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PETITIONER: JIYAJEERAO COTTON MILLS LIMITED AND ANOTHER

       Vs.

RESPONDENT: MADHYA PRADESH ELECTRICITY BOARD AND OTHERS

DATE OF JUDGMENT12/09/1988

BENCH: SHARMA, L.M. (J) BENCH: SHARMA, L.M. (J) SEN, A.P. (J)

CITATION:  1989 AIR  788            1988 SCR  Supl. (2) 978  1989 SCC  Supl.  (2)  52 JT 1988 (4)   737  1988 SCALE  (2)1039

ACT:     Indian   Electricity  Act,  1910--Section   22B--Company entering into agreement with Electricity Board for supply of electricity--Board  supplying additional energy and  billing at penal rates--Action of Board--Whether valid and legal. %     Madhya  Pradesh  Electricity  (Supply  and   Consumption Regulation)    Order   1975/Madhya    Pradesh    Electricity (Generation,  Control  and Consumption) Order  1975:  Clause 3(i)  Regulation  Order--Consumers to  reduce  consumption-- Board  entitled  to disconnect supply for breach  or  charge penal  rates  for excess energy  consumed--Generation  Order provided  for assessment of generating capacity  of  captive power of consumer.     Words and Phrases: ‘Regulate’--Meaning of.

HEADNOTE:      In  October 1971 the appellant company entered  into  an agreement   with  the  Madhya  Pradesh  Electricity   Board, respondent No. 1, for supply of electricity. The quantity of electricity to be supplied varied from time to time.     To  meet  the  situation  arising  out  of  insufficient generation  of  electricity,  the State  of  Madhya  Pradesh issued two orders. By the Madhya Pradesh Electricity (Supply and  Consumption Regulation) Order, 1975 the consumers  were asked  to reduce their consumption failing which they  would have  to pay charges at penal rates for excess  consumption, without  prejudice  to the Board’s power to  disconnect  the supply.  By  the  Generation Order, the  consumers  who  had alternative  sources  of  captive  power  were  required  to generate  electricity  to  the  maximum  extent  technically feasible, from their own sources of electricity.     After  the assessment of their generating capacity,  the appellant was directed to generate additional electricity of 2,500  K.W. Sub-Clause (iii) of Proviso to clause 3  of  the Generation  Order provided that if in certain  contingencies there was reduction in the generation of electricity by  the                                                    PG NO 979 consumer,  the  Board  would try to make  good  the  deficit against the appropriate charge for it. Under this  provision the   appellant,   on  pleading  emergency,   was   supplied

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additional energy from time to time. For excess  consumption drawn without the Board’s prior approval, the appellant  was sent bills at penal rate.     The  appellant company challenged the demand before  the High Court by filing a writ application under Article 226 of the  Constitution,  which was dismissed by  the  High  Court except for granting some minor reliefs.     Before this Court, it was contended by the appellant:     (l)  There  is no sanction in Law for  charging  at  the Penal  rate  for  the electricity consumed  beyond  what  is permissible under the Generation  Order.     (2) That the assessment of their generating capacity was not  made  by  the authority empowered to do  so.  i.e.  the Divisional  Engineer, and (3) that the assessment was  based on irrelevant and extraneous considerations     Dismissing the appeal, it was,     HELD:  (1)  A  perusal  of  the  documents  on   record, including  admissions on the part of the appellant  company. furnishes   unimpeachable    evidence,  proving   that   the assessment   of  the  maximum  feasible  capacity   of   the appellant’s capative power sets was duly made in  accordance with the Generation Order, and that the Divisional Engineer, who  had been authorised by the Generation Order  to  assess the appellant’s generating capacity, reached the  conclusion after personally considering  the matter thoroughly.     (2)  In  pursuance of the assessment of  the  generating capacity  the required direction was issued which was  acted upon  by the parties for a number of years. The Company  not only  took  steps to generate the additional energy  as  was required of it, it also took advantage of the provisions  of proviso  (iii)  to  clause 3 of  the  Generation  Order  and benefited by it from time to time. [988A-B]     (3)  The  appellant company was fully conscious  of  the fact   that   it  was  consuming  electricity   beyond   its entitlement  under  the two Orders. For  several  years  the Company was particular to obtain the permission of the Board                                                    PG NO 980 for drawing electricity in excess of what it was entitled to by  the agreement, as modified by the Regulation  Order  and the  Generation   Order,  but later,  it  not  only  stopped seeking the advance sanction in this regard, it did not even care to inform the Board of the excess drawal. [1001B-C;F-G]     (4)  Section  22B  of the Indian Electricity  Act,  1910 permits  the State Government to issue an appropriate  order for  regulating the supply, distribution and consumption  of electricity. [1010B]     (5)  The expression "regulate" occurs in other  statutes also,  as for example, the Essential Commodities Act,  1955, and  it has been found difficult to give the word a  precise definition. It has different shades of meaning and must take its  colour  from  the context in which it  is  used  having regard to the purpose and object of the relevant provisions, and  as  has  been  repeatedly  observed,  the  Court  while interpreting  the expression must necessarily keep  in  view the  object  to be achieved and the mischief  sought  to  be remedied. [1010C-D]     (6)  There does not appear to be any doubt  that  either under  S. 49(1) of the 1948 Act read  with the agreement  or under  s. 49(3) or under both the provisions the  respondent Board was fully authorised  to levy and to make a  demand at a higher rate than the usual tariff.[1014E-F]     (7)  The necessity for issuing the two orders arose  out of the  scarcity of electricity available  to the Board  for supplying to its customers.  The situation did not leave any option   to  the  Board  but  to  make  limited  supply   of

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electricity  to its consumers. and it must be held to  have, in  the circumstances,. the right to stagger or curtail  the supply.  The orders were issued in this background   and  to make  the  direction  mentioned therein   effective  it  was considered  essential to impose sanctions  which could  take any   reasonable  from;  either  disconnection  in  case  of gross violation  or the lesser sanction of enhanced  tariff. Hence none of the two Orders was illegal or unreasonable.     Adoni  Cotton  Mills v. A.P.  State  Electricity  Board, [1976]  4  SCC  68;  State of  U.P.  v  Hindustan  Aluminium Corporation, [1979] 3 SCC  229 and New Central Jute Mills  v U.P. State Electricity Board, [1986] Supp. SCC581.

JUDGMENT:     CIVlL  APPELLATE JURISDICTION: Civil Appeals Nos.  3510- 3511 of 19822.                                                    PG NO 981     From  the  Judgment and Order dated  23.9.1982  and  I8/ 19.10.1982  of the Madhya Pradesh High Court in Misce.  W.P. NO. 888/81 and Review M.C.C.No. 352 of 1982.     D.  Gupta, M.C. Bhandare, O.P. Khaitan, Anil  Bhatnagar, Krishan  Kumar, Dhruv Agarwal and Mrs. Kiran  Choudhary  for the Appellants.     S.N.  Kacker,  M.L.  Jaiswal,  Vivek  Gambhir  and  S.K. Gambhir for the Respondents.     The Judgment of the Court was delivered by     SHARMA, J. The dispute in these appeals is in regard  to the  additional  demand  of electric  charges  made  by  the respondent no. 1 on the appellant no. 1 for energy consumed. By  a writ application filed before the Madhya Pradesh  High Court   the   appellant  challenged  the   demand   of   Rs. 1,86,97,880.97  for  the  period  12.11.1979  to  30.6.1981. Except for granting a minor relief as indicate in  paragraph 45  of  its  judgment, the High  Court  dismissed  the  writ application.   The writ petitioner-appellants have  impugned the judgment  before this Court by special leave.     2.  The  appellant no. 1 Jiyajeerao  Cotton  Mills  Ltd. hereinafter referred to as the Company which runs a  textile mill in Gwalior, entered into an agreement dated  27.10.1971 with  the respondent no. 1 Madhya Pradesh Electricity  Board in  short the Board a licensee under the Indian  Electricity Act, 1910 hereinafter referred to as the 1918 Act for supply of  electricity in accordance with the terms and  conditions mentioned  therein.  The  quantity  of  electricity  to   be supplied  varied  from  time  to  time  under  supplementary agreements  and the Board had to supply 2,500 K.W.  on  A.T. basis  with effect from 1.11.1973. Since 1975 the  Board  is not able to generate sufficient electricity to meet the full demand  of  the  consumers  and with  a  view  to  ease  the situation  two  orders were issued by the States  of  Madhya Pradesh  under s. 22B of the 1910 Act on 4.4.1975 called  as the  Madhya  Pradesh  Electricity   Supply  and  Consumption Regulation  Order, 1975 and the Madhya  Pradesh  Electricity Generation, Control and Consumption Order. 1975. The learned counsel for the parties have in their arguments referred  to these  orders  as  Regulation  Order  and  Generation  Order respectively.  By the Regulation Order , the consumers  were asked  to  reduce their consumption in accordance  with  the provisions  therein.  It was further provided  that  without prejudice  to the Board’s power to disconnect the supply  in                                                    PG NO 982 the event of any violation  thereof, the consumer will  have to  pay  the charges at penal rates for  the  excess  energy

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consumed.  The Generation Order said that if a consumer  had an  alternative  source  of generating power  from  his  own generating  set (described as captive power by the  parties) it  may be required to generate electricity to  the  maximum extent  technically  feasible and the supply  by  the  Board would  be  reduced  to that extent. The Order  in  Clause  3 provided  for assessment of the generating capacity  of  the captive power of the consumer. The contract demand under the agreement  was directed to remain reduced  accordingly.  Sub clause (iii) of Proviso to Clause 3 said, that if in certain contingencies,  there  was reduction in  the  generation  of electricity  by  the consumer, the Board would try  to  make good  the deficit against an appropriate charge for  it.  An arbitration clause with respect to any dispute was  included in the 6th paragraph of the Order as its last term.     3. Both the Orders came into force with effect from  the 7th  of  April,  1975.  The  Divisional  Engineer,   Gwalior informed the appellant Company by the letter dated 17.5.1975 (marked  as  Annexure ‘B’, page 121, Vol. II  of  the  paper book)  that its additional generation  capacity  technically feasible  by  its own generating sets had been  assessed  at 2,700 K.W. In view of the contract under which the Board was to  supply  2,500  K.W. with effect  from  1.11.11973,,  the Company  was directed to generate additional electricity  to that  extent, thus reducing the demand on the Board to  nil. After several letters passed between the parties, which will be  dealt  with at some length later, another  letter  dated 10.10.1975 (marked as Annexure ‘O’, page 136, Vol. II of the paper  book)  was  sent  to  the  Company  issuing  a  fresh direction  for  generating  additional  electricity  to  the extent of 2,500 K.W. with effect from 31.10.1975.     4. It appears that the Board did not bill the  appellant Company for any additional energy supplied at the penal rate for  the  next  several years. According  to  its  case  the Company invoked the provisions of Proviso (iii) to Clause  3 of  the  Generation Order pleading emergency.  arising  from time  to  time,  covered by the Proviso,  and  was  supplied additional energy accordingly. The Company was under a  duty to  place  its  difficulties before  the  Board  and  obtain permission  before  drawing  additional  energy  under  this provision  of  emergency  supply.  It  appears  that   after 11.11.1979  additional  power  was drawn  by  the  appellant without the Board’s prior approval and a letter Annexure ‘T’ dated 5.8.1980 was ultimately sent to the Company explaining the  situation and telling it that the supply availed by  it with  effect  from 12.11.1979 would be billed at  the  penal                                                    PG NO 983 rate. In the meantime two additional contracts were executed by  the parties; the first one on  11.7.1979 (Annexure  ‘C’) for supplying additional 800 K.W., and the second one  dated 26.2.1980  (Annexure  ‘D’ for additional 190 K.W.  Thus  the total  demand under the agreements added to 3,490  K.W.  The Board by its letter Annexure ‘U’ dated 13.10.1980 reiterated its stand taken under Annexure ‘T’ intimating the  appellant the  maximum   amount of electricity it  was    entitled  to consume at the normal rate. The letter further added that no additional power would be allowed as emergency supply to the Company  even  during  the period  of  overhauling   of  the generating  sets as was done earlier under Proviso (iii)  to Clause 3 of the Generation Order. The matter was debated for some  time  and  ultimately the additional  demand  for  the period 12.11.1979 to 30.9.1980 amounting to  Rs.94,41,745.60 was served on the appellant  Company by the letter  Annexure ‘X’ dated 15.1.1981. The further bills were also sent on the same basis.

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   5. On 5.8.1981 the application under Article 226 of  the Constitution  was filed before the Madhya Pradesh High Court challenging   Annexure ‘H’, ‘O’, ‘T’ and ‘U’. The main  case of the petitioner-appellant  was rejected by the High Court, but marginal reliefs with respect to the Board’s demands for the  period 12.11.1979 to 25.2.1980  and from  26.2.1980  to 31.7.1980   were   allowed  on  the  basis  of   errors   in calculation. The High Court also pointed out that under  the terms of the Generation Order the Board was under a duty  to consider  and   allow the additional emergency  supply  when conditions  arose  making  the Proviso  (iii)  to  Clause  3 applicable  and the Board could not refuse to do so  as  was observed  in  some of its letters. Subject  to  these  minor modifications  the  writ application was  dismissed  by  the judgment  dated 23.9.1982. The Company thereafter  filed  an application  for review, which was dismissed by  a  speaking order of 19.10.1982. The  present appeals have been filed by special leave against these two judgments.     6.  The appeals have been argued at considerable  length by Mr Dipankar Gupta on behalf of the appellant and Mr. S.N. Kacker representing the respondents with great ingenuity and resourcefulness.   Mr.  Gupta appearing in  support  of  the appeals,  however did not press some of the points urged  on behalf  of the appellant in  the High Court and relied  upon some new grounds. We. therefore do not consider it necessary to  deal with all the points disposed of in the  High  Court judgments  except  making reference to some  of  them  while dealing  with the points urged before us.                                                    PG NO 984     7. It will be necessary to examine the relevant portions of  the Regulation and Generation Orders (Annexures ‘E’  and G’) before considering the arguments of the learned counsel. They were both issued on 4.4.1975 by the State Government of Madhya Pradesh under s. 22B of the 1910 Act, which reads  as follows:     "22. B(1) If the State Government is of opinion that  it is  necessary  or expedient so to do,  for  maintaining  the supply and securing the equitable distribution of energy, it may   by   order   provide  for   regulating   the   supply, distribution,  consumption or use thereof.     (2)  Without prejudice to the generality of  the  powers conferred  by sub-section (1) an order made  thereunder  may direct   the  licensee  not  to  comply,  except  with   the permission of the State Government with--     (i)  The   provisions  of  any  contract,  agreement  or requisition  whether made before or after  the  commencement of  the Indian Electricity (Amendment) Act, 1959,for or  the supply (other than the resumption of supply) or an  increase in the supply of energy to any person, or     (ii)  any  requisition for the resumption of  supply  of energy to a consumer after a  period of six months, from the date of its discontinuance, or     (iii)  any requisition for  the resumption of supply  of energy  made  within six months  of its continuance ,  where the  requisitioning consumer was not himself   the  consumer of the supply the time of its discontinuance."     Clauses   3   and   4(i)  of   the   Regulation    Order (Annexure‘E’) have been refer,red to by the learned  counsel for the parties  repeatedly and  they are quoted below:     "3.(1).  No consumer receiving supply electrical  energy from  the Board  and  consuming or using  electrical  energy for any of the categories specified in column  (2) of  PART- (of  Schedule VII shall consume or use during any  month  or day  electrical  energy  in  excess  of  that  specified  in                                                    PG NO 985

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respective entry in column (3) of the said Schedule;     (2) (a). If at any time during the month, on  inspection of  the meter reader or any other person authorised  by  the Divisional  Engineer/Assistant Engineer of the Board  having jurisdiction, the consumer is found to have already  reached or exceeded the quantity of electricity indicated in  column (3)    of   Part-A   of   Schedule   VII   the    Divisional Engineer/Assistant    Engineer   of   the   Board,    having jurisdiction over the area where the consumer’s premises  is situated,  may by an order in writing require  the  consumer not  to utilise electrical energy for the rest of the  month and such order shall be complied with by the consumer forth- with.  Appeal  shall,  however, lie with  the  Deputy  Chief Engineer  of the Board having jurisdiction  whose  decisions thereon shall be final.     (b)  Any  H.T. consumer who makes default  in  complying with the directions contained in sub-clause (1) and item (a) of this sub-clause shall be warned in the first instance  in writing by the Divisional Engineer/Assistant Engineer of the Board having jurisdiction over the area where the consumer’s premises is situated and if the default continues, the  said Divisional    Engineer/Assistant   Engineer   shall    after reasonably   satisfying  himself  disconnect  power   supply altogether to such consumer and supply shall not be  resumed without  orders  of the Deputy Chief Engineer of  the  Board having jurisdiction."     "4.   Without  prejudice  to  the  Board’s   powers   to disconnect  supply  in the event of violation  of  Clause  3 above the Board shall bill the electricity consumed or  used in  excess of the monthly limit specified in column  (3)  of the Schedule VII at the penal rates as mentioned below:     (i) All H.T. consumers as specified in Schedules I,  II, III and IV--Four times of normal tariff (both in respect  of demand  charges  and energy charges) includ- ing  fuel  cost adjustment charges." The  expressions  "average  monthly  consumption",   average demand"   and "average daily consumption" have been  defined in Clause 2 of Annexure ‘E’ by taking January, February  and March 1975 as the base period. The VIIth Schedule  mentioned                                                    PG NO 986 in  Clause 3 above has not been included in the paper  books with reference to which arguments have been addressed but  a copy thereof was filed during the hearing and accepted as  a correct copy by the both sides.     8.  This  Regulation Order was  substituted  by  another Order  and later by still a third Order, amending the  penal rate  and the Schedules to the Order. However,  the  learned counsel  for the parties stated that  except for  change  in the  penal rate and the figures in the Schedules, the  Order has remained the same all through, and it is not  necessary, therefore, to refer to the other Orders.     9.  So  far  as the Generation Order  is  concerned,  it requires  such consumers, who have their private  generating sets,   to  generate  electrIcity  to  the  maximum   extent technically feasible in the following terms:     "3. Any consumer who is receiving electrical energy from the  Board and also has an alternative source of  generation of  power by his own generation set may be required  by  the respective   Divisional   Engineer  of  the   Board   having jurisdiction to generate electricity from his set (or  sets) to the maximum extent technically feasible in the opinion of the Divisional Engineer and the Board’s supply of electrical energy  to such consumer shall be reduced to the  extent  of additional generation assessed as feasible by the Divisional Engineer;

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   Provided that---     (i) Before assessing the additional generation  feasible and  directing  the  consumer  accordingly,  the  Divisional Engineer  shall  consult the local Manager  or  Engineer  in charge of the set;     (ii) The Board shall, during the period such a direction is in force, reduce the contract demand of the consumer to a corresponding extent and     (iii)  if  due  to an emergency  outage,  which  in  the opinion   of  the Divisional Engineer of  the  Board  having jurisdiction  is  not due to any negligence  or  failure  of those responsible for maintaining and running the set. there is reduction is additional generation, or if in the  opinion                                                    PG NO 987 of the Divisional Engineer, the set has to be taken out  for maintenance   during  the  period  of  such   emergency   or maintenance outage the Board shall try its best to make good the reduction to the consumer, levying an appropriate charge for it."     Its 6th Clause directed any dispute between the consumer and the Officer acting under Clauses 3 and 4 to be  referred to the Electrical Adviser and Chief Electrical Inspector  to the State Government, for his decision.     10.  While  Regulation  Order  was  meant  for   general application  to  all  consumers, the  Generation  Order  was confined  only  to such consumers who  were  having  captive power  source. It is also manifest that such a consumer  was under  a duty to generate additional electricity  only  when the maximum technically feasible capacity of the  generating set  or sets of the consumer was assessed under Proviso  (i) to Clause 3 and was followed by a direction to that  effect. The  main argument of the learned counsel for the  appellant has  been  that none of the two assessments  and  directions contained in Annexures ‘H’ and ‘O’ was sustainable in law on the grounds that--     (a) in making the assessment of the technically feasible maximum capacity, relevant factors were not considered.  and irrelevant and extraneous matters were taken into account;     (b)  the  requisite opinion was not arrived at  and  the assessment was not made by the authority empowered to do so; and     (c)  the  participation of the  appellate  authority  in process of’ assessment, completely vitiated it in law.     Mr. Gupta argued that instead of examining the point  on its  merit. the High Court erroneously brushed it  aside  on the plea of waiver and acquiescence. Relying on a number  of letters sent by the appellant to the respondent Board it was urged that the appellant Company was protesting against  the impugned directions issued by the Board and it is not  right to  shut  it out on the technical ground  of  estoppel.  Mr. Kacker,  on  the  other hand interpreted  the  High  Court’s judgment  differently. According to him none of  the  points raised  by  the Company was rejected without  examining  the merits.  He strongly relied on some of the letters  referred to in the argument of the Company itself as also a few other letters  in  support of his submission that  they  furnished                                                    PG NO 988 unimpeachable  evidence including admissions on the part  of the  appellant  Company proving that the assessment  of  the maximum  feasible capacity of the appellant’s captive  power sets  was duly made in accordance with the Generation  Order and  in pursuance thereof the required direction was  issued which  was acted upon by the parties for a number of  years. The  Company not only took steps to generate the  additional energy as was required of it, it also took advantage of  the

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provisions  of Proviso (iii) to Clause 3 of  the  Generation Order and benefitted by it from time to time.     11. For appreciating the argument of the learned counsel for  the  appellant it is necessary to examine some  of  the Orders  and letters issued in March and April 1975.  As  has been  mentioned  earlier.  the two  Government  Orders  were issued  on 4.4. l975. It appears that the matter  was  being discussed   by  the  different  authorities  of  the   State Government and the Electricity Board since before this  date and  advisability  to require the consumers  having  captive power to generate as much energy as was technically feasible was  under consideration for some time. The question  as  to their capacity in this regard, naturally assumed  importance and some steps for assessing the same were taken a few  days before the Orders actually came into effect. On 28.3.1975  a letter  sent  from  the  Board  to  Sri  H.K.  Aggarwal  the Electrical  Adviser  and Chief Electrical Inspector  to  the State  Government (Annexure ‘R-1’) referred to a  telephonic talk  in connection with the  assessment of  the  generating capacity of the captive power set. It was mentioned "that it would be necessary to make a realistic assessment in respect of  each of the consumers" by keeping in mind the  suggested factors.  The letter further said that with that object  the Board had constituted a Committee consisting of Sri Aggarwal himself.  the   Superintending  Engineer  of  the  concerned Circle   of   the  Board  and   the    Divisional   Engineer (Generation),   Jabalpur  of  the  Board  as  Members.   The appellant Company is mentioned as one of the 17 consumers in this  category. Along with his letter dated the 3rd  of  May 1975  Sri Aggarwal sent the report as desired. It  has  been contended  on  behalf of the appellant that  the  Generation Order  authorised  the Divisional Engineer of the  Board  to assess  the  additional feasible capacity  of  the   captive power source and any other person or authority or  Committee could  not  usurp  this jurisdiction.  The  impugned  letter Annexure  ‘H’  issued by the Divisional  Engineer  has  been characterised  as  illegal on the ground that it  was  based upon  the  assessment by the Committee headed  by  Sri  H.K. Aggarwal  and  not by the Divisional Engineer.  the  learned counsel proceeded to say that immediately  after receipt  of the   intimation  by  the Board, the  Company  protested  on 21.5.1975. The Board’s reply dated 2.6.1975 has been  relied                                                    PG NO 989 upon  as showing that the direction was issued on the  basis of the assessment of the Committee and not of the Divisional Engineer.  It was also pointed out that  Electrical  Adviser and Chief Electrical Inspector to the State  Government (the then  incumbent being Sri H.K. Aggarwal) was  the  appellate authority  under Clause 6 of the Generation Order and  could not,  therefore,  take  part  in  the  original   assessment proceeding. The reply of the Board is that the Committee  no doubt  inspected  the   generating sets  and  discussed  the matter with the consumers, and thus collected relevant  data for  the  purpose  of assessment of the  capacity,  but  the Divisional Engineer while relying on the material collected, did not mechanically accept the conclusion of the Committee. He (the Divisional Engineer) applied his mind before issuing the  Order  Annexure ‘H’. Mr. Kacker further said  that  the matter  did  not rest there. After taking into  account  the objection raised by the Company the Divisional Engineer took up  the matter afresh and applied his   mind  independently. Ultimately he came to a similar conclusion as is evident  by the  second  direction as contained in  Annexure  ‘O’  dated 10.10.1975.  The argument of Mr. Kacker appears to  be  well founded.

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   12.  On  receipt  of  the  letter  Annexure  ‘H’   dated 17.5.1975  whereby  the  Divisional  Engineer  directed  the Company  to  generate 2,500 K.W. of electricity by  its  own generating  sets,  the appellant Company  protested  by  its letter dated 21.5.1975 (at page 195 of the  Paper Book  Vol. II).  Mr.  Gupta  strenuously relied on  this  letter  which stated  that the Company failed to understand as to how  its additional  generating capacity had been assessed  at  2,700 K.W.  It will be necessary  to discuss this letter  in  some detail  later  in the judgment while  dealing  with  another point  as Mr. Kacker also has relied on  certain  statements made  therein.  At this stage, however, we  should  like  to point   out  that  the  appellant  did  not  challenge   the assessment  on  the  ground  that it was  not  made  by  the authority  mentioned  in the Generation  Order; and  in  the last paragraph the request made was for  "review". The  next document  referred  to  by  the  learned  counsel  for   the appellant  is  the letter dated 30.5.1975 (page 305  of  the Paper Book Vol. II), wherein the Company stated that:     "as  desired  by the Board, we have  started  generating about 2,000 K.W. additional power at our generating  station tonnes daily for this additional generation."                                                    PG NO 990     Finally   a  request  was  made in  the  letter  to  the Superintending  Engineer  of  the  Board  to  recommend  the appellant’s  case  for allotment  of additional  wagons  for transport  of  coal. Instead of  advancing  the  appellant’s case, the letter shows that the assessment and the direction mentioned  in Annexure ‘H’ were accepted by the Company  and steps  were  taken to implement  the  same.  Chronologically proceeding, the letter dated 2.6.1975 (Annexure ‘I’ at  page 122  of the Paper Book  Vol. II) was relied on by Mr.  Gupta as  proving  the  fact that  the  assessment  of  additional generating capacity had been done by the Committee mentioned in  the  letter  dated  28.3.1975 (supra)  and  not  by  the Divisional Engineer as required by the Generation Order. The learned  counsel far the parties next placed before  us  the letters  dated 3.6.1975 (document no. 3 at page 302  of  the Paper Book Vol. II) and  dated 4.6.1975 (document no. 1,  at page  300 of the Paper Book Vol. II), another letter of  the same  date (Annexure ‘J’ at page 123 of the Paper Book  Vol. II) and then dated 8.8.1975 (Annexure ‘K’ at page 132 of the Paper  Book Vol. II) and 1().10.1975 (Annexure ‘O’  at  page 136 of the Paper Book Vol. ll).     13.  The  argument  of  Mr. Kacker  has  been  that  the Divisional  Engineer applied his mind independently  to  the question  of assessment  of the capacity of the  appellant’s generating  sets, and while so doing took  in  consideration the  factual data collected by the  Committee  mentioned  in the  letter  of 28.3.1975. It was pointed out that  all  the three  persons constituting the Committee were  very  highly placed  officers  and  there could  not  be  any  legitimate objection  if the Divisional Engineer referred to  the  data collected  by  them in presence of  the  Company’s  Officers after  personally verifying them. Even a  judicial  tribunal or  a  regular  court  is  allowed  to  rely  upon  evidence collected by an enquiry officer or commissioner. The learned counsel heavily relied on the letter dated 3.6.1975 from the Divisional Engineer to the Superintending Engineer (document no.  3).  On behalf of the appellant it was  said  that  the Company  had no knowledge of this letter in 1975. We do  not think  that this is a correct stand. The letter mentions  an inspection  of’ the Company’s power House by the  Divisional Engineer  and the materials supplied by the Company to  him. The  details with respect to the boilers of the Company  and

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the  other figures mentioned therein correctness whereof  is not  challenged by the appellant, fully establish  that  the inspection  was  made in presence of and  the  figures  were collected  with  the  assistance  of  the  officers  of  the appellant   Company   and  the  conclusion   regarding   the assessment was reached after taking into account the case of the  Company.  It has  been argued on behalf  of  the  Board before us that the method adopted by the Divisional Engineer as  disclosed by this letter (document No. 3) was  different PG NO 991 from  that followed by the Committee, as a result  of  which there  was  some difference in their final  result.  On  the basis of his independent assessment the Divisional  Engineer issued  another  instruction as contained  in  Annexure  ’O’ dated  10.10.1975 (at page 136 of the Paper Book  Vol.  II), mentioned earlier. This second direction which was effective from  31.10.1975 naturally superseded the earlier one  under Annexure ‘H’. The Board’s impugned demand does not relate to any   period  before  31.10.1975  and,  therefore,   it   is immaterial  if the direction in Annexure ’H’  is  completely ignored on account of its supersession by Annexure ’O’ or on any  other  ground and it be assumed that in  absence  of  a feasible  assessment of the capacity, the  Generation  Order was  not applicable to the appellant Company before 31.  10. 1975.      14.  Mr.  Gupta  relied on the  letter  dated  4.6.1975 (document  No. 1), referred to above, for showing  that  the Company  emphatically protested against the assumption  that it could generate additional 2500 K.W. It was said that  its capability  in  this  regard was limited to  1200  K.W.  The learned  counsel  referred to the other letters also  for  a similar purpose. We think that in view of the revised  order of  the  Divisional  Engineer  passed  on  10.10.1975,  vide Annexure ’O’, earlier correspondence is not material for the purpose  for which the appellant is trying to use them.  The learned  counsel  for the respondent has relied on  some  of them  for his argument on the other points and we will  have to deal with them again when we take up those points. So far as the question as to whether an assessment of the  feasible capacity of the generating sets of the appellant Company was made   by  the  Divisional  Engineer  as  required  by   the Generation  Order  is concerned, we have  no  hesitation  in deciding the issue in favour of the respondent.      15. On behalf of the appellant it was urged that  since the Electrical Adviser-cum-Chief Electrical Inspector of the State  Government  who has been mentioned as  the  appellate authority  under  Clause  6  of  the  Generation  Order  was associated with the assessment by acting as a member of  the Committee (vide Annexure ’R-1’ at page 256 of the Paper Book Vol.  II), the entire process in this regard should be  held to  be  completely vitiated. In view of our finding  in  the preceding  paragraph,  the  argument  has  to  be  rejected. Besides, it is not correct to assume that an appeal  against the  assessment was provided by Clause 6 of  the  Generation Order which reads as follows:      "6. In case of any dispute between the consumer and the Divisional Engineer acting under Clauses 3, and 4, it shall                                                    PG NO 992 be  referred to the Electrical Adviser and Chief  Electrical Inspector to the Government of Madhya Pradesh whose decision shall be final." The  above is obviously an arbitration clause in case  of  a dispute  and  since the maintainability of  the  appellant’s writ  application before the High Court was decided  in  its favour,  it cannot make a grievance on this score.  Besides,

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if  the  appellant  Company  had  a  grievance  against  the assessments  which  were  made in 1975,  it  ought  to  have challenged the same then and not to have waited for a number of years before approaching the High Court. 16.  Mr.  Gupta challenged the assessment still  on  another ground.  He contended that while making the assessment,  the relevant factors were ignored, and irrelevant and extraneous considerations  were taken into account. The argument  which is  based  on certain    scientific  technical  hypothesis proceeded  thus: The Company had 3 Generator Sets  described as  M.V. Turbo Generator Set, B.B. Turbo Generator  Set  and AEG  Turbo  Generator Set; and  five  Boilers.   Another Boiler  was added in 1977. Every generator set has  a  rated capacity which has been described by the learned counsel  as the level at which operation can continue satisfactorily for indefinite  period. This rated capacity is declared  by  the manufacturer and can be accurately      ascertained  without difficulty.  The  terms ’overload’ and  ’overload  capacity’ have been explained by the learned counsel as "one exceeding the level at which operation can continue satisfactorily for an  indefinite period" and "excess capacity of  a  generator over  that of its rating", respectively. It was urgued  that overloading  may lead to distortion or to  overheating  with risk of damage, depending on the type of circuit or  device, and   so  in  many  cases  only  temporary   overloads   are permissible.  The  overload capacity, it has been  said,  is referrable        generally  for  a  specified   time.   The criticism  against the report of the    Committee  is  that the Committee took into account the overload capacity of the sets  and not the rated capacity. Mr. Gupta stressed on  the point  that the AEG Turbo Generator Set was maintained as  a standby  to  be  operated  only when  other  sets  were  not available  for any reasons. He also said that  the  feasible generation  capacity  of a set is also  dependent  on  other factors  and  conditions, namely, age and condition  of  the set,   availability  of  coal  of  requisite   quality   and specification,  adequate  and  continuous  supply  of  water etcetera. Referring to the report of the Divisional Engineer dated 3.6.1975 (document No. 3 at page 302 of the Paper Book Vol.  Il) it was argued that the Divisional Engineer  picked out a moment of time when the plants reached the  generation                                                    PG NO 993 of 7500 K.W. and concluded therefrom that the appellant  was capable  of  generating  1800 extra K.W.  from  its  captive plant.  It  was further suggested that in any  view  of  the matter  on  the  basis  of  the  aforesaid  opinion  of  the Divisional Engineer the appellant Company ought to have been asked  to  generate only 1800 K.W. more and  not  2500  K.W. Finally  it was argued that the Board has to be confined  to the  reasons in support of the assessment orders  which  are mentioned therein and cannot be allowed to travel beyond the same.      17.  Mr.  Kacker  took great pains in  going  into  the reports  and specially through the aforementioned report  of the Divisional Engineer dated 3.6.1975, with a view to  meet the  criticism of the appellant and support the report as  a correct one on merits. He also relied on a number of letters sent  by  the  appellant showing  that  the  assessment  was accepted  as  binding on it and claiming from time  to  time benefits  under Proviso (iii) to Clause 3 of the  Generation Order  which was allowed for a number of years. The  learned counsel   relied  on  this  aspect  as   furnishing   strong circumstantial  evidence in support of the  correctness  and binding nature of the assessment impugned belatedly when the appellant approached the High Court.

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18.  It  is  significant to note that at no  point  of  time either  in  1975  or  later the appellant  chose  to  get  a scientific  assessment  of its generating sets  made  by  an expert,  nor even after filing the present writ petition  in the  High Court did it file any opinion of a  person  having scientific expert knowledge showing the impugned assessments to  be  erroneous or undependable. It is also  important  to appreciate that the appellant has not either earlier or  now made any complaint of mala fides or bias against any of  the members  of the Committee or the Divisional Engineer or  for that  matter against any officer of the respondent Board  or the  State.  On the other hand, the Officers  of  the  Board appear to have taken a very sympathetic attitude towards the appellant  for  more  than four years  and  allowed  it  the benefit of additional energy under Proviso (iii) to Clause 3 of  the Generation Order very generously. It was  only  when the Board discovered in 1980 that the appellant had  stopped even informing the Board and obtaining its prior approval as envisaged  by  the Generation Order before  consuming  extra energy  that the matter was closely examined by the  Board’s Officers.  Mr.  Kacker  is also right in  relying  upon  the conduct  of the parties for about four or five  years  after the assessment was made as furnishing important circumstance relevant  to the issue. We may, therefore, examine a  number of  letters in this regard some of which have  already  been mentioned earlier.                                                    PG NO 994      19.  The  very first letter of  the  appellant  Company after receiving the impugned direction in Annexure ’H’ dated 17.5.1975  was  sent  within  4 days  on  21.5.1975  and  is included  at page 195 of Vol. II of the paper book. It  will be seen that the protest against the assessment referred  to by the learned counsel for the appellant was not founded  on any of the grounds pressed know. The basis was "only due  to steam  limitation",  assuring that "once  our  boiler  under erection  starts steaming, we can enhance our generation  to the  full installed capacity." The prayer in the end of  the letter  was  to "review the whole  matter".  The  Divisional Engineer,  as  mentioned earlier,  personally  examined  the entire matter be novo. Although in its letter dated the 21st May 1975 the Company had stated that it was not advisable to generate  more than 12 K.W. from its own sets, by  the  next letter  dated  30.5.1975 (page 305, Vol. II)  the  appellant informed  the  Board that they were  generating  about  2000 additional  K.W., but were in the need of  additional  coal, for which the Board was requested to make a  recommendation. In  Annexure  ’J’  dated 4.6.1975 (page  123  Vol.  II)  the protest  against the assessment was once more reiterated  on account  of  some  trouble  with  the  boilers.  The   first paragraph  of  this letter indicates that the  question  was under  discussion  of  the  Divisional  Engineer  with   the Company’s   representatives   who  was  armed   during   the conference  "with all relevant records". In this  background the fresh independent assessment was made by the  Divisional Engineer as per the document No. 3 dated 3.6.1975 (page 302, Vol.  II).  Before the fresh independent  direction  by  the Divisional  Engineer as contained in the  impugned  Annexure ’O’  dated 10. l0.1975 was issued, a suggestion was made  on behalf  of  the  Board  to the  appellant  Company  for  its satisfaction  as  to the correctness of  the  assessment  by "actually  taking the load on the set, after running  it  in parellel  with  the  Board’s  supply  system".  The  learned counsel  for the parties before us explained the  scientific implications  of the test by "parellel running", but  we  do not  consider it necessary to go in its  technical  details.

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The  Board requested the Company’s consent for such a  test, to  be communicated positively within a week. By  its  reply dated  25.8.1975  Annexure   ’L’ (page  133,  Vol.  II)  the Company rejected the suggestion on two grounds, namely, that it  was  "not  having protection  system  like  power  relay etc."and" in case of tripping of Board’s supply we would  be doing the parellelling of the sets"; which was not safe.  In reply thereto the Board satisfactorily met the objections by its  next  letter Annexure ’M’ dated 25.10.1975  (page  134, Vol. II). It was pointed out that the parellel running  test will  be undertaken only for a short period after which  the captive sets would be separated from the Board’s system; and a  disturbance  free period could be chosen  for  the  same. Besides,  the  objections to the suggested test have  to  be                                                    PG NO 995 rejected  as frivolous in view of the stand of  the  Company itself  as indicated in the letter Annexure ’N’  (page  135, Vol.  II) dated 6.11.1975, stating that it had no  objection into the suggested trial, which the appellant claims to have sent  to  the  Board which fact is however  denied.  In  the meantime the second assessment order under Annexure ’O’  had already  been communicated. It was, therefore, open  to  the appellant either to accept and act upon this fresh assess-of the boilers in steam generation as the ground for not  being able  to generate additional electricity as required by  the impugned  directions.  It was also mentioned  that  after  a sixth   boiler became available, the difficulty would  stand resolved.  In  this background Mr. Kacker placed  before  us several  letters   starting with the letter of  the  Company dated  14.2.1977 (at pages 4 to 8 of additional  paper  book                                                    PG NO 996 prepared  and  filed  by the  respondent  Board,  which  was referred  to by the learned counsel as Vol. IV of the  Paper Book).  The Company, by this letter requested the  Board  to charge  at the normal tariff for the additional  electricity consumed  by the Company as emergency supply as per  Proviso (iii)  to Clause 3 of the Generation Order.  The  statements made in the letter appear to be extremely important for  the purpose of the Board’s case and it may be useful to consider them in some detail.     21.  In the first paragraph the Company stated  that  it was again placing for the Board’s consideration, the reasons why it could not generate the additional power according  to the  direction  issued.  In the second  paragraph  the  main difficulty has been mentioned as steam limitation and reason therefor  has  been  stated in the third  paragraph  as  the inferior quality of coal. Later it was stated thus;     "These problems would not have arisen in case our  Sixth Boiler recently erected was commissioned and running without any trouble." It  was  said that although the sixth boiler  was  taken  in August, it did  not work properly for some time.  Proceeding further the letter stated:     "It  is  only since the beginning of January  the  Sixth Boiler has been in continuous service, as a result of  which we were in a position to repair our other Boilers also.     Since  the last week of January, we are  generating  our full requirement and not even availing the 6U0 K.W.  allowed by the Board.     In the penultimate paragraph of the letter, the case for normal tariff on the additional electricity already supplied by the Board was argued in the following manners:     "Considering  all  the above facts, we  sincerely  hope, that as due to no fault of our own we had to take power from M.P.  E.B., more than allotted to us, it is  requested  that

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the  charges  made  to  us may be  on  the  usual  terms  as previously  granted by the Board for which we will  be  ever grateful. "                                         (emphasis added) The  letter  is not only conspicuous by the absence  of  the objections  which were taken later in 1980 before filing  of                                                    PG NO 997 this writ case, but it positively indicates that the Company accepted the assessment as correct, and as expected, it  was actually   able   to  generate   the   required   additional electricity  after the addition of the sixth boiler and  was pleading  for normal tariff for the  additional  electricity already  consumed earlier. This position is  re-inforced  by several further letters of the Company, but before we go  to them we would like to point out another very important  fact emerging  out of this very letter. At page 7 of Vol.  II  of the  paper book the letter dealt with another aspect  highly relevant  to  the present dispute. Another  Limited  Company known  by the name of "Gwalior Rayons" is having  a  factory near  the appellant Company’s factory and the appellant  was supplying electric energy to the other factory illegally and without the permission of the Board. On an objection by  the Board this matter was dealt with in the following words:     "It  is not out of place to mention in this appeal  that we  had  given now and then some power in the  past  to  the Gwalior  Rayons,  in emergency for their Beam  Dyeing  Plant whenever M.P.E.B. power failed. This was due to the fact  as the  Beam  dyeing plant is a pressure dyeing plant,  with  a continuous  process, there used to be heavy damage  to  very costly Beams. Since this issue was raised by your Divisional Engineer, we have completely stopped this type of supply  to them,  though the same was given to them after reducing  our humidity or waste plant load.     It  is  again  our request here that  the  same  may  be allowed  in emergency under whatever  arragement  the  Board may so decide to avoid costly damage to  the cloth. A  fervent  appeal  in the interest of  the  other   factory belonging to a different Limited Company altogether was made in the above terms. It has to be remembered that in view  of the provisions of s. 28(1) of the  1910 Act, the Company was prohibited  from supplying any energy to the other  factory. This  aspect  was  stressed in term 2(b)  of  the  agreement between the appellant and the Board as per Annexure ’A (page 62  of  Vol. II). It was not the appellant’s  case  then  or before us now that it had obtained the previous sanction  of the  State  Government for so doing. Under Cluase 4  of  the Generation  Order which reads as follows,  jurisdiction  was vested  in the Divisional Engineer ot the Board to direct  a consumer   having   captive  source  of  power   to   supply electricity  to the Board or to any other consumer  only  if the consumer was having surplus generation:                                                    PG NO 998 "4. If the consumer having own generating set(s) can have, a result of additional generation reasonable in the opinion of the  Divisional Engineer of the Board  having  jurisdiction, energy, surplus to his requirement, the Divisional  Engineer may  direct  him to supply the surplus to the  Board  or  to another consumer nearby who has been taking supply from  the Board  and  who  is  willing to take  the  supply  from  the consumer having generating sets:     Provided that     (i)  the contract demand of and the supply to the  other consumer  from the Board shall be  reduced  correspondingly, whether or not the other consumer avails of the supply  from the consumer having the set,

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   (ii) the other consumer shall pay to the consumer having generating set(s) for such supply as if it is supplied  from the Board,     (iii)  if the payment receivable by the consumer  having the  set  under the last preceding clause is less  than  his incremental  cost of additional generation, the Board  shall make  good the difference to the consumer having the  set(s) and     (iv) the consumer having the set(s) will not be required to  incur  any additional expenditure for laying  lines  for transmitting  energy  to the other consumer; such  lines  if required being laid by and at the cost of the Board." How could, in these circumstances, the appellant pass on  to a third party some of the electricity meant for it, there is no explanation on the records. Mr. Gupta the learned counsel for the appellant argued that since the other factory was in the  neighbourhood it was in the interest of  the  appellant Company  for the sake of security to see that other  factory was not plunged in darkness when the supply was inter-rupted on account of tripping. Mr. Kacker rightly pointed out  that no such suggestion was ever made on behalf of the  appellant in any of its letters. On the other hand, the reason pleaded in  the  letter quoted above was to save the  other  Company from  incurring loss due to costly damage to the  cloth.  In his  final  reply  Mr. Gupta said  that  the  appellant  was passing on some electricity to the Gwalior Rayons only after reducing  its humidity or waste plant load as stated in  the letter.  The  explanation  is too vague  and  it  cannot  be                                                    PG NO 999 assumed  that the appellant was making the  contribution  to its sister concern by creating artificial shortage of supply to  its mills. The appellant’s conduct cannot  be  explained except on the premise that it was able to generate  adequate additional  electricity for its purpose and was  taking  for granted  the  sympathetic attitude of the  Officers  of  the Board  in liberally allowing it additional emergency  supply at normal tariff.     22.   Another   letter  which  calls  for   a   detailed consideration  was sent by the apellant on 30.5.1979 and  is included  at pages 16 to 20 of Vol. IV. A fresh request  for emergency  supply  under Proviso (iii) to Clause  3  of  the Generation Order was made in this letter on the ground  that the sixth boiler was out for annual overhaul. It was  stated in  the  opening sentence that this boiler was  giving  some trouble  earlier  but later ’stabilised’. The  Company  was, therefore,  self-sufficient "without drawing any power  from the  Board so far". The letter proceeded to state  that  the sixth  boiler would be going for annual overhaul  and  after that  the annual overhauling of the other boilers  would  be carried  out; and therefore, 1875 K.W. should be allowed  to be  drawn for the period mentioned therein. Assurance  about the  future was held in the following terms:     Now  when our Sixth Boiler has been stabilised we  would normally  not draw any power from the Board after  15.9.1977 when   overhauling of all the boilers is complete except  in case of emergency due to outage of any of the boilers. It was further requested that during the period of breakdown emergency power as detailed should be supplied and.     "we  would request you that for the power availed by  us from  the  Board for above purpose, say up to a total  of  7 days in a month. we may be charged at the same tariff . Insisting  again  that  it  should  be  allowed  to   supply electricity  to  Gwalior  Rayons, described  as  its  sister concern. the letter read as  follows:

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   "Here  we may also mention that we have  been  supplying power  to  our  sister concern  M/s   Gwalior  Rayons.   in accordance  with  the provisions of sanction granted  to  us under  Section  ’8  of the I.E. Act  vide  Govt.  Order  No.                                                   PG NO 1000 1313/6U61/XIII/74  dated 8.4.1975. However. it had not  been possible for us to obtain prior Permission from S.E. Gwalior before  switching  over power to Gwalior Rayons. It  may  be mentioned here that power has to be supplied to M/s  Gwalior Rayons  during the period the Board’s supply  remained  off. and   it  is  not  practically  possible  to  obtain   prior permission  for supply in such cases. We would,  there-fore, request  you that prior permission should be given once  for all  for  supplying power to the Gwalior Rayons  during  the period supply from the Board to M/s Gwalior Rayons  remained off ’     This  letter  dated 30.5.1977 confirms  the  conclusions derived   from  the  earlier  letter  dated  14.2.1977   and clarifies that the first letter was not sent by some mistake on the part of the appellant Company. Request for  emergency supply was, however, made from time to time in 1978 and  for some time in 1979, which was allowed by the Board. The other letters including those dated 30.5.1978, 29.6.1978, 7.7.1978 and  D  9.9.1978 are all consistent with  a  correctly  made binding assessment of the feasible additional capacity  from the generating sets belonging to the Company.     23. Mr. Gupta contended that throughout the period  1975 to  1979 there was never a demand made by the Board for  any energy  consumed by the appellant at the penal rate  and  it was  only in 1980 that the Board suddenly decided  to  press for  the  additional demand on the basis of  the  Generation Order.  The  learned  counsel  emphasised  that  before  the provisions of the Generation Order can be relied upon by the Board  it is essential for it to make an assessment  of  the consumer’s capacity to generate electricity from its captive power plant. The fact that no demand was made for many years leads to the conclusion that such an assessment as  required by  the provisions of the Generation Order to be  made,  had not  in  fact  been made, and  alternatively  assuming  that factually  the capacity had been assessed, the same must  be ignored on account of the conduct of the parties for several years. The stand of Mr. Kacker, as has been stated  earlier, is  that the parties acted on the basis that  an  assessment had been made in accordance with the Generation Order and on that basis the appellant demanded the benefit under  Proviso (iii) to Clause (3) of the Order. The documents relied on by him  and discussed in the preceding paragraphs  support  the respondents’  stand. They also explain as to why  demand  on the  penal  rate  wa. not made earlier.  but  it  would  be helpful  to  consider  a few more  facts  relevant  to  this aspect.                                                   PG NO 1001     24.  The system of supply of power to the  consumers  is such  that they can go on drawing electricity  beyond  their entitlement  without  any  further  positive  step  by   the officers of the Board. The Board is, however, in a  position to,  by keeping a certain switch known as Air  Break  Switch open, put a restriction on the consumer from drawing  excess energy.  A letter dated 4.6.1975 (document no. l,  at   page 300  of  Vol. II) sent by the appellant  has  been  strongly relied  on by Mr. Kacker for showing that Air  Break  Switch was  permitted  to  remain  closed with  a  view  to  assure uninterrupted  supply of the appellant at its  request.  The result  was  that the appellant was in a  position  to  draw excess electricity without reference to the officers of  the

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Board.   That   letter   indicates  that   the   Board   was contemplating  to  keep the switch open and the  Company  by this  letter  made  a request not to do  so.  The  appellant Company  was  fully  conscious  of  the  fact  that  it  was consuming  electricity beyond its entitlement under the  two Orders,  by claiming the benefit of the  provisions  dealing with  emergency supply. and was also alive to the fact  that this  had  to be done only with the prior  approval  of  the Board.  The  relevant  portion  of  the  letter  is  in  the following terms:     "Further  at no time it may kindly be noted  that  power has  been  availed  from MPEB without  prior  intimation  by phone  either to Divisional Engineer or Supdt. Engineer.  By keeping  the  A.B.  Switch open at your end,  the  delay  in supply  to J.C. Mills will be considerable which will  cause very  heavy losses to the J .C. Mills for no fault of  their own. This may kindly be reviewed and ...."     The  learned counsel for the Board was right  in  saying that  on account of this request by the appellant  the  line was kept open for it unhindered. This did not mean that  the Company  was  entitled to misuse the privilege,  draw  extra energy without prior permission and thereafter refuse to pay higher  charges  when  demanded. It  has  been  conclusively established  by a large number of letters on the records  of the  case that for several years the Company was  particular in  obtaining  the  permission  of  the  Board  for  drawing electricity  in excess of what it was  entitled to,  by  the agreement as modified by the Regulation Order and Generation Order,  but later, it not only stopped seeking  the  advance sanction in this regard, it did not even care to inform  the Board  ot  the excess drawal. The Branch of  the  respondent Board  at Gwalior sent the bills on the basis of the  normal tariff,  as  the question of grant of  additional  emergency supply was being dealt with by the Head Office at  Jabalpur. The  Gwalior Office was not at all dealing with  the  matter                                                   PG NO 1002 relating  to  the excess emergency supply which  aspect  was being exclusively dealt with at Jabalpur, and as soon as the relevant  facts came to the knowledge of the Head Office  of the Board it took up the matter with the appellant  Company. The   entire  conduct  of  the  parties   furnishes   strong circumstantial evidence in support of the Board’s case.     25. Another argument addressed by Mr. Gupta is based  on the  letters  Annex.  ‘P’ series sent by the  Board  to  the appellant Company from time to time. They have been included at  pages  137  to 156 of Vol. Il of  the  paper  book,  and according  to  Mr.  Gupta they  are  inconsistent  with  the Board’s  case  regarding  the  appellant’s  entitlement   to receive the amount of energy from the Board. He has  pointed out  that  these letters do not suggest  that  the  contract demand had been reduced to nil in accordance with  Annexures ‘H’ and ‘O’. By way of illustration he  relied on the letter dated 31.10.1975 (at page 138 of Vol. II) stating       that the  Company’s  maximum demand should not exceed  1875  KW". We  do  not find any merit in the  submission.  The  letters marked as ‘P’   series did not deal with the entitlement  of the  appellant  Company  as a result of  both  the  Orders-- Regulation  and  Generation.  The Regulation  Order  was  ot universal  application  to  all  the  consumers  while   the Generation Order applied to only such of them who had  their own generating sets. Under the Regulation Order the contract demand was reduced by a certain percentage and provided  for payment  of  charges  at  penal  rate  in  case  of   excess consumption.  The  rate  of  cut  and  the  penal  rate  for additional  consumption  did not remain constant,  and  were

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revised  from time to time. It appears that as and when  the revision in the rates took place the consumers were informed as  to the effect of the Regulation Order as it stood  after modification. Mr. hacker was right in saying that since  the Regulation  Order  was applicable to all the  consumers  and letters  similar to those marked as Annexure P’ series  were being  addressed  to  all of them, there could  not  be  any objection  in  the  Board sending  similar  letters  to  the appellant  and others having their private  generating  sets dealing  with  the  effect of the  Regulation  Order  alone, without taking into account the Generation Order. A  perusal of these letters fully supports the respondents’ stand  that they  were  being issued with reference  to  the  Regulation Order alone. Further, a close examination of the  Generation Order   would  show  that  the  maximum  permissible   limit available  under the Regulation Order had not ceased  to  be relevant even after the application of the Generation Order. The  entitlement  of the appellant due to  emergency  outage under Proviso (iii) to Clause 3 ot the Generation Order  was limited  to the original contract demand as reduced  by  the Regulation  Order.  It  was, therefore,  important  for  the                                                   PG NO 1003 appellant to keep in mind that at no point of time it  could be entitled to ask for beyond this limit as emergency supply on  any  ground what-soever. As this limit  fluctuated  from time to time on the change in the percentage of reduction in the Regulation Order, the appellant was rightly reminded  of the latest position in this regard. The learned counsel  for the respondents was also right in saying that these  letters could  not  have  misled the appellant in  any  manner.  The numerous letters discussed earlier clearly indicate that the appellant correctly appreciated its position and  repeatedly made  requests  for emergency supply  under  the  Generation Order  on  the  assumption that  its  entitlement  had  been rendered to zero. The appellant’s letter dated 30.5.1977 (at page 16 of Vol. IV) referred to earlier, fully  demonstrates that  the  plea  raised by the appellant is  devoid  of  any merit. A portion of the said letter (not dealt with earlier) is in the following terms:     "During the period of break down we would request you to agree to the following arrangement:     i.  Before availing Board’s power during  the  emergency we  will  intimate  the  B.E.,  MPEB,  Gwalior  as  well  as S.E.MPEB,  Gwalior  and  send a copy of our  letter  to  the Director (Com), MPEB, Jabalpur.     ii(a)  In case 6th boiler is out and other  boilers  arc working satisfactorily we may be allowed to draw power  upto 1200 KW.     (b)  In case 6th boiler is on range and one of our  M  V boilers is out we may be allowed to draw power upto l200 KW.     (c)  In  case  6th boiler is not and  one  of  our  M.V. boilers  is  also out we may be allowed to draw  power  upto 1875 KW. If present stand of the appellant be assumed to be  correct, there was no occasion for it to claim varying quantities  of power  in changing circumstances as mentioned above.     26.  It  was also urged on behalf of the appellant  that the Board’s letter dated 13.10.1980, Annexure ‘U’, (at  page 182. Vol. II) impugned by the appellant is also inconsistent with  the Board’s stand in the present case. By this  letter the appellant was informed that the contract demand of  3490                                                   PG NO 1004 KW as per the agreements between the parties was going to be reduced  to 1250 KW under the provisions of  the  Generation Order,  and on further reduction under the Regulation  Order

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it  would  come  down  to 875 KW  only.  The  appellant  was accordingly  directed to draw power upto 875 KW with  effect from 1.8.1980. The Board further informed the appellant that no  additional power will be supplied during the  period  of overhauling  of  the private generating sets. This  part  of Annexure  ’U’  has been set aside by the High Court  on  the ground  that  under  Proviso  (iii)  to  Clause  3  ot   the Generation  Order the Board was under a duty to  permit  the appellant to draw additional electricity on satisfaction  ot the relevant conditions for emergency supply, which it could not deny. The Board has not challenged this part of the High Court’s decision, and the same is not relevant for  purposes of  the present appeal. Reliance on behalf of the  appellant has been placed on the earlier part of the letter  directing it  to limit its drawal to 875 KW. Mr. Gupta  explained  the situation  thus:  The contract demand as  per  the  original agreement and the subsequent agreements by the date on which the letter was issued admittedly was 3490 KW. If the Board’s case  that the appellant’s capacity to generate  electricity from  its  own sets was assessed at 2500 KW be  accepted  as correct, then the appellant would have been held entitled to draw KW only and not 1250 KW as mentioned in the letter. Mr. Gupta  invited  us to consider this aspect  along  with  the Board  s earlier letter Annexure ‘R’ dated 28.12.1979  (page 158  of Vol. II),  informing the appellant  that  additional power  to  the extent of l90 KW had   been  sanctioned.  The admitted position in regard to different agreements  between the  parties  is that initially the parties entered  into  a contract with respect to 1500 KW only which was later raised to  2500 KW. The Regulation and Generation Orders came  into existence  at  that  stage. In July  1979,  a  supplementary agreement  was  executed between the parties for  supply  of additional  800 KW. and in December 1979 the  Board  further sanctioned l90 KW. The relevant part of the letter relied on by Mr. Gupta is quoted below:     "The Board has sanctioned l90 KW additional power  (over and  above  3300  KW)  at 33 KV  subject  to  the  following conditions:     (1)  The  Contract Demand shall be reduced in  terms  of Govt. Control Order No. 1254/2048/XIII/75 dated 4.4.75 after the  decision  of the Committee headed  by   the  Electrical Adviser  &  Chief  Electrical Inspector  to  Govt.  of  M.P. regarding  re-assessment of the capacity of  the  consumer’s generating set is known."                                                   PG NO 1005 The  argument  is  that  the Board  could  mention  about  a Committee   proceeding  to  assess  the  capacity   of   the consumer’s captive plant only if there had not been  earlier any  assessment. The reduction in the contract demand  under the  Generation  Order  should  have  been  made  after  the assessment  work was completed, but as a matter of fact,  no such assessment was made and ultimately the letter  Annexure ‘U’  dated  13.10.1980 was issued  arbitrarily  without  any basis. In absence of an assessment of the capacity under the Generation Order, no reduction was permissible.     27.  Mr. Kacker’s reply is that since the appellant  for the  period of more than 4 years was pleading for  emergency supply  from  time to time on one ground or  the  other,  an internal  Committee  of Superintending Engineers  which  had visited the Company’s plant on 25.9.1980 suggested that  the appellant Company be granted additional power to the  extent of 260 KW on regular basis instead of examining the  grounds relied upon by the appellant every now and then. The  latter part of the letter informing the appellant that it would not in the future be supplied additional power on the ground  of

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emergency has been referred to in support of this  argument. Mr.  Kacker  further said that unfortunately the  Board  was held  liable  for  the emergency  supply  if  the  necessary conditions  were  satisfied and thus the appellant  has  got double advantage and this cannot be the basis for  accepting the  appellant’s case. The learned counsel proceeded to  say that  the letter Annexure ‘R’ was issued in connection  with the  sanction  of 190 KW additional power,  subject  to  the Government  Orders, and the reduction thereunder was only  a matter  of arithmetical calculation which should  have  been done  without reference to a Committee. The letter  was  not sent in connection with any controversy about the assessment of  the generating capacity under the Generation Order,  and it  cannot  be  interpreted in the manner  as  suggested  on behalf  of  the appellant. It was further pointed  out  that admittedly  there was no question of a committee  headed  by the Electrical Adviser and Chief Electrical Inspector to the Government  of  Madhya Pradesh to make  a  fresh  assessment under  the  Generation Order or to undertake  the  realistic assessment  of  the  additional  capacity  over  again.  The assessment had to be made by the divisional Engineer of  the Board.  It was lastly said that this argument  addressed  by Mr. Gupta before this Court was not advanced before the High Court  nor was the point taken in the writ petition  or  any affidavit there. On a consideration of the documents and the re,levant circumstances we agree with Mr. Kacker. The use of the word "re-assessment" in the letter quoted above  instead of  "assessment"  also supports the respondents’  case.  The term "re-assessment" implies that there had already been  an                                                   PG NO 1006 assessment   earlier.  Even  interpreting  the   letter   as suggested  by  Mr.  Gupta,  the  existence  of  the  earlier assessment by the Divisional Engineer cannot be ignored.  If the  appellant  was not satisfied with it,  it  should  have taken appropriate step for getting the same quashed in  1975 itself  and  should not have waited for four or  five  years before  approaching  the  High Court, and  in  the  meantime taking  the  benefit of the provisions  regarding  emergency supply on its basis.     28.  Now  in  this background let us come  back  to  the argument  of Mr. Gupta as mentioned earlier in paragraph  16 above.  In reply Mr. Kacker asserted that it is not  correct to  assume  that a machine can function on a  regular  basis only  according  to the rated capacity as  declared  by  the manufacturer.  By  way of illustration he  relied  upon  the specifications  relating to a machine issued by  the  Bharat Heavy   Electricals  Ltd.  indicating  that   the   "Peaking capacity’  of  the machine with "No time limit"  was  higher than the "rated output" mentioned.  The learned counsel also analysed  the report of the Divisional Engineer  along  with the  data  mentioned by the Committee which in  his  opinion indicated that the maximum capacity of the appellant’s  sets technically  feasible  was  much  more  than  that  actually assessed  and  could  not be less by  any  calculation  even before  the 6th boiler was erected. After the  sixth  boiler became  available the capacity rose to at least 9700 KW  but the  Board  taking  a generous view did not  call  upon  the appellant  to generate further additional  electricity  than that directed earlier.     29.  We have heard the learned counsel  at  considerable length  on this aspect and we think that the question as  to what  should be considered the correct feasible capacity  of the  appellant’s  sets is one  involving  complex  technical knowledge and the High Court (or for that matter this Court) was  well advised not to have attempted to determine it.  We

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must  reiterate the circumstances which appear to be  highly relevant,  namely, (i) that the Divisional Engineer who  has been  rightly  considered by the Generation  Order  to  have sufficient  expert  knowledge  in this  regard  reached  the conclusion  which  is under challenge in  the  present  case after  personally  considering the matter  thoroughly  along with  the Officers of the Company as is apparent by many  of the  letters; (ii) the figures collected by the  members  of the Committee are not challenged as incorrect or inaccurate; (iii)  it  is not suggested that any of the members  of  the Committee or the Divisional Engineer or for that matter  any Officer  of the respondent Board or of the Stale  Government had  any  prejudice or bias against the  appellant  Company;                                                   PG NO 1007 (iv) the appellant did not get an independent assessment  of its  generating  sets  made  by  any  person  having  expert knowledge; (v) the appellant avoided to get the  correctness of  the assessment verified by the parellel running test  as suggested  by  the Board; and (vi) the conduct of  both  the appellant  and  the respondent Board as  emerging  from  the documents  placed by the parties on the records of the  case furnish  valuable circumstantial evidence in support of  the respondents’ case. The argument of the appellant challenging the assessment as illegal must, therefore, be rejected.     30. Mr. Gupta by way of an alternative plea  pressed  an argument for granting a limited relief. He urged  that  even assuming  that the assessment of maximum feasible   capacity of the appellant’s sets was correctly made in 1975 so as  to be binding on the appellant, it is fully established even by the letters of the Board that the position stood  materially altered  by November 1979 which called for a  re-assessment. The Board s letters dated 27.11.1979 (page 157 Vol. II)  and 28.12.1979  (page  158, Vol. 11), according to  the  learned counsel.  indicate that irrespective of whether the  initial assessment was good or not, the Board accepted the  position that  steps  for  re-assessment had to be  taken  and  after taking  into account the circumstances, decided to grant  an ad  hoc benefit of 260 KW by its letter Annexure  ‘U’  dated 13.10.1980 (page 182, Vol. Il), discussed earlier.  Although the  appellant  does  not agree that the  grievance  of  the appellant  was properly met by the grant of  the  additional 260  KW but since this was allowed by the Board itself,  the relief  should have been granted with effect  from  November ˜979 and not from 1.8.1980 as mentioned in Annexure ‘U’. The plea  of  the  respondent that  this  additional  power  was allowed  on account of the recurring demand by  the  Company for emergency supply under Proviso (iii) to Clause 3 of  the Generation  Order  has been challenged as incorrect.  It  is urged  that the letter Annexure ‘U’ granting additional  260 KW over and above 875 KW the appellant was held entitled  to draw,  must  be read in the background of Annexure  Q  dated 27.11.1979  (page  157,  Vol. II)  and  Annexure  ’R’  dated 28.12.1979  (page  158, Vol. II). These  letters  have  been discussed  earlier while dealing with another argument.  The argument  of the appellant is that the Board had  recognised the need of re-assessment of the capacity and had decided to entrust the work to a committee and it must be presumed that the  team must have submitted some report. However, no  such report  has been placed by the Board on the records of  this case and the suggestion is that it is a case of  suppression by the respondent and the Board cannot be heard to say  that the  team did not go i˜ e question of  re-assessment.  Since the  matter  was raised by the appellant  in  November  1979                                                   PG NO 1008 which ultimately resulted in the partial relief up to 260 KW

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about  11  months  later, the benefit ought  to   have  been allowed  with effect from November 1979 if not earlier.  The stand  of the Board with respect to this additional  260  KW has  already  been mentioned earlier. It is  argued  by  the Board  that the Generation Order contemplates only a  single assessment  leading to a single direction and the  appellant was not entitled to re-assessment. The word  "re-assessment" in Annexure ’R’ was, according to the respondents, mentioned due  to inadvertence or under a misconception of  the  exact legal  position.  In  any event the  additional  energy  was allowed  as  the  result  of  the  repeated  demand  by  the appellant  for  emergency  grant. With a view  to  meet  the situation  which was arising every now and then  a  generous attitude  was  taken  to  allow additional  260  KW.  It  is contended that no further claim can be legitimately  founded on  this act of generosity. As a result of the High  Court’s decision  the  appellant’s claim for  emergency  supply  was being considered on merits. The appellant is thus having the advantage  of the double benefit with effect from  1.8.1980. because the Board has neither appealed against that part  of the  High Court judgment, nor has it withdrawn  the  special benefit  of 260KW, but a further claim cannot be allowed  on account of this sympathetic attitude. In view of our finding that a proper and binding assessment of the capacity of  the appellant’s  generating  sets  was  made  in  1975  by   the Divisional  Engineer in pursuance of which the direction  in Annexure  O was issued and in view of the further fact  that on that basis the appellant from time to time asked for  and was allowed emergency relief under proviso (iii) to Clause 3 of the Generation Order, the argument of Mr. Kacker  appears to  be  correct. The appellant has, in our view.  failed  to establish  any  right ot additional relief from  an  earlier date.     31.  The next point taken on behalf of the appellant  is that  there is no sanction in law for charging at the  penal rate  for  the electricity      consumed  beyond  what  is permissible on application of the Generation Order.  Section 22B  of the 191() Act confers powers of framing  subordinate legislation on the State Government for the purposes and  to the   extent   mentioned   therein   and   consequence    of contravention  of  any  such Order is provided in  s.42  (e) mentioned below:   "42. Whoever                     .......................................        (e) makes default in complying with any order issued JIYAJEERAO  COTTON MILLS v. ELECTRICITY BOARD [SHARMA.  J  ] 1009 to him under section 22B or sub-section (2) of section 34; shall  be  punishable  with fine which  may  extend  to  one thousand rupees, and, in the case of a continuing offence or default,  with a daily fine which may extend to one  hundred rupees."     The argument is that s. 22B cannot be so construed as to include   a  delegated  power  to  impose  penalty  of   the delegate’s  choice for the contravention of an order  issued under  the Section. Since the legislature  itself  exercised its  legislative power in that field by including s.  42  in the  statute, the State had or has no authority to take  any further  step  for the enforcement of its Order,  except  by resorting  to  s. 42. Dealing with s. 78-A of the  1948  Act which says that in the discharge of its functions, the Board shall  be guided by such directions on questions of   policy as  may  be given to it by the State Government.  Mr.  Gupta contended  that  it  cannot be  interpreted  to  effectively clothe the State to direct the Board to do a thing which  it

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is itself nOt empowered to do. The Board, therefore.  should have  either  prosecuted  the appellant under  s.  42(e)  or disconnected the electric supply altogether, but it  was not entitled  to demand penal charges. Mr. Kacker  countered  by saying  that s. 42 of the 1910 Act belongs to the  group  of sections  39  to  50  dealing  with  Criminal  Offences  and Procedure  as is apparent by the heading just above  s.  39, and deals with the criminal liability only. The same set  of events  may  give rise at the same time to civil  rights  as well  as  to  a criminal offence and it is  not  correct  to suggest  that   merely because provisions  arc  specifically included  in  the Act dealing With criminal  liability,  the civil  liability  is deemed to have disappeared. By  way  of illustration, a simple case of theft ot movable article  may be  considered:  the  owner  ot the  property  can  set  the criminal  law in motion and at the same time may  claim  the property  or  compensation for it under the civil  law.  Mr. Kacker appears to be right in his stand that merely  because the  appellant became liable to the penalty as mentioned  in s.  42(e)  it  cannot on that ground  defend  an  additional demand  on  account  of  supply of  the  extra  energy ,  if otherwise  maintainable under the law. Besides, s.  48  puts the matter beyond controversy by expressly stating that  the penalty  imposed  by  the  aforesaid  section  shall  be  in addition  to,  and not in derogation of,  any  liability  in respect  of the payment of compensation which  the  offender may have incurred.     32.  While  commencing  his  argument,  Mr.  Gupta   had indicated  that  one of the points on  which  the  appellant relied  upon,  related to the validity of Clause  3  of  the                                                   PG NO 1010 Generation   Order  mandatorily  requiring  a  consumer   to generate   maximum   feasible  electricity  from   its   own generating set. It was suggested that the provisions in  the said Clause being in excess of the power under s. 22B,  were ultra  vires.  After completing his argument  on  the  other points  he  said that he was not pressing  this  point.  Mr. Kacker, therefore, did not address us on this aspect. We may not in these circumstances detain ourselves on this question except  mentioning  the decisions in Adoni Cotton  Mills  v. A.P. State Electricity Board, [1976] 4 SCC 68; State of U.P. v.  Hindustan Aluminium  Corporation, [1979] 3 SCC 229;  and New  Central  Jute Mills v. U. P. State  Electricity  Board, [1986] Supp. SCC 581, showing in unambiguous terms that  the power is there. S. 22B permits the State Government to issue an appropriate order for regulating the supply, distribution and  consumption of electricity The expression  "regulate  ’ occurs in other statutes also, as for example, the Essential Commodities  Act, 1955, and it has been found  difficult  to give the word a precise definition. It has different  shades of  meaning  and must take its colour from  the  context  in which it is used having regard to the purpose and object  of the   relevant  provisions,  and  as  has  been   repeatedly observed,  the Court while interpreting the expression  must necessarily  keep in view the object to be achieved and  the mischief  sought to be remedied. The necessity  for  issuing the  two  Orders arose out of the  scarcity  of  electricity available  to the Board for supplying to its customers.  The situation did not leave any option to the Board but to  make limited supply of electricity to its consumers, and it  must be  held to have, in the circumstances the right to  stagger or  curtail  the  supply. The Orders  were  issued  in  this background  and  to  make the  direction  mentioned  therein effective  it was considered essential to  impose  sanctions which  could take any reasonable form; either  disconnection

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in  case  of  gross  violation or  the  lesser  sanction  of enhanced tariff. By the Order issued under s. 22B and quoted in  paragraph 7 of the judgment in Adoni Cotton  Mills  case (supra) the State Government directed a reduction in  supply of electricity to the extent of 75% of the previous  average monthly  demand and provided for payment of the charges  for excess   consumption  at  double  the  tariff   rates.   The Electricity  Board  thereafter proceeded to  impose  further restrictions.  Aggrieved by these measures the Adoni  Cotton Mills,  an aggrieved consumer approached the Court, but  its challenge was repelled. On behalf of the appellant Mr. Gupta attempted to distinguish the decision on the ground that the fixing  of  a higher tariff for the excess  consumption  was against   public  policy  and  that  this  aspect  was   not considered  by this Court in Adoni Cotton Mills case. We  do not  find any merit in this argument. The demand  of  higher charges/tariff                                                   PG NO 1011 for  electricity  consumed beyond legally fixed limit  is  a reasonable   deterrent  measure  providing  an   appropriate sanction--not as harsh as disconnection of supply of  energy altogether--and  cannot be opposed on the ground  of  public policy.  We, therefore, hold that none of the two Orders  is illegal or unreasonable.     33.   Mr.   Gupta  alternatively  contended   that   the provisions fixing the electric charges at 4 times the normal tariff  for the excess consumption  are to be found only  in the  Regulation  Order and since there is  no  corresponding provision in the Generation Order, there is no  sanction for demanding  the  penal  rate  for  the  electricity  consumed incontravention of the Generation Order. He proceeded to say that  there  is no language in either of the two  Orders  to link them with each other. The different measure taken under the  two  Orders  operate  under  different  conditions  and circumstances,   and  they  cannot,  therefore,  be   lumped together. In reply to the argument of Mr. Kacker that  since the Schedule to the Regulation Order refers to the ’contract demand’  which  expression  denotes  the  original  contract demand  as reduced by the provisions of both the  Regulation Order  and the Generation Order, leading to  the  conclusion that  the provisions regarding the payment of penal  charges take  into  account  both the  Orders  together,  Mr.  Gupta contended  that  although it is true that by reason  of  the Generation  Order  the  contract demand is  reduced  but  it cannot be said that a new contract comes into existence  for the  reduced amount to justify the argument of  Mr.  Kacker, because the reduction is as a result of operation of law. In other  words,  the  reduced  amount  cannot  be  termed   as ’contract’  demand as it is in supersession of the  contract demand. The contract demand, therefore, remains the same  as before  although  there is introduced a statutory  bar  from drawing  it  in full measure. Applying this  logic,  it  was argued by the learned gcounsel that the Generation Order has to  be  kept  apart while working  out  the  effect  of  the Regulation  Order.  He  also  referred  to  the   subsequent Regulation  Order  of 1978 in which  the  relevant  Schedule prescribes  50  KW  as  the  minimum  entitlement  which  is inconsistent  with  the Board’s case. It is urged  that  the argument on behalf of the Board that the two Orders have  to be read together must, therefore, be rejected.     24. The reply of Mr. Kacker is three-fold: he point  was not taken in the writ application before the High Court  nor in the grounds before this Court and since it is not a  pure question of law it should not be allowed to be raised in the argument;  (ii) the two Orders were issued on the same  date

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with  the  common object to remedy the same  problem  as  is evident  from their preambles and so they cannot be read  in                                                   PG NO 1012 isolation;  and (iii) in any event the Electricity Board  in levying  and making the impugned demand must be  deemed   to have exercised its power under s.49 of the 1948 Act which it is certainly entitled to.     Mr.Gupta said that it was not right to suggest that  the point was not raised  in the High Court. He placed before us the  review  petition  filed in the  High  Court  after  the disposal  of the writ case and relied on the  statement   in paragraph  3  of  the  judgment  disposing  of  the   review petition.   He  stated  that the written  arguments  of  the Company  consisted of three parts under the heads  ’list  of dates,  notes of argument’ and a ’reply’. Mr.  Gupta  fairly conceded  that the point was not taken in the writ  petition before the High Court and he was not in a position to assert that it was actually argued on behalf of the Company in  the first  argument  addressed  before the High  Court.  but  he claimed  that  the Company did press the  point  during  the final reply. He could not deny that the point was not  taken when  the  present  appeals were filed in  this  Court.  The judgment of the High Court does not deal with the point.  In the  circumstances,  the question arises as to  whether  the question   should be allowed to be urged now and if  so  how should it be  answered .     35  Mr.  Gupta  contended that merely  because  the  two Orders  are   issued under the same provision of  law  on  a particular date, they  cannot be dovetailed. The  similarity in the preamble of the two  Orders is described as not great consequence  as it merely borrows the language  from  s.22B. Many  Orders  are  issued  under  s.  3  of  the   Essentila Commodities Act,the argument proceeds,  and it cannot, there fore, be suggested that the penalty imposed in one has to be applied   to  the  other without express  language  to  that effect in either of two Orders. We do not  think in view  of the  fact  that  the point was not taken on  behalf  of  the Company while  instituting the writ application in the  High Court  and  filing the present appeals in  this   Court,  it should be  allowed to be urged at the hearing. Let us assume that the argument  of Mr. Gupta is correct. Immediately  the next  question  would  arise as to  whether  the  Board   is otherwise  authorised in law to levy and demand charges  for the excess electricity at  the higher rate and if so whether the  Board can be said to have exercised its power in   this regard.  Mr. Kacker contended that apart from the  power  of the state Government to  limit the supply of electricity  to the  consumers by an order under s. 22B and direct   payment of  penal charges for excess consumption, the Board is  also empowered  to impose  sanctions by charging enhanced  tariff and  the authority to do so is  derived both under s.  49(3)                                                   PG NO 1013 of  the  1948  Act  and s.  49(1)  read  with  the  original argeement. The relevant provisions are quoted below:     "49. Provision for the sale of electricity by the  Board to persons other than licensees.     (1)  Subject  to  the  provisions of  this  act  and  of regulations,   if  any, made in this behalf, the  Board  may supply  electricity to any person not being a licensee  upon such  terms and conditions as the Board thinks fit  and  may for the purposes of such supply frame uniform tariffs.     (2) ....................................................     (3) Nothing in the foregoing provisions of this  section shall derogate from the power of the Board, if it  considers it  necessary or expedient to fix different tariffs for  the

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supply  of electricity to any person not being  a  licensee, having regard to the geographical position of any area,  the nature  of  the  supply  and purpose  for  which  supply  is required and any other relevant factors.     (4)  In fixing the tariff and terms and  conditions  for the  supply of electricity, the Board shall not  show  undue preference to any person.     Reliance  was placed on several decisions of this  Court of the High  Courts. It was further contended that it is not essential  for  the  Board  to  frame  regulations  tot  the exercise  of  such power. The leaned counsel appears  to  be right.  In  Adoni  Cotton Mills ’  case  (supra)  the  State Government  had  made an order under s. 22B of the 1910  Act limiting  the supply to 75% of the previous  consumption  as was   done in the present case and directed the  payment of punitive  rates  for  excess  consumption.  The  Board  made supplementary orders for placing further onerous  conditions on  certain groups of consumers. This was challenged  before the High Court inter alia on the ground that since the State Government  had already acted under s. 22B, the Board  could not further pass supplementary orders and that in any  event since  the  Board had not made regulations laying  down  the principles  under s. 79(j) of the 1948 Act, the orders  were bad.  Both the points (along with several others) raised  by                                                   PG NO 1014 the  appellant  in that case were rejected  by  this  Court. Referring  to s. 49(1) of the 1948 Act, the  Court  observed that  the  power to enhance the tariff is  included  in  the Section  and  the  expression that  "the  Board  may  supply electricity ..  upon such terms and conditions as the  Board thinks  fit"  in  s.  49(1) iS  related  to  the  terms  and conditions of the agreement between the parties. Sub-section (  1) confers power on the Board to supply electricity  upon such terms and conditions as it thinks fit and the terms and conditions  include  the power of the Board to  enhance  the rates.  S. 49(3) permits  the Board to fix  different  rates for  the  supply  of electricity having  regard  to  certain conditions   mentioned  therin  and  ’’any  other   relevant factors".  It  was  held  that  the  expression  "any  other relevant  factors" could not be considered  ejusdem  generis because  there is no genus of the relevant factors.  In  New Central Jute Mills Co. Ltd. v. U.P. State Electricity Board, (supra) the situation again was similar to the present case. The argument pressed before the Supreme Court inter alia was that the Board had no authority to make the demand in excess of  the  agreed  rate under  the  agreement.  Repelling  the contention,  the  Court  observed  in  paragraph  4  of  the judgment  that  the agreement itself did  not  envision  the supply of electricity in violation of the ban imposed by the State  Government in exercise of its power under s.  22B  of the  1910  Act; nor did the agreement stipulate the rate  at which  such supply should be charged if notwithstanding  the ban against the supply a consumer drew electricity in excess of the permissible quantity. In the circumstances, the Board was  justified in invoking the power under s. 49(3)  of  the 1948  Act  which  authorised it  to  supply  electricity  by charging   different   tariff  having  regard   to   certain conditions and ’ any  other relevant factors". S. 49(3)  was interpreted  to  be wide enough to cover a  situation  where electricity  in excess of the quantum is drawn in  disregard of the ban imposed under s. 22B of the l9 10 Act. We do  not consider  it  necessary to multiply the decisions  as  there does  not appear to be any doubt that either under s.  49(1) of the 1948 Act read with the agreement or under s. 49(3) or under  both  the provisions the respondent  Board  is  fully

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authorised  to  levy and to make a demand at a  higher  rate than  the   usual tariff. It is also clear that  it  is  not essential  for the Board to make regulations indicating  the basis for such levy before making the demand. The  appellant has  not been able to successfully show before us  that  the power  by  the  Board has to be exercised  in  a  particular manner and by adopting a particular mode. If  it is  assumed that  a  particular formality has to be completed  before  a demand  can be legitimately raised, the appellant cannot  be allowed to claim now that the same is lacking in the present case  in  the absence of a proper pleading in  the  original writ  petition before the High Court. If the point had  been raised  in  time,  the respondent Board  could  have  placed relevant  materials  on  the issue. If at  the  end  of  the hearing  of  the  case  in the  High  Court  the  point  was mentioned in the appellant’s final reply and included in the                                                   PG NO 1015 last instalment of its written argument, it cannot cure  the defect  in the pleading specially when the judgment  of  the High  Court  dismissing the writ application does  not  deal with the point.     In that view it is not necessary to test the correctness of   the  argument  of  Mr.  Kacker  that  the   appellant’s entitlement  to receive the quantum of electricity from  the Board  at  the  normal tariff can be determined  only  by  a combined  reading of the two Orders. We do  not,  therefore, consider  it necessary to decide as to what would have  been the precisely correct answer if the point had been  properly raised before the High Court at the appropriate stage.     36. We do not find any merit in any of the points  urged on behalf of the appellant. We were informed by the  learned counsel  for the parties that the appellant does not  accept the correctness of the calculations in the letter ’P’ series and  the question is being examined by the High Court  in  a pending  case. The appellant also asserts that  even  during the  period  commencing from November 1979 the  Company  had pleaded  for  emergency supply. The High Court  has  in  the present case directed the prayer for emergency supply to  be considered on merits. Since these questions are not involved in  the present appeals, arguments relating to these  points have not been addressed before us. We, in the circumstances, make it clear that any observation made in the present  case shall not be treated to have decided those points which  are the subject matter of a pending case in the High Court.     37.  It  was also pointed out at the  Bar  that  several interim orders were issued by this Court during the pendency of  the present appeals and final direction should be  given in  regard to them. While granting special leave this  Court by its order dated 5.11.1982 directed the appellant  Company as  condition for interim relief of restoration of  electric connection  to pay a sum of Rs.50,00,000 within a  fortnight and  another sum of Rs. 1,50,00,000 within six  months  with interest  from l. 1.1983 at the rate of 12% per annum  until payment.  The  future payment of the electricity  bills  was ordered to be made within four weeks from the service of the bills. The Court also said that the applications made by the appellants  for  consideration of emergency  supply  of  the electricity should be expeditiously disposed of by the Board on merit, and all payments by the appellants will be subject to adjustment in the light of the decision on the  emergency applications.  By  the order dated 24.11.1982 the  time  for payment  of  Rs.50,00,000 was extended  to  6.12.1982.  With respect  to the payment of Rs. 1,50,00,000 the Court by  its order dated 6.5.1983 permitted the amount to be deposited in                                                   PG NO 1016

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two  equal instalments. The Court also said that if  it  was ultimately found  that the appellant had paid any amount  in excess  of the total liability, the Board shall  repay  such excess amount with interest at the rate of 12% per annum. By a  subsequent  order  dated  23.4.1984  the  appellant   was required to pay a sum of Rs. 1,28,00,000 to the Board by the 10th of May, 1984 and to keep the bank guarantee alive  till the  final  disposal  of  these  appeals  as  condition  for continuance of the interim order. During the  hearing of the appeal  a  grievance was made on behalf  of  the  respondent Board  that  the  bank guarantee had  not  been  effectively renewed and the learned counsel for the appellant  undertook on behalf of the Company to correct the defect. Subsequently it was stated at the Bar that proper bank guarantee had been furnished in accordance with the Court’s direction. In  view of our present decision the respondent Board, besides  being entitled  to  retain  the  amount  already  paid  to  it  in pursuance of this Court’s direction, is further entitled  to enforce   the   bank  guarantee.  The   appellant   Company, therefore, must arrange to make the payment withount  delay, failing which the Board shall be entitled to take steps  for enforcement of the bank guarantee. The dispute regarding the appellant  s claim to receive  emergency supply  is  pending before  the High Court. The appellant shall be  entitled  to adjustment in the light of the final decision on this point.     38.  In the result, the appeals fail and  are  dismissed with costs payable to the respondent No. l.     R.S.S.                                Appeals dismissed