Judgment Case ID: 6435

Judgment:
Appeal No 498 of 1975. 438 From the Judgment and Order dated 31.7.1974 of the Madhya Pradesh High Court in Misc. Petition No. 3 16 of 1973. Prithvi Raj	 Satish K. Agnihotri and Ashok Singh for the Appellants. Shankar Ghosh	 Vivek Gambhir and Parveen Kumar for the Respondent. The Judgment of the Court was delivered by PUNCHHI	 J. This is an appeal by special leave against the judgment and order of the High Court of Madhya Pradesh at Jabalpur whereby the petition under Articles 226 and 227 of the Constitution of India preferred by Orient Paper Mills Ltd.	 the sole respondent herein	 was allowed and sequally the order dated 15.3.1973 of the State Government declining to grant the respondent exemption from payment of electrici ty duty for the period from 16.2.1965 to 15.2.1970 and pursuant demand notices dated 20.3.1973 and 3.4.1973 were quashed. The aggrieved State of Madhya Pradesh and its concerned Officers are the appellants challenging the same The respondent had need to go to the High Court to have an assurance dated 1.8.1961 regarding exemption from payment of electricity duty given by the State of Madhya Pradesh in its declared industrial policy observed	 which may well be reproduced here at the outset: "Where power has to be generated by industri alists themselves	 exemption from electricity duty shah be granted for a period of five years from the date of plant goes into produc tion. The concession shall be applicable only to new generating sets installed during the Third Plan period. " Factually it was not disputed before the High Court	 that the case of the respondent squarely fall within the scope of the assurance reproduced above since the industrial plant of the respondent had gone into production w.e.f. 16.2.1965	 the generating set put up was new	 and had been installed during the Third Plan period. To formalise the matter	 the respondent had corresponded with the Government for the grant of the requisite exemption. Since the same was rejected and demands for payment of electricity duty creat ed	 the High Court was requested to issue suitable writs	 directions and orders cancelling the 439 aforesaid orders and demand notices and granting exemption from payment of electricity duty in respect of electricity self generated by the respondent during the said period of five years	 and also commanding the State to carry out the assurance and promises made in the said industrial policy dated 1.8.1961 extracted above and then requiring the State to issue a Notification under Section 3 B of the Madhya Pradesh Electricity Duty Act	 1949 granting exemption or exception to the respondent from payment of electricity duty and other allied consequential reliefs. Before the High Court voluminous documentary evidence was given by the parties in support of their respective pleadings. The High Court	 on consideration of the entire material placed before it	 spelled out a promissory estoppel in favour of the respondent and concluded as follows: "To conclude	 we are of opinion that the petitioner is entitled to invoke the doctrine of promissory estoppel in order to claim exemption from payment of electricity duty for a period of five years from 16.2.1965 to 15.2.1970 in terms of the assurance of the State Government	 dated 1.8.1961. Of course	 as indicated earlier it is not for us to issue any writ directing the State Government to grant the petitioner exemption in terms of section 3 A (vii) or Section 3 B of the M.P. Electric ity Duty (Amendment) Act	 1949. But in view of the unambiguous and unequivocal assurance given by the State Government on 1.8.1961 we can certainly quash the order of the State Government	 dated 15.3.1973 as also the demand notices	 dated 20.3.1973 (Petitioner 's Annex ure 48) and dated 3.4.1973 (Petitioner 's Annexure 50) and leave the matter at that. It would be for the Government to work out its own course of action on that basis. ' ' Mr. Prithvi Raj	 learned counsel for the appellant urged that on the facts and circumstances of the case there was no occasion to invoke the doctrine of promissory estoppel. It was asserted that though the industrial policy was published by the State Government on 1.8.1961 containing the assurance extracted above	 the respondent had not in any manner acted thereon to its own prejudice	 but had rather on its own been taking steps to set up a generating plant much before the industrial policy was announced and had factually set up the generating plant as per its earlier resolve. The facts highlighted were that the 440 respondent Paper Mill	 had been set up at Amlai in Vindhya Pradesh	 when a Part C State under the administration of the Central Government. It had in its application dated 3.5. 1955 to the Government indicated that about 5000 K.W. elec tricity would be required by it to run its paper plant and. it would by itself make arrangements for obtaining the necessary generating equipment. It appears that the State Government had at that time its oven project in view for installing a power plant. On that basis some correspondence ensued between the respondent and the State Government with regard to its annual requirement of electricity. That exer cise was abandoned for some reasons which are not relevant here. Thereafter the respondent applied for import licence for the import of a production plant as also a power plant to run it. The respondent was granted an import licence on the strength of which it started negotiation with an Ameri can supplier. While negotiations were in process the Ameri can supplier increased the price. It became impossible for the respondent to import the production plant and the power plant within the funds allotted to it by the World Bank and in these circumstances	 the American suppliers advised the appellant to drop procurement of the power plant. At the same time the American supplier warned the respondent that if the power plant was not purchased along with the produc tion plant	 it would make the project unsound and it would not be able to fulfil its guarantees as desired by the respondent. The respondent in these circumstances became of two minds	 whether to have the power plant or not. When it was in that state of mind	 the industrial policy was an nounced by the Government on 1.8.1961. Thereafter	 on 21.8.1961	 the respondent applied to the Government of India for sanction of permission to import 3.5 million dollar worth goods more than the sanctioned amount. Finally	 the respondent with the consent of the Government of India and with the aid of the World Bank was able to import the pro duction plant and the power plant and after its installation was able to go on production w.e.f. 16.2.1965. The course of the events set out earlier were not dis puted as such by the appellants before the High Court but it was maintained as now before us	 that the respondent would have on its own gone on to install the power plant even without the announcement of the industrial policy dated 1.8.1961. Additionally	 it was maintained	 in the like manner	 that the respondent had not acted to its prejudice on the basis of the aforesaid assurance dated 1.8.1961 and so that doctrine of promissory estoppel was not invokable. The defence of the State thus raised was rejected by the High Court in the following words: 441 "We have already dealt with that aspect earli er and we have already held that the petition er 's action in setting up a power plant was postponed on account of certain circumstances and ultimately on the advise of the manufac turers who refused to continue the guarantee	 the petitioner decided to set up its own power plant. In the meantime	 the assurance of the State Government	 dated 1.8.1961 had already been given and the petitioner 's action in making a final decision to set up its own power plant can be directly connected with the State Government 's assurance dated 1.8. 1961. No sooner the petitioner took the final deci sion in that behalf	 it applied to the State Government for grant of an exemption	 although that application was premature	 because the petitioner 's paper mill had not started func tioning. As such	 the petitioner would cer tainly be entitled to claim exemption in terms of the assurance of the State Government dated 1.8.1961 with effect from the date the paper mill started functioning	 namely	 16.2.1965 and the exemption would last for a period of five years upto 15.2. 1970. " Whether the respondent was of one mind right from the beginning to set up a power plant	 with or without the assurance of the State Government dated 1.8.1961	 as assert ed by the State	 is neither borne out nor is the view of the High Court arrived at from the record. Rather	 on the con trary	 the view taken is that the respondent 's indecision in that regard ended and it became decisive on the announcement of the assurance dated 1.8.1961. Such view of the High Court was a possible view to be taken on the material placed before it and the inference drawn therefrom could be that the respondent had acted on the basis of the assurance. The effort here to re do the exercise in this regard must inevi tably fail	 for this Court ordinarily does not interfere with factual findings arrived at by the High Court and this case has not been shown to us to be an exception. In this situation	 the view taken by the High Court was unexception al warranting it to be left uninterferred with. Some attempt was made by learned counsel for the appel lant to contend that the doctrine of promissory estoppel could not be pressed into service to command the State Government under Section 3 A (vii) (before its amendment) and Section 3 B of the Madhya Pradesh Electricity Duty Act	 1949 (as amended) to issue a Notification exempting the respondent from payment of electricity duty. The 442 answer to this argument is available in the conclusion arrived at by the High Court extracted above. Without com manding the State Government to issue such a Notification	 it has granted relief to the respondent to which there was no bar. Accordingly	 no provision of Madhya Pradesh Elec tricity Duty Act	 1949 or any other law can be said to have been transgressed. We thus reject this argument too. Thus for the foregoing reasons this appeal fails and is hereby dismissed. No costs.

Summary:
In its industrial policy	 the State Government declared on 1.8.1961 that where power has to be generated by indus trialists themselves	 exemption from electricity duty would be granted for a period of five years from the date of plant goes into production	 and that the concession would be applicable only to new generating sets installed during the Third Plan period. The Respondent indicated to the Government on 3.5.1955 that about 5000 K.W. of electricity would be required by it to run its paper plant and that it would by itself make arrangements for obtaining the necessary generating equip ment. It also applied for import licence for the import of a production plant as also a power plant to run it. The import licence was granted and the Respondent started negotiation with the foreign supplier. Since the price had gone up it was rather impossible for the Respondent to import both the production plant and the power plant	 and if the power plant was not purchased along with the production plant	 it would make the project unsound. Hence the Respondent was in two minds whether to have the power plant or not. Meanwhile	 the above said industrial policy was announced and the Respond ent on installation of the power plant was able to start its production w.e.f. 16.2.1965. Thereafter to formalise the matter	 the Respondent corre sponded 437 with the appellant for the grant of the requisite exemption	 which was rejected	 and the Respondent approached the High Court by way of a petition under Articles 226 and 227 of the Constitution of India. The High Court held that the Peti tioner was entitled to invoke the doctrine of promissory estoppel in order to claim exemption from payment of elec tricity duty for a period of five years from 16.2.1965 in terms of the assurance of the State Government dated 1.8.1961. Against this order of the High Court the State has come in appeal by Special Leave. On behalf of the appellant State it was urged that there was no occasion to invoke the doctrine of promissory estop pel	 since the Respondent had not in any manner acted on the assurance of the Government to its own prejudice but on its own it was taking steps to set up a generating plant much before the industrial policy was announced. Dismissing the appeal	 this Court	 HELD: 1. Whether the respondent was of one mind right from the beginning to set up a power plant	 with or without the assurance of the State Government dated 1.8.1961	 as asserted by the State	 is neither borne out nor is the view of the High Court arrived at from the record. On the con trary	 the view taken is that the respondent 's indecision in that regard ended and it became decisive on the announcement of the assurance dated 1.8.1961. Such view of the High Court was a possible view to be taken on the material placed before it and the inference drawn therefrom could be that the respondent had acted on the basis of the assurance. [441E F] 2. This Court ordinarily does not interfere with factual findings arrived at by the High Court and this case has not been shown to be an exception. The view taken by the High Court was unexceptional warranting it to be left uninter ferred with. [441F] 3. Without commanding the State Government to issue such a Notification	 the High Court has granted relief to the respondent to which there was no bar. Accordingly no provi sion of Madhya Pradesh Electricity Duty Act	 1949 or any other law can be said to have been transgressed. [442A]