TaxTMI 
TaxTMI 
2014 (8) TMI 1224
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....ide Annexure-10 (Series) and order dated 17.04.2007 communicated through letter dated 27.04.2007 vide Annexure-12 for extending the reliefs and concessions envisaged under the sanctioned Revised Rehabilitation Scheme for the entire period of rehabilitation and not restricted to the periods pertaining to power cuts, breakdown, etc. as was being interpreted by CESCO which was communicated through letter dated 28.09.2004 to all the participated Agencies, with immediate effect or within such a reasonable time as this Hon'ble Court may deem it fit and proper and to refund/adjust a sum of Rs. 4,47,26,435/- with up-to-date interest till the date of refund/adjustment for the excess payment already made by the Petitioner No. 1 Company for the power tariff charged by CESCO during the period of rehabilitation." and Be further pleased to issue writ in the nature of Mandamus commanding the Opposite Parties to show cause as to the Letter No. 3187 dated 19.08.2005 to the extent it seeks to realize a sum of Rs. 6,35,19,199/- from the Petitioner No. 1 Company in violation of the modified sanctioned scheme and order of BIFR 19.06.2003 shall not be quash and if the Opposite Parties fa....
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....ergy actually consumed in lieu of demand charge. (ii) GRIDCO shall not levy electricity duty, any penal charges like delayed payment surcharge and low power factor penalty during the period from July, 1, 1995 to June, 30, 2002 i.e. during the period of rehabilitation." 4. While the matter stood thus, CESCO filed an application before the BIFR seeking modification/clarification/review of the reliefs and concessions sanctioned under the Modified Scheme in response to which a letter dated 5.11.2003 at Annexure-4 was written to the CESCO by the Secretary, BIFR. The letter at Annexure-4 reads as follows: "D.O. No. 18(4)/82/B-II/BIFR/Mon./95/1676 dated 5.11.2003 Ref. M/s. IPI Steel Ltd. (ISL)-Case No. 47/94 Dear Shri Paikray, This is regarding the application dated 28.7.03, submitted by CESCO to the Board, seeking clarification/modification/review of the reliefs & concessions in the scheme sanctioned by the Board on 27.10.1997 and also in respect of the Board's subsequent order dated 19.6.03. 2. The Board after review/re-consideration of the issues involved, has directed that the reliefs & concessions envisaged in para 8(i), page-7 of SS a....
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....order dated 19.6.2003 and brought to the notice of the Board that CESCO would like to grant the reliefs & concessions only for the break-down period, instead of the entire rehabilitation period, as envisaged in the SS, and also requested the Board to issue a clarificatory letter to CESCO stating therein that the reliefs envisaged would be for the entire rehabilitation period and would not be restricted to the breakdown period of the rehabilitation process as was being interpreted by CESCO. 7. And, whereas, the Board, on consideration of the submissions made by CESCO as well as the company, noted that the relevant provisions of the SS were not being properly interpreted by CESCO and, therefore, issued a clarificatory letter dated 5.11.2003, written by the Secretary, BIFR to the Chief Executive of CESCO, stating therein the reliefs & concessions envisaged in the scheme sanctioned by the Board would be for the entire period of rehabilitation process and would not be limited to the breakdown periods, as was being interpreted by CESCO." (emphasis supplied) 6. Also, on receipt of copy of letter at Annexure-4, IPISTEEL wrote a letter dated 10.11.2003 at Annexure-5 to ....
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....purported order. The Appellate Authority has directed production of such an order. The Appellants had applied for the copy of the same but again the Appellants were supplied only with the letter of the Secretary stating that such an order had been passed. Thus it is clear that the Respondent had filed the Writ Petition seeking enforcement of an order which was never produced. The High Court without insisting on production of the order or a copy thereof directed implementation of that order. This could not have been done. We thus set aside the impugned order of the High Court with liberty to the Respondents to seek enforcement of the order if and when such an order is produced. The appeal stands allowed accordingly. There will be no order as to costs." 8. It has been averred by the petitioner that in response to the application dated 17.1.2007 made under the Right to Information Act, IPISTEEL was supplied with the copy of Note Sheet at Annexure-11 in which order has been passed by the BIFR clarifying the nature of reliefs and concessions envisaged at clause 8 of page 7 of the Modified Scheme at Annexure-1. It is averred that the Secretary, BIFR had simply commun....
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....e between the two words i.e. 'break down'/'rehabilitation' in this para as has been highlighted by the company in their letter dated 24.9.03. The company has requested for issuance of a clarificatory letter to CESCO stating therein that reliefs envisaged in para 3(i) above is for the entire rehabilitation period and not for the break down periods of rehabilitation process, as is being interpreted by CESCO. The company's request seems to be quite logical especially as CESCO is not willing to implement the orders issued by the Board in its proper prospective. If approved, a clarificatory letter could be addressed from Secretary/Registrar, BIFR to the Chief Executive Officer of CESCO stating inter alia therein the reliefs envisaged in para 3(i) above is for the entire period of rehabilitation and not for the power cuts break down only as being interpreted by CESCO, and compliance report be sent within 15 days. This would be actually reiterating the Bench's earlier order dated 19.6.2003 and would not amount to any modification/review. It may also be stated herein that the non-compliance of Bench's direction would call from initiating action as per provisions....
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....s communicated by the Secy., BIFR in its letter dt. 05/11/03 to CESCO. (emphasis supplied) Xxx xxx xxx." 10. It is also pertinent to note that CESCO preferred Appeal No. 220 of 2007 assailing order of the BIFR at Annexure-12 and the appeal was disposed of during pendency of this writ petition by order dated 8.3.2011. Copies of the order passed by the Appellate Authority for Industrial & Financial Reconstruction, New Delhi (AAIFR) in Appeal No. 220 of 2007 have been filed by the petitioners as well as opposite parties. So far as the contentious issue of nature of direction made at clause 8 of page 7 of the in the Modified Scheme is concerned, AAIFR observed in its order as follows: "10. However, so far as the issue at (b) is concerned, it has to be seen whether the reliefs and concessions could be granted in terms of the "clarificatory order" issued by the BIFR as contained in the letter of the Secretary of BIFR dated 05.11.03 to the appellant i.e. benefits of prorating of demand charges based on energy consumption during the entire period of rehabilitation i.e. 01.7.95 to 30.6.02. We have observed that in SS-07, the BIFR, instead of passing orders expl....
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....the BIFR on the basis of which the Secretary, BIFR issued its clarificatory letter dated 05.11.03 and has sought implementation of the order contained in the Note Sheet before the Hon'ble High Court of Orissa in WP No. 11267/2005 which is subjudice before the Hon'ble High Court. Therefore, in our view, the issue with regard to interpretation of Clause 8 of MS-97 as incorporated in SS-07 is sub-judice before the High Court of Orissa. In these circumstances, in our opinion, the direction of the BIFR in para 16(ii)(c) (sic) that the reliefs as envisaged in para 8 of MS-97 will be granted as per the letter of Secretary, BIFR dated 05.11.03 to CESCO, cannot be sustained. Similarly, in the sanctioned scheme the reference to this letter dated 05.11.03 as a "clarificatory order" of the BIFR is also not sustainable as has been held by the Hon'ble Supreme Court as well as by this Authority that it is not an order of the Board. Undoubtedly, the letter dated 05.11.03 issued by the Secretary, BIFR is based on the Note Sheet dated 27/29.10.03 and the respondent company has sought implementation of the order contained in the Note Sheet in WP No. 11267/2005 which has been opposed by th....
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.... passed in file/Note Sheet at Annexure-11. Learned counsel for the petitioners further argued that in its order dated 16.9.2004 at Annexure-10 BIFR endorsed the clarification made in the Secretary's letter dated 5.11.2003 on the basis of order passed in the file/Note Sheet. It has been specifically observed by the BIFR in its order at Annexure-10 that provisions of the scheme were not being properly interpreted by CESCO, and, therefore, clarificatory letter dated 5.11.2003 at Annexure-4 had been issued. It was further argued that in the meanwhile, IPISTEEL obtained copy of the order passed by the BIFR in file/Note Sheet at Annexure-11. In the order dated 17.4.2007 at Annexure-12, BIFR has pointed out at paragraph 18(i) that the Bench directed, on file, that clarification be sent by the Secretary to CESCO that reliefs contemplated at clause 8 of page 7 of Annexure-1 would not be restricted only to the break-down period(s) and would be for the entire rehabilitation period. The words "break down and rehabilitation" cannot be read in isolation. In view of nature of orders passed by the BIFR from time to time and more particularly in view of the order passed by the Board in file/Not....
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.... by the CESCO, the BIFR passed order dated 19.6.2003 at Annexure-3. CESCO filed application dated 28.7.2003 for review/modification/clarification asserting therein that IPISTEEL is entitled to the benefit of payment on the basis of actual quantity of demand and/or energy only during the period of power cuts/discontinuance/reduced supply/break-down and not during the entire period of rehabilitation. Thereafter, on 11.11.2003, communication under Annexure-4 was received by CESCO. Being aggrieved, CESCO filed Appeal No. 449 of 2003 before the AAIFR whereas IPISTEEL filed W.P.(C) No. 13432 of 2003 before this Court. Time was granted by AAIFR to CESCO for obtaining certified copy of the 'order dated 5.11.2003' of the BIFR. Accordingly, the CESCO applied for certified copy of the order dated 5.11.2003, but, instead of providing certified copy of the order dated 5.11.2003 the BIFR supplied copy of the letter at Annexure-4. Appeal No. 449 of 2003 was dismissed by AAIFR by order dated 8.11.2004 as not maintainable on the ground that the substantive issue raised in the appeal relating to concessional rate of tariff to be provided by the CESCO to IPISTEEL had been decided by this Cour....
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....iod of rehabilitation IPISTEEL understood that reliefs envisaged under clause 8 of page 7 of the Revised Scheme at Annexure-1 is for the period of electrical breakdown only. For that reason IPISTEEL from time to time furnished information under Annexure-J series to CESCO regarding the period during which there was break-down/power cut etc. It is also evident from Annexure-I the Summery Record of Proceedings of the Review Hearing of the BIFR dated 4.10.2001 at paragraph-10 that IPISTEEL submitted letter dated 29.9.2001 requesting for certain modifications in the Revised Scheme at Annexure-1 including a direction to the effect that during the period of rehabilitation, GRIDCO/CESCO should charge for energy actually consumed and should not levy minimum demand charges. However, application for modification was withdrawn as the BIFR suggested that any modification of the scheme at that stage would automatically withdraw the consent given earlier. Thereafter, for the first time, by letter dated 20.12.2002 at Annexure-B, IPISTEEL raised the plea that in view of clause 8 of page 7 of the Revised Scheme at Annexure-1, the company is entitled to benefit of payment on the basis of actual quant....
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....re period of rehabilitation from 1.7.1995 to 30.6.2002 whereas opposite parties insist that IPISTEEL is entitled to concession there under whenever there was electrical break-down during the rehabilitation period. In this context, letter of the Secretary, BIFR at Annexure-4 has already been held to be not an order by the Hon'ble Supreme Court. While setting aside order of this Court passed in W.P.(C) No. 13432 of 2003, Hon'ble Supreme Court by order at Annexure-8 passed in Civil Appeal No. 4602 of 2005 (arising out of SLP(C) No. 23526 of 2004) granted liberty to IPISTEEL to seek enforcement of the order on the basis of which communication under Annexure-4 was made by the Secretary, BIFR, if and when such an order is produced. IPISTEEL has produced the order in the Note Sheet at Annexure-11 to urge that order was passed by BIFR to clarify that reliefs and concessions envisaged at clause 8 of page 7 of the Modified Scheme at Annexure-1 are for the entire period of rehabilitation and not restricted to the periods pertaining to power cuts, break downs etc. during the rehabilitation period, as is being interpreted by CESCO. 17. In Note Sheet at Annexure-11, a copy of which is....
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.... the Government of Orissa, poor profitability arising out of frequent mechanical break-down at the mill and non-availability of need-based working capital funds from the banks. Upon reference to FINANCIAL PERFORMANCE, at page 4 it has been pointed out that the IPISTEEL's operations had been unsatisfactory during the period under review mainly due to low capacity utilization on account of non-availability of power, unfavourable market conditions, labour problems and delay in sanction of reliefs and concessions from the Government of Orissa as per the BIFR approved scheme, and that profitability margin of the company decreased over the period on account of competitive market conditions and increase in the production cost due to frequent mechanical breakdowns at the mill. Also at page 4, under the heading REHABILITATION SCHEME it has been observed that the company's performance had been unsatisfactory due to shortage of power, labour problems, market recession and non-availability of reliefs and concessions from Government of Orissa as envisaged in the BIFR Scheme. Thus, it appears that there is no reference to 'electrical breakdown'. Rather the Scheme refers to freque....