(2) S.C.R: SUPREME COURT REPORTS 213
THE AMALGAMATED ELE,CTRICITY CO., LTD. _r959_
. _v._ .: .., . '·· _February_ _IJ._
I .N .• S. BATHENA .. ' .,···
(JAFER IMAM, ·A. K. SARKAR and
#### · · K. 'Su:BB.A RAo; JJ.) · · ·
_Arbitration_:_Arbit;ation_ claus~ _in_ ele~tricity _licence-Whether_
_binding on consumer_ _of_ _electricity-Electricity (Supply) Act,_ _r948_
_(54_ _of_ _r948);_ s. _57,_ _ct._ _XV I of Sixth Schedule._
The arbitration clause incorporated by s. 57(1) of the
Electricity (Supply) Act, 1948, in a licence granted by the
Government for the supply of electrical energy to the consumers
is not· available for adjudicating upon a dispute between the
licensee. and the consumer, for the licence is an engagement between the licensee and the Government and the arbitration
clause in it refers only to disputes between them. Section 57(1)
does not make the arbitration clause a statutory provision by
virtue of which disputes between any and every person may be
referred to arbitration.
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
361 of 1958.
Appeal by special leave from the judgment and
order dated December 11, 1957, of the Mysore High
Court in Civil Revision No. 702 of 1956, against the
judgment and order dated August 10, 1956, of the
Court of the Second-Extra Assistant Judge, Belgaum,
in Misc. Appeal No. 36 of 1955, arising out of the
order dated September 1, 1955, of the 1st Joint Civil
Judge, Junior Division, Belgaum, in Regular Civil
Suit No. 197 of 1955.
_M. M. Gharekhan_ and _J._ _N._ _Shroff,_ for the appellant.
_D. D. Chawla_ and _G._ _Gopalakrishna.n,_ for the respondent.
_B. Sen_ and _T._ _M. Sen,_ for the intervener (AttorneyGeneral of India).
1959. February 13. The Judgment of the Court
was delivered by
#### SARKAR, J.-This is an appeal from the judgment
passed by the High Court at Bangalore on a petition in
revision. The question is whether a certain suit should
be stayed under s. 34 of the Arbitration Act, 1940.
_Sarkar_ _J._
214 SUPREME COURT REPORTS [1959] Supp.
_, 959_ The appellant carries on business as a supplier of
# -- electrical energy in Belgaum. It obtained a licence
_The_ _Amalgamated_ from the Government under s. 3 of the Indian Elec_Electricity_ _co.,_ _Ltd._ tricity Act, 1910, authorising it to supply the energy
Ba~ena in that area. The respondent, who is the plaintiff in
the suit, obtained supply of electricity from the appel_Sarkar_ _J._ lant. The respondent felt that he was being overcharged by the appellant for the electricity so
supplied. He thereupon filed a suit in the Court of
the Civil Judge, Belgaum, on or about the 8th of June,
1955, claiming a refund of the amount paid in excess
of what he thought was the legitimate charge. The
appellant then applied under s. 34 of the Arbitration
#### Act for a stay of the suit on the ground that the
matter was referable to arbitration under the provisions of the Electricity (Supply) Act, 1948. The application was dismissed by the Civil Judge and his
decision was confirmed by the Extra Assistant Sessions
Judge on appeal and lastly, by the High Court in
revision. The appellant has now come to this Court.
The appellant contends that this matter is referable
to arbitration under the provision contained in
cl. XVI of the Sixth Schedule of the Act of 1948. A
few of the provisions of these Acts will now have to
be referred to. Under the Act of 1910 the business of
supplying electrical energy can be carried on only
with the sanction of the Government. Section 3 of
#### that Act makes provision for the grant of a licence
for supplying electrical energy. The appellant obtained a licence in 1932.
A form of the licence is set out in the rules framed
#### under the Act of 1910 and that form prescribes the
maximum limit which a licensee is entitled to charge
a consumer for the electrical energy supplied. The
Act of 1948 made a somewhat different provision with
#### regard to these charges. It provided by s. 57 as follows:
" _S. 57._ (1) The provisions of the Sixth Schedule
and the Table appended to the Seventh Schedule shall
be deemed to be incorporated in the licence of every
licensee, not being a local authority, from the date of
the commencement of the licensee's next succeeding
#### (2) S.C.R. SUPREME COURT REPORTS 215
year of account, and from such date the licensee shall _x959_
comply therewith accordingly and any provisions of _Th_ _A_ 1 1 _[d ]_
such licence or of the Indian Electricity Act, 1910, or _El:ctrici7;_ f;.~~ 1~.
any other law, agreement or instrument applicable to v.
the licensee shall, in relation to the licensee, be void _Bathena_
and of no effect in so far as they are inconsistent with
the provisions of this section and the said schedule _Sarkar_ _]._
and Table.
(2) ........................................................... "
This section had therefore. the effect of incorporating
in the licence the terms of these two Schedules and
#### provided that they would prevail over the terms of
any previously granted licence or the provisions of
the Act of 1910, or any other law, agreement or
instrument inconsistent with these Schedules. The
Sixth Schedule mn,de ne\v provisions about the clmrges t ]rn,i; a licensee was entitled to realiRe for the
current supplied. Clause XVI of that Schedule contains a provision for arbitration and it is on that that
the appellant relies. That clause is in these terms:
" Any dispute or difference as to the interpretation or
any matter arising out of the provisions of this Schedule shall be referred to the arbitration of the Authority." The appellant contends that the dispute covered
by the respondent's suit is one of the kind mentioned
in this clause and therefore must be referred to arbitration under its terms.
We will assume that the dispute is of the kind_mentioned in cl. XVI of the Sixth Schedule. We are
#### however unable to see that it is a dispute which is
### referable to arbitration under that clause. It is not
the appellant's case that cl. XVI is a clause in any
contract between it and the respondent. That being
so, the only other way in which it is possible for the
appellant to contend that the respondent is bound to
refer the dispute to arbitration under this clause is by
showing that it is a·statutory provision for arbitration.
No doubt if it were so, then in view of the provisions
of s. 46 of the Arbitration Act the appellant would be
entitled to apply for a stay of the suit under s. 34 of
#### that Act. We are however wholly unable to agree that cl. XVI is such a statutory provision. The only
216 SUPREME COURT REPORTS [1959] Supp.
_'959_ statutory provision that we find on the subject is that
#### Th e A ma ganta e I t d [contained in ] l XVI d [s. ] [57 ] [and ] [its ] l [effect is ] . [that ] S. [the ] [terms ] [of ]
_Electricity co., Ltd._ c . an the other c a uses m the 1xth Schedule
v. are to be deemed incorporated in a licence granted by
_Batkena_ the Government under s. 3 of the Act of 1910 and the
#### licensee is to comply with the terms of that Schedule. Sarkar j. Therefore all that we get is that the licence which is
granted by the Government to a supplier of electricity, like the appellant, is to contain a clause that
certain disputes would be referred to arbitration. The
licence is an engagement between the Government
and the licensee, binding the parties to it to its provi### sions. It is unnecessary to decide whej;her this engagement is contractual or statutory, "for, in either case it
is between the two of them only. An arbitratioi+
clause in an instrument like this can only be in respect of disputes between the parties to it. Such an
arbitration clause does not contemplate a dispute
between a party, to the instrument and one who is not
such a party .. We are unable to reads. 57 as making
#### cl. XVI in the Sixth Schedule a statutory provision by which certain disputes between any .and every
person have to be referred to arbitration. . .
### It was said on behalf of the appellant that th~
licence is a statutory document. That, in our vie.w, is
a loose way of putting the thing. By that the utmost
#### that can be meant is that it is issued under the terms
of a statutory provision and . must,qpmply with the
provisions thei;eof. But that cannot convert it into a
sti:ttutory provision for reference to arbitr.ation of disputes irrespective of the parties between whom the
d~sputes may exist. . .
- In our view, therefore, c.1. XVI of the . SJxth Sche'dule of the Act of 1948 contains no provision for, arbi'.
trat.ion, statutory or otherwise, for reference o( t,he
dispute of the nature we have b_efore us, between·.a
licensed. supplier of electricity .and. a. consumer. of .it
from' him. . . . . . .,,. .
. ln the result, this appeal fails and is dismi~sed with
costs. - '
#### _Appeal dismissed._
