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TMI Blog1974 (4) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... tric energy within the Municipal Board and Cantonment Board, Bareilly. It purchases electric energy from the U. P. State Electricity Board. In the year 1947 U. P. Act No. 6 of 1947 was passed regulating the production, supply and distribution of electric energy by a licensee under the Indian Electricity Act 1910. In the year 1948, the Central legislature passed the Electricity Supply Act 1948 being Act. No. 54 of 1948 (hereinafter referred to as the Supply Act). This Act provides for rationalisation of production and supply of electric energy and for taking measures conducive to electrical developments. By Section 57 of the Supply Act provision has been made for enhancement of rates of electric energy supplied by the licensee to the consumer. That provision states that VIth and VIIth Schedules of the Act shall be deemed to be incorporated in the lincence of every licensee. VIth Schedule deals with the rates of electric energy. It allows an enhancement in the charges and provides for a reasonable return on the outlay of the licensee. Reasonable return has been explained in paragraph xvii (9) of the Schedule as follows : Reasonable return means - In respect of any year of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. On 29th December, 1971 the U. P. State Electricity Board revised its grid tarrif in respect of sales of electricity to the licensees with effect from January 1, 1972. A copy of the letter of the Secretary of the Board is appended as Annexure 'D' to the counter-affidavit of Sri N. L. Bhuwania, respondent No. 2, was required under it to pay higher charges for the purchase of electricity from the Board. The State Government by a notification dated 12th February. 1972 notified that all private Electric Supply Undertakings could enhance their rates after following the procedure provided in the sixth Schedule of the Supply Act. Respondent No. 2 thereafter on the 1st March, 1972 gave the required notice under the third proviso to paragraph 1 of the sixth Schedule. It gave the financial and technical data in support of the proposed enhancement as required by paragraph (1-A) of the Schedule. The notice stated that as the tarrif of the Board had been enhanced with effect from 1st January, 1972, the licensee intended to raise the rates as proposed in Appendix VI (a) and VI (b) of the letter from that date. It was clearly stated that this was a notice under the third proviso to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat paragraph viz. the rate charged does not yield a profit exceeding the amount of reasonable return. See also Jindas Oil Mill v. Godhra Electricity Co. Ltd., AIR 1969 SC 1225. In exercise of this unilateral right respondent No. 2 issued the notice dated 1-3-1972 under the 3rd proviso to paragraph 1 of the VIth Schedule of the Supply Act and the rates were revised. This revision was independent of the notification issued by the State Government on the 24th of May, 1972. As regards the notification under Section 3 (2) (aa) the position is as follows : Section 3 (2) (aa) of the State Act only acted as a fetter on the power of the lincensee to revise the rates. That provision having been struck down, the fetter has been removed and the unilateral right of the lincensee under the VIth Schedule becomes fully effective. The proceedings for enhancement having been taken under the VIth Schedule they were effective under that Schedule. Section 3 (2) (aa) of the State Act having been declared ultra vires by this Court, notification dated 24th of May, 1972 was not effective but the increase in the rates was effective on the basis of the proceedings under the VIth Schedule. The notice giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a jurisdiction under which it will be nugatory. See also Hukumchand Mills Ltd. v. The State of Madhya Pradesh, AIR 1964 SC 1329, where Wanchoo J. observed as follows : It is well settled that merely a wrong reference to the power under which certain actions are taken by Government would not per se vitiate the action done if they can be justified under some other power under which the Government could lawfully do these acts. The enhancement can thus not be invalidated on the ground that the State Government has also increased the rates by a notification which was bad in law. In view of the above no futile writ can issue for quashing the impugned notification (Annexure A-2) to the petition. The second point relates to the application of the principles of natural justice to the case. The petitioners claim that they ought to have been heard by the licensee before the enhancement was proposed to the State Government under para (1) of the VIth Schedule. They further claim that the State Government was also under a duty to give them an opportunity before approving the rates. Sections 57 and 57-A and the sixth Schedule provide a complete machinery for the adjustment of rates of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion then is whether the opportunity claimed, on the principles of natural justice, can be enforced as a requirement of the common law, when not enjoined by the Statute. It seems to me that such a right cannot be claimed. In Furnell v. Whangarei High School Board, (1973) 1 All ER 400 it has been held that justice of the common law will not supply the omission of the legislature. Their Lordships approved of the observations of Lord Hailsham in Pearlberg v. Varty (Inspector of Taxes), (1972) 2 All ER 6 : ......... that the courts will lean heavily against any construction of a statute which would be manifestly unfair. But they have no power to amend or supplement the language of a statute merely because on one view of the matter a subject feels himself entitled to a larger degree of say in the making of decision than the statute accords him......... It was further held that a statute is supposed to be carefully drafted and omission in respect of hearing to a party would be presumed to be deliberate. The omission cannot be supplied by invoking the common law principle of natural justice. In (1972) 2 All ER 6 (supra) an application for leave to raise certain assessments was mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e schedule puts a ceiling on the income of the licensee. The consumer may approach the State Government or the Board for the appointment of a rating committee in certain circumstances as was observed by the Supreme Court in Amalgamated Electricity Co. Ltd., AIR 1964 SC 1598 (supra). ( 9. ) The demand for hearing in the instant case has not to be decided on the basis of ultimate burden but on vested rights. The licensee has a unilateral right to increase rates. The consumer has only an option to refuse to buy the energy at higher rates. The Government' appreciation of the assessment of reasonable return has to be accepted, unless there is something palpably wrong with it. The legislature has left the judgment to a statutory authority and it is not to be disturbed except for compelling reasons. A notice to the consumers may involve practical difficulties as well. In paragraph 4 of the counter-affidavit of Sri N. L. Bhuwania it is stated that there are over 20,000 consumers where such a large body is involved it is neither practicable nor possible to give notice to each one of them. This may be another reason why the legislature excluded a provision for notice to them in the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reference under Section 56 of the Stamp Act. AIR 1967 SC 1766 was a case under the Defence of India Rules, 1962, Rule 126-AA (1) empowered the Industrial Tribunal to decide disputes between employers and employees involving variation of contractual relations and alteration of conditions of service. This could not be done on a subjective satisfaction by the Government without consulting the employers. The Supreme Court held that it was to be done on an objective basis by calling for a data from the parties concerned and after investigating the materials furnished. The case only lays down that when an authority is acting in a quasi-judicial manner it should act objectively and not subjectively and reach a conclusion on the basis of the material furnished. The provisions of the Supply Act in the sixth Schedule themselves provide for the furnishing of data for the fixation of reasonable return. Provisos 2 and 4 of para 1 of the sixth Schedule which control excess profits and provide for a refund, enable the licensee only to earn a reasonable profit on the outlay. The procedure thus protects the interest of the consumer, the Government exercising a sufficient check on the licensee. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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