M/S. NAVA BHARAT FERRO ALLOYS LTD. versus TRANSMISSION CORPORATION OF A.P. LTD. AND ANR

Citation: [2010] 14 S.C.R. 900 · Decided: 18-11-2010 · Supreme Court of India · Bench: MARKANDEY KATJU · Disposal: Dismissed
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Judgment (excerpt)

A 
B 
[2010] 14 (ADDL.) S.C.R. 900 
M/S. NAVA BHARAT FERRO ALLOYS LTD. 
v. 
TRANSMISSION CORPORATION OF A.P. LTD. AND ANR .. , 
(Civil appeal No. 1607 of 2004) 
NOVEMBER 18, 2010 
[MARKANDEY KAT JU AND T.S. THAKUR, JJ.) 
Interim order: Held: A party who fails in the main 
proceedings cannot benefit from the interim order issued 
C during the pendency of such proceedings - On facts, in a writ 
petition, interim order of stay was passed against the 
collection of the disputed amount in favour of c,onsumers -
However, writ petition was dismissed by the Court - The fact 
that consumers did not make the payment on account of the 
D operation of interim stay would not affect the enforceability of 
the demand of the disputed amount - Demand for payment 
of additional charges recoverable on account of the delay in 
the payment of the outstanding dues upheld - Electricity laws 
- Electricity (Supply) Act, 1948 - s.49 - Clause 32.2.1.and 
E 34 of the Terms and Conditions of supply (TCS). 
The instant appeals by special leave arise out of an 
order passed by the High Court whereby writ petitions 
filed by the appellant were dismissed and the demand for 
additional charges/surcharge payable on the delayed 
F payment of outstanding electricity dues raised under 
Clause 32.2.1 and 34 of the Terms and Conditions of 
supply (TCS) was upheld. 
The High Court had held that TCS were statutory in 
G character and were not in conflict with any provision of 
the Electricity Supply Act or the Constitution of India. It 
also held that Clause 32.2.1 and Clause 34 of the said 
Terms and Conditions of Supply upon which the Board 
placed reliance for its demand did not violate any 
900 
NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 901 
CORPN. OF A.P. LTD. 
constitutional or statutory provision. The stipulated terms A 
and conditions were, according to the High Court, 
intended to achieve the objective mentioned in Clause (b) 
of sub-section 2 of Section 49 of the Act, -namely, to 
discourage delayed payment of electricity dues and to 
compensate the Board in cases of delay in the making B 
of the payment. Both these conditions, according to the 
High Court were intended to sustain the economic health 
of the Board. 
The appellants contended tJ1at the High Court had 
fallen in error in declining relief to the appellant which C 
according to them was due to it on the analogy of the 
orders of this Court in Kera/a State Electricity Board's 
case. It was submitted that in the light of the decision of 
this Court in Kera/a State Electricity Board's case the 
appellant-consumers could not be said to be in. default D · 
of payment of the outstanding amount during the period 
the interim order passed by the High Court in its favour 
had remained operative. It was further contended that this 
Court had in the above case and in Kanoria Chemicals's 
case dealt with a similar fact situation and granted relief, 
E · 
by awarding interest@ 18% to the Board to compensate 
it for the monetary loss that it may hav,e suffered on 
account of delay in the making of such payment and to 
prevent any prejudice and consequent injustice to the 
Board on account of the direction issued by the Court. It . F 
was argued that the appellant-company was ready and 
willing to pay interest @ 18% p.a. on the outstanding 
. amount for the relevant period but the demand raised by 
the Board being far in excess, deserves to be suitably 
reduced. 
G 
Dismissing the appeals, the Court 
HELD:1.1. There is a basic fallacy in the analogy 
which the appellant draws between its case and the 
H 
A 
B 
c 
D 
E 
F 
902 
SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R. 
cases referred to above. What is overlooked by the 
appellant is the fact that the decision of this Court in the 
Kera/a State Electricity Board's case enforced the terms 
under which the supply of energy was made to the 
consumers in that case. Award of interest@ 18% p.a. is 
not an innovation of this Court. The consequence of non-
payment of the amount within the time stipulated was on 
the contrary prescribed in the tariff/ conditions subject to 
which energy was supplied to MRF the consumer in that 
case. It would not, therefore, be correct to apply the tariff 
conditions relevant to that case to the case at hand 
where such conditions are materially different. In that 
case, it is quite evident that this Court had upheld the 
claim for payment of interest @ 18% p.a. primarily 
because of the stipulation contained in the t
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