Case: Paschimanchal Vidyut Vitran Nigam Ld.&amp;Or Vs. M/S Adarsh Textiles

4. LMV-2 is a non domestic light, power and electricity connection, LMV- 6 electricity connection is of small and medium power having connected load up to 100 HP for industrial/processing or agro-industrial purposes, power loom, etc. HV-2 connection is provided for utilising large and heavy power for industrial and other purposes having contracted load of above 100 HP. Industries which are having load more than 100 HP are covered by tariff HV-2.5. The State Government had issued order dated 14.6.2006 to Managing Director, U.P. Power Corporation Ltd. (hereinafter referred to as Corporation). The Commission opined that it has the effect of altering the rate schedule approved by it. The Commission, in turn, issued order dated 3.7.2006 restraining all electricity supply undertakings in the State of U.P. from implementing the provisions of State Government order dated 14.6.2006.6. The Commission took up the matter to work out modalities as per the Government order. Chairman of the U.P. Power Corporation Limited filed an affidavit before the Commission providing a new scheme compatible with legal framework along with a directive from the State Government issued under Section 108 of the Electricity Act, 2008. The scheme as proposed in the affidavit states that despite the aforesaid order, the normal billing as per applicable tariff shall be made but payment shall be collected as per the directions of the Government at normal billing cycle and that the advance subsidy shall be collected from the Government in one instalment or maximum two half yearly instalments. Pursuant thereto the Commission on 11.7.2006 passed order in which it had prescribed the rate for LMV-2 and LMV-6 consumers only. However, Commission also opined that the State Government has permitted realization on flat rate depending upon reed space, number of looms, etc. It appeared to be the case of altering the rate schedule of the tariff order fixed by it which is not permissible within the legal framework to be attempted by the State Government. The State Government also did not spell out compliance of the advance subsidy payment as envisaged under Section 65 of the Electricity Act, 2003. While dealing with the matter, the Commission observed that billing of the power loom be done strictly in accordance with prevalent schedule.7. It is pertinent to mention that tariff order 2004-2005 was issued by the Commission for providing benefit to LMV-2 and LMV-6 consumers, it admittedly did not cover HV-2 consumers. The Commission ultimately directed that billing of the power loom consumers shall be done strictly in accordance with prevalent rate schedule of tariff order 2004-2005 on monthly basis. It issued further directions with respect to the collection of the subsidy. It also directed that payment from the power loom consumers shall be collected as per the policy direction of the Government on monthly basis. It also directed that Government should earmark capital subsidy for providing free of cost meters to power loom consumers in case of new connections.8. Later on, industries enjoying HV-2 connection approached the Electricity Regulatory Commission to clarify that whether the order of the Commission dated 11.7.2006 in the matter of subsidized electricity rates for power loom consumers shall be applicable to them also, as the benefit of the said order was not extended to them by the concerned authorities.9. The Commission passed an order on 14-15/9/2006 that the order dated 11.7.2006 shall apply mutatis mutandis for even HV-2 power loom consumers irrespective of their load. It also directed that subsidy provision shall accordingly apply to them also.10. The Secretary, Government of U.P. wrote to the Chairman, U.P. State Electricity Regulatory Commission on 6.10.2006 drawing their attention to the Commissions letter dated 14th/15th September, 2006 clarifying that only those consumers to whom the State Government was giving subsidy under Section 65 of Electricity Act, 2003 were entitled for benefit of Government order dated 14.6.2006. The scheme to supply electricity on flat rate to the power loom bunkars has been made for LMV-2 and LMV-6 consumers for whom earlier also provisions of subsidy had been made. The U.P. Government has not made provisions of any subsidy for industries availing HV-2 category connection. Therefore, distributing companies of U.P. could not give facility of flat rate tariff to HV-2 consumers.11. The aforesaid communication was not dealt with by the Commission but Secretary of the Commission vide letter dated 18.10.2006 advised the Principal Secretary, Energy, Government of U.P. to amend the Government order dated 14.6.2006 so as to confine subsidy to LMV-2 and LMV-6 consumers only.12. On 24.2.2007 Chief Engineer (Commercial), U.P. Power Corporation Ltd., Commercial Cell wrote to Chief Engineer (Distribution) Purvanchal Vidyut Vitran Nigam Ltd., Varanasi Region, Varanasi that present tariff is applicable to LMV-2 and LMV-6 consumers and subsidy is not admissible to HV-2 consumers.13. On 1.5.2007 the Secretary of the Government of U.P. wrote to the Managing Director of U.P. Power Corporation Ltd. that only the weaver-consumers falling under rate schedule LMV-2 and LMV-6 would be covered by the flat rate for the supply of electricity to bunkars.14. One of the industry, namely M/s Hiltrex Industrial Fabrics Pvt. Ltd., Sahjani, Magarwara, District Unnao, availing HV-2 connection, filed W.P. No.2204 (M/B) of 2007 before the High Court of Judicature at Allahabad, Lucknow Bench, Lucknow. The writ petition was dismissed. It was held by the Division Bench that subsidy paid by the Government was to help person or class of persons by keeping the prices down. The earlier decision dated 14.6.2006 was intended to give benefit to weavers, who were members of the weaker section of the society, not to consumers like the petitioners.15. Thereafter, the U.P. Electricity Regulatory Commission issued a letter dated 10.10.2007 in the matter of extension of rebate/subsidized power loom flat rate tariff to HV-2 category consumers, duly noticing the decision of the Lucknow Bench in order dated 16.8.2007 rendered in the aforesaid writ petition, it clarified that the provision of tariff for 2006-2007 shall not be attracted in case of HV-2 power loom consumers in consonance with the findings of the High Court.16. Thereafter, in the instant matters the writ petitions were filed by the industries seeking extension of benefit for HV-2 power loom consumers questioning the aforesaid adverse decisions. A Division Bench of the High Court of Allahabad in CMWP No.32401 of 2007 M/s. Maa Vind Vasini Industries Gorakhpur and Another v. Purvanchal Vidyut Vitran Nigam Ltd. and others, allowed the writ petition vide order dated 12.12.2007. The said order has been followed in CMWP No. 8765 of 2008 M/s. Adarsh Textiles v. Paschimanchal Vidyut Vitran Nigam Ltd. & Ors., and CMWP No. 8763 of 2008 M/s Amit Textiles v. Paschimanchal Vidyut Vitran Nigam Ltd.17. In CMWP No.63293 of 2007, M/s. Vikas Textile Company and another v. State of U.P. and others, though following the decision in M/s Maa Vind Vasini Industries and another v. Purvanchal Vidyut Vitran Nigam Limited Varanasi and others, it has been ordered by the High Court on 13.8.2009 that the Corporation shall charge petitioners in accordance with the Government order dated 11.7.2007. The petitioner shall not be entitled to the relief provided by the Government orders dated 14.6.2006 and 31.3.2007.18. Aggrieved by the order dated 13.8.2009, Vikas Textile has filed SLP (Civil) No.30528 of 2009 and prayed for enforcement of the Government Order dated 14.6.2006 and question of demand raised by respondent No.6 (Executive Engineer (Distribution), Electricity Distribution Division - I, Hathras, of Rs.4,43,904/- for the period from April 2007 to December 2007. The said amount had been deposited under protest on 23.9.2009 and a direction is sought to refund the aforesaid amount with interest.

Reasoning:
It can be culled out from order dated 14.6.2006 that the State Government intended the benefit to be extended to power loom weavers alike farmers. The activity of manufacturing textile is generally understood as the weaving of such textile and man who is engaged in such power loom activity is known as weaver. Weaving means: to form a fabric by interlacing yarn on a loom. It also means the method of pattern of weaving or the structure of a woven fabric, as observed by this Court in Ess Dee Carpet Enterprises v. Union of India (UOI) and Others (1990) 1 SCC 461.  The State Government thus, never intended the benefit to be given to big industries like HV-2 industries. In the circumstances, it was incumbent upon the Commission to consult the State Government before passing clarification order dated 14-15/9/2006 while applying its order dated 11.7.2006 to HV-2 consumers. When the State Government has written to the Commission on 6.10.2006, thereafter there was no justification for the Commission not to recall the clarification issued on 14-15/9/2006 as it was the prerogative of the State Government to extend the benefit of subsidy to a class or particular class of consumers and subsidy being a concession could not have been enforced as a matter of right. The Commission was bound to act as per such directives of State Government.29. The submission that the State is bound by the principle of promissory estoppel to extend the benefit of subsidy to HV-2 consumers is also devoid of merit. This Court in Gujarat State Financial Corporation vs. M/s. Lotus Hotels Pvt. Ltd. [1983 (3) SCC 379 ] had referred to Motilal Padampat Sugar Mills Co. Ltd. vs. State of U.P. & Ors. [1979 (2) SCC 409 ] and observed as undertrue principle of promissory estoppel, therefore, seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of whether there is any pre-existing relationship between the parties oraforesaid principle is not attracted in the instant case as the State Government has not extended any assurance by its conduct much less unequivocal one, thus there was no question of the industries acting upon it. The State Government had not extended any assurance to extend the subsidy and, on the other hand, it had made its stand clear and objected to the Commissions clarification by writing a letter on 6.10.2006.30. Equally futile is the reliance upon the agreements which have been entered into for supply of electrical energy after the clarification was issued by the Commission. It was on the basis of the directive issued by the Commission that the said agreements have been entered into by the consumers with the Corporation. However, a perusal of the agreement makes it clear there is no mention as to the subsidy to be extended by the State Government. The only stipulation is that the supply would be made at the rate specified by the Commission. Thus, the agreement does not deal with the question of subsidy at all. Even otherwise the agreements can also not be said to be binding upon the State Government as the Commission/Corporation had no authority to burden the State with the subsidy when it had made no such provision for HV-2 consumers. It is a settled proposition that the assurance to form promissory estoppel must come from the person in authority having competence to extend it. The Commission and the Corporation had no jurisdiction in the matter of subsidy which is the domain of the State Government.