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2000 DIGILAW 497 (PNJ)

Nasa Agro Industries Ltd. v. State Of Punjab

2000-05-09

BAKHSHISH KAUR, G.S.SINGHVI

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Judgment G.S.Singhvi, J. 1. The issue that arises for adjudication in this petition is whether the petitioner is entitled to exemption from payment of minimum charges of electricity fixed by the Punjab State Electricity Board (for short, the Board) in accordance with notification No. 15/1/87-31B111-89/3377 dated 12.4.1989 issued by the State Government and Commercial Circular No. 10 of 1995 issued by the Board vide memo No. 11887/12637/SMI-35 dated 13.2.1995 on the ground that it was declared as a sick industry by an order dated 11.4.1996 passed by the Appellate Authority for Industrial & Financial Reconstruction (AAIFR). 2. The petitioner is a company registered under the Companies Act, 1956, It has registered office at Fazilka and factories in Punjab (Fazilka) and Rajasthan (Sri Ganganagar). The Board had sanctioned electric connection to its establishment at Fazilka in 1985. Supply of electricity to the said establishment was disconnected on 6.12.1985 due to closure of the factory. In the meanwhile, the petitioner had filed an application under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the 1985 Act) for being declared as a sick industry on the ground that it had continuously suffered losses. By an order dated 6.11.1995, the Board for Industrial and Financial Reconstruction (BIFR) dismissed the application. That order was reversed by the AAIFR on an appeal filed by the petitioner with the direction to the BIFR to proceed in accordance with law. After about one year of the passing of order dated 11.4.1996 by the AAIFR, the representative of the petitioner submitted application dated 5.6.1997 for restoration of the supply of electricity and gave an undertaking that the amount due would be paid as per the policies of the Board. By an order dated 29.9.1997, the Chief Engineer of the Board accepted the request made on behalf of the petitioner and directed re-connection of the electric supply subject to the recovery of amount of default and monthly minimum charges from the date of disconnection to the date of restoration of supply in seven equal monthly instalments along with the current energy bills. In compliance of that order, the Senior Executive Engineer/Op. Division of the Board at Fazilka informed the petitioner vide memo dated 29.9.1997 that it should pay Rs. 14,89,451/- (Rs. 1,64,965/- representing outstanding dues and Rs. In compliance of that order, the Senior Executive Engineer/Op. Division of the Board at Fazilka informed the petitioner vide memo dated 29.9.1997 that it should pay Rs. 14,89,451/- (Rs. 1,64,965/- representing outstanding dues and Rs. 13,16,980/- representing minimum charges for the period from 6.12.1995 to September, 1997) and on payment of the first instalment, supply of electricity to the unit of the petitioner was restored. After a few days, the representative of the petitioner submitted application dated 14.11.1997 for re-consideration of the order dated 29.9.1997 on the ground that in terms of Commercial Circular No. 10 of 1995, it was entitled to get exemption from payment of minimum charges. However, the concerned authority of the Board did not entertain the petitioners prayer and second electricity bill was issued on 16.12.1997 requiring it to pay Rs. 3,97,996/-. Thereupon, the petitioner filed Civil suit and also applied for temporary injunction. By an order dated 21.1.1998, learned Additional Civil Judge (Senior Division), Fazilka dismissed the application for temporary injunction. That order was upheld by the Additional District Judge, Ferozepur, who dismissed the appeal filed by the petitioner. Civil Revision No. 2618 of 1998 filed by the petitioner was dismissed by the learned Single Judge on 24.8.1999 with the observation that it may file a petition under Article 226 of the Constitution of India. 3. In the writ petition, it has been averred that in view of the notification dated 12.4.1989 issued by the State Government and Commercial Circular No. 10 of 1995 issued by the Board, the petitioner is entitled to exemption from payment of minimum charges because it was declared sick industry by the AAIFR on 11.4.1996 i.e. after disconnection of supply of electricity. The petitioner has further averred that the demand raised by the concerned authority of the Board vide bill dated 16.12.1997 and rejection of its plea by the Chief Engineer/Commercial. Sales Directorate, P.S.E.B., Patiala for exemption are illegal and ultra vires to the policy framed by the Board. 4. In the written statement filed on behalf of respondent Nos. 2 to 5, an objection has been raised to the maintainability of the writ petition on the ground that civil suit filed in the Court of Additional Civil Judge (Senior Division), Fazilka was pending on the date of filing of this petition. According to the respondents, the petitioner cannot pursue two legal remedies in respect of the same cause. 2 to 5, an objection has been raised to the maintainability of the writ petition on the ground that civil suit filed in the Court of Additional Civil Judge (Senior Division), Fazilka was pending on the date of filing of this petition. According to the respondents, the petitioner cannot pursue two legal remedies in respect of the same cause. On merits, the respondents have controverted the petitioners claim for exemption by stating that the order dated 11.4.1996 passed by the AAIFR would relate back to 31.3.1995 because in the application filed by it under Section 15 of the 1985 Act, the petitioner had specifically prayed that it be declared as a sick industry with effect from that date. The respondents have also relied on the contents of application Annexure P2 to show that as per the petitioners own showing, the order passed by the AAIFR has the effect of declaring it as a sick industry w.e.f. 31.3.1995. We have heard learned counsel for the parties. 5. While Shri R.K. Chhibbar argued that the AAIFR has declared the petitioner as a sick industry w.e.f. 11.4.1996 and, therefore, it is entitled to get exemption from payment of minimum charges in view of para 2(i) of the Commercial Circular No. 10 of 1995 issued by the Board, Shri Deepak Sibal argued that in view of the prayer made by the peti tioner in the application filed by it before BIFR that it be declared as a sick industry with effect from 31.3.1.995, the order dated 11.4.1996 passed by the AAIFR would relate back to that date and as such, the petitioner is not entitled to exemption from payment of minimum charges. Learned counsel submitted that supply of electricity to the petitioners establishment was disconnected on 6.12.1995 i.e. after 31.3.1995 and, therefore, it cannot invoke clause 2(i) of Commercial Circular No. 10 of 1995. 6. Learned counsel submitted that supply of electricity to the petitioners establishment was disconnected on 6.12.1995 i.e. after 31.3.1995 and, therefore, it cannot invoke clause 2(i) of Commercial Circular No. 10 of 1995. 6. For appreciating the contentions urged by the learned counsel for the parties in a correct .perspective, we may refer to the notification dated 20,12.1989 and Commercial Circular No. 10 of 1995, the relevant extracts of which are reproduced below:- Extract of Notification GOVERNMENT OF PUNJAB dated 12.4.1989 (INDUSTRIES III BRANCH) NOTIFICATION Dated Chandigarh, the 12.4.1989 No. 15/1/87-31BIII-89/3377 With a view to revive the Sick Industrial Units in the State, the President of India is pleased to formulate the following policy for the rehabilitation of Sick Industrial Units in the State of Punjab:- i) xxxxxxxxxxxx Relief and Concessions: On the recommendations of Empowered Committee the State Government would consider granting one or more of the following reliefs and concessions to the Sick Industrial Units:- i) xxxxxxxxxxxx ii) Exemption from power cuts and in case this is not possible in view of reduced power availability and other compelling demands, to reduce power this applicable to sick units to about 50% of the stipulated power cuts in case of other Industrial units. In the case of sick units Electricity Board should also waive the minimum payment/penal charges. iii) to v) xxxxxxxx Extract of Cirrcular No. 10 of 1995 Issued vide Memo No. 11887/12637/SMI-35 dated 13.2.95. xxxxxxxxxxxxx 2. The matter regarding Re-connection of permanently disconnected industrial connections of units declared sick by Board of Industrial and Financial Reconstruction (BIFR) and through State Financial Institutions has been considered by the Board and it has been decided to allow reconnection in such cases to enable the revival of sick units in the State, Subject to following conditions: i) No minimum charges shall be charged from industrial units declared sick by BIFR after PDCO. ii) On reconnection the consumer shall be required to pay service connection charges or the cost of service line or augmentation of the mains/sub mains (which ever is higher). However in case the service line is existing and no augmentation is required of mains sub mains transformers, the consumer shall not be required to pay service line etc. and in such cases only reconnection fee. service meter rental along with defaulting amount, if any, shall be recoverable. xxxxxxxxxx" 7. However in case the service line is existing and no augmentation is required of mains sub mains transformers, the consumer shall not be required to pay service line etc. and in such cases only reconnection fee. service meter rental along with defaulting amount, if any, shall be recoverable. xxxxxxxxxx" 7. A careful analysis of the provisions of the notification and Commercial Circular reproduced above shows that with a view to revive the sick industrial units in the State, the government had formulated a policy of rehabilitation by extending relief and concession to such units and in furtherance of that policy, the Board had decided to waive the minimum charges subject to fulfilment of the conditions stipulated in Commercial Circular No. 10 of 1995, one of which is that industrial unit should have been declared sick by BIFR after permanent disconnection of electricity supply. 8. In view of the above, we have to decide as to whether the petitioner should be, treated as a sick industry w.e.f. 11.4.1996 in terms of the order passed by the AAIFR or w.e.f. 31.3.1995 as claimed by respondent Nos. 2 to 5. A bare reading of the order dated 11.4.1996 shows that while reversing the order passed by the BIFR, the AAIFR had declared the petitioner as a sick industrial company within the meaning of Section 3(i) (o) of the 1985 Act and remanded the case to the BIFR for further proceedings in accordance with law. There is nothing in the language of that order from which it can be inferred that the AAIFR had granted retrospective declaration of sickness qua the petitioner. Moreover, there is no provision in the 1985 Act which empowers the BIFR or the AAIFR to grant such retrospective declaration. Therefore, the declaration of sickness by the AAIFR will have to be treated as effective w.e.f. 11.4.1996 and there is no justification to proceed on the assumption that the order passed by the AAIFR has the effect of declaring the petitioner as a sick industrial company w.e.f. 31.3.1995 simply because in the application filed by it under Section 15 of the 1985 Act, the petitioner had prayed for such relief. In our opinion, the interpretation of the order dated 11.4.1996, as suggested by Shri Deepak Sibal would amount to modification substitution of that order and we do not find any cogent reason to adopt that unusual course. 9. In our opinion, the interpretation of the order dated 11.4.1996, as suggested by Shri Deepak Sibal would amount to modification substitution of that order and we do not find any cogent reason to adopt that unusual course. 9. On the basis of above discussion, we hold that the petitioner became a sick industry w.e.f. 11.4.1996 and as the supply of electricity to the establishment of the petitioner was disconnected on 6.12.1995, there is no escape from the conclusion that the decision taken by the Chief Engineer not to extend the benefit of para 2(i) of Commercial Circular No. 10 of 1995 to the petitioner is illegal and ultra vires to the policy decision taken by the State Government and Commercial Circular No. 10 of 1995 issued by the Board. 10. The objection raised by respondent Nos. 2 to 5 to the maintainability of the writ petition deserves to be rejected because:- (i) at the hearing, Shri R.K. Chhibbar made a statement that the suit filed by his client had been withdrawn after the filing of this writ petition: (ii) while disposing of Civil Revision No. 2618 of 1998, the learned Single Judge had given liberty to the petitioner to file petition under Article 226 of the Constitution of India: and (iii) the respondents had raised objection to the maintainability of the civil suit and having done that it is not open to them to challenge the maintainability of the writ petition. 11. For the reasons mentioned above, the writ petition is allowed and it is declared that the petitioner is entitled to exemption from payment of minimum charges in accordance with para 2(i) of Commercial Circular No. 10 of 1995. Respondent Nos. 2 to 5 are directed to refund the excess amount deposited by the petitioner, if any, within three months. This shall be subject to the condition that if any amount is due from the petitioner, then the excess amount paid by it may be adjusted with prior intimation.