DATE: 14/02/2025
BENCH: Justice Dipankar Datta and Justice Sandeep Mehta
FACTS:
In the lead appeal, the State of Goa, through a notification, determined the electricity tariff applicable to bills issued from July 1, 1988. Subsequently, another notification was issued under Section 23, in conjunction with Section 51-A of the Indian Electricity Act, 1910. This notification introduced a rebate scheme, granting industrial units applying for High-Tension or Low-Tension power supply for bona fide industrial activities a 25% reduction in tariff. The rebate was applicable for five years from the date electricity supply was made available. The appellant companies, after applying for power, entered into respective power supply agreements. However, in 1995, a new notification issued under Section 23 and Section 51-A of the 1910 Act, along with Section 21 of the General Clauses Act, 1897, rescinded the earlier notification, discontinuing the rebate scheme. It further stipulated that any new industrial unit applying for power after March 31, 1995, would no longer be eligible for the benefits granted under the 1991 notification.
In 1996, the notification was amended to introduce a new consumer category—"Extra High-Tension." Later that year, it was further amended to extend the 25% rebate benefit to all industrial units applying for or availing Extra High-Tension power supply. Although power was supplied to the appellants, the rebate was only granted from January 1, 1997. To address accumulated arrears, the rebate was set to be disbursed in 60 equated monthly installments. However, a subsequent circular issued by the State suspended the rebate entitlement, prompting the appellants to challenge the decision through writ petitions before the High Court. The High Court upheld the legality of the 1998 notification and ruled that the companies were entitled to the 25% rebate until July 24, 1998. In 2011, the respondents issued a demand notice seeking recovery from the appellants. Aggrieved by this action, the appellants approached the High Court, which dismissed their writ petition. As a result, they brought the matter before the Supreme Court.
ISSUES:
The central issue in all the connected appeals is whether the appellant companies qualify under the notification dated 30.09.1991 to avail a 25% rebate on the applicable power supply tariff.
JUDGEMENT WITH REASONING:
The Apex Court ruled that, civil appeals nos.2027- 2028/2012, 2033-2034/2012, 2031-2032/2012, and 2035-2036/2012 are dismissed. Civil appeal no.4556/2012 is dismissed as not pressed and no costs was granted.
The Court ruled that public interest outweighed the claims of the appellant companies, emphasizing that the rebate policy was financially unviable. The State of Goa had explicitly argued before the High Court in GR Ispat that the policy's discontinuation was necessary due to economic constraints, and the High Court accepted this reasoning, unlike in Pawan Alloys. Furthermore, the Court applied the doctrine of res judicata, holding that since the issue had already been decided in favor of the State in previous proceedings, the appellant companies could not re-litigate the matter. As a result, the Court upheld the High Court's determination that the companies were not entitled to the 25% rebate and that the demand notices issued by the State did not suffer from any legal defect.
Additionally, the Court dismissed the challenge to the rejection of review applications, holding that under Order XLVII Rule 7 of the Code of Civil Procedure, no appeal could be entertained against such an order. Even when considering the review applications on merit, the Court found no justification for reconsideration. The appellant companies' argument that their rights had crystallized upon applying for power supply had already been ruled against them. Furthermore, their claim of discovering a new document—a letter dated April 6, 1999—did not convince the Court, as it did not substantiate any error apparent on the face of the record. Consequently, the Court upheld the High Court’s decision, concluding that the review applications lacked merit.
ANALYIS:
The Supreme Court’s decision in this case underscores the primacy of public interest over private commercial benefits, particularly in matters concerning state policies on subsidies and rebates. By emphasizing the financial unviability of the rebate scheme, the Court affirmed the State of Goa's authority to modify or rescind economic policies in response to changing financial conditions. The Court's reliance on the doctrine of res judicata also reinforces the principle that once a legal matter has been conclusively decided, it cannot be reopened in subsequent litigation. This approach prevents unnecessary judicial review of settled matters and ensures stability in legal and administrative decision-making. The Court's deference to the High Court’s reasoning in GR Ispat, as opposed to Pawan Alloys, further illustrates how economic constraints and public policy considerations can override private claims for financial incentives.
Additionally, the Court's rejection of the review applications highlights the strict procedural limitations on such petitions under Order XLVII Rule 7 of the Code of Civil Procedure. By affirming that no appeal could be entertained against the rejection of a review petition, the Court reinforced the finality of judgments and discouraged repetitive litigation. Moreover, the Court's dismissal of the appellant companies’ argument regarding the crystallization of their rights upon application for power supply indicates that mere application does not create an indefeasible right to benefits under a rescinded policy. The Court’s treatment of the newly discovered document—a letter dated April 6, 1999—also signals that review petitions must meet a high threshold of demonstrating an error apparent on the face of the record. This decision ultimately serves as a precedent for the principle that economic policies can be subject to change based on financial feasibility, and private entities cannot claim vested rights in government subsidies or rebates indefinitely.
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