A MUNICIPAL CORPORATION OF DELHI

v.

THE ASIAN ART PRINTERS (P) LTD. AND ORS. ETC.: ETC.

I

AUGUST 31, 1994

B [B.P. JEEVAN REDDY AND SUHAS C. SEN, JJ.]

The Delhi Municipal Corporation Act, 1957 :

Section 283'--Electricity-Charges for supply-Non-residential

C premises-Mixed Load (HT) connection-Tariff rate--Non-Domestic (Mixed

Load HT) Tariff-Clauses (c) and (d)-/nterpretation of-Held, the clauses

provide for a two-part tariff-Charges payable would be a sum of demand

charges ''plus" energy charges,· and not the amount whichever is higher of the

two-Clause (d),

i.e. the minimum Bill clause, does not have the effect of

modifying or cutting down the meaning or purport of fonnula contained in

D clause (c).

The respondent was a consumer of electricity under the

appellant­

Corporation (supplier). It had applied for a "Mixed Load(HT)" connection

for "non-residential premises".

For the purpose of tariff, the premises fell

E in the category of

"Non· Domestic (Mixed Load HT) tariff'. The relevant

provisions i.e. clause (c) mentioned tariff

as "Demand charges: Rs. 40 per

month per KV A or part thereof of the commuted load

(as per load in the

test report) plus Energy charges:

67 paise per unit": It was further

provided

that these charges would be without prejudice to the minimum

demand

as laid down in clause (d) and adjustment

dause at (xviii) under

F General Conditions of Application. A dispute arose between the parties

with respect to tariff amount/charges. payable

by the respondent each

month. The respondents

and other consumers filed petitions under section

20 of the Arbitration Act, which were allowed by the single judge of the

High Court. The appeals filed

by the Corportion and the cross-objections

G filed by

the consumers were dismissed by the Division Bench of the High

Court. Aggrieved, the Corporation filed the appeals by special leave.

The respondents contended

that clause (c) of the "Mixed Load HT"

provides that first the demand charges @ Rs. 40 per month per KV A would

be ascertained

and then the energy

charges @ 67 paise per unit would be

H calculated and whichever was higher would be payable, and in the event of

8

M.C.D. v. ASIAN ART PRINTERS LTD. 9

both • the demand charges and the energy charges • being equal, the A

demand charges would be payable. The contention of the appellant was

that a sum of both the demand charges and the energy charges-calculated

according to the formula provided in clause (c) was the tariff payable by

••

the consumers •

Allowing the appeals, this Court B

HELD : 1.1. The tariff rate for the Mixed Load HT (other than

industrial load) in clauses

(c) and (d) provide for a

two· part tariff. The

first

part comprises of demand charges and the second part of

energy

charges. The tariff amount shall be determined as an amount which is the

c

total of demand charges plus energy charges, calculated according to the

•• formula given in clause (c). This is evident from the word "plus" occurring

between the two items i.e. between demand charges and energy charges.

When clause

(c) says that the charges payable are demand charges plus

energy charges,

it means just that; it cannot mean demand charges or

D energy charges whichever is higher. Clause (c) is not capable of any other

interpretation,

and it admits of no ambiguity whatsoever. The language is

clear and not susceptible of any reasonable doubt. The words in clause (c),

"the above shall be 'without prejudice' to the minimum demand as laid

down in (d)" indicate that the formula given in clause (c) is unaffected by

what is stated in clause (d). [14-C-FJ

E

1.2. Clause (d) with the heading "Minimum Bill" states, "the amount

t.

of the demand charges based upon the KVA of billing demand", meaning

thereby that

even in case there is no consumption, the minimum bill shall

be the demand charges based upon the KV A of the billing demand. In view

of the language of clause (c) it is not possible to read clause (d) as F

modifying or cutting down the meaning or purport of the formula

con·

tained in clause (c). All that it says is that the demand charges based upon

the

KVA of the billing demand shall at any rate represent the minimum

bill. [15-G-H,

16-A-B]

1.3. The observation in Ashok Soap Factory* have no application to

G

~ the tariff condition relevant in the instant appeals because of the substan-

tial difference in the language employed in the tariff conditions considered

in that decision and-those concerned in the instant appeals. [22-A-B]

*Ashok Soap Factory v. Municipal Corporation of Delhi, [1993) 3 SCC H

10 SUPREME COURT REPORTS [19~4\ SUPP. 3 S.C.R.

A 37, inapplicable.

B

c

D

E

F

Guiab Rao v. Municipal Corporation of Delhi, AIR

{1990) Delhi 249

and Texmaco Ltd. and Anr. v. The Chief Secretary Delhi Administration,

CWP No. 1315/91 decided

by Delhi High Court on 24.4.91, referred to.

2. The very refernce to

arbitration by the High Court pertains

precisely to the interpretation of the

tariff condition occurring in clauses

(c)

and (d)

·applicable to under "Mixed Load HT" Category. Since the

controversy has been decided on merits, the reference to arbitration must

be deemed to have become unecessary and infructuous. [22-C]

CIVIL

APPELLATE

JURISDICTION: Civil Appeal Nos. 5826-33

& 5834-36 of 1994.

From the Judgment and Order dated 25.4.91 & 24.7.91 of the Delhi

High Court in F.A.O. (OS) Nos. 223-30/90 & Suit Nos. 2385, ~93 & 2896

of 1990.

M.K Banerjee, Attorney General, Ashwani Kumar, Praveen Kumar

and Virender Kaushal for the Appellant.

H.N. Salve, Harish Malhotra, S.P. Sharma

and

R.P. Sharma for the

Respondents.

The Judgment of the Court was ·delivered. by

B.P. JEEVAN REDDY,

J. Leave granted. Heard the learned Attor-

ney General

and Sri Ashwini Kumar for the appellant and

Sri Barish Salve

for

the respondents.

C':Jmmca <;_Jestions arise in these appeals. For the sake of con­

venience,

we would refer to the facts in civil appeal arising out of

S.L.P.

(C) Nos. 14140-47 of 1991. The appeal is directed against the judgment

and order of a Division Bench of the Delhi High Court dismissing the

G appeal preferred by the appellant, Municipal Corporation of Delhi

(DESU) -as well as the cross objections preferred by the respondent. The

appeal and cross objections were preferred against the judgment of a

learned Single Judge of the Delhi High Court dated 21st Novermber, 1990

allowing the petition -and a large number of similar petitions -filed by the

H respondent - and other consumers -under Section 20 of the Arbitration

•

....

..

...

M.C.D. v. ASIAN ART PRINTERS LTD. [JEEVANREDDY,J.) 11

Act and referring the dispute between the parties to arbitration. The A

learned Single Judge directed further that pending the arbitration proceed-

ings before the Arbitrator, the consumer shall not

be made to deposit the

disputed amount.

It was, however, observed that in case it is ultimately held

that the consumer

is liable to pay the said disputed amount, he shall pay

the same with interest@ 12% p.a.

B

The respondent is a consumer of electricity. He had applied' for

Mixed Load (HT) Connection for 'non-industrial' purposes. The dispute

between the parties

is with respect to the calculation of the tariff

amount/consumption charges payable by the respondent each month. In

short, the dispute

p~rtains to interpretation of the relevant tariff condition C

in the Tariffs noti.tied under Section 283 of the Delhi Municipal Corpora-

tioi: Act by the Municipal Corporation of Delhi (DESU) for the year ,

1990-91. The same are supplied to us, as a printrd booklet, by the learned

Attorney General, appearing for the appellant. We shall briefly refer to the

relevant provisions therein.

D Under the sub-heading "premises", three expressions, viz., "premises",

"industrial premises" and ''non-industrial premises" are defined. The

respondent's premises are admittedly 'non-industrial premises'. Under the

sub-heading "General Conditions of Applications", besides providing cer-

tain general conditions, a

few more expressions are defined. Clause (i) of E

the General Conditions says that supply of electricity in all cases is subject

to the execution of agreements including compliance of commercial

for­

malities. Clause (ii) says that "these tariffs are subject to the provisions of

the 'Conditions of supply' and 'Scale of miscellaneous charges' relating to

the supply of ekctricity issued by the Undertaking or any modification F

thereof as :-.1.: enforced from time to time and the Rules and Regulations

made or any order issued thereunder or any subsequent amendments or

modifications thereof so far as the same are applicable." Clause (iii) says

that all loads above 100KW under any category of supply shall be given on

H.T. Clause (~v) clarifies that "the minimum charges/demand charges ex-G

elude meter n:nt, electricity taxes and other charges which shall be charged

separately

as in force from time to time depending upon the character of service". Clauses (v) to (viii) define the expressions "connected load",

"sandioned load", "contract demand" and "maximum demand" respectively.

Clause

(ix) provides that wherever the contract demand has been given in

KW, the contract demand in KV A for tariff purposes shall be determined H

u SUPREME COURT REPORTS [1994)SUPP. 3 S.C.R.

A by adopting the power factor as 0.85. For the purpose of tariff rates, th~

consumers are divided into domestic, non-domestic, mixed load HT, small

industrial power (SIP) and large industrial power (LIP) categories. Besides

the· above, separate tariff rates are notified for agriculturists and certain

other consumers Ni.th whom we are not concerned. So far as domestic

B

c

supply is concerned, the character of service is single phase 230V or three

phase 400V. The tariff prescribed is what may be called 'single part tariff'.

It is @ .27p per unit on first 100 units per month, thirty two paise per unit

on next 100 units per month and seventy five paise per unit on all consump­

tion above 200 units per month. This is, of course, subject to minimum

charges prescribed therein.

In the case of non-demestic L.T. supply, dif­

fernet rates are fixed which we

need not refer to.

Now coming to

the Mixed Load HT with which we are concened,

this is "available to consumers having connected

load (other than Industrial

Loads) above

lOOKW, for lighting, fan, heating and power appliances in all

Non-Domestic establishments as categorised in Non-Domestic (Mixed

D Load HT) tariff'. The character of service is AC. 50 cycles, 3 phase, llKV.

E

F

G

The tariff mentioned under clause ( c) and the 'minimum bill' mentioned

in clause ( d) may now be set out in full from page 13 of the booklet* :

"(c)

Tariff:

Demand Charges :

Rs.

40.00 per month per KV A or part thereof of the committed

load (as

per load in the test report)

·

Plus

Energy Charges;

67 paise

per unit;

The above shall

be without prejudice to the minimum demand as

laid down

in ( d) below and adjustment clause at (xviii) under

General Conditions

of Application.

We are referring to the pages of the booklet bacause of the confusing manner in which

the several tariff conditions are enumerated. This is being done to avoid any confusion

or mix-up between tariffs applicable to 'Mixed Load HT' and the tariffs application to

H 'Large industrial

Power' (L.1.P.)

...

M.C.D. v. ASIAN ART PRINTERS LTD. [JEEV AN REDDY, J.) 13

( d) Minimum Bill :

The amount of the demand charges based upon the KV A of billing

demand."

It is the interpretation of above two clauses

-( c) and ( d) -which falls

A

for consideration in these appeals. Though it is not strictly relevant for the B

purpose of these appeals, it has become necessary to notice the tariff rate

prescribed for large industrial power category inasmuch as a decision

rendered by this court with reference to a Note appended to the L.I.P.

tariff rates (affirming the decision of the Delhi High Court) is made the

sheet-anchor of the respondents' case which has been upheld by the

learned Single Judge and affirmed by the Division Bench of the Delhi

High C

• · Court in the orders under appeal herein. In the case of Large Industrial

.Power (L.I.P.) also, the character of service

is

A.C.50 cycles, 3 phase,

llKV. The tariff for LIP category is mentioned in clauses (c) and (d),

occurring at page

16 of the booklet. They read as follows :

"(c) Tariff:

Demand Charges :

Rs. 40 per month per KV A· or part thereof of the committed load

(as

per load in the test report)

plus

Energy Charges :

(i) First

5,00,000 units per months at 85 paise per Unit.

(ii) All above . , .,Jr··• unit:, ;1er month at 84 paise per unit.

Subject> to :-

D

E

F

a maximum over all rate of Rs. 1.10 per KWH only for

bonafide use of supply without prejudice to minimum pay- G

ment as laid down in item (d) below and adjustment clause

at

'(xviii) above under General Conditions of Application.

( d) Minimum Bill :

The amount of demand charges

will be based upon the

KV A of H

A

'B

14 .SUPREME COURT REPORTS (1994) SUPP. 3 S.C.R.

the committed load (as per load in the test report)."

A Note is appended to the above provisions.

It is applicable to

furnaces only.

It

reads :

"Note -

In the case of furnaces, the above tariff and stipulations of

LIP will also be applicable with further provision of clause of

Minimum Consumption Guarantee

@ Rs.

340 per KV A or part

thereof per month." (Printed at page 18 of the booklet)

Now coming back to the tariff rate for the Mixed Load

HT (other

that industrial load) with which we are concerned herein clauses (c)

and

C (d) set out hereinbefore (at page 13 of the booklet) provide for a two-part

tariff. The first

part comprises of demand charges ·and the second part of

energy charges. The demand charges are calculated @ Rs.

40 per month ·

for KV A or part thereof of the committed load. (as per load in the test

report) while the energy charges are calculated

@ 67 paise per unit. In

D

· other words, the tariff amount shall be determined as an amount which is

the total of demand charges plus energy charges. This is evident form the

· word "plus" occurring between the two items, i.t., between demand charges

and energy charges. Having so set out the above formula, clause (c) further

says that "the above shall

be without prejudice to the minimum demand as

E,; laid down in ( d) below and adjustmant clause at (xviii) under General

Conditions

of Application." it is agreed between the parties that the adjust­

ment clause

at (xviii) under General Conditions of Application is not

relevant for our purposes. Nov what do the words "the above shall

be

Mthout prejudice to the minimum demand as laid down in ( d) below"

signify? The words "without prejudice" indicate that the formula indicated

F in clause ( c) is unaffected by what is stated in clause ( d). Clause ( d) reads:

"Minimum Bill :

The amount of the demand charges based upon the KVA

of billing demand".

The main dispute between the parties revolves around the meaning

d' and purport of clause

( c). According to the Respondents-consumers, it

says-'first ascertain the demand charges @ Rs 40 per month per KV A;

then ascertain the energy charges @ 67 paise per unit actually consumed;

if the energy charges are le$S than the demand charges, demand charges

in

full are payable; if the energy charges and demand charges are equal,

only the demand charges are payable;

if, however, the energy charges

H

. exceed the demand charges, then only the energy charges are payable

M.C.D. v. ASIAN ART PRINTERS LTD. [JEEV AN REDDY, J.] 15

inasmuch as demand charges get merged with energy charges'. A

On the other hand, the appellant-supplier says that clause (c)

provides for a two-part tariff; both the demand charges and energy charges

have to be calculated according to the formula prescribed in clause (

c) and

then both have to be added together; the total so arrived at is the tariff

charges payable by the consumer; this

is the plain meaning of the clause B

as disclosed by the use of the word

"plus" between demand charges and

energy charges.

It would be seen immediately that the interpretation placed by the

respondents-consumers on clause (c) has the effect of completely over-

C

looking and nullifying the expression

"plus" in clause (c). According to the

respondents' interpretation, it ceases to

be a two-part tariff. It indeed

amounts to re-writing the clause.

If the respondents' interpretation is to be

accepted, the clause should read like this :

"Demand Charges :

Rs.

40.00 per -month per KV A or part thereof of the committed

load (as per load in the test report)

or

Energy Charges :

67 paise per unit,

whichever

is higher."

We do not think that such a course is permissible to us. When clause

(

c) says that the charges payable are demand charges plus energy charges,

it means just that; it cannot mean demand charges

or energy charges

whichever

is higher. The words in clause (c) to the effect "the above shall

D

E

F

be without prejudice to the minimum demand as laid down in ( d) below ....

" G

make no difference to the above understanding. Clause ( d) carries the

heading "Minimum

bill". It reads : "the amount of the demand charges

based upon the

KV A of billing demand". This only means that even in

case there is no consumption, the minimum bill shall be the demand

charges based upon the KV A of the billing demand. It may be reiterated

that according to clause (c), the formula prescribed therein (demand

H

16 SUPREME COURT REPORTS [1994) SUPP. 3 S.C.R.

A charges plus energy charges) is "without prejudice to the minimum demand

as laid down in ( d) below''. In the face of these words, it is not possible

to read clause ( d) as modifying or cutting down the meaning or purport of

the formula contained in clause (c). Clause (d) does not purport to do any

such thing. All that it says is that the demand charges based upon the KV A

B

of the billing demand shall at any rate represent the minimum bill. We are,

therefore,

of the opinion that clause (c) of the Mixed Load HT is not

capable of any other interpretation than the one placed by us

and that it

admits of no ambiguity whatsoever. The language is clear and not suscep­

tible

of any reasonable doubt.

C The case of the repondents-consumers is based not upon the lan-

guage

of clauses ( c) and ( d) but entirely upon certain observations made

by the Division Bench of the Delhi High Court

iii Guiab Rai v. Municipal

Corporation

of

Delh~ A.LR. (1990) Delhi 249=42 (1990) D.L.T. 121, and

the decision of this Court inAshok Soap Factory v. Municiapl Corporation

D of Delh~ [1993] 3 S.C.C. 37, affirming the same on appeal. It has, therefore,

become necessary to examine the said decisions - in particular the decision

of this Court -closely to ascertain their ratio and the principles enunciated

therein. For the sake of convenience, we shall refer to the decision of this

Court in Ashok Soap Factory.

E

F

The challenge in the writ petitions (filed in the Delhi High Court)

was to the resolution of the Municipal Corporation of Delhi whereby it

approved the proposal of the Delhi Electricity Supply Committee (DESU)

to enhance 'minimum consumption guarantee charges' from Rs. 40 per

KV A to Rs. 340 per KV A in respect of arc/induction furnaces. Arc/induc­

tion furnaces are necessarily units having Large Industrial Power connec­

tions.

Arc furnaces consume electricity in bulk, i.e. in

very large quantities.

Many of these furnances were indulging in several fraudulent practices and

were showing very low consumption than their capacity and working war­

ranted. It had become necessary to check these mal-practices which were

G causing substantial financial loss to the Corporation. With a view to remedy

the situation, the demand charges in the case of furnaces alone was raised

from Rs. 40 per KV A to Rs. 340 per KV A by virtue of the note referred

to above. In the case of all other LIP service holders, the said enhancement

was not applicable. It is the said enhancement which was questioned by the

, furnance-holders in writ petitions filed in Delhi High Court. The conten­

H tions raised by them, as may be culled out from the judgment of this Court

•

M.C.D. v. ASIAN ART PRINTERS LID. [JEEV AN REDDY, J.) 17

in

Ashok Soap Factory, are the following : A

(1) The decision to increase minimum charges, i.e., demand charges

is contrary to

Section 21(2) of the Indian Electricity Act, 1910. Without the

approval of the State Government, no such enhancement could have been

effected (vide paras 16 and 17). The contention was rejected by this court

in paragraphs

22 and 23 holding that. where the licencee is the local B

authority, the said requirement is not attracted.

(2) The minimum guarantee charges can only

be levied under the

proviso to

Section 22 of the Indian Electricity Act, 1910. In other words,

the licencee can only charge that amount which

will give him a reasonable C

return on the capital expenditure and covers standing charges incurred by

it in order to meet the possible miximum demand. The Corporation has

failed to satisfy that the said enhancement from Rs.

40 to Rs. 340 was

required for the above purposes (vide para 18). This contention was

rejected in paragraphs

24 and 25 by pointing out that none of the writ

petitions can invoke

Section 22 inasmuch as the proviso to said section D

"talks about a separate supply unless he has agreed with the licencee to

pay

him such minimum annual sum". This court pointed out that in the case

before them "there is no question of any separate supply or any agreement

in relation to minimum annual

sum" and hence,

Section 22 is wholly

inapplicable.

E

(3) The third contention was based on Article 14 of the Constitution

of India. It was argued that singling out furnaces from out of the class of L.I.P. consumers amounts to invidious discrimination and is, therefore, bad

(Para 32). This contention was also rejected.

F

What is significant to notice is that the interpretation of the tariff

condition relating to L.I.P. category -prescribed in clauses (c) and (d) at

page

16 of the booklet - was not in issue in the said writ petitions or in the

appeals before this Court. Neither

_party raised any contention as to the

method of calculating the tariff charges

in the case of

L.l.P. consumers.

The only question was

as to the validity of the said Note which enhanced G

the Minimum Consumptinn guarantee in the case of furnances

from Rs. 40

per KVA to Rs. 340 per KV A. This Court, however, while dealing with the

second contention aforementioned and

after rejecting the said contention

made the following further observations, with respect to the meaning and

purport of the two-part tariff provided in the case of

L.l.P. category, in ,H

18 SUPREME COURT REPORTS [1994) SUPP. 3 S.C.R.

A paragraph 26 :

"In the present case, on facts, the challenge is to the tariff. As

stated above, the tariff is the two-part tariff system. The two-part

tariff system is comprised

of two charges-(i) minimum consump-

~ ....

B

tion guarantee charges called demand charges and (ii) energy

charges for the actual amount of energy consumed. Under this

system an LIP consumer pays minimum guarantee consumption

charges at the rate fixed by the D.M.C.

If the LIP consumer does

not consume the specified minimum quantity of electricity

or no

energy at all even then he has to pay minimum consumption

c guarantee charges. But in case the consumer consumes more

electricity

than the minimum, then the consumer pays the

~

electricity charges for the actual consumption of electricity beyond

the minimum consumption guarantee charges, in such a manner

that minimum consumption guarantee charges are merged in the

D

total bill for electricity consumed. In other words, if a consumer

consumes more than the specified minimum quantity of electricity

then, in effect, he

will pay for electricity which is actually consumed

by

him. As stated earlier, the appellants have obtained licences for

·the supply of electricity to a sanctioned load or more than 100 KW

and they fall in the category of LIP and the two-part tariff is

E applicable to them. For the period 1985-86 to 1988-89 the respon-

dents had fixed rates of minimum consumption guarantee charges

at the rate of Rs. 40 per KV A and Rs. 38 per KV A for consumption

'

'·

above lOOOKV A."

F

It is the above observations which were made with reference to the

tariff condition relating to L.I.P. category (occurring at page 16 of the

booklet) that are relied upon by the respondents-consumers as concluding

the issue relating to interpretation

of clauses (c) and (d) applicable to

"Mixed

Load HT", non-industrial connections (occurring at page 13.of the

G

booklet) as well. We do not find it possible to agree for more than one

reaso~ Firstly, the relevant tariff condition (tariff condition applicable to

L.I.P. Ca.tegory, printed at page 16 of the booklet) is not correctly quoted

......._,

'

(in para 7 of the judgment). The all-important word "plus" in between the

Demand Charges and ~nergy Charges is omitted in the tariff condition as

extracted

in para 7. This may be because the interpretation of the tariff

H condition was not in issue in the appeals.

Apparently, the said clauses (c)

M.C.D. v. ASIAN ART PRINTERS LTD. [JEEV AN REDDY, J.) 19

and ( d) were taken from the High Court judgment in Guiab Rai where too A

the said clauses are extracted with the same significant omission. The tariff

conditions -clauses (

c) and ( d) -as extracted in paragraph (7) of the

judgment of this Court read thus :

"(d) Tariff

Demand Charges

Rs.

40.00 per KV A or

thereof

B

First 1000 KV A of Billing

demand for for the month

All above lOOOKV A of billing

demand for the month

Rs. 38.00 per KVA or C

part thereof

First 5,00,000 units per month at 85 paise per unit Subject to :

a maximum overall rate of Rs. 1.10 per KV A without prejudice to

the minimum payment as laid down in item (g) below and adjust- D

ment clause at (xvii) above under .General Conditions of Applica­

tions."

Item (g) of the said tariff prescribed that the minimum bill would

be amount of the demand charges based upon the KV A of billing E

demand. Item (g) reads as under :

"(g) Minimum Bill

The amount of the demand charges based upon the KV A of

bill demand."

F

Not only is the all-important word "plus" is missing but the small

sub-heading "Energy charges" is also missing before the words "First

5,00;000 units per month ..... ". Evidently, the observations in para (26) are

coloured by and based upon the said accidental incorrect rendering

of the

relevant tariff condition. As a matter of fact, the observations in

para 26 G

are in affirmation of the observations to the same effect in the judgment

of the Delhi High Court in the judgment under appeal therein. The Delhi

High Court judgment under appeal in

Ashok Soap Factory is reported as

Guiab Ram v.

M.C.D., in A.LR. (1990) Delhi 249 -a decision rendered by

B.N. Kirpal and C.L. Chaudhary, JJ. H

A'

B

c

D

E

F

G

20 SUPREME COURT REPORTS [1994) SUPP. 3 S.C.R.

Se_conclly, it may be noticed that the tariff condition in the case of

Large llldustrial Power category contains a ceiling which is not found in

the case of Mixed Load HT (non-industrial) category. In the case of LIP

category, the ceiling

is provided in the

following words occurring in clause

(c): " ..... subject to a maximum over-all rate of Rs. 1.10 per KWH only for

bona fide use of supply without prejudice to minimum payment as laid

down in item

(cl) below and adjustment clause at (xviii) above under

General

Condit~ons of Applications". That the said 'ceiling' was strongly

relied upon by the appellant:consumer in

Ashok Soap Factory is evident

from para (8) where the contention of the appellant was noted in the

following words :

"In terms of the tariff, the maximum charges cannot be more than

the overall rate. of Rs.1.10 per unit ·consumed. Therefore, 80,000

units consumed would be chargeable at the maximum rate of Rs.

1.10 per unit which works out lo Rs.88,000. Since the amount of

Rs.1,08,000 is higher than Rs. 88,000 i.e. by Rs. 20,000 a rebate of

Rs.20,000 would be given to the consumer and the consumer would

be billed only for Rs. 88,000. It would be evident from the above

illustration that the consumer, in any event, has to

pay the minimum

guarantee charge even if the value/price

of the energy actually

consumed is more than the minimum consumption guarantee char­

ges, the amount

of the minimum consumption guarantee gets

merged into/with the energy

_charges".

As pointed out hereinabove, neither the words (imposing a ceiling)

1_1or any words to that effect are to be found in the tariff condition (at page

13 of the booklet) with whic1 we are concerned in these appeals. In our

respectful opinion, the observations in para

(26) of this court's

judgment

in Ashok Soap Factory are attributable to the said "ceiling"-coupled with

the omission of the all-important word "plus" in the tariff conditions as

placed before this court.

In this context, it is relevant to notice another Deivision Bench

decision of the Delhi High Court rendered by B.N. Kirpal and

DK Jain,

JJ. in Taxmaco Ltd. & Anr. v. The Chief Secretary, Delhi Administration,

CWP No. 1315/91 decided on April

Z4, 1991. (B.N. Kirpal is also the

member of the Division Bench which rendered the decision in

Guiab Rai).

H Taxmaco was concerned with the tariff condition applicable to

L.I.P.

M.C.b. v. ASIAN ART PRINTERS LID. [JEEV AN REDDY, J.] 21

c<insumers for the year 1991-92. In the tariffs notified for the said year, the A

words 'subject to a maximum over~all rate of Rs. l.lOp per K. VA ... '

occurring in cluase ( c) applicable to L.I.P. category were deleted. In view

of the said deletion, it was held.by the Division. Bench in Taxmaco that

unlike during the previous year, for ~he year 1991-92 demand charges are

payable

in addition to energy charges. The following two paragraphs from B

the judgment

are appo;;ite : .

'For the immediately preceding year, for the large industrial power

users like the petitioners tariff

was, inter alia, being charged on the

basis of demand charges plus energy charges. For the year

1990-91,

it was further prescribed that the maximum overall rate would be C

Rs. 1.10 per KWl;I. The effect of the tariff for the year 1990-91

was that the consumers had to pay atleast minimum demand

charges.

In case the consumption was below the sanctioned load

but was in excess of the connected load, then it

is in effect, the

. actual consumption of which payment was being made.

The position in the year

viz. 1991-92 is same to the extent that

there is a

levy of demand charges plus energy charges. In this

year·

also, the minimun. payable ls the demand charges if the energy is

D

not consumed upto the connected.load. The only difference in this

year is that whereas for the year 1990-91, there was mamnum E

overall rate of Rs.1.10 per KWH, this year that maximum has been

done away with. 17ze effect may be that in addition to the demand

charges, the energy charges have also to be paid.•

(emphasis added)

F

It is thus clear from the decision of the Delhi. High Court that its

earlier decision in

Guiab Rai was mainly because of the said words of

'ceiling'; when the ceiling was removed, it was held

that in addition to

demand charges energy charges are also payable. We may reiterate in the

case of tariff condition applicable to 'Mixed Load HT', with which

we are G

concerned in these appeals, there are no words of ceiling. We

muSt,

however, hasten to add that we may must not be understood as holding or

affirming that the said words of 'ceiling' to mean that only the highest of

the

two charges (demand charges and energy charges) alone is payable.

We need express no opinion

on the said question in these appeals for the

1

simple reason that that question does not fall for our consideration. H

1

I

A

B

c

D

22 SUPREME COURT REPORTS (1994) SUPP. 3 S.C.R.

For all the above reasons, it must be held that the observations in

paragraph (26) in

Ashok

Soap Factory have no application to the tariff

condition with which

we are. concerned because of the substantial dif­

ference in the language employed in the relevant tariff conditions con-

·sidered in these appeals. No relief can be granted to the respondents­

consumers herein on the basis of the said observations. The same comment

holds good for the decision of the Delhi High Court in

Guiab Rai.

Now the very reference to arbitration by the Delhi

H~gh Court in

these and other connected matters pertains precisely to the interpretation

of the tariff condition occurring in clauses (c) and (d) applicable to under

"Mixed Load HT" category. Since we have answered the question on

merits, the reference !co arbitration must be deemed to have become

unnecessary and infruct:uous. The restraint order/stay order passed by the

High Court pending disposal of the arbitration proceedings also falls to

ground and

is vacated herewith.

·

The appeals are accordingly allowed and the judgment· of both the

learned Single Judge

and the

Diyision Bench of the Delhi High Court

affirming it -which are the subject matter of these appeals -are set aside.

The appellant shall

be entitled to their costs. Appellant's

costs assessed at

Rs. 20,000 consolidated.

E R.P. Appeals allowed.

.._