M/S Badri Kedar Paper
Pvt. Ltd. Vs. U.P. Electricity Regulatory Commn. & Ors.  INSC 2246
(19 December 2008)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7433 OF 2008 [Arising
out of SLP (Civil) No. 7421 of 2007] M/s Badri Kedar Paper Pvt. Ltd.
...Appellant Versus U.P. Electricity Regulatory Commn. & Ors.
S.B. SINHA, J :
of an action of withdrawal of a circular letter dated 8.09.2000 issued by the
U.P. Power Corporation Ltd. (Respondent No. 2 herein) was the subject matter of
ten writ applications filed before the High Court. The said writ petitions were
writ petitioners preferred appeals before us upon obtaining special leave. This
Court in LML Ltd. v. State of Uttar Pradesh and Others [(2008) 3 SCC 128]
allowed the appeals against the Corporation. The appellant before us is against
the said common judgment of the High Court.
In LML Ltd. (supra),
this Court, inter alia, held:
proximity of issuance of the circular vis-`-vis notification must also be
noticed. The tariff was framed on 7-8-2000 which came into force from 9-8-2000
whereas the Circular was issued on 8-9-2000. The consumers exercised their
option on 31-10-2000. The judgment in LML1 was delivered on 25-4-2001. The
Circular dated 31-8-2001 undoubtedly was issued in view of the said judgment.
The said judgment did not deal with the questions raised before us. In any
event if the licensee violates the tariff approved by the Commission
appropriate legal action can be taken against it. But it would be too much to
contend that for a mistake on the part of the Corporation, the consumers would
suffer. In this view of the matter, we are of the considered view that the
doctrine of estoppel shall apply in the cases where the promise was made.
However, the principle of said doctrine would, however, not be applicable where
no such promise was made."
Pradeep Misra, learned counsel appearing on behalf of the respondent No. 1 -
corporation, however, would submit that the said 3 decision should not be
followed by us as a review petition had been filed. It was urged that in any
event the said decision requires reconsideration.
The said review
petition, we may place on record, has been dismissed by a Bench of this Court
by an order dated 20.02.2008.
therefore, proceed to deal with the submission of Mr. Misra before us that the
said decision requires reconsideration.
For the purpose of
appreciating the said contention, we may notice at the outset the basic fact of
Legislature of the
State of Uttar Pradesh enacted the Uttar Pradesh Electricity Reforms Act, 1999
(for short "the 1999 Act") in terms whereof the U.P. Electricity
Regulatory Commission (for short "the Commission") was constituted.
For determination of tariff in terms of the 1999 Act, the Commission was
approached by the respondent No. 2. Tariff was determined, relevant portion
whereof reads as under:
HV-2 LARGE AND HEAVY POWER
1. Applicability 4
This rate schedule shall apply to all consumers who have contracted load of
more than 75 kW (100 BHP) for industrial and/or processing purposes as well as
to Arc/induction, furnaces rolling/re-rolling mills, mini steel plants and to
any other power consumers not covered under any other rate schedule.
This rate schedule
shall also apply to commercial light, fan and power consumers (LMV-2) and power
consumers of Rate Schedule LMV-6, subject to the condition that they opt for
this rate schedule.
The contracted demand
shall be expressed in whole number only.
2.-3. * * *
4. Rate of charge
Description Demand charge Energy charge A. Basic rate (applicable to urban
consumers) Rs 130 per kVA/month PLUS 390 paise/kWh Notes.--(a) In respect of
consumers who opt for power supply during restricted/peak hours an additional
surcharge of 15% on the amount billed at the "Rate of Charge" under
Item 4-A above i.e.
demand charge and
energy charge shall be levied.
However, in respect
of consumers getting power supply on independent feeders emanating from
400/220/132 kV substations an additional surcharge of 15% on demand and energy
charges shall be charged further subject to the condition that these consumers
will get an assured supply of minimum 500 hours in a month. In case of
shortfall in above guaranteed hours of supply a rebate @ 1% for each 10 hours'
shortfall will be admissible on the bill amount computed under "Rate of
5 (b)-(c) * * * (d)
In respect of supply during peak hours/restricted hours, the consumers shall
have to take the permission from UPPCL."
confusion arose as regards interpretation of the purported levy.
The U.P. Power
Corporation issued a circular calling for options from the consumers of
electrical energy as to whether they intended to have a continuous power supply
of 500 hours in a month. Pursuant to or in furtherance of the said circular,
appellant along with others exercised an option stating that they did not
intend to have 500 hours of continuous supply.
letter was issued by the U.P. Power Corporation Ltd.
on 15.12.2000, the
relevant portion whereof reads, thus:
Electricity Regulatory Commission in its revised tariff for the year 2000-2001
applicable to HV-2 rate schedule consumers who are getting supply from
independent feeders for levy of 15% surcharge on the guarantee of 500 hours of
power supply per month.
In this regard,
detailed guidelines have been issued by this office vide Letter No. 1423 dated
In this regard, it is
directed that those consumers who will exercise option, of not 6 availing 500
hours' guaranteed supply, through a registered letter to Executive Engineer
(Distribution) by 31-12-2000, they will not be charged 15% surcharge from the
very date of its applicability i.e. 7-8-2000. For consumers, who will submit
their option after 31-12-2000, this facility will be applicable from the date
of receipt of the application."
The said policy
decision, however, was not adopted by other suppliers of electricity.
LML Ltd. filed a writ application before the High Court. A Division Bench of
the Allahabad High Court in a judgment (since reported in AIR 2001 All 321)
inter alia held that the said circular letters were illegal and, thus, void
opining that it was the Commission alone who could fix the tariff and, thus,
the same could not have been modified or altered by any licensee.
The impugned circular
was, thereafter, issued withdrawing the aforementioned circulars.
the outset, Mr. Pradeep Misra, learned counsel appearing on behalf of the
respondents, would submit that in the writ petition an order of stay was
granted which was later on vacated. However, the appellant herein 7 prayed for
payment of dues in instalments which was allowed by an office memo 16.03.2004,
the relevant portion whereof reads as under:
"6. According to
the own request of the consumer, he will submit an affidavit to the concerned
Executive Engineer (Distribution) that if he gets any order from Hon'ble Court
in this case for stay of this amount then also he will continue to pay the
installments regularly till the entire payable amount is not paid."
A Director of the appellant
- company is said to have affirmed an affidavit pursuant thereto, stating:
"3. That on my
application Managing Director, Pashchimanchal Vidyut Vitran Nigam Ltd., Meerut
vide letter No. 1670 dated 16.03.2004 has issued order to deposit the aforesaid
outstanding amount in six monthly installments.
4. That besides the
conditions mentioned in the aforesaid letter, I further assure that even if we
get any stay order regarding the said amount by Hon'ble High Court in the said
case, we will continue to pay six monthly installments regularly."
entire amount of Rs. 21,13,031/- together with interest amounting to Rs.
10,16,815/- had been deposited in terms of the said undertaking.
Misra would submit that in that view of the matter, this special leave petition
is not maintainable.
The learned counsel
would further contend that even otherwise the judgment of this Court requires
reconsideration as it had wrongly been held in paragraph 43 thereof that the
Commission did not take any decision despite repeated communications by the
Power Corporation praying for modification of the tariff in terms of the
provisions of the 1999 Act and the regulations framed thereunder and in that
view of the matter, it was only the Commission which could not only frame
tariff but also make amendments thereto. It was urged that finding of this
Court that Sub-section (6) of Section 24 of the 1999 Act inter alia empowers
the holders of the licence to modify the tariff is patently incorrect. In
support of the said contention reliance has been placed on BSES Ltd. v. Tata
Power Co. Ltd. and Others [(2004) 1 SCC 195], West Bengal Electricity
Regulatory Commission v.
CESC Ltd. [(2002) 8
SCC 715] and Association of Industrial Electricity Users v. State of A.P. and
Others [(2002) 3 SCC 711] 9
was contended that in LML Ltd. (supra), the regulations framed by the State had
inadvertently not been placed; from a perusal whereof it would appear that it
was the Commission only who could amend the tariff.
are unable to agree with Mr. Misra on any of the aforementioned contentions.
When questioned, Mr.
Misra conceded that the affidavit affirmed in support of the representation
filed by the appellant as regards payment of the amount had not been brought to
the notice of the High Court.
Concededly again it
had also not been contended before the High Court that in view of the
aforementioned event subsequent to the filing of the writ application by the
appellant, the writ petition became infructuous. Had such contention been
raised before the High Court, it might not have exercised its discretionary
jurisdiction. Such a contention had not only been raised before the High Court,
the respondent No. 1 allowed the High Court to determine the issues arising
therein on their own merit, without any demur whatsoever.
In our opinion, the
respondent No. 1 cannot be permitted to raise such a contention before us for
the first time. Even otherwise in the affidavit, the 10 appellant merely
stated that even if a stay order is granted by the High Court, the six-monthly installments
would be paid regularly. Appellant had not contended that the writ petition
would be withdrawn or even if the writ petition is allowed, it would not ask
for refund of the amount deposited. It is neither in doubt nor in dispute that
such an undertaking had to be given by the appellant only with a view to avoid
disconnection of electrical energy. If by reason of the circular impugned
before the High Court, the appellant was entitled to maintain a writ
application; by reason of such representation, it did not waive its right.
LML Ltd. (supra), this Court proceeded on the basis that it was the Commission
alone who had the exclusive jurisdiction to determine the tariff. In view of
the provisions of the 1999 Act as also the regulations framed thereunder, as
the law stands now, there cannot be any doubt or dispute that the Commission
alone has the exclusive jurisdiction and even for the purpose of modification
and/ or alteration of tariff, the Commission must be approached.
of Mr. Misra that in paragraphs 43 and 44 of the judgment this Court had held
that sub-section (6) of Section 24 of the 1999 Act empowers the holders of the
licence to modify the tariff, is incorrect.
11 The tariff in
terms of Sub-section (6) of Section 24 has to be modified by the licensee
albeit in terms of a direction issued by the Commission, wheretobefore all
procedures laid down in that behalf in terms of the regulations are required to
be complied with. The statement made in paragraph 44 of the said decision
cannot be read in isolation.
cannot further be any doubt or dispute in view of the binding precedent of this
Court in Tata Power Co. Ltd. (supra), CESC Ltd. (supra) and Association of
Industrial Electricity Users (supra) that the Commission has the exclusive
jurisdiction to determine the tariff.
Court in LML Ltd. (supra), however, proceeded to hold in favour of the
consumers of electrical energy on the premise that the respondent No. 1 is
bound by the doctrine of promissory estoppel.
The matter as regards
fulfillment of the conditions of licence granted by the Commission in favour of
the licensee is a matter between the parties thereto. If the Corporation fails
to comply with any of the conditions laid down in the licence or violates the
tariff, the licence of the licensee may be revoked. A penal action may also be
taken. But the same would not mean that the licensee can be permitted to take
advantage of its own wrong. It can 12 approbate and reprobate, particularly
when it is the beneficiary thereof. [See Halsbury's Laws of England, Fourth
Edition, Vol. 16, pages 1012-1013, Nagubai Ammal v. B. Shama Rao (1956) SCR
451, C. Beepathuma v. Velasari Shankaranarayana Kadambolithaya (1964) 5 SCR 836
and Ambu Nair and Kelu Nair (1932-33) 60 Indian Appeals 266 at 271-272] It is
furthermore well known that even a right under a mandatory provision can be
waived. [See Babulal Badriprasad Varma v. Surat Municipal Corporation &
Ors. 2008 (8) SCALE 206] If it had made a representation pursuant whereto or in
furtherance whereof a consumer of electrical energy had altered its position,
the doctrine of promissory estoppel shall apply.
The doctrine of
promissory estoppel, it is now well-settled, applies also in the realm of a
statute. [See State of Punjab v. Nestle India Ltd. and Another (2004) 6 SCC 465
and Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector &
ETIO and Others (2007) 5 SCC 447]
is not the contention of Mr. Misra that in the matter of implementation of
tariff the doctrine of promissory estoppel will have no application. If it
applies, correctness of LML Ltd. (supra) cannot be questioned.
13 Furthermore, the
Allahabad High Court in the first round of litigation was not required to go
into the question as to whether the LML Ltd. could enforce a circular as against
the Kanpur Electricity Supply Company although it did not make any
representation. The question of the tariff prevailing over such circular did
not arise therein as no such circular had been issued by the Kanpur Electricity
Supply Company at all.
circular impugned before the High Court was undoubtedly issued pursuant to the
judgment of the Division Bench of the Allahabad High Court but then whether
having regard to the doctrine of promissory estoppel the same could have been
withdrawn or not, further determination in that behalf was not warranted.
therefore, are of the opinion that LML Ltd. (supra) does not require
reconsideration. This appeal shall also be governed by the aforementioned
judgment. The appeal is allowed with the direction to refund the entire amount
within four weeks. Respondent shall bear the costs of the appellant throughout.
Counsel's fee assessed at Rs. 1,00,000/-.
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