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2011 Supreme(SC) 80

Supreme Court of India
THE HONOURABLE MR. JUSTICE J.M. PANCHAL, THE HONOURABLE DR. JUSTICE B.S. CHAUHAN & THE HONOURABLE MRS. JUSTICE GYAN SUDHA MISRA
M/s. Shree Sidhbali Steels Ltd. & Others
Versus
State of U.P. & Others
Writ Petition (Civil) Nos.537 of 2000
Decided on : 20-01-2011

Advocates Appeared:
For the Petitioners:Shanti Bhushan, Sudhir Kumar Gupta, M.L. Lohaty, R.K. Gupta, P.K. Sharma, Ms. Gargi, Advocates.
For the Respondents:Shail Kr. Dwivedi, AAG, Pramod Swarup, Sr. Advocate, Anuvrat Sharma, Ms. Alka Sinha, Ameet Singh, R.K. Verma, A.P. Sahay, Ms. Rachana Srivastava, Pradeep Misra, Suraj Singh, Advocates.

Headnote:A) CONSTITUTION OF INDIA : Art.14, Art.19(1)(g), Art.21, Art.32, ELECTRICITY SUPPLY ACT : S.49, UTTAR PRADESH ELECTRICITY REFORMS ACT : S.24, S.49:- Petitioners establishing industrial units in the State on the basis of Hill Development Rebate to the extent of 33 % of electricity bill under a notification issued under Section 49 of Electricity Act. However later the State Government reducing the rate. The same was challenged which ultimately calumniated into a civil appeal before this court. In the guise of intgerim directions given in the same, the State Government completely reducing the concession to 0 %. Then the present writ petition was filed on the complee withdrawal of he rebate itself. As the civil appeal was decided in U.P. Power Corporation Ltd. and another vs. Sant Steels and Alloys (P) Ltd. and others (2008) 2 S.S.C. 777 to the extent of rebate granted under Section 24 of Central Act cannot be withdrawn by executive direction until the U.P. Act is passed and hence the authorities held to be bound only upto the passing of UP Act. In view of the above finding the present writ petition is dismissed because there can be no estopel against the statutory provisions under U.P. Act.

       B)

       

Judgement Key Points

Key Points: - The petitioners sought to quash a notification denying Hill Development Rebate (33.33%) and restore the rebate; court analyzes withdrawal/modification of rebates granted under statutory powers (!) (!) (!) . - The case discusses promissory estoppel in the context of government notifications granting rebates and whether such estoppel applies when statutes grant or withdraw benefits (!) (!) (!) (!) (!) . - The judgment considers whether judicial review under Article 32 is maintainable for policy decisions on subsidies/tariffs and whether the government can extend, revise, or withdraw concessions in public interest (!) (!) (!) (!) . - It analyzes the transition from state power under old acts to regulatory commissions under new acts and the corresponding authority to grant or withdraw rebates (!) (!) (!) .

How to determine whether a government grant of Hill Development Rebate can be withdrawn or modified by subsequent notifications?

What is the applicability of promissory estoppel to the withdrawal of rebates/benefits granted by statutory notifications?

What are the limits of judicial review when policy decisions on subsidies and tariffs are challenged under Article 32 of the Constitution?


Judgment

J.M. Panchal, J.

By filing this petition under Article 32 of the Constitution, the ten petitioners which are Private Limited Companies have prayed to issue a writ in the nature of mandamus or any other appropriate writ or order declaring notification No. 1208/HC/UPPCL-V-1974/1204/2000 dated 07.08.2000 issued by the UP Power Corporation Limited, which was formerly known as U.P. State Electricity Board as illegal, arbitrary and violative of Articles 14, 19(1)(g) and 21 of the Constitution in so far as it denies the petitioners, the Hill Development Rebate of 33.33% on the total amount of electricity bills issued by the respondents for the remaining unexpired period of five years from the date of commencement of supply of electricity to the industrial units of the petitioners. The petitioners have also prayed to issue an appropriate writ in the nature of mandamus or any other appropriate writ, order of direction commanding the respondents to restore/give Hill Development Rebate of 33.33% to the industrial units of the petitioners on the total amount of the electricity bills for the remaining unexpired period of five years.

2. The facts giving rise to the filing of this petition are as under:-

The petitioners are industrial units carrying on business of manufacturing iron rods, ingots, strips in furnaces/re-rolling mills in hill are known as Kotdwar, State of Uttar Pradesh, now State of Uttarakhand. The industrial units of the petitioners were connected with power loads in the year 1996-97 by U.P. State Electricity Board which is now known as U.P. Power Corporation Limited. The claim made by the petitioners is that from the year 1986, the State Government, in order to develop hill areas and particularly Zero Industrial Zones of hill areas as well as for inducing, encouraging and alluring new entrepreneurs declared various exhaustive industrial policies with the consent of UP State Electricity Board, Sales Tax Department and Industrial Department granting various incentives including rebate of 33.33% on total amount of electricity bills to industrial units to be established in hill areas of UP. The petitioners have averred that a new industrial policy dated April 30, 1990 was declared by the State Government assuring grant of 33.33% rebate on total amount of electricity bills to new entrepreneurs for a period of five years. The case of the petitioners is that the Government of UP, pursuant to the aforesaid policy issued an order dated 16-10-1990 to UPSEB to implement all the instructions contained in the said industrial policy. The said policy, according to the petitioners was to remain in operation till March 31, 1995. The record shows that the UPSEB by Notification dated June 28, 1996 modified the earlier notifications and extended the Hill Development Rebate which was to expire on March 31, 1995 for a further period of next five years to be made available to the new industrial units which would be set up till 31-3-1997. The petitioners have claimed that the five years period for which the petitioners were entitled to the Hill Development Rebate of 33.33% on the total amount of electricity bills was to be over in the year 2001-02. What is asserted by the petitioners is that in view of the promises, assurances and guarantees given by the Government of UP through various industrial policies declared from time to time and accepted, operated as well as implemented by UPSEB through different gazette notifications, the industrial units of the petitioners were established in Kotdwar, District Pauri in the year 1996-97. According to the petitioners on January 3, 1997 the Respondent No.2 Corporation, brought out its electricity tariff to be levied on the consumers and it was inter-alia stipulated that the promises made in the industrial policy declared by the UP Government on April 30, 1990 and gazette notification dated June 28, 1996 would continue to be available to the new entrepreneurs as before. The petitioners have mentione



















































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