THE MYSORE STATE ELECTRICITY BOARD versus BANGALORE WOOLLEN, COTTON AND SILK MILLS LTD. & ORS.

Citation: [1963] SUPP. 2 S.C.R. 127 · Decided: 15-11-1962 · Supreme Court of India · Bench: S.K. DAS · Disposal: Appeal(s) allowed

Judgment (excerpt)

2 S.C.R. 
SUPREME COURT REPORTS 
127 
THE MYSORE STATE ELECTRICITY BOARD 
f), 
BANGALORE WOOLLEN, 
COTTON 
AND SILK MILLS LTD. & ORS. 
(S. K. DAS, J. L. KAPUR, 
A. K. SARKAR, 
M. HIDAYATULLAH and RAGHUBAR DAYAL, JJ.) 
Ekdricily-Revi8ion of rate8 of supply by Government 
afltr expiry of aureemenl-Di8pule raised by C0118Umer-lf 
liable to arbitration-Electricity (Supply) Act, 1948 (54 of 1.948) 
8, 76,49,60, Indian Eledricily Act, 1910 (9 of 1910), 8. 62. 
Disputes arose between the respondent mills and the 
appellant Board relating to the payment of revised rates to the 
appellant or its predecessor, the Government of Mysore under 
the Electricity (Supply)-Act, 1948. Prior to the constitution of 
the Board under that Act in September, 1957, the Government 
of Mysore was generating and supplying electricity under the 
Electricity Ac\ of 1910. In 1945 agrccmcnts were entered into 
between the Government and the respondents for supply of eler,. 
tricity to them at'ccrtain rates for a period of five years. The 
agreements expired in 1949-50, In March, 1953, the Govern-
ment increased the ,rates. It again increased the rates from 
April, 1956. 
These revisions were not made by the Govern-
ment under s. 49 of the 1948 Act as that section came into 
force in 1957. The respondents did not pay at the enhanced 
rates and moved the High Court under '1rt. 226 of the Consti-
tution for restraining the Government as also the Board, which 
after its constitution was added as a party, from levying at the 
increased rates. It was urged on their behalf that the State Gove-
rnment was not entitled to increase the rates and that the dispute 
between them on the one hand and the Government and the 
Board on the other with regard to increased rates was liable to 
be decided by arbitration under s ... 76 of the Act of 1948, ~which 
had come into force in the State of Mysore on December 30, 
1956. The High Coult decided the first point in favour of the Go-
vernment but did not l:lecide the second. The respondents did not 
pay the arrears at the revised rates and the Board threatened to 
cut oft' the supply. The respondents then nominated their 
arbitrator under s. 76 of the Act. The Board filed applications 
before the DistrietJudgc under s. 33 of the Arbitration Act for 
a dei:l..-tion t!Mt tbe difp11te was not refcm1blc to 'P'bitratioll 
1962 
N ....... r.15 
1962 
M"µtm Sta11 
El«trrt.il' Board 
v. 
Ba.,,1alo'' W, 0!11n, 
Collon & Silk 
Mills Ltd. 
128 SUPREME COURT REPORTS [1963] SUPP. 
under s. 76 of the Electricity (Supply) Act. The additional 
District Judge who heard the matter held in favour of the 
Board. The respondents moved the High Court in revision. 
That Court held that s. 76 applied and the respondents 
were entitled to call for an arbitration. The Board appealed 
to this Court. It was urged on its behalf that in view of the 
decision of the High.Court on the writ petition, the claim of 
reference to arbitration under s. 76 of the Act was barred by 
res judicata and that the expression "other person'' in sttb-s. (I) 
of that section, read ejusdem generis could not include a con-
sumer of electrical energy nor was such a consumer entitled to 
the benefit of sub-s. (2) of that section as no provision of the 
Act of 1948 read with the Act of 1910 authorised reference of 
such a dispute to arbitration. 
Held, th&t it was well-settled that in order to judge 
whether a decision in an earlier litigation operated as res 
judicata the court must consider the nature of the litigation, 
the issue raised in it and the actual decision. The right of the 
Government or the Board to revise the rates and the right of 
the respondents if any, to raise a dispute as to the revised rates 
and seek arbitration thereupon, a question which was expressly 
left open by the High Court, were two different matters and 
the decision on the former could not operate as res judicata in 
respect of the latter. 
The relevant provisions of the Act of 1910 and the Act 
of 1948, read together, made it clear. that the Mysore State 
Government in the years 1953-56 was free to contract with the 
consumers of electricity to supply at such rates as it thought fit. 
When therefore the agreements with the respondents came to 
an end in 1949-50 it was not bound to continue the supply at 
the old rates. The matter rrsted in the region of contract; 
express or implied, and could not i'aise a question under the 
Electricity (Supply) Act of 1948 so ano attract s. 76 of that

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