THE SPECIAL OFFICER (REVENUE) KERALA STATE ELECTRICITY BOARD AND ANR. ETC. ETC. versus M.R.F. LIMITED ETC. ETC.

Citation: [1995] SUPP. 6 S.C.R. 599 · Decided: 12-12-1995 · Supreme Court of India · Bench: G.N. RAY · Disposal: Appeal(s) allowed

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Judgment (excerpt)

THE SPECIAL OFFICER (REVENUE) KERALA STATE 
A 
ELECTRICITY BOARD AND ANR. ETC. ETC. 
v. 
M.R.F. LIMITED ETC. ETC. 
DECEMBER 12, 1995 
B 
[G.N. RAY AND FAIZAN UDDIN, JJ.] 
Restitutiolt-f'rinciple of-Duty of Court-Electricity charges-Upward 
revision of tariffs--Strnck down by High Court as invali(}-Appeal-Revisions 
upheld-Board's claim of interest on unpaid bill drawn on basis of revised C 
tariff-Maintainable. 
Respondent Company entered into an agreement with the kerala 
State Electricity Board for supply of electricity to the factory of the High 
Court in its favour and in terms of interim order passed by this company. D 
The agreement contained a provision for payment of power and energy 
supplied to the company by the Board within 15 days from the date of the 
receipt of the invoice by the consumer, namely the company and that in 
default of payment within the stipulated time, the payment was to be made 
with interest @18% per annum or at such other percentage as would be 
fixed by the Board from time to time. The Board revised the tariffs for the E 
electricity supplied it in 1980, 1982 and 1984. 
The respondent company and other consumers challenged such 
revisions by filing writ petitions. The High Court struck down the reVisions 
of tariff by the Board holding that the respondent company and other F 
consumers were, therefore, entitled to the refund of excess amount on 
account of the payment of revised tariffs and that such amount paid in 
excess would be adjusted towards future bills to be issued by the Board. 
The Board filed Special Leave Petitions challenging the order of the High 
Court. All the appeals were allowed by this Court upholding the validity 
of revisions of tariffs by the Board making the respondent company and G 
other consumers liable to pay the amounts due on the basis of revisions 
of tariff including the amounts since adjusted by them. The Board there-
after raised a demand for payment of the amount by the respondent 
inclusive of interest @18% p.a. The respondent company while not chal· 
lenging the liability to pay the excess amount refused to pay interest as H 
599 
600 
SUPREME COURT REPORTS [1995] SUPP. 6 S.C.R. 
A 
demanded by the Board. Such claim of interest was challenged by filing a 
writ petition. The Single Judge quashed the demand for interest holding 
that the demand was not justified. The Board filed an appeal against the 
judgment of the Single Judge. The Division Bench while dismissing the 
appeal held that after the High Court had struck down the revisions of 
B tariffs and directed adjustment of the excess amount paid towards future 
demands, the respondent company was justified in not making payment of 
amounts which became due and therefore, it could not be held that the 
respondent company had defaulted in payment of amount, and that there 
was no enforceable demand after the decision of the High Court and 
therefore, the order quashing the demand for the interest by the Single 
C Judge was justified. These appeals had been filed against the judgment of 
the Division Bench of the High Court. 
The appellants contended that the High Court on a total misconcep-
tion on the fact and the legal position, bad held that at the relevant time, 
D 
when the order of the High Court striking down the upward revisions of 
tariffs and subsequently when interim order passed by this Court during 
the pendency of the special leave petitions was subsisting, no liability had 
accrued for the respondent company to make payment on the basis of the 
revised tariffs; that in law such liability was always there because the 
revisions of tariff were held valid by this court and because of the er-
E roneous judgment of the High Court striking down the upward revisions 
of tariff such liability remained suspended till the correct position in law 
was finally determined by this court with which the liability revived; that 
as the liability of the respondent company to pay on the basis of the revised 
tariffs was always there and as such payment had not been made by the 
F 
respondent company by taking advantage to the erroneous decision of the 
High Court, the respondent company should not be permitted to claim any 
immunity on its liability to pay interest on the unpaid amount of enhanced 
bill after the correct legal position was finally determined by this Court; 
that when a party to a legal proceeding has suffered on account of an 
erroneous adjudication by a court of law, the court has ~

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