REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7433 OF 2008 [Arising out of SLP (Civil) No. 7421 of 2007]

M/s Badri Kedar Paper Pvt. Ltd. …Appellant

Versus

U.P. Electricity Regulatory Commn. & Ors. …Respondents

J U D G M E N T  

S.B. SINHA, J :

1. Leave granted.

2. Validity  of  an  action  of  withdrawal  of  a  circular  letter  dated

8.09.2000 issued by the U.P. Power Corporation Ltd.  (Respondent No. 2

herein) was the subject matter of ten writ applications filed before the High

Court.  The said writ petitions were dismissed.

3. The  writ  petitioners  preferred  appeals  before  us  upon  obtaining

special leave.  This Court in LML Ltd. v. State of Uttar Pradesh and Others

[(2008)  3  SCC 128]  allowed  the  appeals  against  the  Corporation.   The

appellant before us is against the said common judgment of the High Court.

In LML Ltd. (supra), this Court, inter alia,  held:

“50. The proximity of issuance of the circular vis-à-vis  notification  must  also  be  noticed.  The tariff  was  framed  on  7-8-2000  which  came into force  from  9-8-2000  whereas  the  Circular  was issued on 8-9-2000. The consumers exercised their option  on  31-10-2000.  The  judgment  in  LML1 was  delivered  on  25-4-2001.  The Circular  dated 31-8-2001 undoubtedly was issued in view of the said  judgment.  The  said  judgment  did  not  deal with the questions raised before us. In any event if the  licensee  violates  the  tariff  approved  by  the Commission appropriate legal action can be taken against  it.  But  it  would be too much to  contend that for a mistake on the part of the Corporation, the  consumers  would  suffer.  In  this  view of  the matter,  we  are  of  the  considered  view  that  the doctrine of estoppel shall apply in the cases where the promise was made. However, the principle of said  doctrine  would,  however,  not  be  applicable where no such promise was made.”

4. Mr.  Pradeep  Misra,  learned  counsel  appearing  on  behalf  of  the

respondent  No.  1  –  corporation,  however,  would  submit  that  the  said

2

decision should not be followed by us as a review petition had been filed.  It

was urged that in any event the said decision requires reconsideration.   

The said review petition, we may place on record, has been dismissed

by a Bench of this Court by an order dated 20.02.2008.

5. We,  therefore,  proceed  to  deal  with  the  submission  of  Mr.  Misra

before us that the said decision requires reconsideration.

For the purpose of appreciating the said contention, we may notice at

the outset the basic fact of the matter.

Legislature of the State of Uttar  Pradesh enacted the Uttar Pradesh

Electricity Reforms Act, 1999 (for short “the 1999 Act”) in terms whereof

the U.P. Electricity Regulatory Commission (for short “the Commission”)

was constituted.  For determination of tariff in terms of the 1999 Act, the

Commission  was  approached  by  the  respondent  No.  2.   Tariff  was

determined, relevant portion whereof reads as under:

“RATE SCHEDULE HV-2 LARGE AND HEAVY POWER 1. Applicability

3

This rate schedule shall apply to all consumers who  have  contracted  load  of  more  than  75  kW (100  BHP)  for  industrial  and/or  processing purposes  as  well  as  to  Arc/induction,  furnaces rolling/re-rolling  mills,  mini  steel  plants  and  to any other power consumers not covered under any other rate schedule.

This  rate  schedule  shall  also  apply  to commercial  light,  fan  and  power  consumers (LMV-2) and power consumers of Rate Schedule LMV-6, subject to the condition that they opt for this rate schedule.

The  contracted  demand  shall  be  expressed  in whole number only.

2.-3. * * * 4. Rate of charge Description Demand charge

Energy charge A. Basic rate (applicable to urban consumers)

Rs 130 per kVA/month PLUS 390 paise/kWh

Notes.—(a)  In  respect  of  consumers  who opt for power supply during restricted/peak hours an additional surcharge of 15% on the amount billed at the “Rate of Charge” under Item 4-A above i.e. demand charge and energy charge shall be levied.

However,  in  respect  of  consumers  getting power  supply  on  independent  feeders  emanating from  400/220/132  kV  substations  an  additional surcharge of 15% on demand and energy charges shall  be charged further  subject  to  the condition that these consumers will get an assured supply of minimum  500  hours  in  a  month.  In  case  of shortfall  in  above  guaranteed  hours  of  supply  a rebate @ 1% for each 10 hours’ shortfall will be admissible  on  the  bill  amount  computed  under “Rate of Charge”.

4

(b)-(c) * * * (d)  In  respect  of  supply  during  peak

hours/restricted hours, the consumers shall have to take the permission from UPPCL.”

6. A confusion  arose  as  regards  interpretation  of  the  purported  levy.

The U.P. Power Corporation issued a circular calling for options from the

consumers  of  electrical  energy  as  to  whether  they  intended  to  have  a

continuous  power  supply  of  500  hours  in  a  month.   Pursuant  to  or  in

furtherance of  the said circular,  appellant  along with  others  exercised  an

option  stating  that  they did  not  intend  to  have  500  hours  of  continuous

supply.   

Another circular letter was issued by the U.P. Power Corporation Ltd.

on 15.12.2000, the relevant portion whereof reads, thus:

“U.P. Electricity Regulatory Commission in its revised tariff for the year 2000-2001 applicable to HV-2  rate  schedule  consumers  who  are  getting supply from independent feeders for levy of 15% surcharge on the guarantee of 500 hours of power supply per month.

In  this  regard,  detailed  guidelines  have  been issued by this office vide Letter No. 1423 dated 9- 8-2000.

In  this  regard,  it  is  directed  that  those consumers  who  will  exercise  option,  of  not

5

availing 500 hours’ guaranteed supply, through a registered  letter  to  Executive  Engineer (Distribution)  by  31-12-2000,  they  will  not  be charged 15% surcharge from the very date of its applicability  i.e.  7-8-2000.  For  consumers,  who will  submit  their  option  after  31-12-2000,  this facility will be applicable from the date of receipt of the application.”

The  said  policy  decision,  however,  was  not  adopted  by  other

suppliers of electricity.

7. Indisputably,  LML  Ltd.  filed  a  writ  application  before  the  High

Court.  A Division Bench of the Allahabad High Court in a judgment (since

reported in AIR 2001 All 321) inter alia held that the said circular letters

were illegal and, thus, void opining that it was the Commission alone who

could fix the  tariff  and,  thus,  the same could not  have been modified or

altered by any licensee.

The  impugned  circular  was,  thereafter,  issued  withdrawing  the

aforementioned circulars.   

8. At the outset, Mr. Pradeep Misra, learned counsel appearing on behalf

of the respondents, would submit that in the writ petition an order of stay

was granted  which was later  on vacated.   However,  the  appellant  herein

6

prayed for payment of dues in instalments which was allowed by an office

memo 16.03.2004, the relevant portion whereof reads as under:

“6.According  to  the  own  request  of  the consumer,  he  will  submit  an  affidavit  to  the concerned Executive Engineer (Distribution)  that if  he  gets  any order  from Hon’ble  Court  in  this case  for  stay  of  this  amount  then  also  he  will continue to pay the installments regularly till  the entire payable amount is not paid.”

A Director  of the appellant  – company is said to have affirmed an

affidavit pursuant thereto, stating:

“3.That on my application Managing Director, Pashchimanchal  Vidyut  Vitran  Nigam  Ltd., Meerut vide letter No. 1670 dated 16.03.2004 has issued order  to  deposit  the aforesaid outstanding amount in six monthly installments.

4. That  besides  the  conditions  mentioned  in the aforesaid letter, I further assure that even if we get  any stay order  regarding the  said  amount  by Hon’ble  High  Court  in  the  said  case,  we  will continue  to  pay  six  monthly  installments regularly.”

Indisputably,  the  entire  amount  of  Rs.  21,13,031/-  together  with

interest  amounting to Rs.  10,16,815/- had been deposited in terms of the

said undertaking.

7

9. Mr. Misra would submit that in that view of the matter, this special

leave petition is not maintainable.

The learned counsel would further contend that even otherwise the

judgment of this Court requires reconsideration as it had wrongly been held

in  paragraph  43  thereof  that  the  Commission  did  not  take  any  decision

despite  repeated  communications  by  the  Power  Corporation  praying  for

modification of the tariff in terms of the provisions of the 1999 Act and the

regulations framed thereunder and in that view of the matter, it was only the

Commission which could not only frame tariff but also make amendments

thereto.   It  was  urged  that  finding  of  this  Court  that  Sub-section  (6)  of

Section 24 of the 1999 Act inter alia empowers the holders of the licence to

modify the tariff  is  patently incorrect.   In  support  of  the  said contention

reliance has been placed on BSES Ltd. v.  Tata Power Co. Ltd. and Others

[(2004)  1  SCC 195],  West  Bengal  Electricity  Regulatory Commission v.

CESC Ltd. [(2002)  8  SCC 715] and  Association  of  Industrial  Electricity

Users v. State of A.P. and Others [(2002) 3 SCC 711]

8

10. It was contended that in LML Ltd. (supra), the regulations framed by

the State had inadvertently not been placed; from a perusal whereof it would

appear that it was the Commission only who could amend the tariff.

11. We are unable to agree with Mr. Misra on any of the aforementioned

contentions.

When questioned, Mr. Misra conceded that the affidavit affirmed in

support of the representation filed by the appellant as regards payment of

the  amount  had  not  been  brought  to  the  notice  of  the  High  Court.

Concededly again it had also not been contended before the High Court that

in  view of the aforementioned event  subsequent  to  the filing of  the writ

application by the appellant, the writ petition became infructuous.  Had such

contention been raised before the High Court, it might not have exercised its

discretionary  jurisdiction.   Such  a  contention  had  not  only  been  raised

before  the  High  Court,  the  respondent  No.  1  allowed  the  High Court  to

determine the issues arising therein on their own merit, without any demur

whatsoever.   

In our opinion, the respondent No. 1 cannot be permitted to raise such

a contention before us for the first time.  Even otherwise in the affidavit, the

9

appellant  merely stated  that  even  if  a  stay order  is  granted  by the  High

Court, the six-monthly instalments would be paid regularly.  Appellant had

not contended that the writ petition would be withdrawn or even if the writ

petition is allowed, it would not ask for refund of the amount deposited.  It

is neither in doubt nor in dispute that such an undertaking had to be given

by  the  appellant  only  with  a  view  to  avoid  disconnection  of  electrical

energy.  If by reason of the circular impugned before the High Court, the

appellant  was  entitled  to  maintain  a  writ  application;  by  reason  of  such

representation, it did not waive its right.

12. In LML Ltd. (supra), this Court proceeded on the basis that it was the

Commission  alone  who  had  the  exclusive  jurisdiction  to  determine  the

tariff.   In view of the provisions of the 1999 Act as also the regulations

framed thereunder,  as  the  law stands now, there  cannot  be any doubt  or

dispute that the Commission alone has the exclusive jurisdiction and even

for the purpose of modification and/ or alteration of tariff, the Commission

must be approached.   

13. Submission  of  Mr.  Misra  that  in  paragraphs  43  and  44  of  the

judgment this Court had held that sub-section (6) of Section 24 of the 1999

Act empowers the holders of the licence to modify the tariff, is incorrect.

10

The tariff in terms of Sub-section (6) of Section 24 has to be modified by

the  licensee  albeit  in  terms  of  a  direction  issued  by  the  Commission,

wheretobefore  all  procedures  laid  down  in  that  behalf  in  terms  of  the

regulations  are  required  to  be  complied  with.   The  statement  made  in

paragraph 44 of the said decision cannot be read in isolation.

14. There cannot further be any doubt or dispute in view of the binding

precedent of this Court in Tata Power Co. Ltd. (supra),  CESC Ltd. (supra)

and Association of Industrial Electricity Users (supra) that the Commission

has the exclusive jurisdiction to determine the tariff.

15. This  Court  in  LML  Ltd. (supra),  however,  proceeded  to  hold  in

favour  of  the  consumers  of  electrical  energy  on  the  premise  that  the

respondent No. 1 is bound by the doctrine of promissory estoppel.

The matter as regards fulfillment of the conditions of licence granted

by the Commission in favour of the licensee is a matter between the parties

thereto.  If the Corporation fails to comply with any of the conditions laid

down in the licence or violates the tariff, the licence of the licensee may be

revoked.  A penal action may also be taken.  But the same would not mean

that the licensee can be permitted to take advantage of its own wrong.  It can

11

approbate and reprobate, particularly when it is the beneficiary thereof. [See

Halsbury’s  Laws of  England,  Fourth  Edition,  Vol.  16,  pages  1012-1013,

Nagubai  Ammal v.  B.  Shama Rao (1956)  SCR  451,  C.  Beepathuma v.

Velasari Shankaranarayana Kadambolithaya (1964) 5 SCR 836 and  Ambu

Nair  and Kelu  Nair  (1932-33)  60 Indian  Appeals  266 at  271-272]  It  is

furthermore well known that even a right under a mandatory provision can

be  waived.   [See  Babulal  Badriprasad  Varma v.  Surat  Municipal

Corporation & Ors. 2008 (8) SCALE 206]  If it had made a representation

pursuant whereto or in furtherance whereof a consumer of electrical energy

had altered  its  position,  the  doctrine  of  promissory estoppel  shall  apply.

The doctrine of promissory estoppel, it is now well-settled, applies also in

the realm of a statute.  [See State of Punjab v. Nestle India Ltd. and Another

(2004)  6  SCC  465  and  Southern  Petrochemical  Industries  Co.  Ltd. v.

Electricity Inspector & ETIO and Others (2007) 5 SCC 447]

16. It  is  not  the  contention  of  Mr.  Misra  that  in  the  matter  of

implementation of tariff the doctrine of promissory estoppel will have no

application.   If  it  applies,  correctness  of  LML  Ltd.  (supra)  cannot  be

questioned.

12

Furthermore, the Allahabad High Court in the first round of litigation

was not required to go into the question as to whether the LML Ltd. could

enforce  a  circular  as  against  the  Kanpur  Electricity  Supply  Company

although  it  did  not  make any representation.   The question  of  the  tariff

prevailing over such circular did not arise therein as no such circular had

been issued by the Kanpur Electricity Supply Company at all.

17. The circular impugned before the High Court was undoubtedly issued

pursuant  to  the  judgment  of  the  Division  Bench  of  the  Allahabad  High

Court but then whether having regard to the doctrine of promissory estoppel

the same could have been withdrawn or not, further determination in that

behalf was not warranted.

18. We,  therefore,  are  of  the  opinion  that  LML Ltd.  (supra)  does  not

require  reconsideration.   This  appeal  shall  also  be  governed  by  the

aforementioned  judgment.   The  appeal  is  allowed  with  the  direction  to

refund the entire amount within four weeks.  Respondent shall bear the costs

of the appellant throughout.  Counsel’s fee assessed at Rs. 1,00,000/-.

………………………….J. [S.B. Sinha]

13

..…………………………J.     [Cyriac Joseph]

New Delhi; December 19, 2008

14