Case: Graphite India Ltd Vs. Durgapur Projects Ltd

came, viz., test of prejudice or the rest of fail hearing as it may be called." 24. In Rajendra Singh v. State of M.P. & others, 1996(5) SCC 460 this Court again affirmed that even a mandatory provision which is in the interest of the party can be waived by the party himself but if it is in public interest, it cannot be waived. 25. A person to whom sanction has been granted under Section 28 of the Electricity Act cannot exercise all the powers of a licensee under that Act. The powers to be exercised by holder of sanction are specifically mentioned under the Act. Reference may be made to Section 29 of the Electricity Act. Under that Act, the local authority my, by order in writing, confer and impose upon any person, who has obtained the sanction of the State Government under Section 28 to engage in the business of supplying energy, to the public, all or any of the powers and liabilities of a licensee under Sections 12 to 19, and the provisions of the said sections shall thereupon apply as if such person were a licensee under Part II of the Act. It is, thus, apparent that a sanction holder under Section 28 of the Electricity Act cannot be equated with a licensee under Part II of that Act.26. Under Section 57 of the Supply Act the Sixth Schedule is applicable to a licensee. This Schedule has been made applicable to a sanction holder under the terms of the sanction. Third proviso to the Sixth Schedule provides that the licensee shall not enhance the charges for the supply of electricity until after the expiry of a notice in writing of not less than sixty clear days of his intention to so enhance the charges, given by him to the State Government and to the State Electricity Board. In the present case, when we are considering the applicability of the Sixth Schedule to the sanction holder, it is not the case that any notice was required to be given to the WBSEB. Why notice is required to be given to the State Government can be seen from the fact that the State Government or the State Electricity Board could constitute a rating committee to examine the licensees charges for the supply of electricity and to make recommendations in that behalf to the State Government. What are the consequences of the recommendations of the rating committee find mention in Section 57A and in the Sixth Schedule. There is no question of any approval to be given by the State Government to the licensee. When notice of enhancement of charges is given in the case of sanction holder under the terms of the sanction approval of the State Government is required. We have seen above, approval from the State Government can be retrospective. The bar in the proviso is only to the extent that enhanced charges may not be levied till after the expiry of sixty days notice to the Government. It is not that the State Government is required to grant its approval within 60 days period. As far as sanction holder is concerned, requirement of notice and approval by the State Government are not statutory conditions. These are contractual and could be varied or waived by the State Government. Conditions have been imposed by the State Government and not by virtue of any statute. It would, therefore, appear to us that the requirement of sixty days notice to the State Government is not mandatory in its counter affidavit dated January 10, 1992 filed in the first writ petition, the State Government took the stand that the DPL before enhancing the tariff with effect from April 3, 1991 did not comply with the necessary formalities as required under the Supply Act read with the Government Order No. 4520 (Power) dated August 28, 1964. Graphite was not informed of the said hike which came into force w.e.f. April 8, 1991. However, in the supplementary affidavit filed by the DPL subsequently it was stated that the Government of West Bengal by their letter dated April 27, 1992 duly approved the enhancement of tariff w.e.f. April 8, 1991. In the letter dated February 9, 1991 to the State Government, the DPL mentioned that the tariff was last revised for all categories of consumers w.e.f. August 1, 1988 and thereafter the cost of operation of maintenance of power plant has increased considerably. The revenue derived by the company from the existing tariff has been found to be quite inadequate to absorb spiraling cost and expenses. The State Government is also informed that by its order dated January 31, 1991, it had approved revision in tariff by the WBSEB w.e.f. March 1, 1991 and WBSEB has published a notification in the press announcing revision in their rates and charges. It was further pointed out that the State Government by its letter dated August 29, 1986 had directed the DPLs power tariff should be fixed in line with that of the WBSEB for the purpose of uniformity. In the letter seeking tariff revision for the year 1993-94, details were given as to how revision in tariff has been necessitated. As noted above graphite has failed to show as to how it could be said that charges enhanced by the DPL exceed the amount of reasonable return as required under clause (1) of the Sixth Schedule. It is certainly, a relevant consideration for the DPL to fix its tariff in line with the WBSEB for the purpose of uniformity and as Mr. Reddy put it for capping unless it is shown that tariff revision has contravened the provisions of the Sixth Schedule. State Government has not insisted of notice being less than 60 days. No prejudice is shown to have been causes to Graphite on the ground that notice period fell short Â? by two days. In the circumstances of the case requirement of 60 days notice does not appear to us to be mandatory.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]26. Under Section 57 of the Supply Act the Sixth Schedule is applicable to a licensee. This Schedule has been made applicable to a sanction holder under the terms of the sanction. Third proviso to the Sixth Schedule provides that the licensee shall not enhance the charges for the supply of electricity until after the expiry of a notice in writing of not less than sixty clear days of his intention to so enhance the charges, given by him to the State Government and to the State Electricity Board. In the present case, when we are considering the applicability of the Sixth Schedule to the sanction holder, it is not the case that any notice was required to be given to the WBSEB. Why notice is required to be given to the State Government can be seen from the fact that the State Government or the State Electricity Board could constitute a rating committee to examine the licensees charges for the supply of electricity and to make recommendations in that behalf to the State Government. What are the consequences of the recommendations of the rating committee find mention in Section 57A and in the Sixth Schedule. There is no question of any approval to be given by the State Government to the licensee. When notice of enhancement of charges is given in the case of sanction holder under the terms of the sanction approval of the State Government is required. We have seen above, approval from the State Government can be retrospective. The bar in the proviso is only to the extent that enhanced charges may not be levied till after the expiry of sixty days notice to the Government. It is not that the State Government is required to grant its approval within 60 days period. As far as sanction holder is concerned, requirement of notice and approval by the State Government are not statutory conditions. These are contractual and could be varied or waived by the State Government. Conditions have been imposed by the State Government and not by virtue of any statute. It would, therefore, appear to us that the requirement of sixty days notice to the State Government is not mandatory in its counter affidavit dated January 10, 1992 filed in the first writ petition, the State Government took the stand that the DPL before enhancing the tariff with effect from April 3, 1991 did not comply with the necessary formalities as required under the Supply Act read with the Government Order No. 4520 (Power) dated August 28, 1964. Graphite was not informed of the said hike which came into force w.e.f. April 8, 1991. However, in the supplementary affidavit filed by the DPL subsequently it was stated that the Government of West Bengal by their letter dated April 27, 1992 duly approved the enhancement of tariff w.e.f. April 8, 1991. In the letter dated February 9, 1991 to the State Government, the DPL mentioned that the tariff was last revised for all categories of consumers w.e.f. August 1, 1988 and thereafter the cost of operation of maintenance of power plant has increased considerably. The revenue derived by the company from the existing tariff has been found to be quite inadequate to absorb spiraling cost and expenses. The State Government is also informed that by its order dated January 31, 1991, it had approved revision in tariff by the WBSEB w.e.f. March 1, 1991 and WBSEB has published a notification in the press announcing revision in their rates and charges. It was further pointed out that the State Government by its letter dated August 29, 1986 had directed the DPLs power tariff should be fixed in line with that of the WBSEB for the purpose of uniformity. In the letter seeking tariff revision for the year 1993-94, details were given as to how revision in tariff has been necessitated. As noted above graphite has failed to show as to how it could be said that charges enhanced by the DPL exceed the amount of reasonable return as required under clause (1) of the Sixth Schedule. It is certainly, a relevant consideration for the DPL to fix its tariff in line with the WBSEB for the purpose of uniformity and as Mr. Reddy put it for capping unless it is shown that tariff revision has contravened the provisions of the Sixth Schedule. State Government has not insisted of notice being less than 60 days. No prejudice is shown to have been causes to Graphite on the ground that notice period fell short Â? by two days. In the circumstances of the case requirement of 60 days notice does not appear to us to be mandatory.