Decided on December 17,2002

Hitech Electrothermics And Hydropower Ltd Appellant


Pattanaik, C. J. I - (1.)-These appeals by grant of special leave are directed against the judgment of Kerala High Court dated 6th April, 2001. The appellant approached the High Court of Kerala claiming that it would be entitled to the concessional tariff under the policy of the Government and approved by the Board even though the actual commercial production of the appellants factory started in 1998. The High Court in the impugned judgment accepted the stand of the State Government that in order to be eligible to get the concessional tariff under the policy in question, commercial production must have started by 31st December, 1996 and since admittedly, the appellant did not have the commercial production by that date the incentive of concessional tariff would not be available. The question for consideration in these appeals, therefore, is whether an industrial unit which has set up the industry being lured by policy decision of the Government can still claim the benefit of the concessional tariff under the policy notwithstanding the fact that there has been delay in production, such delay being attributable to the inaction on the part of the Board in providing the necessary electric connection.
(2.)The Government of Kerala in the Industry department, issued GO (MS) dated 21-5-90, indicating therein that the power connection will be given on completion of any project irrespective of whether a general power cut is in force or not. It had also been stated therein that the new units commencing industrial production will be exempted from power cut for a period of 5 years from the date of commercial production. In February, 1992, the government came out with industrial policy offering concessional rate of tariff and electricity duty to new industries for a period of five years from the date of commercial production, if the production commences between 1-1-92 and 31-12-96. The Kerala State Electricity Board adopted the aforesaid policy decision for implementation and in its order dated 27th of March, 1992, reiterated that the concessional tariff as indicated in industrial policy resolution, would be available if the commercial production is made between 1-1-92 and 31-12-96. The appellant industry was issued the registration certificate by the District Industries Centre, on 27-12-1993. In April, 1994, government issued another GO(MS), confirming that the industries registered prior to 31-12-1993 will continue to enjoy the tariff concession and exemption from payment of electricity duty. The State Electricity Board issued a letter on 7-11-1995 to the appellant industry, allocating power in their favour. In its letter dated 13th March, 1996, the said Kerala State Electricity Board confirmed that the appellant will be entitled to the tariff concession, as per the policy resolution of the government. The appellant is stated to have invested a huge sum of money in setting up factory for production of ferro alloys. On 24th of April, 1996, the Secretary to the Government of Kerala confirmed that the appellant will be eligible for concessional tariff, if commercial production starts before 31-12-1996. In June, 1996, the appellant had informed the Board that it is going ahead with the implementation of the project of manufacturing ferro alloys and requested for issuance of demand note to enable the appellant to pay the charges. On 23rd of August, 1986, the State Electricity Board informed the appellant about the estimated amount on the electric connection and further stated that the demand note will be intimated to the appellant at the earliest. On 3rd of August, 1986, news item was published in Delhis Times of India, showing the Kerala Government Policy in welcoming the investment in Kerala. Between August and October, 1996, the appellant intimated several authorities of the government as well as the Board, requesting them to provide power for manufacture of ferro alloys in appellants factory, which was otherwise ready for commissioning. But it is only in August, 1997, the Board issued the order, intimating the supply of power to the appellants factory to the extent of 15 MVA at 110 KV. The Board then took about one year in connecting the sub-station in the appellants factory for supply of power. Ultimately, the Board granted power to the appellants company on 22nd October, 1998. In the first week of November, 1998 the appellant got the Bill from the Board at the regular rate without the benefit of the concessional tariff as indicated in the Industrial Policy of the Government and also adopted by the Board. The appellant, therefore, approached the High Court and the High Court by an interim order directed that the appellant would be demanded the tariff on the basis of the prevalent rate prior to 1-1-1992. But the power connection had been cut off on account of non-payment of the electricity charges. The High Court then passed an order that on payment of Rs. 50 lacs by the appellant, the electric connection would be given by its order dated 15-12-1999. The Board filed an application for modification of the aforesaid order and finally on 6-4-2000, the High Court of Kerala modified earlier order, denying the benefit of concessional tariff. The appeal was carried against the order to the Division Bench, wherein the Division Bench directed the single Judge to dispose of the pending Writ Petition of the appellant and till the disposal of the Writ Petition, stayed the order and directed that the appellant would pay the electricity charges at pre 1-1-1992 rate by its order dated 23-5-2000. The Writ Petition of the appellant was dismissed by the learned single Judge by order dated 21-12-2000 against which the appellant carried the appeal to the Division Bench and the Division Bench by the impugned order dated 6-4-2001 having dismissed the appeal, the present appeal by grant of special leave has been filed.
(3.)Mr. Salve, the learned senior counsel appearing for the appellants contended that the Government of Kerala unequivocally in its policy dated 6th February, 1992 had indicated that new industrial units will be exempted for five years from the payment of enhanced power tariff which came into effect on 1-1-92 and this should be available to the units from the date of commercial production which start production between 1-1-92 and 31-12-1996. This policy was adopted by the Kerala State Electricity Board which issued the letter dated 27th of March, 1992, stating therein that the concessional power tariff and electricity duty to industries would be supplied as a measure of incentive to all the units who start their commercial production between 1-1-92 to 31-12-1996, irrespective of the day of permanent electric connection. On 7-11-1995, the Kerala State Electricity Board intimated to the appellant that in principle sanction of power had been accorded to the extent of 15 MVA at 110 KV to the appellants factory premises at Pudussery Village and the power can be availed and will be operational with peak load restrictions only after commissioning of 220 KV substation at Kanjikode. But notwithstanding the same, the Board having not taken any steps to see that the power supply is given to the appellants premises and it is for such non-supply of power, the commercial production being delayed, it will be un-equitable to deny the concessional tariff flowing from the policy resolution of the government. Mr. Salve contended that under S. 22 of the Indian Electricity Act, 1910, the Board is responsible to supply power on the terms and conditions of the licence and the said Board having allocated the power in favour of the appellant on 7-11-95 and thereafter their being no power connection until 1998, it cannot deny the benefit flowing from the policy resolution of the government which was adopted by the Board in its letter dated 27th of March, 1992. According to Mr. Salve, the Board cannot be permitted to prevent the benefit of an incentive policy by its own failure to provide power, which prevented the appellant from starting commercial production by 31-12-1996. Mr. Salve relying upon the judgment of this Court in Pawan Alloys and Casting Pvt. Ltd., Meerut vs. U. P. State Electricity Board and others (1997) 7 SCC 251, contended that when the appellant was persuaded to set up the industry being lured by incentive of getting the concessional power tariff for a period of five years, ought not to be denied that relief on construing the power policy and literally no such concessional tariff could be granted unless commercial production starts before 31-12-96.

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