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Issues Involved:
1. Whether the Board is estopped from withdrawing the said rebate before the completion of the 3/5 year period, by virtue of the doctrine of promissory estoppel? 2. Whether the agreement executed by the petitioners bars them from questioning the impugned notification? 3. Whether the impugned notification has no application to existing consumers and does it apply to only those consumers who receive the supply on or after 1.8.1986? Summary of Judgment: Issue 1: Promissory Estoppel The Supreme Court affirmed the High Court's finding that the respondent-Board was estopped by virtue of the doctrine of promissory estoppel from withdrawing the development rebate before the completion of the period of three years. The Court emphasized that the Board, being a limb of the State, is subject to the equitable doctrine of promissory estoppel as it had held out a promise through notifications dated 29th October 1982, 13th July 1984, and 28th January 1986, which induced new industrialists to establish industries in Uttar Pradesh. The Court stated, "The doctrine of promissory estoppel is by now well recognized in this country," and held that the Board could not arbitrarily withdraw the said rebate prior to the expiry of the three years' period available to the industries concerned under these earlier notifications. Issue 2: Contractual Bar The Supreme Court overturned the High Court's conclusion that the appellants were barred from questioning the impugned notification due to the express terminology found in the agreements entered into by them with the Board. The Court scrutinized the relevant clauses of these agreements and held that the term "rate schedule" as employed in Clause 7(b) and (c) of the agreements did not encompass the scheme of incentive development rebate. The Court stated, "It is difficult to appreciate how the High Court could persuade itself to hold in the light of Clause 7(c) that the appellants while signing such agreements...agreed to give up their right to claim development rebate." Issue 3: Retrospective Effect The Supreme Court agreed with the High Court's finding that the notification dated 31st July 1986 was not retrospective. The Court clarified that the notification was purely prospective and had resulted in two consequences: (i) any new industry entering into an agreement with the Board for supply of electricity for the first time on and after 1st August 1986 could not get the benefit of incentive of 10% development rebate, and (ii) all existing new industries lost the benefit of development rebate for the unexpired period from 1st August 1986 onwards. The Court concluded, "Both these effects of the notification of 31st July 1986 were purely prospective in character and had no retrospective effect." Ancillary Aspects: The Court directed that for appellants who had already paid the disputed development rebate charges, the Board should credit this amount to their respective running accounts or refund it within three months. The Court also noted that no interest would be payable on the refunded amounts, stating, "Their claim for interest, in our view, deserves to be rejected in exercise of our powers under Article 142 of the Constitution of India." Conclusion: The Supreme Court allowed the appeals (except Civil Appeal Nos. 1713 of 1991 and 3534 of 1991), set aside the common judgment of the High Court, and directed the respondent-Board to comply with the terms specified regarding the development rebate charges.
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