IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 16TH JUNE 2009 / 26TH JYAISHTA 1931 OP.No. 13826 of 2001(U) ----------------------- PETITIONER: --------------- SREE SAKTHI PAPER MILLS LIMITED, “SREE KAILAS”, 39/2724-A, PALIYAM ROAD, KOCHI-682 016 REP. BY ITS MANAGING DIRECTOR, S. RAJKUMAR. BY ADV. MR.M.C.MADHAVAN RESPONDENTS: --------------- 1. THE KERALA STATE ELECTRICITY BOARD, REP. BY ITS SECRETARY, VYDYUTHI BHAVAN, THIRUVANANTHAPURAM. 2. THE SPECIAL OFFICER (REVENUE), KERALA STATE ELECTRICITY BOARD, VYDYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM. 3. THE PRINCIPAL SECRETARY TO GOVERNMENT, POWER (A) DEPARTMENT, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM. ADV. MR.P.SANTHALINGAM, SC, KSEB MR.R.K.VENU NAYAR, SC, KSEB FOR R1 & R2 MR.C.K.KARUNAKARAN, SC FOR KSEB FOR R1 & R2 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 16/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. ------------------------------ O.P.No.13826 of 2001 ------------------------------ Dated this the 16th day of June, 2009 J U D G M E N T ---------------------- 1. The petitioner is a public limited company engaged in manufacture of paper and paper products. With respect to an industrial unit owned by the petitioner, which started commercial production on 19.4.1993, the petitioner was eligible for exemption from payment of Electricity charges at the enhanced power tariff which came into effect on 1.1.1992. This incentive was declared by the State Government through G.O. (MS)4/92/PD dated 6.2.1992, and industrial units started commercial production during the period between 1.1.1992 and 31.12.1996 were declared as eligible for the said concession, for a period of 5 years. Later the State Government issued Ext.P1 order providing an extension of the period for availing the concession, for those industries which could not fully utilize the exemption due to power cut introduced during the years 1995 to 1997. The Government took decision to grant extension of the period for industries which suffered 50% or more power cut during the relevant period. In Ext.P1, which was issued on 26.10.1999, it was promised that Industries Department of the O.P.No.13826/01 2 State Government will reimburse the concessional amount in this regard to the Kerala State Electricity Board, during that financial year itself. The petitioner made various representations as evidenced by Exts.P2 to P6 to the authorities of the 1st respondent and to the State Government, requesting adjustment of the excess amounts paid during the period for which they are eligible for extended exemption for payment at Pre-92 tariff, by virtue of Ext.P1 order. Aggrieved by non-consideration of repeated representations submitted in this regard and challenging the action initiated for disconnection pursuant to Ext.P7 alleging non payment of Electricity charges, the petitioner had approached this Court. In Ext.P8 judgment, this Court directed the authorities of the K.S.E.Board and State Government to consider the representations of the petitioner for allowing extension of eligibility period and for consequential adjustment of excess amount paid, within a period of one month from the date of receipt of a copy of the judgment, after giving an opportunity of hearing to the petitioner. Payment of amounts demanded under Ext.P7 was ordered to be stayed till disposal of the representations. 2. Eventhough the State Government had declared the said incentive as early as on 26.10.1999, the Board took decision O.P.No.13826/01 3 to implement the concession only on 6.9.2000, through Ext.P9 order, only after disbursal of an amount of about Rs.7.5 Crores to the Board, by the State Government. Ext.P9 prescribed the modalities for working out the period of extension as well as the manner in which adjustment of the excess amounts has to be effected. Pursuant to Ext.P9 order, the 1st respondent issued Ext.P10 letter directing the petitioner to approach the 2nd respondent for getting refund and adjustments of the amounts due, against future Electricity Bills. Ultimately by Ext.P11 letter, dated 10.11.2000, the 2nd respondent calculated the amount of arrears due from the petitioner and given credit to the amounts due for refund, on the basis of his eligibility for extension of the period of exemption. On a perusal of Ext.P11 it is evident that for the period from 3/2000 to 9/2000 total arrears due from the petitioner is calculated at Rs.84,95,811/-. The amount refundable is assessed as Rs.29,18,539/-. After allowing set off, a balance amount of Rs.55,77,273/- was ordered to be paid, along with penal interest (surcharge) amounting to Rs.4,77,032/-. The total amount thus payable was allowed to be paid in 6 monthly installments. 3. It is submitted that the petitioner had already remitted the amount as required under Ext.P11, in installments. O.P.No.13826/01 4 But the grievance of the petitioner is regarding collection of huge amount of penal interest, which became due only because of the inordinate delay on the part of the respondents in not implementing Ext.P1 order, which was issued as early as on 26.10.1999, inspite of repeated requests made and inspite of specific directions issued by this Court in Ext.P8 Judgment. Hence the contention of the petitioner is that the petitioner need be exempted from the liability of penal interest, by re- working computation providing adjustment of the benefit available under Ext.P1 at the appropriate point of time, when he raised demand for such adjustments. In other words, the contention of the petitioner is that, if the amounts now found eligible as concession would have been adjusted against the amount fallen due immediately after Ext.P1 order, the interest accrued as calculated in Ext.P11 would have been much less or rather nil. 4. In this context, petitioner submitted Ext.P12 representation before the Member (Finance) of the 1st respondent Board. It was pointed out that charging of interest for the period from March 2000 to September 2000, when there was default in payment of Electricity charges is not justifiable because there was a stay granted by this Court, and since the O.P.No.13826/01 5 petitioner was eligible for getting interest on the amount which was found due to be refunded/adjusted, for the period during which such adjustment was unnecessarily delayed. Instead of the 1st respondent Board considering Ext.P12, the 2nd respondent issued Ext.P13 reply, wherein the petitioner was informed that based on regulation 32(c) and (e) of the Conditions of Supply of Electrical Energy, interest is leviable on defaulted payment of current charges and since the petitioner had not remitted the amount during the respective due dates the payment of interest cannot be waived. Hence it is intimated that the installment facility sanctioned to the petitioner also will be subject to realisation of interest. 5. Sri.M.C. Madhavan, learned counsel appearing for the petitioner vehemently contended that there is deliberate laches and inordinate delay on the part of the respondents in not allowing the incentives declared by the Government during the appropriate time or within any reasonable time. According to him it is not justifiable for putting the petitioner to liability for payment of huge amount of interest, which accrued only due to the deliberate laches and delay on the part of the respondents. Sri.C.K.Karunakaran, learned Standing Counsel appearing for the 1st respondent Board on the contra contended that, merely O.P.No.13826/01 6 because the Government issued Ext.P1 order, the petitioner is not eligible for the incentive/concession. In Ext.P1 itself the Government made it clear that the incentive declared in this regard will be reimbursed to the 1st respondent Board. The Board had adopted the directions issued by the Government, only on 6.9.2000, through Ext.P9 order, when the Government confirmed reimbursement of the required funds. According to him there was no delay occurred after Ext.P9 order and the disputed interest does not pertains to any period after September 2000. It is further contended that expectation of getting some concession, can in no way be claimed as a valid reason for defaulting payment of charges for Electricity consumed by the petitioner. Hence the request for refund of the interest cannot be entertained. 6. On consideration of the entire facts and circumstances, it is revealed that inspite of declaration of the incentive by the Government as early as on October 1999, the petitioner was denied of availing the actual benefit of such concession till November 2000. In between, the petitioner had approached almost all the authorities in the Electricity Board and the State Government on various occasions. Inspite of specific direction issued in Ext.P8 judgment, neither the Board O.P.No.13826/01 7 nor the Government had ever issued any reply to the petitioner, even intimating about any procedural hurdle in allowing the concession. It can reasonably be presumed that, the petitioner defaulted payment of Electricity charges only on the basis of a reasonable expectation that he will be getting adjustment/set-off against the excess payments based on the concession declared under Ext.P1. Further, it is pertinent to note that, during the period when the earlier writ petition was pending before this Court, there was a stay granted against payment of the Electricity charges. There are reasonable grounds for considering the petitioner's case for exonerating him from the liability for payment of penal interest for the relevant period. But this Court could not arrive at any such finding, because the grievance in this regard cannot be catagorized as one based on any statutory right. But at the same time the liability for payment of rigorous interest, at a very high rate of 24%, will definitely put the petitioner to hardships. 7. Considering the above facts and circumstances, I feel that the question regarding waiver of penal interest for the disputed period to any reasonable extent, requires re- consideration at the higher level in the 1st respondent Board. 8. Hence the Secretary of the 1st respondent Board is O.P.No.13826/01 8 directed to place Ext.P12 for consideration of the Board and to take a final decision thereon untramelled by any findings in Ext.P13, after affording an opportunity of personal hearing to the petitioner. A decision in this regard may be taken as early as possible, at any rate within a period of three months from the date of receipt of a copy of this judgment. The petitioner will make available a copy of this judgment along with a copy of the writ petition to the Secretary of the 1st respondent Board. The writ petition is disposed of as above. C.K.ABDUL REHIM, JUDGE. okb