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Issues Involved:
1. Validity of the unilateral alteration and increase of rates by the Municipality. 2. Requirement of State Government's sanction under Section 21(2) of the Indian Electricity Act, 1910. Issue-wise Detailed Analysis: 1. Validity of the unilateral alteration and increase of rates by the Municipality: The appellants contended that the rates agreed upon between the consumers and the Municipality could not be unilaterally altered and increased by the Municipality to the prejudice of the consumers, making the resolution dated April 30, 1956, invalid and unenforceable. The Court examined the relevant clauses of the agreement between the Municipal Council and the consumers, particularly focusing on Ex. B-4 dated May 27, 1932. Key clauses included: - Para IV: The consumer agreed to pay the licensee for all electrical energy supplied at the rates and in accordance with the terms given in the licensee's Current Official Scale of rates. - Para V: Required the consumer to state under which of the rates set out in the licensee's Official Scale of energy Rates they desired to be charged. - Para X: The agreement was subject to the provisions of the Bezwada Municipal Electric Licence, 1927, and the Indian Electricity Act, 1910, including any modifications or re-enactments. The term "current official scale of rates" was ambiguous, potentially referring to rates current at the time of agreement or those current from time to time. The Court interpreted this term in the context of the entire document and surrounding circumstances, concluding that it referred to the official scale of rates current from time to time during the currency of the agreement. Therefore, the appellants were contractually liable to pay the enhanced rates covered by the impugned resolution. 2. Requirement of State Government's sanction under Section 21(2) of the Indian Electricity Act, 1910: The appellants argued that the resolution was void because it was passed without obtaining the previous sanction of the State Government as required under Section 21(2) of the Act. This section stipulates that any conditions made by a licensee to regulate relations with consumers, or any alterations to such conditions, must have the prior sanction of the State Government. The Court considered whether enhancing the rates constituted an alteration of a condition within the meaning of Section 21(2). The learned Solicitor General argued that Section 23, which deals specifically with the fixing of rates, should prevail over the general provisions of Section 21(2). Section 23 does not require the sanction of the Government for fixing rates. The Court did not need to resolve whether Section 23 excluded the operation of Section 21(2) because it found that there was no alteration of any condition within the meaning of Section 21(2). The agreement already included a term that the consumers would pay rates fixed by the Municipality from time to time. Thus, the change in rates was in accordance with the existing condition and did not require State Government sanction. Conclusion: The Court concluded that the appellants were contractually obligated to pay the enhanced rates as per the impugned resolution, and no sanction from the State Government was necessary for this enhancement. Consequently, the appeal was dismissed with costs. Appeal dismissed.
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