Minimum guaranteed electricity charges remain enforceable when the supply contract keeps liability alive after disconnection.

An electricity supply agreement may validly require payment of minimum guaranteed charges irrespective of actual consumption, and disconnection by the Board does not itself end the contractual liability where the agreement treats disconnection as notice of termination and keeps the contract alive until expiry of the compulsory minimum period or notice period, whichever is longer. The scheme under the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 permits such tariff and supply conditions to secure a reasonable return on the supplier's outlay and standing charges. The contractual stipulation was not shown to be unreasonable, so the consumer remained liable until the agreement determined in accordance with its terms.

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Issues: Whether the consumer remained liable to pay minimum guaranteed charges under the electricity supply agreement despite disconnection of supply by the Board, and whether the stipulation for such charges was valid and reasonable.

Analysis: The agreement expressly required payment of minimum guaranteed charges irrespective of actual consumption. It also provided that where supply was disconnected by the Board and the consumer did not seek reconnection, the disconnection would be treated as notice for termination, and the agreement would continue until expiry of the compulsory minimum period or notice period, whichever was longer. The statutory scheme under the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 permitted supply agreements and tariff conditions, including minimum charge arrangements intended to secure a reasonable return on the supplier's outlay and standing charges. The contractual term was part of a standard supply agreement, was not shown to be unreasonable, and disconnection did not by itself extinguish the contractual liability before the agreement came to an end.

Conclusion: The stipulation for minimum guaranteed charges was valid, and the consumer remained liable until the agreement determined in accordance with its terms. The demand and bills were sustainable.

Ratio Decidendi: Where an electricity supply agreement validly provides for minimum guaranteed charges and stipulates that disconnection operates only as notice for termination, the consumer's liability continues until the contract is determined according to its terms.

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