Case: Tamil Nadu Electricity Board  Vs. Status Spinning Mills Ltd

3. The basic fact of the matter is not in dispute.4. The State of Tamil Nadu despite the Parliamentary enactment ofthe Electricity (Supply) Act, 1948 (for short "the 1948 Act") enacted the Tamil Nadu Revision of Tariff Rates on Supply of Electrical Energy Act, 1978 (for short "the 1978 Act"); the relevant provisions whereof are asTariff rates for consumption of electrical energy Not-withstanding anything contained in the Tamil Nadu Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949 (Tamil Nadu Act XXIX of 1949), the tariff rates payable to the Tamil Nadu Electricity Board by any consumer on the electrical energy supplied by the Board shall be as specified in the Schedule to this Act.4. Power of the State Government to amend the Schedule - The State Government may after taking into account the Cost of production of energy, and such other matters as may be prescribed by notification, amend the provisions of the Schedule to this Act.Pursuant thereto and in furtherance thereof, High Tension Supply tariff was prescribed. The State issued a G.O. bearing No. G.O.Ms No. 29 dated 31.01.1995 providing for tariff concession for High Tension industries; the relevant portions whereof are asIn the case of new High Tension Industries to be set up in the areas other than the Madras Metropolitan areas, the following concessional tariffs shall be charged for the first three years from the date, the consumer is given service connection under high tension tariff -I- For the first year 60 per cent of the High Tension rates. For the second year 70 per cent of the High Tension rates. For the third year 80 per cent of the High Tension rates. For the fourth year Full Tariff.The above concession shall apply to both unit rates and maximum demand chares. This concession shall not however, be applicable to an industry set up before the 3rd May, 1989. The concession shall not also be applicable to a consumer, who utilizes power from his own generating units or makes other arrangements for production purposes and utilizes the power supplied by the Board for auxillary purposes only.A memorandum was issued on or about 23.08.1995 to specify the time limit required for dealing with the applications for grant of electrical connections as and when applications therefor are filed which are in the followingto the above, the following further instructions are issued regarding disposal of H.T. applications.i) The Superintending Engineers of all Elecy. Dist. Circle are requested to bestow their efforts and thrive for clearing pending applications wherever possible.ii) The delays in processing the H.t. applications should be strictly avoided at all stages. The revised flow chart showing the various stages of processing of the H.T. applications is enclosed.iii) While scrutinizing the applications the defects observed in the application may be conveyed to the applicants at the first instance itself and not on piece meal with a view to speed up the disposal.iv) It is further to be reiterated that those H.T. applications for which supply could not be extended within 18 months may be returned immediately to the applications with a request to renew after a specific date.v) If supply could be extended to applicants within 18 months but requires enhancement of transformer capacity, improvement of existing lines etc., the load sanction may be accorded pending execution of such improvement works stipulating the above conditions.Depending on the readiness reported and also based on the merits of the each case of H.T. extension, supply may be effected to H.T. applicants using the powers delegated to the Chief Engineers (Distribution) vide memo.no.SE/IEMC/EE3/AEE1/802/91 dated 8.11.91.All Superintending Engineers/Elecy. Distn. Circle are once again informed to ensure that delays do not occur beyond a reasonable time for processing the H.T. applications as H.T. services constitute major source of revenue for the Board and to bestow all efforts to achieve the target fixed for the year 95-96 without fail.Tariff – IThere is increase in both demands and energy charges.For consumption of energy during peak hours viz. 6.00 AM to 9.00 AM and 6.00 PM to 9.00 PM, the energy charges are to be billed at 20% extra. This will be implemented on installation of `Time of Day meters.New industries set up on or after 15.2.97 are not eligible for any tariff concession. However, in respect of H.T. industries set up in areas other than Chennai Metropolitan area before 15.2.97 shall continue to avail the tariff concession until the expiry of 3 years period reckoned from date of servicea G.O. issued on 14.02.1997, the Schedule appended to the 1978 Act was amended asNew High Tension Industries set up in any area on or after 15th February 1997, shall not be eligible for tariff concession:Provided that the High Tension Industries set up in any area other than Chennai Metropolitan area before 15th February 1997 shall continue to avail themselves of the said tariff concession until the expiry of the period of three years from the date on which the consumer is given service connection.(b) New industry to be set up in the areas other than the Chennai Metropolitan area which will work night shift only and existing industry which has only night shift between 9.30 p.m. of a day and 5.30 a.m. of the next day, shall be given a concession of 40 per cent of the appropriate rate for energy consumed during night shift only for a period of seven months from July to January during a period of five years from the date of giving service concession. This concession shall apply to energy rate arrived at after fixing the concession if any:Provided that in respect of those having one day shift and one night shift, the night shift concession shall stand reduced from 40 per cent to 20 per cent.By a letter dated 1.08.1997 addressed to the Chairman of the Board, the State Government purported to clarify the meaning of the word "set up",am to state that the words "set up" would mean "obtained service connection". The "New High Tension Industries set up in any area or after 15th February, 1997 would mean new High Tension Industries for which power service connection was actually extended on or after 15.2.97.Questioning the validity of the said notification dated 14.02.1997 as also the letter dated 1.08.1997, a large number of writ applications were filed contending that the same was barred under the doctrine of promissory estoppel. Writ petitions were also filed contending that the petitioners had set up their industries before 14.02.1997 and they were entitled to the benefit of tariff concession in terms of the proviso appended to Clause (a) of High Tension Tariff - I. By a judgment and order dated 23.04.1999, a learned Single Judge of the High Court disposed of the said batch of writ applicationsWrit petitions which challenged the validity of the Notification dated 14.2.1997 withdrawing the concessions were dismissed.b) Those petitioners who had informed the Electricity Board on or before 14.2.1997 about their readiness for getting power connection or made applications to the Board would be entitled to enjoy the tariff concessions for the full period of three years, from the date of power connection as stipulated in the Notification dated 31.1.1995.c) Those writ petitioners who had not made applications or sent intimation to the Electricity Board regarding their readiness to got power connection on or before 14.2.97 but have altered their position by establishing the industry on or before 14.2.97 would be entitled to the tariff concessions as stipulated in the Notification dated 31.1.95 "provided if they are able to establish the same before the 2nd respondent - Electricity Board.Appeals were preferred thereagainst both by the Board and the State Government. Some of the industries who have challenged the notification on the plea of applicability of the doctrine of promissory estoppel also preferred appeals. Indisputably, during pendency of the said appeals before the Division Bench of the High Court, the Schedule to the 1978 Act was further amended by a notification dated 7.01.2000 whereby and whereunder the following Explanations were1. - For the purpose of this clause, an industry may be considered to be set up on the date of obtaining High Tension Service Connection.Explanation 2. - For the purpose of this clause "Existing Industry" means an industry, which has not completed five years from the date, the consumer is given service connection and which is still eligible to the concessional tariff rate.The Division Bench of the High Court disposing of the said batch of appeals by a judgment and order dated 19.07.2005 opined that it was not necessary to discuss the individual fact of each of the respondents case on the premise that the Secretary to the Government could not clarify the amendments to the Schedule which were made by the Governor. The said appeals were disposed of"...In the present case, the meaning of the words "set up is clear. These words mean "erect or establish", as pointed out by the Supreme Court. If the high tension industry has been erected or established before 15.02.1997, then it is entitled to the benefit of the tariff concession, even though electricity connection may not have been given to it prior to 15.02.1997.ii) We do not agree that it is the date on which the application for electricity supply is received by the electricity board that is the relevant date. An application can be made even before setting up the industry or it can be made after setting up the industry, but that is wholly irrelevant. It is the date when the industry has been set up that is the relevant date.iii) We also do not agree that where the industries have not been set up, but are in the process of being set up, yet, the benefit of the concession will be available, on the basis of the principle of promissory estoppel. There is no question of promissory estoppel because the language of the Notification is very clear and there is no estoppel against a Statute.It is, thus, evident that two points were determined against the respondents. No appeal has been preferred therefrom by the industries in question.

Court's reasoning:
18. The High Court unfortunately did not go into the fact of each case. It proceeded on the basis that the word "set up" should be given its dictionary meaning, i.e., erect or establish in view of a decision of this Court in Ramaraju Surgical Cotton Mills Ltd (supra). The effect for a clarificatory order has also not been considered stating that the Secretary of the Government cannot clarify an amendment to the Schedule which has been made by the Governor.19. We wish that the Division Bench would have bestowed serious considerations on the issues, as has been done by the learned Single Judge.20. The validity of the 1978 Act is not in question. It overrides the provisions of the 1948 Act. It empowered the State Government to amend the provisions contained in the Schedule to the Act prescribing tariff rates payable by different classes of consumers for supply of electrical energy by the Board taking into account the cost of production of energy and such other matters as may be prescribed by notification. Indisputably, the Schedule appended to the Act had been amended from time to time. The notification dated 31.01.1995 was issued amending the Schedule. It for all intent and purport substituted the then existing Schedule; Part A thereof dealt with tariff for High Tension supply. It is only in that notification some concession, as noticed hereinbefore, had been granted. The concession was to apply to both unit rates and maximum demand charges. Certain limitations for grant of the said concession had also been specified.What is necessary to take into consideration is that the Schedule appended to Section 3 of the 1978 Act is a part of the Act. It provides for High Tension tariff. It fixes up cut-off dates. It is a piece of subordinate legislation. A subordinate legislation validly made may have to be read in the same manner as if it is a part of the Act. For the said purpose, although the same would be amenable to constitutional challenge on well-settled principles of law, as noticed by this Court in Bombay Dyeing & Mfg. Co. Ltd. (3) v. Bombay Environmental Action Group and Others [(2006) 3 SCC 434] , Vasu Dev Singh and Others v. Union of India and Others [(2006) 12 SCC 753] and State of Kerala and Others v. Unni and Another [(2007) 2 SCC 365] , the validity thereof is not under challenge.It does not appear that the Chief Secretary of the State had issued the letter in question upon following the procedure laid down in the Rules of Executive Business framed under Article 166 of the Constitution of India. We are, however, not much concerned therewith. It is not a case where the opinion of the Chief Secretary and/or for that matter the State was decisive. In the matter of interpretation of statute, the Court has the last say. We have, therefore, to consider the issues raised before us independently.Validity of the notifications on the ground they are unreasonable has not been raised before the High Court. We, therefore, cannot go into the issue. If that be so, it is difficult to agree with Mr. Parasaran that we should undertake an exercise to interpret the notifications in a manner which would not lead to unreasonableness. For the purpose of declaring a statute unconstitutional, foundational facts have to be laid therefore. [See M/s. Seema Silk & Sarees & Anr. v. Directorate of Enforcement & Ors. Criminal Appeal @ SLP (Crl.) No. 6812 of 2007 decided on 12th May, 2008]. Grounds are required to be raised therefor. In absence thereof it would not be possible for us to enter into the debate of constitutionality of the said provisions. The Division Bench of the High Court had rightly or wrongly opined that the doctrine of promissory estoppel has no application. The fact that the said doctrine may apply even in relation to a statute is beyond any dispute as has been held by this Court in Mahabir Vegetable Oils (P) Ltd. and Another v. State of Haryana and Others [(2006) 3 SCC 620] , A.P. Steel Re-Rolling Mill Ltd. (supra), Pawan Alloys and Casting Pvt. Ltd. v. U.P. State Electricity Board and others [(1997) 7 SCC 251] and Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector & ETIO and Others [(2007) 5 SCCIt, therefore, depends on the nature of the statute as also applicability of the doctrine. As noticed hereinbefore, even such a question had not been raised before the High Court.34. The GOMs dated 31.01.1995 granted concession for the new high tension industries to be set up. The eligibility for grant of concession therefore was for the industries which were to be set up after the said date. The exemption does not stop at that. It is given a retrospective effect. It is extended to those industries which were set up after 3.05.1989. However, exception therefor is sought to be curved out in respect of those industries who had been utilizing power from their own generating units or making other arrangements for production for the purposes and utilizing the power supplied by the Board in auxiliary purposes only. The said notification, therefore is a broad based one. It not only is to apply to those industries which were to be set up on or from 31.01.1995 but also to those which were set up after 3.05.1989.Whether by reason of the said notification dated 14.02.1997, an accrued or vested right has been taken away or not is the question. Thenotification dated 31.01.1995 must be interpreted in a broad based manner, as a promise was made to grant the concessional tariff not only for the new industries which were to be set up thereafter but also to the pre-existing industries. The right accrued to them is sought to be taken away w.e.f. 15.02.1997. Those who were eligible upto 14.02.1997 to avail the benefit of the notification dated 31.01.1995 became ineligible. It is in the aforementioned context, the proviso appended to clause (a) is required to be interpreted. It has used the term `set up in any area other than Chennai Metropolitan area beforeour opinion, it should not be. An accrued right ordinarily cannot be taken away with retrospective effect. It is not a case where the notification has a retroactive operation. A person may apply on a particular date for grant of electrical connection. He may get the electrical connection within a few days or a few weeks or a few months. According to the State Electricity Board, keeping in view the role played by all the three players, namely, the consumer, the Board and the State, an outer limit of 18 months is taken for grant of supply.36. There are cases before us wherefrom it appears that electrical connections had not been provided owing to default on the part of the Electrical Inspector who is an officer of the State and/or authorities of the Board, although prompt action had been taken in the matter of depositing of money and/or complying with directions by the consumers.It is not a case where decisions were altered pursuant to any representation made by the State. Concessions in tariff had been granted by reason of a statutory provision. Such concessions could also be withdrawn. If the appellants have not altered their position pursuant to any promise, the doctrine of promissory estoppel would not apply. If that be so, the question of any right being vested in the appellants would also not apply. In any event, the reasonableness of the statute was not the subject matter of the writ petition. The provisions have not been sought to be declared ultra vires. Even otherwise, the State while amending statute stated about the public interest necessitated the same. When a statute is amended keeping in view the public interest even the concession can be withdrawn with retrospective effect.We have noticed hereinbefore that some of the industries had even installed generators. They had to do it. They inevitably had to do it because the Board would not supply power. Would it not be too much to contend that even those industries have not been set up as they have not become consumers? We think that for the said purpose, the proviso has to be read down. It must be made applicable to them who not only had started commercial production before the said date, namely, 14.02.1997 but also had applied and were otherwise ready to take electrical connections having deposited the amount asked for.46. Those hard cases, even according to Mr. Ganguly, should be brought within the purview of the proviso.