30 March 1964
Supreme Court


Case number: Appeal (civil) 590 of 1963






DATE OF JUDGMENT: 30/03/1964


CITATION:  1964 AIR 1598            1964 SCR  (7) 503  CITATOR INFO :  R          1969 SC1225  (11)

ACT: Electricity  Supply Act, 1948 (54 of 1948), ss. 57, 57A,  70 Sch.   VI  Indian Electricity Act, 1910 (9 of  1910).  s.  3 Schedule -Electricity Rates-Enhancement-Powers of  licensee- Limits of such power-Legality of rates-Jurisdiction of civil court-Burden of proof-

HEADNOTE: The  appellant  company was supplying  electricity  under  a licence issued in 1932 by the Government of Bombay under the Indian Electricity Act, 1910.  The ’licence fixed the limits of  the  prices which the appellant could charge  but  these limits  were altered by an order made by the  Government  on December  30, 1942, acting under para XI of the Schedule  to that Act, Due to the conditions brought about by the  second world war, the licensee was permitted to add a surcharge not exceeding 33-1/3% to the existing charges.  On September 30, 1946,  the  Bombay Electricity (Surcharge)  Act,  1946,  was passed which continued the surcharges for a period of  three years.   Though  the  Surcharge  Act  of  1946  expired   on September  30,  1949, the appellant continued  charging  the consumers at rates which included the surcharge and this was sought  to be justified by resort to the provisions  of  the Electricity  Supply  Act,  1948, which came  into  force  on September  10, 1948.  On September 25, 1958,  the  appellant gave notice to its customers that with effect from  November 1,1958,  it  would charge them at certain  rates  which  the customers  considered to be illegal and unauthorised on  the ground  that they were in excess of those prescribed in  the order  of  December 30, 1942.  In the  suits  instituted  on behalf  of  the consumers challenging the  legality  of  the rates levied by the appellant in excess of the maximum pres- cribed by the Government of Bombay in its order dated Decem- ber  30,  1942, the defence of the appellant  was  that  the charges  were  well  within the  limits  prescribed  by  the Electricity  Supply  Act,  1948,  which  according  to   its contention, effected such a radical change in the method  of determining  the reasonable rate as to completely  supersede the rates and the maxima fixed under the Electricity Act  of



1910.   The  question was also raised as to  whether  having regard to the provisions contained in ss. 57 and 57A of  the Act  of  1948 a civil court would have jurisdiction  to  en- tertain a suit challenging the legality of the rates  levied by the appellant. Held-(i) The maxima prescribed by the State Government which bound  the licensee under the Indian Electricity Act,  1910, no longer limited the amount which he could charge after the Electricity  Supply Act, 1948, came into force and that  the licensee  had  a  statutory right to  adjust  his  rates  as provided by Part 1 of Sch.  VI of the latter Act. (ii) Where  a party challenged the legality of the rates  on the ground that they contravened the provisions contained in Sch.   VI  of  the  Act of 1948 there was  no  duty  on  the licensee  to  prove that the rates were  within  the  limits indicated in Sch.  VI and it was for the party alleging  his right to relief to prove his case. 504 Per Sarkar, J.-The respondents were not entitled to canvass in a civil court any  question as to the rates of a licensee being  in excess of the limit prescribed in para 1  of  Sch. VI to the Act of 1948.  A civil court could not declare that the  rates charged by a licensee were illegal as they  made, its clear profit exceed the reasonable return.  If there was such  excess,  the  relief could be  obtained  only  if  the Government  set up a rating committee, a refund  became  due thereupon under the last proviso to para 1 of Sch.  VI or if relief was available under para II(1) of that Schedule. Per  Das Gupta and Rajagopala Ayyangar, JJ.-(i) There  could be unilateral adjustment of the rates by a licensee but such an adjustment must not leave him with more than the  reason- able  return.   Where  the amount of  reasonable  return  is exceeded, para II of Sch.  VI comes into play and the excess over  the  reasonable  return is to be  distributed  in  the manner laid down in that paragraph. (ii) In   view  of  the  machinery  that  is  provided   for complaints in the event of the licensee deriving more than a reasonable  return as contemplated by Sch.  VI, the  failure consciously  to adjust the rates by working out the  details so  as to reach at the same rate as was  charged  previously did not constitute a failure to adjust the rates as required by para 1. (iii) There being no express bar to the jurisdiction of  the civil  court,  its  jurisdiction could not  be  held  to  be excluded in respect of such matters which were not  assigned by s. 57A of the Act of 1948 to the rating committee, or  in regard  to which the rating committee could not  afford  the consumer  relief  against  an  infraction  of  a   statutory provision by which he was aggrieved.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos. 590591  of 1963-Appeals from the judgment and decree dated February  6, 1963 of the Mysore High Court in Second Appeals Nos. 471 and 472 of 1960. H.   N. Sanyal, Solicitor-General, M. M. Gharekhan and  I.N. Shroff, for the appellant (in C.A. No. 590/1963). H.   N.  Sanyal,  Solicitor-General,  M.C.  Setalvad,   M.M. Gharekhan  and I.N. Shroff, for the appellant (in  C.A.  No. 591/ 63). Naraindas  C  Malkani, J. B. Dadachanji, O.  C.  Mathur  and Ravinder Narain, for the respondents (in both the appeals). March 30, 1964.  The judgment of DAs GUPTA and AyYANGAR  JJ.



was delivered by AYYANGAR J. SARKAR J. delivered a  separate opinion. SARKAR,  J.-The appellant is a company carrying on  business as supplier of electricity in a certain area in the State of Bombay.    The  respondents  Bhathena  and  Tendulkar   were consumers  of electrical energy supplied by  the  appellant. The 505 present   appeals  arise  out  of  disputes  between   these consumers  and the appellant concerning the legality of  the charges  made by the appellant for electricity  supplied  by it. The  supply  of  electrical  energy  is  controlled  by  two statutes  and  the questions involved in the  present  cases will turn on them.  These statutes are the Electricity  Act, 1910  and  the Electricity (Supply) Act 1948. 1  will  first consider the Act of 1910.  Section 3 of this Act gives power to  the Government to grant a licence to a party  to  supply electrical energy in any specified area and to prescribe  in the licence the limits of price to be charged by it for  the supply.   This section further provides that the  provisions in the Schedule to the Act would, unless otherwise directed, be  deemed to be incorporated in the licence.  Paragraph  XI of  that  Schedule  states  that a  licensee  would  not  be entitled to exceed the limits of price fixed in his licence. This  paragraph, however, gives power to the  Government  to alter  these  limits on the recommendation ,of  an  Advisory Board appointed under s. 35 of the Act.  It is not necessary to refer to the other provisions of this Act. The appellant had been supplying electricity under a licence issued in 1932 by the Government of Bombay under the Act  of 1910.  The licence fixed the limits of the prices which  the appellant  could charge but these limits were altered by  an order  made  by the Government on December  30,  1942  under paragraph  XI  of  the  Schedule  and  stood  thereafter  as follows:               A.    For  lights  and fans annas /5/-  (=  31               nP.) per unit and,               B.    For motive power, (i) upto 4 B.H.P. anna               -  /1/  (=O.06 nP.) per unit  in  addition  to               standing  charge  of Rs. 2 / - per  month  per               B.H.P connected. (ii)over 4 B.H.P. -/-/19 pies               (=O.05  nP.)  per  unit  in  addition  to  the               standing  charge at the same rate of  Rs.  2/-               per B.H.P. per month. Due to the conditions brought about by the Second World War, certain  orders were made from time to time  permitting  the licensees  to add a surcharge not exceeding 33 1/2 per  cent to  the existing charges.  Lastly, on September 30, 1946  an Act  was passed by the Bombay legislature called the  Bombay Electricity  (Surcharge) Act, 1946, hereinafter referred  to as   the  Surcharge  Act,  which  continued  the   surcharge specified  therein  for a period of three years.   This  Act expired  on  September  30,  1949.  It  is  said  that  even thereafter the appellant continued charging the consumers at rates which included the surcharge under the Surcharge  Act, and,  therefore,  at rates in excess of those fixed  by  the Order  of  December  30, 1942 and  that  was  illegal.   The appellant on its part claims 506 that its charges after the expiry of the Surcharge Act  were all Justified under the Act of 1948 the relevant  provisions of  which came into force on September 10, 1948.   This  Act will be referred to later. The respondent Bathena commenced taking electricity from the



appellant  sometime  in 1954.  Soon  thereafter  he  started disputes about the legality of the charges realised from him by the appellant in respect of energy supplied for  purposes of  motive power of over 4 B.H.P. and in 1955 filed  a  suit against the appellant for refund of amounts alleged to  have been  illegally collected from him in excess of the  limits. fixed  by the order of December 30, 1942, namely, an  excess standing  charge of 0.69 nP. per B.H.P. per month over  that fixed by the Order of December 30, 1942 and a similar excess unit  charge  of  0.01 nP. per unit.   That  suit  is  still pending  and  with  the disputes involved in  it  I  am  not concerned in this judgment. On  September  25, 1958, the appellant gave  notice  to  its customers  that with effect from November 1, 1958  it  would charge  for motive power 0.09 nP. per unit plus  a  standing charge  of Rs. 2.69 per B.H.P. per month.  The  unit  charge mentioned in the notice was in excess of that prescribed  in the order of December 30, 1942 by 0.04 nP. per unit.   There is  no  dispute  that this notice revised  the  unit  charge existing  at its date but it seems that it did  not  enhance the then existing standing charge.  The notice gave rise  to further  disputes as a result of which two suits were  filed against the appellant on March 31, 1959 in the court of  the Civil Judge, Belgaum.  The first of these suits was filed by the  respondent  Bathena acting for himself  and  all  other consumers  of  electricity  supplied by  the  appellant  for purposes  of  motive power over 4 B.H.P. for  the  following reliefs:               "(a)  That  a declaration be granted  by  this               Hon’able  Court that the standing  charges  of               2.69  nP. per B.H.P. per month and the  excess               sum  of 0.04 nP. per unit of energy  consumed,               for   motive   power  whether   connected   or               otherwise,   are  illegal  and   unauthorised,               inoperative  and ultra vires of the  Defendant               company and the Plaintiff is not bound to  pay               the  same and that the Defendant-Company  have               no  authority to control or interfere  in  the               supply of electric energy or its use, and that               the restrictions imposed in Notice dated 25-9-               58 are illegal, bad in law, and,               (b)   an injunction restraining the Defendant-               Company,  its  servants,  its  agents  or  its               representatives  from levying  and  recovering               the  excess  and  illegal  charges,  (such  as               standing charges and per unit               507               of  consumed  energy  at 0.04  nP.)  from  the               plaintiff,  by means of any coercive  measures               and  from interfering or controlling with  the               electric Supply". The other suit was filed by the respondent Tandulkar also in a  representative capacity in respect of the charge of  0.37 nP.  per unit for electricity supplied for lights and  fans, and it sought the following reliefs:               "(a)  That  a declaration be granted  by  this               Hon’able               Court that the excess sum of 0.06 nP. per unit of               energy  consumed for lights and fans, are  and               unauthorised,  inoperative and ultra vires  of               the Defendant-Company and the plaintiff is not               bound               to pay the same.               (b)   An injunction restraining the Defendant-               Company  its  servants,  its  agents  or   its



             representatives  from levying  and  recovering               the excess and illegal charges, i.e. 0.06  nP.               per unit of consumed energy from the               plaintiff  by means of any  coercive  measures               and from interfering or controlling with the               electric supply". Various  persons were on their own applications later  added as plaintiffs in these suits. The suits were decreed by the trial Court but that  decision was  reversed  on  appeal by a District  Judge.   On  second appeal,  however,  the High Court of Mysore  set  aside  the decision of the learned District Judge and restored that  of the  trial  Court.   The present  appeals  are  against  the judgment of the High Court. I  will first take up the suit relating to the  charges  for motive  power.   To clear the ground it may be  stated  that this suit is not concerned with any charge made prior to the date  that it was filed.  As earlier stated, it asks  for  a declaration  and art in junction.  An injunction  cannot  of course  be in respect of a past period and  the  declaration sought must also, therefore, be confined to the future.   In any case, since the declaration is sought in respect of  the charges  as revised by the said notice as from  November  1, 1958 it is clear that no question as to the legality of  any charge made before November 1, 1958 was sought to be raised. It would have been noticed that the suit was concerned  with disputes about two charges, namely, the unit charge of  0.09 nP.  per unit fixed by the notice of September 25, 1958  and the standing charge of Rs. 2.69 per B.H.P. per month. I  will  first consider the dispute about the  unit  charge. Could the appellant enhance the charge?  It is not  disputed that a licensee can on his own enhance his charges upto  the maximum limit fixed in the licence or otherwise fixed by the Government.  The dispute is as to the right to enhance them 508 beyond that limit, and in this judgment I will be discussing such enhancement only.  It is not in controversy that  under the  Electricity  Act  of 1910 it could not  do  so  but  as already stated, the appellant bases its claim to enhance the charge  on the Electricity (Supply) Act, 1948 as amended  by Act  10th of 1956 with effect from December 30,  1,956.   It will  be noticed that this amendment was in force  When  the revised  rate came into force under the notice of  September 25,  1958.  The relevant provisions of this Act  so  amended are these:               S.    57.    "The  provisions  of  the   Sixth               Schedule and the               Seventh   Schedule  shall  be  deemed  to   be               incorporated in the licence of every licensee,               not being a local authority-               (a)   in the case of a licence granted  before               the commencement of this Act, from the date of               the   commencement  of  the  licensee’s   next               succeeding year of account; and,               (b)   in  the case of a licence granted  after               the commencement of this Act, from the date of               the commencement of supply, and  as from the said date, the licensee shall  comply  with the  provisions of the said Schedules accordingly,  and  any provisions of the Indian Electricity Act, 1910 (9 of  1910), and  the  licence granted to him thereunder and  of  another law,  agreement  or instrument applicable  to  the  licensee shall, in relation to the licensee, be void and of no effect in  so far as they are inconsistent with the  provisions  of section 57A and the said Schedules".



             S.    57A.   "(1) Where the provisions of  the               Sixth Sche-               dule  and  the  Seventh  Schedule  are   under               section  57 deemed to be incorporated  in  the               licence   of  any  licensee,   the   following               provisions  shall have effect in relation  to)               the  said licensee, namely:,(a) the  Board  or               where no Board is constituted under this  Act,               the State Government-               (i)   may, if satisfied that the licensee  has               failed to comply with any of the provisions of               the Sixth Schedule; and,               (ii)  shall, when so requested by the licensee               in writing, constitute  a  rating committee to  examine  the  licensee’s charges   for  the  supply  of  electricity  and   to   make recommendations in that behalf to the State Government:               (c)  a rating committee shall  report to the               State  Government   making  recom-  mendations               regarding  the charges for  electricity  which               the licensee may make               509               (d)   within  one month after the receipt  -of               the   report  under  clause  (c),  the   State               Government               may  make an order in accordance               therewith  fixing the licensee’s  charges  for               the sup-               ply  of  electricity and  the  licensee  shall               forthwith give effect to such order".               Sixth Schedule               1.    "Notwithstanding  anything contained  in               the Indian               Electricity  Act,  1910 (9 of 1910),  and  the               provisions  in the licence of a licensee,  the               licensee  shall  so adjust his rates  for  the               sale  of electricity whether by  enhancing  or               reducing  them  that his clear profit  in  any               year of account shall not, as far as possible,               exceed the amount of reasonable return; Now the first paragraph of the Sixth Schedule to the Act  of 1948 clearly gives a licensee the power to adjust and there- fore  also to enhance his. rates on his own.   It,  however, fixes  a limit for the enhancement and that, is, so as  not, as far as possible, to make his "clear profit", for the year exceed  the amount of "reasonable return".  The  methods  of determining  "clear  profit"  and  "reasonable  return"  are stated respectively in cls. (2) and (9) of paragraph XVII of the Schedule but it will not be necessary for me to go into, their details.  Now under paragraph 1 of the Sixth  Schedule the   rates  can  be  enhanced   "Notwithstanding   anything contained in the Indian Electricity Act, 1910 (9 of 1910), , and  the provisions in the licence of a licensee".   Nothing to the contrary, therefore, contained in the Act of 1910  or the  licence  can make the enhancement of the rates  by  the licensee  in  terms  of this paragraph  illegal.   It  would follow  that  the  power  under paragraph  1  of  the  Sixth Schedule  would  justify an enhancement of the  rate  beyond that  fixed by the licence or any order of  the  Government. This  seems  to  me  to be  perfectly  plain.   It  will  be remembered  that paragraph XI of the Schedule to the Act  of 1910 prohibited a licensee from charging a rate in excess of the maximum fixed by the licence.  That provision,  however, was  repealed by Act 101 of 1956.  This was  obviously  done because  it  was  realised that paragraph  1  of  the  Sixth



Schedule  to  the  Act  of  1948  made  the  prohibition  in paragraph  XI  of  the Schedule to the  Act  of  1910  quite ineffective.  Then we have s. 70(1) of the Act of 1948 which provides  that "No provision of the Indian Electricity  Act, 1910 (9 of 1910), or of any rules made thereunder or of  any instrument  having  effect  by virtue of such  law  or  rule shall,  so  far  as  it is  inconsistent  with  any  of  the provisions  of this Act, have any effect".   This  provision also supports the view that the power to 510 enhance the rates given by the Act of 1948 is not in any way affected  by  anything  in the Act of 1910  or  the  licence granted Under it. Learned  counsel  for the respondents, however,  first  con- tended that the power to enhance cannot be exercised by  the licensee on its own.  If, it wants an increase in its  rates it  has first to ask the Government under s. 57A of the  Act of  1948 to constitute a rating committee.  This  contention appears to me to be entirely unfounded.  No doubt a licensee can  ask  the Government to constitute  a  rating  committee under  that section and if the Government does so and  fixes rates on the basis of the recommendations of that committee, the licensee would be bound by such fixation of rates.   But I find nothing in s. 57A or anywhere else in the Act of 1948 to  lead to the view that the licensee cannot  increase  his rates  except after a rating committee has recommended  such increase  and the Government has permitted it.  Such a  view would  largely  render  paragraph 1 of  the  Sixth  Schedule nugatory.   Nor do think that there is any conflict  between s. 57A and paragraph 1 as was contended by the  respondents. Quite clearly s. 57A gives a licensee the power to call  for the  constitution  of rating committee.  If he does  so.  he does not take the risk of fixing an enhanced rate on his own with  the possible consequences of having to refund Dart  of the  amounts collected under provisions to  which  reference will  be made later.  That seems to be the only  reason  why the  licensee  has  been  given the right  to  ask  for  the constitution  of  a rating committee.  If he does  not  mind taking the risk of these consequences, I find nothing in the Act  of 1948 requiring him to ask for the constitution of  a rating committee before he can proceed to enhance the  rates on his own. Learned counsel for the respondents then relied on subs. (2) of  s.  70  of the Act of 1948 which states  that  "Save  as otherwise  provided in this Act, the provisions of this  Act shall  be  in  addition to, and not in  derogation  of,  the Indian  Electricity  Act,  1910".  He  contended  that  this showed  that an attempt has to be made to harmonise the  two Acts and, therefore, the power to enhance the rates given by the Act of 1948 must be confined to an enhancement upto  the maxima limits specified in the licence granted or any  order made  by the Government.  I am wholly unable to  agree  that sub- s.   (2)  of s. 70 of the Act of 1948 requires the  two Acts to   be harmonised.  In fact sub-s. (1) of s. 70 of the Act  of  1948  provides that  when  there  is  inconsistency between the two Acts, the earlier Act is not to have effect. There  can  be no question of harmonising  unless  there  is inconsistency and sub-s. (1) says what is to happen in  case of inconsistency; it is that one is to give way to the other and not that 511 an attempt should be made to harmonise the two.  Furthermore sub-s.  (2) of s. 70 of the Act of 1948 says that  "Save  as otherwise  provided in this Act" the later Act is not to  be read as in derogation of the earlier Act.  When,  therefore,



it is otherwise provided in the Act of 1948, this Act  might be  read as in derogation of the Act of 1910.  Now s. 57  of the Act of 1948 and paragraph 1 of the Sixth Schedule to  it clearly provide that the provisions therein contained are to override  the provisions of the earlier Act.  It would  thus be  against the express terms of the Act of 1948 to  attempt to  harmonise  the power to enhance the rates given  to  the licensee by it with any of the provisions of the licence  or the Act of 1910. Lastly,  learned  counsel  for  the  respondents  relied  on Babulai  Chaganlal Gujerathi v. Chopda Electric  Supply  Co. Lid.(1) to support his contention that under paragraph 1  of the  Sixth  Schedule to the Act of 1948 a licensee  had  the power  to  enhance  the rates only upto  the  maxima  limits specified  in  the  licence or Government’s  order  but  not beyond  those  limits.  It was no doubt so decided  in  that case but then it turned on paragraph 1 of the Sixth Schedule as  it  stood  before the amendment  in  1956.   Before  the amendment,   that  paragraph  did  not  contain  the   words "Notwithstanding   anything   contained   in   the    Indian Electricity Act, 1910 (9 of 1910) and the provisions in  the licence  of  a licensee".  It seems to me plain  that  these words have made a material change in the provision and as it now stands, it cannot be said that the enhancement permitted must  be restricted to the limit fixed in the licence or  an order by the Government.  The decision cited, therefore,  is of  no assistance in interpreting paragraph 1 of  the  Sixth Schedule as it stands after the amendment in 1956.   Whether Chhaganlal’s  case(1) was correctly decided in view  of  the terms of paragraph 1 as it stood before the amendment is not a  question which arises for determination in this case  and on that question I express no opinion.  I think that it must be held on the terms of paragraph 1 of the Sixth Schedule to the Act of 1948 as it stood at the time of the notice that a licensee  had power to enhance the rates and such power  was not limited to an enhancement up to the limits fixed by  the licence or otherwise by any order of the Government. On  the  question  whether under paragraph I  of  the  Sixth Schedule  to  the Act of 1948 a licensee could  enhance  his rates  beyond the limits fixed by the Government or  in  the licence the High Court took the same view as I have done and held that the respondents could not claim any relief  solely on  the  ground that the rates charged  had  exceeded  those limits.    The  High  Court,  however,  observed  that   the appellant  had failed to establish that it had  revised  its rates (1)  I.L.R. [1955] Bom. 42. 512   as  provided  by the Act of 1948 before its  amendment  in 1956  and, therefore, held that the appellant must be  taken to have illegally continued the surcharge which it was levy- ing  under the Surcharge Act, 1946 even after its expiry  on October,  1, 1949.  It is somewhat difficult  to  understand these observations.  As I have earlier said, no question  as to the legality of any charge made before the suit or at any rate,  before  November  1,  1958,  arises  in  this   case. Therefore, even if the appellant had not revised its charges prior to the amendment, no grievance on that account can  be made  on  the  plaint on which the present  suit  is  based. Furthermore  I  do not see why the burden  of  proving  that those charges were the charges duly revised under the Act of 1948  prior to its amendment should be upon  the  appellant. No  issue on this question also appears to have been  framed by  the  trial Court at all.  Even the plaint does  not  say that what the appellant had done was to continue an  illegal



charge.   I  repeat  that whether the  charges  made  before November 1, 1958 were illegal or not, is not a question that arises  for decision in these cases.  Admittedly the  notice of  September  25,  1958,  revised  the  unit  charge   and, therefore,  in fact there was no continuation of an  earlier illegal  charge,  assuming the earlier charge to  have  been illegal. The  High Court, however, also held that the  appellant  was under  a statutory duty under the Act of 1948 to adjust  its rates so that its clear profit did not exceed the amount  of reasonable  return  and it had not established that  it  had done  so after the Act was amended, nor bad it  proved  that the  enhancement  mentioned in the notice of  September  25, 1958  would  not result in its clear profits  exceeding  the amount  of  reasonable  return.   Lastly,  the  High   Court observed  that  "even  otherwise  the  enhancement  is   the continuation  of the illegal charges and that by  itself  is invalid".   It  was  on these grounds that  the  High  Court decided the cases in favour of the respondents.  I am unable to agree with the High Court on any of these points. I  will  take  the last point first.  With  respect  to  the learned  Judges of the High Court, I do not understand  what exactly  is meant by the enhancement being the  continuation of  the  illegal charge.  That there was a revision  of  the rates   by  the  notice  of  September  25,  1958   is   the respondent’s own case in the plaint.  I will assume that the revision   raised  the  rates  to  the  figures  that   were chargeable under the expired Surcharge Act of 1946.  But the identity   of  the  figures  cannot  by  itself   make   the enhancement illegal if it was legal under the Act of 1948 as amended.   Indeed as there was admittedly a  revision  there was really no continuation of a previous charge.  This point must, therefore, be rejected. 513 The  other points on which, as stated above, the High  Court based  itself,  appear me to be  equally  untenable.   These points are really one and that is whether the appellant  has established  that  the revised rate fixed by the  notice  of September  25, 1958 would not make its clear  profit  exceed the  amount of reasonable return.  As already stated, it  is admitted in the plaint that there was a revision of the unit ,charge  by the notice.  So it is not in dispute that  after the  amendment  of  paragraph 1 of the  Sixth  Schedule  the appellant had revised its unit charge.  I am unable to agree that the onus of establishing that the revision did not make the  appellant’s  clear  profit  exceed  the  amount  of  a, reasonable return should be on the appellant.  I think  that onus  should  be on the respondents because it is  they  who allege  that  "the  rates mentioned  by  the  defendant  are exceeding   the  reasonable  return".   The   more   serious objection  to this point, however, is that it does not  seem to me that it is competent for a Civil Court to go into  the question whether the enhanced rates are illegal because they take  the clear profit beyond the amount of  the  reasonable return,  and to give any relief on that basis.  The  reasons for this view will now be stated. Paragraph  1  of the Sixth Schedule to the Act  of  1948  no doubt prohibits the licensee from enhancing his rates beyond a figure which would make his clear profit exceed the amount of  reasonable return.  The Act, however, at the  same  time provided  the consequences of a breach of  the  prohibition. Thus  the fourth and the last proviso in paragraph 1 of  the Sixth Schedule to the Act of 1948 states, "Provided  further that  if  the  rates of supply fixed  in  pursuance  of  the recommendations  of  a rating  committee  constituted  under



section  57A are lower than those notified by  the  licensee under  and  in accordance with the preceeding  proviso,  the licensee  shall  refund to the consumers the  excess  amount recovered by him from them".  One consequence of the  breach of  the prohibition, therefore, is the liability  to  refund the  difference  between the enhanced rate which has  to  be notified  under  the  third proviso and that  fixed  by  the rating committee.  But a rating committee may not have  been constituted  for it is constituted only where  the  licensee wants  it,  or the Government is entitled to  constitute  it under  s.  57(1)  of  the  Act  of  1948.   Where  a  rating committing  is  not constituted, there is  no  liability  to refund  but the provisions of paragraph II of  the  Schedule would  then apply and this equally whether there is  an  en- hancement of the charge under paragraph 1 and where there is none.  That paragraph is in these terms:               Paragraph  11.  (1) If the clear profit  of  a               license,- in any year of account is in  excess               of the amount of               L/P(D)ISCI-17               514               reasonable  return, one-third of such  excess,               not  exceeding five per cent of the amount  of               reasonable return, shall be at the disposal of               the  undertaking.   Of  the  ,balance  of  the               excess.   One-half shall be appropriated to  a               reserve which shall be called the ’tariffs and               Dividends  Control Reserve and  the  remaining               half  shall either be distributed in the  form               of  a  proportional  rebate  on  the   amounts               collected  from  the sale of  electricity  and               meter  rentals  or  carried  forward  in   the               accounts  of the licensee for distribution  to               the consumers in future, in such manner as the               State Government may direct. This  provision shows that where there was a,  revised  rate and that rate exceeded the limit prescribed in paragraph  1, a  consumer might get a refund of a part of the  excess  but that  too only at the discretion of the government.  He  had clearly  no right to any refund even in such a case.   Quite obviously  if the consumer could obtain refund of the  whole excess  as  determined by a civil  court,  these  provisions would  be  completely meaningless.  Equally obviously  if  a civil  court could decide that the charge made had  exceeded the limit and was, therefore, illegal, it could also  direct a  refund of the amount illegally realised.   Therefore,  it seems to me clear that the question of a breach of the terms of  the first part of paragraph 1 of the Sixth Schedule  was not intended to be canvassed in a civil court; a civil court has  no  power to decide that question nor can it  give  any relief in respect thereof.  Indeed if this were not so,  the consequences  would be most anomalous.  If the  Civil  Court could decide the question whether the enhanced rate resulted in  the clear profit exceeding the amount of the  reasonable return,  then it is conceivable that different courts  might come  to different conclusion on different materials  placed before  them and the result of that would be to destroy  the uniformity  of  rate  chargeable  by  a  licensee.   Such  a situation  could not have been intended.  Again the  Act  of 1948 did not give to the consumer the right to have a rating committee  constituted. This was obviously because it  would be  impossible  to  work a public utility  concern  like  an electric  supply  business  if every consumer  could  get  a rating  committee to go into the question of  rates.   There may then be a continuous succession of rating committees and



there  would  be  no fixity of the  rates  chargeable.   The convenience of all had to be kept in mind.  Power was  hence given  only to the Government to take steps when a  licensee committeed  a breach of its obligations.  Therefore,  in  my opinion,  the  High Court was in error in holding  that  the appellant  should  have shown that the enhancement  did  not result   in  its  clear  profit  exceeding  the  amount   of reasonable return and in deciding in favour of the 515 respondents on that basis.  I hold that the respondents were not entitled to canvass in a Civil Court any question as  to the  rates of a licensee being in excess of the limit  pres- cribed  in paragraph 1 of the Sixth Schedule to the  Act  of 1948.   A  Civil  Court could not  declare  that  the  rates charged  by a licensee were illegal as they made  its  clear profit  exceed  the reasonable return.  If  there  was  such excess. the relief could be obtained only if the  Government set  up a, rating committee, a refund became  due  thereupon under the last proviso to paragraph 1 of the Sixth  Schedule to  the  Act  of  1948 or  if  relief  was  available  under paragraph 11 (1) of that Schedule. Then it was said that the revision by the notice of  Septem- ber  25,  1958 was bad in any case because under  the  third proviso to paragraph I in the Sixth Schedule there could  be no revision of rates under that paragraph unless a notice in writing  of  the  intention  to enhance  was  given  by  the licensee to the Government or to the State Electricity Board and no such notice was in fact given.  That proviso no doubt requires a notice to be given but the contention is none the less clearly without foundation for, as I shall  immediately show such a notice was in fact given.  Now Ex. 62 is a  copy of a letter received by the appellant from the Secretary  of the  State Electricity Board and it refers to a letter  "No. AMAL/BEL/  C-2, dated 7-8-1958" written by the appellant  to the Board and the letter last mentioned, which is Ex. 60, is the  notice  by the appellant to the  Board  expressing  its intention  to  revise  the,  rates.   It  is  quite   clear, therefore,  that notice had been given to the Board  of  the proposed enhancement.  This point it may be stated does  not seem to have been taken in the High Court. It was also said that the notice was bad as it did not state that  the standing charge was being increased from Rs.  2/to Rs.  2.69 per B.H.P. per month.  This again is an  unfounded contention for the standing charge had not been increased by the notice at all.  Indeed the plaint itself in paragraph  5 states that prior to November 1, 1958 the appellant had been levying  standing charges at the rate of Rs. 2.69. So  there was  no enhancement of this charge by the notice and,  hence no  question of giving any notice of any enhancement of  the standing charge arises. Lastly,  it was said that in the notice to the consumers  it was stated that the power supply would be restricted between certain  hours  but  the notice to the  Government  did  not mention  this restriction in the supply.  The notice to  the consumers no doubt stated that the revised unit charge would be  in respect of restricted hours of supply but  that  does not make the contention of any substance.  There was nothing in  the notice to show that the supply would be  restricted. Further L/P(D)ISCI-17(a) .. 516 it is neither alleged in the plaint nor does it appear  from anything  on  the  record,  that  there  was  in  fact   any restriction  in the supply.  That being so, the  failure  to give  notice  to the Government of the  restriction  in  the



supply is wholly immaterial.  I have not, further been shown any  provision  under which notice to the  Government  of  a restriction  in the supply of electricity is necessary.   It is certainly not required by anything in paragraph 1 in  the Sixth Schedule to the Act of 1948. I  am, therefore, of the opinion that there is no reason  to hold that the appellant was not entitled to levy the  charge mentioned in its notice of September 25, 1948. I come now to the standing charge of Rs. 2.69 per B.H.P. per month.  As in the case of the other charge and for the  same reasons,  I  am not concerned with any question  as  to  its legality in respect of any period prior to the suit.  It has to  be remembered that there is no complaint that this  rate had  been  increased  by the  notice.   Lastly,  as  already stated, a Civil Court cannot go into the question whether  a charge  is  illegal inasmuch as it has been  revised  to  an amount  exceeding the limit mentioned in paragraph 1 of  the Sixth Schedule to the Act of 1948.  The only ground on which this  charge  is questioned is put in paragraph  23  of  the plaint in these words: "any standing charges along with  the usual  Unit  Charges  is against equity and  law,  it  being double charge for the industry to pay for the enrichment  of the defendants"; the legality of the standing charge is  not challenged  on  any  other ground.  Now where  a  charge  is permitted by a statute no question of its being  inequitable can  be raised in a Court of law, neither can  the  question whether  the charge is in excess of the limit  justified  by the  statute be canvassed in such a Court.   Therefore,  the respondents cannot in these cases challenge the legality  of the standing charge. What  I have said so far disposes of the appeal in the  suit concerning the rates charged for the supply of motive power. That appeal must, therefore, be allowed. The appeal in the suit with regard to the charges for  light and  fans  can be disposed of substantially on  the  grounds earlier discussed.  The High Court also placed its  decision in respect of this matter on the same ground on which it had disposed  of the other matter.  The only point made in  this case  is that the appellant had been wrongfully  charging  a rate  in excess of the limit fixed by the order of  December 30, 1942 by 0.06 nP. per unit.  On this basis a  declaration that  the excess charge was illegal was sought and  also  an injunction  restraining the appellant from levying  it.   It will be observed that in this case there was no notice given by the appellant of any increase in the charge.  No question of  the charge being illegal by reason of  any  enhancement, therefore, arises.  The only complaint is 517 that  the charge is illegal as it is in excess of the  limit fixed by the Government.  As I have said, under paragraphs 1 and  11 of the Sixth Schedule to the Act of 1948 a  licensee can  charge  any amount so that his clear  profit  does  not exceed his reasonable return and if he exceeds the limit  he only  exposes himself to the consequences mentioned in  them and a consumer cannot go to a court of law for relief on the -round   that   the  licensee  had  exceeded   this   limit. Therefore,  the  respondent cannot ask for any relief  in  a civil court on the basis that the appellant had exceeded the limit.   As  in the other case, in this case also I  am  not concerned with the legality of any charge made prior to  the date  of the suit; the only question is the legality of  the charge  made since March 31, 1959.  That question has to  be decided  under  the  Act of 1948 as  amended  in  1956.   It follows  that in this case also the respondents can  get  no assistance  from the decision in Babulal Chhaganlal(1)  even



if  that case was rightly decided. 1, therefore, think  chat this appeal also succeeds. In  the  result I would allow both the  appeals  with  costs throughout. AYYANGAR,  J.-These  two  appeals which come  before  us  by virtue of special leave granted by this Court are against  a common  judgment of the High Court of Mysore in  two  Second Appeals preferred to it by the respective respondents in the two appeals.  They raise for consideration a question of the legality  of certain rates charged by the  Appellant-company for  the supply of electricity to the respondents for  power and for light and fans respectively. The  Appellant-company is a licensee who is engaged  in  the business of supplying electricity in the town of Belgaum and other  places.  A licence for the supply of  electricity  in the town of Belgaum was -ranted in 1932 to two persons B. S. Ankle and A.S. Ankle.  These two assigned their licence to a concern  by name the Belgaum Electricity Co. Ltd. and  by  a further  assignment by these assignees, the licence came  to be  owned  by  the  Appellant  who  are  now  effecting  the distribution  and  supply of electricity  in  Belgaum.   The original  licence  was granted by the Government  of  Bombay under s. 3 of the Indian Electricity Act of 1910 (Act IX  of 1910) which we shall hereafter refer to as the  "Electricity Act,  1910"  to  whose provisions some  reference  would  be necessary  to  be made later.  Broadly speaking,  under  the provisions  of this enactment the maximum and minimum  rates which  a licensee might charge its consumers were  fixed  by Government  and licensees were afforded freedom to  fix  the rates to be actually charged within these limits.  Under the powers so vested in them in that behalf the Government of (1)  I.L.R. [1955] Bom. 42. 518 Bombay within whose jurisdiction Belgaum then was, passed an order  on December 30, 1942 fixing the maximum  rates  which could  be charged by licensees for supply to  consumers  and these  rates  which  applied to the  Appellant  were  to  be effective from February 1, 1943.  The maximum rates for  the supply  of energy under the licence were, under this  order, to be (1) where the energy was supplied for lights and  fans 5  annas per unit; (2) where energy was supplied  for  power purposes  i.e., for purpose other than lights and  fans  the maximum  rate was to be (a) upto and including 4 B.H.P.  one anna  per unit in addition to a standing charge of  Rs.  2/- per  month per B.H.P. connected, and (b) for over  4  B.H.P. rate was 0.75 annas unit in addition to a standing charge of Rs. 2/- per month per B.H. P. connected.  Thereafter charges at  the maximum permitted rate were levied and collected  by the Appellant.  While so, on March, 11, 1943 a  notification was issued by the Government of Bombay in exercise of powers conferred by rule 81(2)(b) of the Defence of India Rules  by which  relaxation was made as regards the maximum rates  for the  supply  of electrical energy chargeable by  a  licensee under the Electricity Act.  Such licensees were permitted to charge  amounts  not  exceeding 33 1/2  per  cent  over  the permitted  maximum  rates.  Later this surcharge  under  the Defence  of India Rules fixed by the notification  of  1943, was withdrawn and simultaneously what is known as "War Costs Surcharge"  was permitted to be levied, but it did not  make any practical difference as the permitted increases over the mnaximum  was  identical.   The  War  Costs  Surcharge   was continued up to the year 1946 when the Government of  Bombay enacted   a   statute  entitled   the   Bombay   Electricity (Surcharge)  Act of 1946 which came into force on  September 30,  1946.   It was a temporary enactment  which  under  sub



s.(4) of s. 1 was to be in force for a period of three years only  so that it lapsed on October 1, 1949.  The  Provincial Government was under s. 3 of that Act empowered to fix rates of  surcharge  and  under  s. 5 of  that  Act  the  existing surcharge  viz.,  the War Cost Surcharge were to  be  deemed surcharges  fixed under s. 3. As a result of this  piece  of legislation  the position that emerged was that  though  the original  licence  issued under the  Electricity  Act,  1910 which  empowered  the Government to fix the maximum  of  the rates  that could be charged by licensees for the supply  of energy was determined by the order dated December 30,  1942, still  practically  almost  from  the  commencement  of  the operation  of that order a 33- 1/2 per cent.  surcharge  was permitted  to be levied by the licensees over the  permitted maximum  charge  and this state of  things  continued  until October 1, 1949. Notwithstanding  the lapse of the Act of 1946 the  Appellant has  continued  to demand and collect practically  the  same charges for the supply of energy as it had done during the 519 period when it was in force, with a slight variation by  way of  increase  in regard to the supply of power to  which  we shall immediately advert.  In the case of supply for  power, while  the standing charges are being levied at the  maximum permitted by the notification of December 30, 1942, with the addition  of  the  surcharge,  the  unit  charge  has   been increased   even  beyond  this  figure  by  resort  to   the provisions of the Electricity Supply Act, 1948 (Central  Act 54  of 1948) which it will be convenient to refer to as  the Supply  Act.   The  legality  of  the  continuance  of   the surcharge  in regard to the standing charge from  and  after 1st October, 1949 and of the increase in the unit rate  even beyond it are challenged in the suit which has given rise to Civil Appeal 590 of 1963.  In the case of the charge for the supply  of  energy  for lights and fans there  has  been  no chance  since  the 30th September 1949, but the  maximum  as increased  by 33-1/3 per cent still continues and it is  the legality  of  this  continuance of  the  surcharge  that  is impugned  in Civil Appeal No. 591 of 1963.  The levy or  the rates  impugned is in every case justified by the  Appellant by reference to the terms of the Supply Act to the  relevant provisions of which we shall have to make detailed reference later. Pausing  here, we might advert to the fact that  the  Supply Act  was enacted to provide "for the rationalisation of  the purchase and supply of electricity and generally for  taking measures conducive to the electrical development".  The  Act came  into  force from September 10,  1948.   The  principal question  that arises for decision in these appeals  relates to  the  effect of the Supply Act, 1948 and  the  provisions that  it contains on the ,rates to be charged  by  licensees which  had  been  fixed under the  Electricity  Act,  1910-a matter which we shall examine in its proper place.  We might even  at this stage refer to s. 70 of the Supply  Act  which enacts,-- .lm15 (1)  No provision of the Indian Electricity Act, 19 1 0,  or of  any  rules made thereunder or of any  instrument  having effect by virtue of such law or rule shall, so far as it  is inconsistent  with any of the provisions of this  Act,  have any effect; deemed to prevent the State Government from granting,  after consultation with the Board, a licence not inconsistent with the  provisions of the Indian Electricity Act, 1910, to  any person  in  respect  of  such area and  on  such  terms  and



conditions as the State Government may think fit. (2)  Save as otherwise provided in this Act, the  provisions of  this Act shall be in addition to, and not in  derogation of, the Indian Electricity Act, 1910." 520 We  are drawing attention to this provision to indicate  the inter-relation  between  the two Acts-the  Electricity  Act, 1910 and the Supply Act, 1948. We  shall now briefly narrate the course of the  proceedings which have led to the present appeals.  Two suits were filed by consumers of electrical energy in Belgaum receiving their supplies  from  the Appellant in the court of  Civil  Judge, Belgaum,  both being representative suits under O.I.r.8  (if the  Civil Procedure Code.  The first suit no. 133  of  1959 was  in relation to the supply of energy for power.  In  the plaint  it was pointed out that before November 1, 1958  the Appellant was charging the plaintiffs Rs. 2 /11 / - per B.H. Power  per month as standing charges plus one anna per  unit of energy consumed.  It was stated that the Appellant had by a  notice  to the consumers dated September 25,  1958  whose terms  were  set  out,  proposed to  raise  from  and  after Novomber 1, 1958 the unit charge from one anna per unit to 1 1/2  anna  or 9 naye paise per unit.  It  recited  that  the plaintiffs  had  protested  and  addressed  letters  to  the Government of Mysore, (Belgaum having been made part of this State  by  the  State Reorganisation Act)  but  without  any result.   Reference  was made to the circumstance  that  the Appellant  justified  the  increase with  reference  to  the provisions  of the Supply Act, particularly after  the  same was  amended  by  Central Act 101  of  1956.   The  material averment  on  the basis of which relief was claimed  in  the plaint  was  that  the revision effected by  the  notice  of September  25,  1958  was illegal because  it  exceeded  the maximum prescribed by the Government of Bombay in its  order dated  December 30, 1942 which, it was stated,  still  bound the   Appellant.   The  plaintiffs,  therefore,   sought   a declaration that any increase beyond the rates fixed by  the notification  of  the  year 1942 was illegal  and  sought  a declaration (a) that the standing charge was illegal to  the extent  of  the  excess of 0.69 nP. per B.H.P.  over  the  2 rupees  and the increase by 4 naye paise per unit of  energy consumed  was  also  illegal and prayed  for  an  injunction restraining  the Appellant from levying or collecting  these illegal and excess charges. The  other suit in relation to supply of energy  for  lights and fans was no. 135 of 1959.  That plaint pointed out  that under  the order of Government of Bombay dated December  30, 1942  the  Appellant could charge only 5 annas per  unit  or decimal   coinage  31  nP.  and  taking  advantage  of   the surcharges  that  were permitted during the war  period  and subsequently  under the Bombay Electricity (Surcharge)  Act, 1946  it bad been charging 6 annas per unit, and  after  the decimal coinage came into force 37 nP.  The main point  that was  urged  in  the plaint was that on the  ]at-)se  of  the Bombay  Electricity (Surcharge) Act, 1956 on  September  30, 1959  the right of the Appellan to charge anyhting above  31 nP. ceased but that notwith- 521 standing  this  want of legal sanction it had  continued  to levy the same rates even afterwards.  On this basis a prayer was  made seeking a declaration about the invalidity of  any charge beyond 31 nP. per unit and an injunction  restraining the Appellant from charging this illegal excess. The  defence  of the Appellant was based on  the  provisions contained  in the Supply Act of 1948, the  contention  being



that  the  charges  they continued to  levy  or  which  they intended  to levy by virtue of the notice of  September  25, 1958,  were well within the limits prescribed by the  Supply Act of 1.948 and consequently the plaintiffs in neither suit were entitled to any relief. The  learned trial Judge held on an examination of the  pro- visions  of the two Acts-the Electricity Act and the  Supply Act-and  their  schedules that even after  the  coming  into force of the Supply Act the maximum limit of charge fixed by Government  under the Electricity Act of 1910  continued  to govern  the  maximum  rate  that could  be  cleared  and  as admittedly the rates charged or threatened to be charged  by the  Appellant were in excess of those rates, it granted  to the  plaintiffs in each suit the declaration and  injunction they sought. The  Appellant thereupon filed appeals to the  learned  Dis- trict  Judge  and  contended that the  Supply  Act  of  1948 effected such a radical change in the method of  determining the reasonable rate as to completely supersede the rates and the  maxima fixed under the Electricity Act of  1910.   This contention  was  accepted  by the Appellate  Court  and  the appeals were allowed and the suits directed to be dismissed. The  plaintiffs thereafter filed second appeals to the  High Court.   The learned Single Judge of the Mysore  High  Court who  heard the appeals accepted in part the submission  made by   the  Appellant  that  the  maxima  prescribed  by   the Government   under  the  powers  vested  in  them   by   the Electricity  Act  of  1910  ceased to be  in  force  on  the enactment of the Supply Act.  He nevertheless held that  the procedure  prescribed for the fixing of rates to be  charged by  the  licensees by the Supply Act of 1948  had  not  been followed by the Appellant with the result unit it could  not sustain  the  contention that the charges levied  or  to  be levied  were  legal.  On this reasoning  the  learned  Judge allowed  the appeals and restored the decrees of  the  trial Court  in the two suits.  It is from these judgments of  the High  Court  that the present appeals have been  brought  by special leave of this Court. Before  setting out the arguments addressed to us on  behalf of  the Appellant and to appreciate them it is necessary  to read   the   statutory  provisions  which  bear   upon   the controversy  in  the appeal.  The Appellant was,  as  stated earlier,  the  transferee  of a licence  granted  under  the Electricity Act, 1910.  Section 3 of 522 this  Act enables the State Government, on application  made to it, to grant to any person a licence to supply energy  in any  specified area.  Under sub-s.(2) of that  section  "the provisions which shall have effect on licences granted under the  Act"  are set out and of these those relevant  for  our purpose  are  those contained in cl. (d) and cl.  (f)  which read: -               " (d) a license under this Part:               (i)   may  prescribe  such  terms  as  to  the               limits within which. and the conditions  under               which,   the  supply  of  energy  is   to   be               compulsory or permissive, and as to be  limits               of  price  to  be charged in  respect  of  the               supply  of  energy, and generally as  to  such               matters  as  the state  Government  may  think               fit..............................................               "(f) the provisions contained in the  Schedule               shall  be deemed to be incorporated with,  and               to  form part of, every license granted  under               this  Part,  save  in  so  far  as  they   are



             expressly added to, varied or excepted by  the               license,  and shall, subject to any  such  ad-               ditions,  variations or exceptions  which  the               State Government is hereby empowered to  make,               apply  to  the undertaking authorised  by  the               license:               (the  clause  contains  a  proviso  which   is               omitted as immaterial). Section   23  requires  the  licensee  not  to  show   undue preference to any person and enacts that "save as aforesaid, make such charges for the supply of energy as may be  agreed upon, not exceeding the limits imposed by his license". In  the schedule that is referred to in s.3(2)(f)  which  is headed "Provisions to be deemed to be incorporated with, and to form part of, every license granted under Part 11, so far as  not  added  to,  varied or  excepted  by  the  license", Paragraph  XI  which  is the one material  for  our  purpose reads:               "Save as provided by clause IX, sub-clause (3)               (a saving not now relevant) the prices charged               by  the  licensee for energy supplied  by  him               shall  not  exceed  the maxima  fixed  by  his               license, or, in the case of a method of charge               approved by the State Government, such  maxima               as the State Government shall fix on approving               the method." It  was  in exercise of the powers conferred  by  the  State Government  under s.3(2) of this Act that  the  notification dated December 30, 1942 to which reference has already  been made  was  issued and under it the charges for  supply  were fixed. 523 While  narrating  the  facts we have  already  set  out  the maximum  rate which was fixed as that which could be  levied by licensees under the Act both for the supply of energy for power  as well, as for lights and fans.   This  notification came into force on and was effective from February 1,  1943. We have already seen how by virtue first of the notification under  the  Defence of India Rules and later under  the  War costs  Surcharge  and still later under the  Bombay  Act  of 1946,  the  maximum was raised by 33 1/3 per cent.  of  that specified  in the notification of December 30, 1942 and  how these rates continued to be validly charged by the Appellant till September 30, 1949 when the Bombay Act of 1946 lapsed. The  question that now falls to be considered is as  regards the  legality  of the continuance of this  rate  beyond  the maximum prescribed by the notification of December 30,  1942 subsequent  to September 30, 1949.  For this purpose, it  is necessary  to refer to the Supply of 1948 and it is  on  the proper  construction of it’, provisions and their effect  on the limitations prescribed by the previous law on the  rates to  be  charged that the decision of  these  appeals  turns. Reference has already been made to s. 70 of the Supply  Act, 1948  and this provision would show that where there is  any inconsistency  between  the two Acts, the Supply  Act,  1948 would  prevail  and it is only to the extent  that  the  two enactments  do not cover the same field that the  provisions of  the Electricity Act, 1.910 would continue in  operation. Coming now to the provision relating to the fixation of  the rates  to be charged by a licensee for the supply of  energy the  relevant provisions of the supply Act dealing  with  it are those contained in ss.57 and 57A and read with Sch.   VI to the Act. Pausing  here  it is necessary to mention that some  of  the provisions of the Supply Act of 1948 were amended by Central



Act  101 of 1956 and among them was s. 57.  Section  57,  as originally   enacted,  contained  substantially   the   same provisions  as  are after amendment contained in s.  57  and 57A, and as thus there has been no material change  effected by the Amendment for the purposes of the present appeal,  we shall  set out ss. 57 and 57A which were in force  when  the present proceedings were commenced: -               "57.  The provisions of the Sixth Schedule and               the  Seventh  Schedule shall be deemed  to  be               incorporated in the licence of every licensee,               not being a local authority-               (a)   in the case of a licence granted  before               the commencement of this Act, from the date or               the   commencement  of  the  licensee’s   next               succeeding year of account; and               524               (b)   in  the case of a licence granted  after               the commencement of this Act, from the date of               the commencement of supply,               and as from the said date, the licensee  shall               comply   with  the  provisions  of  the   said               Schedules  accordingly, and any provisions  of               the  Indian  Electricity Act,  1910,  and  the               licence  granted to him thereunder and of  any               other law, agreement or instrument  applicable               to  the  licensee shall, in  relation  to  the               licensee,  be void and of no effect in so  far               as  they are inconsistent with the  provisions               of section 57A and the said Schedules."               "57A.  (1) Where the provisions of  the  Sixth               Schedule  and the Seventh Schedule  are  under               section  57 deemed to be incorporated  in  the               licence   of  any  licensee,   the   following               provisions  shall have effect in  relation  to               the said licensee, namely: --               (a)   the   Board   or  where  no   Board   is               constituted   under   this  Act,   the   State               Government-               (i)   may, if satisfied that the licensee  has               failed to comply with any of the provisions of               the Sixth Schedule; and               (ii)  shall, when so requested by the licensee               in writing,               constitute  a rating committee to examine  the               licensee’s   charges   for   the   supply   of               electricity  and  to make  recommendations  in               that behalf to the State Government.               Provided   that  where  it  is   proposed   to               constitute  a  rating  committee  under   this               section  on  account  of the  failure  of  the               licensee to comply with any provisions of  the               Sixth  Schedule, such committee shall  not  be               constituted unless the licensee has been given               a  notice  in  writing of  thirty  clear  days               (which period if the circumstances so  warrant               may  be  extended from time to time)  to  show               cause against the action proposed to be taken.               Provided further that no such rating committee               shall be constituted if the alleged failure of               the licensee to comply with any provisions  of               the  Sixth  Schedule  raises  any  dispute  or               difference  as  to the interpretation  of  the               said   provisions   or  any   matter   arising               therefrom  and such difference or dispute  has               been   referred   by  the  licensee   to   the



             arbitration  of the Authority under  paragraph               XVI of that Schedule               525               before the notice referred to in the preceding               proviso was given or is so referred within the               period of the said notice:               Provided  further  that  no  rating  committee               shall be constituted in respect of a  licensee               within  three -,,cars from the date  on  which               such  a committee has reported in  respect  of               that  licensee.  unless the  State  Government               declares  that  in its  opinion  circumstances               have arisen rendering the orders passed on the               recommendations  of the previous  rating  com-               mittee  unfair to the licensee or any  of  his               consumers;               (b) (c)               (d)   within  one month after the  receipt  of               the   report  under  clause  (e),  the   State               Government  shall  cause  ,he  report  to   be               published in the Official Gazette, and may  at               the  same  time make an  order  in  accordance               therewith  fixing the licensee’s  charges  for               the  supply  of electricity with  effect  from               such  date,  not earlier than  two  months  or               later  than  three months, after the  date  of               publication of the report as may be  specified               in the order and the licensee shall  forthwith               give effect to such order-;               (e)               (The  other  sub-sections (2) to (8)  are  not               material and               so are omitted). Schedule  VI  referred  to in ss.57 and  57A  has  underdone modification  as a result of the amendment effected  by  Act 101  of 1956 and some argument has turned on these  changes. We shall set out para 1 and also para 11 of this Schedule as they stood when originally enacted and as they now read.  As enacted the first two paragraphs ran:               "1. The licensee shall so adjust his rates for               the sale of electricity by periodical revision               that his clear profit in any year shall not as               far   as   possible  exceed  the   amount   of               reasonable return:               Provided  that  the  licensee  shall  not   be               considered  to  have failed so to  adjust  his               rates  if  the  clear profit in  any  year  of               account  has  not exceeded the amount  of  the               reasonable  return  by more  than  thirty  per               centum of the amount of the reasonable return.               11.   (1) If the clear profit of a licensee in               any year of ac-               count is in excess of the amount of reasonable               return,   one-third   of  such   excess,   not               exceeding 7 1/8 per               526               cent.  of  the amount  of  reasonable  return,               shall  be at the disposal of the  undertaking.               Of  the balance of the excess, one-half  shall               be  appropriated to a reserve which  shall  be               called  the  Tariffs  and  Dividends   Control               Reserve and the remaining half shall either be               distributed  in  the form  of  a  proportional               rebate on the amounts collected from the  sale               of  electricity and meter rentals  or  carried



             forward  in the accounts of the  licensee  for               distribution  to the consumers in  future,  in               such  manner  as  the  State  Government   may               direct.               (2)   The   Tariffs  and   Dividends   Control               Reserve shall be available for disposal by the               licensee only to the extent by which the clear               profit  is less than the reasonable return  in               any year of account.               (3)   On the purchase of the undertaking under               the terms of its license any balance remaining               in  the Tariffs and Dividends Control  Reserve               shall  be  handed over to  the  purchaser  and               maintained  as  such  Tariffs  and   Dividends               Control Reserve."               These paragraphs were amended in 1956 to read:               -               "  Not withstanding anything contained in  the               Indian  Electricity  Act,  1910,  except  sub-               section (2) of section 32A, and the provisions               in  the  licence of a licensee,  the  licensee               shall  so  adjust his rates for  the  sale  of               electricity  whether by enhancing or  reducing               them  that  his clear profit in  any  year  of               account shall not, as far as possible,  exceed               the amount of reasonabe return:               Provided that such rates shall not be enhanced               more               than once in any year of account:               Provided  further that the licensee shall  not               be  deemed  to have failed so  to  adjust  his               rates  if  the  clear profit in  any  year  of               account   has  not  exceeded  the  amount   of               reasonable return by fifteen per centum of the               amount of reasonable return:               Provided  further that the licensee shall  not               enhance   the   rates  for   the   supply   of               electricity until after the expiry of a notice               in  writing of not less than sixty clear  days               of  his  intention to so  enhance  the  rates,               given  by him to the State Government  and  to               the Board:               Provided  further that if the rates of  supply               fixed in pursuance of the recommendations of a               rating committee constituted under section 57A               are lower               527               than those notified by the licensee ’under and               in accordance with the preceding proviso,  the               licensee  shall  refund to the  consumers  the               excess amount recovered by him from them.               II.   (1) If the clear profit of a licensee in               any year of ac-               count is in excess of the amount of reasonable               return,   one-third   of  such   excess,   not               exceeding  five  per cent. of  the  amount  of               reasonable return, shall be at the disposal of               the  undertaking.   Of  the  balance  of   the               excess,  one-half shall be appropriated  to  a               reserve which shall be called the Tariffs  and               Dividends  Control Reserve and  the  remaining               half  shall either be distributed in the  form               of  a  proportional  rebate  on  the   amounts               collected  from  the sale of  electricity  and               meter  rentals  or  carried  forward  in   the



             accounts  of the licensee for distribution  to               the consumers in future, in such manner as the               State Government may direct.               (2)   The   Tariffs  and   Dividends   Control               Reserve shall be available for disposal by The               licensee only to the extent by which the clear               profit  is less than the reasonable return  in               any year of account.               (3)   On the purchase of the undertaking under               the terms of its licence any balance remaining               in the Tariffs and Dividends "Control  Reserve               shall  be  handed over to  the  purchaser  and               maintained  as  such  Tariffs  and   Dividends               Control Reserve." Paragraph  17 of this Schedule contains the definitions  and among   the  terms  there  defined  is   ’clear   profit’-an expression  used in paragraphs 1 & 11.  As nothing  material turns  on  the manner in which the ’clear profit’ is  to  be computed  which is described in para 17 we do not  think  it necessary to refer to the details contained there. The  questions raised before us are principally  three:  (1) The  effect of the Supply Act, 1948 on the maxima  of  rates fixed  by  Government under s. (2) of the  Electricity  Act, 1910  which could be charged by a licensee.  The  submission of  the appellant which was accepted by the High  Court  but which  was contested by the respondents before us  was  that any  changes  that might be effected by  a  licensee  acting under the provisions under s.57 of the Supply Act read  with paragraph  1  of  Sch.  VI in revising his rates  so  as  to derive the reasonable return permitted by these  provisions, had  still to be within the maxima prescribed by  Government under  the Electricity Act of 1910; (2) The next  point  was that  assuming that the Appellant was right on point no.  1, whether the charges demanded by ,the appellant-company  from the respondents were legal and 528 justified  by the Supply Act.  It is on this point that  the learned  Single  Judge  in the High  Court  has  upheld  the contention  urged by the respondent; (3) Closely related  to the  2nd  point, the limits of the Jurisdiction of  a  Civil Court  to  afford  relief to  consumers  who  complained  of excessive charges being demanded by licensees. So  far  as  the 1st point is concerned  viz.,  whether  the maxima prescribed by Government under the Electricity  Act.. 1910  still continues to bind the licensee after the  coming into  force  of  the Supply Act, we feel  no  hesitation  in agreeing  with the submission of the Appellant  which  found favour  with the High Court.  Section 57 of the Supply  Act, 1948-both  as  originally  enacted and as  amended  in  1956 expressly  provide that the provisions of the Vlth  Schedule shall  be deemed to be incorporated in the license of  every licensee and "that the provisions of the Indian  Electricity Act,  1910 and the license granted thereunder and any  other law,  agreement  or instrument applicable  to  the  licensee shall  be  void  and of no effect in so  far  as  they  are, inconsistent with the provisions of the section and the said Schedule".   Read in the light of s.70 of the supply Act  it would  follow  that if any restriction incorporated  in  the licence   granted  under  the  Electricity  Act,   1910   is inconsistent  with  the rate which a licensee  light  charge under para 1 of Sch.  VI of the Supply Act, 1948, the former would,  to that extent, be superseded and the  latter  would prevail. Para 1 of Sch.  VI both as it originally stood and as amend- ed,  as seen already, empowered the licensee "to adjust  his



rates,  so that his clear profit in any year shall  not,  as far -,is possible, exceed the amount of reasonable  return". We shall reserve for later consideration the meaning of  the expression  "so adjust his rates".  But one thing  is  clear and  that is that the adjustment is unilateral and that  the licensee has a statutory right to adjust his rates  provided he conforms to the requirements of that paragraph viz.,  the rate charged does not yield a profit exceeding the amount of reasonable return.  The conclusion is therefore irresistible that  the  maxima prescribed by the State  Government  which bound  the  licensee under the Electricity Act  of  1910  no longer  limited  the amount which a  licensee  could  charge after the Supply Act, 1948 came into force, since the "clear profit" and "reasonable return" which determined the rate to be charged was to be computed on the basis of very different criteria   and   factors  than  what  obtained   under   the Electricity   Act.   In  support  of  the  submission   that notwithstanding the Supply Act the maxima fixed by the State Government  was still binding on the licensee and  that  any adjustment within 1st paragraph of Sch.  VI should be within the limits of this maxima we were referred to a decision  of the Bombay High 529 Court  reported  as  Babulal v.  Chopda  Electricity  Supply Co.(1)   It  is  sufficient  to  extract  the  headnote   to understand the point of the decision:               "Section  57(1)  of the  Electricity  (Supply)               Act,  1948, or cl. 1 of the Sixth Schedule  to               the  Act,  does  not confer  a  right  upon  a               licensee  unilaterally to alter the terms  and               conditions  on which supply may be made  by  a               licensee of electrical energy to consumers  in               the  area of supply irrespective of  the  res-               trictions  contained  in the license  and  the               Indian Electricity Act, 1910.               Not  only  does s. 57(1)  of  the  Electricity               (Supply) Act, 1948, impose an obligation  upon               the licensee to conform to the provision is of               the  Sixth Schedule and the table appended  to               the Seventh Schedule to the Act, but the first               clause of the Sixth Schedule imposes a further               obligation to make periodical revisions and to               adjust the profits so that his profits in  any               year  do not as far as possible exceed a  rea-               sonable  return on his investment.  There,  is               nothing in s.57 or in the first clause of  the               Sixth  Schedule which either expressly  or  by               implication  amends  the  provisions  of   the               Indian  Electricity  Act, 1910,  contained  in               s.3(2)(d)  or in s. 21(2) of that Act  or  the               rates  and  methods of charging  the  same  as               fixed by the licence.  The provision contained               in  s.3(2)(d) of the Indian  Electricity  Act,               1910,  which requires the State Government  to               prescribe the terms and conditions under which               the  supply  of energy is to be  made  is  not               affected  by  the  Electricity  (Supply)  Act,               1948.   The  right  to amend  the  license  is               conferred by the Indian Electricity Act, 1910,               upon  the State Government and that  right  is               not  affected by the Eectricity (Supply)  Act,               1948." With  great  respect to the learned Judge we are  unable  to agree   with  this  decision,  for,  in  our  opinion,   the provisions of the Supply Act, 1948 to which we have adverted



,ire too strong to permit the construction, that the  maxima prescribed  under the Electricity Act of 1910 survives as  a fetter  on the rights of the licensee under paragraph  1  of the  Vith Schedule.  If there was any room for any  argument of  this  kind  on  the  terms of para  1  of  Sch.   VI  as originally enacted, the matter is placed beyond  possibility of  dispute by the amendment effected by Act 101 of 1956  to the Vlth Schedule where the opening paragraph commences with the words ’notwithstanding anything (1)  56 Bom, L R. 994 530 contained  in the Indian Electricity Act and the  provisions in the licence of a licensee’.  We, therefore, consider that the  first submission of learned Counsel for  the  Appellant that the limit imposed by the maxima prescribed by the State Government  ceased  to be in force after the Supply  Act  of 1948 came into force is well-founded. The next question for consideration is whether the action of the appellant-company in continuing to charge the rates that it  was  permitted  to  charge by virtue  of  the  War  Cost (Surcharge)  Rules  and the Bombay  Electricity  (Surcharge) Act, 1946 i.e., by making an addition of 33 1/3 per cent. to the maxima which he was permitted by the notification  dated December 30, 1942 is lawful.  This would have a vital  bear- ing on the point involved in Civil Appeal 591 of 1963  which relates  to the unit charge for light and fans for  domestic consumption  as  well  as on the legality  of  the  standing charges  for  the supply of power which is raised  in  Civil Appeal  590  of 1963.  It would be recalled  that  in  these cases the Appellant has merely continued the charges that it was  making before September 30, 1949 even after that  date, there  being no variation in the rates charged.  On  October 1,  1949  the  position was this.  The Bombay  Act  of  1946 having  lapsed by efflux of time, the previous charge  which was 33 1/3 per cent. in excess of the maxima permitted could not  be Continued unless recourse was had to the  provisions of  paragraph 1 of Sch.  VI of the Supply Act of  1948.   It was  not suggested that on or before that day there was  any conscious act on the part of the Appellant to determine  (a) the  "clear profit" on the basis formulated in Sch.  VI  and (b)  an  adjustment  of its rates so as not  to  exceed  the amount of the reasonable return permitted by paragraph 1  of that Schedule.  In this connection there was some debate  in the courts below as to the date the Appellant’s license came to  be governed by the provisions of s. 57(1) and  the  Vlth Schedule.   Section  57(a)  fixes  the  period  from   which licenses  previously in existence would be governed by  Sch. VI  as "the commencement of the licensee’s  next  succeeding year  of  account".  The controversy was as  to  the  period which  would  be  the  date  of  the  commencement  of   the Appellant’s "next succeeding year of account".  Two possible interpretations were suggested of this provision: (1) As the year  of account of the Appellant was the financial year  it was  contended  on behalf of the respondents  that  the  Act became  applicable  to it from April 1,  1949  onwards,  the contention on the side of the Appellant being that it became applicable  only on April 1, 1950, but for the  purposes  of the  cases  before us it makes  little  difference,  because assuming  that  s.  57 and the Supply Act  1948  became  ap- plicable to the Appellant from April 1, 1950 onwards,  still the  same  question  would  arise  as  to  whether  at   the commencement 531 of  that  year the requirements of paragraph 1 of  the  Vlth Schedule had been complied with.



The  material words of paragraph 1 of the VIth Schedule  are "The licensee shall so adjust his rates".  The normal inter- pretation of these words would imply that there should be  a conscious  act on the part of the licensee, for the Act  and the  Schedule for the first time specified the criteria  for determining  the  maximum  profit that shall be  made  by  a company and gave elaborate calculations as to how the ’clear profit’  and the reasonable return’ were to be computed  and determined.  It is, however, possible to read the  paragraph as  meaning that it was only in those cases where either  an increase or a decrease of the charge was necessary in  order to  ensure (a) that a licensee obtained a reasonable  return or  that the profit that he made exceeded or fell below  the amount  of  reasonable  return  that the  rates  had  to  be modified.   In  other words, where no change is  needed,  it might be presumed that no adjustment was needed.  In view of the  machinery that is provided for complaints in the  event of  the licensee deriving more than a reasonable  return  as contemplated  by  the  Vlth Schedule we  consider  that  the failure  consciously to adjust the rates by working out  the details  so  as  to reach at the same rate  as  was  charged previously  does  not constitute a failure  "to  adjust  the rates" as required by paragraph 1. This leads us to the further questions (1) as to whether as- suming  that the rates had been adjusted by the licensee  as required  by  paragraph 1 and the licensee is  charging  the rates  so  adjusted whether the rates now  charged  (a)  for lights and fans, and (b) as standing charges for the  Supply Of  motive  power,  could be successfully  impugned  as  not conforming to the requirements of the Vlth Schedule, (2) and closely  related to this, and that is the third question  we have  specified  earlier,  whether  having  regard  to   the provisions contained in ss. 57 and 57A of the Supply Act,  a Civil Court would have jurisdiction to entertain a suit  for the reliefs claimed in the present plaints. Taking  up, first, the question of lights and fans (and  the standing  charges for the supply of power would be  governed by  similar considerations) the position would be  that  the Appellant  must be deemed to have adjusted his  rates  under paragraph 1 of the Vlth Schedule when after the lapse of the Bombay  Act of 1946 it continued to levy the  same  charges. When in 1949 or 1950 it is deemed to have made this  adjust- ment paragraph 1 which empowered it to make this  adjustment contained a proviso which we shall recall:               "Provided  that  the  licensee  shall  not  be               considered  to  have failed so to  adjust  his               rates if the clear profit               532               in  any  year of account has not  exceeded  by               more  than  30 per cent of the amount  of  the               reasonable return". The  proviso,  no  doubt, uses a  double  negative  "not  be considered  to have failed" but expressed in positive  terms it would mean that where the licensee adjusted his rates  so that  his clear profit exceeds by more than 30 per cent  the reasonable return to which it was entitled, it could not  be said  to have adjusted his rates.  In other words,  such  an adjustment  would  not  be  an  adjustment  at  all  as   is contemplated  by  paragraph  1.  Paragraph  2  of  the  VIth Schedule  proceeds on the basis that there is an  adjustment within  paragraph  1 in other words, that the  rate  charged would  yield to the licensee a clear profit which would  not exceed  the reasonable return by more than 30 per cent.   It is  only  on that basis that the  percentages  specified  in paragraph  2 could be properly appreciated, for it  proceeds



to take the excess over the reasonable return, divide it  by 3  and of that 1/3rd allot a proportion not exceeding  7-1/2 per cent. over to the licensee himself.  Of the balance half is  to be appropriated to the Tariffs and  Dividend  Control Reserve  and the other half is directed to be given  to  the consumers  by granting them proportional rebates.  From  the percentage  named  in para it read in conjunction  with  the absolute  prohibition against a rate which would yield  more than  30 per cent. over the reasonable return it appears  to us that the lawfully adjusted rate contemplated by paragraph 1  is one where the amount of clear profit does  not  exceed the  "reasonable return" by more than the maximum  specified i.e.,  30  per  cent.   The other  paragraphs  of  the  Vlth Schedule  deal  with the creation and  disposal  of  certain funds and reserves to which it is not necessary to refer. We thus reach the position that there could be a  unilateral adjustment  of the rates by a licensee but that such an  ad- justment  must not leave him with more than  the  reasonable return  plus  another 30 per cent, this  being  an  absolute limitation  on the power to "adjust".  Where the  amount  of "reasonable return" is exceeded paragraph 2 comes into  play and the excess over the reasonable return is distributed  in the manner laid down in that paragraph. We  have  next to consider that effect of the  amendment  to para 1 of the Vlth Schedule brought about by Central Act 101 of  1956 by which the maximum rate permitted to  a  licensee became  reduced from one which yielded him not more than  30 per  cent.  beyond  the "reasonable  return"  to  one  which yielded  him not more than 15 per cent.  The result of  this would obviously be that there should have been a further 533 adjustment by licensees so as to conform to the revised pat- tern.   Here again, the question would arise  whether  there should  be a conscious readjustment.  Applying the  rule  of construction  we  have  explained  earlier  in  relation  to "adjustment"  in 1949 or 1950 it would be seen that  if  the rate   previously   charged  yielded  a  profit   over   the "reasonable return" of 15 per cent. or less there need be no readjustment  and if the rate charged yields more than  this permitted profit there should be a readjustment.  The result would, therefore, be that unless it is established that  the rate  charged by the Appellant for lights and fans  and  for the standing monthly charge for supply of power resulted  in a  profit  to  it  of  more  than  15  per  cent.  over  the "reasonable  return",  the Appellant would be held  to  have properly  adjusted  these  rates  in  conformity  with   the requirements of the relevant provisions of the Supply Act as amended by Act 101 of 1956. We  shall.  when dealing with the question relating  to  the jurisdiction of a Civil Court to entertain suits relating to infractions  by licensees of their obligations under Para  1 of  the  VIth  Schedule which is the  last  of  the  matters debated before us, also examine the question as to the party on whom the burden of proof would lie to establish that  the adjustment which is made or which could be deemed to be made by  a  licensee  by the continuance of  a  preexisting  rate contravenes the statutory provisions. Coming  next  to the unit charge for supply for  power,  the impugned  rate was that which had been stepped up from  that which  had  been continued from before September-  1949,  by action taken in compliance with the 3rd proviso to paragraph 1  of Sch.  VI as amended by Act 101 of 1956.  The  licensee notified  to  the  consumers  on  September  25,  1958   his intention to enhance the unit rate for the supply of  power. Previous  thereto  in  terms of that  proviso  a  notice  in



writing  had been issued to the State Government  intimating its  intention  to  enhance the  rate,  and  thereafter  the consumers were notified of this increase in rates.  It would be seen that the 3rd proviso to para 1 requires a notice  to the  State  Government of the intention of the  licensee  to enhance  the  rates.   On  August  7,  1958  the   Appellant intimated  the Government ’of Mysore setting out  the  clear profit  it  had made in 1957-58 and  the  estimated  working position  in 1958-59 and its intention to increase the  unit rate  for  supply  of  power  from 6  nP.  to  9  nP.  unit. Thereafter, on September 25, 1958, it notified the consumers that on and after November 1, 1958 it would be charging  the enhanced  unit  rate together with the  previously  existing standing  charges of Rs. 2.69 per B.H.P. per month The  only point  that was suggested as invalidating the notice to  the Government  was that the Government were not  informed  that the licensee was effecting an 534 enhancement of the rates as regards the standing charges and that  the  notice was, therefore, bad.  We do  not  consider that there is any substance in this objection.  Rs. 2.69 was the  charge  which  had been made prior  to  the  notice  as standing charges and if, as we have held, that was the  rate which  must  be deemed to have been adjusted and  which  the appellant  was  entitled  to  charge when  Sch.   VI  as  it originally  stood, the continuance of the same charge  after the  amendment  of  the  Schedule  would  not  make  it   an enhancement. There  is however one circumstance to which it is  necessary to advert.  As already stated, the rate charged prior to the Supply Act, 1948 and which was continued thereafter would be a  lawful  rate  only  if the profit that  it  left  to  the licensee was less than 30% over the reasonable return.  This was the position when the Supply Act, 1948 came into  force. By  reason  of the amendment effect by Act 101 of  1956  the percentage  of permissible profit was reduced to 15% and  so the adjusted rate Would be valid if it was within this  per- missible  limit.   Unless  the adjusted rate  prior  to  the amendment of 1956 was in excess of 15 per cent permitted  by the 1st proviso to paragraph 1 the continuance of such  rate could not be objected to as an enhancement or as a violation of paragraph 1 of the Vlth Schedule.  The question as to the burden of proof as regards this requirement and whether  the same has been discharged in these cases we shall reserve for later consideration.  Subject to this so far as regards  the unit  charge,  the  requirement  of  the  third  proviso  to paragraph 1 was complied with.  There was thus no illegality or  invalidity  attaching to the notice  to  the  Government issued  under  proviso 3 to paragraph 1 and  the  contention raised in that behalf by the respondents must be rejected. The  question next to be examined is as to the  jurisdiction of  the Civil Court to entertain the suits from which  these appeals  arise for the reliefs prayed for therein.   Section 57  of  the  Supply Act, 1948 which  incorporates  the  Vlth Schedule in the licence of every licensee lays an obligation on  the licensee to comply with the provisions of  the  said Schedule.  Then comes S. 57-A under which where the Board or the State Government, where there is no Board, "if satisfied that  the  licensee  has failed to comply with  any  of  the provisions of the Vlth Schedule and shall when so  requested by the licensee in writing, constitute a Rating  Committee". It is unnecessary to refer to the provisions relating to the procedure  to be followed by the Rating Committee but it  is sufficient to recall that the Rating Committee is  empowered to fix the rates to be charged by licensees and the duty  is



cast on the Rating Committee to recommend a rate which would ensure  to the licensee a clear profit sufficient to  afford it  a  reasonable  return as defined in  the  Vlth  Schedule during the 535 next three years of account.  The provisions in s. 57-A have to be read in conjunction with the last proviso to paragraph 1 of the Vlth Schedule under which where the rates are fixed in pursuance of the recommendations of the Rating  Committee and they are lower than those adjusted by the licensee under the  Schedule,  the licensee is directed to  refund  to  the consumers the excess amount recovered by him from them. The  argument of the learned Solicitor-General was  that  as the  Supply  Act had by s. 57A made  special  provision  and ,created a special machinery for the determination of a pro- per  rate  to be charged by a licensee on its  consumers,  a suit in a civil court by the consumer for obtaining the same relief was impliedly barred.  The procedure prescribed by s. 57A was (1) where a consumer complained that a rate  charged was  excessively high he should first approach the Board  or where  there  was no Board, the State  Government,  (2)  the Board  or  the State Government should, on  considering  the ,complaint,    be   prima   facie   satisfied   about    the reasonableness  of  the  complaint  and  it  was  in   their discretion  to appoint a Rating Committee, (3) if the  Board or the State Government decided that it was not necessary to appoint  a Rating Committee there was an end of the  matter. If, however, a committee was appointed the Rating  Committee would take evidence and, applying the provisions of the  Act and the Schedules, would arrive at a rate which would  yield the  licensee an amount not less than the reasonable  return that  is provided for him under the Act.  It  was  submitted that  this  procedure  was  wholly  incompatible  with   the continued  existence of the jurisdiction of the civil  court to  determine  any  question as to whether  a  licensee  had failed  to comply with the requirements of Sch.  VI  and  in particular  as  to  the reasonableness of  the  rate  to  be charged.   Besides,  attention was also drawn  to  the  last proviso  to  paragraph 1 of the Vlth  Schedule  under  which provision is made for refund to consumers in cases where  an excess  amount is collected from them beyond what was  fixed as a reasonable rate by the Rating Committee. It  is  undoubted  that these provisions have  laid  down  a specific procedure for violations by the licensee of the re- quirements  of Sch.  VI.  There being no express bar to  the jurisdiction of the Rating Committee; or expressed in  other scope  and extent of the bar that could be implied from  the existence  of  these  provisions.  One  thing,  however,  is clear; the bar cannot extend beyond the scope and limits  of the  jurisdiction of the Rating Committee; or  expressed  in other words, the jurisdiction ’of the civil court could  not be held to be excluded in respect of those matters which are not assigned by s. 57A to the Rating Committee, or in regard to  which  the Rating Committee cannot afford  the  consumer relief  against  an infraction of a statutory  provision  by which he is aggrieved 536 Before turning to the facts of the present case with a  view to  examine  whether the relief sought  by  the  respondents viz.,  a  declaration and injunction could be granted  by  a civil  court, we shall deal with the major argument  of  the learned  Solicitor-General  that  for  no  infraction  by  a licensee of his obligations under the schedule could a  suit be  filed in a civil court.  This was based on the words  of s.  57A-(1)(a)(i)  which  empowers the Board  or  the  State



Government to appoint a Rating Committee if satisfied  "that the licensee has failed to comply with any of the provisions of the Sixth Schedule". The  learned  Solicitor-General further contended  that  the provisions contained in s. 57A were wholly incompatible with the existence of a right in a consumer to move a civil court for  obtaining a refund even of an illegal collection  which the  licensee is prohibited from charging.  It was  in  this connection  that he invited our attention to  the  provision for  refund contained in the last proviso to paragraph 1  of Sch.  VI and relying on this he submitted that the scheme of s. 57A could obviously not have contemplated a procedure  by which  one  consumer  went to a  civil  court  and  obtained redress,  the civil court holding that the rate  charged  so far  as the particular plaintiff was concerned  was  illegal and therefore entitling him to a refund of a particular sum, while   another  consumer  approached  the  Government   who appointed  a Rating connection that he invited attention  to the provision for it did provide, for a different amount  of refund.  This is doubtless a serious argument which requires careful examination.  In this context and in support of this submission  stress was laid down on the words "the  licensee has failed to comply with any of the provisions of the Sixth Schedule"  occurr  in in s. 57A-(1)(a)(i) and it  was  urged that  for any and every default of the licensee resort  must be  had to the Board or the Government and could not be  had to the civil courts.  But from these provisions it does not, in  our  opinion, follow that the jurisdiction  of  a  civil court  is  barred  in respect of  the  infraction  of  every obligation  cast  on  a  licensee  by  Sch.   VI.    Broadly speaking,  the utmost that could be urged would be that  the bar  to  the  jurisdiction of a civil  court  would  be  co- extensive with and be restricted to the powers of the Rating Committee  and the reliefs which the committee  could  grant under s. 57A.  A few examples of breaches of Sch.  VI  which a licensee may commit and in regard to which a reference  to the  Rating  Committee is not contemplated  would  make  our meaning  clear.  The first proviso to paragraph 1  specifies that "such rates shall not be enhanced more than once in any year of account".  Let us suppose that the licensee  contra- venes this prohibition and enhances the rate more than once. There is no provision in s. 57A for the Rating Committee  to control  the  licensee in the event of his  transgressing  a positive 537 prohibition  of  this  sort and, indeed, it  would  be  most anomalous  to say that the statute having made  a  provision that  the  rates shall not be enhanced more than once  in  a year,  the  consumer  is  left  without  a  remedy  if   the Government  does  not choose to appoint a  Rating  Committee which, as we said earlier, has no power to afford redress to the affected consumer.  In such a case it appears to us that by  no principle of construction can the jurisdiction  of  a civil  court  to grant a declaration and  an  injunction  be denied.   It  would  also  follow  that  if  that  rate   is collected,  the  court could order a refund of  the  illegal collection.   Take  next  the  case  where  a  licensee   in contravention of the 3rd proviso enhances the rates for  the supply of electricity without giving the requisite notice of his  intention  to the Government and to  the  Board.   Here again,  the Rating Committee does not come into the  picture for  preventing  the  continued charging  of  the  rates  in contravention  of  the 3rd proviso and here we  consider  it impossible  to  contend that the jurisdiction of  the  civil court to grant a declaration and an injunction are  affected



by  the provisions of s. 57A.  We therefore arrive  at  this position that notwithstanding the generality of the words in s. 57A(1)(a)(i) referring to the failure on the part of  the licensee  in  complying with the requirements of  the  Sixth Schedule"  there are some "failures" in regard to which  the jurisdiction of the civil court it is clear, not barred. The next question would be whether the same principle is not applicable  to a case where the 2nd proviso  is  contravened i.e.,  where the licensee so adjusts his rates as  to  yield him  a  profit beyond 15% over the reasonable  return.   The proviso casts an absolute obligation on the licensee not  to exceed  this limit.  There is thus a  statutory  prohibition against the licensee of fixing a rate which would yield such excessive  profit, and if he does so he would not be  acting in terms of the Vlth Schedule at all or by virtue of a power conferred  by  that  Schedule  and  therefore  he  would  be amenable  to  the jurisdiction of the court which  would  be competent  to  issue  an in junction  restraining  him  from charging that rate.  No doubt, the proviso also adds that if he  does  so  he  would  be  failing  to  comply  with   the requirement  ’of  the  main part of paragraph  1.  It  would therefore follow that in a case where in adjusting his  rate the licensee fixes it so high as to contravene this proviso, it would be open to the a-,grieved consumer to approach  the Board or the State Government to appoint a Rating Committee. But  from this circumstance we are not prepared to hold  (a) that  the  action of the licensee in charging  a  prohibited rate  is any the less an illegality not countenanced by  the statute  and (b) that where such an illegality is  made  out the  jurisdiction  of  a civil court  to  afford  relief  is ousted.  It is possible to hold, and we do not desire 538 to express a final opinion on a point which is not  directly involved  in  these appeals, that the  jurisdiction  of  the court  may be confined to granting a declaration as  to  the invalidity  of  the adjustment and  injunction  against  the violation  of the statutory prohibition, and not to grant  a refund.  It is only necessary to add that the relief  sought in  these  2 suits was merely a  declaration  regarding  the invalidity   of  the  rates.  charged  and   an   injunction restraining the Appellant from continuing to charge them. We  are, therefore, satisfied that the mere existence of  s. 57A does not by itself, and without reference to the  parti- cular  violation  complained  of by the  licensee,  bar  the jurisdiction  of  a  civil court and  the  argument  in  the extreme  form  presented  to us by  the  learned  Solicitor- General must be rejected. The  next and the last question that arises is  whether  the respondents have established that the appellant has violated any  of the provisions of the Supply Act and  in  particular those contained in Sch.  VI, paragraph 1 of the Supply  Act. We  have already dealt with the objection that there was  no ,,adjustment" of rates in 1949 or 1950.  Again, we have  al- ready  held  that in regard to the unit rate  for  power  in regard  to which alone there was an enhancement there was  a valid  notice  issued to Government as required by  the  3rd proviso  to paragraph 1. In the circumstances of  this  case the  only ground upon which the respondents would have  been entitled  to the relief of declaration and  injunction  that they  claimed  was that they had established that  the  rate charged  by  the Appellant offended the second  proviso,  in that  it  yielded a profit in excess of 15 per cent  of  the reasonable return.  The learned Judge in the High Court  has held  that  the  onus of proving that  the  rate  which  the Appellant  charged was within this limit was on it and  that



as  no evidence had been led by it on this point he  granted the  plaintiffs the declaration and injunction they  sought. We  consider  that the learned Judge was in  error  in  this respect.  There is no presumption that the rate charged by a licensee  contravenes the statutory prohibition.  It is  for the  party who alleges his right to relief to establish  the facts  upon  which such relief could be obtained.   It  was, therefore,  for  the  plaintiffs to prove  by  facts  placed before  the  court  that  the  rate  charged  offended   the statutory provision.  This they admittedly failed to do  and we,  therefore,  hold  that they were not  entitled  to  the declaration  and injunction which the learned Judge  of  the High Court granted. We accordingly allow the appeals and direct the dismissal of the  suits.   The appellant would be entitled to  its  costs here and in the High Court-one hearing fee. Appeals allowed 539