of electrical
energy in the manner they have done"; it was stated
that there were prior agreements (referring to the
agreements of 1945) and the supply had to be made
at the same old rates since all the terms and conditions of the agreements were observed by both the
parties; (b) secondly, it was stated that the increase
of rates was
arbitrary
and
unfair by reason
2 S.C.R.
SUPREME COURT REPORTS
139
of the
provisions of the Sixth Schedule of
the l!J48 Act.
A reference was made to s. 26
of
the
1948
Act
and the Sixth Schedule
thereof. That Schedule inter alia provides that the
licensee shall so adjust his rates for the sale of
electricity by periodical revision that his clear profit
in any year shall not, as far as possible, exceed the
amount of "reasonable return" determined in accordance with certain rules laid down in the Schedule.
It was pleaded on behalf of the textile mills that it
was possible to find out from the rules the maximum
rate which a licensee could charge under the rules,
and in view of those rules, the revised rates fixe<l by
the Government of Mysore were unfair and excessive.
The prayer which was made in the writ petitions was in these terms :
"The High Court may be pleased to issue a
writ of prohibition or a writ of mandamus or
such other appropriate writ, direction or order
restraining
the
respondent
(meaning
the
Government of Mysore and later the Board)
from levying or collecting the increased rates
as per the Government order dated March 1,
1956, and that the respondent be directed to
continue to levy at the rates agreed to between
the parties in the agreements of 1945."
The decision of the High Court on the writ petitions
makes it clear that the only point which was urged
before the High Court on behalf of the textile mills
was that under s. 26 of the 1948 Act the Board had
all the powers and obligations of a licensee under
the 1910 Act and as the provisions of the. Sixth
Schedule and the Seventh Schedule of the 1948 Act
were, under s. 57 of that Act, deemed to be incorporated in the license of every licensee, the Board
which had the same obligations as a licensee could
not demand charges for the supply of electricity
1962
M,sor1 Stal1
Elt<tri<il) Boord
v •.
Baa1olor1 WHllM,
Cott .. & Silk
Mills Ltd.
D41, J.
1962
M:1so11 SltU1
IJ:letlri<ilJ Board
v.
B mtttlor1 WvtMl1n ~
Cott"" & Silk
Milt. Ltd.
Das, J.
140 SUPREME COURT REPORTS [1963] SUPP.
which were not in consonance with the principles
laid down in those Schedules. This argument was
repelled by the High Court, and the High Court
pointed out that the Board was not a licensee within
the meaning of the I 948 Act and was not subject to
the rules of the Sixth Schedule thereof. Section 26
of the 1948 Act is in these terms :
"Subject to the provisions of this Act, the
Board shall, in respect of the whole State, have
all the powers and obligations of a licensee under
the Indian Electricity Act, 1910, and this Act
shall be deemed to be the licensee of the Board
for the purposes of that Act."
The High Court expressed the view that having
regard to the definition clause in s.2(6) which in clear
terms stated that the Board was not a licensee within
the meaning of the 1948 Act, s. 26 was of no assistance
to the textile mills. The High Court decided that the
plea of the textile mills based on the . provisions of
s. 26 read with the Sixth Schedule of the 1948 Act
was unsound and could not be accepted.
Now, the question is, does this decision operate
as res judicata in the matter of a reference to arbitration under s. 76 of the 1948 Act when the High Court,
in express terms, left that question open ? The learned
Attorney General appearmg for the appellant has
put his argument in the following way.
He has
submitted that s.26 of the 1948 Act came into force
in Mysore on September 30, 1957, and the disputed
revision of rates was made by the Government of
Mysore in 1956 when s.26 of the 1948 Act was not in
force there; but under s.60 of the 1948 Act, all matters
and things engaged to be done by, with or for the
State Government for any of the purposes of the
1948 Act before the first constitution of the Board,
shall be deemed to have been done by, with or for
the Board etc; therefore, the Board was entitled to
ask for payment of all arrears of electric charges at
2 s.c.R. SUPREME COURT REPORTS
141
the rates revised by the State Government, provided
the State Government had the right to revise the
rates in 1956. That right having been found for the
State Government and against the textile mills, the
latter could not re-agitate the question and ask for a
reference to arbitration under s. 76 of the 1948 Act.
As against this line of argument, it has been
submitted on behalf of the textile mills that having
regard to the pleadings in the writ petitions and the
decision of the High Court thereon, all that the
High Court decided was that the Sixth Sc}\edule of
the 1948 Act did not apply to the Board and the
revised rates could not be challenged on.the ground
that there was no compliance with the principles
laid down in that Schedule. The question whether
the dispute shall be determined by arbitration under
s. 76 of the 1948 Act was specifically left open by
the High Court and, therefore, that question cannot
be shut out by the operation of the principle of
rea judica ta.
We do not think that these appeals can be decided on the narrow ground of rea judicata. There
was some argument before us as to whether a decision
on a question of law operates as re8 judicata, and
the learned Attorney General relying on the Full
Bench decision in the Province of Bombay v. The
Municipal Oorporalion of Ahmedabad(')has contended
that a decision given by a court on a question of law
may not bind the same parties when they are litigating with regard to a· matter different from the one
on which the decision was given : but a decision of
law would be binding between the same parties as
rea' judkata if the right that a party claimed was the
same in the former litigation as in the later. We do
. not think that it is necessary for us to consider in the
abstract to what extent a decision on a question of
law operates as ru judicata between the same parties.
It is well settle<!. that in order to decide whether •
11> .&;1,a. ... ._. 1.
1962
J.f,nore Sllll
El#IM" BOJWtl
v.
Ba•1oktiWoolm,
Cottan & Silt
Mills Lid.
Dos, J.
1962
My,.,, Slall
Eketrieity Baard
••
Bllli1alo,. Woo/Un1
CollM t!I SUk
Mills Lid.
Da,J.
142 SUPREME COURT REPORTS [1963] SUPP.
decision in an earlier litigation operates as res
judicata, the court must look at the nature of the
litigation, what were the issues raised therein and
what was actually decided in it. In the cases before
us the High Court decided on the writ petitions · that
the Board was not a licensee within the meaning of
s. 26 of the 1948 Act and was not bound by the
principles laid down in the Sixth Schedule thereof.
This was the actual decision of the High Court. It
is indeed true that what becomes res judicata is the
"matter" which is actually decided and not the
reason which leads the court to decide the "matter."
We find it difficult, however, to agree . with the
learned Attorney General that the matter which was
actually decided on the writ petitions necessarily
embraced or included the question of the right of the
textile mills to call for an arbitration under s. 76 of
the 1948 Act. The right of the State Government
or of the Board to revise the rates, and the right, if
any, of the textile mills to raise a dispute as to the
revised rates, are two different matters and the
decision on one cannot operate as res judicata with
regard to the other. As to the right of the textile
mills to call for an arbitration, the High Court, in
express terms, left that matter open.
While we do not agree with the learned
Attorney General that these cases can be decided on
the narrow ground of res judicata, we do think that
a much larger question arises, and this question has
two facets, namely, whether the alleged dispute
about the revision of rates made by the State Government in 1956 is a question which at all comes under
the 1948 Act and if it does, do the textile mills come
within the. category of "other person" occurring in
s. 76(1) of that Act ?
Let us first consider whether the dispute at all
comes under the 1948 Act. What were the powers
of the State Government to revise the rates in
2 S.C.R.
SUPREME COURT REPORTS
143
1953-1956? No provision of the 1910 Act as it
stood at the relevant time has been brought to our
notice which imp<>Sed any restriction on the State
Government in the matter of charging for the electri!(
energy which it sμpplied, though s. 23 of the 1910
Act and some. of the clauses in the Schedule of that
Act imposed restrictions on a licensee in the matter
of charging for electricity which the licensee supplied. The State Government was not, however, a
licensee, either under the 1910 Act or the 1948 Act,
and was not bound by those restrictions. Speaking
generally, the Board takes the place of the State
Government under the 1948 Act.
Section 49 of the
l\!48 Act states.
"Subject to the provisions of this Act and of
any regulations made in this behalf, the Board
may supply electricity to any person not being
a licensee upon such terms and conditions as
the Board may from time to time fix having
regard to the nature and geographical position
of the supply and the purpose for which it is
r,?quired :
Provided that in fixing any such terms
and conditions the Board shall not show undue
preference to any person."
It is worthy of note that this section came into force
in Mysore on September 30, 1957, and the revision
of rates made in 1953-1956 by the State Government
was not in exercise of the powers given to the Board
under s. 49.
The position in 1953-1956 was that
the State Government of Mysore was free to contract
with the consumers of electric energy to supply at
such rates as it thought fit.
The agreements which
the State Government had entered into with the
four textile mills in 1945 had come to an end in
1949-1950 and the State Government was not bound
to continue to supply electric energy· to those mills
at the old rates. The matter rested in the region of
196l
M710tt Sui.
Eketrltil,J Board
v •.
a.,., • .,. w..u,.,
Collon i'JI Silk
Mills Lt.I.
Du,J.
1962
Mysor1 Stat•
ElttltH.ity Board
v.
Banzai~'' Woo!len,
Collon & Silk
Mills Ltd.
Das,J.
144 SUPREME COURT REPORTS [1963] SUPP.
contract, express or implied, and it could not be
said to raise a question under the 1948 Act. If it
W[lS not a question which arose under the 1948 Act,
s. 76 thereof would not be attracted thereto.
Learned counsel for the respondents has sought
to meet this difficulty in the following way.
He
has first referred to s. 60 of the 1948 Act. It is
perhaps necessary to quote sub-s. (1) of that section
here.
"60 ( 1).
All debts and obligations incurred,
all contracts entered into and all matters and
things engaged to be done by, with or for the
State Government for any of the purposes of
this Act before the first
constitution of the
Board shall be deemed to have been incurred,
entered into or engaged to be done by, with
or for the Board; and all suits or other legal
proceedings instituted or which might but for
the issue of the notification under sub-section
( 4) of section 1 have been instituted by or
against the State Government may be continued or instituted by or against the Board."
The argument is that the revision of rates made by
the State Government in 1956, looked at either as
a matter of contract between the parties or as something done by the State .Government in exercise of
its powers to fix such rates as it thought fit, shall be
deemed under
sub·s. (1) of s. 60 to have been
done by the Board, and if at the time when the
revision was made there was a dispute between the
parties which dispute has continued with the Board
by reason of the Board demanding the arrears at the
revised rates, it must be held that the .dispute arises
under the 1948 Act and may be determined by
arbitration under s. 76 (1) thereof.
Learned counsel
for the respondents has further argued that even if
the Board had revised the rates. in exercise of its
powers under s. 49, a section which we had earlier
-
2 s.c.R.
SUPREME COURT REPORTS
145
auoted, such power would be subject to the provislons of the 1948 Act and would attract s. 76. Therefore, the argument of learned counsel for the respondents is that the effect of ss. 60 and 49 is that
the dispute is one which arises under the 1948 Act
and must be determined by arbitration as required
bys. 76 (1).
We doubt the correctness of this line of argument. First, as to s. 60 of the 1948 Act. The
revision of rates which was made by the State
Government in 1953-1956 rested, as we have said
earlier, either on contract or on the unilateral action
of the State Government. In either case, it was
outside the 1948 Act and was not referable to any
provision thereof. A pre-requisite condition for the
application of s. 60 is that the contract made by the
State Governmenr or
the thing done by it must
be "for any of the purposes of the 1948 Act."
If
it was for the purposes of that Act and was entered
into or done by the State Government before the
first constitution of the Board, then the contract or
the thing done shall be deemed to have been made
or done by the Board and all suits or other legal
proceedings which might have been instituted against
the State Government could be instituted against
the Board. We have earlier pointed out that there was
no provision in the 1910 Act as it stood at the
relevant time which applied to the State Govern-
-
ment in the matter of the rates which it charged for
applying electricity to consumers. In the 1948 Act
also, there is no section which regulates the State
Government in the matter of what it will charge
for electric energy supplied by it. That being the
position, how can it be "Said that the revision of the
rates by the State Government
gave rise to a
question under the 1948 Act ?
We now turn to s. 49. That section came into
force in Mysore, we have said earlier, on September
1962
Mysor1 Stall
El1<1tirii, B .. rd
v.
s .. 1.i.n w.01i..
Colloo & Silk
MUil Ltd.
DM, J.
1962
M.lsoTI Sitt.
E',clrUit• Board
v.
Ban1•lorr Woo'ln,
CotlDn & Silk
Mil/sLld.
!Jds, J.
'
146 SUPREME COURT REPORTS [1963] SUPP.
30, 1957. That section applied to the Board after
is was constituted. It had no application in 1956,
and we are unable to see how it can be said that
any dispute as to the revision of rates made by the
State Government in 1956 was a question which
arose under the 1948 Act.
The learned Attorney
General has indeed accepted the position that the
Board is the successor-in-interest of the State Govern·
ment and the supply of electricity is one of the
purposes of the 1948 Act. That does not, however,
mean that the revision
of rates in 1956 and a
dispute raised as to such revision, became a question
under the 1948 Act by reason of the demand made
by the Board of the . arrears due in respect of the
revised rate.