BIJLI COTTON MILL (UNIT OF NATIONAL TEXTILE CORPORATION U.P. LIMITED) versus U.P. POWER CORPORATION LIMITED & ORS.

Citation: [2007] 12 S.C.R. 129 · Decided: 16-11-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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BULi COTTON MILL (UNIT OF NATIONAL TEXTILE 
A 
CORPORATION U.P. LIMITED) 
V. 
U.P. POWER CORPORATION LIMITED & ORS. 
NOVEMBER 16, 2007 
[DR.ARIJITPASAYAT AND 
LOKESHWAR SINGH P ANTA, JJ.] 
Sick Industrial Companies (special Provisions) Act, 1985: 
Sick Unit of National Textile Corporation-Electricity 
disconnection-Liability to pay late payment surcharge-Under the 
Scheme approved by BIFR, Electricity Board to writ off interest and 
damages--HELD: High Court failed to refer various letters and stands 
urged before it-Matter remitted to High Court~Parties would move 
BIFR to clarifj; whether delayed payment surcharge is included in 
interest or damages in view of conceded position that no interest was 
levied-Order of BIFR shall be placed before High Court which would 
thereqfter decide the matter expeditiously. 
The appellant-Cotton Mill was a unit of National Textile 
Corporation U.P. Ltd. Production in the Mill was stopped in 1992, 
and the electricity supply to it was disconnected. The matter of 
sickness of the Mill was referred to the Board for Industrial and 
Financial Reconstruction under the Sick Industrial Companies 
(Special Provisions) Act, 1985. BIFR approved the Scheme, in para 
5.03(v) and 5.04 whereof the Electricity Board was to writ off interest 
and damages on electricity as regards the appellant-Mill and to 
accept only the principal amount. A bill towards principal amount 
for electricity consumption and a sum towards late payment 
surcharge was raised by the respondent-Corporation. According to 
the appellant it paid the principal amount and took a stand that 
demand for late payment surcharge was contrary to the scheme. 
The High Court held against the Mill. 
129 
B 
c 
D 
E 
F 
G 
H 
130 
SUPREME COURT REPORTS 
[2007] 12 S.C.R. 
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A 
In the instant appeal filed by the Mills, it was contended for 
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the appellant that in the case of another Unit of the NTC, namely, 
Lord Krishna Mills' case, similar relief was claimed and granted and, 
there being no distinctive feature in the instant case, the High Court 
was not justified in refusing the relief. 
B 
Allowing the appeal and remitting the matter to the High Court, 
the Court 
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HELD: 1.1. There is no doubt about the binding effect of the 
Scheme. The approved Scheme was circulated. High Court has not 
c discussed as to why and in what manner Lord Krishna Mills' case 
was distinguishable on facts. If there was any doubt about the true 
effect of clauses 5.03 and 5.04 of the Scheme, the matter could have 
bee~ highlighted before the BIFR and could have been clarified. The 
High Court has also not referred to various letters and the stands 
D taken and urged before it, particularly those mentioned in the 
judgment. [Para 10 and 12] [132-G; 133-G; 134-A, E) 
.... 
Mis L.ML. Ltd., Kanpur v. State of UP. and Ors., AIR (2001) 
Allahabad 321, held inapplicable. 
E 
1.2. The BIFR shall be moved by the parties to clarify whether 
del~yed payment surcharge is included in the interest or the damages 
in view of the conceded position that no interest was levied. The 
order of the BIFR shall be placed on record before the High Court. 
Thl! effect of waiver in the case of Lord Krishna Mills and the 
F relevance of documents referred to in the judgment shall be duly 
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considered. The High Court would decide the matter expeditiously 
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after receipt of the order ofBIFR. 
[Para 12 and 13) [134-G; 135-A, BJ 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5275 of 
G 2007. 
From the Judgment and Order dated 7.11.2006 of the High Court 
., 
of Judicature at Allahabad in Civil Misc. Writ Petition No. 56241 of2005. 
G.E. Vahanvati, SG., Dr. K.P. Kylasanatha Pillay, Ayyoobu Khan, 
H 
J 
BIJLICOTTON. MILL(UNITOFNATIONAL TEXTILE 131 
,/ 
CORPN.U.P.LTD.)v. U.P.POWERCORPN.LTD.[PASAYAT,J.] 
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M., Ch. Leela Sarveswar and Vijay Kumar for the Appellant. 
A 
B.P. Singh Dhakray, AK. Bhattacharya, Ajit Kumar, Sunil Kumar, 
D.B. Raj Vohra, Dharam Bir Raj Vohra, Subramonium Prasad, Vivek 
Kohli and Tarun Mehra for the Respondents. 
The Judgment of the Court was delivered by 
B 
DR. ARIJIT PASA YAT, J. 1. Leave granted. 
2. Challenge in this appeal is to the judgment rendered by a Division 
Bench of the Allahabad High Court. The appellant-a unit of National 
Textile Corporation U.P. Limited (in short 'NTC') had moved the High c 
Court for quashing the recovery proceedings. Further prayer was for 
direction to the respondents not to demand and
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