1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2652 OF 2006
THE STATE OF HIMACHAL
PRADESH & ORS. ...APPELLANTS
VERSUS
M/S GUJARAT AMBUJA CEMENTS
LTD. & ORS. ...RESPONDENTS
JUDGMENT
RANJAN GOGOI, J.
1. The State of Himachal Pradesh is in
appeal before this court challenging an
order of the High Court of Himachal
Pradesh dated 5th September, 2003 allowing
the writ petition filed by the respondents
– M/s Gujarat Ambuja Cements Ltd. and
holding that the respondents - writ
petitioners’ entitlement to the benefit
of power tariff freeze, would include the
right to reimbursement of all the amounts
2
paid by it on account of Peak Load
Exemption Charge (hereinafter referred to
as “PLEC”).
2. The core facts that will be necessary
to be noticed are as follows:
The respondent – writ petitioner no.1
– M/s Gujarat Ambuja Cements Ltd. set up
an industrial unit for manufacture of
portland cement in Darlaghat, District
Solan, Himachal Pradesh. The approval of
the State Government for establishment of
the said unit was accorded on 23rd January,
1990. The cement manufacturing unit of
the respondents – writ petitioners was
accorded the “prestigious status” to avail
of incentives in accordance with the
Revised Rules Regarding Grant of Incentive
to Industrial Units in Himachal Pradesh,
1991 (hereinafter referred to as
“Incentive Rules”), as amended from time
to time. To be entitled to the incentives
3
under the aforesaid Incentive Rules the
respondents – writ petitioners had to and
infact had satisfied the stipulated
requirement of capital investment at least
of Rs. 50 crores and guaranteed employment
of minimum of 200 persons on
permanent/regular basis who are bona fide
residents of Himachal Pradesh. The cement
manufacturing unit of the respondents –
writ petitioners commenced commercial
production on 26th September, 1995. At that
point of time, under the Incentive Rules,
the respondents – writ petitioners were
entitled, inter alia, to a 'power tariff
freeze' for a period of four years from
the date of commencement of commercial
production. Specifically, the tariff
freeze was to be worked out by granting to
the respondents – writ petitioners
reimbursement of any increase in
industrial power tariff after the date of
commencement of commercial production for
4
a period of four years. The formula for
calculating the increase in power tariff
to be reimbursed was the rate of
electricity per unit billed minus the rate
of electricity as on date of commercial
production.
3. On 28th January, 1994 (before
commencement of commercial production) the
respondent – writ petitioner was informed
by the Chief Engineer (Commercial) of the
Himachal Pradesh State Electricity Board
(hereinafter referred to as “the Board”)
that the power required by its cement unit
(i.e. 21000 KW) can be made available
subject to certain terms and conditions
mentioned in the aforesaid letter (dated
28th January, 1994). By the said letter
the respondent – writ petitioner was
informed that Peak Load hours restrictions
will be imposed between 6 p.m. to 9 p.m.
for the summer months (April to October)
5
and 5 p.m. to 9 p.m. for the winter months
(November to March). Thereafter, it
appears that in exercise of powers under
Sections 49 and 59 of the Electricity
(Supply) Act, 1948, the Board brought into
force a schedule of electricity tariff
known as “Himachal Pradesh State
Electricity Board Schedule of Electricity
Tariff, 1994 w.e.f. 31st May, 1994. Clause
(m) of the said Schedule which deals with
“Peak Load Hour Supply” is as follows:
“m) PEAK LOAD HOUR SUPLY
Supplies under Schedule
Agriculture pumping (A.P.),
Small Industrial Power (S.P),
Medium Industrial Power Supply
(Schedule M.S.), Large
Industrial Power Supply for Mini
Steel Mills etc. and for others
(Schedule L.S.-1 and L.S.-2) and
Water and Irrigation pumping
(Schedule W.I.P.) shall not be
available during the peak load
hours as may be notified by the
Board from time to time.
However, in the case of
continuous process industries,
or where a particular industrial
consumer wants to run his
industry during the peak load
hours for any special reasons, a
6
separate agreement shall have to
be entered into with the Board.”
4. On 23rd August,1995, the Chief Engineer
(Commercial) of the Board issued an Office
Order according sanction in favour of the
respondent – writ petitioner for running
of its cement manufacturing unit during
the evening peak load hours subject to the
conditions enumerated in the said Office
Order (dated 23rd August, 1995)
5. After the respondent – writ
petitioner's unit went into commercial
production, on 30th October, 1995 the Board
issued another Notification in exercise of
power under Sections 49 and 59 of the
Electricity (Supply) Act, 1948 publishing
another schedule of tariff and general
conditions for supply of electricity to
various categories of consumers in
Himachal Pradesh with effect from 1st
November, 1995. The aforesaid Notification
7
(dated 30th October, 1995) dealing with the
“Peak Load Hour Supply” which is relevant
to the present case is as follows:
“1) PEAK LOAD HOUR SUPLY
Supplies under Schedule
Agriculture pumping (A.P.), Small
Industrial Power (S.P), Medium
Industrial Power Supply (Schedule
M.S.), Large Industrial Power
Supply for Mini Steel Mills etc.
and for others (Schedule L.S.-1
and L.S.-2) and Water and
Irrigation pumping (Schedule
W.I.P.) shall not be available
during the peak load hours. The
duration of peak load hours in
summer and winter shall be as
under:
i) Summer
(April to Oct) 6 PM to 9 PM
ii) Winter
(Nov. to March) 5.30PM TO 8.30PM
However, in the case of
continuous process industries,
or where a particular industrial
consumer wants to run his
industry during the peak load
hours for any special reasons, a
separate agreement shall have to
be entered into with the Board.
Such consumers shall be billed
for additional charge as
specified in the relevant
schedules of tariff”
In part II of the aforesaid
8
Notification (dated 30th October, 1995)
under the “Schedule of Tariffs” the
provision with regard to “Peak Load
Exemption Charge (PLEC)” were stated in
the following terms:
“5. Peak Load Exemption
Charge (PLEC)
The consumers availing special
dispensation or exemption during
evening peak load hours
stipulated under Part-I General
of this notification shall be
billed at extra charges of Rs.1/-
per unit over and above the
normal tariff. For this purpose,
time of the day (T.O.D.) meters
shall be provided. Till such
time, these meters are provided,
the monthly peak load exemption
charges shall be Rs.70/- per KVA
of exemption/relaxation sought.”
6. After the commencement of the
commercial production by the cement
manufacturing unit of the respondent –
writ petitioner, in the year 1996, the
Incentive Rules were revised and the
incentive of power tariff freeze, though
continued, underwent certain
9
modifications. While the said notification
may not be strictly relevant for the
present what was clearly provided in the
revised Incentive Rules is that the power
tariff to be reimbursed will not include
any other charge/surcharge/peak load
charge/fuel adjustment charge etc. as may
be levied by the competent authority. It
may be noticed, at this stage, that the
aforesaid revised Incentive Rules were
made applicable to new industrial units
which fact is borne out from clause 1.2(a)
of the Revised Incentive Rules (which came
into force with effect from 1st October,
1996) dealing with eligibility which is in
the following terms.
“1.2 Eligibility
(a) New Industrial units as
defined in these rules, shall be
eligible for grant of incentives
as provided for under these
rules. Units which have
commenced commercial production
before the appointed day will
continue to be governed for
grant of all incentives under
10
the Revised Rules regarding
Grant of Incentives to
Industrial Units in HP-1991 as
amended from time to time,
unless otherwise provided in
these rules. Such industrial
units will be eligible for
incentives, concessions and
facilities only if they meet the
minimum employment criteria as
laid down under these rules.”
The definition of 'New Industrial
Unit” contained in clause 2(s) of the
aforesaid Revised Incentive Rules (of
1996) may also be extracted below for
convenience.
“2(s) “New industrial unit”
means a registered SSSBE, tiny,
small, ancillary, medium or
large scale industrial unit as
defined in clauses 2(x) and
2(za) of these rules, located
within the State of Himachal
Pradesh which commences
commercial production on or
after the appointed day and
includes any existing unit which
is eligible to get fresh
registration as per the
guidelines provided by the
Development Commissioner, Small
Scale Industries, Govt. of
India, from time to time.”
The “appointed day” was notified as 1st
11
day of October, 1996.
7. It is in the above backdrop of the
core facts that the issue arising in the
case, namely, the entitlement of the
respondent – writ petitioner to
reimbursement of the PLEC will have to be
decided.
8. The argument advanced by Shri Anoop
George Chaudhari, learned Senior Counsel
appearing for the appellant State of
Himachal Pradesh centres around two
principal issues. The first is that on
the date when the cement unit was set up
and had commenced its commercial
production i.e. 26th September, 1995 the
PLEC had not come into force. The promise
of reimbursement of increased power tariff
did not and, in fact, could not have,
therefore, cover/covered reimbursement of
PLEC. Additionally, it has been contended
12
that even before the cement manufacturing
unit had commenced commercial production
the respondent – writ petitioner was
informed by letter dated 28th January, 1994
that there will be restrictions on
availability of power during the peak load
hours which hours also were specifically
mentioned in the said letter (dated 28th
January, 1994). It has been contended on
behalf of the State that in the
Notification dated 30th October, 1995 it is
clearly and categorically reiterated that
electricity supply during the peak load
hours would not be available except as a
matter of special dispensation to a
industry that needed a continuous supply
of power. In the said Notification (dated
30th October, 1995) it was also mentioned
that supply of power during the peak load
hours would entail an additional charge of
Rs.1/- per unit over and above the normal
tariff and further that a separate meter
13
for reading of electricity consumed during
the peak load hours would be installed.
All these facts, according to the learned
Senior counsel, would go to show that PLEC
is a special/additional charge over and
above the normal tariff in cases where the
power is made available during the peak
load hours as a special dispensation. In
this regard, Shri Chaudhari has also drawn
the attention of the Court to the
affidavit filed before this Court by the
Board wherein it has been, inter alia,
stated that the power for supply during
peak load hours had to be procured by the
Board from other sources. Therefore, it is
contended that PLEC is not a part of the
normal/regular tariff in respect of which
alone there is a promise of reimbursement
by way of an incentive in the event of
increase of such tariff during the
eligibility period i.e. four years from
the date of commencement of commercial
14
production. According to the learned
Senior Counsel, in the present case there
is no dispute with regard to the issue of
reimbursement of charges on account of
hike/increase of normal tariff.
9. In reply, Shri Arvind P. Datar,
learned Senior Counsel appearing for the
respondents – writ petitioners has
submitted that tariff is not a defined
expression either under the Electricity
(Supply) Act, 1948 which would govern the
parties or even in the succeeding statute
i.e. the Electricity Act, 2003. The
dictionary meaning of tariff is not very
helpful either; tariff has been conveyed
to mean a charge or list of charges either
for services or on goods entering a
country. Shri Datar has pointed out that
the object and effect test must, therefore
be applied to hold that PLEC is included
within the meaning of electricity tariff.
15
Exclusion of such charges from an
understanding of the expression “tariff”
would be counter-productive in a situation
where incentive has been offered under the
industrial policy of the State to attract
investments. Shri Datar has submitted that
any exclusion of PLEC from the meaning of
the expression 'tariff' in the present
context would be to permit the appellant
to destroy the very purpose of the
incentive scheme. Such an interpretation
would enable the appellant to load the
normal tariff with various other
additional charges and surcharges by
giving such additions different
nomenclatures with a view to distinguish
the same from the expression 'tariff'.
Shri Datar has also pointed out to the
very language of the Notification dated
30th October, 1995 and the provisions of
Sections 49 and 59 of the Electricity
(Supply) Act, 1948 to contend that PLEC is
16
nothing but tariff inasmuch as it is by
revision of the schedule of tariff made by
the said Notification that PLEC had been
introduced. Shri Datar has further
submitted that even under the Notification
of 1992 granting the incentive of “tariff
freeze” the method of calculation
prescribed is a simple one, namely,
difference between the amount actually
billed and the amount that would have been
billed as per the tariff in force on the
date of commercial production. The said
formula, if applied, would definitely
include reimbursement of PLEC within the
ambit of the incentive granted. Lastly,
Shri Datar has submitted that the Revised
Rules of 1996 which specifically excludes
PLEC from the power tariff to be
reimbursed makes the position amply clear
that PLEC had always been and is a part of
the tariff.
17
10. We have considered the submissions
advanced on behalf of the rival parties.
The sequence of facts recited in the
preceding paragraphs makes it abundantly
clear that what was provided for by way of
an incentive under the Incentive Rules
framed under the Industrial Policy of the
State is 'power tariff freeze' for a
period of four years from the date of
commercial production by reimbursement of
the amount of increase in tariff during
the aforesaid period of four years. It
cannot be lost sight of that even before
the cement manufacturing unit had gone
into the commercial production, by letter
dated 28th January, 1994 the respondents –
writ petitioners were clearly informed
that the State is going through a phase of
acute shortage of power affecting peak
load hour supply. The schedule of tariff
published by the Board by Notification
dated 31st May, 1994 made an unequivocal
18
reiteration on the part of the Board that
power supply during peak load hours, as
may be notified by the Board from time to
time, shall not be available and in case
of continuous process and like industries
electricity supply during peak load hours
would be provided only for special reasons
and by means of a separate agreement to
be entered into with the Board. In fact,
an Office order dated 23rd August, 1995 was
passed by the Chief Engineer (Commercial)
of the Board according sanction for supply
of electricity during peak load hours to
the respondents – writ petitioners’ unit
subject to the terms and conditions
mentioned therein. Finally by notification
dated 30th October, 1995 another schedule
of tariff was published levying peak load
exemption charge (PLEC) at the rate of
Rs.1/- per unit over and above the normal
tariff. Power during peak hours was to be
provided as a special dispensation for
19
industries which could not afford to
remain without continuous
power/electricity. The mode of making
available the power was also different
inasmuch as the Notification dated 30th
October, 1995 contemplated installation of
separate meters for the said purpose. As
already noticed, in the counter affidavit
filed by the Board before this Court it
has been stated that power, to make
electricity supply available during the
peak load hours, was obtained from other
sources. The normal supply of electricity
for which there was a normal tariff was
infact discontinued during the peak hours.
Normal supply of electricity therefore has
to be distinguished from the supply of
electricity during peak load hours which
was an act of special dispensation and
upon payment of PLEC which change, in the
facts noted, would assume the character of
a surcharge. The question is not one
20
whether PLEC is a part of the tariff
having regard to the dictionary and the
natural meaning of the word 'tariff'. The
question is how the word/expression
'tariff' is to be understood in the
context in which such meaning is required
to be determined. The meaning that has to
be assigned must, naturally, be contextual
having regard to what was promised i.e.
tariff freeze. The nature of the charge
imposed i.e. PLEC has to be understood
keeping in mind that supply of power
during the peak load hours was an
exception; a special dispensation
involving a special arrangement i.e.
procurement from other sources.
11. If the matter is to be viewed from the
aforesaid perspective we have to arrive at
the conclusion that the incentive provided
under the Incentive Rules would not
include PLEC and the respondents – writ
21
petitioners would not be entitled to
reimbursement towards the PLEC paid for
availing power supply by way of special
dispensation in force. The fact that in
the revised Incentive Rules of 1996 PLEC
has been specifically excluded from the
scope of reimbursement made on account of
power tariff will not fundamentally alter
the situation. The said declaration can be
reasonably understood to be clarificatory
and intended to clear all doubts, queries
and issues raised on the aforesaid score.
12. For the aforesaid reasons, we hold
that the respondents – writ petitioners
are not entitled to reimbursement towards
PLEC paid by it during the period of four
years commencing from the date of
commercial production i.e. 26th September,
1995. We order accordingly and direct that
in the event any reimbursement had been
22
made the same be returned forthwith by the
respondents – writ petitioners to the
appellants with interest thereon at the
rate of 6% per annum.
13. Consequently and in the light of the
above, the order of the High Court is set
aside and the appeal is allowed in the
above terms.
...................,J.
(RANJAN GOGOI)
....................,J.
(NAVIN SINHA)
NEW DELHI
OCTOBER 4, 2017
23
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2652 OF 2006
THE STATE OF HIMACHAL
PRADESH & ORS. ...APPELLANTS
VERSUS
M/S GUJARAT AMBUJA CEMENTS
LTD. & ORS. ...RESPONDENTS
JUDGMENT
RANJAN GOGOI, J.
1. The State of Himachal Pradesh is in
appeal before this court challenging an
order of the High Court of Himachal
Pradesh dated 5th September, 2003 allowing
the writ petition filed by the respondents
– M/s Gujarat Ambuja Cements Ltd. and
holding that the respondents - writ
petitioners’ entitlement to the benefit
of power tariff freeze, would include the
right to reimbursement of all the amounts
2
paid by it on account of Peak Load
Exemption Charge (hereinafter referred to
as “PLEC”).
2. The core facts that will be necessary
to be noticed are as follows:
The respondent – writ petitioner no.1
– M/s Gujarat Ambuja Cements Ltd. set up
an industrial unit for manufacture of
portland cement in Darlaghat, District
Solan, Himachal Pradesh. The approval of
the State Government for establishment of
the said unit was accorded on 23rd January,
1990. The cement manufacturing unit of
the respondents – writ petitioners was
accorded the “prestigious status” to avail
of incentives in accordance with the
Revised Rules Regarding Grant of Incentive
to Industrial Units in Himachal Pradesh,
1991 (hereinafter referred to as
“Incentive Rules”), as amended from time
to time. To be entitled to the incentives
3
under the aforesaid Incentive Rules the
respondents – writ petitioners had to and
infact had satisfied the stipulated
requirement of capital investment at least
of Rs. 50 crores and guaranteed employment
of minimum of 200 persons on
permanent/regular basis who are bona fide
residents of Himachal Pradesh. The cement
manufacturing unit of the respondents –
writ petitioners commenced commercial
production on 26th September, 1995. At that
point of time, under the Incentive Rules,
the respondents – writ petitioners were
entitled, inter alia, to a 'power tariff
freeze' for a period of four years from
the date of commencement of commercial
production. Specifically, the tariff
freeze was to be worked out by granting to
the respondents – writ petitioners
reimbursement of any increase in
industrial power tariff after the date of
commencement of commercial production for
4
a period of four years. The formula for
calculating the increase in power tariff
to be reimbursed was the rate of
electricity per unit billed minus the rate
of electricity as on date of commercial
production.
3. On 28th January, 1994 (before
commencement of commercial production) the
respondent – writ petitioner was informed
by the Chief Engineer (Commercial) of the
Himachal Pradesh State Electricity Board
(hereinafter referred to as “the Board”)
that the power required by its cement unit
(i.e. 21000 KW) can be made available
subject to certain terms and conditions
mentioned in the aforesaid letter (dated
28th January, 1994). By the said letter
the respondent – writ petitioner was
informed that Peak Load hours restrictions
will be imposed between 6 p.m. to 9 p.m.
for the summer months (April to October)
5
and 5 p.m. to 9 p.m. for the winter months
(November to March). Thereafter, it
appears that in exercise of powers under
Sections 49 and 59 of the Electricity
(Supply) Act, 1948, the Board brought into
force a schedule of electricity tariff
known as “Himachal Pradesh State
Electricity Board Schedule of Electricity
Tariff, 1994 w.e.f. 31st May, 1994. Clause
(m) of the said Schedule which deals with
“Peak Load Hour Supply” is as follows:
“m) PEAK LOAD HOUR SUPLY
Supplies under Schedule
Agriculture pumping (A.P.),
Small Industrial Power (S.P),
Medium Industrial Power Supply
(Schedule M.S.), Large
Industrial Power Supply for Mini
Steel Mills etc. and for others
(Schedule L.S.-1 and L.S.-2) and
Water and Irrigation pumping
(Schedule W.I.P.) shall not be
available during the peak load
hours as may be notified by the
Board from time to time.
However, in the case of
continuous process industries,
or where a particular industrial
consumer wants to run his
industry during the peak load
hours for any special reasons, a
6
separate agreement shall have to
be entered into with the Board.”
4. On 23rd August,1995, the Chief Engineer
(Commercial) of the Board issued an Office
Order according sanction in favour of the
respondent – writ petitioner for running
of its cement manufacturing unit during
the evening peak load hours subject to the
conditions enumerated in the said Office
Order (dated 23rd August, 1995)
5. After the respondent – writ
petitioner's unit went into commercial
production, on 30th October, 1995 the Board
issued another Notification in exercise of
power under Sections 49 and 59 of the
Electricity (Supply) Act, 1948 publishing
another schedule of tariff and general
conditions for supply of electricity to
various categories of consumers in
Himachal Pradesh with effect from 1st
November, 1995. The aforesaid Notification
7
(dated 30th October, 1995) dealing with the
“Peak Load Hour Supply” which is relevant
to the present case is as follows:
“1) PEAK LOAD HOUR SUPLY
Supplies under Schedule
Agriculture pumping (A.P.), Small
Industrial Power (S.P), Medium
Industrial Power Supply (Schedule
M.S.), Large Industrial Power
Supply for Mini Steel Mills etc.
and for others (Schedule L.S.-1
and L.S.-2) and Water and
Irrigation pumping (Schedule
W.I.P.) shall not be available
during the peak load hours. The
duration of peak load hours in
summer and winter shall be as
under:
i) Summer
(April to Oct) 6 PM to 9 PM
ii) Winter
(Nov. to March) 5.30PM TO 8.30PM
However, in the case of
continuous process industries,
or where a particular industrial
consumer wants to run his
industry during the peak load
hours for any special reasons, a
separate agreement shall have to
be entered into with the Board.
Such consumers shall be billed
for additional charge as
specified in the relevant
schedules of tariff”
In part II of the aforesaid
8
Notification (dated 30th October, 1995)
under the “Schedule of Tariffs” the
provision with regard to “Peak Load
Exemption Charge (PLEC)” were stated in
the following terms:
“5. Peak Load Exemption
Charge (PLEC)
The consumers availing special
dispensation or exemption during
evening peak load hours
stipulated under Part-I General
of this notification shall be
billed at extra charges of Rs.1/-
per unit over and above the
normal tariff. For this purpose,
time of the day (T.O.D.) meters
shall be provided. Till such
time, these meters are provided,
the monthly peak load exemption
charges shall be Rs.70/- per KVA
of exemption/relaxation sought.”
6. After the commencement of the
commercial production by the cement
manufacturing unit of the respondent –
writ petitioner, in the year 1996, the
Incentive Rules were revised and the
incentive of power tariff freeze, though
continued, underwent certain
9
modifications. While the said notification
may not be strictly relevant for the
present what was clearly provided in the
revised Incentive Rules is that the power
tariff to be reimbursed will not include
any other charge/surcharge/peak load
charge/fuel adjustment charge etc. as may
be levied by the competent authority. It
may be noticed, at this stage, that the
aforesaid revised Incentive Rules were
made applicable to new industrial units
which fact is borne out from clause 1.2(a)
of the Revised Incentive Rules (which came
into force with effect from 1st October,
1996) dealing with eligibility which is in
the following terms.
“1.2 Eligibility
(a) New Industrial units as
defined in these rules, shall be
eligible for grant of incentives
as provided for under these
rules. Units which have
commenced commercial production
before the appointed day will
continue to be governed for
grant of all incentives under
10
the Revised Rules regarding
Grant of Incentives to
Industrial Units in HP-1991 as
amended from time to time,
unless otherwise provided in
these rules. Such industrial
units will be eligible for
incentives, concessions and
facilities only if they meet the
minimum employment criteria as
laid down under these rules.”
The definition of 'New Industrial
Unit” contained in clause 2(s) of the
aforesaid Revised Incentive Rules (of
1996) may also be extracted below for
convenience.
“2(s) “New industrial unit”
means a registered SSSBE, tiny,
small, ancillary, medium or
large scale industrial unit as
defined in clauses 2(x) and
2(za) of these rules, located
within the State of Himachal
Pradesh which commences
commercial production on or
after the appointed day and
includes any existing unit which
is eligible to get fresh
registration as per the
guidelines provided by the
Development Commissioner, Small
Scale Industries, Govt. of
India, from time to time.”
The “appointed day” was notified as 1st
11
day of October, 1996.
7. It is in the above backdrop of the
core facts that the issue arising in the
case, namely, the entitlement of the
respondent – writ petitioner to
reimbursement of the PLEC will have to be
decided.
8. The argument advanced by Shri Anoop
George Chaudhari, learned Senior Counsel
appearing for the appellant State of
Himachal Pradesh centres around two
principal issues. The first is that on
the date when the cement unit was set up
and had commenced its commercial
production i.e. 26th September, 1995 the
PLEC had not come into force. The promise
of reimbursement of increased power tariff
did not and, in fact, could not have,
therefore, cover/covered reimbursement of
PLEC. Additionally, it has been contended
12
that even before the cement manufacturing
unit had commenced commercial production
the respondent – writ petitioner was
informed by letter dated 28th January, 1994
that there will be restrictions on
availability of power during the peak load
hours which hours also were specifically
mentioned in the said letter (dated 28th
January, 1994). It has been contended on
behalf of the State that in the
Notification dated 30th October, 1995 it is
clearly and categorically reiterated that
electricity supply during the peak load
hours would not be available except as a
matter of special dispensation to a
industry that needed a continuous supply
of power. In the said Notification (dated
30th October, 1995) it was also mentioned
that supply of power during the peak load
hours would entail an additional charge of
Rs.1/- per unit over and above the normal
tariff and further that a separate meter
13
for reading of electricity consumed during
the peak load hours would be installed.
All these facts, according to the learned
Senior counsel, would go to show that PLEC
is a special/additional charge over and
above the normal tariff in cases where the
power is made available during the peak
load hours as a special dispensation. In
this regard, Shri Chaudhari has also drawn
the attention of the Court to the
affidavit filed before this Court by the
Board wherein it has been, inter alia,
stated that the power for supply during
peak load hours had to be procured by the
Board from other sources. Therefore, it is
contended that PLEC is not a part of the
normal/regular tariff in respect of which
alone there is a promise of reimbursement
by way of an incentive in the event of
increase of such tariff during the
eligibility period i.e. four years from
the date of commencement of commercial
14
production. According to the learned
Senior Counsel, in the present case there
is no dispute with regard to the issue of
reimbursement of charges on account of
hike/increase of normal tariff.
9. In reply, Shri Arvind P. Datar,
learned Senior Counsel appearing for the
respondents – writ petitioners has
submitted that tariff is not a defined
expression either under the Electricity
(Supply) Act, 1948 which would govern the
parties or even in the succeeding statute
i.e. the Electricity Act, 2003. The
dictionary meaning of tariff is not very
helpful either; tariff has been conveyed
to mean a charge or list of charges either
for services or on goods entering a
country. Shri Datar has pointed out that
the object and effect test must, therefore
be applied to hold that PLEC is included
within the meaning of electricity tariff.
15
Exclusion of such charges from an
understanding of the expression “tariff”
would be counter-productive in a situation
where incentive has been offered under the
industrial policy of the State to attract
investments. Shri Datar has submitted that
any exclusion of PLEC from the meaning of
the expression 'tariff' in the present
context would be to permit the appellant
to destroy the very purpose of the
incentive scheme. Such an interpretation
would enable the appellant to load the
normal tariff with various other
additional charges and surcharges by
giving such additions different
nomenclatures with a view to distinguish
the same from the expression 'tariff'.
Shri Datar has also pointed out to the
very language of the Notification dated
30th October, 1995 and the provisions of
Sections 49 and 59 of the Electricity
(Supply) Act, 1948 to contend that PLEC is
16
nothing but tariff inasmuch as it is by
revision of the schedule of tariff made by
the said Notification that PLEC had been
introduced. Shri Datar has further
submitted that even under the Notification
of 1992 granting the incentive of “tariff
freeze” the method of calculation
prescribed is a simple one, namely,
difference between the amount actually
billed and the amount that would have been
billed as per the tariff in force on the
date of commercial production. The said
formula, if applied, would definitely
include reimbursement of PLEC within the
ambit of the incentive granted. Lastly,
Shri Datar has submitted that the Revised
Rules of 1996 which specifically excludes
PLEC from the power tariff to be
reimbursed makes the position amply clear
that PLEC had always been and is a part of
the tariff.
17
10. We have considered the submissions
advanced on behalf of the rival parties.
The sequence of facts recited in the
preceding paragraphs makes it abundantly
clear that what was provided for by way of
an incentive under the Incentive Rules
framed under the Industrial Policy of the
State is 'power tariff freeze' for a
period of four years from the date of
commercial production by reimbursement of
the amount of increase in tariff during
the aforesaid period of four years. It
cannot be lost sight of that even before
the cement manufacturing unit had gone
into the commercial production, by letter
dated 28th January, 1994 the respondents –
writ petitioners were clearly informed
that the State is going through a phase of
acute shortage of power affecting peak
load hour supply. The schedule of tariff
published by the Board by Notification
dated 31st May, 1994 made an unequivocal
18
reiteration on the part of the Board that
power supply during peak load hours, as
may be notified by the Board from time to
time, shall not be available and in case
of continuous process and like industries
electricity supply during peak load hours
would be provided only for special reasons
and by means of a separate agreement to
be entered into with the Board. In fact,
an Office order dated 23rd August, 1995 was
passed by the Chief Engineer (Commercial)
of the Board according sanction for supply
of electricity during peak load hours to
the respondents – writ petitioners’ unit
subject to the terms and conditions
mentioned therein. Finally by notification
dated 30th October, 1995 another schedule
of tariff was published levying peak load
exemption charge (PLEC) at the rate of
Rs.1/- per unit over and above the normal
tariff. Power during peak hours was to be
provided as a special dispensation for
19
industries which could not afford to
remain without continuous
power/electricity. The mode of making
available the power was also different
inasmuch as the Notification dated 30th
October, 1995 contemplated installation of
separate meters for the said purpose. As
already noticed, in the counter affidavit
filed by the Board before this Court it
has been stated that power, to make
electricity supply available during the
peak load hours, was obtained from other
sources. The normal supply of electricity
for which there was a normal tariff was
infact discontinued during the peak hours.
Normal supply of electricity therefore has
to be distinguished from the supply of
electricity during peak load hours which
was an act of special dispensation and
upon payment of PLEC which change, in the
facts noted, would assume the character of
a surcharge. The question is not one
20
whether PLEC is a part of the tariff
having regard to the dictionary and the
natural meaning of the word 'tariff'. The
question is how the word/expression
'tariff' is to be understood in the
context in which such meaning is required
to be determined. The meaning that has to
be assigned must, naturally, be contextual
having regard to what was promised i.e.
tariff freeze. The nature of the charge
imposed i.e. PLEC has to be understood
keeping in mind that supply of power
during the peak load hours was an
exception; a special dispensation
involving a special arrangement i.e.
procurement from other sources.
11. If the matter is to be viewed from the
aforesaid perspective we have to arrive at
the conclusion that the incentive provided
under the Incentive Rules would not
include PLEC and the respondents – writ
21
petitioners would not be entitled to
reimbursement towards the PLEC paid for
availing power supply by way of special
dispensation in force. The fact that in
the revised Incentive Rules of 1996 PLEC
has been specifically excluded from the
scope of reimbursement made on account of
power tariff will not fundamentally alter
the situation. The said declaration can be
reasonably understood to be clarificatory
and intended to clear all doubts, queries
and issues raised on the aforesaid score.
12. For the aforesaid reasons, we hold
that the respondents – writ petitioners
are not entitled to reimbursement towards
PLEC paid by it during the period of four
years commencing from the date of
commercial production i.e. 26th September,
1995. We order accordingly and direct that
in the event any reimbursement had been
22
made the same be returned forthwith by the
respondents – writ petitioners to the
appellants with interest thereon at the
rate of 6% per annum.
13. Consequently and in the light of the
above, the order of the High Court is set
aside and the appeal is allowed in the
above terms.
...................,J.
(RANJAN GOGOI)
....................,J.
(NAVIN SINHA)
NEW DELHI
OCTOBER 4, 2017
23
