1964 (3) TMI 104 - SC - Indian Laws

Summary

Issues Involved:
1. Legality of electricity charges levied by the appellant.
2. Applicability and impact of the Electricity Act, 1910 and the Electricity (Supply) Act, 1948.
3. Jurisdiction of civil courts to adjudicate on the legality of electricity charges.
4. Compliance with statutory requirements for adjusting electricity rates.
5. Validity of the surcharge levied after the expiry of the Bombay Electricity (Surcharge) Act, 1946.
6. Burden of proof regarding the legality of adjusted rates.

Detailed Analysis:

1. Legality of Electricity Charges Levied by the Appellant:
The appellant, a company supplying electricity, was challenged by the respondents on the legality of its charges. The respondents argued that the charges exceeded the limits set by the Government's order of December 30, 1942, and the surcharge continued after the expiry of the Bombay Electricity (Surcharge) Act, 1946, was illegal. The appellant contended that its charges were justified under the Electricity (Supply) Act, 1948, as amended in 1956.

2. Applicability and Impact of the Electricity Act, 1910 and the Electricity (Supply) Act, 1948:
The court examined the provisions of both the Electricity Act, 1910, and the Electricity (Supply) Act, 1948. Section 3 of the 1910 Act allowed the Government to grant licenses and fix price limits. Paragraph XI of the Schedule to the Act prohibited licensees from exceeding these limits unless altered by the Government. The 1948 Act, particularly Section 57 and the Sixth Schedule, allowed licensees to adjust rates to ensure reasonable returns, overriding the 1910 Act's provisions. The court held that the 1948 Act superseded the 1910 Act's maxima limits.

3. Jurisdiction of Civil Courts to Adjudicate on the Legality of Electricity Charges:
The court discussed whether civil courts could adjudicate on the legality of electricity charges. It was held that civil courts could not decide if the enhanced rates resulted in clear profits exceeding reasonable returns, as this was within the purview of the Rating Committee constituted under Section 57A of the 1948 Act. The court emphasized that the Rating Committee's findings and the provisions of the Sixth Schedule were intended to ensure uniformity and prevent multiple litigations.

4. Compliance with Statutory Requirements for Adjusting Electricity Rates:
The court analyzed whether the appellant complied with the statutory requirements for adjusting rates. It was found that the appellant had given notice to the State Electricity Board of its intention to revise rates, as required by the third proviso to paragraph 1 of the Sixth Schedule. The court rejected the respondents' contention that the notice was invalid due to the absence of details about standing charges and supply restrictions.

5. Validity of the Surcharge Levied After the Expiry of the Bombay Electricity (Surcharge) Act, 1946:
The court examined the continuation of the surcharge after the expiry of the Bombay Electricity (Surcharge) Act, 1946. It was held that the appellant could not continue the surcharge beyond the Act's expiry unless justified under the 1948 Act. The court noted that the appellant's charges post-1949 were deemed adjusted under the Sixth Schedule of the 1948 Act, provided the clear profit did not exceed the reasonable return by more than 15%.

6. Burden of Proof Regarding the Legality of Adjusted Rates:
The court held that the burden of proof to establish that the rates charged exceeded the statutory limits was on the respondents. The respondents failed to provide evidence that the appellant's rates resulted in profits exceeding the permissible limits. Consequently, the court ruled in favor of the appellant, stating that the respondents were not entitled to the relief sought.

Conclusion:
The appeals were allowed, and the suits filed by the respondents were dismissed. The court held that the appellant's charges were justified under the Electricity (Supply) Act, 1948, and the respondents failed to prove that the charges exceeded statutory limits. The court also clarified the jurisdiction of civil courts and the role of the Rating Committee in adjudicating disputes related to electricity charges.