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PETITIONER: STATE OF U.P. & ORS.

       Vs.

RESPONDENT: HINDUSTAN ALUMINIUM CORPN. LTD. & ORS.

DATE OF JUDGMENT17/04/1979

BENCH: SHINGAL, P.N. BENCH: SHINGAL, P.N. DESAI, D.A.

CITATION:  1979 AIR 1459            1979 SCR  (3) 709  1979 SCC  (3) 229  CITATOR INFO :  R          1981 SC 711  (10)  RF         1988 SC1737  (30)  R          1989 SC 788  (32)

ACT:      Electricity Act  (9 of  1910), s.  2(h)  &  Electricity (Supply) Act  1948 (64  of 1948)  S. 2(b)-State  Electricity Board if a licensee.      Electricity Act  1910 (9 of 1910), S. 22-B (as inserted in 1959)-Scope  and object of-Order under section-Factors to be taken  into consideration & Electricity (Supply) Act 1948 (54 of 1948), S. 26 Proviso 2-Scope of.      U.P. Electricity  (Regulation of  Supply, Distribution, Consumption and  Use) Order  1977-  Cl.  6(a)  (i)  Proviso- Validity of.      Words    &     Phrases-’Regulation’,     ’restriction’, ’prohibition’-Distinction between.

HEADNOTE:      At the  time of granting licence to the company for the establishment of  a new  Aluminium factory the Government of India obtained the consent of the Government of U.P. To make available to  the company in bulk cheap electricity from the Rihand Hydro-Electric  Scheme. An agreement was entered into between the  Company and  the State  Government for the bulk supply  of   electricity   on   a   firm,   continuous   and uninterrupted basis  at 1.99 odd paise per unit for a period of 25 years.      The company set up and commissioned its aluminium plant at Renukoot in April, 1962. It was granted a further licence for the  expansion of  its installed  capacity. As the State was unable to meet the extra requirement of energy, sanction under s.  28 of  the Electricity Act 1910 was granted to the Company, at  its request,  on November 12, 1964, to set up a generating station  at Renusagar,  near Renukoot.  It set up two generating units of 67.5 mw each. The first unit started generating power in 1967 and the other in 1968.      In the meantime, permission was granted to increase the Company’s installed  capacity from  40,000 metric  tonnes to 60,000 metric  tonnes. The  Company thought  of setting up a plant  for   the  production  of  60,000  metric  tonnes  of aluminium in  the State  of Gujarat.  But the  Government of

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U.P. entered  into negotiations  with the Company and in its letter dated  November 20,  1968, it stated that there could be no  difficulty in  meeting the  interim  requirements  of energy for  2 to  3 years  from the  U.P. State  Electricity Board and  also for  arranging for parallel running of their new power  stations. The  Company was  granted  sanction  to expand the  Renu Sagar  Generation  by  250  mw,  and  after negotiations with  the State  Government it  was agreed that the U.P.S.E.B.  would meet  the additional  energy  under  a phased programme.  The U.P.S.E.B. stated in its letter dated September  2,   1972,  that  the  supply  would  be  without prejudice to  the power  of the  State Government to control the 710 distribution and  consumption of  energy under s. 22B of the Act. The  additional energy  was not  made available  to the Company during  1972-75 although  the rate was substantially increased with retrospective effect.      An agreement  was  however  entered  into  between  the Company  and   the  U.P.S.E.B.  on  November  30,  1976,  in supersession  of   the  earlier   agreements,  and   it  was stipulated that  it would  be  read  and  construed  in  all respects  in   conformity  with   the  provisions   of   the Electricity  (Supply)  Act,  1948  and  its  rules  and  the regulations and the amendments thereto.      The State  Government took  a decision in December 1976 to reconnect  some agricultural  pumping sets which had been disconnected and  this placed an additional load on the grid system of the State. On the note of the UPSEB that there was acute  shortage  of  energy,  and  its  suggestion  for  the imposition  of   some  restrictions,  the  U.P.  Electricity (Regulation of Distribution and Consumption) order 1977, was issued by the Government on April 7, 1977. Under cl. 6(a)(i) of the  Order, the  Company could  draw energy  only to  the extent of 50 per cent of its monthly consumption.      As  the  shortage  of  energy  became  more  acute  the Secretary of  the  Power  Department  sent  a  note  to  the Governor dated  May 3,  1977 stating  that there was a large gap between  demand and  availability  of  energy  and  that overriding  public   interest,  particularly   the  need  to maintain food  supply, required  that units which were heavy consumers of  energy should  be subjected  to further cut in the consumption  of energy.  It was particularly pointed out that  as   the  Company  was  itself  generating  energy  at Renusagar, it will have more than 50 per cent of energy even if the Board’s supply was completely withdrawn. The Governor approved that  proposal on  June  1,  1977.  A  proviso  was inserted in cl. 6(a) (i) of the U.P. Electricity (Regulation of Distribution and Consumption) Order, 1977 in June 2, 1977 according to  which an  industrial consumer  having its  own source of generation of energy from which it obtained 50 per cent or  more of  its consumption  would suffer a cut of 100 per cent  in the  energy supplied  by the UPSEB. The company was given time to bring about the total cut.      Fresh elections  were held  to  the  State  Legislature Assembly, and the new Cabinet was sworn in on June 23, 1977. It decided  to reduce the supply of energy to the company to zero, in  pursuance of  the amendment dated June 2, 1977 and called for  a fresh  note  on  the  position  regarding  the generation and  distribution of  energy. The Chairman of the UPSEB prepared  a note  on August  26,  1977,  in  which  he pointed out  the shortage  of energy,  including substantial fall in  the  generation  of  thermal  energy,  and  in  the "import" of  energy. The  State Government  made an order on September 19,  1977 called  the U.P. Electricity (Regulation

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of Supply Distribution, Consumption and Use) Order, 1977.      That order  was made  for maintaining  the  supply  and securing equitable distribution of electrical energy, and to provide for regulating the supply, distribution, consumption and use  thereof. Clause  6 of  the order which provided for compulsory cut in consumption of energy and demand, affected the company. 711      The clause provided as follows:      "6(a)(i): In  respect of  electrical energy consumed by all large  and heavy  power industrial  consumers  receiving power at  33 kv.  and above  excepting fertilizers, from the U.P.S.E.B. a cut of 50 per cent in their monthly consumption of electricity both in respect of energy and demand shall be exercised:      Provided that  where any  such industrial  consumer has his own  source of  generation of energy which alone enables him to  obtain 50 per cent or more of his total consumption, then a  cut of  100 per  cent in  the energy supplied by the UPSEB shall be exercised."      Being aggrieved  by the  compulsory cut  imposed by the Government the company filed its third writ petition against the  order.   The  company’s  earlier  writ  petitions  were dismissed as withdrawn.      The High Court took the view:-      (a) that  it was  the statutory obligation of the UPSEB to supply  electrical energy to a consumer and held that the Pipri Bus Bar was a "distributing Main" under s.2(o) and was an electricity  supply line as defined in s.2(f) of the Act; (b) s.  22B of  the Act  did not  confer power  on the State Governments  to   cut  off  supply  of  energy  to  existing consumers or to issue an order that certain preferences will be followed  in supplying  energy, (c)  though  the  company deserved the  writ, it  could not  be said  that  UPSEB  had deliberately under  utilised its  generation  capacity,  and held the  first proviso to Clause 6(a)(i) of the order ultra vires,  quashed   it  and   directed  the  UPSEB  to  supply electrical energy  to the  company in  accordance with  law, without taking  into consideration,  the provisions  of  the said proviso.      Appeals were  filed in  this Court by the State and the Company, the  State being  aggrieved because  the High Court had interfered  with the  U.P.  Electricity  (Regulation  of Supply, Distribution, Consumption and Use) Order, 1977 dated September 19,  1977 made  under s.  22B of  the  Electricity Supply Act,  1910 and  the Company  felt  aggrieved  on  the ground that  the High  Court had not granted all the reliefs which it  had claimed  in its petition under Art. 226 of the Constitution.      In the appeals it was contended:      (a) Only  the energy  which was  generated by the Board could be  the subject-matter of an order under s. 22B of the Act and  it was  not permissible  for the State to take into account the energy generated by the Company for its own use.      (b) Sub-s.  (1) of  s. 22B of the Act was confined to a licensee and  would not be applicable to the energy supplied by a sanction-holder under s. 28.      (c) The  only permissible  preference  was  that  under s.22A in  favour of an establishment mentioned in it and the preference shown to individual consumers was illegal.      (d) The  validity of  the Order,  which was  by way  of subordinate legislation,  was open to judicial scrutiny; the subjective satisfaction of the State Government in making it was open  to challenge in a court of law, the order suffered from the  vice of  malice in  law; it  had been  made in the

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colourable exercise of 712 the power  under s.  22B of  the Act  simply to  compel  the company to  agree to  the payment  of a  higher rate for the supply of  energy to  it. While  making the  order the State Government failed  to take into consideration the facts that the production  of aluminium  was of considerable importance to the  national economy  and that  the Board was capable of generating more  energy but  was not  doing so. The issue of the Order  was really  a colourable  exercise of  the  State Government’s power  under s.  22B of  the Act  as power  was supplied indiscriminately  to new consumers after imposing a cut on the Company’s consumption of energy.      (e) The  Board had  deliberately  reduced  its  thermal generation. ^      HELD: 1.  The High  Court erred in taking the view that the Pipri Bus Bar, which was composed of a set of conductors which were  made up of thick aluminium core steel reinforced cables, was  a ’distributing  main’ under s. 2(e) of the Act and was  an electric  supply line  as defined in s. 2(f) and that cl.  VI of  the Schedule  to the  Act  would  be  fully applicable to  the Board  in so far as its obligation to the Company was  concerned. In  view of the second proviso of s. 26 of  the Act  of 1948,  the provisions  of cl.  VI of  the Schedule to the Act could apply to the U.P.S.E.B. in respect of that  area only where distribution mains had been laid by the Board  and the  supply of energy through any of them had commenced. [724B-F]      The High  Court, therefore,  erred in  taking the  view that the  Board was  bound by  the term  of cl.  VI  of  the Schedule to  the Act  to supply energy to the Company within one month  of the  making of  a requisition  or within  such longer period  as the  Electrical Inspector might allow. But even if  the Board  was under an obligation to supply energy to every  person, the  fact nevertheless  remained that  the State Government  had the  over-riding power  to provide, by order made  under s.  22B of  the Act,  for  regulating  the supply, distribution, consumption or use thereof. Sub-s. (2) of that section categorically states that, without prejudice to the  generality of  the power under sub-s. (1), the order may direct  the Board  not  to  comply  with  any  contract, agreement or requisition for the supply of energy. [725B-D]      2. Sub-s.  (1) of  s. 28  of the Act in terms refers to and deals  with, engaging by a non-licensee, in the business of supplying  energy to  the "public".  It  was,  therefore, futile to  contend that  what was generated by the Renusagar Power Company  was not  meant for  supply to the public, but was the  Company’s own  energy. It  is true  that generation became, in  the circumstances,  the "captive" generation for the use  of the  Company, but that was far from saying that, in the eye of law, it was not energy meant for supply to the public or  that it was not amenable to control under s. 22B. It was therefore also liable to equitable distribution by an order under s. 22B of the Act. [725G-726A]      3. The  expression "energy" had been defined by cl. (g) of s.  2 of  the Act  to mean  electrical energy, generated, transmitted or  supplied for  any purpose  or used  for  any purpose  except  the  transmission  of  a  message.  It  was therefore a pervading definition and there was no reason why energy generated  and supplied under s. 28 of the Act should not fall within its sweep. [726B-C]      4. Though  the use  of the  article "the" in sub-s. (2) was not  quite appropriate,  there was  no justification for the  argument  that  section  22B  was  applicable  only  to

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licensees and not to a sanction holder under s. 28. [727C] 713      5.  What  s.  22B  of  the  Act  authorised  the  State Government to  do,  was  to  make  an  order  providing  for ’regulating" the supply, distribution, consumption or use of energy. [727D]      6. A distinction between ’regulation’ and ’restriction’ or  ’prohibition’   had  always   been  drawn.  ’Regulation’ promotes the freedom or the facility which is required to be regulated  in   the  interest   of  all  concerned,  whereas ’prohibition’ obstructs  or shuts off, or denies it to those to whom it is applied. The High Court went wrong in thinking that the  order had  the effect of prohibiting the supply of energy to  the Company,  which was  an ’exciting  consumer’. [727G-728C]      Municipal Corporation  of the City of Toronto v. Virgo, 1896 AC 88; Attorney General for Ontario v. Attorney-General for the Dominion and the Distillers and Brewers’ Association of Ontario,  1896  AC  348;  Birmingham  and  Midland  Motor Omnibus Co.  Ltd. v. Worcestershire County Council, [1967] 1 WLR 409.  Tarr v.  Tarr. [1972]  2 WLR  1068; The Automobile Transport (Rajasthan) Ltd. v. The State of Rajasthan & Ors., [1963] 1 SCR 491; State of Mysore v. H. Sanjeeviah, [1967] 2 SCR 361; Fatehchand Himmatlal & Ors. v. State of Maharashtra etc. [1977] 2 SCR 828 at p. 851.      7. What  had been  ordered was no more than a cut of 50 per cent in the monthly consumption of electricity and not a total prohibition  of consumption of energy. That was a step in the  direction of  regulating the  consumption of energy, and not  a total  prohibition as envisaged in the proviso to cl. 6(a) (i) of the Order. [728E]      8. The  proviso operates  in a  special  or  particular field and  for a  particular purpose where it was considered necessary for  regulating the  supply etc., of the energy in the interest  of the other consumers, for s. 22B was mean to maintain the supply and secure the equitable distribution of energy to  all concerned.  The High  Court did  not properly appreciate that aspect of the matter. [728F]      9. Large and heavy industrial consumers of the category in cl.  6(a)(i) are  a class  by themselves and it is hardly permissible for  them to  complain that the small preference shown to  agriculturists in supplying energy for their water pumps or  tube-wells, or  in  energising  State  tube-wells, supplying water  to them,  or the  supply of energy to small scale industries  had really  created a  privileged class of consumers or  brought into  existence any  such  concept  of priorities as  to run  counter to or defeat the objective of bringing about  the equitable  distribution of  energy by an order under s. 22B. The High Court had no real justification for recording  an adverse  finding against  the State on the question of the so-called preference or priorities. [729G-H, 730B]      10. There was no doubt that the State Government formed its opinion about the necessity and expediency of making the Order for the purpose of maintaining the supply and securing the equitable distribution of energy at a time when that was called for and this Court cannot sit as a Court of appeal to examine any  and every  argument in  an attempt to show that the opinion  of the  State Government  was vitiated  for one fanciful reason or the other. [731 G-H]      11.  Although   the  U.P.  Electricity  (Regulation  of Supply, Distribution,  Consumption and Use) Order, 1977, had been made on the ground that the State Government was of the opinion that it was necessary and expedient for main- 714

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taining the  supply and  securing the equitable distribution of electrical  energy, to provide for regulating the supply, distribution, consumption  and use  thereof, it did not deal with all  those matters  in detail.  In fact  it may well be said to  be an  order relating essentially to compulsory cut in the  consumption of  energy. But that cannot detract from the basic  fact that the order had the sanction of s. 22B of the Act  and subserved  the main  purpose thereof. Therefore its validity  was not  open  to  challenge  as  a  piece  of subordinate legislation. [732G-733B]      12. Malice  in law is another aspect of the doctrine of ultra vires.  An offending  Act can be condemned simply, for the reason that it is unauthorised. Bad faith has often been treated as  interchangeable with unreasonableness and taking a decision  on extraneous  considerations. In that sense, it is not  really a  distinct ground  of invalidity. It is well settled that if a discretionary power has been exercised for an ’unauthorised  purpose’ that  is  enough  to  invite  the Court’s review. [733-D]      Roncarelli v.  Duplessis, [1959] SCR 121 p. 141 (Canada Law Reports); referred to.      In the  instant case,  the Company had not been able to establish malice  in law,  merely because  of what the Chief Secretary said in his press statement dated July 8, 1977, or what the Minister informed the Assemble. It may well be that the new  State Government  was  dissatisfied  with  the  new agreement which had been entered into at the instance of the political party which was then in power, but it could not be said  that  the  new  Minister’s  desire  to  examining  the validity or  propriety of  that agreement  arose out  of any extraneous or  improper consideration  so as  to  amount  to malice in law. [734H-735A]      13. Although  the High  Court arrived at the conclusion that the  company deserved the writ which it granted, it did not  find   it  possible   to  hold   that  the  UPSEB,  had deliberately under  utilised its  generation capacity.  That was a  finding of  fact which did not call for interference. [736E]      14. As  long as  the dominant  motive  was  proper  and reasonable, and was not sullied by a mere pretext, the Order based on  it would  be valid when it was well within the due scope and  policy of  the Act  and was  an honest attempt to deal with  the situation  for which  the power  to make  the order had  been granted  by  the  Act.  There  was  thus  no justification for  the argument that there was malice in law on the  part of  the State  Government in  making the order. [736G, F]      15. That  distribution can  be said  to be  "equitable" which is  "just and right under all the circumstances of the particular case". The High Court had recorded a finding that there was  shortage in  the generation  of energy  when  the order was  made. The fact remains that the demand for energy was far  in excess  of the supply from all sources available to the  UPSEB. It  had also  been well  established  that  a situation had  arisen when  it became necessary to obtain an order from  the State  Government about the course of action to be  adopted  by  the  Board.  Self-contained  notes  were therefore drawn  up in March, 1977 and on May 24, 1977. June 28, 1977  and August 26, 1977, which were quite detailed and objective and  led to the making of the Order. The Order was a  genuine  attempt  to  secure  equitable  distribution  of energy. It  was true that the Company was the worst sufferer under cl.  6 (a)(i)  of the  Order, but then it was also the greatest consumer. [737C-F] 715

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    16. From  the Chief  Secretary’s letter  dated November 20, 1968  it appeared  that the State Government had assured the Company  that it  would meet  the interim requirement of the Company  for 2  or 3 years from the UPSEB and facilitate the parallel  running of  the Company’s new power station in addition to  the station which had been set up at Renusagar. But the  State was  not  a  party  to  the  agreement  dated November 30, 1976 for the supply of additional 30mw. because the agreement was made between the Company and the UPSEB. It was expressly  stated in  that agreement  that it  would  be subject to  the provisions  of the  Electricity Acts of 1910 and 1948 and the rules and regulations thereunder, including the amendments  thereto. Care was also taken to provide that the  UPSEB   shall  not   be  responsible   for  damages  or diminutions in  the supply of energy according to the orders issued by the State Government. A similar provision was made in the  earlier agreement  of 1959. In the Board’s letter to the  Company   dated  September   2,  1972   reference   was specifically  made   to  the  State  Government’s  power  to "control the distribution and consumption of energy under s. 22B of the Indian Electricity Act, 1910." [739A-D]      17. Decisions  in the  matter  of  restrictions  to  be imposed on  the consumption  of energy  on account  of acute shortage of energy in the State, were taken by the different State Governments, including the Governor’s Advisors, and it cannot be  said that  the cuts  were  imposed  suddenly,  or without due regard to the company’s difficulties in reducing its consumption  of energy  in the  manner directed  by  the order. It  cannot therefore, be said that the State wantonly disregarded  its  contractual  obligation  to  the  company. [739E-F]      18. Sub-section  (2) of  s. 22B of the Act specifically provided that it was permissible for the State Government to direct by the order that the UPSEB shall not comply with the provisions  inter  alia  of  any  contract  made  by  it.  A direction to that effect was expressly made in cl. 11 of the Order, and  so it  is not  permissible for  the  company  to complain on that account. [739G]      19. Craics  on Statute  Law (7th Edn.) pages 357-58 has mentioned six  different classes  of  enactments  which  are considered as  having ceased  to be in force. These six have been mentioned  as the  enactments which  are  selected  for inclusion in  the Statute  Law Revision  Acts of  England as having ceased  to be  in force  otherwise  than  by  express repeal, or  having by  lapse of  time  or  otherwise  become unnecessary. [740G, 741D]      The question is whether the order could be said to have "spent" itself  or become  "obsolete". Whether  a  piece  of legislation has  spent itself  or exhausted  in operation by the accomplishment  of the  purpose for which it was passed, or whether the state of things contemplated by the enactment has ceased  to exist  are essentially  questions of fact for the legislature  to examine, and no vested right exists in a citizen to  ask for  a declaration  that the  law  has  been impliedly repealed on any such ground. [741E-F]      20. The  power to  legislate is  both positive  in  the sense of  making  a  law,  and  negative  in  the  sense  of repealing a  law or  making it imperative. In either case it is the  power of  the legislature,  and should  lie where it belongs. In  an extreme  and a  clear  case,  no  doubt,  an antiquated law  may be said to have become obsolete-the more so if  it is a penal law and has become incapable of user by a drastic  change in the circumstances. But the judge of the change  should  be  the  legislature,  and  courts  are  not expected to undertake

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716 that  duty   unless  that   becomes  unavoidable   and   the circumstances are so apparent as to lead to one and only one conclusion. This is equally so in regard to the delegated or subordinate legislation. [741G-742A]      Elwood Hamilton  v. Kentucky  Distilleries &  Warehouse Co., 64  L.ed. 194;  Chastleton Corporation  v. A.  Leftwich Sinclair, 68  L.ed. 841;  Nashville, Chattanooga & St. Louis Railway v.  Herbert S.  Walters, 79  L.ed. 949; The Union of India v. Ram Kanwar & Ors., [1962] 3 SCR 313; referred to.      The Petition  of the  Earl of  Antrim &  11 Other Irish Peers, [1967] AC 691; distinguished.      21. The  High Court  found three facts (i) the shortage in the reservoirs for generation of hydel energy had ceased, (ii) further  supply of  energy  was  available  from  newly commissioned units,  and (iii)  fresh power  connection  had been given  by the  UPSEB, but  lost sight  of the important fact that  it was all along the case of the State that hydel energy was  only one-third of the total generation, and that generation of  thermal energy  which met  two third  of  the total  requirement  had  declined  for  reasons  beyond  the control of  U.P.S.E.B. The  High  court  did  not  therefore undertake a  careful examination of the facts, and took some new connections  into consideration  without  attempting  to examine their magnitude and effect on the overall generation and availability  of energy  from all  the sources. The High Court  therefore   erred  in   taking  the   view  that  the continuance of  the Order  was no longer justified. Even so, the High Court abstained from striking down the whole of the Order and  merely declared  that the  provision of the first proviso to  cl. 6(a)  (i) was  ultra vires,  and quashed it. [743C-F]      22. Even  though the  proviso is  valid and has wrongly been quashed  by the  High Court,  it is  not  necessary  to restore it  in  view  of  the  statement  of  the  Solicitor General, so  that it shall not be deemed to form part of cl. 6(a)(i) of  the Order.  But it there is deterioration in the generation of  energy again,  or there  are other sufficient reasons, within the purview of s. 22B of the Act to reinsert the proviso,  in the  present or  modified form, it would be permissible for the State Government to do so accordingly to the law. [743G-H, 744C]

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 921/78 and 425/79      Appeals by  Special Leave  from the  Judgment and Order dated 27-4-1978 of the Allahabad High Court in Writ Petition No. 3732/77.      M. V. Goswami for the Appellant (In CA 921/78)      S. S.  Ray, D.  Gupta, Shiv Dayal, N. R. Khaitan, U. K. Khaitan and  G. Mitra  for the  Respondent in  CA 921/78 and Appellant in CA 425/79.      S. N. Kacker, Sol. Genl. of India, G. C. Dwivedi, S. C. Bhudhwar, S.  Markendaya and  K. Madan Mohan Reddy for U. P. State Electricity Board (Appellant No. 2 in CA 921/78). 717      The Judgment of the Court was delivered by      SHINGHAL J.-These  appeals by  special leave arise from the judgment  of the  Allahabad High  Court dated  April 27, 1978. While  Civil Appeal  No. 921 of 1978 has been filed by the State of Uttar Pradesh, the U.P. State Electricity Board and the  Executive Engineer  of the  Rihand  Power  Station,

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hereinafter collectively  referred to  as the  State,  Civil Appeal No.  425 of  1979 has  been filed  by  the  Hindustan Aluminium Corporation  Ltd., its  Vice President  and  Chief Accountant, hereinafter  referred to as the Company. We have heard the two appeals together and will dispose them of by a common judgment.      The controversy  relates to  the supply  of  electrical energy (for short "energy") for the production of aluminium, which is  the most  modern of  the common metals. Unlike the other common  industrial metals  like iron, copper, zinc and lead, pure  aluminium is not produced by the direct smelting of its  ores. The  metal  is  now  produced  by  the  modern electrolytic method  under the  influence of direct current. It takes  about 10 kilo watt-hours of electricity to produce a pound of aluminium, and the supply of cheap electric power is therefore  an essential requisite or raw material for its production. The  metal has  many advantages and uses and has gained such  importance that  it is  an essential  commodity under the  Essential Commodities  Act and  its production is one  of   the  scheduled  industries  under  the  Industries (Development and  Regulation) Act.  While  the  State  feels aggrieved because  the High  Court has  interfered with  the Uttar   Pradesh    Electricity   (Regulation    of   Supply, Distribution,  Consumption   and  Use)  Order,  1977,  dated September 19,  1977, hereinafter  referred to  as the Order, which it  made under  section 22B  of the  Electricity  Act, 1910, (for  short the  Act), the Company’s grievance is that the High  Court has not granted all the reliefs which it had claimed  in   its  petition   under  article   226  of   the Constitution. The Court’s record is much too voluminous, but it appears to us that the appeals can be adequately disposed of on  the basis  of the important averments in the lists of dates drawn  up by counsel for the parties about which there is no dispute before us.      When the  question  of  establishing  a  new  aluminium factory arose  for consideration by the Government of India, it took  into consideration the consent of the Government of Uttar Pradesh  to make energy available for the factory from the Rihand  Hydro-electric Scheme  which was  expected to go into operation by the end of 1960, and granted an industrial licence to  the Company  on  September  26,  1959,  for  the manufacture of  20,000 metric tonnes of aluminium ingots per year at  Rihand. An  agreement was also entered into between the State of 718 Uttar Pradesh  and the  Company on  October 29,1959  for the supply of  55 m  w  of  power  on  a  firm,  continuous  and uninterrupted basis at a rate of 1.997717 paise per unit for a period  of 25  years from  the date of commencement of the supply.      The Company set up and commissioned its aluminium plant at Renukoot  (near Rihand Dam) with an installed capacity of 20,000 metric tonnes per annum in April 1962. It was granted a  further  licence  for  the  expansion  of  its  installed capacity by 40,000 metric tonnes per annum. As the State was unable to  meet the  extra requirement  of energy,  sanction under section  28 of  the Act was granted to the Company, at its request,  on November  12, 1964,  to set up a generating station at  Renusagar, near Renukoot, through its subsidiary the Renusagar Power Company Ltd. It had two generating units of 67.5 m w each. The first unit started generating power in 1967 and  the  other  in  1968.  The  40,000  metric  tonnes expansion unit was commissioned in 1968. In the meantime the Company was granted a licence in December 1966 for effecting a further expansion of 60,000 metric tonnes per annum in its

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installed capacity for the production of aluminium.      The Company  thought of  setting up  the plant  for the production of  60,000 metric  tonnes of aluminium in Gujarat State as  it was  informed by  the Gujarat State Electricity Board that  it would  be able  to meet  the  requirement  of energy there at a rate of Rs. 320/- per kilowatt year, which was much  higher than  the rate  at which  it was  receiving energy from  U.P. State  Electricity Board (U.P.S.E.B.). The Government of  U.P. held  negotiations with the Company, and it was decided that the Company would produce the additional 60,000 metric tonnes of aluminium also in Uttar Pradesh. The Chief Secretary  to the  government of U.P. wrote a detailed letter to  the Company  on November  20, 1968,  in which the position regarding  the  supply  of  energy  was  stated  as follows,-      "Regarding the  power plant, I can see no difficulty in      meeting the  interim requirements for 2 to 3 years from      the U.P.  State Electricity  Board, nor  do I  see  any      difficulty in  arranging for  parallel running  of your      new power  station, with  the  U.P.  State  Electricity      Board."      The Company  then  addressed  a  letter  to  the  State Government  on  September  26,  1969  stating  the  position regarding the  supply and generation of increased energy for the expansion of aluminum production as follows,-      "5(a) The  Scheme of  power supply for our expansion by      UPSEB is interlinked with the question of expansion of 719      Our Renusagar  power plant  and its  parallel operation      with your  system. The application for the expansion of      our Renusagar Power Plant has already been submitted to      your office,  a copy  of which is enclosed herewith for      your ready  reference. The necessary permission for the      same is requested as early as possible.           (b)  The   emergency  assistance   under  parallel      operation would  be required  for about 100 m w and the      terms and  conditions for  the same  would have  to  be      decided  simultaneously   with   the   permission   for      expansion of our Power Plant." It may be mentioned that the Company was granted sanction to expand Renusagar generation by 250 m w.      In 1972 the Company expanded its installed capacity for the production  of aluminium  by 35,000  metric  tonnes  per year. On  its  part,  the  U.P.S.E.B.  sanctioned  110  m  w additional energy  under a  phased programme to be compelled by June  1, 1975. It was clearly stated in the letter of the U.P.S.E.B. dated September 2, 1972, that the supply would be without prejudice  to the  power of  the State Government to control the  distribution and  consumption of  energy  under section 22B  of the Act. Reference in the letter was made to the acute  shortage of  power because  of scanty rainfall in the catchment area.      It so  happened that  additional energy  was  not  made available to  the Company  during 1972-75  although the rate was substantially increased (to 11 paise instead of 1.997717 paise) with  retrospective effect  from June 30, 1975, under the new  aluminium policy  of the  Government of  India.  An agreement was  however entered  into between the Company and the U.P.S.E.B. on November 30, 1976 for the supply of 85 m w of energy on a continuous basis, for a period of 5 years, in supersession  of   the  earlier   agreements,  and   it  was stipulated that  it would  be  read  and  construed  in  all respects in  conformity with  the provisions of the Act, the Electricity (Supply)  Act,  1948,  and  the  rules  and  the regulations and  the amendments thereto The Company received

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that supply and was even promised an additional supply of 35 m w over a phased period from July 1977, but did not get it. The Company was all the same able to raise its production of aluminium to  95,000 metric tonnes by April 7, 1977, because of the supply of 85 m w of energy.      In the  meantime, the  State Government took a decision by the end of December 1976 to reconnect some 70,000 pumping sets which had 720 been disconnected  for non-payment  of the electricity dues. That placed  an additional load of about 400 m w on the grid system of  the State. The Chairman of U.P.S.E.B. submitted a note on  the power situation which was likely to obtain from April to  July 1977.  He pointed  out that  there was  acute shortage of  energy and  suggested the  imposition  of  some restrictions upto  the end  of July  1977 by when the demand for agriculture  was expected to decrease and the Rihand and Matatila reservoirs would be filled up. That was proposed to meet the  needs of agriculture and related industries and to meet the  industrial demand  to the  extent possible. One of the proposals was for a 50 per cent cut in the demand of the Company and  some other  industrial units  including Kanoria Chemicals  and   Industries  Ltd.  That  note  came  up  for consideration in the State Cabinet on April 1, 1977, and was partially approved.  The  U.P.  Electricity  (Regulation  of Distribution and  Consumption) Order,  1977,  was  therefore issued on April 7, 1977. Under clause 6(a) (i) of the Order, the Company could draw energy only to the extent of 42.5 m w i.e. 50  per cent  of its  monthly consumption;  but it  was allowed to draw 55 m w for the time being.      Uttar Pradesh  came under the President’s rule on April 30, 1977,  and the  Company was allowed to draw 55 m w until further orders.  It is  the  case  of  the  State  that  the shortage of  energy became  more acute  in the third week of May. The  Company, in  the meantime,  filed its  first  writ petition [No. 1790(c) of 1977] on receipt of a letter of the Executive Engineer (O.&M.), Rihand, that the power supply to the Company  should be  cut off  completely  with  immediate effect. The  writ petition  was dismissed  on May  20, 1977, because of  a subsequent  letter by the Government requiring the U.P.S.E.B.  to continue  the supply  of 42.5  m w energy instead of  55 m w in accordance with the aforesaid Order of April 7, 1977.      The Secretary  of the  Power Department  of  the  State government sent  a note  to the  Governor on  May 24,  1977, proposing some  additional cuts  in the  supply  of  energy. Decision thereon was deferred until information was obtained from other  States in  regard to  availability of  energy to aluminium plants.  A fresh  note was thereafter prepared for orders. In  that note dated May 31, 1977, it was stated that there was  a large  gap between  demand and  availability of energy and  that was  creating a serious imbalance requiring load shedding  on a  large scale, and that had given rise to discontent in all sectors of the economy and, in particular, in the rural sector. It was also pointed out that overriding public interest, particularly the need to maintain 721 food supply  and the  industrial production,  required  that units  which  were  heavy  consumers  of  energy  should  be subjected to  further cut  in the  consumption of energy. It was particularly  pointed out that as the Company was itself generating energy  at Renusagar,  it will  have more than 50 per cent  of energy  even if  the Board’s supply of 42.5 m w was completely  withdrawn, and  that will  service some 8500 pumping sets.  It was, all the same, stated that the Company

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would continue  to have  60 m w from the U.P.S.E.B. as stand by supply  as  in  the  past.  The  Governor  approved  that proposal on  June  1,  1977.  A  proviso  was,  inter  alia, inserted  in   clause  6(a)(i)   of  the   U.P.  Electricity (Regulation of Distribution and Consumption) Order, 1977, on June 2,  1977, according  to which  the industrial  consumer which had  its own source of generation of energy from which it obtained  50 per  cent or  more of  its total consumption would suffer a cut of 100 per cent in the energy supplied by the U.P.S.E.B.  The Company  was accordingly  given time  to bring about the total cut.      In the  meantime, the  Company filed  its  second  writ petition [No. 2160(c) of 1977] along with an application for stay.  The  High  Court  admitted  the  writ  petition,  but rejected the  application for  stay. The  Company then moved this Court  for special  leave. The  Hon’ble Vacation  Judge made an  observation that the matter may be discussed by the parties concerned,  and the  State agreed  to give 20 m w of energy to the Company for the time being.      Fresh elections  were held  to  the  State  Legislative Assembly, and the new Cabinet was sworn in on June 23, 1977. It decided  to reduce the supply of energy to the Company to zero, in  pursuance of the amendment dated June 2, 1977, and called for  a fresh  note  on  the  position  regarding  the generation  and   distribution  of   energy.  The  Executive Engineer, Rihand,  accordingly asked  the Company  to reduce the consumption to zero.      A detailed note was prepared by the Secretary concerned on June  28, 1977,  and it  came up for consideration in the Cabinet on  June 30, 1977, but no decision was taken and the note was  kept pending.  It appears that the Chairman of the U.P.S.E.B. prepared  a note  on August 26, 1977, in which he pointed out  the shortage of energy, including a substantial fall in the generation of thermal energy and in the "import" of energy.  It appears that the Minister concerned made some statements in  regard to  the generation  of energy  in  the State and the position of the Company, but we shall refer to them later when we deal with the allegation regarding malice in law.  It  will  be  sufficient  to  say  that  the  State Government made the Order 722 on September  19, 1977, called the Uttar Pradesh Electricity (Regulation of  Supply, Distribution,  Consumption and  Use) Order, 1977.  It has  undergone some amendments, but learned counsel are  in agreement  that they  have no bearing on the controversy before us.      The Company  filed its third writ petition (No. 3732 of 1977), against  the Order,  on September  26, 1977.  It  was admitted the  same day  and the  earlier writ  petition (No. 2160 of  1977) was  dismissed as  withdrawn. The  High Court directed the  Company to make an application under clause 10 of the  Order,  for  exemption,  but  it  was  rejected  all December 9,  1977 when made. The High Court ultimately heard and decided the writ petition by the impugned judgment dated April 27,  1978 against which these appeals by special leave have been directed as aforesaid. This Court made an order on May 4,  1978 for  the supply  of 20  m w  of energy  to  the Company as  a purely interim arrangement. That was raised to 35 m  w by  an order dated August 29, 1978, and the State is now supplying  42.5  m  w  to  the  Company  as  an  interim arrangement.      These basic  facts are  not in  dispute before  us.  We shall examine  the arguments  of the learned counsel for the parties  with   reference  to   them,  after   taking   into consideration the other well settled facts on which reliance

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has been  placed by  learned counsel, and with due regard to the relevant averments of the parties.      The High  Court has  recorded a  number of findings. We shall have  occasion to refer to those of the findings which have been  challenged before us. It may be sufficient to say here that  the High  Court has  worded the operative part of its judgment as follows,-           "In  view   of  the   aforesaid   discussion   the      provisions of  the first proviso to clause VI (a)(i) of      the Uttar  Pradesh Electricity  (Regulation of  Supply,      Distribution, Consumption  and Use)  Order, 1977  dated      September 19,  1977 are  declared ultra  vires and  are      quashed. The  U. P. State Electricity Board is directed      to  supply  electrical  energy  to  the  petitioner  in      accordance with  law without  taking into consideration      the provisions of the said proviso".      In order  to examine  the findings  of the  High  Court about the  invalidity of  the proviso  to clause 6(a) (i) of the order,  it will  be convenient  to examine  the relevant findings of the High Court on the various points of law.      The High  Court has  taken the  view  that  it  is  the statutory  obligation  of  the  U.P.S.E.B.  because  of  the obligation of a licensee under 723 sections 18  and 26 of the Electricity (Supply) Act, 1948 to supply electrical  energy to  a consumer.  Reference in this connection has  also been  made to clause VI of the Schedule to the Act.      Clause (h) of section 2 of the Act defines a "Licensee" to mean  any person licensed under Part II to supply energy. Section 26  of the  Act of  1948 provides, inter alia, that, subject to the provisions of that Act, the Electricity Board shall in respect of the whole State, have all the powers and obligations of  a licensee under the Indian Electricity Act, 1910, and the Act of 1948 "shall be deemed to be the licence of the  Board" for  purposes of the Act (of 1910). The first proviso to  the section  excludes the  application  of  some sections, including  section 22,  of the Act, and the second proviso states  that the  provisions of  clause  VI  of  the Schedule to  the Act  shall apply to the Board in respect of that area  only where  distribution mains  have been laid by the Board  and the  supply of the energy through any of them has commenced.      While, therefore,  the U.P.S.E.B.  is a  licensee under the  Act,   it  will  be  sufficient,  for  purpose  of  the controversy before  us, to say that section 22 of the Act is not applicable  to it,  and clause  VI of  the  Schedule  is applicable to it subject to the restriction contained in the second proviso  to section  26 of  the Act  of 1948. So even though the Board is a licensee, the obligation under section 22 of  the Act  to supply  energy to every person within the area of its supply is not fastened on it.      The provisions of the Schedule to the Act are deemed to be incorporated  in, and  to form  part  of,  every  licence granted under  Part II.  Clause VI  of that  Schedule states that where  after distributing mains have been laid down and the  supply   of  energy   through  them  has  commenced,  a requisition is made by the owner or occupier of any premises situate within  the area of supply requiring the licensee to supply energy for such premises, the licensee shall make the supply and  shall continue  to do  so in accordance with the requisition. But,  as  has  been  pointed  out,  the  second proviso  to   section  26  of  the  Act  of  1948  places  a restriction  on   that  obligation  for  it  says  that  the provisions of  clause VI shall apply to the Board in respect

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of that  area only  "where distribution mains have been laid by the  Board and  the supply  of energy through any of them has commenced".      Clause (i)  of section 2 of the Act defines a "main" to mean any  electric supply-line through which energy is or is intended to  be, supplied  to the  public.  A  "distribution mail" has  been defined by clause (e) of the same section to mean the  portion of  any main with which a service line is, or is intended to be, immediately connected. We 724 have also  gone through the definitions of "electric supply- line"  and  "service-line".  They  leave  no  doubt  that  a "distributing main"  is different  from an  electric supply- line, for to it a service-line is immediately connected.      The High  Court has  stated that  the Company  gets its supply from the Pipri Bus Bar, which is composed of a set of conductors which  are made  up of thick aluminium core steel reinforced cables, and has taken the view that the Pipri Bus Bar is  a "distributing  main" under section 2(e) of the Act and is an electric supply-line as defined in section 2(f) so that clause  VI of  the Schedule  to the  Act would be fully applicable to  the Board  in so far as its obligation to the Company is concerned.      But as has been stated in the second proviso of section 26 of  the Act  of 1948,  the provisions of clause VI of the Schedule to the Act could apply to the U.P.S.E.B. in respect of that  area where distribution mains had been "laid by the Board". It was therefore a question of fact whether that was so, and  had to be examined on the basis of the averments of the parties  to that  effect. It  is  however  not  disputed before us  that the  Company did not plead that distributing mains had been laid by the Board for supply of energy to the Company, or to any one else, from the Pipri Sub-station. The State had  therefore no  occasion  to  controvert  any  such allegation. This  has in  fact been admitted to be so by Mr. Ray in  his arguments,  and the  High Court  went  wrong  in recording a  finding of  fact against  the State without any basis for  it in  the pleadings.  We have  also gone through section 18  of the  Act of  1948 to which reference has been made in the judgment of the High Court, but it is also of no avail to  the Company.  The section  makes a  mention of the general duties  of the  Board,  but  it  does  not  make  it obligatory  for   it  to   supply  energy  to  every  person irrespective of its practical difficulties.      The High  Court has in fact quoted extensively from its earlier judgment  in Civil  Miscellaneous Writ  Petition No. 618 of  1972 to  which one of the two Judges was a party. It is not  disputed, however,  that when  an appeal  was  taken against  that   judgment,  the   writ  petition  was  itself withdrawn and  was dismissed,  so that  judgment of the High Court may not be said to have subsisted thereafter, and need not have  formed the  basis of the finding of the High Court against the Board in regard to its duty to supply the energy asked for  by the  Company-the more  so when the decision on the point  should have  turned  on  the  facts  pleaded  and established on the record. 725      Mr.  Ray  for  the  Company  has  however  invited  our attention to  a decision of the Rajasthan High Court in firm Sadul Cotton Ginning and Pressing Factory v. Rajasthan State Electricity Board.(1) But that was a different case where it was not  pleaded by  the Electricity Board that clause VI of the Schedule  to the  Act was  not applicable  to it  as the distributing mains  had not  been laid by it. The High Court therefore erred  in taking the view in the present case that

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the Board  was bound  by the  terms  of  clause  VI  of  the Schedule to  the Act  to supply energy to the Company within one month  of the  making of  the requisition or within such longer period  as the  Electrical Inspector  may allow.  But even if  it  were  assumed  that  the  Board  was  under  an obligation to  supply  energy  to  every  person,  the  fact nonetheless  remains  that  the  State  Government  had  the overriding power to provide, by order made under section 22B of  the   Act,  for  regulating  the  supply,  distribution, consumption or  use thereof. In fact sub-section (2) of that section categorically  states that, without prejudice to the generality of  the power  under sub-section  (1), the order, may direct  the Board  not  to  comply  with  any  contract, agreement or  requisition for  the supply of energy etc. The High Court erred in taking a contrary view.      It has  next been argued that only the energy which was generated by  the Board  could be  the subject-matter  of an order  under   section  22B  of  the  Act  and  it  was  not permissible for  the State  to take  into account the energy generated by the Company for its own use.      It may  be recalled  that the  Company applied  for the grant of sanction under section 28(1) of the Act to generate 120  m   w  of  energy  for  the  additional  production  of aluminium. That was allowed and a notification was issued on November 12,  1964, granting sanction to the Renusagar Power Company Limited  (a wholly  owned subsidiary of the Company) to engage  in  the  business  of  supplying  energy  to  the Company. It  has two  generating units  and 135 m w power is being generated  by the  Renusagar Station for the exclusive use of  the Company,  and it is this energy for which it has been argued that it cannot be the subject-matter of an order under section 22B.      But sub-section  (1) of  section 28 of the Act in terms refers to,  and deals  with, engaging  by a non-licensee, in the business  of supplying  energy to  the "public".  It  is therefore futile  to contend  that what was generated by the Renusagar Power  Company was  not meant  for supply  to  the public but  was the  Company’s own  energy. It  is true that that generation  became, in the circumstances, the "captive" generation for  the use of the Company, but that is far from saying that, in 726 the eye  of law,  it was  not energy meant for supply to the public or  that it was not amenable to control under section 22B. It  must therefore  be held that it was not amenable to control under section 22B. It must therefore be held that it was also  liable to equitable distribution by an order under section 22B of the Act.      The expression  "energy" has been defined by clause (g) of section 2 of the Act as follows,-      "(g) "energy" means electrical energy-      (i)  generated,  transmitted   or  supplied   for   any           purpose, or      (ii) used for  any purpose except the transmission of a           message".      It is therefore a pervading definition, and there is no reason why energy generated and supplied under section 28 of the Act should not fall within its sweep.      We are  mindful of  the fact  that while section 22B of the Act  occurs in  Part II,  the aforesaid section 28 is in Part III, but that will not really take the supply of energy under section  28 out of the control of section 22B. Part II deals with  "supply of  energy" by  licensee, while Part III deals with  "supply, transmission  and use of energy by non- licensees". But  when it  was thought  necessary to vest the

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State Government  with  the  power  to  give  directions  to licensees  (under   section  22A),   and  to   control   the distribution and  consumption of energy (under section 22B), it became necessary to insert sections 22A and 22B by Act 32 of  1959.   The  Legislature  therefore  inserted  both  the sections in  Part II  which occurred  earlier than Part III, and under  the  broad  fabric  "Supply  of  Energy".  As  is obvious, insertion  of sections  22A and  22B would not have been appropriate  in Part III, and the Legislature cannot be blamed if  it preferred  the inclusion  of the  two sections together in  Part II  rather than  in the residuary Part IV. Moreover it  is by now well settled that the true meaning of a provision of law should be determined on the basis of what it provides  by its  clear language,  and with due regard to the scheme  of the  law as  a whole,  and not  merely by the place it finds in the formation of its Parts or Chapters.      An ancillary  argument has  been advanced  that if sub- section (1)  of section  22B of  the Act  is read  with  due regard to  sub-section (2),  it will  appear that, like sub- section (2),  sub-section (1) is also confined to a licensee and will  not be  applicable to  the energy  supplied  by  a sanction-holder under  section 28.  Our  attention  in  this connection has  been invited to the use of the article "the" in sub-section  (2) while  stating that the order made under sub-section (1) may direct 727 "the licensee’  not to  comply with  the matters  stated  in clauses (i)  to (iii).  The argument  is untenable  for  two reasons. Firstly, subsection(1) of section 22B refers to the State Government’s  power to  control  the  distribution  of energy as  a whole  and not merely the energy generated by a licensee, and  there is no rule of construction by which the restricted scope  of sub-section  (2), which deals only with the licensees should govern the scope of sub-section (1) and confine it  to licensees.  Secondly,  the  purpose  of  sub- section (2) is to provide exceptions of the nature which are peculiar to  licensees and  are necessary  to save them from the statutory  obligations mentioned in the three clauses of the sub-section. It appears that the use of he article "the" in sub-section  (2) is not quite appropriate, but we have no doubt that  there is  no justification for the argument that section 22B  is applicable  only to  licensees and  not to a sanction holder under section 28.      What section  22B  of  the  Act  authorises  the  State Government  to  do,  is  to  make  an  order  providing  for "regulating" the supply, distribution, consumption or use of energy, and  it has  been held  by the  High Court  that the section does  not confer the power to prohibit the supply of energy to  any consumer.  The High Court has gone on to hold that Parliament  did not confer on the State Governments the power to  cut off  supply to existing consumers. Mr. Ray has supported the  view of  the High  Court and  has invited our attention to  the decisions  in Municipal Corporation of the City of Toronto v. Virgo,(1) Attorney General for Ontario v. Attorney-General for  the Dominion  and the  Distillers  and Brewers’ Association  of Ontario,(2)  Birmingham and Midland Motor Omnibus  Co. Ltd. v. Worcestershire County Council(3), Tarr v.  Tarr(4), The  Automobile Transport (Rajasthan) Ltd. v. The  State of Rajasthan and others(5) and State of Mysore v. H.  Sanjeeviah(6). As  against that the learned Solicitor General has  placed reliance  on the view taken in Fatechand Himmatlal and  others v.  State of  Maharashtra etc.(7) that ’regulation’, if the situation is necessitous, may reach the limit of prohibition.      It appears  that a distinction between ’regulation’ and

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’restriction’ or  ’prohibition’ has  always been drawn, ever since Municipal Corpora- 728 tion of  the City  of Toronto v. Virgo (supra). ’Regulation’ promotes the freedom or the facility which is required to be regulated  in   the  interest   of  all  concerned,  whereas ’prohibition’ obstructs  or shuts off, or denies it to those to whom  it is  applied. The  Oxford English Dictionary does not define  "regulate" to  include prohibition so that if it had been the intention to prohibit the supply, distribution, consumption or use of energy, the Legislature would not have contented itself  with the  use  of  the  word  "regulating" without using  the word  "prohibiting" or some such word, to bring out that effect.      But where  the High  Court went  wrong was  in thinking that the  Order had  the effect of prohibiting the supply of energy to the Company, which was an "existing consumer". The proviso to  clause 6(a)  (i) of the Order to which exception has been taken, states as follows,-           "Provided that  where any such industrial consumer      has his [own source of generation of energy which alone      enables him to obtain] 50 per cent or more of his total      consumption, then  a cut  of 100 per cent in the energy      supplied by  the Uttar  Pradesh State Electricity Board      shall be exercised."      What has  therefore been  ordered is no more than a cut of 50 per cent in the monthly consumption of electricity and not a  total prohibition of consumption of energy. That is a step in  the direction  of  regulating  the  consumption  of energy as  far as  it goes,  and it  is overridden  with the further regulation  contained in  the proviso in the case of an industrial  consumer having  its own source of generation of energy "which alone" enabled him to obtain 50 per cent or more of  his total consumption so as to ensure even to him a consumption of  50 per  cent  of  energy  and  not  a  total prohibition. The  proviso therefore operates in a special or particular field  and for  a particular  purpose where it is considered necessary  for regulating  the supply etc. of the energy in  the interest  of the other consumers, for section 22B is meant to maintain the supply and secure the equitable distribution of  energy to all concerned. We are constrained to say  that the High Court did not properly appreciate this aspect of the matter.      The High  Court has  gone on  to hold that no power was vested in  the State Government under section 22B of the Act to issue  an order that certain preferences will be followed in supplying energy. The High Court has found it established that after  power supply  was totally  "disconnected" by the Board to  the Company,  "power supply connections were given to the  agricultural sector and agro-based industries." This appears to  be the  High Court’s  finding in  regard to  the argument that the Order was bad as it was not permissible to adjust the priorities 729 by an  order under  section 22B.  Learned  counsel  for  the Company have argued that the only permissible preference was that  under  section  22A  in  favour  of  an  establishment mentioned in  it and that the preference shown to individual consumers was illegal.      Now  so  far  as  clause  6(a)  (i)  of  the  Order  is concerned,  it   does  not,   by  itself,  provide  for  any preferences or  priorities, beyond  excluding  "fertilizers" from the  cut  of  50  per  cent  on  all  large  and  heavy industrial power  consumers receiving  power at  33 k  v and more. Clause  7 of  the Order  deals with  "exemptions", and

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"fertilizers   manufacturing   establishments"   have   been included  there  amongst  the  consumers  to  whom  the  cut referred  to   in  clause  6  of  the  Order  shall  not  be applicable. It has not been argued before us that it was not permissible  for   the  State   Government  to  provide  for exemptions in  an order  under section  22B, and we have not been referred  to any  such data or material on the basis of which it  may be  possible to examine whether the exemptions in  question   were  in   derogation  of   the  concept   of "maintaining and  securing  the  equitable  distribution  of energy" under section 22B.      It may  be that the State Government was of the opinion that supply  of energy  to the agricultural sector and agro- based industries  was more  necessary and  would benefit the state more  substantially than  the  supply  made  to  heavy industrial consumers, but merely because any such preference has been  entertained by  the State Government, it cannot be said that  it necessarily  runs counter  to the  concept  of equitable distribution  of energy  stated in section 22B. In fact counsel for the Company have repeatedly urged before us that the  cut of  50 per cent referred to in clause 6(a) (i) was meant  to deprive  only a  few consumers  of energy, and that the  cut of  100 per  cent under  the proviso  operated exclusively  against   the  Company.   And  it   has  to  be appreciated that  clause 6(a)  (i) deals only with large and heavy industrial  power consumers  receiving power  at 33 kv and above,  and it  is hardly  permissible for  such a heavy consumer as  the Company  to complain of any preference that may have  been shown  to small  consumers in  the  field  of agriculture, or  agro-based or  other small  industries. The fact remains  that large  and heavy  industrial consumers of the category  mentioned in  clause 6(a)  (i) are  a class by themselves and it is hardly permissible for them to complain that  the   small  preference  shown  to  agriculturists  in supplying energy  for their  water pumps or tube-well, or in energising State  tube-wells supplying water to them, or the supply of  energy  to  small  scale  industries  has  really created a  privileged class  of consumers  or  brought  into existence any  such concept  of priorities as to run counter to or  defeat the  objective of bringing about the equitable distribution of energy by an order 730 under section 22B. No glaring instance of any preference has been brought  to our notice so as to raise in us a desire to examine the  question whether it was necessary or proper for the State  Government to  provide guidelines  for the  small preferences shown  by it to the aforesaid consumers. In fact it has  been admitted  in the  written arguments  which have been filed  and received in Court that, in the present case, the company  is "not  sure as to what exactly has happened". In such  a situation,  we are  not persuaded  that the  High Court had  any real  justification for  recording an adverse finding against  the State  on the question of the so-called preferences or  priorities. Learned  counsel for the Company were not  able to  refer us to any plea in the writ petition about illegal  priorities or  preferences.  Nor  could  they refer to a plea that any preference or priority shown by the State was  the very  antithesis of  the concept of equitable distribution which,  for  the  purpose  of  maintaining  the supply of  energy, was  the very object of the Order. If any such plea had been taken, it would have been permissible for the State  to take  any defence  that may  have been open to them. But merely because the word preference or priority has been used  by the  State for  the purpose  of comparing  the grantees of  energy in  preference to  the Company,  or as a

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matter of priority over the consumption of energy by a giant consumer  like   the  Company,  it  will  not  be  fair  and reasonable for  us to  hold that the State has established a class of privileged consumers, and to set aside the grant of energy to  them in  their absence  and without examining the facts and  circumstances  of  their  respective  cases.  The purpose of the Order is to maintain the supply of energy and to secure its equitable distribution. One such method was to conserve energy  by virtue  of the provisions of clause 6(a) (i). If  that has  been done  according to  law; and  if the resultant saving  of energy  is frittered  away  by  showing unlawful preferences  or  creating  unlawful  priorities  by other orders  of an  administrative nature, there is nothing to prevent  the aggrieved party, including the Company, from challenging it  according to  the  law,  in  an  appropriate proceeding, if  so advised. But any such grievance cannot be examined in  these proceedings  for the Order has the avowed object of  bringing  about  equitable  distribution  of  the conserved energy  in an  honest and  forthright  manner  and there is nothing on the record for us to hold otherwise.      It has next been argued that the validity of the Order, which is  by way  of a  piece of subordinate legislation, is open  to   judicial  scrutiny   and  that   the   subjective satisfaction of the State Government in making it is open to challenge in a court of law.      It will  be enough  for  us  to  say  that  subordinate legislation is  by now a well-recognised form of legislation for practical reasons. The modern 731 administrative machinery  is quite  complex and  it is often found difficult   to  pass complicated  legislative measures through the  full parliamentary procedure and on a permanent or durable  basis. Even a carefully drafted Act may not work well in actual practice. It may also be that the exact means of achieving  the object  of an  Act may  not be  adequately comprehended all  at once,  and it  may be useful to provide for some elasticity in the actual working of a law. That can best be  done by  leaving some of the details to subordinate legislation.  That   is  why  some  legislative  powers  are delegated to executive authorities, subject of course to the purpose and the scheme of the parent Act, the constant vigil of the Parliament or the State Legislature, and the Judicial control. These  are reliable  safeguards and with their easy availability, it is no surprise that subordinate legislation is now  so voluminous  that it  may well  be  said  to  have dwarfed the parent.      The grounds  of challenging the validity of subordinate legislation are  well known.  The challenge  may be  on  the ground that  the power  to make  the law could not have been exercised in  the circumstances which were prevailing at the time when  it was made, or that a condition precedent to the making of  the  legislation  did  not  exist,  or  that  the authority which  made the  order was not competent to do so, or that  the order  was not  made according to the procedure prescribed by  law, or  that its provisions were outside the scope of  the enabling  power in  the  parent  Act  or  were otherwise violative  of  its  provisions  or  of  any  other existing statute.  As it  happens, none  of these grounds or circumstances has  been shown  to exist in the present case. The High  Court has  taken the  view that  the  Company  was unable to  establish as a fact that there was no shortage in the generation of energy at the time when the order was made under section  22B. It  is no  body’s case  that  the  State Government was  not competent  to make the order, or that it did not comply with any procedural requirement of the Act in

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making the  order, or  that its  provisions (or any of them) are outside the scope of the enabling power or are violative of the provisions of any other law. We have examined some of the points  of law  on which  the High  Court has found some provisions of the order to be invalid, and we have given our reasons for  taking a  different view. We have no doubt that the State  Government formed its opinion about the necessity and expediency  of making  the order  for  the  purposes  of maintaining  the   supply   and   securing   the   equitable distribution of  energy at  a time when that was called for, and this  Court cannot  sit as  a court of appeal to examine any and  every argument  in an  attempt  to  show  that  the opinion  of  the  State  Government  was  vitiated  for  one fanciful reason  or the other. It has to be appreciated that the question whether the reasons which led to the 732 making of the order were sufficient, was essentially for the State Government to consider.      The validity  of the  order has  been challenged on the ground that  it suffers  from the vice of malice in law. But that  is   a  point  by  itself  and  we  shall  examine  it separately.      It will thus appear that the above arguments which have been advanced against the validity of clause 6(a) (i) of the order are  not justified.  The whole  of the clause reads as follows,-           "6(a) (i) In respect of electrical energy consumed      by all  large  and  heavy  power  industrial  consumers      receiving  power   at  33   kv  and   above,  excepting      fertilizers, from  the U.P.  State Electricity  Board a      cut of  50 per  cent in  their monthly  consumption  of      electricity both  in respect of energy and demand shall      be exercised:      Provided that  where any  such industrial  consumer has his own  source of  generation of energy which alone enables him to  obtain 50 per cent or more of his total consumption, then a  cut of  100 per  cent in  the energy supplied by the Uttar Pradesh State electricity Board shall be exercised." It  thus  deals  with  the  consumption  of  energy  by  all (excepting fertilizers)  large and  heavy  industrial  power consumers receiving  power from  the U.P.S.E.B. at 33 kv and above. It  imposes a  cut of  50 per  cent in  their monthly consumption of energy. Then it adds the provision that where such an  industrial consumer  has his  own  source  for  the generation of  energy which  by itself gives him 50 per cent or more  of his total consumption of energy (provided for in the main  clause), then  it will not receive any energy from the U.P.S.E.B. as the cut in its supply will then be 100 per cent. The  clause therefore subserves the purpose of section 22B for,  in a  period of  scarcity or  insufficiency of the supply, it  will have  the effect of regulating the same and thereby securing the equitable distribution thereof.      It is true that although the order has been made on the ground that  the State  Government is  of opinion that it is necessary and  expedient  for  maintaining  the  supply  and securing the equitable distribution of electrical energy, to provide for regulating the supply, distribution, consumption and use  thereof, and  has been  called  the  Uttar  Pradesh Electricity (Regulation of Supply, Distribution, Consumption and Use) order 1977, it does not deal with all those matters in details.  In fact  it may  well be  said to  be an  order relating essentially to compulsory cut in the consumption of energy. But that cannot detract from the basic fact 733 that the  order has  the sanction  of section 22B of the Act

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and subserves  the main  purpose thereof,  even though there may be  justification for  the criticism that it does not go far enough  in its  regulative enterprise  in the  expansive field set out for it in the preamble. At any rate, it cannot be said  to be  beyond the  scope  and  the  ambit  of  that section, and its validity is not really open to challenge as a piece of subordinate legislation.      It has however been strenuously argued on behalf of the Company that  the order  should be struck down on the ground of malice  in law  on the part of the State Government. That no doubt  is another  aspect of the doctrine of ultra vires, for an  offending Act can be condemned simply for the reason that it is unauthorised. Bad faith has often been treated as interchangeable with  unreasonableness and taking a decision on extraneous  considerations. In  that  sense,  it  is  not really a  distinct ground  of invalidity. It is well settled that if  a discretionary  power has  been exercised  for  an "unauthorised purpose", that is enough to invite the Court’s review, for  as has  been said  quite widely but properly by Rand J. in Roncarelli v. Duplessis,(1) malice is "acting for a   reason    and   purpose   knowingly   foreign   to   the administration." But  the question  is whether this has been Proved to be so in the present case.      Mr. Ray  has argued  on behalf  of the Company that the order is  malafide, and  has been  made  in  the  colourable exercise of the power under section 22B of the Act simply to compel the  Company to agree to the payment of a higher rate for the  supply of  energy to  it. He has tried to establish his argument  on the  basis of  the statement  of the  Chief Secretary of  the State  Government dated  July 8,  1977 and some statements  of the Minister concerned. We shall examine them separately.      What the  Chief Secretary  said in  his press statement dated July  8, 1977,  was  that  the  State  Government  had reduced the supply of power to the Company from 85 m w to 10 m w  and that  it had been decided to almost double the rate for the  supply of  the power  which was  being given to the Company. It  will  be  remembered  that  by  virtue  of  the amendment which was made to the U.P. Electricity (Regulation of distribution  and consumption) order on June 2, 1977, the Company was  required  to  reduce  its  consumption  of  the Board’s energy  to zero, but it was, nonetheless, allowed to draw 30  m w  for some  time. That led to further directions for the  reduction of  consumption, and  ultimately an order was made  on June  29, 1977  for disconnecting the supply. A representative of the Company met the Minister concerned and explained the Com- 734 pany’s difficulties.  He asked  for permission  to  draw  at least 10  m w  to keep the pots warm. The Minister agreed to that request, but only against the standby agreement for the demand of  60 m  w. A  letter to that effect was sent to the Company on  June 30,  1977. As  under the standby agreement, energy was  to be supplied at the rate of 24 paise per unit, instead of  11 paise,  the Chief Secretary merely stated the factual position  on July  8, 1977.  At any  rate  there  is nothing to  show that  the plea  of scarcity  of energy  was merely a ruse to charge a higher rate from the Company.      Mr. Ray  has invited our attention to the statements of the Minister  concerned dated  July 18, 1977, July 28, 1977, September 14,  1977, August  29, 1978  and his  reply to the Company dated  October 18,  1978, to  show  that  the  State Government was  not satisfied  with the contractual rate for the supply of energy as it was below the cost of generation, and wanted  to review  and rescind the agreement altogether.

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We have  gone through  the record  of the proceedings of the Legislative Assembly and we find that what the Minister said there was  essentially correct  that 10 m w energy was being supplied to  the Company under the standby agreement. It was in that content that the Minister informed the Assembly that the charges  for the said standby supply came to 26-28 paise per unit. The learned Solicitor General has taken us through the relevant record to show that the Minister did not really want to  harm the  Company unnecessarily,  and if  he stated further that  he was  never  approached  personally  by  the Company, or  in a  proper manner,  or that the relief to the Company would  be considered  depending on  how it contacted him for  that purpose,  the Minister  simply wanted to state the facts  and to  convey his resentment against the attempt to influence him politically, or through any Minister of the Central Government.      The  State   has  in   fact  filed  a  chart  with  its supplementary counter-affidavit  about the  supply of energy to the Company from February 1973 to April 7, 1977. It shows that during  the period  February 1973 to August 7, 1975 the Company received  energy from  27.50 m w to 1.25 m w. It was only after  the declaration  of emergency  on June  26, 1975 that the  Company received some 55 m w of energy, and then a fresh agreement  was made soon after on November 30, 1976 to supply 85  m w  of energy.  But even before that date, for a sufficiently long  period, the  Company got  far more energy than what it was entitled to. We are therefore not satisfied that the  Company has  been able  to establish malice in law merely because  of what  the Chief Secretary or the Minister stated here  and there.  It may  well be  that the new State Government was dissatisfied with the new agreement which had been 735 entered into  at the  instance of  the political party which was then  in power,  but it  cannot be  said  that  the  new Minister’s desire  to examine  the validity  or propriety of that agreement  arose out  of  any  extraneous  or  improper consideration so as to amount to malice in law.      Our attention  has also been invited in this connection to certain  statements on behalf of the State Government and the Board that energy was available in abundance, and it has been urged that even so the Company was denied its supply in spite of  the agreements  and the  assurances of  the  State Government to  the contrary. That is a point relating to the contractual rights of the Company and we shall come to it in a while.      Then it  has been  argued that  even though  the  State Government professed  in its  affidavit that  the cut in the consumption of  energy by  the Company could not be restored because  of   the  desire   to  provide   more  energy   for agricultural purposes,  that was  not really so and that any such  attempt   was  in   the  nature   of   an   extraneous consideration  which  vitiated  the  implementation  of  the Order. Reference  in this  connection has  been made  to the Company’s averments  in the supplementary affidavit that the load on  account of agriculture and irrigation had declined, and there was in fact no diversion of energy to agriculture. In order  to examine  the point,  we directed  the State  to prepare a  statement for the entire period from January 1977 to December  1978. The Order was made on September 19, 1977, and the  statement shows  that  consumption  of  energy  for agricultural and  irrigation purposes  increased appreciably thereafter, and  there is  no justification for the argument to the contrary.      Another "extraneous"  factor which is said to have been

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taken into  consideration by  the State Government in making the Order  is said  to be its view that the major portion of the aluminium  produced by  the Company  was being  consumed outside the State. A similar objection was raised before the High Court  on the  basis of  an averment  in  the  counter- affidavit  of  the  State.  The  High  Court  has,  however, recorded the  finding that  it would  be "unsafe"  to uphold that contention,  and we  see no  reason to take a different view.      The other  factors to  which reference has been made as extraneous factors  which vitiated  the Order are said to be consideration of  the facts  that the  Company had failed to expand its  generating capacity, the financial loss suffered by the  U.P.S.E.B. and the non-payment of the coal surcharge by the  Company. But  there is nothing on the record to show that these factors were taken into consideration at the time of making  the Order.  It may  be  that  those  or  somewhat similar facts were mentioned 736 at one  time or  the other in answer to the complaint of the Company, or  in justification  of what  the State Government had done,  by way  of defence,  but that  cannot justify the argument that  they formed  the basis  for the making of the Order.      It has also been argued that while making the Order the State Government failed to take into consideration the facts that  the   production  of  aluminium  was  of  considerable importance to  the national  economy and  that the Board was capable of  generating more  energy but  was not  doing  so. Reference has  also been  made to  the new  aluminium policy which the Central Government announced on July 15, 1975, and to the  benefits which  the U.P.S.E.B. was deriving from the aluminium products  manufactured by  the  Company.  But  the argument is  untenable because there is nothing to show that these factors were not taken into consideration while making the Order, and an inference that they were ignored cannot be drawn against  the State  merely because the Company was not permitted to  consume all the energy it wanted and there was a fall  in  the  production  of  aluminium  because  of  the restriction imposed  by  the  Order.  It  may  be  that  the U.P.S.E.B. was capable of generating more energy, or that it was  not  running  efficiently  and  had  not  succeeded  in reaching its  target of  ideal generation. But here again it will be  enough to  say that although the High Court arrived at the  conclusion that  the Company deserved the writ which it granted,  it did  not find  it possible  to hold that the U.P.S.E.B. had  deliberately under  utilised its  generation capacity. That  is a finding of fact which does not call for interference by us.      There is  thus no  justification for  the argument that there was  malice in law on the part of the State Government in making  the Order.  It may  be that  the  State  gave  an impression, after  the Order had been made, that it had some spectacular effect on the fortune of the Company, or that it had brought  about such  efficiency as  to ensure  supply of energy to new entrepreneurs. It may also be that in doing so the State  over-stated its  resources of  energy in order to open up  a State  which had  not been  able to  develop  its industrial resources  satisfactorily, but  what  has  to  be examined in  such cases is the true and the dominant purpose behind the  Order. And  as long  as the  dominant motive  is proper and reasonable, and is not sullied by a mere pretext, the Order  based on  it will be valid when it is well within the true  scope and  policy of  the Act  and  is  an  honest attempt to  deal with  the situation  for which the power to

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make the Order had been granted by the Act.      It has  however been further argued by Mr. Ray that the Order is  invalid as  it does  not subserve  the purpose  of section 22B  of the  Act inasmuch  as it does not secure the "equitable distribution" of energy. 737 Reference has  been made  to Jowitt’s  Dictionary of English Law, where  "equitable" has  been stated to mean "that which is  fair",  and  to  Corpus  Juris  Secundum  to  show  that equitable  is   that  which  is  done  "fairly,  justly  and impartially". Our  attention has  been invited  to the facts and circumstances  which led  to the  establishment  of  the Company in the State of Uttar Pradesh and the agreement with and the  assurances which  were given  to the  Company.  Our attention has also been invited to the new connections which were given  by the  U.P.S.E.B. to  the other consumers while denying the contractual supply of energy to the Company.      It cannot be doubted that only that distribution can be said to  be "equitable"  which is  "just and right under all the circumstances  of  the  particular  case"  (The  Century Dictionary). It  will be  remembered that the High Court has recorded a finding that there was shortage in the generation of  energy  when  the  Order  was  made.  A  great  deal  of statistical data  has been  laid before us and Mr. Gupta has tried to  make full  use of it on behalf of the Company. But the fact  remains that  the demand  for energy  was  far  in excess of  the supply  from all the sources available to the U.P.S.E.B.  It   has  also  been  well  established  that  a situation had  arisen when  it became necessary to obtain an order from  the State  Government about the course of action to be  adopted  by  the  Board.  Self-contained  notes  were therefore drawn  up in March 1977, and on May 24, 1977, June 28, 1977 and August 26, 1977. We have gone through the notes and they  are quite  detailed and  objective. We have made a mention of  the developments  which took  place  because  of those notes,  including the  making of the Order. We have no doubt that  it was  made because a situation had arisen when regulation of  the supply, distribution, consumption and use of energy  had become necessary, and the Order was a genuine attempt to  secure equitable  distribution of  energy. It is true that  the Company  was the  worst sufferer under clause 6(a)(i) of  the Order,  but then  it was  also the  greatest consumer.      The basis for the making of the Order was the necessity or expediency  for maintaining  the supply  and securing the equitable distribution  of  energy  by  means  of  an  order providing for  the regulation  of the  supply, distribution, consumption and use of energy. It has been argued by Mr. Ray that as power was supplied indiscriminately to new consumers after imposing a cut on the Company’s consumption of energy, the issue  of the  Order was really a colourable exercise of the State  Government’s power  under section 22B of the Act. Our attention  in this  connection has  been invited  to the averments in  the affidavits which have been filed on behalf of the Company and to a 738 list  of   new  connections   filed  as   Annexure  to   the supplementary rejoinder affidavit of Suresh Chandra, Special Officer of  the Company.  Reference has  also been made to a list of  new connections filed in the High Court on March 6, 1978. Learned Solicitor General has however pointed out that even if  all the  new connections  were to  become effective within a  period of  two years,  their incidence would be no more than 4 per cent of the total connected load as the real impact on  the system  would merely be an additional load of

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only 18  m.w. It  has also been pointed out that while there was an  increase of  9 per cent in the installed capacity of the U.P.S.E.B. for the generation of energy, the increase in the connected  load was  not more  than 2  per cent. We have been informed  that the percentage increase in the connected load had  declined from 10 in 1974-75 to 2 in 1977-78, which showed that  great care  was being  taken in incurring extra liability.  The  State  has  also  filed  a  list  of  those applicants to whom new connections were sanctioned, but were not actually released, making a total of some 23 mw.      It has  been urged  on behalf  of the  Company that the Board had  deliberately reduced  its thermal  generation. It has been  pointed out  that while  there was  a  substantial increase in  hydro-electrical generation, the performance in the thermal  field was  highly unsatisfactory. The State has supplied the necessary information which shows that the fall in thermal generation was due to the initial troubles of new plants,  the   poor  performance  of  the  plants,  and  the breakdown at  Harduaganj. We  have been  informed  that  the performance of  the U.P.S.E.B. was better than the Boards in the  other   States.  We   have  also  been  told  that  the proposition  that   there  was   deliberate   under-capacity operation of thermal machines is technically unsound because of the  operating constraints  in running  the large thermal machines at  loads lower  than the  rated capacity.  We have made a  reference to  the finding  of the High Court against the Company in this respect.      Another aspect  of the controversy before us relates to the contractual  liability of the State to supply the energy which it had assured to the Company. It has been pointed out that under  the agreement  dated October 29, 1959, the State was bound  to supply  55 m w of energy upto 1987 and then an agreement was  entered into  on November 30, 1976, to supply additional 30  m w, making a total of 85 m w for a period of 5 years.  It has  therefore  been  argued  that  instead  of fulfilling its obligation under the agreements and the other assurances which  were given by the State from time to time, the State  took resort  to the  provisions of section 22B to get out  of its  obligation and  the making  of the impugned Order was  really a  colourable exercise  of that  statutory power. 739      We  find   from  the  counter-affidavit  of  the  State (October,  1977)  that,  as  would  appear  from  the  Chief Secretary’s letter  dated November  20, 1968, what the State Government had  assured the  Company was to meet the interim requirement of  the Company  for  2  or  3  years  from  the U.P.S.E.B. and  to facilitate  the parallel  running of  the Company’s new  power station,  in addition  to  the  station which had  been set  up at Renusagar. It is also not without significance that the State was not a party to the agreement dated November  30, 1976,  for the  supply of  additional 30 m.w., because  that agreement  was made  between the Company and the  U.P.S.E.B. It  was in fact expressly stated in that agreement that  it would be subject to the provisions of the Electricity  Acts  of  1910  and  1948  and  the  rules  and regulations, including the amendments thereto. Care was also taken  to   provide  that   the  U.P.S.E.B.   shall  not  be responsible for  damages or  diminutions in  the  supply  of energy  according   to  the   orders  issued  by  the  State Government, A  similar provision  was made  in  the  earlier agreement of  1959. Reference  was in fact specifically made in the  Board’s letter  to the  Company dated  September  2, 1972, to  the  State  Government’s  power  to  "control  the distribution and  consumption of energy under section 22B of

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the Indian Electricity Act, 1910".      We have  made a  reference to the manner and the stages in  which  the  State  Government  took  decisions  for  the restrictions to be imposed on the consumption of energy with due  regard   to  the  detailed  factual  notes  which  were submitted for its orders on account of the acute shortage of energy in  the State.  Decisions in the matter were taken by the different  State Governments,  including the  Governors’ Advisors, and  it cannot  be said that the cuts were imposed suddenly,  or   without  due   regard   to   the   Company’s difficulties in  reducing its  consumption of  energy in the manner directed  by the  Order. We  are therefore  unable to take the  view  that  the  State  wantonly  disregarded  its contractual obligations  to the  Company. But  even  if  the Company had  some cause  of grievance  on that account, that may well  be said  to be unavoidable, in the situation which had arisen when the Order was made on September 19, 1977. It has to  be appreciated that subsection (2) of section 22B of the Act  specifically provided  that it  was permissible for the State  Government  to  direct  by  the  Order  that  the U.P.S.E.B. shall  not comply with the provision, inter alia, of any  contract made  by it. A direction to that effect was expressly made  in clause  11 of  the Order,  and it  is not permissible for the Company to complain on that account.      It is not disputed that the consumers which were hit by the provisions  of clause  6(a) (i)  of the  Order were  the Company, the Kanoria 740 Chemicals and  Industries Ltd.,  the  Indian  Railways,  the Indian Explosives  Ltd., and  the Fertiliser  Corporation of India. The  last three  of these have been exempted from the rigour of  the Order.  As regards  the Kanoria Chemicals and Industries Ltd.,  the State  has stated in its reply that it was manufacturing  Benzena Chloride  and BHC  which are used for agricultural  purposes and for purifying drinking water. They were  entitled to 50 per cent of their consumption, and the State  allowed them  exemption to  the extent  of 3  m w making it  permissible for  them to  consume  12.5  m.w.  It cannot therefore be said that the continued supply of energy to Kanoria  Chemicals was proof of any hostility on the part of the  State in so far as the Company was concerned. It may also be  that, as  has been argued on behalf of the Company, some other restrictions which were initially imposed on some other consumers  under the  Order were withdrawn, so that it is the  Company which  is the main sufferer under the Order. Even so,  it is  not reasonable  to take  the view  that the Order was  not justified  when it was made, and it cannot be held to  be invalid  merely because  the Company is the main sufferer under  it. It  is not  its case  that the Order was discriminatory and should be struck down under article 14 of the Constitution.  As has  been stated the High Court has in fact found  that the  Company was  "unable to establish as a fact that  there  was  no  shortage  in  the  generation  of electricity when  the impugned  Order was made under section 22B of the Act of 1910."      The Order was therefore justified and was a valid Order when it  was made  on September  19, 1977.  The question  is whether there is force in the argument that it has ceased to be in  force and  stood impliedly  repealed because  of  the change in the circumstances which brought it into existence. The High  Court has recorded a finding in this connection in favour of the Company.      Craies on  Statute Law,  seventh edition, has mentioned six different classes of enactments at pages 357-8 which are considered as having ceased to be in force,-

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    "1.  Expired-that  is,  enactments  which  having  been           originally limited  to endure only for a specified           period by  a distinct  provision,  have  not  been           either   perpetuated   or   kept   in   force   by           continuance, or  which have  merely had  for their           object  the   continuance  of  previous  temporary           enactments for  periods now  gone by  effluxion of           time;      2.   Spent-that is,  enactments spent  or exhausted  in           operation by  the accomplishment  of the  purposes           for which  they were  passed, either at the moment           of their first 741           taking effect or on the happening of some event or           on the doing of some act authorised or required;      3.   Repealed in general terms-that is, repealed by the           operation  of   an  enactment  expressed  only  in           general terms  as distinguished  from an enactment           specifying the Acts on which it is to operate;      4.   Virtually repealed-where  an earlier  enactment is           inconsistent with,  or is  rendered nugatory by, a           later one;      5.   Superseded-where a  later  enactment  effects  the           same purposes  as an  earlier one by repetition of           its terms or otherwise;      6.   Obsolete-where the state of things contemplated by           the  enactment   has  ceased   to  exist,  or  the           enactment is  of such  a nature as to be no longer           capable of being put in force, regard being had to           the   alteration    of   political    or    social           circumstances." These six  have been  mentioned as  the enactments which are selected for  inclusion in  the Statute Law Revision Acts of England as  having ceased  to be  in force otherwise than by express repeal,  or having  by lapse  of time  or  otherwise become unnecessary.  It is  quite an exhaustive list and the question is  whether the Order could be said to have "spent" itself or  become "obsolete",  for the other four categories are inapplicable to the present case. But whether a piece of legislation has  spent itself  or exhausted  in operation by the accomplishment  of the  purpose for which it was passed, or whether the state of things contemplated by the enactment has ceased  to exist,  are essentially questions of fact for the Legislature  to examine, and no vested right exists in a citizen to  ask for  a declaration  that the  law  has  been impliedly repealed on any such ground.      It has to be appreciated that the power to legislate is both positive  in the sense of making a law, and negative in the sense  of repealing  a law  or making it inoperative. In either case,  it is  a power  of the Legislature, and should lie where  it belongs.  Any other view will be hazardous and may well  be said  to be  an encroachment on the legislative field. In  an  extreme  and  a  clear  case,  no  doubt,  an antiquated law  may be said to have become obsolete-the more so if  it is a penal law and has become incapable of user by a drastic  change in the circumstances. But the judge of the change  should  be  the  Legislature,  and  courts  are  not expected  to   undertake  that   duty  unless  that  becomes unavoidable and the circumstances are so apparent 742 as to  lead to  one and only one conclusion. This is equally so in regard to the delegated or subordinate legislation.      We have  gone through  the  cases  reported  in  Elwood Hamilton  v.   Kentucky  Distilleries  &  Warehouse  Co.,(1) Chastleton  Corporation   v.  A.  Leftwich  Sinclair(2)  and

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Nashville, Chattanooga  & St.  Louis Railway  v. Herbert  S. Walters(3) on which reliance has been placed by Mr. Ray, but they are  of no  real help  to the  Company. Thus  in Elwood Hamilton(1) it has been held that it requires "a clear case" to justify  a court  in declaring  that  a  Federal  Statute adopted to  increase war  efficiency has ceased to be valid, on the  theory that  the war  emergency has  passed and  the power  of   Congress  no   longer  exists.   In   Chastleton Corporation(2) it  has been held that courts would pronounce on the  continued operation  of law  upon facts  which  they "judicially know."  We have  also gone  through Nashville(3) case where the view has been taken that a statute valid when enacted may  become invalid  by change  in the conditions to which it  is applied.  We have  gone through The petition of the Earl  of Antrim  and Eleven  other Irish  Peers(4)  also where a  declaration was  asked for by some Irish Peers that the peerage of Ireland had in accordance with the provisions of the  Union with  Ireland  Act,  1800,  the  right  to  be represented by  28 Lords temporal of Ireland for life. Their petition was  rejected because  the provisions of the Act of 1800 had  ceased to be effective on the passing of the Irish Free State (Agreement) Act, 1922. That was therefore quite a different case.  Mr. Ray  has placed  reliance  on  Pannalal Lahoti v.  State of  Hyderabad,(5) but  what has  been  held there is  that a  temporary legislation cannot be allowed to outlast the  war emergency  which "brought it forth". In The Union of  India v. Ram Kanwar and others(6) it was held that as the  building in  question was  being used  for a purpose other than  that for  which it  was originally requisitioned under the  law, it  was liable  to be  de-requisitioned. The question is  whether any such situation has been found to be established in the present case ?      Now what the High Court has found in this respect is as follows,-           "This  Court   finds   that   circumstances   have      materially changed  since the  impugned order was made.      The shortage in reservoir from which water is drawn for      the generation of 743      Hydro-electricity has  ceased and  further supplies  of      electrical energy are available from newly commissioned      units.  The   respondents  admit   that   fresh   power      connections have  been given.  In these  circumstances,      the continuance  of the  impugned order  is  no  longer      justified and  consequently, the  order must be held to      have outlived the purpose for which it was made and, as      such, it must be held to be no longer valid.’ It has  thus found  three facts:  (i) the  shortage  in  the reservoir(s) for generation of hydel energy had ceased, (ii) further  supply   of  energy   was  available   from   newly commissioned units,  and (iii)  fresh power  connections had been given  by the U.P.S.E.B. But what was lost sight of was the important  fact that  it was  all along  the case of the State that  hydel energy  was only  one-third of  the  total generation, and  that generation of thermal energy which met two-third of  the total requirement had declined for reasons beyond the  control of  U.P.S.E.B. The  High Court  did  not therefore undertake  a careful examination of the facts, and took  some   new  connections   into  consideration  without attempting to examine their magnitude and effect on the over all generation  and availability  of  energy  from  all  the sources. The  State has  filed a  detailed  affidavit  dated October  12,  1978,  where  it  has  been  stated  that  the U.P.S.E.B. was  at best  capable  of  generating  electrical energy to  the "tune  of 10,185  m  u,"  whereas  the  total

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requirement of  the State for 1978-79 was 13,866 m u so that there was  a gap  of 393 m u. The High Court therefore erred in taking  the view that the continuance of the order was no longer justified.      Even so,  the High  Court abstained  from striking down the  whole  of  the  Order  and  merely  declared  that  the provisions of the first proviso to clause 6(a) (i) was ultra vires, and quashed it.      We have  given our reasons for taking the view that the whole of  clause  6(a)  (i)  of  the  order,  including  the proviso, is  valid, and  the  question  remains  whether  we should restore  the  quashed  proviso.  The  answer  to  the question is simple. The learned Solicitor General has made a statement at the Bar that at present, or in the near future, there is  no difficulty  in supplying 42.5 m w energy to the Company, and  that the  Company is  getting that much energy already. He  has been  frank enough to say that this will be so even  if the  proviso is  restored by  this Court. He has stated that  the State  Government has  been  reviewing  the position from time to time, and has given the 744 assurance that  it will  continue to do so in future. He has also stated that although the application of the Company for grant of  exemption under  clause 10  of the  Order had been rejected on  December 9,  1977, there  is nothing to prevent the Company  from making  a fresh  application if  it thinks that there  is a  real and  substantial improvement  in  the generation of  energy  in  the  State.  The  fact  therefore remains that, as things stand at present, the proviso, which admittedly applies  only to  the Company, is of no practical use for  the time  being. So even though it is valid and has wrongly been  quashed by  the High Court, we do not think it necessary to  restore it,  so that it shall not be deemed to form part  of clause  6(a) (i) of the Order. But if there is deterioration in  the generation  of energy  again, or there are other  sufficient reasons  within the purview of section 22B of  the Act  to reinsert  the proviso, in the present or modified  form,   it  will  be  permissible  for  the  State Government to do so according to the law.      In the result, while C.A. No. 921 of 1978 is allowed to the extent  mentioned above,  C.A. No. 425 of 1979 fails and is dismissed.  In the circumstances of the case, the parties shall pay and bear their own costs in both the appeals. N.V.K.                                  C.A. 921/78 allowed.                                       C.A. 425/79 dismissed. 745