M.P. STATE ELECTRICITY BOARD vs GRASIM INDUSTRIES LTD.

The Supreme Court addressed the legality of the Madhya Pradesh High Court's decision regarding the deletion of Clauses 21(f) & 21(g) from the Board’s General Conditions for Supply of Electrical Energy, which pertained to interest on security deposits. The Court held that the Division Bench of the High Court misinterpreted the precedent set in Ferro Alloys Corpn. Ltd. v. A.P. State Electricity Board, specifically paragraph 158, which affirms that Electricity Boards cannot delete clauses related to interest payment where such provisions exist. The Court concluded that the notification dated 24.1.1996 was issued under Section 49 of the Electricity (Supply) Act, 1948, and upheld the Single Judge's decision in favor of the appellant-Board.