Judgment B.P.Singh, J. 1. The petitioner herein M/s Indian Steel and Iron Products limited is a duly incorporated company registered under the Companies Act, 1956. There was another existing Company known as Jamshedpur Engineering and Machine Manufacturing Company Limited which merged into the petitioner-company by order dated 12th May, 1992 passed by the Calcutta High Court in Company Petition No. 59 of 1992. It thereafter became one of the divisions of the petitioner-Company. Respondent no. 2 herein M/s Tata Iron & Steel Company Limited is also a Company incorporated under the Companies Act, 1882. The said respondent no. 2- Company is a sanction holder within the meaning of that term under section 28 of the Indian Electricity Act, 1910 (hereinafter refered to as the Electricity Act). Respondent no. 2 shall hereinafter be referred to as TISCO. TISCO has been receiving/purchasing electricity from the Bihar State Electricity Board as well as Damodar Valley Corporation besides generating electricity for its own use. After the electricity is received/purchased by TISCO from BSEB and D.V.C., it supplies/resells electricity to its consumers including the petitioner in its area: of supply. It had entered into an agreement in the year 1981 with erstwhile M/s Jamshedpur Engineering and Machine Manufacturing Company Limited for supply of 6.6 KV high tension supply line for 3 M.V.A. In the year 1987 the said agreement came to an end whereupon TISCO called upon the petitioner to execute a fresh agreement containing arbitrary clauses. The petitioner objected to the inclusion of certain clauses in the agreement to be executed by it since they were contrary to the provisions of Supply Act as well as the Electricity Act and were also not authorised in terms of the order of sanction granted in favour of TISCO. Despite its protests TISCO did not relent and put pressure on the petitioner to execute the agreement failing which it threatened to disconnect the electric supply line to the petitioner. The petitioner was therefore compelled to file the instant writ petition. In its writ petition the petitioner prayed for quashing of the various demands raised by respondent no. Despite its protests TISCO did not relent and put pressure on the petitioner to execute the agreement failing which it threatened to disconnect the electric supply line to the petitioner. The petitioner was therefore compelled to file the instant writ petition. In its writ petition the petitioner prayed for quashing of the various demands raised by respondent no. 2 on account of (a) differential rates between D.V.C. and BSEB tariff and old and new tariff with retrospective effect from 1.4.1991; (b) annual minimum guarantee charges (AMG for short) calculated and/or worked out on the basis of 55 percent load factor instead of 25 percent load factor; (c) maximum demand charges calculated and or worked out on the basis of meter set on 15 minutes integration instead of 30 minutes; and (d) interest on the said demand. It also prayed for an order restraining TISCO (respondent no. 2) from disconnecting supply of electricity to the petitioner. 2. With a view to appreciate the nature of the controversy in this writ petition it is necessary to notice a few relevant facts. As observed earlier, the Jamshedpur Engineering and Machine Manufacturing Company Limited which is now a division of the petitioner-Company, had entered into an agreement with TISCO for the supply of 6.6 KV high tension supply line for 3 MVA. Under the said agreement there was a provision for payment of annual minimum guarantee charges which was to be calculated and/or worked out on the basis of 25 percent load factor. Similarly there was provision for payment of maximum demand charges calculated and/or worked out on the basis of meter set on 15 minutes integration. After the said agreement came to an end TISCO wrote a letter to the petitioner-Company enclosing therewith a draft agreement and requesting the petitioner-Company to execute the agreement. Drastic changes were made in the tariff purportedly in view of the revised agreement of TISCO with D.V.C. The petitioner, inter alia, objected to the A.M.G. being calculated on the basis of 55 percent load factor. However, despite its objection TISCO went on submitting bills on the said basis. The petitioner did not execute an agreement as required by TISCO. Thereafter by letter dated 5.5.1992 TISCO again forwarded a draft agreement to the petitioner-Company for its execution. However, despite its objection TISCO went on submitting bills on the said basis. The petitioner did not execute an agreement as required by TISCO. Thereafter by letter dated 5.5.1992 TISCO again forwarded a draft agreement to the petitioner-Company for its execution. The petitioner-Company by its reply dated 25.9.92 objected to giving retrospective operation to the agreement, the surcharge claimed, and A.M.G. charges calculated on the basis of 55 percent load factor as against 25 percent hitherto charged on the basis of BSEB tariff. In reply thereto TISCO forwarded to the petitioner-Company its Circular dated 21.10.1992 regarding the expiry of its agreement with D.V.C. on 31.3.91. It informed the petitioner-Company that a settlement had been reached for continuing the supply by D.V.C. with effect from 1.4.91. It mentioned the fact that the Government of Bihar had withheld permission for continued D.V.C. power to TISCO, proposing that the BSEB will be in a position to supply bulk power thereafter. On account of certain technical difficulties it had resolved that D.V.C. will continue to supply power to TISCO at BSEB tariff with effect from 1.4.1991. Arising out of this, TISCO was required to pay for energy supplied by D.V.C. from 6.4.1991 at BSEB tariff which was higher than the D.V.C. tariff. Arrears for the period 1.4.91 to 31.8.92 was to be paid in four instalments before 31st March, 1993. Notice was, therefore, sent for recovery of the differential tariff between BSEB and D.V.C. for the period 1.4.91 to 31.8.92 to be recovered fully in four instalments before 31.3.93. Consequently to the above TISCO also proposed to revise their tariff applicable to all consumers, and the revised tariff, which was presently being worked out, will be effective from 1.9.92, 3. On 23.1.92 TISCO intimated that a sum of Rs. 38,65,062.01 paise was payable by the petitioner as differential tariff and a sum of Rs. 15,44,862.44 paise as revised tariff from September 1992 to December 1992. The petitioner-Company objected to the same as it had not been told in advance about the enhancement of the tarift and therefore, it had no chance of recovering the same from its customers. This was significant, particularly in view of the fact that the cost of electrical energy accounted for 15 percent of its cost of production. The petitioner-Company objected to the same as it had not been told in advance about the enhancement of the tarift and therefore, it had no chance of recovering the same from its customers. This was significant, particularly in view of the fact that the cost of electrical energy accounted for 15 percent of its cost of production. It, therefore, objected to the revision of the tariff retrospectively, and also contended that the agreement between D.V.C. and TISCO was not binding upon it. TISCO again wrote to the petitioner on 21.9.94 enclosing a copy of the alleged approval granted by the Government on 26.5.93 along with a copy of TISCOs tariff with effect from 1.7.1993. 4. The grievance of the petitioner has been that even under the agreement between the BSEB, DVC and TISCO, TISCO was only acting as an agent of the BSEB and therefore it could charge only as per the mode of calculation of BSEB regarding annual minimum guarantee charges and maximum demand chages. Section 2(8) of the Supply Act provides for the maximum demand calculated on th.e basis of 30 minutes integration, and in the absence of Governments permission, the same could not be calculated on the basis of 15 minutes integration. 5. However, the TISCO went on submitting AMG bills and calculating the same on the basis of 55 percent load factor and claimed a sum of Rs. 7,67,922.82 paise for the period April to June 1993 and Rs. 63,12,631.50 paise for the period July 1993 to March 1994. The petitioner objected, insisting that the charge should be levied on the basis of 25 percent load factor and not 55 percent load factor. While such disputes were continuing, on 22.3.95 TISCO again forwarded a draft agreement for execution within 30 days failing which it was to be presumed that the petitioner had duly executed the same with effect from 1.4.1993. Despite the petitioners objection, respondent no. 2 again demanded a sum of Rs.1,007,531.99 paise for the delayed payment of AMG bills to which also the petitioner objected. On 30th June, 1995, TISCO again demanded AMG and differential power charges amounting to Rs.1.27 crores. Thereafter on 23.10.1995 TISCO demanded a sum of Rs.1,93,45,305.33 paise being the enhanced energy charges, surcharge etc. from 1.7.1993 and dues from 1.1.93 to 30th September, 1995. A meeting was held on 15.1.96 but that did not bring about any change. On 30th June, 1995, TISCO again demanded AMG and differential power charges amounting to Rs.1.27 crores. Thereafter on 23.10.1995 TISCO demanded a sum of Rs.1,93,45,305.33 paise being the enhanced energy charges, surcharge etc. from 1.7.1993 and dues from 1.1.93 to 30th September, 1995. A meeting was held on 15.1.96 but that did not bring about any change. It was in this background that the instant writ petition was filed. 6. Respondent no. 2 TISCO in its counter-affidavit denied the allegations and submitted that under section 22 of the Electricity Act, supply of electricity is to be made pursuant to an agreement. Since the petitioner had not entered into an agreement, it was not entitled to the supply of electrical energy. Moreover, TISCO as a sanction holder could not discriminate between its consumers. Since the other consumers had accepted the terms and conditions incorporated in the agreement, the petitioner could not claim a separate tariff for itself. Moreover, TISCO as a sanction holder was not expected to supply at a rate lower than what it paid for the supply of such electrical energy from its supplier. Since the TISCO had been called upon to pay enhanced charges retrospectively with effect from 1.4.91, it was justified in passing on the enhanced liability to its consumers. Similarly, since TISCO is required to pay annual minimum guarantee charges based on 55 percent load factor and maximum demand charges on the basis of 15 minutes integration, it was justified in applying the same method for calculating the charges payable by its consumers. 7. in-the supplementary counter-affidavit filed on behalf of TISCO, the maintainability of the writ petition was challenged and it was further stated that the petitioner owed to TISCO a sum of Rs. 2.91 crores. The petitioner had not entered into an agreement with TISCO after 1987. The question of calculation of annual minimum guarantee charges and maximum demand charges involved disputed question of fact and could not be gone into in a writ petition. Moreover, TISCO not being State within the meaning of Article 12 of the Constitution of India, was not amenable to writ jurisdiction of this Court. 8. It appears from the record that this Court by order dated 19.2.96 while issuing notice to respondent no. 2 had directed that pending admission of the writ petition respondent no. 2, TISCO was restrained from disconnecting the electrical energy of the petitioner. 8. It appears from the record that this Court by order dated 19.2.96 while issuing notice to respondent no. 2 had directed that pending admission of the writ petition respondent no. 2, TISCO was restrained from disconnecting the electrical energy of the petitioner. On 14.5.1996 when the writ petition was admitted for hearing it was observed that in case the petitioner if it agreed to sign the agreement, subject to the result of the writ petition respondent no. 2 TISCO shall not disconnect the supply of electrical energy to it provided all charges are paid, including the arrears. It was made clear that signing of the agreement by the petitioner-Company during the pendency of the writ petition will not preclude it from making the submissions, which had been urged in the writ application. In the counter-affidavit filed in reply to the application for vacating the interim order dated 19.2.1995, the petitioner-Company stated that it had signed the agreement and was making payment as per the order dated 14.5.96. 9. The petitioner-Company filed an application for amendment of the writ petition reiterating its earlier grievances and further challenged the interest demanded by TISCO which, according to it, was exorbitant. 10. At the threshold I may notice that the preliminiary objection raised by TISCO, respondent no. 2, that it was not amenable to the writ jurisdiction of this Court not being State within the meaning of Article 12 of the Constitution of India, was considered by a Division Bench of this Court and by order dated 27th February, 1997, it was held that TISCO was an authority within the meaning of Article 226 of the Constitution of India, and State within the meaning of Article 12 of the Constitution. The preliminary objection of TISCO was therefore, rejected and the writ petition was held to be maintainable. 11. Before adverting to the rival submissions it is necessary to notice some of the provisions of the Electricity Act and the Supply Act. Section 28 of the Electricity Act provides that no person, other than a licensee, shall engage in the business of supplying energy to the public, except with the previous sanction of the State Government, and in accordance with such conditions as the State Government may fix in this behalf. It is also worth noticing that section 28 occurs in Part III of the Electricity Act. It is also worth noticing that section 28 occurs in Part III of the Electricity Act. By definition "licensee" under the Act means any person licensed under Part ll to supply energy. It. therefore, follows that a sanction holder under section 28 does not fall within the definition of licensee under the. Electricity Act. However, under the Supply Act of 1948 a licensee had been defined to mean a person licensed under Part II of the Electricity Act or a person who has obtained sanction under section 28 of the Act to engage in the business of supplying energy, but does not include the Board or a generating company. It would thus appear that sanction holder under section 28 of the Electricity Act comes within the definition of licensee under the Supply Act, 1948. 12. Section 21(2) of the Electricity Act is also relevant because it has been included as one of the provisions applicable to the sanction holder, TISCO. Section 21 (2) provides as follows : "A licensee may, with the previous sanction of the State Government, given after consulting the State Electricity Board and also the local authority, where the licensee is not the local authority, make conditions not inconsistent with this Act or with his licence or with any rules made under this Act, to regulate his relations with persons who are or intend to become consumers, and may, with the like sanction given after the like consultation, add to or alter or amend any such conditions; and any conditions made by a licensee without such sanction shall be null and void." Section 22 of the Electricity Act is also relevant which provides as under: 22. Obligation on licensee to supply energy.- Where energy is supplied by a licensee, every person within the area of supply shall, except in so far as is otherwise provided by the terms and conditions of the licence, be entitled on application, to a supply on the same terms as those on which any other person in the same area is entitled in similar circumstances to a corresponding supply : Provided that no person shall be entitled to demand, or to continue to receive, from a licensee a supply of energy for any premises having a separate supply unless he has agreed with the licensee to pay to him such minimum annual sum as will give him a reasonable return on the capital expenditure, and will cover other standing charges incurred, by him in order to meet the possible maximum demand for those premises, the sum payable to be determined in case of difference or dispute by arbitration." Under the Electricity (Supply) Act, 1948 section 2(8) defines maximum demand as under : "Maximum demand" in relation to any period shall, unless otherwise provided in any general or special order of the State Government mean twice the largest number of kilowatt-hours or kilo-volt-ampere-hours supplied and taken during any consecutive thirty minutes in that period." Section 57 of the Supply Act provides that the provisions of the Sixth Schedule shall be deemed to be incorporated in the licence of every licensee, not being a local authority, in the case of a licence granted before the commencement of this Act from the date of the commencement of the licensees next succeeding year of account; and in the case of a licence granted after the commencement of this Act, from the date of the commencement of supply. From such date the licensee shall comply with the provision of the Sixth Schedule and any provisions of the Electricity Act 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 57-A and the said Schedule. The first clause of the Sixth Schedule reads thus : I "Notwithstanding anything contained in the Indian Electricity Act, 1910 (9 of 1910) except sub-section (2) of Sec. 22-A, and the provisions in the licence of a licensee, the licensee shall so adjust his charges 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 : Provided that such charges 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 charges if the clear profit in any year of account has not exceeded the amount of reasonable return by twenty per centum of the amount of reasonable return : Provided further that the licensee shall not enhance the charges 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 charges, given by him to the State Government and to the Board : Provided further that if the charges of supply fixed in pursuance of the recommendations of a rating committee constituted under Sec. 57-A are lower 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 : Provided also that nothing in this Schedule shall be deemed to prevent a licensee from levying, with the previous approval of the State Government, minimum charges for supply of electricity for any purpose. I-A The notice referred to in the third proviso to para. I shall be accompanied by such financial and technical data in support of the proposed enhancement of charges as the State Government may, by general or special order, specify." 13. Considerable reliance has been placed by the parties on the third and the fifth provisos set out above. Counsel for the petitioner has very succinctly identified the five heads of dispute in the instant case as follows : (i) Whether TISCO in calculating annual minimum guarantee charges is entitled to change load factor from 25 percent to 55 percent without any prior approval of the Government? (ii) Whether TISCO can alter its tariff with retrospective effect? Counsel for the petitioner has very succinctly identified the five heads of dispute in the instant case as follows : (i) Whether TISCO in calculating annual minimum guarantee charges is entitled to change load factor from 25 percent to 55 percent without any prior approval of the Government? (ii) Whether TISCO can alter its tariff with retrospective effect? (iii) When although statute prescribes maximum demand to be computed on the basis of 30 minutes integration period, whether TISCO can levy such demand on the basis of 15 minutes integration period? (iv) Whether the TISCO is entitled to levy any surcharge when the maximum demand of a consumer exceeds the contract demand? (v) Change in the rate of interest from 12 percent per annum to 2 percent per month i.e., 24 percent per annum is exorbitant. 14. It is not in dispute that the sanction was accorded to TISCO for the first time on 9th November, 1923 under section 28 of the Electricity Act. However, the said order of sanction was modified by notification no. 2 dated 29.1.1974. In fairness, Sri Chatterjee, Senior Advocate appearing on behalf of TISCO, brought this to the notice of the Court and produced a copy thereof. By the said notification the Government of Bihar made some additions or variations in the conditions of the sanction order dated 9.11.1923. Paragraph no. 1 refers to some of the sections and clauses of the Schedule to the Electricity Act, 1910 which were made applicable to the grantee as they applied to a licensee in respect of supply of power to the consumers, in addition to the conditions incorporated in the sanction dated 9.11.1923. The sections of the Electricity Act which are made applicable are sections 20, 21, 22, sub-sections (1) and (2) of section 22-A, section 22-B, section 24 and section 26. It is not necessary to refer to the various clauses of the Schedule which were made applicable as nothing turns on that. Clause (2) of the notification provides that the grantee shall not revise, amend or alter the conditions of supply, the mode of charge and the charges for supply of energy to any class or category of consumer without the prior approval of the State Govt. in writing. Clause (2) of the notification provides that the grantee shall not revise, amend or alter the conditions of supply, the mode of charge and the charges for supply of energy to any class or category of consumer without the prior approval of the State Govt. in writing. Under clause 3(a) the grantee is prohibited while making any agreement for the supply of energy to show undue preference to any person, except the bonafide employees of the Company to whom the concessional rate may be offered with the approval of the Government. 15. One more fact deserves notice at this stage since TISCO, respondent no. 2, justifies its action on the basis of a tripartite agreement entered into between BSEB, DVC and TISCO. Under the Damodar Valley Corporation Act, Damodar Valley Corporation cannot supply electrical energy beyond the area comprised within the "Damodar Valley" unless required by the State to do so. There was an agreement between the Government of Bihar and Damodar Valley Corporation which authorised supply of electrical energy by DVC to the area where TISCO is located outside the DVC valley. The said agreement came to an end on 31st March, 1991. Thereafter, the State Government was not willing to continue the supply being made by DVC to such areas. However, after great persuation a tripartite agreement was entered into between the Bihar State Electricity Board, Damodar Valley Corporation and TISCO which was executed on 23rd December, 1992, but was given effect from 1.4.1991. The said agreement is Annexure-34 to the writ petition. Clauses 2 and 3 of the agreement are relevant and are extracted in extenso: "2. Whereas with the permission of the Government of Bihar, the DVC and the TISCO had entered into an Agreement for supply of power and the said Agreement expired on 31.8.1991 and in order to maintain the continuity in supply of power beyond 31.3.91, the DVC and the TISCO approached the Government of Bihar and after several discussions held between the BSEB, TISCO and the DVC, and the, Government of Bihar, thereafter having come to a settlement, whereupon the following terms and conditions were agreed to by and between the parties named hereinabove. 2(i) The present arrangement of power supply by DVC to TISCO at Jamshedpur will continue on terms and conditions mentioned hereinbelow. 2(ii). The supply of power by DVC to TISCO shall be treated as deemed supply by BSEB. 2(i) The present arrangement of power supply by DVC to TISCO at Jamshedpur will continue on terms and conditions mentioned hereinbelow. 2(ii). The supply of power by DVC to TISCO shall be treated as deemed supply by BSEB. 2(iii) TISCO shall directly pay to DVC at BSEB tariff which shall not be less than the DVC tariff and such payment shall be enforceable from time to time for such power supply with effect from 1st day of April, 1991. 2(iv). From the payment collected from TISCO, the DVC shall adjust towards the current charge of electricity at their tariff, the differential amount between the bills at BSEB tariff and the DVC tariff applicable to TISCO shall be paid and/or adjusted by DVC towards current, arrears and outstanding dues of BSEB payable to DVC and when arrears of DVC outstanding is fully adjusted additional amount realised by DVC from TISCO on account of supply at BSEB tariff shall be paid by DVC to BSEB after adjusting current energy charges payable by BSEB to DVC on account of supply of energy by it to BSEB. 2(v) TISCO agrees to pay the differential amount of bills based on BSEB tariff and DVC tariff to DVC from 01/04/1991 (i.e. the date when the last contract between DVC and TISCO expired) subject to the following : (a) DVC will raise a bill to TISCO as per Clause 2(iii) above for the period from 1.4.91 to 31.10.92. TISCO will pay 50% of the billed amount in the first instalment. Balance amount of the said bill will be paid in three equal instalments by 31.3.1993. (b) For the period from 1.11.92 onwards DVC will raise current/supplementary bills as per Clause 2(iv). 3. This Agreement shall remain in force till such times as permitted by the Government of Bihar." 16. After the execution of the said tripartite agreement on 23.12.92 TISCO, respondent no. 2, wrote to the State Government soliciting its approval for revision of its tariff with effect from 1.4.92. The said application is Annexure-35 to the writ petition, and it refers to the tripartite agreement signed on 23rd December, 1992. The Government of Bihar had also signed the said agreement as a conforming party. In view of the agreement TISCO had worked out the revised tariff to its consumers based on 6th Schedule of the Indian Electricity (Supply) Act, 1948 . The Government of Bihar had also signed the said agreement as a conforming party. In view of the agreement TISCO had worked out the revised tariff to its consumers based on 6th Schedule of the Indian Electricity (Supply) Act, 1948 . Various statements and calculations were annexed to the said application and approval for revision of tariff with effect from 1.4.92 was solicited. It also referred to the minutes of the meeting dated 28.7.92 when Hon ble Chief Minister had given approval to revise the tariff from 1.4.91. In Tariff (A) 92 which was also enclosed with the aforesaid letter, the ceiling overall unit rate applicable was shown as Rs. 1.98/KWH, and it was stated that the overall unit rate comprising of energy charge and demand charge, but excluding fuel cost surcharge and any other element of charoes, shall not exceed above the ceiling rate without prejudice to the payment of minimum demand charges and the minimum guaranteed energy charges. 17. Pursuant to the application of TISCO for revision of tariff, the State Government was pleased to approve the tariff for high tension, low tension and other consumers with effect from 1st April, 1992 as detailed in the order granting approval. The said order granting approval is dated 26th May, 1993, but the approval for revision of tariff has been given with effect from 1st April, 1992. 18. A similar application for revision of tariff was made on 11th October, 1993 which is Annexure-36 to the writ petition. It became necessary to further revise the tariff because Bihar State Electricity Board vide Tariff Notification dated 21.6.93 had revised its tariff to its consumers with effect from 1st July, 1993. In view of the revision of the tariff by BSEB, TISCO had revised its tariff and the revised tariff was made effective from 1st July, 1993. The State of Bihar by its letter (Annexure-37) dated 1.10.1995 approved the tariff with effect from 29.9.1993, as detailed in the said letter. 19. It appears that TISCO, respondent no. 2, was not satisfied with the revision of tariff with effect from 29.9.1993 for the reasons mentioned in the said letter. The TISCO had prayed that the tariff be made effective from 1.7.1993 since TISCO had implemented the revised tariff with effect from 1.7.1993 to its consumers only after expiry of 60 days notice. It appears that TISCO, respondent no. 2, was not satisfied with the revision of tariff with effect from 29.9.1993 for the reasons mentioned in the said letter. The TISCO had prayed that the tariff be made effective from 1.7.1993 since TISCO had implemented the revised tariff with effect from 1.7.1993 to its consumers only after expiry of 60 days notice. It does not appear that the request of the TISCO was granted by the Government. 20. Pursuant to the approval granted by the State Government, the impugned bills have been raised by TISCO against the petitioner-company. 21. At the threshold Sri K.D. Chatterjee appearing on behalf of TISCO challenged the maintainability of the writ petition on the ground that after the expiry, of the agreement in the year 1987, the petitioner despite repeated request did not enter into an agreement with TISCO. The TISCO had served upon the petitioner a notice of disconnection but by. reason of interim order passed by this Court, the supply of electrical energy to the petitioner was maintained. The tariff framed by TISCO and approved by the State Government has been accepted by all other consumers, except the petitioner, who demands a special tariff for itself. They do not have any such right. It was further submitted that in terms Section 22 of the Electricity Act provides that no person shall be entitled to demand or to continue to receive from a licensee a supply of energy for any premises having a separate supply unless he has entered into an agreement with the licensee to pay to him such minimum annual sum as will give him a reasonable return on the capital expenditure and will cover other standing charges incurred by him in order to meet the possible maximum demand for those premsies. Thus, a licensee is not obliged to supply electrical energy in the absence of an agreement with the consumer. The petitioner not having entered into an agreement with TISCO is not entitled to maintain a writ petition claiming special terms and conditions for itself. The main part of Section 22 of the Electricity Act also obliges a licensee to supply electrical energy to a consumer on the same terms as those on which any other person in the same area is entitled in similar circumstances to a corresponding supply. The main part of Section 22 of the Electricity Act also obliges a licensee to supply electrical energy to a consumer on the same terms as those on which any other person in the same area is entitled in similar circumstances to a corresponding supply. In sum and substance, it was submitted that in the absence of agreement between the TISCO and the petitioner, the instant writ petition was not maintainable. 22. The submission urged on behalf of TISCO must be rejected. It has been held by this Court that TISCO being a sanction holder under section 28 of the Electricity Act is an authority under Article 226 of the Constitution of India and State within the meaning of Article 12 of the Constitution of India. TISCO has a monopoly for the supply of electrical energy within its own area. As a sanction holder, it performs functions which are controlled by statutory provisions, including the sanction order issued under section 28 of the Act. The TISCO, therefore, cannot act in an arbitrary or unreasonable manner. If TiSCO purports to impose conditions of supply, or incorporates in the draft agreement clauses relating to payment of charges not in accordance with law, a consumer is certainly entitled to challenge the action of TISCO being an authority under Article 226 of the Constitution of India on the allegation that its actions are in breach of the statutory provisions. The case of the petitioner is that it is willing to enter into an agreement which is authorised by law, but it is certainly entitled to protest and challenge the action of TISCO if it acts in a manner contrary to law. The submission urged on behalf of the petitioner must prevail, because even in the matter of entering into an agreement with a consumer, a sanction holder under section 28 of the Electricity Act cannot act in an unreasonable or arbitrary manner, and certainly not in breach of the statutory provisions. For this purpose a consumer can certainly maintain a writ petition under Article 226 of the Constitution of India to compel TISCO to act in accordance with law. The preliminary objection must, therefore, be rejected. 23. Mr. For this purpose a consumer can certainly maintain a writ petition under Article 226 of the Constitution of India to compel TISCO to act in accordance with law. The preliminary objection must, therefore, be rejected. 23. Mr. K.D. Chatterjee made a general submission having regard to the background in which TISCO applied for being granted a sanction under Section 28 of the Electricity Act, the scheme underlying the Electricity Act and the Supply Act, and circumstances which necessitated the change in the tariff and other changes brought about by it, which is subject matter of challenge in this writ petition, it was submitted that in the year 1912 TISCO set up an industry at Jamshedpur for the production and manufacture of steel. Gradually, a township developed and the need was felt for civic amenities to the inhabitant of the township, including supply of electrical energy. In these circumstances, TISCO became a sanction holder under the original sanction order dated 9.11.1923 which was published in the Gazette on that date. Part III of the Electricity Act which consists of only three sections beginning with Section 28, deals with supply, transmission, and use of energy, by non-licensee, which includes a sanction holder. Under the Electricity Act, a sanction holder is not a licensee and there is nothing in Part III which relates to framing of tariff. TISCO continued to supply electrical energy to its consumers for almost 51 years and it was only thereafter that changes were made in the order granting sanction by notification dated 21.9.1974. By the aforesaid notification some sections of the Electricity Act were incorporated in the sanction order which included Sections 21 and 22. Though he submitted that Section 23 was not incorporated in the sanction order, it appears that clause 3 of the notification dated 21.9.1974 is a verbatim re-production of Section 23 of the Electricity Act. Only some minor changes, such as substitution of the word grantee for the word licensee in Section 23 have been made. He, therefore, submitted that it was only after the year 1974 that a question may possibly arise about the application of the provisions of the Act relating to tariff. Only some minor changes, such as substitution of the word grantee for the word licensee in Section 23 have been made. He, therefore, submitted that it was only after the year 1974 that a question may possibly arise about the application of the provisions of the Act relating to tariff. For the period 1974 to 1984, the picture is not clear as there is nothing in the pleadings as to how the charges were levied during this period, but thereafter the supply of electrical energy to TISCO by DVC contained the annual minimum guarantee formula based on 55% load factor. However, the consumers benefited by TISCOs default because during the period 1984-87 the AMG formula remained unchanged based on 25% load factor. However in the year 1987, TISCO sought, to bring about a change in the AMG formula by substituting 55% load factor in place of 25% load factor, because the AMG formula applicable to TISCO in respect of electrical energy supplied to it by DVC was based on 55% load factor. This change was accepted by all consumers of TISCO except the petitioner. 24. He further submitted that under an agreement between Damodar Valley Corporation (for short DVC) and the Govt. of Bihar, the DVC was permitted to supply electrical energy beyond its area of operation. This agreement came to an end on 31.3.1991 whereafter the State Government was not willing to permit the DVC to supply electrical energy to Jamshedpur which was beyond its area of operation. However, after great persuasion a tripartite agreement was entered into, which was signed on December 23, 1992, but which came into effect from 1st April, 1991. The State of Bihar was a conforming party to the agreement and therefore the terms and conditions of the agreement had the approval of the State of Bihar. The change in tariff for which approval was sought by TISCO and granted by the State Government, has as its basis the aforesaid Tripartite agreement. It was submitted that TISCO cannot be expected to supply electrical energy to its consumers at a price less than what it pays for the supply of electrical energy by the DVC, and therefore there was justification for the increase. 25. Mr. It was submitted that TISCO cannot be expected to supply electrical energy to its consumers at a price less than what it pays for the supply of electrical energy by the DVC, and therefore there was justification for the increase. 25. Mr. Chatterjee further submitted that under the Electricity Act a sanction holder under section 28 of the Act is not a licensee, because a licensee under the Act means a person licenced under Part II to supply energy. However by definition under the Supply Act of 1948, licensee includes not only a person licensed under Part ll of the Electricity Act, but also a person who has obtained a sanction under section 28 of the Act to engage in the business of supplying energy, but does not include the Board or a generating company. He submitted that a contextual meaning must be given to term "licensee" even under the Supply Act, and it would be erroneous to always include a sanction holder wherever the term licensee occurs in the Act. In this context he submitted that though Section 57 of the Supply Act provides that the provisions of the 6th Schedule shall be deemed to be incorporated in the licensee, it does not follow that the term "licencee" in the said Section includes a sanctioned holder. According to him, since a sanction holder does not possess a licence, the term licensee in Section 57 must be confined in the context, a licensee under Part II of the Electricity Act. He submitted that it would be impossible to work out the profits in case of a sanction holder in accordance with Schedule 6. 26. It is not necessary to go into the question as to whether a sanction holder is included within the term "licensee" in Section 57 of the Act, so that the 6th Schedule to the Supply Act gets incorporated in its sanction order. Though counsel for the petitioner has relied upon Section 57 and 6th Schedule of the Supply Act, he also contended, as did Mr. Chatterjee, that so far as rights and obligations of a sanction holder are concerned, they must be speit out from the order granting the sanction under Section 28 of the Electricity Act. 27. Though counsel for the petitioner has relied upon Section 57 and 6th Schedule of the Supply Act, he also contended, as did Mr. Chatterjee, that so far as rights and obligations of a sanction holder are concerned, they must be speit out from the order granting the sanction under Section 28 of the Electricity Act. 27. I shall now take up for consideration the question as to whether TISCO was justified in basing its AMG charges on 55 per cent load factor instead of 25 per cent load factor after 1987. it is not in dispute that AMG charges were payable by the consumers, such as the petitioner, even before 1987, but the charges were based on 25 per cent load factor. The formula prescribed for determination of AMG charges has as its component the load factor. The formula is as follows : contract demand multiplied by 0.85 (power factor) multiplied by 24 (hours) multiplied by 365 (days) multiplied by load factor. Thus if the load factor is substituted by 55 instead of 25, there is bound to be an enhancement of the minimum charges payable. Counsel for the petitioner relied upon the 5th proviso to the 6th Schedule to the Supply Act which provides that nothing in the Schedule shall be demand to prevent a licensee from levying, with the previous approval of the State Government, minimum charges for supply of electricity for any purpose. This proviso to my mind only enables a licensee to levy minimum charges with the previous approval of the State Government. It does not deal with the enhancement or the increase of minimum charges. It is not in dispute that the minimum charges were payable by the petitioner even in the past, and therefore, it can be assumed, in the absence of any averment to the contrary, that the levy of minimum charges had previous approval of the State Government. Even otherwise, under Section 22 of the Electricity Act, a licensee is entitled to stipulate for payment of minimum charges. There is, therefore, nothing in the 5th proviso to the 6th Schedule which deals with enhancement of minimum charges. Even otherwise, under Section 22 of the Electricity Act, a licensee is entitled to stipulate for payment of minimum charges. There is, therefore, nothing in the 5th proviso to the 6th Schedule which deals with enhancement of minimum charges. Reliance was then placed on subsection (2) of Section 21 of the Electricity Act which provides that a licensee may with the previous sanction of the State Government, make conditions not inconsistent with this Act or with his licence or with any rules made under this Act, to regulate his relations with persons who are or intend to become consumers, and may, with the like sanction given after the like consultation, add to or alter or amend any such condition, and any conditions made by a licensee without such sanction shall be null and void. To my mind, Section 21(2) is also of no help to the petitioner because that only deals with making of conditions not inconsistent with the Act, the licence, or with any rule made under the Act. As noticed earlier, Section 21 itself provides for incorporation of a term relating to payment of minimum charges, and therefore, the levy of minimum charges is not inconsistent with the Acts and rules made thereunder or with the licence of a licensee, which in the context of a sanction holder must mean his sanction order. 28. However, the amendment made to the sanction order by notification dated 21.9.1974 is relevant. Clause (2) of the notification provides that the grantee shall not revise, amend or alter the conditions of supply, the mode of charge, and the charges for supply of energy to any class or category of consumers without the prior approval of the State Government in writing. It would thus appear that TISCO is not entitled to revise, without the prior approval of the State Government in writing, the conditions of supply, the mode of charge, and the charges for supply of energy. By substituting 50 per cent load factor in place of 25 per cent load factor in the formula evolved for determination of AMG charges, there is certainly a revision of the mode of charge, if not the charge for supply of energy. By substituting 50 per cent load factor in place of 25 per cent load factor in the formula evolved for determination of AMG charges, there is certainly a revision of the mode of charge, if not the charge for supply of energy. Counsel for the TISCO submitted that AMG is not a charge but an obligation to take supply of minimum quantity of electricity, and therefore the unit charge to be demanded on the failure of the obligation is not an enhanced charge. It may be that the obligation to pay AMG charge may arise upon failure of a consumer to consume the guaranteed minimum units. However, it cannot be denied that it is a charge payable by a consumer to the supplier, and by substitution of 50 per cent load factor in place of 25 per cent load factor, such charge is definitely enhanced. That a consumer may not incur this liability is a different question altogether. However, if the liability arises, the charge has to be paid. It may also be noticed that this enhanced charge is being demanded from the year 1987 onwards, much before the tripartite agreement. The only basis on which such demand was made was that DVC calculated AMG charges payable by TISCO on the basis of 55 per cent load factor. In my view, if the AMG is also a charge, the same cannot be enhanced without the prior approval of the State Government in writing. No such approval in writing has been brought on record. I. therefore, hold that TISCO in the absence of the approval of the State Government cannot enhance the AMG charges by the indirect method of substituting 55 per cent load factor in place of 25 per cent load factor in the AMG formula. 29. The second grievance of the petitioner relates to maximum demand charges. It is not in dispute that earlier the maximum demand was computed on the basis of maximum demand during 30 minutes integration period. That is sought to be changed to 15 minutes integration period and the reason therefore is the same, namely, that the DVC which supplies electrical energy to TISCO applies the same formula while calculating the maximum demand charges payable by TISCO. That is sought to be changed to 15 minutes integration period and the reason therefore is the same, namely, that the DVC which supplies electrical energy to TISCO applies the same formula while calculating the maximum demand charges payable by TISCO. It may here be noticed that DVC is not a licensee either under the Electricity Act or the Supply Act and is, therefore, not bound by the terms and conditions of any license issued to it, nor is it approved by the provisions of the Supply Act in so far as they relate to levy of maximum demand charges. TISCO however is a sanction holder and, therefore, a licensee under the Supply Act and is, therefore, bound by the provisions of the said Act. It cannot stipulate terms and conditions which are contrary to the provisions of Supply Act. Under the Supply Act, maximum demand has been defined in sub-section (8) of Section 2 which definition has been extracted earlier in this judgment. The calculation of maximum demand is based on 30 minutes integration period and not 15 minutes. Since the maximum demand has been statutorily defined, it is not possible for a licensee under the Act to prescribe otherwise. Indeed, it is not open even to the State Government to approve of a maximum demand which is calculated in the manner other than in the mariner prescribed under the Act. The reduction of the integration period from 30 minutes to 15 minutes is therefore, clearly contrary to the provisions of the Supply Act, which statutorily defines the terrn maximum demand. I, therefore, hold that TISCO is not justified in reducing the integration period from 30 minutes to 15 minutes in the teeth of definition of "maximum demand" as contained in Section 2(8) of the Supply Act. 30. The next question which arises for consideration is whether the TISCO is justified in revising its tariff and claiming any differential charge from the petitioner. The TISCO has demanded from the petitioner differential charge between DVC and BSEB tariffs by issuance of two bills, both dated 23.1.1993. The first bill relates to the period 1.4.1991 to 31.8.1992 and the second bill relates to the period 1.4.1991 to 31.8.1992. Two further bills have been raised by the TISCO representing the difference between the old and the new tariff. The first bill relates to the period 1.4.1991 to 31.8.1992 and the second bill relates to the period 1.4.1991 to 31.8.1992. Two further bills have been raised by the TISCO representing the difference between the old and the new tariff. The third bill dated 23.1.1993 relates to the period 1.2.1992 to 31.12.1992 and the fourth bill of 31.12.1992 relates to the period 1.7.1993 to 30.11.1993. 31. A few facts not in dispute may be noticed. The tripartite agreement executed on December 23, 1992 came into effect from 1st April, 1991. Pursuant thereto by Annexure-35 the TISCO applied to the State Government, for its approval for revising its tariff with effect from 1.4.1992. The said approval was granted by the State Government by Annexure-6 dated 26.5.1993 with effect from 1.4.1992. Similarly, upon the revision of tariff by Bihar State Electricity Board by its notification dated 21.6.1993, TISCO applied to the State Government on 11.10.1993 soliciting its approval for revising the HT and LT tariff in the light of upward revision of tariff by the Board. Approval was sought effective from 1st July, 1993, but the State Government by its order dated 1.10.1995 (Annexure-37) granted approval effective from 29.9.1993. 32. It is, therefore, not in dispute that the enhanced tariff has the approval of the State Government. The question however which has been urged before this Court is that such approval granted by the State cannot be applied retrospectively, and for this proposition reliance is placed upon a judgment of this Court in Bihar Chamber of Commerce & Anr. V/s. The Bihar State Electricity Board and anr. [1993 (1) PLJR 36] which followed the principle laid down by the Supreme Court in the case reported in AIR 1972 SC 2427 . It was submitted on the strength of this authority that tariff cannot be changed with retrospective effect. 33. On the other hand, counsel for TISCO submitted that the authority relied upon by the petitioner is not an authority for the proposition that tariff cannot be revised retrospectively, and all that was held in that decision was that the Board acting as a delegate exercising powers of subordinate delegation could not frame a tariff which had retrospective effect. He further submitted that the tariff framed does not have retrospective effect in the sense that it alters the existing tariff and implements the revised tariff in the place of existing tariff. He further submitted that the tariff framed does not have retrospective effect in the sense that it alters the existing tariff and implements the revised tariff in the place of existing tariff. It was submitted that mere reference to an earlier date does not make it retrospective, unless it seeks to change the existing conditions with effect from an earlier date. As a principle of law, he submitted that though a condition may not be changed retrospectively, but if a dispute arises an approval may be given which has effect from the date the dispute arose. In the instant case, he submits the question of revision of tariff arose on account of tripartite agreement and the upward revision of tariff by BSEB. TISCO, therefore, applied for revision of its tariff and the State naturally took some time to grant the approval. In such a case, it could not be said that the tariff had retrospective operation, because during that period the question as to whether the tariff should be enhanced, was pending consideration. 34. in Bihar Chamber of Commerce (supra) the petitioners had challenged the various provisions of the revised tariff notified by the Bihar State Electricity Board vide notification dated 26th August, 1991 in supersession of the earlier notification dated 17th June, 1983. The impugned notification was purported to have been issued in exercise of powers conferred under Sections 46 and 49 of the Supply Act with the approval of the State Government. By the aforesaid notification changes were made with regard to high tension service consumer, low tension service consumer, domestic consumer and commercial consumer. The notification was challenged on the ground that the Board being the delegatee was not entitled to frame a tariff with retrospective effect unless the statute specifically empowered it to do so. Thus, clause (2) of the impugned notification, so far as it made the tariff effective from 1.8.1991, was illegal and unauthorised. Noticing the provision of Section 49 of the Supply Act, the Court held, relying upon the decision of the Supreme Court in Hukumchand V/s. Union of India ( AIR 1972 SC 2427 ), that the power vested under Section 49 of the Act authorising the Board to fix uniform tariff was in the nature of power to make subordinate legislation. Noticing the provision of Section 49 of the Supply Act, the Court held, relying upon the decision of the Supreme Court in Hukumchand V/s. Union of India ( AIR 1972 SC 2427 ), that the power vested under Section 49 of the Act authorising the Board to fix uniform tariff was in the nature of power to make subordinate legislation. Such being the position, in the absence of any such power allowing the Board to make the tariff effective retrospectively, clause (2) of the impugned notification to that extent was bad in law and could only be made effective from the date it was published in the Gazette. 35. It would, thus, appear that counsel for TISCO is right in submitting that this decision is not an authority for the proposition that a tariff cannot be revised retrospectively. In that case, it was held, having regard to the nature of power exercised by the Board under section 49 of the Act, that the power was in the nature of making subordinate legislation and therefore that power could not be exercised so as to frame a tariff with retrospective effect. The judgment, therefore, proceeds on the basis that an authority exercising powers of subordinate legislation has to act within the limits of its power, and such delegated legislation made by the authority could only have prospective operation, unless specifically authorised by law otherwise. 36. The facts in the instant case are quite different. In the instant case, we are not concerned with any tariff framed under Section 49 of the Supply Act. We are also not concerned with the exercise of any power by the State in the nature of subordinate legislation. In terms the sanction order prohibits a grantee from revising, amending or altering the condition of supply, the mode of charge and the charges for supply of energy, without the prior approval of the State Government in writing. Though the grantee may revise the charges for supply of energy, it cannot do so without the prior approval of the State Government in writing. If the Government grants approval, the charges for supply of energy may be revised in accordance with the Older granting approval. Obviously, therefore, if sanction is granted for revision of th9 charges of supply of energy from an earlier date, the grantee is entitled to revise its tariff with effect from such date. If the Government grants approval, the charges for supply of energy may be revised in accordance with the Older granting approval. Obviously, therefore, if sanction is granted for revision of th9 charges of supply of energy from an earlier date, the grantee is entitled to revise its tariff with effect from such date. The revision of tariff is by the grantee, in this case TISCO, but the same cannot be made effective unless approval is granted by the State Government. The power to grant approval of tariff framed by TISCO is relatable to the power reserved for the State Government in the sanction order. If such power were not reserved for the State Government, TISCO could have revised its tariff without reference to the Government. In these circumstances, I hold that the revision of tariff which has the approval of the State Government suffers from no illegality and the petitioner is bound to pay the charges according to the revised tariff as approved by the State Government. However, keeping in view the fact that the State Government grants approvals with effect from 1.4.1992 and 29.9.1993, the revision of tariff shall be effective only from those dates. 37. Two other submissions were faintly advanced on behalf of the petitioner. It was submitted that for delayed payment, TISCO has levied by way of interest an amount calculated at the rate of 2 per cent per month. In the agreement of the year 1981, the rate of interest was 12 per cent per annum. But the same has been unreasonably increased to 24 per cent per annum. Counsel for the petitioner did not dispute the fact that interest was chargeable on delayed payment, his only grievance being that the rate of interest prescribed is exorbitant. This submission must be rejected because it is well known that Bihar State Electricity Board levies by way of delayed payment surcharge a charge calculated at the rate of 2 per cent per month which is the same as the rate of interest prescribed by TISCO. The rate of interest cannot, therefore, be said to be exorbitant or unconscionable. 38. Lastly, it was submitted that a surcharge had been levied for exceeding the contract demand. No relief has been claimed in the writ petition against the levy of surcharge, nor are there pleadings on record to justify an examination of this issue. The rate of interest cannot, therefore, be said to be exorbitant or unconscionable. 38. Lastly, it was submitted that a surcharge had been levied for exceeding the contract demand. No relief has been claimed in the writ petition against the levy of surcharge, nor are there pleadings on record to justify an examination of this issue. I, therefore, find no reason to interfere with the levy of surcharge by TISCO. 39. In the result, this writ petition is partly allowed. The calculation of AMG charges on the basis of 55 per cent load factor is held to be bad in law. Similarly, the calculation of maximum demand based on 15 minutes integration period is also held to be illegal. The revised tariff and the bills raised pursuant thereto are upheld but with effect from 1.4.1992 and 29.9.93, the dates with effect from which they were approved by the State Government. The interest charged and the surcharge levied by the TISCO are also upheld. TISCO is directed to revise its bills wherever necessary in relation to AMG charges and maximum demand charges in the light of the observations contained in this judgment, as also its bills prepared on the basis of revision of tariff so as to make the enhanced tariff effective from 1.4.1992 and 29.9.1993 in accordance with the approval granted by the State Government. There will be no order as to costs. I.P.Singh, J. 40 I agree.