Case: Assam State Electricity Board and Others Vs. Brahama Putra Steels Private Limited and Others

The authority to reimburse the subsidy was Udyog Sahayak, a Branch of the Directorate of the Industries, Government of Assam. The industries entitled to the subsidy were to be given the same for a period of 5 years from the date of the setting up of the industry. Thewas set up sometime in July 1988 and as such the entitlement of the industry was up to July 1993. It is the case of the industry that no subsidy was paid till December 1993 and as such a writ petition was filed in the High Court in March 1993 seeking a direction to the State of Assam to pay the subsidy in terms of the Policy. The writ petition came for motion hearing before the High Court onwhen the following order wasthe petition for order onfor consideration of the interim prayer. In the meantime, petitioner shall clear the bill datedamounting to Rs 6, 27, 708 within 7 days from today adjusting any amount if already paid by the petitioner against the said bill. It is directed that until further order electricity supply to the petitioner industry shall not be disconnected."the petition came for hearing before the High Court onThe High Court passed the followinginto consideration the hardship faced by the petitioner due to admitted failure on the part of the Government to pay the subsidy, for the ends of justice, in the interim, I direct that Government of Assam shall pay the arrear electricity charges to ASEB as well as current charges payable up to June 1993 within a period of one month from today and the ASEB will receive the payment from the Government. The petitioner, shall, however, be liable to pay the current bills raised for consumption of electricity on and from July 1993. Respondent ASEB is directed not to disconnect the supply of electricity to Petitioner 1 until further order."The High Court finally allowed the writ petition and directed the State Government to pay the subsidy to thein terms of the Policy. Apart from the abovesaid direction, the High Court further held asword subsidy means a grant of money made by the Government in aid of the promoters of any enterprise or work, and the expression reimburse means to pay back, to make restoration or to indemnify. Therefore, thehas to pay the energy charges to ASEB and then the Government has to pay back 50% of the amount paid by theThat apart, in any event the Government has to grant power subsidy to the extent of 50% only. Therefore, the contention of the learned Advocate General has some force. But the interim order was made rightly or wrongly and that interim order is enforceable or executable one. The order was not appealed and, therefore, it became final. It is also settled that the doctrine of res judicata is applicable to different stages of the same proceedings, that is to say, matter decided at one stage cannot be reagitated in subsequent stage. Be that as it may, it is not disputed that thepaid sufficient amount of electricity charges to the electricity Board, about 523 lakhs according to theny has produced tables of account showing outstanding as onThe tables show that the electricity charges still outstanding (including surcharge and rebate disallowed) are about Rs 252 lakhs and the power subsidy amount payable to theis about 300 lakhs. The tables are placed on record. We are not expressing about the correctness of the account. But the tables, if it is found correct, show that the power subsidy amount to be paid to theunder the Policy of 1986 will be more than the entire amount to be paid by thefor the electricity consumption for the period ending 1993 and one or two months of 1994. As already stated, reimbursement of subsidy amount was to be done on quarterly basis but it was not done. Thehas the legitimate expectation of receiving the subsidies and, as such, the Court must protect its expectation as a matter of public law. Had the Government paid the subsidy amount in time there might not have been default in payment of electricity charges. The Government is not only to pay power subsidy, but also interest subsidy and subsidy on drawal of power lines. Thealso claims capital subsidy and transport subsidy, as already stated. The account can be settled afterwards. On the facts and circumstances of the case, we are of the view that the interim order was a just one at that point of time."As a consequence of thefindings, a High Court finally directed as under"There shall not be disconnection of supply of electricity to theon the grounds of arrears tilland/or a part of January 1994.This appeal by special leave is by the Assam State Electricity Board (the Board)

Court's reasoning:
A bare reading of the Policy statement reproduced above shows that the grant of subsidy to an industry was not linked with the payment of electricity charges by the industry to the Board. The industry is under a contractual as well as statutory obligation to pay the charges to the Board in respect of electricity consumed. If there was any delay in the payment of subsidy that would not be the ground for the industry to withhold the electricity charges. We are of the view that the High Court fell into patent error in linking the grant of subsidy with payment of electricity charges. Neither the contents of the interim orders granted by the High Court on93 nor the concept of legitimate expectations of the industry to get subsidy can be validly made the ground for linking the payment of electricity charges/surcharge with the receipt of the subsidy under thetherefore, set aside thepart of the High Court judgment and the direction given by the High Court quoted above. We allow the writ petition to the above extent7. So far as the High Courts direction to the State Government to pay the subsidy in terms of the Policy to the industry, we find no fault with the same and we uphold that part of the judgment