Case: M/s Nava Bharat Ferro Alloys Ltd Vs. Transmission Corporation of A.P. Ltd. &amp; Another

has been wiped out from existence." 21. Suffice it to say that the decision of this Court in Kerala State Electricity Boards case (supra) does not lend any support to the appellant-company in its endeavour to avoid payment of the amount which became recoverable from it no sooner the judgment of the High Court was reversed in the earlier round of litigation upholding the revision of the tariffs. 22. That brings us to the decision of this Court in Kanoria Chemicals and Industries Ltd. and Ors. v. U.P. State Electricity Board and Ors. (1997) 5 SCC 772. That was also a case where the validity of a notification issued by the U.P. State Electricity Board revising the electricity rates/tariffs under Section 49 of the Electricity (Supply) Act, 1948 was challenged by the consumers. Interlocutory applications filed in the writ petitions for stay of the operation of the impugned notification were eventually dismissed by the High Court whereupon the consumers deposited the differential amount between the pre-revised and the revised electricity rates. Consumers did not, however, deposit the late payment surcharge "recoverable" in terms of Clause 7(b) of the notification. Notices of demand were, therefore, issued to the consumers which were challenged in a fresh batch of writ petitions filed by them. The main contention urged by the consumers before the High Court was that since the operation of the notification revising the tariffs had been stayed between 25th July, 1990 and 1st March, 1993, no late payment surcharge could be levied on the amount withheld by the petitioners under the orders of the Court, no matter the writ petitions were finally dismissed. That contention was rejected by a Division Bench of the High Court of Allahabad. The matter was then brought up to this Court in appeal by the consumers, inter alia, contending that the stay of the operation of the impugned notification relieved the consumers of the obligation to pay the revised tariffs/rates and consequently additional charges for late payment, if any. Reliance in support of that submission was placed by the consumers upon the decision of this Court in Adoni Ginning Factory v. Secy. A.P. Electricity Board (1979) 4 SCC 560. Speaking for the Court, Honble B.P. Jeevan Reddy, J. held that the decision of this Court in Adoni Ginning Factorys case (supra) had no application to the case at hand nor could it be understood to mean that during the period covered by the stay no demand could be made against the consumers as no such issue has been raised before this Court in Adoni Ginning Factorys case (supra). This Court observed: "..............We, therefore, agree with the High Court that Adoni Ginning1 cannot be read as laying down the proposition that the grant of stay of a notification revising the electricity charges has the effect of relieving the consumers/petitioners of their obligation to pay late payment surcharge/interest on the amount withheld by them even when their writ petitions are dismissed ultimately. Holding otherwise would mean that even though the Electricity Board, who was the respondent in the writ petitions succeeded therein, is yet deprived of the late payment surcharge which is due to it under the tariff rules/regulations. It would be a case where the Board suffers prejudice on account of the orders of the court and for no fault of its. It succeeds in the writ petition and yet loses. The consumer files the writ petition, obtains stay of operation of the notification revising the rates and fails in his attack upon the validity of the notification and yet he is relieved of the obligation to pay the late payment surcharge for the period of stay, which he is liable to pay according to the statutory terms and conditions of supply -- which terms and conditions indeed form part of the contract of supply entered into by him with the Board. We do not think that any such unfair and inequitable proposition can be sustained in law..........." 23. This Court further clarified that the terms in which the prayer in the stay application was made by the consumers did not determine the effect of the order issued by the Court in the writ petitions raising similar questions of law. The phraseology used in the prayer for interim orders could be materially different though in essence the relief may be similar. On a question of principle this Court held that the impugned order coming to an end upon dismissal of the substantive proceedings, it is the duty of the Court to put the parties in the same position as they would have occupied but for the interim orders of the Court for otherwise it would give rise to unjust results. This Court said: "..............It is equally well settled that an order of stay granted pending disposal of a writ petition/suit or other proceeding, comes to an end with the dismissal of the substantive proceeding and that it is the duty of the court in such a case to put the parties in the same position they would have been but for the interim orders of the court. Any other view would result in the act or order of the court prejudicing a party (Board in this case) for no fault of its and would also mean rewarding a writ petitioner in spite of his failure. We do not think that any such unjust consequence can be countenanced by the courts. As a matter of fact, the contention of the consumers herein, extended logically should mean that even the enhanced rates are also not payable for the period covered by the order of stay because the operation of the very notification revising/enhancing the tariff rates was stayed. Mercifully, no such argument was urged by the appellants. It is ununderstandable how the enhanced rates can be said to be payable but not the late payment surcharge thereon, when both the enhancement and the late payment surcharge are provided by the same notification - the operation of which was stayed..............."

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]10. There is, in our opinion, a basic fallacy in the analogy which the appellant draws between its case and the cases referred to above. What is overlooked by the appellant is the fact that the decision of this Court in the Kerala State Electricity Boards case (supra) has enforced the terms under which the supply of energy was made to the consumers in that case. Award of interest @ 18% p.a. is not an innovation of this Court. The consequence ofof the amount within the time stipulated was on the contrary prescribed in the tariff/conditions subject to which energy was supplied to MRF the consumer in that case. It would not, therefore, be correct to apply the tariff conditions relevant to that case to the case at hand where such conditions are materially different. It is on the contrary necessary to cull out the principle of law settled in the said case for application to the case at hand. This may require recapitulation of a few facts in the backdrop whereof the decision in the Kerala State Electricity Boards case (supra) was delivered.11. MRF was engaged in manufacturing automobile tubes and tread rubber in the State of Kerala. The company entered into an agreement with the Kerala State Electricity Board for supply of power to the factory set up by it. The agreement contained a provision for payment of power and energy supplied to the company by the Board within 15 days from the date of the receipt of the invoice by theThe agreement further provided that in the event of a default in the payment of the amount within the stipulated period, interest @ 18% p.a. or at such other rate as may be fixed by the Board from time to time would be chargeable.12. The Board revised the tariff for the electricity supplied by it in 1980, 1982 and 1984. These revisions were challenged by MRF in a writ petition filed before the High Court of Kerala, which was together with other similar petitions disposed of by a common order by which the revisions made by the Board were struck down. Consequently MRF Limited and other consumers became entitled to the refund of the excess amount paid by them pursuant to the revised tariffs. The High Court of Kerala directed the adjustment of such amounts towards future bills to be issued by the Board.13. Aggrieved by the order passed by the Kerala High Court the Board filed special leave petitions before this Court which were entertained by this Court and an interim order passed, inter alia, directing that pending disposal of the appeals before this Court, the refund of charges already collected shall remain stayed. It was further directed that the future charges would be collected to the extent of 50% only and the balance adjusted towards the past charges.14. The appeals filed by the Board were finally allowed by this Court by its judgment dated 26th August, 1986 upholding the validity of the revision of the tariffs by the Board. The inevitable conclusion flowing from that decision was that theand other consumers became liable to pay the amounts due on the basis of the revision of tariffs including those that had since been adjusted by them pursuant to the interim directions of this Court. Consequently, the Board raised a demand for the payment of the amount inclusive of interest @ 18% p.a. While the company did not challenge the liability to pay the excess amount pursuant to the revision that had been upheld by this Court it refused to pay the interest and challenged the demand to that extent before the High Court of Kerala in a writ petition filed before it. The Single Judge as also the Division Bench of the High Court in appeal held that thecould not be said to be in default for nonpayment of liability which did not factually exist at the relevant time and struck down the demand for payment of interest.15. The Electricity Board appealed to this Court against the said judgment of the High Court. Allowing the appeals preferred by the Board this Court took the view that while the consumers had no obligation to take notice of the revised tariffs and to make any payment on the basis thereof after the judgment of the High Court of Kerala till the said decision was reversed by this Court, yet no sooner the decision of this Court upheld the upward revision of the tariffs, the Boards entitlement to draw bills on the basis of the revisions and consequently enforce payment of such bills by the consumers revived with full force. This Court repelled the contention that the liability to pay the revised tariffs accrued only after the pronouncement of the judgment of this Court upholding the upward revision and not from any date prior to that. This Court held that once the upward revision was found to be valid and enforceable such revision would be effective from the date the revision was made, no matter such revision had remained unenforceable for some period on account of the decision of the High Court.Applying the above principle to the case before it this Court held that thes an ongoing business concernwho must have gainfully utilized the money saved on account of the decision of the High Court, in its commercial activities. The Court further held that the Board had to suffer financial loss because of the erroneous decision delivered by the High Court and that conforming to equity as well asprinciple of restitution the Board could claim interest @ 18% p.a. on the unpaid portion of the bill drawn on the basis of the revised tariffs to which the8. It is quite evident that this Court had upheld the claim for payment of interest @ 18% p.a. primarily because of the stipulation contained in the tariffs/agreement executed between the Board and the consumer providing for payment of interest at that rate in the event of delay in the payment/discharge of the bills raised against the consumer. It is not as though this Court had refused to enforce the stipulation contained in the tariffs providing for recovery of interest from the consumer if the latter failed to pay the amounts within the time stipulated. It is also manifest that this Court had in no uncertain terms held that even after the upward revisions of the tariffs had remained unenforceable for a certain period on account of erroneous judgment of the High Court, the moment the said judgment was set aside in appeal, the liability to pay revived with full force from the date the revisions were made effective. The very fact there was during the intervening period an erroneous decision of the High Court obliterating the revision in full or in part would make little difference in so far as the liability to pay the amount under the revised tariffs was concerned. So also the fact that the consumers were not deliberately in default on account of the judgment of the High Court did not affect the enforceability of the demand arising from the revised tariffs or the stipulation regarding payment of interest demanded on the same on account of theor delayed payment of the amount recoverable by the Board.19. Suffice it so say that the decision of this Court in the case of Kerala State Electricity Board (supra) does not grant any relief to a defaulting consumer once the demand is upheld nor does it interfere with the principle of restitution which would entitle the successful party to be relegated back to the position it would hold had there been no judgment adverse to it.20. Super added to all this is the fact that this Court was dealing with a case where the High Court had finally struck down the revised tariff, but the said decision was reversed in appeal. In the present case the appellant had obtained only an ad interim order of stay against the enforcement of the tariffs. There is a qualitative difference in the two situations. Even if one were to take a charitable view of the legal effect of any direction of the High Court, pending adjudication by the Court, cases in which the High Court finally held the tariffs to be bad would in our opinion stand on a different footing than cases where the party obtains an order granting interim protection to it. While there is an element of finality in the case of a final adjudication by a competent Court in so far as that Court is concerned, an interim order can be vacated at any stage. The interim order may not even prevent a prudent party from paying the charges according to the revised tariffs if it does not propose to take any chance and suffer recovery of an additional amount on account of theof the dues by the date stipulated for the purpose.Suffice it to say that the decision of this Court in Kerala State Electricity Boards case (supra) does not lend any support to thein its endeavour to avoid payment of the amount which became recoverable from it no sooner the judgment of the High Court was reversed in the earlier round of litigation upholding the revision of the tariffs.This Court further clarified that the terms in which the prayer in the stay application was made by the consumers did not determine the effect of the order issued by the Court in the writ petitions raising similar questions of law. The phraseology used in the prayer for interim orders could be materially different though in essence the relief may be similar. On a question of principle this Court held that the impugned order coming to an end upon dismissal of the substantive proceedings, it is the duty of the Court to put the parties in the same position as they would have occupied but for the interim orders of the Court for otherwise it would give rise to unjust results.