Amalgamated Electricity Co. Vs.
Municipal Committee, Ajmer  INSC 161 (25 July 1968)
25/07/1968 HEGDE, K.S.
CITATION: 1969 AIR 227 1969 SCR (1) 430
R 1972 SC2504 (26) E&F 1974 SC 923
Ajmer Merwara Municipalities Regulation,
223--Municipality fails to pay surcharge
levied regarding supply of electricity--Suit to recover--Notice under section
Bombay Electricity Surcharge Act (Bom..Act 19
of 1946) ss. 3, 4 and 6--Power of Commissioner to issue notifications levying
Indian Electricity Act (9 of 1910) Schedule,
12--Sections 3 and 4 of Bombay Act if ultra
vires, cl. 12 of Schedule.
The Ajmer Electric Supply Co. Ltd. a licensee
under the Indian Electricity Act, 1910, entered into two contracts with the
respondent-Municipal Committee, (i) for supplying electricity for street
lighting, and (ii) pumping water from the wells belonging to the respondent at
a particular place.
The Bombay Electricity Surcharge Act, 1946,
was extended to the province of Ajmer Metwar subject to certain modifications.
Thereafter, the Ajmer Electric Supply Co. applied under s. 3 of the Bombay Act,
to the Chief Commissioner, for imposing the surcharge provided in that section,
to meet its increased cost. The Chief Commissioner issued a notification and on
the basis of that notification the Ajmer Electric Supply Co. called upon the
respondent by a notice, to pay the surcharge detailed therein with respect to
the two contracts. As the respondent did not comply with the demand, the
appellant, with which the Ajme'r Electric Supply Company was amalgamated, filed
a suit for the recovery of the surcharge.
The trial Court decree.d the suit but the
High Court set aside the decree on the grounds: (1) Before filing the suit a
notice as required by s. 233 of the Ajmer Metwar Municipalities Regulation,
1925, was not given; (2) The Commissioner's notification imposing the impugned
surcharge was beyond the provisions of the Bombay Act, because of the omission
of certain words from s. 6 of that Act as extended to Ajmer Merwara; and (3)
The relevant provisions of the Bombay Act. namely, ss. 3 and 4 were ultra vires
el. 12 of the Schedule to the Indian Electricity In appeal to this Court,
HELD: (1) No notice under s. 233 of the Ajmer
Merwar Municipalities Regulation was necessary before instituting the suit.
[438 E] Under the section a notice is necessary when the suit is filed against
the Committee only in respect of any act done in its official capacity. The
expression 'act' includes an illegal omission; but. before an omission can be
considered as an illegal omission, it must be shown that there was an omission
to discharge some official duty imposed in public interest. That is the
non-discharge of the duty must amount to an illegality entailing penal
consequences. [436 B, G] In the present case, the appellant's contention was
that it was entitled to recover from the respondent the amount of surcharge
claimed, while the respondent's case was a bonafide contention, namely, that
the levy of 431 surcharge was invalid. Under the Regulation it was the duty of
the respondent to di'scharge all its liabilities, but failure to do so would
not ordinarily make it an illegal omission, because, the respondent or its
members or office hearers could not be punished for their failure to pay the
amount due to the appellant. [436 D-G] Revati Mohan Das v. Jitendra Mohan
Ghosh, 61 I.A. 171, applied.
Debendra Nath Roy v. Official Receiver,
A.I.R. 1938 Cal. 191 approved.
Bhagchand Dagdusa Gujrathi v. Secretary of
State for India, 54 I.A. 338. distinguished.
(2) The provisions of s. 3 of the Bombay Act
empower the Chief Commissioner to levy surcharge on the bills for the supply of
electricity for street lighting. Section 4 empowers the licensec to collect
from the consumer the surcharge levied. Municipal councils are not excluded
from the operation of ss. 3 and 4 of the Act as extended to Ajmer Metwar.Similarly,
electrical energy supplied on the basis of a contract is not excluded from the
operation of s. 3. For taking action on the basis of those sections no
assistance is needed from s. 6, and so, s. 6 as it stood originally or as
modified does not in any manner cut down the operation of as. 3 and 4.
Therefore, the High Court was Wrong in its decision that the notification
issued by the Chief Commissioner levying surcharge on the price of electrical
energy supplied for street lighting was without the authority of law. [440 C-E,
H; 441 A] (3) Since 'Electricity' is a concurrent subject, the Bomhay
Legislature was competent to provide for the levy of surcharge so long as the
relevant provision did not conflict with any provision in any Central Act.Clause
12 of the Schedule to the Indian Electricity Act, which is deemed to form part
of the licence under s. 3(f) of the Electricity Act, does not conflict with ss.
3 and 4 of the Bomhay Act.
The clause merely prescribes a procedure for
settling the price of electricity supplied by the licensec for street lighting
and lays down the machinery for settling the price if there is a dispute
between the contracting parties. It o.nly means that the licensee cannot
dictate its terms to the authority responsible for street lighting, but does
not fix the price to be paid or even the maximum price payable.
It imposes no fetters on the powers of the
Provincial Legislature in the matter of enhancing the price of electricity
supplied by the licensec for street lighting.
The High Court was, therefore, wrong in
holding that by incorporating cl. 12 into the licenee the Central Legislature
intended that under no circumstances the liability of the consumer can be
increased heyond what was agreed during the continuance of the contract. [441
H; 442 A-D] (4) Under the notification imposing surcharge, the appellant,
however, was not entitled to get any additional sum as regards the pumping of
water. Under the notification surcharge is levied on the price of electrical
energy supplied under a contract. In construing a contract it must be read as a
whole. So read, under the second contract, the appellant only undertook to pump
water from the wells and not to supply any electricat energy. [442 E-F, H]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 706 of 1965.
432 Appeal from the judgment and decree dated
September 22, 1964 of the Rajasthan High Court in D.B. First Appeal No. 67 of
Purshottam Trikamdas and 1. N. Shroff, for
B.D. Sharma, for the respondent.
The Judgment of the Court was delivered by
Hegde, J. This is plaintiff's appeal. The Amalgamated Electricity Co. Ltd. is
the plaintiff in the suit from which this appeal arises. It sued the Municipal
Committee, Ajmer through its Chairman in suit No. 21 of 1951 in the court of
Sub Judge, first class, Ajmer. In that suit it claimed a sum of Rs. 93,520/2/1
as Surcharge due under certain notifications issued by the Chief Commissioner
Out of the said sum, a sum of Rs. 28,837/12/5
was claimed as being due as SUrcharge on the bills issued by it in respect of
the electricity supplied by it to the defendant for street lighting. A sum of
Rs. 58,143/12/2 was claimed as Surcharge on its bills in respect of the
electricity utidised for pumping water in pursuance of one of its contracts
with the defendant. The balance amount was claimed as interest on the amount
claimed. That suit was resisted by the defendant on various grounds. The trial
court substantially allowed the plaintiff's claim and decreed the suit in a sam
of Rs. 44,461/11/9 with interest and proportionate costs. The High Court of
Rajasthan accepting the appeal (No. 67 of 1956) of the defendant dismissed the
plaintiff's suit. After obtaining a certificate under Art. 133(1) (a) of the
Constitution, the plaintiff has filed this appeal.
The High Court of Rajasthan dismissed the
plaintiff's suit on two grounds namely (1 ) that before filing the suit, no
notice as required by s. 233 of the Ajmer .Merwara Municipalities Regulation,
1925 has been given and (2) the notification of the Commissioner imposing the
impugned Surcharge is either beyond the scope of the provisions of Bombay
Electricity Surcharge Act, 1946 (Bombay Ac't 19 of 1946) (to be hereinafter
referred to as the Bombay Act) as extended to Ajmer by the Central Government
in pursuance of the powers conferred on it under the Ajmer Merwar (Extension of
Laws) Act, 1947 or in the alternative the provisions of the Bombay Act are
ultra vires cl. 12 of the .schedule to the Indian Electricity Act, 1910 (to be
hereinafter referred to as the Electricity Act).
In view of the above findings the other pleas
taken by the d,efendant were not examined. We have to see whether the decision
of the High Court is in accordance with law.
The material facts of the case are as
A company known as Trustees Corporation (I)
Ltd. took out license from the Chief Commissioner of Ajmer on 19-1-1928 433
under the provisions of the Electricity Act authorising it to geneate and
supply electrical energy within the municipal limits of Ajmer and such
extensions beyond those limits as may be permitted by the Chief Commissioner
from time to time in accordance with the conditions mentioned in the licence
(Exh. 1 ). Someime later they said company transferred all its rights and
liabilities, Ajmer Electric Supply Co., Ltd. The Ajmer Electric Supply Co. Ltd.
was later amalgamated with the plaintiff's company as. ber the scheme of
transfer approved by the Bombay High Court. Fhe Ajmer Electric Supply Co. Ltd.
had en'tered into an agreenent (Exh. 20) on 31-3-1932 with the Municipal
Committee, Ajmer for supplying electricity for street lighting and maintaining
the street lighting equipments. By another agreement (Exh. 21 ) dated
15-3-1939, it undertook to pump water from the wells belonging to Municipal
Committee at Bhaonta.
On September 3, 1948, the Governmen't of
India in exercise of the powers conferred on it by s. 2 of Ajmer Merwar
(Extension of Laws) Act, 1947, extended the Bombay Act to the province of Ajmer
Merwar subject to certain modifications. That notification among other
modifications omitted the words "or in any contract for energy or for
maintenance of street lighting equipment" found in s. 6 of the Bombay Act.
The other modifications made are not relevant for our present purpose. After
the extension of the Bombay Act to Ajmer Merwar the Ajmer Electric SuppLy Co.,
Ltd., applied under s. 3 of the Bombay Act to the Chief Commissioner for
imposing Surcharge as provided in that section to meet its increased cost. On
September 19, 1948, the Chief Commissioner directed that the Bombay Act as
modified shall apply to two undertakings including Ajmer Electric Supply Co.
Ltd., Ajmer. There was another notification on September 19, 1948 but that is
not relevant for our present purpose. On March 29, 1949, the Chief Commissioner
issued the notification herein set out below in substitution of the
notification issued by him on September 19, 1948.
"CHIEF COMMISSIONER'S OFFICE, AJMER.
No. 6/5/48-LSG. Dated Ajmer, the 29th March,
To be substituted for the notification
bearing the same number and date.
Orders by the Chief Commissioner, Ajmer
NOTIFICATION No. F/8-4-II(CC)-H. Dated Ajmer,
the 19th September 1948.
434 In exercise of the powers conferred by
sub-sec. (2) of sec. 3 of the Bombay Electricity (Surcharge) Act 1946 (XIX of
1946) as extended to the Ajmer Merwara by the Government of India, Minis'try of
Home Affairs Notification No. 8/9/48- Judicial dated the 3rd September 1948,
and in accordance with the recommendations made by the Electricity Advisory
Board constituted by him under sec. 35 of the Indian Electricity Act, 1910, the
Chief Commissioner, is pleased to fix for a period of two years from the date
of this Notification, the following rates of surcharge on the charges for
energy leviable by the Ajmer and Beawar Electric Supply Companies :-- (1 ) For
supplies made under standard tariffs:
(i) Ajmer Electric Supply Co. Ltd., Ajmer 20%
(ii) Beawar Electric Supply Co., Ltd., Beawar 15% (2 ) For supplies made under
special contracts, other than those made with Municipal Committee for street
Ajmer Electric Supply Co., Ltd. Ajmer and
Beawar Electric Supply Co., Ltd., Beawar.--0.007 of an anna per unit (Kw. hour)
per rupee increase in the price of oil beyond the basic price of Rs. 90/- per
(3 ) For supplies for Municipal Street
Lighting made under special contracts Ajmer Electrictiy Co., Ltd., Ajmer,
Beawar Electric Supply Co., Ltd., Beawar.--O.
128 of an anna per month per each rupee
advance in price of fuel oil beyond the basic price of Rs. 90/- per ton for each
60 wattage lamp and prorate for lower and higher wattage lamps.
The surcharge is leviable on the actual
energy consumed and not on the standing charges of motors and meters.
By order Sd/- A.N. Lal Secretary to the Chief
Commissioner, Ajmer Merwara." On the basis of that notification the Ajmer
Electric Supply Co., Ltd. called upon the defendant by means of a lawyers'
notice dated 16-8-1951 to pay the surcharge detailed therein. As the defendant
did not comply with the demand made, the plaintiff after the amalgamation
men.tioned earlier instituted the present suit.
435 It is not necessary to deal with the
various pleas taken by the defendant in resisting the plaintiff's suit. Some of
those pleas have been given up; some have not been considered by the High
Court. The plaintiff's suit has been dismissed by the High Court solely on the
grounds mentioned above. If the plaintiff succeeds satisfying this Court that
the view taken by the High Court is wrong then the matter will have to go back
to the High Court for decision on questions left undecided.
We shall first take up the question of notice
under s. 233 of Ajmer Merwar Municipalities Regulation. The contention of the
defendant is that the notice issued is invalid inasmuch as the same was issued
on behalf of the Ajmer Electric Supply Co. Ltd. after that company was
amalgamated with the plaintiff. The next ground of attack is that the said
notice is invalid because it does not set out the name and the place of abode
of the intending plaintiff. These contentions have commended themselves to the
learned Judges of the High Court. Section 233 of the Ajmer Merwar Municipality
"Section 233:Suits against Committee or
its officers. No suit shall be instituted against a Committee, or against any
member, officer or servant of a Committee, in respect of any act purporting to
be done in its or his official capacity, until the expiration of one month next
after notice in writing has been, in the case of a Committee, delivered or left
at its office, and in the case of an officer or servant, delivered to him or
left at his office or place of abode, stating the cause of action and the name
and place of abode of the intending plaintiff; and unless the plaint domains a
statement that such notice has been so delivered or left:
Provided that nothing in this section shall
apply to any suit instituted under section 54 of the Specific Relief Act, 1877
(I of 1877)." So far as suits against
public officials are concerned this section is an exact reproduction of s. 80,
Civil Procedure Code.
But s. 80, Civil Procedure Code has two parts
(1) Suits against Governments and (2) Suits
against public officers in respect of acts purporting to be done by those
public officers in their official capacity.
So far as suits against Governments are
concerned, they cannot be validly instituted without giving a notice as
required by s. 80, Civil Procedure Code. But when we come to suits against public
officers, s. 80, Civil Procedure Code applies only to suits in respect of any
'act' purporting to be done by a public officer and 436 that in his official
capacity. Hence before s. 80 can be relied on in any suit against a public
officer, it must be shown that it is a suit in respect of an 'act' purporting
to be 'done by him 'in his dial capacity. In view of the provisions of 'the
General Clauses Act, the expression 'act' also includes illegal omissions.
Therefore if the suit does not relate to any 'act' or 'illegal omission'
purporting to be done by a public officer in his official capacity, s. 80 will
not have any application. Similar is the position under s. 233 of the Ajmer
Merwar Municipalities Regulation.
The stand taken by the plaintiff is that in
the instant case no notice under s. 233 of Ajmer Merwar Municipalities
Regulation was necessary; alternatively it was urged that if such a notice is
necessary, the notice issued complies with the requirements of law. If the
first alternative is accepted there is no need to go into the question as to
the validity of the notice issued.
In the suit, the plaintiff does not complain
of any act done by the defendant nor does it say that the defendant was guilty
of any illegal omission. The plaintiff's case is as mentioned earlier that in
view of the notification issued by the Chief Commissioner on March 29, 1949
[Exh. 13(B)], it was entitled to recover from the defendant the amount claimed.
The stand taken by the defendant is that the levy of surcharge is invalid.
Whether the contention is sustainable or not there is no doubt that it is bona
fide contention. That contention had commended itself to the High Court. Every
omission is not an illegal omission.
Before an omission can be considered as an
illegal omission it must be shown that the official concerned had omitted to
discharge some official duty imposed on him in public interest. The omission in
question must have a positive content in it. In other words the non discharging
of that duty must amount to an illegality. We are told that under the
provisions of the Ajmer Metwar Municipalities Regulation, it is the duty of the
Municipal Council to discharge all its liabilities. In that connection
reference was made to certain provisions of the said Regulation. But the
failure on the part of the Municipality to discharge its liabilities will not
ordinarily become illegal omissions.
The municipality or its members or office
bearer cannot be punished for their failure to pay the amount due to the
plaintiff. To put it differently the omission complained does not entail any
penal consequence for the public official responsible for it. If every omission
is considered as an illegal omission and therefore an 'act' either within the
meaning of s. 80, Civil Procedure Code or s. 233 of the Ajrner Merwar
Municipalities Regulation then the distinction between the first part of s. 80,
Civil Procedure Code and its second part disappears. If that is so, k follows
that in every suit against a public officer relating to his public duty, the
issuance of a notice is a condition precedent. That in our opinion would be
rewriting the section.
437 It is true that in Bhagchand Dagdusa
Guirathi and ors.
v. Secretary of State for India(1) the Privy
Council laid down that s. 80 should be strictly complied with and is applicable
to all forms of action and all kinds of reliefs claimed against the Government.
But here in this case we are not concerned with a claim against the Government.
Therefore that decision has no application to
the facts of the present case. The case which is relevant for our present
purpose is Revati Mohan Das v. Jatindra Mohan Ghosh(2). Therein a manager of an
estate appointed under s. 95 the Bengal Tenancy Act, 1885 executed a mortgage
in favour of the predecessor of the plaintiff therein after obtaining the
sanction of the local court. The successor of that manager failed to discharge
the mortgage debt.
Consequently the plaintiff brought a suit
against him for obtaining a mortgage decree. That suit was resisted on the ground
that the plaintiff had failed to give the notice prescribed by s. 80, Civil
Procedure Code before instituting the suit. That plea succeeded in the High
Court. The Judicial Committee of the Privy Council reversed the decree of the
High Court holding that the failure on the part of the respondent to discharge
the mortgage cannot be considered as an 'act' within the meaning of s. 80,
Civil Procedure Code. In the course of the Judgment Sir George Lowndes speaking
for the Board observed thus:
"On the alternative contention their
Lordships are unable to hold that non-payment by respondent 1 is an 'act
purporting to be done by' the manager 'in his official capacity'. Under the
general definitions contained in s. 3, General Clauses Act, 1897 an 'act' might
include an illegal omission but there clearly was no illegal omission in the
present case. It is also difficult to see how mere omission to pay either
interest or principal could be an act purporting to be done by 'the manager in
his official capacity." (emphasis supplied).
At this stage we would like to emphasis the
observations of their Lordships; "but clearly there was no illegal
omission in the present case." This observation shows that a mere omission
to discharge the debt without anything more is not an illegal omission. It is
true that in that case, the court proceeded further and observed:
"The mortgage imposed no personal
liability upon the manager, but merely provided that if payment was not made
the mortgagee would be entitled to realize his dues by sale through the Court,
and this was all that the appellant sought by his suit. The manager for the
time being no doubt had an option to pay in order to save the sale, but failure
to exercise an option is not in any sense a breach of duty. The appellant made
no claim against (1) 54 I.A. 338. (2) 61 I.A. 171.
438 respondent 1 personally. He was there
only as representing the estate of which the sale was sought. In their
Lordships' opinion, such a suit is not within the gambit of s. 80 and no notice
of suit was required." It is possible to read this passage as merely
setting out the facts of that particular case and the equitable considerations
arising there from and not as the ratio of the decision. Even if we consider
that passage as one of the reasons given in support of the decision, the
strength of the earlier ratio is not weakened. The interpretation placed by us
on that decision is the same as that placed by the Calcutta High Court in
Debendra Nath Roy v. Official Receiver(1). Mr. Sharma read to us several
decisions of the various High Courts wherein it has been laid down that a suit
brought in respect of breach of contract by a public official is an act within
the meaning of s. 80 Civil Procedure Code. Similarly, illegal omissions have
been held to be 'acts' under that section. In some of the decisions it was held
that the second part of s. 80, Civil Procedure Code applies only to actions on
torts committed by public officials, in the discharge of their public
There is conflict of judicial opinion on that
point. For our present purpose it is not necessary to resolve that conflict.
Suffice it to say that in the present case, the plaint does not complain of any
'act' or even an illegal omission on the part of the defendant. Hence we agree
with Mr. Purshottam Tricumdas that no notice under s. 233 of the Ajmer Metwar
Municipalities Regulation was necessary before instituting the suit. In that
view it is not necessary to consider whether the notice relied on by the
plaintiff meets the requirements of the law.
This takes us to the validity of the
notification issued by the Chief Commissioner of Ajmer on March 29, 1949
levying certain surcharges on the consumers of electricity supplied by the
plaintiff. Section 6 of the Bombay Act as it originally stood read:
"The provisions of the Act shall apply
notwithstanding anything in any other law or any licence or sanction granted
under the Principal Act or in any contract for energy or maintaining street
light equipments." The notification extending this Act to Ajmer Metwar
modified that section and the modified section reads:
"The provisions of the Act shall apply
notwithstanding anything in any other law or any licence or sanction granted
under the principal Act." The words 'Principal Act' refer to the
Electricity Act. On the basis of this modification it is urged on behalf of the
respondent (1) A.I.R. 1938 Cal. 191.
439 that the Chief Commissioner was not
competent to levy the impugned surcharge. From the fact that certain words were
omitted in s. 6, we are asked to assume that the Government of India intended
that no surcharge should be levied on the bills issued to the defendant for the
supply of electrical energy for street lighting. We do not know why the words
in question were omitted from s. 6. But to our mind the omission of those words
does not in any manner affect the provisions contained in ss. 3 and 4 the
Bombay Act. Now we shall set out ss. 3 and 4 of the Bombay Act. They read:
"Section 3 .--( 1 ) Any license or
sanction-holder may apply to the Provincial Government in the prescribed form
for fixing a rate of surcharge on the charges for energy or street lighting
equipment leviable by him under the terms of his licenee, sanction or contract,
as the case may be. Such application shall be accompanied I by such
calculations as may be prescribed.
(2) On receipt of an application under
sub-section (1) the Provincial Government may, if it considers that a surcharge
is desirable in the case of such licensec or sanction-holder, by order notified
in the Official Gazette, fix the rate of surcharge.
(3) The rate of surcharge fixed under
sub-section (2) shall not exceed:
(a) 331/2 per centuries in the case of
undertakings where diesel oil is used for the generation of energy, (b) 20 per
centuries in the case of undertakings where steam is used for the generation of
(4) In the order fixing the rate of surcharge
under sub-section (2), the Provincial Government may specify such conditions as
it may think fit to be observed by the licensee or sanction-holder.
(5) Without prejudice to the generality of
the power contained in sub- section (4), the Provincial Government may require
the execution of an undertaking in the prescribed form by the licensec or
sanction holder that his profits in excess of the prescribed limits shah be
transferred to a Rates Stabilization Reserve for prescribed purposes.
(6) The Provincial Government may at any time
enhance or reduce by a like order the rate fixed under sub-section (2).
440 Sec. 4 :--Upon the rate of surcharge
being fixed by the Provincial Government from time to time in accordance with
this Act, it shall not be lawful for the licensec or sanction-holder concerned
except with the previous sanction of the Provincial Government to charge at
other than charges surch arged at the rate for the time being so fixed;
Provided that no surcharge or any subsequent
revision thereof shall affect charges leviable for any period not covered by
the relevant order of the Provincial Government." The provisions contained
therein clearly empower the Chief Commissioner to levy surcharge on the bills
for the supply of electricity for street lighting.
Section 4 empowers the licensec to collect
from the consumer the surcharge levied. Municipal Councils are not excluded
from the operation of ss. 3 and 4 of the Bombay Act as extended to Ajmer
Merwar. Similarly electrical energy supplied on the basis of a contract is not
excluded from the operation of s. 3. That much is clear from the language of
that section. We see no reason to read into that section an exception in the
case of Municipal Councils or electricity supplied for street lighting under a
contract. Section 6 does not in any manner cut down the operation of ss. 3 and
4. In our opinion that section as it stood
originally or as modified has no impact on ss. 3 and 4. Charges for the supply
of energy for street lighting are ordinarily payable by the Municipal Councils.
Generally speaking it is the Municipal Councils that provide street lighting.
6 was included in the Bombay Act as a matter
of abundant caution. It is not denied that the Bombay legislature had
competence to enact that Act. We shall presently examine the contention that
Act is ultra vires the provisions of Electricity Act and therefore the
provisions of that Act should not be given effect to. But for the present we
are assuming that Act is valid and proceed to examine the impact of s. 6 on ss.
3 and 4. We think that s. 6 does not in any manner control ss. 3 and 4. The
intention of a legislature or its delegate has to be gathered from the language
of the statutory provisions and not from what it failed to say. If because of
modification of s. 6, the provisions contained in ss. 3 & 4 could not be
applied in the case of supply of electrical energy for street lighting under a
contract then it could have been said that the notification issued by the Chief
Commissioner was without the authority of law. But that cannot be said in this
case. The provisions in ss. 3 and 4 are self contained provisions. For taking
action on the basis of those sections no assistance is needed from s. 6.
Therefore we think the High Court was wrong in opining that the notification
issued by the Chief 441 Commissioner levying surcharge on the price of the
electrical energy supplied for street lighting was without the authority of
We shall now examine the contention that the
notification issued by the Chief Commissioner on March 29, 1949 is ultra vires
the provisions of the Electricity Act.
On this aspect the argument on behalf of the
respondent proceeded thus: Section 3(f) of that Act provides that the
provisions contained in the Schedule shall be deemed to be incorporated with,
and to form part of, every licence granted under this Act save in so far as
they are expressly added to, varied or excepted by the licence, and shaH,
subject to any such additions, variations or exceptions which the State
Government is hereby empowered to make, apply to the undertaking authorised by
(Proviso is not relevant for our present
purpose) Clause 12 of the Schedule as it stood at the relevant time read:
"XII. CHARGE FOR SUPPLY FOR PUBLIC
LAMPS.-- The price to be charged by the licensec and to be paid to him for
energy supplied for the public lamps, and 'the mode in which those charges are
to be ascertained shall be settled by agreement between the licensee and the
(State Government) or the local authority, as the case may be, and, where any
difference or dispute arises, the matter shall be determined by
arbitration." The argument proceeded that the Electricity Act which is a
central legislation lays down that the price to be charged by the licensee and
to be paid to him for the electrical energy supplied for street lighting shall
be settled either by agreement between the licensee and the State Government or
the local authority as the case may be or, and, where any difference or dispute
arises the matter should be determined by arbitration; the price so fixed
cannot be altered in any manner; levying surcharge is but one mode of enhancing
the price to be paid; such a course is violative of cl. 12 of the Schedule in
the Electricity Act; hence it must be held that the Chief Commissioner had no
power to levy any surcharge which would interfere with the mandate of cl. 12.
It was not said before us nor before the High
Court that the Bombay legislature had no competence to enact the Act.
Electricity is a concurrent subject both
under the Constitution as well as under the Government of India Act, 1935.
Therefore quite clearly the Bombay legislature had competence to provide for
the levy of surcharge so long as the relevant provision did not conflict with
any provision in any central Act. Hence the question is whether ss. 3 and 4 are
in conflict 442 with cl. 12 of the Schedule of the Electricity Act ? If the two
can co-exist then there is no question of conflict between the two.
We see no conflict between cl. 12 of the
Schedule in the Electricity Act and ss. 3 and 4 of the Bombay Act. Clause 12
prescribes a procedure for settling the price of electricity supplied by the
licensee for street lighting.
It merely lays down the machinery for
settling the price if there is dispute between the contracting parties. That
clause does not fix the price to be paid or even the maximum price payable. We
fail to see how that clause takes away the power from the State legislature to
impose additional burden on the consumer. All that clause means is that the
licensec cannot dictate his terms to the authority responsible for street
lighting. We are unable to agree with the learned Judges of the High Court that
in incorporating cl. 12 of the Schedule, the central legislature intended that
under no circumstance the liability of the consumer can be increased beyond
what is asked during the continuance of the contract. In our opinion it imposes
no fetters on the powers of the provincial legislatures in the matter of
hanging the price of the electricity supplied by the licensec for street
For the reasons mentioned above we are unable
to agree with the High Court that either the suit is bad because of want of a
valid notice under s. 233 of the Ajmer Merwar Municipalities Regulation or that
the notification imposing surcharge is invalid for any reason.
Under the notification imposing surcharge the
plaintiff is not entitled to get any additional sum as regards the pumping of
water. Under that notification to the extent it is applicable to this case
surcharge is levied only on the price of electrical energy supplied under a
contract for street lighting and not in respect of the price of the electrical
energy used for pumping water. Under Exh. 21 the plaintiff entered into an
agreement to pump water for a fixed consideration. For so doing it may have to
utilise the electricity produced by it but that does not amount to supplying
electricity to the Municipal Council much less supplying electricity for street
lighting. From el. 8 of that agreement it is seen that the parties to that
agreement contemplated the pumping of water by using Oil Engines though
ordinarily it was expected that it will be done by electrical energy. It is
true that el. 20 of the agreement provides that the Municipal Council shall
have first claim over other consumers for the supply of energy for pumping such
quantity of water as may be required from the wells at Bhaonta. In construing
the true nature of the contract entered into between the parties. the contract
has to be read as a whole and if so read it is clear that what the plaintiff
undertook was to pump water from the wells in question and not to supply any
443 Hence we are in agreement with the
learned Judges of the High Court that the plaintiff's case in this regard
Mr. Sharma urged that the High Court had not
thought it necessary to decide certain contentions advanced on behalf of the
defendant in view of its conclusions set out earlier. He told us that the
defendant had pleaded that the plaintiff failed to prove the quantum of
surcharge payable by the defendant. It also contended 'that the notification
under which the surcharge is levied cannot have retrospective operation and
that no surcharge was leviable under that notification on the charges in
respect of maintaining street lighting equipments. According to the learned
Counsel for the plaintiff there is no merit in any one of these contentions. As
mentioned earlier the High Court has not gone into these contentions. It is for
that court to examine those contentions. This court does not ordinarily examine
contentions which have not been examined by the appellate court. It is best
that these questions should be gone into by the High Court.
In the result we allow this appeal, set aside
the judgment of the High Court and remand the case back to the High Court for
deciding the issues that remain to be decided. The costs of this appeal shall
be costs in the cause.
V.P.S. Appeal allowed.