IMPORTANT POINT
State should not give any assurance without proper appreciation of all the relevant factors.

Judgment :-

Anil R. Dave, J.

1. Being aggrieved by the common Judgment dated 24th February, 2005 delivered by the High Court of Kerala at Ernakulam in W.P.(C) No.5795/2004, W.P.(C) No.5877/2004, W.P.(C) No.5984/2004 and O.P. No.9816/2001, the appellants, original petitioners before the High Court have approached this Court by way of these appeals.

2. The facts giving rise to the present appeals, in a nut-shell, are as under:

The appellants are businessmen having their manufacturing units in the State of Kerala and they are manufacturing different articles with the help of electricity, which is generated/supplied by the Kerala State Electricity Board (hereinafter referred to as ‘the Board’). The respondent-Government was desirous of having industrial development in the State of Kerala and therefore, it had framed certain policies so as to encourage and invite businessmen for setting up their manufacturing units in the State of Kerala. Due to shortage of electricity supply in the State of Kerala, interested entrepreneurs were not inclined to set up their units in the State of Kerala. In view of the aforestated circumstances, the State Government had laid down a policy whereby it declared to give continuous electricity supply at a particular rate to certain new manufacturing units.

3. So as to put the aforestated policy in practice, the respondent-State had issued a Government Order dated 21st May, 1990 which read as under:

“Government have been considering the question of giving some incentives to new industries in the matter of power connection. Taking into consideration the announcements made by the Minister (Finance) in the current year’s budget speech and after discussions with all concerned, Government are now pleased to issue the following orders in this context which will have effect from 1-4-1990.

1. Power connection will be given on completion of any project irrespective of whether a general power cut is in force or not.

2. New units commencing industrial production will be exempted from power cut for a period of 5 years from the date of commercial production.

3. Exemption from payment of electricity duty for a period of 5 years from the date of commencement of commercial production will be given to the new units.

4. In future the electricity duty will not be collected from the industries if they are eligible for exemption.

5. Service connection charges will not be levied if no extension is required or if the additional line to be provided is less than 500 meters in length.”

The aforestated State Government Order had been adopted by the Board by its Order dated 19th June, 1990.

4. By virtue of the aforestated policy declared under the order dated 21st May, 1990, the respondent-State had assured the manufacturing units to be set up in the State of Kerala that electricity connection would be given to the projects which might be set up and they would be exempted from power cut for a period of 5 years from the date of commencement of commercial production. Such new units were also given certain exemption in relation to payment of electricity duty for a period of five years.

5. It is not in dispute that in pursuance of the aforestated policy the appellants had established their manufacturing units (hereinafter referred to as ‘the new units’) in the respondent-State. It is also not in dispute that the requisite conditions, which had been imposed upon such new units, had been fully complied with by the appellants and therefore, the appellants were entitled to an uninterrupted electricity supply for a period of 5 years from the date on which they had commenced their commercial production.

6. The respondent-State had thereafter passed a further order on 6th February, 1992, whereby the new units were exempted for 5 years from the payment of enhanced power tariff on certain conditions. According to the appellants, they were also entitled to benefit under the aforestated G.O. dated 6th February, 1992.

7. In spite of the assurance given by the resp