REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICITION

CIVIL APPEAL NO.1607 OF 2004

M/s Nava Bharat Ferro Alloys Ltd. …Appellant

Versus

Transmission Corporation of A.P.  Ltd. and Anr. …Respondents

(With CA Nos.1608-1609 of 2004  and CA No.4741 of 2006)

J U D G M E N T

T.S. THAKUR, J.

1. These  appeals  by  special  leave  arise  out  of  an  

order dated 6th June, 2002 passed by the High Court of  

Andhra Pradesh whereby Writ Petitions No.9081 of 1999  

and  13458  of  1993  filed  by  the  appellant  have  been  

dismissed  and  the  demand  for  additional  

charges/surcharge  payable  on  the  delayed  payment  of  

outstanding electricity dues raised under Clause 32.2.1  

and  34  of  the  Terms  and  Conditions  of  supply  (TCS)

upheld.  Facts  necessary  for  the  disposal  of  these  

appeals may be summarised as under:

2. The appellant is a public limited company engaged  

in the manufacture of Ferro Silicon.  The industry set  

up by the appellant is energy intensive in as much as it  

consumes approximately 10,000 units of electricity for  

every  ton  of  Ferro  Silicon  produced.  The  appellant’s  

case  is  that  the  respondent-Electricity  Board  had  

initially agreed to supply power to the appellant @ 6  

paise per unit but revised the said rate to 11 paise per  

unit  in  the  year  1975.  The  revised  rate  was  in  the  

beginning  applicable  only  to  four  consumers  who  were  

similarly situate but the number of such power intensive  

consumers gradually rose to 84. On 13th December, 1983  

the  Board  revised  the  general  tariff  but  a  separate  

order applicable to power intensive consumers like the  

appellant was issued on 29th January, 1984. Aggrieved by  

the said order which permitted charging of a higher rate  

of  tariff,  the  appellant  and  few  others  filed  writ  

petitions before the High Court of Andhra Pradesh, which  

were dismissed by a Division Bench of that Court on 3rd  

April, 1985. During the pendency of the writ petition,  

however, the High Court had granted an interim order of  

2

stay against the collection of the disputed amount in  

the following terms:

“There  shall  be  stay  of  operation  of  the  order  in  so  far  as  writ  petition  is  concerned, subject to the condition if the  writ petitioner pays at the rate of 47.89  paise per unit with effect from April 1984  onwards,  furnishing  Bank  guarantee  for  the  balance  to  the  satisfaction  of  the  Superintending  Engineer  concerned  in  four  weeks from today. In default of any of the  conditions,  the  stay  stands  vacated.  The  bank  guarantee  furnished  shall  be  renewed  for every 3 months. If the petitioner has  already  paid  the  demand  for  the  month  of  April, on the basis of the impugned order,  this order passed by me shall be effective  from the month of May 1984 otherwise it will  be operative from April, 1984.”

3. The dismissal of the writ petitions filed by the  

appellants was assailed by them before this Court by way  

of  special  leave  petitions  nos.9206-9207/1985  (C.A.  

Nos.2569-2570/1985). This Court by an order dated 22nd  

July,  1985  while  granting  leave  to  appeal  directed  

continuation  of  interim  arrangement  made  by  the  High  

Court in the following terms:  

“As  regards  stay,  after  hearing  learned  counsel  for  the  parties  we  felt  that  the  order  passed  by  the  High  Court  dated  24.4.1984 which operated during the pendency  of  the  writ  petitions  will  continue  to  operate during the pendency of the appeals  

3

with the modification that the rate of 47.89  paise  per  unit  mentioned  in  the  order  is  rounded to 48 paise per unit.

We  would,  however,  like  to  make  it  clear  that because of the High Court’s order dated  13.4.1985, for a couple of months, there was  no such orders in regard to future payments  and the Electricity Board has received the  dues at the enhanced rates in lump sum from  some  of  the  consumers.  There  will  no  question  of  refunding  the  amounts  back  to  these consumers.  The bank guarantee already furnished by the  petitioners/appellants  will  be  kept  alive  from  time  to  time  and  will  cover  all  the  differences including the future difference.”

4. It  is  not  in  dispute  that  the  above  order  was  

modified subsequently in respect of the bills issued from  

16th March, 1990 onwards.   The appeals, eventually failed  

and were dismissed by this Court by an order dated 2nd  

May,  1991.   In  I.As.  filed  by  the  appellant  post-

dismissal of the appeals, this Court passed an order on  

9th May, 1991 to the effect that the appellants could  

after paying outstanding 50% of the amount due under the  

subsisting  bank  guarantee  make  representation  to  the  

Board for payment of the balance amount in instalments  

keeping in view the circumstances and the hardships in  

each individual case. Consequently, the appellants made a  

representation  to  the  Board  praying  for  grant  of  

installments for payment of the balance amount.  While  

4

the said request was under consideration, the appellant  

received a communication dated 14th June, 1991 from the  

Superintending Engineer pointing out that an amount of  

Rs.5,57,66,539.18 was recoverable from the appellant for  

the period April 1984 to August 1987. For the recover of  

the  outstanding  amount  the  Board   invoked  the  bank  

guarantee furnished to it for a sum of Rs.2,83,53,120.93  

thereby leaving a balance of Rs.2,74,13,218.25 due and  

payable  which  amount  the  appellant  was  requested  to  

arrange.  The  communication  also  pointed  out  that  in  

addition to the above amount arrears of Rs.4,45,63,903.21  

for the period from August 1987 to July 1989 were also  

payable besides additional charges for delayed payments  

of  the  said  amount  which  the  latter  proposed  to  

communicate separately.  

5. The request made by the appellant for payment of the  

balance  amount  of  tariff  arrears  was  accepted  by  the  

Board in terms of communication dated 9th July, 1999. It  

was in the above background that the appellant filed writ  

petitions  No.9081  of  1999  and  13458  of  1993  raising  

common questions of law relevant to two different periods  

in  the  High  Court  of  Andhra  Pradesh,  inter  alia,  

assailing the demand of additional charges and interest  

5

on the delayed payment of the amounts determined pursuant  

to the judgment of this Court. By the order impugned in  

these appeals the said petitions have been dismissed by  

the High Court. The High Court held that the Terms and  

Conditions of Supply (TCS) were statutory in character  

and  were  not  in  conflict  with  any  provision  of  the  

Electricity Supply Act or the Constitution of India. It  

also held that Clause 32.2.1 and Clause 34 of the said  

Terms  and  Conditions  of  Supply  upon  which  the  Board  

placed  reliance  for  its  demand  did  not  violate  any  

constitutional  or  statutory  provision.  The  stipulated  

terms and conditions were, according to the High Court,  

intended to achieve the objective mentioned in Clause (b)  

of sub-section 2 of Section 49 of the Act, namely, to  

discourage delayed payment of electricity dues and to  

compensate the Board in cases of delay in the making of  

the payment. Both these conditions, according to the High  

Court were intended to sustain the economic health of the  

Board.  

6. The High Court further held that the decisions of  

this  Court  in  Kerala  State  Electricity  Board v.  MRF  

Limited (1996)  1  SCC  597  and  Kanoria  Chemicals  and  

Industries Ltd. v. U.P. State Electricity Board (1997) 5  

6

SCC 772 were of no assistance to the appellants. The High  

Court  noted  the  factual  background  in  which  the  said  

decisions were rendered and found that in cases before it  

there was no justification for nullifying the effect of  

the Clauses 32.2.1 and 34 of the T.C.S.  

7. Appearing  for  the  appellants  Mr.  Sudheer  Chandra  

Agarwal, learned senior counsel, strenuously agued that  

the High Court had fallen in error in declining relief to  

the appellant which according to the learned counsel was  

due to it on the analogy of the orders of this Court in  

Kerala State Electricity Board’s case (supra). It was  

submitted that in the light of the decision of this Court  

in  Kerala  State  Electricity  Board’s case  (supra)  the  

appellant-consumers could not be said to be in default of  

payment of the outstanding amount during the period the  

interim order passed by the High Court in its favour had  

remained operative. It was further contended that this  

Court had in the above case and in  Kanoria Chemicals’s  

case (supra)  dealt  with  a  similar  fact  situation  and  

granted relief, by awarding interest @ 18% to the Board  

to compensate it for the monetary loss that it may have  

suffered  on  account  of  delay  in  the  making  of  such  

payment  and  to  prevent  any  prejudice  and  consequent  

7

injustice to the Board on account of the direction issued  

by the Court. It was argued that the appellant-company  

was ready and willing to pay interest @ 18% p.a. on the  

outstanding amount for the relevant period but the demand  

raised by the Board being far in excess, deserves to be  

suitably reduced.

8. On behalf of the respondent it was, on the other  

hand,  argued  by  Mr.  C.  Kodanda  Ram,  learned  senior  

counsel,  that  the  High  Court  was,  in  the  facts  and  

circumstances of the case, right in distinguishing the  

decisions relied upon by the appellant and declining the  

relief prayed for before it. It was submitted that the  

facts situation in which the relief was granted in those  

cases was different from that of the present case.  It  

was  further  argued  that  the  additional  charges  and  

interest  were  payable  in  terms  of  the  TCS  which  was  

statutory in character and to which the appellant had  

agreed to abide by. The amount which the appellant had  

not paid would have been utilized by it in its commercial  

ventures  to  make  profits.  Non-payment  of  the  dues  

recoverable from the appellant would, therefore, expose  

the Board to serious financial prejudice and loss.  

8

9. The  case  of  the  appellant-company  rests  entirely  

upon the decisions of this Court in the case of  Kerala  

State Electricity Board (supra) and that delivered in the  

case of  Kanoria Chemicals Ltd.  (supra).  The argument  

advanced on behalf of the appellant in essence is that  

the fact situation in the said two cases being similar to  

the one at hand grant of interest @ 18% p.a. on the  

outstanding amount would meet the ends of justice in the  

instant case also.

10. There is, in our opinion, a basic fallacy in the  

analogy which the appellant draws between its case and  

the cases referred to above. What is overlooked by the  

appellant is the fact that the decision of this Court in  

the  Kerala State Electricity Board’s case (supra) has  

enforced the terms under which the supply of energy was  

made to the consumers in that case.  Award of interest @  

18%  p.a.  is  not  an  innovation  of  this  Court.   The  

consequence of non-payment of the amount within the time  

stipulated was on the contrary prescribed in the tariff/  

conditions subject to which energy was supplied to MRF  

the consumer in that case.  It would not, therefore, be  

correct to apply the tariff conditions relevant to that  

case  to  the  case  at  hand  where  such  conditions  are  

9

materially different. It is on the contrary necessary to  

cull out the principle of law settled in the said case  

for application to the case at hand. This may require  

recapitulation of a few facts in the backdrop whereof the  

decision in the  Kerala State Electricity Board’s case  

(supra) was delivered.  

 11. MRF was engaged in manufacturing automobile tubes  

and tread rubber in the State of Kerala. The company  

entered  into  an  agreement  with  the  Kerala  State  

Electricity Board for supply of power to the factory set  

up by it. The agreement contained a provision for payment  

of power and energy supplied to the company by the Board  

within  15  days  from  the  date  of  the  receipt  of  the  

invoice by the consumer-company.  The agreement further  

provided that in the event of a default in the payment of  

the amount within the stipulated period, interest @ 18%  

p.a. or at such other rate as may be fixed by the Board  

from time to time would be chargeable.   

12. The Board revised the tariff for the electricity  

supplied by it in 1980, 1982 and 1984. These revisions  

were challenged by MRF in a writ petition filed before  

the High Court of Kerala, which was together with other  

1

similar petitions disposed of by a common order by which  

the  revisions  made  by  the  Board  were  struck  down.  

Consequently  MRF  Limited  and  other  consumers  became  

entitled to the refund of the excess amount paid by them  

pursuant  to  the  revised  tariffs.   The  High  Court  of  

Kerala directed the adjustment of such amounts towards  

future bills to be issued by the Board.   

13. Aggrieved by the order passed by the Kerala High  

Court the Board filed special leave petitions before this  

Court which were entertained by this Court and an interim  

order passed, inter alia, directing that pending disposal  

of the appeals before this Court, the refund of charges  

already collected shall remain stayed. It was further  

directed that the future charges would be collected to  

the extent of 50% only and the balance adjusted towards  

the past charges.   

14. The appeals filed by the Board were finally allowed  

by this Court by its judgment dated 26th August, 1986  

upholding the validity of the revision of the tariffs by  

the Board. The inevitable conclusion flowing from that  

decision  was  that  the  consumer-company  and  other  

consumers became liable to pay the amounts due on the  

1

basis of the revision of tariffs including those that had  

since  been  adjusted  by  them  pursuant  to  the  interim  

directions of this Court. Consequently, the Board raised  

a  demand  for  the  payment  of  the  amount  inclusive  of  

interest @ 18% p.a.  While the company did not challenge  

the liability to pay the excess amount pursuant to the  

revision that had been upheld by this Court it refused to  

pay the interest and challenged the demand to that extent  

before the High Court of Kerala in a writ petition filed  

before it.  The Single Judge as also the Division Bench  

of  the  High  Court  in  appeal  held  that  the  consumer-

company  could  not  be  said  to  be  in  default  for  non-

payment of liability which did not factually exist at the  

relevant time and struck down the demand for payment of  

interest.  

15. The Electricity Board appealed to this Court against  

the said judgment of the High Court. Allowing the appeals  

preferred by the Board this Court took the view that  

while the consumers had no obligation to take notice of  

the revised tariffs and to make any payment on the basis  

thereof after the judgment of the High Court of Kerala  

till the said decision was reversed by this Court, yet no  

sooner  the  decision  of  this  Court  upheld  the  upward  

1

revision of the tariffs, the Board’s entitlement to draw  

bills  on  the  basis  of  the  revisions  and  consequently  

enforce payment of such bills by the consumers revived  

with full force. This Court repelled the contention that  

the liability to pay the revised tariffs accrued only  

after the pronouncement of the judgment of this Court  

upholding the upward revision and not from any date prior  

to that. This Court held that once the upward revision  

was found to be valid and enforceable such revision would  

be effective from the date the revision was made, no  

matter such revision had remained unenforceable for some  

period on account of the decision of the High Court.  The  

following passage from the decision of this Court is in  

this regard apposite:

“But  after  the  decision  of  this  Court  upholding  upward  revisions  of  tariffs,  the  Board’s  entitlement  to  draw  bills  on  the  basis of upward revisions and consequential  enforceability of payment of such bills by  the  consumers  revived  with  full  force.  Hence, it would not be correct to contend  that although the Company or for that matter  other consumers were required to pay on the  basis of revisions of tariffs from the dates  when  such  revisions  became  effective,  liability for such payment would accrue only  from  the  date  of  pronouncement  of  the  judgment  by  this  Court  upholding  upward  revisions  and  not  from  any  date  prior  to  that. If the upward revisions are held as  valid,  enforceability  of  such  upward  revisions  being  consequential  to  such  revisions,  though  it  had  remained  unenforceable for some period on account of  

1

the decision of the High Court, cannot but  revive from the dates of upward revisions.”

16. This Court then applied the principle of restitution  

as enunciated by the Privy Council in Rodger v. Comptoir  

D’Escompte de Paris 1871 (3) PC 465 and held that it will  

be the endeavour of the Court to ensure that a party who  

had suffered on account of a decision that is finally  

reversed should be put back in the same position as far  

as the same is practicable, in which he would have been  

if the decision of the Court adversely affecting him had  

not been passed.  This Court observed:

“In giving full and complete relief in an  action  for  restitution,  the  court  has  not  only  power  but  also  a  duty  to  order  for  mesne profits, damages, costs, interest etc.  as may deem expedient and fair conforming to  justice to be done in the facts of the case.  But in giving such relief, the court should  not be oblivious of any unmerited hardship  to  be  suffered  by  the  party  against  whom  action by way of restitution is taken. In  deciding  appropriate  action  by  way  of  restitution,  the  court  should  take  a  pragmatic view and frame relief in such a  manner  as  may  be  reasonable,  fair  and  practicable  and  does  not  bring  about  unmerited hardship to either of the parties.”

17. Applying the above principle to the case before it  

this Court held that the consumer-company was an on-going  

business  concern who  must have  gainfully utilized  the  

1

money saved on account of the decision of the High Court,  

in its commercial activities. The Court further held that  

the Board had to suffer financial loss because of the  

erroneous decision delivered by the High Court and that  

conforming  to  equity  as  well  as  well-established  

principle of restitution the Board could claim interest @  

18% p.a. on the unpaid portion of the bill drawn on the  

basis  of  the  revised  tariffs  to  which  the  consumer-

company had agreed.  The Court observed:

“The Company is an ongoing business concern  and must have utilised the money, saved on  account of the decision of the High Court,  gainfully  in  its  commercial  activities.  Similarly,  other  consumers  have  gainfully  utilised  the  amount  saved  for  being  not  required  to  pay  on  the  basis  of  revised  tariffs. The Board had to suffer financial  loss because of the said erroneous decision  of  the  High  Court.  In  the  aforesaid  circumstances, it will be lawful, conforming  to equity and well-established principle of  restitution for the Board to claim interest  at  18%  on  the  unpaid  portion  of  the  Bill  drawn on the basis of revised tariffs. The  Company had agreed to pay interest at 18% on  the bills if not paid when it became due and  payable.”

18. It is quite evident that this Court had upheld the  

claim  for  payment  of  interest  @  18%  p.a.  primarily  

because  of  the  stipulation  contained  in  the  

tariffs/agreement  executed  between  the  Board  and  the  

consumer providing for payment of interest at that rate  

1

in the event of delay in the payment/discharge of the  

bills raised against the consumer.  It is not as though  

this  Court  had  refused  to  enforce  the  stipulation  

contained  in  the  tariffs  providing  for  recovery  of  

interest from the consumer if the latter failed to pay  

the  amounts  within  the  time  stipulated.  It  is  also  

manifest that this Court had in no uncertain terms held  

that even after the upward revisions of the tariffs had  

remained unenforceable for a certain period on account of  

erroneous judgment of the High Court, the moment the said  

judgment was set aside in appeal, the liability to pay  

revived with full force from the date the revisions were  

made  effective.  The  very  fact  there  was  during  the  

intervening  period  an  erroneous  decision  of  the  High  

Court obliterating the revision in full or in part would  

make little difference in so far as the liability to pay  

the amount under the revised tariffs was concerned. So  

also the fact that the consumers were not deliberately in  

default on account of the judgment of the High Court did  

not affect the enforceability of the demand arising from  

the revised tariffs or the stipulation regarding payment  

of interest demanded on the same on account of the non-

payment or delayed payment of the amount recoverable by  

the Board.   

1

19. Suffice it so say that the decision of this Court in  

the case of Kerala State Electricity Board (supra) does  

not grant any relief to a defaulting consumer once the  

demand is upheld nor does it interfere with the principle  

of restitution which would entitle the successful party  

to be relegated back to the position it would hold had  

there been no judgment adverse to it.   

20. Super added to all this is the fact that this Court  

was dealing with a case where the High Court had finally  

struck down the revised tariff, but the said decision was  

reversed in appeal.  In the present case the appellant  

had obtained only an ad interim order of stay against the  

enforcement  of  the  tariffs.   There  is  a  qualitative  

difference in the two situations. Even if one were to  

take  a  charitable  view  of  the  legal  effect  of  any  

direction of the High Court, pending adjudication by the  

Court, cases in which the High Court finally held the  

tariffs  to  be  bad  would  in  our  opinion  stand  on  a  

different footing than cases where the party obtains an  

order granting interim protection to it.  While there is  

an  element  of  finality  in  the  case  of  a  final  

adjudication by a competent Court in so far as that Court  

is concerned, an interim order can be vacated at any  

1

stage.  The interim order may not even prevent a prudent  

party from paying the charges according to the revised  

tariffs if it does not propose to take any chance and  

suffer recovery of an additional amount on account of the  

non-payment of the dues by the date stipulated for the  

purpose.  We may in this regard refer to the following  

observations of this Court in Shree Chamundi Mopeds Ltd.  

v.  Church  of  South  India  Trust  Association  CSI  Cinod  

Secretariat, Madras 1992 (3) SCC 1:

“While considering the effect of an interim  order  staying  the  operation  of  the  order  under  challenge,  a  distinction  has  to  be  made between quashing of an order and stay  of  operation  of  an  order.  Quashing  of  an  order  results  in  the  restoration  of  the  position  as  it  stood  on  the  date  of  the  passing of the order which has been quashed.  The stay of operation of an order does not,  however,  lead  to  such  a  result.  It  only  means that the order which has been stayed  would not be operative from the date of the  passing of the stay order and it does not  mean that the said order has been wiped out  from existence.”

21. Suffice it to say that the decision of this Court in  

Kerala State Electricity Board’s  case (supra) does not  

lend  any  support  to  the  appellant-company  in  its  

endeavour to avoid payment of the amount which became  

recoverable from it no sooner the judgment of the High  

1

Court was reversed in the earlier round of litigation  

upholding the revision of the tariffs.

22. That brings us to the decision of this Court in  

Kanoria Chemicals and Industries Ltd. and Ors.  v. U.P.  

State Electricity Board and Ors. (1997) 5 SCC 772.  That  

was also a case where the validity of a notification  

issued by the U.P. State Electricity Board revising the  

electricity  rates/tariffs  under  Section  49  of  the  

Electricity  (Supply)  Act,  1948  was  challenged  by  the  

consumers. Interlocutory applications filed in the writ  

petitions  for  stay  of  the  operation  of  the  impugned  

notification were eventually dismissed by the High Court  

whereupon the consumers deposited the differential amount  

between  the  pre-revised  and  the  revised  electricity  

rates.  Consumers  did  not,  however,  deposit  the  late  

payment surcharge “recoverable” in terms of Clause 7(b)  

of the notification. Notices of demand were, therefore,  

issued to the consumers which were challenged in a fresh  

batch  of  writ  petitions  filed  by  them.   The  main  

contention urged by the consumers before the High Court  

was that since the operation of the notification revising  

the tariffs had been stayed between 25th July, 1990 and  

1st March, 1993, no late payment surcharge could be levied  

1

on  the  amount  withheld  by  the  petitioners  under  the  

orders of the Court, no matter the writ petitions were  

finally dismissed.  That contention was rejected by a  

Division  Bench  of  the  High  Court  of  Allahabad.   The  

matter was then brought up to this Court in appeal by the  

consumers,  inter alia, contending that the stay of the  

operation  of  the  impugned  notification  relieved  the  

consumers  of  the  obligation  to  pay  the  revised  

tariffs/rates  and  consequently  additional  charges  for  

late  payment,  if  any.   Reliance  in  support  of  that  

submission was placed by the consumers upon the decision  

of this Court in  Adoni Ginning Factory  v.  Secy. A.P.  

Electricity Board  (1979) 4 SCC 560.  Speaking for the  

Court,  Hon’ble  B.P.  Jeevan  Reddy,  J.  held  that  the  

decision of this Court in  Adoni Ginning Factory’s case  

(supra) had no application to the case at hand nor could  

it be understood to mean that during the period covered  

by the stay no demand could be made against the consumers  

as no such issue has been raised before this Court in  

Adoni  Ginning  Factory’s  case  (supra).   This  Court  

observed:

“…………..We,  therefore,  agree  with  the  High  Court that Adoni Ginning1 cannot be read as  laying down the proposition  that the grant  

2

of  stay  of  a  notification  revising  the  electricity  charges  has  the  effect  of  relieving the consumers/petitioners of their  obligation  to  pay  late  payment  surcharge/interest on the amount withheld by  them  even  when  their  writ  petitions  are  dismissed  ultimately.  Holding  otherwise  would mean that even though the Electricity  Board, who was the respondent in the writ  petitions succeeded therein, is yet deprived  of the late payment surcharge which is due  to it under the tariff rules/regulations. It  would  be  a  case  where  the  Board  suffers  prejudice on account of the orders of the  court and for no fault of its. It succeeds  in  the  writ  petition  and  yet  loses.  The  consumer  files  the  writ  petition,  obtains  stay  of  operation  of  the  notification  revising the rates and fails in his attack  upon  the  validity  of  the  notification  and  yet he is relieved of the obligation to pay  the late payment surcharge for the period of  stay, which he is liable to pay according to  the statutory terms and conditions of supply  —  which  terms  and  conditions  indeed  form  part of the contract of supply entered into  by him with the Board. We do not think that  any such unfair and inequitable proposition  can be sustained in law………..”

23. This Court further clarified that the terms in which  

the  prayer  in  the  stay  application  was  made  by  the  

consumers  did  not  determine  the  effect  of  the  order  

issued by the Court in the writ petitions raising similar  

questions of law. The phraseology used in the prayer for  

interim orders could be materially different though in  

essence the relief may be similar.  On a question of  

principle this Court held that the impugned order coming  

2

to an end upon dismissal of the substantive proceedings,  

it is the duty of the Court to put the parties in the  

same position as they would have occupied but for the  

interim orders of the Court for otherwise it would give  

rise to unjust results.  This Court said:

“…………..It  is  equally  well  settled  that  an  order of stay granted pending disposal of a  writ  petition/suit  or  other  proceeding,  comes to an end with the dismissal of the  substantive  proceeding  and  that  it  is  the  duty of the court in such a case to put the  parties in the same position they would have  been  but  for  the  interim  orders  of  the  court. Any other view would result in the  act  or  order  of  the  court  prejudicing  a  party (Board in this case) for no fault of  its  and  would  also  mean  rewarding  a  writ  petitioner in spite of his failure. We do  not think that any such unjust consequence  can  be  countenanced  by  the  courts.  As  a  matter  of  fact,  the  contention  of  the  consumers herein, extended logically should  mean that even the enhanced rates are also  not payable for the period covered by the  order of stay because the operation of the  very  notification  revising/enhancing  the  tariff rates was stayed. Mercifully, no such  argument was urged by the appellants. It is  ununderstandable how the enhanced rates can  be  said  to  be  payable  but  not  the  late  payment  surcharge  thereon,  when  both  the  enhancement  and  the  late  payment  surcharge  are provided by the same notification - the  operation of which was stayed……………”

2

24. It  is  manifest  from  the  above  that  both  on  the  

question of restitution of the benefit drawn by a party  

during legal proceedings that eventually fail as also on  

the general principle that a party who fails in the main  

proceedings cannot benefit from the interim order issued  

during  the  pendency  of  such  proceedings,  this  Court  

found against the consumers and upheld the demand for  

payment of additional charges recoverable on account of  

the delay in the payment of the outstanding dues.  Far  

from lending any assistance to the appellant-company the  

decision squarely goes against it and has been correctly  

appreciated and applied by the High Court.

25. In  the  result  these  appeals  fail  and  are  hereby  

dismissed but without any orders as to costs.   

……………………………J. (MARKANDEY KATJU)

……………………………J. (T.S. THAKUR)

New Delhi November 18, 2010

2