TaxTMI 
TaxTMI 
TaxTMI 
2014 (2) TMI 1277
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....s of having industrial development in the State of Kerala and therefore, it had framed certain policies so as to encourage and invite businessmen for setting up their manufacturing units in the State of Kerala. Due to shortage of electricity supply in the State of Kerala, interested entrepreneurs were not inclined to set up their units in the State of Kerala. In view of the aforestated circumstances, the State Government had laid down a policy whereby it declared to give continuous electricity supply at a particular rate to certain new manufacturing units. 3. So as to put the aforestated policy in practice, the respondent-State had issued a Government Order dated 21st May, 1990 which read as under: "Government have been considering the question of giving some incentives to new industries in the matter of power connection. Taking into consideration the announcements made by the Minister (Finance) in the current year's budget speech and after discussions with all concerned, Government are now pleased to issue the following orders in this context which will have effect from 1-4-1990. 1. Power connection will be given on completion of any project irrespective of whether a general ....
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.... units set up under the aforestated policy, the respondent-State passed further order on 26th October, 1999, whereby it granted extension of period of assured power supply to the new units, who were adversely affected because of the power cut in certain circumstances. Under the aforestated order, it was decided and declared to extend the benefit which had been given under G.O. dated 25th May, 1990 and 6th February, 1992 to the new units by number of days during which supply of electricity to them had been cut to the extent of 50% or more. The respondent-State also decided to reimburse the Board with the amount of benefit which was given to the new units on account of power cut beyond 50%. 8. In the aforestated admitted facts and circumstances, the respondent- State should have given the benefits which had been assured to the new units but for the reasons beyond control of the State as well as the Board, the benefits assured to the new units could not be given and therefore, along with other industrial units, the present appellants had filed writ petitions before the High Court of Kerala praying that the benefits which had been assured to them should be given and they should not be....
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....nts were to be given benefit, there was electricity cut for 921 days and out of those 921 days there were 214 days when the cut in electricity supply was for more than 50%. It had been further submitted that the period during which even the electricity cut was less than 50%, the new units could not work at its optimum level, which had resulted into several problems for the appellants. 14. He had further added that the respondent Board had accepted the policy of the State with regard to giving benefit to the new units for uninterrupted power supply on same tariff and therefore, the Board could not have asked for additional tariff during the period of 5 years, as extended by the period during which there was power cut. 15. The learned counsel had also alleged that the respondent- State had given discriminatory treatment to the appellants by not giving uninterrupted 100% electricity supply because the State had given uninterrupted 100% electricity supply to certain other manufacturing units like Malabar Cement and the industries set up within the Export Processing Zone. It had been asserted that if the above stated manufacturing units could be given 100% uninterrupted electricity su....
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....ppellants were provided. 21. It had been further submitted that the appellants cannot expect benefit of extension of period simply because there was negligible cut in the supply for very less period. Therefore, the respondent- State had decided that as and when the cut was 50% or more, the period for which such the cut had been effected would be added to the period of 5 years and the said decision was just and fair. 22. The learned counsel had also submitted that all consumers of electricity, including the appellants were informed well in advance about the stoppage of electricity supply and thus, all possible efforts were made to see that the appellants and other similarly situated consumers were not put to much hardship. 23. The learned counsel had further submitted that looking at the facts of the case, there would not be any promissory estoppel as submitted by the learned counsel appearing for the appellants. The learned counsel had relied upon the judgments delivered in the case of State of Haryana & Ors. v. Mahabir Vegetable Oils Pvt. Ltd., [2011 (3) SCC 778] and State of Rajasthan & Anr. v. M/s Mahaveer Oil Industries & Ors., [1999(4) SCC 357] to substantiate their case to....
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....any justifiable reason for deciding as to why the respondent-State decided to give the benefit of extended period only when the power cut was 50% or more. It is pertinent to know that the cases where the consumer is having a continuous process industry, even power cut below 50% would adversely affect the manufacturing unit. It is a matter of common knowledge that in several industries, the manufacturing process can not be stopped abruptly. Many a times, restarting of the machines or boilers take lot of time and energy, which results into loss to the manufacturer. The said fact ought to have been considered by the State while taking the aforestated decision. The decision with regard to giving extension of time to such a limited extent is not reasonable and in our opinion, that would have surely affected the new units adversely. 30. It is true that Section 22B of the Act enables the State Government to regulate the supply, distribution and consumption of electricity for the purpose of maintenance and supply of equitable distribution of energy but in our opinion, provisions of the said section are not much relevant for the reason that in the instant case, the respondent State had giv....
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.... in consideration of all the relevant factors, there are all chances that he would fail not only in his business but he would completely ruin himself. Thus, one can very well appreciate that the appellants must have thought about all relevant factors, including the incentives offered by the respondent- State and might have decided to set up their industries in the respondent-State. While deciding this case, this Court would invariably keep in mind the circumstances in which the appellants had set up their industries in the State of Kerala. 34. In view of the incentives and assurances given to the appellants along with others, who were desirous of setting up new industries, the appellants set up their new units which were much dependant upon continuous supply of electricity. One of the appellants is a Steel Re-rolling Mill. In Steel industry, when the industry is concerned with making of steel or re-rolling of steel, it requires lot of power and energy, and electricity being one of the important sources of power, the appellant was much dependent on continuous supply of electricity, which had been assured to it by the respondent-State. 35. If an assurance was given to the appellant....