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Issues Involved:
1. Power of the State Electricity Board to enhance electricity rates despite existing agreements. 2. Applicability of Section 49 of the Electricity Supply Act, 1948. 3. Applicability of Section 59 of the Electricity Supply Act, 1948. 4. Validity of contractual stipulations in light of statutory powers. Issue-wise Detailed Analysis: 1. Power of the State Electricity Board to Enhance Electricity Rates Despite Existing Agreements: The core question was whether the State Electricity Board could unilaterally enhance electricity rates despite existing agreements with the appellant. The appellant had entered into three agreements with the Board for the supply of electricity at specified rates. The Board later issued a notification to revise the rates, claiming it was empowered to do so under Sections 49 and 59 of the Electricity Supply Act, 1948. 2. Applicability of Section 49 of the Electricity Supply Act, 1948: Section 49(1) empowers the Board to supply electricity to any person other than a licensee upon such terms and conditions as the Board thinks fit and to frame uniform tariffs. Sub-section (3) allows the Board to fix different tariffs for different consumers based on geographical position, nature of supply, and other relevant factors. The court held that the agreements entered into by the appellant were in exercise of the statutory power under Section 49(3) to fix special tariffs. Therefore, the Board could not override these stipulations by unilaterally enhancing the charges. 3. Applicability of Section 59 of the Electricity Supply Act, 1948: Section 59 mandates that the Board shall not, as far as practicable, carry on its operations at a loss and shall adjust its charges accordingly from time to time. However, the court noted that the term "as far as practicable" implies that the Board is not under a rigid directive to avoid losses at all costs. The Board cannot enhance charges in violation of a contractual obligation. Section 59 does not provide the Board with the authority to override existing agreements to avoid operational losses. 4. Validity of Contractual Stipulations in Light of Statutory Powers: The court examined whether a stipulation binding the Board not to charge more than a specific rate would be void as it would fetter the Board's statutory power. The principle that a public authority cannot fetter its statutory powers by contract applies only when the contract is made in general terms and not in exercise of a statutory power. Since the agreements were made under Section 49(3), they were valid and binding. The Board could not unilaterally revise the charges in breach of these agreements. The court emphasized that the agreements were entered into in exercise of statutory power and therefore could not be disregarded. Conclusion: The Supreme Court quashed the notification dated 28th November 1969, which sought to apply revised tariffs to the appellant. The Board was restrained from enforcing the revised tariffs against the appellant and was directed to adhere to the charges specified in the agreements. The appeal was allowed, and the Board was ordered to pay the costs of the appeal to the appellant.
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