Civil Appeals Nos 106 and 107 of 1975
Appeals by Special Leave from the Judgment and Order dated 18 10 74 of the Orissa High Court in OJC Nos 851 and 850 of 1972 respectively
section V Gupte In CA 10775 and Vinoo Bhagat for the Appellant
G Rath Advocate General and B Parthasarthi for Respondent No 1 In CA 10675 and Respondent in CA 10775
The Judgment of the Court was delivered by GOSWAMI J
This judgment will govern both the above mentioned appeals
We may take the facts briefly from Civil Appeal No 107 of 1975
The Orissa Textile Mills Limited is a public limited company briefly the company and is engaged in manufacture of textile articles
It is located at Choudwar in the District of Cuttack Orissa
On May 12 1960 the company described in the agreement as Consumer entered into an agreement with the State of Orissa described in the agreement as the Supplier for supply of electric power
The contract was for a period of five years from the date of supply of electric power namely February 1 1963 and it was thereafter to so continue unless and until the same was determined by either party giving to the other six calendar months  notice in writing of the intention to terminate the agreement
It is common ground that the agreement has not been terminated
It may be appropriate at this stage to refer to a few clauses in the agreement
Clause 12 provides for charges to be paid by the consumer as well as about maximum demand
Clause 13 reads as follows The tariff and conditions of supply mentioned in this Agreement shall be subject to any revision that may be made by the Supplier from time to time
309 Clause 22 deals with extra charge regarding domestic lighting fans domestic power and street lighting etc
in the colony of the Mills
Clause 23 reads as follows Any dispute or difference arising between the Consumer and the Supplier or their respective Electrical Engineers as to the supply of electrical energy hereunder or the pressure thereof or as to the interpretation of this Agreement or the right of the Supplier or the consumer respectively to determine the same or any other question matter or thing arising hereunder shall be referred to a single arbitrator who shall be mutually agreed upon by both parties
The arbitrator s decision thereon shall be final and the provisions of the Arbitration Act of 1940 X of 1940 or of any other statutory modification thereof for the time being in force shall apply to any such reference
On April 1 1962 the Orissa State Electricty Board briefly the Board was constituted by the State Government under section 5 of the briefly the Act
Under section 601 of the Act all debts and obligations incurred all contracts entered into and all matters and things engaged to be done by with or for the State Government for any of the purposes of this Act before the first constitution of the Board shall be deemed to have been incurred entered into or engaged to be done by with or for the Board  By this section therefore the Board assumed all obligations of the State Government in respect of matters to which the Act applied
It is common ground that the contract entered between the company and the State Government is binding on both
The Board decided to levy a surcharge of 10 per cent on the power tariff then in force with effect from July 1 1972 and a Press Note was issued accordingly
The material portion of the Press Note may be extracted The Orissa State Electricity Board has decided to levy a general and uniform surcharge of 10 per cent on the power tariff now in force except on the following categories of consumers who will pay the existing tariff 1 Power Intensive Industries which are governed by Special Agreements
2 Domestic power and lighting
In respect of irrigation loads pumping and agriculture the power tariff will be Re 016p sixteen paise per unit Kwh with a rebate of Re 001p one paise per unit KwhP  for timely payment
The above levy of surcharge of 10 per cent is also applicable to the power supply to the Hindustan Steel Ltd Rourkela and Kalinga Iron Works Barbil
310 The levy of 10 per cent surcharge will be on demand charges unit charges maximum and minimum charges and reservation charges
    The levy of surcharge and revised tariff for irrigation loads has become necessary for improving the Board s overall financial return and enabling it to undertake larger developmental programmes like rural electrification
    It appears that the second purpose in the above Press Note with reference to larger developmental programmes like rural electrification was omitted by a revised Press Note
The company unsuccessfully challenged the levy of the surcharge by an application under article 226 of the Constitution in the Orissa High Court
Several contentions were raised in the petition before the High Court
The surcharge was inter alia challenged as being violative of article 14 of the Constitution
This objection was repelled by the High Court and the learned counsel appearing on behalf of the company was unable to press the same before us in view of the Presidential suspension of that article during the emergency
Some other grounds including that clause 13 is ultra vires the Act were taken before the High Court but have not been pressed before us
Mr Gupte the learned counsel appearing on behalf of the appellants submits as follows 1 The Board has no power to levy a surcharge under the provisions of the Act
2 Clause 13 of the agreement cannot take in the levy of surcharge
It is therefore not a matter for reference to arbitration under clause 23 of the agreement
3 Assuming it has power under the Act or under clause 13 to levy a surcharge the Board in exempting certain categories and imposing surcharge upon the appellants is guilty of discrimination which is impermissible under section 49 of the Act and clause 2 of Schedule I to the agreement
With regard to his first contention Mr Gupte submits that surcharge is unknown to the provisions in the Act and the Board has no power under the Act to levy a surcharge
It is not possible to accede to the submission that the demand of surcharge cannot be included in the revision of rates of tariff
The word surcharge is not defined in the Act but etymologically inter alia surcharge stands for an additional or extra charge or payment see Shorter Oxford English Dictionary
Surcharge is thus a 311 superadded charge a charge over and above the usual or current dues
Although therefore in the present case it is in the form of a surcharge it is in substance an addition to the stipulated rates of tariff
The nomenclature therefore does not alter the position
Enhancement of the rates by way of surcharge is well within the power of the Board to fix or revise the rates of tariff under the provisions of the Act
The first submission of counsel is therefore of no avail
Before we deal with the second submission of counsel we may refer to a recent decision of this Court in Ms Titagarh Paper Mills Ltd vs Orissa State Electricity Board and Another1 briefly the Titagarh s case to which one of us was a party
This Court following the decision in the Indian Aluminium Company vs Kerala State Electricity Board2 with regard to the scope of sections 49 and 59 of the Act held in the Titagarh s case supra as follows  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
It is clear from the above decision that an agreement entered in exercise of the power conferred by the statute such as under section 493 of the Act cannot be set at naught by unilateral exercise of power by the Board under the Act to enhance the rates agreed upon between the parties in the absence of any provision in that behalf in the agreement itself
In the Indian Aluminium Company s case supra there was no provision in the agreement with regard to the revision of tariff such as we find in clause 13 of the present agreement
This Court therefore had not to consider in that case about the effect of a clause like clause 13
In the Titagarh s case supra however this Court had to take into consideration clause 13 of the agreement therein which is the identical clause in the present case
Sub sections 1 and 2 of section 49 empower the Board to fix uniform rates of tariff
Sub section 3 of section 49 on the other hand reserves to the Board the power of fixing different tariffs having regard to certain factors mentioned therein
Section 493 contemplates what are known as special agreements 
Power under section 491 and 2 cannot be invoked during the subsistence of special agreements providing for stipulation of rates of tariff in absence of any reservation therein
Exercise of power under section 491 and 2 as also under section 59 will remain suspended during the currency of the special agreements between the parties and no unilateral enhancement of rates is permissible under law
There is only a pro tempore ban on revision of rates during the subsistence of statutory special agreements entered in conformity with section 493 of the Act
312 Mr Gupte however submits that since there have been special agreements between the parties the stipulated rates could not be increased by adding the surcharge in question
This argument proceeds on a wrong assumption that surcharge is absolutely different from rates of tariff
Besides the submission fails to take count of clause 13 of the agreement with regard to revision of rates
The ratio of the Indian Aluminium Company s case supra will be available on all fours only where there is nothing in the special agreement with regard to revision of rates during the subsistence of the agreement
With regard to the second submission which overlaps to some extent with the first Mr Gupte points out that revision of tariff under clause 13 cannot include levy of surcharge which is distinct from tariff
He also draws our attention to the various clauses in the Press Note where both the expressions surcharge and tariff  are freely used
On the other hand the learned Advocate General submits that the import of surcharge depends upon the nature of the original charge
If the surcharge is appended to a tariff it partakes of the character of tariff
When the Press Note introduces the surcharge in addition to tariff rates not much can be made of for use of the two words separately
We have already noted the meaning of the word surcharge  while dealing with the first submission of the learned counsel
We may only add that this Court in Titagarh s case supra put the matter beyond controversy in the following words Now the effect of the levy of coal surcharge would be to enhance the rates for the supply of electricity stipulated under the agreement
Besides in the Titagarh s case supra this Court further observed as follows Questions such as whether the Board has power under clause 13 of the agreement to levy any coal surcharge at all when no such power was conferred on it by the Act whether the action of the Board in levying the coal surcharge on the appellant under clause 13 of the agreement was arbitrary and unreasonable or whether it was based on extraneous and irrelevant considerations and whether on the facts and circumstances of the case the Board was justified under clause 13 of the agreement to levy the coal surcharge on the appellant are plainly questions arising under the agreement and they are covered by the arbitration provision contained in clause 23 of the agreement
All the contentions raised by the appellant against the claim to justify the levy of the coal surcharge by reference to clause 13 of the agreement would therefore seem to be covered by the arbitration agreement and there is no reason why the appellant should not pursue the remedy of arbitration which it has solemnly accepted under clause 23 of the agreement and instead invoke the extraordinary 313 jurisdiction of the High Court under Article 226 of the Constitution to determine questions which really form the subject matter of the arbitration agreement
 Although this Court was dealing with the coal surcharge in the above decision there is no distinction in principle between the coal surcharge or a surcharge simpliciter and the ratio of the above decision will be applicable in this case
The second submission of the learned counsel therefore fails and the point is squarely covered by the above decision
The matter is therefore covered by the arbitration clause 23 of the agreement
With regard to the last submission regarding discrimination founded upon section 49 of the Act and clause 2 of the Schedule I to the agreement Mr Gupte relied upon sub section 4 of section 49 which provides that in fixing the tariff and terms and conditions for the supply of electricity the Board shall not show undue preference to any person
He also draws our attention to clause 2 of the conditions of supply in the First Schedule to the agreement to the effect that the Department shall not be entitled to discriminate between different consumers in fixing the charges for the supply of energy
The agreement is entered under the provisions of section 493 of the Act
If we read section 49 as a whole we find that under sub section 1 of that section the Board in supplying electricity to any person not being a licensee may for the purposes of such supply frame uniform tariffs
However under sub section 2 of that section in fixing the uniform tariffs the Board shall have regard to the various factors under four heads a b c and d
Then comes sub section 3 which preserves the power of the Board if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee having regard to the geographical position of any area the nature of the supply and purpose for which supply is required and any other relevant factors
Mr Gupte submits that there is no reason why the power intensive industries which are governed by special agreements should have been exempted from the levy of surcharge in the Press Note
He further points out that there are eight industries referred to in paragraph 20 of the Special Leave Petition which have not been subjected to the aforesaid 10 per cent surcharge even though the rates of electricity charged per unit in their case are less than those of the Orissa Textile Mills
It is enough to point out that the industries referred to in the Special Leave Petition were covered by special agreements and we are not even told whether these special agreements had a similar clause like clause 13 in the present case
This Court has held that special agreements entered under section 493 cannot be given a go by while exercising the power of revision of rates under section 49 read with section 59
That being the position the objection on the score of discrimination loses all importance
The totality of the provisions under section 49 does not give any scope for the plea of discrimination raised in this case and in view of clause 13 in the agreement itself
314 We can appreciate the handicap of counsel in advancing his arguments under the head of discrimination having lost the protective amulet of article 14 of the Constitution under the Presidential embargo during the emergency
A plea of discrimination which is available when article 14 is in free play is not at par with the interdict of undue favour  under section 49 of the Act
Apart from this when law makes it obligatory for certain special agreements to continue in full force during their currency stultifying the power of the Board to revise the rates during the period no ground of discrimination can be made out on the score of exempting such industries as are governed by special agreements
Although the Press Note in the instant case did not recite any provisions of the Act under which the same was issued mere omission to do so does not disentitle the Board to reply upon clause 13 of the agreement for a claim to revision of the rates although in the form of a surcharge in this case
We therefore do not give any significance to the omission in the Press Note to refer to clause 13 or to any other provision of the Act
The matter is therefore covered by the arbitration clause 23 of the agreement
It is not for this Court to speculate what answers the Arbitrator will enter with regard to the disputed questions that may be raised before him
We are not to be understood as expressing any opinion on the merits of the dispute or difference between the parties with regard to the surcharge
It is then submitted that this Court should not use its discretion in favour of arbitration in a matter where it is a pure question of law as to the power of the Board to levy a surcharge
This submission would have great force if the sole question involved were the scope and ambit of the power of the Board under sections 49 and 59 of the Act to levy a surcharge as it was sought to be initially argued
The question in that event may not have been within the content of clause 23 of the agreement
But all questions of law one of which may be interpretation of the agreement need not necessarily be withdrawn from the domestic forum because the court has discretion under section 34 of the Arbitration Act or under article 226 of the Constitution and that the court is better posted to decide such questions
The arbitration clause 23 is a clause of wide amplitude taking in its sweep even interpretation of the agreement and necessarily therefore of clause 13 therein
We are therefore unable to accede to the submission that we should exercise our discretion to withhold the matter from arbitration and deal with it ourselves
We therefore find no justification in interfering with the conclusion of the High Court in dismising the writ application
In the result the appeals fail and are dismissed
We will however make no order as to costs
PBR Appeals dismissed


Summary:
Under cl 13 of the agreement between the parties the tariff and conditions of supply of electricity were subject to any revision that may be made by the supplier from time to time
Clause 23 states that any dispute or difference arising between the consumer and the supplier shall be referred to an arbitrator
The respondent issued a press note deciding to levy a surchage of 10 per cent on certain categories of customers which included the appellants
The appellants challenged the levy but the High Court dismissed their writ petitions
On appeal to this Court it was contended that 1 the Board had no power under the Act to levy a surcharge 2 cl
13 of the Agreement could not take in the levy of surcharge and as such it is not a matter for reference to arbitration under cl 23 of the agreement and 3 in exempting certain categories and imposing surcharge upon the appellants the Board was guilty of discrimination which is impermissible under section 49 of the Act and cl 2 of Schedule I to the Agreement
Dismissing the appeals  HELD 1 Enhancement of the rates by way of surcharge is well within the power of the Board to fix or revise the rates of tariff under the provisions of the Act
The word surcharge is not defined in the Act
Etymologically it stands for an additional or extra charge or payment and in the present case it is in substance an addition to the stipulated rate of tariff
311 A B 310H 2 i It is only where there is nothing in a special agreement with regard to revision of rates during the subsistence of the agreement that the existence of the special agreements prevents any increase of the rates stipulated in the special agreements by adding the surcharge
In the present case cl 13 of the agreement provides for revision of rates and the surcharge is not absolutely different from rates of tariff because the effect of the levy of surcharge would be to enhance the rate of supply of electricity stipulated under the agreement
312 A B Ms
Titagarh Paper Mills Ltd vs Orissa State Electricity Board and Another  followed
Indian Aluminium Company vs Kerala State Electricity Board   explained
Therefore the matter in dispute is covered by the arbitration clause of the Agreement
313 B ii Although the press note did not recite any provision of the Act mere omission to do so did not disentitle the Board to rely upon clause 13 for a claim to revision of the rates
314 C iii This is not a fit case for the Court in its discretion to withhold the matter from arbitration and itself deal with it merely because the Court has discretion to do so under section 34 of the Arbitration Act or under article 226 of the 308 Constitution and that the Court is better posted to decide such questions
The arbitration clause is of wide amplitude taking in its sweep even interpretation of the agreement and necessarily therefore of cl 13
314 F 3 The totality of the provisions under section 49 does not give any scope for the plea of discrimination raised in this case and in view of cl 13 of the agreement itself
As regards the various industries which have not been subjected to the charge it is not known whether there is a similar provision like cl 13 in the agreements
313 G H When the law makes it obligatory for certain special agreements to continue in full force during their currency stultifying the power of the Board to revise the rates during the period no ground of discrimination can be made out on the score of exempting such industries as are governed by special agreements
314 B Ms
Titagarh Paper Mills Ltd vs Orissa State Electricity Board and Another  applied