- (1.)By filing this petition under Art. 226 of the Constitution, Petitioners are praying for quashment of letter dt. 24-2-1997 (Annexure P-1), issued by the Senior Accounts Officer, M. P. Electricity Board to State Bank of Indore/Dewas, for encashment of five Bank Guarantees mentioned in the said letter.
(2.)Facts material for deciding the said petition are mentioned hereinbelow;Petitioners Nos. 1 and 2 are Mini Steel Plant and Rolling Mill respectively, situated at Dewas. Both the Units are divisions of Reliance Ispat IndustriesLimited, a duly registered Company under the provisions of Companies Act. For the purposes of manufacturing their products, the Petitioners need electrical energy, which constitute about 20% of the raw material cost of the plants of the Petitioners, which are intensively power based industries. Respondent No. 1/M.P. Electricity Board (for short referred to as os;Board') has been constituted by State Government under S. 5 of the Electricity Supply Act, 1948.
(3.)Petitioners have furnished five Bank Guarantees in favour of Respondent/Board for a sum of Rs. 55,39,000/-. Since the Respondents are taking steps to encash the bank guarantees, for non payment of arrears of electrical charges, consumed by Petitioners, they have approached this Court for quashment of the same. Petitioners' submission is, that they have been declared as Sick Industrial Units, under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (for short the 'Act'), thus, no recovery towards arrears of electrical charges, or, steps for encashment of the bank guarantees can be made by the Respondent/Board.