LexSTATE OF KERALA versus INDIAN ALUMINIUM CO. LTD. AND ORS.
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ST A TE OF KERALA A v. INDIAN ALUMINIUM CO. LTD. AND ORS. APRIL 6 1999 [V.N. KHARE AND R.P. SETHI, JJ.] B Electricity (Supply) Act, 1948 : Ss.49 (3) and 49 (5) (as amended by Act 7 of 1983)-Company-Special agreement with the Board for supply of Electricity at concessional rates-Amendment in Act-Fixation of uniform C tariff-Effect of-Held, special agreement entered into was not annulled as a whole-Payment of duty by company a concessional rates not effected in any manner-Neither State Government nor Board entitled to demand duty at a rate over and above what was provided in the exemption order-Kera/a Electricity Duty Act, 1963 : S.4. Constitution of India, 1950 : Article 14-'-Electricity (Supply) Act, 1948: S.49(5) (As amended by Act 7of1983)-Validity of-Held, Sec. 49(5) creates no bar on the Board to enter into any special agreement with any consumer including appellant-company-No hostile discrimination against appellant- D company-Thus, not violative of Article 14 of the Constitution. E Respondent-Company engaged in manufacturing aluminium, en.tered into an agreement with State Electricity Board for supply of electricity at concessional rates, under sec. 49(3) of Electricity (Supply) Act, 1948. The State Government by inserting sub-section (5) in section 49 of the Act by F Amendment Act, 1983, rescinded the supply of electricity at concessional rates. On challenge, High Court upheld the validity of sub-section (5) of the Act but set aside the notice of demand of duty at higher rates. Aggrieved, both the appellant-State and Respondent-company have preferred the present appeals. On behalf of appellant-State it was contended that once the special 'agreement stipulating supply of electricity at concessional rates was annulled . by virtue of sub-section (5) of Section 49 of the Act, the concession granted to the Company for paying duty at concessional rates also stood abrogated G , and, therefore, the company was not entitled to any concession in the matter H 465 466 SUPREME COURT REPORTS [1999] 2 S.C.R. · A of payment of duty and liable to pay at the uniform rates under the Act, and the view taken by the High Court was erroneous. On behalfofthe respondent-Company it was contended that it was open to the Board to enter into a special agreement under the provisions ofsub- B section (3) of Section 49 with other similarly situated consumers, but the appellant-company alone has been deprived from entering into a special agreement. Thus, by virtue of sub-section (5) of Section 49 of the Act, it has been picked up for hostile discrimination which was violative of Article 14 of the Constitution. c Dismissing the appeals, this Court HELD : 1.1. By virtue of insertion of sub-section (5) in Section 49 of the Electricity (Supply) Act, 1948 the special agreement entered into between · the Board and Company as a whole was not annulled and only thing that was D annulled was the agreement relating to rates of electricity payable by the company under the agreement and further the said Amendment Act did not in any manner affect the payment of duty by the Company at the concessional rates. [471-E-F) 1.2. On a perusal of sub-section (5) it is clear that by this amendment E the agreement entered into between the company and the Board was not rescinded. What was rescinded, was the connectional rates at which the -.-- company was receiving electricity. The agreement, as a whole, was not rescinded. For other purposes it remained intact. It is also clear from the fact that, _on insertion of sub-section (5) in Section 49 of the Act in the year F 1983 no fresh agreement was entered into between the Board and the Company and the old agreement continued. Had there been an abrogation of the entire agreement, the Board would not have supplied electricity to the company. At no point of time, the Board after passing of the Amendment Act G stopped supplying electricity to the company or entered into any fresh· agreement for supply of electricity. [470-G-H; 471-A) Indian Aluminium Company Ltd. v. Karnataka Electricity Board, (1993) 2 sec 266, relied on. H 2. Neither the State Government nor the Board was within its r!ghts • - ST A TE v. INDIAN ALUMINIUM CO. LTD. 467 to demand from the company electricity duty at the rate over and above what A ·has been provided in the exemption order. Section 4 of the Kerala Electricity Duty Act, 1963 provides that it is open to the State Gover
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