Case: M/S. Southern Ispat Ltd Vs. State Of Kerala

made on 17.7.1995. The appellants factory had yet to be constructed and machinery to be transported and installed after the construction of the factory building. Undoubtedly, the application was moved on 17.7.1995 in anticipation. The material on record suggests that there was acute shortage of electricity as a result of which even domestic power connections were being refused. The high tension power supply required by the appellant had to be specially arranged by drawing the electrical lines on OYEC basis by construction of PSC polls along the line at the Appellants cost. This amount was deposited on 11.12.1996, only a few days before the concession was about to lapse. Having examined the correspondence on record, we are not in a position to accept the contention of the appellant that the respondents had acted with undue tardiness or lethargy. Further, the remittances of Rs. 8,54,700/- and Rs. 3,45,200/- made by way of security deposit for executing the power supply agreement were actually made on 1.2.1997 and 4.2.1997, after the expiry of the period of concession. 22. The KSEB made the power allocation on the specific condition that power would be supplied subject to drawing of 11 KVA exclusive feeder line from 110 KV Parali station under the OYEC scheme. The electric wiring was completed in the factory of the appellant and the wiring contractor submitted completion certificate on 29.8.1998. There were some deficiencies which were rectified by the appellant only on 1.12.1998. The electrical inspector is required to sanction the electrical wiring and this was done on 14.12.1998. Power supply commenced only on 19.12.1999. Thus, upto and including 19.2.1999 the appellant had not functioned with the power supplied by the KSEB either temporarily or on permanent basis. 23. The contention of the appellant that commercial production had commenced in December 1996 can hardly be accepted. The appellant was setting up the factory for manufacturing of alloy steel M.S. Sections, C.T.D. bars, Steel ingots and so on with a planed production of 24000 tons of iron and steel ingots and 24000 tons of iron and steel bars, coils etc. It hardly stands to reason that commercial production of such a factory could have commenced by using of a 125 KVA diesel generator set. There is also no material on record to show that the appellant had run the factory by using 125 KVA generator set during the period December 1996 to February 1999. It is pointed out by the High Court, and rightly in our view, that even the diesel unit could also not be used until permission was obtained under Rule 65 of the Indian Electricity Rules, 1956, from the Chief Electrical Inspector. Such permission was obtained from the Chief Electrical Inspector only on 14.12.1998. Thus, it is clear that even the order for energisation of the 125 KVA diesel generator set was accorded to the appellant only in 1998. 24. In these circumstances, we find it difficult to accept the contention of the appellant that commercial production had started in December 1996 by using diesel generator set as alleged. 25. The appellant contends that the certificate issued by the Kerala Financial Corporation dated 11.9.1998 is conclusive evidence of the fact that the appellant had commenced commercial production in December 1996. Interestingly, the KFCs certificate is very guarded and states: This is to certify that Southern Ispat Limited has commenced its commercial production of C.I. Shot and grits with the help of Generator set as Kottayi in Palakkad district on the 14th day of December, 1996 as per records submitted by the company. (Emphasis is ours) 26. In the first place, we are unable to accept that the certificate issued by the KFC is conclusive in the matter. At the highest, it may be one of the facts to be considered by the KSEB in the light of all other relevant material. 27. The High Court has pointed out a series of difficulties in accepting this certificate as conclusive. Firstly, the certificate has been issued only on 11.9.1998. The certificate is issued To whom so ever it may concern. There is no reference to the electrical Inspectors findings on the matter of conditions of appellants high tension installations, which was a pre-requisite for the KFC to issue a proper certificate for the purpose of entitlement to the pre-1992 tariff concessions. There is nothing to show that the KFC had made any inquiry of their own. On the contrary, as the certificate shows, the certificate appears to have been issued merely on the basis of record produced by the company. The record produced by the company could not have shown that the appellant company had started commercial production. The High Court has also disbelieved and rejected the other documents relied upon in support of the appellants case of commencing of commercial production prior to 31.12.1996.28. The High Court points out the fact that promoters of the appellant company had a factory at Raipur in Madhya Pradesh and the possibility of the Appellant having brought manufactured goods from there and sold them within the State of Kerala to create documents to show that the production started before 1996 could not be ruled out. Even the documents produced by the appellant do not show any continuous commercial production during the period December 1996 to February 1999. We agree with the conclusion of the High Court that it was not sufficient for showing commercial production that some small items were sold by the appellant in December 1996 and nil assessment of sales tax was made and a small excise duty payment was also made. We agree with the High Courts view that these were all self-serving documents created as evidence for commercial production prior to the cut off date of 31.12.1996. 29. Upon an overall assessment of the facts on record, we are not satisfied that the view taken by the Division Bench of the High Court on facts is so perverse that it requires interference by this Court under Article 136 of the Constitution.

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

Explanation:
0[ds]29. Upon an overall assessment of the facts on record, we are not satisfied that the view taken by the Division Bench of the High Court on facts is so perverse that it requires interference by this Court under Article 136 of the Constitution