U.P. POWER CORPORATION LTD. & ANR. versus SANT STEELS & ALLOYS (P) LTD. & ORS.

Citation: [2007] 12 S.C.R. 1160 · Decided: 10-12-2007 · Supreme Court of India · Bench: A.K. MATHUR · Disposal: Disposed off

Judgment (excerpt)

A 
U.P. POWER CORPORATION LTD. & ANR. 
v. 
SANT STEELS & ALLOYS (P) LTD. & ORS. 
DECEMBER 10, 2007 
B 
[A.K. MATHUR AND MARKANDEY KAT JU, JJ.] 
Electricity (Supply) Act, 1948-s. 49-Notification under-
Concession of 33.33% development rebate to new industrial units in 
c hill areas for jive years from the date of commencement of supply of 
electricity-Subsequent Notifications reducing the concession to 
I 7'Yo-Principle of promissory estoppel-Applicability of-Held: 
Notification was in the nature of delegated legislation and not an Act 
.framed by State Legislature-In such delegated legislation revocation 
D is permissible, if larger public interest is involved or an Act is passed 
by legislature-On facts, no evidence to make out the case of public 
interest to revoke the concession granted-Thus, principle of 
promissory estoppel applicable-However, units entitled to such 
benefits till the Act of 1999 came into force since after coming into 
E force the Act of 1999 no such concession was granted-Administrative 
law-Delegated legislation-UP. Electricity Reforms Act, 1999-
Notifications dated 18.1.1992, 15. 7.1994, 18. 6.1998 and 25.1.1999 .. 
Administrative law-Promissory estoppel-Applicability of, 
F 
against State or its instrumentalities-Held: Depends on the facts of 
each case-When State Government makes representation showing 
benefits to entrepreneurs and entrepreneurs make investment, then 
revocation of such benefits by State Government would be unfair and 
arbitrary-Consideration of public interest and that there cannot any 
estoppel against a Statute are exceptions. 
G 
The appellant-U.P. Power Corporation Ltd., issued Notifications 
and allowed 33.33% hill development rebate in consumption of 
\ 
energy to the new industrial units for a period of five years from the 
date of commencement of the supply of the electricity. The 
H 
1160 
U.P.POWERCORPORATIONLTD. v. SANT STEELS& 1161 
ALLOYS(P)LTD. 
entrepreneurs established industrial units in the hill areas after A 
incurring huge investments. By subsequent Notifications, the 
appellant-Corporation restructured the tariffs and the concession 
was reduced from 33.33% to 17%. The entrepreneurs filed writ 
petitions challenging the Notifications. The Division Bench of the 
High Court allowed the writ petitions holding that the appellant was B 
bound by the principle of promissory estoppel and could not revoke 
the benefit of the concession in consumption of energy given to the 
writ petitioners for establishing industries in the hill areas. It directed 
the appellant-Corporation to issue electricity bills to the writ 
petitioners after allowing 33.33% hill development rebate on the c 
total amount of bill for the remaining unexpired period of five years. 
Hence the present appeals by the appellants-U.P. Power Corporation 
Ltd. 
Appellant-U.P. Power Corporation Ltd. contended that the 
notifications modifying the rebate were issued in exercise of the D 
statutory provisions under section 49 of the Electricity (Supply) Act, 
1948; that there was large scale theft of energy in the State ofU.P.; 
that the High Court failed to consider the public interest, specifically 
pleaded by filing an affidavit; that by virtue of the U.P. Electricity 
Reforms Act, 1999, the new tariff was fixed from August 2000-2001 E 
by the Commission and no estoppel against the Statute could be 
pleaded after the Act of1999 having come into force; that it was not 
in public interest to continue the benefit to these industries located 
in hill areas; that the entire benefit was not withdrawn, the benefit 
was rationalized and as a result the energy consumption of these units F 
increased to manifold; and that the whole exercise ofrestructuring 
the rebate was done in the public interest only. 
Respondent-writ petitioners inter alia contended that these 
concessions were given to the hill areas in pursuance to the direction G 
by the State Government in exercise of power under section 78A of 
/ 
the Act; that under section 49 of the 1948 Act, there is no such 
contemplation that the exemption could be revoked; that the change 
in the tariff would be unconstitutional, unfair, arbitrary to the citizens 
who acted on the promise made by the appellant-Corporation; that H 
1162 
SUPREME COURT REPORTS 
[2007] 12 S.C.R. 
A the State Government/Corp. is estopped from withdrawing these 
.. 
concessions; that the concession which were given had a vested right 
and it could be revoked by the same Statute

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