TaxTMI 
TaxTMI 
2010 (5) TMI 900
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....High Tension Industrial consumers of electricity as a policy of the State Government. In Civil Appeal No. 4219 of 2002 (M/s M.R.F. Ltd. & Anr. Vs. State of Goa & Anr.), the appellant has called in question the judgment and order passed by the High Court of Bombay Panaji Bench, at Goa in Writ Petition No. 364 of 1999 dated 24.4.2001, partly allowing the writ petition filed by the appellant. In Civil Appeal No. 4214 of 2002 (Goa Glass Fibre Ltd. & Anr. Vs. The State of Goa & Anr.), the appellant has called in question the correctness or otherwise of the judgment and order passed by the High Court of Bombay Panaji Bench, at Goa in Writ Petition No. 254 of 1999 dated 25.4.2001 dismissing the writ petition filed by the appellant. In Civil Appeal No. 4217 of 2002 (Alcon Cement Company Limited & Anr. Vs. The State of Goa & Anr.), the appellant has called in question the correctness of the judgment and order passed by the High Court of Bombay Panaji Bench, at Goa in Writ Petition No. 277 of 1999 dated 24.4.2001 partly allowing the writ petition. In Civil Appeal No. 4218 of 2008 (Mauvin Godinho Vs. Manohar Parrikar & Ors.), the appellant has called in question the correctness of the judg....
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....dated 30.09.1991. On 29.06.1995, a Calling Attention Notice in Legislative Assembly was also brought in by Mr. Manohar Parrikar, seeking clarification from the State Government as to whether these industrial units were entitled for the benefits flowing from the Notification dated 30.09.1991 upto 31.03.1995. The Power Minister gave a reply to the said Notice which is reproduced in the judgment under appeal. In sum and substance the Minister stated, that, the Government was committed to honour the concession granted by the Notification dated 30.09.1991 to the eligible industrial units who apply for High Tension and low tension power on or after 01.10.1991 till the date of withdrawal, i.e. 01.04.1995. 4) The Under Secretary to Government of Goa, Department of Power issued a clarification dated 01.11.1995 to the Chief Electrical Engineer on the lines of the reply given by the Power Minister to the Calling Attention Motion and reiterated the same by a communication dated 12.12.1995. Later, as the Government being satisfied that there were certain difficulties in the matter of clearing cases of claim of rebate for the period upto 31.03.1995, issued certain clarifications. On 15.05.1996,....
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....rt by an order dated 13.02.2001 declined to interfere, the said order of the High Court and rejected both sets of appeals. 8) Mr. Manohar Parrikar, the 1st respondent herein, in the meantime, had moved the High Court, a Misc. Civil Application No.637 of 1999, seeking withdrawal of his writ petition, liberty to challenge the legality or otherwise of the Notification after this Court decided the above mentioned civil appeals filed before it against the order of the High Court dated 21.01.1999. The High Court by its order dated 27.01.2000 rejected the said application. Mr. Manohar Parrikar had also moved the High Court to hear his petition along, earlier set of writ petitions disposed of by the High Court on 21.01.1999. Subsequently, the said prayer was also withdrawn. 9) Before the High Court, the 1st respondent herein challenged the correctness of the Notifications dated 15.05.1996 and 01.08.1996, and sought to declare the same as null and void. He also challenged the guidelines framed in the letter dated 12.12.1995 and sought to declare the said circular was illegal and to quash it to the extent it goes beyond the scope of Notification of 1991. He also prayed for certain other re....
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....rectory and failure to comply, them did not vitiate the Notifications and in any event, if it was realized by the State Government that these Notifications were issued contrary to the Provisions of Article 166 nothing prevented the State Government from withdrawing them and the fact that no such action was taken by the State Government for almost two years itself indicated that the State Government was satisfied, the legality of the Notifications. The respondent also raised a preliminary objection regarding the maintainability of the Writ Proceedings on the ground, that, once the Notifications impugned have been authenticated as per the Business Rules, they are immune from any challenge and there cannot be a situation where respondent No.1, who at the relevant point of time, was the Chief Minister of Goa, would be contesting against the action of the State Government. It was also contended that the petition lacked bona fides and was moved only to settle political scores and to gain political mileage. The fact that contradictory stands were taken by the State Government by filing two affidavits of the Chief Electrical Engineer itself showed that the State Government walked into the ....
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.... :- Appellant applied for power supply connection for setting up a factory in the State of Goa on 03.10.1991. On 02.09.1992, appellant was supplied electricity for the first time. Sometime in October 1996, the Executive Engineer had acknowledged that the appellant is entitled for 25% rebate as provided in the notification. The amount of rebate was computed at Rs. 1,04,70,762 for the period from 02.09.1992 to 01.09.1996 and it was further stated that the amount of arrears be credited in 60 installments w.e.f. September, 1996 and each installment was of Rs. 1,74,513. The respondent had adjusted an amount of Rs. 53,78,594 as against the bills from September, 1996 to August, 1997 and further adjustment of Rs. 31,41,234 was also done subsequently thus leaving a balance of Rs. 73,29,528. The benefit of rebate was denied to the appellant for the remaining period on the basis of the notification dated 31.3.1998, whereby the extension of rebate in tariff was suspended. Pursuant to the judgment dated 21.1.1999, the appellant raised a fresh demand for rebate before the respondent no. 2 and as they failed to succeed, they approached the High Court for directions to seek implementation of the s....
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.... notification dated 31.3.1998, whereby the extension of rebate in tariff was suspended. Pursuant to the judgment dated 21.1.1999, the appellant raised a fresh demand for rebate before the respondent no. 2 and as they failed to succeed, they approached the High Court seeking directions to implement the said judgment. 19) Before us the appellants urged various contentions and supported them, various grounds and the case laws. The questions of law according to the appellants are as under: * Whether there is any breach of judicial discipline by the High Court in not following it's own Judgment rendered by a Full Bench in the Case of Kharkanis wherein the Business Rules framed under Article 166 (3) were held to be directory in nature, but in holding that the Rules of Business are mandatory? * Whether the High Court by the judgment impugned herein has set at naught the judgment dated 21.01.1999 rendered by the other Division Bench, reference to the same notifications impugned in Writ Petition No. 316 of 1999, the former of which has been affirmed by this Court by its order dated 13.02.2001 in Civil Appeal No. 3206-07 of 1999 and others? * Whether the appellants as consumers of....
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....ein and that the High Court should await the order of this Court in Appeals pending and which was eventually disposed by order dated 13.02.2001? * Did the High Court erred in not permitting Manohar Parrikar [1st respondent herein] to withdraw his writ petition, when he himself had submitted that the issues in his writ petition were covered by the judgment of the High Court dated 21.01.1999 and that the appeals there against were pending in this Court? 20) These civil appeals are opposed by the State Government by filing a detailed Counter Affidavit. The contentions of the State Government in support of the impugned judgment can be summarized as under: * That the State has a vital interest in the outcome of the proceedings before this Court which have a bearing on the State's Finances as an order of this Court setting aside the judgment impugned will result in a loss of Rs. 50 Crores to the State's Exchequer. * That the State has already paid an amount of about 16 crores as rebate and it cannot afford to pay any more on account of financial crunch faced by it and also on account of the Notifications not being Government decision in the eyes of law, in as much as the m....
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....ts. The said affidavits also reflected the fact that there was neither financial sanction nor was there a budgetary provision nor was there a Cabinet approval as mandatorily required under the provisions of Article 166 (3) of the Constitution and the said Notifications therefore could not be said to be the decision of the State Government in the eye of law. The affidavit dated 12.04.2001 was filed before the High Court after the State re-examined the entire matter at the highest level and after examining the legal aspects and as it was found that certain matters which go to the root of the matter and as the earlier affidavits filed before the High Court did not place all the facts emanating from Government files and records. The said affidavit was filed explaining the severe financial implications which the said Notifications incurred on the State in the form of rebate which could not be borne by the State's interest and which was detrimental to the State's Interest, more so in view of lack or absence of legal sanctity for the said notification. The affidavit was filed further to disclose that there was breach of mandatory Business Rules and to show that neither cabinet app....
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.... said application by order dated 27th January, 2000, gave the following reasoning:- "It appears that at one stage the applicant had prayed for taking up the Writ Petition No. 316/98 along, the other batch of Writ Petitions, but the said prayer was withdrawn. In the said batch of Writ Petitions, challenge had been thrown to the decision of government of Goa communicated by the Chief Electrical Engineer vide Circular dated 31st March, 1998 to suspend the release of 25% rebate of power tariff to the industrial consumers. There was no challenge whatsoever to Notification dated 15th May, 1996, or Notification dated 1st August, 1996, or that the said Notifications were null and void and to nullify any effect given to them in the earlier batch of Writ Petitions which declaration is now sought by the Writ Petition No. 316/98. There was also no challenge to the guidelines framed by letter dated 12th December, 1995, which is sought to be challenged in the Writ Petition No. 316/98 on the ground that it is illegal to the extent it goes beyond the scope of 1991 Notification. No direction had been sought in the earlier batch of Writ Petitions for investigation into the grant of rebate, or for ....
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....r will not come in its way in deciding the issues involved in this petition for the reasons, that, these issues were not raised and therefore not required to be decided by the High Court in its earlier judgment dated 21.01.1999 as was clear from the order passed by it on 27.01.2000 in Misc. Civil Application No. 637 of 1999. The High Court held, that, it had no occasion to address itself on the challenge raised to the notification impugned in the Writ Petition of Manohar Parrikar and the earlier batch of Writ Petitions proceeded solely against the order dated 31.03.1998, and subsequent Notification issued by the State Government on 24.07.1998. It is observed by the High Court, that, the State Government opposed those Writ Petitions without examining the legality of the Notifications dated 15.05.1996 and 01.08.1996 and it had contended that the benefit of rebate was withdrawn as the State Government was facing financial crunch and that the said benefit had been introduced as a policy of the State Government and when it was realized by the State that it was facing financial difficulties in extending the benefit of rebate it decided to withdraw the same which has been upheld by the Hi....
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...., the decision of the Government and they are in conformity, the mandate of the Constitution. Thus the High Court has rejected the preliminary objection as to the maintainability of the Writ Petition and proceeded to decide the challenge made to the above mentioned two notifications on its merits. 27) In our view, the principle of merger essentially refers to the merging of the orders passed by the superior courts, that of the orders passed by a subordinate court. This Court in the case of Shankar Ramachandra Abhyankar Vs. Krishnaji Dattatreya Bapat (AIR 1970 SC 1) has laid down the condition as to when there can be a merger of the orders of the superior court, that of the orders passed by the lower court. This Court stated, that, if any judgment pronounced by the superior court in the exercise of its appellate or revisional jurisdiction after issue of a notice and a full hearing in the presence of both the parties, then it would replace the judgment of the lower court. Thus, constituting the judgment of the superior court the only final judgment to be executed in accordance, law by the Court below. The merger is essentially of the operative part of the order and the principle of ....
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....g this issue against this respondent. In aid of this submission, the learned senior counsel has pressed into service the observations made by this Court in the case of State of Karnataka vs. All India Manufacturer Organization and Others, [(2006) 1 SCC 32]. 29) We are not impressed by the submission of the learned senior counsel Shri K.N. Bhatt. In our view, the subject matter of earlier Writ Petitions was completely different and distinct from the public interest litigation filed by Mr. Manohar Parrikar. In the earlier Writ Petitions, the challenge was against notification and the circulars issued by the State Government and in the present Writ Petitions the High Court was primarily concerned, validity or otherwise of the notifications dated 15.5.1996 and 01.08.1996. Therefore, we are of the view that the reasoning and conclusions reached by the High Court, on the aforesaid issue is in accordance, law and in accordance, the principles laid down by this Court. Therefore, we agree, the conclusion reached by the High Court. 30) The appellants herein have raised an issue, regard to the nature of Business Rules framed by the Government of Goa i.e. whether these Rules are directory or....
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.... itself prescribe any particular form of expression of that executive decision. Article 166 directs all executive action to be expressed and authenticated in the manner therein laid down but an omission to comply, those provisions does not render the executive action a nullity. 31) Reference is also made to the decision of this Court in Gulabrao Keshavrao Patil and Ors. Vs. State of Gujarat (1996) 2 SCC 26. It was noted as follows: "Article 166(1) and (2) expressly envisage authentication of all the executive action and shall be expressed to be taken in the name of the Governor and shall be authenticated in such manner specified in the rules made by the Governor. Under Article 166(3), the Governor is authorised to make the rules for the more convenient transaction of the business of the Government of the State, and for the allocation among Ministers of the said business insofar as it is not a business, respect to which the Governor is by or under the Constitution required to act in his discretion. In other words, except in cases when the Governor in his individual discretion exercises his constitutional functions, the other business of the Government is required to be convenient....
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....e object of the statute must be looked at. The cases on the subject will be found collected in Maxwell on Statutes, 5th ed. P. 596 and following pages. When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted, the duty, and at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable not effecting the validity of the acts done." (emphasis supplied) 35) In R v Immigration Appeal Tribunal Ex parte Jeyeanthan 1999 (3) AER 231, it is observed : "The issue is of general importance and has implications for the failure to observe procedural requirements outside the field of immigration. The conventional approach when there has been non-compliance, a procedural requirement laid down by a statute or regulation is to consider whether the requirement which was not complied, should be categorised as directory or mandatory. If it is categorised as directory it is ....
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.... defect is properly raised has the task of determining what are to be the consequences of failing to comply, the requirement in the context of all the facts and circumstances of the case in which the issue arises. In such a situation that tribunal's task will be to seek to do what is just in all the circumstances (see Brayhead (Ascot) Ltd v Berkshire CC [1964] 1 All ER 149, [1964] 2 QB 303 applied by the House of Lords in London and a Clydesidc Estates Ltd v Aberdeen DC [1979] 3 All ER 876, [1980] lWLR 182). By contrast, a requirement may be clearly directory because it lays down a time limit but a tribunal is given an express power to extend the time for compliance. If the tribunal grants or refuses an extension of time the position is clear. If the time limit is extended the requirement is of no Significance. If an extension is refused the requirement becomes critical. It may, for example, deprive a member of the public of a right to appeal which if exercised in time would have been bound to succeed. In the latter situation a directory requirement has consequences which are as significant as any mandatory requirement. A far from straightforward situation is where there is....
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....consequences of non- compliance'. This is how I will approach the matter." 37) In R v Sekhon and others, 2003(3) AER 508, it is observed : "25. There is no doubt that difficulties for courts exist in applying the distinction between mandatory requirements on the one hand, and directory requirements on the other. Even if the terms `directory' and `mandatory' are not used the problem remains of answering the question : what is the effect of non-compliance, procedural requirements? What is necessary as indicated by Lord Campbell LC in Liverpool Borough Bank v. Turner (1861) 30 LJ Ch 379 at 381, 45 ER 715 at 718, is `to try to get at the real intention of the legislature, by carefully attending to the whole scope of the statute to be construed." 38) Reference can be made to certain passages from HALSBURY'S Laws of England, 4th Edition Re issue Vol. 44(1) at para 1237 and 1238 : 1237. Substantive and procedural enactments. A distinction is drawn between enactments that have substantive effect and those that are merely procedural. Here 'substantive' means having to do, the substance of the law, in particular the nature and existence of legal rights, powers o....
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.... Where, however, a requirement, even if in mandatory terms, is purely procedural and is imposed for the benefit of one party alone, that party can waive the requirement. Provisions requiring a public authority to comply, formalities in order to render a private individual liable to a levy have generally been held to be mandatory. Requirements are construed as directory if they relate to the performance of a public duty, and the case is such that to hold void acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted, the duty, without at the same time promoting the main object of the legislature. This is illustrated by many decisions relating to the performance of public functions out of time, and by many relating to the failure of public officers to comply, formal requirements. On the other hand, the view that provisions conferring private rights have been generally treated as mandatory is less easy to support; the decisions on provisions of this type appear, in fact, to show no really marked leaning either way. If the requirement is found to be mandatory, then in a case where a duty to implement it is....
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....rvations made in the following decisions : - 40) In State of Kerala vs. A. Lakshmikutty, [(1986) 4 SCC 632], it is held : "It must therefore follow that unless and until the decision taken by the Council of Ministers on January 30, 1985 was translated into action by the issue of a notification expressed in the name of the Governor as required by Article 166(1), it could not be said to be an order of the State Government. Until then, the earlier decision of the Council of Ministers was only a tentative one and it was therefore fully competent for the High Court (sic State Government) to reconsider the matter and come to a fresh decision." (pr. 41, pp. 659) 41) In CBI vs. Ravi Shankar Srivastava, [(2006) 7 SCC 188], it is observed : "13.....has been rightly submitted by learned counsel for the appellant, there is no notification revoking the earlier notification. The letter on which great emphasis has been laid by Respondent 1 and highlighted by the High Court, the authority to write the letter has not been indicated. It has also not been established that the person was authorised to take a decision. In any event, the same does not meet the requirements of Article 166 of the ....
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....t a power has been given to the Minister in charge of the Forest Department to do an act which concerns the revenue of the State and also the rights of individuals. The negative or prohibitive language of rule 10(1) is a strong indication of the intent to make the Rule mandatory. Further, rule 10(2) makes it clear that where prior consultation, the Finance Department is required for a proposal, and the department on consultation, does not agree to the proposal, the department originating the proposal can take no further action on the proposal. The cabinet alone would be competent to take a decision. When we see that the disagreement of the Finance Department, a proposal on consultation, deprives the department originating the proposal of the power to take further action on it, the only conclusion possible is that prior consultation is an essential pre-requisite to the exercise of the power." (pr. 16, pp. 896) 45) In Dattatraya Moreshwar vs. State of Bombay, [1952 SCR 612] at pp. 624-65, per Das, J. : "The fact that the old provisions have been split up into two clauses in Article 166 does not appear to me to make any difference in the meaning of the article. Strict compliance, t....
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.... ministries. Each ministry can, therefore, issue orders or notifications in respect of the functions which have been allocated to it under the Rules of Business." 48) In Gulabrao Keshavrao Patil vs. State of Gujarat, [(1996) 2 SCC 26], it is held : "14....It would, therefore, be clear that the decision of a Minister under the Business Rules is not final or conclusive until the requirements in terms of clauses (1) and (2) of Article 166 are complied with. Before the action or the decision is expressed in the name of the Governor in the manner prescribed under the Business Rules and communicated to the party concerned it would always be open by necessary implication, to the Chief Minister to send for the file and have it examined by himself and to take a decision, though the subject was allotted to a particular Minister for convenient transaction of the business of the Government. The subject, though exclusively allotted to the Minister, by reason of the responsibility of the Chief Minister to the Governor and accountability to the people, has implied power to call for the file relating to a decision taken by a Minister. The object of allotment of the subject to a Minister is for ....
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....ion is to be taken by way of an order or instrument, it shall be expressed to be taken in the name of the Governor in whom the executive power of the State is vested. Under Clause (2), the orders and instruments made and executed in the name of the Governor shall be authenticated in the manner specified in the rules. Under Clause (3) of Article 166 of the Constitution, the Governor is authorized to make rules for the more convenient transaction of business of the Government of the State and for the allocation among its Ministers of the business of Government. All matters excepting those in which the Governor is required to act in his discretion have to be allocated to one or the other of the Ministers on the advice of the Chief Minister. Apart from allocating business amongst Ministers, the Governor can also make rules on the advice of the Council of Ministers for more convenient transaction of business. 53) In the case on hand, we are required to examine the contentions of the appellants on this issue, reference to the Business Rules framed by Governor of Goa under Article 166 (3) of the Constitution of India. Rule 7 (2) of the Business Rules of the Government of Goa states, that....
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....d to be processed only after the concurrence of the Finance Department and cannot be finalized merely at the level of the Minister in charge. The procedure or process does not stop at this. After the concurrence of the Finance Department the proposal has to be placed before the Council of Ministers and/or the Chief Minister and only after a decision is taken in this regard that it will result in the Decision of the State Government. Therefore the High Court has rightly rejected the arguments of the appellants herein based on the judgment of the Full Bench of the High Court. The High Court has observed, that the Rules of Business are framed in such a manner that the mandate of the provisions of Articles 154, 163 and 166 of the Constitution are fulfilled. Therefore, if it is held that the non- compliance of these Rules does not vitiate the decisions taken by an individual Minister concerned alone the result would be disastrous. In a democratic set up the decision of the State Government must reflect the collective wisdom of the Council of Ministers or at least that of the Chief Minister who heads the Council. The fact that the decisions taken by the Minister alone were acted upon by ....
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....eraj Avasthi, [2006 (1) SCC 667], this Court held that the power of the State Government was confined to issuing directions to State Agricultural Produce Market Board on the question of policy and observed : "Such a decision on the part of the State Government must be taken in terms of the Constitutional scheme, i.e., upon compliance of the requirement of Article 162 read, Article 166 of the Constitution of India. In the instant case, the directions were purported to have been issued by an officer of the State. Such directions were not shown to have been issued pursuant to any decision taken by a competent authority in terms of the Rules of Executive Business of the State framed under Article 166 of the Constitution of India. .... We are therefore of the opinion that the direction by the State was not strictly in accordance, law." 57) In Gulabrao Keshavrao Patil (supra), this Court held that a decision of a Minister was not an order of the Government in view of non-compliance, Article 166. 58) The decision of the Constitution Bench in Chitralekha has been misinterpreted. In that case this Court was considering a controversy in regard to an order which was not expressed in the n....
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....nance Minister's proposal involving important change in the policy and practice; proposals to vary or reverse a decision previously taken by the Council. Under Rule 16 the decisions of the Council in each case should be recorded and placed, the records of the case after their approval by the Chief Minister. Extracts of the decision should be sent to the Secretary of the Department who should take necessary action thereon. Rule 17 enables a Minister in Charge of a Department on the basis of standing orders to give such directions as he thinks fit for disposal of cases in his department and further requires the Secretary of the Department concerned to simultaneously submit to the Chief Minister and the Governor the statement showing the particulars of any important cases disposed of by the Minister. Rule 20 stipulates, that, when the subject involves or relates to more than one Department, no order should be issued or the case be laid before the council until the case has been considered by all the departments involved or concerned, unless the case is one of extreme urgency. In the case on hand, the decisions impugned involve and concern not only the department of power but also ....
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....ies Departments. The Notification dated 15.5.1996 which was argued by the appellants herein to be only clarificatory had imposed an additional burden on the State's Exchequer by introducing a new class of consumers for grant of rebate retrospectively and it was finalized by the Power Minister at his level. In law the proposal for the decision leading to the Notification dated 15.5.1996 should have been placed before the Council of Ministers or the Chief Minister and since the same has not been done it is in violation of the Business Rules and hence the decision is non est. Even for the sake of arguments if it is assumed that the Notification dated 15.5.1996 was c1arificatory in nature the same violates Rule 19 of the Business Rules and there is nothing on record, as observed by the High Court to show that the department concerned attempted to seek ratification of the decision taken by the Power Minister before the Notification dated 15.5.1996 was issued. 61) At this stage, we find it necessary to refer to some of the Constitutional provisions to deal, the issue raised by the appellants. Under Article 154 of the Constitution of India, the Governor is vested, the Executive Power....
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....ansaction of the business of the Government and the said business has to be transacted in a just and fit manner in keeping, the said Business Rules and as per the requirement of Article 154 of the Constitution. Therefore, if the Council of Ministers or Chief Minister has not been a party to a decision taken by an Individual Minister, that decision cannot be the decision of the State Government and it would be non-est and void ab initio. This conclusion draws support from the Judgment of this Court in the case of Haridwar Singh Vs. Bagun Sambrui & ors (1973) 3 SCC 889. This Court in the said case was dealing, the Business Rules of the State Of Bihar framed under Article 166 (3) of the Constitution of India and the observations of this Court on the issue apply to the case on hand in all force. This Court observed: " 14. Where a prescription relates to performance of a public duty and invalidate acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted, the duty, such prescription is generally understood as mere instruction for the guidance of those upon whom the duty is imposed. 15. Where however, a powe....
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....between 01.10.1991 to 31.03.1995 and industrial units supplied, power on/or after 31.03.1995 would not be entitled for the same. On 14.02.1996, the Chief Electrical Engineer submitted a note containing a proposal to amend the rebate notification requesting to extend the benefit of the rebate of 25% to Extra High Tension consumers and sought approval thereof. The said draft when referred to the Law Department for its opinion, it was opined thereon that it was legally impermissible to give retrospective effect to the proposed Notification. However, though the said amendment was approved by the then power minister, the same was not given effect to in view of the elections scheduled on 02.05.1996. On 03.05.1996, the Power Minister passed an order to issue the amendment Notification as by then the elections were over and the notification dated 15.05.1996 was accordingly issued, though the subject matter was never placed before the Council of Ministers or the Chief Minister. The Notification was issued solely on the directions of the Power Minister despite the opinion of the Law Secretary that retrospective effect to the proposed amendment could not be given as it involved additional cla....
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....al for re-introduction attracted the provisions of Rules 9 & 10 of the Business Rules and it did not seek the concurrence of the Finance Department. From the file produced before it the High Court has found that the decision was finalized by the Power Minister at his level without any reference to the Council of Ministers or the Chief Minister. The High Court has also referred to the Statement in writing given by the Chief Minister to the Investigating Officer during the course of investigation launched pursuant to the complaint given by the 1st respondent, that the Power Minister at no point of time had placed the proposal regarding decisions dated 15.5.1996 and 1.8.1996. This apart, from the records the High Court finds that the agency to certify the eligibility of industrial units for concessional tariff was yet to be identified and the issue whether the rebate for the period between 01.10.1991 to 31.03.1995 was to be made available as per the Notification dated 27.6.1988 or, reference to the tariff prevailing from time to time. The Note dated 8.7.1996 is referred to by the High Court. The High Court also refers to the reply of the Electrical Engineer dated 10.7.1996 wherein it ....
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....fic category of consumer and the amending notification had led to manipulation of records to the extent that some people had attempted to become beneficiaries of the Scheme within the notified period of 01.10.1991 and 31.03.1995. The note of the Commissioner raised certain issues relating to grant of rebate to industrial units after 31.03.1995. As per the objections raised in the note the cases of units which had applied for power but could not be supplied, power by 31.03.1995 were to be referred to the State Government. However, it was later decided to leave it to the Chief Electrical Engineer to allow release of said subsidy to all such units. The Note of the Commissioner had also raised an issue touching upon the number of industrial units entitled to subsidy and the liability per month on that count and fixed the same at Rs. 80 lakhs per month and opined that the total amount of the subsidy by way of adjustment of bills would be in excess of Rs. 50 Crores. Having regard to these aspects the note suggested suspension of the rebate scheme immediately until the legal issues were sorted out. On 03.04.1998, the Joint Law Secretary gave his clarification after examining the matter in....
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....rom time to time at which the units were billed for a period of five years from the date of supply of power was made available to them and who had applied or availed power supply on or after 01.10.1991. The notification dated 30.09.1991 on the other hand made available the rebate on the basis of tariff set out in the Notification dated 27.06.19888 and to Low and High Tension Power consumers who had applied for supply of power and were given power supply on or after 01.10.1991. The Notification dated 01.08.1996, it is seen, extended the scope of benefit of rebate as compared to the Notification dated 30.09.1991 which had been rescinded by the Notification dated 31.03.1995. It is on record and we notice from the judgment of the High Court that the State Government had paid as a result of the Notification dated 01.08.1996 a sum or Rs. 8 crores in excess as compared to the benefit available under the Notification of 1991 and the total amount of rebate would have been more than 30 crores had the benefit as made available by the 1996 Notification been continued. 68) Thus from the foregoing, it is clear that a decision to be the decision of the Government must satisfy the requirements of....
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....public law. It is further submitted that often private law and public law concepts are similar in name and text but needs to be differentiated. Reference is made to the observations of this Court in Shrisht Dhawan (Smt.) Vs. Shaw Bros. (1992) 1 SCC 534, wherein it is observed: "20.....But fraud in public law is not the same as fraud in private law. Nor can the ingredients which establish fraud in commercial transaction be of assistance in determining fraud in Administrative Law. It has been aptly observed by Lord Bridge in Khawaja that it is dangerous to introduce maxims of common law as to effect of fraud while determining fraud in relation to statutory law." 71) The doctrine of indoor management is also known as the Turquand rule after the case of Royal British Bank v. Turquand, [1856] 6 E. & B. 327. In this case, the directors of a company had issued a bond to Turquand. They had the power under the articles to issue such bond provided they were authorized by a resolution passed by the shareholders at a general meeting of the company. But no such resolution was passed by the company. It was held that Turquand could recover the amount of the bond from the company on the ground ....
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....1896] 2 Ch. 93. But there the agent whose authority was relied on had been acting to the knowledge of the company as a managing director, and the act done was one within the ordinary ambit of the powers of a managing director in the transaction of the company's affairs. It is, I think, clear that the transaction there would not have been supported had it not been in this ordinary course or had the agent been acting merely as one of the ordinary directors of the company. I know of no case in which an ordinary director, acting without authority in fact, has been held capable of binding a company by a contract, a third party, merely on the ground that that third party assumed that the director had been given authority by the Board to make the contract. A limitation of the right to make such an assumption is expressed in Buckley on the Companies Acts, 10th Edition, at p. 175, in the following concise words: -- And the principle does not apply to the case where an agent of the company has done something beyond any authority which was given to him, or which he was held out as having." 73) This exception to the doctrine of indoor management has been subsequently adopted in many Ind....
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.... issue regarding the validity or legality of the Notifications dated 15.5.1996 and 1.8.1996 was never raised in the earlier batch of writ petitions before the High Court and the High Court never had an opportunity or occasion to look into, consider and pronounce upon the validity of the same, reference to the Business Rules framed under Article 166 (3) of the Constitution. These principles pressed into service by the appellants cannot operate against the State Government merely because the State did not agitate either before the High Court or this Court the legality or validity of these notification in the earlier round of litigation when it had an occasion to do so and the State Government cannot be deemed to have accepted the legality of the Notification and waived its objection or challenge thereto. The Doctrine of Estoppel therefore has no application at all more so, in view of the illegality the notifications dated 15.05.1996 and 01.08.1996 suffer from in view of their non-compliance, the provisions of the Business Rules. In our opinion the fact that the State Government did not raise these objections in the earlier batch of Writ Ptitions does not disentitle it to such a stand....