R.S. Garg, J.
1. By this writ petition filed under Article 226 of the Constitution of India the petitioner has challenged Annexure P/15 a demand letter issued by the Chief Engineer (Electricity Safety) on 12-2-2001 making a demand in sum of Rs. 1,08,46,763.16 as interest on alleged dues of electricity duty. Annexure P/17 a demand letter dated 10-7-2001 issued by Chief Engineer, Electrical Safety and Chief Electrical Inspector demanding the above referred amount and Annexure P/19 letter-cum-demand notice dated 24-3-2005 issued by the Chief Engineer (Electrical Safety) and Chief Electrical Inspector. By way of amendment the petitioner has also challenged the notification No. 2698-3752-XIII dated 22-7-1975 issued by the State Government in exercise of the powers under Section 5 of Madhya Pradesh Electricity Duty Act, 1949 and Rule 5 of the Madhya Pradesh Electricity Duty Rules, 1949 as ultra vires the Act and ultra vires the Constitution of India.
2. The short facts necessary for disposal of the present writ petition are that the petitioner was enjoying certain exemption extended by the State Government but later on the said exemptions were withdrawn. After withdrawing the said exemptions, the State Government started making certain demands under the head of the electricity duty but the petitioner instead of making the payments to the Government challenged the said order demanding the duty. The matter was dismissed by the High Court and ultimately the order of the High Court was confirmed by the Supreme Court. After dismissal of the writ application filed by the present petitioner, the respondents again issued demand note for recovery of the electricity duty. The petitioner without any objection paid the said amount. However, after sometime the respondents found that according to Section 5 of the Madhya Pradesh Electricity Duty, 1949 read with notification No. 2678-3752-XIII dated 22-7-1975 they would be entitled to interest on the unpaid amount from the date of payment till it is paid. They accordingly issued the notice requiring the present petitioner to pay a sum of Rs. 1,08,46,763.16. The petitioner again being aggrieved by the said demand and the reminders filed this writ petition and challenged the demand notices and the notification dated 22-7-1975.
3. Learned Counsel for the petitioner submitted that in absence of a provision in the Act for recovery of the interest on the delayed payments a notification in exercise of the powers conferred by Sub-rule (2) of Rule 5 of Madhya Pradesh Electricity Duty Rules, 1949, could not be issued.
4. Shri Shukla, learned Counsel for the State on the other hand submitted that Section 5 of the M.P. Electricity Duty Act, 1949 itself provides for recovery of duty and interest. According to him, if the Act provides for recovery of duty and interest then the petitioner would not be allowed to say that there is no provision in the Act.
5. Section 5 of M.P. Electricity Duty Act, 1949 reads as under:
5. Recovery of duty and interest:
(1) The amount of duty due and remaining unpaid shall carry interest at such rate and in such circumstances as may be prescribed.
(2) Without prejudice to any other mode of recovery available to the State Government, any duty falling due for payment and the interest accruing thereon, if any, may be recovered in the same manner as an arrear of land revenue.
6. Sub-section (1) of Section 5 of M.P. Electricity Duty Act, 1949 clearly provides that the amounts of duty due and the duty amount which remains unpaid shall carry interest at such rate and in such circumstances as may be prescribed. If Sub-section (1) provides for recovery of the interest on the amount of the duty due and the amount of the duty unpaid then it cannot be argued that such interest cannot be levied. Rule 5 of the Madhya Pradesh Electricity Duty Rules, 1949 reads as under:
5. Recovery of duty and interest:
(1) Where the duty is not paid within the period specified under Rule 3, the same shall be paid thereafter with interest thereon at the rate prevailing in accordance with Sub-rule (2).
(For the purpose of calculating the interest part of a month shall be treated as equal to a month).
(2) The rate of interest payable under Sub-rule (1) shall be such as may be fixed by the Provincial Government by notification from time to time subject to a maximum of (24%) per annum.
Rule 5(1) provides that if the duty is not paid within the period specified under Rule 3 the same shall become payable with interest thereon at the rate prevailing in accordance with Sub-rule (2) of Rule 5. Sub-rule (2) clearly provides that the rate of interest payable under Sub-rule (1) shall be such as may be fixed by the State Government by notification from time to time subject to maximum of 24% per annum.
7. The Act does nowhere say that what shall be the rate of interest or it shall always be less tan 24%. However, when a cap is provided by the Act or Rule in relation to the rate of interest to be recovered then beyond the said cap interest cannot be recovered.
8. The notification dated 22-7-1975 even otherwise cannot be held to be bad because it runs in accord with Sub-section (1) of Section 5 of the M.P. Electricity Duty Act, 1949. Sub-section (1) of Section 5 provides (1) that the amount shall carry interest at such rate and (2) in such circumstances as may be prescribed. Under Section 5 of the Act the State would be entitled to fix any rate of interest taking into consideration the circumstances.
9. The State Government after taking into consideration the delays and defaults on the part of the defaulters/consumers issued the notification which provides that if there is a delay of three months or less the interest payable would be at the rate of 12%. If it is paid beyond three months but within six months the rate would be 15%, but if it is beyond six months but within 12 months rate of interest will be 20% and if the payment is made after 12 months the rate of interest shall be 24%. From the notification it would be clear that the Government is making a reasonable classification amongst the defaulters and is making classes between the defaulters by charging less or more interest. When the Government has taken into consideration the true spirit of Section 5 of the Act then one cannot say that there is any discrimination between the classes of the defaulters.
10. We are unable to agree with the first question raised by the learned Counsel for the petitioner.
11. It was then contended that recovery of the interest at the rate of 24% per annum would be penal in nature. In our opinion, this argument again would not be available to the petitioner. Section 5 of the Act does not put any cap on the rate of the interest but gives an absolute discretion to the State Government but the Government, in its wisdom has put a cap in Rule 5 by observing that the interest rate shall not go beyond 24%. As the Rule provides for a cap which was otherwise not provided by Section 6 of the M.P. Electricity Duty Act, 1949. we must hold that the Rule in fact serves the interest of the public and the defaulters. In absence of Rule 5 the Provincial Government could levy interest at any rate but in this case the Government has chosen to charge' interest beyond 24%. When the Act itself provides recovery of the interest and the Rule provides that the rate of interest shall not go beyond 24% then one cannot argue that the rate of the interest is penal in nature.
12. It was then contended that as the High Court granted stay against the recovery on an earlier occasion in view of the bona fide dispute raised by the petitioner the State would not be entitled 16 recover the interest on delayed payment of duty; In our opinion this argument is also misconceived. When a Court grants stay against execution of any order or stays the operation of a particular action then such stay order acts in favour Of the party who had Secured such stay order. After vacation of the stay order the party which could secure the stay order cannot and should not be allowed to say that as the Court provided a protective umbrella, even after vacation of the order or rejection of the challenge the other side should not be allowed to recover the dues. If the argument is accepted then it would lead to a chaotic situation arid judicial anarchy. After securing stay the party would enjoy non payment and after dismissal if the other party is not allowed to recover the losses which they suffered because of the non recovery, then the other party would come to a position from where there is no retreat. Equity and fairplay provide that if a man secures certain privileges or benefits flowing from an order passed by the Court, then such a person should be required to return the benefit after vacation or rejection of the order. The petitioner cannot be allowed to say that because some stay order was granted at 'that some time they would not be liable to pay the interest.
In view of the discussion aforesaid, we are unable to hold that the State Government through the respondent No. 2 was not justified in issuing the notice of demand. The demand notices are held not to be bad in law. We are also unable to hold that the notification dated 22-7-1975 is ultra vires the Madhya Pradesh Electricity Duty Act, 1949 or Madhya Pradesh Electricity Duty Rules, 1949 or the provisions of the Constitution of India. The petition is dismissed. There shall however be no order as to costs.