Raymond Ltd. v. State of M. P. — 1998 DIGILAW 207 (MP)

Mathur, C.J. -- 1. This is a reference made by the Division Bench of this Court vide order dated 11th September, 1997 in writ petition Nos. 3616/95, 3981/95, 4099/95, 169196, 430/96, 4104/95, 431/96, 507/96 and 4711/96 to reconsider the decision given by the Division Bench of this Court in the case of M/s. Gwalior Steels Private Limited v. MP. Electricity Board ( 1993 JLJ 306 = AIR 1993 MP 118 ) that an obligation is on the consumer to pay 40% load factor of the contract demand every month as the minimum charge irrespective of the fact whether the M.P. Electricity Board (for short the Board) supplies 40% of the load factor every month or not. 2. In order to dispose of this reference, facts of W.P. No. 3616 of 1995 (M/s. Raymond Limited and another v. State of M.P. and others) are taken into consideration. The petitioner is a company registered under the Companies Act 1956, having its registered office at Ratnagiri in the State of Maharashtra. Its cement manufacturing division is situated at Gopalnagar, Tahsil Janjgir, District Bilaspur (M.P.). The petitioners by way of this writ petition challenge the bill dated 18.10.1995 (Annex P2). They have also prayed that the respondent 3 and 4 be directed to reduce the amount of bill dated 18.10.1995. In the connection, a question arose whether the petitioner is entitled to any reduction in the amount of bill or not as per Clause 23(a) and 23(b) of the Agreement dated 27.3 .1979 (Annexure P1/A). The petitioners have pointed out that on account of inability of the Board to supply the full power, the petitioner Company had to suffer a great loss. In that connection, a reference was made to a decision of this Court in the case of Gwalior Steels Private Ltd. (supra) and it was pointed out that the petitioner company is being billed on the basis of 40% load factor of the contract as minimum charges irrespective of the fact whether the petitioner Company received 40% load factor supply or not. 3. Learned counsel for the petitioners submitted that the ratio laid down in the aforesaid case requires re-consideration because the contract is unconscionable as the consumer is required to pay 40% of the load factor irrespective of the fact whether the respondent Board supplies the energy or not. 3. Learned counsel for the petitioners submitted that the ratio laid down in the aforesaid case requires re-consideration because the contract is unconscionable as the consumer is required to pay 40% of the load factor irrespective of the fact whether the respondent Board supplies the energy or not. Arguments were raised from both sides and on being persua4ed, reference was made by the Division Bench of this Court by order dated 11.9.97 for reconsideration whether the consumer is required to pay minimum tariff of 40% of contract load irrespective of the fact that 40% contract load energy has been supplied to the consumer or not. 4. In order to appreciate the controversy involved, it will be relevant to mention various provisions of the Indian Electricity Act, 1910, Electricity (Supply) Act, 1948, Regulation and terms of the agreement framed there under. Section 22-B of the Indian Electricity Act, 1910 (for short the Act of 1910) lays down power to control the distribution and consumption of energy. Section 22B of the Act of 1910 reads as under: "S. 22B. Power to Control the distribution and consumption of energy – (1) If the State Government is of opinion that it is necessary or expedient so to do; for maintaining the supply and securing the equitable distribution of energy, it may by order provide for regulating the supply, distribution, consumption or use thereof. (2) Without prejudice to the generality of the powers conferred by sub-Section (1) an order made there under may direct the licensee not to comply, except with the permission of the State Government, with-(i) the provisions of any contract, agreement or requisition whether made before or after the commencement of the Indian Electricity (Amendment) Act, 1959 (32 of 1959), for the supply of energy to any person, or (ii) any requisition for the resumption of supply of energy to a consumer after a period of six months, from the date of its discontinuance, or (iii) any requisition for the resumption of supply of energy made within six months of its discontinuance, where the requisitioning consumer was not himself the consumer of the supply at the time of its discontinuance. " Our attention was also invited to Section 49 of the Electricity (Supply) Act, 1948 (for short the Act of 1948) which deals with the provision for sale of electricity by the Board to persons other than licensee. " Our attention was also invited to Section 49 of the Electricity (Supply) Act, 1948 (for short the Act of 1948) which deals with the provision for sale of electricity by the Board to persons other than licensee. Section 49 of the Act of 1948 reads as under: "S. 49. Provision for the sale of electricity by the Board to persons other than licensees -- (1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs. (2) In fixing the uniform tariffs, the Board shall have regard to all or any of the following factors, namely -(a) the nature of the supply and the purposes for which it is required; (b) the coordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee; (c) the simplification and standardisation of methods and rates of charges (1 for such supplies; (d) the extension and cheapening of supplies of electricity to sparsely developed areas. (3) Nothing in the foregoing provisions of this Section shall derogate from the powers of the Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee, having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and any other relevant factors. (4) In fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any persons. By the above provisions, the Board, subject to the Act of 1948 and of regulations framed, if any, may regulate an uniform tariff. Section 59 of the Act of 1948 deals with the general principles of Board's finance. Section 79 of the Act of 1948 empowers the Board to frame regulations. In pursuance of the statutory provisions, the Board has framed regulations. The Board has framed -- Madhya Pradesh Electricity Board Agreement for High Tension Supply. This statutory agreement has been placed on record as Annexure P1/A. 5. Section 79 of the Act of 1948 empowers the Board to frame regulations. In pursuance of the statutory provisions, the Board has framed regulations. The Board has framed -- Madhya Pradesh Electricity Board Agreement for High Tension Supply. This statutory agreement has been placed on record as Annexure P1/A. 5. Our attention was also invited to the relevant provisions of the statutory agreement. Relevant clauses 3, 4,5, 19,21 and 23(a) and (b) read as under: "3(a). The Board agrees to provide the necessary 1,32,000 volts supply line from the Board's mains to the premises of the Consumer up-to the point of supply required to supply power to the Consumer under this Agreement and the fuses, isolators or oil circuit breakers as may be necessary at the point of supply as per standard practice of the Board and the Consumer shall pay to the Board the cost of such portion of that supply line as may be prescribed by the Board. Rent• on metering equipment and/or any equipment instalred by the Board at the Consumer's request will be charged in accordance with the rules of the Board. (b) Notwithstanding that a portion of the supply line is paid for by the Consumer the ownership of the entire supply line including the portion paid for by the consumer shall vest in the Board and will be maintained by the Board at its cost. 4. The energy supplied to the consumer by the Board shall be on three pahse, 50 cycles, alternating current system at a normal pressure of 1,32,000 votes. 4. The energy supplied to the consumer by the Board shall be on three pahse, 50 cycles, alternating current system at a normal pressure of 1,32,000 votes. The frequency and pressure of the electrical energy at the point of supply to the feeders of the consumer shall be subject to the fluctuations that are ordinary, usual and incidental to the generation and transmission of electrical energy but such fluctuation shall not, except for reasons beyond the control of the Board, be more than three per cent on the frequency and (i) 6 per cent on the higher side or 9 per cent on the lower side in the case of high voltage; or (ii) 10 per cent on the higher side or 121/2 per cent on the pressure as under : 3500 (Three thousand five hundred) kilowatts from the date of commencement of agreement; 5500 (five thousand five hundred) kilowatts, nine months after the date of commencement of Agreement, 12000 (twelve thousand) kilowatts, eleven months after the date of commencement of agreement; 5(a). The Consumer shall provide and maintain at his expense a locked and weather proof enclosure of a design to be approved by the Board for purpose of housing the Board's terminal high tension switch gear and equipment. (b) The Consumer shall further provide free of cost to the Board necessary land belonging to the Consumer and afford all reasonable facilities for bringing in not only the direct cables or overhead lines from the Board's system for servicing the Consumer, but also cables or overhead lines connecting Board's other consumers; and shall permit the Board to provide all requisite switch gear and connections thereto on the above premises and to furnish supply to such other Consumers through cables and terminals situated on the Consumer's premises, provided supply to the consumer in the opinion of the Board is not thereby unduly affected. (c) The Consumer may with the written permission of the Board house his own H.T. Switch-gear and other apparatus connected with a supply of energy to him under this agreement and as must necessarily be placed therein; but such enclosure shall not be used for any other purpose. (c) The Consumer may with the written permission of the Board house his own H.T. Switch-gear and other apparatus connected with a supply of energy to him under this agreement and as must necessarily be placed therein; but such enclosure shall not be used for any other purpose. (d) The representatives, servants, subordinates and workmen of the Board with or without tools shall have access at all times to the said enclosure or premises and to the incoming or outgoing cables or overhead lines laid under, over or across his lands under sub-provision. (b) above for purposes of inspection, testing, repairs and maintenance of its property. 19. The Consumer shall pay to the Board every month, charges for the electrical energy supplied to the Consumer during the preceding month, at the Board's tariff applicable for the class of service and in force from time to time. A copy of the current H.T. Tariff No.1-A of notification No. 5/GA/1/17 dated 11.3.1976 as amended applicable to the Consumer is set out in the Scheduled attached to this Agreement. 21.(a) The Consumer shall from the date of utilisation of electrical energy, or from the date of expiry of three month's notice mentioned in clause (2) hereof guarantee such minimum consumption as when calculated at the tariff (excluding charges due to fuel adjustment clause meter rent and miscellaneous charges) will yield an annual revenue of Rs. 5,40,000/- (five lacs forty thousands only) or pay this sum as a minimum. The deficit, if any, between the guaranteed minimum charges and the actual charges shall be payable by the Consumer. (b) The minimum guarantee specified in clause 21(a) above shall at all times be without prejudice to realisation by the Board of the minimum prescribed under the tariff referred to in clause 19 hereof. 23(a). The deficit, if any, between the guaranteed minimum charges and the actual charges shall be payable by the Consumer. (b) The minimum guarantee specified in clause 21(a) above shall at all times be without prejudice to realisation by the Board of the minimum prescribed under the tariff referred to in clause 19 hereof. 23(a). If at any time, consumer is prevented from receiving or using' the electrical energy supplied under this agreement either in whole or in part through lock out, strike, riot, insurrection, command of civil or military authority, tire explosion, act of god, other unavoidable cause or natural calamity (hereinafter called the 'breakdown') then and in any such case, the Consumer on giving notice in writing to the Board of such breakdown shall not be required to pay for a greater supply of electrical energy under this agreement, than the Consumer may require (hereinafter referred to as 'the reduced supply') during such time as the said works and premises may be wholly or partially unfit for occupation or use, provided nevertheless on the expiration of period of agreement referred to in clause 28 here, of this Agreement shall continue to remain in force for a further period equal in length to the period during which the 'reduced supply' under this clause shall have continued and provided also that the Consumer shall pay for the said reduced supply at such rate as under, the Board's tariff for the area for the time being in force the Consumer shall elect to be charged. (b) If at any time during the continuance of this Agreement, due to the said breakdown, the Board is prevented from supplying the electrical energy herein contracted, the Board on giving notice in writing to the consumer of such breakdown shall be under no obligation to give supply of electrical energy during such time as the Board may be prevented from giving supply by reason of the said breakdown. But in such event, the consumer shall not be liable to pay for any energy not actually supplied by the Board nor shall the period of discontinuance be added to the said period of the Agreement.' , Under the notification for High Tension Tariff for 132 KV/220 KV supply, minimum tariff prescribed for Cement Factories is as under: ''Tariff Minimum -- The Consumer will guarantee a minimum monthly consumption (KWH) equivalent to 40% load factor of the contract demand. The consumer will be required to pay the energy charges on the said minimum monthly consumption plus the demand charges on the billing demand for the month as minimum monthly payment irrespective of whether any energy is consumed or not during the month. An average power factor of 0.9 will be applied for the calculation of corresponding unit of 40% load factor on contract demand." 5. This question in relation to minimum tariff came up for consideration before this Court in the Gwalior Bench in the case of M/s. Gwalior Steel Private Limited (supra). In that case, question involved was whether the consumer of High Tension Industrial Power, on account of the interrupted supply of electrical energy due to power cuts is not relieved of the obligation to pay minimum monthly charges and only liable to pay to the extent of electrical energy actually consumed by him. This question was answered in favour of the Board with reference to the tariff which was existing at the relevant time that consumer is under obligation to pay minimum charges irrespective of the fact that minimum of energy was supplied or riot. The monthly minimum charge for Mini Steel Plants was prescribed in the tariff dated 1st December, 1988 which reads as under : "Tariff for Mini Steel Plants -- Tariff Minimum -- The tariff is subject to a minimum monthly consumption of 100 units per KVA of the contract demand, whether energy is consumed or not. " This was amended with effect from 1.9.1991 and the monthly minimum consumption for Steel Plants was raised to 150 units per KVA of the contract demand, whether energy was consumed or not. " This was amended with effect from 1.9.1991 and the monthly minimum consumption for Steel Plants was raised to 150 units per KVA of the contract demand, whether energy was consumed or not. It is this tariff which came up for consideration in the aforesaid case and the argument raised was in terms of Clauses 11,12,( a) and (b) and 23 as reproduced above on behalf of the petitioners that wherever the supply is interrupted on account of power-cut or otherwise and the Board is unable to supply the minimum electrical energy provided in the tariff, the Board cannot charge the minimum but should charge at the reduced rate for the actual consumption of power supplied by the Board. This argument was turned down by their Lordships on the ground that the idea behind imposition of minimum charge is to ensure for the producer of electrical energy, a fair return on his capital out-lay. It was observed that the minimum charges 'were intended to compensate the supplier for keeping in a state of readiness the generating capacity and facilities for supplying electricity. In that connection, the Court relied on the decisions given in the case of Saila Bala Roy v. Chairman Dargiling Municipality (AIR 1936 Cal. 265). Mukund Iron and Steel Works Ltd. v. M.S.E. Board ( AIR 1982 Bom. 580 ) and Bihar State Electricity Board, Patna v. M/s. Green Rubber Industries ( AIR 1990 SC 699 ). 6. It was pointed out in reference to clauses, 11, 12 and 23 of the Agreement that consumers can only get the benefit of reduced supply under the aforesaid three clauses and the minimum tariff is not covered by any of these clauses. Therefore, the consumer cannot claim the benefit of the reduction in minimum tariff and he will have to pay the minimum monthly charge which has nothing to do with the reduced supply as contemplated in the aforesaid three clauses. In this' background, the learned counsel for the parties have invited our attention to various decisions of Hon. Supreme Court as well as of High Courts wherein a contrary view has been taken to which we shall refer hereinafter." . 7. Clause 11, 12(a) and 23 of the Agreement deal with situation of reduced supply. In this' background, the learned counsel for the parties have invited our attention to various decisions of Hon. Supreme Court as well as of High Courts wherein a contrary view has been taken to which we shall refer hereinafter." . 7. Clause 11, 12(a) and 23 of the Agreement deal with situation of reduced supply. Clause 11 talks of force majeure meaning thereby that in the event of lockout, or a strike of employees of the Board or breakdown of machinery or plant or force majeure or any other cause over which the Board has no control and in any such case the Board shall not be responsible for any discontinuation of supply and shall only recommence the supply as soon as it is reasonably possible. Clause 12(a) of the Agreement also says that the consumer shall restrict or regulate consumption of electrical energy supplied to him during peak hours as may be directed by the Chief Engineer of the Board in wilting and at any other hours if so required to do, if any power position or any other emergency in the power system warrants such a course of action. Clause 12(b) further says that the consumer has agreed for supply of curtailed power, staggered or cut-off altogether by the Board, if the power position or any other emergency in the power system warrants such a course of action. Clause 23 of the Agreement takes into consideration both the contingencies i.e. in the event of inability of the consumer to receive the supply or 'inability of the Board to supply of the electrical energy, Clause 23(a) of the Agreement says that if at any time the consumer is prevented from receiving or using the electrical energy supplied because of lock out, strike, riot, insurrection, command of civil or military authority, fire, explosion, act of God, other unavoidable cause or natural calamity, then in any such case, the consumer on giving notice in writing to the Board of such breakdown shall not be required to pay for a greater supply of electrical energy than received by him. However, as per clause 28, the agreement shall continue to remain in force for a further period equal in length to the period during which the reduced supply under this clause shall have continued and provided also that- the consumer shall pay for the said reduced supply at such rate as under the Board's tariff for the area for the time being in force the consumer shall elect to be charged. Sub-Clause (b) of Clause 23 says that if during continuation of this agreement, due to the said breakdown, the Board is prevented from supplying the electrical energy herein contracted, then in that case, the Board on giving notice in writing to the consumer of such breakdown shall be under no obligation to give supply of electrical energy during such time as the Board may be prevented from giving supply by reason of the said breakdown. But in such event, the consumer shall not be liable to pay for any energy not actually supplied by the Board nor shall the period of discontinuance be added to the said period of the agreement. The consumer shall pay for any reduced supply which the Board may supply to the consumer for the time being at such rate as under the Board's tariff for the area for the time being in force the consumer shall elect to be charged. Therefore; the obligation of the Board to supply electrical energy under clause 11 of the Agreement is further circumscribed by clauses 12 and 23 of the Agreement. 8. Question before us is that notwithstanding the aforesaid clauses of the Agreement which provide for payment to the Board by a consumer on reduced supply made to the consumer because of certain breakdown, the Board has no obligation whatsoever so far as minimum tariff is concerned. It was submitted on behalf of the Board that irrespective of the fact that on account of certain breakdowns or otherwise, if the Board is unable to supply the power, still the Board will charge the minimum tariff prescribed. It is this interpretation on the 'minimum tariff which needs to be re-considered that even if the Board is unable to supply the minimum contract demand, still the consumer is under an obligation to pay minimum of 40% tariff of the demand or not. It is this interpretation on the 'minimum tariff which needs to be re-considered that even if the Board is unable to supply the minimum contract demand, still the consumer is under an obligation to pay minimum of 40% tariff of the demand or not. Learned counsel for the Board submitted that the agreement has been entered into between the parties with all eyes open and the consumer is under obligation to pay this much of minimum tariff. It was pointed out that this minimum tariff covers the capital outlay of the Board as the electrical energy is not something which can be preserved and it has to be constantly produced and consumed. It is not a storable commodity and in order to maintain that, certain minimum outlay has to be laid down. The Board requires heavy capital expenditure in creation of infrastructure for generation, transmission and distribution of electricity. The Board is required to incur expenditure towards payment of interest, depreciation, operation and maintenance of infrastructure. It was also pointed out that the expenditure is required to be incurred regularly and constantly irrespective of the fact whether the energy is generated and transmitted up-to the premises of the consumer or is used by him or not. It was also pointed out that as per the prevailing rates nearly Rs. 40,000/- per K.W. is also required for creating infrastructure for evacuation of 1 K.W. power and bringing it upto the premises of the consumer. Learned counsel took pains to point out that for each kind of industry, a minimum tariff has been worked out like, Cement, Steel, etc. and detailed chart has been given showing how the tariff is to be worked out. The Board is recovering only monthly minimum tariff charges varying from 3.7% ti 62.06% of the amount what Board is logically required to recover. 9. There is no two opinion that the Board is required to maintain constant production of energy and it has to take it to the consumer through transmission lines and this requires heavy financial outlay. But it does not mean that because of the Board's outlay for maintenance of all the infrastructures, it is under no obligation to supply minimum of power for which it is charging from the consumer. But it does not mean that because of the Board's outlay for maintenance of all the infrastructures, it is under no obligation to supply minimum of power for which it is charging from the consumer. This is a very vexed question and it has been agitated by the consumers before the Apex Court as well as before various High Courts in the country. It is true that way back in 1936 in Saila Bala Roy's case (supra), it was realised that in order to supply energy by the Board, certain minimum charge may be necessary; but that was a situation in 1936 when the power supply position was not bad as it is these days. We cannot lose sight of the fact that these days supply of energy is not regular and it is erratic as a result of which industries also suffer. We cannot be oblivious of rights of others. When the Board requires that consumer should pay the minimum charges, then the Board should supply minimum of the energy for which it is charging and it cannot do away with the obligation of the minimum supply for which it is charging. In case the supply had been maintained regularly, then such difficulty of payment of minimum charges would not have come up. In case the consumer consumes the power more than minimum required, then the actual charges for consumption will cover the minimum. Difficulty arises only when the consumer is willing to consume minimum energy and the Board is unable to supply the same. In that case, question is, can the contract be one sided irrespective of the fact that the minimum of energy is not supplied and still the consumer is under obligation to pay the minimum ? . 10. So far as cases of breakdown as referred in Clause 23 of the Agreement, are concerned, equity has been provided that in the event of inability of the Board to supply the energy, the Board will charge for the actual energy consumed by the consumer. But there is no two way provided for the situation when the Board is unable to supply the minimum of energy. Question is whether this kind of interpretation put by the Division Bench in regard to the tariff can be sustained or not. But there is no two way provided for the situation when the Board is unable to supply the minimum of energy. Question is whether this kind of interpretation put by the Division Bench in regard to the tariff can be sustained or not. In this connection, a leading decision of Supreme Court in the case of M/s. Northern Indian Iron and Steel Co. v. State of Haryana ( AIR 1976 SC 1100 ) will throw a considerable light and• this has been considered by the Division Bench in the case of M/s. Gwalior Steels Pvt. Ltd. (supra). This was a case from State of Punjab and the Punjab Electricity (Duty) Act and the Electricity (Supply) Act 1948 came up for consideration before their Lordships of Supreme Court. In this case; there were two well known systems of tariffs -- one is the flat rate system and the other is known as two-part tariff system. Under the former a flat rate is charged on unit of energy consumed and the latter system is meant for big consumers of electricity and it comprised of (1) demand charges to cover investment, installation and the standing charges to some extent and (2) energy charges for the actual amount of energy consumed. The Board framed certain terms and conditions and procedure in regard to supply of electricity to the consumer under Section 49 of the Act of 1948 and it was one of the demand charged. 'Demand charge' was defined in clause 1 (h) as under: " "demand charge" shall mean the amount chargeable per month in respect of Board's readiness to serve the consumer irrespective of whether he consumes any energy or not, and is based upon the connected load, the minimum demand or the contract demand, as the case may be and as prescribed in the relevant Schedule of tariff. " The other clauses were almost para-materia with that in the present case in language and therefore, they need not be referred. Two questions came up before their Lordships of Supreme Court for consideration, namely, (1) Whether on the facts and in the circumstances of the cases the Board is entitled to claim any demand charge; if so, to what extent? (2) Whether any duty is leviable on the demand charge; if so, to what extent? We are not concerned with regard to the first question. We are concerned with the second question. (2) Whether any duty is leviable on the demand charge; if so, to what extent? We are not concerned with regard to the first question. We are concerned with the second question. Argument before Hon. Supreme Court was that definition of 'demand charge' in clause 1(h) of the terms and conditions framed by the Board that since the Board was not ready to serve the consumer and the consumer was ready to consume maximum electric energy the former was not entitled to ask for any demand charge. Argument on behalf of the Board was that the Board was entitled to assess as per clause 4 of the tariff irrespective of the fact whether it was in a position to supply the energy according to the demand of the consumer or not. This argument was observed by their Lordships to be inequitable. Their Lordships were on thorns of dilemma. It was observed: "... If we were to hold that for the Board's inability to supply a fraction of the consumers demand as per the contract it could claim only the energy charge and not the demand charge, it would have been very hard and injurious to the Board and the consumer would have been unjustifiably got the supply at a very cheap rate. If on the other hand, we were to say that the consumer was liable to pay the entire demand charge as per the method of assessment provided in clause 4 of the tariff even when for no fault of it, it could get only a fraction of its demand fulfilled, resulting in its not being able to run the industry to its full capacity, it would be liable to pay a huge amount per month, and this will not only be uneconomical but would seriously affect its economic structure." Their Lordships observed during the course of argument, that just, equitable and legal solution of the difficulty was provided with reference to sub-cluase (f) of clause 4 of the tariff. Sub-clause (f) of clause 4 was as under: "(F) Force Majeure -- In the event of lock out, fire or any other circumstances considered by the supplier to be beyond the control of the consumer, the consumer shall be entitled to a proportionate reduction or demand charges/minimum charges provided he serves at least 3 days notice on the supplier for shut down of not less than 15 days duration." After referring the aforesaid clause 4, their Lordships concluded as under: "9. We are, therefore, of the view that the inability of the Board to supply electric energy due to power cut or any other circumstance beyond its control as per the demand of the consumer according to the contract will be reflected in and considered as a circumstance beyond the control of the consumer which prevented it from consuming electricity as per the contract and to the extent it wanted to consume. The monthly demand charge for a particular month will have to be as-sassed in accordance with sub-clause (b) of clause 4 of the tariff and there from a proportionate reduction will have to be made as per sub-clause (f) ..." Sub-clause (f) of clause 4 is somewhat analogous to clause 23 of the Agreement in the present case. 11. The aforesaid judgment in the case of M/s. Northern India Iron and Steel Co. (supra) was distinguished by their Lordships in the case of M/s. Gwalior Steels Pvt. Ltd. (supra) on the ground that there is no clause akin to aforesaid clause 4(f) in the Agreement. As such, the case of the Hon. Supreme Court was distinguished. This is with great respect, in our opinion, is not correct. This we will demonstrate hereinafter. 12. The matter came up again before their Lordships of Supreme Court in the case of B.S.E. Board v. M/s. Dhanawat Rice & Oil Mills ( AIR 1989 SC 1030 ) wherein clauses of Bihar Electricity Board and the Tariff there under came up for consideration. This we will demonstrate hereinafter. 12. The matter came up again before their Lordships of Supreme Court in the case of B.S.E. Board v. M/s. Dhanawat Rice & Oil Mills ( AIR 1989 SC 1030 ) wherein clauses of Bihar Electricity Board and the Tariff there under came up for consideration. A similar argument was advanced in this case with reference to clause 4 of the agreement and it was contended that clause 4 of the agreement clearly talks of the payment of annual minimum guarantee charges and, therefore, it could not be said that because of the power cut or situation beyond the control of the Board, the power could not be supplied for 24 hours every day and the consumer can deny the payment of annual minimum guarantee bills. It was also contended that by virtue of clause 13 of the Agreement, the parties approached the Chief Engineer for shortage of electrical energy and sought proportionate reduction in the annual minimum guarantee bill. The Chief Engineer decided the question on the facts and declined to grant proportionate reduction and hence, a petition was filed before the High Court and the High Court declined to interfere. Hence, the matter was taken up to the Hon. Supreme Court. Reliance was placed on the decision of their Lordships of Supreme Court given in the case of M/s. Northern Iron and Steel Co. (supra) and in the case of M/s. Man Industrial Corporation v. R.S.E.B. (AIR 1986 Raj.137). Reference was also made to the decision in the case of Mukund Iron & Steel Works Limited v. M.S.E. Board (AIR 1982 Born. 580). Their Lordships relying on the decision in the case of M/s. Northern Indian Iron and Steel Co. (supra) interpreted clause 13 of the Agreement that language of this clause clearly provides for proportionate reduction in the annual minimum guarantee bills. It was observed that in view of the decisions of this Court, the respondent consumers are entitled to a proportionate reduction in the actual minimum guarantee bills. This judgment was also placed before the Division Bench and it was distinguished by their Lordships in the case of M/s. Gwalior Steels Pvt. Ltd. (supra) to the effect that there is no clause akin to Clause. 13 in the present agreement. This judgment was also placed before the Division Bench and it was distinguished by their Lordships in the case of M/s. Gwalior Steels Pvt. Ltd. (supra) to the effect that there is no clause akin to Clause. 13 in the present agreement. 13 In the case of M/s. Man Industrial Corporation (supra), the terms of agreement in the State Electricity Board came up for consideration before Hon. S.C. Agarwal, J., as he then was and His Lordship observed thus: . "Where the Electricity Board supplies energy to the consumer under an agreement and they are liable to pay minimum charges for the supply, the consumers are entitled to proportionate reduction in the minimum charges payable by them in the event of curtailment of the supply of electric energy to them on account of imposition of the power cut." In this case, Clause 17(a) of the Rajasthan Agreement came up for consideration. Clause 17 reads as under: "17(a) If at any time the supplier is prevented from supplying electrical energy under this agreement in whole owing to all or any of the causes mentioned in clause 10 of this agreement, then the minimum charges payable by the consumer shall be reduced proportionately. (b) If in the opinion of the Chief Engineer of the Board, the consumer, at any time, is prevented from receiving or using the electric energy to be supplied under this Agreement in whole, owing to any strike, riots, insurrection, command of a civil or military authority, fire explosion or act of God, then the consumer shall not be liable to pay the minimum charges/minimum guarantee for the period the event (s) mentioned above. provided the consumer notifies the Board in writing of the occurrence of any event as noted above immediately with necessary details, to enable the consumer to prove that the occurrence is preventing/has prevented the consumer' from receiving or using the full amount of power. If the consumer consumes power other than for factory lighting purposes during the occurrence of the event, he will not be entitled for the remission of minimum charges/minimum guarantee. However, the factory lighting consumption will be ignored for this purpose. The consumer will get reading of the main meter and factory lighting meter taken by the Board's authorised representative at the beginning and at the end of the event. However, the factory lighting consumption will be ignored for this purpose. The consumer will get reading of the main meter and factory lighting meter taken by the Board's authorised representative at the beginning and at the end of the event. The consumer will also keep the Board informed once in every week of further development regarding the event. No remission in the minimum charge/minimum guarantee as mentioned in the tariff schedule applicable will be considered, if no such notice is received by the Board. Subject as aforesaid, the consumer shall in any event be liable to pay the minimum charges/minimum guarantee every year as mentioned in the tariff schedule attached hereto. The decision of the Chief Engineer of the Board in this behalf shall be final and binding on the consumer." Relying on the decision given in the case of Mis. Northern Indian Iron and Steel Co. (supra). His Lordship held that the consumers are entitled to proportionate reduction in the minimum tariff charges. 14. Our attention was also invited to a decision of Orissa High Court in the case of M/s. J.M. Graphite & M. Company v. Orissa State Electricity Board ( AIR 1994 Ori. 224 ) wherein their Lordships observed thus: "...But so far as the reverse situation is concerned, where the consumer is ready to consume but the Board is not prepared to supply, to yet allow the Board to realise the higher duty merely because of the existence of agreement would be travesty of justice. " In the case of M/s. Pyrites Phosphates and Chemicals Ltd. v. Bihar Electricity Board and others ( AIR 1996 Pat. 1 ), similar question came up for consideration and his Lordship observed that clause 13 embraces within its fold not only acts of God but also acts of men like strikes, riots, fire and explosions, as a result of which supply of energy is prevented from receiving the contract demand. His Lordship made a reference to the Division Bench decision of the Patna High Court where a similar provision of the agreement has been interpreted to mean that any other causes beyond the control must be read as illustration and cannot be read as ejusdem generis to the words 'act of God'. It was observed that the words 'any other cause reasonably beyond control' do not signify only vismajor. It was observed that the words 'any other cause reasonably beyond control' do not signify only vismajor. However, what would be reasonably beyond control of the consumer would depend on the facts and circumstances of each case. 15. Out attention was also invited to a decision in the case Associated Cement Companies Ltd. v. A.P. State Electricity Board ( AIR 1997 A.P. 142 ). This was a case with regard to levy of additional charge by the Board and their Lordships observed: "...A reading of this condition makes it obvious that the additional charges could be imposed only if the Board was in a position to supply energy at the higher voltage and yet the consumer was not ready to receive supply at the specified higher voltage. Otherwise, it would lead to the unreasonable and absurd result that even though the Board was not in a position to supply the energy at the higher voltage, the consumer should pay for not receiving the energy at the higher voltage. It would be unreasonable for the Board to charge for the period consumer was not in a position to receive supply when in fact the Board was not ready and prepared to supply the energy at the higher voltage. " It shows that the obligation is mutual and in case Board fails to supply the energy then the consumer cannot be forced to bear additional charges. 17. Out attention was also invited to the decisions of the Hon. Supreme Court in the case of Bihar State Electricity Board v. Bijoy Mining Company Ltd. and others [ (1996)6 SCC 202 ]. In this case, clause 13 of the agreement of Bihar Electricity Board was interpreted and in that context, their Lordships observed that the clause clearly indicates that the Board is enjoined to give proportionate reduction provided anyone of the conditions enumerated therein had occasioned. However, the Court left the matter and directed the parties to approach the Chief Engineer first. In the case of Bihar State Electricity Board and others v. Allied Refractories (Pvt.) Limited and others [ (1996)7 SCC 491 ] also, similar order was passed. 18. However, the Court left the matter and directed the parties to approach the Chief Engineer first. In the case of Bihar State Electricity Board and others v. Allied Refractories (Pvt.) Limited and others [ (1996)7 SCC 491 ] also, similar order was passed. 18. Learned counsel for the Board submitted that as the minimum charge is not subject to the supply of the energy by the Board, the payment of minimum guarantee equivalent to 40% load factor of the contract demand is irrespective of the obligation of the Board to supply the energy. As mentioned above, the Board's stand is categorical that this minimum guarantee of 40% of the contract demand is not subject to the actual consumption. It is only for the purpose of maintenance of the constant production of the energy and supply through the transmission lines. It only safeguards the capital out lay. It was submitted that 40% of the load factor has been worked out for various industries like, cement, Steel etc. and this load factor as worked out in detail on the basis of investment and incurring expenditure of the Board will have to be paid irrespective of consumption or not. Therefore, this 40% of the contract demand has no relevance with regard to the actual supply of the energy. Learned counsel submitted that there is no corresponding provision in the agreement to give a reduction in the 40% of the minimum guarantee of the contract demand. Learned counsel submitted that the petitioners have entered into the agreement with their eyes open that 40% shall be the minimum guarantee of the contract demand and they will have to pay this irrespective of the fact whether the Board supplies the energy or not and, therefore, they cannot go back from this. 19. Clauses 11 and 23 of the Agreement only contemplate proportionate reduction and provide that supply shall be made continuously except in cases of lock-out, or strike by employees of the Board, breakdown of machinery, plant, force majeure or any other cases in which the Board has no control and in such cases, the Board shall not be responsible for discontinuation of energy and shall recommence supply as soon as it is reasonable. The discontinuance of the supply of energy for any of the cases which are not within the control of the Board means that the Board can discontinue supply of energy in such events. Learned counsel submitted that there is no corresponding provision to reduce the minimum guarantee charges which the consumer is under obligation to pay Learned counsel submitted that Clause 23 of the Agreement does not in any way make a corresponding obligation of the Board to give a rebate in payment of the minimum guarantee in the event of non-supply of the energy. Our attention was invited to the decision in the case of Grind well Norton Ltd. v. A.P.S.E. Board, Hyderabad ( AIR 1989 AP 14 ) where similar question was posed whether the petitioner is relieved of obligation to pay minimum charges on account of interruption in regular voltage or the power supply. Their Lordships though referred to the decision in the case of M/s. Northern Indian Iron and Steel Co. (supra) answered the question against the petitioner and observed that notwithstanding the interruption and curtailment of supply of energy or low voltage, the petitioner is not relieved of the obligation to pay minimum charges under clause 11 of the Agreement. In the case of Mukund Iron & Steel Works Limited (supra), the matter came up before Bombay High Court and there also after referring the case of M/s. Northern Indian Iron and Steel Co. (supra) answered the question against the consumer and held that Board, though obliged to maintain the continuous supply but the minimum charges are for the readiness of the requisite generating capacity and facilities even during the period of the power cut so as to be able to supply the quantum of the contract demand the moment the power cut was lifted, the consumer was liable to pay the minimum demand charge even during the period of power cut. This single Bench decision of the Bombay High Court further came up before the Division Bench of Bombay High Court in the case of Century Textiles & Industries Ltd. v. M.S.E.B. Bombay ( AIR 1997 Bom. 192 ). This single Bench decision of the Bombay High Court further came up before the Division Bench of Bombay High Court in the case of Century Textiles & Industries Ltd. v. M.S.E.B. Bombay ( AIR 1997 Bom. 192 ). The Division Bench relied on the decision of Single Bench and held that the Board was always required to maintain contract demand supply whenever the consumer would put on his switch and in view of the fixed cost of capital, investment and other reasons, it is absolutely just, fair and reasonable that the Board should insist upon the payment for the minimum demand as contemplated under the tariff. Their Lordships negatived the contention that even if the Board is unable to supply the minimum demand, the consumer is not relieved of his responsibility to make payment of the minimum tariff. It was observed that it is not necessary to read force majeure clause in favour of the petitioner consumer. 20. Our attention was also invited to a decision of the Supreme Court in the case of Bihar State Electricity Board, Patna v. M/s. Green Rubber Industries ( AIR 1990 SC 699 ), where minimum guaranteed charges as contemplated in clause 13 came up for consideration and the validity thereof was upheld. But it may be mentioned here that in Clause 13, there was a provision which enabled the consumer to move the authority for rebate in the event of non-supply of the energy. This issue came up for consideration in the two subsequent decisions of Supreme Court in the cases of Bihar State Electricity Board v. Bijoy Mining Company Limited and others [ (1996)6 SCC 202 ] and in the case of Bihar State Electricity Board and others v. Allied Refractories (Pvt.) Limited and others [ (1996)7 SCC 491 ) and their Lordships directed the parties to approach the Chief Engineer for the relief. Thus, Clause 13 of the Agreement of the Bihar Electricity Board made a provision for proportionate rebate in the minimum guaranteed charges but there is no such provision in the present case and the stand taken by the Board is that they are not under obligation to reduce the minimum guaranteed charges. 21. The survey of the cases of Apex Court as well as of various High Courts referred to above would show that the issue is debatable one. 21. The survey of the cases of Apex Court as well as of various High Courts referred to above would show that the issue is debatable one. Barring Bombay High Court and A.P. High Court, other High Courts have taken more pragmatic approach in the matter and they have realised that looking to the power position all over the country, the Board has not been able to maintain the regular supply. Therefore, pragmatic approach has been taken that the Board should give the proportionate rebate in the event of non-supply of the minimum electrical energy so as to cover the minimum tariff. In the case of M/s. Northern Indian Iron and Steel Co. (supra), their Lordships took a very pragmatic approach and looking to the realities of the frequent power break-down in the country, observed that though strictly it is not a breakdown as contemplated in terms of the agreement but nonetheless when there is inability on the part of the Board to supply the minimum energy so as to cover the minimum charges, in that case the Board should give a proportionate rebate in the minimum charges. It is not that their Lordships were not aware of the argument of the Board that the minimum guarantee or minimum charges cover the investment and the financial out lay for management of transmission lines and other necessary requisites irrespective of the fact whether consumer consumes the power or not, or that there is total non-supply of power on account of major breakdown. It was after having considered all aspects of the matter that their Lordships of the Supreme Court interpreted it to be a case of breakdown and awarded proportionate rebate in the minimum charges. 22. In fact, it would be travesty of justice to construe that irrespective of the fact whether the Board is unable to supply the minimum energy which covers the minimum charges, even then the consumer is under obligation to pay the minimum guaranteed charges. It was contended that since the consumer has entered into an agreement with all eyes open, he is bound by the terms of contract and it is not open for him to plead that if the Board is unable to supply the power, there should be a proportionate reduction in the minimum charges. It was contended that since the consumer has entered into an agreement with all eyes open, he is bound by the terms of contract and it is not open for him to plead that if the Board is unable to supply the power, there should be a proportionate reduction in the minimum charges. The Courts have to do justice between the parties and they cannot close eyes to the realities that the power condition in the country is staggering. Therefore, Courts have to interpret the Clauses of the Agreement which advances the cause of justice. Clauses 11 and 23(b) of the Agreement provide-for reduced charges in the event of inability of the Board to supply power. Not only this, in the event of consumer being unable to consume the power, he can also give a notice under clause 23(a) of the Agreement and can seek reduction in the supply and the Board can charge the reduced supply at such rate as per Board's tariff for the area for the time being in force. As such, it is not that that there is one way traffic. There is in fact two way traffic. Whenever the Board fails to • supply energy, then proportionate rebate has been given in Clause 23(b) and • when the consumer is unable to consume the contract demand, he has also been charged on the reduced supply at such rate under Board's' tariff for the area for the time being in force the consumer shall elect to be charged. In both the situations, it is not that the realities of the life have not been taken into consideration. 23. In the tariff which has been issued by the Board, as quoted above, there is no such provision made for a situation that on account of inability of the Board to supply energy, there should be proportionate reduction in the minimum charges or not. After having bestowed our best of consideration, we are of the opinion that clause 23(b) of the Agreement can be invoked in the present situation as when the Board is unable to supply even less than the 40% of the contract demand, that would be treated to be the inability of the Board to supply energy and on account of the reduced supply, the consumer would be entitled to proportionate reduction in the minimum of the contract demand. When the Board is unable to supply the contract demand, then the Board is under an obligation to give a proportionate rebate in the minimum charges also. This is no answer to the fact that since the consumer has entered into an agreement with his eyes open, therefore, he is bound by the statutory contract or that the Board has to cater to out lay and it has worked out 40% contract demand so as to keep the energy going even during the inability of the supplier or of the consumer. Where even the minimum 40% of the contract demand energy is not supplied by the Board and the Board claims charges for the same, it is nothing but travesty of justice. Difficulty arises only when the Board is unable to supply the minimum of the 40% of the contract demand. In case the demand is more than 40%, then automatically 40% of the contract demand charge is covered. But where the Board supplies only 20% of the contract demand and charges for the minimum 40% of the contract demand, can this liberty be given to the Board in face of such inequitable and arbitrary action of the Board on the plea that the consumer has entered into a contract with his eyes open 'and the Board has to cover various out lays? In our humble opinion, this will be inequitable, arbitrary and uneasonable to sustain such an argument. The Courts• are not here to do technical justice. The Courts are also Courts of equity. When clauses 11 and 23 of the Agreement make a provision for two situations i.e. in the event of inability of the Board to supply energy or in the event of inability of the consumer to consume the contract demand, then in either case, charges are made on the reduced supply, then there is no justification to say that so far as 40% of the contract demand is concerned, the Board is under no obligation to supply 40% of the contract load. To accede to this interpretation of the Board will be unfair and unjust. 24. It may be relevant to mention here that in the case of M/s. Northern Indian Iron and Steel Co. To accede to this interpretation of the Board will be unfair and unjust. 24. It may be relevant to mention here that in the case of M/s. Northern Indian Iron and Steel Co. (supra) as well as in the case of B.S.E. Board v. M/s. Dhanawat Rice & Oil Mills ( AIR 1989 SC 1030 ), though clauses of both the Haryana Electricity Board and Bihar State Electricity Board were not exactly akin to the present clauses but all over the country, a model agreement provides for the proportionate rebate in the event of inability of the supplier to supply energy and that of the consumer to consume the energy. In the case of Rajasthan Electricity Board also, in the case of M/s. Man Industrial Corporation v. R.S.E.B. ( AIR 1986 Raj. 137 ), rebate was given. Both the decisions in the case of M/s. Man Industrial Corporation (supra) and Mukund Iron and Steel Works Limited (supra) were referred to by the Hon. Supreme Court in the case of Bihar State Electricity Board v. M/s. Dhanawat Rice and Oil Mills (supra) and after referring to the earlier decision in the case of M/s. Northern Indian Iron and Steel Co. (supra), their Lordships of the Supreme Court reaffirmed the position of law that the consumer in the event of non-supply of the minimum of the contract demand will be entitled to be charged for the actual supply of energy. 25. After considering all aspects of the matter, we are of the opinion that the view taken by the learned Division Bench of this Court in the case of M/s. Gwalior Steels Private Limited v. M.P. Electricity Board ( 1993 JLJ 306 = AIR 1993 M.P. 118 ) does not lay down a correct law and we hold with reference to clause 23(b) of the Agreement read with Tariff, that whenever contracted supply falls short of 40% of the contract load, then the Board shall be entitled to charge for the reduced energy (actually supplied) and will not be entitled to charge 40% of the contract load. This interpretation which appears to us to be more equitable, just and reasonable shall be applicable only prospectively that is from the date of the order and will not have any retrospective operation. This interpretation which appears to us to be more equitable, just and reasonable shall be applicable only prospectively that is from the date of the order and will not have any retrospective operation. This is being done keeping in view that the Division Bench judgment of this Court has held the field since 1993 and the Board has been billing the consumers in the State on that basis and now since we are taking a different view from that of the Division Bench of this Court and we are interpreting the provision contrary to the view taken by the Division Bench in the above case of M/s. Gwalior Steel Private Limited it would be more just and equitable to give this interpretation a prospective effect and not retrospective. Similar course of action was adopted by the Hon. Supreme Court in the case of L. Chandra Kumar v. Union of India ( AIR 1997 SC 1125 ). Therefore we hold that the present interpretation will be prospective in nature and not retrospective. Reference is accordingly answered. The writ petitions will go back before the appropriate Division Bench for hearing and disposal accordingly.