Madras High Court
Venkatalakshmi Paper & Boards ... vs State Of Tamil Nadu on 16 November, 2021
W.P.No.2860 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED 16.11.2021
CORAM
THE HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY
W.P.No.2860 of 2018
and
W.M.P.No.3529 of 2018
Venkatalakshmi Paper & Boards Private Limited,
(Formerly known as V.G.Paper and Boards Ltd)
Andipatty Road, Kolumam,
Madathukulam Taluk – 642 204,
Rep.by its Director Dr.Narendran. ...Petitioner
..Vs..
1.State of Tamil Nadu,
Rep.by the Secretary to Government,
Energy Department,
Secretariat, Fort St.George,
Chennai – 600 009.
2.The TANGEDCO,
Rep.by its Chairman,
No.144 Anna Salai,
Chennai – 600 002.
3.The Chief Engineer / Commercial,
TANGEDCO,
144, Anna Salai,
Chennai – 600 002.
1/17
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W.P.No.2860 of 2018
4.The Superintending Engineer,
Udumalpet Electricity Distribution Circle,
TANGEDCO,
Udumalpet. ...Respondents
PRAYER : Petition filed Under Article 226 of the Constitution of India
praying to issue a Writ of Certiorarified Mandamus, calling for the records
of the 3rd respondent in his impugned demand notice dated 23.01.2018
bearing Lr.No.SE/UEDC/UDT/DFC/AO/R/AAO/HT/AS/F.TF concession/
2018 and quash the same as illegal, arbitrary, without the authority of law
and against the very spirit of the order of the Supreme Court dated
16.05.2008 and consequently direct the respondents to grant tariff
concession to the petitioner by following the procedure laid down by the
Hon'ble Supreme Court in its Judgment dated 16.05.2008 passed in Civil
Appeal No.3940 of 2008 and permit the petitioner to release the Bank
Guarantees executed in favour of the respondents with respect to the tariff
concession amount.
For Petitioner : Mr.R.Pandiyaraj
For Respondents : Mr.K.M.D.Muhilan,
Government Advocate for R1
Mr.Abdul Kalam,
Standing Counsel for R2 to R4
ORDER
This Writ Petition has been filed, praying to issue a Writ of
Certiorarified Mandamus, calling for the records of the 3rd respondent in his
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W.P.No.2860 of 2018
impugned demand notice dated 23.01.2018 bearing
Lr.No.SE/UEDC/UDT/DFC/AO/R /AAO/HT/AS/F.TF concession/2018
and quash the same as illegal, arbitrary, without the authority of law and
against the very spirit of the order of the Supreme Court dated 16.05.2008
and consequently direct the respondents to grant tariff concession to the
petitioner by following the procedure laid down by the Hon'ble Supreme
Court in its Judgment dated 16.05.2008 passed in Civil Appeal No.3940 of
2008 and permit the petitioner to release the Bank Guarantees executed in
favour of the respondents with respect to the tariff concession amount.
2. The petitioner has come forward with the plea that pursuant to the
issuance of G.O.Ms.No. 29 Energy (A-2) dated 31.1.1995, they have started
to establish the industry with a view to get tariff concession as mentioned
therein and ultimately they have set up the industry but due to some reason
or other giving power connection was delayed beyond 14.2.1997 which
resulted in refusal by the respondents in extending infancy benefit made
available as a tariff concession by the Government, in G.O.Ms.No.29, dated
31.1. 1995.
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W.P.No.2860 of 2018
3. The learned counsel for the petitioner would submit that the
petitioner set up an industry, i.e., a Paper Mill with a capital investment of
around Rs.23.81 Crores and made an application 09.10.1995 for a maximum
demand of 3500 KVA of supply of electrical energy under the category of
"High Tension". The said application was kept pending for more than 10
months without assigning any reason by the respondents. Later, vide
communication dated 19.08.1996, the 3rd respondent sanctioned the
demand of 3500 KVA and pursuant to the same, the petitioner also paid
EMD of Rs.10,50,000/- on 11.09.1996. Thereafter, the petitioner vide
communication dated 18.09.1996, expressed its readiness to avail power
after completion of civil works and having equipments installed at the site.
While so, there was no response from the respondents despite the petitioner
approaching them periodically and in the meanwhile, the tariff concession
notification issued in G.O.Ms.No.29 dated 31.01.1995 was withdrawn by
the Government vide G.O.Ms.No.17 dated 14.02.1997. Thereafter, on
01.09.1997, the respondents sent a letter to the petitioner, directing to pay a
sum of Rs.5,95,945/- towards development and service connection charges,
etc. Immediately, the petitioner also paid the said amount on 03.09.1997.
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W.P.No.2860 of 2018
Later, the petitioner obtained CEIG certificate and finally, the respondents
provided service connection on 31.10.1998. Therefore, according to the
petitioner, the petitioner had already set up the industry well prior to
14.02.1997 having invested substantial sum and erected imported
machineries in the year 1996 itself and also expressed its readiness even on
18.09.1996 and as such, the petitioner is entitled to receive the Tariff
concession. The learned counsel also relied upon the judgment of the
Hon'ble Supreme Court dated 16.05.2008 in Civil Appeal Nos.3940 to 4084
of 2008.
4. On the other hand, the learned Standing counsel appearing for the
respndents would submit that though the petitioner confirmed in their letter
dated 03.12.1997 that they received the Safety certificate from Chief
Electrical Energy to Government/Chennai on 02.12.1997 and that they were
ready to avail supply, the benefit of G.O.Ms.No.29 dated 31.10.1995 has
been seized of by virtue of its withdrawal by the Government and as such,
the High Tension Industry set up on or after 15.02.1997 are not entitled for
Tariff Concession. He also submitted that the petitioner obtained Safety
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W.P.No.2860 of 2018
Certificate from Chief Electrical Inspector to Government only on
02.12.1997 and produced the same on 03.12.1997 and thereafter only, the
petitioner was provided with High Tension Service Connection on
12.01.1998 and therefore, the petitioner started the commercial production
only from 28.01.1998 onwards, the petitioner is not entitled to the relief and
hence, he sought for dismissal of the Writ Petition.
5. Heard the learned counsel appearing for the petitioner and also the
learned standing counsel appearing for the respondents and perused the
materials available on record.
6. The Government issued G.O. Ms. No.29, Energy Department dated
31.01.1995 by which a policy decision was taken to grant tariff concession
to the industries which avail high tension electricity service connection from
the respondents electricity board by setting up an industry. It was ordered
therein that such tariff concession would be extended to them for the first
three years from the date of availing the high tension service connection.
Subsequently, another notification was issued in G.O. Ms. No.17, Energy
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W.P.No.2860 of 2018
Department dated 14.02.1997 clarifying that such concession could be
granted only to those who have set up industries on or before 14.02.1997
alone. According to the petitioner, they have established their industry even
before the cut off date and therefore they are entitled to such concession.
Therefore, if the petitioner has established that they set up their industry on
or before 14.02.1997, they are eligible for tariff concession.
7. The Hon'ble Supreme Court in connected batch of cases passed
a judgment in the case of "Tamil Nadu Electricity Board and another vs.
Status Spinning Mills Limited and another" reported in (2008) 5 MLJ
1267 (SC) wherein in para No.42 and 45, it was specifically held that such
concession would be applicable not only to those who had started
commercial production before 14.02.1997, but also had applied and were
otherwise ready to take electrical connections having deposited the amount
demanded by the electricity board. The relevant portion of the judgment of
the Hon'ble Supreme Court as found in paragraphs 43 and 44, is extracted as
under:
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W.P.No.2860 of 2018
"43. The proviso is an exception to the main clause
whereas all industries which were set up on or after 15th
February become wholly ineligible for any tariff concession
but those who had set up prior thereto shall continue to
avail themselves of the said tariff concession. Legally, those
who had not become consumer of electrical energy, but
were the potential consumers, they had not only applied for
it but they were and, in fact, some of them has also been
gone into commercial production. Once they have set up the
high tension industries and who had gone up for
commercial production must be held to have set up the high
tension industries. Once they have set up the high tension
industries after 31st March, 1995, they became entitled to
the benefit of concessional tariff for a period three years.
Such concession was to be availed by them from the date of
grant of service connection. If they had already been
granted service connection, they would continue to avail
themselves of the said tariff concession. However, the
difficulty arises only in cases where despite applying for
grant of electrical communication, actual service
connection had not been granted. If a literal interpretation
of the proviso is taken recourse to, the same may result in
an anomaly in the sense that in one case, connection may be
granted in one day and in another case, connection may not
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W.P.No.2860 of 2018
be granted for a long time. Because of the acts of
discrimination on the part of the officers of the Board or the
State, the entrepreneurs would suffer. It is in the
aforementioned limited sense, the doctrine of promissory
estoppel will have application. If doctrine of promissory
estoppel applies, the right accrued in terms thereof cannot
be withdrawn with a retrospective effect. [See Mahabir
Vegetable Oils (P) Ltd. (supra) Southern Petrochemical
Industries Co. Ltd. (supra)]
"44. However, the difficult arises only in cases
where despite applying for grant of electrical connection,
actual service connection had not been granted. If a literal
interpretation of the proviso is taken recourse to, the same
may result in an anomaly in the sense that in one case,
connection may be granted in one day and in another case,
connection may not be granted for a long time. Because of
the acts of discrimination on the part of the officers of the
Board or the State, the entrepreneurs would suffer. It is in
the aforementioned limited sense, the doctrine of promissory
estoppel will have application. If doctrine of promissory
estoppel applies, the right accrued in terms thereof cannot
be withdrawn with a retrospective effect (See. Mahabir
Vegetable Oils (P) Ltd., and Souther Petrochemical
Industries Co., Ltd.,)."
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W.P.No.2860 of 2018
8. It is contended on behalf of the petitioner that by virtue of the
judgment of the Hon'ble Supreme Court, they are entitled to the tariff
concession especially when they have set up the industry before the cut off
date viz., 14.02.1997. It is evident from the interpretation given by the
Hon'ble Supreme Court that the tariff concession can be extended to those
who commenced commercial production before 14.02.1997 and also to
those who have applied and were otherwise ready to take electrical
connections before the said date. In other words, even those who have
applied for service connection and are ready to avail the service connection,
but not started the commercial production are also eligible to get tariff
concession. Thus, the Hon'ble Supreme Court had interpreted the word "set
up" in such a way that the benefit of tariff concession has to be extended for
the best use of the consumers who have set up the industry in anticipation of
the tariff concession.
9. According to the learned counsel appearing for the petitioner, if
any one of the two conditions, as interpreted by the Hon'ble Supreme Court
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W.P.No.2860 of 2018
are fulfilled, then the petitioner is eligible for extending the tariff
concession. However, it is contended on behalf of the respondents that
unless both the conditions are fulfilled namely, setting up the industry and
commencing commercial production within the cut off date, the petitioner is
not eligible to the tariff concession.
10. For determining the eligibility of the petitioner, the word "set
up" indicated in the Government Order requires to be interpreted. The word
"set up" has to be liberally and harmoniously interpreted in the best interest
of the consumers. This Court carefully perused the pleadings made by the
petitioner in the Writ Petition. The petitioner set up an industry, i.e., a
Paper Mill with a capital investment of around Rs.23.81 Crores and made an
application 09.10.1995 for a maximum demand of 3500 KVA of supply of
electrical energy pet under the category of "High Tension". The said
application was kept pending for more than 10 months without assigning
any reason by the respondents. Later, vide communication dated
19.08.1996, the 3rd respondent sanctioned the demand of 3500 KVA and
pursuant to the same, the petitioner also paid EMD of Rs.10,50,000/- on
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W.P.No.2860 of 2018
11.09.1996. Thereafter, the petitioner vide communication dated
18.09.1996, expressed its readiness to avail power after completion of civil
works and having equipments installed at the site. While so, there was no
response from the respondents despite the petitioner approaching them
periodically and despite expressing its readiness to avail power. It is
pertinent to note that the respondents had kept silent without taking any
efforts to process the request of the petitioner, which expressed its readiness
as early as on 18.09.1996. But only in the year 1997, i.e. after a lapse of 11
months, the respondents sent a communication dated 01.09.1997, requesting
the petitioner to pay Development and Service Connection Charges for the
purpose of providing service connection. Immediately, the petitioner also
paid the said amount on 03.09.1997. Later, the petitioner obtained CEIG
certificate and finally, the respondents provided service connection on
31.10.1998. Had the respondents responded in time well before the cut off
date, the petitioner would have certainly come under the zone of
consideration for availing tariff concession. But due to the delay on the part
of the respondents in providing the power supply, there is no justification on
the part of the respondents to contend that the petitioner is not eligible to
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W.P.No.2860 of 2018
avail the tariff concession. In such event, the petitioner cannot be penalized
for the inaction on the part of the respondents in effecting electricity supply
before the cut off date. Therefore, the contention of the respondents that the
petitioner did not commence commercial production before the cut off date
and thereby, they are not eligible for tariff concession cannot be
countenanced. It has to be seen whether the petitioner did not commence
production owing to the delay attributable on his part or the delay is on the
part of the Board in effecting service connection. This is more so that this
was not the intention of the Government in taking a policy decision to
extend tariff concession. Had it been the intention of the Government, it
could have excluded those who have not obtained power connection before
15.02.1997 by specifically stating that the concession would be extended
only to those who have commenced commercial production before the cut
off date. It was merely stated that those who have set up the industries are
entitled for the tariff concession, meaning thereby, those who have applied
and are ready to take up the service connection are also entitled for the
concession. This alone would be the criteria for extending the tariff
concession and the word "set up" has to be interpreted only in this way.
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W.P.No.2860 of 2018
Such consumers who were ready to take up the service connection by
keeping intact all the infrastructural amenities can only be construed as pre-
existing industries. By virtue of this position, the petitioner, who had set up
a new industry with the electricity supply to be provided by the respondents,
acquires a vested right. It is not in dispute that the petitioner has applied
well before the cut off date and having paid EMD, expressed its readiness
and was anticipating to get power supply effected by the respondents by
providing all the infrastructural facilities required for the same. In other
words, the petitioner was ready to take the service connection that may be
provided by the respondents. The anticipation of the petitioner in setting up
industry by investing huge amount towards recruiting men, machineries,
fixtures and other infrastructural amenities, on the basis of the concession
announced by the Government to extend power tariff, is a legitimate
expectation which cannot be denied by the respondents.
11. As regards the impugned order is concerned, the 3rd respondent
did not take note of the delay on the part of the department in effecting the
service connection but merely rejected the claim of the petitioner. In other
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W.P.No.2860 of 2018
words, it was not specifically stated as to whether the delay in getting
service connection is on the part of the petitioner or not. It was also not
specifically stated as to whether the individual consumer/petitioner has
applied for setting up the industry in time, provided necessary
infrastructural amenities to take the service connection, remitted the amount
required for effecting service connection etc., As regards remittance of
amount towards development charges/meter charges, unless the respondents
demand the petitioner to remit it before the cut off date, they will not be in a
position to do so. Therefore, the respondents ought to have stated in the
impugned order that in spite of demands made by them, the petitioner has
failed and neglected to remit the amount. In the absence of indicating any
such specific date on which the amount was demanded by the respondents
and the date on which the amount was paid by the petitioner, the impugned
order is liable to be vitiated.
12. Accordingly, the writ petition stands allowed and the impugned
demand notice dated 23.01.2018 bearing Lr.No. SE/UEDC/UDT/DFC/AO/
R/AAO/HT/AS/F.TF concession/ 2018 issued by the 3rd respondent is
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W.P.No.2860 of 2018
hereby set aside. No costs. Consequently, connected miscellaneous petition
is closed.
16.11.2021
Pns
Index : Yes / No
Internet : Yes / No
To
1.The Secretary to Government,
State of Tamil Nadu,
Energy Department,
Secretariat, Fort St.George,
Chennai – 600 009.
2.The Chairman,
TANGEDCO,
144 Anna Salai,
Chennai – 600 002.
3.The Chief Engineer / Commercial,
TANGEDCO,
144, Anna Salai,
Chennai – 600 002.
4.The Superintending Engineer,
Udumalpet Electricity Distribution Circle,
TANGEDCO,
Udumalpet.
https://www.mhc.tn.gov.in/judis
W.P.No.2860 of 2018
KRISHNAN RAMASAMY, J.
Pns
W.P.No.2860 of 2018
and
W.M.P.No.3529 of 2018
16.11.2021
https://www.mhc.tn.gov.in/judis
