Uniform electricity tariff classification prevails over prior supply agreements, while promissory estoppel cannot defeat a valid statutory amendment.

A statutory amendment to section 49 of the Electricity (Supply) Act, 1948 is described as permitting uniform tariff treatment for a rational consumer category, and the constitutional challenge under Articles 14 and 19(1)(g) is stated to fail where the classification is non-arbitrary and the tariff change does not impose an unconstitutional restriction on business. Prior supply agreements are said to yield to the amended statute to the extent of inconsistency, and promissory estoppel is unavailable to defeat a valid legislative mandate. Classification of a smelter plant with other high power intensive industries is treated as a reasonable tariff basis, with no hostile discrimination shown.

---

---

Issues: (i) whether the Karnataka amendment to section 49 of the Electricity (Supply) Act, 1948 was beyond legislative competence or otherwise invalid for offending Articles 14 and 19(1)(g) of the Constitution of India; (ii) whether the prior supply agreements and the plea of promissory estoppel prevented the Board from charging tariff under the amended statutory regime; and (iii) whether the categorisation of the smelter plant with other high power intensive industries for uniform tariff was discriminatory.

Issue (i): whether the Karnataka amendment to section 49 of the Electricity (Supply) Act, 1948 was beyond legislative competence or otherwise invalid for offending Articles 14 and 19(1)(g) of the Constitution of India.

Analysis: The amended provision was upheld as a valid exercise of legislative power. The Court accepted that the State Legislature could enact the amendment and that the scheme of the amendment operated to apply uniform tariff to the relevant category of consumers notwithstanding prior arrangements. The challenge based on Articles 14 and 19(1)(g) failed because the classification adopted by the statute was held to rest on a rational basis and the increase in tariff did not amount to an unconstitutional restraint on the carrying on of business.

Conclusion: The amendment was held valid and the challenge on the grounds of legislative incompetence and violation of Articles 14 and 19(1)(g) was rejected.

Issue (ii): whether the prior supply agreements and the plea of promissory estoppel prevented the Board from charging tariff under the amended statutory regime.

Analysis: The agreements of 1966 and 1976 were found to be the result of negotiations and not the product of any unilateral governmental promise or assurance inducing a legally enforceable equity against statutory change. The Court held that once the amended section 49 operated, the earlier agreements stood displaced to the extent inconsistent with the statute. In such circumstances, the doctrine of promissory estoppel could not be invoked to compel performance contrary to the amended law.

Conclusion: The plea of promissory estoppel was held unavailable, and the Board was not bound by the earlier tariff arrangement against the amended statutory scheme.

Issue (iii): whether the categorisation of the smelter plant with other high power intensive industries for uniform tariff was discriminatory.

Analysis: The Court accepted that the smelter plant had distinctive operational features and that electricity played a critical role in the manufacturing process, but held that broader classification on the basis of high power intensity was neither arbitrary nor unreasonable. The plant had been placed in the relevant category even before the amendment, and no hostile discrimination or impermissible equality violation was shown.

Conclusion: The categorisation was upheld and the discrimination challenge failed.

Final Conclusion: The appeal failed and the judgment under appeal was left undisturbed, with the statutory tariff regime sustained and no relief granted to the appellants.

Ratio Decidendi: A statutory amendment enabling uniform tariff to be charged from consumers within a rationally based category prevails over inconsistent prior agreements, and promissory estoppel cannot defeat a later valid legislative mandate.

---