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PETITIONER: BHUSAWAL BOROUGH MUNICIPALITY

       Vs.

RESPONDENT: AMALGAMATED ELECTRICITY CO.  LTD. &ANR.

DATE OF JUDGMENT: 10/12/1963

BENCH: MUDHOLKAR, J.R. BENCH: MUDHOLKAR, J.R. SINHA, BHUVNESHWAR P.(CJ) DAYAL, RAGHUBAR AYYANGAR, N. RAJAGOPALA

CITATION:  1966 AIR 1652            1964 SCR  (5) 905  CITATOR INFO :  F          1977 SC  27  (7)

ACT: Bombay  Electricity Supply (Licensed Undertakings was  Cost. Order,  944,  cl. 5-Scope  of-Construction  of  document--If question of law.

HEADNOTE: The Municipality filed two suits to claim refund of two  sum of money paid by them to the respondent no.  1 under protest a, electricity charges.  The defence of the respondent no. 1 was  that  the dispute between it and the  municipality  was decided  by  the  Government of Bombay and  that  under  the second  proviso  to cl. 5 of the Surcharge Order,  1944  the decision of the Government was final and binding both on the appellant  and  the respondent no. 1. The  decision  of  the Government  was  communicates to the parties by  the  letter dated  May  22, 1946.  The appellant succeeded in  both  the suits in the trial court as well as the District 906 Court.  In second appeal, the High Court dismissed  the  two units.  Hence this appeal. Held:     (i)  The  Municipality was not entitled  to  claim fund  because  the  dispute between  the  parties  had  been decided by the Government under the second proviso to cl.  5 of   the  Surcharge  order,  1944.   The  decision  of   the Government was final and binding on the parties. (ii) The communication dated May 22,1946 sent by the Govern- ment to   both  the parties was a final decision  under  the second proviso to cl. 5 of the Surcharge Order, 1944.  There is  no  reason  to think  that  the  communication  contains nothing but the opinion of the Government. (iii)     The second proviso to cl. 5 of the Surcharge Order does not require that the dispute has to be referred by both the  parties.  Such a dispute can be referred by one of  the parties  as   clear from the language of the  proviso  which says  "in the event of dispute by any party interested"  the decision of the provincial Government shall be final. (iv) The Trial Court and the District Court had wholly  mis- construed  the  document  dated May 22, 1946  which  is  not

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merely of evidentiary value but is one upon which the  claim of  the  respondent  no.  1  for  the  surcharge  is  based. Misconstruction  of such document would thus be an error  of law  and the High Court  in second appeal would be  entitled to correct it.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos. 47 and  48 of 1961. Appeals by special leave from the judgment and decree  dated August 5, 1957, of the Bombay High Court in Appeal No.  1085 of 1954 with second Appeal No.     1086 of 1954. G.S. Pathak and Naunit Lal, for the appellant. I. N. Shroff, for respondent no. 1 M.S.K. Sastri and R.H. Dhebar, for respondent No. 2. December 10, 1963.  The Judgment of the Court was  delivered by MUDHOLKAR  J.-This judgment will also govern C.A. no. 48  of 1961.   Both  the  appeals are by  special  leave  from  the judgment of the Bombay High Court in second appeal disposing of  two  appeals  which  arise out  of  two  separate  suits instituted  by  the appelant, the  Borough  Municipality  of Bhusawal, against 907 the  Bhusawal Electricity Co. Ltd., respondent No. 1  before us, to which suits the State of Bombay was later added as  a defendant. In each of the two suits the appellant had claimed refund of two sums of money paid by them to the respondent No. 1 under protest as electricity charges to which the respondent No. 1 claimed  to  be entitled by virtue of an order made  by  the Government  of  Bombay under the Bombay  Electricity  Supply (Licensed  Undertakings  War  Costs)  Order,  1944   (herein referred  as Surcharge Order ). The appellant  succeeded  in both  the suits in the trial court as well as  the  District Court.  In second appeal, however, the High Court set  aside the decrees passed by the trial court and dismissed the  two suits.   While doing so, the High Court admitted  on  record certain documents by way of additional evidence and the only contentions  raised  before us by Mr. G.S.  Pathak  for  the appellant are firstly that the High Court is incompetent  in second  appeal  to admit additional evidence on  record  in- asmuch  as  O.  XLI,  r. 27,  Code  of  Civil  Procedure  is inapplicable  to a second appeal.  Secondly, the  provisions of O. XLI, r. 27 cannot be used to fill up the lacuna in the evidence left by a party.  We may incidentally mention  that when  the  High Court, by its order dated  April  30,  1958, decided to admit additional evidence on record, no objection was raised on behalf of the appellant before us. It  seems to us to be wholly unnecessary to decide  in  this case  whether  the  High  Court  has  the  power  to   admit additional  evidence in second appeal and also whether  even if it has that power it was right in admitting the  evidence in  the  circumstances  of this case.  Basing  itself  on  a particular   interpretation  of  the  agreements   regarding payment  of  electric  charges with respondent  no.  1,  the appellant  claimed  refund  on the ground that  it  was  not liable  to  pay the surcharge payable  under  the  Surcharge Order, 1944 in respect of electrical energy consumed by  it. The  substantial defence of the respondent no.  1  was  that the dispute between it and the municipality was 908 decided  by  the  Government of Bombay and  that  under  the

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second  proviso  to cl. 5 of the Surcharge Order,  1944  the decision of the Government was final and binding both on the appellant  and the respondent No. 1.The relevant  provisions read thus:               Clause 5:  "Upon  the  rate of the  War  Costs               Surcharge   being  fixed  by  the   Provincial               Government  from  time to time  in  accordance               with  this order, it shall not be  lawful  for               the  licensee or sanction-holder concerned  to               supply energy at other than charges surcharged               at the rate for the time being so fixed:"                *            *        *                  *               Second proviso: "Provided      further that no               War  Costs Surcharge shall be  effective  upon               the charges for the supply of energy under any               contract  entrered  into after  the  1st  May,               1942,  unless such contract provides  for  the               same charges for energy as have been contained               in  similar  previous  contracts  for  similar               supply  by  the licensee  or  sanction  holder               concerned (as to which in the event of dispute               by  any party interested, the decision of  the               Provincial  Government  shall  be  final)   or               unless and to such extent as such  application               may  be  expressly ordered by  the  Provincial               Government." It is not disputed before us by Mr. Pathak that the decision of  the Government upon the dispute is final and binding  on the parties.  But, according to him, it was not  established by  the  evidence led in the trial Court  that  the  dispute between  the  parties  had  at  all  been  referred  to  the Government  and  that a certain communication  sent  by  the Government to the parties, Ex. 68 dated May 22, 1946  relied upon  by  the  respondent no. 1, contains  nothing  but  the opinion  of the Government.  Mr. Pathak further  urged  that the  proviso  referred to by us purports to  constitute  the Govern- 909 ment  into an arbitrator and, therefore, there had to  be  a reference  to  the  arbitrator by both the  parties  to  the dispute  under the provisions of the Arbitration Act,  1940. This latter point, however, had not been taken in the courts below  nor  is it found in the statement of  the  case.   We have,  therefore, not permitted Mr. Pathak to rely  upon  it before us. The  communication of May 22, 1946 relied upon by the  first respondent runs thus: "No. 6404/36-E1(1).       Public Works Department,                           Bombay Castel, 22nd May, 1946. From              The  Secretary  to  the  Government  of              Bombay  Public Works Department (Irrigation). TO              The President, The Borough Municipality,              Bhusawal.              Subject: War Costs Surcharge. Dear sir,               With  reference to the  correspondence  ending               with Government letter no. 6404/36, dated  the               10th May, 1946 on the subject mentioned above,               I  am to inform you that Government has  fully               considered your case under the second  proviso               to  clause 5 of the Bombay Electricity  Supply               (Licensed Undertakings War Costs) Order, 1944,               and  has  decided  that  you  should  pay  the

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             surcharge  to  the  Bhusawal  Electricity  Co.               Ltd., at the rate of 15 % fixed in  Government               Order No. 6331/36 (IV) dated the 15th  August,               1944,  unless the Company raised its  rate  of               supply  of energy for street lighting to  more               than 4 annas per unit.                                         Yours faithfully,                                         Sd/ D.N. Daruwala.                        for Secretary to the Govt. of Bombay.               Copy  forwarded  for  information  to:  Public               works  Department, the Electrical Engineer  to               the 910               Government  with reference to his No.  LRM.57/               5260, dated the 8th March, 1946.  The Account-               ant General, Bombay with reference to his  No.               O.A.  2888,  dated  the  2nd  February   1946.               Messrs  The  Bhusawat  Electricity  Co.  Ltd.,               Bombay with reference to correspondence ending               with  Government  letter No.  6404/36-El.  (i)               dated the 17th May 1946.  CC to E.E.  Bhusawal               for information sent on 25th May 1946." It is obvious from this communication that both the parties, that is, the appellant as well as the respondent no.  1  had stated  their respective cases before the Government.  There was  no  occasion for them to do so unless  they  were  both purporting  to act under the second proviso to cl. 5 of  the Order of 1944.  After consideration of the cases of both the parties the Government has stated in the aforesaid  communi- cation that it had decided that the municipality should  pay to  the  Electricity Company surcharge at the  rate  of  15% fixed  in  a  certain Government Order  unless  the  Company raised its rate for the supply of energy for street lighting to  more  than four annas per unit.  There is no  reason  to think  that what is on the face of it a decision is  nothing but  an  opinion  because  if there  were  anything  in  the correspondence  to which a reference is made in that  letter as  well as in the endorsement at the bottom which  went  to show that the appellant did not purport to refer any dispute to the Government, it was for the appellant to produce  that correspondence.   Its  omission to do so must  be  construed against  it.  Then Mr. Pathak said that under the  Surcharge Order  itself  the dispute had to be referred  by  both  the parties  and not by only one of them.  This  contention  is, however,  untenable  in view of the clear  language  of  the proviso  which says: "In the event of dispute by  any  party interested" the decision of the Provincial Government  shall be  final.   There  is,  therefore,  no  substance  in   the contention.  In our opinion the trial court and the District Court  had  wholly misconstrued this document which  is  not merely of evident- 911 iary value but is one upon which the claim of the respondent no.  1 for the surcharge is based.  Misconstruction of  such a document would thus be an error of law and the High  Court in  second appeal would be entitled to correct it.  This  is what in fact has been done. There  is  no substance in the appeals which  are  dismissed with costs. Appeals dismissed.