U.P STATE ELECTRICITY BOARD. LUCKNOW & ORS. versus CITY BOARD, MUSSOORIE & ORS. ETC. (AND VICE VERSA)

Citation: [1985] 2 S.C.R. 815 · Decided: 08-02-1985 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Disposed off

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

Judgment (excerpt)

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U.P. STATE ELECTRICITY BOARD. LUCKNOW & ORS. 
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v. 
CITY BOARD, MUSSOORIE & ORS. ETC. 
(AND VICE VERSA) 
February 8, 1985 
[0. CHINNAPPA REDDY, E.S. VBNKATARAMIAH AND SABYASACHI 
MUKHARJI, JJ.] 
E/ectriclty (Supply) Act, 1948, sections 46 and 56-Grid tariif-Flxa1ion 
of-Framing of Regulations under section 79(h)--Whether condition precedent-
A common tariff for all licensees in an area servtd by the grid-Whether 
permlssibl•. 
Section 46 of the Electricity (Supply) Act 1948 prov id•s that a '"if 'r 
be known as the Grid Tariff shall, in accordance with any-regulations made, 
be fixed from time to time by the Electricity Board. Section 58 enables a local 
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authority to implement th~ directions issued by the Electricity Board or the 
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Government with regard to amortisation and tariffs policies. 
The U .P. Electricity Board under a notification dated 24 April 1962, 
fixed the tariff payable by licensees who used to get bulk supply of electric 
tnergy. The tariff so fixed was enhanced by another notification dated 
September 30, 1967 by 20% which came into force on December, l, 1967. The 
City Board, a licensee, moved the State Government on September 13, 1966 
for permission to enhance the rates for supply; but no such sanction was given 
till March 23, 1968. 
The City Board questioned the validity of the tariff fixed and its 
subsequent enhancement under Art. 226 on the grounds: (I) that the notifica· 
lion dated April 24, 1962 was not in conformity Y'ilh s. 46, and (2) that it had 
not been permitted to enhance correspondin@'ly the rates chargeable by it. The 
petition was, however,_ dismissed. 
On appeal the Division Bench partly allowed the app.al, holding : (i) 
1-rt1t ample guidance is available in the Act, and that the rates fixed are subject 
to the control of the State Government : (ii) that the levy of an additional 
7.1/2 % as an aC.diticnal charge and subsequent enhancement under the two 
notifications was illegal; (iii) that it was open to the Electricity Board to make 
an additional charge to the e:ii:tent of the actual expenditure incurred by 
supplying energy at 6600 volts, and (iv) that the Electricity Board should 
consider afresh rates at which electric energy could be supplied, 
Both the City Board and the Electricity Board filed appeals to this 
Court. It was contended on behalf of the City Board that in the absence of 
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any re'ulations layin$ down the principles for fixins the tariff under s. 79, the 
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SUPREME COURT REPORTS 
(1985] 2 S.C.R. 
two Notifications issued under s. 46 of the Act were void as they had been 
issued without any guidance and were, therefore, arbitrary. 
On the question whether the grid tariff fixed suffered from vice of 
arbitrariness, 
HELD: (1) Whiles. 79(h) of the Act authorises the Electricity Board 
to make regulations laying down the principles governing the fixirg of Grid 
Tariffs, s. 46(1) of the Act does not say that no Grid Tariff can be fixed until 
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such regulations are made. It only provid~s that the Grid Tariffs shall be fixed 
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in accordance with any regulations made in this behalf. The framing of 
regulation under s. 79(h) of the N:t cannot, therefore, be a condition prece-
dent for fixing the Grid Tariff. In the instant case, the Grid Tariff fixed did not 
suffer from the vice of arbitrariness. [82JE-G; 822E] 
Mysore State Road Transport CorPQration v. Gopinath Gundachar Char 
(1968] 1 S.C.R. 767, followed. 
(2) Th• Electricity (Supply) Act 1948 had been enaoted to provide for 
the rationalisation of the production of supply of electricity and generallyfor 
taking measures conducive to electrical development. It is, 
therefore, 
permissible for the Electricity Board to fix a common Grid Tariff for an area 
so that there may be a reasonably uniform development of the area by the 
supply of electric energy to all licensees or consumers in the area at a uniform 
rate with such reasonable variations as may be permissible in law subject to 
the condition that no undue preference is shown to any of them. The Act 
also furnishes ample guidance regardina: the determintioo of tariffs by an 
Electricity Board. [823A-CJ 
Maharashtra Stal• El•ctricity Board v. Ka/ya11 Boro•gh MU11icipa/ity alld 
Anr .. [1968] 3 S.C.R. 137, followed. 
(3) The validity of the levy of additional char11es could not be question-
ed by the City Board under Article 226 of the Constitution in respect of the 
period prior to the filing of 

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