M/S RAYMOND LTD. AND ANR. ETC. ETC. versus MADHYA PRADESH ELECTRICITY BOARD AND ORS. ETC. ETC.

Citation: [2000] SUPP. 4 S.C.R. 668 · Decided: 16-11-2000 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Disposed off

Judgment (excerpt)

A 
B 
c 
MIS RAYMOND LTD. AND ANR. ETC. ETC. 
v. 
MADHYA PRADESH ELECTRICITY BOARD 
AND ORS. ETC. ETC'. 
NOVEMBER 16, 2000 
[B.N. KIRPAL, DORAISWAMY RAJU AND 
K.G. BALAKRISHNAN, JJ.] 
Electricity Laws: 
Minimum charges fixed on basis of minimum guaranteed consumption 
by Electricity Board-Whether consumer required to pay even if consumption 
is less than the minimum guaranteed consumption-Held, yes. 
D 
Whether consumer required to pay if supply by Board is less than 
minimum guaranteed consumption-Held, the Board shall be entitled to 
charge only for energy actually supplied-Electricity Act, 191011948. 
Constitution of India, 1950-Article 226-Principle of prospective over 
ruling-Application-Power of High Court exercising writ jurisdiction-
E Held, High Court can apply the principle if it is found necessary in balancing 
the rights of parties and in the interest of justice-Articles 136, 141and142. 
Appellant-industries entered into an agreement with Board for supply 
and purchase of high tension electric energy for use in manufacture of their 
"(..., 
F products. ~s per the agreement, consumer have to pay minimum guaranteed 
amount to the Board fixed on the basis of minimum guaranteed consumption 
equivalent to 40% load factor of contract demand if the actual consumption 
falls below the minimum guaranteed consumption. On the basis, Board raised 
bills for a certain period for the minimum guaranteed amount. The consumers 
questioned the liability to pay difference amount between the actual 
..,. · 
G consumption and the minimum guaranteed consumption, by filing Writ 
Petition before the High Court. The Division Bench, not concurring with the 
earlier decision of a Division Bench of the same High Court, referred the 
cases to Full Bench for proper interpretation. The Full Bench interpreted 
with reference to the agreement read with Tariff that whenever contracted 
H supply falls short of 40% of the contract load (minimum guaranteed 
668 
RAYMOND LTD. v. M.P. ELECTRICITY BOARD 
669 
consumption), then the Board shall be entitled to charge only for the reduced A 
energy actually supplied and not entitled to charge the minimum guaranteed 
amount and also held that this interpretation shall have a prospective effect 
from the date of its order. With the prospective declaration of law, no relief as 
prayed for by the consumers was granted and the Writ Petitions were 
dismissed by the High Court. In appeal to this Court, the consumers 
challenged the prospective declaration of law while the Board challenged the B 
view with respect to charge on reduced suppl_y/consumption. 
The Board contended that the minimum charges is not subject to either 
actual supply by the Board or consumption by the consumer and the. payment 
• 
of such minimum guaranteed amount is in substance a partial return for C 
various investments in the various installations and to. meet recurring 
expenses for maintenance. The load factor envisaged is said to be a measure 
of liability for minimum guarantee and not to cast any obligation on the Board 
to effect supply of energy so as to make it a condition precedent for casting 
liability on the consumer to pay the minimum guaranteed ·charges. The 
consumers, on the other hand, contended that the contract must be construed 
as a whole in the context and object underlying the same and should be 
meaningful and useful. The consumers further contended that the quality, 
quantity and manner of supply have also to be taken into account in assessing 
the usefulness of the energy for industrial purposes and to pay the minimum 
guaranteed amount would result in grave injustice besides being inequitable 
an unconscionable. The consumers also questioned the principle of prospective 
over ruling contending that such principles cannot be invoked by the High 
Court exercising jurisdiction under Article 226 of the Constitution of India. 
Disposing of the appeals, the Court 
HELD: 1.1. The terms and conditions of supply, as envisaged in the 
contract and the statutory provisions and general conditions have been 
standardised for uniform application among consumers with variations merely 
necessitated by the different class or categories of consumers and there is 
D 
E 
F 
no scope otherwise for expecting any scope for individual or free bargaining G 
right in this regard by each consumer with the Board. Therefore, it is futile 
for a consumer to contend that the Board was at the dictating end and the 
parties were not e

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