TaxTMI 
TaxTMI 
1997 (8) TMI 519
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.... supply of electricity to them for the first time, the respondent-Board had arbitrarily and prematurely withdrawn concession of the said rebate by a latter notification dated 31st July 1986 which is impugned in these proceedings. Various writ petitions were filed in the High Court of Judicature at Allahabad challenging the said impugned notification. They were heard together by a Division Bench consisting of B.P. Jeevan Reddy, CJ (as he then was) and V.N. Mehrotra, J. Diverse contentions were canvassed in support of the writ petitions. In the forefront it was submitted that Board was bound on the principle of promissory estoppel to continue the development rebate to these new industries for a period of three years as indicated in the earlier notifications and consequently the Board could not have arbitrarily withdrawn the said development rebate prior to the expiry of three years' period available to the industries concerned under these earlier notifica- tions. It was also contended that in any case the impugned notification applied prospectively and could not have any retrospective effect on earlier existing new industries. The respondent-Board on the other hand opposed the....
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.... P.B. Sawant, JJ., stayed the recovery of late payment surcharge dues but declined stay of recovery of development rebate charges. Subsequently after hearing the contesting parties special leave to appeal was granted in these matters and the stay of recovery of late payment surcharge was made absolute. We are informed that most of the appellants have already, therefore, paid up disputed development rebate charges to the respondent-Board. But the late payment surcharge demand has remained stayed. It is also brought to our notice that in some of the matters stay of recovery of development rebate charges has also enured for their benefit as this Court granted stay of disconnection of electric supply due to non- payment of these charges. At the final hearing of this group of appeals we heard Dr. Rajiv Dhawan, learned senior counsel for the appellants and other counsel for the appellants as well as Shri Dushyant Dave, learned senior counsel for the respondent-Board in common as the question involved are identical in all these matters. Accordingly all these appeals are being disposed of by this common judgment. Rival Contentions Dr. Dhawan, learned senior counsel appearing in Civil....
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....issed also on that score. He further submitted that whatever benefits might have accrued to the appellants prior to 1st August 1986, those benefits were prospectively withdrawn by the Board by issuing the impugned notification and to that extent decision of the High Court on Issued No. 3 could not be faulted. Shri Dave also submitted that so far as the question of surcharge on late payment of impugned development rebate is concerned it is not germane to the present controversy as the demand for late payment was raised by the Board after the decision of the High Court and, therefore, strictly speaking the said question would not arise from the judgment of the High Court and, therefore, if the appellants have no case on merits regarding development rebate, the question regarding payment of surcharge may be kept open. Alternatively he contended that on the principle of restitution once the appellants fail on merits, if his contentions on behalf of the Board on the issue of promissory estoppel and contractual obligations of the appellants are accepted, then the demand for surcharge should be permitted to be effectuated with appropriate rate of interest as the Board could not recover th....
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....resentation the party claiming estoppel has changed the position and if such an estoppel does not fly in the face of any statutory prohibition, absence of power and authority of the promisor, is otherwise not opposed to public interest, and also when equity in favour of the promisee does not outweigh equity in favour of the promisor entitling the latter to legally get out of the promise. In this connection we may usefully refer to a decision of this Court rendered in the case of State of H.P. and Others v. Ganesh Wood Products and Others, [1995] 6 SCC 363. B.P. Jeevan Reddy, J. speaking for a Bench of two learned Judges of this Court made the following pertinent observa-tions in this connection in paragraphs 54 and 55 of the Report : "The doctrine of promissory estoppel is by now well recognised in this country. Even so it should be noticed that it is an evolving doctrine, the contours of which are not yet fully and finally demar-cated. It would be instructive to bear in mind what Viscount Hailsham said in Woodhouse Ltd. v. Nigerian Produce Ltd., (1972) AC 741 : (1972) 2 All ER 271 : (1972) 2 WLR 1090 - 'I desire to add that the time may soon come when the ....
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....onstitution." We may say at this stage that at the time the aforesaid decision was rendered, judgment of this Court in the case of Kasinka Trading and Another v. Union of India and Another, [1995] 1 SCC 274 was pending scrutiny before a larger Bench. Subsequently, the said decision came to be confirmed by the decision of a Bench of three learned Judges of this Court speaking through A.M. Ahmadi, CJ. in the case of Shrijee Sales Corporation and Another v. Union of India, [1997] 3 SCC 398. We will refer to these decisions in the latter part of this judgment. Suffice it to say at this stage that if a statutory authority or an executive authority of the State function-ing on behalf of the State in exercise of its legally permissible powers, has held out any promise to a party who relying on the same has changed its position not necessarily to its detriment and if this promise does not offend any provision of law or does not fetter any legislative or quasi-legislative power inhering in the promisor then on the principle of promissory estop- pel the promisor can be pinned down to the promise offered by it by way of representation containing such promise for the benefit of the promisee....
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....ed issued on this point and submitted that in the writ petitions it was clearly averred by them that the State of U.P. had taken a decision to attract new industries in the State and, therefore, the State saw to it that appropriate incentives were being offered as a package to these new industries. That consequently the State Government in exercise of its statutory powers under Section 78A of the Act had issued appropriate instructions to the Board and that is how the Board had come out with the scheme of rebates on the electricity bills pertaining to electricity consumed by the new industries. In this connection our attention was invited to a package of incentives and concessions offered by the State to new industries, a copy of which was found annexed to S.L.P. (C) No. 13827 of 1991 out of which Civil Appeal No. 3203 of 1991 arises. Shri Dave, learned senior counsel for the Board in this connection submitted that whatever might have been alleged by the writ petitioners in their writ petitions before the High Court their clear case at the stage of arguments before the High Court was confined to the ground of promissory estoppel only against the Board and not against the State G....
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....h January 1986 were issued by the Board in exercise of its statutory power under Section 49 of the Act. The said Section reads as under : "49. Provision for the sale for electricity by the Board to persons other than licencees. - (1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs. (2) In fixing the uniform tariffs, the Board shall have regard to all or any of the following factors namely : (a) the nature of the supply and the purposes for which it is required; (b) the co-ordinated development of the supply and distribu-tion of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or ade-quately served by the licensee; (c) the simplification and standardisation of methods and rates of charges for such supplies; (d) the extension and cheapening of supplies of electricity to spa....
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.... "In partial modification of their Notification (Amendment) No. 225-HC/SEB- V-1974-1204-C-86, dated January 28, 1986, regarding rates and tariffs for supply of electrical energy by the Board, as published in U.P. Gazette extraordinary, dated January 29, 1986 and as amended from time to time, the U.P.S.E.B. in exercise of the powers under Section 49 of the Electricity (Supply) Act, 1948 (Act No. 54 of 1948) and all other powers in this behalf hereby make the following amendment in rate schedules LMV-6, LMV-8, HV-1 and HV-2 annexed thereto, which shall be deemed to have come into force w.e.f. August 1, 1986 : (1)... (2)... (3) Rate Schedule HV-1 (a) The first para of item 8 under the heading "Incentive to New Industry" be deleted." A mere look at this item shows that all the aforesaid three notifications which held the field from 29th October 1982 to 28th January 1986 clearly contained a representation by the Board to the consumers, who were to establish new industrial units in the territories of the State in which the Board was to supply electricity, that on the total bill of electricity consumed by them during the period of first three years....
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....t, therefore, be held that the earlier three notifications issued by the Board under Section 49 read with Section 78A of the Act were a part and parcel of this incentive scheme. This scheme of rebate of 10% for new industries to be established in plains of the Slate had remained operative since 29th October 1982 for almost four years and even by the latest notification dated 28th January 1986 the Board had continued the said package of incentives and made it available also to the new industries which could come up even after 28th January 1986 in the area of the State where the Board was supplying electricity and selling it to its consumers. It is also obvious that when new industries are attracted in the region, the Board would be able to find more and more customers for the electricity sought to be sold by it to these consumers of electricity who would be taking high voltage electric power and, therefore, would be paying higher tariff by way of HVI and HV2. Thus such an incentive scheme would benefit not only the entire State but also the Board itself. It is, therefore, not possible to agree with the contention of learned senior counsel for the Board that these three notific....
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....to the new industries so as to attract them to the State to enable the Board to take them in its fold as prospective consumers of electricity to be sold by it to them. It the case of Amrit Banaspati Co. Ltd. and Another v. State of Punjab and Another, [1992] 2 SCC 411 another Bench of this Court consisting of two learned Judges speaking through R.M. Sahai, J., considered the ques-tion whether any promissory estoppel was available against the State of Punjab when it promised new industries refund of sales tax collected by it earlier from its consumers. In connection with the doctrine of promissory estoppel the follow-ing pertinent observations, relying on a number of decisions of this Court, are found in paragraph 4 of the Report : "The law of promissory estoppel furnishes a cause of action to a citizen, enforceable in a court of law, against govt. if it or its officials in course of their authority extend any promise which creates or is capable of creating legal relationship, and it is acted upon, by the promisee irrespective of any prejudice. What, there-fore, requires to be examined, is if any promise was made by the Government or its officials to the appellants th....
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....ax exemption could validly form the subject-matter of promissory estoppel as it would not be against public policy but in so far as any representation seeks to enable the promisee to get refund of the collected sales tax it would remain unconstitutional being violative of the taxation scheme of the Constitution and, therefore, would be contrary to public policy and would get voided under Section 23 of the Contact Act. Consequently it cannot be held On the clear recitals found in the aforesaid three notifications issued by the Board that no representation whatsoever guaranteeing 10% rebate on electricity consumption bills could be culled out from these notifications. We, therefore, agree with the finding of the High Court on Issue No. 1 that by these notifications the Board had clearly held out a promise to these new industries and as these new industries had admittedly got established in the region where the Board was operating, acting on such promise, the same in equity would bind the Board. Such a promise was not contrary to any statutory provision but on the contrary was in compliance with the directions issued under Section 78A of the Act. These new industries which got attract....
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....powers under Section 49(1) of the Act by fixing uniform rates of tariff for electricity charges. When it fixes general tariffs, it may be said to be exercising delegated legislative power. But while doing so, it also in exercise of its statutory power can grant rebate to a given class of con-sumers under Section 49 sub-Sections (2) and (3) read with Section 78A of the Act. Once the uniform tariffs are fixed the statutory function of quasi-legislative nature gets fructified. Dehors such rates if some concession by way of rebates is to be given the same would still remain in the field of statutory exercise of power. On this aspect we may usefully refer to a decision of this Court in the case of Bihar State Electricity Board and Another v. Usha Martin Industries and Another, [1997] 5 SCC 289 rendered by a Bench of two learned Judges wherein one of us (K.T. Thomas, J.) was a member. Dealing with the very same Section 49(1) the following pertinent observations were made by Sen, J. speaking for the Bench : "Moreover, the tariff is fixed by exercise of statutory power. It is not fixed as a result of any bargaining by and between the Board and the consumers. It is a uniform tariff....
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..... 1. We, therefore, now proceed to deal with these decisions. In the case of Kasinka Trading (supra) a Bench of two learned Judges of this Court consisting of M.N. Venkatachaliah, CJ. and Dr. A.S. Anand, J., had to consider the question whether a notification issued under Section 25 of the Customs Act, 1962 granting complete exemption from payment of customs duty to PVC resin imported into India by manufacturers of certain products requiring the said resin as one of the raw materials, which was issued in public interest and which had stated that it would remain in force upto and inclusive of 31st March 1981 could be withdrawn before the expiry of the said period by fresh notification issued by the Government in exercise of the very same power under Section 25 of the Customs Act. This Court speaking through Dr. Anand, J., took the view that as the said notification was issued in public interest it could be withdrawn even before the time fixed therein for its operation also in public interest and while issuing such a notification no promise can be said to have been held out or any representation made to the importers in general on the basis of which they could insist on the doctri....
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....plicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation. It may, however, be mentioned that in paragraph 21 of the Report the Court has observed that the notification which was impugned before it was not designed or issued to induce the appellants to import PVC resin. Admittedly, the said notification was not even intended as an incentive for import. The notification on the plain language of it was conceived and issued by the Central Government 'being satisfied that it was necessary in the public interest so to do'. Strictly speaking, therefore, the notification could not be said to have extended any 'representation' much less a 'promise' to a party getting the benefit of it to enable it to invoke the doctrine of promissory estoppel against the State. It must, therefor....
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.... schedule of tariff rates as that Was also in the interest of the Board for the obvious reason that thereby more and more new industries as consumers of high power electricity would be attracted to the region and would be paying higher electricity rates/charges to the Board. Shri Dave next invited our attention to a three Judge Bench judgment of this Court in the case of Shrijee Sales Corporation (supra) wherein A.M. Ahmadi, CJ., speaking for the Bench considered the correctness of the aforesaid decision in Kasinka Trading (supra). As the decision in Shrijee Sales Corporation (supra) has laid down the parameters of the field in which the doctrine of promissory estoppel can apply it is necessary to closely refer to the relevant observations found in the said judgment. It may be mentioned that the very same customs exemption notification which was considered by the Bench of two learned Judges in Kasinka Trading (supra) was considered by a three Judge Bench in Shrijee Sales Corporation (supra). While upholding the said notification Ahmadi, CJ., in paragraphs 3 and 4 of the Report observed as under : "It is not necessary for us to go into a historical analysis of the case- ....
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....e Court which has to determine whether the Government should be held exempt from the liability of the 'promise' or 'representation'. "In the present case, the first notification exempting the customs duty on PVC itself recites '......Central Government being satisfied that it is necessary in public interest to do so......'. In the notification issued later which gave rise to the present cause of action, the same recitation is present." It is, therefore, obvious that even though it may be found that the Govern- ment or any other competent authority had held out any promise on the basis of which the promisee might have acted, if public interest required recall of such a promise and such a public interest outweighed the interest of the promisee then the doctrine of promissory estoppel against the Government would lose its rigour and cannot be of any avail to such promisee. In the aforesaid decision the further contention canvassed on behalf of the appellant-promisee was also examined. That centered round the question whether the notification having fixed a time limit for its operation could be rescinded prior to the expiry of the said period. Rejecting the s....
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....ppellants would not be entitled to succeed. We, therefore, now proceed to examine these twin aspects of the controversy. So far as the question of public interest is concerned it must at once be stated that it is not the case of the respondent-Board that it sought to withdraw the incentive development rebate made available earlier by it to the new industries on the ground of any public interest. In this connection by way of illustration we my refer to one of the identical counters filed by the respondent-Board in this group of matters. In Civil Appeal No. 1710 of 1991 the counter affidavit of the Board is found at page 154. Though the counter is sought to be filed in Civil Appeal No. 5318 of 1997 (Arising out of S.L.P.(C) No. 5355 of 1991) it is sought to be treated as a counter affidavit in this Civil Appeal. One B.S. Sharma, Executive Engineer (Com- mercial) of the respondent- Board has staked the claim of the Board for supporting the impugned notification for withdrawal of development rebate only on the twin grounds. Firstly it was contended that the grant of rebate could be withdrawn by the Board at any time it thought fit and for that purpose Section 49 of the Act was press....
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....airness and reasonableness under Article 14 of the Constitu-tion) made representations and promises to the effect that an incentive in the form of 10% development rebate on the amount of electricity bills shall be given to all new industrial units in the State for a period of three years from the date of commencement of supply of electricity to them. (ii) That the petitioner established a new industrial unit (relying on the aforesaid representations and promises of the Board)." The counter affidavit filed on behalf of the Board in reply to the said averments makes an interesting reading. At page 70 is the counter affidavit filed by the same deponent Shri Sharma, Executive Engineer (Commercial) whose counter in other case is referred to earlier. In the said counter he had stated that he relies upon the counter affidavit in Civil Appeal No. 1713 of 1991 for the purpose of the aforesaid Civil Appeal also. The said counter is annexed by way of Annexure '1' at page 72 of the Paper Book. So far as the recitals in the S.L.P. at paragraphs 3(i) and 3(ii) are con- cerned the reply thereto in the said counter is found at page 80 by way of parawise reply. In paragrap....
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.... and acting on the same once they had established their industries and spent large amounts for constructing the infrastructure and for employing necessary labour and for purchasing raw materials etc., it would be almost impossible for them to restore the status quo ante and to walk out midstream if the development rebate incentive was withdrawn for the unexpired period out of the three years' guaranteed period of currency of development rebate incentive. In fairness even it was not suggested by learned senior counsel for the respondents that on such withdrawal of development rebate the appellants would be able to restore the status quo ante and walk out. He simply relied upon the ratio of the decision of this Court in the case of Shrijee Sales Corporation (supra) for contending that it is the power of the Board to grant the rebate and it is equally the power of the Board to withdraw the same in its own discretion. Consequently it must be held that the twin aspects highlighted by this Court in Shrijee Sales Corporation (supra) on the basis of which the authority promising a particular course of conduct on its part to the prospective promisee can resile from the promise even p....
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....ch bound them and unless the same was revised question of promissory estoppel did not arise. We fail to appreciate how the aforesaid decision can advance the case of respondent-Board in the peculiar facts of this group of matters. As we have noted earlier here is a converse poisition where the Board presumably appears to have accepted the guidelines and the directions given by the State of U.P. under Section 78A of the Act and its adopted the scheme of incentive rebates for new industries by promulgating it own tariffs in exercise of its powers under Section 49 read with Section 78A of the Act and it was the Board itself which had given such a promise and held out such representations to the newcomer industries by the first three notifications as seen above. Once that was so the question of compelling the Board to promulgate such policy would not survive for consideration in the present cases. It is obvious that if the Board had not promulgated such a policy the Court could not have compelled the Board to give such concession. Here the question is having itself promulgated such a policy whether the Board can go back upon it prematurely. The aforesaid decision of this Court had n....
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.... with the Board when they took electric connections for their industries, that the Board had power to change the rate schedules from time to time and to revise them, the appellants were barred from challenging the impugned notification. Now it must be kept in view that as per the incentives offered to the new industries the Board had promised these new industrialists that for three years from the date on which they took electric supply for the first time for their industries they would be given 10% rebate on the total bill of electricity consumption charges for their industries. It is not in dispute that before electric supply could be made available to these new industries who would be new consumers to be enrolled by the Board these consumers had to enter into standard agreements. Such agreements had to be signed and entered into by all the prospective consumers whether they were covered by any incentive scheme or not. It is also an admitted position that all the appellants while taking electric connections for the first time for their new industries established by them in the region relying upon the incentives offered by the Board, entered into such written agreements in standard....
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....erms. More often, however, it is simply handed to him at the time of making the contract, and the question will then arise whether the printed conditions which it contains have become terms of the contract. The party receiving the document will probably not trouble to read it, and may even be ignorant that it contains any conditions at all. Yet standard form contracts very frequently embody clauses which purport to impose obligations on him or to exclude or restrict the liability of the person supplying the document. Thus it becomes important to determine whether these clauses should be given contractual effect." In paragraph 12.013 at page 566 of the book the learned author has made following observations regarding the onerous or unusual terms : "Onerous or unusual terms. - Although the party receiving the document knows it contains conditions, if the particular condition relied on is one which is a particularly onerous or unusual term, or is one which involves the abrogation of a right given by statute, the party tendering the document must show that it has been brought fairly and reasonably to the other's attention. 'Some clauses which I have seen', said ....
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....- Although it has been stated that there is not in law any difference of construction between mercantile contracts and other instruments, commercial documents 'must be construed in a business fashion', and 'there must be ascribed to the words a meaning that would make good commercial sense'. Indeed, in The Antaios Lord Diplock said that 'if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must yield to business commonsense'. Moreover, in mercantile con-tracts, the words employed may have acquired a special meaning, and this may be a different meaning from their natural one. Hence it is that mercantile contracts are to be construed according to the usage and custom of merchants, provided that the custom is not inconsistent with the agreement. When such contracts contain peculiar expressions which have in particular places or trades a known meaning attached to them, the meaning of these expressions is a question of fact, although the meaning of the contract still remains a question of law....." In Cheshire's Law of Contract, 12th Edition 'Use of standar....
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....hey have been dictated by that party whose bargaining power, either exercised alone or in conjunction with others providing similar goods or services, enables him to say; 'If you want these goods or services at all, these are the only terms on which they are obtainable. Take it or leave it'. It is fair to add that even in Lord Diplock's second class there are good as well as bad reasons for the adoption of standard form contracts. In many cases the actual conclusion of the contract is in the hands of relatively junior persons who are not trained in contract negotiation and drafting and there are enormous economies to be effected if the company only employs one (or at most a few) standard forms of agreement. As regards the first class, we should note that whole areas of English commercial practice are governed by the prevalent standard forms which exist in a symbiotic relationship with the courts, so that an historical analysis of the development of a particular form would show that the clause represented a response to a decision in the past. In the complex structure of modern society the device of the standard form contract has become prevalent and per....
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....neffective. If the clause is ap-propriately drafted so as to exclude or limit the liability in question, then the Courts, must (subject to the powers now conferred on them by the Unfair Contract Terms Act 1977) give effect to the clause. Moreover, as between businessmen, exemption clauses can perform a useful function in that they may, for example, anticipate future contingencies which hinder or prevent performance, estab-lish procedures for the making of claims and provide for the allocation of risks as between the parties to the contract. In a business transaction, the effect of an exemption clause may simply be to determine which of the parties is to insure against a particular risk. Exemption clauses in business transactions are not necessarily unfair or inequitable. But even in business transactions the Courts must be satisfied that the clause, on its wording, does have the effect contended for by the person relying on it, that is, the party seeking to exclude or restrict his liability. (a) Strict interpretation of the clause. 'If a person is under a legal liability and wishes to get rid of it,. he can only do so by using clear words.' The words....
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....etitioner and therefore, it cannot be said that the petitioner voluntarily and willingly chose and accepted the more onerous condition of a higher rate instead of the normal rate for payment of minimum charges. The willingness to accept such an onerous term with free consent can be assumed only where a consumer has an option or in other words he can get the supply of electricity he wants even without agreeing to any such term specified by the Board for being incorporated in the written contract without execution of which the consumer cannot insist on supply of electricity to him. It is not the Board's case that it was willing to honour the petitioner's requisition and make the supply even without the petitioner un-dertaking in writing to pay minimum charges according to Cl. 16(c). How can it then be said that the petitioner willingly accepted this term when the fact is that it had no option in the matter....." We are of the view that the aforesaid observations of the Rajasthan High Court are in accordance with the correct legal position. In the light of the above legal position, we have to appreciate the express terms found in the written agreements of identical nature e....
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....city if circumstances mentioned in Item 5 are satisfied. Then follows Item 6 which deals with 'Minimum consumption guarantee'. Next is Item 7 dealing with 'Deter- mination of demand'. It refers to the procedure for preparation of bill. And then follows Item 8 dealing with 'Incentive to new industries', first para-graph whereof stood deleted as noted earlier by the impugned notification with effect from 1st August 1986. When these relevant items and the rate schedule which is an annexure to the agreement are read in a comprehen-sive manner it becomes obvious that what the signatory to the agreement was trying to agree as per Clause 7(b) was that the rates of electricity charges as computed in the light of diverse items 1 to 7 in the rate schedule would be paid by the consumer. Item 8, though part and parcel of the rate schedule, does not deal with the computation of bill for consumption of electricity in the light of the general tariff rates as fixed by the Board. It deals with entirely a different topic of an incentive rebate. A close look at Item 8 of the rate schedule clearly indicates that this development rebate of 10% was to be paid on the amount of the....
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....c) itself indicates that the rates of charges of electricity being general tariff could be either increased or decreased. That has nothing to do with the scheme of incentive development rebate which is entirely a different concept and withdrawal of development rebate cannot be said to be an upward revision of the general rate schedule for charging the consumer while being supplied the electricity. These types of standard contracts have to be examined in the light of the express language found therein and by implication nothing can be read which obviously would be miles away from the real intention of the persons signing such contracts in standard forms. It is difficult to appreciate how the High Court could persuade itself to hold in the light of Clause 7(c) that the appellants while signing such agreements for taking electricity supply for the first time for their new industries as if by sidewind agreed of give up their right to claim development rebate by handing over on a platter an absolute right to the Board to totally withdraw such development rebate at any time it liked before the three years' period, for which incentive was meant to be guaranteed, would have expired.....
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....ement as found at clause 7(a), (b) and (c). This would result in a total exercise in futility. The incentive development rebate scheme would in such an eventuality be still-born. It is also easy to visualize that a new industrial unit which spends large amounts for establishing its infrastructure and gets lured in the light of the representation held out by the Board and establishes its plant and machinery in the new unit, would not simultaneously and voluntarily agree by signing such an agreement with the Board to give up the very same benefit of incentive by permitting the latter to withdraw it at any time it likes. That would be doing violence to common sense and business approach of an ordinarily prudent businessman. No businessman in his senses would ever voluntarily to such an absurd, incongruous and inconsistent predicament. It is, therefore, too much to imply any written consent on the part of a prudent consumer who established new industrial units to at once give up the incentive of development rebate guaranteed in his favour by the Board. Consequently it is not possible for us to endorse the reasoning which appealed to the High Court which decided Issue No. 2 against t....
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.... within the three years of the currency of the incentive scheme, to Rs. 200 per KW all the well established industries will have to pay Rs. 200 per KW for the electricity consumed while the new industries which were earlier getting infancy benefit will pay Rs. 180 per KW as 10% rebate will still be available to them by way of development rebate. Thus benefit of infancy protection will remain avail-able to the new industries for competing with the old ones even if general tariff rate gets revised upwards for a given class of consumers comprising of new as well as old industries in the field. New industries will, therefore, despite such increase in general tariff rate will be able to sell their products in the same manner as compared to the old established industries as they were doing earlier. Thus the cloak of protection available to them against old competitors in the field will still be available despite any upward revision of the general tariff by the Board in exercise of its powers under Clause 7(c) of the agreement read with Section 49 of the Act. Consequently the provision of revision of general rates under Clause 7(c) of the agreement cannot be treated to be conferring any f....
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....he contention of learned counsel for the appellants that the said notifica-tion had any retrospective effect It was purely prospective and had resulted into two consequences - (i) any new industry which entered into an agreement with the Board for supply of electricity lor the first time on and after 1st August 1986 could not get the benefit of incentive of 10% development rebate and (ii) all existing new industries which were armed with the guarantee of 10% development rebate under the earlier notifica-tions and had unexpired period out of the three years from the date of earlier commencement of supply of electricity to their concerns lost the benefit for that unexpired period which otherwise would have been avail-able to them from 1st August 1986 onwards till the entire three years' period which had already commenced would have been over. Both these effects of the notification of 31st July 1986 were purely prospective in character and had no retrospective effect. Consequently it cannot be said that the said notification was liable to be struck down on the score of being retrospective in nature. The third point for consideration, therefore, is answered in the negative. In v....
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.... benefit of any further development rebate incentive after the aforesaid three years' period in case of each of them had worked itself out. In fairness to the appellants it must be stated that even they did not claim any such extra benefit. It is also true that the present proceedings are confined only to the claim of 10% development rebate on the bills of consumption of electricity which according to the appellants is available to them for the unexpired period of three years from 1st August 1986 onwards and which development rebate according to the Board was not available to them. However before parting with the present appeals we have to clarify two ancillary aspects pertaining to the controversy in these proceedings. At the time of issuing notice in the SLPs as noted earlier the recovery of development rebate charges was not stayed in most of the matters, though as we are informed in some of the matter even that stay came to be indirectly granted. Those appellants who were protected by the grant of stay of recovery of the impugned development rebate charges naturally will not be entitled to claim any refund from the Board even though they succeed in these appeals and the ....
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....e cost of electricity would normally not be borne by these industrialists but they would see to it that the said expenditure enters their cost structure and pricing so that ultimately the burden would be passed on to the purchasers of the items manufactured by them by utilising the electric supply purchased from the Board. Even though the appellants might have paid these disputed amounts to the Board as stay was refused by this Court so far as development rebate charges are concerned, they would in all probability have spread the said burden in a phased manner by including it in the cost structure on the basis of which they would have worked out their future pricing for the goods manufactured by them and sold to consumers or outside wholesale dealers. Consequently, according to Shri Dave, on the principle of unjust enrichment even they would not be entitled to get refund of the amount, much less any interest thereon. So far as the refund question is concerned, on the basic principle of restitution and in the absence of any clear evidence or even averment on this aspect it is not possible for us to come to any definite finding that all the disputed amounts of development rebate c....