IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTIETH DAY OF JUNE TWO THOUSAND AND EIGHT PRESENT THE HON'BLE DR JUSTICE G.YETHIRAJULU WRIT PETITION NO : 18122 of 2002 Between: M/s.Sree Rayalaseema Alkalies and Allied Chemicals Limited Regd.Office at Gondiporla Kurnool Kurnool Dist rep.by its Vice President R.Madan Mohan Rao. ..... PETITIONER AND 1 Transmission Corporation of A.P.Limited (A.P.Transco) rep.by its Chief Managing Director, Vidyut Soudha Khairtabad Hyderabad 2 The Chairman and Manging Director Central Power Distribution Company of A.P.Limited, Singareni Bhavan Lakdikapool, Hyderabad 3 The Superinteding Engineer Operation, Central Power Distribution Company of A.P.Ltd Kurnool Kurnool dist. 4 The Senior Accounts Officer Operation, Central Power Distribution Company of AP Ltd Kurnool Kurnool Dist. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to To issue a writ or order or direction more particularly one in the nature of Writ of Mandamus declaring the Letter No.CE(Comml)DE(C)/D.No.2045, dated 11-09-2002 of the 2nd respondent as highly illegal, arbitrary and unjust and consequently set aside the same and further declare that the petitioner is entitled for incentive of discount in terms of Memo.No.CE(Comml)AAO/Tariffs 2001/2/329/2001 of the 1st respondent dated 26-4-2001 pass such other order or orders as this Hon'ble Corut may deem fit and proper in the circumstances of the case. Counsel for the Petitioner:MR.D.V.NAGARJUNA BABU Counsel for the Respondent No.: MR.O.MANOHER REDDY The Court made the following : THE HON’BLE Dr.JUSTICE G.YETHIRAJULU W.P. No.18122 of 2002 ORDER: This writ petition is filed by the petitioner seeking to declare that the letter No.CE (Comml.)DE(C)/D.No.2045, dated 11-09-2002 of the second respondent as illegal, arbitrary and unjust and consequently set aside the same and further declare that the petitioner is entitled for incentives in terms of Memo No.CE (Comml.)AAO/Tariffs 2001-2/329/2001 of the first respondent dated 26-04-2001 and pass such other reliefs as the Court deems fit. 2. The petitioner in the affidavit filed in support of writ petition pleaded as follows: The petitioner is a public limited company having its registered office at Kurnool. The petitioner established an industrial unit for manufacturing of caustic soda and other allied by-products. The industry is a power intensive unit and power is one of the chief raw material of the factory. The respondent, the then Electricity Board, was changed as A.P. Transco and A.P. Zenco. The terms and conditions of the Electricity Board and the consumers are binding on the A.P. Transco and the Consumers and petitioner’s service connection falls within the area of the operation of CPDC (Central Power Distribution Company) of A.P. Limited. The Government of A.P. allowed many private companies to set up power generating stations and to sell the power to the consumers of the A.P. Transco. As the private generating companies are offering various concessions in the matter of power supply, most of the High Tension consumers of the A.P. Transco are leaning towards the private supplies. To withstand the competition of the private generating companies, A.P. Transco in its tariff order dated 01-04-2002 for the year 2002-2003 offered incentive of rebate on the consumption of extra energy by High Tension consumers vis-à-vis consumption of power for the corresponding months during the previous year. The first respondent through memo dated 26-04-2001 provided working instructions to implement the incentive scheme. The only condition to become eligible for the rebate is that there should not be any outstanding dues from the consumer. By taking into account the said offer made by the A.P. Transco, the petitioner company started consuming more power with a fond hope that it would get the incentive of rebate in terms of the offer made by the A.P. Transco. Though the petitioner is entitled for the incentive, the respondents have not allowed the same. After lot of persuasion, the second respondent through its letter dated 11-09-2002 informed the petitioner that the respondents are agreeable to allow the incentive rebate to the petitioner as per the tariff order 2002-2003 from 01- 04-2002 onwards subject to the conditions mentioned in the communication dated 11-09-2002. 3. The petitioner further contended that the first condition stipulated by the second respondent is that the representation filed by the petitioner for waiver of R & C penalties to an extent of Rs.1,84,23,346/- relating to the year 1987 was paid by the petitioner under protest subject to its further persuasion. But, surprisingly the second respondent is requiring the petitioner to withdraw the said representation made for waiver of the penalties, which action is illegal, arbitrary and irrational. The second condition stipulated by the second respondent is that the petitioner to agree for the payment of additional charges which would be levied in future and that the incentive offered to the petitioner shall be adjusted against the said future levy. The petitioner contends that this amounts to dictating the terms to the petitioner to agree for the future levy of additional charge and that it should undertake for the adjustment of the said future levy towards the incentive for which the petitioner is entitled. This condition is also arbitrary and irrational for the reason that so far the respondents have not levied any additional charges and if they do so, still the petitioner can pursue its remedies available under law. Therefore, the respondent cannot foreclose the legal remedies available to the petitioner. The third condition imposed by the second respondent is that the petitioner should avail the additional load from the Central Power Distribution Company Limited. This condition is also equally irrational and arbitrary as the original scheme does not stipulate such a condition at all. The last condition stipulated by the second respondent is that the petitioner should withdraw the case which is pending before the High Court of A.P. in W.P. No.30391 of 1998, which is filed assailing the arbitrary levy of penalty to the tune of Rs.29,50,261.30 ps. The High Court disposed of the Writ Petition on 02-09-2002 with a direction to the first respondent to look into the matter and further directed the petitioner to deposit a sum of Rs.5,00,000/- within eight weeks from the date of receipt of a copy of the order. Without having any regard to all these aspects, the second respondent stipulated a condition to withdraw the above mentioned writ petition. The imposition of the above conditions by the second respondent is irrational and does not stand to judicial scrutiny. The whole action is tainted with arbitrariness and offends the Article 14 of the Constitution of India. If the incentives offered by the A.P. Transco is not extended to the petitioner, it would be put to serious loss and irreparable damage. Therefore, the petitioner requested to allow the writ petition by granting the reliefs as prayed for. 4. The third respondent filed a counter with the following contentions in brief: It is true that A.P. Transco issued instructions for allowing incentives to the H.T. Industrial consumers who exceeds the contracted maximum demand for encouraging to avail the A.P. Transco power. The incentive scheme was extended for the H.T. Industrial consumers for the financial year 2002-2003 through the memo dated 30-03-2002. The incentives shall be allowed to the H.T. Consumers only if they are not having any outstanding dues to A.P. Transco. The petitioner approached the respondent for allowing the incentives. The respondents have considered the petitioner’s representation for allowing incentives after payment of balance amount due against R& C penalties covered under Writ Appeals and as per the tariff order of the year 2002-2003. As the petitioner liable to pay the additional charges for the belated payments as per the tariff conditions, the CPDCL proposed to adjust the incentive amount permissible to the petitioner against additional charges payable by the consumer and accordingly stipulated the condition vide letter dated 11-09-2002. The stipulated conditions mentioned in the letter are in accordance with the terms and conditions of the supply. The petitioner has to comply with the conditions. The petitioner is under an obligation to pay the additional charges for the belated payments of the dues as per the tariff conditions and the agreement entered into with APCPDCL. The respondents are entitled to recover the amount from the incentives available to the consumer as per the terms and conditions of CPDCL. The action taken by the respondent is legal and valid and do not call for any interference from this Court. Hence, the Writ Petition is liable to be dismissed. 5. The petitioner’s counsel Sri D.V.Nagarjuna Babu submitted that the stipulation of conditions are unworkable and taking away the legal right of the petitioner provided under the law, therefore except condition that there should not be any outstanding dues to get the incentives, other conditions are not warranted, therefore, they are liable to be set aside with a direction to the respondents to give the incentive rebates to the petitioner in terms of the memo issued by the A.P. Transco. The second respondent through letter dated 11-09-2002 informed the petitioner that the respondents are aggreable to allow the incentive to the petitioner as per the tariff order 2002-2003 from 01-04-2002 onwards subject to the following conditions: (i) The petitioner shall not press for any relief in the R & C penalties and the appeal preferred by the petitioner to A.P. TRANSCO has to be withdrawn. (ii) The petitioner has to pay additional charges for the delayed payment charges of R & C penalties as per the terms and conditions of supply. The incentive allowable as per Tariff Order 2002-2003 shall be adjusted against the additional charges. (iii) The petitioner has to avail additional load from CPDCL. (iv) The petitioner has to withdraw Court case against the R&C penalties amounting to Rs.30,55,260/-, which is still pending in the Court. 6. Condition numbers (i) and (iv) are nothing but coercing the petitioner to withdraw the cases by curtailing the right of the petitioner to challenge the order on the grounds of illegality and arbitrariness. So far as R & C penalties are concerned, they are bound to pay outstanding arrears, since it is a condition to get the incentive rebate to any consumer. From 01-04-2002 the petitioner claims that it is entitled to incentive discount to a tune of Rs.41,18,935/-, which has to be given by the respondents by adjusting in the monthly bills payable by the petitioner which was already communicated to the respondents on 09-09-2002 requesting to adjust the said amount against the bills for the year 2002 for an amount of Rs.65,47,458/-. After adjusting the said amounts, the petitioner has to still get a sum of Rs.5,15,640/- by way of refund, but in view of the communication of the impugned proceedings, the respondents may not allow the petitioner to claim the incentive, unless the petitioner fulfils the four conditions stipulated in the impugned agreements. There is no dispute that if there is any amount due by the petitioner to the respondents, the petitioner is bound to pay the amounts to get eligibility for the incentive rebate scheme. The petitioner claims that the respondent has to pay a sum of Rs.5,15,640/-, but the correct amount has to be calculated by the respondent as to what is the amount that is payable to the petitioner after adjusting the amounts due from him. As the condition Nos.1 and 4 are onerous, which take away the right to question the illegality and arbitrariness of the conditions, they are liable to be set aside as violative of Article 14 of the constitution. 7. The learned counsel for the petitioner submitted that during the pendency of the writ petition, the respondents refunded the amount due to the petitioner, therefore, they are liable to pay interest on the incentive amount from the date of finalization of the amount due to the petitioner till the date of payment. He relied on a Judgment of the Supreme Court in SECRETARY, IRRIGATION DEPARTMENT, GOVT. OF INDIA v. G.C.ROY [1] and represented that on the principle of equity, interest has to be granted, as the amount due to the petitioner towards incentive rebate. 8. The learned counsel for the petitioner also relied on a Judgment of this Court in JINDAL STRIPS LTD., VISAKHAPATNAM v. SE, OPERATION CIRCULE, APSEB [2], wherein a learned single Judge held that when the Board is collecting interest or additional charges for delayed payments, same analogy applies and the Board has also to pay interest insofar as excess amounts paid by the petitioner. When the Board had fixed up its own rates of interest, it cannot say that the petitioner is entitled to customary interest, but not on par with the Board. In the above decision, the learned Judge, by applying a Judgment of a Division Bench of this Court in SURYAMUKHI ENTERPRISES, HYDERABAD v. A.P.S.E.B., HYDERABAD [3], held that the petitioner is entitled to interest @ 18% per annum on the amount due to him towards excess payment made by him. 9. By applying the analogy of the above decision, the respondents are directed to pay interest @ 18% per annum on the amount refundable to the petitioner towards incentive rebate after deducting the amounts due to them from the date of finalization of the amount till the date of payment. 10. The Writ Petition is, accordingly, allowed. No order as to costs. _____________________ (Dr.G.YETHIRAJULU, J. ) Date: 20-06-2008. SKMR [1] AIR 1992 SC 732 [2] 2008 (3) ALD 641 [3] 1997 (3) ALD 192 (DB)