Case Note & Summary
The matter concerns a writ petition under Article 226 of the Constitution of India filed by a sick industrial unit engaged in steel manufacturing. The petitioner challenged a demand notice dated 3 March 2011 raising a demand of Rs.86,32,75,991 and sought directions to calculate the 25% rebate due to it based on earlier court orders and to refund the balance amount. The background traces to a State Government notification dated 30 September 1991 issued under Sections 23 and 51A of the Indian Electricity Act, 1910 which granted a 25% rebate on power tariff to new industrial units for five years. The petitioner availed power supply on 2 December 1991 and became entitled to the rebate. Disputes arose over the implementation of the rebate, leading to the suspension of the scheme by a circular dated 31 March 1998 and disconnection of supply. The petitioner filed Writ Petition No.244 of 1998, which was disposed of by a Division Bench on 21 January 1999 holding that the circular was invalid and that all petitioners were entitled to 25% rebate to be adjusted in 60 monthly instalments. This order was upheld by the Supreme Court on 13 February 2001. Subsequently, a supplementary bill dated 7 April 1999 was issued, which the petitioner contested on the ground that the rebate was not correctly computed on the basis of the prevailing tariff. The petitioner filed Civil Miscellaneous Applications and also approached the Supreme Court. Meanwhile, the petitioner was declared a sick company by BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985. A Billing Dispute Redressal Committee was formed following another writ petition, but its decision was not communicated; only demand notices including the impugned one were issued. The petitioner contended that the demand notice was contrary to the binding judicial orders and sought quashing thereof. The court reserved judgment on 26 April 2011 and pronounced it on 8 July 2011, but the full judgment text is not available in the provided excerpt. Hence, the court's final reasoning and decision are not recorded.
Issue of Consideration
Whether the demand notice dated 3 March 2011 is valid and whether the petitioners are entitled to have the 25% rebate calculated on the basis of the prevailing tariff as per the High Court order dated 21 January 1999 and the Supreme Court order dated 13 February 2001
Case Details
2011 LawText (BOM) (07) 29
Writ Petition No.214 of 2011 (along with Writ Petition No.240 of 2011)
S.C. Dharmadhikari, F.M. Reis
Shreehari Aney, Tejaswini Shirodkar, Shivan Dessai, S.S. Kantak, Sapna Mordekar
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Nature of Litigation
Writ petition challenging demand notice for electricity dues and seeking recalculation of 25% rebate.
Remedy Sought
Quashing of demand notice dated 3 March 2011, direction to calculate 25% rebate based on earlier court orders, and refund of balance amount.
Filing Reason
Dispute over calculation of rebate arrears and issuance of demand notice for Rs.86,32,75,991 allegedly contrary to High Court and Supreme Court orders.
Previous Decisions
High Court of Bombay at Goa in Writ Petition No.244 of 1998 and connected matters on 21.01.1999 held petitioners entitled to 25% rebate and directed adjustment in 60 installments; Supreme Court upheld. Billing Dispute Redressal Committee formed; its decision not communicated, only demand notice issued.
Issues
Whether the demand notice dated 3 March 2011 is valid given the earlier binding court orders?
Whether the petitioners are entitled to calculation of rebate on the basis of prevailing tariff as per the 1999 High Court judgment?
Submissions/Arguments
Petitioners contended that the respondents failed to calculate the 25% rebate as per the prevailing tariff from time to time, no delayed payment charges are leviable, the demand notice is erroneous, and the BDR Committee's decision was not communicated.
Judgment Excerpts
the demand notice dated 3rd March 2011 under which a demand of Rs.86,32,75,991/- has been raised
All the petitioners are entitled to 25% rebate in power tariff for the periods as indicated in paragraph 56 of this judgment
Procedural History
1991: State Government notification granting 25% rebate. 2 December 1991: petitioner availed power supply. 1998: Circular suspending rebate and disconnection of supply; filing of Writ Petition No.244 of 1998. 21 January 1999: High Court allowed petition, held circular invalid, directed rebate adjustment in installments. 13 February 2001: Supreme Court upheld High Court order. 7 April 1999: supplementary bill issued; disputed by petitioner. BIFR reference and declaration of sickness. Formation of Billing Dispute Redressal Committee. Filing of Writ Petition No.460 of 2008. 25 February 2011: BDR Committee demand notice. 3 March 2011: impugned demand notice. Present writ petitions filed.
Acts & Sections
- Indian Electricity Act, 1910: Section 23, Section 51A
- Companies Act, 1956:
- Sick Industrial Companies (Special Provisions) Act, 1985:
- Constitution of India: Article 226
