wp179-11 (corrected).doc 1 IN THE HIGH COURT OF BOMBAY AT GOA PANAJI, GOA APPELLATE SIDE WRIT PETITION NO.179 OF 2011 M/s.Karthik Alloys Ltd .. Petitioner versus State of Goa and Anr .. Respondents Mr.V.B.Nadkarni, Sr.Advocate with Mr.Y.V.Nadkarni with Ms.H.Chonkar for the petitioner. Mr.S.S.Kantak, Advocate General with Ms.Sapna Mordekar, Addl.Govt.Advocate for the respondents. CORAM : S.C.DHARMADHIKARI & F.M.REIS, JJ. RESERVED ON : 4th MAY 2011. PRONOUNCED ON : 8TH JULY, 2011. JUDGMENT (PER S.C.DHARMADHIKARI, J): . Rule. Respondents waive service. By consent Rule made returnable forthwith. 2 The petitioner by this petition under Article 226 of the wp179-11 (corrected).doc 2 Constitution of India has impugned the demand notice dated 21st February 2011, a copy of which is at Annexure ‘A’ by which the Executive Engineer, Electricity Division IV, Margao, Goa, is seeking to recover amount of Rs.1,08,66,027/- in the manner set out in the said demand notice. 3 The petitioner is a company incorporated under the Companies Act, 1956 and had set up its factory at Cuncolim Industrial Estate for manufacture of HC Ferro Maganese and Silico Manganese. It is stated that on 30th September 1991, a Notification was issued by the State Government in exercise of the powers conferred by section 23 read with section 51A of the Indian Electricity Act, 1910 providing for concessional tariffs for power supply to bonafide industrial activities by way of rebate of 25% in the tariffs chargeable. In furtherance of this Notification, the petitioner applied for supply of power to its factory on 26th November 1992. The power supply was made available on 17th November 1993. By a subsequent Notification dated 31st March 1995, the State was pleased to rescind the 1991 Notification. It is submitted that although this scheme of 25% rebate in power tariff wp179-11 (corrected).doc 3 for period of 25 years was introduced in 1991, the modalities of the rebate benefit could not be worked out until 12th December 1995. On this, certain guidelines were issued by Under Secretary (Power), Government of Goa. Reliance is placed on these guidelines and then contended that the two further Notifications, one of 15th May 1996 and 1st August 1996 were issued. On 31st March 1998, the Chief Electrical Engineer issued a circular, whereby release of 25% rebate was suspended with immediate effect. Some writ petitions were filed in this Court challenging the Circular dated 31st March 1998 and one of the writ petitions was filed by the petitioner herein. That was numbered as Writ Petition No.241 of 1998. There was another notification dated 24th July 1998, which suspended with immediate effect, the Notifications of 1996 and, therefore, the writ petition was amended. All petitions including the one filed by the present petitioner came to be heard and disposed off by the Division Bench on 21st January 1999 (G.R.Ispat Ltd Vs. Chief Electrical Engineer & Ors) and the common judgment directs that the benefit of the Notification dated 30th September 1991 shall be made applicable to the present petitioner from the date of power supply. The rescinding wp179-11 (corrected).doc 4 Notification of 1995 will not affect the petitioner’s entitlement and it would be receiving the rebate benefit as accrued prior to 1st April 1995. 4 The challenge to the Division Bench judgment and further events which are identical to one noted in judgments in the companion matters, are then referred to and it is urged that the challenge to the Act VIII of 2002 was negatived by the Supreme Court on 3rd May 2010 (Civil Appeal No.4220/2002- M/s.M.R.F Ltd Vs. Manohar Parrikar & Ors and other connected appeals). In pursuance of this judgment of the Hon’ble Supreme Court, the State Government issued a Notification No.120/4/CEE/TECH dated 27th January 2011, notifying the manner and time limit for the refund. Annexure ‘F’ is a true copy of this Notification. It is in pursuance of this Notification that the impugned demand notice has been issued. That is challenged in the instant petition on several grounds. 5 Upon the petition being served on the State an affidavit in reply is filed by the Chief Electrical Engineer, Margao, Goa. wp179-11 (corrected).doc 5 While referring to the notifications and the challenge to the Government actions, so also the orders of this Court and the Hon’ble Supreme Court, it is contended that the contention of the petitioner that there is no benefit of rebate under Notifications dated 15th May 1996 and 1st August 1996, is not correct. It is submitted that in view of these two Notifications, the petitioner was claiming rebate for five years from the date of power supply i.e 17th September 1993. Pointing out the difference in the wording of the two notifications, it is submitted that the petitioner is entitled to rebate of 25% as per 1988 tariff from the date of power supply i.e 17th November 1993 till 31st March 1995. This amount works out to Rs.43,45,050/-. The petitioner is given a total rebate of Rs.1,53,09,077/-. The differential sum of Rs.1,08,66,027/- is sought to be recovered in terms of the Act VIII of 2002 and the impugned demand notice. Therefore, the challenge to the demand notice should fail. 6 A rejoinder affidavit is filed by the petitioner in which it seeks to deal with the affidavit in reply and submits that the judgment of this Court in Writ Petition No.241 of 1998 and wp179-11 (corrected).doc 6 companion matters delivered on 21st January 1999 would apply with full force. The petitioner is not party to the subsequent writ petitions being Writ Petition Nos.277/1999 or 264/1999 which are disposed off by this Court on 24th April 2001. In these circumstances, the State cannot place reliance on any of the subsequent judgments to deny the petitioner’s benefits. In paras 16, 17, 18 and 21 in the rejoinder affidavit, this is what is stated: “16. In this petition, at paragraph 6 thereof, it has been specifically set out that the Government on 12/12/1995 had issued guidelines including the manner in which the grant of rebate was to be adjusted. 17. The relevant clauses of the said guidelines viz.Clauses (iv), (v) and (vi) were also set out. Clause (v) thereof stipulated that “a 25% rebate may be worked out with reference to the energy charges as per which the billing may be done” and Clause (vi) stipulated that “the amount of 25% rebate worked out as above may be adjusted against the subsequent/current bills and may not be refunded in cash.” 18. At ground (IV) of the petition the entire set of reliefs claimed in Writ Petition No.316/1998 filed by Shri Manohar Parrikar have been set out, prayer (b) whereof was “for a declaration that the guidelines as framed by letter dated 12/12/1995 is illegal to the extent it goes beyond the scope of 1991 Notification”; and prayer (c) thereof was “for an order or direction to quash and set aside the guidelines dated 12/12/1995 to the extent they go beyond the 1991 Notification”. wp179-11 (corrected).doc 7 21. It is pertinent to note that the afore-referred guidelines dated 12/12/1995 were framed by the Government as tacitly stated therein at Clause (iv) thereof viz “since the scheme has been withdrawn with effect from 01.04.1995 the industrial units who have been supplied electricity upto and inclusive of 31/03/1995 shall become eligible for the rebate for a period of 5 years”.” 7 Therefore, the petitioner cannot be called upon to pay back or refund the rebate. The petitioner is entitled to 25% rebate for the period of 17th November 1993 to 27th July 1998 as held in the case of G.R.Ispat Ltd Vs. Chief Electrical Engineer & Ors, (W.P.No.199/98 and connected matters, dated 21st January 1999), and particularly because of the guidelines issued on 12th December 1995. The billing has been done accordingly and the energy charges have been paid. There is, therefore, no question of any refund and if beyond entitlement of the petitioner any excess amount is paid, then, the petitioner undertake to refund the same within such period as the Court may direct. These are the statements made in the affidavit in rejoinder by one B.Srinivasa, Director of the petitioner-Company. 8 It is on this material, that we have heard the learned wp179-11 (corrected).doc 8 counsel appearing for the parties. 9 Mr.V.B.Nadkarni, learned senior counsel appearing on behalf of the petitioner submitted that the demand notice is contrary to law. He submits that the petitioner cannot be called upon to refund any monies as there is no question of any excess rebate or wrong benefit being given to the petitioner. He submits that if the petitioner was entitled to benefit of 25% rebate in power tariff under the Notification dated 30th September 1991 from the date of power supply to them, then, that benefit in terms of the notification is for five years. That benefit cannot be taken away midstream and all of a sudden by the State. The State is bound by the Division Bench judgment of this Court delivered in the petitioner’s case to which it is a party. The State cannot rely on any other judgments or orders and that too in proceedings to which the petitioner is not a party. By doing so, the respondents are violating the mandate of this Court’s judgments and orders, so also directions. There is no question of the petitioner being denied the benefit and, therefore, this Court should quash and set aside the demand notice as prayed. wp179-11 (corrected).doc 9 10 Mr.Nadkarni then submitted that the petitioner is not responsible if the benefit of the 1991 Notification was not extended immediately. The benefit has been extended much beyond the notification of 1991 and, therefore, the State itself issued the guidelines on 12th December 1995. In the petitioner’s case, the power supply was commenced in terms of the request of the petitioner, from 17th November 1993. Once that is the position, then, the benefit of five years rebate at the rate of 25% in the power tariff should be granted, or else, this Court will be permitting the respondents to flout and violate the judgment and order of this Court which has gained finality. Mr.Nadkarni has, therefore, submitted that the impugned demand notice is violative of the mandate of Article 14 and Article 19(1)(g) of the Constitution of India. 11 Mr.Nadkarni then submits that the petitioner has not gained any benefit under the 1996 notification as falsely contended. He submits that even the subsequent judgments in the case of Manohar Parrikar Vs. State of Goa & Ors(W.P.No. wp179-11 (corrected).doc 10 316/1998 decided on 24th April 2001) and Alcon Cement Company Vs. State of Goa (W.P.No.277 of 1999 and other connected matters decided on 24th April 2001) will not apply to the petitioner as it was never being made party to the said proceedings. Once, the judgments have been understood as inter parties, then, all the more, no reliance can be placed on the same. 12 Mr.Nadkarni submits that the next issue that is raised for determination is that the 25% rebate is not restricted to the tariffs chargeable under Government Notification dated 27th June 1988. The subsequent changes in the tariff rates also became applicable during the five years benefit period and, therefore, the rebate needed to be computed and granted accordingly. The petitioner must be granted full rebate and that would include benefit in terms of payment of energy charges so also demand charges. If the 25% rebate is restricted to the energy charges, then, that would go contrary to the notification. For all these reasons, he submits that the petition be allowed. wp179-11 (corrected).doc 11 13 On the other hand, Mr.Kantak, learned Advocate General supported the demand notice and invited our attention to the affidavits filed in the reply. He relied upon the judgments of this Court in the writ petitions filed in 1998 viz the judgment delivered in Manohar Parrikar’s case (supra) and that in Alcon’s case (supra). He also relies upon the Act VIII of 2002 and submits that the petition is devoid of any merits and must be dismissed. 14 Mr.Nadkarni, learned senior counsel appearing for the petitioner has relied on the following decisions in support of the above submissions: “1. 1990 (Supp) Supreme Court Cases 440 (Narendra Kumar Maheshwari Vs. Union of India & Ors); 2. (2006) 8 Supreme Court Cases 702 (MRF Ltd, Kottayam Vs. Asstt. Commissioner (Assessment) Sales Tax & Ors); 3. (2008) 2 Supreme Court Cases 777(U.P.Power Corporation Ltd & Anr Vs. Sant Steels & Alloys (P) Ltd & Ors); 4. W.P.No.277/99 (Alcon Cement Company Ltd & Anr Vs. State of Goa & Anr) and W.P.No.364/99 (M/s.M.R.F Ltd & Anr Vs. State of Goa & Anr) decided on 24th April 2001; wp179-11 (corrected).doc 12 5. AIR 1928 Calcutta 777 (Tarini Charan Bhattacharjee & Ors Vs. Kedar Nath Haldar); 6. AIR 1928 Calcutta 782 (Sarat Chandra Pal Vs. Barlow & Co); 7. AIR 1966 Supreme Court 1061 (State of West Bengal Vs. Hemant Kumar Bhattacharjee & Ors); 8. AIR 1961 Supreme Court 1457 (Daryao & Anr Vs. State of U.P & Ors); 9. (2009) 3 Supreme Court Cases 273 (Kopargaon S.S.K. Ltd Vs. State of Maharashtra & Ors); 10. (2009) 9 Supreme Court Cases 757 (Gangai Vinayagar Temple & Ors Vs. Meenakshi Ammal & Ors); 11. AIR 1976 Supreme Court 1100 (M/s.Northern India Iron & Steel Co Vs. State of Haryana); 12. (2009) 8 Supreme Court Cases 209 (Assistant Commissioner (CT) LTU & Anr Vs. Amara Raja Batteries Ltd); 13. 1993 Supp (1) Supreme Court Cases 612 (Commissioner of Income Tax, Bangalore Vs. Vasudeo V. Dempo); 14. (2002) 4 Supreme Court Cases 380 (Khet Singh Vs. Union of India)” 15 After carefully perusing the petition and the affidavits filed on record, so also all annexures, we are of the opinion that the petitioner’s case in this petition is not different from the other wp179-11 (corrected).doc 13 petitioners whose petitions we have decided by the companion judgment. Same contentions have been raised by Mr.Nadkarni, learned senior counsel appearing for the petitioner and we have found no substance therein. The reasons that have persuaded us not to accept these contentions and submissions, are elaborately recorded in the judgments in the companion writ petitions. For the same reasons, we reject the contentions of the petitioner in this petition. 16 The argument of Mr.Nadkarni is that principles of finality of judgment and res judicata would not enable the respondents to place reliance on a judgment of this Court in Manohar Parrikar’s case (supra). It is also not well founded. His reliance on the judgments of the Hon’ble Supreme Court in that regard is not apposite in this case. Firstly, the petitioner has in the petition, as a part of the factual narration, pointed out that the Writ Petition No.241 of 1998 was disposed off, so also, the Special Leave Petition therefrom was disposed off. In para 15 they make a reference to Manohar Parrikar’s case. They also make a reference to Goa (Prohibition of Further Payments and Recovery wp179-11 (corrected).doc 14 of Rebate Benefits) Act, 2002 and the issue of its constitutional validity. The petitioner was party to the writ petitions filed in the Hon’ble Supreme Court challenging the said Act. These petitions have also been dismissed by the Supreme Court on 3rd May 2010. We have made reference to the observations in this very judgment of the Hon’ble Supreme Court to reject the contentions of the other petitioners. There is no question of principle of finality of judgment and res judicata applying because this Court in the judgment delivered on 21st January 1999 in the petitioner’s writ petitions and other cases relied on the fact that the notification dated 30th September 1991 survived after it was rescinded in 1995. For its survival, this Court relied upon the phraseology and wording of the subsequent Notifications dated 15th May 1996 and 1st August 1996. It also made reference to the guidelines. However, in Manohar Parrikar’s case (supra), this Court held that the 1996 Notifications were void ab initio and were of no legal effect. Once they were held to be void ab initio, then, there is no question of they being relied upon to hold that the 1991 notification survives. Admittedly, the 1991 Notification has been rescinded by Notification dated 31st March 1995. That rescission wp179-11 (corrected).doc 15 has not been questioned. Once the Notification of 1991 stands rescinded and all findings of its survival being based on 1996 notification, then, irrespective of the fact whether the petitioner is party to the decision in Manohar Parrikar’s case (supra) or not, the law laid down therein binds them as well as us. The Hon’ble Supreme Court has set out the circumstances which led to the conclusion that these notifications are void ab initio. Therefore, the judgments on the principle of finality of decisions and res judicata relied upon by Mr.Nadkarni are not applicable in these facts. Similarly, his reliance on the decisions on the point of res judicata and particularly decision of Full Bench of Calcutta High Court reported in AIR 1928 Calcutta 777 (Tarini Charan Bhattacharjee & Ors Vs. Kedar Nath Haldar) is misplaced. The principles are too well settled. What is important is their application. Therefore, even these decisions are of no assistance to the petitioner. We need not refer to each of the decision cited, once we are of the aforementioned opinion. 17 Then, the reliance placed on the decisions on the status of guidelines is also misplaced. The guidelines in this case are of wp179-11 (corrected).doc 16 no assistance because all that they indicate is how the Notifications are to be implemented. Once both the 1991 and 1996 Notifications are no longer in the field, then, reliance on the guidelines alone cannot be of any assistance. Therefore, the decisions in that behalf also need not be noted and referred to in any further details. 18 In the light of the above conclusion, we are of the view that there is no merit in this writ petition and it deserves to be dismissed. Rule is accordingly discharged but without any orders as to costs. (S.C.DHARMADHIKARI, J) (F.M.REIS, J)