Case: M/S A.P. Steel Re-Rolling Mill Ltd Vs. State Of Kerala

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." 28. The general principles with regard to construction of exemption notification are not of much dispute. Generally, an exemption notification is to be construed strictly, but once it is found that the entrepreneur fulfils the conditions laid down therein, liberal construction would be made. 29. In M/s. O.N.G.C. Ltd. vs. Commnr. Of Customs, Mumbai [(2006) 8 SCALE 551] , this Court held: "This Court, times without number, has construed such exemption notifications in liberal manner. [See Commissioner of Customs (Imports), Mumbai v. Tullow India Operations Ltd., (2005) 13 SCC 789 , [See Tata Iron & Steel Co. Ltd. v. State of Jharkhand and Others, (2005) 4 SCC 272 , Government of India and Ors. v. Indian Tobacco Association, (2005) 7 SCC 396 , Commnr. Of Central Excise, Raipur v. Hira Cement, JT 2006 (2) SC 369 . and P.R. Prabhakar v. Commnr. Of Income Tax, Coimbatore, 2006 (7) SCALE 191 ]. If, thus, the Appellant was entitled to the same, it should not be denied the benefits thereof. It is directed accordingly." 30. A question as to whether, in a given situation, an entrepreneur was entitled to the benefit under an exemption notification or not, thus, would depend upon the fact of each case. A bare perusal of the notification dated 6.2.1992 issued by the 1st respondent would show that the purport and object thereof was to grant benefit of a concessional power tariff which came into force on and from 1.1.1992. The phraseology used in the said notification postulates that the benefit was to be granted in regard to the enhanced power tariff. Thus, where the new units had started production between 1.1.1992 and 31.12.1992, such exemption was available to the entrepreneurs.31. Evidently, except in a situation as might have been existing in Hitech Electrothermics (supra) that any application filed by the entrepreneur had not been processed within a reasonable time, in which case benefit might not be denied on equitable ground; in cases where there has been a substantial failure on the part of the industrial unit to obtain such benefit owing to acts of omission and commission on its part, in our opinion, no such benefit can be given.32. The High Court has arrived at a finding of fact that the appellant herein had failed and/or neglected to comply with the terms and conditions of the scheme or contributed to a large extent in not being able to obtain such sanction within a reasonable time.33. The appellant applied for grant of electrical connection on 9.11.1994. It, however, on its own showing did not receive any sanction till 17.11.1995. But even on that date the project was not complete. It was only at an advanced stage.34. From the appellants letter dated 24th June, 1996, as noticed supra, it would appear that it merely had been complaining of about non-grant of sanction, but then, evidently, it was not ready for commencing commercial production. Machineries were obtained by it only on 4.6.1996. How much time was taken for installation of machinery and completion of the project, is not known.35. Sanction, evidently, had been allocated on 24.2.1997. It accepted the same without any demur. It had been making payments in terms of the new tariff. It filed the writ petition only in the year 2003, i.e., only after this Court rendered its decision in Hitech Electrothermics (supra) on 17th December, 2002.36. The benefit of a judgment is not extended to a case automatically. While granting relief in a writ petition, the High Court is entitled to consider the fact situation obtaining in each case including the conduct of the petitioner. In doing so, the Court is entitled to take into consideration the fact as to whether the writ petitioner had chosen to sit over the matter and then wake up after the decision of this Court. If it is found that the appellant approached the Court after a long delay, the same may disentitle him to obtain a discretionary relief. {See Chairman, U.P. Jal Nigam & Anr. vs. Jaswant Singh & Anr. [2006 (12) SCALE 347 ]. 37. We are, thus, of the opinion that the principle of promissory estoppel will apply where an entrepreneur has altered its position pursuant to a promise made by the State, but the application thereof would depend upon the facts and circumstances of each case. Having regard to the findings of fact arrived at by the High Court, we are of the opinion that it cannot be said to have committed any illegality in passing the impugned judgment. So far as the case of M/s. A.P. Steel Re-Rolling Mill Ltd. is concerned, evidently the question involved therein was a disputed question of fact. Although, the High Court could have entertained a writ petition, as has been done in the case of M/s. Victory Papers and Boards India Ltd., but as M/s. A.P. Steel Re-Rolling Mill Ltd. withdrew its writ application, in our opinion, no case has been made out for interference with the impugned judgment. As the appellant has still its remedies open, it may avail the same.

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

Explanation:
0[ds]14. Applicability of doctrine of promissory estoppel in a case where entrepreneur alters his position pursuant to or in furtherance of a promise made by the State to grant exemption from payment of charges on the basis of current tariff is not in dispute. The State made its policy decision. The said policy decision could be made by the State in exercise of its power under Section 78A of the Electricity (Supply) Act, 1948. The Electricity Board framed tariff for supply of electrical energy in terms of Sections 46 and 49 of the 1948 Act. While framing its tariff, the Board could take into consideration the policy decision of the State. It was, therefore, permissible both for the State to issue a policy decision and for the Board to adopt the same in exercise of their respective statutory powers under the 1948 Act. When a beneficent scheme is made by the State, the doctrine of promissory estoppel would undoubtedly apply.The general principles with regard to construction of exemption notification are not of much dispute. Generally, an exemption notification is to be construed strictly, but once it is found that the entrepreneur fulfils the conditions laid down therein, liberal construction would be made.A question as to whether, in a given situation, an entrepreneur was entitled to the benefit under an exemption notification or not, thus, would depend upon the fact of each case. A bare perusal of the notification dated 6.2.1992 issued by the 1st respondent would show that the purport and object thereof was to grant benefit of a concessional power tariff which came into force on and from 1.1.1992. The phraseology used in the said notification postulates that the benefit was to be granted in regard to the enhanced power tariff. Thus, where the new units had started production between 1.1.1992 and 31.12.1992, such exemption was available to the entrepreneurs.31. Evidently, except in a situation as might have been existing in Hitech Electrothermics (supra) that any application filed by the entrepreneur had not been processed within a reasonable time, in which case benefit might not be denied on equitable ground; in cases where there has been a substantial failure on the part of the industrial unit to obtain such benefit owing to acts of omission and commission on its part, in our opinion, no such benefit can be given.32. The High Court has arrived at a finding of fact that the appellant herein had failed and/or neglected to comply with the terms and conditions of the scheme or contributed to a large extent in not being able to obtain such sanction within a reasonable time.33. The appellant applied for grant of electrical connection on 9.11.1994. It, however, on its own showing did not receive any sanction till 17.11.1995. But even on that date the project was not complete. It was only at an advanced stage.34. From the appellants letter dated 24th June, 1996, as noticed supra, it would appear that it merely had been complaining of about non-grant of sanction, but then, evidently, it was not ready for commencing commercial production. Machineries were obtained by it only on 4.6.1996. How much time was taken for installation of machinery and completion of the project, is not known.35. Sanction, evidently, had been allocated on 24.2.1997. It accepted the same without any demur. It had been making payments in terms of the new tariff. It filed the writ petition only in the year 2003, i.e., only after this Court rendered its decision in Hitech Electrothermics (supra) on 17th December, 2002.36. The benefit of a judgment is not extended to a case automatically. While granting relief in a writ petition, the High Court is entitled to consider the fact situation obtaining in each case including the conduct of the petitioner. In doing so, the Court is entitled to take into consideration the fact as to whether the writ petitioner had chosen to sit over the matter and then wake up after the decision of this Court. If it is found that the appellant approached the Court after a long delay, the same may disentitle him to obtain a discretionary relief.We are, thus, of the opinion that the principle of promissory estoppel will apply where an entrepreneur has altered its position pursuant to a promise made by the State, but the application thereof would depend upon the facts and circumstances of each case. Having regard to the findings of fact arrived at by the High Court, we are of the opinion that it cannot be said to have committed any illegality in passing the impugned judgment. So far as the case of M/s. A.P. Steel Re-Rolling Mill Ltd. is concerned, evidently the question involved therein was a disputed question of fact. Although, the High Court could have entertained a writ petition, as has been done in the case of M/s. Victory Papers and Boards India Ltd., but as M/s. A.P. Steel Re-Rolling Mill Ltd. withdrew its writ application, in our opinion, no case has been made out for interference with the impugned judgment. As the appellant has still its remedies open, it may avail the same.