1979 (2) TMI 201 - SC - Indian Laws

Summary

Issues:
1. Validity of G.O. No. 187 dated 30th January, 1955 enhancing rates of electrical energy supply.
2. Legality of surcharge imposed by the Electricity Board.
3. Impact of injunction obtained by consumers on payment obligations.

Issue 1: Validity of G.O. No. 187 dated 30th January, 1955:
The judgment discusses the background where consumers challenged the validity of G.O. No. 187 dated 30th January, 1955, which increased rates of electrical energy supply. The High Court initially struck down the G.O., but a Division Bench later upheld it, leading to consumers filing appeals in the Supreme Court. The Supreme Court eventually dismissed all appeals on 25th March, 1964.

Issue 2: Legality of surcharge imposed by the Electricity Board:
Consumers contested the imposition of surcharge by the Electricity Board, arguing it was penal and unenforceable due to the injunction obtained. The Court examined the agreement's clause 9, which mandated a one percent monthly surcharge for delayed payments. The Court clarified that the surcharge was not a penalty but interest compensation for delayed payments, thus upholding the legality of the surcharge.

Issue 3: Impact of injunction obtained by consumers on payment obligations:
Consumers claimed that the injunction obtained from the Supreme Court prevented any default on their part. However, the Court explained that the injunction only restrained the Electricity Board from coercive actions for arrears collection, not from demanding payment of enhanced rates. Consumers were liable to pay arrears to avoid surcharge, as clearly outlined in the bills issued by the Electricity Board. The Court dismissed the appeals, affirming consumers' obligation to pay arrears and surcharge if appeals were unsuccessful.

The judgment emphasizes the contractual obligations of consumers, the distinction between penalty and interest compensation, and the limited scope of injunctions in affecting payment obligations. It clarifies the legal basis for surcharge imposition and upholds the Electricity Board's right to claim surcharge for delayed payments during the pendency of appeals.