SUPREME COURT OF INDIA
(1) A.P. Steel Re-Rolling Mill Limited ; (2) Victory Papers and
Boards India Limited
Vs
State of Kerala and Others
Appeal (Civil) 5814 of 2006 (Arising Out of S.L.P.(C)Nos.7972-7973 of 2005); Civil Appeal No. 5816/2006 (Arising Out of S.L.P.(C) No.6809 of 2005)
(S. B. Sinha and Markandeya Katju, JJ)
JUDGMENT
S. B. SINHA, J.
Leave granted.
These two appeals, involving common questions of fact and law, were taken up
for hearing together and are being disposed of by this common judgment.
We will, however, notice the fact of the matter from M/s. Victory Papers and
Boards India Ltd.'s case.
The State of Kerala adopted an industrial policy in the year 1992 and in the
light thereof a notification bearing No. G.O.(MS)No.4/92/PD dated 6.2.1992, was
issued, which reads as under :
"ORDER
In the light of the statement of Industrial Policy approved for implementation
by Government the following incentives in respect of electricity are ordered:
1. New industrial units will be exempted for 5 years from payment of enhanced
power tariff which came into effect on 1.1.92. This concession will be
available.
i. to new units from the date of commercial production, which start such
production between 1.1.92 and 31.12.96.
ii. to manufacturing units only and not to service and entertainment units.
iii. To existing units for substantial expansion/ modernization/diversification
the concession in such cases will be available only for the consumption of the
new machinery and equipments which adds to the capital asset, by not less than
25% of the exiting fixed capital investment excluding land and building, the
installation of which is to be certified by the competent authority.
iv. for modernization, to industrial units having a contract demand not
exceeding 500 KVA. In such cases, new equipments alone will be eligible for the
concession."
The said industrial policy of the State was accepted by the Kerala State
Electricity Board, which is a body constituted and incorporated under the
provisions of the Electricity (Supply) Act, 1948, in
respect of which a notification was issued on 27.3.1992. By reason of the said
notification, some guidelines were also issued. The appellant herein contended
that pursuant to or in furtherance of the representation made by the State of
Kerala and/or the respondent-Board, they altered their position by investing a
huge amount by setting up factories/new units.
The State, admittedly, at the district level constituted a 'Green Channel
Clearance Committee' (GCC).
The appellant had applied for grant of electric power allocation to the extent
of 2500 KVA. It obtained loan on 19.1.1995. As the application of the appellant
had not allegedly been processed, GCC issued several reminders to the Board. On
or about 17.11.1995, Appellant informed the Board that the project was at an
advanced stage. It was recorded that despite recommendations by GCC, sanction
for grant of electrical connection had not been issued, stating:
"We wish to add at this juncture that the Government is inviting
entrepreneurs to start their industrial units in the State and are offering
Power, Water and other infrastructural facilities availability so easily. But
on the contrary the concerned authorities are reluctant to sanction the
necessary infrastructural facilities to the units. Our case is one of the
examples. Your goodself will appreciate that without electric power we cannot
start out production as schedule, which will hamper the work and finally affect
the production of the unit. The delay in implementing the project will,
finally, escalate the cost of the project.
Since more than one year has lapsed after submitting our application to the
KSEB, we have so far not received sanction of Power to our unit. Hence we
request to your goodself to kind enough to prevail upon the authority to
sanction Electric Power to out unit to the extent of our
requirement."
It, allegedly, imported machinery from abroad, which fact was intimated to the
Board by a letter dated 24th June, 1996, stating:
"Under the circumstances, our Bankers are reluctant to clear term loan
because of non-sanctioning of Power to the Project. Presently, the total
machinery worth Rs.3.5 Crore have already arrived at site and the erection is
in progress. Any further delay in receiving the power allocation will affect
our total project which will lead to a financial constraint. It is really
unexpected from the authorities such a situation by the entrepreneur who is
taking initiative to install a factory in Kerala.
Since we have already invested a huge amount for land, building and machinery,
we do not have other alternative other than to complete the project and start
production at the earliest.
We have informed these facts and figures to the previous Ministry vide our
letter dated 22nd February, 1996, addressed to Hon'ble Minister of Electricity.
We are sorry to inform you that so far we have not received any favourable
decision.
According to our schedule, we are planning to start production in the month of
August, 1996. Of the huge investment of Rs.12.5 crore, 75% of the total cost of
the project has already been invested and any more delay in power allocation
will effect our project very seriously.
To avoid unnecessary delay in starting the production, we need the sanction of
power allocation urgently.
We understand that our file is pending with the Chief Engineer, World Bank
Projects, Vaiduthy Bhavanam, Thiruananthapuram and with the Secretary, Kerala
State Electricity Board, Trivandrum vide No. TSI/PA/Victory Paper/95-96/3019
dated 7.8.1995."
[Emphasis supplied]
The response of the Board thereto is to be found in the letter dated 11.2.1997,
whereby sanction for power allocation was sought for by the Deputy Chief Engineer
from the Chief Engineer of the Board. Having regard to the fact that there was
no adequate transformer capacity at Kanjiokode Sub Station, the allocation
could not be granted, as was informed to the appellant by the Board in terms of
its letter dated 21.4.1997. Electrical energy was allocated for six months on
trial-run basis on 24.12.1997 and a final sanction was granted on 21.12.1998.
Appellant started commercial production on 10.3.1999. It evidently denied the
benefit of the said incentive scheme dated 6.2.1992. A writ petition was filed
by the appellant, which has been dismissed by reason of the impugned judgment
of the High Court, inter alia, stating:
".....The only question to be considered is whether the Petitioner had
satisfied the various terms and conditions laid down in the order dated
6.2.1992. Facts would eloquently show that Petitioner had not satisfied the
various conditions laid down in the order. Petitioner might have submitted an
application during the year 1994. Mere submission of application would not be
sufficient to hold that Petitioner had complied with all the terms and
conditions. Power allocation was issued by the fourth Respondent on 24.12.1997
with specific condition that the connection would be effected only after providing
a separate 22 KV feeder with outlet from the substation to the factory under
OYEC scheme. Respondent could start the work of drawing at 2.8 km of 22 KV line
only after the Petitioner remitting the OYEC amount. Even though allocation was
given on 24.12.1997 Petitioner took his own time to remit the amount.
Petitioner has taken considerable time to complete the work and was not ready
for availing power supply. Petitioner has produced energization sanction order
under Rule 63 of the Indian Electricity Rules 1956 from the Chief Electrical
Inspector only during December 1998 even though power allocation was sanctioned
on 24.12.1997. Petitioner had executed the H.T. agreement only on 22.1.1999 and
the unit was energised on 10.3.1999, by the time period fixed for concessional
tariff was already over. We are of the view, ext. P1 order of the apex court
would not apply to the facts of this case where power allocation was made from
the year 1991 but the power could not be supplied. Hence commercial production
could not be started by 31.12.1996. Hence Petitioner had not complied with the
formalities so as to get the benefit of the concession orders. The principle of
promissory estoppel in the facts and circumstances of the case cannot be put
against the Board. Above being the factual situation, we are of the view
Petitioner is not entitled to get concessional tariff."
So far as case of M/s. A.P. Steel Re-Rolling Mill Ltd. is concerned, we need
not go into the factual aspect of the matter. Suffice it to notice that its
writ petition was permitted to withdrawn by the High Court by an order dated
24th November, 2003. A review application filed by the said appellant was also
dismissed by an order dated 25th May, 2004. We may, however, note that an
application for grant of electrical connection was filed by it in November,
1995 and actual commercial production started in or about October, 1998.
The principal contentions which have been raised by Mr. Ranjit Kumar and Mr.
Venkatararamani, learned Senior counsel appearing on behalf of the appellants,
are : -
i) Appellants having altered their position pursuant to or in furtherance of
the representation made by the State of Kerala as also the Board, the doctrine
of promissory estoppel would squarely apply in the instant cases;
ii) The High Court committed a manifest error in proceeding on the premise that
the appellants were not entitled to grant of such exemption as they had started
commercial production after the period envisaged in the said notification;
iii) The Board was statutorily obligated to supply electrical energy to the
appellant within a reasonable time.
(iv) Had electrical energy been supplied to the appellants within a reasonable
time, they would have been able to obtain the benefit of the said exemption.
Mr. Venkataramani added :
(v). A concession made by the Counsel on a question of law being not binding on
the client, the High Court should have allowed the application for review of
its earlier order permitting to withdraw its writ petition.
Mr. M.T. George, learned Counsel appearing on behalf of the Board, on the other
hand, would urge that the appellants themselves were guilty of serious delay
and latches on their part in complying with the statutory requirements and
thus, it is idle to put the blame on the Board. It was submitted that the
language of the notification dated 6.2.1992 being clear and explicit, the same
does not envisage grant of any benefit beyond 31.12.1996.
Before adverting to the rival contentions raised on behalf of the parties, we
may notice that construction of the notification in question came up for
consideration before a Bench of this Court in Hitech Electrothermics &
Hydropower Ltd. vs. State of Kerala & Ors. 7,
wherein this Court opined:
"On a perusal of the industrial policy of the government, unequivocally
indicting that concessional tariff rate would be given as well as the order of
the Electricity Board adopting the same, it can be safely held that such
concession could be availed of by the industrial units for a period of five
years from the date, they start such production between 1.1.1992 and
31.12.1996. In this context the stand of the Board as well as the State
Government cannot be held to be devoid of any substance when admittedly the
commercial production of the appellant's unit did not start till 31.12.1996.
But the question for consideration is when the government has itself come
forward alluring industrial units to set up their industries and when under the
provisions of the Electricity Act, every consumer has the right to get the
supply of power and in the case in hand, when power allocation has been made in
favour of the appellant as early as in 1995, and yet the same power could not
be supplied for such non-supply of power, the commercial production could not
start by 31.12.1996, would it at all be equitable to deny the relief to the
appellant by giving a literal interpretation to the incentive scheme of the
government as adopted by the Board? Our answer to this question must be in the
negative. There are several documents on record, which were produced before us
to indicate that the appellant has been communicating with the Board, seeking
power connection at an early date so that it would be able to start commercial
production by 31.12.1996. In making such communication, the appellant has been
bringing it to the notice of the Board but for supply, the appellant has made
all other arrangements to set the production, but yet there has been inaction
on the part of the Board in providing power to the appellant. Mr. Rohatgi,
appearing for the Board no doubt brought to our notice a letter from the
appellant to the Board and contended that it could not have been possible for
the appellant to start production by 31.12.96 but we are unable to accept this
submission nor are we making deeper probe into the matter. Suffice it to say
that the appellant has been denied power supply by the Board in appropriate
time, which has prevented the appellant from starting the commercial production
by 31.12.1996. This being the position, and having regard to the gamut of the
circumstances, starting from the government policy resolution and culminating
in setting up of the factory by the appellant in Kerala and commencing the
production of ferro alloys, though not by 31.12.1996, we are of the considered
opinion that granting the concessional tariff for a period of three years
instead of five years, as indicated in the policy resolution would meet the
ends of justice and we, accordingly, so direct."
A review application filed by the Kerala State Electricity Board, in the said
matter again fell for consideration of this Court in Kerala State Electricity
Board vs. Hitech Electrothermics & Hydropower Ltd. & Ors. . The
said review application was dismissed, stating:
"This Court has referred to several documents on record and also
considered the documentary evidence brought on record. This Court on a
consideration of the evidence on record concluded that the respondent had been
denied power supply by the Board in appropriate time which prevented the respondent
from starting the commercial production by 31.12.1996. This is a finding of
fact recorded by this Court on the basis of the appreciation of evidence
produced before the Court. In a review petition it is not open to this Court to
re- appreciate the evidence and reach a different conclusion, even if that is
possible. Learned counsel for the Board at best sought to impress us that the
correspondence exchanged between the parties did not support the conclusion
reached by this Court. We are afraid such a submission cannot be permitted to
be advanced in a review petition. The appreciation of evidence on record is
fully within the domain of the appellate court. If on appreciation of the
evidence produced, the Court records a finding of fact and reaches a conclusion,
that conclusion cannot be assailed in a review petition unless it is shown that
there is an error apparent on the face of the record or for some reason akin
thereto. It has not been contended before us that there is any error apparent
on the face of the record. To permit the review petitioner to argue on a
question of appreciation of evidence would amount to converting a review
petition into an appeal in disguise."
Applicability of doctrine of promissory estoppel in a case where entrepreneur alters
his position pursuant to or in furtherance of a promise made by the State to
grant exemption from payment of charges on the basis of current tariff is not
in dispute. The State made its policy decision. The said policy decision could
be made by the State in exercise of its power under Section 78A of the Electricity (Supply) Act, 1948. The Electricity Board
framed tariff for supply of electrical energy in terms of Sections 46 and 49 of
the 1948 Act. While framing its tariff, the Board could take into consideration
the policy decision of the State.
It was, therefore, permissible both for the State to issue a policy decision
and for the Board to adopt the same in exercise of their respective statutory
powers under the 1948 Act.
When a beneficent scheme is made by the State, the doctrine of promissory
estoppel would undoubtedly apply.
In Union of India & Ors. vs. M/s. Indo-Afgan Agencies Ltd. , this
Court opined:
"We hold that the claim of the respondents is appropriately founded upon the equity which arises in their favour as a result of the representation made on behalf of the Union of India in the Export Promotion Scheme, and the action taken by the respondents acting upon that representation under the belief that the Government would carry out the representation made by it. On the facts proved in this case, no ground has been suggested before the Court for exempting the Government from the equity arising out of the acts done by the exporters to their prejudice relying upon the representation"
In M/s. Motilal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh &
Ors. this Court rejected the plea of the State to the effect that in the
absence of any notification issued under Section 4-A of the U.P. Sales Tax Act,
the State was entitled to enforce the liability to sales tax imposed on the
petitioners thereof under the provisions of the Sales Tax Act and there could
be no promissory estoppel against the State so as to inhibit it from
formulating and implementing its policy in public interest.
The question came up for consideration before this Court also in Pournami Oil
Mills & Ors. vs. State of Kerala & Anr. Wherein it was held:
"Under the order dated April 11, 1979, new small scale units were
invited to set up their industries in the State of Kerala and with a view to
boosting of industrialisation, exemption from sales tax and purchase tax for a
period of five years was extended as a concession and the five-year period was
to run from the date of commencement of production. If in response to such an
order and in consideration of the concession made available, promoters of any
small scale concern have set up their industries within the State of Kerala,
they would certainly be entitled to plead the rule of estoppel in their favour
when the State of Kerala purports to act differently. Several decisions of this
Court were cited in support of the stand of the appellants that in similar
circumstances the plea of estoppel can be and has been applied and the leading
authority on this point is the case of M.P. Sugar Mills. On the other hand,
reliance has been placed on behalf of the State on a judgment of this Court in
Bakul Cashew Co. v. STO. In Bakul Cashew Co. case this Court found that there
was no clear material to show any definite or certain promise had been made by
the Minister to the concerned persons and there was no clear material also in
support of the stand that the parties had altered their position by acting upon
the representations and suffered any prejudice. On facts, therefore, no case
for raising the plea of estoppel was held to have been made out. This Court
proceeded on the footing that the notification granting exemption
retrospectively was not in accordance with Section 10 of the State Sales Tax
Act as it then stood, as there was no power to grant exemption retrospectively.
By an amendment that power has been subsequently conferred. In these appeals
there is no question of retrospective exemption. We also find that no reference
was made by the High Court to the decision in M.P. Sugar Mills' case. In our
view, to the facts of the present case, the ratio of M.P. Sugar Mills' case
directly applies and the plea of estoppel is unanswerable."
Yet again in Assistant Commissioner of Commercial Taxes (Asst.) Dharwar &
Ors. vs. Dharmendra Trading Company & Ors. , this Court, on the
factual matrix obtaining therein, rejected the contention of the State that any
misuse of the concessions granted was committed by the respondent therein and
thus the State cannot go back on its promise.
It was further observed:
"The next submission of learned counsel for the appellants was that the
concessions granted by the said order dated 30-6-1969 were of no legal effect
as there is no statutory provision under which such concessions could be
granted and the order of 30-6-1969 was ultra vires and bad in law. We totally
fail to see how an Assistant Commissioner or Deputy Commissioner of Sales Tax
who are functionaries of a State can say that a concession granted by the State
itself was beyond the powers of the State or how the State can say so either.
Moreover, if the said argument of learned counsel is correct, the result would
be that even the second order of 12-1-1977 would be equally invalid as it also
grants concessions by way of refunds, although in a more limited manner and
that is not even the case of the appellants."
Mangalore Chemicals and Fertilisers Limited vs. Deputy Commissioner of
Commercial Taxes & Ors. is a case where this Court had the occasion
to consider as to whether subsequent change in the eligibility criteria can
undo the eligibility for the condition stipulated in the earlier notification
and answered the same in the negative.
This Court reaffirmed the legal position in Pawan Alloys & Casting Pvt.
Ltd., Meerut vs. U.P. State Electricity Board & Ors. 4, holding:
"As a result of the aforesaid discussion on these points the conclusion
becomes inevitable that the appellants are entitled to succeed. It must be held
that the impugned notification of 31-7-1986 will have no adverse effect on the
right of the appellant-new industries to get the development rebate of 10% for
the unexpired period of three years from the respective dates of commencement
of electricity supply at their units from the Board with effect from 1-8-1986
onwards till the entire three years' period for each of them got exhausted.
This result logically follows for the appellants who have admittedly entered
into supply agreements with the Board as new industries prior to
1-8-1986."
The question yet again came up for consideration before this Court recently in
State of Punjab vs. Nestle India Ltd. & Anr. , wherein this Court
surveyed the growth of the said doctrine and held the doctrine to be applicable
to legislative action also.
In Jai Narain Parasurampuria (Dead) & Ors vs. Pushpa Devi Saraf & Ors.
2006 (7) SCC 756, this Court held :
"The doctrine of estoppel by acquiescence was not restricted to cases
where the representor was aware both of what his strict rights were and that
the representee was acting on the belief that those rights would not be
enforced against him. Instead, the court was required to ascertain whether in
the particular circumstances, it would be unconscionable for a party to be
permitted to deny that which, knowingly or unknowingly, he had allowed or
encouraged another to assume to his detriment. Accordingly, the principle would
apply if at the time the expectation was encouraged"
In Shrijee Sales Corporation & Anr. vs. Union of India 1, this Court referring to Motilal Padampat (supra), it
was stated :
"Two propositions follow from the above analysis:
(1) The determination of applicability of promissory estoppel against public
authority/Government hinges upon balance of equity or "public
interest".
(2) It is the Court which has to determine whether the Government should be
held exempt from the liability of the "promise" or
"representation".
In the present case, the first Notification exempting the customs duty on PVC
itself recites "....Central Government being satisfied that it is
necessary in public interest to do so...". In the Notification issued
later which gave rise to the present cause of action, the same recitation is
present."
An exemption notification, however, can be withdrawn only if it is permissible
to do so in public interest.
Yet again, in Dr. Ashok Kumar Maheshwari vs. State of U.P. & Anr. 6, it was held :
"There are many aspects of "Promissory Estoppel", but in the
instant case we are concerned only with one aspect which is to the effect that
if any "promise" has been made contrary to law, can it still be
enforced by invoking this rule.
The basic principle is that the plea of estoppel cannot be raised to defeat the
provisions of a Statute. (See: G.H.C. Ariff v. Jadunath Majumdar Bahadur;
Mathra Parshad & Sons v. State of Punjab and Ors.; Rishabh Kumar & Sons
v. State of U.P.)
This principle was reiterated in Union of India v. R.C. D'Souza, where a
retired army officer was recruited as Assistant Commandant on temporary basis
and was called upon to exercise his option for regularisation contrary to the
statutory rules. It was held that it would not amount to estoppel against the
Department.
Whether a Promissory Estoppel, which is based on a 'promise' contrary to law
can be invoked has already been considered by this Court in Kasinka Trading and
Anr. v. Union of India and Ors., as also in Shabi Construction Co. Ltd v. City
& Industrial Development Corporation and Anr. wherein it is laid down that
the Rule of "Promissory Estoppel" cannot be invoked for the
enforcement of a "promise" or a "declaration" which is
contrary to law or outside the authority or power of the Government or the
person making that promise."
{See also M/s. Ashoka Smokeless Coal Ind. P. Ltd. & Ors. vs. Union of India
& Ors. [Civil Appeal No.5302 of 2006 @ SLP(C)No.20471 of 2005 and batch,
disposed of on 1st December, 2006].}
We may notice that a somewhat different view viz. strict construction of such
notification was advocated in the case of State Level Committee & Anr. vs.
Morgardshammar India Ltd. 4, wherein, B.P.
Jeevan Reddy, J., referring to CCE vs. Parle Exports (P) Ltd. , opined :
"We agree with the above statement of law except insofar as it states
that where two views of the exemption notification are possible, it should be
construed in favour of the subject since it is contrary to the decisions afore-
mentioned including the three-Judge Bench decision in Novopan India Ltd. It may
be noted that this decision was referred to in Mangalore Chemicals and Fertilizers
and yet a slightly different principle enunciated. So far as decision in
Hindustan Aluminium Corporation (referred to in Parle Export), rendered by a
Bench comprising Tulzapurkar and R.S. Pathak, JJ., is concerned, it only holds
that the expression "metal" occurring in a notification issued under
U.P. Sales Tax Act should be understood in its primary sense, i.e., in the form
in which it is marketable as a primary commodity. The learned Judges held that
the subsequent forms evolved from the primary form constituted distinct
commodities marketable as such and must be regarded as new commercial
commodities and not included within the four corners of the notification. This
decision cannot therefor be understood as supporting the proposition enunciated
in Parle Exports with which we have disagreed. Be that as it may, the occasion
for applying the said proposition arises only where there is "real
difficulty, in ascertaining the meaning of a particular enactment"
(statement in Parle Exports). In the case before us, there is neither any
ambiguity in the language nor does the clause in question present a real
difficulty in ascertaining its meaning."
We may, however, also notice that in Southern Ispat Ltd. vs. State of Kerala
& Ors. 1, this Court took somewhat different
view then Hitech Electrothermics & Hydropower Ltd. vs. State of Kerala
& Ors. 7, stating :
"As the Division Bench rightly pointed out, the question to be decided
in this case is essentially a question of fact, namely, whether the appellant
had started 'commercial production' between 1.1.1992 and 31.12.1996 so as to be
entitled to power supply at concessional tariff rates. As a rule, it is not the
practice of this Court to interfere with factual findings which have been
concurrently recorded by two courts below. Both the learned single Judge and
Division Bench have concurrently answered all factual findings against the
appellant. On that ground itself the appellant must fail. Nonetheless, as the
appeal was argued with some seriousness, we propose to deal with the facts and
examine the factual findings only from the point of view of interference under
our special jurisdiction under Article 136.
The Division Bench of the High Court rightly pointed out that though the policy
of granting concessional tariff was announced by the State Government on
6.2.1992; followed by the KSEB order dated 27.3.1992, the appellant did nothing
till or about June 1995. It is only in June 1995 that the appellant company was
incorporated and an application for power allocation was made on 17.7.1995. The
appellant's factory had yet to be constructed and machinery to be transported
and installed after the construction of the factory building. Undoubtedly, the
application was moved on 17.7.1995 in anticipation. The material on record
suggests that there was acute shortage of electricity as a result of which even
domestic power connections were being refused. The high tension power supply
required by the appellant had to be specially arranged by drawing the
electrical lines on OYEC basis by construction of PSC polls along the line at
the Appellant's cost. This amount was deposited on 11.12.1996, only a few days
before the concession was about to lapse. Having examined the correspondence on
record, we are not in a position to accept the contention of the appellant that
the respondents had acted with undue tardiness or lethargy. Further, the
remittances of Rs.8, 54, 700/- and Rs.3, 45, 200/- made by way of security
deposit for executing the power supply agreement were actually made on 1.2.1997
and 4.2.1997, after the expiry of the period of concession."
The general principles with regard to construction of exemption notification
are not of much dispute. Generally, an exemption notification is to be
construed strictly, but once it is found that the entrepreneur fulfils the
conditions laid down therein, liberal construction would be made.
In M/s. O.N.G.C. Ltd. vs. Commnr. Of Customs, Mumbai 2006 (8) Scale 551,
this Court held :
"This Court, times
without number, has construed such exemption notifications in liberal manner.
[See Commissioner of Customs (Imports), Mumbai v. Tullow India Operations Ltd.,
, [See Tata Iron & Steel Co. Ltd. v. State of Jharkhand and Others,
2005 (4) SCC 272, Government of India and Ors. v. Indian Tobacco
Association, , Commnr. Of Central Excise, Raipur v. Hira Cement,
2006 (2) JT 369. and P.R. Prabhakar v. Commnr. Of Income Tax, Coimbatore,
2006 (7) SCALE 191. If, thus, the Appellant was entitled to the same, it
should not be denied the benefits thereof. It is directed
accordingly."
A question as to whether, in a given situation, an entrepreneur was entitled to
the benefit under an exemption notification or not, thus, would depend upon the
fact of each case. A bare perusal of the notification dated 6.2.1992 issued by
the 1st respondent would show that the purport and object thereof was to grant
benefit of a concessional power tariff which came into force on and from
1.1.1992. The phraseology used in the said notification postulates that the
benefit was to be granted in regard to the 'enhanced power tariff'. Thus, where
the new units had started production between 1.1.1992 and 31.12.1992, such
exemption was available to the entrepreneurs.
Evidently , except in a situation as might have been existing in Hitech
Electrothermics (supra) that any application filed by the entrepreneur had not
been processed within a reasonable time, in which case benefit might not be
denied on equitable ground; in cases where there has been a substantial failure
on the part of the industrial unit to obtain such benefit owing to acts of
omission and commission on its part, in our opinion, no such benefit can be
given.
The High Court has arrived at a finding of fact that the appellant herein had
failed and/or neglected to comply with the terms and conditions of the scheme
or contributed to a large extent in not being able to obtain such sanction
within a reasonable time.
The appellant applied for grant of electrical connection on 9.11.1994. It,
however, on its own showing did not receive any sanction till 17.11.1995. But
even on that date the project was not complete. It was only at an advanced
stage.
From the appellant's letter dated 24th June, 1996, as noticed supra, it would
appear that it merely had been complaining of about non-grant of sanction, but
then, evidently, it was not ready for commencing commercial production.
Machineries were obtained by it only on 4.6.1996. How much time was taken for
installation of machinery and completion of the project, is not known.
Sanction, evidently, had been allocated on 24.2.1997. It accepted the same
without any demur. It had been making payments in terms of the new tariff. It
filed the writ petition only in the year 2003, i.e., only after this Court
rendered its decision in Hitech Electrothermics (supra) on 17th December, 2002.
The benefit of a judgment is not extended to a case automatically. While
granting relief in a writ petition, the High Court is entitled to consider the
fact situation obtaining in each case including the conduct of the petitioner.
In doing so, the Court is entitled to take into consideration the fact as to
whether the writ petitioner had chosen to sit over the matter and then wake up
after the decision of this Court. If it is found that the appellant approached
the Court after a long delay, the same may disentitle him to obtain a
discretionary relief. {See Chairman, U.P. Jal Nigam & Anr. vs. Jaswant
Singh & Anr. 2006 (12) Scale 347.}
We are, thus, of the opinion that the principle of promissory estoppel will
apply where an entrepreneur has altered its position pursuant to a promise made
by the State, but the application thereof would depend upon the facts and
circumstances of each case. Having regard to the findings of fact arrived at by
the High Court, we are of the opinion that it cannot be said to have committed
any illegality in passing the impugned judgment.
So far as the case of M/s. A.P. Steel Re-Rolling Mill Ltd. is concerned,
evidently the question involved therein was a disputed question of fact.
Although, the High Court could have entertained a writ petition, as has been
done in the case of M/s. Victory Papers and Boards India Ltd., but as M/s. A.P.
Steel Re-Rolling Mill Ltd. withdrew its writ application, in our opinion, no
case has been made out for interference with the impugned judgment. As the
appellant has still its remedies open, it may avail the same.
For the reasons aforementioned, there is no merit in these appeals which are
dismissed accordingly. However, in the facts and circumstances of the case,
there shall be no order as to costs.