Civil Appeal Nos 814 and 815 of 1974 From the Judgment and Order dated 13
8 1970 of the High Court of Allahabad in Special Appeal No 34 of 1969 D section N Kackar Gopal Subramaniam and Mrs Shobha Dikshit for the Appellant in CA
No 814 and respondent in CA No 815
U R Lalit and B section Chauhan for the Respondent in CA
No 814 and Appellant in CA
No 815
E The Judgment of the Court was delivered by VENKATARAMIAH J
These two appeals by special leave are filed against the judgment dated August 13 1970 of the High Court of Allahabad in Special Appeal No 34 of 1964 City Board Mussoorie v State Electricity Board  Ors1 by the Uttar Pradesh Electricity Board hereinafter referred to as the Electricity Board  Constituted under the hereinafter referred to as the Act  and the City Board Mussoorie a local authority hereinafter referred to as the City Board  respectively
The City Board as a licensee under the used to get bulk supply of electric energy from the Electricity Board from the Ganga Sarda Grid and in its turn was distributing it to the consumers within its jurisdiction
In the year 1962 under a 1 AlR 1971 Allahabad 219 818 notification dated April 24 1962 issued under section 46 of the Act the tariff payable by the City Board and other licensees in the Ganga Sarda Grid was fixed by the Electricity Board
The relevant portion of the Tariff was as follows 1
Applicability This rate schedule is applicable to all licensees situated in Ganga Sarda Grid area and taking supply in bulk from the Board
Character of service A C 3 Phase 50 cycles 11000 volts Alternatively the supply can be given at a voltage lower than 11 KV in which case an additional charge at 7 12 per cent on the total amount of the bill will be levied
If the consumer takes supply at a standard voltage above 11 KV a rebate of 5 will be allowed to him by the Board on the total amount of the bill calculated at the rates prescribed for supply at KV
Rate a Demand Charges First 500 KVA of Chargeable demand during the month at the rate of   
Rs 1275 per KVA Neat 1500 KVA of the charge demand during the month at the rate of    
Rs 1000 per KVa All above 2000 KVA of the chargeable demand during the month at the rate of 
Rs 850 per KVA PLUS b Energy Charges First 170 Kwh per KVA of Chargeable demand consumed during the month at the rate of   5P per Kwh 819 Next 170 Kwh
per KVA of chargeable demand consumed during the month at the rate of   4P per Kwh
Remaining Kwh
per KVA of the chargeable demand consumed during the month at the rate of   3P per KWh 4
iChargeable Demand The chargeable demand for the month shall be defined as the actual demand during the month or 60 per cent of the contracted demand or 75 per cent of the highest demand which occurred during the preceding 11 months whichever is the highest
ii Coal Clause The above rates shall be subject to a coal price adjustment at the rate of 0001 per Kwh
increase or decrease for every one P Of variation above or below Rs 40 per tonne of coal delivered at the bunkers in the Harduaganj Generating Station 5
Determination of Demand Demand measurement shall be made by suitable instruments at the point of deli very
The demand for any month shall be defined at the highest average load measured in Kilovolt amperes during any 30 consecutive minutes period of the month
 The tariff so fixed was enhanced by another notification dated September 30 1967 by twenty per cent and the enhanced rate come into force on December 1 1967
Under section 58 of the Act the Electricity Board or where no such Board was constituted the State Government had the power to direct the amortisation and tariffs policies of any licensee being a local authority with respect to its licensed undertaking in such manner as the Electricity Board or the State Government as the case may be after giving the local authority a reasonable opportunity of being heard considered expedient for the purposes of the Act
The licensee being a local authority the provisions of any other law or of any rules made or directions given thereunder notwithstanding was bound to give effect to any such directions of the Electricity Board or the State Government as the case may be
The Electricity Board however could not issue any directions under section 58 of the Act except after obtaining the prior approval of the State Government
The City Board had H 820 moved the State Government on September 13 1966 for permission to enhance the rates for supply of electric energy to Consumers
No such sanction was given till March 23 1968
The City Board therefore filed a petition under Article 226 of the Constitution questioning the validity of the tariff fixed under the notification dated April 24 1962 and the enhancement made under the notification dated September 30 1967 It may however be stated here that subsequently on April 20 1968 the City Board was permitted to raise the charges for light and fan by two paise per unit which came to 6 or 7 of the original rates and by 10 for electric energy supplied for other purposes
The City Board challenged the notification issued on April 24 1962 on the ground that it was not in conformity with section 46 of the Act
It questioned the enhancement made on September 30 1967 on the ground that it had not been permitted to enhance correspondingly the rates chargeable by it to the consumers even though in its vicinity the Electricity Board itself was supplying electric energy to consumers at a much higher rate
The petition was contested by the Electricity Board
The Writ Petition was heard by a Single Judge of the High Court
He dismissed the petition
The City Board thereafter filed an appeal before the Division Bench of the High Court
The Division Bench allowed the appeal in part
Aggrieved by the judgment of the Division Bench the City Board and the Electricity Board have filed the above appeals by special leave
The material part of section 46 of the Act reads thus 46
1 A tariff to be known as the Grid Tariff shall in accordance with any regulations made in this behalf be fixed from time to time by the Board in respect of each area for which a scheme is in force and tariffs fixed under this section may if the Board thinks fit differ for different areas
2 Without prejudice to the provisions of section 47 the Grid Tariff shall apply to sales of electricity by the Board to licensees where so required under any of the First Second and Third Schedules and shall subject as herein 821 after provided also be applicable to sales of electricity by the Board to licensees in other cases Provided that if in any such other case it appears to the Board that having regard to the extent of the supply required the transmission expenses involved in affording the supply are higher than those allowed in fixing the Grid Tariff the Board may make such additional charges as it considers appropriate    The first contention urged before us by the City Board is that in the absence of any regulations framed by the Electricity Board under section 79 of the Act regarding the principles governing the fixing of Grid Tariffs it was not open to the Electricity Board to issue the impugned notifications
This contention is based on subsection 1 of section 46 of the Act which provides that a tariff to be known as the Grid Tariff shall in accordance with any regulations made in this behalf be fixed from time to time by the Electricity Board
It is urged that in the absence of any regulations laying down the principles for fixing the tariff the impugned notifications were void as they had been issued without any guidelines and were
therefore arbitrary
It is admitted that no such regulations had been made by the Electricity Board by the time the impugned notifications were issued
The Division Bench has negatived the above plea and according to us rightly
It is true that section 79 h of the Act authorises the Electricity Board to make regulations laying down the principles governing the fixing of Grid Tariffs
But section 46 1 of the Act does not say that no Grid Tariff can be fixed until such regulations are made
It only provides that the Grid Tariff shall be in accordance with any regulations made in this behalf
That means that if there were any regulations the Grid Tariff should be fixed in accordance with such regulations and nothing more
We are of the view that the framing of regulations under section 79 h of the Act cannot be a condition precedent for fixing the Grid Tariff
A similar contention was rejected by this Court in Mysore State Road Transport Corporation vs Gopinath Gundachar Charl which was a case arising under the Road Transport Corporation Act 1950
Under section 14 of that Act a Road Transport Corporation was entitled to appoint officers and servants as it considered necessary for the efficient performance of its sanctions
Under section 34 1 of the Road Transport Corporation Act 1950 1 19681 1 SCR 767 822 the State Government had been empowered inter alia to issue directions to the Road Transport Corporation regarding recruitment conditions of service and training of its employees
Under section 45 2 c of that Act the Road Transport Corporation was empowered to make regulations regarding the conditions of appointment and service and the scales of pay of officers and servants of the Corporation other than the Chief Executive Officer General manager and the Chief Accounts Officer
Admittedly no regulations had been framed under section 45 2 c of that Act
It was contended that the Corporation could not appoint officers and servants referred to therein or make any provision regarding their conditions of service until such regulations were made
This Court rejected the said plea with the following observation at page 770 The conjoint effect
Of sections 14 3 b 34 and 45 2 c is that the appointment of officers and servants and their conditions of service must conform to the directions if any given by the State Government under section 34 and the regulations if any framed under section 45 2 c
But until such regulations are framed or directions are given the Corporation may appoint such officers or servants as may be necessary for the efficient performance of its duties on such terms and conditions as it thinks fit
 We do not also find any merit in the submission that the Grid Tariff fixed in this case suffered from the vice of arbitrariness
As observed by the Division Bench of the High Court there is ample guidance available in the various provisions of the Act and that the rates fixed are subject to the control of the State Government
We do not find it necessary to repeat what is stated by the Division Bench except observing that we respectfully agree with the reasons given by it for rejecting the said plea
In Maharashtra State Electricity Board vs Kalyan Borough Municipality  Anr
l this Court has discussed the relevant provisions of the Act while dealing with section 49 thereof which show that the Act furnishes ample guidance generally regarding the determination of tariffs by an Electricity Board functioning under the Act
There is also no merit in the submission that there cannot be a common tariff for all licensees in an area served by a Grid and that there should be a separate rate 1  823 of charge for each licensee
While it may not be objectionable to have a reasonable tariff fixed in the case of a particular licensee without offending the rule of non discrimination fixation of a common Grid Tariff is in consonance with the spirit of the Act
The preamble to the Act says that it had been enacted to provide for the rationalisation of the production and supply of electricity and generally for taking measures conducive to electrical development
Looked at against this background it is permissible for the ElectriCity Board to fix a common Grid Tariff for an area so that there may be a reasonably uniform development of the area by the supply of electric energy to all licensees or consumers in the area at a uniform rate with such reasonable variations as may be permissible in law subject to the condition that no undue preference is shown to any of them
The Division Bench however held that the levy of an additional 712 as an additional charge made by the Electricity Board under the first para of clause 2 of the impugned notifications dated April 24 1962 and September 30 967 was illegal and therefore liable to be quashed because according to it the additional charge of 712 could be imposed under the proviso to section 46 2 of the Act to cover extra expenses only and not for supplying electric ENERGY at a lower voltage of 6600 volts when the Grid Tariff had fixed rates for supplying electric energy at 11000 volts
It however held that it was open to the Electricity Board to make an additional charge only to the extent of the actual expenditure incurred by supplying electric energy at 6600 volts
It also quashed the Government order dated April 20 1968 by which the City Board was permitted to increase the charges payable by the consumers in some respects and the subsequent action taken on the above basis
The Division Bench directed the respondents to consider afresh the question of the rates at which electric energy could be supplied
We do not propose to go into the correctness of this part of the decision of the Division Bench because we are of the view that this case can be dispensed of in a different way
The contention relating to the validity of the levy of additional charges could not be raised by the City Board under Article 226 of the Constitution in respect of the period prior to the filing of the writ petition
The above additional charge of 712 was levied in 1962 and the City Board did not question it before the Court till March 23 1968 when it filed the writ petition
It is further seen that it has not stated that it had not collected charges from the consumers of electric energy supplied by it at the 824 rates which would cover the additional 7112
The learned counsel for the City Board was not able to state that the City Board had not recouped itself by collecting the charges from the consumers
In this situation we have to presume that the City Board had not suffered any loss by the levy of 712  by way of additional charges
We are of the view that in cases of this nature where there is little or no possibility of refunding the excess amount collected from the ultimate consumer to him and the granting of the relief to the petitioner would result in his unjust enrichment the Court should not ordinarily direct any refund in exercise of its discretion under Article 226 of the Constitution Moreover in this case the City Board woke up nearly 6 years after the issue of the first notification and that too only after an enhancement by 20 was made under the second notification
In the case of the City Board which is a local authority there is an additional reason
Under section 58 of the Act which is already referred to above a local authority is bound to implement the directions issued by the Electricity Board or the Government as the case may be with regard to the amortisation and tariffs policies
The City Board has been given directions from time to time by the Government regarding the charges it may collect from the consumers in the light of the charges it has to pay to the Electricity Board and its own investment and expenditure on the undertaking
The City Board cannot question the Grid Tariff only without at the same time questioning the directions pursuant to which it has been collecting charges from its consumers
No satisfactory material is placed before the Court showing that the charges which were being collected by the City Board from the consumers were uneconomical and did not satisfy the reasonable standards which should govern the directions issued by the Electricity Board or the Government from time to time regarding the tariffs policies of the City Board
In this situation we feel that it would not be proper to reopen the claims of the City Board in regard to the period prior to the filing of the writ petition arising on the basis of the alleged invalidity of the notification dated April 24 1962
Hence we refuse to grant any relief in this regard to the City Board for the period up to the date of the writ petition that is till March 23 1968
The Grid Tariff was revised in this case on July 1 1968
The decision of the High Court on the above point is however allowed to reremain only for the period between March 23 1968 and July 1 1968 without expressing any opinion on its correctness because the period is a small one and the Electricity Board does not insist upon a decision on this question in this case
The question is left open by 825 us
Similarly the relief granted by the High Court with regard to A the levy of additional charge of 2  with effect from December 1 1967 till July 1 1968 is not disturbed by us for the same reason without expressing any opinion on its correctness
This judgment shall not be construed as affirming the decision of the High Court in so far as the above points are concerned
The matter may be reconsidered by the Electricity Board as directed by the Division Bench of the High Court but with regard to the periods specified above
The appeals are accordingly disposed of
There shall be no order as to costs


Summary:
Section 46 of the Electricity Supply act 1948 provides that a tariff to be known as the Grid Tariff shall in accordance with any regulations made be fixed from time to time by the Electricity Board
Section 58 enables a local authority to implement the directions issued by the Electricity Board or the Government with regard to amortisation and tariffs policies
The UP Electricity Board under a notification dated 24 April 1962 fixed the tariff payable by licensees who used to get bulk supply of electric energy
The tariff so fixed was enhanced by another notification dated September 30 1967 by 20 which came into force on December 11967
The City Board a licensee moved the State Government on September 131966 for permission to enhance the rates for supply but no such sanction was given till March 23 1968
The City Board questioned the validity of the tariff fixed and its subsequent enhancement under article 226 on the grounds 1 that the notification dated April 24 1962 was not in conformity with section 46 and 2 that it had not been Permitted to enhance correspondingly the rates chargeable by it
The petition was however dismissed
On appeal the Division Bench partly allowed the appeal holding i that ample guidance is available in the Act and that the rates fixed are subject to the control of the State Government ii that the levy of an additional 7112  as an additional charge and subsequent enhancement under the two notifications was illegal iii that it was open to the Electricity Board to make an additional charge to the extent of the actual expenditure incurred by supplying energy at 6600 volts and iv that the Electricity Board should consider afresh rates at which electric energy could be supplied
Both the City Board and the Electricity Board filed appeals to this Court
It was contended on behalf of the City Board that in the absence of any regulations laying down the principles for fixing the tariff under s 79 the 816 two Notifications issued under section 46 of the Act were void as they had been issued without any guidance and were therefore arbitrary
On the question whether the grid tariff fixed suffered from vice of arbitrariness  HELD 1 While section 79h of the Act authorises the Electricity Board to make regulations laying down the principles governing the fixing of Grid Tariffs section 461 of the Act does not say that no Grid Tariff can be fixed until such regulations are made
It only provides that the Grid Tariffs shall be fixed in accordance with any regulations made in this behalf
The framing of regulation under section 79h of the Act cannot therefore be a condition precedent for fixing the Grid Tariff
In the instant case the Grid Tariff fixed did not suffer from the vice of arbitrariness
821E G 822E Mysore State Road Transport Corporation vs Gopinath Gundachar Char   followed
2 The had been enacted to provide for the rationalisation of the production of supply of electricity and generally for taking measures conducive to electrical development
It is therefore permissible for the Electricity Board to fix a common Grid Tariff for an area so that there may be a reasonably uniform development of the area by the supply of electric energy to all licensees or consumers in the area at a uniform rate with such reasonable variations as may be permissible in law subject to the condition that no undue preference is shown to any of them
The Act also furnishes ample guidance regarding the determination of tariffs by an Electricity Board
823A C Maharashtra State Electricity Board vs Kalyan Borough Municipality and Anr   followed
3 The validity of the levy of additional charges could not be questioned by the City Board under Article 226 of the Constitution in respect of the period prior to the filing of the writ petition
The additional charge of 712 was levied in 1962 and the City Board did not question it before the Court till March 23 1968 when it filed the Writ Petition
Moreover the City Board had not stated that it had not collected charges from the consumers of electric energy supplied by it at the rates which would cover the additional 712 and had not recouped itself by collecting the charges from the consumers
The presumption in this situation would be that the City Board had not suffered any loss by the levy of 712 by way of additional charges
823 G H 824 A B In the instant case the City Board has been given directions from time to time by the Government regarding the charges it may collect from the consumers in the light of the charges it has to pay to the Electricity Board and its own investment expenditure on the undertaking
The City Board cannot question the Grid Tariff only without at the same time questioning the directions pursuant to which it has been collecting charges from its consumers
No satisfactory material has been placed before the Court showing that the charges which were being collected by the City Board from the consumers were uneconomical and did not satisfy the reasonable standards which should 817 govern the directions issued by the Electricity Board or the Government from A time to time regarding the tariffs policies of the City Board
Therefore it would not be proper to reopen the claims of the City Board in regard to the period prior to the filing of the writ petition arising on the basis of the alleged invalidity of the notification dated April 241962
The decision of the High Court on the above point is allowed to remain only for the period between March 23 1968 and July 1 1968
No opinion on its correctness is expressed because the period is small one and the Electricity Board has not insisted upon a decision on this question
The relief granted by the High Court with regard to the levy of additional charge of 20 with effect from December 1 1967 till July 1 1968 is also not disturbed for the same reasons 824D H 825A The matter may be reconsidered by the Electricity Board as directed by the High Court on the other points in regard to the above specified periods