# KERALA STATE ELECTRICITY BOARD v. INDIAN ALUMINIUM CO - **Citation:** [1976] 1 S.C.R. 552 - **Court:** Supreme Court of India - **Decided:** 1975-09-01 - **Bench:** A. Alagjriswami, P. N. Bhagwati, P. K. Goswami, R. S. Sarkaria, A. C. Gupta - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/kerala-state-electricity-board-v-indian-aluminium-co-6630 - **Pages:** 35 ## Headnote Kerala E:ssential Articles Control (Ten1porary Powers) Act, 1961, S.2(a) and S.3-Kerala State E/Ectricity Supply (K'lTala State Electricity Board and Licensees Areas) Surcharffie Order made under s. 3-ConstitutionltJ validity of-Constitutidn of India, 1950-Art, 246-Notwithstanding'' and "Subject to" in Art. 246(1) and (3) 111eaning of-Entries 43 and 44 of List I and Entry 38 of List Iff,--Doctrine of pith and substance. Presidential assent-If could be given td cure posiible repugna11cy-Ij could be given to notification.s--Assent to the whole Act not n1erely to one an1endmL11t when referred-Subordinar.e Legislation-Principle regarding validity of. Section 2(a) of the Kerala Es.sential Articles Control (Temporary Pov,..ers) Act, 1961 defines "essential article" as meaning any article (not being an essential article as defined in Essential Commodities Act. 1955) which may be declared by the Government by a. notification to be an essential article. A B c Section 3 enables the State Government, if or the opinion that it is necessary "'t or expedient so to do for maintaining or increasing the supplies of any essential D 'I article etc. to make certain notified orders. The Act was originally intended to be in force for five y~ars but its life was extended by successive amend-' men ts. In exercise of powers conferred by s.2(a) of the Kerala Act, the State Government declared 'electricity' as an essential article in 1965. In 1968, the State Government passed an Order called the Kerala State Electricity Supply (Kerala State Electricity Board and Licensees Areas) Surcharge Order, 1968, under s.3 of the Kerala Act, by which, the State Electricity Board was required E to collect surcharge from non-licensee consumers of electricity even though the Board may have entered into long term contra.:ts with them with regard to the rate at which electricity was to be ·supplied to them. The respondents, who were bulk consumzrs of electricity, questioned before the High Court the validity of the Order. The Order having been ~truck down by the High Court, in appeal to this Court, the respondents supported the judgment of the High Court on the grounds : (i) The Kcrala Act is repugnant to the Electricity Act. 1910 and the Electricity (Supply) Act. 1948 F (both of which are Central Acts) and, in particular the latter, which falls within Entries 43 and 44 of Lisi I; and that the State Act trenches upon th~1 field occupied by the 1948-Act which falls partly under Entry 43 of List I and partly under Entry 38 of List lll. On behalf of the appellants it was contended that the Kerala· Act falls under Entries 2·6 and 27 of List JI, and in any event, the Presidential assent to the K·e:rala Act has cured the repugnancy. Allowing the appeal (per majority-AlagiriswJ The 1948-Act was enacted for the purpose of co-ordinated development of electricity in India on a regional basi~. The Statement of Objects and Reasons states' that there was necessity for the constitution of semi-autonomous bodies like Electricity Boa:rds to administer grid' system on quasi-commercial lines. The Act deals With the incnq:x::iration and regulation of Electricity Boards. It created a central authority (which is not an incorporated body) a' well M various provlncial Electricity Boards (which are incorporate~ bodies). A Provincial Electricity Board located in one Province and operating in a neighbouring Province could carry on its operations by agreement with the other Province or Provinces. The jurisdiction of an Electricity Board, however, was confined mainly to the jurisdiction of a Province under the Act the executive power vestedl in the Provinces. The Statement of Objects and RCasons further says that the semi-autonomous Electricity Boards contemplated under the Act could not be set up by provincial Governments under the then exi.sting constitutional Act as they would be in the nature of trading corporations within the meaning of entry 3J of the Federal Legislative List of the Government of. India Act, 1935. [568 A-HJ 4. The argument that the 1948.Act falls under entries 43 and 44 of Ll•t I has no substance. [568 Al (a) A reading of the Statement of Objects and Reasons shows that the 1948eAct was a legislation under an entry in the Concurrent List. Although the Statement of Objects and Reasons mentions entry 33 of the Federal Li•t of the Government of India Act, 1935 (corresponding to entries 43 and 44 of List I of the Seventh Schedule to the Constitution)-it does not show that the 1948-Act falls under entry 44. Nor is the fact that entry 33 of List I of tho Government of India Act, 1935 was mentioned in the Stateml!nt of Objects and Reasons a conclusiVe test. [568 E] (b) From an examination of the provisions of the l948·Act it would· be obviou• that one part Of the Act deals with the constitution of the Board the incotpotation Of the Board and the regulation Of its activities. But th~ main ~urpose o! tho Act is for rationalising the production and supply of electricity. The regulation contemplated in entries 43 and 44 of List I is not-regulation of the business of production, distribution and supply ofe1ectri5-L925SupCl/75 554 SUPREME COURT REPORTS [1976) 1 S.C.R. city of the Corporation. The p1ov1s1on regarding the incorporation nnt A B c UT, if at all. [573 F-G] D (e) The 1910 and 1948-Acts together forn1 a complete (;Ode with re:-.pect to entry 38 in List 11I and the Board is only· an instrument fashioned for carrying out this object. [57 J A] (f) 'fherefore both the 1910~Act and 1948-Act could be amended or repealed by the Parlian1ent and also by the State Legislature if' it obtains Presidential assel(t to an Act amending or repealing th~ 1910-Act or 1948-Act. [566 H'l A. K. Krishna v. State of ftvfadra.\· [l957J SCR 399; P. N. Kaul v. Th~· State of J & K. [ 1959] Supp. 2 SCR 270 and J & K State v. M. S. Farooai [1972] (3) SCR 881. referred to. (g) The assent of the President should be deemed not merely to ttie sub· stitution of the words five years by the words seven years in the Kerala Act but to the Act as a lt'bole and any repugnance between the Kerala Act on the one hand and the 1910-Act and 1948-Act on the other should be deented to have been cured by such assent. The Kerala Act in so far as it deals with electricity can be deemed to be l"Cgislation under entry 38 of Lis.t III. Though the Act itself has not declared any article as an esS;Cntial article. wben the declaration was made und"Cr s.2(a) in 1965 it becan1e part of the Act. When the President assented to the Amendment Act of 1967 the declaration of electricity as an essential article h~d been made and should be deemed to have become a part of the Act. [575 F; CJ (5) But 1hc Kc nil a .i\ct i:<-. a n10't 'r f:11li1~g under entries 26 nnJ 27 of E F Li-st II. [57 5 Al G (a) "E·ssential article" is a t'erm which has acquired a defining connotation fn Indian legislative practice and is not a vague or a general term. "Essential "Commodity" defined in the Essential Con1111odities Act, 1955 includes practically every n1atter regarding industry within the legislative competence of Parliament. The term "essential commodity 1' is an expression corresponding to a conunodity "Cssential to the life of the con1nn1nity. Tt is not open to the authority e·iercising powers under s.2(a) of the Kcrala A·ct to declare any and every cGrnmodity as an essential cornrn~ity. That A-ct deals with e~<;ential. articles H not being essential articles dealt with hv the Central Act of 195.'l. It 1s not a 1egislation with respect to electricitv aild, therefore, docs not fall under entry 38 of List lIT. Electricity, being- beyond doubt an essential article may be declared to he an essential article under the Act. In that case the power -~. ~ « f ,,. I " ,. \ t i >- :- I • \ -, )- • -,> ;..___ • ' ~ I A B c D E F G H KERALA STATE ELEC, BOARD V. INDIAN ALUMINIUM CO. 555 exercised is. not in relation to elechicity qua electricity but electricity as. an essential article. The Act, therefore. in pith and substance is with respect to trade and commerce and production, supply and distribution of electricity. It is not a permanent legislation with respect to electricity but a temporary one dealing \Vith ~ temporary situation. f574 A; F-H] (b) The Surcharge Order was necessary for the survival and existence of the Board without which there can be no production or supply of electricity. It is no valid criticism. of this view to say that the ,powers of the Board under the 1948·Act are over-ridden by the Surcharge Order and the Order i~, therefore, repugnant to the 1948-Act. The Board was anxious to make the Surcharge Order. This is a simple· case of' a contract being over-ridden in exercise of statutory power:'\. [575 B] 6(a) It is not corrCct to say that in so far as the consequence of a declaration under s.2(a) of the Kerala Act was that the State Government was enabled to make orders regarding production, supply and distribution of electricity, there was a possibility of such orders being repugnant to the provision~ of the 1910-Act and the 1948-Act and, therefore, any such repugnancy was cured by the as-sent given by the President. It is only the actual repugnancy that can be cured by Presidential assent and not the possibility of repugnancy_ [575 GJ (b) No Presidential assent was possible to the notification. Art. 254(2) docs not contemplate Presidential assent to notifications issued under the Act. The Article contern.plates Presidential assent only to laws made by the Legislature of a State. [567 G] 7 (a) Notwithstanding the fact that subordinate legislation is laid on the table of Hou5es of Parlian1ent or State Legislature and being subject to such modification, annulment or amendment as they may make, the subordinate legislation cannot be said to be valid unless it is within the. scope of' the rulen1aking power provided in the statute. Where an executive authority is given power to frame subordinate legislation within stated lin1its, rules made by such authority, if outside the scope of-rhe rule-making power. should not he deemed to be valid merely because such rules havie been placed before the Legislature and are s.ubject to such mvdification, annulment or amendment as the Legislature may think fit The process of such amendment, modification or annulment is not the same as the process of legi<>lation and in particular it lacks the assent either of the· President or the Governor of the State. [576 E-G) Minister of flealth v. The Ki11R. [1931] A.C. 494 and Institute of Patent· Agents v, Ldckwood, [1894] A.C. 347 referred to. (b) ]f a declaration made under s. 2(a) or an OrdCr 111ade under s. 3(a) is no6 within the SC0ses the want of a declared legislative policy in the Act. The Act does not provide any guidance or lay down any te9t to ascertain what makes an article e~ntial for the purpose ol' the Act. 'fhe reference to the Essential Commodities Act in s.2(a) which defines ''essential article" is merely to exclude from its purviiew the commodities covered by the Essential Commodities Act and only serves to emphasise its indefiniteness and makes it more difficult to find any clue to the nature of the articles the Legislature had in mind in enacting the Kerata Act. Almost the entire legislative field was left open to the Government to choose from and decide according to their own Jights what should be an essential article. [583 C-G] (b) The Legislature cannot delegate the essential legislative function, which means· that the Legislature must declare the policy of the law and provide a standard for the guidance of the subordinate law making authority. The Kerala Act authorises the Government to declare any article ag essential, except those mentioned in the Essential Commodities Act without laying down A B c D any definite criteriai or standards. This is surrendering unguided and uncanalised E power to the· executive. The Act cannot be called an instance of conditional legislation. The powers conferred on the Go\o~rnment by the Kerala Act exceed the limits of permissible delegation. [583 HJ (c) The Kerala Act of 1961 was to remain in force for a period of five years. from January 1962. The principal Act as well as the Amending Acts of 1967, 1969, and 1970 received the assent of the President. But the Act ag passed in 19()1 did not appear to contain any provision which was repugnant to any Central Act or existing law; that being so, the assent given to it seems redundant and or no consequence. Article 254(2) contemplates an existing repugnancy and not possible future inconsistencies. [Obiter: Assuming that assent given by the President to the amending Acts would have the effect of curing the repugnancy between the declaratiou under s.2{a) and the Surcharge Order under s.3 of the principal Act on the one hand and the Central Acts of 191.0 and 1948 on the other. if the dedaration and the Surcharge Order were outside the Act. then the assent given to the Act 1;::ould not cure the repugnancy arising from these two Orders. [584 HJ The Orders made by the State Government under s.2(a) and s.3(1) of the impugned Act could not be called par.t of the Act. The Act did not even say that such orders were to be tq:ated as if enacted in the Act. The .President's assent could not be said to have cured the repugnancy created by-the Surcharge Order. [585 GJ Argu111e11ts fdr tTie appellant : · The impugned Kerala Act is a legislation under Entry 26 of List JI {Trade and commerce). It may also fall under Entry 27, List II (Production, Distribntfon and Supply of Goods). Assuming that the Electricity Supply Act falls under Entries 43 and/or 44 of List I, the State Legislature is competent F G H. 1~ ' \ /I y i ~ ) ,,...( "' • ; + A B KERALA STATE ELEC. BOARD v. INDIAN ALUMINIUM CO. 557 to pass legislation relating to the trading and commercial activilies of the Corporation set up under the Central Act passed under Entry 43 and/or 44 of List I. Assuming that the Kerala Act encroaches on the powers of the Electrici~y Board und"er s.49·, such encroachment is incidental and is justified under ·the doctrine of pith and substance. Assuming that the Central legislation as well as the State legislation falls under Entry 38 of List III, there is no repugnancy or conflict between the powers of the Board under s.49 and the impugned! Act and. the orders because they are made within the provision& of the Act and to aid and support the powers of the Board. "'1 If the surcharge had not been introduced the Electricity Board would not 1 have been able to carry on the business and would have been compelled to close down its business. 1 ' C Argu1nents on behalf of Elea,tricity Board: D E F G H The Act applies to essential commodities i.e. all essential commodities as understood at the time of legislation in 19,62. In Vi'Cw- of the programme of industrialisation. and the limited scope of the Central Essential Commodities Act, 1955, the present Act was conceived. The background of the Act strongly indicates tihe con~nt of the expre$ion 'essential commod~ties' as meaning the same thing as ''essential to the life of the community''. Under the impugned Act by s.2 (a) the . power· to select the articles for control is delegated to the State Governmenl The1 power to take orders for control is delegated both to the Stare Government and authorised officers. The artiyles falling within the Central Essenti~J Commodities Act, 1955 are excluded from the purview of the Act not because control of those articles is not desired but because the State Government have the n'ecessary powers under the Central Act itself. The definition in s.2(a) should be understood to mean "essential articles'' notified bv the State Government and essential articles should be understood as those Wbicb are essential to the life of the community. The word 'control' in the preamble is indicative or the limited scope cf the Act. This interpretation saves the Act from the vice of abdication of essential legislative. function by the Legistature. The preamble to the Act is a key~note to the understanding of an Act as well as the Statement of Objects and Reasons clearly indicates the scope and purpose of the Act. ''Trade and Commerce'' as well as ''supply and distribution'' must be in respect of' articles or goods but on that account it will not be permissible to dissect the Act and make it relatable to each commodity over which control is imposed. The pith and substance of the Act makes them fall within List If, Entries 26 and 27. The law is not a law relating to electricity as such nor relating to the incorporation or power of the Electricity Board established under the Electricity Supply Act, 1948. · The Supply Act, 1948, as clearly expressed in the preamble and worked out in the Act through several agencies including the Board shows that the pith and substance of the Act is development of electricity and falls within List III, Entry 31 of the Government of India Act. 1935 .• The incorporation of State Electricity Board for each State is only one of the means of achieving the objective. Moreover, the Board is not a trading Corporation since it is not created to earn profits but to carry out development and supply energy at the most economical rate. Each Board is established by a State. The whole law falls in the Concurrent List and in any event not Under List J, Entry 43 because the Board is not a trading corporation nor does it fall under Entry 44 because the Board is a State Board for the State. The Supply Act was passed under the Government of Tndia Act, 1935 and was an "existing law" and not an impediment to the State· :passingi a law within its competence. There is no conflict between the impugned notification and the exercise of powers ol' the Board under s.40 of the supply Act. Assuming that both the legislations fall under List III, the , President's assent to the impugned Act was operative, the conflict was immaterial. 558 SUPRE1fE COURT REPORTS [1976] I S.C.R. Argr1111ents for the respo11de111 : , The El~ctri'city Supply Act of 1948 is rclatable partly to List I entry 43 and 44 (Government of India Act List 1 Entry 33) and partly to Li:-.t Ill Entry 38 (Government of India Act List Ill Entry 31 J. Part of the 1\ct i'i concerned with the constitution and powers of the Electricity Board which is something like the memorandum and Article or a Limited Company :ind another part of the Act may be said to he concerned with electricity. The Kerala Act is :t. vague piece of legislation. The Articles to which thi-.; ,f\ct may apply are not mentioned. It is only after the power under the Act i~ exercised that it is possible to sfiy \vhethcr it would conflict with any other legislation. The in1pugned Act may be applicable to A.rticlcs rclalable to as n1anv a<; 20 legislative entires front Li'il L II and TH at the discretion of' the Govern-- A B 1nent. (_,' Regti.lation and Control with regard to n1any of the matters are covered by existing c·entraL Acts such as Industries Regulation and Development Act. Factories Act; Central Excise and Salt Act.' Defence of India Act, Tndiun Electricity Act, 1910, Electricity Supply Act, 1948. Every aspect of electri:ity in respect of generation, control price fixation n1ust be re]atable to entry 38 of List l and not Entt~' 26 or 27 of List II. The Centnil Legislature has already legislated on all thes·.: aspects in the Jndian Electricity Act of 1910 and Supply Act 1948. If these were the subject matter of .Entries 26 and 27 of List II, the Central Legislature could not have legislated. Any argt1n1ent on the basis that the Electricity Supply Act 1948 is existing law, is not relevant because the 1948 Act has been cxtensiV'ely amended in 1956 and 1966 and these arnendn1ents relate to the field of control under the Kcrala Act. if the same is applied in respect of electricity. The Presidential assent given to the K'.~rala Act could be said to be an as...cnt within the n1eaning of Article 254 since at the time when the ;.i5sent \\.'as giv'.!n the Act did not disclose any inconsistency with any c·entral Act since the item5 to which the, Kerala Act was applicable did not appear in the ~tatute. The conflict arose only when an order was made by the State Government applying the Act to electricity. No steps were even taken to incorporate in the Act the commodities to which the Act could apply and to take President'~ a<>sent 1hereon. The Kerala Act suffers fro1n excessive delegation b·~cause at the will of the State Government the Act could be made applicable to any article, except those covered by the Essential Commodities Act. The State Government could apply the Act even to items falling in Li<>t I since there is no guideline. CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2557 /69, 20170, 1423-1434, 1733, 2474, 2575-2578172, 95-105, 1318, 1371-74, 2040173, 2100-2102174 and 120, 121 & 536 of 1975. From the Judgment and Order dated 24-9-69, 16-8-71, 25-1-72, 16--2-72, 11-2-72, 10-2-72, 22-11-72, 21-7--72, 8-2-72, 25-7-72, 31-5-72 and 4-3-75 of the Kcrala High Court in W.A. Nos. 809169, 846-47, 855, 867, 894 and 940 of 1969, 261171 and 957-58, 983, 988 and 1021169, 942i69, 427171, 458, 415. 407, 408 & 68 of 1971 and 211, 241!70, 3 and 7171, 342/72, 36, 42 and 43 of 1971 arid D E F G H + y r • , j I A "' ,: • ll \ " : . .; ' c • 0 , . E F , ~ G • .. >r H KERALA STATE ELEC, BOARD v. INDIAN ALUMINIUM CO. SS!t Civil Appeal No. 2117 of 1972. Appeal by Special Leave from the Judgment and Order dated 17-8--71 of the Kerala High Court in W.A. No. 1021of1969. Lal Narain Sinha, Solicitor Geneml of India, A. G. PuddisserJ' for 1hc Appellant jn C.A. No. 2557/69. V. A. Seyid Mohammed and K. M. K. Nair for the Appellant in C.A. No. 20170. A. K. Sen (In C.A. Nos. 1423 /72), M. P. Jha (In C.A. 1423172), A. G. Puddissery (In all the petitions) for the appellants in C.As. Nos. 1423, 1434, 1735, 2474, 2575, 2576-78/72, 1318, 1371, 1374, 2040(73, 2100-2102/74, 120-121, 536/75. P. C. Chandi, K. M. K. Nair and K. R. Nambiar for the Appellants in CAs. Nos. 21l7 /72 and 95-105 /73. S. V. Gupte, Ajay Ray and P. Mathai, 0. C. Mathur, K. !. John and J. B.. Dadachanji for the Appellants in CA. No. 1457 /71. G. Rat/ii, Advocate General for the State of Orissa and B. Paratha- .rnrthy for the Appellant in C.A. Nos. 1652[74. Vinoo Bhagal for the Appellants (In C.As. Nos. 1653-54774). S. V. Gupte (In CA. No. 2557 /69), £'.. Mathai, Ajay Ray, 0. C. Mathur K. John, J. B. Dadachanji and Mrs. S. Bhandare (In C.A. No. 20/70 for Respondent Nos. 1 (In CA. No. 2557 /69) & (In CAs. Nos. 20170, 1423-24/72). G. B. Pai, K. I. John, 0. C. Mathur, J. B. Dadachanji and P. K. Kurian (In CAs. Nos. 1733/72) for Respondent No. 1 (In CAs. Nos. 1426-1429, 1431-1434, 1733/72, 2577-78, 95-96, 99-100 antl 102 -105173). N. Sudharkaran, P. Matlwl and P. K. Pillai for Respond~nt Nos. I (In CA. No. 2575/72) and (C.A. No. 1425/72). K. R. Nambiar for Respondent No. 2 (In CA. No. 2575/72, 2S76 - 78 /72 and 2040 /73) . Miss Lily Thomas for Respondent No. 1 (In CA. No. 2576/72). A. S. Nambiar for Respondent No. 1 (In CA. No. 2578/72). N. Sudharkaran for Respondent No. 1 (In CA. No. 97773) . G. B. Pai (In CA Nos. 2100-2102/74, 121/75), P. Mathai (In CA, Nos. 1318175) Ranjit Mahanty, Ajay Ray (In CAs. No. 1652(74) and 0. C. Mathur, K. I. John and J. R Dadachanji (In all matters) for Respondent No. 1 (In C.A. No. 1318[73, 2100-2102[74, 75) for the Respondents (In C.As. Nos. 1652[74). 121 I Lal Narain Sinha, Solicitor General of India (In C.A. No. 1457 f 71) A. G. Puddissery for the Respondent (In CA. No. 1641171). 1457 and 560 SUPREME COURT REPORTS [1976] 1 s.c.R. T. S. Krishnamoorthy Iyer, P. Matha;, N. Sudharkaran and P. K. Pillai for Respondent No. 1 (In CA. No. 1371 and 1374/73) and (In C.A. No. 1373/73) K. M. K. Nair for Respo:ident No. 2 (In C.As. Nos. 1371-1374/ 73 ). A G. L. Santhi, P. Mathai, K. ]. John, 0. C. Mathur and]. B .. DadaB chanji for Respondent No. 1 (In CA. No. 1372173). G. Rathi, Advocate General for the State of Orissa and B. Parthasarthy for Respondents (In CAs. Nos. 1653-1654 774). P. K. Pillai for the Intervener (In CA. No. 20/70). G. L. Sanghi, P. V. Kapur, U. K. Khaitan (for Ferro Alloys C Corpn.) K. R. Chaudhry K. Raj Chaudhry (for A.P. Electricity Board) for the Intervener (In C.A. No. 1652/74). S. Balakrishnan for Respondent No. 1 (i;1 CA. No. 2040/73). Note : Mrs. Sunanda Bhandar·~, Advocate appeared for the applicant intervener in CA. Nos. 1457 and 1642/71 and CA. Nos. 1652- -1654]74 and Mr. B. Sen, Se.nior Advocate, appeared for Respondent No. 1 (In CA. 20/70 and applicant intervener in CA. No. 16521 74). The Judgment of the Court was delivered by A Alagiriswami, J. A. C. Gupta, J. gave a dissenting Opinion. ALAGIR!SWAM!, J. The validity of the Kenlla State Electricity Supply (Kerala State Electricity Board and Licensees Areas) Surcharge Order 1968 is in question in these appeals. That Order was passed in exercise of the powers conferred by section 3 of the Kerala Essential Articles Qmtrol (Temporary Powers) Act, 1961. It obliges the Board to collect surcharges from non-licensee consumers of electricity even though the Board may have elntered into long-term contracts with them with regard to the rate at which electricity is to be supplied to them. The Act is one to provide, in the interest of the general public for the control of the production, supply and distribution of, and trade. and commerce in, certain articles. Section 2(a) of the Act defines "essential articles" as meaning any article (not being an essential commodity as defined in the Essential Commidities Act, 1955) which may be declared by the Government by notified order to be an essential article. Section 3 enables the Government, if of opibion that it is necessary or expedient so to do for maintaining or increasing the SU)?plies of any essential article or for securing their equitable distribution !llld availability at fair prices, to make notified orders providing for: (a) regulating by licences, permits or otherwise the production or manufacture of any csential article: (b) controlling the price at which any essential article may be bought or sold; D E F G H I J t • ' + A -t B c D E F ' • G H KERALA STATE ELEC. BOARD V. INDIAN ALUMINIUM CO. 5 61 (Alagiriswami, J.) ( c) regulating by licences, permits, or otherwise the storage, distribution, transport, disposal, acquisition, use or consumption of any essential article; ( d) prohibiting the withholding from sale of any essential article ordinarily kept for sale; (e) rei;1uiring any person holding in stock any essential article to sell the whole or a spe<:ified part of the stock to the Gove.rnment or to an officer or agent of the Government or to such other person or class of persons and in such circumstances as may be specified in the order; (f) regulating or prohibiting any class of commercial or financial transactions relating to any essential article, which, in the opinion of the authority making the order, are, or if unregulated are likely to be detrimental to the public interest; (g) collecting any information or statistics with a view to regulating or prohibiting any of the aforesaid matters; (h) requiring persons engaged in the production, supply or distribution of, or trade or commerce in any essential article to maintain and produce for inspection such books, accounts and records relating to their business and to furnish such informatlon relating thereto as may be specified in the order; (i) regulating the processing of any essential article; (j) ex,rcising over the whole or any part of ~n existing undertaking, such functions of control and subject to such conditions, as may be specified in the order; (k) any incidental and supplementary matters including in particular the entering and search of premises, vehicles, vessels and aircraft, the seizure by a person authorised to make soch search of any article in respect of which such person has reason to believe that a contraveJntion of the order has been, is being or is about to be committed, the grant or issue of licences, permits or other documents, and the charging of fees therefor. In exercise of the powers under section 2(a) electricity was declared as an essential article in 1965. Electricity is the only article declared as an essential article under the Act so far a!,1d in spite of the wide powers with regard to making of notified orders under section 3 the impugned Surcharge Order is the only order so fur made. It pr9vides, as already stated, for levying of a surcharge on supplies of electricity made to bulk consumers, many of whom are respondents in these appeals. The validity of the Act itself is not seriously questioned except in o'ae respect which we shall deal with later; but it is contended that by the declaration of electricity oas an essential article under the Act, the 562 SUPREME COURT REPORl'S [1976] I s.c.R. Act impinges upon various matters either in List I or List III of the Seventh Schedule to the Constitution. According to Mr. Gupte, who appeared for the respondent in Civil Appeal No. 2557 of 1969, the legislation is repugnant to the Electricity Act, 1910 and the Electricity (Supply) Act, 1948, in particular the latter, which falls withia Entries 43 and 44 of List I. According to Mr. B. Sen, who appeared for the respondents in Civil Appeal No. 20 of 1970, the Act trenches upon the field occupied by the Electricity (Supply) Act, 1948 which falls partly under Entry 43 of List I and partly under Entry 38 of List Ill. According to Mr. G. B. Pai, who appeared for the 1st respondent in Civil No. 1733 of 1972. the 1948 Act falls within E1try 44 of List l and the Kcrala Act impinges upon that field. On the contra~y, the Solicitor General appearing on behalf of the Kerala State Electricity BC'ard contends that the Kerala Act falls under Entries 26 and 27 of List II of the Seventh Schedule to the Constitution. There is, in the 'irguments o•,1 behalf of the respondents. a certain amonnt of confusion. The question of repugnance arises only in case hoth the legislations fall within the same List III. There can, therefore, be no question of repugnance between the Electricity Act aml .\ B c the Electricity (Supply) Act 0'.1 the one hand and the Kerala Act on D the other, if the former fall in List I or List III and the latter in List TI. If any legislation is enacted by a State Legislature in respect of a matter falling within List I that will be without jurisdiction and therefore void. The scope of the legislative powers of the Parliament and the State Legislatures is now well settled. They arc found in Article 246 of E the Constitution, which reads : 246. (1) Notwithstandi•.ig anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the "Union List"). F (2) Notwithstanding anything in clause (3), Parliament and, subject to clause ( 1), the Legislature of a:ay State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List"). (3) Subject to clauses (1) and (2). the Legislature of a State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in the Constitution referred to as the "State List"). G ( 4) Parliament has power to make laws with respect to H any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in th-~ State List." ~ " .J j ~ I • . ~ ''i# t 'f • • A B c 0 E ~ KERALA STATE ELEC. BOARD V. INDIAN ALUMIK!UM CO. 563 (A/agiriswami, /.) In view of the provisions of Article 254, the power of Parli~ment to legislate in regard to matters in List III, which arc de-alt with by clause (2) is supreme. The Parliament has exclusiye power to legislate with respect to matters in List I. The State Legislature has exclusive power to legislate with respect to matters in List II. But this is subject to the provisions of clause ( 1) (leaving out for the moment the reference to clause 2). The power of Parlrament to legislate with respect to matters included in List I is supreme notwithstanding anything contained in clause (3) (_again leaving out of consideration the provisions of clause 2). Now what is the meaning of the words "notwithstanding" in clause (J ). anU "subject to" in clause (3)? Thev mean that where an entry is In general terms in List ll and-part of that entry is in specific terms in List I, the entry in List I takes effect notwithstanding the entry in List II. This is also on the principle that the 'special' excludes the 'general' and tho general entry in List II is subject to the special entry in List I.