- (1.) THESE appeals are directed against the order dated 25. 5. 2000 passed by the division Bench of the Allahabad High Court whereby the Division Bench has allowed the writ petitions and Clause 9 (a) of the notification dated 25. 1. 1999 (Annexure-8 to the writ petition) and clause 8 (a) of the notification dated 18. 6. 1998 (Annexure-7 to the writ petition) were struck down. It was further directed that the writ petitioners were entitled to get hill development rebate of 33. 33% on the total amount of the bill till the period of 5 years from the date of commencement of supply of the electricity to them and the appellant- Corporation was directed to issue electricity bills to the writ petitioners after allowing 33. 33% hill development rebate on the total amount of bill for the remaining unexpired period of five years. Aggrieved against this order, the present appeals were filed by u. P. Power Corporation Ltd. (hereinafter referred to as Corporation.)
(2.) IN order to dispose of these appeals brief facts may be detailed below. Pursuant to industrial policy of the State of Uttar pradesh, U. P. State Electricity Board (now U. P. Power Corporation Limited) [hereinafter to be referred to as the "corporation"]- the appellant herein framed its tariffs vide notifications dated 18. 1. 1992 and 15. 7. 1994. By these notifications 33. 33% hill development rebate was allowed to the new industrial units for a period of five years from the date of commencement of the supply of the electricity. The above concession was initially valid till 31. 3. 1995. It was later on extended up to 31. 3. 1997. It was alleged that all the writ petitioners established industrial units in the hill areas after huge investments and after executing agreement with the appellant-Corporation. But subsequently, by notifications dated 18. 6. 1998 and 25. 1. 1999 the concession which was earlier given was reduced by the appellant-Corporation from 33. 33% to 17% which is arbitrary and not permissible according to principle of promissory estoppel and in that connection reliance was placed on a decision of this Court in Pawan Alloys and Casting pvt. Ltd. , Meerut v. U. P. State Electricity Board and Ors. , [ (1997) 7 SCC 251. Written statement was filed by the appellant-Corporation and the appellant took the stand that the impugned tariffs were new structured tariff in respect of HV-1 category of consumers and it was empowered to frame tariff under the provisions of Section 49 of the Electricity (Supply) Act, 1948 (hereinafter to be referred to as the Act of 1948 ). It was also contended that this restructuring was necessitated in order to avoid loss to the Corporation due to theft of electricity and it was done in the public interest. In order to appreciate the controversy involved in the matter, it will be appropriate to refer to the relevant tariff notification issued from time to time by the appellant- Corporation. The first in point of time is the tariff vide notification dated 18. 1. 1992. Relevant provisions of clauses read as under: "4. Rate of Charge ( Energy Charges): all KWH consumed in the month 200 paise per KWH. 5. Extra Charge or Rebate : (i) In case of supply given at 400 volts, the consumer shall be required to pay an extra charge of 10 per cent on the amount calculated at the rate of charge under item (4 ). (ii) If supply is given at voltage more than 11kv, rebate mentioned below will be admissible on the amount calculated at the rate of charge under item (4 ).- JUDGEMENT_605_SUPREME8_2007Html1.htm 8. Concessions : in respect of connections as may be located in any of the eight hill districts in u. P. whose names are given below but excluding those existing at a height of less than 610 mts (2,000feet) above m. S. L. in Dehradun and National districts a development rebate of 33 1/3% on the amount of the bill as computed under item 4 and 5 above will be given to new connections for a period of five years from the date of commencement of supply. This rebate will also be admissible for the unexpired period of five years to those existing connections which have not completed five years from the date of commencement of supply. This development rebate shall not be admissible to the Departments/ Corporations/ Undertaking of State/ Central Government and Local Bodies. " JUDGEMENT_605_SUPREME8_2007Html2.htm In respect of connections as may be located in Bundelkhand region, comprising jhansi, Lalitpur, Hamipur, Jalaun and Banda districts a development rebate of 50% on the amount of the bill as computed under item 4 and 5 above will be given to new Industrial units for a period of five years from the date of commencement of supply. This rebate will also be admissible for the unexpired period of five years to those existing Industrial units of the above district of Bundelkhand region who have not completed five years from the date of commencement of supply. This development rebate shall however not be allowed to the Department/ Corporations/ Undertakings of the State/ Central Government and Local bodies. "therefore, this concession was extended to the entrepreneurs in the hill districts including Dehradun who established their industries at the height of 610 metres (2000 feet) above M. S. L. for a period of five years. Then on 15. 7. 1994 another notification was issued. Relevant provisions of Clauses 4,5 and 8 read as under : "4. Rate of Charge (Energy Charges): all KWH consumed in 3 month 280 paise per KWH. 5. Extra Charge or Rebate : (iii) In case of supply given at 400 volts, the consumer shall be required to pay an extra charge of 10 per cent on the amount calculated at the rate of charge under item (4 ). (iv) If supply is given at voltage more than 11kv, rebates mentioned below will be admissible on the amount calculated at the rate of charge under item (4 ). JUDGEMENT_605_SUPREME8_2007Html3.htm 8. Concessions: (a) In respect of connections as may be located in under mentioned areas of the hill districts in U. P. , a development rebate of 33 1/3 percent on the amount of the bill as computed under item 4 and 5 above will be given to new connections for a period of five years from the date of commencement of supply. This rebate will also be admissible for the unexpired period of five years to those existing connections which have not completed five years from the date of commencement of supply. Provided that the above development rebate shall not be admissible to the departments/corporations/undertakings of State/central Government and local bodies. Description of Area of Hill Districts : 1. Almora district 2. Pithoragah district 3. Chamoli district 4. Uttarkashi district 5. Pauri Gathwal district excluding Nagarpalika area of Kotdwara. 6. Tehri Garhwal district excluding Muni Ki Reti and Dhalwala Blocks. 7. Nainital district excluding Haldwani, Rudrapur, Gadarpur, Kashipur, Bajpur, Ram Nagar, Jaspur, Khatima and Sitarganj Block. 8. Dehradun district excluding Doiwala, Rampur, Sahaspur and Vikas Nagar Blocks. (b) In respect of connections as may be located in Bundelkhand region, comprising Jhansi, Lalitpur, hamipur, Jalaun and Banda districts a development rebate of 50% on the amount of the bill as computed under items 4 and 5 above will be given to new Industrial units for a period of five years from the date of commencement of supply. This rebate will also be admissible for the unexpired period of five years to those existing Industrial units of the above district of Bundelkhand region who have not completed five years from the date of commencement of supply. This development rebate of 50% in Bundelkhand region shall, however, not be allowed to the Railways and Departments/ corporations/ Undertakings of the state/ Central Government and local Bodies. The development rebates under this clause shall be allowed subject to the condition that the net amount payable after allowing these rebates would not be less than the amount of minimum consumption guarantee under item 6 above. " Meaning thereby that the energy charges were increased from 200 paise to 280 paise and the concession granted to the hill areas continued. Thereafter, in supercession of earlier notifications another notification was issued in which energy charges were increased from 280 paise to 308 paise per KW. But the concession granted earlier continued. Relevant provision reads as under : "4. Rate of Charge ( Energy Charges): all KWH consumed in one month 308 paise per KWh. 5. Extra Charge or Rebate: (i) In case of supply given at 400 volts, the consumer shall be required to pay an extra charge of 10 per cent on the amount calculated at the rate of charge under item (4 ). (ii) If supply is given at voltage more than 11kv, rebate mentioned below will be admissible on the amount calculated at the rate of charge under item (4 ). JUDGEMENT_605_SUPREME8_2007Html4.htm 8. Concessions: the concessions mentioned hereunder shall be applicable to consumers connected upto 31. 3. 97. (a) In respect of connections as may be located in under mentioned areas of the hill districts in U. P, a development rebate of 33 1/3 % on the amount of the bill as computed under item 4 and 5 above will be given to new connections for a period of five years from the date of commencement of supply. This rebate will also be admissible for the unexpired period of five years to those existing connections which have not completed five years from the date of commencement of supply. Provided that the above development rebate shall not be admissible to the departments/ Corporations/ Undertakings of State/ Central Government and local bodies. Description of Area of Hill Districts : 1. Almora district 2. Pithoragah district 3. Chamoli district 4. Uttarkashi district 5. Pauri Garhwal district excluding nagarpalika area of Kotdwara. 6. Tehri Garhwal district excluding Muni Ki reti town area and Dhalwala villae under narendra Nagar Block. 7. Nainital district excluding Haldwani, rudrapur, Gadarpur, Kashipur, Bajpur, ram Nagar, Jaspur, Khatima and sitarganj Blocks. 8. Dehradun district excluding Doiwala, rampur, Sahaspur and Vikas Nagar Blocks. (b) In respect of connections as may be located in Bundelkhand region, comprising Jhansi, Lalitpur, hamipur, Jalaun and Banda districts a development rebate of 50% on the amount of the bill as computed under items 4 and 5 above will be given to new Industrial units for a period of five years from the date of commencement of supply. This rebate will also be admissible for the unexpired period of five years to those existing Industrial units of the above districts of Bundelkhand region who have not completed five years from the date of commencement of supply. This development rebate of 50% in Bundelkhand region shall, however, not be allowed to the Departments/ Corporations/ undertakings of the State/ Central government and Local Bodies. The development rebates under this clause shall be allowed subject to the condition that the net amount payable after allowing these rebates would not be less than the amount of minimum consumption guarantee under item 6 above. " Thereafter, on 18. 6. 1998 a new notification came to be issued, which is relevant for our purpose. By this notification the bills were divided into two parts, i. e. demand charge plus energy charge. Relevant provisions of Clauses 4, 5 and 8 read as under: "4. RATE OF CHARGE : (A) Demand Charge 1. Induction Furnaces Rs. 700/- per KVA/ month 2. ARC Furnaces Rs. 615/- per KVA/ month 3. Rolling/re-rolling Mills Rs. 440/- per KVA/month (B) Plus Energy Charge All KWH consumed in the month 100 Paise per month. Notes : (i) Any consumer availing the supply for more than one process of induction Furnace, ARC furnace or rolling/ Re-rolling Mill, will be charged at the applicable rate of demand charge whichever is higher. (ii) The recording of demand and energy shall be done through static Trivector Meters. 5. EXTRA CHARGE OR REBATE: (i) In case of supply given at 400 volts, the consumer shall be required to pay an extra charge of 10 per cent on the amount calculated at the rate of charge under item (4 ). (ii) If supply is given at voltage more than 11 KV, rebate mentioned below will be admissible on the amount calculated at the rate of charge under item (4 ). JUDGEMENT_605_SUPREME8_2007Html5.htm 8. CONCESSION : the concessions mentioned hereunder shall be applicable to consumers connected upto 31. 03. 1997. (a) In respect of connections as may be located in under mentioned area of hill districts in U. P. a development rebate of 17% on the demand charges only as computed under item (4) above will be given during the unexpired period of five years to those existing connections which have not completed five years from the date of commencement of supply. Provided that the above development rebate shall not be available to the department/ Corporations/ Undertaking of state/ Central Government and Local Bodies. DESCRIPTION OF AREA OF HILL DISTRICTS : 1. Almora district 2. Pithoragah district 3. Chamoli district 4. Pauri Garhwal district excluding nagarpalika area of Kotdwara. 5. Uttarkashi district 6. Tehri Garhwal district excluding Muni Ki reti town area and Dhalwala villae under Narendra Nagar Block. 7. Nainital district excluding Haldwani, rudrapur, Gadarpur, Kashipur, Bajpur, ram Nagar, Jaspur, Khatima and Sitarganj Blocks. 8. Dehradun district excluding Doiwala, rampur, Sahaspur and Vikas Nagar Blocks. (b) In respect of connections as may be located in Bundelkhand region, comprising Jhansi, Lalitpur, hamipur, Jalaun and Banda districts a development rebate of 25% on the demand charges only as computed under item 4 above will be given during the unexpired penod of five years to those existing industrial units of the above districts of Bundelkhand region who have not completed five years from the date of commencement of supply. This development rebate shall however not be allowed to the Departments/corporations/ Undertakings of the State/ Central Government and Local Bodies. . " Similar is the notification dated 25. 1. 1999 which is identical to the notification dated 18. 6. 1998. But in this notification dated 25. 1. 1999 the concession was not in clause 8 but the concession has been re-numbered from clause 8 to clause 9 which is identical and as such need not be reproduced again. As a result of these two notifications i. e. notifications dated 18. 6. 1998 and 25. 1. 1999 two significant things happened, that the tariff was divided into two parts i. e. demand charge plus energy charge. The energy charge was charged earlier at 308 paise per KV was reduced to 100 paise KVA per month but the demand charge i. e. induction furnace, ARC furnace, rolling/re-rolling mills etc. which were fixed charges, concession was given at the rate of 17 % computed under item No. 4 (A) i. e. induction furnace @ rs. 700/- per KVA/ month, ARC furnace @ rs. 615/- per KVA/month and Rolling/ Re-rolling Mills @ Rs. 440/- per KVA/ month. Therefore, as a result of restructuring of tariff, the demand charges under item 4 (A) were made fixed but the energy charges were reduced from 308 paise to 100 paise per month. It is not the case that the appellant has completely revoked the concession. It is the case that appellant- Corporation has reduced the energy charges from 308 paise per KVA to 100 paise but the demand charges have been fixed per KVA/ month and the concession has been re-scheduled instead of giving them 33. 33% the energy charges have been reduced which is applicable to all but in the case of demand charges for hill areas it has been reduced to 17 % in respect of demand A charges and that was allowed to be continued for the un-expired period of five years to its existing connections which have not completed five years from the date of commencement of supply. At the same time the appellant- Corporation has denied this benefit to the State Departments/ Corporations, Undertakings of the state/ Central Government and local Bodies. Therefore, so far as the private consumers are concerned, this has been kept in tact. Now, in this factual controversy, we have to examine whether the concession in the consumption of energy which has been given to the writ petitioners for establishing the industries in the hill areas can be revoked or modified by the appellant- Corporation or not. The High Court has taken the view that the appellant is bound on the principle of promissory estoppel and it cannot revoke the benefit.
(3.) DR. A. M. Singhvi, learned senior counsel for the appellant has given nine reasons that this modification of the rebate is fully justified for the following reasons : (i) That the notifications have been issued in exercise of the statutory provisions under section 49 of the act of 1948, therefore, it has statutory flavour. (ii) That there is complete change of tariff i. e. it has two parts, (a) demand charge and (b) energy charge. (iii) That there has been reduction in the energy consumption charges i. e. from 308 paise to 100 paise per unit. (iv) That there was large scale theft of energy in the State of U. P. (v) That units were closing on account of these concessions. (vi) That there is no total withdrawal of the rebate but by restructuring concession at the rate of 17% continues in the demand charges. (vii) That the High Court has failed to consider the public interest which was specifically pleaded by filing a detailed affidavit. (viii) That no malafide is attributed. (ix) That actual cost of energy production has shoot up to Rs. 2. 50. Therefore, learned senior counsel for the appellant submitted that the appellant- Corporation is fully within its right to modify the rebate and the principle of promissory estoppel cannot estop. Dr. Singhvi also submitted that the Division Bench of the High Court has relied on a decision in Pawan Alloys and Casting pvt. Ltd. (supra) in which no affidavit was filed. This was not appreciated by the High Court and therefore, the whole situation has turned on that count. Dr. Singhvi has also raised the question of laches, estoppel, waiver and acquiesance and submitted that the earlier writ petition was filed challenging the notification dated 18. 6. 1998 and it was withdrawn with liberty and thereafter on 4. 11. 1999 application to recall the order was filed which was rejected. Again, another writ petition has been filed without permission of the High Court. Dr. Singhvi submitted that by virtue of the U. P. Electricity Reforms Act, 1999, (hereinafter to be referred to as the act of 1999) now the new tariff has been fixed from August, 2000-2001 by the Commission because now the power to determine the tariff has been given to the Commission and no estoppel against the statute can be pleaded after the Act of 1999 having come into force. Dr. Singhvi, learned senior counsel submitted that in view of the affidavit filed by Shri C. R. Goswami, executive Engineer, Electricity Distribution Division, Kotdwar, uttarakhand on Behalf of the appellant and a comparative chart has been annexed to indicate that in fact after introduction of two part tariff, energy consumption of these units has considerably increased. The chart has been filed along with the affidavit in respect of all the writ petitioners except Shree Sidhbali steels Ltd. As against this, Mr. Shanti Bhusan, learned senior counsel for the respondent-writ petitioners submitted that these concessions were given to the hill areas in pursuance to the direction by the State Government in exercise of power under Section 78a of the Act of 1948 and submitted that the state Government was fully competent to do so. The State/ Corporation has made a representation on which the private entrepreneurs have made huge investments and therefore, the State Government/corporation cannot wriggle out from it and the State Government/corp, is estopped from withdrawing these concessions Mr. S. Ganesh, learned senior counsel appearing for some of the writ petitioners has also submitted that the concession which has been given has a vested right and it can only be revoked by the same statute.;