ORDER
D.S.R. Varma, J.
1. The petitioner seeks a writ of mandamus directing the respondents to bill the petitioner for the power supplied, according to H.T. Category-I tariff, giving the 25 percent rebate, which is granted to new industries.
2. The facts in brief are that the petitioner is a public limited company having the unit at Gondiparla Village of Kurnool District, involved in the production of caustic soda. As per the scheme available, the petitioner-company opted to be categorized under Category-I and applied to the respondent-A.P. State Electricity Board (presently known as “A.P, Transmission Corporation. Hence, hereinafter referred to ‘the Corporation’) for supply of H.T. power initially at 20 M.V.A. in the year 1981. The availability of the power was confirmed by the Corporation and directed the petitioner to comply with certain formalities. The petitioner also made an application in this regard. Subsequently, several other changes in the policy of the Corporation had taken place, but they are not very relevant for the present purpose, excepting the fact that the petitioner required the Corporation to supply H.T. power at an extent of 10 M.V.A. instead of 20 M.V.A. as was originally requested. All the formalities, including such of those formalities, which emerged due to change in the policies of the Corporation from time to time, were also complied with. An agreement was entered into on 26,6.1987. But on the ground that the proposal to release the supply was pending before the Corporation for approval, the supply was not given, resulting in filing of a writ petition by the petitioner in W.P. No. 15257/1987. Consequent upon the interim direction granted by this Court on 14.10.1987, supply was released with effect from 20.1.1987 and the petitioner unit commenced availing the supply. The grievance of the petitioner is that in the test report prepared at the time of releasing the supply, it was mentioned under the column ‘special features’, the petitioner-unit was treated as power intensive industry under Category-Ill. Accordingly the Corporation also raised bill for the period from 20.10.1987 to 25.10.1987 for a certain amount, treating the petitioner as a unit under H.T. Category – ID. According to the petitioner this procedure is illegal.
3. It is stated, for the first time the categorization was made by the Corporation through B.P. Ms. No. 671 (Commercial) dated 10.6.1987, exercising its power under Section 49 of the Electricity (Supply) Act, 1948 (for short ‘the Act’) into three categories, whereby the H.T. tariffs were classified into H.T. Category-I, H.T. Category-II and H.T. Category-III. Significantly in the said board proceedings, only eight consumers were classified under H.T. Category – III, giving power intensive tariff. It is stated that the petitioner-company was not among those eight consumers and, therefore, it is clear that initially the petitioner was treated as an industry belonging to Category-I, as was opted by it. The actual power supply was given on 20.1.1987.
4. It is further stated that subsequently the Corporation issued another proceedings in B.P. Ms. No. 298 dated 30.3.1988 amending the earlier B.P. Ms. No. 671 and by virtue of which, the caustic soda industry also was included under the power intensive industries under Category-III and since the petitioner-company is involved in the production of caustic soda, it is also included under Category-III as per B.P. Ms. No. 298. Accordingly the billing was made, applying the said board proceedings and it resulted in a considerable hike in the charges.
5. It also appears that the petitioner -company was informed that it is not entitled for the 25 per cent rebate, extendable to the new industries for a period of three years from the date of commencement of the initial production, on the sole ground that the said benefit is not available to the industries falling under Category-III. Hence, the present writ petition.
6. The learned Senior Counsel for the petitioner Sri Mohan mainly raised four contentions. Firstly he contended that treating the petitioner-company as belonging to Category-Ill, contrary to the agreement dated 26.6.1987 is arbitrary and unreasonable. He stated that the rebate is extendable only to Category-I, but not to Category – III. Secondly he contended that concession of 25 per cent rebate on consumption charges cannot be denied to the petitioner on the ground that it was categorized as power intensive unit. Thirdly, that when once the agreement was entered into between the Corporation and the petitioner, the Corporation is bound by the conditions of the agreement and hence estopped from changing the power tariff, by treating the petitioner-company under Category-III.
7. Fourthly he contended that the agreement should be treated as a special agreement, inasmuch as the Corporation has the power under Section 49(3) of the Act to enter into special agreement depending upon the circumstances, and fix different tariffs for the supply of electricity to any person having regard to the special features of a particular industry.
8. He elaborated by contending that had the petitioner-company been treated as per the agreement, the Corporation ought to have billed the petitioner only under Category -I, but not under Category-III. This change effected by the Corporation, resulted in payment of higher charges, which is contrary to the agreement. Hence, he seeks to treat the petitioner – company under Category-I and extend the 25 percent rebate, extendable to new industries. The further grievance of the petitioner is that it was also denied the concession, which was applicable at the time of staring the industry, as per the G.Os. existing as on that date, on the ground that the petitioner was treated as power intensive industry under Category – III. Therefore, the grievance of the petitioner is that it was deprived of the benefit of rebate for a period of three years from the date of initial production.
9. On the other hand the learned Counsel for the respondent-Corporation Sri N. Subba Reddy submitted that this issue had already been decided by a Full Bench of this Court in VBC Ferro Alloys Ltd v. A.P.S.E.B., , whereby the power of the Corporation in this regard had been upheld and, therefore, there are no merits in the writ petition and the same is liable to be dismissed.
10. From the above contentions, broadly two questions would fall for consideration, they are:
1. Whether the respondent-Corporation has the power to change the category of the unit of the petitioner from Category-I to Category-III and collect electricity charges at a higher rate?
2. Whether the petitioner can be denied the incentive by way of 25 per cent rebate on consumption charges for a period of three years from the date of initial production, on the ground that it was categorized under Category-III?
11. Point No. 1: In order to answer this point, it is imperative to refer the judgment of the Full Bench in V.B.C. Ferro Alloys Ltd. v. APSEB, case (supra), which had considered the same issue with reference to various judgments of the Apex Court.
12. The Full Bench at paragraph No. 38 of the judgment held as under:
“On the other hand, the question relating to classification had squarely fallen for consideration in Ferro Alloys (DB). This Court in Ferro Alloys held that the classification of power intensive industries is not only founded on an intelligible differentia distinguishing the H.T. Category-I consumers, but the differentia has also rational relation to the object sought to be achieved by Section 49(3) of the Act. This decision met the approval of the Apex Court in Petitions for Special Leave to Appeal (Civil) Nos. 4496 of 1993 and 6639 of 1993.”
13. Further at paragraph Nos. 40 and 42 it was held as under:
“40. As observed in T.B. Khosa , itself, the classification need not be apparent and the relevant material can be scrutinized by the Court to find out whether the classification rests on a reasonable basis and bears nexus to the object in view. This Court in Ferro Alloys (1993 (1) An. WR 353) took into consideration all the material produced by the Board and held that the material discloses two basic factors that formed the basis for classification of Power Intensive Industries, viz., (1) the intensity of the power industries consume, more or less a raw-material, and (ii) the cost of power in relation to the cost of the end-product roughly at 20%. This is the differentia evolved as rational basis behind the classification of ‘Power Intensive Industries’ as distinct from H.T. Category-I Consumers. This Court held that “this classification cannot be said to be ‘Mini-classification based on micro-distinction’ to hold that it is a overdone classification.” It is further held by this Court that the classification of Power Intensive Industries is not only founded on an intelligible differentia distinguishing the H.T. Category-I consumers, but the differentia has also its rational relation to the object sought to be achieved by Section 49(3) of the Act.”
42. What applies to B.P. Ms. No. 671 is equally applicable to B.P. Ms. No. 298 by which Item No. 9 in the list of H.T. Category-III power intensive tariff consumers is added. The reasons for which B.P. Ms. No. 697 dated 10.6.1987 is upheld by this Court would equally applicable for upholding the B.P. Ms. No. 298 dated 30th March, 1988. By B.P. Ms. No. 298 some other consumers manufacturing Caustic Soda, Ferro Silicon etc., are added to the list of H.T. Category-III power intensive consumers’. Therefore, we hold that the B.P. Ms. No. 298 dated 30th March, 1988 does not suffer from any constitutional infirmity. Likewise, continuing the re-categorization of the petitioner’s unit in H.T. Category-III vide B.P. Ms. No. 353 also does not suffer from any unconstitutionality.”
14. The Full Bench while dealing with the challenge based on Article 14 of the Constitution of India observed at paragraph No. 46 as under:
“….The decision taken by the Board for the achievement of a specified object or purpose need not be all embracing. Mere fact that certain categories of consumers which would stand on the same footing as those which are covered by the impugned proceedings are left out would not vitiate the very classification. It is well settled that the equals should not be treated unlike and unlikes should not be treated alike. Likes should be treated alike. But it is equally well settled that in giving effect to the said principle, a mathematical precision is not envisaged and there should be no doctrinaire and unrealistic approach to the matter. It is always open to the State and its instrumentalities to classify the persons, things or objects for legitimate purpose.”
15. It was further held at paragraph Nos.48 and 49 as under:
48. Legislation or an instrument which is legislative in character cannot be struck down by this Court by merely characterizing the same as arbitrary unless some or other constitutional infirmity is established. Having upheld the classification and having found that the impugned Board proceedings are not violative of the equality clause/equal protection clause enshrined in Article 14, it would not be possible for this Court to strike down the same on the ground of arbitrariness. A legislative instrument which satisfies the test of classification cannot be held to be an arbitrary one.
The tariff fixation by the Board is legislative in character
49…. The mechanics of price fixation/tariff fixation has necessarily to be left to the judgment of the authority concerned and unless it is patent that there is hostile discrimination against a class of consumers, the processual basis of price fixation has to be accepted in the generality of cases as valid. The Board is entitled to make pragmatic adjustments, which may be required in the particular circumstances. The tariff fixation can be declared unconstitutional only if it is patently arbitrary, irrational, discriminatory or demonstrably irrelevant. The Court in exercise of its judicial review jurisdiction ought not to normally interfere so long as the exercise of the power to fix the tariff is within a ‘zone of reasonableness’. The Supreme Court repeatedly held that the price fixation is not within the province of the Courts. Judicial function in respect of such matters is exhausted when mere is found to be a rational basis for the conclusions reached by the concerned authority.”
16. From the above it is clear that the Full Bench held that it is not permissible for the Courts to interfere with such tariffs fixed by the Corporation, when that is found to be on rational basis.
17. Dealing with the aspect of the binding nature of the agreement, the Full Bench held at paragraph No. 60 as under:
“….The agreement itself is precarious in its nature. It is susceptible to termination on the volition of the Board on finding that there is a violation of the terms of the agreement and terms and conditions of the supply notified by the Board from time to time or by any provision of law touching the agreement including the Electricity (Supply) Act, 1948 and the Rules framed there under. It specifically enables the Board to vary terms and conditions of supply by special or general proceedings. Therefore, there is no specific period fixed with an assurance as such by the Board to the petitioner herein to supply the power at the agreed rate in exercise of power under Section 49(3) of the Act….. Therefore, on that ground, it is not possible to exempt the petitioner from the operation of B.P.Ms.No.298 dated 30th March, 1988 adding Item No. 9 in the list of H.T. Category-III power intensive tariff consumers, The amendment to B.P. Ms. No. 671 (Commercial) dated 10.6.1987 bringing the petitioner’s unit under H.T. Category-III does not suffer from any legal infirmity or constitutional vice…”
18. While dealing with the aspect of the power of the Corporation to enter into special agreement depending upon various circumstances of a particular industry, it was held at paragraph No. 59 as under;
“It is thus clear that even in case of statutory special agreement entered in conformity with Section 49(3) of the Act, the Board is unilaterally entitled to enhance the rates of tariff, provided there is a stipulation and reservation in favour of the Board enabling the Board unilaterally to revise the tariffs.”
19. Finally the Full Bench while considering the aspect whether B.P. Ms.No.298 is prospective or retrospective, held that the said Board proceedings are only prospective. Accordingly the petitioners therein were declared as entitled for the relief till the date of issuance of B.P. Ms. No. 298.
20. From a careful reading of the Full Bench judgment, I am convinced that all the contentions raised by the learned Senior Counsel for the petitioner were adverted to in detail. This Court need not express any further opinion, inasmuch as the same are binding upon this Court and also in view of the fact that the Division Bench judgment in Ferro Alloys Corporation Ltd v. A.P.S.E. Board, 1993 (1) An. WR 353, which had fallen for consideration before the Full Bench, was already confirmed by the Supreme Court in Petitions for Special Leave to Appeal (Civil) Nos. 4496 of 1993 and 6639 of 1993.
21. Therefore, in view of the Full Bench judgment of this Court, the contentions of the learned Counsel for the petitioner cannot be sustained and the point No. 1 is held against the petitioner.
22. Point No. 2: It is not in dispute that the petitioner-unit was originally treated as an industry falling under Category-I and, therefore, it was entitled to have the concession by way of 25 per cent rebate on consumption charges for the first three years. Now by virtue of the fact that the petitioner was brought into the fold of Category-III, the incentive was denied on the ground that industries falling under Category-III are not entitled to any concession. It is also not in dispute that petitioner was eligible to have the permissible incentives by virtue of different proceedings of the Government as well as the Corporation. On this aspect, the Apex Court in Pavan Alloys and Casting Pvt. Ltd. v. U.P.S.E.B., , held at paragraph No. 24 as under:
“. . . . Such a promise was not contrary to any statutory provision but on the contrary was in compliance with the directions issued under Section 78-A of the Act. These new industries which got attracted to this region relying upon the promise had altered their position irretrievably. They had spent large amounts of money for establishing the infrastructure, had entered into agreements with the Board for supply of electricity and, therefore, had necessarily altered their position relying on these representations thinking that they would be assured of at least three years’ period guaranteeing rebate of 10% on the total bill of electricity to be consumed by them as infancy benefit so that they could effectively compete with the old industries operating in the field and their products could effectively compete with the products. On these well-established facts the Board can certainly be pinned down to its promise on the doctrine of promissory estoppel.”
23. From the above observations of the Apex Court it is clear that since the new industries would be started by spending huge amounts, relying on the promise with regard to grant of rebate on consumption charges or other incentives, the Corporation is subsequently estopped from denying those incentives, as they are given as infancy benefit to effectively compete with the old established industries in the field.
24. So far as the rebate is concerned it is to be seen that the incentive by way of rebate had been emanated from earlier policy of the Government subject to certain conditions. In the present case, there is no complaint from the Corporation that any such conditions have been violated. At the inception of the industry, the entrepreneur would start the industry with an expectation that the incentive would be granted. In such a case, when a new industry is entitled for the incentive as per the policy or the scheme of the Government or the Corporation, as the case may be, the same shall be accorded, of course subject to the eligibility.
25. In the present case, the petitioner started the industry with the promise made by the Government regarding the extension of the incentive by way of 25 per cent rebate on the consumption charges for a period of three years from the date of commencement of initial production. It is not in dispute that the incentive was for only to Category-I industries. After the categorization the petitioner has been treated as power intensive industry and was brought into the fold of Category – III and thereby made to loose the benefit of rebate as applicable to Category I industry. In my view, the promise made at the time of inception, shall not be defeated or taken away because of subsequent change in the categorization. The object of the incentive is perceivably to allow the new industries to come up and the power to vary the tariff is statutory as per Section 49 of the Act and also by the terms and conditions of the contract.
26. In my considered view the promise regarding the incentives to start the industry cannot be linked up with the power of the Government or the Corporation as the case may be, as regards the variation of the charges for the power supply after the industry started commercial production. In other words the right of the petitioner -industry to have the benefit of the incentives for three years, which was as per the policy of the Government, cannot be made to depend on the variation in the charges of the power and the fixation thereof from time to time as per the right of the Government or the Corporation, conferred by the Statute. It is to be distinctly noted that the incentives have been promised as per the policy enunciated by the Government, which is traceable to Section 78-A of the Act and the Corporation has accepted the same, which is not in dispute. Whereas the variation in the charges from time to time is permissible to be effected by the Corporation under Section 49 of the Act. Therefore, the promise made by the Government cannot be taken away by the Corporation. To put in a different way, the benefit which had been given with one hand, cannot be taken away by the other.
27. In the instant case, by virtue of recategorization, petitioner had fallen under Category-III and this shall not take away the benefit promised to the petitioner, which is a new industry. The power of the Corporation is only to the limited extent of varying charges, depending upon various circumstances by virtue of the categorization. Therefore, petitioner is entitled to have the benefit for a period of three years from the date of commencement of initial production, as was originally promised at the time of inception of the industry. Such promise and the resultant benefit shall be continued, irrespective of the variation in the change in the charges for electricity supply or due to recategorization. To put it precisely the 25 per cent rebate on consumption charges shall be extended irrespective of recategorization.
28. Further the Apex Court at paragraph No. 59 held as under:
“Let us take an example to clarify this aspect. If a general rate of electricity tariff for a given class of industries if Rs. 100/- per KW and if 10% rebate by way of development incentive is given to new industries, the latter will pay Rs. 90/- per KW while other well-established industries will pay Rs. 100/- per KW. Thus the goods manufactured by new industries would be cheaper costwise as compared to goods manufactured by well-established industries in the region. That will enable the newly-established industries to compete more effectively with their senior counterparts. Now if the general rate is increased by the Board even within the three years of the currency of the incentive scheme, to Rs. 200 per KW for the electricity consumed while the new industries which were earlier getting infancy benefit will pay Rs. 180/- per KW as 10% rebate will still be available to them by way of development rebate. Thus benefit of infancy protection will remain available to the new industries for competing with the old ones even if general tariff rate gets revised upwards for a given class of consumers comprising new as well as old industries in the field….. Thus the cloak of protection available to them against old competitors in the field will still be available despite any upward revision of the general tariff by the Board in exercise of its powers under Clause 7(c) of the agreement read with Section 49 of the Act….”
29. From the above it is clear that the petitioner is entitled to the incentive by way of 25 per cent rebate on consumption charges continuously for three years, inasmuch as originally it was entitled to have the benefit under Category -I. However, the Corporation has the right to vary the consumption charges, but such variation shall not have any adverse effect on the right that accrued already to the petitioner. To put it precisely, the petitioner is entitled to have the benefit of the incentive for the first three years on the revised consumption charges also, if any, made during the said three years, as was illustratively observed by the Apex Court in the above judgment i.e., in Pavan Attoysand Cashing Pvt. Limited UPSEB, case cited (supra).
30. Accordingly this point is answered in favour of the petitioner.
31. Further in view of the Full Bench judgment of our High Court and also of the Supreme Court it is clear that the effect of B.P. Ms. No. 298 is only prospective and therefore, the benefit under the earlier Board proceedings, as discussed above, shall be extended up to the issuance of the later Board proceedings in B.P. Ms. No. 298.
32. Curiously the petitioner raised a new ground in the reply affidavit, which demands attention.
33. It is averred in the reply affidavit that the tariff fixation by the Corporation shall necessarily be done only within the framework of Sections 57 and 57-A and Clause (VI) of the Schedule to the Act. It is further contended that Section 57 of the Act postulates that the provisions of the Schedule shall be deemed to be incorporated in the licence of every licensee. It is stated that as per Section 57-A of the Act, upon the request of the Corporation or in the event of the failure of the Corporation to comply with the provisions of Clause VI of the Schedule, the State Government shall constitute a Rating Committee to examine the licence charges for the supply of electricity and to make necessary recommendations in that behalf to the State Government. Clause VI of the Schedule further envisages only one tariff revision in a year. Therefore, the specific grievance of the petitioner is that the Corporation having issued B.P. Ms. No. 671 on 10.6.1982 revising the tariff rates upward having included only eight industries in Category-III, ought not have issued B.P. Ms. No. 298 dated 30.3.1988 for the very same year. In other words the specific contention of the petitioner is that because of this method adopted by the Corporation, the revision in the tariff was effected twice in the very same year and this is contrary to Clause VI of the Schedule of the Act.
34. But this specific ground had been raised only for the first time in this writ petition. As noted above, the Full Bench had upheld the issuance of B.P. Ms. No. 298 and even before that, in Ferro Alloys Corporation case, the Apex Court had approved the B.P. Ms. No. 298. Further while upholding the B.P. Ms. No. 298, the present objection raised by the petitioner had not fallen for consideration. However, since the said proceeding has received the seal of approval by the Supreme Court, though the present objection raised by the petitioner appears to be sound, I am restrained from making any further investigation and give a finding thereof.
35. In the result the respondent-Corporation is directed to extend the 25 per cent rebate on the actual consumption charges levied and collected for the first three years. Further, the petitioner shall be treated as Category-III industry from 30.3.1988 i.e., the date of issuance of B.P. Ms. No. 298 only, inasmuch as the increase in the tariff by virtue of this proceeding was held be only prospective by the Full Bench of this Court in VBC Ferro Alloys Ltd v. APSEB case (supra).
36. Accordingly the writ petition is allowed in part. No costs.
37. After the judgment is pronounced, the learned Counsel for the petitioner submits that pursuant to the judgment of this Court on Point No-1, the Electricity charges will be rescheduled and surcharge on the belated payments is likely to be levied.
38. Levying of surcharge on the belated payments may be a natural corollary pursuant to the judgment of this Court. Nevertheless, the power of the Government or the Board in giving any exemption/ concession is not curtailed, if deemed fit, having regard to the special circumstances, if any.
39. The learned Counsel for the petitioner in this regard points out that in V.B.C. Ferro Alloys Ltd v. APSEB case (supra), when the petitioner therein had approached the Government, some concessions were given.
40. In such a case, it is needless to mention that it is always open to the petitioner to approach the Government or the Board, as the case may be, and make a representation regarding any concession or levying of any surcharge. In the event of making any such representation, the Government or the Board shall consider the same and pass appropriate orders, in accordance with law, by exercising their discretionary jurisdiction.