2002 (12) TMI 235 - SC - Indian Laws

Whether an industrial unit which has set up the industry being lured by policy decision of the Government can still claim the benefit of the concessional tariff under the policy notwithstanding the fact that there has been delay in production, such delay being attributable to the inaction on the part of the Board in providing the necessary electric connection? Held that - Appeal allowed. Having regard to the gamut of the circumstances, starting from the Government policy resolution and culminating in setting up of the factory by the appellant in Kerala and commensurate the production of ferro alloys, though not by December 31, 1996, we are of the considered opinion that granting the concessional tariff for a period of three years instead of five years, as indicated in the policy resolution would meet the ends of justice and we, accordingly, so direct. Be it be stated that the appellant has been enjoying the concessional tariff on the basis of interim orders of the court and, therefore, that should be taken into account and due adjustment would be made in computing the period of three years, for which we are directing for grant of concessional tariff.

Summary

Issues:
- Interpretation of industrial policy for concessional tariff eligibility
- Delay in commercial production due to power connection delay
- Equitable consideration in denying concessional tariff benefit

Interpretation of Industrial Policy for Concessional Tariff Eligibility:
The case involved an appeal against the Kerala High Court's judgment regarding the eligibility of an industrial unit for concessional tariff under the government's policy. The appellant argued that despite a delay in commercial production due to the State Electricity Board's failure to provide power connection in time, they should still be entitled to the concessional tariff as per the policy. The appellant relied on the government's policy resolution of 1992, which offered concessional rates to new industries starting production between January 1, 1992, and December 31, 1996. The State Electricity Board had also confirmed the availability of concessional tariff if commercial production commenced within the specified period. The Court analyzed the policy's language and concluded that the appellant's unit did not start commercial production by the deadline, thus technically not qualifying for the concessional tariff. However, considering the circumstances and the appellant's efforts to secure power connection on time, the Court decided to grant a reduced period of concessional tariff as an equitable remedy.

Delay in Commercial Production Due to Power Connection Delay:
The appellant's delay in commercial production was attributed to the State Electricity Board's failure to provide power connection promptly, despite allocating power to the appellant's factory in 1995. The Court noted various communications from the appellant to the Board requesting power connection to enable production by the stipulated deadline. The Board's delay in supplying power prevented the appellant from starting commercial production by December 31, 1996. The Court acknowledged the appellant's proactive approach in seeking power connection and held that the denial of concessional tariff solely based on the missed deadline would be inequitable, given the circumstances.

Equitable Consideration in Denying Concessional Tariff Benefit:
The Court emphasized the need for an equitable approach in determining the appellant's eligibility for concessional tariff under the government's policy. While acknowledging the technical non-compliance with the deadline for commercial production, the Court considered the appellant's investment and efforts to commence production in a timely manner. Ultimately, the Court decided to grant a concession by reducing the period for which the concessional tariff could be availed, taking into account the appellant's situation and the delays caused by the State Electricity Board. The Court set aside the Kerala High Court's judgment and allowed the appeals, directing the grant of concessional tariff for a reduced period of three years instead of the original five years specified in the policy.