MIS INDIAN MAIZE AND CHEMICALS LTD. versus STATE OF U.P. AND ORS.

Citation: [1997] 1 S.C.R. 216 · Decided: 13-01-1997 · Supreme Court of India · Bench: K. RAMASWAMY, G.T. NANAVATI · Disposal: Dismissed

Judgment (excerpt)

A 
MIS INDIAN MAIZE AND CHEMICALS LTD. 
v. 
STATE OF U.P. AND ORS. 
JANUARY 13, 1997 
B 
(K. RAMASWAMY AND G.T. NANAVATI, .JJ.) 
Indian Electricity Act, 19)0: 
Sick lndusuial Companies (Special Provisions) Act, 1985 : Section 
c 22( 1). 
E/eclliciry supply--Agreement between petitioner and respo11de11t 
Board:-Outsta11ding payment-Witli a view to avoidi11g disco111iectio11 
petitioner agreeing to make payment i11 12 monthly i11stalments-Board agreed 
D for same and gave reco11nection subject to the petitioner paying the agreed 
amount--Petitio11er paid one instalment a11d thereafter committed 
def au It-Anticipated disc01mectio11-Writ filed by petitionet-Seeking direc-
tio11 not to recover outstanding amount-Ground that as it was a sick industry 
and its claim for rehabilitation was pending before B.I.F.R., thenfore, no 
E 
action could be taken in that behalf-High Court refused to gr<ult relief-Ap-
peal before Supreme Court-Held under the Indian Electricity Supply Act, 
one of the conditio11s is that conti11ued paymellt of the price of electrical 
e11ergy :mpplied by the Board is a co11dition for the conti~ued supply-Default 
committed in the payment thereof entails .disconnection of the supply-Since 
the petitioner had committed default and as a condition for re-connection, 
F agreed t~ pay the amoullt in instalments, he is liable to comply with the 
undertaking given for supply of electrical energy--lt is not elltitled to w.·k any 
declaratio11 or direction from the Court that since the matter is pending before 
the BIFR, he would be entitled to the supply of elecl1ical energy without the 
compliance of the c01responding obligation of payment under regulations or 
G of the contract under the Indian Electdcity Supply Act. 
C.E.S.C. Ltd. & Ors. v. Bowrech Cotton Mills Co. Ltd. & Ors., [1993) 
Supp. 1 SCC 451, held inapplicable. 
Modi Spinning & Weaving Mills Co. Ltd. v. U.P.S.E.B. & Ors., AIR 
H (1992) All. 247, referred to. 
216 
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M/S. INDIAN MAIZE AND CHEMICALS LTD. v. STATE 
217 
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CIVIL APPELLATE JURISDICTION: Special Leave Petition (C) A 
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No. 1421of1997. 
From the Judgment and Order dated 2.6.7.96 of the Allahabad High 
Court in W.P. No. 2109 of 1996. 
R. Santhanam, Rajendra Singhvi and Ashok Kumar Singh for the 
Petitioner. 
The following Order of the' Court·was delive~ed: 
Delay condoned. 
•, 
The petitioner is, through this petiticin, assailing the correctness of 
the order of the Allahabad High Court, Lucknow Bench, made on July 26, 
1996 in Writ Petition No. 2109 of 1996. The petitioner got the electricity 
connection from the respondent-U.P. State Electricity Board on February 
6, 1990 for the Supply of electric energy of 1650 KV A The petitioner had 
executed an agreement and also complied with the formalities for the 
supply of electricity in terms of Indian Electricity Act, 1910. The petitioner 
claimed the rebate on the basis that he had established the industry in an 
undeveloped area but we are not concerned with that controversy. Admit-
· tedly, a sum of Rs. 49.95 lacs was due from the petitioner. On a demand 
·raised· by the Board on June 4, 1996 in that behalf, the petitioner ap-
proached the High Court. The petitioner, with a view to avoid disconnec-
tion had agreed with the Board on June 10, 1996 for payment of above 
outstanding amount in U monthly instalments and the Board had agreed 
for the same and given re-connection subject to the petitioner paying the 
amount as agreed. The petitioner after depositing one instalment, com· 
· mitted default in the payment. Since the petitioner anticipated disconnec-
tion, it approached the High Court for the direction not to recover the 
amount putting forth the plea that the petitioner is a sick industry and his 
claim for rehabilitation was pending before B.I.F.R. and, therefore, no 
action could be taken in that behalf. The High Court has refused to grant 
the relief by the impugned Order dated June 26, 1996. Thus, this special 
leave petition. 
Learned counsel for the petitioner has contended that the controver-
sy is covered by the judgment of this Court in C.E.S.C. Ltd. & Ors. v. 
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Bowrech Cotton Mills Co. Ltd. & Ors., [1993) Supp. 1 SCC 451. Therefore, , H 
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218 
SUPREME COURT REPORTS 
(1997] 1 S.C.R. 
A the High Court was not right in relying upon that Court's earlier judgment 
. 
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B 
in Modi Spinning & Weaving Mills Co. Ltd. v. U.P.S.E.B. & Ors., AIR {1992) 
All.

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