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SUPREME COURT OF INDIA
A.K.MATHUR AND MARKANDEY KATJU, JJ.
U.P. Power Corporation Ltd. and Anr. - Petitioner
Versus
Sant Steel and Alloys P. Ltd - Respondent
Civil Appeal No. 1215-1216 of 2001.
Decided On : 10-12-2007
ELECTRICITY - TARIFF - CONCESSION - HILL DEVELOPMENT REBATE - REVOCATION - PROMISSORY ESTOPPEL - PUBLIC INTEREST - U.P. ELECTRICITY REFORMS ACT, 1999 - Held, the High Court was right in holding that the appellant was estopped by virtue of the doctrine of promissory estoppel from withdrawing the development rebate before the completion of the period of three years. The appellant cannot be permitted to withdraw the said benefit before expiry of the stipulated period by issuing the notification revoking the same which the respondents were legitimately entitled to avail. The grounds that the revocation notification was issued in public interest and that same has the flavour of the statute, cannot persuade us to uphold it. The judicial consensus that emerges is that whenever the State has made a representation to the public and the public has acted on that representation and suffered economically or otherwise, then in that case the State should be estopped from withdrawing such benefit to the detriment of the such people except in public interest or against the Statute. So far as the public interest as involved in the present case is concerned, we have found that there was no overwhelming evidence to revoke the benefit granted to the industrial units in the hill areas. So far as the Statute is concerned, the notification was issued under Section 49 of the Act of 1948 and the same was revoked under Section 49 of the Act of 1948 though there was no such provision contained in Section 49 that it will be open to the Corporation to revoke the same but could be possible by invoking the principle of General Clauses Act. But in such delegated legislation such withdrawal could only be permitted if larger public interest is involved or if the Act is passed by legislature. Since such benefits have not been recognised by the Act of 1999, therefore, upto the date of coming into force of the Act of 1999, all the benefits which were being given to the respondent- entrepreneurs shall be protected by invoking the principle of promissory estoppel but after coming into force of the Act of 1999, which is a primary legislation enacted by the State Legislature the benefits from the date the Act has come into force, cannot be made available to the respondents.
Fact of the Case:
The appellant-Corporation 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.
Finding of the Court:
The High Court was right in holding that the appellant was estopped by virtue of the doctrine of promissory estoppel from withdrawing the development rebate before the completion of the period of three years. The appellant cannot be permitted to withdraw the said benefit before expiry of the stipulated period by issuing the notification revoking the same which the respondents were legitimately entitled to avail. The grounds that the revocation notification was issued in public interest and that same has the flavour of the statute, cannot persuade us to uphold it. The judicial consensus that emerges is that whenever the State has made a representation to the public and the public has acted on that representation and suffered economically or otherwise, then in that case the State should be estopped from withdrawing such benefit to the detriment of the such people except in public interest or against the Statute. So far as the public interest as involved in the present case is concerned, we have found that there was no overwhelming evidence to revoke the benefit granted to the industrial units in the hill areas. So far as the Statute is concerned, the notification was issued under Section 49 of the Act of 1948 and the same was revoked under Section 49 of the Act of 1948 though there was no such provision contained in Section 49 that it will be open to the Corporation to revoke the same but could be possible by invoking the principle of General Clauses Act. But in such delegated legislation such withdrawal could only be permitted if larger public interest is involved or if the Act is passed by legislature. Since such benefits have not been recognised by the Act of 1999, therefore, upto the date of coming into force of the Act of 1999, all the benefits which were being given to the respondent- entrepreneurs shall be protected by invoking the principle of promissory estoppel but after coming into force of the Act of 1999, which is a primary legislation enacted by the State Legislature the benefits from the date the Act has come into force, cannot be made available to the respondents.
Issues: 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.
Ratio Decidendi: The judicial consensus that emerges is that whenever the State has made a representation to the public and the public has acted on that representation and suffered economically or otherwise, then in that case the State should be estopped from withdrawing such benefit to the detriment of the such people except in public interest or against the Statute.
Final Decision: The appeals are accordingly disposed of with no order as to costs.
JUDGMENT :
A.K.Mathur, J. - 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.
3. 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 :
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).
(a) Above 11 KV upto 66 KV 5%
(b) Above 66 KV upto 132 KV 7.5%
c) Above 132 KV 10%.
Xx xx xx
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?% 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 commencemen
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