Stay on tariff notification does not erase surcharge liability, though equitable reduction may apply for the interim period.

A stay of a tariff revision notification does not annul the notification or extinguish liabilities arising under the governing supply terms; it only keeps its operation in abeyance during the pendency of the writ proceedings. On that basis, late payment surcharge remained payable for the stay period, even though the writ petitions were ultimately dismissed. The Court also noted that the surcharge was not penal in character, but granted limited equitable relief because consumers may have acted on a bona fide understanding of the earlier position. For the stay period up to 1 March 1993, the surcharge rate was moderated to 18%.

---

---

Issues: (i) whether consumers were liable to pay late payment surcharge for the period during which the notification revising electricity tariffs remained under stay in the writ petitions, notwithstanding ultimate dismissal of those petitions; and (ii) whether the surcharge rate prescribed for that period required reduction on the facts of the case.

Issue (i): whether consumers were liable to pay late payment surcharge for the period during which the notification revising electricity tariffs remained under stay in the writ petitions, notwithstanding ultimate dismissal of those petitions.

Analysis: A stay of operation does not obliterate the notification or suspend the underlying obligation created by it; it only keeps the order in abeyance during the pendency of the proceeding. The liability to pay enhanced charges and the consequential surcharge depends upon the statutory terms and the contract of supply, and is not destroyed merely because interim protection was obtained. The earlier decision relied upon was confined to the effect of an injunction against recovery and did not decide the question of surcharge for the period covered by a stay of the notification. On dismissal of the writ petitions, the parties are to be restored, as far as possible, to the position they would have occupied but for the interim order.

Conclusion: the consumers were liable to pay late payment surcharge for the stay period, and the challenge to the levy failed.

Issue (ii): whether the surcharge rate prescribed for that period required reduction on the facts of the case.

Analysis: Although the surcharge was held not to be penal in character, the Court took note of the circumstance that the consumers may have proceeded on a bona fide understanding of the earlier decision and may have believed that surcharge would not be payable during the stay period. In those special facts, limited equitable relief was justified by moderating the rate for the period covered by the stay orders.

Conclusion: the surcharge rate was reduced to 18% for the period covered by the stay orders up to 1 March 1993.

Final Conclusion: the appeals substantially failed, but the consumers obtained limited relief by reduction of the surcharge rate for the stay period.

Ratio Decidendi: a stay of operation of a notification does not annul the notification or extinguish liabilities arising under it, and upon dismissal of the substantive proceeding the interim protection cannot be used to defeat obligations otherwise payable under the governing tariff terms.

---