Supreme Court Terms West Bengal State Electricity Board’s Action Of Withdrawing Concessional Rate Of Power Supply Under Agreement Arbitrary
|The Civil Appeal before the Supreme Court was filed against the judgment of the Calcutta High Court confirming the order dismissing the petition challenging the action of the West Bengal State Electricity Board.
The Supreme Court has termed the action of the West Bengal State Electricity Board withdrawing the concessional rate of power supply under the Agreement as arbitrary. The Apex Court further held that the Board was not justified in changing its stand after more than 2 years.
The Civil Appeal before the Supreme Court was filed against the judgment of the Division Bench of the Calcutta High Court confirming the order of the Single Judge dismissing the writ petition filed by the appellant challenging the arbitrary action of the West Bengal State Electricity Board withdrawing the concessional rate of power supply under the Agreement dated January 18, 1999.
The Division Bench of Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar held, “Despite the above, even if the Board wanted confirmation of the fact that the appellant has not availed subsidy either under the West Bengal State Incentive Scheme or from the Director, Cottage and Small Scale Industries, it would have been justified. However, there was no justification whatsoever for the Board to take a plea that the appellant would not qualify as a ‘New Industry’ to avail the concession of 25% on the total energy charge for three years. We are of the opinion that the Board is not justified in changing its stand after more than 2 years.”
“The facts speak for themselves and there is no need for any further discussion or analysis. We have no hesitation in holding that decision of the Board dated 16.11.2000 is unsustainable, illegal and arbitrary”, it added.
Advocate Gaurav Jain represented the Appellant while AOR Saurabh Mishra represented the Respondent.
Factual Background
The Respondent Board issued a notification in the year 1996, revising the tariff applicable. The notification also provided a concessional tariff to new and expanding industries, as well as sick and closed industries being reopened. The appellant, an industry involved in the manufacture of cast iron, had a low-tension (LT) power supply connection for its factory at Dankuni, Hooghly, West Bengal. In order to expand its business and to cope with clean and technologically advanced industrial growth, the appellant installed a 500 kg capacity Induction Furnace.
By such upgradation, the appellant transitioned into a ‘New Industry’. With the aforesaid installation and upgradation, the appellant filed an application for an HT power supply. In terms of the Memo, Agreement and the Supply Connection, the Board granted 25% concession on the total energy consumed by the appellant for August, September and November 1999.
However, when a demand for the entire amount, without the benefit of a 25% concession for consumption of power in the month of October, 1999 was raised, the appellant raised objections. The Board demanded that the appellant provide the necessary certificate that it had never claimed any subsidy under any government scheme. The appellant submitted a certificate, but the Board was not satisfied with it. In compliance, the appellant obtained the necessary certificate from the Director, Cottage and Small Scale Industries, and submitted the same.The Board issued yet another letter raising a new ground, that the appellant was not a ‘New Industry’ and as such the 25% concessional supply of energy was not admissible. The appellant’s Writ Petition was dismissed by the Single Bench as well as the Division Bench of the High Court. Aggrieved thereby, the appellant filed an appeal before the Apex Court.
Reasoning
The Bench referred to the agreement entered into between the appellant and the Board, which incorporated the obligation of the Board to provide a concession of 25% on the total energy charge for three years. The Bench also found sufficient evidence to show that the Agreement was implemented and an HT/Bulk Power Supply Connection with a contractual demand of 400KVA at 11KVA was affected on July 29, 1999.
The Bench held that the Board was not justified in its stand. As per the Bench, the Single Judge as well as the Division Bench of the High Court committed a serious error in not scrutinising the letter of the Board in the context of the admitted facts, whereunder the position of the Board was completely different.
Thus, allowing the Civil Appeal and setting aside the judgment of the High Court, the Bench ordered, “The appellant will be entitled to 25% concession on the total energy charge for three years as per the agreement dated 18.01.1999.”
Cause Title: Edcons(Mks) Castings Pvt. Ltd. v. West Bengal State Electricity Board (Neutral Citation: 2025 INSC 1006)
Appearance
Appeallant: Advocate Gaurav Jain, AOR Abha Jain
Respondent: AOR Saurabh Mishra, Advocates Shrimay Mishra, Bhumi Agrawal, Kapil Kaushik