SIHOR ELECTRICITY WORKS LTD. versus THE GUJARAT ELECTRICITY BOARD AND ANR.

Citation: [1969] 3 S.C.R. 438 · Decided: 29-01-1969 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

smoR ELECTRICITY WORKS LTD. 
v. 
TIIE GUJARAT ELECTRICITY BOARD AND ANR. 
January 29, 1969 
(J, C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.] 
Elfctricity (Supply) Act, 1948, Ss. 2(8) and 19(1 )(b)(ii)-Expres. 
sion 'maxinzum demand'-Construction of-Conditions precedent for en .. 
cbling Electricity Board to nzake direct supply in area of a licensee. 
The appellant carried on the business ~f generating and distributin.g 
electriqal" energy within a specified area under a licence granted t? 1t 
under the Indian 
Electricity 
Act, 1910. 
The 
respondent, 
Gu1a_rat 
Electricity Board agreed with the second respondent company to give 
direct supply of electricity to its factory which wa~ wit~in the area of 
supply of the appellant. The appellant brou·ght a suit agamst the respon- . 
den~ for declaration that the agreement between the first and the second 
respondents without its consent was illegal and ultra vires lhe powers of 
the first respondent under the Electricity (Supply) Act., 1948, and sought 
an injunction restraining the first respondent from 
IDlplementmg 
the 
decision. 
The appellant's case was that the first respondent was not entitled to 
give direct supply to the second respondent as the "maximum 'demand" 
of the appellant at the time of the request of the second respondent was 
262 to 349 KVA between September and December, 1959, and therefore. 
mdre than twice the "maximum dem3nd" of the second respondent which 
had never exceeded 40 tq 45 KV A. The first respondent dontended, how-
ever, that the 
0 maximum demand" of the appeJlant company at the time 
of request was less than twice the "maximum 
demand" 
of 398 KVA 
asked for bv the second respondent from the first respondent. The trial 
court held that the first respondent's decision to give direct supply to the 
second respondent was ultra vires its power under section 19 (l)(b)(ii) 
of the Act. However, the first appellate court allowed an appeal and the 
High Court dismissed a further appeal holding, inter alia, that by virtue 
of s. 1'9(1)(b)(ii) the comparison required to be made was between the 
maximum demand of the licensee on the Board at the time of request for 
direct supply based on electiicity actually supplied and taken during some 
reasonable period immediately preceding the time of request for dircc( 
supply, and the maximum demand whi<1h the applicant wants to keep the 
Board ready on tap when supplying electricity to the applicant. 
On appeal to this the Court, 
HELD : The appellant was entitled to the grant of a decree in terms 
of the trial court's deci'ee. 
The "maximum demand" as defined in section 2(8) of the Act has 
relation only to an existing state of facts and there can be no maximum 
demand in relation to a future period. 
On a true construction of section 
19(1) (b)(ii), what is required to be compared for determining the 
applicability of the clause with the maximum demand of the licensee on 
the Board at the time of request fo'r direct ~upply, was the 
11maximun1 
'demand" by the appliaant on the licensee at that time and not any hypo-
thetical or anticipated demand which the applicant may call upon the 
Board be ready to supply, The phrase "supplied and taken" in s. 2(8) 
shows that the ascertaimnent of maximum demand is dependent upon the 
electricity actually supplied and taken in any particular period in the p .. t 
and not electricity which may be supplied and taken in a future period. 
[444B] 
B 
c 
D 
E 
F 
G 
A 
B 
c 
D 
E 
F 
G 
H 
ELECT\'. WORKS v. ELECTY. BOARD (Ramaswamy, J.) 
439 
There was no force in the respondent's contention that 
the 
words 
"asked for by any such person" must be construed to mean any hypothe· 
trical or anticipated demand which the applicant may call upon the Board 
to be rc.:iJy to supply. Such an interpretation \vould be inconsistent with 
the definition of .. maxin1urn demand" in section 2( 8) of the Act. 
There 
was no reason \.\hy 1he phrase "maximum denu-1nd'' in section 19(1)(b)(ii) 
of the Act should be given two different meanings one for the Jicensee 
and the· other for the consumer ask in~ for the m:1ximt1m den1and. H cannot 
be '.'>l1Pf10sed 
th~ll th~ legislature (onten1platcd th:t1 the phntsc "maximum 
dem:ind" should he 
~dvt>n two ditrcreni 
m~anin•!,,, in 
lh~ s;1m~ 
claus~. 
1444Ci I 
• 
• 
CIVIL APPELLATE JURISDICT.!ON : Civil Appeals Nos. J52 
and 453 of 1966. 
Appeals by special leave from the judgment and order, dated 
July 4, 1964 of the Gujarat High Court in 

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