AMALGAMATED ELECTRICITY CO. LTD vs JALGAON BOROUGH MUNICIPALITY

The Supreme Court held that clauses 2 and 3 of the agreement between the plaintiff and the Municipality are independent and clearly establish a minimum guarantee for the supply of electrical energy, as per the proviso to Section 22 of the Indian Electricity Act, 1910. The Court found that the High Court erred in dismissing the appeal by overlooking the unambiguous terms of clause 3, which mandated the Municipality to pay minimum charges regardless of actual consumption. The appeal was allowed, affirming the enforceability of the minimum guarantee provision in the agreement.