{"id":174344,"date":"2002-12-17T00:00:00","date_gmt":"2002-12-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/hitech-electrothermics-vs-state-of-kerala-ors-on-17-december-2002"},"modified":"2016-05-05T09:26:03","modified_gmt":"2016-05-05T03:56:03","slug":"hitech-electrothermics-vs-state-of-kerala-ors-on-17-december-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/hitech-electrothermics-vs-state-of-kerala-ors-on-17-december-2002","title":{"rendered":"Hitech Electrothermics &amp; &#8230; vs State Of Kerala &amp; Ors on 17 December, 2002"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Hitech Electrothermics &amp; &#8230; vs State Of Kerala &amp; Ors on 17 December, 2002<\/div>\n<div class=\"doc_author\">Author: . Pattanaik<\/div>\n<div class=\"doc_bench\">Bench: Cji, K.G. Balakrishnan.<\/div>\n<pre>           CASE NO.:\nAppeal (civil)  8322 of 2001\nAppeal (civil)  8323 of 2001\nAppeal (civil)  8324 of 2001\n\nPETITIONER:\nHitech Electrothermics &amp; Hydropower Ltd.\n\nRESPONDENT:\nState of Kerala &amp; Ors.\n\nDATE OF JUDGMENT: 17\/12\/2002\n\nBENCH:\nCJI,K.G. BALAKRISHNAN.\n\nJUDGMENT:\n<\/pre>\n<p>JUDGMENT<\/p>\n<p>PATTANAIK, CJI.\n<\/p>\n<p>\tThese appeals by grant of special leave are directed<br \/>\nagainst the judgment of Kerala High Court dated 6th April,<br \/>\n2001.  The appellant approached the High Court of Kerala<br \/>\nclaiming that it would be entitled to the concessional tariff<br \/>\nunder the policy of the Government and approved by the<br \/>\nBoard even though the actual commercial production of the<br \/>\nappellant&#8217;s factory started in 1998.  The High Court in the<br \/>\nimpugned judgment accepted the stand of the State<br \/>\nGovernment that in order to be eligible to get the<br \/>\nconcessional tariff under the policy in question, commercial<br \/>\nproduction must have started by 31st December, 1996 and<br \/>\nsince admittedly, the appellant did not have the commercial<br \/>\nproduction by that date the incentive of concessional tariff<br \/>\nwould not be available.\t The question for consideration in<br \/>\nthese appeals, therefore, is whether an industrial unit which<br \/>\nhas set up the industry being lured by policy decision of the<br \/>\nGovernment can still claim the benefit of the concessional<br \/>\ntariff under the policy notwithstanding the fact that there has<br \/>\nbeen delay in production, such delay being attributable to the<br \/>\ninaction on the part of the Board in providing the necessary<br \/>\nelectric connection.\n<\/p>\n<p>\tThe Government of Kerala in the Industry department,<br \/>\nissued GO(MS) dated 21.5.90, indicating therein that the<br \/>\npower connection will be given on completion of any project<br \/>\nirrespective of whether a general power cut is in force or not.<br \/>\nIt had also been stated therein that the new units commencing<br \/>\nindustrial production will be exempted from power cut for a<br \/>\nperiod of 5 years from the date of commercial production. In<br \/>\nFebruary, 1992, the government came out with industrial<br \/>\npolicy offering concessional rate of tariff and electricity duty<br \/>\nto new industries for a period of five years from the date of<br \/>\ncommercial production, if the production commences<br \/>\nbetween 1.1.92 and 31.12.96.  The Kerala State Electricity<br \/>\nBoard adopted the aforesaid policy decision for<br \/>\nimplementation and in its order dated 27th of March, 1992,<br \/>\nreiterated that the concessional tariff as indicated in industrial<br \/>\npolicy resolution, would be available  if the commercial<br \/>\nproduction is made between 1.1.92 and 31.12.96.\t The<br \/>\nappellant industry was issued the registration certificate by<br \/>\nthe District Industries Centre,\t on 27.12.1993.\t In April,<br \/>\n1994, government issued another GO(MS), confirming that<br \/>\nthe industries registered prior to 31.12.1993 will continue to<br \/>\nenjoy  the tariff concession and exemption from payment of<br \/>\nelectricity duty.  The State Electricity Board issued a letter on<br \/>\n7.11.1995 to the appellant industry, allocating power in their<br \/>\nfavour.\t  In its letter dated 13th March, 1996, the said Kerala<br \/>\nState Electricity Board confirmed that the appellant will be<br \/>\nentitled to the tariff concession, as per the policy resolution<br \/>\nof the government.   The appellant is stated to have invested a<br \/>\nhuge sum of money in setting up factory for production of<br \/>\nferro alloys.\tOn 24th of April, 1996, the Secretary to the<br \/>\nGovernment of Kerala confirmed that the appellant will be<br \/>\neligible for concessional tariff,  if commercial production<br \/>\nstarts before 31.12.1996.  In June,1996, the appellant had<br \/>\ninformed the Board that it is going ahead with the<br \/>\nimplementation of the  project of manufacturing ferro alloys<br \/>\nand requested  for issuance of demand note to enable the<br \/>\nappellant to pay the charges.\t On 23rd of August, 1986, the<br \/>\nState Electricity Board informed the appellant about the<br \/>\nestimated amount on the electric connection and further<br \/>\nstated that the demand note will be intimated to the appellant<br \/>\nat the earliest.  On 3rd of August, 1986, news item was<br \/>\npublished in  Delhi&#8217;s Times of India, showing the Kerala<br \/>\nGovernment Policy in welcoming the investment in Kerala.<br \/>\nBetween August and October,  1996, the appellant intimated<br \/>\nseveral authorities of the government as well as the Board,<br \/>\nrequesting them to provide power for manufacture of ferro<br \/>\nalloys in appellant&#8217;s factory, which was otherwise ready for<br \/>\ncommissioning.\tBut it is only in August, 1997, the Board<br \/>\nissued the order, intimating the supply of power to the<br \/>\nappellant&#8217;s factory to the extent of 15 MVA at 110 KV.<br \/>\nThe Board then took about one year in connecting the sub-<br \/>\nstation in the appellant&#8217;s factory for supply of power.<br \/>\nUltimately, the Board granted power to the appellant&#8217;s<br \/>\ncompany on 22nd October, 1998.\tIn the first week of<br \/>\nNovember, 1998 the appellant got the Bill from the Board at<br \/>\nthe regular rate without the benefit of the concessional tariff<br \/>\nas indicated in the Industrial Policy of the Government and<br \/>\nalso adopted by the Board.  The appellant, therefore,<br \/>\napproached the High Court and the High Court by an interim<br \/>\norder directed that the appellant would be demanded the tariff<br \/>\non the basis of the prevalent rate prior to 1.1.1992.  But the<br \/>\npower connection had been cut off on account of non-<br \/>\npayment of the electricity charges.  The High Court then<br \/>\npassed an order that on payment of Rs.50 lacs by the<br \/>\nappellant, the electric connection would be given by its order<br \/>\ndated 15.12.1999.  The Board filed an application for<br \/>\nmodification of the aforesaid order and finally on 6.4.2000,<br \/>\nthe High Court of Kerala modified earlier order, denying the<br \/>\nbenefit of concessional tariff.\t The appeal was carried against<br \/>\nthe order to the division Bench, wherein the division Bench<br \/>\ndirected the Single Judge to dispose of the pending Writ<br \/>\nPetition of the appellant and till the disposal of the Writ<br \/>\nPetition, stayed the order and directed that the appellant<br \/>\nwould pay the electricity charges at pre 1.1.1992 rate by its<br \/>\norder dated 23.5.2000.\tThe Writ Petition of the appellant<br \/>\nwas dismissed by the learned Single Judge by order dated<br \/>\n21.12.2000 against which the appellant carried the appeal to<br \/>\nthe Division Bench and the Division Bench by the impugned<br \/>\norder dated 6.4.2001 having dismissed the appeal, the present<br \/>\nappeal by grant of special leave has been filed.\n<\/p>\n<p>Mr. Salve, the learned senior counsel appearing for the<br \/>\nappellants contended that the Government of Kerala<br \/>\nunequivocally in its policy dated 6th February, 1992 had<br \/>\nindicated that new industrial units will be exempted for five<br \/>\nyears from the payment of enhanced power tariff which came<br \/>\ninto effect on 1.1.92 and this should be available to the units<br \/>\nfrom the date of commercial production which start<br \/>\nproduction between 1.1.92 and 31.12.1996.  This policy was<br \/>\nadopted by the Kerala State Electricity Board which issued<br \/>\nthe letter dated 27th of March, 1992, stating therein that the<br \/>\nconcessional power tariff  and electricity duty to industries<br \/>\nwould be supplied as a measure of incentive to all the units<br \/>\nwho start their commercial production between 1.1.92 to<br \/>\n31.12.1996, irrespective of the day of permanent electric<br \/>\nconnection.  On 7.11.1995, the Kerala State Electricity Board<br \/>\nintimated to the appellant that in principle sanction of power<br \/>\nhad been accorded to the extent of 15 MVA at 110 KV to the<br \/>\nappellant&#8217;s factory premises at Pudussery Village  and the<br \/>\npower can be availed and will be operational with peak load<br \/>\nrestrictions only after commissioning of 220 KV substation at<br \/>\nKanjikode.    But notwithstanding the same, the Board having<br \/>\nnot taken any steps to see that the power supply is given to<br \/>\nthe appellant&#8217;s premises and it is for such non-supply of<br \/>\npower, the commercial production being delayed, it will be<br \/>\nun-equitable to deny the concessional tariff flowing from the<br \/>\npolicy resolution of the government.  Mr. Salve contended<br \/>\nthat under Section 22 of the Indian Electricity Act, 1910, the<br \/>\nBoard is responsible to supply power on the terms and<br \/>\nconditions of the licence and the said Board having allocated<br \/>\nthe power in favour of the appellant on 7.11.95 and thereafter<br \/>\ntheir being no power connection until 1998, it cannot deny<br \/>\nthe benefit flowing from the policy resolution of the<br \/>\ngovernment which was adopted by the Board in its letter<br \/>\ndated 27th of March, 1992.   According to Mr. Salve, the<br \/>\nBoard cannot be permitted to prevent the benefit of an<br \/>\nincentive policy by its own failure to provide power, which<br \/>\nprevented the appellant from starting commercial production<br \/>\nby 31.12.1996.\tMr. Salve relying upon the judgment of this<br \/>\ncourt in <a href=\"\/doc\/1741949\/\">Pawan Alloys and Casting Pvt. Ltd., Meerut vs.<br \/>\nU.P. State Electricity Board and Ors.,<\/a> (1997) 7 SCC 251,<br \/>\ncontended that when the appellant was persuaded to set up<br \/>\nthe industry being lured by incentive of getting the<br \/>\nconcessional power tariff for a period of five years, ought not<br \/>\nto be denied that relief on construing the power policy\t and<br \/>\nliterally no such concessional tariff could be granted unless<br \/>\ncommercial production starts before 31.12.96.\n<\/p>\n<p> Mr. Rohtagi, the learned Additional Solicitor General,<br \/>\nappearing for the State of  Kerala  as well as on behalf of the<br \/>\nBoard, vehemently argued that the language of the policy<br \/>\nissued by the Government and adopted by the State<br \/>\nElectricity Board was unequivocal and such policy clearly<br \/>\nstipulated that only those units which would start commercial<br \/>\nproduction between 1.1.92 and 31.12.96 would be entitled to<br \/>\nthe concessional tariff indicated in the policy. Since<br \/>\nadmittedly the appellant&#8217;s manufacturing unit did not start<br \/>\ncommercial production within the stipulated period, the<br \/>\nbenefit of the concessional tariff under the policy has rightly<br \/>\nbeen denied and the impugned judgment does not suffer from<br \/>\nany infirmity.\tAccording to Mr. Rohtagi, even if for certain<br \/>\nlatches on the part of the Board, the appellant may be entitled<br \/>\nto an equitable consideration, but in the matter of incentive<br \/>\ngranted under the policy decision by the government, no<br \/>\nmanufacturing unit can claim the benefit, so long as the<br \/>\nconditions precedent of the applicability of policy resolution<br \/>\nhave not been satisfied.  Mr. Rohtagi also contended that<br \/>\nthere might have been some latches on the part of the Board<br \/>\nin its failure to provide power connection in time, but the<br \/>\nsame is not one-sided and even the appellant himself was not<br \/>\nin a position to start commercial production within the<br \/>\nstipulated date.  Mr. Rohtagi also urged that since there has<br \/>\nbeen no finding of the Division Bench of the High Court, as<br \/>\nto who was at fault and if so, to what extent on which<br \/>\nequities could be worked out, the matter could be remanded<br \/>\nback to the High Court for re-adjudication. Mr. Rohtagi,<br \/>\nhowever to the suggestion from the Court finally agreed that<br \/>\nthe appeal can be disposed of on equitable consideration by<br \/>\nthis  Court by reducing\t the period for which concessional<br \/>\ntariff could be given to the appellant.\n<\/p>\n<p>On perusal of the industrial policy of the government,<br \/>\nunequivocally indicting that concessional tariff rate would be<br \/>\ngiven as well as the order of the Electricity Board adopting<br \/>\nthe same, it can be safely held that such concession could be<br \/>\navailed of by the industrial units for a period of five years<br \/>\nfrom the date,\tcommercial production which start such<br \/>\nproduction in between 1.1.92 and 31.12.1996.  In this context<br \/>\nthe stand of the Board as well as the State Government<br \/>\ncannot be held to be devoid  of any substance when<br \/>\nadmittedly   the commercial production of the appellant&#8217;s<br \/>\nunit did not start till 31.12.96.  But the question for<br \/>\nconsideration is when the government has itself come<br \/>\nforward alluring industrial units to set up their industries and<br \/>\nwhen under the provisions of the Electricity Act, every<br \/>\nconsumer has the right to get the supply of power and in the<br \/>\ncase in hand, when power allocation has been made in favour<br \/>\nof the appellant as early as in 1995, and yet the same power<br \/>\ncould not be supplied for such non-supply of power, the<br \/>\ncommercial production could not start by 31.12.96, would it<br \/>\nat all be equitable to deny the relief to the appellant by giving<br \/>\na literal interpretation to the incentive scheme of the<br \/>\ngovernment as adopted by the Board?  Our answer to this<br \/>\nquestion must be in the negative.  There are several<br \/>\ndocuments on record, which were produced before us to<br \/>\nindicate that the appellant has been communicating with the<br \/>\nBoard, seeking power connection at an early date so that it<br \/>\nwould be able to start commercial production by 31.12.96.  In<br \/>\nmaking such communication, the appellant has been bringing<br \/>\nit to the notice of the Board but for supply, the appellant has<br \/>\nmade all other arrangements to set the production, but yet<br \/>\nthere has been inaction on the part of the Board in providing<br \/>\npower to the appellant.\t Mr. Rohtagi, appearing for the Board<br \/>\nno doubt brought to our notice a letter from the appellant to<br \/>\nthe Board and contended that it could not have been possible<br \/>\nfor the appellant to start production by 31.12.96 but we are<br \/>\nunable to accept this submission nor are we making deeper<br \/>\nprobe into the matter.\tSuffice it to say that the appellant has<br \/>\nbeen denied power supply by the Board in appropriate time,<br \/>\nwhich has prevented the appellant from starting the<br \/>\ncommercial production by 31.12.96.  This being the position,<br \/>\nand having regard to the gamut of the circumstances, starting<br \/>\nfrom the government policy resolution and culminating in<br \/>\nsetting up of the factory by the appellant in Kerala and<br \/>\ncommensurate the production of ferro alloys, though not by<br \/>\n31.12.96, we are of the considered opinion that granting the<br \/>\nconcessional tariff for a period of three years instead of five<br \/>\nyears, as indicated in the policy resolution would meet the<br \/>\nends of justice and we, accordingly, so direct.\t Be it be stated<br \/>\nthat the appellant has been enjoying the concessional tariff on<br \/>\nthe basis of interim orders of the court and, therefore, that<br \/>\nshould be taken into account and due adjustment would be<br \/>\nmade in computing the period of three years, for which we<br \/>\nare directing for grant of concessional tariff.\t The impugned<br \/>\njudgment of the Kerala High Court is set aside and these<br \/>\nappeals are allowed to the extent indicated above.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Hitech Electrothermics &amp; &#8230; vs State Of Kerala &amp; Ors on 17 December, 2002 Author: . Pattanaik Bench: Cji, K.G. Balakrishnan. CASE NO.: Appeal (civil) 8322 of 2001 Appeal (civil) 8323 of 2001 Appeal (civil) 8324 of 2001 PETITIONER: Hitech Electrothermics &amp; Hydropower Ltd. RESPONDENT: State of Kerala &amp; Ors. DATE [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-174344","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Hitech Electrothermics &amp; ... vs State Of Kerala &amp; Ors on 17 December, 2002 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/hitech-electrothermics-vs-state-of-kerala-ors-on-17-december-2002\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hitech Electrothermics &amp; 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