LexINDIAN ALUMINIUM COMPANY LIMITED AND ANR. versus KARNATAKA ELECTRICITY BOARD AND ORS.
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INDIAN ALUMINIUM COMPANY LIMITED AND ANR. A v. KARNATAKA ELECTRICITY BOARD AND ORS. MAY 13, 1992 [N.M. KASLIWAL AND G.N. RAY, JJ.] B -~ Electricity (Supply) Act, 1948: Section 49: (As amended by Kamataka Act 33 of 1981)-Constitutional validity of. Company-Establishment of Aluminium Smelter Plant-Tripartite C agreement between Company, Electricity Board and State-Provision for supply of electricity at concessional rates-Amendment of Electricity (Supply) 1ct-Effect of-Imposition of enhanced revised tariff in supersession of the terms of ihe Agreement-Inclusion of Aluminium Smelter Plant in .power intensive industries i.e .. category HT-JA and imposition of uni/ orm tariff rate on all industries catesarised as HT-JA-Validity of. D Constitution of India, 1950 : Article 14: Equality-Classification-Principles for exclusion or inclusion-Ques- G tion of hostile discrimination-Examination of-Not mere phraseology but the real effect of the provisions should be looked into. Constitution-Interpretation of-Ascertainment of legislative com- petence-Provisions should not be constJUed with na"ow or pedantic ap proach-Should be interpreted broadly and liberally. H 213 A B 214 SUPREME COURT REPORTS (1992) 3 S.C.R. The appellant-Company established its Aluminium Smelter Plant at Belgaum in the State of karnataka. On March 26, 1966 a tripartite agree- ment was entered into between the Company, the Electricity Board and the State of Karnataka. A second tripartite agreement,, in supersession or the earlier one, was entered on August 7, 1976 between the parties providing for uninterrupted supply of power to the company at concessional rates. According to the appellant-company the agreement of 1976 was made in view of the industrial policy of the Government of llidia and the guidelines stated by the Government in the matter of electricity tariff to be applied to aluminium plants. In July 1980, the Electricity Board inc~ the power rate far beyond the prescribed rate in the agreement. Subsequently, C the State of Kamataka enacted the Electricity (Supply) (Karnataka Amendment) Act, 1981 amending Section 49 of the Electricity (Supply) Act 1948. The amended Section 49 empowered the Electricity Board to increase its tariff rates notwithstanding any agreement with the consumers. On February 2, 1981 the Board further increased the tariff rate. Aggrieved by· D increase of tariff rates and the consequential demands for payment of bills on the basis of increased tariff the company filed a writ petition challeng- ing the vires of the Amending Act on the score of legislative competence and also on the ground of arbitrary action of revising the tariff without justification and the unjust classification of the aluminium Smelter Plant E F in the category of other power tariff industries included in the category of HT IA Industries ignoring the special features of aluminium smelter plant. It was also contended that since the State Government invited the company to establish the plant by assuring uninterrupted supply of power at con- cessional rates, the principle of promissory estoppel was applicable and consequently the demand of tariff contrary to agreement was. illegal and arbitrary. The High Court upheld the validity of the impugned legislation by holding that : (1) under the amended provisions of Section 49 of the Electricity (Supply) Act uniformity was the basis of tariff and since all the powe~ tariff industries were treated alike the treatment meted out to the G company was not discriminatory under Article 14; (2) the enhancement of tariff was not violative of Article 19(1) (g); (3) no special promise was held out by the State or Electricity Board to the C~m~ny that a particular formula will be applied in the case of coiisumption of electricity by the company; that the doctrine of promissory estoppel was not attracted in the H sphere of statutory power and since the impugned action was a conse- - INDIAN ALUMINIUM CO. v. ELEClRICITY BOARD 215 quence of the amended provision of Section 49 the question of promissory A ~ estoppel did not arise; (4) the State Legislature was not denuded of its legislative competence merely because the Parliament declared aluminium industry as a controlled industry under the Industries (Development and Regulation) Act, 1951; and (5) the notification issued by the Central Government fixing the aluminium policy and also indicating the tariff B affec
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