Statutory tariff revision under the Electricity (Supply) Act overrides fixed contractual rates and permits unilateral charge revision.

Section 57 of the Electricity (Supply) Act, 1948 incorporated the Sixth Schedule into the licence and rendered inconsistent contractual terms void to that extent, so a fixed tariff clause under an earlier agreement or licence could not override the statutory duty to revise charges periodically to secure a reasonable return. On that basis, an electricity licensee could unilaterally revise supply rates in accordance with the Schedule. The correspondence between the parties did not establish a continuing binding assurance against recovery of the revised rates from the municipality, because later communications showed notice of the revised charges and an intention to recover them.

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Issues: (i) Whether the electricity licensee could unilaterally revise the supply rates under section 57 and the First Clause of the Sixth Schedule to the Electricity (Supply) Act, 1948 notwithstanding the rates fixed by agreement and the earlier licence conditions under the Indian Electricity Act, 1910; (ii) Whether the correspondence between the parties amounted to a binding assurance preventing recovery of the revised rates from the municipality.

Issue (i): Whether the electricity licensee could unilaterally revise the supply rates under section 57 and the First Clause of the Sixth Schedule to the Electricity (Supply) Act, 1948 notwithstanding the rates fixed by agreement and the earlier licence conditions under the Indian Electricity Act, 1910.

Analysis: Section 57 of the Electricity (Supply) Act, 1948 provided that the Sixth Schedule and the Table in the Seventh Schedule stood incorporated in the licence, and any inconsistent provision in the licence, agreement, or other instrument became void to that extent. The First Clause of the Sixth Schedule required the licensee to adjust rates by periodical revision so that profits did not exceed reasonable return. The contractual stipulation fixing a static rate without scope for revision conflicted with that statutory regime. The statutory power of revision was therefore not excluded by the prior agreement or by the earlier licence restrictions.

Conclusion: The licensee was entitled to revise the rates unilaterally, and the contractual rate stipulations could not prevail against the statute.

Issue (ii): Whether the correspondence between the parties amounted to a binding assurance preventing recovery of the revised rates from the municipality.

Analysis: The correspondence showed an initial assurance concerning the then-notified revision, but the position changed after the umpire fixed revised rates and the company communicated its decision to charge those rates. The later letters indicated that the municipality was informed of the revised charges and that the company intended to recover them under the statutory power. The record did not support a continuing assurance barring the revised charges.

Conclusion: No binding assurance prevented the company from charging the revised rates.

Final Conclusion: The decree in favour of the municipality could not be sustained because the statutory scheme permitted revision of charges and the material correspondence did not bar recovery at the revised rates.

Ratio Decidendi: Where section 57 of the Electricity (Supply) Act, 1948 incorporates the Sixth Schedule, any contractual term inconsistent with the statutory power and duty to periodically revise tariffs so as to secure a reasonable return is void to that extent, and the licensee may revise charges unilaterally in accordance with the Schedule.

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