Punjab Steel Corporation Vs. the State of Punjab and Others - Court Judgment

Excerpt:
- sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the.....order1. the petitioner, a medium scale industry, registered with the ministry of industry (department of industrial development) new delhi was given a certificate by the general manager, district industries centre, batala (respondent no. 4) on 5-2-1990. the petitioner was held to be eligible 'for exemption from the payment of electricity duty for a period of 5 years from the date if gets electric connection'. on 24-7-1990, without giving the petitioner any opportunity, respondent no. 4 withdrew the exemption certificate given on 5-2-1990. a few days later he recommended the representation of the petitioner vide annexure p7 inter-alia, observing that the representation be considered sympathetically and favourably. aggrieved by the withdrawal of the exemption certificate, the petitioner has.....

Judgment:
ORDER

1. The petitioner, a medium scale industry, registered with the Ministry of Industry (Department of Industrial Development) New Delhi was given a certificate by the General Manager, District Industries Centre, Batala (respondent No. 4) on 5-2-1990. The petitioner was held to be eligible 'for exemption from the payment of electricity duty for a period of 5 years from the date if gets electric connection'. On 24-7-1990, without giving the petitioner any opportunity, respondent No. 4 withdrew the exemption certificate given on 5-2-1990. A few days later he recommended the representation of the petitioner vide Annexure P7 inter-alia, observing that the representation be considered sympathetically and favourably. Aggrieved by the withdrawal of the exemption certificate, the petitioner has filed the present petition.

2. Briefly, the case as made out in the petition is that the petitioner commenced business as a small scale industry in the year 1979. It claims to have grown to the level of a medium scale industry with the total investment of about Rs. 67 lakhs. It is engaged in the manufacture of machine tools, steel castings and an electricity connection of 99.540 KV is stated to have been sanctioned on 26-10-1979. It is further claimed that in the year 1989 the petitioner-firm underwent expansion. It is stated that an induction furnace was installed in June, 1989 and an additional load of electricity was accordingly sanctioned on 4-7-1989. As such, the total connected load came to 1699.340 KV. The whole work of expension is stated to have been completed from April, 1989 to July, 1989.

3. It is further claimed by the petitioner that in order to encourage industrial growth in the terrorists' affected State of Punjab an industrial policy and incentive code was drawn up. This scheme provided for exemption from payment of electricity duty to such units as fulfilled various conditions laid down in the policy and the rules framed thereunder. The petitioner-firm claims to have submitted an application to respondent No. 4 for the grant of exemption. It is their claim that after through inspection of the unit, the General Manager had issued the necessary certificate on 5-2-1990. A copy of this certificate is at Annexure P3. In accordance with the policy of the Government, the petitioner was entitled to exemption from payment of electricity duty till 3-7-1994. In pursuance to the certificate of 5-2-1990 the petitioner was factually exempted from payment of the electricity duty and the same was not charged from him in the bills forwarded by the Electricity Board. The petitioner alleges that on 24-7-1990 the certificate was withdrawn 'without affording any opportunity whatsoever to the petitioner'. The petitioner claims to have submitted a representation vide Annexure P6 in which it was pointed out that various other units like M/s. Malwa Steel Mohali, M/s. Punjab Pesticides Dera Bassii and M/s. Ajay Lamps Mohali, etc. had been granted the benefit of exemption on the basisof expansion/modernisation of their units. This representation of the petitioner was recommended by respondent No. 4 vide his letter of 29-8-1990 a copy of which has been placed on record as Annexure P7. Having failed to get any decision, the petitioner filed a civil suit in the Court of Senior Sub Judge, Batala for permanent injunction restraining the defendants i.e. P.S.E.B. from disconnecting the electricity connection. However, later on the suit was withdrawn and the present petition was filed. The action of the Respondents in withdrawing the certificate and the consequential demand for duty have been challenged as being totally arbitrary and unfair. After notice of motion, the writ petition was admitted and recovery of electricity duty was stayed.

4. In reply to the notice of writ petition a written statement has been filed by the project Manager District Industries Centre, Batala on behalf of respondent Nos. 1, 2 and 4. A separate written statement has also been filed on behalf of respondent No. 3. The respondents have tried to show that under the relevant rules, the petitioner was not entitled to the grant of the certificate (Annexure P3). The averments of the petitioner regarding the other having availed of this concession on the basis of expansion/modernisation have not been denied. It has been further averred that 'the withdrawal of these orders did not involve the necessity of issuing any show cause notice as the previous action was against the provisions of the rules and subsequently withdrawal was a correct step only.'

5. Mr. S. C. Sibal, appearing for the petitioner has made three submissions. He has firstly contended that the grant of the certificate on 5-2-1990 entitled the petitioner to exemption from payment of electricity duty till July, 1994. This would have saved the petitioner from a liability of lakhs of rupees. A right had vested in the petitioner on account of which he would have been entitled to exemption from payment of electricity duty for a long period. This right could not have been taken away except after the grant of a due and reasonable opportunity. He hasfurther contended that others who were similarly situate had been granted exemption and continue to enjoy the benefit while the certificate issued to the petitioner had been withdrawn. The counsel contends that the action amounted to invidious discrimination. It has also been argued by the learned counsel that the action is totally arbitrary. The impugned order at Annexure P5 had been passed by respondent No. 4. Almost a month later, the representation submitted by the petitioner was recommended by the said respondent vide his letter of 29-8-1990 a copy of which is at Annexure P7. The counsel submits that the recommendation shows that the impugned order had been arbitrarily passed and could not be legally sustained.

6. None has appeared on behalf of respondent Nos. 1, 2, 4. 5 and 6, Mr. R. S. Rai, who appeared for respondent No. 3 contended that according to the written statement filed on behalf of respondents Nos. 1, 2 and 4, the certificate had been given in violation of the rules. As such, no right of the petitioner has been violated by the withdrawal of the certificate and accordingly, the petitioner could have no grievance which may be remedied by resort to the present proceedings.

7. Having heard counsel at considerable length I find that the contentions raised by the petitioner deserve to succeed. The certificate at Annexure P3 had been granted to the petitioner as a result of which he had become entitled to exemption from the payment of electricity duty till July, 1994. This would have saved the petitioner from a considerable expenditure. The withdrawal of this certificate carries with it serious civil consequences for the petitioner. It would put him to a heavy recurring liability of lakhs of rupees. This was done without the grant of any opportunity whatsoever. The contention raised in the written statement is that the grant of the certificate itself was contrary to the rules and as such only an error had been corrected. This cannot be sustained. If an opportunity had been granted to the petitioner, he could have proved and the competent authority could have been satisfied that the certificat had been granted legally and that it; fact the petitioner was entitled to the said certificate. Denial of opportunity has deprived the petitioner of achance to prove it. It has seriously prejudiced his interests. In my view, it was incumbent upon the respondents to give the petitioner the said opportunity. They have failed to do so. Their action was in violation of principles of natural justice and cannot be sustained.

8. There is another aspect of the matter. The petitioner, in his representation, as also the writ petition, has averred that other concerns who had modernised or expanded their units had been granted exemption. This suggestion of the petitioner has not been denied by the respondents. His claim that he has also expanded his unit has not been denied. That being the position, the respondents were bound to give the petitioner an opportunity and to examine the whole case in light of the factual position. If the facts had been established the petitioner could not have been treated differently from others. It is thus apparent that even on this account, the failure to grant an opportunity has visited the petitioner with a discriminatory treatment.

9. Even otherwise, I am not satisfied that the impugned order was justified. The certificate had been issued by respondent No. 4 and it was withdrawn by the same authority in July, 1990. In August, 1990, respondent No. 4 itself recommended the petitioner's representation for favourable and sympathetic consideration. If this be the actual position, it is not understood as to what prompted respondent No. 4 to withdraw to certificate vide his order dated 24-7-1990 (AnnexureP5). The action is apparently arbitrary.

10. The writ petition is accordingly allowed. The order at Annexure P5 is quashed. It is further held that if the petitioner has deposited any electricity duty on account of the withdrawal of the order at Annexure P3 and on the assumption that the certificate at Annexure P3 did not exist, the respondent shall be liable to refund that amount within a period of three months from the date of the receipt of this order. In case of failure to refund the amount, the petitioner shall be entitled to the payment of interest at the rate of 12 per cent per annum from the date of payment till the date of its actual refund. The petitioner shall also be entitled to his costs which are assessed at Rs. 2,000/-.

11. Petition allowed.