2011 (1) TMI 1248 - SC - Indian Laws

Whether a benefit given by a statutory notification can be withdrawn by the Government by another statutory notification and whether the principles of promissory estoppel would be applicable in a case where concessions/rebates given by a statutory notification are subsequently withdrawn by another statutory notification? - Held that - Appeal dismissed.The petitioners cannot raise plea of estoppel against the notification dated August 7, 2000 reducing Hill Development Rebate to 0% as there can be no estoppel against the statute. Whether the term stipulated in the contract entered into between the petitioners and the U.P. State Electricity Board (now the Corporation) stipulating that the respondent No.2 would give 33.33% rebate to the petitioners, is legally enforceable and whether in view of the said term the respondent No.2 precluded from changing the tariff rates? - Held that - This Court does not find any prohibition in the agreement by which the respondent No.2 was bound to give 33.33% rebate to the petitioners in all the circumstances or was precluded from changing the tariff rates. The petitioners being parties to the agreement now cannot turn around and argue that the respondent No. 2 is bound to give 33.33% Hill Development Rebate and can never change the tariff rates to the detriment of the petitioners. On the facts and in the circumstances of the case, therefore, this Court holds that the respondent No. 2 is not bound to give 33.33% Hill Development Rebate to the petitioners for the period specified in the notification irrespective of change in the tariff rates. Whether the Court of law would be justified in interfering with the policy decision of the Government either to grant or not to grant rebate to certain industrial units? - Held that - What is relevant to notice is that if the power to reduce the rebate to 17% is assumed to be available, then power to reduce the rebate to 0%, as is done by the notification dated August 7, 2000, is also available. The petitioners have not challenged previous judgment of the High Court wherein this Court has held that the rebate would not be available/cannot be given after coming into force of the U.P. Electricity Reforms Act, 1999. The petitioners have also not challenged the tariff rates made applicable from September 16, 2001 to March 31, 2002 vide order dated September 1, 2000 by the U.P. Electricity Regulatory Commission, wherein no rebate based on geographical area has been provided. The discussion made above makes it very clear that the petitioners have not been differently treated nor the tariff is sought to be recovered in any illegal or arbitrary manner. Under the circumstances, this Court does not find breach of the salutary provisions of Article 14 of the Constitution. As no right guaranteed to the petitioners under Article 14 of the Constitution is found to have been breached, the present petition filed under Article 32 of the Constitution cannot be entertained and the petitioners are not entitled to the reliefs claimed in the instant petition. Therefore, the petitioners are precluded from challenging notification dated August 7, 2000 withdrawing the rebate in electricity rates.

Issues Involved:
1. Maintainability of the petition under Article 32 of the Constitution.
2. Application of the principle of promissory estoppel.
3. Legality of the withdrawal of Hill Development Rebate of 33.33%.
4. Enforceability of contractual terms regarding electricity tariffs.
5. Judicial review of policy decisions related to electricity tariffs.

Detailed Analysis:

1. Maintainability of the Petition under Article 32:
The respondents contended that the petitioners, being companies, do not have Fundamental Rights under Article 19 and hence cannot file a petition under Article 32. The court noted that while companies do not have rights under Article 19, they can claim rights under Article 14. Therefore, the petition was maintainable to examine whether there was a breach of Article 14 by withdrawing the concession in electricity rates.

2. Application of the Principle of Promissory Estoppel:
The petitioners argued that the concessions in electricity bills were promised by the State Government under Section 78-A of the Electricity (Supply) Act, 1948, and thus the respondents could not withdraw these concessions. The court held that the principle of promissory estoppel cannot be invoked against statutory notifications. The court emphasized that promissory estoppel cannot be applied to actions that are contrary to law or statutory provisions.

3. Legality of the Withdrawal of Hill Development Rebate:
The court examined whether the withdrawal of the rebate by the notification dated August 7, 2000, was legal. It was noted that the rebate was initially granted under Section 49 of the Electricity (Supply) Act, 1948, and later withdrawn under Section 24 of the Uttar Pradesh Electricity Reforms Act, 1999. The court held that the power to issue a notification includes the power to withdraw or modify it under Sections 14 and 21 of the General Clauses Act, 1897. Therefore, the withdrawal of the rebate was within the legal authority of the respondents.

4. Enforceability of Contractual Terms Regarding Electricity Tariffs:
The petitioners claimed that the agreement with the U.P. State Electricity Board included a term for a 33.33% rebate, which should be enforceable. The court referred to Clause 7 of the agreement, which allowed the supplier to revise tariffs from time to time. The court held that the petitioners were precluded from challenging the revised tariffs as the agreement explicitly allowed for such revisions.

5. Judicial Review of Policy Decisions Related to Electricity Tariffs:
The court considered whether it was justified in interfering with the policy decision of the Government regarding the grant of rebates. It was noted that the power to fix tariffs was transferred to the U.P. Electricity Regulatory Commission under the U.P. Electricity Reforms Act, 1999, which did not provide for differential tariffs based on geographical areas. The court held that the policy decision to withdraw the rebate was neither arbitrary nor unreasonable and was not subject to judicial review. The court emphasized that such policy decisions are fiscal decisions and should not be interfered with unless found to be arbitrary or unreasonable.

Conclusion:
The court dismissed the petition, holding that the withdrawal of the Hill Development Rebate was legal and within the statutory powers of the respondents. The petitioners could not claim promissory estoppel against the statutory notifications, and the contractual terms allowed for the revision of tariffs. The policy decision to withdraw the rebate was not arbitrary or unreasonable and thus not subject to judicial review.

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