INDIAN ALUMINIUM COMPANY LIMITED Vs. KARNATAKA ELECTRICITY BOARD

JUDGEMENT

(1.) THIS Civilarising out of Special Leave Petition (Civil) No. 5890 of 1988, is directed against the judgment passed by the division bench of Karnataka High court on 19/04/1988 in Writ Petition No. 6257 of 1981. The appellants prayed for a writ in the nature of certiorari for directing the respondents to withdraw the letter dated 3/07/1980 (Annexure 'G' to the writ petition) and notification dated 30/06/1980 and for appropriate writs and directio disconnecting the supply of electricity to the factory of appellant I, Indian Aluminium Company Limited at Belgaum. The appellants also prayed for directing respondent 1, the Karnataka Electricity Board to exercise its powers under Section 49(3 of the Electricity (Supply) Act beither framing regulations in the tariff or by entering into an agreement providing for appropriate protective claims.

(2.) THE essential facts concerning the writ petition involved in the instant Civilmay be stated as follows:

(3.) THE Aluminium Control Order was issued by the Central Government in 1970 to control the price of aluminium ingots, wire bars, billets etc. On July 15, 1975, the Central Government notified the aluminium policy. It was indicated in the said policy that the proposed new rate for aluminium should remain in force for five years and such rates should be periodically revised and revision, if any, should be made only after consultation with the central government which was controlling the price of aluminium. In July, 1975 the rate of tariff was 7 paise per unit. THE second tripartite agreement in supersession of the earlier one was entered on August 7, 1976 between the writetitioners and respondent 4 and such agreement inter alia provided that whenever the Board wants to increase its power rates, it must give at least six months' notice to the Company to approach the central government so that corresponding increase in retention price of aluminium was effected to absorb the increased power rate. It was however provided that if the central Government would not increase the price within the period of six months, the increased tariff rates would become effective. On 22/01/1980, the Board issued a letter to the Company calling upon the Company to contact the Executive Engineer for executing a supplementary agreement relating to certain changes in the tariff rate proposed in the letter. THE Company by its letter dated 25/02/1980 requested the Government of Karnataka for arranging a meeting for discussion of the situation arising out of the proposed change in the tariff rate. It is contended that no positive result came out of the discussion held between the parties. On 15/07/1980 the government of India issued a notification inter alia refixing the retention price. On 8/07/1980, the Company received letter dated 3/07/1980 from the Board indicating that additional surcharge of 2 paise per unit had been enforced. On 5/08/1980 the Company, by way of abundant caution, had applied to the Central government for increasing the retention price. THE request made by the Company not to increase the tariff rate for the supply of power to its smelter plant however, was not acceded to by the Board. THE power rate was increased to 19.59 paise per unit in 1980. THE Board had also imposed surcharge of 10 paise per unit on 30/06/1980, and such surcharge was made effective from 1/06/1980. THE Company contended that the Board had not given six months' notice for the surcharge and in the writ petition such change of surcharge effective from 1/06/1980 had also been challenged and the legality and validity of imposition of surcharge for the period between 1/07/1980 to 1/11/1980 before the promulgation of the said Ordinance, were challenged in the writ petition. On 21/11/1980, the State of Karnataka promulgated Electricity Supply (Karnataka Amendment) Ordinance for amending S. 49 of the Electricity (Supply) Act which as aforesaid was replaced by Act 33 of 1981. THE effect of such amendment of S. 49 of the Electricity (Supply) Act is that it has empowered the Board to increase tariff rates notwithstanding any agreement with the consumers. On 2/02/1981, the Board increased the tariff rate to 25.93 per unit. Being aggrieved by increase of tariff rates and consequential demands for payment of bills on the basis of increased tariff in complete a disregard of the said agreement of 1976, the Company and one of its shareholders moved the said Writ Petition No. 6257 of 1981 for the reliefs indicated hereinbefore.