Judgment :

ALTAMAS KABIR, J.

1. The Respondent No.1 is a Public Limited Company engaged in the manufacture and sale of two-wheelers, scooters and motorcycles, having its registered office at Panaki Industrial Area in Kanpur, U.P. The Company obtained power load from the Kanpur Electricity Supply Administration, hereinafter referred to as "KESA", which was extended from time to time. In the year 2006, the sanctioned load of the Company was 8 MVA from 132 KV line.

2. On account of a decreasing market the Company apprehended that its work force would be directly affected and, accordingly, made a representation to the State Government for declaring the Respondent-Company as a "Relief Undertaking" under Section 3(1) of the U.P. Industrial Undertaking (Special Provisions for Prevention of Unemployment) Act, 1966. A Notification was issued by the State Government on 24th June, 2004, suspending all contracts, agreements and other instruments in force under any law, for a period of one year which resulted in a strike disrupting the operations of the company. Consequently, all manufacturing activities of the Respondent-Company came to a halt, ultimately leading to the declaration of a lockout on 7th March, 2006. As a result, on 31st March, 2006, the Respondent-Company applied to the Kanpur Electricity Supply Company, hereinafter referred to as "KESCO", for reduction of the contract load from 8 MVA to 1.25 MVA with effect from 1st April, 2006. On 19th April, 2006, a meeting took place between the officers of KESCO and the Respondent-Company in which a decision was taken for reduction of the load with certain conditions. On the said date itself KESCO conveyed its agreement for reduction of load to the U.P. Electricity Regulatory Commission and sought its formal approval.

3. The Commission did not raise any objection regarding the decision to reduce the load but it observed that the agreement which had been reached between the parties was internal to the parties and the same had to be implemented strictly in accordance with the Electricity Supply Code, 2005. Thereafter, the Respondent wrote to KESCO on 17th May, 2006, to reduce the load with effect from 1st April, 2006. However, the electricity bill for the month of May, 2006 based on 8 MVA load was presented to the Respondent on 7th June, 2006. The Respondent immediately sent a letter of protest indicating that the bill amount ought to have been raised on the basis of the agreed load of 1.25 MVA. The respondent paid the bill on the basis of 1.25 MVA load and also invoked the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985, hereinafter referred to as the "SICA". The said reference was registered as Case No.80 of 2006 on 15th September, 2006 and, thereafter, on 8th May, 2007, the Respondent-Company was declared as a sick industrial company under section 6(3)(o) of the 1985 Act and the IDBI Bank was appointed as the Operating Agency. On 4th October, 2006, KESCO wrote to the Respondent-Company for submitting a Bank Guarantee for the arrears of the amount as per Clause 4.49 of the U.P. Supply Code, 2005 so that action could be taken to reduce the load from 8 MVA to 1.25 MVA. In response, the Respondent No.1-Company wrote to KESCO indicating that once the normal work of the factory was restored, the payment of arrears of electricity dues would be finalized.

4. On 11th March, 2007, the Respondent-Company restarted its manufacturing activities and requested KESCO to increase the load from 1.25 MVA to 2.25 MVA. KESCO, however, responded on 20th March, 2007, informing the Petitioners that the load reduction could not be considered owing to non-submission of the Bank Guarantee by the Respondent-Company for the balance amount of the bill raised for the month of May, 2006. On 3rd August, 2007, a settlement was arrived at with regard to the payment of arrears. As the respondent was registered as a Sick Unit with the Board for Industrial and Financial Reconstruction, hereinaft