# 9 S.C.R. 870 TAMIL NADU ELECTRICITY BOARD & ANR v. STATUS SPINNING MILLS LTD. & ANR

- **Citation:** [2008] 9 S.C.R. 870
- **Court:** Supreme Court of India
- **Decided:** 2008-05-16
- **Case number:** Civil Appeal No. 3940 of 2008
- **Bench:** S.B. Sinha, Lokeshwar Singh Panta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/9-s-c-r-870-tamil-nadu-electricity-board-anr-v-status-spinning-mills-ltd-anr-24894
- **Pages:** 41

## Headnote

Tamil Nadu Revision of Tariff Rates on supply of Electrical Energy Act, 1978: Ss 3, 4 and GO.Ms.No. 29 dated
c 31.01.1995 and GO.Ms. dated 14.2.2007 making amendment
in the schedule appended to 1978 Act:
Government Order/Notification providing for tariff concession for High Tension Industries - Amendment made restricting the benefit to industries set up only upto the specified date
D - Challenge to - Dismissing the petition High Court held that
Industries which either informed or made application to Electricity Board for getting power connection before the due date
or industries established before the specified date would be
entitled to get tariff concession - But benefit of the tariff conE cession would not be available on the basis of principle of
promissory estoppel - Correctness of- Held: Incorrect - High
Court did not go into fact of case but proceeded on the basis
that the word 'set up' as in the proviso of Schedule of the 1978
Act should be given its dictionary meaning - Notification
F amending the Schedule to 1978 Act was issued providing
some tariff concession - It was further amended disallowing
the concession in tariff to Industries set up on or after 15. 2. 1997
-A word in a statute has to be read in the context in which it has
been used - Schedule to the Act is a piece of subordinate
G legislation and it has to be read in the same manner as the
Act - In terms of Notification grant of service connection to
industries was considered to be a pre-requisite for grant of concession - It is in this context impugned amendment has to be
construed - Notification in question is a broad based one as
H
870
+
TAMIL NADU ELECT BOARD & ANR. v. STATUS
871
SPINNING MILLS LTD. & ANR.
concession was a/so given to pre-existing industries - AppelA
/ant-Board did not alter its position pursuant to any promise,
the doctrine of promissory estoppel would not apply - In the
facts and circumstances of the case, provisio to schedule of
1978 Act applicable to industries, which not only started commercial production before the specified date but also to those,
B
which had applied for service connection by depositing the
requisite amount therefor - Interpretation of statute.
Doctrine/Principles:
(ij Principle of contemporaneous exposito - Applicability of c
(ii) Doctrine of promissory estoppe/ - Applicability of
Words and phrases:
'Exemption Notification' - Construction of- Held: Exemption Notification requires construction depending upon the D
tenor of the statute - It could be withdrawn in public interest
'Statute' and 'policy decision' - Distinction between in the
context of subordinate legislation.
The questions arose for determination before this
E
Court in the instant appeals were as to what is the connotation of the expression 'set up' in the context of
concessional tariff provided in terms of the Government
Notification providing for tariff concession for High Tension Industries; as to whether the expression 'set up'
F
would have to be construed in the context of the expression 'shall continue to avail themselves of the tariff concession' appearing in the proviso to the schedule of the
Tamil Nadu Revision of Tariff rates on supply of Electrical
Energy Act, 1978 and the concession could be availed by G
the High Tension Industries upto three years from the date
the consumer was given the service connection; and as
to whether the Notification conferring tariff concession
could be construed liberally to extend the benefit thereof
by construction of the expression 'set up' and by introH
872
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A ducing the element of uncertainty.
Appellant-Board contended that the State of Tamil
Nadu intended to confer benefit on a class of people. Such
classes of people having been identified as consumers
of High Tension Electrical Energy, it was permissible for
8 the State not only to fix a cut-off date but also to specify
the same so as to enable the industries to take the benefit
only from the date when they start consu

## Text

_Characters 0–39,589 of 79,984. This is a partial read: ask again with offset=39589 for what follows._

A
B
[2008) 9 S.C.R. 870
TAMIL NADU ELECTRICITY BOARD & ANR.
v.
STATUS SPINNING MILLS LTD. & ANR.
(Civil Appeal No. 3940 of 2008)
MAY 16, 2008
[S.B. SINHA AND LOKESHWAR SINGH PANTA, JJ.]
Tamil Nadu Revision of Tariff Rates on supply of Electrical Energy Act, 1978: Ss 3, 4 and GO.Ms.No. 29 dated
c 31.01.1995 and GO.Ms. dated 14.2.2007 making amendment
in the schedule appended to 1978 Act:
Government Order/Notification providing for tariff concession for High Tension Industries - Amendment made restricting the benefit to industries set up only upto the specified date
D - Challenge to - Dismissing the petition High Court held that
Industries which either informed or made application to Electricity Board for getting power connection before the due date
or industries established before the specified date would be
entitled to get tariff concession - But benefit of the tariff conE cession would not be available on the basis of principle of
promissory estoppel - Correctness of- Held: Incorrect - High
Court did not go into fact of case but proceeded on the basis
that the word 'set up' as in the proviso of Schedule of the 1978
Act should be given its dictionary meaning - Notification
F amending the Schedule to 1978 Act was issued providing
some tariff concession - It was further amended disallowing
the concession in tariff to Industries set up on or after 15. 2. 1997
-A word in a statute has to be read in the context in which it has
been used - Schedule to the Act is a piece of subordinate
G legislation and it has to be read in the same manner as the
Act - In terms of Notification grant of service connection to
industries was considered to be a pre-requisite for grant of concession - It is in this context impugned amendment has to be
construed - Notification in question is a broad based one as
H
870
+
TAMIL NADU ELECT BOARD & ANR. v. STATUS
871
SPINNING MILLS LTD. & ANR.
concession was a/so given to pre-existing industries - AppelA
/ant-Board did not alter its position pursuant to any promise,
the doctrine of promissory estoppel would not apply - In the
facts and circumstances of the case, provisio to schedule of
1978 Act applicable to industries, which not only started commercial production before the specified date but also to those,
B
which had applied for service connection by depositing the
requisite amount therefor - Interpretation of statute.
Doctrine/Principles:
(ij Principle of contemporaneous exposito - Applicability of c
(ii) Doctrine of promissory estoppe/ - Applicability of
Words and phrases:
'Exemption Notification' - Construction of- Held: Exemption Notification requires construction depending upon the D
tenor of the statute - It could be withdrawn in public interest
'Statute' and 'policy decision' - Distinction between in the
context of subordinate legislation.
The questions arose for determination before this
E
Court in the instant appeals were as to what is the connotation of the expression 'set up' in the context of
concessional tariff provided in terms of the Government
Notification providing for tariff concession for High Tension Industries; as to whether the expression 'set up'
F
would have to be construed in the context of the expression 'shall continue to avail themselves of the tariff concession' appearing in the proviso to the schedule of the
Tamil Nadu Revision of Tariff rates on supply of Electrical
Energy Act, 1978 and the concession could be availed by G
the High Tension Industries upto three years from the date
the consumer was given the service connection; and as
to whether the Notification conferring tariff concession
could be construed liberally to extend the benefit thereof
by construction of the expression 'set up' and by introH
872
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A ducing the element of uncertainty.
Appellant-Board contended that the State of Tamil
Nadu intended to confer benefit on a class of people. Such
classes of people having been identified as consumers
of High Tension Electrical Energy, it was permissible for
8 the State not only to fix a cut-off date but also to specify
the same so as to enable the industries to take the benefit
only from the date when they start consuming electrical
energy; that the Division Bench of the High Court committed a serious error insofar as it failed to take into cone sideration that a High Tension industry gets ready to discharge the functions for which it was set up, only with
certain formalities as provjded for in the Indian Electricity
Act, 1910 and the Rules framed thereunder; that an industry starts functioning only when it is ready to
D operationalise its machinery which can only be done when
the power connection is granted. One of the essential prerequisite therefor is certification and approval by the Inspector in terms of Section 37 of the 1910 Act and Rule 63
of the 1956 Rules and compliance of Rule 63 of the 1956
E Rules is a definite parameter to assess the readiness of
industry to discharge the functions for which it had been
set up; that the Government letter dated 1.08.1997 being
clarificatory in nature, the same should be given effect
to; and that the subsequent notification dated 7 .01.2000
F whereby two Explanations were introduced is also
clarificatory in nature as a bare perusal of Explanation 1
would demonstrate that it merely clarified what was inhered/ implied in the said proviso which also reflects the
undertaking of the government which alone was compeG tent to grant exemptions to concerned industries and/or
to withdraw or modify the same; and that the operative
part of the order of the Division Bench of the High Court
should be suitably modified to reflect that the setting up
of an industry prior to 15.02.1997 implies that such industry was ready to discharge all the functions for which it
H
TAMIL NADU ELECT. BOARD & ANR. v. STATUS
873
SPINNING MILLS LTD. & ANR.
..._
had been set up and that it has already become a conA
sumer having obtained High Tension service connection
from 15.02.1997 and only those industries which have
been set up before 15.02.1997 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 B
is given a service connection.
Respondent-Industries submitted that that the
amendments to the Schedule carried out by the notifications are unreasonable being in contravention of the stat-
-#
ute; that the word "set up" having been interpreted by c
•
this Court holding that the said word is in contra-distinction of the word "commence"; that some of the High Tension industries having already set up their business and
having gone for commercial production by reason of generators, it cannot be said that they had not been set up. D
For the said purpose, not only the doctrine of promissory
estoppel should be applied, the wordings of the Section
should be read down to mean that those industries are
entitled to the tariff concession which were not only
granted connection but which ought to have been E
granted connection; that in most of the cases, not only
the entrepreneurs altered their position pursuant to or in
furtherance of the promise made by the State in terms of
the notification dated 31.01.1995. They had applied for
grant of communication much prior to the cut off date fixed
F
by the notification dated 14.02.1997. The entrepreneurs
who had acted pursuant to the promise made by the State
should not be allowed to suffer for no fault on their part;
and that although no appeals have been preferred from
the judgment of the Division Bench of the High Court, this G
Court in exercise of its jurisdiction under Order 41, Rule
_._
33 of the Code of Civil Procedure may permit the respondents to raise the said contention.
Allowing the appeals, the Court
H
874
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
HELD: 1.1 The High Court did not go into the fact of
B
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. [para 18] [893-F,G]
Commissioner of Wealth Tax v. Ramaraju Surgical Cotton Mills, Ltd. 1967 (1) SCR 761 and Kabini Minerals (P) Ltd.
and another v. State of Orissa and others (2006) 1 sec 54 -
referred to
c
1.2 The Tamil Nadu Revision of Tariff Rates on supply of Electrical Eneryy Act, 1978 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
0
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.
[para 20] [894-A-C]
2.1 The notification dated 31.01.1995 was issued
E 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 had been granted. The concession was to apply to both unit rates and maximum deF mand charges. Certain limitations for grant of the said
concession had also been specified. [para 20] [894-C,D]
2.2 The Schedule was further amended by the notification dated 14.02.1997 reflecting the operation of grant
of concession tariff to those who had set up the new High
G Tension industries on or after 15.02.1997. What is, therefore, significant is the meaning of the word "set up" vis-avis "commencement". [para 21] [894-E]
2.3 A word cannot be assigned a meaning in vacuum.
H It has to be read in the context in which it has been used.
TAMIL NADU ELECT BOARD & ANR. v. STATUS
875
SPINNING MILLS LTD. & ANR.
A decision which has been rendered on a different Act A
dealing with a different subject matter may not be apposite while construing the same term in another statute.
[para 22] [894-F]
Commissioner of Wealth Tax v. Ramaraju Surgical CotB
ton Mills Ltd. 1967 (1) SCR 761 - referred to
2.4 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 prov.ides for High Tension tariff. It
fixes up cut-off dates. It is a piece of subordinate legisla- c
tion. A subordinate legislation validly made may have to
be read in the same manner as if it is a part of the Act. [
para 23] [895-F,G]
Bombay Dyeing & Mfg. Co. Ltd. (3) v. Bombay Environmental Action Group and Others (2006) 3 SCC 434; Vasu Dev D
Singh and Others v. Union of India and Others (2006) 12 sec
753 and State of Kera/a and Others v. Unni and Another (2007)
2 sec 365 - relied on
2.5 The notification dated 31.01.1995 postulated conE
cession to the new High Tension industries "to be set up"
for the first three years from the date the consumer is given
a service connection. It did not speak of commencement
of production. It intended to attain a certainty as to from
which date such concession would be available. Grant of
service connection was considered to be a pre-requisite F
for grant of the concession. It is in this context, the impugned amendment will have to be construed. It fixes a
cut off date beyond which the concession shall not be
available to the industries, viz., those who had set up in
any area on or after 15.02.1997. [para 24] [896-B,C,D]
G
2.6 The proviso appended to Schedule of 1978 Act,
~
however, saves the cases of those who had availed themselves of the said tariff concession and they who would
continue to get the benefit thereof until expiry of the peH
876
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A riod of three years from the date on which the consumer
..
is given service connection. The date on which the service connection is given, therefore, plays an important
role. The clarification issued by the State during pendency
of the appeals should have, therefore, been considered
B by the High Court in its proper perspective. If it is
clarificatory in nature, it could be given a retrospective
operation. [para 25] [896-D,E,F]
..
2.7 When a subordinate legislation is made by the
State Government, it must be done in terms of the constic tutional provision. An executive order is also issued keeping in view the rule~ and executive business. It may not
have the force of law but the same may come within the
purview of the well-known principle of contemporaneous
exposito. Rules of executive construction are also relevant.
D [para 25] [896-G, 897-A]
3.1 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
E say. [para 27] [897-E,F]
3.2 In terms of the Notification concession is to be
given in respect of payment of the charges for electrical
energy. When can it be given would be a question of fact.
When it has been given would be known to everybody.
F The bills are required to be paid only after electrical energy is consumed. Question of availing the benefit of concession would not arise unless a service connection is
granted. For the said purpose, the definition of consumer,
as contained in Section 2(1)(c) of the 1910 Act would be
G relevant. The benefit can be availed by the consumer keeping in view the nature of concession granted. Exemption
notifications, therefore, require construction depending
-~
upon the tenor of the statute/ notification. Whether it
should undergo a strict construction or a liberal construeH tion is one thing but it is another thing that whether a per-
TAMIL NADU ELECT. BOARD & ANR. v. STATUS
877
SPINNING MILLS LTD. & ANR.
son is entitled to concession on a plain reading of the A
notification. [para 28] [897-G, 898-A,B]
3.3 It may be true that the exemption notification
should receive a strict construction. But it is also true that
once it is found that the industry is entitled to the benefit
of exemption notification, it would receive a broad con8
struction. [para 28] [898-C,D]
Tata Iron & Steel Co. Ltd. v. State of Jharkhand (2005) 4
SCC 272; A.P Steel Re-Rolling Mill Ltd. v. State of Kera/a
(2007) 2 SCC 725 and Novopan India Ltd. Hyderabd v. Co/-
C
/ector of Central Excise and Customs, Hyderabad 1994 Supp.
(3) S.C.C. 606 - referred to
3.4 A notification granting exemption can be withdrawn in public interest. What would be the public interest would, however, depend upon the facts of each case. D
[para 28] [898-D,E]
3.5 The word "set up" was required to be construed
keeping in view the provisions of the statute operating in
the field, viz., the 1910 Act, the 1948 Act and the 1956 Rules.
E
[para 30] [899-B]
State of Jharkhand v. Tata Cummins Ltd. (2006) 4 SCC
57 - referred to
4. For the purpose of declaring a statute unconstitutional, foundational facts have to be laid therefor. Grounds
F
are required to be raised therefor. In absence thereof it
would not be possible for this Court 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 applicaG
tion. The fact that the said doctrine may apply even in relation to a statute is beyond any dispute. [para 31] [899-C,D,E]
Mis. Seema Silk & Sarees & Anr. v. Directorate of Enforcement & Ors. Criminal Appeal@ SLP (Crl.) No. 6812 of H
878
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A 2007 decided on 121h May, 2008; 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 Altoys and Casting Pvt. Ltd. v. UP State Electricity Board and
others (1997) 7 SCC 251 and Southern Petrochemical IndusB tries Co. Ltd. v. Electricity Inspector & ET/O and Others (2007)
5 sec 447 - referred to
5. Applicability of the doctrine of promissory estoppel would depend upon various factors including the nature and purport of the Statute, the object it seeks to
c achieve, the purpose for grant of concession/exemption
etc. It, therefore, depends on the nature of the statute as
also applicability of the doctrine. Even such a question
had not been raised before the High Court. [paras 32 and
33] [901-F,G]
D
6.1 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 exE emption 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 which had
been utilizing power from their own generating units or
making other arrangements for production for the purF poses 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. [para
G 34 ] [902-D,E,F]
7.1 The respondents in the instant case have started
'I
setting up their industries after the said date. It is on the
aforementioned backdrop, the impugned notification
H dated 14.02.1997 requires interpretation. Those who had
TAMIL NADU ELECT. BOARD & ANR. v. STATUS
879
SPINNING MILLS LTD. & ANR.
set up their industries have acquired a right, viz. the right A
to obtain the tariff concession once a right is accrued in
their favour. What was promised to them was that they
would be granted the tariff concession for a period of three
years @ 60%, 70% and 80% of the consumption charges.
[para 34] [902-F,G]
B
7.2 The notification 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 C
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) of the Notification is required to be interpreted. It has D
used the term 'set up' in any area other than Chennai Metropolitan area before 15.02.1997. However, the rule of liberal interpretation should not be applied. An accrued right
ordinarily cannot be taken away With retrospective effect.
It is not a case where the notification has a retroactive E
operation. [para 35] [903-B,C,D]
7 .3 A statute, even a subordinate legislation, may have
to be construed reasonably. A subordinate legislation ordinarily would not be given a retrospective effect. Retrospective effect can be granted only if there exists any
F
power in that behalf. There is nothing to show that such a
power has been conferred upon the State in terms of the
Act. While saying so, this Court is not oblivious of the situation that the State has a statutory power to fix the tariff. It
may also be true that when a statutory power is conferred, G
the State would have power to amend, alter, modify or
rescind the same. The Court must also bear in mind that
it may not cause undue hardship. If construction of a statute is possible as a result of hardship is avoided, vis-avis, an undue hardship would be created, the court will H
880
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A prefer the former interpretation. The proviso is an exception to the main clause whereas all industries which were
set up on or after 151h February become wholly ineligible
for any tariff concession but those who had set up prior
thereto shall continue to avail themselves of the said tars iff concession. Legally, those who had not become consumer o~ electrical energy, but were the potential consumers, they had not only been applied for it but they were
and, in faG.t, some of them have also been gone into commercial pro.d.uction. Once they have set up the high tenC sion industries and who had gone up for commercial production must be held to have set up the high tension industries. Once th_ey have set up the high tension industries after 31s1 March, 1995, they became entitled to the benefit of concessional tariff for a period three years. Such
0 concession was to be availed by them from the date of grant
of service connection. If they had already been granted
service connection, they would continue to avail themselves of the said tariff concession. However, the difficulty
arises only .in cases where despite applying for grant of
electrical communication, actual service connection had
E not been granted. If a literal interpretation of the proviso is
taken r~course to, the same may result in an anomaly in
the sense that in pne case, connection may be granted in
one day and in another case, connection may not be
granted for a long time. Because of the acts of discriminaF tion on the part of the officers of the Board or the State, the
entrepreneurs would suffer. It is in the aforementioned limited sense, the doctrine of promissory estoppel will have
application. If doctrine of promissory estoppel applies, the
right accrued in terms theieof cannot be withdrawn with a
G retrospective effect. [para 37] [903-G, 904-A-H, 905-A]
H
8. 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
TAMIL NADU ELECT. BOARD & ANR. v. STATUS
881
SPINNING MILLS LTD. & ANR.
the appellants have not altered their position pursuant to A
any promise, the doctrine of promissory estoppel would
not apply. If that be so, the question of any riEJht 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. [para 42] [907-A-C]
B
Mahabir Vegetable Oils (P) Ltd. and Anr v. State of
Haryana & Ors. (2006) 3 SCC 620; Southern Petrochemical
Industries Co. Ltd. v. Electricity Inspector & ETIO & Ors. (2007)
5 SCC 447; MRF Ltd., Kottayam v. Asstt. Commissioner (Assessment) Sales Tax and others (2006) 8 sec 702; Tata c
Teleservices Ltd. v. Commissioner of Customs (2006) 1 SCC
7 46; State of Orissa and Others v. Tata Sponge Iron Ltd. (2007)
8 SCC 189 and State of Kera/a and Others v. Kurian Abraham
(P) Ltd. and Another (2008) 3 SCC 582 - referred to
9. A distinction must be made between a policy deciD
sion and a statute. Whereas prima facie a policy decision
may not have any retroactive operation, a statute may
have. Only because it affects a past transaction the same,
by itself, would not come in the way of the legislature in E
enacting an enactment or the executive government to
exercise its power of subordinate legislation. [para 44 ]
[909-8,C]
10. Some of the industries had even installed gen-
~
erators. They had to do it. They inevitably had to do it beF
cause the Board would not supply power. It would be too
much to contend that even those industries have not
been set up as they have not become consumers. It is for
, the said purpose, the proviso has to be read down. It must
be made applicable to them who not only had started comG
mercial 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,
wherefor their industries were otherwise ready for cons uming electrical energy. [para 45] [909-C,D,E]
H
882
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
11. The matters have to be examined by the Appropriate Authority of the Board, as directed by the High Court
in individual cases. [para 46] [910-C]
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 3940
of 2008
B
From the final Judgment and Order dated 19/7/2005 of
the High Court of Judicature at Madras in W.A. No. 1735/1999
WITH
c
C.A. Nos. 3941, 3942, 3943, 3944, 3945, 3946, 3947,
3948,3949,3950,3951,3952,3953,3954,3955,3956,3957,
3958,3959,3960,3961,3962,3963,3964,3965,3966,3967,
3968, 3969,3970,3971, 3972, 3973,3974,3975,3976, 3978,
3979,3980,3981,3982,3983,3984,3985,3986,3987,3988,
D 3989,3990,3991,3992,3993,3994,3995,3996,3997,3998,
3999,4000,4001,4002,4003,4004,4005,4006,4007,4008,
4009,4010,4011,4012,4013,4014,4015,4017,4018,4019,
4020,4021,4023,4024,4025,4026,4027,4028,4029,4030,
4031,4032,4033,4036,4035,4034,4037,4038,4039,4040,
E 4041,4042,4043,4044,4045,4046,4047,4048,4049,4050,
4051,4052,4053,4054,4055,4056,4057,4058,4060,4061,
4062,4063,4064,4065,4066,4067,4068,4070,4071,4072,
4073, 4075, 4076, 4077, 4078, 4080, 4081, 4083 and 4084 of
2008
F
A.K. Ganguli, K. Ramamoorthy, K. Parasaran, S. Ganesh,
lndu Malhotra, E. Padmanabhan, G. Anoop Choudhary, Ramji
Srinivasan, T. Harish Kumar, V. Vasudevan, K.K. Senthilvelan,
Rakesh K. Sharma, V. Balaji, Narendra Kumar, Shashi M.
Kapila, Sandeep Mahapatra, Abhinav Agnihotri, Vikas Mehta,
G M.A. Krishna Kumar, M.A. Chinaswamy, T.S. Shanthi, P.
Narashimhan, R.S. Paliwal, Punish Arora, Pranab Kumar
Mullick, K. Krishna Kumar, Chowhan, K.K. Mani, V.M. Shivkumar,
...
R.K. Pandey, Mayur R. Shah, B. Ragunath, P. Venkataraman,
Vijay Kumar, E.R. Kumar, Rukhmini Bobde, Shivshankar, Lalit
1H Chauhan (for Mis. Parekh & Co.) V. Balachandran, V.
TAMIL NADU ELECT BOARD & ANR. v. STATUS
883
SPINNING MILLS LTD. &ANR. [S.B. SINHA, J]
Prabhakar, Ramjee Prasad, Revathy Raghavan, K.V.
A
Viswanathan, V. Mohana, Hari Shankar K., Vikas Singh Jangra,
S. Nanda Kumar, G. Ananda Selvam, Satish Kumar, Tarun
Trivedi, V.N. Raghupathy, K. Swami, Yousa Lachampa, Prabha
Swami, P.H. Parekh, Naresh Kumar, Gaurav Agrawal, A.TM.
Sampath, S. Ravi Shankar, Guru Krishnakumar, Srikala
B
Gurukrishna Kumar, Senthil Jagadeesan for the Appearing
Parties.
The Judgment of the Court was delivered by
S.B. SINHA, J : 1. Leave granted.
2. These appeals at the instance of the Tamil Nadu Electricity Board (for short "the Board") and State of Tamil Nadu are
directed against a judgment and order dated 19.07.2005
passed by a Division Bench of the Madras High Court dismissc
ing the writ appeals filed by the appellants herein arising out of D
a judgment and order dated 23.04.1999 passed by a learned
Single Judge of the said Court.
3. The basic fact of the matter is not in dispute.
4. The State of Tamil Nadu despite the Parliamentary enE
actment of the 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 as under:
"3. Tariff rates for consumption ~ electrical energy
F
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 G
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 ScheduleThe State Government may after taking into account the
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[2008] 9 S.C.R.
~
A
Cost of production of energy, and such other matters as
may be prescribed by notification, amend the provisions
of the Schedule to this Act."
5. Pursuant thereto and in furtherance thereof, High TenB
sion 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 as under:
.J...
"a) In the case of new High Tension Industries to be set up
c
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 -1For the first year
60 per cent of the
D
High Tension rates.
For the second year
70 per cent of the
High Tension rates.
E
For the third year
80 per cent of the
High Tension rates.
For the fourth year
Full Tariff.
F
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
G
and utilizes the power supplied by the Board for auxiliary
purposes only."
6. A memorandum was issued on or about 23.08.1995 to
.,,
specify the time limit required for dealing with the applications
H for grant of electrical connections as and when applications
TAMIL NADU ELECT. BOARD & ANR. v. STATUS
885
SPINNING MILLS LTD. & ANR. [S.B. SINHA, J]
therefor are filed which are in the following terms:
A
.4-
"Adverting to 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
B
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.
c
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.
D
iv)
It is further to be reiterated that those H.T. applications
y
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.
E
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
F
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.
G
All Superintending Engineers/Elecy. Distn. Circle are once
again informed to ensure that delays do not occur beyond
a reasonable time for r.irocessing the H.T applications as
HT services constitute major source of revenue for the
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886
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A
Board and to bestow all efforts to achieve the target fixed
for the year 95-96 without fail."
B
c
D
E
F
G
H
7. The flow chart annexed thereto specified the maximum
period of 18 months' time to be taken from the date of filing of
the application till the date of grant of connection.
8. The G.O. dated 31.01.1995 was amended on
14. 02.1997 in the following terms:
"H.T. Tariff - I
There 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 ~.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 service concession."
By a G.O. issued on 14.02.1997, the Schedule appended
to the 1978 Act was amended as under:
"(a) New 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
TAMIL NADU ELECT. BOARD & ANR. v. STATUS
887
SPINNING MILLS LTD. & ANR. [S.B. SINHA, J]
and existing industry which has only night shift between
A
· 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
B
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."
C
9. 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", stating:
"I am to state that the words "set up" would mean "obtained
D
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."
10. Questioning the validity of the said notification dated
E
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 uru;ler the doctrine of promissory estoppel. Writ petitions
were also file9 contending that the petitioners had set up their
industries'p&ifore 14.02.1997 and they were entitled to the benF
efit of !~riff 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 applications directing:
a)
b)
G
Writ petitions which challenged the validity of the
· Notification dated 14.2.1997 withdrawing the
concessions were dismissed.
Those petitioners who had informed the Electricity
Board on or before 14.2.1997 about their readiness
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888
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B
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SUPREME COURT REPORTS
[2008] 9 S.C.R.
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.
D
11. 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
E further amended by a notification dated 7.01.2000 whereby and
whereunder the following Explanations were added:
"Explanation 1. - For the purpose of this clause, an
industry may be considered to be set up on the date of
F
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
G
tariff rate."
H
12. The Division Bench of the High Court dispos.ing 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
TAMIL NADU ELECT. BOARD & ANR v. STATUS
889
SPINNING MILLS LTD. & ANR [S.B. SINHA, J]
...
that the Secretary to the Government could not clarify the amendA
ments to the Schedule which were made by the Governor. The
said appeals were disposed of holding:
i)
" ... In the present case, the meaning of the words
"set up is clear. These words mean "erect or
B
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.
c
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
D
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
E
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."
F
13. It is, thus, evident that two points were determined
against the respondents. No appeal has been preferred therefrom by the industries in question.
14. The core questions which arise for our consideration G
are as under:
'
i)
What is the connotation of the expression "set up" in
the context of the concessional tariff granted in favour
of High Tension Industries for the first three years
"from the date, the consumer is given service
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890
SUPREME COURT REPORTS
[2008] 9 S. C.R.
A
connection?.
-;..
ii)
Whether the expression "set up" appearing in the
proviso to clause (a) of High Tension Tariff would
have to be construed in the context of the expression
B
"shall continue to avail themselves of the said tariff
concession" appearing in the proviso?
iii)
Whether the expression "set up" would also takes its
j..
colour from the context that the continued tariff
concession could be availed by the High Tension
c
Industries "until the expiry of the period of three years
from the date on which the consumer is given service
connection.?
iv)
Whether the expression "set up" be not construed to
ensure certainty amongst the consumers who could
D
continue to avail of the tariff concession and whether
the date on which the consumer is given a service
connection provides such certainty?
"(
v)
Whether the Notification conferring tariff concessions
E
could be construed liberally to extend the benefit
thereof by construction of the expression "set up"
and by introducing the element of uncertainty?
15. Mr. A.K. Ganguly, learned senior counsel appearing
on behalf of the appellants would submit that the State of Tamil
F Nadu intended to confer benefit on a class of people. Such
classes of people having been identified as consumers of High
~
Tension Electrical Energy, it was permissible for the State not
only to fix a cut-off date but also to specify the same so as to
enable the industries to take the benefit only from the date when
G they start consuming electrical energy. It was, however, submitted that there can be some exceptional cases where despite
filing of applications for grant of electrical connection, there had
been some avoidable delays on the part of the Board.
'
It was urged that for the purpose of grant of benefit of conH cession in tariff rate, the Board must know who the beneficia-
TAMIL NADU ELECT BOARD & ANR. v. STATUS
891
SPINNING MILLS LTD. & ANR. [S.B.