# JINDAS OIL MILL & ORS v. GODHRA ELECTRICITY CO. LTD

- **Citation:** [1969] 3 S.C.R. 836
- **Court:** Supreme Court of India
- **Decided:** 1969-02-26
- **Bench:** M. Sikri, R. S. Bachawat, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jindas-oil-mill-ors-v-godhra-electricity-co-ltd-4648
- **Pages:** 13

## Headnote

B
Electricity Supply Act, 1948, s. 51(2)(c)-Rates of supply licensus
fixed by Government on recommendation of rating comn1it/lee-Act amenlled in 1956 s. 57(A)(l)(e) of amended Act read with amended Schedule
VJ-Licensee's power under amended Act to en/lance rates of supplyRates "fixed under original Act whether can be enhanced by licensee unilatera/1)-Vested righ! whether afj.cted-App/icability of General Clauses Act,
1897, s. 6.
c
The respondent helO a licence for the supply of Electricity under the
Indian Electricity Act, 1910 in the Godhra area of undivided Bombay.
On the creation of the State of Gujarat the area went to that State. The
Electricity (Supply) Act came into force in 1948 and under it the conditions in Schedule VI thereof were deemed to be incorpo'rated ill; the licence
of every licensee.
Under s. 57(2)(c) of the Act the Government could
fix the rates for supply of electricity and under cl. I of the Schedule VI
D
a I icensee could reduce the rates for keeping the profit at a reasonable
level. A lictnsee bad no power to enhance the rate&. except by requesting
the Government to fix ne1rv rates on the recommendation of a fresh rating
committee.
In 1952 the Government fixed certain rates on the recommendations of a rating committee. In 1956 the Supply Act of 1948 wao
amended. By s. 57A( I )(e) of the amended Act the rates fixed by the
Government under s. 57(A) (l)(d) on the recommendation of a rating
E
committee we're to enure for a maximum of three years.
Under cl. I of
the amended Schedule VI the licensee shall so adjust his charges for the
sale of electricity whether by enhancing dr reducing them that hii clear
profit in any year of acdount shall not as far
as possible exceed the
amount of reasonable return.
In 1963 the respondent enhanced the rates
of supply without having them fixed by the Government on the recommendations of a rating committee.
The appellants who were consumers
df electricity in the Godhra area filed suits seeking to restrain the responF
dent from enforcing the enhanced charges.
The suits were decreed by
the trial court and the decrees were confirmed by the first appellate court
and in second appeal by a single Judge.
In Letters Patent appeal ho..,-
ever the High Court held that under the Supply Act as amended in 1956
the re•pondent had a unilateral right to enhance the charges subje(\t to the
conditions prescribed in Schedule VI of the Act.
The appellants came
to this Court contending that they had a vested right in the rates; fixed
by Government in 1952, that under the amended Act the respondent did
G
not have a unilateral right to enhance those rates, and that the amended
provi5ions not being retrospective nor inconsistent with the old provisions
the charges fixed by the Government in 1952 must in view of s, 6 of the
General Clauses Act, 1897 continue to be in operation.
HELD : The law declared by the Amending Act does not affect any
ri~ht or privilege, accrued under the repea1ed provision. It merely prescnbes as to what can or should be done in the future.
Therefore there
H
is no basis for saying that it affects vested rights. [847 F]
For finding out the power of the licensee to alter the ch"!ges one has
to look at the terms of the license in the light of the law as 1t stands, the
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JINDAS OIL MILL v. GODHRA ELFCT. co. (Hegde, J.)
pa•t history of that law being wholly irrelevant. If the tellII& of the
licence, including the deemed term! permit him to unilaterally alter the
charges then he has that right. Jn the pr•e«nt case looking at tbooe term!,
the respondent was certainly within itll rigms in enhancing the chargeo as
admittedly it had followed the procedure pre.\Cribed by law. [847 F-GJ
The contention that there w.. no inconsistency between the present
•cheme relating to the enhanceme.nt of cilarges viso{;-v/s the scheme provided under the Supply Act prior to its amendment in 1956 could not be
accepted. The two schemes are rubstantially different. Under the former
scheme

## Text

JINDAS OIL MILL & ORS.
v.
GODHRA ELECTRICITY CO. LTD.
February 26, 1969
[S, M. SIKRI, R. S. BACHAWAT AND K. S. HEGDE, JJ.]
B
Electricity Supply Act, 1948, s. 51(2)(c)-Rates of supply licensus
fixed by Government on recommendation of rating comn1it/lee-Act amenlled in 1956 s. 57(A)(l)(e) of amended Act read with amended Schedule
VJ-Licensee's power under amended Act to en/lance rates of supplyRates "fixed under original Act whether can be enhanced by licensee unilatera/1)-Vested righ! whether afj.cted-App/icability of General Clauses Act,
1897, s. 6.
c
The respondent helO a licence for the supply of Electricity under the
Indian Electricity Act, 1910 in the Godhra area of undivided Bombay.
On the creation of the State of Gujarat the area went to that State. The
Electricity (Supply) Act came into force in 1948 and under it the conditions in Schedule VI thereof were deemed to be incorpo'rated ill; the licence
of every licensee.
Under s. 57(2)(c) of the Act the Government could
fix the rates for supply of electricity and under cl. I of the Schedule VI
D
a I icensee could reduce the rates for keeping the profit at a reasonable
level. A lictnsee bad no power to enhance the rate&. except by requesting
the Government to fix ne1rv rates on the recommendation of a fresh rating
committee.
In 1952 the Government fixed certain rates on the recommendations of a rating committee. In 1956 the Supply Act of 1948 wao
amended. By s. 57A( I )(e) of the amended Act the rates fixed by the
Government under s. 57(A) (l)(d) on the recommendation of a rating
E
committee we're to enure for a maximum of three years.
Under cl. I of
the amended Schedule VI the licensee shall so adjust his charges for the
sale of electricity whether by enhancing dr reducing them that hii clear
profit in any year of acdount shall not as far
as possible exceed the
amount of reasonable return.
In 1963 the respondent enhanced the rates
of supply without having them fixed by the Government on the recommendations of a rating committee.
The appellants who were consumers
df electricity in the Godhra area filed suits seeking to restrain the responF
dent from enforcing the enhanced charges.
The suits were decreed by
the trial court and the decrees were confirmed by the first appellate court
and in second appeal by a single Judge.
In Letters Patent appeal ho..,-
ever the High Court held that under the Supply Act as amended in 1956
the re•pondent had a unilateral right to enhance the charges subje(\t to the
conditions prescribed in Schedule VI of the Act.
The appellants came
to this Court contending that they had a vested right in the rates; fixed
by Government in 1952, that under the amended Act the respondent did
G
not have a unilateral right to enhance those rates, and that the amended
provi5ions not being retrospective nor inconsistent with the old provisions
the charges fixed by the Government in 1952 must in view of s, 6 of the
General Clauses Act, 1897 continue to be in operation.
HELD : The law declared by the Amending Act does not affect any
ri~ht or privilege, accrued under the repea1ed provision. It merely prescnbes as to what can or should be done in the future.
Therefore there
H
is no basis for saying that it affects vested rights. [847 F]
For finding out the power of the licensee to alter the ch"!ges one has
to look at the terms of the license in the light of the law as 1t stands, the
A
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F
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JINDAS OIL MILL v. GODHRA ELFCT. co. (Hegde, J.)
pa•t history of that law being wholly irrelevant. If the tellII& of the
licence, including the deemed term! permit him to unilaterally alter the
charges then he has that right. Jn the pr•e«nt case looking at tbooe term!,
the respondent was certainly within itll rigms in enhancing the chargeo as
admittedly it had followed the procedure pre.\Cribed by law. [847 F-GJ
The contention that there w.. no inconsistency between the present
•cheme relating to the enhanceme.nt of cilarges viso{;-v/s the scheme provided under the Supply Act prior to its amendment in 1956 could not be
accepted. The two schemes are rubstantially different. Under the former
scheme once the Govemment fixed the charges the licensee could not enhance them but at present at the end of the period fixed in the Government order the licensee has a unilateral right to enhance the qbargea in
accordance with the conditions pre!Cribed in Schedule VI. Therefore in
view of '· 57 the provisions contained in that Schedule have an over'ridini:
effect. [847 H-848 A]
The intention of the legislature beinr c"ar and unambiguous there was
no need to call into aid any rule of statutory construction or any lepl
presumption.
Further, there was no reason why those who obtained
licences prior to the amendment of the Supply Act in 1956 should be in
a more disadvantageous position than those who got their licenceo thceafter.
Correspondingly there wao no reason why those who are eerved
by licencees who obtained their licences prior to the amendment of the
~pply Act in 1956 should be plac.d m a better position than thooc !!Orved
by licensees who obtained their licence. thereafter. [847 CJ
Section 57(A)(l)(e) was intended to meet the qbanging economic
oircumstances. The pur(lO'e behind the new provisions appears to be to
permit the licencees to adjuot their charges to get reasonable profitll. But
at the same time a machinery ha, been provided to see whether any exce.s
charges haYe been levied and if levied get the •ame refunded lo the
consumen.[847 El
In view of the above comiderations and findin!I" the appeals muet fail.
Statt of Punjab v. Mohar Singh, [19SS) S.C.R. 893 and Du, C/uJlld
v. Statt of U.P. & Ors. [1959) 2 Supp. S.C.R. 8, distinguished
Amalgamated Electricity Co. Lli. v. N. S. Bhathtna .t Anr. !1964] 7
S.C.R. 503, applied.
CML APPELLATE Jfilm>ICTJON: Civil Appeals Nos. 15 and
16 of 1969.
Appeals from the judgment and order dated December 3 1968
of the Gujarat High Court in Letters Patent Appeals Nos. 43 and
42 of 1966 respectively.
M. C. Chagla, P. C. Bhartari, P. N. Tiwari and J. B. Dtldachanji, for the appellants (in both the appeals).
I. N. Shroff, for the respondent (in both the appeals).
The Judgment of the Court was delivered by
Hegde, J. Common questions of law arise for decision in these
appeals, by cei:ificate. The suits fro~ which these appeals arise
have been considered together and decided by common judgmems
838
SUPREME COURT REPORTS
[1969] 3 S.C.R.
both in the High Court as well as in the courts below. It is convemient to do so in this Court as well.
The smls in questions are representative suits. The plaintiffsappellants who are consumers of electricity in the Godhra area
sued the respondent-company on behalf of all the consumers in
that area ;ecking to restrain the respondent from enforcing the
enhanced charges sought to be collected from the consumers of
power used for lights and fans as well as of motive power.
The facts leading to these appeals may now be stated.
On
November 19, 1922, the then Government of Bombay granted
a licence under the Indian Eleclricity Act, 1910 to a concern
called Lady Sulochna Chinubhai & Co. authorising it to generate
and supply electricity to the consumers in Godhra area. Clause 10
of the licence prescribed the maximum charges that the licensee
could levy for the power supplied. The respondent is the successor of the said licensee. After the Electricity (Supply) Act, 1948
(to be hereinafter referred to as the Supply Act) came into force,
a rating committee was constituted under s. 57(2) of the Supply
Act at the request of the respondent on January !9, 1950.
On
the recommendation of that committee, the Government
fixed
wirh effect from February I, 1952, the following charges for the
power supplied :
'
(i) 0-7-9 pies per unit for th~ electricity supplied for
lights and fans with a minimum of Rs, 3/- per
month per installation and
(ii1 for motive power at 4 annas per unit with a
minimum of Rs, 4-8-0 per month per installation,
The Supply Act was amended in 1956, The respondent incre."Lsed
the charges for motive power from January 1, 1963 to 35 NP,
per unit with a minimum of Rs, 7 /- per month for every installation,
On June 22, 1963, the rates for lights and fans were increased with effect from July I, 1963 to 70 NP. per unit with a
minimum of Rs, 5/- per month for every installation, The contention of the appellants is that the respondent was not competent to enhance the charges in question without the matter having
been considered by a rating committee,
Their suits to restrain
the respondent from levying the proposed increased charges were
decreased by the trial court Those decrees were affirmed
by
the first appellate court as well as by a single judge of the Gujarat
High Court in second appeals but the appetlate bench
of the
Gujarat High Court reversed those decrees and dismissed the suits
holding that under the Supply Act' as amended-in 1956 the respondent has a unilateral right to enhance the charges subject to
the conditions prescribed in the VI ScheduJe to that Act It is
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JINDAS OIL MILL v. GODHRA ELECT. co. (Hegde, /.)
8 39
as agail15t those decisions these appeals have been brought. Civil
Appeal No. 15 of 1969 relates to the enhancement of charges for
electricity power for lights and fans and Civil Appeal No. 16 of
1969 relates to the enhancement of charges for the motive power.
The only question that ·arises for decision in these appeals is
whether under the provisions of the Supply Act as amended in
1956, the respondent was competent to unilaterally enhance the
charges.
In the~e appeals we are not concerned with the provisions of
the Electricity Act, 1910. There is no disp11te as regards the
charges fixed by the Government with effect from February
1,
1952, under s. 57(2)(c) of the Supply Act on the basis of the
r!'COlllmendation made by the rating committee. The appellants
admit their liability to pay enhanced charges that may be fixed by
the Government on the basis of any recommendation by a freshly
appointed rating committee.
They merely challenge the respondent's right to unilaterally enhance the charges.
According to
the appellants they have a vested right to be governed by the
charges fixed in 1952 until the same is revised by the Government on the basis of the recommendation of a rating committee.
It was urged on their behalf that the amendments made in 1956
do not affect the charges fixed in 1952 and they continue to rule
till altered by the Government in
accordance with law. The
respondent repudiates those contentions.
It denies
that
the
appellants have any vested right in the charges fixed.
It was
urged on its behalf that the amendments made to the Supply Act
in 1956 have substantially altered the scheme as regards levying
charges; it is now open to a licensee to alter the charges fixed by
the Govermnent ·unilaterally subject to the conditions prescribed
in s. 57(A) and in Sch. VI of the Supply Act. We may mention
at this stage that even according to the appellants the charges that
may be fixed by the Government now on the basis of the recommen~ation of a rating co.mmittee can be unilaterally altered by
the licensee after the penod fixed in the Government order in
accordance with cl. {e) of s. 57(A){l), expires.
.
In on;ier t~ ctecide the point in controversy, we have to take
mto cons1derallon t;he relevan! provi.sions of the Supply Act as it
stands now and as 1! stood pnor to tis amendment in 1956. For
the s.~e of convenience we shall set out side by side the relevant
proV1S10ns.
The Supply Act u ii llood before
1956.
S, 57. Llcenace·s charges to consumen.
The Supply Act as amended in 1956
S. 57. The Provisions of tho Slxtlt
Schedule and the Seventh Scbodul<>
840
SUPREME COURT REPORTS
(1969] 3 S.C.R.
(I) The provisions of the Sixth
Schedule and the Table •Ppended to the Seventh Schodule shall be deemed to be
incorporated in the licence of
evtrf licensee, not being a
local authority, from the dale
of the commencement of the
lcense-e's next mcceeding year
of account.
and from such
date the licensee shall comply
therewith accordingly and any
provisions of such licence or
ot the Indian Electricity Act,
1910 (LX of 1910), or any
other law, agreement or inatrurnent applicable to
the
licengee ~iall, in relation to the
licensee, be void and of no
effect in so far as they are
inconsistent with the provisions of thiS section and the
said Schedule and Table.
(2) Where the provisions of the
Sixth Schedule and the Table
appended to the Seventh Schedule are under sub-section ( 1)
deemed to be incorporated in
the
licence of any licensee.
1he following provisions shall
ilavc effect in relation to the
said licensee, namely :-
(a) The Board or where no
Board is constituted under
this Act, the Provincial
Government, may, if it
iS satisfied that the liceneee bas failed to comply
with any provisions
of
the Sixth
Schedule and
shall when requested so
to do
by the licensee.
constitute a rating com·
mittee to examine
the
licensee's charges for the
supply of electricity and
to recommend thereon to
the
Provincial
Government;
Prol'ided t.'iat no rating com ..
mittee shall be constituted
in
respect of a licensee within three
shall be deemed to be incorporated
in the licence of every licensee. not
being a local authority :-
( •) in the case of a licence granted
beore the commencement of.
this Ac~ from the date of the
commencement of the Jicea. ..
see's next succeeding year of
account; and
( b) in the case of a Ucencee graated after the commencemeat
of this Act, from tho date Ill
the commencement of suJ)l'ly,
and as from the said date, the
licensee shall comply with tho
provisions of the said Schedules accordingly, and
aay
provisions
of the
Indiaa
Electricity Ac~ 1910, and tbe
the
licence granted to hi•
thereunder and of any other
Jaw, agreement or instrumCllt
applicable to the licensee Shill,
in relation to the licensee, be
void and of no effect in so far
as they are inconsistent with
the provisions of section S7 A
and the said Schedules.
S. 57(A) (!): wh•retheprovisions of the Sixth Schedale
and the Seventh Schedule are
under section S7 deemed to
be incorporated in the licence
of any licensee, the following
provision~ shall have effect in
relation to. the said licenaec
namely:-
(•) the Board or where no Board
is constituted under this Act.
the State Government-
(i) may, if satisfied that tbe
licensee
has failed
to
comply with any of the
provisions
of the Sixth
Schedule, and
(ii) shali when so requoated
by the liceruec in writing
conttitute a rating committee to examine
the
licensee's charges for the
supply of electricity
and
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JINDAS OIL MILL v. GODHRA ELECT. co. (Hegde, I.)
841
years trom the date on which
such a committee has reported
in respect of that licensee, unless
the Provincial Government declares that in its opinion circumstances bavo arisen readoring the orders passed on the
recommendation
of the previ,om: rating committee unfair
to the licensee or any of his
consumers.
( b) The rating committee shall
after giving the licensee a
reasonable opportunity
of
being heard and after taking
into consideration the efficiency
of operation
and
management and the potentialities of his undertaking
report to
the
Provincial
Government making recommendations
(and
giving
reasons therefore)
regarding the charges for electricity which the licencee may
make to any clas~ or classes
ot consumers so however
that the
recommendations
arc not likely to prevent
Lie licensee from earning
clear profits sufficient when
taken with the sums available
in the Tariffs
and
Dividends Control Reserve
to afford him a reasonable
return
during
his
next
succeeding three year!:
of
account if the potentialities
of the undertaking of the
1icensee,
with
efficient
operation and management,
so perm.it.
(c) Within one month after the
receipt of the report under
clause (b) the
Provincial
Government shall cause the
repart to be published in
tho official Gazette.
and
may at the same time make
an
order
in
accordance
therewith
fixing the licen-
~ee's charges for the supply
to
make
reeommenda.
tions in that behalf to the
State Government :
Provided that where it is pro·
pooed to constitute a rating com·
mittee under this section on account
of. the failure of the licensee to
coinply with any provisions of the
Sixth Schedule. such
committee
shall not be constituted unlei:s the
licensee has been given a notice
in writing
of thirty clear
days
(which period. if the circumstances
so warrant may be extended from
time to time) to show cauSe against
the action proposed to be taken :
Provided further
that no such
rating committee shall be constitu.
ted if the alleged failure of the
Iicen*e to comply with any pro-.
visions of the Sixth Schedule raises
any dispute or difference as to the
interpretation of the said provisions
or any matter arising
therefrom
and such difference or dispute has
been referred by the licensee
to
the arbitration of the
Authority
under paragraph XVI of that Schedule before the notice referred to
in the preceding proviso was given
or i~ so referred within the period
of the said notice :
Provided further that no rating
committee shall be constituted in
respect of a licensee within three
years from the date on which such
a committee has reported in res))Cct
of that licensee. unless the State
Government declares that in
its
opinion circum!.1ances have arisen
rendering the orders passed on the
recommendations of the previouo;
rating
committee
unfair to
the
licensee or any of the consumers :
( b) a rating committee
under
clause (a) shall,-
J i) where such committee is to
he constituted under sub·
clause (i) of that clause. be
constituted not later
than
three
months
after
the
842
SUPREME COURT REPORTS
[1969] 3 S.CR.
of
electricity
with effect
from such date, not earlier
than two months after the
date of publication of the
report, as may be fi'(>ecified
in the order; and the licensee shall
forthwith
. give
effect to such order :
Provided that nothing in this
clause shall be deemed to prevent a licensee from reducing at
any time any charges. so fixed.
THE SIXTH SCHEDULE
1. The Licensee shall so adjust his
rates for the &"ale of' electricity
by periodical revision that his
clear profit in any year shall not
as far as possible exceed the
amount of reasonable return :
Provided that the licensee shall
not be considered to have failed
so to adjust his rates if the clear
profit in any year
of account
has not exceeded the a1nount of
tbe reasonable return by more
than thirty per centum of the
amount of the reasonable return.
II. (I) If the
clear profit
of a
licensee in
any year
of
account is in excess of the
amount of reasonable return
one-third of such excess. not
exceeding 7 1/2 per cent of
the amount of reasonable
return shall b;e at the disposal of the
undertaking.
Of the balance of the excess. one half r,'hall be appropriated
to
a
reserve
which
shall be called the
Tariffs and Dividends Control Reserve and the remaining half shall either be distributed in the form of a
proportionabte rebate on the
amounts coHected from the
sale of electricity and meter
rentals or carried forward
in the accounts of the licensee for distribution to the
consumer!t in future,
in
expiry of the notice referred
to in the first proviso to
tha~ clause :
tii) where such committee is to
be constituted at the request
of the licensee, be constituted
within three months of the
date of such request;
(c) a rating committee shall, after
giving the licensee a reasonable
opportunity
of
being
heard and after taking
into
con!tideration the efficiency of
operation and management and
the potentialities of his undertaking,
report to the
State
Government
within
three
months from the date of its
constitution,
making recommendations
wit!l
reasons
therefor, regarding the charges
for
electricity
which
the
licensee may make to any class
or classes of conr,'umers
so,
however. that the recommen.
dations are not likely to pre.
vent the licensee from earning
clear profit, sufficient
when
taken with the sums available
in the Tariffs and Dividends
Control Reserve to afford him
a reasonable return as define;d
in the S~th Schedule during
his next succeeding three years
of account:
Provided that the State Govern~
rnent may, if it ~o deems nece~ary,
extend the said period of three
months by a further period not
exceeding three
monthS'
within
which the
report of the
rating
committee may be submitted to
it;
(d) within one month after the
receipt of the
report under
clause (c), the State Government shall cause the report to
be published in the
Official
Gazette, and may at the same
time make an order in accord ..
ance
therewith
fixine;
the
licensee's
charges
for
tbc
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JINDAS OIL MILL v. GODHRA ELECT. co. (Hegdc, /.)
843
such manner as the Provincial Government
may
direct
(2) The Tariffs
and Dividends
Control Reserve shall
be
available for disposal by the
licensee only to the extent
by which the clear profit is
less than
the
reasonable
return
in
any
year
of
account.
( 3) On the purchage
of the
undertaking under the terms
of its licence any balance
remaining in the Tariff:t and
Dividends Control Reserve
shall be handed over to the
purchaser
and maintained
as such
Tariffs and Dividends Control Reserve.
supply
of
electricity
with
~ffect from
such date,
not
earlier than two months
or
later than three months, after
the date of publication of the
report as may be specified in
the order and the licensee shall
forthwith give effect to such
order;
( e} the charges for the supply of
electricity fixed under clause
( d) shall be in operation for
such
period
not exceeding
three years as the State Oov~
ernment may specify in the
order :
Provided
that nothing 1n
this
clause shall be deemed to prevent
a licensee from reducing at
any
time any charges 00 fixed.
THE SIXTH SCHEDULE
I. Notwithstanding anything
con~
tained in the Indian Electricity
Act. 1910 except sub-aection (2)
of section 9 of 1910, 22A. and
the provisions in the licence of
a licensee. the licensee shall so
adjust his (charges) for the sale
of electricity whether by
enw
hancing or reducing them that
his clear profit in any year or
account shall
not, as far
as
possible, exceed ·the amount of
reasonable return :
Provided that such (charges) snau
not be enhanced more thaa once
in any year of account :
Provided further that the licensee
shall not be deemed to
have
failed so to adjust his (charges)
if the clear profit in any year or
account has not exceeded
the
amount of reasonable return by
(twenty)
per centum of
the
amount of reasonable return ~
Provided further that the licmlset
'1lall not enhance the ( charces)
for the supply of electricity nntil
after the expiry of a notice in
wtiting of not 1.,. than sixty
844
I
SUPIU!MB COURT IU!PORTS
[J 969] 3 S.C.R.
clear days of his intention to so
enhanc:e the (charges) given by
him to the State Government and
and to the Board :
Provided
further
th at i(
the
(charges) of supply fixed
m
pursuance of the recommendations of a rating committee. constituted under sec. S7 A are lower
than those notified by the licensee
under and in accordance with
the preceding proviso, the licensee
shall refund to the consumers
the excess amount recovered by
him from them :
A
B
Provided aJso that nothing in this
C
Schedule shall be deemed to
prevent a licensee from levying.
with the previous approval of the
State Govt. minimum charges for
supply of electricity
t'or
any
purpose.
IA. The notice referred to in the
third proviso to paragraph I shall
D
be accompanied by such financial and technical data in rupport of the proposed enhancement of charges as the State
Government_ may, by general _or
special order, specify,
II. (!) If the clear profit
of
a
licensee in
any
year
of
E
account is in excess of the
amount of reasonable return.
one-third of such excess, not
exceeding (five per cent) of
the amount of reasonable
return, shall be at the dh;-
posal of the undertaking, Of
the balance of the exccis,
one-half shall
be
approF
priated to a
res~rve which
shall be called the Tariffs
and Dividends Control Reserve
and the
remaining
half shall either be distributed in the form of
a
proportional rebate on the
amounts collected from the
G
sale of electricity and meter
rentals or carried forward
in the
accounts
of
the
licensee for digtribution to
the consumers in future, in
such manner as the State
Government may direct.
(2) The Tariffs and Dividends
H
Contrdt Reserve shall
be
available for disposal
by
the 1iccnsee only to
the
~xtent hy which the clear
A
B
.!)
E
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G
H
JINDAS OIL MILL v. GODHRA ELECT. co. (Hegde, J.)
845
/
profit is less than the reasonable return in any year of
account.
(3) On
the purcha~ of the
undertaking under the terms
of its licence any balance
remaining
in the
Tariffs
and Dividends Control Roserve shall be handed over
to tho purchaser and maintained aa such Tariffs and
Dividends Control Reserve:
Provided that where the undertaking is purcbasod bY the Board
or the
State Government
the
amount of the Reserve may be
ded\lcted from the prico payable
to the licensee.
From an examination of these provisions it would be seen
that under the Supply Act prior to its amendment in 1956, the
charges fixed by tile Govt. under s. 57(2)(c) remained in force
unless reduced by the licensee in the meantime till the same were
altered by a subsequent order made by the Govt. after getting a
fresh recommendation from the rating committee but under the
law as it now stands the rate fixed by the Government under s. 57
(A)(l)(d) would be in operation only for such period not exceeding three years as the State Govt. may specify in the order. Thereafter it can be enhanced by the licensee in accordance with the
provisions contained in Sch. VI. It was urged on behalf of the
appellants that the present s. 57(A(l )(e) can only govern the
charges fixed under s. 57(A)(l)(d) and it has not impact on an
order made under the old s. 57(2)(c). According to the appellants
the charges so fixed can only be modifi,,d by
the Government
aftec getting a report from the rating committee.
Mr. Chagla,
learned Counsel for the appellants contended that the consumers
who get power from the respondent have a vested right in the
charges fixed in 1952 and that vested right cannot be considered
to have been taken away by the provisions of the Amending Act.
He argued that the provisions of the Amending Act are not retrospective in character nor is there any inconsistency between those
provisions and the present provisions as the
two
operate on
different fields; hence in view of s. 6 of the General Clauses Act,
1897, we must hold that the charges fixed by the Government in
1952 continue to be in operation. In this connection he relied
on certain observations made by this Court in Stare nf Punjab v.
illohar Singh(') and Deep Chand v. State of U.P. & Ors.( 2 ). On
the other hand it was contended hy the learned Counsel for the
respondent that the rights and liabilities of the respondents
at
present are exclusively regulated by the provisions of the Supply
(I) [195'] S.C.R. 89.1.
(2) [1950] c S•mr. S C.R. ~.
846
SUPREME COURT REPORTS
[1969] 3 S.C.R.
Act as it stands now; the terms of licence as they originally stood
or as they stood on the coming into force of the Supply Act in
1948 are of no consequence now; they cannot be looked into for
finding out the rights or duties of the licensee as at present; for
that purpo;e we must look into those terms as modified by the
provisions of the Supply Act as it is now. It was also urged on
its behalf that there is no 4uestion of vested rights in these cases;
herein we are only concerned with the procednre to be ·adopted
in modifying the charges fixed in 1952.
In Mohar Singh's case(') this Court laid down that the provisions of s. 6 ( c), ( d) and ( e) of the General Clauses Act, 1897
relating to the consequences of the repeal of a law are applicable
not only when an Act or Regulation is repealed simpliciter but
also to a case of repeal and simultaneous enactment re-enacting
all the provisions of the repealed law.
In the course of its judgment this Court observed that when the repeal is followed by a
fresh legislation on the same subject, the Court has undoubtedly
to look into the provisions of the new Act but that only for the
purpose of determining whether they indicate a different intention.
The line of inquiry would be, not whether the new Act keeps alive
the old rights and liabilities but whether it manifests any intention
to destroy them.
In Deep Chand's case(') this Court was considerin7 the effect of repugnancy between a State Act and a Central
Act.
The observations made in that context, we think, have no
bearing on the point in issue in this case. It is true that when
an existing Statute or Regulation is repealed and the same
is
replaced by fresh Statute or Regulation unless the new Statute or
Regulation specifically or by necessary implication affects rights
created under the old law those rights must be held to continue in
force even after the new Statute or Regulation comes into force.
But in the cases before us there is no question of affecting any
vested right.
There is no dispute that the charges fixed can be
altered.
The controversy relates to the procedure to be adopted
in altering them.
That controversy does not touch any vested
right.
The procedure in question must necessarily be regulated
by the law in force at the time of the alteration of the charges.
Section 57 of the Supply Act as it stands now lays down that
the provisions of Sch. VI shall be deemed to be incorporated in
the licence of every licensee not being a local authority, in the
case of a licence granted before the commencement of the Act
from the date of the commencement of the licensee's next succeeding year of account
Admittedly the licence with which we are
concerned in these cases was granted even before the Supply Act
was enacted.
Therefore quite clearly the licence in. question is
governed by the present s. 57. Hence we have·to read into that
licence the provisions contained in Sch. VI. If any of the earlier
(I) [19551 S.C.R. 893.
(2) [1959] 2 Supp. S.C.R. 8.
A
B
c
E
F
G
H
A
B
c
D
E
F
G
H
JINDAS OIL MILL v. GODHR.A ELECT. CD. (Hegde, J.)
8 47
provisions in the licence either as they stood when the licence was
originally granted or as they stood modified as per the provisions
of the Supply Act prior to its amendment in 1956 are inconsistent
with the provisions of Sch. VI or s. 57(A) as they are now they
must be held to be void and of no effect. In other words we must
read into the licence the provisions of Sch. VI and strike out
therefrom such terms as are inconsistent with those provisions and
thereafter give effect to Ihe same.
For determining the rights
and duties of the licensee as at present we have only to look into
the terms of the licence as modified by Sch. VI. We cannot go
behind them.
That much is clear from the language of the
Supply Act. The intention of the legislature is clear and unambiguous. Therefore there is no need to call into aid any rule of
statutory construction or any legal
presumption.
Further
no
reason was advanced before us, nor can we conceive of any why
those who obtained licenses prior to the amendment of Supply
Act in 1956 should be in a more disadvantageous position than
those who got their licenses thereafter.
Correspondingly we fail
to see why those who are served by licensees who obtained their
licences prior to the amendment of the Supply Act in 1956 should
be placed in a better position than those served by licensees who
obtained their licenses thereafter.
After all, every law has some
reason behind it.
Section 57(A)(2)(e) was intended to meet the
changing economic circumstances.
The purpose
behind
the
new provisions ·appears to be to permit the licensees to so adjust
their charges as to get reasonable profits. But at the same time
a machinery has been provided to see whether any excess charges
have been levied and if levied, get the same refunded to the con-
:;umers.
The law declared by the Amending Act does not affect any
right or privilege, accrued under the repealed provision. It
merely prescribes as to what could or should be done in future.
Therefore there is no basis for saying that it affects vested rights.
For finding but the power of the licensee to alter the charges one
~as to look to the terms of the licence in the light of the law as
1t stands, the past history of that law being wholly irrelevant. If
the t~rrns of the licence, including the deemed terms permit him
to umlaterally alter the charges then he has that right. If we
mere~y look at those terms, as we think we ought to, then there ·is
no dispute that the respondent was within its rights in enhancing
the charges as admittedly it has followed the procedure prescribed
by law. We also do not agree with Mr. Chagla in his contention
that there is no inconsistency between the present scheme relating to the enhancement of charges vis-a.vis the scheme provided
under the Supply Act prior to its amendment in 1956. The two
schemes are substantially different. Under the fonner scheme
once the Government fixes the charges the licensee cannot alter
848
SUPREME COURT REPORTS
[1969] 3 S.C R.
it but at present at the end of the period fixed in the Government
order the licensee has a unilateral right to enhance the charge,, in
accordance with the conditions prescribed in the VI Schedule.
Therefore in view of s. 57 the provisions contained in that schedule.
have an over-riding effect.
In Amalgamated Electricity Co., Ltd. v. N. S. Bhathena mid
Anr. (') this Court was called upon to consider the scape of
s. 57 (A) and the Sch. VI as it stands now. Therein the ~ontro
versy was whether the appellant therein was
entitled to levy
charges more than the maximum charges prescribed in its licence
issued in 1932. It may be noted that in that case the notice of
enhancement of the charges was given on September 25, 1958.
This Court held that the maximum stipulated in the licence no
longer governed the right of the licensee to enham;e the charg~;
his rights were exclusively governed by the provisions contained
in paragraph I of Sch. VI of the Supply Act. It is true that in
that case this Court was considering the right of the licensee
under the Supply Act vis-a-vis his right under the licence granted
under the Indian Electricity Act, 1910 but th.at difference is not
material. What this Court in fact considered was the right of the
licens~e under the existing Jaw to enhance the charges. Dealing
with the scope ot paragraph I of Sch. VI, Ayyangar, J. who spoke
for the majority observed thus :
"Para I of Sch. VI both as it originally stood. and
as amended, as seen already, empowered the licensee
"to adjust his rates, so that his clear' profit in any year
shall not, as far as possible, exceed the amount of
reasonable return". We shall reserve for later consideration the meaning 'of the expression "so adjust his rates".
But one thing is clear and that is that the adjustment is
unilateral and that the licensee has a statutory right to
adjust his rates provided he conforms to the requirements of that paragraph viz .• the rate charged does not
yield a profit exceeding the amount of reasonable return.
The conclusion is therefore irresistible that the
maxima prescribed by the State Government which
bound the licensee under the Electricity Act of 1910 no
longer limited the amount which a licensee
could
charge after the Supply Act, 1948
came into force
since the "clear profit" and "reasonable return" which
determined the rate to be charged was to be compul!:d
on the basis of very different criteria and factors than
what obtained under the Electricity Act."
For the reasons above, these appeals fail and they are dismissed with costs.
One hearing fee.
G.C.
Appeals dismiss~d.
(I) [1964) 7 S.C.R. 503.
A
c
D
E.
F
...
G.
H•