TITAGARH PAPER MILLS LIMITED ORISSA TEXTILES MILLS LIMITED Vs. ORISSA STATE ELECTRICITY BOARD:ORISSA STATE ELECTRICITY BOARD

JUDGEMENT

(1.) This appeal, by special leave, is brought against an order of the High court of orissa dismissing a writ petition filed by the appellant for quashing a press note dated 1/02/1971, levying a coal surcharge at the rate of 0. 62 p. per unit on electricity supplied by the orissa State Electricity Board from the Talcher Hirakud grid. The writ petition came to be filed by the appellant in the following circumstances.

(2.) The appellant is a limited liability company carrying on business of manufacture of board and paper. The appellant wanted to set up its factory at a place which would be convenient from the point of view of availability of facilities such as electric power. The State of orissa had, about this time, commissioned hydroelectric station at the site of Hirakud dam with a view to stepping up the production of electricity and making it available for industrial purposes. It offered to supply electricity to the appellant at reasonable rates as also to make other facilities available to the appellant if the appellant set up its factory atchoudwar in Cuttack district. An agreement dated 3/12/1960 was accordingly entered into between the appellant and the State of orissa for supply of electricity at certain mutually agreed rates and on the terms and conditions set out in the agreement. Clause (1) of the agreement provided that it shall be deemed to be in force for a period of five years from the date of supply of hydro-power, i. e. 1/02/1958 and thereafter shall so continue unless and until the same shall be determined by either party giving to the other six calendar months' notice in writing of his intention to terminate the agreement: It was common ground between the parties that neither had given notice terminating the agreement as contemplated in clause (1) and in the circumstances, the agreement continued to be in force. Clauses (7) , (14) and (22) specified the charges payable by the appellant for the electricity supplied by the State Electricity Board under the agreement. Clause (13) provided that:

(3.) In or about 1962 the State government, by a notification issued under S. 5, Ss. (1) of the Electricity (Supply) Act, 1948 (hereinafter referred to as the Supply Act) constituted the orissa State Electricity Board (for shortness called the Board). S. 60 of the Supply Act provides inter alia that all contracts entered into by, with. . the State government for any of the purposes of this Act before the first constitution of the Board shall be deemed to have been. . entered into. . by, with. . the Board. Therefore, as soon as the Board was constituted, the agreement dated 3/12/1960 was deemed to have been entered into by the appellantwith the Board and for all the purposes of the Supply Act it was to be treated as an agreement entered into with the Board. The Board in its turn supplied electricity to the appellant from the Hirakud hydro-power station at the rates and in accordance with the terms and conditions set out in the said agreement.