LexM/S. PAWAN ALLOYS AND CASTING PVT. LTD., MEERUT ETC. ETC. versus U.P. STATE ELECTRICITY BOARD AND ORS.
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A M/S. PAWAN ALLOYS AND CASTING PVT. LTD., B MEERUT ETC. ETC. v. U.P. STATE ELECTRICITY BOARD AND ORS. AUGUST 5,. 1997 (S.B. MAJMUDAR AND K.T. THOMAS, JJ.) Electricity (Supply) Act 1948 : Section 49--Notification by Board promising 10% rebate on electricity consumption to new industries for a period C of three years-Prematurely withdrawn by notification dated 31st July, 1986-High Court holding that though Board is estopped from withdrawing the rebate on the principle of proinissory estoppel, appellalits ba"ed from challenging the notification in view of the agreements ·entered into by them with the Board for revised tariff rates-On appeal held the Board can be D pinned down to its promise on the doctrine of promissory estoppel-Notifica- tion not withdrawn on the ground of general public interest but solely for commercial interest of the Board-Agreement to revise general rates of charges has nothing to do with· development rebate-Appellants not bamd from chal- lenging the impugned notification-Notification is purely prospective in na- ture-Appellants who have already paid the development rebate charges are E entitled to refund-Claim of interest rejected-Administrative law-Promissory estoppel. Constitution of lndia, 1950 .' Article 142-Jurisdiction-Exercise of-Could be invoked in the F peculiar facts and-circumstances of the given case. Appellants were consumers of electricity supplied by the respondent- Board. The respondent-Board in exercise of its powers under Section 49 of the Electricity (Supply) Act; 1948 issued notifications promising new industrialists seeking to establish industries in the State, that on the G charges of electricity consumed by them they will be given 10% rebate for a period of three years from the date of commencement of supply of electricity to them for the first time. Subsequently the respondent-Board by notification dated 31st July 1956 withdrew the above concession. On challenge, the High Court, while dismissing the petition held that (i) the H respondent-Board was estopped by virtue of doctrine of promissory estop- 266 PA WAN ALLOYS AND CASTING PVI'. LTD. v. U.P. STATEELECTRICITYBD.267 pel from withdrawing the development rebate before completion of the A period of three years; (ii) the appellants were barred from challenging the impugned notification in view of the agreement entered into by them with the Board for revision of tariff rates at the time of taking electric supply and thus the impugned notification was not illegal; and (iii) the impugned notification is not retrospective in nature. Being aggrieved by the decision of the High Court the appellants have filed the present appeals. The appellants conten.ded that the Board was bound by the principle B of promissory estoppel to continue development incentive for a period of C three years and consequently the Board could not have withdrawn the said rebate by impugned notification; the High Court erred in holding that they were barred from challenging the impugned notification on the ground that they have entered into an agreement with the Board while getting electricity supply; the impugned notification was liable to be struck down being retrospective in nature. D The respondent-Board contended that there was no promise held out by them and they had only exercised statutory or quasi legislative powers and thus there could not be any promissory estoppel against such an exercise of power; it was open to the Board to withdraw the rebate on the E ground of public policy and doctrine of promissory estoppel cannot be pressed in service; the appellants were barred by the contractual obligation flowing from the agreement entered into by them with the Board while taking electric supply and were thus barred from challenging the im- pugned notification. F Allowing the appeals, this Court HELD : 1.1. The respondent-Board can be pinned down to its promise on the doctrine of promissory estoppel. The respondent-Board must be treated to be estopped from prematurely withdrawing the incen- G tive development rebate made available to the appellant industries by Issuing the impugned notification dated 31st July, 1986. (301-F] 1.2. If a statutory authority or an executive authority of the State functioning on behalf of the State in exercise of its legally permissible powers, has held out any promise to a party who relying on the same has H 268 SUPREME COURT REPORTS [1997] SUPP. 3 S.C.
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