NADIAD ELECTRIC COMPANY LIMITED Vs. NADIAD BOROUGH MUNICIPALITY

JUDGEMENT

(1.) The question which arises for considration in this appeal by certificate is whether the plaintiff in the suit out of which this appeal arises i.e. Nadiad Borough Municipality, Nadiad is an establishment which can claim the benefit of sub-section (3) of Section 22-A of the Indian Electricity Act, 1910 (Act No. 9 of 1910) (hereinafter referred to as "the Act"). The plaintiff instituted the said suit on August 12, 1960 against the defendant, Nadiad Electric Supply Co. Ltd., Nadiad on the file of the Civil Judge (Senior Dividion), Nadiad for a declaration that it was entitled to the supply of electrical energy from the defendant on the same terms and conditions as were specified in the agreement dated August 14, 1940 entered into between it and the defendant until the defendant received a notice in writing from the plaintiff requiring it to discontinue the supply and for an injunction restraining the defendant from discontinuing the supply till such notice was served on the defendant. The facts set out in the plaint were briefly these:The plaintiff was a Municipality which was under an obligation to make reasonable and adequate provision for lighting of public streets, places and buildings situated within its limits and for that purpose, the plaintiff had entered into an agreement on August 14, 1940 with the defendant which was a licensee under the Act. The period during which the supply of electrical energy was to be made under the agreement was 20 years from the date on which the agreement was executed. On May 10, 1960, the defendant wrote a letter to the plaintiff that the suit agreement was to come to an end on the expiry of August 13, 1960 and the defendant was not under any obligation to continue to supply energy to the plaintiff as per rates, terms and conditions stated in the agreement after its expiry and that it was willing to supply energy thereafter provided the plaintiff was willing to pay the charges for the supply at the new rates demanded by it. The defendant also informed the plaintiff that if the plaintiff was not willing to purchase energy at the revised rates, it would discontinue the supply on the expiry of the period of the agreement. The plaintiff thereafter wrote a letter on August 6,1960 requesting the defendant to renew the agreement on the same terms and conditions as were mentioned in the agreement dated August 14, 1940. By its reply dated August 9, 1960, the defendant informed the plaintiff that it was not willing to supply electrical energy on the same terms and conditions mentioned in the agreement after its expire and insisted upon payment being made at the revised rates as stated in its letter dated May 10,1960.The plaintiff thereafter filed the above suit on August 12,1960 for the reliefs referred to above principally relying upon the provisions of sub-section (3) of Section 22-A of the Act. The defendant, in the course of its written statement, inter alia contended that the plaintiff was not entitled to the benefit of sub-section (3) of Section 22-A of the Act as it was not an establishment to which the said provision was applicable. In the course of the trial, it was not disputed that the State Government had not issued any notification stating that in its opinion the plaintiff was an establishment used or intended to be used for maintaining supplies and services essential to the community as required by sub-section (1) of Sec. 22-A of the Act. The trial court held that in the absence of such a notification, the plaintiff was not entitled to claim the benefit was not entitled to claim the benefit of sub-section (3) of section 22-A of the Act and, therefore, no relief could be granted in the suit. The suit was accordingly dismissed.

(2.) Aggrieved by the decree of the trial court, the plaintiff filed an appeal before the District Judge of Kaira at Nadiad. The said appeal was transferred to the file of the 2nd Extra Assistant Judge at Ahmedabad. After hearing the parties, the 2nd Extra Assistant Judge dismissed the appeal. Against the decree of the First Appellate Court, the plaintiff filed a second appeal before the High Court of Gujarat. The second appeal was allowed in part by a single judge of the High Court of Gujarat and a decree was passed granting a declaration in favour of the plaintiff declarating that the defendant was bound under sub-section. (3) of Sec. 22-A of the Act to continue to supply electrical energy to the plaintiff at the same rates and on the same terms and conditions as were specified in the agreement dated August 14, 1940 so long as the plaintiff continued to be an establishment used or intended to be used for maintaining supplies and services essential to the community and until the defendant received a notice in writing from the plaintiff requiring the defendant to discontinue the supply, such obligation, however, being subject to the other provisions of the Act, and the provisions of the Electricity (supply) Act 1948, including Sections 57 and 57-A and the Sixth and Seventh Schedules to that Act. The relief of permanent injunction prayed for in the suit was, however refused on the ground that the defendant had never refused to supply electrical energy to the plaintiff at the same rates and on the same terms and conditions as were specified in the agreement dated August 14, 1940 if it was held either that there was a covenant for renewal contained in the agreement dated August 14, 1940 or that subsection (3) of Section 22-A of the Act applied to the facts of the case.

(3.) Against the decree passed in the second appeal, the defendant filed Letters Patent Appeal No. 11 of 1963 on the file of the High Court. That appeal was dismissed by a Division Bench of the High Court. Thereafter the Division Bench issued a certificate under Article 133 (1) (c) of the Constitution certifying that the case was a fit one for appeal to this Court. On the basis of the above certificate, the defendant has filed this appeal before this Court. In the course of this appeal on an application made by the plaintiff, the Gujarat State Electricity Board has also been impleaded as a respondent.