{"id":272124,"date":"1996-09-17T00:00:00","date_gmt":"1996-09-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-ester-industries-ltd-vs-u-p-state-electricity-board-ors-on-17-september-1996"},"modified":"2018-06-01T21:18:55","modified_gmt":"2018-06-01T15:48:55","slug":"ms-ester-industries-ltd-vs-u-p-state-electricity-board-ors-on-17-september-1996","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-ester-industries-ltd-vs-u-p-state-electricity-board-ors-on-17-september-1996","title":{"rendered":"M\/S. Ester Industries Ltd vs U.P. State Electricity Board &amp; Ors on 17 September, 1996"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">M\/S. Ester Industries Ltd vs U.P. State Electricity Board &amp; Ors on 17 September, 1996<\/div>\n<div class=\"doc_bench\">Bench: K. Ramaswamy, G.B. Pattanaik<\/div>\n<pre id=\"pre_1\">           PETITIONER:\nM\/S. ESTER INDUSTRIES LTD.\n\n\tVs.\n\nRESPONDENT:\nU.P. STATE ELECTRICITY BOARD &amp; ORS.\n\nDATE OF JUDGMENT:\t17\/09\/1996\n\nBENCH:\nK. RAMASWAMY, G.B. PATTANAIK\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n<p id=\"p_1\">\t\t\t O R D E R<br \/>\n     This special  leave petition  arises from\tthe judgment<br \/>\nand order  of the Division Bench of the Allahabad High Court<br \/>\nat Lucknow made on May 8, 1996 in writ Petition No.10195\/89.\n<\/p>\n<p id=\"p_1\">     The admitted  position is\tthat the Government of Uttar<br \/>\nPradesh\t had   laid  down   a  sanction\t for  grant  of\t 10%<br \/>\ndevelopmental rebate  in supply\t of electricity to the newly<br \/>\nset up\tindustries on  July 16,\t 1986 and  that was to be in<br \/>\nVogue till  1990. It  is the  claim of\tthe petitioner\tthat<br \/>\npursuant to  that policy,  the petitioner  had\tset  up\t his<br \/>\nindustry in  Nainital District. Consequently, he is entitled<br \/>\nto the\trebate. When  the bill was issued, the Board imposed<br \/>\nits tariff  rates contrary  to the rebate. Resultantly, they<br \/>\nfiled the  writ petition.  The High  Court in  the  impugned<br \/>\njudgment has held that <a href=\"\/doc\/1245912\/\" id=\"a_1\">Section 78A<\/a> of the Indian Electricity<br \/>\n(Supply) Act,  1984 (Act  54 of 1948) (for short, the &#8216;Act&#8217;)<br \/>\nbeing a\t legislative policy, the Board was not automatically<br \/>\nbound by  the directions issued by the State Government. The<br \/>\nBoard is  entitled to  revise tariff  in accordance with its<br \/>\nprocedure. Therefore,  writ could  not be  issued compelling<br \/>\nthe Board  to follow  the directions  issued  by  the  State<br \/>\nGovernment. Thus, this special leave petition.\n<\/p>\n<p id=\"p_2\">     It is  contended for the petitioner that in view of the<br \/>\nlaw laid  down by  this Court  in <a href=\"\/doc\/660777\/\" id=\"a_1\">Real\tFood Products Ltd. &amp;<br \/>\nOrs. vs.  A.P. State  Electricity Board\t &amp; Ors<\/a>. [AIR 1995 SC<br \/>\n2234] in  particular paragraph\t8, the Board is bound by the<br \/>\ndirections issued by the State Government. The view taken by<br \/>\nthe High Court is, therefore, not correct in law. We find no<br \/>\nforce in  the contention.  It is well settled legal position<br \/>\nthat the  fixation of the tariff is a legislative policy and<br \/>\nthe Board is entitled to revise unilaterally the tariff from<br \/>\ntime to\t time. The  consumer is bound by the revision of the<br \/>\ntariff\tduly  notified\tin  accordance\twith  the  procedure<br \/>\nprescribed under  the Act. The question is: whether contrary<br \/>\nto the conditions of the tariff entered into by the parties,<br \/>\nthe policy direction issued by the State would be interposed<br \/>\nand be\trevised by  the Electricity Board in consonance with<br \/>\nthe directions\tissued by  the\tState  Government?  In\tthis<br \/>\nregard, the  observations of  this Court  in paragraph 8 are<br \/>\nworth recapitulation:\n<\/p>\n<blockquote id=\"blockquote_1\"><p>     &#8220;The  only\t surviving  question  is<br \/>\n     with  regard   to\tthe  nature  and<br \/>\n     effect of\tthe direction  given  by<br \/>\n     the State\tGovernment under <a href=\"\/doc\/17714\/\" id=\"a_2\">Section<br \/>\n     78<\/a> A  of the  Act. The question has<br \/>\n     to be  examined in\t the context  of<br \/>\n     the confined  to thee charging of a<br \/>\n     flat rate per H.P. for agricultural<br \/>\n     pump  sets.   The\tnature\t of  the<br \/>\n     function if the Board in the fixing<br \/>\n     the tariffs  and the  manner of its<br \/>\n     exercise  has  been  considered  at<br \/>\n     length in\tthe earlier decisions of<br \/>\n     this Court\t and it does not require<br \/>\n     any  further   elaboration\t in  the<br \/>\n     present case. Section 78 A uses the<br \/>\n     expression\t &#8220;the\tBoard  shall  be<br \/>\n     guided  by\t  such\t directions   on<br \/>\n     question of  policy as may be given<br \/>\n     to it  by the State Government&#8221;. It<br \/>\n     does appear that the view expressed<br \/>\n     by\t the   State  Government   on  a<br \/>\n     question of policy is in the nature<br \/>\n     of a  direction to\t be followed  by<br \/>\n     the Board in the area of the Policy<br \/>\n     to which it relates. In the context<br \/>\n     of the  function of  the  Board  of<br \/>\n     fixing the\t tariffs  in  accordance<br \/>\n     with <a href=\"\/doc\/1467548\/\" id=\"a_3\">Section  49<\/a> read  with <a href=\"\/doc\/1787076\/\" id=\"a_4\">Section<br \/>\n     59<\/a> and other provisions of the Act,<br \/>\n     the Board\tis to  be guided  by any<br \/>\n     such   direction\tof   the   State<br \/>\n     Government, as in the present case,<br \/>\n     was to  fix a  concessional  tariff<br \/>\n     for agricultural  pump  sets  at  a<br \/>\n     flat rate\tper H.P., it does relate<br \/>\n     to a  question of\tPolicy which the<br \/>\n     Board  must   follow.  However,  in<br \/>\n     indicating the  specific rate  in a<br \/>\n     given case, the action of the State<br \/>\n     Government may  be in excess of the<br \/>\n     power of  giving a direction on the<br \/>\n     question  of   Policy,  which   the<br \/>\n     Board,   if   its\t conclusion   be<br \/>\n     different, may  not bee  obliged to<br \/>\n     be bound  by. But\twhere the  Board<br \/>\n     considers even  the rate  suggested<br \/>\n     by the  State Government  and finds<br \/>\n     it\t to   be   acceptable\tin   the<br \/>\n     discharge\tof   its   function   of<br \/>\n     decision of  the Board would not be<br \/>\n     vitiated  merely\tbecause\t it  has<br \/>\n     accepted the  opinion of  the State<br \/>\n     Government even  about the specific<br \/>\n     rate. In  such  a\tcase  the  Board<br \/>\n     accept the\t suggested rates because<br \/>\n     that appears  to be  appropriate on<br \/>\n     its own view. If the view expressed<br \/>\n     by\t the  State  Government\t in  its<br \/>\n     direction\texceeds\t  the  State  of<br \/>\n     policy, the  Board may not be bound<br \/>\n     by it unless it takes the same view<br \/>\n     on merits itself.&#8221;<\/p><\/blockquote>\n<p id=\"p_3\">     <a href=\"\/doc\/1873192\/\" id=\"a_5\">Section 78A(1)<\/a>  of\t the  Act  postulates  that  in\t the<br \/>\ndischarge of  its functions,  the Board\t shall be  guided by<br \/>\nsuch directions on questions of policy as may be given to it<br \/>\nby the\tState Government.  In other  words, the\t Electricity<br \/>\nBoard has a statutory function to discharge in determination<br \/>\nof the\trates of  tariff and terms and conditions subject to<br \/>\nwhich the electrical energy be supplied to the consumers and<br \/>\nenforcement thereof.  This being a legislative policy, while<br \/>\nexercising the\tpower under  <a href=\"\/doc\/1245912\/\" id=\"a_6\">Section 78A<\/a>  policy  directions<br \/>\nissued\tby   the  Government   may  also   be\ttaken\tinto<br \/>\nconsideration by the Electricity Board which has a statutory<br \/>\nduty to\t perform. But so long as the policy direction issued<br \/>\nby the\tGovernment is  consistent with the provisions of the<br \/>\nAct and tariff policy laid down by the Board, it may be open<br \/>\nto the\tBoard to  either accept\t it or\tmay not\t accept\t the<br \/>\ndirections as  such. It\t is  for  the  State  Government  to<br \/>\nconsider whether  the Board  has laid  down  the  policy  or<br \/>\nwhether the direction issued by the State Government has not<br \/>\nbeen properly implemented. The Court cannot give a direction<br \/>\nto implement  the directions  issued by the State Government<br \/>\nexercising the\tpower under  <a href=\"\/doc\/1712542\/\" id=\"a_7\">Article 226<\/a> of the Constitution<br \/>\nto direction  the Board\t to exercise its power under <a href=\"\/doc\/1873192\/\" id=\"a_8\">Section<br \/>\n78A(1)<\/a> of  the Act.  Sub-section (2)  has no application for<br \/>\nthe reason  that if  the Board feels any doubt as to whether<br \/>\nthe direction  issued by the Government is in the realm of a<br \/>\npolicy or  otherwise, then  it\tshall  be  referred  to\t the<br \/>\nauthority constituted  under the Act whose decision shall be<br \/>\nfinal, i.e., de hors the question in this case.\n<\/p>\n<p id=\"p_4\">     The learned  counsel for  the petitioner has brought to<br \/>\nour notice  that this  Court has  granted leave\t against the<br \/>\njudgment of  another  Division\tBench  on  the\tquestion  of<br \/>\napplicability of the promissory estoppel. In this case, that<br \/>\nquestion does  not arise  for the reason that the promissory<br \/>\nestoppel would\tapply only  in a  case where  there  was  no<br \/>\ncontract executed  between the\tparties. In this case, since<br \/>\nthere exists  a contract  duly executed\t by law\t between the<br \/>\npetitioner and\tthe Board  which binds\tthem, unless  it  is<br \/>\nrevised, the question of promissory estoppel does not arise.<br \/>\nConsidered from\t this perspective,  we are  of the view that<br \/>\nthe High  Court has  not committed any manifest error of law<br \/>\nwarranting interference.\n<\/p>\n<p id=\"p_5\">     The special leave petition is dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India M\/S. Ester Industries Ltd vs U.P. State Electricity Board &amp; Ors on 17 September, 1996 Bench: K. Ramaswamy, G.B. Pattanaik PETITIONER: M\/S. ESTER INDUSTRIES LTD. Vs. RESPONDENT: U.P. STATE ELECTRICITY BOARD &amp; ORS. DATE OF JUDGMENT: 17\/09\/1996 BENCH: K. RAMASWAMY, G.B. PATTANAIK ACT: HEADNOTE: JUDGMENT: O R D E R This [&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-272124","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>M\/S. Ester Industries Ltd vs U.P. 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