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PETITIONER: M/S RAYMOND LIMITED & ANR., ETC.  ETC.

       Vs.

RESPONDENT: MADHYA PRADESH ELECTRICITY BOARD & ORS.,ETC.ETC.

DATE OF JUDGMENT:       16/11/2000

BENCH: B.N.Kirpal, Doraiswamy Raju, K.G.Balakrishna

JUDGMENT:

RAJU, J. L.....I.........T.......T.......T.......T.......T.......T..J

     The  above  batch  of appeals arise out  of  a  common judgment  rendered  in a batch of Writ Petitions by  a  Full Bench  of  the Madhya Pradesh High Court, since reported  in AIR  1999  Madhya  Pradesh 143 and  also  the  consequential separate  orders  passed subsequently by the Division  Bench dismissing  the  Writ  Petitions.   The  Writ  Petitioner  - Industries filed appeals against that portion of the opinion of  the Full Bench confining the declaration of law made for prospective  application only and the dismissal of the  Writ Petitions,  whereas, the Electricity Board had filed appeals against  that  portion  of  the opinion of  the  Full  Bench declaring  the position of law that whenever the  contracted supply  falls  short  of 40% of the contract load  then  the Board  shall  be  entitled to charge only  for  the  reduced energy  actually  supplied and not for 40% of  the  contract load  as  minimum charges and thereby overruling an  earlier decision of a Division Bench of the said High Court reported in  M/s  Gwalior Steels Private Ltd.  vs  M.P.   Electricity Board (AIR 1993 M.P.  118).  For the purpose of appreciating the  points  raised, we would advert to the facts in one  of these  appeals,  particularly those in M/s Raymond Ltd.   in C.A.  Nos.  4218-4219 of 1998.

     The  appellant M/s Raymond Ltd., a company  registered under  the  Companies  Act,  1956   and  having  its  cement manufacturing  division within the State of Madhya  Pradesh, entered   into   an  agreement   with  the  Madhya   Pradesh Electricity  Board  on  27.3.1979 renewed  periodically  for supply  and purchase of high tension electric energy for use in  the  manufacture  of cement.   The  minimum  contractual demand  was  for  33 MW (38,822 KVA) per day and  clause  19 provided for the Tariff, while clause 21 stipulated the term relating to minimum guarantee in the following terms:

     21(a) The consumer shall from the date of utilisation of  electrical  energy,  or from the date of expiry  of  the three  months notice mentioned in clause 2 hereof guarantee such  minimum  consumption as when calculated at the  tariff (excluding charges due to fuel adjustment clause, meter rent and  miscellaneous charges) will yield an annual revenue  of Rs.5,40,000/- (Rupees Five Lakhs Forty Thousand Only) or pay this  sum  as a minimum.  The deficit, if any,  between  the

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guaranteed  minimum charges and the actual charges shall  be payable by the Consumer.

     (b)  The  minimum guarantee specified in Clause  21(a) above shall at all times be without prejudice to realisation by  the  Board  of the minimum prescribed under  the  tariff referred to in Clause 19 hereof.

     (c)  It hereby agreed further that the Board shall  be entitled to fix and charge enhanced amount of annual revenue if  the Board, on completion of all works for supply to  the Consumer,  finds it has incurred higher expenditure than the pre-  estimated cost and in that case the Consumer shall pay to  the  Board the enhanced annual revenue so fixed  by  the Board  without any objection and will not raise any  dispute regarding the same.

     Clause 19 of the agreement read as follows:

     The  Consumer  shall  pay to the Board  every  month, charges  for the electrical energy supplied to the  Consumer during the preceding month, at the Boards tariff applicable to  the class of service and in force from time to time.   A copy  of  the  current H.T.  tariff No.1-A  of  notification No.5/GA/147-A  dated 11.03.1976 as amended applicable to the Consumer  is  set  out  in the  Schedule  attached  to  this Agreement.

     Under the notification issued for High Tension for 132 KV/220  KV supply, the minimum tariff prescribed for  cement factories is said to be as hereunder:

     The  consumer  will  guarantee   a  minimum   monthly consumption  (KWH)  equivalent  to 40% load  factor  of  the contract  demand.  The consumer will be required to pay  the energy  charges on the said minimum monthly consumption plus the  demand  charges on the billing demand for the month  as minimum  monthly payment irrespective of whether any  energy is  consumed  or  not during the month.   An  average  power factor  of  0.9  will  be applied  for  the  calculation  of corresponding  unit  of  40%   load  factor  on  contractual demand.

     The   Senior   Account  Officer   concerned   of   the Electricity  Board issued a bill dated 18.10.1995 raising  a demand  of Rs.2,83,18.581/- for the consumption period  from 15.9.1995  to  15.10.1995.   While   recording  the   actual consumption  in  units  of  the electrical  energy  and  the charges  therefor,  the ultimate bill and demand came to  be raised  on  the  basis  of  the  minimum  guarantee  charges equivalent  to  40% load factor of contract  demand.   This, according  to  the  appellant,  resulted   in  a  demand  of Rs.87,45,685/-  in addition to the charges really due on the actual  consumption of energy during the period in question. Challenging  the same, Writ Petition No.  3616 of 1995  came to be filed, claiming either for refund or adjustment of the said  excess  amount  against future demands, the  said  sum being  for  electrical energy not really consumed  by  them. During  the pendency of the said Writ Petition, another bill dated  18.10.96  for the consumption period from 1.12.95  to 15.12.95  was  said to have been issued  for  Rs.10,24,867/- towards  minimum  guarantee charges equivalent to  40%  load factor  of contract demand.  As against this, Writ  Petition No.   4711  of 1996 came to be filed challenging the  demand and  seeking for either refund of the same or for adjustment

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thereof  against  future  demands.   The  Electricity  Board contested  the claim of the appellants and others contending that  as  per  the  terms  of  the  agreement  entered  into governing  the supply of electrical energy, the sum demanded is  quite,  in accordance with law, justified and cannot  be avoided  by any of the appellants, and the details of  their defence  will be adverted to hereinafter, at the appropriate stage.

     The batch of Writ Petitions initially came up before a Division Bench and keeping in view the earlier decision of a Division Bench reported in AIR 1993 M.P.  118 (Supra), by an order  dated  11.9.97, the matter was placed before  a  Full Bench with the following observations:

     After reviewing all these cases on the subject we are impressed  with  the  arguments  that  the  matter  requires consideration  by  the larger Bench because  notwithstanding the  fact  that  as  per  the terms  of  the  agreement,  an obligation  has been cast on the consumer 40% load factor of the  contract demand and pay for the same every month.   But there  is  no  corresponding obligation on  the  Electricity Board  to  supply  40% load factor of the  contract  demand. When  there  is  no corresponding duty on the  part  of  the Electricity  Board  to  supply minimum 40% of  the  contract demand  load  every  month still the consumer  is  under  an obligation  to  40%  of  the  contract  demand  load.   This prima-facie  sound  in  equitable.  Therefore, we  think  it proper  that  since  this is a larger  issue  which  involve serious interpretation of the aforesaid tariff clause of the Electricity Board as much, yet the matter may be referred to a  Larger Bench so that the matter can be placed beyond  the pale of any further controversy in the matter.  Papers maybe placed  before  the Chief Justice for constituting a  Larger Bench.

     The Full Bench, which heard the matter, by its opinion dated 5.3.98 held as follows:@@       JJJJJJJJJJJJJJJJJJJJJJJ

     25.   After considering all aspects of the matter, we are  of  the  opinion  that the view taken  by  the  learned Division  bench  of  this Court in the case of  M/s  Gwalior Steels  Private  Limited v M.P.Electricity Board,  AIR  1993 Madh  Pra  118, does not lay down a correct law and we  hold with  reference  to Clause 23(b) of the Agreement read  with Tariff,  that whenever contracted supply falls short of  40% of  the  contract load, then the Board shall be entitled  to charge  for the reduced energy (actually supplied) and  will not  be  entitled to charge 40% of the contract load.   This interpretation  which  appears to us to be  more  equitable, just  and reasonable shall be applicable only  prospectively that  is  from the date of the order and will not  have  any retrospective operation.  This is being done keeping in view that  the Division Bench judgment of this Court has held the field  since  1993  and  the  Board  has  been  billing  the consumers  in  the State on that basis and now since we  are taking  a different view from that of the Division Bench  of this Court and we are interpreting the provision contrary to the  view  taken by the Division Bench in the above case  of M/s  Gwalior Steel Private Limited it would be more just and equitable  to give this interpretation a prospective  effect and not retrospective.  Similar course of action was adopted by the Hon.  Supreme Court in the case of L.Chandra Kumar v. Union  of India, AIR 1997 SC 1125.  Therefore, we hold  that

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the present interpretation will be prospective in nature and not retrospective.

     Thereupon, the Writ Petitions came to be posted before the  Division  Bench,  and  apparently  on  account  of  the prospective  declaration of law, no relief as prayed for  in respect  of particular demands for the earlier period  could be  granted  and  the Writ Petitions came to  be  dismissed. Hence,  the appeals by the Writ Petitioners before the  High Court.   So far as the Electricity Board is concerned,  they filed  appeals,  felt aggrieved by the judgment of the  Full Bench  insofar as it overruled the earlier judgment reported in  AIR 1993 M.P.  118 (Supra).  This Court, while  granting leave  in  the  Special Leave Petitions  filed,  on  24.8.98 directed  the  appeals to be placed before a Bench of  three judges in view of the decision of this Court in Orissa State Electricity  Board  &  Another vs IPI Steel Ltd.   &  Others reported in 1995 (4) SCC 320.

     Heard  the  learned counsel appearing on either  side. Shri  C.S.   Vaidyanathan,  learned senior counsel  for  the Electricity  Board,  took us at length through  the  various clauses  in  the agreements and contended that  the  minimum charges  expressly guaranteed in favour of the Board is  not subject  to either actual supply by the Board or consumption by the consumer and the payment of such minimum guarantee at a  rate equivalent to 40% load factor of the contract demand is  in substance a partial return for various investments in the various installations and to meet recurring expenses for maintenance   and   the   consumers,   having   specifically undertaken  to do so with no provision for any reduction  or deduction  in  the  contract  as such for  such  reasons  or grounds,  cannot  go  back upon the solemn  commitments  and undertaking  under clause 19.  In reinforcing the said stand it  is further contended that whenever the State  Government pass   orders   under   Section    22   B   imposing   power cuts/reduction/staggering in supply both parties are obliged to  carry  out  the  same and it would  be  futile  for  the consumers  to read into the word consumption, the  element of  supply  too.  The load factor envisaged is said to be  a measure  of liability for minimum guarantee and not to  cast any  obligation  on the Board to effect supply of energy  to that  extent  so  as to make it a  condition  precedent  for casting  liability  on  the  consumer  to  pay  the  minimum guaranteed  charges.   It  is  further  contended  that  the minimum guarantee has been fixed for various industries such as  cement, steel etc.  depending upon the different minimum load   factors   having  regard  to   the   investments   on establishments  and recurring maintenance expenditure and it is  never  considered  to be part of the tariff  but  really relate  to  the  realm  of   mechanics  of  price  fixation, exclusively   within  the  discretion  of  the   Board   and consequently  the High Court could not have interfered  with the same.

     On  behalf of the consumer industries Shri G.L.Sanghi, learned senior Advocate, made the leading arguments followed by   Sarvashri  A.K.   Chitale,   Bhimrao   Naik,   Ravindra Srivastava,   Senior  Advocates,   and  S.Ganesh,  U.A.Rana, A.K.Sanghi  and  others.  Adverting to clauses  1(a),  3(a), (b),  8,  11,  12,  18, 19, 21 and 23,  it  was  strenuously contended  that the contract must be construed as a whole in the  context of the object underlying the same and the basic

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contract  being  for  supply continuously 33  KV  electrical energy  on day to day basis, it should really be  meaningful and  really  useful  and  possible of  consumption  for  the purposes  of the industries concerned.  It is further stated that the quality, the quantity and manner of supply has also to  be taken into account in assessing the usefulness of the energy  for industrial purposes and if it is shown that  the supply  actually made did not conform to these vital aspects of supply then the undertaking to pay the minimum guaranteed amount  should itself have to go and any other  construction would   result  in  grave   injustice  besides  being   also inequitable  and  unconscionable.  The further plea is  that the  Board during the period in dispute did not supply  even the  bare  minimum  quality of energy required  to  run  the essential  machineries  to  keep the  manufacturing  process going  and  continuous and the supply actually made  was  of poor   quality,   not  really   useful,  erratic  and   non- continuous,   fluctuating  and   accentuated  with  frequent trippings  and  in  effect not only dislocating  the  normal working  of the industries but also damaging the machineries and  retarding production and therefore, no exception  could be taken to the manner of construction placed on the clauses in  the  contract as well as the conclusions arrived  at  in respect  of  the  statutory  and other  liabilities  of  the consumers, by the High Court.  The learned counsel appearing also endeavoured to highlight some of the individual factual details  pertaining  to  their cases and  also  invited  our attention  to  some of the correspondence exchanged  between parties regarding their grievances about the quality as well as  the  quantity  of supply made to them.  We may  make  it clear even at this stage that we do not propose to undertake an  enquiry  into or adjudication of such factual claims  in these  proceedings, particularly in the teeth of the  manner of disposal given by the Division Bench after the opinion of the  Full  Bench  and  the desire  of  the  learned  counsel themselves  to  relegate to the High Court the  matters,  if need be, for determination of such claims.

     Though  there  was  an attempt for  the  consumers  to contend  that  any  shortfall  in the supply  of  the  total quantity  of contract demand agreed to be made would relieve them  of  all  liabilities  from   payment  of  the  minimum guaranteed  sum undertaken, we are unable to countenance any such  claim, particularly in view of the very question  that was  actually  referred to and decided by the Full Bench  of the  High Court and which on the face of it merely pertained to  the liability or otherwise of the consumer industries to pay the minimum guaranteed charges even when the minimum 40% of  the  contract demand energy is not supplied  during  the relevant period by the Board.  As a matter of fact, we find, in  the light of the decision in AIR 1993 M.P.  118  (Supra) the  correctness of which was taken up for consideration  by the  Full  Bench,  the question referred to the  Full  Bench itself  is  as  to whether the consumer is required  to  pay minimum  tariff of 40% of the contract load irrespective  of the  fact that even 40% of the contract load energy has been supplied  or  not  to the consumer.  Therefore,  it  is  not permissible  for the consumer industries in these appeals to invite  a  decision as to the liability or otherwise of  the consumers  to pay the minimum guaranteed charges undertaken, notwithstanding  the  factual position that the supply  made was  actually  40% or even more though not of the extent  of total  contract  demand agreed to between the parties  under the  respective  contracts.  That apart, countenancing  such claims  to  be agitated in proceedings under Article 226  of

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the   Constitution  would  amount   to   the   extraordinary jurisdiction  being  permitted to be availed to rewrite  the contract  and read just contractual liabilities and  thereby undertaking  an  adjudication of rights of  parties  flowing under  a  contract  - a function normally  assigned  to  the ordinary civil courts of the land.

     Apart  from  making such submissions on the merits  of their  claim, on the basis of the very decision of the  High Court  and  drawing sustenance to substantiate such  claims, the  consumer  industries also attacked that portion of  the judgment  which purported to confine the declaration of  law made  for future application only by applying the  principle of  prospective overruling, contending that such  principles cannot be invoked by the High Courts exercising jurisdiction under  Article 226 of the Constitution of India and that the High  Court,  in  any  event,  committed  an  error  in  not affording  an opportunity to them to make their  submissions on  the  applicability  or  otherwise of  the  principle  of prospective overruling to the cases on hand.

     Claims  similar to the one sought to be now  asserted, have  come up for consideration before this Court, though in somewhat  different  background  of  facts  and  pattern  of contracts  between  consumers  and Electricity  Boards,  and either  of the parties before us tried to lay their hands on some  or the other of the observations made in those  cases, to  justify  their respective stand.  In M/s Northern  India Iron  and Steel Co.  vs.  State of Haryana & Anr.  (1976 (2) SCC 877) the dispute arose between the parties as to whether in  a situation where there were substantial power cuts  and the  Board was not able to supply the energy required by the consumer  in  terms of the contract entered into, the  Board was  entitled to get any demand charge and if so, to  what extent  and whether the State could demand any duty on  such demand  charge.  This Court adverted to the existence of two well-known  systems of tariff - one the flat rate system  in which  a flat rate on units of energy consumed and the other known as the two-part tariff system, meant for big consumers of  electricity  comprising of (i) what is known as  ‘demand charges  to cover investment, installation and the standing charges  to  some  extent and (ii) energy  charges  for  the actual  amount  of  energy consumed.  The  Court  ultimately decided   the  question  on  the   basis  of  the   specific stipulation  contained  in  clause   4(f)  of  the  contract therein,  which  entitled the consumer to  a  proportionate reduction  of  demand  charges/minimum   charges,  if   the consumer  was not able to consume any part of the electrical energy  due  to any circumstance beyond its control and  for that  purpose  the circumstance of power cut which  disabled the Board to give the full supply to the consumer because of the  government  order  made  under  Section  22  B  of  the Electricity  Act, 1910, was considered to be a  circumstance which  disabled  the consumer from consuming electricity  as per the contract.

     In  Bihar  State  Electricity  Board &  Anr.   vs  M/s Dhanawat  Rice  & Oil Mills (1989 (1) SCC 452),  this  Court while  applying  the  decision in 1976 (2) SCC  877  (supra) construed  clause 13 of the contract between parties in that case  which  specifically  provided  for  the  proportionate reduction  of the annual minimum guarantee bills, as  merely entitling the consumer to a proportionate reduction only and not  completely  avoid payment of annual  minimum  guarantee bills,  even in cases where there was failure on the part of

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the  Board to supply electrical energy as per demand of  the consumer  under  the contract.  In Bihar  State  Electricity Board,  Patna  &  Others vs M/s Green  Rubber  Industries  & Others  (1990  (1)  SCC 731, this Court, while  repelling  a challenge  to the clause in the agreement which provided for payment  of  minimum  guaranteed   charges  irrespective  of whether  energy was consumed or not, observed that the  same was  reasonable and valid for the reason that the supply  of electricity  to  a consumer involves incurring  of  overhead installation  expenses  by the Board which do not vary  with the quantity of electricity consumed and also for the reason that  those  installations have to be continued and must  be maintained until the agreement itself comes to an end.  Such a  stipulation  was  also  considered to be not  by  way  of penalty  for not consuming the specified quantity of  energy but  more for the obligation of the Board to keep the energy available to the consumer at his end.  Again in Andhra Steel Corporation   Ltd.   &  Others  vs  Andhra   Pradesh   State Electricity  Board  & Others (1991 (3) SCC 263)  this  Court held  that the purpose of prescribing minimum charges is  to ensure that no undue loss is caused to the Electricity Board due  to the tendency of the consumer to have connection  for inflated  requirement and the Boards agreement to meet such requirement  and the readiness to maintain the supply up  to that  requirement,  even  if  no or very  little  energy  is consumed.   The  decision  of  the  State  Government  under Section  78  A of the Supply Act, 1948, to fix  concessional tariff  was also held not sufficient to absolve the consumer from  the liability undertaken to pay the minimum guaranteed charges.   In coming to such a conclusion, reliance has also been  placed upon the decisions reported in 1990 (1) SCC 731 (Supra) and The Amalgamated Electricity Company Ltd.  vs The Jalgaon Borough Municipality (1975 (2) SCC 508) wherein this Court observed as follows:

     9.   Moreover  it  is obvious that if  the  plaintiff company  was  to  give  bulk  supply  of  electricity  at  a concessional rate 0.5 anna per unit it had to lay down lines and  to keep the power ready for being supplied as and  when required.   The  consumers  could   put  their  switches  on whenever  they liked and therefore the plaintiff had to keep everything  ready  so that power is supplied the moment  the switch was put on.  In these circumstances it was absolutely essential  that  the plaintiff should have been ensured  the payment  of the minimum charges for the supply of electrical energy  whether  consumed or not so that it may be  able  to meet the bare maintenance expenses.

     In  Orissa  State Electricity Board & Another  vs  IPI Steel  Ltd.   & Others (1995 (4) SCC 320) this Court had  an occasion  once again to deal with these issues in the  light of  the  earlier  case  law  on  the  subject.   This  Court explained  therein  the meaning of the expressions  maximum demand  charges,  consumption charges and dealt with  the role  as  well  as purpose of installing two  meters  -  the normal  meter  meant  for recording the  total  quantity  of energy consumed over a given period, in variably a month and trivector  meter  meant for recording the  highest  level/ load  at  which the energy is drawn over any  thirty  minute period  in  a month.  While explaining the two  part  tariff system  meant  for big/bulk consumers of  electricity,  this Court  has  emphasised and reiterated the justification  and reasonableness of the same, observing the following:

     Normally  speaking,  a factory utilises energy  at  a

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broadly  constant  level.   May be,  on  certain  occasions, whether  on  account of breakdowns, strikes or shutdowns  or for other reasons, the factory may not utilise energy at the requisite   level  over  certain   periods,  but  these  are exceptions.   Every  factory expects to work  normally.   So does the Electricity Board expect - and accordingly produces energy required by the factory and keeps it in readiness for that  factory  - keeping it ready on tap, so to  speak.   As already  emphasised,  electricity once generated  cannot  be stored  for  future  use.   This  is  the  reason  and   the justification  for  the  demand charges and  the  manner  of charging  for  it.  There is yet another  justification  for this  type  of  levy  and it is this:   demand  charges  and consumption  charges are intended to defray different items. Broadly  speaking, while demand charges are meant to  defray the  capital costs, consumption charges are supposed to meet the  running  charges.   Every  Electricity  Board  requires machinery,  plant,  equipment,   sub-stations,  transmission lines and so on, all of which require a huge capital outlay. The  Board like any other corporation has to raise funds for the  purpose which means it has to obtain loans.  The  loans have  to be repaid, and with interest.  Provision has to  be made for depreciation of machinery, equipment and buildings. Plants, machines, stations and transmission lines have to be maintained,  all  of which require a huge staff.  It  is  to meet  the capital outlay that demand charges are levied  and collected  whereas  the consumption charges are  levied  and collected to meet the running charges.

     Adverting  to the actual grievance of the consumer  in that  case that where the cut in supply, be it even for  the reason of an order passed by the Government under Section 22 B  of  the  1910 Act, is only to the extent of half  of  the contract  demand,  it was held that during such  periods  of restricted supply the consumer had to pay the energy charges for  the actual consumption plus maximum demand charges  for the  maximum demand availed of by him at the rate prescribed in  the  agreement.  As in the cases before us, it seems  to have  been projected there also that even during the periods of  restricted  supply  there were frequent cuts  and  break downs  as well as irregular supply and the Board cannot levy full  demand  charges  merely because in any  thirty  minute period in a given month, the power is availed at the maximum demand level, and that except the actual consumption charges nothing  further, particularly the full demand charges could be  collected.  After referring to the decisions reported in 1990 (1) SCC 731 (Supra), and the other decisions which were quoted with approval therein such as AIR 1936 Cal.265 (Saila Bala  Roy vs Chairman, Darjeeling Municipality and 1969  (1) Madras  Law  Journal 69 (M.G.Natesa Chettiar vs  Mad.   SEB) which  were quoted with approval earlier by this Court,  the challenge  by the consumer came to be rejected.  It was also observed  that breakdowns and trippings etc.  which are  not confined to periods of restricted supply alone but may occur during  normal  times also does not affect the liability  of the  consumer  and  only if there is no supply  at  all  for considerable  periods,  the  situation would  be  different, whether  it  happens during the period of normal  supply  or restricted  supply,  though on facts the case considered  by the Court was not found to be one such.

     We  have  carefully considered the submissions of  the learned  counsel  appearing on either side, in the light  of the  provisions  of the 1910 Act and 1948 Act, the  contract entered into between the parties, the general conditions for

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supply  and  the  tariff  rates prescribed as  well  as  the governing  principles as laid down by this Court.  The terms and  conditions of supply, as envisaged in the contract  and the  statutory  provisions and general conditions have  been standardised  for  uniform application among consumers  with variations  merely  necessitated by the different  class  or categories  of consumers and there is no scope otherwise for expecting  any scope for individual or free bargaining right in  this regard by each consumer with the Board.  Therefore, it is futile for a consumer to contend that the Board was at the  dictating  end  and  the   parties  were  not   equally positioned  in  settling  the terms of  the  contract.   The further attempt made to contend that the failure on the part of  the  Board  to effect supply up to the  contract  demand level  relieved the consumers from the obligation undertaken to  pay  a minimum guaranteed sum per month, as  though  the contract  demand  is the minimum guaranteed for supply,  not only  lack any basis in law or on the terms of the  contract governing  the supply but also directly runs counter to  the terms  in  the contract which makes  different  stipulations relating to contract demand and the minimum guarantee in the form  of  a  portion or percentage of the  contract  demand, only.   The  question of exonerating the consumer  from  the liability undertaken to pay minimum guaranteed charges for a month  and billing only for the actual consumption of energy or  allowing  a  consumer  to pay the rates  on  the  actual consumption  of  electricity measured in units will and  can arise and has also been considered for determination only in case  the  supply  by  the Board itself fell  short  of  the minimum  of  energy, the consumption of which go to make  up the  minimum  guaranteed sum.  It is well settled and  there could  be no controversy over the position that if only  the supply  was  available for consumption but the consumer  did not  consume  so  much  of energy up to the  extent  of  the obligation cast upon him to pay the minimum charge, there is no  escape  from  the  payment  of  the  minimum  guaranteed charges,  except  in very exceptional cases envisaged  under clause  23  of  the contract, and that too  subject  to  the stipulations and restrictions contained therein.

     In the light of the serious controversies raised as to the  duration,  quantity,  manner and quality of  supply  of electrical  energy  expected  to be made by  the  Board,  it becomes  inevitably  necessary to decide first the  question relating  to  the  unit or standard  of  measurement,  which invariably  must  have relevance, in our view, only  to  the billing cycle envisaged in the contract and the tariff which is  only  a month.  The payment by the consumer is to be  on the  electrical energy supplied during the preceding  month. The  parties have also agreed that the maximum demand of the supply  is to be measured with reference to the month at the point  of  supply of the consumer and will be determined  on the  basis  of  the  supply during  any  consecutive  thirty minutes  in  that month as recorded by the trivector  meter. The  power factor, according to the statutory conditions  of supply which form part and parcel of the supply of energy to a  consumer, is also to be determined with reference to  the supply  of energy to a consumer, and that factor is also  to be  determined  with reference to the supply  of  electrical energy  made  during  a month.  The minimum  consumption  of energy  guaranteed, as per the tariff notification, is  also in  terms of a monthly minimum.  While that be the position, it is futile for the consumers to contend that they will not be  liable  to  abide  by  the  minimum  guaranteed  charges undertaken, unless on every day of the month/year and during

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the twenty four hours or round the clock the load factor and power supply agreed to be made, at one and is the same level without  any  shortfall,  tripping  or  low  voltage.    The provisions of Section 56 of the Contract Act, 1872 sought to be relied upon have no relevance or application to the cases on hand.  Countenancing of such claims would not only defeat the  very purpose, object and aim of providing for a minimum charges  guarantee  clause  but would ultimately  result  in mutilation  of the very fabric of tariff structure rendering thereby the schemes of generation and supply of power at the agreed  concessional  rates uneconomical and non-viable  for the Board.  This would also result in the re-writing of many of  the  clauses in the contract and rendering nugatory  the tariff  pattern and system itself throwing into disarray and disharmony  the  efficient  execution of  the  power  supply schemes.

     The  further claim asserted on behalf of the consumers that  since  what was agreed to between the parties  was  to make  the  supply  available   continuously  except   during situations  envisaged  in  clause 11 of  the  contract,  the failure  to effect such supply by the Board renders the very contract  relating  to  the payment  of  minimum  guaranteed charges   unenforceable  against  them,   does   not   merit acceptance   in  our  hands.   It  cannot  legitimately   be contended  that  the  word continuously has  one  definite meaning only to convey uninterruptedness in time sequence or essence  and on the other hand the very word would also mean ‘recurring  at  repeated intervals so as to be  of  repeated occurrence‘.   That  apart,  used as an adjective  it  draws colour from the context too, and in the light of the texture of clause 11 as well as clause 12 and clause 23 (b) and also Section 22 B of the 1948 Act and orders passed therein which are  binding with equal force upon both the consumer and the Board,  the  word  is incapable of being construed  in  such absolute terms as endeavoured by the learned counsel for the consumers.

     The  High Court was of the view that it would be  more just,   equitable  and  reasonable  to  hold  whenever   the contracted  supply  fell short of 40% of the  contract  load which  alone  accounts for the minimum guaranteed sum,  then the Board shall be entitled to charge for the reduced energy actually supplied and not the minimum of 40% of the contract demand.   As noticed supra, on behalf of the consumers,  not only  inspiration  is drawn to support their claim  in  this regard  but  an extreme stand is also sought to be taken  by contending  that  in such cases as also in cases  where  the supply  is  not of the contracted load and to the extent  of the  agreed load factor without interruptions so as to cause any  disturbance or dislocation of the smooth functioning of their industry concerned, the obligation under the clause in the  agreement  providing  for the payment  of  the  minimum guaranteed  charges to the tune of 40% of the contract  load also would automatically stand snapped and not only that the consumers  will be relieved of their liability but they  can be  made  answerable only to the extent of  energy  actually supplied  and  which  has  been   consumed.   There  is   no justification  for  countenancing this extreme stand  either under  any  of the provisions of the Act or the  regulations made  thereunder  or  under the provisions of  the  contract entered  into  between  the   parties  and  tariff  schedule notified  and made binding upon the consumers.  This  would, if  accepted,  give  credence  to   the  plea  vaguely   and indirectly  projected  as though the contract demand is  the

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minimum  supply undertaken to be made by the Board,  whereas in  contrast clause 23 of the general conditions for  supply of  electrical  energy  by  the   Board  applicable  to  all consumers  in unmistakable terms stipulate that the  maximum demand  agreed to be supplied and taken under the  agreement shall  be  the  consumers contract demand and that if  as  a matter  of  fact in any given case the  consumption  exceeds this  level, then only the contract provides for  additional charges to be paid by the consumers.

     As  a matter of general principle, any stipulation for payment  of minimum guarantee charges is unexceptionable, in a  contract  of  this  nature   wherein,  the  Board   which undertakes generation, transmission and supply of electrical energy  has  to, in order to fulfil its obligation lay  down lines  and  install the required equipment and  gadgets  and constantly keep them in a state of good repair and condition to  render  it possible for the consumer to draw the  supply required  at  any  and  all times.   These  commitments  are irrespective  of the capacity of the Board to generate at  a given  point  of time or during a relevant period the  total quantum  required  for the consumption of all  consumers  of various  categories  or  even during the days  of  breakdown envisaged or staggering necessitated on account of orders of Government  regulating  the distribution and consumption  of energy  as well as during periods when for reasons  personal or  peculiar  to the consumers or even beyond their  control the  consumption  is  not and could not be of  the  mutually agreed  extent.  The Board undertakes to generate and supply energy,  in  public interest also at concessional  rates  of varying  nature  and it cannot be stated that the  rates  so fixed invariably are to meet the expenditure incurred by the Board  for generation and supply of energy, to the last pie. Consequently,  if either in the general conditions and terms of  supply  or the contract or the tariff rates as the  case may  there  be  any stipulation, in clear  and  unmistakable terms  that  the  liability  relating   to  the  payment  of guaranteed   minimum  charge  could  or  will  be   enforced irrespective  of the actual consumption rate of the consumer or  even  dehors the capacity or otherwise of the  Board  to supply  even  the minimum of the contract  demanded  energy, there  could  be  no  valid objection in law  for  any  such stipulation  being  made and the consumer will be  bound  to honour  such  commitment.   The contract for the  supply  of electrical  energy  cannot be treated on par with any  other contacts  of mutual rights and obligations, having regard to the   peculiar   problems  involved   in   the   generation, transmission  and  supply which invariably depend  upon  the vagaries  of  monsoon  as well short supply to them  of  the required  coal  and oil in time and similar  other  problems over  which the Board cannot have any absolute control.  The recurring  commitments  relating to constant and  periodical maintenance  of supply lines and other installations  cannot be  anytheless  even  during  such times  and  such  onerous liabilities  cannot  be  left to fall exclusively  upon  the Board  and  it  is only keeping in view all  these  aspects, payment  of  minimum  guaranteed charges is  necessarily  in built   in   the  tariff  system  of  the  Board   and   the reasonableness  or legality of the same cannot be considered either in the abstract or in isolation of all these aspects. It is for this reason that all over and the consumer is also made to share the constraints on Boards economy even during such  periods.   In  fact  the tariff inclusive  of  such  a provision   for   payment  of  a  minimum   guaranteed   sum irrespective  of the supply/consumption factor appears to be

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the  consideration  for  the commitments undertaken  by  the Board  as  a  package  deal  and   it  is  not  possible  or permissible  to  allow the consumer to wriggle out  of  such commitments  merely on the ground that the Board is not able to  supply  at any point of time or period the  required  or agreed  quantum of supply or even supply up to the level  of the  minimum  guaranteed  rate of charges.   Tinkering  with portions  of  contracts  for  any such  reasons,  merely  on considerations  of equity or reasonableness pleaded for  and vis-a-vis  one party alone will amount to mutilation of  the whole  scheme underlying the contract and render thereby the very generation and supply of electrical energy economically unviable  for  the  Board.  Consumers, who enter  into  such commitments  openly and knowing fully well all these hazards involved in the generation, transmission and supply, will be estopped  from  going  behind   the  solemn  commitment  and undertaking  on their/its part under the contract.  The High Court  does not seem to have properly appreciated the  ratio of  the several decisions noticed except merely referring to them  in  extenso,  and yet ultimately just,  arrived  at  a conclusion  merely for the reason that the court  considered it to be ‘more equitable, just and reasonable to do so.

     So  far  as  the  cases under  consideration  and  the liability of the consumers relating to minimum guarantee are concerned, the relevant clause relating to minimum guarantee charges  as  well  as the tariff notification  relied  upon, would  go  to  show  that what was guaranteed  was  not  the payment  of  a flat sum or amount of money to be  calculated with  reference  to  a particular number  or  percentage  of units,  dehors the quantum of electrical energy  distributed and  supplied  by the Board.  In other words, the  guarantee was  of such minimum consumption as when calculated at the tariff.. will yield a particular monthly/annual sum to the Board.    Even  going  by   the  tariff  notification  which prescribes  also a minimum entitling the Board to collect it [vide  clause  21  (b)]  it merely casts  liability  on  the consumer   to  guarantee  a  minimum  monthly   consumption equivalent  to  40%  load factor of  the  contract  demand. Consequently,  for the consumer to honour his/its commitment so  undertaken  to give a minimum consumption  there  should essentially be corresponding supply by the Board at least to that  extent,  without which the consumption of  the  agreed minimum  is  rendered  impossible by the very lapse  of  the Board.   The  minimum guarantee, thus, appears to be not  in terms  of  any  fixed or stipulated amount but in  terms  of merely  the energy to be consumed.  The right, therefore, of the  Board to demand the minimum guaranteed charges, by  the very  terms  of the language in the contract as well as  the one  used  in  the tariff notification is  made  enforceable depending upon a corresponding duty, impliedly undertaken to supply  electrical  energy at least to that extent, and  not otherwise.   It is for this and only reason we find that the ultimate conclusion arrived at by the Full Bench of the High Court does not call for any interference in these appeals.

     Shri  C.  S.  Vaidyanathan, learned senior counsel for the  Board, further contended that the High Court  committed an  error  in overlooking the facts placed on record in  the form  of  statements  showing  the  units  which  were  made available  to  the consumers during the periods in  question and the units determined on which the minimum charges became payable and that those statements sufficiently substantiated the  position  that the units made available were more  than sufficient  to cover the payment of minimum charges and  the

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contentions to the contrary that the Board had not been able to supply even 40% of the contract demand to insist upon the payment  of minimum guaranteed charges has no basis or merit of  acceptance.  In this connection, our attention has  been drawn  by the counsel on either side to those materials  and particulars  placed along with the counter affidavits/Return of  the  Board  filed before the High Court,  the  annexures thereto  and some of the correspondence between the officers of  the  Board and the consumers concerned.   Unfortunately, even  the  Division  Bench, before which  the  matters  were posted  for  further  hearing and disposal pursuant  to  the opinion  given  by the Division Bench, did not undertake  to adjudicate  this vital aspect of the issues involved  which, in  our view, became very much relevant and essential in the light  of  the  opinion of the Full Bench.   Apparently,  on account  of  the  fact  that the  Full  Bench  confined  the operation  of its decision for future application only,  and the  liability  for  the periods under  challenge  therefore stood  governed  by the position of law as declared  by  the decision  in  AIR 1993 MP 118 (supra) which held the  field, the Division Bench might have thought such an exercise to be superfluous.   But, in the light of our conclusion that,  as the  matter stands, on the basis of the existing clauses  in the  contract as well as the Tariff notification the minimum guarantee  assured was of the monthly consumption equivalent to  40%  load factor of the contract demand which  obligated the  Board also to ensure supply at least to that extent  to insist  upon the payment of the minimum charges, it  becomes necessary  to undertake an exercise, to decide in individual cases,  the question of actual supply said to have been made in  order  to  find out whether the units of energy  to  the extent  of  minimum of 40% of the contract demand  has  been made  available  for consumption.  For this  purpose,  these cases  have to be necessarily and are hereby remitted to the High  Court, for being restored to their original number  to find out the actual position about claim/dispute relating to the  supply  of energy equivalent to 40% load factor of  the contract demand.  Wherever the High Court finds this fact in favour  of  the Board, the consumer has to pay  the  minimum guaranteed  consumption  charges  as  claimed,  without  any further challenge to the said liability.  Both parties shall be  at liberty to substantiate their respective stand in the light  of  the  materials already on record or that  may  be produced  further  before  the High Court in  the  relegated proceedings.

     So  far  as the challenge made to the judgment of  the Full Bench of the High Court, in confining its operation and applicability  only  for future period, Shri  G.L.   Sanghi, learned  counsel,  followed  by  the  others  have  strongly contended  that  the  High Court as such  cannot  apply  the principle  of  prospective  over ruling.  Reliance  in  this regard  has been placed upon the decision reported in  State of  H.P.  & Others vs Nurpur Private Bus Operators Union  & Others  [1999  (9) SCC 559] to which one of us  (B.N.Kirpal, J.)  was  a party.  Passing reference has been made  to  the decision in Golak Nath vs State of Punjab (AIR 1967 SC 1643) and  the observation contained therein that the doctrine  of prospective  overruling  can  be  invoked  only  in  matters arising under the Constitution and that it can be applied by the  Supreme  Court of India.  The decision in Golak  Naths case  as  such  was subsequently overruled by  the  decision reported in Kesavananda Bharati vs State of Kerala (AIR 1973 SC  1461)  though not specifically on this point.   Reliance has  also  been  placed upon the decision  reported  in  M/s

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K.S.Venkataraman  &  Co.   vs State of Madras (AIR  1966  SC 1089)  even  to contend that if the High Court had  no  such power, this Court while hearing an appeal from such judgment of the High Court, will equally cannot exercise such powers. This  submission of the learned counsel overlooks the  vital fact  in that case that not only the High Court was found to exercise  under  Section 66 of the Income Tax Act,  1922,  a special  advisory  jurisdiction  the scope  of  which  stood limited by the section conferring such jurisdiction but even the  appeal to the Supreme Court having been made only under Section  66  A (2) of the said Act was noticed to hold  that the  jurisdiction  of this Court also does not get  enlarged and  that  the Supreme Court can also only do what the  High Court  could  do.   Apart  from   the  fact  that  the  writ jurisdiction conferred upon High Courts under Article 226 of the  Constitution  does  not carry any  restriction  in  the quality  and  content of such the powers, this  Court  could always  have  recourse to the said doctrine or principle  or even  dehors  the  necessity  to fall  back  upon  the  said principle  pass such orders under powers which are  inherent in  its  being  the  highest  court  in  the  country  whose dictates,  declaration  and  mandate   runs  throughout  the country  and binds all Courts and every authority or persons therein  and  having regard to Articles 141 and 142  of  the Constitution  of India.  The Appellate powers under  Article 136  of the Constitution itself would also be sufficient  to pass any such orders.  This Court has been from time to time exercising  such  powers whenever found to be  necessary  in balancing  the  rights  of parties and in the  interests  of justice.   [vide:  Union of India vs Mohd.  Ramzan Khan 1991 (1)  SCC  588;   Managing Director ECIL vs B.   Karunakar  & Others  1993  (4) SCC 727;  India Cement Ltd.  vs  State  of Tamil  Nadu  AIR  1990  S.C.85.] The  decision  reported  in 1999(9)  SCC 559 (Supra) at any rate is no authority for any contra position to deny such powers to this Court.

     The  peculiar  facts and circumstances of these  cases and  the interests of justice, in our view, necessitate  the application  of the Law declared therein only prospectively. The  electricity  Board is a public authority of  the  State engaged in the generation and supply of electrical energy at concessional  rates  to  different  class  and  category  of consumers  in  the State.  The construction placed by us  is likely  to have serious and adverse impact upon the finances and  the economic viability of the scheme underlying  tariff and  minimum  guarantee charges already determined.   It  is impossible  for the Board, at this point of time to make  up or  change the pattern of tariff retrospectively to retrieve itself in this regard for the past period.  The construction and execution of various developmental schemes and works are likely  to suffer thereby a serious set back also.   Keeping in  view all these aspects we will be justified in declaring that  the  law declared in these cases shall be  for  future application only and not for the earlier period.

     For  all  the  reasons stated above, the  appeals  are disposed  of in the light of the directions and observations contained  herein  and  the  High Court  shall  restore  the proceedings  to its original file and dispose of the same in accordance  with the directions contained in this  judgment. The parties will bear their respective costs.