STATE OF MADHYA PRADESH AND ORS. versus ORIENT PAPER MILLS LTD.

Citation: [1989] SUPP. 2 S.C.R. 436 · Decided: 07-12-1989 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Dismissed

Judgment (excerpt)

A 
B 
STATE OF MADHYA PRADESH AND ORS. 
v. 
ORIENT PAPER MILLS LTD. 
DECEMBER 7, 1989 
[M.M. PUNCHHI AND S. RANGANATHAN, JJ.] 
Administrative Law: Promissory estoppel-Industrialists generat-
ing power through their own new generating sets-Assurance given by 
Government-Electricity duty exemption-Effect of 
Constitution of India, 
1950: Article 136-lnterference .with 
C factual findings-Only in exceptional cases. · 
Madhya Pradesh Electricity Duty Act, 1949: Section 3-B-
Electricity duty-Exemption-Notification-High Court granting relief 
without ordering issuance of notification-Whether amounts to trans-
D gression. 
In its· industrial policy, the State Government declared on 
1.8.1961 that . where power has to be generated by industrialists 
themseb<es, exemption from electricity duty would be granted for a 
perit>CI of five years from the date of plant goes into production, and 
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that the concession would be applicable only to new generating sets 
installed during the Third Plan_ period. 
The Respondent indicated to the Government on 3.5.1955 that 
about 5000 K. W. of electriclty Would be required by it to run its paper 
plant and that it would by itself make arrangements for obtaining the 
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necessary generating equipment. It also applied for import licence for 
the import of a production plant as also a power plant to run it. The 
import licence was granted and the Respondent started negotiation with 
the foreign supplier. Since the price had gone up it was rather impossi-
ble for the Respondent to import both the production plant and the 
power plant, and if the power plant was not purcha8ed along with the 
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production plant, it would make the project unsound. Hence the 
Respondent was in two minds whether to have the power plant or not. 
Meanwhile, the above said industrial policy was announced and the 
Respondent on installation of the power plant was able to start its 
production w.e.f. 16.2.1965. 
H 
Thereafter to formalise the matter, the Respondent corresponded 
436 
STATE OF M.P. v. ORIENT PAPER MILLS 
437 
with the appellant for the grant of the requisite exemption, which was 
rejected, and the Respondent approached the High Court by way of a 
petition under Articles 226 and 227 of the Constitution of India. The 
High Court held that the Petitioner was entitled to invoke the doctrine 
of promissory estoppel in order to claim exemption from payment of 
electricity duty for a periof of five years from 16.2.1965 in terms of the 
assurance of the State Government dated 1.8.1961. 
Against this order of the High Court the State has come in appeal 
by Special Leave. 
On behalf of the appellant-State it was urged that there was no 
occasion to invoke the doctrine of promissory estoppel, since the Respon· 
dent had not in any manner acted on the assurance of the Government 
to its own prejudice but on its own it was taking steps to set up a 
generating plant much before the industrial policy was announced. 
Dismissing the appeal, this Court, 
HELD: 1. Whether the respondent was ofone mind right from the 
beginning to set up a power plant, with or without the assurance of the 
State Government dated J.8.1961, as asserted by the State, is neither 
borne out nor is the view of the High Court arrived at from the record. 
On the contrary, the view taken is that the respondent's indecision in 
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B 
c 
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that regard ended and it became decisive on the announcement of the 
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assurance dated 1.8.1961. Such view of the High Court was a possible 
view to be taken on the material placed before it and the inference 
drawn therefr(!m could be that the respondent had acted on the basis of 
the assurance. [441E-F] 
2. This Court ordinarily d~s not interfere with factual findings 
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arrived at by the High Court and this case has not been shown to be an 
exception. The view taken by the High Court was unexceptional 
warranting it to be tell uninterferred with. I 44 lF] 
3. Without commanding the State Government to issue such a 
Notification, the High Courf has granted relief to the respondent to 
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which there was no bar. Accordingly no provision of Madhya Pradesh 
Electricity Duty Act, 1949 or any other law can be said to have .been 
transgressed. [442A] 
· 
CIVIL APPELLATE JURSIDICTION: Civil Appeal No 498 of 
~. 
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438 
SUPREME COURT REPORTS 
[ 1989] Supp. 2 S.C.R. 
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From the Judgment and Order dated 31.7.1974 of the Madhya 
Pradesh High Court in Misc. Petition No. 316 of 1973. 
Prithvi Raj, Satish K. Agnihotri and

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