Local authority electricity charges are trade debts, while electricity duty remains a priority claim in winding up.

Under section 530(1)(a) of the Companies Act, "revenue" payable to a local authority was construed in context with "taxes, cesses and rates" and, applying noscitur a sociis, was limited to compulsory exactions. Amounts due for electricity supplied by a municipal licensee were held to be trade debts arising from commercial activity and not revenue entitled to priority in winding up. Electricity duty collected on behalf of the State Government was treated differently and retained priority status.

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Issues: Whether the amount payable to a municipal local authority for supply of electricity, apart from electricity duty collected on behalf of the State Government, constituted "revenue" due to a local authority within section 530(1)(a) of the Companies Act so as to rank in priority in winding up.

Analysis: The claim was due at the relevant date and had become payable within twelve months before that date, so the only controversy was the meaning of "revenue" in section 530(1)(a). The expression was read in context with the accompanying words "taxes, cesses and rates", which are all compulsory exactions and not payments arising from commercial dealings. Applying the rule of noscitur a sociis, the wider word "revenue" was held to take colour from the associated words and to mean a compulsory exaction, not income arising from commercial or industrial activity of a local authority. The supply of electricity by a municipal licensee was treated as a commercial activity, and payment for such supply was therefore only a trade debt. Electricity duty collected for and payable to the State Government stood on a different footing and was entitled to priority.

Conclusion: The electricity charges recoverable by the municipality were not "revenue" within section 530(1)(a) and did not rank in priority. Priority was allowed only for the electricity duty amount due to the State Government.

Ratio Decidendi: In section 530(1)(a) of the Companies Act, "revenue" means a compulsory exaction analogous to taxes, cesses and rates, and does not include commercial income arising from the supply of electricity by a local authority.

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