MAHARASHTRA STATE ELECTRICITY BOARD versus KALYAN BOROUGH MUNICIPALITY & ANR.

Citation: [1968] 3 S.C.R. 137 · Decided: 08-02-1968 · Supreme Court of India · Bench: K.N. WANCHOO · Disposal: Appeal(s) allowed
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Judgment (excerpt)

137 
A 
MAHARASHTRA STATE ELECTRICITY BOARD 
B 
c 
D 
E 
F 
G 
v. 
KALYAN BOROUGH MUNICIPALITY & ANR. 
February 8, 1968 
[K. N. WANCHOO, C.J., S. M. Snoo, J.M. SHELAT, V. BHARGAVA 
AND C. A. VAIDlALlNGAM, JJ.] 
Electricity (Supp(v) Act 54 of 1948; s. 49 as amended by the Electri-
city (S11pply) Amendment Act 30 of 1966, s. 24-Pow.er of Electricity 
Board to /ev,v uniform tariffs for different consumers-Valulity of s. 49 
-Whether colourable exercise of taxing power-Whetf1er gives unguided 
po,.-er to Board--Ej/ect of s. 24 of Amendment Act. 
The appellant the Maharashtra State Electricity Board which took over 
tho supply of electrical energy from the original linc<,nsec, increased the 
tariff and fixed a 11niform tariff for all its consumers. The respondents-
consume;s filed petitions under Art. 226 of the Constitution. contending 
that (a) s. 49 of the Electricity (supply) Act 1948 .did not permit the 
Board to frame uniform tariffs for consumers in compact areas as well 
as consumers in sparse areas. so as to require the former to pay a part of 
the oost involved in the supply of electricity to the latter: and (b) if s. 
49 gave such power to the Board it was ultra vii"es and void, as it offended 
the provisions of the Constitution. The High Court allowed 
the 
writ 
J>Zlitions. The Board filed appeals to this Court and during its pcndency 
s. 49 was amended 1cb:ospectively by the Electricity (Supply) Amendment 
Act 1966 and by s. 24 of the Amendment Act tho imposition and cotlcc· 
tion of cha1ges undeJ s. 49 was validated. 
HEID : The appeals must be allowed. 
(i) "Ibc appellate-Board had ample powers to frame uniform tariffs 
and the levy was valid. 
In the old s . .,.'> .. there was no such policy or direction indicated by the 
Legislature that ~·Board is to frame uniform tariffs. Under that section, 
the Board had the po\\-er to supply electricity on such terms and conditions 
as it may from time to time fix, having regard to t!n matters referred to 
in the said section.' "Ihe only restriction upon the Board's power was that 
it shall not show undue preferenee to any person in fixinR any such tef1n.;. 
and conditions. In s. 49 as it now stands tm Legislature hns empowered 
the Board to frame uniform tariffs and it has also indicated the. factor~ 
to 00 taken into account in fixing uniform tariffs. These two aspects arc 
contained in sn~. (1) and (2). The Legislature has also made it clear 
in sub-s. (3) that the Boan! in the special circumstances mentioned thcn:--
iii, has got power to fix different tariffs for the supply of electricity. Sub-
section (4) directs the Board not to show undue preference to any person 
f01 fixing the tariffs and the terms and conditions for the supply of electri-
city. 
Though prima fade it would appear that sub-s. ( 4) will govern 
sub-ss. (1) to (3) in s. 49 the proper way to interpret sub-s. ( 4) will be 
to read it along with snb-s.. (7). When the e'ntire tariff is uniform for 
every consumer. there is no question of any undue preference as every 
customer will pay the same amount for the same benefit received b~r him. 
(153 CE] 
H 
So11th of Scotlcnd Electricity Board & Ors. v. British Oxygen Co. Ltd. 
(195~ 2 All E.R. 225 and Attorney-Gene/"11 for 
Victoria v. 
Mayor, 
Aldermen. Councillors and Citizens of Melbourne, 
[19071 A.C. 469, re·· 
ferred' to. 
L4SUp.Cl./6S-10 
138 
SUPREME COURT REPORTS 
(1963] 3 S.C.R. 
(ii) In the counter-affidavit filed on behalf of the Board, it has been 
stated that ever sinoe its constitution, it has been carrying an its opuatiQlia 
at a loss and there has been no occas:on when any part of its revenues 
has bc,on passed to the consolidated fund of the State, as provided by the 
proviso to sub-<:l. (b) of cl. 10 of s. 67. Even otherwise, before the pro-
viSo can come into operation, there are several other items in respect of 
which adjustments will have to be made, and there will be n9 occasion at 
an for th-e proviso to come in~o effect. There is no force in ffie contention 
of the respondents that with a view to give effect to the proviso. the Board 
will so. fix <he tariffs as to enable them to have huge surplus, after meeting 
the various adjustments. 
In case such a thing happens in future. the 
proviso, which is clearly severable, may have to be struck down. There-
fore, this ground of attack, that there is a colourable exercise of taxing 
power, cannot be accepted. 
f.154 H-155 CJ 
· 
(iii) Section 49 is not, in any way, bad on the gro
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