M/S. Prakash Industries Ltd vs State Of Chhattisgarh And Ors
2022 Latest Caselaw 204 Chatt

                                               1




                                                                                      NAFR
                    HIGH COURT OF CHHATTISGARH AT BILASPUR
                                   WPC No. 2432 of 2007

             M/s. Prakash Industries Limited, A Company incorporated under the Indian
             Companies Act, 1963, Through its Executive Director Shri A. K. Chaturvedi,
             A-4, Shatabdi Nagar, Beyond Songanga Colony, Bilaspur, Chhattisgarh.

                                                                            ---- Petitioner

                                            Versus

        1. State Of Chhattisgarh, Through the Secretary, Department of Energy, Dau
             Kalyan Singh Bhavan Mantralaya, Raipur, Chhattisgarh.

        2. Collector, Janjgir-Champa, Chhattisgarh

        3. Chief Electrical Inspector/Superintending Engineer, State of Chhattisgarh,
             36/437, First Floor, Bairan Bazaar, Raipur, Chhattisgarh.

        4. State of Madhya Pradesh, Through the Secretary, Department of Energy,
             Vallabh Bhavan, Mantralaya, Bhopal, Madhya Pradesh.

                                                                         ---- Respondents

For Petitioner : Mr. Ashish Shrivastava, Sr. Adv. With Mr. Aman Saxena, Advocate For State : Mr. P. Acharya, PL

Hon'ble Shri Justice P. Sam Koshy Order on Board

12/01/2022

1. Aggrieved by the impugned memo dated 29.12.2003 which was

further issued on 22.01.2007 Annexure P-6 & Annexure P-13

respectively the present writ petition has been filed.

2. The matter relates to the non payment of the electricity duty with

interest by the petitioners. The petitioner is an establishment

engaged in the manufacturing of steel and is a company registered

under the Indian Companies Act in the year 1998. The petitioner

establishment was declared as a sick industry under the provision of

Sick Industries Companies(Special Provisions) Act of 1985, in short

('SICA 1985').

3. The petitioner at the time of establishment of their manufacturing unit

were entitled for exemption for payment of electricity duty for the

initial period of five years. Thereafter, the petitioner establishment

was liable to pay electricity duty. Accordingly, vide Annexure P-6 a

demand was raised by the respondents for payment of electricity

duty. Meanwhile, however, the petitioner establishment was declared

sick vide order dated 10.06.1998 by the Board for Industrial and

Financial Reconstruction in short ('BIFR'). Thereafter the proceedings

for revival was pending before BIFR and finally the petitioner

establishment on its request were discharged from the purview of

SICA 1985. The petitioners were discharged from the proceedings

under the SICA on account of the petitioner company getting revived

and all the accumulated loss having wiped off and the net worth also

had become positive.

4. The petitioner meanwhile had paid the entire principal amount. The

respondent subsequently vide Annexure P-13 raised a fresh demand

dated 22.01.2007 claiming interest on the electricity duty to the tune

of Rs.3,13,45,231/-. It is this notice Annexure P-13 dated 22.01.2007

which led to the filing of the present writ petition.

5. Learned counsel for the petitioner challenging the two impugned

orders Annexure P-6 & Annexure P-13 contended that respondent

could not have claimed electricity duty from the petitioners for the

said period during which they were declared sick and proceedings

were pending before the BIFR. According to the petitioner they were

entitled for protection provided under Section 22 of the SICA 1985.

According to the petitioner once when the petitioners were declared

sick they would have been entitled for waiver off payment of

electricity duty itself as long as the establishment was sick. It was

further contended by the learned counsel for the petitioner that the

demand notice also is bad for the reason that the period during which

the electricity duty and interest is being claimed is from 1999

onwards and whereas the very first notice demanding electricity duty

by the respondent was only on December, 2003 i.e. Annexure P-6.

Therefore for the period between 1996-2003 the petitioner should not

be compelled to pay the electricity duty firstly on the ground that they

are protected under the provision of Section 22 of Sica Act of 1985

and secondly the demand has been made belatedly.

6. Learned counsel for the petitioner relied upon the judgment in the

case of Uttar Gujarat S. R. V. Sangh Limited Vs. Mehsana District

Central Cooperative Bank Limited & Others, (2008) 11 SCC 492 in

support of his contentions. Learned senior counsel appearing for the

petitioner primarily has based his argument on the provisions of SICA

1985 on the basis of which he was claiming waiver from payment of

duty at all at the first instance and payment of interest later. It has

been stated by the counsel for the petitioner that subsequent to the

impugned notice Annexure P-6, petitioner themselves has paid entire

principal amount payable to the respondent towards electricity duty

amounting to Rs. 2.98 Crores in the year 2007. Thus, as on date the

dispute is only so far as payment of interest is concerned. According

to the petitioner they should be entitled for the exemption for payment

of interest on the said amount.

7. Learned counsel for the petitioner also relied to the document

Annexure P-5 while submitting that even the State Government had

invoking the provisions of Madhya Pradesh Sahayata Upkram

(Vishesh Upbandh) Sanshodhan Adhiniyam, 1978 had declared the

petitioners Industrial unit as a relief undertaking and on this count

also the petitioners cannot be saddled with the liability of payment of

interest. Thus, for all these reasons, the petitioners prayed for setting

aside and quashing of the two demand notices Annexure P-6 &

Annexure P-13 and further prayed that a writ holding the petitioners

not entitled for payment of interest on the electricity duty payable by

the petitioner.

8. Per contra, learned State counsel opposing the petition submits that

it is a case where the demand notice Annexure P-13 itself has been

raised by the respondents in the year 2007 that is after the petitioner

establishment got revived and was no longer sick. According to the

State counsel after it was revived, the petitioner company could also

wipe out all the loss sustained during the intervening period and the

net worth also was reflected to be on the positive note.

9. Contention of the State counsel was that even if the petitioners had

the protection under the SICA 1985 or for that matter the State Act of

1978, the protection would be only to the extent of not making any

coercive steps for recovery during the period they were sick. That by

itself would not lead to the conclusion that the petitioners would be

entitled for the waiver off the entire liability itself.

10. Learned State counsel further also contended that neither the

Act of 1985 nor the Act of 1978 enumerates or has a provision

whereby the petitioner establishment would be exempted from their

lialibity of payment of electricity duty or for that matter any other

statutory charges which the petitioners are entitled to make.

According to the State counsel until and unless there is a clear

protection under the statutes, even the Courts would not be in a

position to grant any benefit to the petitioner and thus prayed for

dismissal of the writ petition and also for vacating the interim relief

granted by this Court in the past.

11.Having heard the contentions put forth on either side, the admitted

factual position as it stands is that the petitioner establishment

otherwise is liable to make payment of electricity duty. Initially they

were exempted for an initial five years period during which they

enjoyed the protection of waiver. Thereafter they were required to pay

electricity duty. It appears that petitioners have not paid the said

electricity duty and therefore a demand notice was issued vide

Annexure P-6. Vide the impugned notice Annexure P-6 the

respondents had called upon the petitioner to clear the outstanding

amount payable towards electricity duty beyond the period of five

years during which they had the protection of waiver. The said notice

was not acted upon or honoured by the petitioners. Meanwhile, the

petitioners had been declared sick between June, 1998 to June,

2005.

12. Another fact which needs to be taken note of at this juncture is

that the petitioners realizing their liability in between voluntarily have

deposited the principal amount in the year 2007 to the tune of Rs.

2.98 Crores. Once when the petitioners have voluntarily made the

principal amount the question of liability part stands settled. Now

comes the question as to whether they would be liable to pay interest

on the said amount or not? The plain perusal of Section 5 of the

Chhattisgarh Electricity Duty Act also clearly enumerates that the

amount of duty due and remaining unpaid shall carry interest. Thus

statutes itself provides for charging interest on unpaid and delayed

payments.

13. As regards the ground of challenge by the petitioner

establishment so far as the proceedings under Section 22 of the

SICA, 1985 is concerned, the plain reading of the provision of

Section 22 itself emphatically reflects that it is only suspension of the

legal proceedings and contracts etc. This in other words means that

the moment the company stands revived, they would be liable to

clear off the liabilities which at one point of time they could not do on

account of they being declared sick. The statute does not have a

provision whereby it is envisaged waiver off of all the liabilities during

the intervening period, if the company is sick, Section 22 of SICA

only refers of suspension or deferring of all the proceedings as long

as they are sick.

14. As regards the judgment of Supreme court referred to by the

petitioner, the factual backdrop is entirely different in the said case.

The party was ready to make the payment but were refrained from

making the payment by an order of the Court which is not the factual

aspect in the instant case. Thus, the ratio laid down in the said

judgment cannot be applied in the factual backdrop of the present

writ petition and is quite distinguishable on facts itself.

15. In addition, learned counsel for the petitioner has not been able

to produce any provision of law under which the petitioners, for the

reason that they were sick during the period June, 1998 to June,

2005 would be exempted from making any statutory payment. In the

absence of which this Court finds it difficult to grant the relief sought

for. The writ petition sans-merits and is accordingly dismissed.

16. No order as to costs. The interim relief earlier granted also

stands vacated.

Sd/-

(P. Sam Koshy) Judge Rohit