STATE OF U.P. & ORS. versus HINDUSTAN ALUMINIUM CORPN. LTD. & ORS.

Citation: [1979] 3 S.C.R. 709 · Decided: 17-04-1979 · Supreme Court of India · Bench: P.N. SHINGAL · Disposal: Disposed off

Cited by 5 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

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709 
STATE OF U.P. & ORS. 
v. 
HINDUSTAN ALUMINIUM CORPN. LTD. & ORS. 
April 17, 1979 
[P. N, SHINGHAL AND D. A. DESAI, JJ.] 
Electricity Act (9 of 1910), s. 2(h) & Electricity (Supply) Act 1948 (64 of 
1948) S. 2(b)-State Electricity Board if a licensee. 
Electricity Act 1910 (9 of 1910), S. 22-B (as inserted in 1959)-Scope and 
object of-Order under section-Factors to be taken into consideration & Elec· 
tricity (Supply) Act 1948 (54 of 1948), S. 26 Proviso 2-Scope of. 
U.P. Electricity (Regulation of Supply, Distribution, Consumption and 
Use) Order 1977- Cl. 6(a) (i) Proviso-Validity of . 
Words 
& 
Phrases-'Regulmlon', 
'restriction', 
'prohibition'-Distinction 
between. 
At the time of granting lincence to the company for the establishment of a 
new Aluminium factory the Government of India obtained the consent of the 
Government of U.P. to make available to the company in bulk clieap electricity 
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from the Rihand Hydro-Electric Scheme. An agreement was entered into 
between the Company and the State Government for the bulk supply of elec-
tricity on a firm, continuous and uninterrupted basis at 1.99 odd paise per unit 
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for a period of 25 years. 
The company set up and commissioned its aluminium plant at Renukoot in 
April, 1962. It was granted a further licence for the expansion of its installed 
capacity. As the State was unable to meet the extra requirement of energy, 
silnction under s. 28 of the Electricity Act 1910 was granted to the Company, 
at its request, on NOvember 12, 1964, to set up a generating station at Reno-
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sagar, near Renukoot. 
It set up two gen·erating units of 67'.5 mw each. The 
first unit started generating power in 1967 and the other in 1968. 
In the meantime, permission was 
granted 
to increase 
the 
Company's 
installed capacity from 40,000 metric tonnes to 60,000 metric tonnes. The 
Company thought of setting up a plant for the production of 60,000 metric 
tonnes of aluminium in the State of Gujarat. But the Government of U.P. 
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entered into negotiations: with the Company and in its letter dated November 
20, 1968, it stated that there could be no difficulty in meeting the interim 
requirements of energy for 2 to 3 years from the U.P. State Electricity Board 
and also for arranging for parallel running of their new power stations. The 
Company was granted sanction to expand the Renu Sagar Generation by 250 
mw, and after negotiations with the State Government it Was agreed that the 
U.P.S.E.B. would meet the additional energy under a phased programme. The 
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U.P.S.E.B. stated in its letter dated September 2, 1972, that the supply would be 
without prejudice to the power of the State Government to control the 
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710 
SUPREME COURT REPORTS 
[1979] 3 S.C.R. 
distribution and consumption of energy under s. 22B of the Act. The additional 
energy was not made available to the Company during 1972-75 although the 
rate was substantially increased with retrospective effect. 
An agreement \Vas however entered into between the Company and the 
U.P.S.E.B. on November 30, 1976, in sup'ersession of the earlier agreements, 
and it was s-tipulated that it would be read and construed in all respects in 
conformity with the provisions of the Electricity (Supply) Act, 1948 and its 
rules and the regulations and the amendments thereto. 
Th~ State Government took a decision in December 1976 to reconnect some 
agricultural pumping sets which had been disconnected and this placed a.n addi-
tional load on the grid system of the State. 
On the note of the UPSEB 
that 
there was acute shortage of energy, and its suggestion for the imposition of 
some restrictions, the U.P. Electricity (Regulation of Distribution and Con-
sumption) Order 1977, was issued by the Government on April 7, 1977. Under 
cl. 6(a)(i) of the Order, the Company could draw energy only to the extent of 
SO per cent of its monthly coi.1sumption. 
As the shortage of energy became more acute the Secretary of the Power 
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DepMim'ent sent a note to the Governor dated May 3, 1977 stating that there 
was a large gap between demand and availability of energy 
and that over-
riding public interest, particularly the need to maintain food supply, required 
that units which were heavy consumers of 'energy should be subjected to further 
cut in the consumption of energy. It was particularly pointed out that as the 
Company was itself generating energy at Renusagar, it will have more than 50 
p

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