Sunday, May 9, 2010

M/S M.R.F. LTD. Versus MANOHAR PARRIKAR AND ORS.

Constitution of India, 1950 — Article 166 — conduct of business of the Government of State — Indian Electricity Act, 1910 — Section 23 read with Section 51-A — Business Rules and Rules of Authentication — the State Government published the revised electricity tariff for the State as specified in the Schedule appended to the Notification. By another Notification the State Government for the first time created a new and separate category viz. Extra High Tension Supply Consumers and was included in the revised tariff framed under Notification — the Notification granting 25% rebate to Extra High Tension Supply Consumers imposed an additional burden on the State's Exchequer by introducing a new class of consumers for grant of rebate retrospectively and it was finalized by the Power Minister at his level — the High Court held that the Notifications issued by the Power Minister could not be termed as Notifications issued by the State Government on account of Non Compliance of the Rules of Business framed under Article 166 (3) of the Constitution of India and therefore non-est and void-ab-initio and that the consequential actions based on these two notifications are null and void — appeal — held that the Business Rules 3,6,7 and 9 are Mandatory and not Directory and any decision taken by any individual Minister in violation of them cannot be termed as the decision of the State Government — the Notification was issued solely on the directions of the Power Minister despite the opinion of the Law Secretary that retrospective effect to the proposed amendment could not be given as it involved additional class of consumers of power, which is in violation of the Business Rules of Government of Goa — nothing produced on record to show that the department concerned attempted to seek ratification of the decision taken by the Power Minister before the Notification, therefore, if the Council of Ministers or Chief Minister has not been a party to a decision taken by an Individual Minister, that decision cannot be the decision of the State Government and it would be non-est and void ab initio — appeals dismissed.

Supreme Court of India

CIVIL APPEAL NO.4220 of 2002

Judge(s): R.V. RAVEENDRAN ,H.L. DATTU

Date of Judgment: Monday, May 03, 2010

M/S M.R.F. LTD. Versus MANOHAR PARRIKAR AND ORS.


JUDGMENT

H.L. Dattu,J.

In Civil Appeal Nos. 4220 of 2002, 4213 of 2002 and 4218 of 2002, the appellants have called in question the correctness of the judgment and order in Writ Petition No. 316 of 1998 dated 19/24.4.2001, passed by the High Court of Bombay Panaji Bench, at Goa in a Writ Petition brought in public interest by one Manohar Parrikar, a Member of Legislative Assembly, Goa (who later on became the Chief Minister of the State of Goa) questioning the legality, validity and propriety of two notifications issued by Government of Goa dated 15.5.1996 and 01.8.1996 in respect of grant of 25% rebate to Low Tension, High Tension and Extra High Tension Industrial consumers of electricity as a policy of the State Government.

In Civil Appeal No. 4219 of 2002 (M/s M.R.F. Ltd. & Anr. Vs. State of Goa & Anr.), the appellant has called in question the judgment and order passed by the High Court of Bombay Panaji Bench, at Goa in Writ Petition No. 364 of 1999 dated 24.4.2001, partly allowing the writ petition filed by the appellant.

In Civil Appeal No. 4214 of 2002 (Goa Glass Fibre Ltd. & Anr. Vs. The State of Goa & Anr.), the appellant has called in question the correctness or otherwise of the judgment and order passed by the High Court of Bombay Panaji Bench, at Goa in Writ Petition No. 254 of 1999 dated 25.4.2001 dismissing the writ petition filed by the appellant. In Civil Appeal No. 4217 of 2002 (Alcon Cement Company Limited & Anr. Vs. The State of Goa & Anr.), the appellant has called in question the correctness of the judgment and order passed by the High Court of Bombay Panaji Bench, at Goa in Writ Petition No. 277 of 1999 dated 24.4.2001 partly allowing the writ petition.

In Civil Appeal No. 4218 of 2008 (Mauvin Godinho Vs. Manohar Parrikar & Ors.), the appellant has called in question the correctness of the judgment and order passed by the High Court of Bombay Panaji Bench, at Goa in Writ Petition No. 316 of 1998 dated 19/24.4.2001

The material facts as pleaded by the Appellants in Civil Appeal Nos. 4220 of 2002, 4213 of 2002 and 4218 of 2002 are as under:

1) The Government of Goa, in purported exercise powers conferred upon them by Section 23 of the Indian Electricity Act, 1910 (`Electricity Act' for short) issued a Notification on 30.09.1991, granting rebate of 25% in Tariff in respect of the power supply to the Low Tension and High Tension Industrial Consumers/appellants who apply for availing High Tension or Low Tension Power Supply on or after the 1st of October, 1991 for bona fide industrial activities and certified by the Industries Department, Government of Goa as eligible for concessional tariffs for a period of five years from the date on which electricity supply is made available to such units.

2) This Notification was issued by the State Government in the name of the Governor of the State as per the Rules of Authentication framed under Article 166(2) of the Constitution of India by following the procedure prescribed by the Business Rules framed under the Provisions of Article 166(3) of the Constitution of India after the State Cabinet had approved it. Though the said Notification was in subsistence, except one Industrial Unit, none applied to the State Government for the grant of benefit of the Notification for a long period or at least till 31.03.1995. On 31.03.1995, the said Notification was rescinded by the State Government in purported exercise of power conferred on it under Section 21 of the General Clauses Act read with Sections 23 & 51-A of the Electricity Act with effect from 01.04.1995, by issuing a Notification dated 31.03.1995 strictly in accordance with the Business Rules and Rules of Authentication pursuant to the decision taken by the State Cabinet.

3) Though the Government rescinded the Notification dated 30.09.1991, number of industrial units approached the State Government and claimed benefit of 25% rebate in terms of Notification dated 30.09.1991 for the period between the date of supply of electricity and 31.03.1995. Some applications were rejected by the Chief Electrical Engineer of State of Goa, on the ground, that, they being in the category of Extra High Tension did not fall within the category of consumers covered by the Notification dated 30.09.1991. On 29.06.1995, a Calling Attention Notice in Legislative Assembly was also brought in by Mr. Manohar Parrikar, seeking clarification from the State Government as to whether these industrial units were entitled for the benefits flowing from the Notification dated 30.09.1991 upto 31.03.1995. The Power Minister gave a reply to the said Notice which is reproduced in the judgment under appeal. In sum and substance the Minister stated, that, the Government was committed to honour the concession granted by the Notification dated 30.09.1991 to the eligible industrial units who apply for High Tension and low tension power on or after 01.10.1991 till the date of withdrawal, i.e. 01.04.1995.

4) The Under Secretary to Government of Goa, Department of Power issued a clarification dated 01.11.1995 to the Chief Electrical Engineer on the lines of the reply given by the Power Minister to the Calling Attention Motion and reiterated the same by a communication dated 12.12.1995. Later, as the Government being satisfied that there were certain difficulties in the matter of clearing cases of claim of rebate for the period upto 31.03.1995, issued certain clarifications. On 15.05.1996, however, the State Government issued another Notification in purported exercise of power conferred on it under Sections 23 & 51-A of the Electricity Act read with Section 21 of the General Clauses Act, to amend the Notification dated 30.09.1991 which had been rescinded as per Notification dated 31.03.1995. By the said Notification the Government substituted the words "High Tension or Low Tension power supply" by the words "High Tension/Extra High Tension or Low Tension power supply". The State Government further issued another Notification dated 01.08.1996 restoring the facility of giving 25% rebate to these three categories of Industrial consumers and made the said rebate available from 01.08.1996 to those who had either applied or availed the power supply as on that date.

5) By an order dated 31.03.1998, issued by the Chief Electrical Engineer of State of Goa, the benefits of rebate granted by the State Government were withdrawn, as it appears that the State Government did a re-thinking over its power to grant such rebate on the Tariff. This action of the State Government led to a spate of litigations by the Industrial Units in the High Court of Bombay Panaji Bench, at Goa, wherein they contended that the benefits granted by the State Government as a policy decision could not be withdrawn by the order dated 31.03.1998, which was merely an administrative order and that they were entitled to the benefits granted by the Notification dated 01.03.1996, as long as the said Notification was not withdrawn by due process of law.

6) During the pendency of these writ proceedings before the High Court, the State Cabinet after addressing itself to the issues raised by the industrial units in the writ proceedings, passed a resolution to withdraw the benefit of 25% rebate and accordingly issued a Notification dated 24.07.1998 and withdrew the rebate of 25% with effect from 01.08.1998.

By an order dated 21.01.1999, the High Court disposed of the batch of writ petitions, inter alia holding that the Circular dated 31.03.1998 mentioned supra as invalid and inoperative and the Notification dated 24.07.1998 as legal, valid and operative, and that all petitioners therein were entitled to 25% rebate in power tariff for the periods as indicated in paragraph 56 of the said judgment etc.

7) The judgment of the High Court was taken up in appeal by both parties to this Court and this Court by an order dated 13.02.2001 declined to interfere with the said order of the High Court and rejected both sets of appeals.

8) Mr. Manohar Parrikar, the 1st respondent herein, in the meantime, had moved the High Court with a Misc. Civil Application No.637 of 1999, seeking withdrawal of his writ petition with liberty to challenge the legality or otherwise of the Notification after this Court decided the above mentioned civil appeals filed before it against the order of the High Court dated 21.01.1999. The High Court by its order dated 27.01.2000 rejected the said application. Mr. Manohar Parrikar had also moved the High Court to hear his petition along with earlier set of writ petitions disposed of by the High Court on 21.01.1999. Subsequently, the said prayer was also withdrawn.

9) Before the High Court, the 1st respondent herein challenged the correctness of the Notifications dated 15.05.1996 and 01.08.1996, and sought to declare the same as null and void. He also challenged the guidelines framed in the letter dated 12.12.1995 and sought to declare the said circular was illegal and to quash it to the extent it goes beyond the scope of Notification of 1991. He also prayed for certain other reliefs, including initiation of recovery of rebates paid by the State Government to the beneficiaries.

10) Though the petitioner had sought many reliefs in his writ petition, the High Court confined itself to the challenge made to the legality of the notifications dated 15.05.1996 and 01.08.1996. Before the High Court the 1st respondent herein contended as under:

7 That the two notifications were not issued in compliance with the requirements of Article 154 read with Article 166 of the Constitution of India and the Business Rules of the Government of Goa framed by the Governor thereunder.

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