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Judgment
M.H.S. Ansari, J.—The arguments in the Miscellaneous petition as well as the main Writ Petition being similar, Sri R. Subhash Reddy, learned counsel for the petitioner and Sri K. N. Jwala, learned Standing Counsel for the respondent board requested that the main writ petition itself be heard as counter affidavit on behalf of the Respondent Board has also been filed.
The petitioner, a Hotel has filed the above writ petition seeking a direction for setting aside the proceedings dated 18-3-1997 of the Superintending Engineer -- Respondent No. 4 and for a further direction to the respondents to give rebate on electricity power consumption charges to the extent of 25% on the monthly bills for a period of three years to the petitioner as per G.O. Ms. No. 31, dated 13-4-1994.
The petitioner -- Hotel is one which has been approved by the Department of Tourism under Janata category of Hotels and is situated at Khammam.
By G. O. Ms. No. 31, dated 13-4-1994, the Government declared Tourism as an Industry and notified the places specified in the Annexure to the said order as Special Tourist Centres. In the said Government Order, it was inter alia declared as under :
"C) All new holets/motels/recognised star hotels and classified restaurants situated in the Tourism notified areas asindicatedin the annexure to this Order will be eligible for 25% rebate in power bills (both demand and energy) for a period of three years from the date of commencement of the business. The rebate shall be allowed by the APSEB in their monthly bills. The maximum admissible rebate for the total three years period will be Rs. 50 lakhs in respect of major medium hotels/motels etc.,"
Sales tax exemption has also been granted subject to the terms contained therein. Eligibility criteria has also been prescribed.
By G. O. Ms. No. 83, dated 14-11-1994, the Government included Khammam Town also amongthe Special Tourist Centres under Pilgrim-cum-Tourist Centre in Khammam District for extending incentives to Hotel Industry as per G.O. Ms. No. 31, dated 13-4-1994. The petitioner''s hotel is situated in Khamman. The benefits of G. O. Ms. No. 31, dated 13-4-1994 are thus made applicable to petitioner''s hotel as well.
The petitioner has fulfiled the eligibility criteria as prescribed in G. O. Ms. No. 31, dated 13-4-1994 and has been issued Eligibility Certificate No. 2841/A3/96 dated 25-1-1997 for claiming the 25% rebate in power tariff. The Certificate dated 25-1-1997 clearly certifies that the petitioner is eligible for the said 25% rebate in power tariff w.e.f., 12-5-1996 for a period of three years limited to a maximum of Rs. 30 lakhs for the total period of three years from the date of commencement of commercial production i.e., 12-5-1996.
By the impugned proceedings dated 18-3-1997, the petitioner was informed that the Hotels are not eligible for 25% rebate as the Board has not adopted G. O. Ms. 31, dated 13-4-1994.
It is thus seen that the sole ground of rejection of the petitioner''s claim for 25% rebate is that the Board has not adopted the G. O. Ms. 31, dated 13-4-1994.
Therefore, the short question for considertion in this writ petition is whether non-adoption of the G. O. Ms. 31, dated, 13-4-1994 by the respondent Board dis-entitles the petitioner from claiming the rebate as per G. O. Ms. 31, dated 13-4-1994.
Sri R. Subhash Reddy, Learned counsel for the petitioner submits that G. O. Ms. 31, dated 13-4-1994, is in effect a policy decision of the Government for promoting the growth of Tourism industry in the State and to provide a greater impetus to the Industry. As a policy decision, the Government have declared Tourism as an Industry and notified certain concession, rebates and exemptions under various State Laws such as Investment subsidy on capital cost, rebate on power bills and sales tax exemption. The Government Order in so far as the Electricity Board as concerned, is to be construed as a direction u/s 78-A of the Electricity (Supply) Act, 1948. It was further submitted that by virtue of Section 78-A, the Respondent Board is bound by such directions on questions of policy.
Sri K.N.Jwala, learned Standing Counsel for the respondent Board reiterated the averments made in the counter affidavit to the effect that the Respondent Board is ah autonomous body and in exercise of powers conferred by Section ,49 of Electricity (Supply) Act, 1948, the Board is framing and notifying its own Rules and Regulations from time to time. The A.P.S.E. Board is not owned by the State Government and not bound by any decision or order of the Government. The A.P.S.E. Board will adopt the orders and decisions of the Government depending upon the financial position of the A.P.S.E. Board. The 25% rebate allowed to certain industries in the State is not reimbursable to the Board by the Government or any other Agency. The A.P.S.E. Board is under serious financial troubles and struggling for existence. The Board has not adopted G. O. Ms. 31, dated 13-4-1994 in which certain types of Hotels were extended the benefit of 25% rebate in power bills. The B. P. Ms. No. 51, was issued on 24th May, 1993 extending 25% power rebate for certain industries in L.T. & H. T. categories. The G. O. Ms. No. 31, was issued on a later date i.e., dated 13-4-1994 to the said B.P. Unless the A.P.S.E. Board adopts the said G. O., the benefit of 25% power rebate allowed to Hotels and Hotels set up in State Government approved tourist centres of the District in the said B. P. cannot be extended to the petitioner''s Hotel Venus, Khammam.
in short, it is the submission of the learned Standing Counsel for the Respondent Board that unless the Board adopts the G. O. Ms. 31, dated 13-4-1994, the petitioner cannot as of right claim any benefits thereunder and it is further submitted that G. O. Ms. 31, dated 13-4-1994 is not a direction to the Respondent -- Board u/s 78-A of the Act.
Learned Standing Counsel relied upon an unreported judgment of a Division Bench in W. P. No. 17536 of 1993 and W. P. No. 5502 of 1995 dated 28-2-1997 in support of his contention that the petitioner cannot claim any benefits unless directions arre issued to the Board by the State Government u/s 78-A of the Act and unless the same are in conformity with the Act and are adopted by the Board.
A perusal of the said judgment, however, shows that the question in that case for determination was regarding the authority of the Commissioner of Industry to make recommendation to the Board for certain concessions and reliefs to the petitioner-industry in that case which was declared sick and was under a rehabilitation scheme. It was not the case of the petitioner in that case that any directions were issued to the Board by the State Government u/s 78-A. Only recommendation was made to the Electricity Board by the Commissioner of Industries for certain concessions and reliefs and no directive was issued by State Government as G. O. Ms. 31, dated 13-4-1994. That case is thus distinguishable on the facts of the instant case.
Next, Sri K. N. Jwala. learned Standing Counsel for the Respondent Board, relied upon a judgment of this Court in Poddar Projects Ltd. (Multi Steels) Vs. The A.P.S.E. Board and Others, . In that case, the broad question that fell for consideration was whether Electricity Board is bound to implement the directive u/s 78-A of the Act and further whether the consumers of electric supply acquire a right to seek a direction against the Electricity Board to implement the said G. O. The Court held that the relevant G. O., in that case related to granting of concessional tariff to certain specified Mini Steel Plants. The said G. O. was interpreted by the Court as not one of a general directive by the State on question of policy as envisaged by Section 78-A.
In that case, the Court also considered the question hypothetically assuming the relevant G. O. was a direction u/s 78-A and observed that no third party acquires any right thereunder, the dispute is one between the Board and the State Government which could be only referred to the Authority constituted u/s 3.
However, in Nava Bharat Ferro Alloys Limited Vs. Andhra Pradesh State Electricity Board, Hyderabad, , after referring to the Bench Decisions, another Division Bench of this Court observed that "earlier Division Bench decision of this Court referred to above were not cited in Poddar''s case (supra 1 cited) and the Division Bench proceeded on the footing that, because the G. O. did not expressly refer to be a directive u/s 78-A of the Supply Act, it cannot be construed as a direction issued by the Government u/s 78-A" and relying upon the decision in S. Narayan Iyer Vs. The Union of India (UOI) and Another, , observed as under :
"In view of the Supreme Court decision, the observations made in Poddar Projects Ltd. (Multi Steels) Vs. The A.P.S.E. Board and Others, would no longer be applicable. We hold that the fixation of tariffs is a matter of major policy decision taken by the Board which is entrusted by the legislature with the duty of fixing the tariffs."
It may be useful to refer to a passage from the Nava Bharat Ferro Alloys Ltd. (supra 2 cited) judgment with regard to the power of State Government to effectively intervene by acting u/s 78-A of the Act with regard to formulating socio-economic policies and granting concessions in favour of consumers availing supply for agricultural or community purposes.
"quote"
"54. u/s 78-A of the Supply Act, the Board, in the discharge of its functions, shall be guided by such directions on questions of policy as may be given to it by the State Government. The State has got manifold functions, including the giving of encouragement to entrepreneurs to set up industries either in the private sector, public sector or joint sector. In the initial periods, the industries would be rearing supply of power at concessional rates. If the matter was to be left to the Board, the Board may not be in a position to offer any concessions to such entrepreneurs. It is clearthat the Government steps in and gives directions to the Board as may be necessary to supply power to those new industries at concessional tariffs, during the formative years. The State, in formulating its socio-economic policies, would be inclined to show some concessions in favour of consumers availing supply for agricultural or community purposes and such like occupations justifying the fixation of tariffs at a lower level. In our view, the fixation of tariffs is, therefore, a major policy decision which the Board can take concerning which the Government can effectively intervene by acting u/s 78-A of the Supply Act. In one of the early cases which came up before this Court in W. A. No. 359/74 and batch this question arose before a Division Bench consisting of Obul Reddi, C. J. and Lakshmaiah, J. Whether a certain decision taken by the State Government on 12-4-73 was a policy decision. There was a difference of opinion between the two learned Judges and the matter was subsequently referred to Sambasiva Rao, J. (as he then was). Obul Reddi, C. J. held :
"Section 49(3) does not prevail over the powers vested in Government by Section 78-A. It is open to the Government to lay down its policy in the matter of fixation of tariff rates; but any policy decision of its must be in consonance with the requirements of Sub-section (3) of Section 49. The requirements of Sub-section (3) of Section 49 must be satisfied."
Sambasiva Rao, J. held :
"In this connection the power of the government to issue directions u/s 78-A of the Act on questions of policy should also be borne in mind. Once a direction is given on a policy matter, which must necessarily include in its ambit the rates that should be charged from consumers, the Board is bound to be guided by them". (unquote)
G. O. Ms. 31, dated 13-4-1994 shows that the Government with a view to promote growth of Tourism Industry in the State and to provide greater impetus to the Industry have offered a "more attractive package" analogous to those available to Industrial units as a corollary to the Government''s decision to declare Tourism as an Industry. Various types of concessions have been offered as "package deal" for new Hotels and Hotels constructed in all the notified tourist centres. Investment subsidy has been granted subject to maximum for each category, rebate in electricity consumption for a period of three years from the date of commencement of business subject to a maximum prescribed therein and sales tax exemption for a period of five years. To be eligible for the said concessions, eligibility criterion has been prescribed. That the State has made a policy decision and announced the same as a "package deal" offering incentives and concessions by G. O. Ms. 31, dated 13-4-1994 admits of no doubt. It is a policy decision that has been announced by the State Government by its G.O. Ms. No. 31.
u/s 78-A, in discharge of its functions, the Board shall be guided by such directions on questions of policy as may be given to it by the State Government. If any dispute arises between the Board and the State Government as to whether a question is or is not a question of policy, Sub-section (2) of Section 78-A postulates that it shall be referred to the authority whose decision shall be final.
Let us now consider the contention advanced by learned Standing Counsel for the Respondent Board that G. O. Ms. 31, dated 13-4-1994 is not a direction u/s 78-A of the Act. It is true that in G. O. Ms. 31, dated 13-4-1994 reference to Section 78-A of the Act is not to be found. It cannot, however, be disputed that concessions have been announced by the Government by G. O. Ms. 31, dated 13-4-1994 as a policy. It has been categorically stated in G. O.Ms. No. 31 that
".....rebate shall be allowed by the APSEB in their monthly bills.....".
Whether non-mentioning of the Section 78-A of the Act in G. O. Ms. 31, dated 13-4-1994 would rob the G. O. Ms. 31, dated 13-4-1994 of its efficacy as a directive by the Government u/s 78-A ?
A Division Bench of this Court in the A. P. State Electricity Board v. Sarada Ferro Alloys Limited -- (4) in writ Appeal No. 1271 of 1991 dated 7-2-1992, considered a similar contention. The case of the petitioner in that case was that based on the assurance of the Government as contained in G. O. Ms. No. 375, dated 23-8-1985, the Factory was established in Srikakulam and the Electricity Board had rejected the request for granting 25% rebate on demand and energy charges. One of the contentions considered in that Writ Appeal was whether the concessions by the Electricity Board was pursuant to directions issued by the State Government evenn though no specific provisibn of law was adverted to. in the Government Orders. The Division Bench while considering the said contention held as under :
"There was no serious debate on trie question of the validity of the various directions issued by the Government without quoting the relevant statutory provision. It is settled law that when an authority has power under a statute, to take a particular course of action and when that power was exercised without referring to the particular statutory provision, the exercise of that power would not become illegal but must be traced to that provision. We, therefore, hold that the rebate in power tariffs to the extent of 25% in regard to industries other than, the 65 industries identified by the Government, was in compliance with the directions issued by the Government from time to time in exercise of its powers u/s 78-A of the Act."
23A. In the light of the above, non-mentioning of Section 78-A of the Act in G. O: Ms. 31, dated 13-4-1994 would make no difference and the policy to give concessions including 25% rebate in power bills has to be construed as a directive by the State Government to the State Electricity Board u/s 78-A. The contention that no directives u/s 78-A have been issued by the State Government to the Electricity Board under G. O. Ms. 31, dated 13-4-1994, has therefore to be rejected.
Next, it was contended by the learned Standing Counsel for the Respondent Board that the Board is not owned by the State Government and not bound by any decision or order of the Government. The Electricity Board will adopt the orders and decisions of the Government depending upon the financial position of the Board.
Section 78-A empowers the Government to issue directions to the Board on questions of policy. It further declares that the Board shall be guided by such directions in discharge of its functions if, however, any dispute arises between the Board and the State Government as to whether a particular direction pertains to a question of policy or not, such dispute has to be referred to and decided by the Authority created u/s 3 whose decision shall be final. The power conferred on the Government is neither absolute nor unguided. Any direction given by the Government would have to be in consonance with the provisions of the Act and the rules if apy made thereunder. Any direction issued by the State Government contrary to any particular provision of the Act or the rules framed there under would obviously be outside the purview of Section 78-A.
While considering similar contentions with, regard to directions issued by the State Government for levying concessional rate for agricultural pump sets, a Division Bench of this Court in Andhra Pradesh State Electricity Board Vidyut Soudha and others Vs. The Gowthami Solvent Oils and another, observed as under :
"At the same time, however, it must be conceded that the Government is entitled to take into consideration the public interest and the interest of the economy of the State and the nation while giving such directions. Directions actuated by such considerations cannot be said to be either contrary to the provisions of the Act or outside the framework of the Act. As emphasized hereinbefore, the Board is not like any other private individual, or corporation; it is a statutory public corporation with a commitment to social good and to public welfare."
It is no answer that the directive issued by the Government in G. O. Ms. 31, dated 13-4-1994 has not been adopted by the Board. Once power is conceded to the State Government to issue directives u/s 78-A in public interest or in the interest of the economy of the State, the State Electricity Board is obliged u/s 78-A of the Act to be guided by such directives unless of course, as noted above, such directives are outside the framework of the Act or contrary to any provisions of the Act and unless the Board raises a dispute which it is so empowered under Sub-section (2) of Section 78-A. In the instant case, no such dispute has been raised and no positive action has neither been taken by the Board to reject the directives on any grounds nor any decision has been taken by the Board not to follow the directives issued by G. O. Ms. 31, dated 13-4-1994 granting 25% rebate in power bills to the eligible hotels.
It must not be forgotten that when the Stale Government made a policy decision of granting incentives concessions and rebates, and offered a "package deal" by its policy decision in G. O. Ms. 31, dated 13-4-1994, a promise was held out to the people that on fulfilment of the eligibility criteria prescribed in the G. O. Ms. 31, dated 13-4-1994, incentives, concessions arid rebate under various laws and enactments would be available to the people. Such directives relating to rebate in power tariffs were issued by the State Government on earlier occasions and pursuant to the same they have been granted by the State Electricity Board. The petitioner in the circumstances is justified in pleading legitimate expectation that the incentives announced by the State Government in G. O. Ms. 31, dated 13-4-1994 would be made available to the petitioner by the Electricity Board. It is not as though the promise held out by the Government is contrary to any provisions of the Electricity Supply Act or is otherwise forbidden by law. At any rate no such contention has been pleaded except financial hardship. Such rebates in power tariffs have been given in the past by the State Government to industries cannot be seriously disputed.
In the light of the above, the impugned proceedings dated 18-3-1997 of the respondents informing that Hotels are not eligible for 25% rebate has to be set aside and is accordingly so set aside.
A direction shall issue to the respondent Board to consider the question of granting 25% rebate to eligible Hotels in the light of the directions issued in G. O. Ms. 31, dated 13-4-1994 within a period of two months from the date of receipt of a copy of this order.
This order, however, shall not preclude the Respondent Board within the said period, to faise a dispute, if so advised, under Sub-section (2) of Section 78-A before the Competent Authority.
With the directions as above, the writ petition is accordingly disposed of.