THE AMALGAMATED ELECTRICITY CO. LTD. versus N.S. BHATHENA AND ANOTHER

Citation: [1964] 7 S.C.R. 503 · Decided: 30-03-1964 · Supreme Court of India · Bench: A.K. SARKAR · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

.. 
is.c.R. 
SUPREME COURT REPORTS 
503 
THE AMALGAMATED ELECTRICITY CO. LTD. 
v. 
N.S. BHATHENA AND ANOTHER 
(A. K. SARKAR, K. C. DAS GUPTA AND RAJAGOPALA AYYAN· 
GAR, JJ.J 
Eiectricity Supply Act, 1948 (54 of 1948), ss. 57, 57A, 70 Sch. 
VI Indian Electricity Aot, 1910 (9 of 1910). s. 3 Schedule 
-Electricity 
Rates-Enhancement-Powers 
of 
!icensee-
Limits of such power-Legality of rates-J11.nsdiction of civil 
court-Burden of proof-
The appellant company was supplying electricity under ~ 
licence issued in 1932 by the Government of Bombay under the 
Indian Electricity Act, 1910. The licence fixed the limits r·f the 
prices which the appellant rould charge but these limits were al-
tered by an order made by the Government on December 30, 1942, 
acting under para XI of the Schedule to that Act, Due to the 
conditions brought about by the seeond world war, the licensee 
was permitted to add a surcharge not exceeding 33-1/3 % to the 
existing charges. On September 30, 1946, tho Bombay Electricity 
(Surcharge) Act, 1946, was passed which continued the surcharges 
for a period of·three years. Though the Surcharge Act of 1946 ex-
pired on September 30, 1949, the appellant continued charging 
the consumers at rates which included the surcharge and thi' 
was sought to be justified by resort to the provisions' of the Elec-
tricity Supply Act, 1948, which came into force on September 10, 
1948. On September 25, 1958, the appellant gave notice to its cus-
tomers that with effect from November 1, 1958, it would charge 
them at certain rates which the customers considered to be ille-
gal and unauthorised on the ground that they were in excess of 
those prescribed in the order of December 30, 1942. In the suits in-
stituted on behalf of the consumers challenging the legality of 
the rates levied by the appellant in excess of the maximum pres-
cribed by the Government of Bombay in its order dated Decem-
ber 30, 1942, the defence of the appellant was that the charges 
were well within the limits prescribed by the Electricity Supply 
Act, 1948, which according to its contention. effected such a radi-
cal change in the method of determining the reasonable rate as 
to completely supersede the rates and the maxima fixed under 
the Electricity Act of 1910. The question was also raised as to 
whether having regard to the provisions contained in ss. 57 and 
57A of the Act of 1948 a civil court would have jurisdiction to en-
tertain a suit challenging the legality of the rates levied by the 
appellant. 
· 
Held-(i) The maxima prescribed by the State Government 
which bound the licensee under the Indian Electricity Act. 1910. 
no longer limited the amount which he could charge after the 
Electricity Supply Act, 1948, came into force and that the licensee 
had a statutory right to adjust his rates as provided by Part I of 
Sch. VI of the latter Act. 
(ii) Where a party challenged the legality oi the rates on the 
ground 
that they contravened the provisions 
contained 
in Sch. VI of the Act of 1948 there was no duty on the 
licensee to prove that the rates were within the limits indicated 
in Sch. VI and it was for the party alleging his right to relief to 
prove his case. 
1964 
March JO 
504 
SUPREME COURT REPORTS 
[1964], 
196A 
Per Sarkar, J.-The respondents were not entitled to canvass 
TM. Amalgamakd in a civil court any question ao to the rates of a licensee being in 
Elutrici<yOo. Lid. excess of the limit prescribed in para I of Sch. VI to the Act of 
v. 
1948. A civil court could not declare that the rates charged by a 
N.S. Bha<lu:na licensee were illegal as they made its clear profit exceed the rea-
andAiwther 
sonable return. If there ~as such excess. the relief could be ob-
tained. only if'the Government set up a rating committee, a re-
fund became due thereupon under the last proviso to para I of 
Sch. VI or if relief was available under para Il(l) of that Sche-
dule. 
Sarkar, J. 
Per Das Gupta and Rajagopala Ayyangar, JJ.-(i) There 
could be unilateral adjustment of the rates by a licensee but such 
an adjustment must not leave him with more than the reason-
able return. Where the amount of reasonable return is exceeded, 
para II of Sch. VI comes into play and the excess over the reason-
able return is to be distributed in the manner !&id down in that 
paragraph. 
(ii) In view of the machinery that is provided for complaints 
in the event of the licensee deriving more than a reasonable 
return as contemplated by Sch. VI, the 

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