M/S.
Ester Industries Ltd. Vs. U.P. State Electricity Board & Ors [1996]
INSC 1150 (17 September
1996)
K. Ramaswamy,
G.B. Pattanaik
ACT:
HEAD NOTE:
O R D
E R
This
special leave petition arises from the judgment and order of the Division Bench
of the Allahabad High Court at Lucknow made
on May 8, 1996 in writ Petition No.10195/89.
The
admitted position is that the Government of Uttar Pradesh had laid down a
sanction for grant of 10% developmental rebate in supply of electricity to the
newly set up industries on July 16, 1986
and that was to be in Vogue till 1990. It is the claim of the petitioner that
pursuant to that policy, the petitioner had set up his industry in Nainital
District. Consequently, he is entitled to the rebate. When the bill was issued,
the Board imposed its tariff rates contrary to the rebate. Resultantly, they
filed the writ petition. The High Court in the impugned judgment has held that
Section 78A of the Indian Electricity (Supply) Act, 1984 (Act 54 of 1948) (for
short, the 'Act') being a legislative policy, the Board was not automatically
bound by the directions issued by the State Government. The Board is entitled
to revise tariff in accordance with its procedure. Therefore, writ could not be
issued compelling the Board to follow the directions issued by the State
Government. Thus, this special leave petition.
It is
contended for the petitioner that in view of the law laid down by this Court in
Real Food Products Ltd. & Ors. vs. A.P.
State Electricity Board & Ors. [AIR
1995 SC 2234] in particular paragraph 8, the Board is bound by the directions
issued by the State Government. The view taken by the High Court is, therefore,
not correct in law. We find no force in the contention. It is well settled
legal position that the fixation of the tariff is a legislative policy and the
Board is entitled to revise unilaterally the tariff from time to time. The
consumer is bound by the revision of the tariff duly notified in accordance
with the procedure prescribed under the Act. The question is: whether contrary
to the conditions of the tariff entered into by the parties, the policy
direction issued by the State would be interposed and be revised by the
Electricity Board in consonance with the directions issued by the State
Government? In this regard, the observations of this Court in paragraph 8 are
worth recapitulation:
"The
only surviving question is with regard to the nature and effect of the
direction given by the State Government under Section 78 A of the Act. The
question has to be examined in the context of the confined to thee charging of
a flat rate per H.P. for agricultural pump sets. The nature of the function if
the Board in the fixing the tariffs and the manner of its exercise has been
considered at length in the earlier decisions of this Court and it does not
require any further elaboration in the present case. Section 78 A uses the
expression "the Board shall be guided by such directions on question of
policy as may be given to it by the State Government". It does appear that
the view expressed by the State Government on a question of policy is in the
nature of a direction to be followed by the Board in the area of the Policy to
which it relates. In the context of the function of the Board of fixing the
tariffs in accordance with Section 49 read with Section 59 and other provisions
of the Act, the Board is to be guided by any such direction of the State
Government, as in the present case, was to fix a concessional tariff for
agricultural pump sets at a flat rate per H.P., it does relate to a question of
Policy which the Board must follow. However, in indicating the specific rate in
a given case, the action of the State Government may be in excess of the power
of giving a direction on the question of Policy, which the Board, if its
conclusion be different, may not bee obliged to be bound by. But where the
Board considers even the rate suggested by the State Government and finds it to
be acceptable in the discharge of its function of decision of the Board would
not be vitiated merely because it has accepted the opinion of the State
Government even about the specific rate. In such a case the Board accept the
suggested rates because that appears to be appropriate on its own view. If the
view expressed by the State Government in its direction exceeds the State of
policy, the Board may not be bound by it unless it takes the same view on
merits itself." Section 78A(1) of the Act postulates that in the discharge
of its functions, the Board shall be guided by such directions on questions of
policy as may be given to it by the State Government. In other words, the
Electricity Board has a statutory function to discharge in determination of the
rates of tariff and terms and conditions subject to which the electrical energy
be supplied to the consumers and enforcement thereof. This being a legislative
policy, while exercising the power under Section 78A policy directions issued
by the Government may also be taken into consideration by the Electricity Board
which has a statutory duty to perform. But so long as the policy direction
issued by the Government is consistent with the provisions of the Act and
tariff policy laid down by the Board, it may be open to the Board to either
accept it or may not accept the directions as such. It is for the State
Government to consider whether the Board has laid down the policy or whether
the direction issued by the State Government has not been properly implemented.
The Court cannot give a direction to implement the directions issued by the
State Government exercising the power under Article 226 of the Constitution to
direction the Board to exercise its power under Section 78A(1) of the Act.
Sub-section (2) has no application for the reason that if the Board feels any
doubt as to whether the direction issued by the Government is in the realm of a
policy or otherwise, then it shall be referred to the authority constituted
under the Act whose decision shall be final, i.e., de hors the question in this
case.
The
learned counsel for the petitioner has brought to our notice that this Court
has granted leave against the judgment of another Division Bench on the
question of applicability of the promissory estoppel. In this case, that
question does not arise for the reason that the promissory estoppel would apply
only in a case where there was no contract executed between the parties. In
this case, since there exists a contract duly executed by law between the
petitioner and the Board which binds them, unless it is revised, the question
of promissory estoppel does not arise.
Considered
from this perspective, we are of the view that the High Court has not committed
any manifest error of law warranting interference.
The
special leave petition is dismissed.
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