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Judgment
This wit petition is filed for issuance of a writ of mandamus declaring the action of the respondents in not granting the 25% rebate in power tariff to the petitioner for the initial three years as highly illegal, arbitrary and unjust and consequently to direct the respondents to grant 25% rebate to the petitioner for the initial three years with effect from 8-12-1989 i.e., the date of going into commercial production pursuant to G.O. Ms. No.654, Industries and Commerce Department, dated 13-3-1976 and B.P. Ms. No.691 (Commercial), dated 10-8-1976 of the 2nd respondent and to pass such other orders in the circumstances of the case.
The brief facts which require to be stated for disposal of this writ petition are as follows :
The petitioner is a S.S.I. Unit engaged in the manufacture of Corrosion Resistant Castings, Heat Resistant Castings, Steel Alloy Casiings and Alloy Iron Castings etc. The petitioner was granted provisional S.S.I, registration for establishing the industry in an industrially backward area in the Certificate No.01/02/0481/Prov/SSI/Rural, dated 25-7-1986 in L.Dis. No.4773/B.3/86, dated 25-7-1986 by the General Manager, District Industries Centre, Chittoor. The registration was originally valid upto 24-7-1987. It was revalidated upto 23-7-1988. When the petitioner approached the General Manager, District Industries Centre for subsequent revaiidation, it was rejected. Therefore, the petitioner was compelled to file WP No.5574 of 1989. In the said writ petition, interim direction was given to revalidate the provisional S.S.I, registration to the petitioner. The writ petition was allowed subsequently and the petitioner was granted permanent S.S.I, registration dated 25-5-1992. After that, the petitioner took effective steps to establish the industry. The petitioner purchased the land on 1-2-1987. On 16-2-1987, an assurance was given by the Chairman, A.P. State Electricity Board that the required power of 3000 KVA would be made available at 33 K.V. terminus. In the month of July, 1987, the petitioner was given clearance by the District Medical and Health Officer, Chittoor for the construction of the Unit. On 11-9-1987 the Director of Town and Country Planning, Government of Andhra Pradesh had granted approval for the proposal of installation of the petitioner''s unit u/s 4(iv)(c) and Rule 125 of A.P. Gram Panchayats Act, 1964. The Director of Factories, Andhra Pradesh, Hyderabad also granted approval under the Factories Act on 4-8-1987. The petitioner''s unit was ready for commissioning by March, 1989. But, the A.P. State Electricity Board did not release the power supply.
Thereupon, the petitioner was constrained to file WP No.10512 of 1989. In pursuance of the orders the power was released on 29-11-1989. The petitioner went into commercial production from that date.
Meanwhile, the 1st respondent issued G.O. Ms. No.654, Industries and Commerce Department, dated 13-7-1976 extending the 25% concession in power tariff to new industrial units which have gone into commercial production on or after 1-1-1976. However, in the G.O. it is mentioned that the above rate shall not be applicable to the 65 excluded industries notified in G.O. Ms. No.224, Industries and Commerce, dated 9-3-S976. The policy decision taken by the Government of Andhra Pradesh is binding on the A.P. State Electricity Board, by virtue of Section 78-A of the Electricity (Supply) Act. In pursuance of G.O. Ms. No.654, the Board has issued B.P. Ms. No.691 (Commercial), dated 10-8-1976 extending the 25% rebate in power tariff to all new industrial units which had gone into commercial production on or after 1-1-1976. Thereafter, the Government issued another G.O. Ms. No.34, dated 20-1-1977 modifying G.O. Ms. No.654, dated 3-7-1976 by giving effect to G.O. Ms. No.654 with effect from 20-10-1975, granting 25% concession in power tariff with effect from 20-10-1975. Correspondingly, the A.P. State Electricity Board issued B.P. Ms. No.311, dated 6-4-1977 adopting G.O. Ms. No.38. Thereafter, Government issued G.O. Ms. No.379, dated 27-7-1989 thereby adding eight categories of Industries in addition to 65 ineligible industries as appended to. In those industries, mini steel plants are also one of the items.
It is the case of the petitioner that he has been approaching the Industries Department as well as the Electricity Board for grant of 25% rebate for initial three years. Inspite of several representations, no action was taken. Ultimately, the General Manager, District Industries Centre has given the eligibility certificate in D.Dis. No.5334/ A3/91, dated 27-6-1992 for claiming the 25% rebate in power tariff as per G.O. Ms. No.654, dated 13-7-1976 and B.P. Ms. No.651 (Commercial), dated 8-12-1989 from the date of going into commercial production for a period of three years. The said Certificate was issued upon the permission granted by the Commissioner of Industries in his Memo dated 17-6-1992. A copy of the eligibility certificate was sent to the 3rd respondent for grant of 25% rebate in power tariff to the petitioner. Even though the competent authority has granted the eligibility certificate, respondents 2 to 4 are bent upon not to grant the said concession to the petitioner.
The petitioner is entitled for the grant of 25% rebate by virtue of the policy of the Government, The decisions taken by the Government are binding on the A.P. Slate Electricity Board by virtue of Section 78-A. Basing on the promise and assurances made by the Government and subsequently by the Board, the petitioner''s unit has come into existence. But for the incentive, the petitioner would not have ventured to establish the industry in the backward area. The petitioner has spent huge amounts in establishing the industry. There are no laches on the part of the petitioner. He took active interest in setting up of the Unit from 1987 itself. He obtained necessary permissions from all the authorities. He also started civil construction by spending considerable amounts. He has also ordered plant and machinery by paying huge advances. There was initial delay because of nonco-operation of the Industries Department in registering the S.S.I. Unit. That is why the petitioner had to approach the Hon''ble High Court. The petitioner was given permanent revalidation by the Industries Department. He would have commissioned the Unit in early part of 1988 itself. The Industry is established in a backward area. It went into commercial production with effect from 8-12-1989from which date the Unit is entitled for 25% rebate in power tariff.
The petitioner further stated that in WP No.8932 of 91 between M/s. Sarada Ferro Alloys Ltd v. A.P.S.E.B., this Court held that when once a policy decision is taken, the same is binding on the Board u/s 78-A of Electricity (Supply) Act. The authorities cannot resile from the promise and the assurances made. The said writ petition was allowed on 8-11-1991. The writ appeal preferred by the Board i.e., WA No.1271 of 91 was dismissed by a Division Bench on 7-2-1992. Therefore, the petitioner''s case is squarely covered by the said judgment.
Hence, the writ petition.
While pending the writ petition, the Board passed an order. The petitioner tiled amendment petition challenging the decision of the Board and also the Government. The amendment was permitted.
The respondents filed a comprehensive counter in this case. The Senior Accounts Officer of the Board (4th respondent) swore to the affidavit that the claim of the petitioner is untenable. He stated that there were no orders issued by the Chairman of the Board to the effect that the petitioner''s unit would be provided power supply of 3000 KVA on 16-2-1987. It is stated that there is no objection for the Board to release the supply to the petitioner had the petitioner paid the service line charges of Rs. 10,47,800/- in lumpsum and in time. However, the petitioner requested for instalments. The Board granted six monthly instalments. The first instalment of Rs.1,75,000/- was paid on 11-3-1988. The petitioner filed WP No. 10512 of 1989 for exemption from payment of service line charges. Therefore, there is no laxity on the part of the Board in releasing the service. The petitioner himself is responsible for the delay in releasing the service. He admitted the issuance of B.P. Ms. No.311 in pursuance of G.O. Ms. No.38, sanctioning 25% rebate in the charges. He also admits the contents of the Board''s Memo dated 3-8-1989. He denied the allegation that the petitioner was constantly approaching the Board for the grant of 25% rebate for initial period of three years. Nobody from the petitioner''s company has contacted the Superintending Engineer (Operation), Tirupathi either in person or through atleast a letter. It was only on 7-7-1992, the Superintending Engineer (Operation), Tirupathi received the eligibility certificate in respect of the petitioner from the District Industries Centre dated 27-6-1992. The Board was unaware of the eligibility certificate upto 6-7-1992. However, he is not eligible in view of the order passed in G.O. Ms. No.379, dated 27-7-1989. From that date, the concession was withdrawn. As per the Board''s Memo dated 29-7-1991, the Superintending Engineer (Operation), Tirupathi is not empowered to sanction 25% rebate to H.T. services whose C.M.D. is above 1000 KVA. The petitioner''s unit is having C.M.D. of 2000 KVA. The policy decision was revised in G.O. Ms. No.379, dated 27-7-1989. The rebate was withdrawn. The cut-off date is 27-7-1989. in the instant case, the petitioner was not eligible for the rebate. There is no delay on the part of the Board in releasing the supply. Further, the Board approved the scheme of extension of H.T. supply well in advance, vide B.P. Ms. No.19, dated 7-1-1988. The consumer has to pay the following charges :--(1) Service line charges of Rs. 10,47,800/- (in addition to supply of 2 Nos.33 KV Vaccum Circuit brackets costing Rs.2,09,600/- each as on the date of B.P. (2) Security Deposit of Rs. 14,56,000/-. In addition to the above, the petitioner has to instal captive generation of 600 KVA. As the petitioner did not comply all these requirements, the supply was delayed. Therefore, the Board is not responsible for the consequences thereof. However, the supply was released without collecting service line charges as per the directiongiven by the High Court in WP No. 10512 of 1989 and the writ petition is still pending. As earlier stated, the rebate is no longer available after passing G.O. Ms. No.379, dated 27-7-1989. The eligibility certificate issued by the Industries Department is in ignorance of the said G.O. and also the Board Memos and therefore the Certificate is not valid. The additional grounds taken in the additional affidavit are also untenable. The petitioner had applied for H.T. service connection with C.M.D. of 2000 KVA at 33 K.V. point of supply with a connected load of 3085 H.P. on 21-3-1986. The administrative approval was granted on the condition that the petitioner shall pay the service line charges of Rs.14,67,000/-. The pelitioner was directed to procure 2 Nos.33 K.V. VCBS at his cost, at the rate of Rs.2,09,600/- per VCB, amounting to Rs.4,19,200/-. This amount should be deducted from the service line charges payable by the petitioner. The petitioner agreed to pay the balance of Rs. 10,47,800/-along with the 2 Nos. VCBS. The Divisional Engineer informed the petitioner on 18-1-1988 to pay a sum of Rs. 1,15,000/- towards service connection line charges and Rs.17,33,000/-towards S.D. charges along with the former with the condition that after payment only further action will be taken up for releasing the supply. The petitioner represented to the Board to accord instalments for payment of the service line charges. The Board agreed in their proceedings dated 12-10-1987. Again, the petitioner approached the Board for grant of instalments with regard to service line charges and the Board granted six instalments in their proceedings dated 11-1-1988. The petitioner paid an amount of Rs.1,75,000/-towards the first instalment on 11-3-1988 as stated earlier. The petitioner paid Security Deposit of Rs.4,14,000/- as first instalment on 27-3-1989 and Rs.15,000/- as service connection charges in the letter dated 27-3-1989. The Chief Electrical Inspector, Government of Andhra Pradesh gave temporary approval for petitioner''s installation in the proceedings dated 25-3-1989 with validity upto 25-4-1989. The petitioner was directed to pay the balance instalments to obtain regular approval. The petitioner was called upon to pay the balance of five instalments of service line charges which were sanctioned on 11-1-1988 for considering the release of H.T. supply. But the petitioner sent a contradictory letter on 17-6-1989 addressing the Superintending Engineer. He filed WP No.10512 of 1989 for releasing the supply. The writ petition was dismissed on 27-2-1998 directing the petitioner to pay the instalments in respect of service line charges as demanded by the respondents. The supply was actually released on 29-11-1989 on the direction given by the Hon''ble Court. The laches are on the part of the petitioner. The petitioner did not commence commercial production within the deadline laid down in G.O. Ms. No.379, dated 27-7-1989. Therefore, no concession can be granted to the petitioner. Hence, the respondents pray for dismissal of the writ petition.
The main plank of the petitioner is that in pursuance of the incentive given by the Government he installed the mini plant. He made every effort enumerated above to start the Unit as early as possible. The petitioner, as stated earlier, was granted provisional certificate on 25-7-1986. He purchased the land. He got necessary certificates from the Director of Factories, District Medical and Health Officer, elc. The Board, in their proceedings dated 11-1-1988 granted six. instalments to pay the service line charges. The power supply should be made immediately after payment of the first instalment. This was not done in this case. In January, 1988, the Chief Engineer, Southern Zone, Cuddapah granted line approval to the petitioner, vide his Memodated 12-1-1988. The power was to be released by erecting a separate line from the sub-station which is 8.5 Kms. away. The service line charges of Rs.10,47,800/-were worked out by the competent authorityfor which the petitioner was granted six instalments. The Divisional Engineer, Operation, Chittoor required the petitioner to pay the following amounts in his proceedings dated 18-1-1988 :
(1) Rs.10,47,800/- towards service line charges.
(2) Rs.15,000/- towards service connection charges.
(3) Rs.17,33,060/- towards security deposit.
The technical sanction was accorded for release of power supply to the petitioner by Memo dated 3-3-1988. The petitioner, in pursuance thereof, paid a sum of Rs.1,75,000/-towards first instalment towards service line charges. On 4-8-1988, the Chief Engineer (Operation) permitted to supply power to the petitioner by tapping the existing 33 K.V feeder temporarily which was going near to the petitioner''s Unit. For the above temporary arrangement, the petitioner was asked to pay Rs.1,50,950/- which has been paid by the petitioner, apart from the 1st instalment of Rs. 1,75,000/-. The petitioner has also paid Rs.15,950/- on 25-11-1988 towards S.L.C. for temporary arrangement. On 27-3-1989, the petitioner paid another sum of Rs.4,14,000/- towards the first instalment towards security deposit. He also paid Rs.15,000/- on 29-3-1989 towards connection charges. Thereupon, the Divisional Engineer, Operation, Chittoor addressed a letter to the Superintending Engineer, Tirupathi. In his letter, dated 27-3-1989 it is admitted that the petitioner''s unit is ready for commissioning. The Superintending Engineer by his proceedings dated 27-3-1989 addressed a letter to the Chief Engineer, Southern Zone, Cuddapah to sanction the approval to release power supply to the petitioner''s unit. Again, the Chief Engineer addressed a letter to the Chief Engineer, Operation, Vidyut Soudha in his proceedings dated 31-3-1989 to accord approval to release the power supply to the petitioner. On 25-3-1989, the Chief Electrical Inspector to Government granted temporary authorisation for energisation of the petitioner''s Unit. The Chief Electrical Inspector to the Government by his proceedings dated 4-5-1989 accorded final approval of energisation of the petitioner''s unit. This was not done. Therefore, the petitioner was constrained to file WP No.10512 of 1989 challenging the action ofthe Board in not releasing the power supply and also insisting the petitioner to install a captive generator of 600 KVA, which condition was not there in the original agreement. In pursuance thereof, on 5-9-1989, the Court directed respondents to release power supply to the petitioner''s unit by the order in WP MP No. 13946 of 1989. On 23-10-1989, the Hon''ble Court directed to release the power supply to the petitioner without subjecting the petitioner to any further conditions. On 29-11-1989, the supply was released in pursuance of the order passed in WP No.10512 of 1989. On 8-12-1989, the petitioner has gone into commercial production. Again, the petitioner was constrained to file WP No.18359 of 1989 challenging the collection of service line charges. The Hon''ble High Court directed the Board to adjust the amount paid by the petitioner towards service line charges against the future bills payable by the petitioner in WP MP No.24322 of 1989 in WP No. 18359 of 1989. The Government of Andhra Pradesh issued proceedings for the grant of eligibility certificate to claim 25% rebate for the initial three years by the petitioner. The General Manager, District Industries Centre, Chittoor granted eligibility certificate to claim 25% rebate in power tariff. Even then, the Board is adamant and takes refuge in the deadline fixed in G.O. Ms. No.379, dated 27-7-1989.
The learned Counsel appearing for the petitioner submitted that the Board cannot decline granting 25% rebate in power tariff for the concerned three years by virtue of principle of promissory estoppel. In support of his contention, the learned Counsel strongly relied upon the judgment of Supreme Court in Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, . This judgment is locus classicus on the point. Justice P.N. Bhagwati (as he then was), traced out the history of the doctrine of promissory estoppel called by other names also as ''requisite estoppel'', ''quasi-estoppel'' and ''new estoppel''. Ultimately, his Lordship relied upon the observations of Lord Denning in Evenden v. Guildford City Association Football Club Ltd. (1975) 3 All. E.R. 269, and held that for the application of the doctrine of promissory estoppel, it is not necessary that the parties should enter into a kind of legal relationship. It was further held that the principle of promissory estoppel is applicable to the State action also, subject to certain conditions. This judgment was subsequently relied upon by the Hon''ble Supreme Court in Union of India (UOI) and Others Vs. Godfrey Philips India Ltd., ; Pournami Oil Mills and Others Vs. State of Kerala and Another, ;State of Bihar and another v. Usha Martin Industries Ltd. (1987) 65 STC 430 and Vij Resins Pvt. Ltd. and Others Vs. State of Jammu and Kashmir, .
In the submission of the learned Counsel the ratio of the judgment of Supreme Court in Assistant Commissioner of Commercial Taxes (Asst.) Dharwar and Others Vs. Dharmendra Trading Company and Others, , directly applies to the facts of this case. The judgment of Supreme Court in M/s. Pawan Alloys and Casting Pvt. Ltd., Meerut etc, etc. Vs. U.P. State Electricity Board and others, , is also a direct case and squarely applies in all its force to the facts of the present case. The learned Counsel also relied upon the judgment of Supreme Court in Shrijee Sales Corporation and Another Vs. Union of India (UOI), and submitted that the Government can also resile from its promise even in the absence of public interest if no one is adversely affected thereby or if it provides reasonable opportunity to the promisee to resume his position, provided restoration of status quo ante is possible. In this case there is no possibility for restoration of status quo ante by virtue of change in the policy of the Government in G.O. Ms. No.379. Therefore, the State is bound by the principle of promissory estoppel.
Apart from the above Supreme Court judgments, the learned Counsel for the petitioner also relied upon the Bench judgment of this Court in M/s. V.K. Ferro Alloys Industries Pvt. Ltd. Vs. The A.P. State Electricity Board and others, . In that case, the benefit of rebate was extended to specified industries from the date of their going into regular production on orafter 1-1-1976. The industry was manufacturing ferro products. The subsequent order making it ineligible was set aside by the Bench. The Bench held as follows :
".... It would not be ineligible for such concession on the ground that the concession was withdrawn by the Electricity Board on earlier date than the date when the Industry had gone into commercial production. The Government in exercise of powers u/s 78-A of the Electricity (Supply) Act, 1948, have been taking policy decisions as to the entitlement of the power concession to the industries and issuing orders reckoning the date of extension of concessions as the date on which the industry went into regular production, as such the ineligibility for the industries manufacturing Ferro products operates from the date of issue of G.O. Ms. No.379, dated 27-7-1989 but not from any earlier date of withdrawal of concession by Board by issuing Board proceedings....."
This is a direct case on the point. The withdrawal, according to the Bench, is only prospective and not retrospective.
Strong reliance is also placed on the judgment of a single Judge of this Court in Maruthi Steels (P) Ltd. Vs. Government of A.P., Industries and Commerce Department and Others, . In that case, the G.Os. pressed into service in this case, were the subject-matter of consideration. The learned Judge considered various judgments of the Supreme Court.
The facts of the case on hand are similar to the facts of the case cited Maruthi Steels (P) Ltd. Vs. Government of A.P., Industries and Commerce Department and Others, . The judgment of Supreme Court in A.P. State Electricity Board and Others Vs. Sarada Ferro Alloys Ltd., , was distinguished and rightly so by the learned Judge. In the case cited Maruthi Steels (P) Ltd. Vs. Government of A.P., Industries and Commerce Department and Others, , the Unit had already obtained rebate for the first three years from the Board. In the beginning of the commencement of the next two years in which the rebate has to be given by the Government, G.O. Ms. No.379 came into force. The contention of the Government Pleader was that by the time of commencement of the next two years period the G.O. had come into force and therefore the Unit is not entitled for any rebate. That contention was brushed aside by the learned Judge. I entirely agree with the reasons given by the learned single Judge in the judgment cited Maruthi Steels (P) Ltd. Vs. Government of A.P., Industries and Commerce Department and Others, as the facts of the case on hand are similar to the facts of that case.
The learned Standing Counsel for the Electricity Board submitted that according to Section 49 of the Electricity (Supply) Act (Act 54/48), the terms and conditions notified by the Board are statutory and the fact that individual agreements are entered by the Board with each consumer does not make the terms and conditions for supply contractual. He also relied upon the judgment of Supreme Court in M/s. Hyderabad Vanaspathi Limited Vs. Andhra Pradesh State Electricity Board and Others, . The learned Counsel submitted that the Board is an autonomous body and it has to manage its own finances by virtue of Sections 49 and 59 of the Electricity (Supply) Act. He further submitted that the validity of Section 49 was upheld by the Supreme Court in Ferro Alloys Corpn. Ltd. Vs. A.P. State Electricity Board and another, . However, the learned Standing Counsel did not venture to say that the directions given by the Government from time to time u/s 78-A are (sic not) binding on the Board. Therefore, it is futile to say that the Board can act independently on its own and against the policies of the Government by virtue of Section 78-A.
On the facts, the learned Standing Counsel for the A.P. State Electricity Board submitted that there was delay on the part of the petitioner. He did not deposit the required amounts. He filed writ petitions and delayed the matter. Therefore there was delay in the Unit going into commercial production. By the time it went into commercial production the concession granted was withdrawn by the Government. Therefore, the petitioner is not entitled for any rebate.
The submissions made by the learned Standing Counsel for the Board are untenable. The sequence of events and the steps taken by the petitioner are enumerated above. The commercial production, in this case, started on 8-12-1989. The G.O. came into effect on 27-7-1989. The events enumerated show that the petitioner tookall the steps in commissioning the Unit. Certainly the principle of promissory estoppel is applicable to this case and the petitioner is eligible to be given the rebate under the incentive scheme. Therefore, the writ petition is allowed and in the circumstances without costs. However, the petitioner is directed to pay all the other dues, if any, to the Board.