2014 (8) TMI 1224 - HC - Indian Laws

Implementation of Revised Rehabilitation Scheme sanctioned by BIFR - import and implication of concessions envisaged by BIFR at clause 8 of page 7 of the Modified Scheme - Petitioners' case is that the concession envisaged is for the entire period of rehabilitation from 1.7.1995 to 30.6.2002 whereas opposite parties insist that IPISTEEL is entitled to concession there under whenever there was electrical break-down during the rehabilitation period - HELD THAT - Considering the contentions raised by IPISTEEL to the effect that CESCO has not been properly interpreting the reliefs as contained in clause 8 of page 7 of the Scheme at Annexure-1 and also in para 5(i) and 5(ii) of the order at Annexure-3, the Secretary was directed to issue clarificatory letter. Authenticity of Note Sheet of BIFR is not in question. By the order passed in the Note Sheet, neither the Scheme nor any earlier order has been reviewed or modified. The view expressed in the Note Sheet to the effect that reliefs envisaged at clause 8 of page 7 of the Scheme at Annexure-1 is for the entire period of rehabilitation and not restricted to the periods pertaining to power cut/break-down only has been reiterated and ratified by order dated 17.4.2007 at Annexure-12 reproduced above, by observing that as there was, prima facie, an ambiguity in respect of the reliefs and concessions envisaged from CESCO in clause 8 of page 7 of the Scheme at Annexure-1, the Bench directed, on file, to issue a clarification to CESCO stating inter alia therein that the reliefs as contained in the said para of the Scheme at Annexure-1 would not be restricted only to the break-down period(s) and would be for the entire rehabilitation period. Thus, in course of review hearing, M/s. IPISTEEL Ltd.(IPISL) held on 17.4.2007 at Annexure-12, it has been held that reliefs and concessions envisaged at clause 8 of page 7 of the Scheme at Annexure-1 would not be restricted only to the break-down period(s). Otherwise also, in order to understand the import and implication of the reliefs and concessions envisaged at clause 8 of page 7 of the Scheme at Annexure-1, a reference may be made to the observations of the BIFR in the Scheme on the basis of which specific reliefs and concessions were granted. While dealing with BACKGROUND at page 2 of the Scheme it has been observed that IPISTEEL failed to make payments as per the OTS mainly in view of non-compliance of various conditions of the BIFR approved scheme by the Government of Orissa, poor profitability arising out of frequent mechanical break-down at the mill and non-availability of need-based working capital funds from the banks - it appears that there is no reference to 'electrical breakdown'. Rather the Scheme refers to frequent 'mechanical breakdowns' as one of the factors which rendered the IPISTEEL sick. In such circumstances, there is no scope to restrict the meaning of words 'break-down/rehabilitation' as used in clause 8 of page 7 of the Scheme to the period of electrical breakdown only. None of the reliefs and concessions envisaged from CESCO being confined to the period of electrical breakdown only and in the absence of any reference to electrical breakdown as pointed out above, there is no scope to restrict the period of reliefs and concessions envisaged under clause 8 of page 7 of the Scheme to the period of electrical breakdown only - Petition allowed.

Summary

Issues Involved:
1. Implementation of the Revised Rehabilitation Scheme sanctioned by BIFR.
2. Interpretation of the reliefs and concessions under the Modified Sanctioned Scheme.
3. Validity and enforcement of BIFR's clarificatory letter dated 05.11.2003.
4. Refund/adjustment of excess payment made by the petitioner.
5. Legality of CESCO's demand for Rs. 6,35,19,199/- from the petitioner.

Detailed Analysis:

1. Implementation of the Revised Rehabilitation Scheme sanctioned by BIFR:
The petitioners sought a writ of Mandamus commanding CESCO to implement the Revised Rehabilitation Scheme sanctioned by BIFR. The scheme, initially sanctioned in 1995 and modified in 1997, provided various reliefs and concessions for the revival of IPISTEEL. The petitioners argued that CESCO had not properly implemented these reliefs, particularly those related to the power tariff during the rehabilitation period.

2. Interpretation of the reliefs and concessions under the Modified Sanctioned Scheme:
The core issue was the interpretation of clause 8 of page 7 of the Modified Sanctioned Scheme, which stated, "During the period of break-down/rehabilitation, GRIDCO shall charge for the actual quantity of demand based on energy actually consumed in lieu of demand charges." The petitioners contended that this relief should apply for the entire rehabilitation period (01.07.1995 to 30.06.2002), not just during electrical breakdowns. The court examined the scheme's background and found that the term "break-down/rehabilitation" should be interpreted to cover the entire rehabilitation period, not limited to electrical breakdowns.

3. Validity and enforcement of BIFR's clarificatory letter dated 05.11.2003:
The BIFR issued a clarificatory letter on 05.11.2003, stating that the reliefs should apply for the entire rehabilitation period. The Supreme Court, in a previous judgment, held that this letter was not an official order of the BIFR. However, the petitioners obtained a copy of the BIFR's Note Sheet, which contained the order clarifying the reliefs. The court found that the Note Sheet and subsequent orders from BIFR consistently supported the interpretation that the reliefs were for the entire rehabilitation period.

4. Refund/adjustment of excess payment made by the petitioner:
The petitioners sought a refund or adjustment of Rs. 4,47,26,435/- for excess payments made during the rehabilitation period. The court directed CESCO to extend the benefits and concessions for the entire rehabilitation period, implying that any excess payments made due to incorrect interpretation should be refunded or adjusted.

5. Legality of CESCO's demand for Rs. 6,35,19,199/- from the petitioner:
The petitioners challenged CESCO's demand for Rs. 6,35,19,199/-, arguing it violated the modified sanctioned scheme. The court's interpretation of the reliefs and concessions as applicable for the entire rehabilitation period indirectly addressed this issue, suggesting that CESCO's demand was not in line with the scheme's provisions.

Conclusion:
The court allowed the writ petition, directing CESCO to extend the benefits and concessions envisaged under clause 8 of page 7 of the Modified Sanctioned Scheme for the entire rehabilitation period. This decision clarified that the reliefs were not limited to periods of electrical breakdowns but covered the entire rehabilitation duration, ensuring the petitioners received the intended support for their revival efforts.