Judgment

S.B. Sinha, J.

1. Leave granted.

2. These two appeals, involving common questions of fact and law, were taken up for hearing together and are being disposed of by this common judgment.

3. We will, however, notice the fact of the matter from M/s. Victory Papers and Boards India Ltd.s case.

4. The State of Kerala adopted an industrial policy in the year 1992 and in the light thereof a notification bearing No.G.O.(MS) NoAI92/PD dated 6.2.1992, was issued, which reads as under:

"ORDER

In the light of the statement of Industrial Policy approved for implementation by Government the following incentives in respect of electricity are ordered:

1. New industrial units will be exempted for 5 years from payment of enhanced power tariff which came into effect on 1.1.92. This concession will be available.

i. to new units from the date of commercial production, which start such production between 1.1.92 and 31.12.96.

ii. to manufacturing units only and not to service and entertainment units.

iii. To existing units for substantial expansion/ modernization/diversification the concession in such cases will be available only for the consumption of the new machinery and equipments which adds to the capital asset, by not less than 25% of the exiting fixed capital investment excluding land and building, the installation of which is to be certified by the competent authority.

iv. for modernization, to industrial units having a contract demand not exceeding 500 KVA. In such cases, new equipments alone will be eligible for the concession."

5. The said industrial policy of the State was accepted by the Kerala State Electricity Board, which is a body constituted and incorporated under the provisions of the Electricity (Supply) Act, 1948, in respect of which a notification was issued on 27.3.1992. By reason of the said notification, some guidelines were also issued. The appellant herein contended that pursuant to or in furtherance of the representation made by the State of Kerala and/or the respondent-Board, they altered their position by investing a huge amount by setting up factories/new units.

6. The State, admittedly, at the district level constituted a Green Channel Clearance Committee (GCC).

7. The appellant had applied for grant of electric power allocation to the extent of 2500 KV A. It obtained loan on 19.1.1995. As the application of the appellant had not allegedly been processed, GCC issued several reminders to the Board. On or about 17.11.1995, appellant informed the Board that the project was at an advanced stage. It was recorded that despite recommendations by GCC, sanction for grant of electrical connection had not been issued, stating:

"We wish to add at this juncture that the Government is inviting entrepreneurs to start their industrial units in the State and are offering Power, Water and other infrastructural facilities availability so easily. But on the contrary the concerned authorities are reluctant to sanction the necessary infrastructural facilities to the units. Our case is one of the examples. Your goodself will appreciate that without electric power we cannot start out production as scheduled, which will hamper the work and finally affect the production of the unit. The delay in implementing the project will, finally, escalate the cost of the project.

Since more than one year has lapsed after submitting our application to the KSEB, we have so far not received sanction of Power to our unit. Hence we request to your goodself to be kind enough to prevail upon the authority to sanction Electric Power to out unit to the extent of our requirement."

8. It, allegedly, imported machinery from abroad, which fact was intimated to the Board by a letter dated 24th June, 1996, stating:

"Under the circumstances, our Bankers are reluctant to clear term loan because of non-sanctioning of Power to the Project. Presently, the total machinery worth RS.3.5 crore have already arrived at site and the erection is in progress. Any further delay in receiving the