# M/S. SHREE SIDHBALI STEELS LTD. AND ORS v. STATE OF U.P. AND ORS

- **Citation:** [2011] 3 S.C.R. 134
- **Court:** Supreme Court of India
- **Decided:** 2011-01-20
- **Bench:** J.M. Panchal, Dr. B.S. Chauhan, Gyan Sudha Misra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-shree-sidhbali-steels-ltd-and-ors-v-state-of-u-p-and-ors-27535
- **Pages:** 42

## Headnote

Electricity (Supply) Act, 1948:
s. 49 - Notification issued in exercise of powers conferred
by s. 49 of the Act, granting Hill Development rebate to
industries set up in hilly areas in respect of electricity charges
to the extent of 33. 33%, for a period of five years -Meanwhile,
D U.P. Electricity Reforms Act, 1999 came into force - By
notification issued in exercise of powers conferred by s.24 of
the 1999 Act, the benefit, which was granted to the industries
set up in the hill areas regarding rebate in the electricity
charges, was completely withdrawn -
Writ petition filed
E challenging the same -
Petitioners raised the plea of
promissory estoppel against the Government - Held: The
petitioners were not entitled to raise plea of estoppel against
the notification reducing Hill Development Rebate from 33%
to 0% as there can be no estoppel against the statute - The
rebate granted to the petitioners was a freedom from an
F obligation which they otherwise were liable to discharge - The
petitioners, as recipients of a concession, accepted to enjoy
the benefits of the concession during the period of its grant -
This right to enjoy was defeasible in the sense that it was
liable to be taken away or withdrawn in exercise of the very
G power under which the rebate/exemption was granted - Also,
before starting their industrial units, the petitioners had
entered into an agreement with the then U.P. State Electricity
Board -
The terms and conditions stipulated in the
agreement make it clear that the petitioners were precluded
H
134
.
SHREE SIDHBALI STEELS LTD. AND ORS. v.
135
STATE OF U.P. AND ORS.
from challenging revision of tariff in exercise of statutory A
powers conferred on respondent No. 2 in the larger public
interest - The petitioners being parties to the agreement now
cannot turn around and argue that the respondent No.2 was
bound to give 33.33% Hill Development Rebate and could
never change the tariff rates to the detriment of the petitioners
B
- U. P. Electricity Reforms Act, 1999.
s.49 - Notification uls.49 granting rebate/exemption in
respect of electricity charges -
Power of the State
Government to curtail and/or withdraw the notification -
Applicability of ss. 14 and 21 of the General Clauses Act -
C
Held: The Electricity (Supply) Act, being a Central Act, the
provisions of ss.14 and 21 of the General Clauses Act would
be applicable - The State Government, in view of s. 21 of the
General Clauses Act, could always withdraw, rescind, add to
or modify an exemption notification ..,.. General Clauses Act,
D
1897 - ss.14 and 21.
Purpose of - Held: The Act was enacted to provide for
rationalization of production and supply of electricity ·and
generally for taking measures conducive to electrical -E
development.
Electricity Regulatory Commission Act, 1998 - s.29 -
Power of the licensee to amend and for modify the electricity
tariff - Scope - Held: The licensee has no power to amend
and/or modify the tariff determined by the Electricity
F
Regulatory Commission - UP. Electricity Reforms Act, 1999
- ss.24 and 29.
General Clauses Act, 1897:
G
Purpose of - Held: The purpose 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
H
136
SUPREME COURT REPORTS
[2011) 3 S.C.R.
A 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.
ss. 14 and 21 -
Principles laid in ss. 14 and 21 -
Discussed - Held: By virtue of ss. 14 and 21 of the Act, when
8 a power is conferred on an a1,1thority to do a particular act,
such power can be exercised from time to time and carries
with it the power to withdraw, modify, amend or cancel the
notifications earlier issued, to be exercised in the like manner
C and subject to like conditions, if any, attached with the exercise
of t

## Text

_Characters 0–39,960 of 87,699. This is a partial read: ask again with offset=39960 for what follows._

A
B
c
[2011] 3 S.C.R. 134
M/S. SHREE SIDHBALI STEELS LTD. AND ORS.
V.
STATE OF U.P. AND ORS.
(Writ Petition (C) No. 537 of 2000)
JANUARY 20, 2011
[J.M. PANCHAL, DR. B.S. CHAUHAN AND GYAN
SUDHA MISRA, JJ.]
Electricity (Supply) Act, 1948:
s. 49 - Notification issued in exercise of powers conferred
by s. 49 of the Act, granting Hill Development rebate to
industries set up in hilly areas in respect of electricity charges
to the extent of 33. 33%, for a period of five years -Meanwhile,
D U.P. Electricity Reforms Act, 1999 came into force - By
notification issued in exercise of powers conferred by s.24 of
the 1999 Act, the benefit, which was granted to the industries
set up in the hill areas regarding rebate in the electricity
charges, was completely withdrawn -
Writ petition filed
E challenging the same -
Petitioners raised the plea of
promissory estoppel against the Government - Held: The
petitioners were not entitled to raise plea of estoppel against
the notification reducing Hill Development Rebate from 33%
to 0% as there can be no estoppel against the statute - The
rebate granted to the petitioners was a freedom from an
F obligation which they otherwise were liable to discharge - The
petitioners, as recipients of a concession, accepted to enjoy
the benefits of the concession during the period of its grant -
This right to enjoy was defeasible in the sense that it was
liable to be taken away or withdrawn in exercise of the very
G power under which the rebate/exemption was granted - Also,
before starting their industrial units, the petitioners had
entered into an agreement with the then U.P. State Electricity
Board -
The terms and conditions stipulated in the
agreement make it clear that the petitioners were precluded
H
134
.
SHREE SIDHBALI STEELS LTD. AND ORS. v.
135
STATE OF U.P. AND ORS.
from challenging revision of tariff in exercise of statutory A
powers conferred on respondent No. 2 in the larger public
interest - The petitioners being parties to the agreement now
cannot turn around and argue that the respondent No.2 was
bound to give 33.33% Hill Development Rebate and could
never change the tariff rates to the detriment of the petitioners
B
- U. P. Electricity Reforms Act, 1999.
s.49 - Notification uls.49 granting rebate/exemption in
respect of electricity charges -
Power of the State
Government to curtail and/or withdraw the notification -
Applicability of ss. 14 and 21 of the General Clauses Act -
C
Held: The Electricity (Supply) Act, being a Central Act, the
provisions of ss.14 and 21 of the General Clauses Act would
be applicable - The State Government, in view of s. 21 of the
General Clauses Act, could always withdraw, rescind, add to
or modify an exemption notification ..,.. General Clauses Act,
D
1897 - ss.14 and 21.
Purpose of - Held: The Act was enacted to provide for
rationalization of production and supply of electricity ·and
generally for taking measures conducive to electrical -E
development.
Electricity Regulatory Commission Act, 1998 - s.29 -
Power of the licensee to amend and for modify the electricity
tariff - Scope - Held: The licensee has no power to amend
and/or modify the tariff determined by the Electricity
F
Regulatory Commission - UP. Electricity Reforms Act, 1999
- ss.24 and 29.
General Clauses Act, 1897:
G
Purpose of - Held: The purpose 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
H
136
SUPREME COURT REPORTS
[2011) 3 S.C.R.
A 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.
ss. 14 and 21 -
Principles laid in ss. 14 and 21 -
Discussed - Held: By virtue of ss. 14 and 21 of the Act, when
8 a power is conferred on an a1,1thority to do a particular act,
such power can be exercised from time to time and carries
with it the power to withdraw, modify, amend or cancel the
notifications earlier issued, to be exercised in the like manner
C and subject to like conditions, if any, attached with the exercise
of the power.
Administrative Law:
Administrative decision -
Difference from judicial
D decision - Held: Administrative decision is revocable while
a judicial decision is not revocable except in special
circumstances.
Subordinate legislation -
Exercise of power of
subordinate legislation - Held: Is prospective and cannot be
E retrospective unless the statute authorizes such an exercise
expressly or by necessary implication.
Doctrines/Principles - Doctrine of promissory estoppel
-
Object and applicability of -
Held: The doctrine of
F promissory estoppel is not a hard and fast rule but an elastic
one, the objective of which is to do justice between the parties
and to extend an equitable treatment to them - For application
of doctrine of promissory estoppel, the promisee must
establish that he suffered in detriment or altered his position
G by reliance on the promise - Normally, the doctrine of
promissory estoppel is being applied against the Government,
and defence based on executive necessity would not be
accepted by the Court - However, if it can be shown by the
Government that having regard to the facts as they have
H subsequently transpired, it would be inequitable to hold the
SHREE SIDHBALI STEELS LTD; AND ORS. v. STATE137
OF U.P. AND ORS.
Government to the promise made by it, the Court would not A
raise an equity in favour of the promisee and enforce the
promise against the Government - Where public interest
warrants, the principles of promissory estoppe/ cannot be
invoked -
Government can change the policy in public
interest - Also, doctrine of promissory estoppel cannot be
B
invoked for enforcement of a promise made contrary to law,
because none can be compelled to act against the statute.
Constitution of India, 1950 - Article 32 - Policy decision
of the State Government - Fiscal decision - Judicial Review
- Held: The Supreme Court, while exercising powers under C
Article 32, cannot substitute the opinion and/or view of the
Government - On facts, the policy of the State Government
in not granting rebate in respect of electricity charges to
industrial units situated in a particular area was basically a
fiscal decision and in absence of arbitrariness or D
unreasonableness in the said policy, it cannot be a subjectmatter of judicial review of the Supreme Court under Article
32 - No right guaranteed to the petitioners under Article 14
of the Constitution was found to have been breached - Thus,
no case was made out to interfere with the policy of the State
E
Government.
Pursuant to declaration of new industrial policy by
the State Government, Notification dated 28.06.1996 was
issued in exercise of pqwers conferred by Section 49 of
F
Electricity (Supply) Act, 1948, granting Hill Development
rebate to industries set up in hilly areas in respect of
electricity charges to the extent of 33.33%, for a period
of five years. The percentage of rebate was reduced to
17% by subsequent notifications dated 18.06.1998 and
G
25.01.1999, also i.ssued in exercise of the powers
conferred by Section 49 of the Act of 1948. Meanwhile,
the Uttar Pradesh Electricity Reforms Act, 1999 came into
force with effect from 14.01.2000. By notification dated
7.08.2000, issued in exercise of powers conferred by
H
138
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A Section 24 of the Uttar Pradesh Electricity Reforms Act,
1999, the benefit, which was granted to the industries set
up in the hill areas regarding rebate in the electricity
charges, was completely withdrawn.
8
In the instant writ petition, the petitioners prayed for
issuance of a writ in the nature of mandamus or any other
appropriate writ or order declaring notification dated
07.08.2000 issued by the UP Power Corporation Limitad
(formerly known as U.P. State Electricity Board) as illegal,
arbitrary and violative of Articles 14, 19(1 )(g) and 21 of the
C Constitution insofar as it denied the petitioners, the Hill
Development Rebate of 33.33% on the total amount of
electricity bills issued by the respondents for the
remaining unexpired period of five years from the date of
commencement of supply of electricity to the industrial
D units of the petitioners. The petitioners also prayed for
issuance of appropriate writ in the nature of mandamus
or any other appropriate writ, order or direction
commanding the respondents to restore/give Hill
Development Rebate of 33.33% to the industrial units of
E the petitioners on the total amount of the electricity bills
for the remaining unexpired period of five years.
Dismissing the petition, the Court
F
HELD: 1.1. The Electricity (Supply) Act, 1948 was
enacted by the Parliament to 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
G General Clauses Act, 1897 would be applicable. By
Section 14 of the General Clauses Act, 1897, any power
conferred by any central enactment may be exercised
from time to time as occasion arises, unless a different
intention appears in the Act. There is no different
H intention in the Electricity (Supply) Act, 1948. Therefore,
SHREE SIDHBALI STEELS LTD. AND ORS. v. STATE 139
OF U.P. AND ORS.
the power to issue a notification under Section 49 of the
A
Act of 1948, can be exercised from time to time :t
circumstances so require. Section 21 is based on the
principle that power to create includes the power to
destroy and also the power to alter what is created.
Section 21, amongst other things, specifically deals with s
power to add to, amend,-vary or rescind notifications. The
power to rescind a notification is inherent in the power
to issue the notification without any limitations or
conditions. Section 21 embodies a rule of construction.
The nature and extent of its application must be governed c
by the relevant statue which confers the power to issue
the notification, etc. However, there is no manner of doubt
that the exercise of power to make subordinate legislation
includes the power to rescind the same. This is made
clear by Section 21. On that analogy an administrative 0
decision is revocable while a judicial decision is not
revocable except in special circumstances. Exercise of
power of a subordinate legislation will be prospective and
cannot be retrospective unless the statute authorizes
such an exercise expressly or by necessary implication.
The principle laid down in Section 21 is of general
application. The power to rescind mentioned in Section
E
21 is without limitations or conditions. It is not a power
so limited as to be exercised only once. The power can
be exercised from time to time having regard to the
exigency of time. When by a Central Act, power is given
to the State Government to give some relief by way of
F
.. concession and/or rebate to newly established industrial
units by a notification, the same can be curtailed and/or
withdrawn by issuing another notification under the
same provision and such exercise of power cannot be
G
faulted on the ground of promissory estoppel. The
purpose 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
H
•
140
SUPREME COURT REPORTS
[2011) 3 S.C.R.
A 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
B 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,
power to curtail and/or withdraw the notification issued
under Section 49 of the Electricity (Supply) Act, 1948,
c granting certain benefits, was available to the
respondents. [Para 12) [162-H; 163-A, G-H; 169-A-H; 165A]
1.2. By virtue of Sections 14 and 21 of the General
Clauses Act, when a power is conferred on an authority
D 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
conditions, if any, attached with the exercise of the power.
E It would be too narrow a view to accept that chargeability
once fixed cannot be altered. Since the charging
provision in the Electricity (Supply) Act, 1948 is subject
to the State Government's power to issue notification
under Section 49 of the Act granting rebate, the State
F Government, in view of Section 21 of the General Clauses
Act, can always withdraw, rescind, add to or modify an
exemption notification. No industry can claim as of right
that the Government should exercise its power under
Section 49 and offer rebate and it is for the Government
G to. decide whether the conditions are such that rebate
should be granted or not. [Para 13) [165-C-E]
1.3. There being nothing repugnant to raising of
public revenue in exercise of sovereign power of State
to impose and collect taxes including electricity duty, in
H
SHREE SIDHBALI STEELS LTD. AND ORS. v. STATE 141
OF U.P. AND ORS.
any provision of the Act of 1948 or the policy statement A
made in the notification granting rebate, the raising of
public revenue by withdrawing or reducing exemption,
cannot be said to be against the provisions of any statute.
Noticeably, the new industrial units, which were being
established in the hill areas, could not have compelled the
B
Government to exercise power under Section 49 of the
Act of 1948 in their favour, for grant of rebate/concession
in electricity tariff. Powers under Section 49 normally
would be exercised by the State Government for
industrial growth of an area and to generate employment c
opportunities for those who are residing in the area.
However, on change in the circumstances, the
Government can always reconsider the matter and can
either curtail or withdraw the benefit granted earlier. The
concept of the larger public interest introduced, before
D
invocation of Section 21 of the General Clauses Act, in
fact, amounts to amendment of the said provision, as
notifications dated June 18, 1998 and January 25~ 1999,
issued under Section 49 of the Act of 1948, as well as
notification dated August 7, 2000, issued under Section
E
24 of the Uttar Pradesh Electricity Reforms Act, 1999, are
in the nature of legislations and, therefore, the principle
of promissory estoppel would not apply to them. [Para
14] [165-F-H; 166-A-C]
1.4. The rule of promissory estoppel being an
F
equitable doctrine has to be moulded to suit the particular
situation. It is not a hard and fast rule but an elastic one,
the objective of which is to do justice between the parties
and to extend an equitable treatment to them. This
doctrine is a principle evolved by equity, to avoid injustice G
and though commonly named promissory estoppel, it is
neither in the realm of contract nor in the realm of
estoppel. For application of doctrine of promissory
estoppels, the promisee must establish that he suffered
_ in detriment or altered his position by reliance on the
H
142
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A promise. Normally, the doctrine of promissory estoppel
is being applied against the Government, and defence
based on executive necessity would not be accepted by
the Court. However, if it can be shown by the Government
that having regard to tile facts as they have subsequently
B transpired, 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.
c 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
D 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
E is contrary to law. The petitioners are not entitled to claim
promissory estoppel against the Government and 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. [Paras
11, 17, 18] [160-H; 161-A-E; 169-H; 170-A]
F
1.5. The rebate which was granted to the petitioners,
was, by definition, a freedom from an obligation which
they otherwise were liable to discharge. The rebate was
a privilege granting an advantage which was not made
G available to others. The rebate granted under Section 49
of the Electricity Supply Act of 1948 was, therefore, a
concession granted by the State Government so that the
beneficiaries of such concessions were not required to
pay the electricity tariff, they were otherwise liable to pay
H under the said Act during the period of its grant. The
SHREE SIDHBALI STEELS LTD. AND ORS. v. STATE 143
OF U.P. AND ORS.
petitioners, as recipients of a concession, accepted to
A
enjoy the benefits of the concession during the period of
ii:s grant. This right to enjoy was defeasible in the sense
that it was liable to be taken away or withdrawn in
exercise of the very power under which the exemption
was granted. [Para 16) [168-G-H; 169-A]
B
State of Rajasthan and Another vs. J.K. Udaipur Udyog
Ltd. and Another (2004) 7SCC 673; Arvind Industries and
others vs. State of Gujarat and others AIR1995 SC 2477 -
relied on.
U.P. Power Corporation Ltd. and another vs. Sant Steels
and Alloys (P) Ltd. and others (2008) 2 S.S.C. 777 - referred
to.
c
2. Further, it is pertinent to notice that before starting
D
the industrial units, the petitioners had entered into an
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.
E
·Sub-clause (a) of Clause 7 of the agreement in most clear
terms provided that the consumer, i.e., the present
petitioner shall pay for the supply of electric energy at the
rates enforced by the supplier, i.e., the respondent No. 2
from time to time. Though the rate schedule applicable
F
at the time of execution of the agreement between the
petitioners and the respondent No. 2 was annexed to the
agreement, it was provided specifically again in subclause (c) of Clause 7 that the rate schedule mentioned
·may, at the discretion of the supplier, be revised by the
supplier from tirrie to time and in case of revision the rates
G
schedule so revised shall be applicable to the consumer.
It was also provided in the agreement that any levy such
as sales tax, excise duty, electricity duty or any other
charges by whatsoever name called by Central or State
H
144
SUPREME COURT REPORTS
[2011) 3 S.C.R.
A Government or other competent authority on the
electricity supplied to the consumer shall also be paid by
the consumer. Therefore, in view of the terms and
conditions stipulated in Clause 7 of the agreement, it is
clear that the petitioners are precluded from challenging
B revision of the tariff in exercise of statutory powers
conferred on respondent No. 2 in thf' larger public
interest. There is no prohibition in the agreement by which
respondent No. 2 was bound to give 33.33% rebate to the
petitioners in all the circumstances or was precluded from
c 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
0 in the circumstances of the case, therefore, 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. [Para
20] [170-C-H; 171-A-G]
E
3. 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
filed by Additional Secretary, Government of Uttarakhand,
Department of Energy, is neither found to be
F unreasonable nor found to be arbitrary in any manner.
Grant of power concession to new industrial units was
not found by the State Government to be in larger public
interest. This Court, while exercising powers under
Article 32 of the Constitution, cannot substitute the
G opinion and/or view of the Government and come to the
conclusion that power concession to new steel
industries is in the larger public interest and, therefore,
should be made available to the new steel industries.
Such a course is not permissible at all. The policy having
H not been found either arbitrary, capricious or
SH REE SI DH BALI STEELS LTD. AND ORS. v.
145
STATE OF U.P. AND ORS.
unreasonable, this Court cannot interfere with the policy
A
decision of the State Government. The policy of the State
Government in not granting rebate to industrial units
situated in a particular area is basically a fiscal decision
and in absence of arbitrariness or unreasonableness in
the said policy, it cannot be a subject-matter of judicial
B
review of this Court while exercising powers under
Article 32 of the Constitution. Therefore, no case is made
out by the petitioners to interfere with the said policy.
[Para 22] [173-F-H; 174-A-D]
4. Also, in view of Section 29 of the Electricity c
Regulatory Commission Act, 1998, the licensee, i.e., the
respondent No. 2 has no authority to enforce any tariff
other than the approved by the Commission. In view of
Section 24 of the U.P. Electricity Reforms Act, 1999 the
licensee, i.e., the respondent No. 2 lacks power/authority
D
to modify the tariff determined by the Commission and
in case of any violation, the licensee would be exposing
itself to the punishment prescribed under Section 28 of
the Uttar Pradesh Electricity Reforms Act, 1999. Grant of
reliefs claimed by the petitioners would amount to
E
compelling them to act against the statute. Such a course
is not permissible while exercising powers under Article
32 of the Constitution. Thus the respondent No. 2
Corporation cannot be directed to amend or modify the
tariffs determined by the Commission nor the petitioners
F
would be entitled to seek any direction against the
licensee to amend or modify the tariff determined by the
Commission. [Para 23) [174-E-G; 175-A]
Association of Industrial Electricity Users vs. State of U.P.
G
and others(2002) 3 SCC 711; West Bengal Electricity
Regulatory Commission v. CESC (2002) 8 SCC 715; BSES
vs. Tata Power Company Limited (2004) 1 SCC 195 - relied
on.
5. If the power to reduce the rebate to 17% is
H
146
SUPREME COURT REPORTS
(2011] 3 S.C.R.
A 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 the previous judgment wherein this Court has
held that the rebate would not be available/ cannot be
B 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
c Commission, wherein no rebate based on geographical
area has been provided. This 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
0 find breach of the salutary provisions of Article 14 of the
Constitution. As no right guaranteed to the petitioners
under Article 14 of the Constitution iS'found to have been
breached, the present petition filed under Article 32 of the
Constitution cannot be entertained and the petitioners
E are not entitled to the reliefs claimed in the instant
petition. Therefore, the petitioners are precluded from
challenging notification dated August 7, 2000
withdrawing the rebate in electricity rates. [Para 24] [175B-F]
F
Case Law Reference:
(2008) 2 s.s.c. 777
referred to
Paras 6,9,10,11
(2004) 7SCC 673
relied on
Para 16
G
AIR1995 SC 2477
relied on
Para 17
c2002) 3 sec 111
relied on
Para 23
(2002) s sec 115
relied on
Para 23
(2004) 1 sec 195
relied on
Para 23
H
SHREE SIDHBALI STEELS LTD. AND ORS. v. STATE 147
OF U.P. AND ORS.
CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil) No.
A
537 of 2000.
Under Article 32 of Constitution of India.
Shanti Bhushan, Sudhir Kumar Gupta, M.L. Lohaty, R.K.
B
Gupta, P.K. Shanna, Gargi for the Petitioners.
Shail Kr. Dwivedi, MG, Pramod Swarup, Anuvrat Sharma,
Alka Sinha, Ameet Singh, R.K. Verma, A.P. Sahay, Rachana
Srivastava, Pradeep Misra, Suraj Singh for the Respondents.
The Judgment of the Court was delivered by
c
J.M. PANCHAL, J. 1. By filing this petition under Article
32 of the Constitution, the ten petitioners which are Private
Limited Companies have prayed to issue a writ in the nature
of mandamus or any other appropriate writ or order declaring D
notification No. 1208/HC/UPPCL-V-1974/1204/2000 dated
07.08.2000 issued by the UP Power Corpor~tion Limited,
which was formerly known as U.P. State Electricity Board as
illegal, arbitrary and violative of Articles 14, 19(1)(g) and 21 of
the Constitution in so far as it denies the petitioners, the Hill
E
Development Rebate of 33.33% on the total amount of
electricity bills issued by the respondents for the remaining
~nexpired period of five years from the date of commencement
of supply of electricity to the industrial units of the petitioners.
The petitioners have also prayed to issue an appropriate writ
F
in the nature of mandamus or any other appropriate writ, order
or direction 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.
·
G
2. The facts giving rise to the filing of this petition are as
under:-
The petitioners are industrial units carrying on business of
H
148
SUPREME COURT REPORTS
(2011] 3 S.C.R.
A
manufacturing iron rods, ingots, strips in furnaces/re-rolling mills
in hill area 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
B
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
C 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 established in hill areas
of UP. The petitioners have averred that a new industrial policy
D dated April 30, 1990 was declared by the State Government
assuring grant of 33.33% rebate on total amount of electricity
bills to new entrepreneurs for a period of five years. The case
of the petitioners is that the Government of UP, pursuant to the
aforesaid policy issued an order dated 16-10-1990 to UPSEB
to implement all the instructions contained in the said industrial
E
policy. The said policy, according to the petitioners was to
remain in operation till March 31, 1995. The record shows that
the UPSEB by Notification dated June 28, 1996 modified the
earlier notifications and extended the Hill Development Rebate
which was to expire on March 31, 1995 for a further period of
F
r.ext five years to be made available to the new industrial units
which would be set up till 31-3-1997. The petitioners have
claimed that the five years period for which the petitioners were
entitled to the Hill Development Rebate of 33.33% on the total
amount of electricity bills was to be over in the year 2001-02.
G What is asserted by the petitioners is that in view of the
promises, assurances and guarantees given by the Government
of UP through various industrial policies declared from time to
time and accepted, operated as well as implemented by
UPSEB through different gazette notifications, the industrial
H
units of the petitioners were established in Kotdwar, Distirct
SHREE SIDHBALI STEELS LTD. AND ORS. v. STATE 149
OF U.P. AND ORS. [J.M. PANCHAL, J.]
Pauri in the year 1996-97. According to the petitioners on
A
January 3, 1997 the Respondent No. 2 Corporation, brought
out its electricity tariff to be levied on the consumers and it was
inter-alia stipulated that the promises made in the industrial
policy declared by the UP Government on April 30, 1990 and
gazette notification dated June 28, 1996 would continue to be
B
available to the new entrepreneurs as before. The petitioners
have mentioned that 33.33% rebate promised to industrial units
established in the hill areas was accordingly granted to the
petitioners who had established their industrial units in the year
1996-97. Explaining as to why the respon<;lents had promised c
to grant rebate of 33.33%, it is stated that, the rebate was
meant to meet out extra expenditure incurred by the industrial
units set up in hill areas in comparison to the industrial units
established on plain and developed areas on account of various
factors such as labour charges, maintenance cost, 0
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 & 25-011999, issued by the respondent Corporation, uniform tariffs
were introduced, which were seemingly innocuous but in fact
E
had reduced the rebate ftom 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
F
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
G
the total bill till the period of five years from the date of
, commencement of supply of electricity t9 them was to come to
an end. The record shows that the final Judgm~nt dated
25.05.2000 rendered by the High Court of Allahabad was
challenged by U.P. Power Corporation Limited before this Court
H
150
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A by way of filing SLP No. 10665-10666 of 2000 and this Court
had initially passed an Interim Order dated July 28, 2000
directing the present industrial units of the petitioners to make
payments of electricity bills as per tariff notification dated
25.01.1999. The claim made by the petitioners is that after
B passing of the above mentioned interim order dated
28.07.2000 the respondent had issued a new tariff by
notification dated 07.08.2000 and had increased exorbitantly
the rate of charges and had completely withdrawn the Hill
Development Rebate which was made admissible under the
c industrial policy dedared by the then Chief Minister in the year
1996 and continuously allowed by the respondent No. 2 till 1806-98/25.01.99. It is relevant to notice that the notifbation
granting rebate was issued under Section 49 of the Electricity
Supply Act, 1948, whereas the notification dated 07.08.2000
D whereby the rebate was completely withdrawn was issued
under Section 24 of the Uttar Pradesh Electricity Reforms Act,
1999 which came into force with effect from 14.01.2000. The
grievance made by the petitioners was that because of the
interim order dated 28.07.2000 passed in S.L.P. Nos. 1066510666 of 2000, the respondents were not entitled to issue and
E or introduce a new tariff by a notification dated 07.08.2000
increasing the rate of charges and completely withdrawing the
Hill Development Rebate but were entitled to levy tariff
according to the notification dated 25.01.99. Therefore, they
filed IA No. NIL of 2000 in SLP Nos. 10665-66 of 2000 seeking
F appropriate directions from the Court. The claim advanced by
the petitioners is that the said IA was listed before the Court
on 29.09.2000 and after hearing the parties, while adjourning
the said IA for a period of two weeks the Bench hearing the
I.A. had opined that the petitioners, if so advised, should file
G writ petition challenging the new tariff/revised rates of power
made applicable with effect from 09.08.2000 by the notification
dated 07.08.2000. The petitioners have claimed that taking hint
from the opinion expressed by this Court on 29.09.2000, the
instant petition was filed. The petitioners have mentioned that
H
SHREE SIDHBALI STEELS LTD. AND ORS. v. STATE, 151
OF U.P. AND ORS .. [J.M. PANCHAL, J.]
by new tariff notification dated 07.08.2000, the respondents
A
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
B
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 c
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
D
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 under the provisions of Electricity
E
Regulatory Commission Act, 1998. Under the circumstances,
the petitioners have filed the instant petition and claimed the
reliefs to which reference is made earlier.
3. On service of notice Mr. N.N.Srivastava, Deputy General
Manager (Com.), U.P. Power Corporation Limited, i.e., the
F
respondent No.2 herein, has filed affidavit in opposition on
behalf of Respondent Nos. 2 & 3 taking preliminary objections
that the petition is not maintainable as no fundamental right of
the petitioners, which are the companies, is violated. The
respondent No.2 has stated that since tariff was framed in
G
exercise of statutory powers by a statutory body, the petition is
not maintainable against exercise of this statutory power. In the
reply it is mentioned that there is a provision of filing review
before the Commission in case the petitioners feel aggrieved
but they are not justified in making grievance directly before this
H
152
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A Court regarding introduction of new tariff rates and/or withdrawal
of rebate by filing a writ petition under Article 32 of the
Constitution. After mentioning that the agreement entered into
by the petitioners with the Respondent No. 2 Corporation
contains a clause that the rates/tariff fixed/revised by the
B supplier i.e. the replying respondent, from time to time, would
also be applicable to the petitioners. it is asserted that in view
of the said clause. the petitioners are estopped from challenging
the revision of the tariff made under statutory exercise of
powers for greater public interest. In the reply, clause seven of
c the agreement has been reproduced and it is claimed that the
petition which is mainly based on the principle of promissory
estoppel being thoroughly misconceived, should be dismissed
at once. So far as, merits of the matter is concerned, it is stated
that the notification dated 07 .08.2000 is neither illegal nor
0 arbitrary nor discriminatory nor hit by the principle of promissory
estoppel and the reliance placed upon the decision dated
25.05 2000 rendered by the High Court in Writ Petition No.
15292 93 of 1999 is misconceived as the same is subject
matter of challenge in tile pending SLP's. According to the
reply, during the pendency of SLP filed by the respondent UP
E Power Corporation Limited, the UP Electricity Regulatory
Commission framed a new tariff in exercise of statutory powers
and directed 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
F 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
G 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 Najibabad, it is stated that the claim of high
cost advanced by the petitioners is not genuine. In the reply it
H
SHREE SIDHBALI STEELS LTD. AND ORS. v. STATE 153
OF U.P. AND ORS. [J.M. PANCHAL, J.]
is emphasized that the tariff was revised to minimize the theft
A
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 therefore had filed
writ petition in the High Court from which the SLP No. 10665B
66 of 2000 have arisen. Another affidavit dated 26.12.2000 is
· also filed by Mr. N.N. Srivastava clarifying certain aspects of
the matter. In the additional reply, different provisions of U.P.
Electricity Regulatory Commission Act and U.P. Electricity
Reforms Act, 1999 are adverted to and it is claimed that in view c
of Section 7(a) of the Act, the tariff as framed by the U.P. State
Electricity Board is applicable to the petitioners and they having
undertaken to pay the electricity charges as per the rules/tariff
determined by UP State Electricity Board from time to time, the .
petition is not maintainable. It is also asserted in the reply that
D
when the Regulatory Commission has held that no development
rebate is to be given to a consumer, the Corporation has no
authority at all to grant any development rebate and, therefore,
the petitioners are not entitled to the reliefs claimed in the
petition.
4. The petitioners have filed rejoinder to the counter
affidavits dated 03.11.2000 and 26.12.2000 filed on behalf of
Respondents No. 2 and 3. In the rejoinder, they have reiterated
their stand taken in the petition.
5. It may be mentioned that Civil Appeal Nos.