TMI Blog2011 (1) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... rebate to the petitioners in all the circumstances or was precluded from changing the tariff rates. The petitioners being parties to the agreement now cannot turn around and argue that the respondent No. 2 is bound to give 33.33% Hill Development Rebate and can never change the tariff rates to the detriment of the petitioners. On the facts and in the circumstances of the case, therefore, this Court holds that the respondent No. 2 is not bound to give 33.33% Hill Development Rebate to the petitioners for the period specified in the notification irrespective of change in the tariff rates. Whether the Court of law would be justified in interfering with the policy decision of the Government either to grant or not to grant rebate to certain industrial units? - Held that:- What is relevant to notice is that if the power to reduce the rebate to 17% is assumed to be available, then power to reduce the rebate to 0%, as is done by the notification dated August 7, 2000, is also available. The petitioners have not challenged previous judgment of the High Court wherein this Court has held that the rebate would not be available/cannot be given after coming into force of the U.P. Electricity R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n commanding the respondents to restore/give Hill Development Rebate of 33.33% to the industrial units of the petitioners on the total amount of the electricity bills for the remaining unexpired period of five years. 2. The facts giving rise to the filing of this petition are as under:- The petitioners are industrial units carrying on business of manufacturing iron rods, ingots, strips in furnaces/re-rolling mills in hill are known as Kotdwar, State of Uttar Pradesh, now State of Uttarakhand. The industrial units of the petitioners were connected with power loads in the year 1996-97 by U.P. State Electricity Board which is now known as U.P. Power Corporation Limited. The claim made by the petitioners is that from the year 1986, the State Government, in order to develop hill areas and particularly Zero Industrial Zones of hill areas as well as for inducing, encouraging and alluring new entrepreneurs declared various exhaustive industrial policies with the consent of UP State Electricity Board, Sales Tax Department and Industrial Department granting various incentives including rebate of 33.33% on total amount of electricity bills to industrial units to be establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... developed areas on account of various factors such as labour charges, maintenance cost, transportation of raw material, transportation of finished goods, availability of water, establishment charges etc. The petitioners have averred that vide Notification dated 18-06-1998 25-01-1999, issued by the respondent Corporation, uniform tariffs were introduced, which were seemingly innocuous but in fact had reduced the rebate from 33.33% to 17% and the result was that hill area units became less competitive and unviable in comparison to the units situated in developed areas. The petitioners have mentioned that the two Notifications dated June 18, 1998/25-01-1999 levying the tariffs, were challenged by the petitioners before High Court of Allahabad by way of filing C.W.P. Nos. 15292 and 15293 of 1999. The High Court vide judgment dated 25-05-2000 had allowed the writ petitions and struck down clause 9(a) of the Notification dated 25-01-1999 and clause 8(a) of the Notification dated 18-06-1998 holding that the petitioners were entitled to get H.D.R. of 33.33% on the total bill till the period of five years from the date of commencement of supply of electricity to them was to come to an end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents have completely withdrawn the assured, promised and guaranteed Hill Development Rebate which has made it impossible for the petitioners to run their industrial units located in the hill areas and therefore the notification dated 07.08.2000 should be regarded as illegal, arbitrary, discriminatory and violative of provisions of Article 14, 19(1)(g) and 21 of the Constitution as well as contrary to the principles of promissory estoppel. The assertion made by the petitioners is that the respondents are bound to act as per their promise, solemnly made to the petitioners while inviting them to establish the industrial units in completely remote and underdeveloped areas of U.P. The petitioners have further claimed that because of the tariff introduced by notifications dated 18.06.98/25.01.99 out of 28 industrial units which were established on assurances given by the respondents, 15 industrial units were closed down and now only 13 industrial units of the petitioners are operating at present. It is mentioned that the new tariff introduced by notification dated 07.08.2000 is contrary to the suggestions/recommendations made by Uttar Pradesh Regulatory Commission established unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riff in exercise of statutory powers and directed the respondents to enforce the same and therefore the respondents to enforce the same and therefore the respondents who are bound to enforce the tariff, have enforced the same vide notification dated 07.08.2000. It is claimed that tariff revision made under the statutory powers has nothing to do with the interim order dated 28.07.2000 passed by this Court in the SLPs filed by the U.P. Power Corporation Limited and the High Court is wrong in allowing the Writ Petitions and directed that 33.33% rebate should be given to the petitioners, when the entire tariff is changed and total financial burden on the petitioners is less than 5% of tariff. After asserting that the Kotdwar is practically situated in plain area and very near to to Najibabad, it is stated that the claim of high cost advanced by the petitioners is not genuine. In the reply it is emphasized that the tariff was revised to minimize the theft of electricity which was prevalent amongst large and heavy consumers like petitioners and in fact rates enforced with effect from 18.06.1998 were more favourable to the petitioners but they were not satisfied with the said tariff and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced on December 10, 2007 and it is reported in U.P. Power Corporation Ltd. and another vs. Sant Steels and Alloys (P) Ltd. and others (2008) 2 S.S.C. 777. This Court by the said decision held that notifications dated 28.06.1996 and 03.01.1997 wherein rebate was given were issued under Section 49 of the Electricity (Supply) Act, 1948 and they were in the nature of delegated legislation. It was further held that on the basis of principle of promissory estoppel, the respondent No.2 i.e. UP Power Corporation Limited was not entitled to take away benefit given to the industries. However, the Court made reference to Uttar Pradesh Electricity Reforms Act, 1999 wherein no such benefit of rebate is recognized and held that the benefit of rebate cannot be extended after coming into force of Uttar Pradesh Regulatory Reforms Act, 1999, i.e., after 14.01.2000 because estoppel cannot be claimed against the statute. The findings recorded by this Court while disposing of Civil Appeals No. 1215-1216 of 2001 made in Paragraph 34 and 36 of the decision, read as under: 34. Dr. Singhvi, learned Senior Counsel for the appellant Corporation submitted that now the Act of 1999 has come into f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Government of U.P. In response to the same, Mr. Nitish Kumar Jha, Additional Secretary to the Government of Uttarakhand, has filed affidavit dated April 19, 2010 mentioning that the concession/rebate by way of incentive was part of the policy framed by the then State Government of UP and the same was enforceable till the year 1997, but consequent upon enforcement of the UP Reorganization Act, 2000, the hill areas of the erstwhile State of UP were carved out which now form part of the new State known as State of Uttarakhand. According to the affidavit, to accelerate the pace of industrial development in remote and backward hill region and to remove economic backwardness of the hill region, by generating the employment opportunities with the possibility to check the brain drain from these areas and keeping in view the uneven geographic situation, environmental and social conditions, the Government of Uttarakhand has framed Special Integration Industrial Development Policy for hills and remote areas of Uttarakhand. The affidavit proceeds to state that the policy formulated by the State of Uttarakhand is an attempt to help and promote the establishment of industries based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undamental Rights guaranteed under Article 19 of the Constitution. A company, being not a citizen, has no Fundamental Rights under Article 19 of the Constitution. Nonetheless the companies would be entitled to claim right under Article 14 of the Constitution and, therefore, it would be relevant to examine whether the respondents have committed breach of Article 14 by withdrawing the concession in electricity rates given/granted earlier. 9. The short question which now falls for decision of this Court is whether the Hill Development Rebate of 33.33% on total amount of electricity bills under industrial policy of the erstwhile State Government of U.P. granted to the writ petitioners will cease to have effect after 14.01.2000 when U.P. Electricity Reforms Act, 1999 came into force or should continue thereafter, as can be seen from the decision in U.P. Power Corporation Limited Anr. vs. Sant Steels and Alloys (P) Ltd. Ors. (Supra). 10. Mr. Shanti Bhushan, learned Senior Counsel for the writ petitioners submitted that the concessions in the bills for power supply were given to the industries set up in the hill areas in view of the direction given by the State Government in exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Judges of this Court in Civil Appeal Nos. 1215-1216 of 2001. 11. In view of the observations made by the Division Bench of this Court in the reported decisions, the questions that fall for consideration of this larger Bench are whether a benefit given by a statutory notification can be withdrawn by the Government by another statutory notification and whether the principles of promissory estoppel would be applicable in a case where concessions/rebates given by a statutory notification are subsequently withdrawn by another statutory notification. It is an admitted position that the notification dated June 28, 1996, granting rebate to the industries set up in hill areas, was issued in exercise of powers conferred by Section 49 of Electricity (Supply) Act, 1948. By the said notification rebate in electricity charges to the extent of 33.33% was given to the industries, which were set up in the hill areas during the specified period. It is also an admitted position that thereafter, by notifications dated June 18, 1998 and January 25, 1999, issued in exercise of the powers conferred by Section 49 of the Act of 1948, the percentage of rebate granted by the earlier notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise an equity in favour of the promisee and enforce the promise against the Government. Where public interest warrants, the principles of promissory estoppel cannot be invoked. Government can change the policy in public interest. However, it is well settled that taking cue from this doctrine, the authority cannot be compelled to do something which is not allowed by law or prohibited by law. There is no promissory estoppel against the settled proposition of law. Doctrine of promissory estoppel cannot be invoked for enforcement of a promise made contrary to law, because none can be compelled to act against the statute. Thus, the Government or public authority cannot be compelled to make a provision which is contrary of law. Having noticed salient features of the principle of promissory estoppel it would be relevant to refer to certain observations made by the two Judge Bench of this Court in U.P. Power Corporation Ltd. and another vs. Sant Steel and Alloys (P) Ltd. (supra). In the said decision the Court has observed in paragraph 33 of the reported decision as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o provide for the rationalization of the production and supply of electricity and generally for taking measures conducive to electrical development. The Electricity (Supply) Act, 1948 being a Central Act, the provisions of Sections 14 and 21 of the General Clauses Act, 1897 would be applicable. Section 14 of the General Clauses Act, 1897 reads as under:- 14. Powers conferred to be exercisable from time to time. (1) Where, by any Central Act or Regulation made after the commencement of this Act, any power is conferred, then unless a different intention appears that power may be exercised from time to time as occasion requires. (2) This section applies also to all Central Acts and Regulations made on or after the fourteenth day of January, 1887. Whereas Section 21 of the General Clauses Act, 1897 reads as under:- 21. Power to issue, to include power to add to, amend, vary or rescind notifications, orders, rules or bye-laws. Where, by any Central Act or Regulations a power to issue notifications, orders, rules or bye-laws is conferred, then the power includes a power, exercisable in the like manner and subject to the like sanction and conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the General Clauses Act is to place in one single statute different provisions as regards interpretations of words and legal principles which would otherwise have to be specified separately in many different Acts and Regulations. Whatever the General Clauses Act says whether as regards the meaning of words or as regards legal principles, has to be read into every statute to which it applies. Further, power to curtail and/or withdraw the notification issued under Section 49 of the Electricity (Supply) Act, 1948 giving rebate is implied under Section 49 itself on proper interpretation of Section 21 of the General Clauses Act. Therefore, this Court is of the firm opinion that, power to curtail and/or withdraw the notification issued under Section 49 of the Electricity (Supply) Act, 1948, granting certain benefits, was available to the respondents. 13. By virtue of Sections 14 and 21 of the General Clauses Act, when a power is conferred on an authority to do a particular act, such power can be exercised from time to time and carry with it power to withdraw, modify, amend or cancel the notifications earlier issued, to be exercised in the like manner and subject to like conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. At this Stage, it would be relevant to notice certain principles which have emerged from the reported decisions of this Court. 16. In State of Rajasthan and Another vs. J.K. Udaipur Udyog Ltd. and Another (2004) 7SCC 673, pursuant to its Fourth New Industrial Policy, the State of Rajasthan had framed and notified the Rajasthan Sales Tax/Central Sales Tax Exemption Scheme for Industries, 1998 under Section 15, Rajasthan Sales Tax Act, 1994 and Section 8(5) of the Central Sales Tax Act. The Scheme was brought into force w.e.f. 1.4.1998. The Scheme inter alia provided for grant of exemption to industrial units from payment of sales tax on intra-State and inter-State sale of goods and by-products manufactured within the State ofRajasthan. The cement plants and units were also entitled to exemption at the flat rate of 25% for eleven years. Sick units were also granted such benefits. The respondents before this Court were the Companies manufacturing cement in different units in Rajasthan and were sick industrial companies. They had applied for exemption under the Scheme claiming benefits. On 20-2-1999, the Director of Industries had certified that the application of the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graph 25 of the reported decision:- An exemption is by definition a freedom from an obligation which the exemptee is otherwise liable to discharge. It is a privilege granting an advantage not available to others. An exemption granted under a statutory provision in a fiscal statute has been held to be a concession granted by the State Government so that the beneficiaries of such concession are not required to pay the tax or duty they are otherwise liable to pay under such statute. The recipient of a concession has no legally enforceable right against the Government to grant of a concession except to enjoy the benefits of the concession during the period of its grant. This right to enjoy is a defeasible one in the sense that it may be taken away in exercise of the very power under which the exemption was granted. (See Shri Bakul Oil Industries v. State ofGujarat(1987) 1 SCC 31, Kasinka Trading v. Union ofIndia(1995) 1 SCC 274 and Shrijee Sales Corpn. V. Union ofIndia(1997) 3 SCC 398.) From the principle enunciated in the above mentioned decision there is no manner of doubt that the rebate which was granted to the petitioners, was, by definition, a freedom from an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve discussion, it is clear that the petitioners cannot raise plea of estoppel against the notification dated August 7, 2000 reducing Hill Development Rebate to 0% as there can be no estoppel against the statute. 19. The next question, which falls for determination of this Court is whether the term stipulated in the contract entered into between the petitioners and the U.P. State Electricity Board (now the Corporation) stipulating that the respondent No.2 would give 33.33% rebate to the petitioners, is legally enforceable and whether in view of the said term the respondent No.2 precluded from changing the tariff rates. 20. It is pertinent to notice that before starting the industrial units, the petitioners had entered into agreement units, the petitioners had entered into agreement with the then U.P. State Electricity Board. Clause 7 of this agreement provided that the rates/tariff fixed/revised by the supplier, i.e., the respondent No.2 from time to time, will be applicable to the petitioners. Clause 7 of the agreement reads as under:- (7) a. The consumer shall pay for the supply of electric energy at the rates enforced by the supplier from time to time as may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case, therefore, this Court holds that the respondent No. 2 is not bound to give 33.33% Hill Development Rebate to the petitioners for the period specified in the notification irrespective of change in the tariff rates. 21. Another question, which needs to be answered, is whether the Court of law would be justified in interfering with the policy decision of the Government either to grant or not to grant rebate to certain industrial units. From the record of the case, it is evident that before August 8, 2000, the U.P. State Electricity Board had power to frame/fix tariff under Section 49 of the Electricity (Supply) Act, 1948. However, thereafter tariff was determined and is being determined by U.P. Electricity Regulatory Commission under the provisions of U.P. Electricity Reforms Act, 1999. What is relevant to notice is that earlier the U.P. State Electricity Board had power to make/fix a tariff other than the uniform tariff contemplated under Section 49(3) of the Act of 1948 for the electricity to be supplied to its consumers having regard to the geographical position of any area. However, this power was not conferred on U.P. Electricity Regulatory Commission under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncession to new industrial units is concerned, the aforesaid policy does not provide for any concession to the steel industries established in the State because it was not considered necessary in the larger public interest to grant such subsidy. In the said affidavit it is mentioned that in view of lack of provision in the industrial development policy, the concession of Hill Development Rebate of 33.33% earlier granted by the Uttar Pradesh Government cannot be extended to the steel industries in the State of Uttarakhand. Whether to grant rebate to certain industrial units located in an area is basically and essentially a policy decision. The policy decision as reflected in the affidavit dated April 19, 2010 filed by Nitesh Kumar Jha, Additional Secretary, Government of Uttarakhand, Department of Energy, is neither found to be unreasonable nor found to be arbitrary in any manner. The Special Integration Policy introduced by the State of Uttarakhand for hills and remote areas of Uttarakhand is not subject-matter of challenge by the petitioners in the present writ petition. Grant of power concession to new industrial units is not found by the State Government to be in larger public i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined by the Commission nor the petitioners would be entitled to seek any direction against the licensee to amend or modify the tariff determined by the Commission. 24. What is relevant to notice is that if the power to reduce the rebate to 17% is assumed to be available, then power to reduce the rebate to 0%, as is done by the notification dated August 7, 2000, is also available. The petitioners have not challenged previous judgment of the High Court wherein this Court has held that the rebate would not be available/cannot be given after coming into force of the U.P. Electricity Reforms Act, 1999. The petitioners have also not challenged the tariff rates made applicable from September 16, 2001 to March 31, 2002 vide order dated September 1, 2000 by the U.P. Electricity Regulatory Commission, wherein no rebate based on geographical area has been provided. The discussion made above makes it very clear that the petitioners have not been differently treated nor the tariff is sought to be recovered in any illegal or arbitrary manner. Under the circumstances, this Court does not find breach of the salutary provisions of Article 14 of the Constitution. As no right guaranteed to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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