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TMI Blog1975 (7) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... red to supply electricity to the appellant at reasonable rates as also to make other facilities available to the appellant if the appellant set up its factory Choudwar in Cuttack district. An agreement dated December 3, 1960 was accordingly entered into between the appellant and the State of Orissa for supply of electricity at certain mutually agreed rates and on the terms and conditions set out in the agreement. Clause (1) of the agreement provided that it shall be deemed to be in force for a period of five years from the date of supply of. The tariff and conditions of supply mentioned in this agreement shall be object to any revision that may be made by the supplier from time to time Clause (23) laid down the machinery of arbitration. It said Any dispute or difference arising between the consumer and the supplier or their respective Electrical Engineer as to the supply of electrical energy hereunder or the pressure therefore or as to the Supplier of the Consumer respectively to determine the same or any question, matter or thing arising hereunder shall be referred to a single arbitration (sic arbitrator) who shall be mutually agreed upon the both partiesAnd lastly, clause ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the Board. Both the Hirakud hydel project and the Talcher thermal project were then operated by the Board. Now in the thermal project, coal is an essential raw material as it constitutes the fuel necessary for generation of electricity and the cost of generation of electricity is therefore directly linked with the price of coal. The Board after it had taken over Talcher thermal project, found that owing to steep rise in the price of coal of generation of electricity at Talcher thermal power station had gone up considerably and in order to offset this rise in the cost of generation, it was necessary to levy a coal surcharge on consumer receiving electricity from the Talcher-Hirakud grid. The board accordingly, after. Owing to steep rise in the price of coal which is necessary for generations of thermal power at Talcher the cost of generation has gone up considerably and the Board felt that the additional cost could be met only by the levy of a coal surcharges on consumers receiving power supply from Talcher-Hirakud grid as is levied by other Electricity Boards who have thermal generation. As per the provisions of Sections 49 and 59 and the Indian Electricity (Supply) act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be from the Hirakud hydro-power station as clearly indicated in clauses (1) and (24) of the agreement and rise in the price of coal was therefore irrelevant so far as the cost of supply of electricity to the appellant was concerned. Even if the electricity supply from the. Though these contentions were pressed on behalf of the appellant at the hearing of the writ petition the Division Bench of the High Court of Orissa, which heard the writ petition, declined to entertain the merits of these contentions and dismissed the writ petition of a short preliminary ground. That ground may be stated as follows in the words of the Division Bench Clause 23 of the agreement provides for arbitration in the event of any dispute arising out of it. We are of the view that the petitioner must avail of the specific remedy provided in the agreement, if so advised to resolve its dispute with the Board as in our opinion, even if an examination of the servant contentions advanced before us it turns out that adequate power under the is wanting, the Board may yet justify its action relying upon the contractual provision. Whether the levy is justified under the agreement is a matter well within scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have pronounced our judgment this morning. It is clear from our judgment in that case that neither Section 49 nor Section 59 confers any authority on the Board to enhance the rates for supply of electricity where they are fixed under a stipulation made in an agreement. The Board has no authority under either of these two sections to override a contractual stipulation and enhance unilaterally the rates for the supply of electricity. Now, the effect of the levy of coal surcharge would be to enhance the rates for the supply of electricity stipulated under the agreement. It would, therefore, appear to be clear that the Board cannot claim to justify the levy of coal surcharge on the appellant by resort to Sections 49 and 59. It is futile for the Board to rely on either of these two sections. Equally futile is the. But that does not put an end to the controversy between the parties. It is true that in the press note the Board relied only on Sections 49 and 59 and the Sixth Schedule of the Supply Act as the source of the power under which it claimed to levy the coal surcharge and these provisions have been found not to contain the power sought in them. But, if there is one principle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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