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Friday, February 7, 2014

Electricity Act - Promissory estoppel - Kerala state Govt. Policy to supply uninterrupted electricity for new industry units if established in Kerala, for 5 years and along other benefits - failure to supply of electricity due to reason beyond control - another policy to extend the benefits for further 5 years but not implemented - High court dismissed the writ petition - Apex court held that Govt. is liable to compensate the Industry units established under policy as the units are established on sheer promise and policy of the Govt. - now the Govt. can not go back from it's promise - Apex court set aside the orders of High court = M/s S.V.A. Steel Re-rolling Mills Ltd. etc. etc. .....Appellants. Versus State of Kerala & Ors. etc. etc. …..Respondents. = 2014 (Feb. Part) judis.nic.in/supremecourt/filename=41204

Electricity Act  - Promissory estoppel - Kerala state Govt. Policy to supply uninterrupted electricity for new industry units if established in Kerala, for 5 years and along other benefits - failure to supply of electricity due to reason beyond control - another policy to extend the benefits for further 5 years but not implemented - High court dismissed the writ petition - Apex court held that Govt. is liable to compensate the Industry units established under policy as the units are established on sheer promise and policy of the Govt. - now the Govt. can not go back from it's promise - Apex court set aside the orders of High court =
 State Government had laid down a policy whereby it declared to give
        continuous electricity supply at a particular rate to  certain  new
        manufacturing units.


   3. So as to put the aforestated policy in practice, the  respondent-State
        had issued a Government Order dated 21st May, 1990  which  read  as
        under:


           “Government have been considering the question  of  giving  some
           incentives to new industries in the matter of power  connection.
           Taking into consideration the announcements made by the Minister
           (Finance)  in  the  current  year’s  budget  speech  and   after
           discussions with all concerned, Government are  now  pleased  to
           issue the following orders  in  this  context  which  will  have
           effect from 1-4-1990.


              1. Power connection  will  be  given  on  completion  of  any
              project irrespective of whether a general  power  cut  is  in
              force or not.


              2.  New  units  commencing  industrial  production  will   be
              exempted from power cut for a period of 5 years from the date
              of commercial production.


              3. Exemption from payment of electricity duty for a period of
              5  years  from  the  date  of  commencement   of   commercial
              production will be given to the new units.


              4. In future the electricity duty will not be collected  from
              the industries if they are eligible for exemption.


              5. Service connection  charges  will  not  be  levied  if  no
              extension is  required  or  if  the  additional  line  to  be
              provided is less than 500 meters in length.”






        The aforestated State Government Order  had  been  adopted  by  the
        Board by its Order dated 19th June, 1990. 
.It is not in dispute that in pursuance of the aforestated  policy  the
        appellants had established their manufacturing  units  (hereinafter
        referred to as ‘the new units’) in  the  respondent-State. It  is
        also not in dispute that the requisite conditions, which  had  been
        imposed upon such new units, had been fully complied  with  by  the
        appellants and  therefore,  the  appellants  were  entitled  to  an
        uninterrupted electricity supply for a period of 5 years  from  the
        date on which they had commenced their commercial production.
  = but govt. failed to supply and passed G.O.  it  was  decided  and  declared  to  extend  the
        benefit which had been given under G.O. dated 25th  May,  1990  and
        6th February, 1992 to the new units by number of days during  which
        supply of electricity to them had been cut to the extent of 50%  or
        more. 
The respondent-State also decided to reimburse the Board with
        the amount of benefit which was given to the new units  on  account
        of power cut beyond 50%. =
but for the reasons beyond control of the State  as  well
        as the Board, the benefits assured to the new units  could  not  be
        given and therefore, along with other industrial units, the present
        appellants had filed writ petitions before the High Court of Kerala
        praying that the benefits which had been assured to them should  be
        given and they should not be  constrained  to  pay  tariff  at  the
        enhanced rate. 
All these grievances were ventilated before the  High  Court  by
        filing different petitions which were ultimately  rejected  by  the
        High Court by virtue of the impugned order.
=The question, thus, arises  as  to  how  the  adversely  affected
      persons who had been assured by a promise with  regard  to  continuous
      supply of electricity for five years can be fairly compensated.

 Framing such policies and doing the needful for  its  implementation
       are administrative functions of the respondent-State and  therefore,
       normally this Court would not like to interfere  with  its  policies
       but looking at the peculiar facts of the case,  where  an  assurance
       had been given  for uninterrupted supply of electricity,  one  would
       presume  that  the  respondent-State  must   have   made   necessary
       arrangements to provide 100% uninterrupted supply of electricity for
       5 years to the new units.  If for any reason it was not possible  to
       supply electricity as assured, the respondent-State  ought  to  have
       extended the period of 5 years by the period  during  which  assured
       electricity was not supplied.  By  doing  so,  the  respondent-State
       could have made an effort to fulfill its promise and  satisfied  the
       persons who had acted on an assurance given by the State and set  up
       their manufacturing units in the State of Kerala.
Before laying down any policy  which  would  give  benefits  to  its
       subjects, the State must think about pros and cons of the policy and
       its capacity to give the benefits.  Without proper  appreciation  of
       all the relevant factors, the State should not give  any  assurance,
       not only because that would be in violation  of  the  principles  of
       promissory estoppel but it would be unfair and immoral on  the  part
       of the State not to act as per its promise.
A steel industry, for example,  which
       cannot function without electricity or  power  in  any  other  form,
       would be put to enormous inconvenience and loss if the power  supply
       is not continuous.  
So as to reactivate or to restart  the  machines
       or to start the process afresh, the industry has to spend  something
       more then what it would have spent if the supply  or  power  namely,
       electricity was uninterrupted.   
Stoppage of  manufacturing  process
       would mean losses under several heads.  
The labour employed  has  to
       be paid even when the employer does not get  work  from  the  labour
       force.   
Very often, so as to bring a required temperature  for  the
       purpose of carrying  on  certain  processes,  more  fuel  is  to  be
       injected so as to attain the condition which was prevailing prior to
       electricity supply being  disconnected. 
 Moreover,  there  would  be
       several overhead expenses which one has to incur even if there is no
       production or stoppage of manufacturing process.

For the aforestated reasons, in our  opinion,  the  respondent-State
       was not wholly fair when it extended benefit to the appellants  only
       for the period during which electricity supply was reduced  to  less
       than 50% on certain days.


   38. We, therefore, hold that the  benefit  extended  by  the  respondent
       State  is  not  sufficient.   The  respondent-State  ought  to  have
       extended the period even for the days when supply of electricity was
       more than 50% but not 100% as assured under G.O. dated 21.5.1990 and
       6.2.1992.  We, therefore, direct the respondents to  give  the  said
       benefit by extending the period of incentive.


   39. We, therefore, allow the appeals by quashing and setting  aside  the
       impugned order passed by the High Court and direct  the  respondents
       to calculate the period during which 100% electricity supply was not
       given  to  the  appellants  and  extend  the  period  of   incentive
       accordingly.  The calculation shall be made and consequential orders
       shall be passed within  two  months  from  today.  The  appeals  are
       allowed with no order as to costs.


2014 (Feb. Part) judis.nic.in/supremecourt/filename=41204
        ANIL R. DAVE, A.K. SIKRI

   REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                    CIVIL APPEAL NOs. 10103-10106 OF 2010



M/s S.V.A. Steel Re-rolling Mills Ltd.


etc. etc.                                    .....Appellants.



                                Versus



State of Kerala & Ors. etc. etc.                …..Respondents.

WITH

C.A.NOS.10107-10108, 10110-10114, 10116-10121, 10123 OF 2010 AND
C.A.NO.4035 OF 2007.

                               J U D G M E N T




1 ANIL R. DAVE, J.




     1. Being aggrieved by the common Judgment dated  24th  February,  2005
        delivered by the High Court  of  Kerala  at  Ernakulam  in  W.P.(C)
        No.5795/2004, W.P.(C) No.5877/2004, W.P.(C) No.5984/2004  and  O.P.
        No.9816/2001, the appellants, original petitioners before the  High
        Court have approached this Court by way of these appeals.


     2. The facts giving rise to the present appeals, in a  nut-shell,  are
        as under:


        The appellants are businessmen having their manufacturing units  in
        the State of Kerala and
they are manufacturing  different  articles
        with the help of electricity, which is  generated/supplied  by  the
        Kerala State Electricity Board (hereinafter  referred  to  as  ‘the
        Board’).   
The  respondent-Government  was   desirous   of   having
        industrial development in the State of Kerala and therefore, it had
       
framed certain policies so as to encourage and  invite  businessmen
        for setting up their manufacturing units in the  State  of  Kerala.
        Due to shortage of electricity  supply  in  the  State  of  Kerala,
        interested entrepreneurs were not inclined to set up their units in
        the State of Kerala.
 In view of the aforestated circumstances, the
        State Government had laid down a policy whereby it declared to give
        continuous electricity supply at a particular rate to  certain  new
        manufacturing units.


   3. So as to put the aforestated policy in practice, the  respondent-State
        had issued a Government Order dated 21st May, 1990  which  read  as
        under:


           “Government have been considering the question  of  giving  some
           incentives to new industries in the matter of power  connection.
           Taking into consideration the announcements made by the Minister
           (Finance)  in  the  current  year’s  budget  speech  and   after
           discussions with all concerned, Government are  now  pleased  to
           issue the following orders  in  this  context  which  will  have
           effect from 1-4-1990.


              1. Power connection  will  be  given  on  completion  of  any
              project irrespective of whether a general  power  cut  is  in
              force or not.


              2.  New  units  commencing  industrial  production  will   be
              exempted from power cut for a period of 5 years from the date
              of commercial production.


              3. Exemption from payment of electricity duty for a period of
              5  years  from  the  date  of  commencement   of   commercial
              production will be given to the new units.


              4. In future the electricity duty will not be collected  from
              the industries if they are eligible for exemption.


              5. Service connection  charges  will  not  be  levied  if  no
              extension is  required  or  if  the  additional  line  to  be
              provided is less than 500 meters in length.”






        The aforestated State Government Order  had  been  adopted  by  the
        Board by its Order dated 19th June, 1990.


   4. By virtue of the aforestated policy declared  under  the  order  dated
        21st May, 1990, the respondent-State had assured the  manufacturing
        units to be  set  up  in  the  State  of  Kerala  that  electricity
        connection would be given to the projects which might be set up and
        they would be exempted from power cut for a period of 5 years  from
        the date of commencement of commercial production.  Such new  units
        were also  given  certain  exemption  in  relation  to  payment  of
        electricity duty for a period of five years.


   5. It is not in dispute that in pursuance of the aforestated  policy  the
        appellants had established their manufacturing  units  (hereinafter
        referred to as ‘the new units’) in  the  respondent-State.   It  is
        also not in dispute that the requisite conditions, which  had  been
        imposed upon such new units, had been fully complied  with  by  the
        appellants and  therefore,  the  appellants  were  entitled  to  an
        uninterrupted electricity supply for a period of 5 years  from  the
        date on which they had commenced their commercial production.


   6. The respondent-State had thereafter passed  a  further  order  on  6th
        February, 1992, whereby the new units were  exempted  for  5  years
        from the payment of enhanced power tariff  on  certain  conditions.
        According to the appellants, they were  also  entitled  to  benefit
        under the aforestated G.O. dated 6th February, 1992.


   7. In spite of the assurance given by the  respondent-State  to  the  new
        units that they would not suffer any power cut, because of  certain
        difficulties  faced  by  the  Board  with  regard  to   supply   of
        electricity to new  units,  there  used  to  be  power  cuts  which
        adversely affected the new units.
In view of  the  said  fact,  to
        alleviate  the  difficulties  of  the  units  set  up   under   the
        aforestated policy, the respondent-State passed  further  order  on
        26th October, 1999, whereby  it  granted  extension  of  period  of
        assured power supply to the new units, who were adversely  affected
        because of the power  cut  in  certain  circumstances.   Under  the
        aforestated order, it  was  decided  and  declared  to  extend  the
        benefit which had been given under G.O. dated 25th  May,  1990  and
        6th February, 1992 to the new units by number of days during  which
        supply of electricity to them had been cut to the extent of 50%  or
        more. The respondent-State also decided to reimburse the Board with
        the amount of benefit which was given to the new units  on  account
        of power cut beyond 50%.


   8. In the aforestated admitted facts and circumstances,  the  respondent-
        State should have given the benefits which had been assured to  the
        new units but for the reasons beyond control of the State  as  well
        as the Board, the benefits assured to the new units  could  not  be
        given and therefore, along with other industrial units, the present
        appellants had filed writ petitions before the High Court of Kerala
        praying that the benefits which had been assured to them should  be
        given and they should not be  constrained  to  pay  tariff  at  the
        enhanced rate.


   9. Thus, according to the appellants, in fact,  they  did  not  get  real
        benefit of  the  policy  because  their  production  was  adversely
        affected whenever there was power cut and the five years’ period of
        exemption from power cut was not extended by the  Government  which
        was in violation of the promise given to the appellants  and  other
        similarly situated new units.


   10.      All these grievances were ventilated before the  High  Court  by
        filing different petitions which were ultimately  rejected  by  the
        High Court by virtue of the impugned order.


   11.      The learned counsel appearing for the appellants had  vehemently
        submitted that it was unfair on the part of the  respondent  -State
        not to adhere to the promise given to the appellants with regard to
        uninterrupted 100% electricity supply.  The appellants had  set  up
        their industries in the State of  Kerala  because  of  the  promise
        given by the respondent-State that at least for a period of first 5
        years from the date of commencement of the  commercial  production,
        there would be uninterrupted power supply and there  would  not  be
        any increase in the tariff and therefore,  the respondent-State was
        bound by the said policy. The principle of promissory estoppel  was
        also invoked by the appellants.


   12.      The learned counsel had  further  submitted  that  if  for  some
        reason it was not  possible  for  the  respondent-  State  to  give
        uninterrupted 100%  electricity  supply  to  the  appellants  on  a
        particular day, the said period or the said day  should  have  been
        added to the period of 5 years for which the  respondent-State  had
        promised uninterrupted 100% electricity supply to  the  new  units.
        According to the learned  counsel,  though,  the  period  had  been
        extended, but not in a fair and reasonable manner because the  days
        during which there was cut of electricity supply to the  extent  of
        50% or more, were added to the period of 5 years.  According to the
        learned counsel, whenever there was any reduction in power  supply,
        even if the reduction or cut was  50%  or  less,  the  said  period
        should have been added to the period of 5  years,  for  the  reason
        that  in  case  of  continuing  process  industries,   for   proper
        functioning of the manufacturing units, uninterrupted  100%  supply
        of electricity is a sine qua non.


   13.      The learned counsel had shown us some material  whereby  it  was
        shown that out of first 5 years during which the appellants were to
        be given benefit, there was electricity cut for 921 days and out of
        those 921 days there were 214 days  when  the  cut  in  electricity
        supply was for more than 50%.  It had been further  submitted  that
        the period during which even the electricity cut was less than 50%,
        the new units could not  work  at  its  optimum  level,  which  had
        resulted into several problems for the appellants.


   14.      He had further added that the respondent Board had accepted  the
        policy of the State with regard to giving benefit to the new  units
        for uninterrupted power supply on same tariff  and  therefore,  the
        Board could not have asked for additional tariff during the  period
        of 5 years, as extended by the period during which there was  power
        cut.


   15.      The learned counsel had also alleged that the respondent-  State
        had given discriminatory treatment to the appellants by not  giving
        uninterrupted 100% electricity supply because the State  had  given
        uninterrupted   100%   electricity   supply   to   certain    other
        manufacturing units like  Malabar Cement and the industries set  up
        within the Export Processing Zone.  It had been  asserted  that  if
        the  above  stated  manufacturing  units  could   be   given   100%
        uninterrupted electricity supply, there was no reason  for  denying
        the same benefit to the appellants.


   16.      So as to substantiate the submission with regard  to  promissory
        estoppel, the learned counsel had  relied  upon  certain  judgments
        delivered by this Court.


   17.      On the  other  hand,  the  learned  counsel  appearing  for  the
        respondent -State had  submitted  that  the  prayers  made  by  the
        appellants before the High Court were unjust and  therefore,  their
        petitions and other  petitions,  praying  for  similar  relief  had
        rightly been rejected by the impugned order of the High Court.


   18.      It had been also submitted that  Section  22  B  of  the  Indian
        Electricity Act,  1910  (hereinafter  referred  to  as  ‘the  Act’)
        enables the respondent-State to impose control on distribution  and
        consumption of energy.  Section 22 B of the Act reads as under:


             “Sector  22B.  (1)  Power  to  control  the  distribution   and
        consumption of energy:- If the State Government is of opinion  that
        it is necessary or expedient so to do, for maintaining  the  supply
        and securing the equitable distribution of energy, it may by  order
        provide for regulating the supply, distribution, consumption or use
        thereof.”


   19.      The aforestated provision, according  to  the  learned  counsel,
        enables the respondent-State to regulate the  supply,  distribution
        or  consumption  of  electricity  and  as  there  was  shortage  of
        electricity  supply,  the  respondent-State  had  to  impose   some
        electricity cut, so as to see that least problems were  created  to
        the residents and industrial units set up in the  respondent-State.
        The Government authorities had  to  use  their  discretion  in  the
        matter  of   supply  of  electricity.   The  discretion  which  the
        respondent-State used was quite reasonable as it was  not  possible
        to give 100% electricity supply to all the consumers of electricity
        in the State.  In the aforestated  circumstances,  the  respondent-
        State had to regulate the supply by imposing some  power  cut,  and
        unfortunately it resulted into some difficulties to the appellants.


   20.      It had been further submitted by the learned counsel that, so as
        to reduce the difficulties of the appellants,  the  Government  had
        issued an order whereby the days, during which  electricity  supply
        was cut beyond 50%, had been added to the period of 5 years  during
        which the appellants were entitled to the  concession  declared  by
        the State of Kerala.  Thus, sufficient efforts  were  made  to  see
        that the benefits assured to the appellants were provided.


   21.      It had been further submitted that the appellants cannot  expect
        benefit of extension of period simply because there was  negligible
        cut in the supply for very less period.  Therefore, the respondent-
        State had decided that as and when the cut was  50%  or  more,  the
        period for which such the cut had been effected would be  added  to
        the period of 5 years and the said decision was just and fair.


   22.      The learned counsel had also submitted  that  all  consumers  of
        electricity, including the appellants were informed well in advance
         about the stoppage of electricity supply and  thus,  all  possible
        efforts were made to see that the appellants  and  other  similarly
        situated consumers were not put to much hardship.


   23.      The learned counsel had further submitted that  looking  at  the
        facts of the case, there would not be any  promissory  estoppel  as
        submitted by the learned counsel appearing for the appellants.  The
        learned counsel had relied upon the judgments delivered in the case
        of  State of Haryana & Ors. v.  Mahabir Vegetable Oils  Pvt.  Ltd.,
        [2011 (3) SCC 778] and State of Rajasthan & Anr. v.   M/s  Mahaveer
        Oil Industries & Ors., [1999(4) SCC 357] to substantiate their case
        to the effect that there could not be any  promissory  estoppel  in
        such cases.


    24.     We had heard the learned  counsel  at  length  and  perused  the
        impugned judgment and the judgments referred to in  the  course  of
        hearing and the relevant material placed on record of  this  Court.
        It is not in dispute that the appellants had set up their new units
        in the State of Kerala only upon knowing the policy with regard  to
        uninterrupted power supply and that too at the same  tariff  for  a
        period of 5 years from the date of commercial production.


    25.     In the instant case, no case had been made out by the respondent-
        State that the appellants had committed  any  breach  or  were  not
        entitled to any of the  benefits  or  concessions  which  had  been
        offered to them by the respondent-State.  In the circumstances, the
        respondent-State was bound to give  the  benefits  which  had  been
        assured to the appellants.


    26. Though the respondent-State was bound to supply uninterrupted  100%
        electricity required by the appellants, one cannot  lose  sight  of
        the fact that at times there would be circumstances which would put
        the respondent-State and the Board into such a difficulty that they
        would not be in a position to fulfill the assurance  given  to  the
        new units.  It is not in dispute that the State of  Kerala  is  not
        generating enough  electricity  to  cater  the  needs  of  all  its
        consumers in the State of  Kerala.   The  respondent-State  is  not
        having a magic wand which would enable the State to  generate  more
        electricity.  There  might  be  several  factors  which  might   be
        adversely affecting the respondents and as a  result  thereof,  the
        respondents might not be generating sufficient electricity so as to
        fulfill the needs of  the appellants and  other  residents  of  the
        State.


  27.      The question, thus, arises  as  to  how  the  adversely  affected
      persons who had been assured by a promise with  regard  to  continuous
      supply of electricity for five years can be fairly compensated.


  28.        It is true that the respondent-State came out  with  Government
      Order dated 26th October, 1999, whereby it had decided that the period
      when there would be reduction or cut in supply of power to the  extent
      of 50% or more, such period of power cut would be added to the  period
      of 5 years, during which the appellants and other  similarly  situated
      persons were to be given continuous power supply.


   29. The learned counsel appearing for the respondents could not show  us
       any justifiable reason for deciding as to why  the  respondent-State
       decided to give the benefit of extended period only when  the  power
       cut was 50% or more.  It is pertinent to know that the  cases  where
       the consumer is having a continuous process industry, even power cut
       below 50% would adversely affect the manufacturing unit.   It  is  a
       matter  of  common  knowledge  that  in  several   industries,   the
       manufacturing process can not be stopped abruptly.   Many  a  times,
       restarting of the machines or boilers take lot of time  and  energy,
       which results into loss to the manufacturer.  The said fact ought to
       have been considered by  the  State  while  taking  the  aforestated
       decision.  The decision with regard to giving extension of  time  to
       such a limited extent is not reasonable and  in  our  opinion,  that
       would have surely affected the new units adversely.


   30. It is true that Section 22B of the Act enables the State  Government
       to regulate the supply, distribution and consumption of  electricity
       for the purpose of maintenance and supply of equitable  distribution
       of energy but in our opinion, provisions of the said section are not
       much  relevant  for  the  reason  that  in  the  instant  case,  the
       respondent State had given an assurance with regard to uninterrupted
       supply of electricity and therefore, the respondents ought  to  have
       made provision  for  uninterrupted  supply  of  electricity  to  the
       appellants  and  other  similarly  situated  persons  by  regulating
       electricity supply in a proper manner.


   31. Framing such policies and doing the needful for  its  implementation
       are administrative functions of the respondent-State and  therefore,
       normally this Court would not like to interfere  with  its  policies
       but looking at the peculiar facts of the case,  where  an  assurance
       had been given  for uninterrupted supply of electricity,  one  would
       presume  that  the  respondent-State  must   have   made   necessary
       arrangements to provide 100% uninterrupted supply of electricity for
       5 years to the new units.  If for any reason it was not possible  to
       supply electricity as assured, the respondent-State  ought  to  have
       extended the period of 5 years by the period  during  which  assured
       electricity was not supplied.  By  doing  so,  the  respondent-State
       could have made an effort to fulfill its promise and  satisfied  the
       persons who had acted on an assurance given by the State and set  up
       their manufacturing units in the State of Kerala.


   32. Before laying down any policy  which  would  give  benefits  to  its
       subjects, the State must think about pros and cons of the policy and
       its capacity to give the benefits.  Without proper  appreciation  of
       all the relevant factors, the State should not give  any  assurance,
       not only because that would be in violation  of  the  principles  of
       promissory estoppel but it would be unfair and immoral on  the  part
       of the State not to act as per its promise.


   33. In the instant case, the respondent-State was  conscious  about  the
       fact that there was a problem with regard to supply  of  electricity
       in the State of Kerala and possibly for that reason industries which
       depended much upon  electricity  as  a  source  of  power  were  not
       inclined to establish new industries in the State of Kerala.  Before
       setting up  an  industry,  the  entrepreneur  or  the  industrialist
       considers several factors and thereupon takes several decisions like
       place of business, capacity at which production should be made, type
       of raw-material, etc.   After considering all these factors, a final
       decision is taken with regard to setting up of an industry.   For  a
       new entrepreneur, such a decision is of vital importance because  if
       he fails in his estimates or in consideration of  all  the  relevant
       factors, there are all chances that he would fail not  only  in  his
       business but he would completely ruin himself.  Thus, one  can  very
       well appreciate that the appellants  must  have  thought  about  all
       relevant factors, including the incentives offered by the respondent-
       State and might have decided to  set  up  their  industries  in  the
       respondent-State.   While  deciding  this  case,  this  Court  would
       invariably keep in mind the circumstances in  which  the  appellants
       had set up their industries in the State of Kerala.


   34. In view of the incentives and assurances  given  to  the  appellants
       along with others, who were desirous of setting up  new  industries,
       the appellants set up their new units which were much dependant upon
       continuous supply of electricity.  One of the appellants is a  Steel
       Re-rolling Mill. In Steel industry, when the industry  is  concerned
       with making of steel or re-rolling of  steel,  it  requires  lot  of
       power and energy, and electricity being one of the important sources
       of power, the appellant was much dependent on continuous  supply  of
       electricity, which had been assured to it by the respondent-State.


   35. If an assurance was given to the appellants and  similarly  situated
       persons that they would be given 100% electricity  supply  for  five
       years, the respondents can not riggle  out  of  their  liability  by
       making a policy to the effect that the benefit by way  of  incentive
       would be extended only if the electricity supply was reduced to less
       than 50% on a particular day.
 A steel industry, for example,  which
       cannot function without electricity or  power  in  any  other  form,
       would be put to enormous inconvenience and loss if the power  supply
       is not continuous.  
So as to reactivate or to restart  the  machines
       or to start the process afresh, the industry has to spend  something
       more then what it would have spent if the supply  or  power  namely,
       electricity was uninterrupted.   
Stoppage of  manufacturing  process
       would mean losses under several heads.  
The labour employed  has  to
       be paid even when the employer does not get  work  from  the  labour
       force.   
Very often, so as to bring a required temperature  for  the
       purpose of carrying  on  certain  processes,  more  fuel  is  to  be
       injected so as to attain the condition which was prevailing prior to
       electricity supply being  disconnected. 
 Moreover,  there  would  be
       several overhead expenses which one has to incur even if there is no
       production or stoppage of manufacturing process.


   36. The judgments cited by the counsel  appearing  for  the  respondents
       would not help them for the reason that in the  cases  referred  to,
       the Government had to change the policy in public interest.  In  the
       instant case, by compensating  the  aggrieved  appellants,  no  harm
       would be caused to the State of Kerala except that it will  have  to
       compensate the appellants by supplying assured electricity for  some
       extended period at a specified tariff.


   37. For the aforestated reasons, in our  opinion,  the  respondent-State
       was not wholly fair when it extended benefit to the appellants  only
       for the period during which electricity supply was reduced  to  less
       than 50% on certain days.


   38. We, therefore, hold that the  benefit  extended  by  the  respondent
       State  is  not  sufficient.   The  respondent-State  ought  to  have
       extended the period even for the days when supply of electricity was
       more than 50% but not 100% as assured under G.O. dated 21.5.1990 and
       6.2.1992.  We, therefore, direct the respondents to  give  the  said
       benefit by extending the period of incentive.


   39. We, therefore, allow the appeals by quashing and setting  aside  the
       impugned order passed by the High Court and direct  the  respondents
       to calculate the period during which 100% electricity supply was not
       given  to  the  appellants  and  extend  the  period  of   incentive
       accordingly.  The calculation shall be made and consequential orders
       shall be passed within  two  months  from  today.  The  appeals  are
       allowed with no order as to costs.



                                         ……………………….J.
                                               (ANIL R. DAVE)




                                         ……………………….J.
                                                       (A.K.          SIKRI)


   New Delhi
   February  6,  2014.




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