K.D. INDUSTRIES versus BIHAR STATE ELECTRICITY BOARD AND ORS.

Citation: [2001] 2 S.C.R. 560 · Decided: 21-03-2001 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed

Judgment (excerpt)

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A 
K.D. INDUSTRIES 
! 
v. 
BIHAR STATE ELECTRICITY BOARD AND ORS. 
MARCH 21, 2001 
B 
[S. RAJENDRABABU AND S.N. VARIAVA, JJ.] 
Electricity Supply Act, 1948 : Section 78-A. 
Electricity Tariff-New industrial units-Minimum Guarantee Charges-
c 
Exemption from payment of-State Governmellt in its Industrial Policy granted 
exemption to new industrial units from payment of minimum guarantee charges-
State Electricity Board passed a resolution granting such exemption-Jn an 
earlier writ petition State Government clar~fied that there was no distinction 
between low-tension and high-tension connection in the matter of exemption-
.. 
Accordingly, new industrial units set up and low-tension connection given-But 
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Board refused to grant exemption-Validity of-Held: In view of the Govern-
ment's clarification it is not open to contend that exemption did not apply to 
low-tension connections-Whilst granting exemption the Government has not 
specifically excluded low-tension connections-Board having accepted Gov-
ernment's direction is bound to grant exemption to both low and high-tension 
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connections-Hence, refusal to grant exemption from payment of minimum 
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guarantee charges to low-tension connections, illegal. 
The State Government in its Industrial Policy issued a direction 
under Section 78-A of the Electricity Supply Act, 1948 granting exemption 
to new industrial units from payment of minimum guarantee charges. 
F 
Accordingly, the respondent-Board passed a resolution granting exemp· 
tion from payment of Minimum Guarantee (Minimum Base Charge) in 
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respect of new industrial units, 
During the hearing of an earlier writ petition the State Government 
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had clarified that the Industrial Policy did not make any distinction be-
tween high-tension and low-tension connections, The appellants, therefore, 
had set np new industrial units and were given low-tension connections. 
However, the appellants were forced to pay minimum guarantee charges. 
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The writ petition filed by the appellants was dismissed by the High Court. 
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On behalf of the appellants it was contended that a conjoint reading 
560 
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K.D. INDUSTRIES v. BIHAR STATE ELECTRICITY BOARD 
561 
A 
of paragraphs 9.4 and 9.6 of the Industrial Policy showed that the exemp-
A 
tion was for high-tension as well as low-tension connections and, therefore, 
denial of exemption to the appellants was illegal. 
On behalf of the respondents it was contended that the Govern-
ment's Industrial Policy did not grant exemption to low-tension connec-
B 
!ions. 
Allowing the appeal, the Court 
HELD 1.1. The Government had clarified that the lndnstrial Policy 
did not make any distinction between high-tension and low-tension con-
c 
nections. Therefore, it is now not open to contend that the Government's 
Policy did not grant exemption to low-tension connections. [564-E-F] 
1.2. Even otherwise the provisions of paragraphs 9.4 and 9.6 of the 
Industrial Policy have to be read together. A conjoint reading makes it 
clear that the Government is aware that there are low-tension connections 
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and high-tension connections. Whilst granting exemption the Government 
is not specifically excluding low-tension connections. Even in Paragraph 
9.6, when the Government wants to refer to low-tension connections it 
specifically does so. Thus the only conclusion can be that if the Govern-
ment wanted to exclude low-tension connections they would have specifi· 
E 
cally done so. [564-G-H] 
2. The State Electricity Board is accepting the Government's direc-
!ions given to it under Section 78-A of the Electricity Supply Act, 1948. In 
its Resolution it is granting exemption from payment of minimnm guaran-
tee (minimum base charge). The respondent is well aware of the difference 
F 
... . between low-tension connections and high-tension connections. If, as is 
claimed, the term "minimum guarantee charge'' were not used for high-
tension connections, then they wmdd not have used that term at all in the 
Resolution if they wanted to restrict the exemption to high-tension connec-
ti.ons. Advisedly they have used both the terms "Minimum Guarantee" 
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and "Minimum Base Charge". This itself shows that the exemption ap-
plied to both types of connections. The respondent has not stated that such 
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an exemption would not be granted to low-tension connections. The re-
spondent having adopted the direction of the Government is bound to 
comply with those directions. So long as the other cond

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