KERALA STATE ELECTRICITY BOARD LTD. & ANR versus RUBFILA INTERNATIONAL LIMITED & ORS. on 15 November 2022

1. Leave granted.

2. The instant appeals are directed against the judgment and orderdated 22[nd]November, 2018 followed with order dated 29[th]July, 2019passed by the High Court of Kerala at Ernakulam.

3. The seminal facts relevant for the purpose of disposal of thepresent appeals are that respondent no. 1 is an industrial unit whichstarted its commercial production on 26[th]March, 1995 and the unit wasenergised on 16[th]September, 1995.

4. The Government of Kerala under its GO dated 6[th]February,1992 granted certain incentives in respect of electricity for new industrialunits starting commercial production between 1[st]January, 1992 and 31[st]December, 1996 for a period of 5 years in regard to payment of enhancedrate of tariff which came into effect from 1[st]January, 1992.

5. In the first round of litigation, the dispute that arose was as towhether the respondent (industrial unit) is entitled to claim benefit ofincentive from the date of commercial production i.e. 26[th]March, 1995or from the date of energisation i.e. 16[th]September, 1995 for a period of5 years, but the Division Bench of the High Court under its judgmentdated 18[th ]January, 2005 held that the crucial date in terms of the GOissued by the Government of Kerala dated 6[th]February, 1992 is the dateof commencement of commercial production and the respondent(industrial unit) started its commercial production on 26[th]March, 1995and accordingly while disposing of the petition filed at the instance of therespondent herein returned a finding that the date of commercialproduction in respect of the respondent (industrial unit) is 26[th]March,1995 and the claim for concessional tariff for a period upto 16[th]September, 2000 based on the date of energisation came to be rejected.The operative part of the Order dated 18[th]January, 2005 is referredhereunder:- A

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SUPREME COURT REPORTS

A“We are of the view, crucial date is date of commencementof commercial production. Certificate produced by the petitionerwould show the date of commencement of commercial productionon 26.03.1995. In the above circumstances, the claim of thepetitioner for concessional tariff for a period up to 16.09.2000cannot be granted.”B

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6. It reveals from the record that after dismissal of the writ petitionby judgment and order dated 18[th]January, 2005, a review applicationwas filed by the respondents and it was prayed that instead of the dateof commencement of commercial production, date of energisation hasbeen considered by the Kerala State Electricity Board (hereinafterCreferred to as “the Board”) granting concession to other industrial units.Taking note of the statement made by the respondent (industrial unit),the review petition came to be disposed of by an order dated 8[th]March,2007 granting liberty to the respondent (industrial unit) to file arepresentation before the Board, if so advised.

D7. Against the aforesaid orders, the appellants filed Special LeavePetition (Civil) No.13408 of 2007 before this Court which came to bedismissed by an order dated 20[th]February, 2009.

8. In view of the liberty granted by the Division Bench of theHigh Court while disposing of the review application by order dated 8[th]EMarch, 2007, representation was filed by the respondent (industrial unit)and that came to be rejected by the Board by a self-contained reasonedorder dated 31[st]August, 2007.

9. That gave a fresh cause of action and a writ petition came tobe preferred at the instance of the respondents. The only contentionFadvanced and persuaded the learned Single Judge of the High Court inthe second round of litigation was that a benefit of 5 years’ exemptionfor enhanced power tariff has been granted to another industrial unit,M/s Patspin India Ltd., from the date of energisation and accordingly itwas directed that the respondent(industrial unit) is also entitled to claimGthe benefit of 5 years’ exemption of enhanced power tariff from thedate of energisation. The writ petition was disposed of by the learnedSingle Judge by an order dated 19[th]September, 2017. The extract of theorder of the learned Single Judge is reproduced herein:

“4. Therefore, this Court is of the view that the Board is not justifiedHin declining the request of the petitioner. Holding that the petitioner

is also entitled for the benefit of five years’ exemption of enhancedpower tariff from the date of energisation, the writ petition isallowed. The excess amount shall be refunded to the petitionerwithin a period of four months. It is open for the respondents toadjust the excess amount received from the petitioner from thefuture bills by passing appropriate orders in regard to the same.No costs.”

10. The aforesaid order came to be challenged by the appellantsin writ appeal before the Division Bench of the High Court and thatcame to be dismissed by the judgment and order dated 22[nd]November,2018 on the premise that since the Board had taken a different view inthe case of M/s Patspin India Ltd. where the concession has beenextended from the date of energisation to the unit rather than from thedate of commercial production, finally upheld order of the learned SingleJudge holding that the respondent(industrial unit) is entitled for theconcession as being granted to M/s Patspin India Ltd. and that makesthe respondent (industrial unit) entitled to the benefit of concession for 5years from the date of energisation.

11. After the writ appeal came to be dismissed, a review applicationwas filed at the instance of the present appellants and at this stage, itwas brought to the notice of the High Court that claim of the respondent(industrial unit) was based on the plea that other industrial unit (M/sPatspin India Ltd.) has been granted certain benefits from the date ofenergisation, but the order in the case of M/s Patspin India Ltd. hasbeen withdrawn by the Board by its order dated 22[nd]November, 2001and once the very foundation on which the respondent (industrial unit)claimed concession of 5 years from the date of energisation loses itseffect/stands demolished, the judgment granting benefit to the industrialunit from the date of energisation deserves to be recalled, but the reviewapplication came to be dismissed by Order dated 29[th]July, 2019 on thepremise that the benefit once extended to M/s Patspin India Ltd. evenhas been reviewed by the Board, that in itself will not efface the findingof the judgment and that became the subject matter of challenge at theinstance of the appellants before this Court. Extract of order dated 22[nd]November, 2001 pursuant to which concession to M/s. Patspin IndiaLimited was withdrawn from the date of energisation is reproducedhereunder:- AB

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“O R D E R

Based on the G.O., B.O & Certificate issued by the KeralaState Industrial Development Corporation referred 1, 2 & (3)above, sanction was accorded vide reference (5) by the FinancialAdviser & Chief Accounts Officer, K.S.E. Board, extending thebenefit of concessional tariff (Pre-92 tariff) to M/s. Patspin IndiaLimited, Kanjikode, for a period of 5 years from 01.4.94 to 31.3.99.The Board vide order referred to (6) above has accorded sanctionto extend the concessional tariff for the period where there was50% or more power cut to the eligible consumers. As such, M/s.Patspin India Ltd.., Cons. Code No. 26/2662, is also eligible forthe extension of concessional tariff to compensate the period ofpower cut of 214 days. While going through the certificate dated15.10.1994 issued by the Kerala State Industrial DevelopmentCorporation, it has been observed that the actual date ofcommencement of commercial production as per item 9 of thecertificate is 18.01.94 (with using D.G. set). Period of concessionto be given as per item 10, is 01.04.94 to 31.03.99. (For 1000KVA) & from 01.08.94 to 31.07.99 (for 2500 KVA).

As per G.O referred to (1) above, vide para 1(1), it is clearlymentioned that incentive as per the G.O is “to the units from thedate of commercial production which start such productionbetween 01.01.92 to 31.12.96". Since the date of CommercialProduction is 18.01.94. M/s Patspin India Limited, Cons. CodeNo. 26/2662 is eligible for 5 years concessional tariff from thedate of commercial production, i.e., from 18.01.94 to 17.01.1999.

As such the proceedings of the Financial Adviser and ChiefAccount Officer Dtd. 11.11.94 referred (5) above is modified andthe consumer is eligible for Pre-92 tariff from 18.01.94 to 17.01.99.

Sanction is hereby accorded to extend to benefit ofconcessional tariff for 214 days to compensate the period wherethere was 50% and more power cut from 01/96 to 12/97, from18.01.99 to 19.08.99. The invoice for the above period will berevised and the excess collected, if any, will be adjusted.

The order read as fifth paper above stands modified to theabove extent.”

12. It is further brought to our notice that apart from the controversywhich was raised by the respondent (industrial unit) claiming parity inrespect of concessional tariff granted to M/s Patspin India Ltd., a furtherobjection was raised that the respondent(industrial unit) is also entitledfor extension of the period of application of pre-1992 tariff at least forthe period where there was 50% or more power cut in terms of theBoard’s Order but that has not been extended to the respondent (industrialunit) herein, the extension of the period of application pre-1992 tariffwas from 26[th]March, 2000 to 26[th]October, 2000 so as to cover theperiod where there was 50% or more power cut, has been extended tothe respondent (industrial unit) as per the Board’s order dated 18[th]October, 2000 (Ann.P-5).

13. Learned counsel for the appellants submits that once the paritywhich was claimed by the respondent (industrial unit) with M/s PatspinIndia Ltd. has been withdrawn by the appellant Board by order dated22[nd ]November, 2001 and it was noticed by the Division Bench of theHigh Court at the stage when review application was filed at the instanceof the present appellants, in the given circumstances, the finding whichhas been returned in extending the concessional tariff to the respondent(industrial unit) for 5 years from the date of energisation is not legallysustainable.

14. Learned counsel further submits that so far as the GovernmentOrder dated 6[th]February, 1992 is concerned, the new industrial unitstarting production between 1[st]January, 1992 and 31[st]December, 1996was entitled to claim exemption from enhanced power tariff for a periodof 5 years from the date it started commercial production and in theinstant case, the date of commercial production in reference to therespondent (industrial unit) herein admittedly was 26[th ]March, 1995 andthat was noticed by the Division Bench of the High Court in the firstround of litigation and after the date of commercial production beingsettled, the exemption from enhanced power tariff has been extended tothe respondent (industrial unit) for 5 years from the date unit startedcommercial production in terms of GO dated 6[th ]February, 1992. Moreso, after the order came to be passed on 22[nd ]November, 2001, benefitin favour of M/s Patspin India Ltd. being withdrawn, there remain nofactual foundation on the basis of which the parity by the respondent(industrial unit) could have been claimed. In the given circumstances,the judgment passed by the Division Bench of the High Court is notlegally sustainable and deserves to be set aside.

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A15. Per contra, learned counsel for the respondents, on the otherhand, while supporting the finding returned by the Division Bench of theHigh Court under the judgment impugned submits that even taking noteof the order of withdrawal dated 22[nd]November, 2001, the respondent(industrial unit) was entitled for concessional tariff for 214 days tocompensate the period when there was 50% or more power cut, in theBmanner as extended to M/s Patspin India Ltd., which is indicated in theorder dated 22[nd]November, 2001 relied upon by the Board. The presentrespondent (industrial unit) is also entitled for the extension of concessionaltariff to compensate the period of power cut for 214 days as extended toM/s Patspin India Ltd. in terms of the order dated 22[nd]November, 2001.C

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16. Learned counsel further submits that if the period ofcommercial production in the case of the respondent (industrial unit) istaken from 26[th]March, 1995 which may be effective for a period of 5years upto 25[th]March, 2000, the period which is subsumed within 5years from the date of commercial production, at least the respondentD(industrial unit) is entitled for extension of the period of application ofpre-1992 tariff for further 214 days where there was 50% or more powercut, as per the orders of the Board from time to time and this has notbeen considered by the Board even while the orders passed in the caseof the present respondent (industrial unit) dated 18[th]October, 2000. Insupport of his submissions, learned counsel has placed reliance on theEjudgment of this Court in S.V.A. Steel Re-Rolling Mills Limited andOthers vs. State of Kerala & Others[1].

17. We have heard learned counsel for the parties and with theirassistance perused the material on record.

F18. It is not disputed that enhanced power tariff became effectivefrom 1[st]January, 1992 and the Government of Kerala came with theGO dated 6[th]February, 1992 to provide exemption from enhanced powertariff to new industrial units starting commercial production between 1[st]January, 1992 and 31[st]December, 1996 for a period of 5 years from thedate the unit started commercial production.G

19. In the case of the present respondent (industrial unit), admittedlythe date to start commercial production was 26[th]March, 1995 and thusthe respondent (industrial unit) was entitled for exemption from enhancedpower tariff upto 25[th ]March, 2000. Indisputedly, the exemption from H1(2014) 4 SCC 186

enhanced power tariff for 5 years from the date of commencement ofcommercial production was extended to the respondent (industrial unit).

20. So far as the claim in the second round of litigation seekingparity with another industrial unit i.e. M/s Patspin India Ltd. is concerned,the date of energisation has been considered to be the touchstone forgranting exemption from enhanced power tariff for a period of 5 yearsin terms of GO dated 6[th]February, 1992 but the very foundation onwhich the respondent (industrial unit) proceeded, stands nullified afterpassing of the order dated 22[nd]November, 2001 withdrawing the benefitof exemption from enhanced power tariff from the date of energisationto industrial unit (M/s Patspin India Ltd.) remained unchallenged andthis being the error apparent on the face of record, the finding which hasbeen returned by the Division Bench of the High Court holding thatwithdrawal of exemption in the case of M/s Patspin India Ltd. will notefface the finding recorded in the impugned judgment in exercise of itsjurisdiction under Article 226 of the Constitution read with Order 47Rule 1 CPC, in our view, does not hold good and is not sustainable inlaw.

21. That apart, it was nowhere the case of the respondent(industrial unit) that the benefit seeking exemption from enhanced powertariff as being granted by the Government under its GO dated 6[th]February,1992 from the date of production or other benefits extended to newindustrial units started commercial production between 1[st ]January, 1992to 31[st]December, 1996 has not been extended to the respondent(industrial unit). What being prayed for is something which does notemerge/contemplate from the GO dated 6[th]February, 1992 and afterthe order has been withdrawn in the case of M/s Patspin India Ltd. withwhom parity was claimed by order of the Board dated 22[nd]November,2001, no negative equality would have been claimed by the respondenttaking aid of Article 14 of the Constitution.

22. So far as the submission which has been made before us inclaiming the benefit of concessional tariff for 214 days for a period wherethere was 50% or more power cut is concerned, although this was not asubject matter of challenge before the High Court but that apart, theorder has been placed on record where the benefit of 214 days wasextended to the present respondent (industrial unit) as well, as it reflectedfrom the order dated 18[th]October, 2000 (Ann. P-5) granting extensionfor the period of pre-1992 tariff to the respondent (industrial unit) from AB

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A26[th]March, 2000 till 25[th]October, 2000 to cover the period when therewas 50% or more power cut, as per Board’s Order with a clear indicationthat it will be applicable only for the energy charge for the contractdemand of 500 KV, indeed, it has not subsumed the period of 5 years interms of GO dated 6[th]February, 1992.

B23. So far as the judgment in S.V.A. Steel Re-Rolling MillsLimited and Others(supra) on which the learned counsel for therespondent (industrial unit) has placed reliance, deal with the self- sameissue for grant of certain benefits of exemption as assured by theGovernment of Kerala in terms of GO dated 21[st]May, 1990 followedwith GO dated 6[th]February, 1992 and that being considered in the caseCof present respondent (industrial unit) of which reference has been made,indeed complied with by the Board by order dated 18[th]October, 2000.

24. Consequently, the appeals deserve to be allowed and areaccordingly allowed. The judgment impugned dated 22[nd]November, 2018followed with order dated 29[th]July, 2019 passed by the High Court ofDKerala at Ernakulam are hereby set aside.

25. There shall be no order as to costs.

26. Pending application(s), if any, shall stand disposed of.

ENidhi Jain

(Assisted by : Shashwat Jain, LCRA)

Appeals allowed.

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