IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC MONDAY, THE 15TH JUNE 2009 / 25TH JYAISHTA 1931 WP(C).No. 16728 of 2007(N) -------------------------- PETITIONER(S): --------------- 1. NATIONAL TEXTILE CORPORATION, (APLL &M) LTD., P.B.NO.2173, 2912, KH ROAD, SANTHI NAGAR, BANGALORE-560 027, REP. BY ITS CHIEF GENERAL MANAGER. 2. PARVATHI MILLS, P.B.NO.1, KOLLAM, REP. BY ITS GENERAL MANAGER. BY ADV. SRI.U.K.RAMAKRISHNAN, SENIOR ADVOCATE SRI.E.K.MADHAVAN SRI.P.V.LOHITHAKSHAN SMT.P.VIJAYAMMA SMT.UMA GOPINATH RESPONDENT(S): --------------- 1. KERALA STATE ELECTRICITY BOARD, VYDYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM-4, REPRESENTED BY ITS SECRETARY. 2. THE SPECIAL OFFICER (REVENUE), KERALA STATE ELECTRICITY BOARD, VYDYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM-4. 3. STATE OF KERALA, REPRESENTED BY ITS PRINCIPAL SECRETARY (POWER) THIRUVANANTHAPURAM. MR.I.V.PRAMOD, GOVERNMENT PLEADER FOR R3 SRI.C.K.KARUNAKARAN, SC FOR KSEB FOR R1 & R2 SRI.P.P.THAJUDEEN, SC, K.S.E.B FOR R1 & 2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15/06/2009, ALONG WITH WPC NOS. 16729 & 17041 OF 2007, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC NO.16728/2007 APPENDIX PETITIONER'S EXHIBITS P1 : COPY OF THE LETTER NO.HTB 19/921 DATED 07/05/2005 OF THE R2. P2 : COPY OF THE LETTER DATED 25/04/2005 OF THE 1ST PETITIONER ADDRESSED TO THE CHAIRMAN OF THE R1. P3 : COPY OF THE LETTER DATED 30/05/2005 OF THE 1ST PETITIONER ADDRESSED TO THE R3. P4 : COPY OF COMMUNICATION 5089/A1/05/PD DATED 10/10/2005 OF THE R3. P5 : COPY OF CIRCULAR DATED 13/05/2005 OF R1. P6 : COPY OF LETTER NO.NTC/M(IA)/ELECDUES/05 DATED 20/06/2005. P7 : COPY OF THE LETTER DATED 22/11/2005 OF R1. P8 : COPY OF LETTER DATED 09/12/2005 OF 1ST PETITIONER. P9 : COPY OF LETTER DATED 03/01/2006 OF THE CONVENOR, OTS COMMITTEE. P10 : COPY OF LETTER DATED 19/01/2006 OF 1ST PETITIONER. P11 : COPY OF LETTER NTC/FIN/KSEB DATED 20/02/2006 OF 1ST PETITIONER. P12 : COPY OF LETTER DATED 26/12/2006 OF PETITIONERS. P13 : COPY OF ORDER NO.229/2007 DATED 27/01/2007 OF R1. P14 : COPY OF THE REPRESENTATION DATED 26/02/2007 OF THE DEPUTY GENERAL MANAGER (FINANCE). P15: COPY OF THE ORDER DATED 21/05/2007 ISSUED BY R2 TO THE 2ND PETITIONER. P16 : COPY OF LETTER DATED 18/08/2007 OF KSEB. P17 : COPY OF STATEMENT OF THE KSEB. P18 : COPY OF STATEMENT OF THE 2ND PETITIONER. P19 : COPY OF THE COMMUNICATION DATED 28/05/2009. ANNEXURE-A : COPY OF STATEMENT OF KSEB ANNEXURE-A1 : COPY OF GOVERNMENT ORDER DATED 18/09/2003. ANNEXURE-B : COPY OF STATEMENT. //TRUE COPY// PA TO JUDGE. jg ANTONY DOMINIC, J. ------------------------- W.P.(C.) Nos.16728, 16729 & 17041 of 2007 --------------------------------- Dated, this the 15th day of June, 2009 J U D G M E N T In these writ petitions challenge is against the demands made by the Kerala State Electricity Board on three mills owned by the National Textile Corporation Ltd., a Government of India undertaking. 2. The 1st petitioner company, on account of losses suffered, became a sick industrial undertaking and made a reference to the BIFR constituted under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. The reference was registered, the company was declared as a sick industrial undertaking, and after enquiry, a Scheme for rehabilitation was sanctioned by the BIFR on 21/03/2002. 3. In these writ petitions, the dispute is regarding the liability of the aforesaid mills owned by the petitioner company to pay interest on the belated payment of energy charges and the petitioner company disputes its liability to pay interest mainly WP(C) Nos.16728, 16729 & 17041/2007 -2- relying on various provisions of the scheme sanctioned by the BIFR. 4. It is stated that in respect of mills of the petitioner in the northern region, an identical scheme was sanctioned by the BIFR. According to the petitioner, when interest was sought to be levied by the concerned Electricity Board, the mills covered by the Scheme disputed its liability relying on the provisions of the Scheme sanctioned by the BIFR. The matter was ultimately considered by the Apex Court and in the judgment in Bijli Cotton Mill v. U.P.Power Corporation Ltd. and Others (2009 (148) Company Cases 4 (SC)), and the Apex Court directed that the matter will be considered by the BIFR. It is also stated that the BIFR passed orders favourable to the Mills. According to the petitioner, since the scheme which covers them, is identically worded, and as the dispute is also identical, their claim for waiver of interest should also be directed to be considered by the BIFR as directed by the Apex Court in the judgment referred to above. 5. However, it is noticed that the belated payment of energy charges by the Mills involved in these writ petitions was in respect of the periods subsequent to 21/03/2002, when the scheme covering the Mills was sanctioned by the BIFR. If that be so, in view of the decision of the Apex Court in Dy.Commercial Tax Officer v. WP(C) Nos.16728, 16729 & 17041/2007 -3- Corromandal Pharceuticals (AIR 1997 SC 2027), and the Full Bench decision of this Court in Prima Industries Ltd. v. Dy.Commissioner (Appeals) and others (2006(4) ILR (Kerala) 831), such liability will not get the protection of the Scheme or the Sick Industrial Companies (Special Provisions) Act, 1985. The judgment relied on by the learned counsel for the petitioner shows that the claim before the Apex Court was not examined in the light of the law laid down in the Corromandal Pharceuticals's case referred to above. Therefore, in the light of the aforesaid judgments of the Apex Court and the Full Bench of this Court, the prayer of the petitioner for having their cases referred to the BIFR cannot be allowed, and is rejected. 6. However, the learned counsel for the petitioner raised a serious contention regarding the accuracy of the liability as quantified by the 2nd respondent, the Special Officer (Revenue) of the Board. Having regard to the factual dispute regarding the accuracy of the liability quantified, I feel it is only appropriate that the 2nd respondent should treat the quantification, which is already done, as provisional and examine the matter with notice to the petitioner company, so that the petitioner can also raise their objections in the matter. Accordingly, there will be a direction to WP(C) Nos.16728, 16729 & 17041/2007 -4- the 2nd respondent to issue notice to the petitioner, allow them to raise their objections against the quantification of the liability, and quantify their liability for interest, afresh. 7. As at present, demands have been raised by the Board calling upon the aforesaid three mills of the petitioner company to pay substantial amounts. In so far as the mill in WP(C) No.16728/2007 is concerned, the amount demanded by Ext.P19 is Rs.2,33,54,683/-. By Annexure I in I.A.No.6057/09 in WP(C) No.16729/2007 & by Annexure I in I.A.No.5880/09 in WP(C) No.17041/2007, the amount demanded is Rs. 95,27,665/- and Rs. 2,28,81,985/- respectively. It is directed that, on the petitioner remitting 1/3rd of the amounts so demanded within six weeks from today, further proceedings for recovery of the amounts covered by the demands referred to above shall be kept in abeyance, pending quantification of the liability of the petitioner company in the manner as directed above. These writ petitions are disposed of as above. (ANTONY DOMINIC, JUDGE) jg