ivil Appeals Nos 92178 and 42579 Appeals by Special Leave from the Judgment and Order dated 27 4 1978 of the Allahabad High Court in Writ Petition No 373277
M V Goswami for the Appellant In CA 92178 section section Ray D Gupta Shiv Dayal N R Khaitan U K Khaitan and G Mitra for the Respondent in CA 92178 and Appellant in CA 42579
section N Kacker Sol
of India G C Dwivedi section C Bhudhwar section Markendaya and K Madan Mohan Reddy for U P State Electricity Board Appellant No 2 in CA 92178
717 The Judgment of the Court was delivered by SHINGHAL J
These appeals by special leave arise from the judgment of the Allahabad High Court dated April 27 1978
While Civil Appeal No 921 of 1978 has been filed by the State of Uttar Pradesh the UP State Electricity Board and the Executive Engineer of the Rihand Power Station hereinafter collectively referred to as the State Civil Appeal No 425 of 1979 has been filed by the Hindustan Aluminium Corporation Ltd its Vice President and Chief Accountant hereinafter referred to as the Company
We have heard the two appeals together and will dispose them of by a common judgment
The controversy relates to the supply of electrical energy for short energy for the production of aluminium which is the most modern of the common metals
Unlike the other common industrial metals like iron copper zinc and lead pure aluminium is not produced by the direct smelting of its ores
The metal is now produced by the modern electrolytic method under the influence of direct current
It takes about 10 kilo watt hours of electricity to produce a pound of aluminium and the supply of cheap electric power is therefore an essential requisite or raw material for its production
The metal has many advantages and uses and has gained such importance that it is an essential commodity under the Essential Commodities Act and its production is one of the scheduled industries under the Industries Development and Regulation Act
While the State feels aggrieved because the High Court has interfered with the Uttar Pradesh Electricity Regulation of Supply Distribution Consumption and Use Order 1977 dated September 19 1977 hereinafter referred to as the Order which it made under section 22B of the Electricity Act 1910 for short the Act the Company s grievance is that the High Court has not granted all the reliefs which it had claimed in its petition under article 226 of the Constitution
The Court s record is much too voluminous but it appears to us that the appeals can be adequately disposed of on the basis of the important averments in the lists of dates drawn up by counsel for the parties about which there is no dispute before us
When the question of establishing a new aluminium factory arose for consideration by the Government of India it took into consideration the consent of the Government of Uttar Pradesh to make energy available for the factory from the Rihand Hydro electric Scheme which was expected to go into operation by the end of 1960 and granted an industrial licence to the Company on September 26 1959 for the manufacture of 20000 metric tonnes of aluminium ingots per year at Rihand
An agreement was also entered into between the State of 718 Uttar Pradesh and the Company on October 291959 for the supply of 55 m w of power on a firm continuous and uninterrupted basis at a rate of 1997717 paise per unit for a period of 25 years from the date of commencement of the supply
The Company set up and commissioned its aluminium plant at Renukoot near Rihand Dam with an installed capacity of 20000 metric tonnes per annum in April 1962
It was granted a further licence for the expansion of its installed capacity by 40000 metric tonnes per annum
As the State was unable to meet the extra requirement of energy sanction under section 28 of the Act was granted to the Company at its request on November 12 1964 to set up a generating station at Renusagar near Renukoot through its subsidiary the Renusagar Power Company Ltd It had two generating units of 675 m w each
The first unit started generating power in 1967 and the other in 1968
The 40000 metric tonnes expansion unit was commissioned in 1968
In the meantime the Company was granted a licence in December 1966 for effecting a further expansion of 60000 metric tonnes per annum in its installed capacity for the production of aluminium
The Company thought of setting up the plant for the production of 60000 metric tonnes of aluminium in Gujarat State as it was informed by the Gujarat State Electricity Board that it would be able to meet the requirement of energy there at a rate of Rs 320 per kilowatt year which was much higher than the rate at which it was receiving energy from UP State Electricity Board UPSEB
The Government of UP held negotiations with the Company and it was decided that the Company would produce the additional 60000 metric tonnes of aluminium also in Uttar Pradesh
The Chief Secretary to the government of UP wrote a detailed letter to the Company on November 20 1968 in which the position regarding the supply of energy was stated as follows Regarding the power plant I can see no difficulty in meeting the interim requirements for 2 to 3 years from the UP State Electricity Board nor do I see any difficulty in arranging for parallel running of your new power station with the UP State Electricity Board
 The Company then addressed a letter to the State Government on September 26 1969 stating the position regarding the supply and generation of increased energy for the expansion of aluminum production as follows 5a The Scheme of power supply for our expansion by UPSEB is interlinked with the question of expansion of 719 Our Renusagar power plant and its parallel operation with your system
The application for the expansion of our Renusagar Power Plant has already been submitted to your office a copy of which is enclosed herewith for your ready reference
The necessary permission for the same is requested as early as possible
b The emergency assistance under parallel operation would be required for about 100 m w and the terms and conditions for the same would have to be decided simultaneously with the permission for expansion of our Power Plant
 It may be mentioned that the Company was granted sanction to expand Renusagar generation by 250 m w
In 1972 the Company expanded its installed capacity for the production of aluminium by 35000 metric tonnes per year
On its part the UPSEB sanctioned 110 m w additional energy under a phased programme to be compelled by June 1 1975
It was clearly stated in the letter of the UPSEB dated September 2 1972 that the supply would be without prejudice to the power of the State Government to control the distribution and consumption of energy under section 22B of the Act
Reference in the letter was made to the acute shortage of power because of scanty rainfall in the catchment area
It so happened that additional energy was not made available to the Company during 1972 75 although the rate was substantially increased to 11 paise instead of 1997717 paise with retrospective effect from June 30 1975 under the new aluminium policy of the Government of India
An agreement was however entered into between the Company and the UPSEB on November 30 1976 for the supply of 85 m w of energy on a continuous basis for a period of 5 years in supersession of the earlier agreements and it was stipulated that it would be read and construed in all respects in conformity with the provisions of the Act the  and the rules and the regulations and the amendments thereto The Company received that supply and was even promised an additional supply of 35 m w over a phased period from July 1977 but did not get it
The Company was all the same able to raise its production of aluminium to 95000 metric tonnes by April 7 1977 because of the supply of 85 m w of energy
In the meantime the State Government took a decision by the end of December 1976 to reconnect some 70000 pumping sets which had 720 been disconnected for non payment of the electricity dues
That placed an additional load of about 400 m w on the grid system of the State
The Chairman of UPSEB submitted a note on the power situation which was likely to obtain from April to July 1977
He pointed out that there was acute shortage of energy and suggested the imposition of some restrictions upto the end of July 1977 by when the demand for agriculture was expected to decrease and the Rihand and Matatila reservoirs would be filled up
That was proposed to meet the needs of agriculture and related industries and to meet the industrial demand to the extent possible
One of the proposals was for a 50 per cent cut in the demand of the Company and some other industrial units including Kanoria Chemicals and Industries Ltd That note came up for consideration in the State Cabinet on April 1 1977 and was partially approved
The UP Electricity Regulation of Distribution and Consumption Order 1977 was therefore issued on April 7 1977
Under clause 6a i of the Order the Company could draw energy only to the extent of 425 m w ie 50 per cent of its monthly consumption but it was allowed to draw 55 m w for the time being
Uttar Pradesh came under the President s rule on April 30 1977 and the Company was allowed to draw 55 m w until further orders
It is the case of the State that the shortage of energy became more acute in the third week of May The Company in the meantime filed its first writ petition No 1790c of 1977 on receipt of a letter of the Executive Engineer OM Rihand that the power supply to the Company should be cut off completely with immediate effect
The writ petition was dismissed on May 20 1977 because of a subsequent letter by the Government requiring the UPSEB to continue the supply of 425 m w energy instead of 55 m w in accordance with the aforesaid Order of April 7 1977
The Secretary of the Power Department of the State government sent a note to the Governor on May 24 1977 proposing some additional cuts in the supply of energy
Decision thereon was deferred until information was obtained from other States in regard to availability of energy to aluminium plants
A fresh note was thereafter prepared for orders
In that note dated May 31 1977 it was stated that there was a large gap between demand and availability of energy and that was creating a serious imbalance requiring load shedding on a large scale and that had given rise to discontent in all sectors of the economy and in particular in the rural sector
It was also pointed out that overriding public interest particularly the need to maintain 721 food supply and the industrial production required that units which were heavy consumers of energy should be subjected to further cut in the consumption of energy
It was particularly pointed out that as the Company was itself generating energy at Renusagar it will have more than 50 per cent of energy even if the Board s supply of 425 m w was completely withdrawn and that will service some 8500 pumping sets
It was all the same stated that the Company would continue to have 60 m w from the UPSEB as stand by supply as in the past
The Governor approved that proposal on June 1 1977
A proviso was inter alia inserted in clause 6ai of the UP Electricity Regulation of Distribution and Consumption Order 1977 on June 2 1977 according to which the industrial consumer which had its own source of generation of energy from which it obtained 50 per cent or more of its total consumption would suffer a cut of 100 per cent in the energy supplied by the UPSEB
The Company was accordingly given time to bring about the total cut
In the meantime the Company filed its second writ petition No 2160c of 1977 along with an application for stay
The High Court admitted the writ petition but rejected the application for stay
The Company then moved this Court for special leave
The Hon ble Vacation Judge made an observation that the matter may be discussed by the parties concerned and the State agreed to give 20 m w of energy to the Company for the time being
Fresh elections were held to the State Legislative Assembly and the new Cabinet was sworn in on June 23 1977
It decided to reduce the supply of energy to the Company to zero in pursuance of the amendment dated June 2 1977 and called for a fresh note on the position regarding the generation and distribution of energy
The Executive Engineer Rihand accordingly asked the Company to reduce the consumption to zero
A detailed note was prepared by the Secretary concerned on June 28 1977 and it came up for consideration in the Cabinet on June 30 1977 but no decision was taken and the note was kept pending
It appears that the Chairman of the UPSEB prepared a note on August 26 1977 in which he pointed out the shortage of energy including a substantial fall in the generation of thermal energy and in the import of energy
It appears that the Minister concerned made some statements in regard to the generation of energy in the State and the position of the Company but we shall refer to them later when we deal with the allegation regarding malice in law
It will be sufficient to say that the State Government made the Order 722 on September 19 1977 called the Uttar Pradesh Electricity Regulation of Supply Distribution Consumption and Use Order 1977
It has undergone some amendments but learned counsel are in agreement that they have no bearing on the controversy before us
The Company filed its third writ petition No 3732 of 1977 against the Order on September 26 1977
It was admitted the same day and the earlier writ petition No 2160 of 1977 was dismissed as withdrawn
The High Court directed the Company to make an application under clause 10 of the Order for exemption but it was rejected all December 9 1977 when made
The High Court ultimately heard and decided the writ petition by the impugned judgment dated April 27 1978 against which these appeals by special leave have been directed as aforesaid
This Court made an order on May 4 1978 for the supply of 20 m w of energy to the Company as a purely interim arrangement
That was raised to 35 m w by an order dated August 29 1978 and the State is now supplying 425 m w to the Company as an interim arrangement
These basic facts are not in dispute before us
We shall examine the arguments of the learned counsel for the parties with reference to them after taking into consideration the other well settled facts on which reliance has been placed by learned counsel and with due regard to the relevant averments of the parties
The High Court has recorded a number of findings
We shall have occasion to refer to those of the findings which have been challenged before us
It may be sufficient to say here that the High Court has worded the operative part of its judgment as follows In view of the aforesaid discussion the provisions of the first proviso to clause VI ai of the Uttar Pradesh Electricity Regulation of Supply Distribution Consumption and Use Order 1977 dated September 19 1977 are declared ultra vires and are quashed
The U P State Electricity Board is directed to supply electrical energy to the petitioner in accordance with law without taking into consideration the provisions of the said proviso
In order to examine the findings of the High Court about the invalidity of the proviso to clause 6a i of the order it will be convenient to examine the relevant findings of the High Court on the various points of law
The High Court has taken the view that it is the statutory obligation of the UPSEB because of the obligation of a licensee under 723 sections 18 and 26 of the to supply electrical energy to a consumer
Reference in this connection has also been made to clause VI of the Schedule to the Act
Clause h of section 2 of the Act defines a Licensee to mean any person licensed under Part II to supply energy
Section 26 of the Act of 1948 provides inter alia that subject to the provisions of that Act the Electricity Board shall in respect of the whole State have all the powers and obligations of a licensee under the  and the Act of 1948 shall be deemed to be the licence of the Board for purposes of the Act of 1910
The first proviso to the section excludes the application of some sections including section 22 of the Act and the second proviso states that the provisions of clause VI of the Schedule to the Act shall apply to the Board in respect of that area only where distribution mains have been laid by the Board and the supply of the energy through any of them has commenced
While therefore the UPSEB is a licensee under the Act it will be sufficient for purpose of the controversy before us to say that section 22 of the Act is not applicable to it and clause VI of the Schedule is applicable to it subject to the restriction contained in the second proviso to section 26 of the Act of 1948
So even though the Board is a licensee the obligation under section 22 of the Act to supply energy to every person within the area of its supply is not fastened on it
The provisions of the Schedule to the Act are deemed to be incorporated in and to form part of every licence granted under Part II
Clause VI of that Schedule states that where after distributing mains have been laid down and the supply of energy through them has commenced a requisition is made by the owner or occupier of any premises situate within the area of supply requiring the licensee to supply energy for such premises the licensee shall make the supply and shall continue to do so in accordance with the requisition
But as has been pointed out the second proviso to section 26 of the Act of 1948 places a restriction on that obligation for it says that the provisions of clause VI shall apply to the Board in respect of that area only where distribution mains have been laid by the Board and the supply of energy through any of them has commenced
Clause i of section 2 of the Act defines a main to mean any electric supply line through which energy is or is intended to be supplied to the public
A distribution mail has been defined by clause e of the same section to mean the portion of any main with which a service line is or is intended to be immediately connected
We 724 have also gone through the definitions of electric supply line and service line
They leave no doubt that a distributing main is different from an electric supply line for to it a service line is immediately connected
The High Court has stated that the Company gets its supply from the Pipri Bus Bar which is composed of a set of conductors which are made up of thick aluminium core steel reinforced cables and has taken the view that the Pipri Bus Bar is a distributing main under section 2e of the Act and is an electric supply line as defined in section 2f so that clause VI of the Schedule to the Act would be fully applicable to the Board in so far as its obligation to the Company is concerned
But as has been stated in the second proviso of section 26 of the Act of 1948 the provisions of clause VI of the Schedule to the Act could apply to the UPSEB in respect of that area where distribution mains had been laid by the Board
It was therefore a question of fact whether that was so and had to be examined on the basis of the averments of the parties to that effect
It is however not disputed before us that the Company did not plead that distributing mains had been laid by the Board for supply of energy to the Company or to any one else from the Pipri Sub station
The State had therefore no occasion to controvert any such allegation
This has in fact been admitted to be so by Mr Ray in his arguments and the High Court went wrong in recording a finding of fact against the State without any basis for it in the pleadings
We have also gone through section 18 of the Act of 1948 to which reference has been made in the judgment of the High Court but it is also of no avail to the Company
The section makes a mention of the general duties of the Board but it does not make it obligatory for it to supply energy to every person irrespective of its practical difficulties
The High Court has in fact quoted extensively from its earlier judgment in Civil Miscellaneous Writ Petition No 618 of 1972 to which one of the two Judges was a party
It is not disputed however that when an appeal was taken against that judgment the writ petition was itself withdrawn and was dismissed so that judgment of the High Court may not be said to have subsisted thereafter and need not have formed the basis of the finding of the High Court against the Board in regard to its duty to supply the energy asked for by the Company the more so when the decision on the point should have turned on the facts pleaded and established on the record
725 Mr Ray for the Company has however invited our attention to a decision of the Rajasthan High Court in firm Sadul Cotton Ginning and Pressing Factory vs Rajasthan State Electricity Board1 But that was a different case where it was not pleaded by the Electricity Board that clause VI of the Schedule to the Act was not applicable to it as the distributing mains had not been laid by it
The High Court therefore erred in taking the view in the present case that the Board was bound by the terms of clause VI of the Schedule to the Act to supply energy to the Company within one month of the making of the requisition or within such longer period as the Electrical Inspector may allow
But even if it were assumed that the Board was under an obligation to supply energy to every person the fact nonetheless remains that the State Government had the overriding power to provide by order made under section 22B of the Act for regulating the supply distribution consumption or use thereof
In fact sub section 2 of that section categorically states that without prejudice to the generality of the power under sub section 1 the order may direct the Board not to comply with any contract agreement or requisition for the supply of energy etc
The High Court erred in taking a contrary view
It has next been argued that only the energy which was generated by the Board could be the subject matter of an order under section 22B of the Act and it was not permissible for the State to take into account the energy generated by the Company for its own use
It may be recalled that the Company applied for the grant of sanction under section 281 of the Act to generate 120 m w of energy for the additional production of aluminium
That was allowed and a notification was issued on November 12 1964 granting sanction to the Renusagar Power Company Limited a wholly owned subsidiary of the Company to engage in the business of supplying energy to the Company
It has two generating units and 135 m w power is being generated by the Renusagar Station for the exclusive use of the Company and it is this energy for which it has been argued that it cannot be the subject matter of an order under section 22B
But sub section 1 of section 28 of the Act in terms refers to and deals with engaging by a non licensee in the business of supplying energy to the public
It is therefore futile to contend that what was generated by the Renusagar Power Company was not meant for supply to the public but was the Company s own energy
It is true that that generation became in the circumstances the captive generation for the use of the Company but that is far from saying that in 726 the eye of law it was not energy meant for supply to the public or that it was not amenable to control under section 22B
It must therefore be held that it was not amenable to control under section 22B
It must therefore be held that it was also liable to equitable distribution by an order under section 22B of the Act
The expression energy has been defined by clause g of section 2 of the Act as follows g energy means electrical energy i generated transmitted or supplied for any purpose or ii used for any purpose except the transmission of a message
It is therefore a pervading definition and there is no reason why energy generated and supplied under section 28 of the Act should not fall within its sweep
We are mindful of the fact that while section 22B of the Act occurs in Part II the aforesaid section 28 is in Part III but that will not really take the supply of energy under section 28 out of the control of section 22B Part II deals with supply of energy by licensee while Part III deals with supply transmission and use of energy by non licensees
But when it was thought necessary to vest the State Government with the power to give directions to licensees under section 22A and to control the distribution and consumption of energy under section 22B it became necessary to insert sections 22A and 22B by Act 32 of 1959
The Legislature therefore inserted both the sections in Part II which occurred earlier than Part III and under the broad fabric Supply of Energy
As is obvious insertion of sections 22A and 22B would not have been appropriate in Part III and the Legislature cannot be blamed if it preferred the inclusion of the two sections together in Part II rather than in the residuary Part IV
Moreover it is by now well settled that the true meaning of a provision of law should be determined on the basis of what it provides by its clear language and with due regard to the scheme of the law as a whole and not merely by the place it finds in the formation of its Parts or Chapters
An ancillary argument has been advanced that if sub section 1 of section 22B of the Act is read with due regard to sub section 2 it will appear that like sub section 2 sub section 1 is also confined to a licensee and will not be applicable to the energy supplied by a sanction holder under section 28
Our attention in this connection has been invited to the use of the article the in sub section 2 while stating that the order made under sub section 1 may direct 727 the licensee  not to comply with the matters stated in clauses i to iii
The argument is untenable for two reasons
Firstly subsection1 of section 22B refers to the State Government s power to control the distribution of energy as a whole and not merely the energy generated by a licensee and there is no rule of construction by which the restricted scope of sub section 2 which deals only with the licensees should govern the scope of sub section 1 and confine it to licensees
Secondly the purpose of sub section 2 is to provide exceptions of the nature which are peculiar to licensees and are necessary to save them from the statutory obligations mentioned in the three clauses of the sub section
It appears that the use of he article the in sub section 2 is not quite appropriate but we have no doubt that there is no justification for the argument that section 22B is applicable only to licensees and not to a sanction holder under section 28
What section 22B of the Act authorises the State Government to do is to make an order providing for regulating the supply distribution consumption or use of energy and it has been held by the High Court that the section does not confer the power to prohibit the supply of energy to any consumer
The High Court has gone on to hold that Parliament did not confer on the State Governments the power to cut off supply to existing consumers
Mr Ray has supported the view of the High Court and has invited our attention to the decisions in Municipal Corporation of the City of Toronto vs Virgo1 Attorney General for Ontario vs Attorney General for the Dominion and the Distillers and Brewers  Association of Ontario2 Birmingham and Midland Motor Omnibus Co Ltd vs Worcestershire County Council3 Tarr vs Tarr4 The Automobile Transport Rajasthan Ltd vs The State of Rajasthan and others5 and State of Mysore vs H Sanjeeviah6
As against that the learned Solicitor General has placed reliance on the view taken in Fatechand Himmatlal and others vs State of Maharashtra etc7 that regulation  if the situation is necessitous may reach the limit of prohibition
It appears that a distinction between regulation  and restriction  or prohibition  has always been drawn ever since Municipal Corpora 728 tion of the City of Toronto vs Virgo supra Regulation  promotes the freedom or the facility which is required to be regulated in the interest of all concerned whereas prohibition  obstructs or shuts off or denies it to those to whom it is applied
The Oxford English Dictionary does not define regulate to include prohibition so that if it had been the intention to prohibit the supply distribution consumption or use of energy the Legislature would not have contented itself with the use of the word regulating without using the word prohibiting or some such word to bring out that effect
But where the High Court went wrong was in thinking that the Order had the effect of prohibiting the supply of energy to the Company which was an existing consumer
The proviso to clause 6a i of the Order to which exception has been taken states as follows Provided that where any such industrial consumer has his own source of generation of energy which alone enables him to obtain 50 per cent or more of his total consumption then a cut of 100 per cent in the energy supplied by the Uttar Pradesh State Electricity Board shall be exercised
 What has therefore been ordered is no more than a cut of 50 per cent in the monthly consumption of electricity and not a total prohibition of consumption of energy
That is a step in the direction of regulating the consumption of energy as far as it goes and it is overridden with the further regulation contained in the proviso in the case of an industrial consumer having its own source of generation of energy which alone enabled him to obtain 50 per cent or more of his total consumption so as to ensure even to him a consumption of 50 per cent of energy and not a total prohibition
The proviso therefore operates in a special or particular field and for a particular purpose where it is considered necessary for regulating the supply etc
of the energy in the interest of the other consumers for section 22B is meant to maintain the supply and secure the equitable distribution of energy to all concerned
We are constrained to say that the High Court did not properly appreciate this aspect of the matter
The High Court has gone on to hold that no power was vested in the State Government under section 22B of the Act to issue an order that certain preferences will be followed in supplying energy
The High Court has found it established that after power supply was totally disconnected by the Board to the Company power supply connections were given to the agricultural sector and agro based industries
 This appears to be the High Court s finding in regard to the argument that the Order was bad as it was not permissible to adjust the priorities 729 by an order under section 22B Learned counsel for the Company have argued that the only permissible preference was that under section 22A in favour of an establishment mentioned in it and that the preference shown to individual consumers was illegal
Now so far as clause 6a i of the Order is concerned it does not by itself provide for any preferences or priorities beyond excluding fertilizers from the cut of 50 per cent on all large and heavy industrial power consumers receiving power at 33 k v and more
Clause 7 of the Order deals with exemptions and fertilizers manufacturing establishments have been included there amongst the consumers to whom the cut referred to in clause 6 of the Order shall not be applicable
It has not been argued before us that it was not permissible for the State Government to provide for exemptions in an order under section 22B and we have not been referred to any such data or material on the basis of which it may be possible to examine whether the exemptions in question were in derogation of the concept of maintaining and securing the equitable distribution of energy under section 22B
It may be that the State Government was of the opinion that supply of energy to the agricultural sector and agro based industries was more necessary and would benefit the state more substantially than the supply made to heavy industrial consumers but merely because any such preference has been entertained by the State Government it cannot be said that it necessarily runs counter to the concept of equitable distribution of energy stated in section 22B
In fact counsel for the Company have repeatedly urged before us that the cut of 50 per cent referred to in clause 6a i was meant to deprive only a few consumers of energy and that the cut of 100 per cent under the proviso operated exclusively against the Company
And it has to be appreciated that clause 6a i deals only with large and heavy industrial power consumers receiving power at 33 kv and above and it is hardly permissible for such a heavy consumer as the Company to complain of any preference that may have been shown to small consumers in the field of agriculture or agro based or other small industries
The fact remains that large and heavy industrial consumers of the category mentioned in clause 6a i are a class by themselves and it is hardly permissible for them to complain that the small preference shown to agriculturists in supplying energy for their water pumps or tube well or in energising State tube wells supplying water to them or the supply of energy to small scale industries has really created a privileged class of consumers or brought into existence any such concept of priorities as to run counter to or defeat the objective of bringing about the equitable distribution of energy by an order 730 under section 22B No glaring instance of any preference has been brought to our notice so as to raise in us a desire to examine the question whether it was necessary or proper for the State Government to provide guidelines for the small preferences shown by it to the aforesaid consumers
In fact it has been admitted in the written arguments which have been filed and received in Court that in the present case the company is not sure as to what exactly has happened
In such a situation we are not persuaded that the High Court had any real justification for recording an adverse finding against the State on the question of the so called preferences or priorities
Learned counsel for the Company were not able to refer us to any plea in the writ petition about illegal priorities or preferences
Nor could they refer to a plea that any preference or priority shown by the State was the very antithesis of the concept of equitable distribution which for the purpose of maintaining the supply of energy was the very object of the Order
If any such plea had been taken it would have been permissible for the State to take any defence that may have been open to them
But merely because the word preference or priority has been used by the State for the purpose of comparing the grantees of energy in preference to the Company or as a matter of priority over the consumption of energy by a giant consumer like the Company it will not be fair and reasonable for us to hold that the State has established a class of privileged consumers and to set aside the grant of energy to them in their absence and without examining the facts and circumstances of their respective cases
The purpose of the Order is to maintain the supply of energy and to secure its equitable distribution
One such method was to conserve energy by virtue of the provisions of clause 6a i
If that has been done according to law and if the resultant saving of energy is frittered away by showing unlawful preferences or creating unlawful priorities by other orders of an administrative nature there is nothing to prevent the aggrieved party including the Company from challenging it according to the law in an appropriate proceeding if so advised
But any such grievance cannot be examined in these proceedings for the Order has the avowed object of bringing about equitable distribution of the conserved energy in an honest and forthright manner and there is nothing on the record for us to hold otherwise
It has next been argued that the validity of the Order which is by way of a piece of subordinate legislation is open to judicial scrutiny and that the subjective satisfaction of the State Government in making it is open to challenge in a court of law
It will be enough for us to say that subordinate legislation is by now a well recognised form of legislation for practical reasons
The modern 731 administrative machinery is quite complex and it is often found difficult to pass complicated legislative measures through the full parliamentary procedure and on a permanent or durable basis
Even a carefully drafted Act may not work well in actual practice
It may also be that the exact means of achieving the object of an Act may not be adequately comprehended all at once and it may be useful to provide for some elasticity in the actual working of a law
That can best be done by leaving some of the details to subordinate legislation
That is why some legislative powers are delegated to executive authorities subject of course to the purpose and the scheme of the parent Act the constant vigil of the Parliament or the State Legislature and the Judicial control
These are reliable safeguards and with their easy availability it is no surprise that subordinate legislation is now so voluminous that it may well be said to have dwarfed the parent
The grounds of challenging the validity of subordinate legislation are well known
The challenge may be on the ground that the power to make the law could not have been exercised in the circumstances which were prevailing at the time when it was made or that a condition precedent to the making of the legislation did not exist or that the authority which made the order was not competent to do so or that the order was not made according to the procedure prescribed by law or that its provisions were outside the scope of the enabling power in the parent Act or were otherwise violative of its provisions or of any other existing statute
As it happens none of these grounds or circumstances has been shown to exist in the present case
The High Court has taken the view that the Company was unable to establish as a fact that there was no shortage in the generation of energy at the time when the order was made under section 22B
It is no body s case that the State Government was not competent to make the order or that it did not comply with any procedural requirement of the Act in making the order or that its provisions or any of them are outside the scope of the enabling power or are violative of the provisions of any other law
We have examined some of the points of law on which the High Court has found some provisions of the order to be invalid and we have given our reasons for taking a different view
We have no doubt that the State Government formed its opinion about the necessity and expediency of making the order for the purposes of maintaining the supply and securing the equitable distribution of energy at a time when that was called for and this Court cannot sit as a court of appeal to examine any and every argument in an attempt to show that the opinion of the State Government was vitiated for one fanciful reason or the other
It has to be appreciated that the question whether the reasons which led to the 732 making of the order were sufficient was essentially for the State Government to consider
The validity of the order has been challenged on the ground that it suffers from the vice of malice in law
But that is a point by itself and we shall examine it separately
It will thus appear that the above arguments which have been advanced against the validity of clause 6a i of the order are not justified
The whole of the clause reads as follows 6a i In respect of electrical energy consumed by all large and heavy power industrial consumers receiving power at 33 kv and above excepting fertilizers from the UP State Electricity Board a cut of 50 per cent in their monthly consumption of electricity both in respect of energy and demand shall be exercised Provided that where any such industrial consumer has his own source of generation of energy which alone enables him to obtain 50 per cent or more of his total consumption then a cut of 100 per cent in the energy supplied by the Uttar Pradesh State electricity Board shall be exercised
 It thus deals with the consumption of energy by all excepting fertilizers large and heavy industrial power consumers receiving power from the UPSEB at 33 kv and above
It imposes a cut of 50 per cent in their monthly consumption of energy
Then it adds the provision that where such an industrial consumer has his own source for the generation of energy which by itself gives him 50 per cent or more of his total consumption of energy provided for in the main clause then it will not receive any energy from the UPSEB as the cut in its supply will then be 100 per cent
The clause therefore subserves the purpose of section 22B for in a period of scarcity or insufficiency of the supply it will have the effect of regulating the same and thereby securing the equitable distribution thereof
It is true that although the order has been made on the ground that the State Government is of opinion that it is necessary and expedient for maintaining the supply and securing the equitable distribution of electrical energy to provide for regulating the supply distribution consumption and use thereof and has been called the Uttar Pradesh Electricity Regulation of Supply Distribution Consumption and Use order 1977 it does not deal with all those matters in details
In fact it may well be said to be an order relating essentially to compulsory cut in the consumption of energy
But that cannot detract from the basic fact 733 that the order has the sanction of section 22B of the Act and subserves the main purpose thereof even though there may be justification for the criticism that it does not go far enough in its regulative enterprise in the expansive field set out for it in the preamble
At any rate it cannot be said to be beyond the scope and the ambit of that section and its validity is not really open to challenge as a piece of subordinate legislation
It has however been strenuously argued on behalf of the Company that the order should be struck down on the ground of malice in law on the part of the State Government
That no doubt is another aspect of the doctrine of ultra vires for an offending Act can be condemned simply for the reason that it is unauthorised
Bad faith has often been treated as interchangeable with unreasonableness and taking a decision on extraneous considerations
In that sense it is not really a distinct ground of invalidity
It is well settled that if a discretionary power has been exercised for an unauthorised purpose that is enough to invite the Court s review for as has been said quite widely but properly by Rand J in Roncarelli vs Duplessis1 malice is acting for a reason and purpose knowingly foreign to the administration
 But the question is whether this has been Proved to be so in the present case
Mr Ray has argued on behalf of the Company that the order is malafide and has been made in the colourable exercise of the power under section 22B of the Act simply to compel the Company to agree to the payment of a higher rate for the supply of energy to it
He has tried to establish his argument on the basis of the statement of the Chief Secretary of the State Government dated July 8 1977 and some statements of the Minister concerned
We shall examine them separately
What the Chief Secretary said in his press statement dated July 8 1977 was that the State Government had reduced the supply of power to the Company from 85 m w to 10 m w and that it had been decided to almost double the rate for the supply of the power which was being given to the Company
It will be remembered that by virtue of the amendment which was made to the UP Electricity Regulation of distribution and consumption order on June 2 1977 the Company was required to reduce its consumption of the Board s energy to zero but it was nonetheless allowed to draw 30 m w for some time
That led to further directions for the reduction of consumption and ultimately an order was made on June 29 1977 for disconnecting the supply
A representative of the Company met the Minister concerned and explained the Com 734 pany s difficulties
He asked for permission to draw at least 10 m w to keep the pots warm
The Minister agreed to that request but only against the standby agreement for the demand of 60 m w A letter to that effect was sent to the Company on June 30 1977
As under the standby agreement energy was to be supplied at the rate of 24 paise per unit instead of 11 paise the Chief Secretary merely stated the factual position on July 8 1977
At any rate there is nothing to show that the plea of scarcity of energy was merely a ruse to charge a higher rate from the Company
Mr Ray has invited our attention to the statements of the Minister concerned dated July 18 1977 July 28 1977 September 14 1977 August 29 1978 and his reply to the Company dated October 18 1978 to show that the State Government was not satisfied with the contractual rate for the supply of energy as it was below the cost of generation and wanted to review and rescind the agreement altogether
We have gone through the record of the proceedings of the Legislative Assembly and we find that what the Minister said there was essentially correct that 10 m w energy was being supplied to the Company under the standby agreement
It was in that content that the Minister informed the Assembly that the charges for the said standby supply came to 26 28 paise per unit
The learned Solicitor General has taken us through the relevant record to show that the Minister did not really want to harm the Company unnecessarily and if he stated further that he was never approached personally by the Company or in a proper manner or that the relief to the Company would be considered depending on how it contacted him for that purpose the Minister simply wanted to state the facts and to convey his resentment against the attempt to influence him politically or through any Minister of the Central Government
The State has in fact filed a chart with its supplementary counter affidavit about the supply of energy to the Company from February 1973 to April 7 1977
It shows that during the period February 1973 to August 7 1975 the Company received energy from 2750 m w to 125 m w
It was only after the declaration of emergency on June 26 1975 that the Company received some 55 m w of energy and then a fresh agreement was made soon after on November 30 1976 to supply 85 m w of energy
But even before that date for a sufficiently long period the Company got far more energy than what it was entitled to
We are therefore not satisfied that the Company has been able to establish malice in law merely because of what the Chief Secretary or the Minister stated here and there
It may well be that the new State Government was dissatisfied with the new agreement which had been 735 entered into at the instance of the political party which was then in power but it cannot be said that the new Minister s desire to examine the validity or propriety of that agreement arose out of any extraneous or improper consideration so as to amount to malice in law
Our attention has also been invited in this connection to certain statements on behalf of the State Government and the Board that energy was available in abundance and it has been urged that even so the Company was denied its supply in spite of the agreements and the assurances of the State Government to the contrary
That is a point relating to the contractual rights of the Company and we shall come to it in a while
Then it has been argued that even though the State Government professed in its affidavit that the cut in the consumption of energy by the Company could not be restored because of the desire to provide more energy for agricultural purposes that was not really so and that any such attempt was in the nature of an extraneous consideration which vitiated the implementation of the Order
Reference in this connection has been made to the Company s averments in the supplementary affidavit that the load on account of agriculture and irrigation had declined and there was in fact no diversion of energy to agriculture
In order to examine the point we directed the State to prepare a statement for the entire period from January 1977 to December 1978
The Order was made on September 19 1977 and the statement shows that consumption of energy for agricultural and irrigation purposes increased appreciably thereafter and there is no justification for the argument to the contrary
Another extraneous factor which is said to have been taken into consideration by the State Government in making the Order is said to be its view that the major portion of the aluminium produced by the Company was being consumed outside the State
A similar objection was raised before the High Court on the basis of an averment in the counter affidavit of the State
The High Court has however recorded the finding that it would be unsafe to uphold that contention and we see no reason to take a different view
The other factors to which reference has been made as extraneous factors which vitiated the Order are said to be consideration of the facts that the Company had failed to expand its generating capacity the financial loss suffered by the UPSEB and the non payment of the coal surcharge by the Company
But there is nothing on the record to show that these factors were taken into consideration at the time of making the Order
It may be that those or somewhat similar facts were mentioned 736 at one time or the other in answer to the complaint of the Company or in justification of what the State Government had done by way of defence but that cannot justify the argument that they formed the basis for the making of the Order
It has also been argued that while making the Order the State Government failed to take into consideration the facts that the production of aluminium was of considerable importance to the national economy and that the Board was capable of generating more energy but was not doing so
Reference has also been made to the new aluminium policy which the Central Government announced on July 15 1975 and to the benefits which the UPSEB was deriving from the aluminium products manufactured by the Company
But the argument is untenable because there is nothing to show that these factors were not taken into consideration while making the Order and an inference that they were ignored cannot be drawn against the State merely because the Company was not permitted to consume all the energy it wanted and there was a fall in the production of aluminium because of the restriction imposed by the Order
It may be that the UPSEB was capable of generating more energy or that it was not running efficiently and had not succeeded in reaching its target of ideal generation
But here again it will be enough to say that although the High Court arrived at the conclusion that the Company deserved the writ which it granted it did not find it possible to hold that the UPSEB had deliberately under utilised its generation capacity
That is a finding of fact which does not call for interference by us
There is thus no justification for the argument that there was malice in law on the part of the State Government in making the Order
It may be that the State gave an impression after the Order had been made that it had some spectacular effect on the fortune of the Company or that it had brought about such efficiency as to ensure supply of energy to new entrepreneurs
It may also be that in doing so the State over stated its resources of energy in order to open up a State which had not been able to develop its industrial resources satisfactorily but what has to be examined in such cases is the true and the dominant purpose behind the Order
And as long as the dominant motive is proper and reasonable and is not sullied by a mere pretext the Order based on it will be valid when it is well within the true scope and policy of the Act and is an honest attempt to deal with the situation for which the power to make the Order had been granted by the Act
It has however been further argued by Mr Ray that the Order is invalid as it does not subserve the purpose of section 22B of the Act inasmuch as it does not secure the equitable distribution of energy
737 Reference has been made to Jowitt s Dictionary of English Law where equitable has been stated to mean that which is fair and to Corpus Juris Secundum to show that equitable is that which is done fairly justly and impartially
Our attention has been invited to the facts and circumstances which led to the establishment of the Company in the State of Uttar Pradesh and the agreement with and the assurances which were given to the Company
Our attention has also been invited to the new connections which were given by the UPSEB to the other consumers while denying the contractual supply of energy to the Company
It cannot be doubted that only that distribution can be said to be equitable which is just and right under all the circumstances of the particular case The Century Dictionary
It will be remembered that the High Court has recorded a finding that there was shortage in the generation of energy when the Order was made
A great deal of statistical data has been laid before us and Mr Gupta has tried to make full use of it on behalf of the Company
But the fact remains that the demand for energy was far in excess of the supply from all the sources available to the UPSEB
It has also been well established that a situation had arisen when it became necessary to obtain an order from the State Government about the course of action to be adopted by the Board
Self contained notes were therefore drawn up in March 1977 and on May 24 1977 June 28 1977 and August 26 1977
We have gone through the notes and they are quite detailed and objective
We have made a mention of the developments which took place because of those notes including the making of the Order
We have no doubt that it was made because a situation had arisen when regulation of the supply distribution consumption and use of energy had become necessary and the Order was a genuine attempt to secure equitable distribution of energy
It is true that the Company was the worst sufferer under clause 6ai of the Order but then it was also the greatest consumer
The basis for the making of the Order was the necessity or expediency for maintaining the supply and securing the equitable distribution of energy by means of an order providing for the regulation of the supply distribution consumption and use of energy
It has been argued by Mr Ray that as power was supplied indiscriminately to new consumers after imposing a cut on the Company s consumption of energy the issue of the Order was really a colourable exercise of the State Government s power under section 22B of the Act
Our attention in this connection has been invited to the averments in the affidavits which have been filed on behalf of the Company and to a 738 list of new connections filed as Annexure to the supplementary rejoinder affidavit of Suresh Chandra Special Officer of the Company
Reference has also been made to a list of new connections filed in the High Court on March 6 1978
Learned Solicitor General has however pointed out that even if all the new connections were to become effective within a period of two years their incidence would be no more than 4 per cent of the total connected load as the real impact on the system would merely be an additional load of only 18 mw
It has also been pointed out that while there was an increase of 9 per cent in the installed capacity of the UPSEB for the generation of energy the increase in the connected load was not more than 2 per cent
We have been informed that the percentage increase in the connected load had declined from 10 in 1974 75 to 2 in 1977 78 which showed that great care was being taken in incurring extra liability
The State has also filed a list of those applicants to whom new connections were sanctioned but were not actually released making a total of some 23 mw
It has been urged on behalf of the Company that the Board had deliberately reduced its thermal generation
It has been pointed out that while there was a substantial increase in hydro electrical generation the performance in the thermal field was highly unsatisfactory
The State has supplied the necessary information which shows that the fall in thermal generation was due to the initial troubles of new plants the poor performance of the plants and the breakdown at Harduaganj
We have been informed that the performance of the UPSEB was better than the Boards in the other States
We have also been told that the proposition that there was deliberate under capacity operation of thermal machines is technically unsound because of the operating constraints in running the large thermal machines at loads lower than the rated capacity
We have made a reference to the finding of the High Court against the Company in this respect
Another aspect of the controversy before us relates to the contractual liability of the State to supply the energy which it had assured to the Company
It has been pointed out that under the agreement dated October 29 1959 the State was bound to supply 55 m w of energy upto 1987 and then an agreement was entered into on November 30 1976 to supply additional 30 m w making a total of 85 m w for a period of 5 years
It has therefore been argued that instead of fulfilling its obligation under the agreements and the other assurances which were given by the State from time to time the State took resort to the provisions of section 22B to get out of its obligation and the making of the impugned Order was really a colourable exercise of that statutory power
739 We find from the counter affidavit of the State October 1977 that as would appear from the Chief Secretary s letter dated November 20 1968 what the State Government had assured the Company was to meet the interim requirement of the Company for 2 or 3 years from the UPSEB and to facilitate the parallel running of the Company s new power station in addition to the station which had been set up at Renusagar
It is also not without significance that the State was not a party to the agreement dated November 30 1976 for the supply of additional 30 mw because that agreement was made between the Company and the UPSEB
It was in fact expressly stated in that agreement that it would be subject to the provisions of the Electricity Acts of 1910 and 1948 and the rules and regulations including the amendments thereto
Care was also taken to provide that the UPSEB shall not be responsible for damages or diminutions in the supply of energy according to the orders issued by the State Government A similar provision was made in the earlier agreement of 1959
Reference was in fact specifically made in the Board s letter to the Company dated September 2 1972 to the State Government s power to control the distribution and consumption of energy under section 22B of the 
We have made a reference to the manner and the stages in which the State Government took decisions for the restrictions to be imposed on the consumption of energy with due regard to the detailed factual notes which were submitted for its orders on account of the acute shortage of energy in the State
Decisions in the matter were taken by the different State Governments including the Governors  Advisors and it cannot be said that the cuts were imposed suddenly or without due regard to the Company s difficulties in reducing its consumption of energy in the manner directed by the Order
We are therefore unable to take the view that the State wantonly disregarded its contractual obligations to the Company
But even if the Company had some cause of grievance on that account that may well be said to be unavoidable in the situation which had arisen when the Order was made on September 19 1977
It has to be appreciated that subsection 2 of section 22B of the Act specifically provided that it was permissible for the State Government to direct by the Order that the UPSEB shall not comply with the provision inter alia of any contract made by it
A direction to that effect was expressly made in clause 11 of the Order and it is not permissible for the Company to complain on that account
It is not disputed that the consumers which were hit by the provisions of clause 6a i of the Order were the Company the Kanoria 740 Chemicals and Industries Ltd the Indian Railways the Indian Explosives Ltd and the Fertiliser Corporation of India
The last three of these have been exempted from the rigour of the Order
As regards the Kanoria Chemicals and Industries Ltd the State has stated in its reply that it was manufacturing Benzena Chloride and BHC which are used for agricultural purposes and for purifying drinking water
They were entitled to 50 per cent of their consumption and the State allowed them exemption to the extent of 3 m w making it permissible for them to consume 125 mw
It cannot therefore be said that the continued supply of energy to Kanoria Chemicals was proof of any hostility on the part of the State in so far as the Company was concerned
It may also be that as has been argued on behalf of the Company some other restrictions which were initially imposed on some other consumers under the Order were withdrawn so that it is the Company which is the main sufferer under the Order
Even so it is not reasonable to take the view that the Order was not justified when it was made and it cannot be held to be invalid merely because the Company is the main sufferer under it
It is not its case that the Order was discriminatory and should be struck down under article 14 of the Constitution
As has been stated the High Court has in fact found that the Company was unable to establish as a fact that there was no shortage in the generation of electricity when the impugned Order was made under section 22B of the Act of 1910
 The Order was therefore justified and was a valid Order when it was made on September 19 1977
The question is whether there is force in the argument that it has ceased to be in force and stood impliedly repealed because of the change in the circumstances which brought it into existence
The High Court has recorded a finding in this connection in favour of the Company
Craies on Statute Law seventh edition has mentioned six different classes of enactments at pages 357 8 which are considered as having ceased to be in force 1
Expired that is enactments which having been originally limited to endure only for a specified period by a distinct provision have not been either perpetuated or kept in force by continuance or which have merely had for their object the continuance of previous temporary enactments for periods now gone by effluxion of time 2
Spent that is enactments spent or exhausted in operation by the accomplishment of the purposes for which they were passed either at the moment of their first 741 taking effect or on the happening of some event or on the doing of some act authorised or required 3
Repealed in general terms that is repealed by the operation of an enactment expressed only in general terms as distinguished from an enactment specifying the Acts on which it is to operate 4
Virtually repealed where an earlier enactment is inconsistent with or is rendered nugatory by a later one 5
Superseded where a later enactment effects the same purposes as an earlier one by repetition of its terms or otherwise 6
Obsolete where the state of things contemplated by the enactment has ceased to exist or the enactment is of such a nature as to be no longer capable of being put in force regard being had to the alteration of political or social circumstances
 These six have been mentioned as the enactments which are selected for inclusion in the Statute Law Revision Acts of England as having ceased to be in force otherwise than by express repeal or having by lapse of time or otherwise become unnecessary
It is quite an exhaustive list and the question is whether the Order could be said to have spent itself or become obsolete for the other four categories are inapplicable to the present case
But whether a piece of legislation has spent itself or exhausted in operation by the accomplishment of the purpose for which it was passed or whether the state of things contemplated by the enactment has ceased to exist are essentially questions of fact for the Legislature to examine and no vested right exists in a citizen to ask for a declaration that the law has been impliedly repealed on any such ground
It has to be appreciated that the power to legislate is both positive in the sense of making a law and negative in the sense of repealing a law or making it inoperative
In either case it is a power of the Legislature and should lie where it belongs
Any other view will be hazardous and may well be said to be an encroachment on the legislative field
In an extreme and a clear case no doubt an antiquated law may be said to have become obsolete the more so if it is a penal law and has become incapable of user by a drastic change in the circumstances
But the judge of the change should be the Legislature and courts are not expected to undertake that duty unless that becomes unavoidable and the circumstances are so apparent 742 as to lead to one and only one conclusion
This is equally so in regard to the delegated or subordinate legislation
We have gone through the cases reported in Elwood Hamilton vs Kentucky Distilleries  Warehouse Co1 Chastleton Corporation vs A Leftwich Sinclair2 and Nashville Chattanooga  St Louis Railway vs Herbert section Walters3 on which reliance has been placed by Mr Ray but they are of no real help to the Company
Thus in Elwood Hamilton1 it has been held that it requires a clear case to justify a court in declaring that a Federal Statute adopted to increase war efficiency has ceased to be valid on the theory that the war emergency has passed and the power of Congress no longer exists
In Chastleton Corporation2 it has been held that courts would pronounce on the continued operation of law upon facts which they judicially know
 We have also gone through Nashville3 case where the view has been taken that a statute valid when enacted may become invalid by change in the conditions to which it is applied
We have gone through The petition of the Earl of Antrim and Eleven other Irish Peers4 also where a declaration was asked for by some Irish Peers that the peerage of Ireland had in accordance with the provisions of the Union with Ireland Act 1800 the right to be represented by 28 Lords temporal of Ireland for life
Their petition was rejected because the provisions of the Act of 1800 had ceased to be effective on the passing of the Irish Free State Agreement Act 1922
That was therefore quite a different case
Mr Ray has placed reliance on Pannalal Lahoti vs State of Hyderabad5 but what has been held there is that a temporary legislation cannot be allowed to outlast the war emergency which brought it forth
In The Union of India vs Ram Kanwar and others6 it was held that as the building in question was being used for a purpose other than that for which it was originally requisitioned under the law it was liable to be de requisitioned
The question is whether any such situation has been found to be established in the present case  Now what the High Court has found in this respect is as follows This Court finds that circumstances have materially changed since the impugned order was made
The shortage in reservoir from which water is drawn for the generation of 743 Hydro electricity has ceased and further supplies of electrical energy are available from newly commissioned units
The respondents admit that fresh power connections have been given
In these circumstances the continuance of the impugned order is no longer justified and consequently the order must be held to have outlived the purpose for which it was made and as such it must be held to be no longer valid  It has thus found three facts i the shortage in the reservoirs for generation of hydel energy had ceased ii further supply of energy was available from newly commissioned units and iii fresh power connections had been given by the UPSEB
But what was lost sight of was the important fact that it was all along the case of the State that hydel energy was only one third of the total generation and that generation of thermal energy which met two third of the total requirement had declined for reasons beyond the control of UPSEB
The High Court did not therefore undertake a careful examination of the facts and took some new connections into consideration without attempting to examine their magnitude and effect on the over all generation and availability of energy from all the sources
The State has filed a detailed affidavit dated October 12 1978 where it has been stated that the UPSEB was at best capable of generating electrical energy to the tune of 10185 m u whereas the total requirement of the State for 1978 79 was 13866 m u so that there was a gap of 393 m u
The High Court therefore erred in taking the view that the continuance of the order was no longer justified
Even so the High Court abstained from striking down the whole of the Order and merely declared that the provisions of the first proviso to clause 6a i was ultra vires and quashed it
We have given our reasons for taking the view that the whole of clause 6a i of the order including the proviso is valid and the question remains whether we should restore the quashed proviso
The answer to the question is simple
The learned Solicitor General has made a statement at the Bar that at present or in the near future there is no difficulty in supplying 425 m w energy to the Company and that the Company is getting that much energy already
He has been frank enough to say that this will be so even if the proviso is restored by this Court
He has stated that the State Government has been reviewing the position from time to time and has given the 744 assurance that it will continue to do so in future
He has also stated that although the application of the Company for grant of exemption under clause 10 of the Order had been rejected on December 9 1977 there is nothing to prevent the Company from making a fresh application if it thinks that there is a real and substantial improvement in the generation of energy in the State
The fact therefore remains that as things stand at present the proviso which admittedly applies only to the Company is of no practical use for the time being
So even though it is valid and has wrongly been quashed by the High Court we do not think it necessary to restore it so that it shall not be deemed to form part of clause 6a i of the Order
But if there is deterioration in the generation of energy again or there are other sufficient reasons within the purview of section 22B of the Act to reinsert the proviso in the present or modified form it will be permissible for the State Government to do so according to the law
In the result while CA No 921 of 1978 is allowed to the extent mentioned above CA No 425 of 1979 fails and is dismissed
In the circumstances of the case the parties shall pay and bear their own costs in both the appeals
NVK CA 92178 allowed
CA 42579 dismissed


Summary:
At the time of granting licence to the company for the establishment of a new Aluminium factory the Government of India obtained the consent of the Government of UP
To make available to the company in bulk cheap electricity from the Rihand Hydro Electric Scheme
An agreement was entered into between the Company and the State Government for the bulk supply of electricity on a firm continuous and uninterrupted basis at 199 odd paise per unit for a period of 25 years
The company set up and commissioned its aluminium plant at Renukoot in April 1962
It was granted a further licence for the expansion of its installed capacity
As the State was unable to meet the extra requirement of energy sanction under section 28 of the Electricity Act 1910 was granted to the Company at its request on November 12 1964 to set up a generating station at Renusagar near Renukoot
It set up two generating units of 675 mw each
The first unit started generating power in 1967 and the other in 1968
In the meantime permission was granted to increase the Company s installed capacity from 40000 metric tonnes to 60000 metric tonnes
The Company thought of setting up a plant for the production of 60000 metric tonnes of aluminium in the State of Gujarat
But the Government of UP entered into negotiations with the Company and in its letter dated November 20 1968 it stated that there could be no difficulty in meeting the interim requirements of energy for 2 to 3 years from the UP State Electricity Board and also for arranging for parallel running of their new power stations
The Company was granted sanction to expand the Renu Sagar Generation by 250 mw and after negotiations with the State Government it was agreed that the UPSEB would meet the additional energy under a phased programme
The UPSEB stated in its letter dated September 2 1972 that the supply would be without prejudice to the power of the State Government to control the 710 distribution and consumption of energy under section 22B of the Act
The additional energy was not made available to the Company during 1972 75 although the rate was substantially increased with retrospective effect
An agreement was however entered into between the Company and the UPSEB on November 30 1976 in supersession of the earlier agreements and it was stipulated that it would be read and construed in all respects in conformity with the provisions of the and its rules and the regulations and the amendments thereto
The State Government took a decision in December 1976 to reconnect some agricultural pumping sets which had been disconnected and this placed an additional load on the grid system of the State
On the note of the UPSEB that there was acute shortage of energy and its suggestion for the imposition of some restrictions the UP Electricity Regulation of Distribution and Consumption order 1977 was issued by the Government on April 7 1977
Under cl
6ai of the Order the Company could draw energy only to the extent of 50 per cent of its monthly consumption
As the shortage of energy became more acute the Secretary of the Power Department sent a note to the Governor dated May 3 1977 stating that there was a large gap between demand and availability of energy and that overriding public interest particularly the need to maintain food supply required that units which were heavy consumers of energy should be subjected to further cut in the consumption of energy
It was particularly pointed out that as the Company was itself generating energy at Renusagar it will have more than 50 per cent of energy even if the Board s supply was completely withdrawn
The Governor approved that proposal on June 1 1977
A proviso was inserted in cl 6a i of the UP Electricity Regulation of Distribution and Consumption Order 1977 in June 2 1977 according to which an industrial consumer having its own source of generation of energy from which it obtained 50 per cent or more of its consumption would suffer a cut of 100 per cent in the energy supplied by the UPSEB
The company was given time to bring about the total cut
Fresh elections were held to the State Legislature Assembly and the new Cabinet was sworn in on June 23 1977
It decided to reduce the supply of energy to the company to zero in pursuance of the amendment dated June 2 1977 and called for a fresh note on the position regarding the generation and distribution of energy
The Chairman of the UPSEB prepared a note on August 26 1977 in which he pointed out the shortage of energy including substantial fall in the generation of thermal energy and in the import of energy
The State Government made an order on September 19 1977 called the UP Electricity Regulation of Supply Distribution Consumption and Use Order 1977
That order was made for maintaining the supply and securing equitable distribution of electrical energy and to provide for regulating the supply distribution consumption and use thereof
Clause 6 of the order which provided for compulsory cut in consumption of energy and demand affected the company
711 The clause provided as follows 6ai In respect of electrical energy consumed by all large and heavy power industrial consumers receiving power at 33 kv
and above excepting fertilizers from the UPSEB a cut of 50 per cent in their monthly consumption of electricity both in respect of energy and demand shall be exercised Provided that where any such industrial consumer has his own source of generation of energy which alone enables him to obtain 50 per cent or more of his total consumption then a cut of 100 per cent in the energy supplied by the UPSEB shall be exercised
 Being aggrieved by the compulsory cut imposed by the Government the company filed its third writ petition against the order
The company s earlier writ petitions were dismissed as withdrawn
The High Court took the view a that it was the statutory obligation of the UPSEB to supply electrical energy to a consumer and held that the Pipri Bus Bar was a distributing Main under s2o and was an electricity supply line as defined in s2f of the Act b section 22B of the Act did not confer power on the State Governments to cut off supply of energy to existing consumers or to issue an order that certain preferences will be followed in supplying energy c though the company deserved the writ it could not be said that UPSEB had deliberately under utilised its generation capacity and held the first proviso to Clause 6ai of the order ultra vires quashed it and directed the UPSEB to supply electrical energy to the company in accordance with law without taking into consideration the provisions of the said proviso
Appeals were filed in this Court by the State and the Company the State being aggrieved because the High Court had interfered with the UP Electricity Regulation of Supply Distribution Consumption and Use Order 1977 dated September 19 1977 made under section 22B of the Electricity Supply Act 1910 and the Company felt aggrieved on the ground that the High Court had not granted all the reliefs which it had claimed in its petition under article 226 of the Constitution
In the appeals it was contended a Only the energy which was generated by the Board could be the subject matter of an order under section 22B of the Act and it was not permissible for the State to take into account the energy generated by the Company for its own use
b Sub section
1 of section 22B of the Act was confined to a licensee and would not be applicable to the energy supplied by a sanction holder under section 28
c The only permissible preference was that under s22A in favour of an establishment mentioned in it and the preference shown to individual consumers was illegal
d The validity of the Order which was by way of subordinate legislation was open to judicial scrutiny the subjective satisfaction of the State Government in making it was open to challenge in a court of law the order suffered from the vice of malice in law it had been made in the colourable exercise of 712 the power under section 22B of the Act simply to compel the company to agree to the payment of a higher rate for the supply of energy to it
While making the order the State Government failed to take into consideration the facts that the production of aluminium was of considerable importance to the national economy and that the Board was capable of generating more energy but was not doing so
The issue of the Order was really a colourable exercise of the State Government s power under section 22B of the Act as power was supplied indiscriminately to new consumers after imposing a cut on the Company s consumption of energy
e The Board had deliberately reduced its thermal generation
 HELD 1
The High Court erred in taking the view that the Pipri Bus Bar which was composed of a set of conductors which were made up of thick aluminium core steel reinforced cables was a distributing main  under section 2e of the Act and was an electric supply line as defined in section 2f and that cl
VI of the Schedule to the Act would be fully applicable to the Board in so far as its obligation to the Company was concerned
In view of the second proviso of section 26 of the Act of 1948 the provisions of cl
VI of the Schedule to the Act could apply to the UPSEB in respect of that area only where distribution mains had been laid by the Board and the supply of energy through any of them had commenced
724B F The High Court therefore erred in taking the view that the Board was bound by the term of cl
VI of the Schedule to the Act to supply energy to the Company within one month of the making of a requisition or within such longer period as the Electrical Inspector might allow
But even if the Board was under an obligation to supply energy to every person the fact nevertheless remained that the State Government had the over riding power to provide by order made under section 22B of the Act for regulating the supply distribution consumption or use thereof
Sub section
2 of that section categorically states that without prejudice to the generality of the power under sub section
1 the order may direct the Board not to comply with any contract agreement or requisition for the supply of energy
725B D 2
Sub section
1 of section 28 of the Act in terms refers to and deals with engaging by a non licensee in the business of supplying energy to the public
It was therefore futile to contend that what was generated by the Renusagar Power Company was not meant for supply to the public but was the Company s own energy
It is true that generation became in the circumstances the captive generation for the use of the Company but that was far from saying that in the eye of law it was not energy meant for supply to the public or that it was not amenable to control under section 22B
It was therefore also liable to equitable distribution by an order under section 22B of the Act
725G 726A 3
The expression energy had been defined by cl
g of section 2 of the Act to mean electrical energy generated transmitted or supplied for any purpose or used for any purpose except the transmission of a message
It was therefore a pervading definition and there was no reason why energy generated and supplied under section 28 of the Act should not fall within its sweep
726B C 4
Though the use of the article the in sub section
2 was not quite appropriate there was no justification for the argument that section 22B was applicable only to licensees and not to a sanction holder under section 28
727C 713 5
What section 22B of the Act authorised the State Government to do was to make an order providing for regulating the supply distribution consumption or use of energy
727D 6
A distinction between regulation  and restriction  or prohibition  had always been drawn Regulation  promotes the freedom or the facility which is required to be regulated in the interest of all concerned whereas prohibition  obstructs or shuts off or denies it to those to whom it is applied
The High Court went wrong in thinking that the order had the effect of prohibiting the supply of energy to the Company which was an exciting consumer 
727G 728C Municipal Corporation of the City of Toronto vs Virgo  Attorney General for Ontario vs Attorney General for the Dominion and the Distillers and Brewers  Association of Ontario  Birmingham and Midland Motor Omnibus Co Ltd vs Worcestershire County Council Tarr vs Tarr  The Automobile Transport Rajasthan Ltd vs The State of Rajasthan  Ors 1963 1 SCR 491 State of Mysore vs H Sanjeeviah   Fatehchand Himmatlal  Ors
vs State of Maharashtra etc
 at p 851 7
What had been ordered was no more than a cut of 50 per cent in the monthly consumption of electricity and not a total prohibition of consumption of energy
That was a step in the direction of regulating the consumption of energy and not a total prohibition as envisaged in the proviso to cl 6a i of the Order
728E 8
The proviso operates in a special or particular field and for a particular purpose where it was considered necessary for regulating the supply etc of the energy in the interest of the other consumers for section 22B was mean to maintain the supply and secure the equitable distribution of energy to all concerned
The High Court did not properly appreciate that aspect of the matter
728F 9
Large and heavy industrial consumers of the category in cl
6ai are a class by themselves and it is hardly permissible for them to complain that the small preference shown to agriculturists in supplying energy for their water pumps or tube wells or in energising State tube wells supplying water to them or the supply of energy to small scale industries had really created a privileged class of consumers or brought into existence any such concept of priorities as to run counter to or defeat the objective of bringing about the equitable distribution of energy by an order under section 22B The High Court had no real justification for recording an adverse finding against the State on the question of the so called preference or priorities
729G H 730B 10
There was no doubt that the State Government formed its opinion about the necessity and expediency of making the Order for the purpose of maintaining the supply and securing the equitable distribution of energy at a time when that was called for and this Court cannot sit as a Court of appeal to examine any and every argument in an attempt to show that the opinion of the State Government was vitiated for one fanciful reason or the other
731 G H 11
Although the UP Electricity Regulation of Supply Distribution Consumption and Use Order 1977 had been made on the ground that the State Government was of the opinion that it was necessary and expedient for main 714 taining the supply and securing the equitable distribution of electrical energy to provide for regulating the supply distribution consumption and use thereof it did not deal with all those matters in detail
In fact it may well be said to be an order relating essentially to compulsory cut in the consumption of energy
But that cannot detract from the basic fact that the order had the sanction of section 22B of the Act and subserved the main purpose thereof
Therefore its validity was not open to challenge as a piece of subordinate legislation
732G 733B 12
Malice in law is another aspect of the doctrine of ultra vires
An offending Act can be condemned simply for the reason that it is unauthorised
Bad faith has often been treated as interchangeable with unreasonableness and taking a decision on extraneous considerations
In that sense it is not really a distinct ground of invalidity
It is well settled that if a discretionary power has been exercised for an unauthorised purpose  that is enough to invite the Court s review
733 D Roncarelli vs Duplessis p 141 Canada Law Reports referred to
In the instant case the Company had not been able to establish malice in law merely because of what the Chief Secretary said in his press statement dated July 8 1977 or what the Minister informed the Assemble
It may well be that the new State Government was dissatisfied with the new agreement which had been entered into at the instance of the political party which was then in power but it could not be said that the new Minister s desire to examining the validity or propriety of that agreement arose out of any extraneous or improper consideration so as to amount to malice in law
734H 735A 13
Although the High Court arrived at the conclusion that the company deserved the writ which it granted it did not find it possible to hold that the UPSEB had deliberately under utilised its generation capacity
That was a finding of fact which did not call for interference
736E 14
As long as the dominant motive was proper and reasonable and was not sullied by a mere pretext the Order based on it would be valid when it was well within the due scope and policy of the Act and was an honest attempt to deal with the situation for which the power to make the order had been granted by the Act
There was thus no justification for the argument that there was malice in law on the part of the State Government in making the order
736G F 15
That distribution can be said to be equitable which is just and right under all the circumstances of the particular case
The High Court had recorded a finding that there was shortage in the generation of energy when the order was made
The fact remains that the demand for energy was far in excess of the supply from all sources available to the UPSEB
It had also been well established that a situation had arisen when it became necessary to obtain an order from the State Government about the course of action to be adopted by the Board
Self contained notes were therefore drawn up in March 1977 and on May 24 1977
June 28 1977 and August 26 1977 which were quite detailed and objective and led to the making of the Order
The Order was a genuine attempt to secure equitable distribution of energy
It was true that the Company was the worst sufferer under cl 6 ai of the Order but then it was also the greatest consumer
737C F 715 16
From the Chief Secretary s letter dated November 20 1968 it appeared that the State Government had assured the Company that it would meet the interim requirement of the Company for 2 or 3 years from the UPSEB and facilitate the parallel running of the Company s new power station in addition to the station which had been set up at Renusagar
But the State was not a party to the agreement dated November 30 1976 for the supply of additional 30mw
because the agreement was made between the Company and the UPSEB
It was expressly stated in that agreement that it would be subject to the provisions of the Electricity Acts of 1910 and 1948 and the rules and regulations thereunder including the amendments thereto
Care was also taken to provide that the UPSEB shall not be responsible for damages or diminutions in the supply of energy according to the orders issued by the State Government
A similar provision was made in the earlier agreement of 1959
In the Board s letter to the Company dated September 2 1972 reference was specifically made to the State Government s power to control the distribution and consumption of energy under section 22B of the  739A D 17
Decisions in the matter of restrictions to be imposed on the consumption of energy on account of acute shortage of energy in the State were taken by the different State Governments including the Governor s Advisors and it cannot be said that the cuts were imposed suddenly or without due regard to the company s difficulties in reducing its consumption of energy in the manner directed by the order
It cannot therefore be said that the State wantonly disregarded its contractual obligation to the company
739E F 18
Sub section 2 of section 22B of the Act specifically provided that it was permissible for the State Government to direct by the order that the UPSEB shall not comply with the provisions inter alia of any contract made by it
A direction to that effect was expressly made in cl 11 of the Order and so it is not permissible for the company to complain on that account
739G 19
Craics on Statute Law 7th Edn pages 357 58 has mentioned six different classes of enactments which are considered as having ceased to be in force
These six have been mentioned as the enactments which are selected for inclusion in the Statute Law Revision Acts of England as having ceased to be in force otherwise than by express repeal or having by lapse of time or otherwise become unnecessary
740G 741D The question is whether the order could be said to have spent itself or become obsolete
Whether a piece of legislation has spent itself or exhausted in operation by the accomplishment of the purpose for which it was passed or whether the state of things contemplated by the enactment has ceased to exist are essentially questions of fact for the legislature to examine and no vested right exists in a citizen to ask for a declaration that the law has been impliedly repealed on any such ground
741E F 20
The power to legislate is both positive in the sense of making a law and negative in the sense of repealing a law or making it imperative
In either case it is the power of the legislature and should lie where it belongs
In an extreme and a clear case no doubt an antiquated law may be said to have become obsolete the more so if it is a penal law and has become incapable of user by a drastic change in the circumstances
But the judge of the change should be the legislature and courts are not expected to undertake 716 that duty unless that becomes unavoidable and the circumstances are so apparent as to lead to one and only one conclusion
This is equally so in regard to the delegated or subordinate legislation
741G 742A Elwood Hamilton vs Kentucky Distilleries  Warehouse Co   Chastleton Corporation vs A Leftwich Sinclair   Nashville Chattanooga  St Louis Railway vs Herbert section Walters   The Union of India vs Ram Kanwar  Ors   referred to
The Petition of the Earl of Antrim  11 Other Irish Peers  distinguished
The High Court found three facts i the shortage in the reservoirs for generation of hydel energy had ceased ii further supply of energy was available from newly commissioned units and iii fresh power connection had been given by the UPSEB but lost sight of the important fact that it was all along the case of the State that hydel energy was only one third of the total generation and that generation of thermal energy which met two third of the total requirement had declined for reasons beyond the control of UPSEB
The High court did not therefore undertake a careful examination of the facts and took some new connections into consideration without attempting to examine their magnitude and effect on the overall generation and availability of energy from all the sources
The High Court therefore erred in taking the view that the continuance of the Order was no longer justified
Even so the High Court abstained from striking down the whole of the Order and merely declared that the provision of the first proviso to cl 6a i was ultra vires and quashed it
743C F 22
Even though the proviso is valid and has wrongly been quashed by the High Court it is not necessary to restore it in view of the statement of the Solicitor General so that it shall not be deemed to form part of cl 6ai of the Order
But it there is deterioration in the generation of energy again or there are other sufficient reasons within the purview of section 22B of the Act to reinsert the proviso in the present or modified form it would be permissible for the State Government to do so accordingly to the law
743G H 744C