2011 (1) TMI 1248
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....es the petitioners, the Hill Development Rebate of 33.33% on the total amount of electricity bills issued by the respondents for the remaining unexpired period of five years from the date of commencement of supply of electricity to the industrial units of the petitioners. The petitioners have also prayed to issue an appropriate writ in the nature of mandamus or any other appropriate writ, order of direction commanding the respondents to restore/give Hill Development Rebate of 33.33% to the industrial units of the petitioners on the total amount of the electricity bills for the remaining unexpired period of five years. 2. The facts giving rise to the filing of this petition are as under:- The petitioners are industrial units carrying on business of manufacturing iron rods, ingots, strips in furnaces/re-rolling mills in hill are known as Kotdwar, State of Uttar Pradesh, now State of Uttarakhand. The industrial units of the petitioners were connected with power loads in the year 1996-97 by U.P. State Electricity Board which is now known as U.P. Power Corporation Limited. The claim made by the petitioners ....
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....ial units established in the hill areas was accordingly granted to the petitioners who had established their industrial units in the year 1996-97. Explaining as to why the respondents had promised to grant rebate of 33.33%, it is stated that, the rebate was meant to meet out extra expenditure incurred by the industrial units set up in hill areas in comparison to the industrial units set up in hill areas in comparison to the industrial units established on plain and developed areas on account of various factors such as labour charges, maintenance cost, transportation of raw material, transportation of finished goods, availability of water, establishment charges etc. The petitioners have averred that vide Notification dated 18-06-1998 & 25-01-1999, issued by the respondent Corporation, uniform tariffs were introduced, which were seemingly innocuous but in fact had reduced the rebate from 33.33% to 17% and the result was that hill area units became less competitive and unviable in comparison to the units situated in developed areas. The petitioners have mentioned that the two Notifications dated June 18, 1998/25-01-1999 levying the tariffs, were challenged by the petitioners before Hi....
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....riod of two weeks the Bench hearing the I.A. had opined that the petitioners, if so advised, should file writ petition challenging the new tariff/revised rates of power made applicable with effect from 09.08.2000 by the notification dated 07.08.2000. The petitioners have claimed that taking hint from the opinion expressed by this Court on 29.09.2000, the instant petition was filed. The petitioners have mentioned that by new tariff notification dated 07.08.2000, the respondents have completely withdrawn the assured, promised and guaranteed Hill Development Rebate which has made it impossible for the petitioners to run their industrial units located in the hill areas and therefore the notification dated 07.08.2000 should be regarded as illegal, arbitrary, discriminatory and violative of provisions of Article 14, 19(1)(g) and 21 of the Constitution as well as contrary to the principles of promissory estoppel. The assertion made by the petitioners is that the respondents are bound to act as per their promise, solemnly made to the petitioners while inviting them to establish the industrial units in completely remote and underdeveloped areas of U.P. The petitioners have further claimed t....
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....0 is neither illegal nor arbitrary nor discriminatory nor hit by the principle of promissory estoppel and the reliance placed upon the decision dated 25.05.2000 rendered by the High Court in Writ Petition No. 15292-93 of 1999 is misconceived as the same is subject matter of challenge in the pending SLP's. According to the reply, during the pendency of SLP filed by the respondent UP Power Corporation Limited, the UP Electricity Regulatory Commission framed a new tariff in exercise of statutory powers and directed the respondents to enforce the same and therefore the respondents to enforce the same and therefore the respondents who are bound to enforce the tariff, have enforced the same vide notification dated 07.08.2000. It is claimed that tariff revision made under the statutory powers has nothing to do with the interim order dated 28.07.2000 passed by this Court in the SLPs filed by the U.P. Power Corporation Limited and the High Court is wrong in allowing the Writ Petitions and directed that 33.33% rebate should be given to the petitioners, when the entire tariff is changed and total financial burden on the petitioners is less than 5% of tariff. After asserting that the Kotdwar i....
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....up to 1997 and after that when the new tariff was introduced in 1998. He may file the affidavit to this effect within two weeks from today. It will be open for the respondents to file their reply within two weeks thereafter. Let this matter be listed after the disposal of Civil Appeal No. 1215-1216 of 2001." Thus the instant writ petition was detagged and directed to be listed after the disposal of civil appeal Nos. 1215-1216 of 2001. 6. The decision in Civil Appeal No. 1215-1216 of 2001 was pronounced on December 10, 2007 and it is reported in U.P. Power Corporation Ltd. and another vs. Sant Steels and Alloys (P) Ltd. and others (2008) 2 S.S.C. 777. This Court by the said decision held that notifications dated 28.06.1996 and 03.01.1997 wherein rebate was given were issued under Section 49 of the Electricity (Supply) Act, 1948 and they were in the nature of delegated legislation. It was further held that on the basis of principle of promissory estoppel, the respondent No.2 i.e. UP Power Corporation Limited was not entitled to take away benefit given to the industries. However, the Court made reference to Uttar Pradesh Electricity Reforms Act, 1999 wherein no s....
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....se to have effect after 14.01.2000, as was directed by the Division Bench in C.A. No. 1215-1216 of 2001 decided on 10.12.2007. Pursuant to the said direction the petition is placed before the present larger Bench. The proceedings of the case indicate that the writ petition was listed for hearing on 03.02.2010, when the Court directed the learned Counsel for the State of Uttarakhand to seek instructions from the Government whether the State Government was inclined to extend the benefit of Hill Development Rebate of 33.33% on total amount of electricity bills to the industrial units as was done by the erstwhile State Government of U.P. In response to the same, Mr. Nitish Kumar Jha, Additional Secretary to the Government of Uttarakhand, has filed affidavit dated April 19, 2010 mentioning that the concession/rebate by way of incentive was part of the policy framed by the then State Government of UP and the same was enforceable till the year 1997, but consequent upon enforcement of the UP Reorganization Act, 2000, the hill areas of the erstwhile State of UP were carved out which now form part of the new State known as State of Uttarakhand. According to the affidavit, to accelerate the ....
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....'s Fundamental Right as in the eye of law two are distinct entities. A corporation in law is equal to a natural person and has legal entity of its own. The entity of a corporation is entirely separate from that of its shareholder applying the doctrine of piercing or lifting of veil and it cannot be said that the petition by corporation is a petition by the shareholder. It is important to mention that the petitioners are the companies registered under the provisions of the Companies Act, 1956. It is well settled that a company cannot maintain a petition under Article 32 of the Constitution for enforcement of Fundamental Rights guaranteed under Article 19 of the Constitution. A company, being not a citizen, has no Fundamental Rights under Article 19 of the Constitution. Nonetheless the companies would be entitled to claim right under Article 14 of the Constitution and, therefore, it would be relevant to examine whether the respondents have committed breach of Article 14 by withdrawing the concession in electricity rates given/granted earlier. 9. The short question which now falls for decision of this Court is whether the Hill Development Rebate of 33.33% on total amount of electrici....
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....ed above from the reported decision are against the present petitioners but the Court also held that all the benefits which were being given to entrepreneurs shall stand protected before coming into force of the Act of 1999 on the principle of promissory estoppel. Therefore, this Court will have to consider the question whether the reasoning adopted by the Division Bench for coming to the said conclusion is legal, though it was made clear to all the learned counsel for the parties that the instant Writ Petition cannot be treated as an appeal against the decision dated December 10, 2007 rendered by the two learned Judges of this Court in Civil Appeal Nos. 1215-1216 of 2001. 11. In view of the observations made by the Division Bench of this Court in the reported decisions, the questions that fall for consideration of this larger Bench are whether a benefit given by a statutory notification can be withdrawn by the Government by another statutory notification and whether the principles of promissory estoppel would be applicable in a case where concessions/rebates given by a statutory notification are subsequently withdrawn by another statutory notification. It is an admitted position ....
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....doctrine is a principle evolved by equity, to avoid injustice and though commonly named promissory estoppel, it is neither in the realm of contract nor in the realm of estoppel. For application of doctrine of promissory estoppel the promisee must establish that he suffered in detriment or altered his position by reliance on the promise. Normally, the doctrine of promissory estoppel is being applied against the Government and defence based on executive necessity would not be accepted by the Court. However, if it can be shown by the Government that having regard to the facts as they have subsequently transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise an equity in favour of the promisee and enforce the promise against the Government. Where public interest warrants, the principles of promissory estoppel cannot be invoked. Government can change the policy in public interest. However, it is well settled that taking cue from this doctrine, the authority cannot be compelled to do something which is not allowed by law or prohibited by law. There is no promissory estoppel against the settled proposition of law. Doctrine of promisso....
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....le in case of delegated legislation if withdrawal/curtailment of benefit was in larger public interest or if the legislation was enacted by the Legislature authorizing the Government to withdraw/curtail the benefit granted by a notification. Under the circumstances the two notifications curtailing the benefit to 17% were treated as contrary to Section 49 of the Act of 1948. On review of the law on the subject and the relevant statutory provisions, this Court finds that, for the reasons mentioned hereinafter, the above statement of law is not an accurate proposition of law. 12. It may be mentioned that the Electricity (Supply) Act, 1948 was enacted by the Parliament to provide for the rationalization of the production and supply of electricity and generally for taking measures conducive to electrical development. The Electricity (Supply) Act, 1948 being a Central Act, the provisions of Sections 14 and 21 of the General Clauses Act, 1897 would be applicable. Section 14 of the General Clauses Act, 1897 reads as under:- "14. Powers conferred to be exercisable from time to time. - (1) Where, by any Central Act or Regul....
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....te authorizes such an exercise expressly or by necessary implication. The principle laid down in Section 21 is of general application. The power to rescind mentioned in Section 21 is without limitations or conditions. It is not a power so limited as to be exercised only once. The power can be exercised from time to time having regard to the exigency of time. When by a Central Act power is given to the State Government to give some relief by way of concession and/or rebate to newly established industrial units by a notification, the same can be curtailed and/or withdrawn by issuing another notification under the same provision and such exercise of power cannot be faulted on the ground of promissory estoppel. It would be profitable to remember that the purpose of the General Clauses Act is to place in one single statute different provisions as regards interpretations of words and legal principles which would otherwise have to be specified separately in many different Acts and Regulations. Whatever the General Clauses Act says whether as regards the meaning of words or as regards legal principles, has to be read into every statute to which it applies. Further, power to curtail and/or ....
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....ther curtail or withdraw the benefit granted earlier. This Court finds that the proposition of law laid down by the two Judge Bench in the decision mentioned above is too wide and has tendency to make Section 21 of the General Clauses Act, 1897, inoperative. The concept of the larger public interest introduced, before invocation of Section 21 of the General Clauses Act, in fact, amounts to amendment of the said provision, as notifications dated June 18, 1998 and January 25, 1999, issued under Section 49 of the Act of 1948, as well as notification dated August 7, 2000, issued under Section 24 of the Uttar Pradesh Electricity Reforms Act, 1999, are in the nature of legislations and, therefore, the principle of promissory estoppel would not apply to them. 15. At this Stage, it would be relevant to notice certain principles which have emerged from the reported decisions of this Court. 16. In State of Rajasthan and Another vs. J.K. Udaipur Udyog Ltd. and Another (2004) 7SCC 673, pursuant to its Fourth New Industrial Policy, the State of Rajasthan had framed and notified the Rajasthan Sales Tax/Central Sales Tax Exemption Scheme for Industries, 1998 under Section 15, Rajasthan Sales Ta....
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....at the rights available to the respondents under the original Scheme were substantive rights and could not be affected adversely unless the subsequent notification clearly manifested an intention to do so. The Division Bench held that no such intention was manifested by the corrigendum and that the amendment was arbitrary and violative of Article 14 being discriminatory vis-a-vis other sick industries. It was also held that the amendment could not discriminate against sick cement plants which had not availed of benefits of tax exemption earlier. It was concluded by the Division Bench that the benefits available to the respondents under the original Scheme were not affected by the corrigendum. This court while allowing the appeal has held as under in paragraph 25 of the reported decision:- "An exemption is by definition a freedom from an obligation which the exemptee is otherwise liable to discharge. It is a privilege granting an advantage not available to others. An exemption granted under a statutory provision in a fiscal statute has been held to be a concession granted by the State Government so that the be....
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....ot be attracted. What this Court finds is that several reported decisions some of which are rendered by the larger Bench were not considered by Division Bench of this Court while delivering judgment dated 10.12.2007 in Civil Appeal No. 1215 to 1216 of 2001. The legal effect would be that the finding recorded by the Division Bench of this Court, in the above mentioned case that the notification dated 18.6.1998 and 25.1.1999 reducing the rate of rebate from 33.33% to 17% were bad in law will have to be regarded as not laying down correct proposition of law. Thus, the petitioners in the present writ petition are not entitled to claim promissory estoppel against the Government and would not be entitled to any benefit on the basis of two Judge Bench judgment of this Court referred to earlier. 18. From the above discussion, it is clear that the petitioners cannot raise plea of estoppel against the notification dated August 7, 2000 reducing Hill Development Rebate to 0% as there can be no estoppel against the statute. 19. The next question, which falls for determination of this Court is whether the term stipulated in the contract entered into between the petitioners and the U.P. State E....
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....al or State Government or other competent authority on the electricity supplied to the consumer shall also be paid by the consumer. Therefore, in view of the terms and conditions stipulated in Clause 7 of the agreement, this Court is of the firm opinion that the petitioners are precluded from challenging revision of the tariff in exercise of statutory powers conferred on the respondent No.2 in the larger public interest. This Court does not find any prohibition in the agreement by which the respondent No.2 was bound to give 33.33% rebate to the petitioners in all the circumstances or was precluded from changing the tariff rates. The petitioners being parties to the agreement now cannot turn around and argue that the respondent No. 2 is bound to give 33.33% Hill Development Rebate and can never change the tariff rates to the detriment of the petitioners. On the facts and in the circumstances of the case, therefore, this Court holds that the respondent No. 2 is not bound to give 33.33% Hill Development Rebate to the petitioners for the period specified in the notification irrespective of change in the tariff rates. 21. Another question, which needs to be answered, is whether the Cou....
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....nt rebate of 33.33% to the industrial units set up in hill area, as was done by the erstwhile State Government of Uttar Pradesh. Accordingly, the learned counsel for the State of Uttarakhand had taken appropriate instructions and as mentioned earlier, filed a short affidavit on April 19, 2010 for consideration of the Court. In the said affidavit it is specifically mentioned that with an objective to accelerate the pace of industrial development in remote and backward hill region and to remove economic backwardness of the hill region by generating the employment opportunities with the possibility to check the brain drain from this area and keeping in view the uneven geographical situation, the environmental and social conditions, the Government of Uttarakhand has framed " Special Integration Industrial Development Policy" for hills and remote areas of Uttarakhand, but as far as power concession to new industrial units is concerned, the aforesaid policy does not provide for any concession to the steel industries established in the State because it was not considered necessary in the larger public interest to grant such subsidy. In the said affidavit it is mentioned that in view of la....
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.... licensee, i.e., the respondent No.2 lacks power/authority to modify the tariff determined by the Commission and in case of any violation, the licensee would be exposing itself to the punishment prescribed under Section 28 of the Act of 1999. This Court in Association of Industrial Electricity Users vs. State of U.P. and others (2002) 3 SCC 711 as well as in West Bengal Electricity Regulatory Commission vs. CESC (2002) 8 SCC 715, and in BSES vs. Tata power Company Limited (2004) 1 SCC 195, has held that the licensee has no power to amend and/or modify the tariff determined by the Regulatory Commission. Grant of reliefs claimed by the petitioners would amount to compelling them to act against the statute. Such a course is not permissible while exercising powers under Article 32 of the Constitution. Thus the respondent No.2 Corporation cannot be directed to amend or modify the tariffs determined by the Commission nor the petitioners would be entitled to seek any direction against the licensee to amend or modify the tariff determined by the Commission. 24. What is relevant to notice is that if the power to reduce the rebate to 17% is assumed to be available, then power to reduce the ....