GOPISETTI VENKATRATNAM Vs. VIJAYAWADA MUNICIPALITY ANOTHER

JUDGEMENT

(1.) On November 22, 1927, the Government of Madras, in exercise of its powers under S. 3(1) of the Indian Electricity Act, 1910 (IX of 1910), hereinafter called the Act, issued a license to the Bezwada (now Vijayawada) Municipal Council for the supply of electric energy within the municipal limits of Bezwada at rates not exceeding the maximum charges given in the third annexure to the said license. The appellants, who are some of the consumers of electric energy for domestic and industrial purposes, entered into agreements with the licensee for the supply of electric energy to them for domestic, industrial and other purposes, agreeing to pay the current official scale of rates. On December 13, 1940, the Municipality passed a resolution bringing into force new rates for the supply of electric energy from April 1, 1940. The consumers paid the rates so fixed till the year 1956. On April 30, 1956, the Municipal Council passed another resolution enhancing the rates from 1st April, 1956. The appellants filed a representative suit against the Vijayawada Municipality in the Court of the District Munsif, Vijayawada, for a declaration that the said resolution dated April 30, 1956, passed by the Municipal Council was illegal, invalid and unenforceable and for an injunction restraining the said Municipality from collecting charges from the consumers of electric energy in the licensee's area at the new revised rates in pursuance of the impugned resolution. The learned District Munsif held that the demand of enhanced rate was legal and valid and dismissed the suit. On appeal, the learned Subordinate Judge held that the levy from the date of the said resolution was good, but it could not be given retrospective operation. He further held that the claim for duty at half an anna per unit was invalid. In the result he modified the decree of the District Munsif. On a further appeal, a Division Bench of the Andhra Pradesh High Court confirmed the decree of the Subordinate Judge. By special leave the present appeal has been filed in this Court.

(2.) Mr. A. V. Viswanatha Sastri, learned counsel for the appellants raised before us the following two contentions : (1) The rates agreed upon between the consumers and the Municipality cannot be unilaterally altered and increased by the Municipality to the prejudice of the consumers and, therefore, the said resolution dated April 30, 1956, was invalid and unenforceable; and (2) as the said resolution was passed without obtaining the previous sanction of the State Government under S. 21(2) of the Act it was void for that reason also.

(3.) The first contention turns upon the relevant clauses of the agreement entered into between the Municipal Council and the consumers. Ex. B-4 is one such agreement dated May 27, 1932, between the Municipality and one of the appellants herein. The material clauses of the agreement read: