Court No. - 10
Case :- WRIT - C No. - 8167 of 2009 Petitioner :- U.P. Power Corporation Limited Respondent :- The Appellate Authority And Others Counsel for Petitioner :- ,Nipendra Mishra Counsel for Respondent :- M.B.Mathur,Mahesh Narayan Mishra
Hon'ble Mahesh Chandra Tripathi,J.
1. Heard Shri Nipendra Mishra, learned counsel for U.P. Power Corporation Limited and Shri Ravi Kant, Senior Advocate assisted by Shri Hanuman Upadhya, appearing for the M/s Raunaq Automative Components Limited.
2. U.P. Power Corporation Limited through its Managing Director is before this Court assailing the validity of the order dated 21.3.2005 passed by the first respondent, Appellate Authority for Industrial and Financial Reconstruction, New Delhi (AAIFR) in Appeal No.4 of 2005 (M/s Raunaq Automative Components Ltd. vs. BIFR and others) as well as the orders dated 11.3.2004 and 14.12.2004 passed by the second respondent, Board for Industrial and Financial Reconstruction, New Delhi (BIFR) in Case No.323 of 2000 (M/s Raunaq Automative Components Ltd. vs. U.P. Power Corporation Limited).
3. The third respondent i.e. M/s Raunaq Automative Components Limited (in short, the company) is a company incorporated under the provisions of the Companies Act, 1956. The company was a consumer of the petitioner Corporation having sanctioned load of 800 KVA. The company incurred cash losses during initial years of its operations and it was granted relief by the financial institutions by way of re- scheduling of principal and interest in February, 1990 and April, 1991. However, despite the reliefs and concessions granted by the financial institutions the company's net worth was fully eroded as on March 31, 2000. Thereafter, mandatory reference under Section 15 (1) of the Sick Industrial Companies (Special Provision) Act, 1985 (hereinafter referred to as SICA) was made by the company. Consequently, the BIFR vide its order dated 22.6.2001 declared the company as "Sick Industrial Company" in terms of Section 3 (1) (o) of the SICA.
4. For the purpose of its revival, the company submitted an application before the BIFR for rehabilitation package and the same was registered as Case No.323 of 2000 (M/s Raunaq Automative Components Ltd. vs. U.P. Power Corporation Limited). The BIFR vide its order dated 11.3.2004 sanctioned a Scheme for revival of the company in terms of Section 18 of SICA and appointed Industrial Development Bank of India (IDBI) as the Monitoring Agency for monitoring the progress of implementation of the Sanctioned Scheme. In terms of Clause 8 (iii) of the Sanctioned Scheme, the Corporation was directed to exempt the company from power cuts and to waive off the demand charges of Rs.170/- per KVA on 75% of the sanctioned load of 800 KVA. In the Sanctioned Scheme, the cut off date was fixed as 31.3.2003 and it was implied that the concessions under Clause 8 (iii) would be available to the company from the corporation for a period of five years from the cut-off date. Since the Corporation did not extend the concessions as envisaged in the Sanctioned Scheme, the Managing Director of the company held a meeting with the General Manager of the petitioner Corporation on 24.8.2004. It is claimed that during the said meeting the assurance was given by the General Manager that the relief in terms of the Sanctioned Scheme was under active consideration by the Corporation and necessary directions would be issued in this regard by 03.9.2004 but, inspite of the assurance, there was complete silence on the part of the petitioner.
5. In this backdrop, it is claimed that the company vide its letter dated 6.9.2004 had informed to the Monitoring Agency/IDBI about the inaction of the petitioner in granting reliefs to it, as envisaged in the Sanctioned Scheme. It is also admitted situation that the petitioner vide letter dated 26.4.2004 had also asked certain clarifications from the BIFR about the interpretation of the concessions to be granted by it to the company in terms of the Sanctioned Scheme. The IDBI vide its letter dated 14.9.2004 informed the BIFR that the petitioner had not granted the concessions to the company as envisaged in the Sanctioned Scheme. On 16.9.2004 the petitioner refused to grant any concession to the company and warned that in the event of non-payment of the bills within three days, action for recovery of the amount and disconnection of the electricity would be taken by it. At the said juncture, even the IDBI had intervened in the matter and requested the BIFR that the petitioner may be directed to accord the reliefs as had been envisaged in Clause 8 (iii) for a period of five years commencing from the cut of date i.e. upto 31.03.2008. The BIFR vide its order dated 14.12.2004 clarified that the petitioner was required to waive off qua the company, the demand of charges at the rate of Rs.170/- per KVA of the sanctioned loan of 800 KVA amounting to Rs.1,02,000/- per month from the cut off date. Although the order dated 14.12.2004 passed by the BIFR was subjected to challenge by the company by preferring an appeal before the AAIFR and the same was registered as Appeal No.4 of 2005. Finally, by the impugned order dated 21.3.2005 the AAIFR had allowed the aforesaid appeal and set aside the order of the BIFR dated 14.12.2004 with direction to the petitioner Corporation to waive off demand charges for a period of five years in accordance with the manner described in Clause 8 (iii) of the Sanctioned Scheme.
6. Thereafter, the financial condition of the company improved and the BIFR vide its order dated 5.11.2005 held that the net worth of the company turned positive and its accumulated loss get wiped of and discharged the respondent company from the purview of the SICA/BIFR. The respondent company continued to deposit the bills as per demand. However, for the reason best known to them, the respondent company stopped payment of bills, which were due and payable by the company in the month of February, 2008. The company submitted an application dated 8.2.2008 before the BIFR for adjustment of demand charges of Rs.61.20 lacs in the account of the company. Consequently, the BIFR issued a show cause notice on 25.2.2008 calling upon the petitioner to submit its response within stipulated time, otherwise appropriate order would be passed in the matter. The petitioner submitted its reply to the show cause notice on 25.3.2008 to which the company submitted a rejoinder on 27.5.2008. Since there was no response from the petitioner, the respondent company was constrained to make an application under Section 18 (9) read with Section 18 (12) of SICA before the BIFR on 15.12.2010 seeking compliance of the orders passed by the BIFR/AAIFR. Finally, the BIFR vide its order dated 27.12.2010 had taken cognizance of the aforesaid application filed by the company and directed the Chief Managing Director of the Corporation to be present on the next date of hearing.
7. In this backdrop, Shri Nripendra Mishra, learned counsel for the petitioner Corporation submits that the respondent company as per its own wisdom stopped payment of electricity bills, even though its financial condition was improved. The electricity charges are imposed as per provisions of the Electricity Act, 2003 read with Tariff Order issued by the U.P. Electricity Regulatory Commission (UPERC) and the U.P. Electricity Supply Code, 2005. Section 45 of the Electricity Act, 2003 (in short, the Act of 2003) confers ample power to the petitioner Corporation as a licensee within the meaning of Section 14 of the Act of 2003 to recover the electrical charges in accordance with such tariff fixed from time to time by the State Commission. Chapter-VII of the Act of 2003 confers power on the UPERC for determination and fixation of tariff. So far as the determination of tariff is concerned, it is the sole prerogative of UPERC and the petitioner being a licensee is under statutory obligation to demand the electrical charges as per the tariff. Lastly, he has contended that in terms of the Sanctioned Scheme, whatever relief has been extended to the company, the amount is to be paid by the State Government and in this regard necessary communication has also been made to the State Government. The amount, as has been asked for towards the electrical charges, is to be paid by the company and in case the amount in question is realised from the State Government, the same would be repatriated to the company. The orders impugned are unsustainable and liable to be set aside.
8. On the other hand, Shri Ravi Kant, Senior Advocate has vehemently contended that the order of the BIFR dated 14.12.2004 was challenged by the company in appeal. The AAIFR vide its order dated 21.3.2005 allowed the aforesaid appeal and set aside the order dated 14.12.2004 with direction that the petitioner Corporation will waive off the demand charges for a period of five years in accordance with the manner as prescribed in Clause 8 (iii) of the Sanctioned Scheme. He further apprised to the Court that under the Sanctioned Scheme the petitioner i.e. U.P. Power Corporation had been heard in the matter and even at the appellate stage the petitioner was duly represented in the hearing through Mr. A.K. Gupta, Executive Engineer. Ever since the sanction of the Scheme by the BIFR, the respondent company has been paying the electricity charges to the petitioner including the demand charges as raised by it on actual basis. Admittedly, in the present matter at no point of time the petitioner had taken any action for true implementation of the Sanctioned Scheme and always threatened to disconnect the electricity connection of the company. Due to non- cooperation of the petitioner in extending the concessions the respondent company had paid more than Rs.50 lacs as excess payment to the petitioner and it was obligatory on the part of the petitioner Corporation to accord concessions in terms of the sanctioned Scheme, which was valid till February, 2008 that should have been available to the respondent company amounted to Rs.61,20,000/- @ Rs.1,02,000/- per month. At no point of time the company had made any defaults in regular payment and in term of Section 32 (1) of SICA, the petitioner is bound by the terms of the Sanctioned Scheme and the orders passed by the BIFR as well as AAIFR. Moreover, the orders passed by the first and second respondents have become final and no appeals have been preferred by the petitioner against any of them and the belated attempt has been made by preferring the present writ petition and the same is liable to be dismissed with heavy costs.
9. Heard rival submissions and perused the record.
10. The Court has proceeded to examine the record in question and finds that the respondent company was declared a sick industrial company by the BIFR in terms of Section 3 (1) (o) of SICA on 22.6.2001 and IDBI was appointed as the Operating Agency under Section 17 (3) of the SICA to examine the viability of the company and submit its report. Thereafter, the BIFR vide its order dated 11.3.2004 sanctioned a rehabilitation of the company and appointed the IDBI as the Monitoring Agency to monitor the progress of implementation of the Sanctioned Scheme. Thereafter, the BIFR clarified on 14.12.2004 that the petitioner was required to waive off the demand charge of Rs.1,02,000/- per month from the cut off date. The aforesaid order dated 14.12.2004 was challenged by the company in Appeal No.4 of 2005. The AAIFR allowed the appeal on 21.3.2005 and set aside the order of BIFR dated 14.12.2004 with direction to the petitioner to waive off the demand charges for a period of five years in accordance with the manner described in Clause 8 (iii) of the sanctioned scheme. Thereafter, the financial condition of the company improved and the BIFR vide its order dated 5.11.2005 discharged the company from the purview of the SICA/BIFR. The respondent company continued to deposit the bills as per demand.
11. The Court also finds that the respondent company submitted an application before the BIFR on 8.2.2008 for initiating action against the erring officials of the petitioner Corporation in terms of Sections 33 (1) and 34 of SICA for non-compliance of the orders passed by the BIFR and AAIFR. The request was also made to issue directions to the petitioner to either give credit of the excess amount of Rs.51,53,550/- (after considering the accrued reliefs of Rs.61,20,000/-), which is claimed to be paid in excess of normal electricity bills/dues or refund the excess amount alongwith 18% interest. The respondent company also requested the BIFR to issue directions to the petitioner Corporation to ensure uninterrupted power supply to the company till final disposal of the outstanding issues. On the aforesaid application, the show cause notice was issued to the Chairman and Managing Director of the petitioner Corporation on 25.2.2008 directing him to explain within a period of 30 days, as to whether the petitioner would ensure implementation of the orders issued by the BIFR and AAIFR in regard to the reliefs to be granted to the respondent company and also to ensure adjustment/refund of the excess amount. Admittedly, the said show cause notice was responded by the Managing Director on 25.3.2008 and for the first time while responding the said show cause notice the claim has been set up by the petitioner Corporation that the reliefs, as had been envisaged in the Sanctioned Scheme from the petitioner Corporation, are not in line with the Act of 2003 and the said relief was also not in consonance with the directions issued by the Apex Court in M/s Indian Maize and Chemical Limited vs. The State of Uttar Pradesh reported in 1997 (9) SCC 462. Consequently, it had been claimed for withdrawal of the show cause notice dated 25.2.2008. The rejoinder to the said response had also been filed by the respondent company on 27.5.2008 and refuted the claim set up by the petitioner Corporation with categorical stand that the judgement of Apex Court in M/s Indian Maize and Chemical Limited's case (supra) would not be attracted in the matter. In the said case the Scheme had not been sanctioned by the BIFR, contrarily in the present matter the petitioner Corporation was heard while passing the order dated 11.3.2004 by the BIFR, which is annexed at page-50 to the counter affidavit. Even Mr. A.K. Gupta, Executive Engineer of the petitioner Corporation had also been heard in the appeal. The instant writ petition had been preferred in the year 2009 i.e. almost five years after the orders of the BIFR dated 11.3.2004 and 14.12.2004 and almost four years after the order of the AAIFR dated 21.3.2005.
12. The Court is also of the opinion that even the remedy was available to the petitioner Corporation to assail the show cause notice dated 25.2.2008 before the AAIFR under Section 25 of SICA and in terms of the Sections 19 (1) and (2) as well as Section 25 of SICA. There was consent of the petitioner to the Scheme sanctioned as per the statutory mandate of Section 19 (2) of SICA. Even assuming that the petitioner Corporation had not given its consent in the said proceeding, then the same could very well be assailed by the petitioner as per Section 25 of SICA before the AAIFR. Moreover, the sanctioned Scheme was substantially implemented by all the parties except the petitioner Corporation and on account of diligent and dedicated endeavours of the employees of the company in implementing the sanctioned scheme, the company turned into profits. In such circumstances, the Court is not inclined to interfere in the matter.
13. The writ petition sans merit and is dismissed.
Order Date :- 23.1.2019 A.K. Srivastava/RKP