Case Note & Summary
The dispute arose when Godhra Electricity Co. Ltd., a licensee under the Indian Electricity Act, 1910, supplying electricity in Godhra area, unilaterally enhanced its electricity rates in 1963. The appellant consumers, Jindas Oil Mill & Ors., filed suits seeking to restrain the licensee from enforcing the enhanced charges. The legal issue centered on the interpretation of the Electricity Supply Act, 1948. Originally, under Section 57(2)(c) and Schedule VI, the rates for supply could only be fixed by the Government on the recommendation of a rating committee; the licensee had no power to enhance rates unilaterally. In 1952, the Government had fixed rates following such procedure. The Electricity Supply Act was amended in 1956, introducing Section 57A(1)(e) and amending Schedule VI. The amendment empowered the licensee to adjust its charges, whether by enhancing or reducing them, so that its clear profit in any year did not as far as possible exceed the amount of reasonable return. The respondent licensee enhanced the rates relying on this amended provision, without seeking a fresh rating committee recommendation. The consumers contended that the rates fixed under the original Act could not be unilaterally enhanced and that they had a vested right in those rates, invoking Section 6 of the General Clauses Act, 1897. The Supreme Court examined the scope of the amended provisions and the applicability of Section 6 of the General Clauses Act. It held that the 1956 amendment permitted the licensee to enhance rates without government approval and that the earlier rates did not create a vested right that survived the amendment. The suits were consequently dismissed.
Headnote
A) Electricity Supply - Rate Fixation - Original Act - Electricity Supply Act, 1948, Sections 57(2)(c), Schedule VI - Under the original Act, a licensee had no power to unilaterally enhance rates; rates could only be fixed by Government on recommendation of a rating committee. (Paras not available) B) Electricity Supply - Amendment of 1956 - Licensee's Power to Adjust Rates - Electricity Supply Act, 1948 as amended, Section 57A(1)(e), Amended Schedule VI - The 1956 amendment empowered the licensee to adjust rates (enhancing or reducing) to ensure clear profit does not exceed reasonable return. (Paras not available) C) Electricity Supply - Vested Rights and General Clauses Act - General Clauses Act, 1897, Section 6 - The case examined whether rates fixed under original Act created a vested right for consumers that could not be affected by amendment. (Paras not available)
Issue of Consideration
Whether a licensee under the Electricity Supply Act, 1948, after the 1956 amendment, could unilaterally enhance the rates of supply without the same being fixed by the Government on the recommendation of a rating committee, and whether the rates fixed under the original Act created a vested right for consumers
Final Decision
The Supreme Court held that the 1956 amendment permitted the licensee to enhance rates without government approval and that the earlier rates did not create a vested right in consumers. The suits were dismissed.
Law Points
- Electricity Supply Act
- 1948
- s. 57(2)(c)
- s. 57A(1)(e)
- Schedule VI
- amendment of 1956
- licensee's unilateral enhancement
- reasonable return
- vested right
- General Clauses Act
- 1897
- s. 6
