Case Note & Summary
The appeal arose from a High Court order that quashed a surcharge imposed on Kashi Vishwanath Steels Ltd. (KVSL) for electricity supplied from independent feeders. The Uttar Pradesh State Electricity Board had established a tariff under the Electricity (Supply) Act, 1948, which included a 15% surcharge for consumers drawing power from independent feeders, contingent on receiving a guaranteed supply of 500 hours. KVSL had previously communicated its non-requirement for the guaranteed supply, leading to an exemption from the surcharge. However, the Uttarakhand Power Corporation later withdrew this exemption based on a High Court ruling that clarified the tariff's application. The Supreme Court found that the High Court's interpretation was flawed, as the tariff did not allow for such exemptions. The court emphasized that KVSL had not demonstrated any promise made by the U.P. Power Corporation that would exempt it from the surcharge, thus rejecting the claim of promissory estoppel. The appeal was allowed, and the High Court's order was set aside, reinstating the surcharge with costs awarded to the appellant.
Headnote
A) Electricity Law - Tariff and Surcharge - Applicability of Surcharge - Electricity (Supply) Act, 1948 - The court held that the respondent was liable to pay the 15% surcharge as the tariff clearly stipulated such a charge for consumers drawing power from independent feeders, irrespective of their requirement for guaranteed supply. The High Court's ruling that exempted the respondent from this surcharge was found to be incorrect. (Paras 9-20).
Issue of Consideration
Whether the respondent was liable to pay a 15% surcharge for electricity supplied from independent feeders despite not requiring guaranteed supply for 500 hours.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's order dated 17th January, 2007, and reinstated the 15% surcharge on KVSL with costs of Rs.50,000.
Law Points
- Electricity tariff
- surcharge
- independent feeders
- promissory estoppel
- regulatory commission
