IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 10.11.2009 C O R A M: THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA and THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.A.No.2506 of 1999 The Chairman, Tamil Nadu Electricity Board, 800, Anna Salai, Chennai – 600 002. .. Appellant vs. 1. The Madras Aluminium Company Ltd., Mettur Dam-638 402 rep. By its General Manager (Finance). 2. State of Tamil Nadu represented by its Secretary to Government, Industries Department, Chennai – 600 009. 3. State of Tamil Nadu represented by its Secretary to Government, Energy Department, Chennai – 600 009. .. Respondents Writ Appeal filed under Clause 15 of the Letters Patent Act against the order of this Court in W.P.No.19331 of 1997 dated 25.11.1999. For Appellant : Mr.P.S.Raman Advocate General for Mr.J.Ravindran For Respondent 1 : Mr.C.A.Sundaram Senior Counsel for Mr.V.Nataraj For Respondents 2 & 3: Mr.G.Desinghu Special Government Pleader https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T F.M.IBRAHIM KALIFULLA, J. The Tamil Nadu Electricity Board is the appellant. The challenge is to the order of the learned Single Judge dated 25.11.1999, passed in W.P.No.19331 of 1997. The first respondent herein is the petitioner in that writ petition. 2. The challenge in the writ petition was to the order of the Government in G.O.Ms.No.190, Energy (A2) Department, dated 11.12.1997 and while seeking to quash the said G.O., the first respondent prayed for a direction to the appellant, as well as, the State Government to forbear from collecting the normal High Tension Tariff with effect from 28.04.1996. 3. There was another writ petition filed by the Workers' Union of the first respondent in W.P.No.151 of 1998 for a similar relief. 4. By the impugned order, the learned Judge allowed both the writ petitions. There was also a direction to refund part of the amount deposited by the first respondent during the pendency of the writ petitions. 5. The brief facts which are required to be stated are, the first respondent company was under the grip of B.I.F.R. and it was declared as a "sick industrial company" under Section 3(1)(o) of the Sick Industrial Companies (Special Provision) Act, 1985. Though there were certain attempts made earlier to revive the company, the same did not fructify. 6. At the instance of the first respondent company, the State Government issued G.O.Ms.No.165, Industries Department dated 28.04.1992 and decided to grant certain concessions for settlement of arrears of electricity charges by granting moratorium for a period of one year as well as instalment facilities. It also came forward to show some concession by reducing the rate of current consumption charges to Re.1/- per KWH including electricity tax for a period of four years. It also came forward to grant sales tax deferral for a period of five years from the date of reopening of the unit. 7. Thereafter, a rehabilitation proposal came to be considered by the B.I.F.R. in the year 1994, at the instance of a new promoter. When the B.I.F.R. wanted the State of Tamil Nadu for extension of the concessions, which the State Government came forward to grant in G.O.Ms.No.165, dated 28.04.1992, the State Government in its letter dated 21.12.1994, agreed to grant the very same reliefs/concessions. It also came forward to grant further concessions. https://hcservices.ecourts.gov.in/hcservices/ 8. The B.I.F.R. passed its orders on 23.12.1994, approving and sanctioning the fresh rehabilitation scheme submitted by the new promoter, wherein, the concessions inter alia contained the concessions which were originally proposed and subsequently added were all noted. Thereafter, the State Government issued G.O.Ms.No.37, Industries Department, dated 10.02.1995, incorporating the concessions originally proposed in G.O.Ms.No.165, dated 28.04.1992, as well as, the other concessions which it came forward to extend at the time of consideration of the rehabilitation scheme. 9. The first respondent commenced its manufacturing operations on and from 21.02.1995. Though initial billing to the current consumption charges was made at the regular rate, based on the representation of the first respondent, the concessional rate of current consumption charges were implemented. It was only thereafter, the appellant Board approached the State Government in the month of September and October, 1997 and wanted the State Government to allow the Board to charge the first respondent company at the normal High Tension Tariff on par with other industrial consumers. In response to the said representation, the State Government issued G.O.Ms.No.190, Energy Department, dated 11.12.1997, withdrawing the concessions on the footing that the concessions were to operate only between 28.04.1992 and 27.04.1996 i.e. for a period of four years and thereafter it was permissible for the appellant Board to collect the normal High Tension Tariff from the first respondent w.e.f. 28.04.1996. 10. The said G.O. came to be challenged by the first respondent in W.P.No.19331 of 1997, where the impugned order dated 25.11.1999, came to be passed by the learned Judge. 11. In the order impugned in this appeal, the learned Judge set aside the order of the Government in G.O.Ms.No.190, Energy Department, dated 11.02.1997 by holding that the concessions granted by the Government for four years would commence from the date of starting of the production by the first respondent. The learned Judge also rejected the alternate contention raised on behalf of the appellant that the period of four years would start from 30.09.1994, which is the assumed cut-off date mentioned in the sanctioned scheme dated 23.12.1994. 12. Assailing the order of the learned Judge, Mr.P.S.Raman, learned Advocate General appearing for the appellant submitted that under the rehabilitation scheme, while mentioning the reliefs/concessions offered by the various parties viz., Financial Institutions, preferential shareholders, State Government, Central Government, labourers and the promoters, it was specifically provided that the reliefs/concessions were envisaged assuming the cut-off date as 30.09.1994 and stated that when all the parties to the proceedings https://hcservices.ecourts.gov.in/hcservices/ before the B.I.F.R. have understood the position that that should be the cut-off date for the operation of all reliefs/concessions, even assuming the four years period would not commence from 1992, the stand of the appellant that it should commence from the assumed cut- off date of 30.09.1994, ought to have been accepted by the learned Judge. 13. The learned Advocate General took pains to point out that while recording the concessions offered by the State Government under paragraph 4(D)(i) to (vii) for different concessions, different stipulations have been mentioned and that in so far as the offer of concessional consolidated rate of Re.1/- per KWH in paragraph 4(D) (ii), it is stated "Electricity tariff at a concessional consolidated rate of Re.1/- per KWH (including electricity tax) to be available for a period of 4 years." Whereas under clause 4D(i),(iv) & (v) there is a specific reference as to the actual date of reopening of the unit for those concessions to operate. The learned Advocate General therefore contended that when such a specific provision has not been incorporated in the offer of the State Government in clause 4D(ii), it was implied that the commencement of four years period should be as mentioned in the main paragraph 3 namely the assumed cut-off date of 30.09.1994. The learned Advocate General therefore submitted that the order of the learned Judge to the extent of not countenancing such a plea of the appellant Board is liable to be set aside. 14. To reinforce his submissions, the learned Advocate General submitted that even in the first G.O.Ms.No.165 dated 28.04.1992, in paragraph 3 when the State Government came forward to offer the concessions, made it clear that such concessions were being offered with a hope that the company would make the unit viable by reopening its operations in a period of three months from the date of the said G.O., in as much as, the State Government was more concerned about the interest of large number of workers who would otherwise face unemployment if the company is wound up. According to him, the State was also alive to the fact that the respondent's company is the only Aluminium manufacturing unit in the State which also weighed with the State Government while making the offer. Even according to the learned Advocate General the scheme sanctioned by the B.I.F.R. under Section 19 of the Sick Industrial Companies (Special Provisions) Act, 1985 will have greater implication and that the same would operate without any hindrance from any quarters. 15. The learned Advocate General would therefore contend that when the interest of labourers numbering more than 1000, weighed with the State Government when it came forward to offer its concessions and the G.O.Ms.No.165, dated 28.04.1992, specifically stated that https://hcservices.ecourts.gov.in/hcservices/ the revival should take place within three months to achieve the objectives, by its proposals before the B.I.F.R. on 21.12.1994, they intended for such revival to take place at the earliest point of time and therefore on that ground also the assumed cut-off date should alone be held as the starting point for calculating the period of four years. The learned Advocate General therefore contended that the order of the learned Judge in not accepting the said stand of the appellant would vitiate his order and the same should be set aside. 16. As against the said submissions, Mr.C.A.Sundaram, learned senior counsel appearing for the first respondent in his submissions contended that the assumed cut-off date mentioned in paragraph 3 of the scheme was referable only to the concessions which came to be offered by the Financial Institutions and Banks and the same has nothing to do with the concessions offered by other parties. 17. The learned senior counsel by referring to paragraph 4(A)(i) & (ii) and B(i) & (ii) pointed out that there was a specific reference to the very same cut-off date in those paragraphs and a reading of those paragraphs, in which the Financial Institutions and the Banks offered their concessions makes it clear that the said assumed cut-off date had a close nexus to the concessions offered in those clauses, while in the case of the concessions offered by the State Government in paragraph 4(D) (i) to (vii), the specific provisions contained therein discloses that the operations of those clauses had absolutely no relations to the assumed cut-off date 30.09.1994. 18. According to the learned senior counsel if the assumed cut- off date of 30.09.1994, is to be applied for the various concessions recorded in paragraph 4(D)(i) to (vii), the same would conflict with each other and that that was never the intention of the parties as well as the B.I.F.R. when it passed its orders sanctioning the scheme incorporating those concessions. 19. The learned senior counsel further pointed out that after the scheme came to be approved by the B.I.F.R. dated 23.12.1994, the State Government issued its G.O. dated 10.02.1995 in G.O.Ms.No.37, reiterating the concessions which was offered by it and which form part of the scheme by way of implementation of the B.I.F.R. scheme and that within eleven days thereafter i.e. on 21.02.1995, the first respondent reopened the operation of the factory premises. 20. The learned senior counsel therefore contended that after the approval of the scheme by the B.I.F.R. there was no loss of time https://hcservices.ecourts.gov.in/hcservices/ in implementing the scheme and that by virtue of the specific provisions contained in the scheme in relation to the concessional traffic rate offered by the State Government, it was to operate for the full period of four years from the date of commencement of its operations and not from the assumed cut-off date namely 30.09.1994. 21. The learned senior counsel therefore contended that when once such a scheme providing for such specific concessions came to be sanctioned by the B.I.F.R. by virtue of the statutory provisions contained under Section 19 of the Act, every party who consented for various concessions where bound by such concessions recorded in the sanctioned scheme and the scheme being a statutory scheme will have the force of law and consequently neither the State nor the appellant can meddle with the scheme by passing any conflicting orders. 22. The learned senior counsel therefore contented that G.O.Ms.No.190, dated 11.12.1997 impugned in the writ petition which runs counter to the B.I.F.R. scheme was rightly set aside by the learned Judge and therefore no interference is called for. 23. The learned senior counsel relied upon the decisions reported in (1979) 4 SCC 565 (Desh Bandhu Gupta and Co. and others Vs. Delhi Stock Exchange Association Ltd.), (1996) 10 SCC 387 (Ranadey Micronutrients Vs. Collector of Central Excise) and (2008) 7 SCC 619 (Tata Motors Limited Vs. Pharmaceutical Products of India Limited) in support of his submissions. 24. Having heard the learned Advocate General for the appellant and the learned senior counsel for the first respondent, we find force in the submissions of the learned senior counsel appearing for the first respondent. 25. At the very outset, it will have to be stated that there is absolutely no scope for the appellant to contend that the concessional consolidated rate of electricity tariff of Re.1/- per KWH (including electricity tax) made available for a period of four years can by any stretch of imagination be held to have operated between 1992 to 1996 as claimed by the State Government. The said stand of the State Government was based on the 1st G.O., dated 28.04.1992 in G.O.Ms.No.165. In the said G.O., while making the offer, it was stated that the said concession would be available for a period of four years and that after four years, the company should pay the normal High Tension Tariff rate. https://hcservices.ecourts.gov.in/hcservices/ 26. It will have to be remembered that the revival of operation of the first respondent factory was not merely based on the concessions offered by the State Government in the above referred to G.O., in as much as, the first respondent was under the grip of B.I.F.R. and unless and until the concessions offered by various parties viz., the financial institutions and the State Government are duly incorporated in the sanctioned scheme, and that scheme is put into operation, the question of commencement of any concessions would not arise. Moreover, when we refer to the subsequent move of the State Government immediately prior to the order of B.I.F.R. dated 23.12.1994, we find that the present promoter came forward with a rehabilitation proposal dated 28.07.1994, the same was forwarded to the State Government and the sanction order of the B.I.F.R. reveal that the State Government agreed to grant the proposed reliefs and concessions in a written communication dated 21.12.1994. It is only thereafter, the scheme came to be sanctioned which provided for the various reliefs/concessions of the Banks, Financial Institutions, preferential shareholders, State Government, Central Government, workmen and the investments which the promoters came to make on its part where all recorded with all annexures submitted by the parties. Therefore, it was too late in the day for the State Government to have taken the stand that the period of four years should be counted as from the date of the first Notification dated 28.04.1992, in G.O.Ms.No.165. Therefore, the conclusion of the learned Judge on that score cannot be found fault with. 27. As far as the contention of the learned Advocate General based on the assumed cut-off date mentioned in paragraph 3 of the B.I.F.R. order dated 23.12.1994, the said contention also cannot be accepted. As rightly pointed out by Mr.C.A.Sundaram, learned senior counsel for the first respondent, a reading of paragraph 4(A) & (B) wherein, the various reliefs and concessions offered by the Financial Institutions and Banks have been recorded discloses that the assumed cut-off date of 30.09.1994, has got a close nexus with the reliefs/concessions mentioned in those paragraphs. For instance in paragraph 4(A)(i) the Financial Institutions have offered to waive the penal interest/liquidated damages/compound interest and 90% of simple interest accrued upto 30th September, 1994 as also waiver of 90% of interest funded in the past. In as much as, the half yearly closing of Financial Institutions and Banks always has to take place on 30.09.1994, it is quite apparent that the calculations for working out the reliefs necessarily to be anticipated in advance while considering a very sound proposal for rehabilitation. 28. In fact in paragraph 4 (A) (i) & (ii) and (B)(i) & (ii) for the purpose of calculation of interest, the specific date viz.,30.09.1994, has been fixed which offer of the Financial Institutions and the banks came to be ultimately accepted which form https://hcservices.ecourts.gov.in/hcservices/ part of the sanctioned scheme. As against the above position with reference to the assumed cut-off date mentioned in the main paragraph 3 and sub paragraphs (A) & (B) of paragraph 4, when we refer to the concessions offered by the preferential shareholders we find that under paragraph 4(C)(i) & (ii) the shareholders agreed for waiver of arrears of dividends upto 94-95 and for payment of dividends of preferential shares for 1995-96, 1996-97 to be paid on the close of 1996-97. If the said concessions is to operate, the assumed cut-off date of 30.09.1994, will have no application at all. In other words, the assumed cut-off date mentioned in paragraph 3 viz., 30.09.1994, can be applied only were such cut-of date will have any application to the reliefs/concessions and it cannot be applied unilaterally for all kinds of concessions offered by different parties. On the other hand, when we examine the specific concessions offered by the State Government contained in paragraph D(i) to (vii), we find that while in paragraph D(i) if payment of arrears of electricity tariff for the period upto 28.02.1991, time was fixed as four years after one year of moratorium from the date of reopening, similar such concessions have been offered in respect of sales tax, central sales tax and additional TNGST by providing the deferral for a period of five years from the date of reopening of the unit. Similarly in sub-paragraph D (v) for payment of current dues of electricity charges upto the date of reopening, provision has been made for such payment in 48 equal monthly instalments commencing from 1996-97 to 1999-2000. 29. In the light of the above specific provisions relating to payment of arrears of electricity charges for the past period, provision for payment of sales tax by stipulating deferral scheme, the specific clause relating to grant of concessional rate of electricity traffic at Re.1/- per KWH inclusive of electricity tax for a period of four years unless it is to be provided from the date of manufacture, the very offer of concession to be accepted, will have no meaning. In other words, only if the said concessional tariff rate to operate, first and foremost the commencement of manufacturing operation should take place. It is also relevant to keep in mind that indisputably, consumption of power is part of other inputs in the manufacturing process of the first respondent factory. In fact that was one of the reasons why the said concession came to be offered by the State Government which really helped the promoters to workout the rehabilitation scheme in order to revive the operations of the first respondent company from its adverse financial position to a confortable situation in its projected rehabilitation scheme. 30. If the contention of the appellant that the offer of concessional rate of tariff was to operate from the assumed cut- off date viz., 30.09.1994, is to be accepted, it will result in incongruous situation namely the real benefit which would accrue from https://hcservices.ecourts.gov.in/hcservices/ such concessions could not been achieved at all, in as much as, when commencing manufacturing operations, the validity of concessional rate of tariff would not be there. Therefore, when the scheme itself came to be approved by the order of the B.I.F.R. only on 23.12.1994 and in pursuance to the said scheme, the State Government issued G.O.Ms.No.37, Industries Department, dated 10.02.1995, it is only thereafter, the first respondent could commence its manufacturing operations from 21.02.1995 i.e. within 11 days from the date of issuance of the said G.O. In such circumstances, the conclusion is inevitable that the concessional consolidated tariff of Re.1/- per KWH offered by the State Government was to commence only from the date of the revival of the manufacturing operations of the first respondent i.e., from 21.02.1995 and not from any other earlier date. Any other construction of the relief provisions contained in the scheme would make the scheme a failure which would not have been in contemplation by any of the parties before the B.I.F.R. 31. We are therefore convinced that the conclusion of the learned Judge in holding that four years period for operation of the concessional rate of tariff was to operate only from the date of commencement of the manufacturing operations namely 21.02.1995 and not 30.09.1994, as claimed by the appellant was perfectly justified. 32. When once we steer clear of the said position, when we come to the validity of the order impugned in the writ petition dated 11.12.1997, having regard to our above conclusion on the validity of the period of concession, we have to necessarily hold that the State Government having agreed to provide such concessions cannot be permitted to vary the said concessions according to its whims and fancies. 33. In this context, the specific provisions contained in Section 19 of the Sick Industrial Companies (Special Provisions) Act, 1985 assumes significance. The scheme of the said provision postulates provision for financial assistance or concessions or sacrifices by the State, financial institutions and other statutory institutions and private parties for the revival of a "sick industrial company" before sanctioning any scheme under the said provision. 34. Sub-section 2 to Section 19 envisages circulation of any rehabilitation scheme to the various parties concerned for expressing their consent to the scheme by fixing a stipulated time limit not exceeding 60 days. If no consent is received, within the said period or any extended further period, the consent is deemed to have been given. https://hcservices.ecourts.gov.in/hcservices/ 35. Section 19(3) is more relevant for our present purpose which reads as under: "19.Rehabilitation by giving financial assistance:- (1)...... (2)...... (3) Where in respect of any scheme the consent referred to in sub-section (2) is given by every person required by the scheme to provide financial assistance, the Board may, as soon as may be, sanction the scheme and on and from the date of such sanction the scheme shall be binding on all concerned." 36. As rightly contended by Mr.C.A.Sundaram, learned senior counsel for the first respondent having regard to specific provisions contained in Section 19(3) and the other sub-clause, the scheme once approved under Section 19(3) will have binding effect being a statutory scheme and it will not be open for any party who expressed its consent, to withdraw from the scheme. For that proposition the reliance placed upon by the learned senior counsel for the first respondent can be usefully referred to in the decision reported in (1996) 10 SCC 387 (Ranadey Micronutrients Vs. Collector of Central Excise), where the Hon'ble Supreme Court has held as under in paragraph 16: "16.......The whole objective of such circulars is to adopt a uniform practice and to inform the trade as to how a particular product will be treated for the purposes of excise duty. It does not lie in the mouth of the Revenue to repudiate a circular issued by the Board on the basis that it is inconsistent with a statutory provision. Consistency and discipline are of far greater importance than the winning or losing of court proceedings." 37. In this context, the proposition canvassed by the learned senior counsel for the first respondent for considering the concessions reiterated by the State Government in its order dated 21.12.1994, where it agreed to grant the proposed reliefs/concessions as offered in G.O.Ms.No.165, dated 26.04.1992, the recording of such concession in detail in paragraph 4(D)(i) to (vii) and the issuance of G.O.Ms.No.37, dated 10.02.1995, where again the State Government reiterated the very same concessions which found place in the sanctioned scheme which documents having come into existence https://hcservices.ecourts.gov.in/hcservices/ contemporaneously, it would be a farfetched argument for the State to contend that the concession relating to consolidated rate of tariff at Re.1/- per KWH was to operate in