Kusumam Hotels (P) Ltd vs Kerala State Electricity Board & Ors

2. Appellants herein are owners of hotels situated at different parts of the State of Kerala.

3. Apart from the concession in electricity and water charges and payment of building tax to be levied by the Revenue Department which was open ended in nature, other concessions were to be granted on a one time measure.

Classified hotels (One to Five Stars) came within the purview thereof. In terms of the said policy decision, the Kerala State Electricity Board (the Board) was directed to grant tariff concessions to the classified hotels and motels consequent on the said declaration of Government of Kerala and Government of India. The concessions to be granted thereby were :

industrial tariff/l.t. Iv industrial tariff depending on the type of supply from 1.4.1987 (2) The tariff as indicated above will be applied to the institutions either on production of proper certificate from the Director of Tourism or based on list of institutions eligible for the concessional tariff furnished by the director of tourism to the Secretary, Kerala Electricity Board. The certificates/ communications should be given by the Director of Tourism himself.

(3) In the case of institutions in the above categories applying for power connection hereafter tariff as above will be applied by the Kerala State Electricity Board on receipt of necessary certificate from the Director of Tourism.

(4) Regarding the admissibility of the concession to any particular unit the matter will be referred to the Director of Tourism and the report on the matter will 4 be accepted by the Kerala State Electricity Board."

2. The Chairman, Kerala State Electricity Board in his letters read above has reported that the loss sustained by the Kerala State Electricity Board due to concessional electricity tariff allowed to Industries during the last ten years comes to Rs.60.3 crores and that the loss for the year 1995-96 alone is Rs.24 crores.

6. By an order dated 11.10.1999, the industrial tariffs granted to the hotels in the State stood cancelled w.e.f 15.10.1999. It was ordered that industrial tariff already granted by various officers of the Board from 15.5.1999 would be suspended by an order dated 8.11.1999, stating :

Appellants, however, were served with demand-cum- disconnection notices on the basis of bills raised on commercial tariffs on or about 9.4.2000.

8. A writ petition was filed thereagainst. In the meantime, the State of Kerala issued a Government Order on or about 26.9.2000 stating that the concession on electricity tariff shall be limited only to five years by the Department of Tourism, Government of Kerala. The concession was not to be extended for any further period. Clause (3) of the said GO reads, thus :

9. The writ petition filed by the appellants was disposed of by an order dated 4.8.2004 directing that commercial tariff may be charged w.e.f. 15.5.1999 onwards. After the aforementioned Government Order dated 26.9.2000 was issued, demand-cum-disconnection notices were issued again. Representations were made by the appellants which were rejected.

15.5.1999 was fixed as the cut off date by the Board. It, by itself, could not have done so. But the State for issuing the GO dated 26.9.2000 could have fixed the said cut off date on its own. We although do not agree that by granting retrospectivity to the said order, the entirety of the Government Order should be set aside the same or per se would be held to be unreasonable, but what we mean to say is that it could be given effect to only from the date of the order, i.e., prospectively and not from an anterior date, i.e., retrospectively.

We, however, are not concerned with a similar situation.

29. We, therefore, are of the opinion that the impugned GO dated 26.9.2000 must be held to have a prospective operation and not a retrospective operation. That view would save it from being vulnerable to the challenge of being hit by Article 14 of the Constitution of India.

31. We, therefore, are of the opinion that the High Court was not correct in its view to the aforementioned extent. The judgment of the High Court is, thus, set aside to the aforementioned extent. The appeals are allowed with costs. Counsels fee assessed at 25,000/- (Rupees five thousand only) in each appeal.

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33. This appeal is, thus, dismissed. However, there shall be no order as to costs.

May16, 2008