1997 Supreme(SC) 440

1997(3) Supreme 229
SUPREME COURT OF INDIA
B.P. Jeevan Reddy and K.S. Paripoornan, JJ.
M/s. Kanoria Chemicals and Industries Ltd. etc. -Appellants
versus
U.P. State Electricity Board & Ors. -Respondents
Civil Appeal No. 1836 of 1997
(Arising out of SLP (C) No. 6588 of 1994)
With
Civil Appeal Nos. 1837-42 of 1997
(Arising out of SLP (C) Nos. 21905-06/93, 21913-14/93, 6479/94 and 23250/94)
And
Writ Petition (C) No. 761 of 1993
Decided on 10-3-1997
Counsel for the Parties :
Appearing for the Parties : H.N. Salve, C.S. Vaidyanathan, D.A. Dave, Sr. Advocates, Ms. Kiran Budhiraja, (Ms. Nina Gupta), Advocate, for Vineet Kumar, Prag Tripathi, A.T. Patra, Gautam Khaitan, P.P. Tripathi, Rajesh Kumar Singh, Sahahid Rizvi, Suman J. Khaitan, Raj Kumar Gupta, H.V.P. Sharma, Rajesh, (Anil Kumar Jha) Advocate, (NP) (R.B. Misra) Advocate, (NP), Sunil Kumar Jain, Vijay Hansaria, Pradeep Misra and T. Mahipal, Advocates.

IMPORTANT POINT
The grant of stay of a Notification revising the electricity charges does not have the effect of relieving the consumers/petitioners of their obligation to pay late payment surcharge/interest on the amount withheld by them when their writ petitions are dismissed ultimately.

Headnote:(i) INTERIM STAY-Order of stay granted pending disposal of a writ petition/suit or other proceeding-Order comes to an end with dismissal of a substantive proceeding-Duty of Court in such a case to put parties in the same position they would have been but for interim orders of the Court. (Para 10)

       (ii) ELECTRICITY-Electricity (Supply) Act, 1948-Section 49-U.P. State Electricity Board revised electricity rates/tariffs under-Notification dated 21-4-1990 provided for payment of interest in case bill amount is not paid within specified period-Validity challenged-Writ petitions-Interlocutory Application praying for stay of operation of Notification-Interim orders of stay-dismissal of writ petitions-Liability of consumers to pay surcharge amount for period covered by order of stay granted by High Court-Disputed-Whether grant of stay of a Notification revising electricity charges has the effect of relieving consumers/petitioners of their obligation to pay late payment surcharge/interest on amount withheld by them even when their writ petitions are dismissed ultimately?-(No)-Adoni Ginning factory case, 1979(4) SCC 560 : Distinguished-Rate of late payment surcharge payable under clause 7(b) reduced to 18% from 25.5% p.a. for period covered by stay orders.

       Held that the only dispute in Adoni Ginning pertained to the liability of the consumers to pay surcharge @ twelve percent per annum on the amount not collected from them under the orders of injunction granted by this Court pending their appeals. It is significant to notice that the dispute in the said case did not pertain to the liability of the consumers to pay the surcharge amount for the period covered by the order of stay granted by the High Court; the Board did not choose to demand any surcharge for that period. (Para 9)

       We, therefore, agree with the High Court that Adoni Ginning cannot be read as laying down the proposition that the grant of stay of a Notification revising the electricity charges has the effect of relieving the consumers/petitioners of their obligation to pay late payment surcharge/interest on the amount withheld by them even when their writ petitions are dismissed ultimately. Holding otherwise would mean that even though the Electricity Board, who was the respondent in the writ petitions succeeded therein, is yet deprived of the late payment surcharge which is due to it under the tariff rules/regulations. It would be a case where the Board suffers prejudice on account of the orders of the court and for no fault of it s. It succeeds in the writ petition and yet loses. The consumer files the writ petition, obtains stay of operation of the Notification revising the rates and fails in his attack upon the validity of the Notification and yet he is relieved of the obligation to pay the late payment surcharge for the period of stay, which he is liable to pay according to the statutory terms and conditions of supply - which terms and conditions indeed form part of the contract of supply entered into by him with the Board. We do not think that any such unfair and inequitable proposition can be sustained in law. No such proposition flows from Adoni Ginning. (Para 10)

       It is equally well settled that an order of stay granted pending disposal of a writ petition/suit or other proceeding, comes to an end with the dismissal of the substantive proceeding and that it is the duty of the court in such a case to put the parties in the same position they would have been but for the interim orders of the court. Any other view would result in the act or order of the court prejudicing a party [Board in this case] for no fault of its and would also mean rewarding a writ petitioner inspite of his failure. (Para 10)

       Further held : We cannot agree that the rate of late payment surcharge provided by clause 7(b) is penal, but having regard to the particular facts and circumstances of this case and having regard to the fact that petitioners could possibly have understood the decision in Adoni Ginning as relieving them of their obligation to pay interest/rate payment surcharge for the period of stay, we reduce the rate of late payment surcharge payable under clause 7(b) to eighteen percent. But this direction is confined only to the period covered by the stay orders in writ petitions filed challenging the Notification dated April 21, 1990 and limited to March 1, 1993, the date on which those writ petitions were dismissed. (Para 13)