INDIAN METALS AND FERRO ALLOYS LIMITED AND ANR. ETC versus STATE OF ORISSA & ORS. ETC. ETC.

Citation: [1987] 3 S.C.R. 265 · Decided: 06-05-1987 · Supreme Court of India · Bench: V. BALAKRISHNA ERADI · Disposal: Appeal(s) allowed
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Judgment (excerpt)

INDIAN METALS AND FERRO ALLOYS LIMITED 
AND ANR. ETC 
v. 
STA1E OF ORISSA & ORS. ETC. ETC. 
MAY 6, 1987 
[V. BALAKRISHNA ERADI AND G.L OZA JJ.) 
Indian Electricity Act, 1910-Section 228-Equitable distribution 
of energy-Benefit of clubbing-Whether can be withdrawn with 
retrospective effect-'Domestic unit'-Benefit of clubbing permitted-
Whether can be denied to industry classiMd a.r 'power intensive unit'. 
Orissa State Electricity Board (General Conditioru of Supply) 
Regulations, 1981-Regulation 28-Ckusification of service to consu-
mers-Industries-Five categories-siTUl/1, medium, large, power 
A 
B 
c 
i 
intensive and heavy-Separate categorisation of 'export oriented 
~ 
industries'-Not pennissible. 
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i. 
'·· ... 
Tbe petitioner-company, engaged in manufadun et ferr.silicon1 
silicon metal and silicon carbide, was permitted dabb~ of electricity 
for the water yt'ars 1979-80 to 1983--84 for iu v.nit5 in an industrial 
complex in t~ State of Orissa, which utilised electricity as raw material 
and which were classified as 'power lnteosiTe industries'. During the 
E 
water year 1984-85, clubbing of power supply from Jllfy 1984 ouwards 
wu allowed and bi.lb for the period from July 1934 to December 1984 
were drawn up and served on the basis tbat the company was entitled to 
the be~fit of dubbing. Though tbe position was subject to re~n In 
October 1984 no revision took place. In ()Kember 1~, tbe facility of 
dllbblng was refused on tbe ground that one of the onib befnK a l~ f 
trport oriented Industry, power supply to it had to be regulated sepa-
rately for purposn of power alJocatioa aDd that clubbing had been , 
allowed for the month of Joly1984 onl)'. 
Under Section 228 of the ladla.a Eledrklty Act.t949, tbe State of 
Orissa Issued an order on January ll, 1985, etrtdln from July t, 1984, G 
cllrtding the State El«trlclty Board to ml11~ sappiJ of energy so as to 
allow consumers to avail of supply only to the extent spedlled in the 
&tnt xure to the order. There was a note to the order prescribing cer-
tain toodltlons. 
All the units of the petltioner-compaay were sbowu in the 
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265 
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266 
SUPREME COURT REPORTS 
[1987] 3 S.C.R. 
A Annexure under the classification 'power intensive industries'. The 
First three units were allotted energy together and the fourth unit 
separately. 
After the promulgation of the above order, the Board served a 
revised bill on the company demanding payment at the higher tariff 
B rate for the period from October 1984 to June 1985, on the ground that 
there bad been alleged excess drawal by the company due to clubbing. 
The company filed a writ petition in the High Court challenging ......,. 
the aforesaid order and also the letter of the Board refusing clubbing 
for the entire water year 1984-85 and praying for quashing the same. 
C 
The company also sought a writ of mandamus directing the Board and 
the State Goveroment to permit clubbing for the water year 1984-85 as -
well as for the future years. On behalf of the State it was contended that 
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clubbing had been allowed to the company by the Board temporarily for 
the month of July 1984 only during the water year 1984·85 and that the 
power allotted to the fourth unit could not be allowed to be clubbed with 
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that allotted to the other three units since the former was a 100% export 
oriented unit and, it had, therefore, to be treated separately for the 
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aUocation of power. 
During the pendency of the writ petition the State Government 
passed another order effecting allocation of power under Section 22B of 
E the Act for the water year 1985-86. The company was served with a 
notice of disconnection for non-payment of the bills prepared at the 
higher tariff rate for the month of August, 1985. The company filed \ 
another writ petition challenging the order and praying for identical 
reliefs as in the previous petition. This petition was opposed by the State 
contending that the said unit, being a 100% export oriented unit, had to 
F 
be treated separately for the purpose of power allocation. The High 
Court passed an interim order directing the State Government to dis-
pose of the company's request for clubbing of the power allotted for aU 
the four units for the water year 1985-86. The State Government, there-
after passed an order, rejecting the application without giving any 
reason. The company's application for amending the writ petition by 
G challenging the Government's refusal was allow
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