Orissa High Court
M/S Ipisteel Limited And Another vs Central Electricity Supply Company on 19 August, 2014
Author: B.K. Patel
Bench: B.K. Patel
HIGH COURT OF ORISSA : CUTTACK.
W.P.(C) NO.11267 of 2005
In the matter of an application under Articles 226 and 227 of the
Constitution of India.
-------
M/s IPISTEEL Limited and another. ...... Petitioners
- Versus-
Central Electricity Supply Company
of Orissa Limited and another ...... Opposite Parties
For Petitioners : M/s Umesh Ch. Pattnaik,
S.D. Mishra and S.Patnaik
For Opp. Parties : Mr. R.K.Rath
M/s. B.K.Nayak and D.K.Mohanty
PRESENT:
THE HONOURABLE SHRI JUSTICE B.K. PATEL
Date of Judgment - 19.08.2014
B.K. PATEL, J.In this writ application under Articles 226 and 227 of the Constitution of India, petitioners have made prayer for the following reliefs:-
"In the circumstances, it is therefore prayed that this Hon'ble would graciously be pleased to examine the aforesaid facts and issue a writ of Mandamus commanding CESCO, Opposite Party No.1 to implement the Revised Rehabilitation Scheme sanctioned by BIFR vide Annexure-1 which was communicated to all the concerned parties by the Registrar, BIFR.
AND Further be pleased to issue a writ of Mandamus commanding CESCO, Opposite Party No. 1 to act upon the order dated 19.06.2003 vide Annexure-3 communicated through letter dated 20.06.2003 and the order dated 16.09.2004 of the BIFR vide Annexure-10 (Series) and order dated 17.04.2007 communicated through letter dated 27.04.2007 vide Annexure-12 for extending the reliefs and concessions envisaged under the sanctioned Revised Rehabilitation Scheme for the entire period of rehabilitation 2 and not restricted to the periods pertaining to power cuts, breakdown, etc. as was being interpreted by CESCO which was communicated through letter dated 28.09.2004 to all the participated Agencies, with immediate effect or within such a reasonable time as this Hon'ble Court may deem it fit and proper and to refund/adjust a sum of Rs.4,47,26,435/- with up-to-date interest till the date of refund/adjustment for the excess payment already made by the Petitioner No.1 Company for the power tariff charged by CESCO during the period of rehabilitation."
AND Be further pleased to issue writ in the nature of Mandamus commanding the Opposite Parties to show cause as to the Letter No. 3187 dated 19.08.2005 to the extent it seeks to realize a sum of Rs.6,35,19,199/-from the Petitioner No.1 Company in violation of the modified sanctioned scheme and order of BIFR 19.06.2003 shall not be quash and if the Opposite Parties fail to show cause or show insufficient cause make the said Rule absolute.
AND Issue such other writ/writs, direction/directions and order/orders as this Hon'ble Court may deem fit and proper And for this act of kindness the Petitioners shall as in duty bound ever pray."
2. Petitioner no.1 M/s IPISTEEL Ltd. (IPISTEEL), a company registered under the Companies Act,1956, is a mini steel plant and the petitioner no.2 is the Managing Director of the company. Opposite Party no.1, Central Electricity Supply Company of Orissa Limited (CESCO), formerly GRIDCO, is an agency for retail supply of electricity in the Central Zone of Orissa. The Board of Industrial and Financial Reconstruction (BIFR) had sanctioned a rehabilitation scheme in the year 1995 providing for various reliefs and concessions from different agencies for revival of the IPISTEEL which had become a sick industry. As the sanctioned scheme of 1995 could not take off due to various reasons, the BIFR sanctioned a Modified/Revised Scheme dated 27.10.1997, a copy of which is at Annexure-1 to the writ petition. The Modified Sanctioned Scheme at Annexure-1 envisages various reliefs from different agencies as well as State Government including the CESCO. One of such reliefs and concessions directed to be made at clause 8 of page 7 of the Scheme reads:
3"During the period of break-down/rehabilitation, GRIDCO shall charge for the actual quantity of demand based on energy actually consumed in lieu of demand charges."
3. The BIFR from time to time reviewed the progress of implementation of Modified Sanctioned Scheme at Annexure-1. Upon such review, BIFR passed order dated 19.6.2003 at Annexure-3 again directing that the reliefs and concessions to be granted by the State Government may be adhered to as per terms of Modified Sanctioned Scheme at Annexure-1. The concluding part of the order at Annexure-3 reads as follows:
"5. The Bench, after due consideration of all material, has therefore, acceded to the request made by the company vide their letters dated 9.6.2003 and 29.5.2003 and has directed that the reliefs and concessions to be granted by the State Government may be adhered to as under in terms of the modified sanctioned scheme of Oct,1997:-
(i) During the period of break-down/rehabilitation, GRIDCO shall charge for the actual quantity of demand based on energy actually consumed in lieu of demand charge.
(ii) GRIDCO shall not levy electricity duty, any penal charges like delayed payment surcharge and low power factor penalty during the period from July,1,1995 to June,30,2002 i.e. during the period of rehabilitation."
4. While the matter stood thus, CESCO filed an application before the BIFR seeking modification /clarification/review of the reliefs and concessions sanctioned under the Modified Scheme in response to which a letter dated 5.11.2003 at Annexure-4 was written to the CESCO by the Secretary, BIFR. The letter at Annexure-4 reads as follows:
"D.O.No.18(4)/82/B-II/BIFR/Mon./95/1676 dated 5.11.2003 Ref. M/s. IPI Steel Ltd. (ISL)-Case No.47/94 Dear Shri Paikray, 4 This is regarding the application dated 28.7.03, submitted by CESCO to the Board, seeking clarification/modification/review of the reliefs & concessions in the scheme sanctioned by the Board on 27.10.1997 and also in respect of the Board's subsequent order dated 19.6.03.
2. The Board after review/re-consideration of the issues involved, has directed that the reliefs & concessions envisaged in para8(i), page-7 of SS and also in para 5(i)(sic) of the Board's order dated 19.6.03 is for the entire period of rehabilitation and not restricted to the periods pertaining to power cuts, break-downs etc. during the rehabilitation period, as is being interpreted by CESCO. In view of this, the Board's order dated 19.6.03 in this regard does not require any further alternation/modification. The Board has further directed that the order dated 19.6.03 should be implemented by CESCO in its true spirit and a compliance report thereof be sent to the Board within 15 days, failing which the Bench may consider initiating punitive action as per provisions under the Act.
3. As regards the request of CESCO to substitute the word 'CESCO' in place of 'GRIDCO' in the Board's order dated 19.6.03, the Board has approved this amendment and a separate formal amendment would be sent to you shortly.
4. Please acknowledge receipt of this letter and report compliance within a period of 15 days as mentioned in para 2 above.
With best wishes. Yours sincerely,
Sd/-
VINAY VASISHTHA
Shri Srikant Paikray,
Chief Executive Officer,
Central Electricity Supply Company of Orissa Ltd., IDCO Tower, 2nd Floor, Janpath, Bhubaneswar-751022."
5. It appears that the IPISTEEL had, thereafter, filed representation before the BIFR alleging non-compliance/non- implementation of the Rehabilitation Scheme by the CESCO and also alleging misinterpretation of the nature of reliefs and concessions envisaged at clause 8 of page 7 of the Modified Sanctioned Scheme at 5 Annexure-1. Considering the representation and also applications filed by the CESCO, order dated 16.9.2004 at Annexure-10 was passed by the BIFR. In the order, BIFR made, inter alia, the following observations:
"6. And, whereas, CESCO, upon receipt of the Board's order dated19.6.2003, submitted an application dated 28.7.2003 to the Board order for review/modification of the Board's said order dated 19/06/03 in line with the submissions made by them in the said application dated 28.7.2003. Meanwhile, the company vide their letter dated 24.9.2003 also brought to the notice of the Board that CESCO had not been properly interpreting the reliefs & concessions, as contained in the relevant clause of the SS/the Board's subsequent order dated 19.6.2003 and brought to the notice of the Board that CESCO would like to grant the reliefs & concessions only for the break-down period, instead of the entire rehabilitation period, as envisaged in the SS, and also requested the Board to issue a clarificatory letter to CESCO stating therein that the reliefs envisaged would be for the entire rehabilitation period and would not be restricted to the breakdown period of the rehabilitation process as was being interpreted by CESCO.
7. And, whereas, the Board, on consideration of the submissions made by CESCO as well as the company, noted that the relevant provisions of the SS were not being properly interpreted by CESCO and, therefore, issued a clarificatory letter dated 5.11.2003, written by the Secretary, BIFR to the Chief Executive of CESCO, stating therein the reliefs & concessions envisaged in the scheme sanctioned by the Board would be for the entire period of rehabilitation process and would not be limited to the breakdown periods, as was being interpreted by CESCO." (emphasis supplied)
6. Also, on receipt of copy of letter at Annexure-4, IPISTEEL wrote a letter dated 10.11.2003 at Annexure-5 to CESCO to give effect to letter at Annexure-4. In view of inaction on the part of CESCO in implementing Modified Sanctioned Scheme at Annexure-1 as clarified by the Secretary of the BIFR in letter at Annexure-4, IPISTEEL filed W.P.(C) No.13432 of 2003 which was disposed of by this Court by judgment dated 30.9.2004 at Annexure-7 directing the CESCO to implement the Rehabilitation Scheme by granting the reliefs and concessions to the petitioners-company in accordance with the orders passed by the BIFR at Annexures 1,3 and 4 within the stipulated period. The concluding 6 part of the order passed by this Court in W.P.(C) No.13432 of 2003 reads as follows:
"11. In view of the undisputed facts involved in this case with regard to Rehabilitation Scheme and directions thereon issued by the BIFR directing the opp. party to grant reliefs and concessions to the petitioners-company by its orders passed on 27.10.97, 19.6.2003 and 5.11.2003 and even though the opp. party has preferred an appeal against the same, no stay order having been passed by the Appellate Authority we have no hesitation in allowing this writ application.
12. We, therefore, direct that the opp. party shall implement the Rehabilitation Scheme by granting the reliefs and concessions to the petitioners-company as directed therein by the BIFR, within a period of four weeks from the date of receipt of this order.
13. The writ application is allowed. But in the circumstances, without costs."
7. Being aggrieved by the judgment of this Court in W.P.(C) No.13432 of 2003, CESCO filed Civil Appeal No.4602 of 2005 (arising out of SLP(C) No.23526/04) before the Hon'ble Supreme Court. By order dated 25.7.2005 at Annexure-8 the Hon'ble Supreme Court set aside the order passed by this Court. The order dated 25.7.2005 at Annexure-8 reads as follows:
" xxx xxx xxx
Leave granted.
Heard parties.
This is a very peculiar case. The respondents' claimed that BIFR had passed an order. They filed a writ petition for the enforcement of that order. However, till date the order or a copy thereof has not been produced even before this Court. We find that all that is available with the Respondent is a copy of letter dated 5.11.2003 written by the Secretary, BIFR that such an order has been passed.
The Appellant had gone in Appeal against the purported order. The Appellate Authority has directed production of such an order. The Appellants had applied for the copy of the same but again the Appellants were supplied only with the letter of the Secretary stating that such an order had been passed.
Thus it is clear that the Respondent had filed the Writ Petition seeking enforcement of an order which was never 7 produced. The High Court without insisting on production of the order or a copy thereof directed implementation of that order. This could not have been done. We thus set aside the impugned order of the High Court with liberty to the Respondents to seek enforcement of the order if and when such an order is produced.
The appeal stands allowed accordingly. There will be no order as to costs."
8. It has been averred by the petitioner that in response to the application dated 17.1.2007 made under the Right to Information Act, IPISTEEL was supplied with the copy of Note Sheet at Annexure-11 in which order has been passed by the BIFR clarifying the nature of reliefs and concessions envisaged at clause 8 of page 7 of the Modified Scheme at Annexure-1. It is averred that the Secretary, BIFR had simply communicated the order passed by the BIFR in the Note Sheet/file at Annexure-11. Concluding part of the Note Sheet at Annexure-11 is reproduced below:-
"5. CESCO upon receipt of this order of the Bench dated 19.6.03 submitted an application dated 28.7.03 for review/modification of this order. The prayer of CESCO are reproduced below:-
i) To clarify/modify/review the Sanctioned
Scheme dated 27.10.1997 and/or dated
19.6.2003.
ii) To direct that M/s IPISTEEL is entitled to
the entitled to the benefit of payment on the basis of actual quantity of demand and/or energy only during the period of power cuts, discontinuance, reduced supply/break down and not during the entire period of rehabilitation.
iii) To substitute CESCO in place of GRIDCO in
the order dated 19.6.2005.
iv) To pass such other order(s) as may be
deemded just and proper in the facts and
circumstances of the case.
6. On going through the Bench's order dated 16.9.2003 it is seen that the Bench highlighting the directions/views expressed by the Hon'ble Orissa High Court (OHC) and Supreme Court i.e. where the GRIDCO/CESCO had filed 8 their application/appeal, has reiterated that the reliefs & concessions envisaged in the SS including those above mentioned in para-3(i) & (ii) above, would have to be granted to the company. In view of this, the application dated 28.7.2003 submitted by the CESCO for review of the Board's order dated 19.6.2003 does not seem to have any merit and therefore, does deserve any further consideration. The Bench, may however, consider issuing an amendment in respect of para-5(ii) above i.e. to replace GRIDCO in place of 'A' CESCO in the order dated 19.6.2003 issued by the Bench, as the GRIDCO has been changed to CESCO.
7. The company vide their letter dated 24.9.2003(page-9, 15/c) has brought to the notice of the Board that CESCO has not been properly interpreting the reliefs as contained in Clause 8, page-7 of the SS and also in para 5(i) & 5(ii) of the subsequent order dated 19.6.03 issued by the Bench in this regard. It is evident from the company's letter that CESCO is not willing to offer the reliefs envisaged in these paras for the entire rehabilitation period and, instead, would like to offer those reliefs only for a limited period i.e. only for the break down period etc., possibly due to the use of oblique between the two words i.e. 'break down'/'rehabilitation' in this para as has been highlighted by the company in their letter dated 24.9.03. The company has requested for issuance of a clarificatory letter to CESCO stating therein that reliefs envisaged in para 3(i) above is for the entire rehabilitation period and not for the break down periods of rehabilitation process, as is being interpreted by CESCO. The company's request seems to be quite logical especially as CESCO is not willing to implement the orders issued by the Board in its proper prospective. If approved, a clarificatory letter could be addressed from Secretary/Registrar, BIFR to the Chief Executive Officer of CESCO stating inter alia therein the reliefs envisaged in para 3(i) above is for the entire period of rehabilitation and not for the power cuts break down only as being interpreted by CESCO, and compliance report be sent within 15 days. This would be actually reiterating the 'B' Bench's earlier order dated 19.6.2003 and would not amount to any modification/review. It may also be stated herein that the non-compliance of Bench's direction would call from initiating action as per provisions u/s 33 of the Act.
8. To sum up portions marked 'A' & 'B' above in para 6 & 7 are for consideration and approval please.
Sd/-(Vinoy Vasisth),Secretary.
M(SPB) We may act as suggested by Secy. At 'A' & 'B' above. CESCO may send their compliance report within 15 days.
M(NFS) Sd/-29/10/3 1. Clarificatory letter as per B. 9 Sd/- 29 X 2. Pl. submit draft formal order reg. 'A' for Bench approval without any delay."(emphasis supplied)
9. During pendency of this writ petition, BIFR again, upon review hearing of the case of IPISTEEL bearing Case No.128 of 1990(47/94) passed order dated 17.4.2007 at Annexure-12. In the said order at Annexure-12 it was observed, inter alia, as follows:
"xxx xxx xxx 18(i). The Bench, on consideration of the facts, merits of the case, materials on record and also the submissions made by the concerned agencies present in the today's hearing, notes the followings:-
Xxx xxx xxx xxx
Xxx xxx xxx xxx
There was, prima facie, an ambiguity in respect of the reliefs & concessions envisaged from GRIDCO/CESCO, in para-8, page-7 of the MS-97. In view of this, the Bench, besides due consideration to the representation received from the company M/s IPISL and also the submissions made by CESCO in this regard, also considered the view/ recommendations made by the MA (ICICI) to the Board vide their letter dt.30.10.01 and directed, on file, that a clarification could be sent to CESCO, stating inter alia, therein that the reliefs, as contained in the said para of the MS-97, would not be restricted only to the break-down period(s) and would be for the entire rehabilitation period. This direction was, however, communicated by the Secretary, BIFR vide his letter dt.05/11/03 to CESCO.
(ii) Keeping in view the above, the Bench, in exercise powers conferred u/s 18(4), read with Section 19(3) of the Act, hereby approves the DRS, subject to incorporation of the directions/modifications, as brought-out in sub-para (a) to
(e) below:-
Xxx xxx xxx
(c) The Bench hereby reiterates its earlier direction(s) that
the CESCO would grant the reliefs to the company M/s IPISL as envisaged in para-8, page-7 of the MS-97/as also directed by the Board in its subsequent order dt.19/06/03, in the manner, as communicated by the Secy., BIFR in its letter dt.05/11/03 to CESCO. (emphasis supplied) Xxx xxx xxx."10
10. It is also pertinent to note that CESCO preferred Appeal No.220 of 2007 assailing order of the BIFR at Annexure-12 and the appeal was disposed of during pendency of this writ petition by order dated 8.3.2011. Copies of the order passed by the Appellate Authority for Industrial & Financial Reconstruction, New Delh (AAIFR) in Appeal No.220 of 2007 have been filed by the petitioners as well as opposite parties. So far as the contentious issue of nature of direction made at clause 8 of page 7 of the in the Modified Scheme is concerned, AAIFR observed in its order as follows:
"10. However, so far as the issue at (b) is concerned, it has to be seen whether the reliefs and concessions could be granted in terms of the "clarificatory order" issued by the BIFR as contained in the letter of the Secretary of BIFR dated 05.11.03 to the appellant i.e. benefits of prorating of demand charges based on energy consumption during the entire period of rehabilitation i.e. 01.7.95 to 30.6.02. We have observed that in SS-07, the BIFR, instead of passing orders explicitly and in clear terms, regarding the interpretation of para 8 of SS-97, which the BIFR incorporated in SS-07, the BIFR has directed implementation of Clause 8 of SS-97 as per its "clarificatory order" dated 05.11.03 issued by the Secretary of BIFR. It is a fact that language of clause 8 of SS-97 was ambiguous, and was amenable to various interpretations. The clarificatory letter dated 05.11.03 which was issued by the Secretary, BIFR was neither accepted by this Authority nor by the Hon'ble Supreme Court as an order of the BIFR. The Hon'ble Supreme Court in the case of Central Electricity Supply Company of Orissa Ltd. Vs. M/s IPI Steel Ltd. & Anr. SLP(C) No.23526/2004 while setting aside the order of the Hon'ble High Court of Orissa dated 30.9.04 held as follows:-
" Thus it is clear that the Respondent had filed the Writ Petition seeking enforcement of an order which was never produced. The High Court without insisting on production of the order or a copy thereof directed implementation of that order. This could not have been done. We thus set aside the impugned order of the High Court with liberty to the Respondents to seek enforcement of the Order if and when such an Order is produced."
11. The Hon'ble Supreme Court in the aforesaid case also observed that the letter of the Secretary, BIFR dated 05.11.03 only shows that such an order of the BIFR has been passed. Therefore, it is clear by implication that the Hon'ble Supreme Court did not consider the letter of the Secretary, BIFR as an 11 order passed by the BIFR. A similar view has also been held by this Authority in its order dated 29.6.04 in appeal No.449/03 in the case of M/s CESCO Vs. BIFR & Ors. This Authority also observed that the appeal has been filed against order of the BIFR dated 05.11.03. However, a copy of the order has not been annexed and what is annexed is a letter purported to have been written by the Secretary of the BIFR. This Authority, therefore, held that unless a copy of the order on the basis of which the letter dated 05.11.03 has been written is filed, the appeal cannot be proceeded with. It is, therefore, quite evident that the letter of the Secretary, BIFR which is referred to in SS-07 cannot be called a "clarificatory order" of the BIFR. The respondent company under the RTI Act has obtained a copy of the Note Sheet dated 27/29.10.03 of the BIFR on the basis of which the Secretary, BIFR issued its clarificatory letter dated 05.11.03 and has sought implementation of the order contained in the Note Sheet before the Hon'ble High Court of Orissa in WP No.11267/2005 which is subjudice before the Hon'ble High Court. Therefore, in our view, the issue with regard to interpretation of Clause 8 of MS-97 as incorporated in SS-07 is sub-judice before the High Court of Orissa. In these circumstances, in our opinion, the direction of the BIFR in para 16(ii)(c) (sic) that the reliefs as envisaged in para 8 of MS-97 will be granted as per the letter of Secretary, BIFR dated 05.11.03 to CESCO, cannot be sustained. Similarly, in the sanctioned scheme the reference to this letter dated 05.11.03 as a "clarificatory order" of the BIFR is also not sustainable as has been held by the Hon'ble Supreme Court as well as by this Authority that it is not an order of the Board. Undoubtedly, the letter dated 05.11.03 issued by the Secretary, BIFR is based on the Note Sheet dated 27/29.10.03 and the respondent company has sought implementation of the order contained in the Note Sheet in WP No.11267/2005 which has been opposed by the appellant on the ground that the said Note Sheet cannot be construed as an order of the BIFR and the BIFR cannot abdicate its power in favour of the Secretary, BIFR. Therefore, since the issue of validity of the Note Sheet of the BIFR dated 27/29.10.03 on the basis of which the letter dated 05.11.03 has been issued is sub-judice before the Hon'ble High Court of Orissa, the BIFR could not have relied upon the said letter dated 05.11.03 for the interpretation of para 8 of SS-97.
12. In result, we uphold the direction of the BIFR in SS-07 to the appellant regarding grant of reliefs to respondent company as envisaged in para 8, page-7 of MS-97 as also the direction of the Board in its subsequent order dated 19.6.03, but we set aside the subsequent direction that the aforesaid reliefs will be granted by the appellant in the manner, as communicated by Secretary, BIFR in its letter dt.05.11.03.
12This order is subject to the decision of the Hon'ble High Court of Orissa in WP No.11267/2005. The appeal is disposed of accordingly."(emphasis supplied)
11. Petitioners' case is that the very basis of Modified Sanctioned Scheme at Annexure-1 being for rehabilitation of IPISTEEL, reliefs and concessions as envisaged in the Scheme have to be accorded a purposive interpretation. The use of expression "break down/ rehabilitation" at clause 8 of page 7 of the scheme cannot be given a restricted meaning to be construed that the concession is for the period of electrical break downs only. It was argued by Sri U.C.Pattnaik, learned counsel for the petitioners that on review of 1997 Scheme at Annexure-1, BIFR again reiterated by the order dated 19.6.2003 at Annexure-3 at paragraph 5 (i) the selfsame reliefs directed to be accorded to IPISTEEL under clause 8 of page 7 of the Modified Sanctioned Scheme at Annexure-1. The CESCO well understood that the reliefs envisaged is for the entire period of rehabilitation and not limited to break down period alone. This is evident from the fact that it was the CESCO which filed an application dated 28.7.2003 seeking modification/ clarification/ review of the directions contained in the Modified Sanctioned Scheme at Annexure-1 as well as the subsequent order of the BIFR at Annexure-3. Clarificatory letter dated 5.11.2003 at Annexure-4 was written by the Secretary of the Board communicating the order of the Board passed in file/Note Sheet at Annexure-11. Learned counsel for the petitioners further argued that in its order dated 16.9.2004 at Annexure-10 BIFR endorsed the clarification made in the Secretary's letter dated 5.11.2003 on the basis of order passed in the file/Note Sheet. It has been specifically observed by the BIFR in its order at Annexure-10 that provisions of the scheme were not being properly interpreted by CESCO, and, therefore, clarificatory letter dated 5.11.2003 at Annexure-4 had been issued. It was further argued that in the meanwhile, IPISTEEL obtained copy of the 13 order passed by the BIFR in file/Note Sheet at Annexure-11. In the order dated 17.4.2007 at Annexure-12, BIFR has pointed out at paragraph 18(i) that the Bench directed, on file, that clarification be sent by the Secretary to CESCO that reliefs contemplated at clause 8 of page 7 of Annexure-1 would not be restricted only to the break-down period(s) and would be for the entire rehabilitation period. The words "break down and rehabilitation" cannot be read in isolation. In view of nature of orders passed by the BIFR from time to time and more particularly in view of the order passed by the Board in file/ Note Sheet at Annexure-11, CESCO is obliged to extend the benefit envisaged under clause 8 of page 7 of the Modified Sanctioned Scheme at Annexure-1 as well as at paragraph 5(i) of the order of the Board at Annexure-3 for the entire period of rehabilitation.
12. Opposite parties have filed counter affidavit resisting the reliefs claimed by the petitioners. Opposite parties contend that for the self-same reliefs, IPISTEEL had filed W.P.(C) No.13432 of 2003 wherein prayer was made for direction to CESCO to implement Revised Sanctioned Scheme and to comply with the direction dated 5.11.2003 at Annexure-4. By order dated 19.6.2003 at Annexure-3 the BIFR directed that during the period of break-down/ rehabilitation, GRIDCO shall charge for the actual quantity of demand based on energy actually consumed in lieu of demand charges. CESCO filed an application for review/ modification/ clarification of Sanctioned Scheme at Annexure-1 as well as order dated 19.6.2003 at Annexure-3. It is contended that without hearing the CESCO and without passing any speaking order, the BIFR issued clarificatory letter dated 5.11.2003 at Annexure-4 which was the subject matter of adjudication before this Court in W.P.(C) No.13432 of 2003. The judgment dated 30.9.2004 of this Court in W.P.(C) No.13432 of 2003 was set aside by Hon'ble 14 Supreme Court by order dated 25.7.2005 in Civil Appeal No. 4602 of 2005 and SLP (C) No. 25816 of 2004 holding that communication dated 5.11.2003 at Annexure-4 was not an order of the BIFR. Therefore, present writ petition is not maintainable. Since the IPISTEEL has not produced any order of the BIFR, there is no merit in this writ petition. Though the period of rehabilitation was from 1.7.1995 to 30.6.2002, IPISTEEL, for the first time, by letter dated 20.12.2002 at Annexure-B raised the plea that in view of clause-8 of page 7 of the Modified Sanctioned Scheme at Annexure-1 it is entitled to benefit of payment on the basis of actual quantity of demand and/or energy during entire period of rehabilitation, and not only during the period of break-down, and sought for such direction. Earlier IPISTEEL made payment of all energy bills for the period from July, 1995 to October, 2000 in which benefit of payment on the basis of actual quantity of demand/energy was given only during the period of electrical break-down/ power cut. Upon consideration of reply filed by the CESCO, the BIFR passed order dated 19.6.2003 at Annexure-3. CESCO filed application dated 28.7.2003 for review/modification/ clarification asserting therein that IPISTEEL is entitled to the benefit of payment on the basis of actual quantity of demand and/or energy only during the period of power cuts/discontinuance/reduced supply/ break-down and not during the entire period of rehabilitation. Thereafter, on 11.11.2003, communication under Annexure-4 was received by CESCO. Being aggrieved, CESCO filed Appeal No.449 of 2003 before the AAIFR whereas IPISTEEL filed W.P.(C) No.13432 of 2003 before this Court. Time was granted by AAIFR to CESCO for obtaining certified copy of the 'order dated 5.11.2003' of the BIFR. Accordingly, the CESCO applied for certified copy of the order dated 5.11.2003, but, instead of providing certified copy of the order dated 5.11.2003 the BIFR supplied copy of the letter at Annexure-4. Appeal No.449 of 2003 was dismissed by AAIFR by order dated 8.11.2004 as not 15 maintainable on the ground that the substantive issue raised in the appeal relating to concessional rate of tariff to be provided by the CESCO to IPISTEEL had been decided by this Court in W.P.(C) No.13432 of 2003. The IPISTEEL had approached the BIFR for certain modification of the Sanctioned Scheme praying that during the period of rehabilitation, GRIDCO/CESCO should charge for energy actually consumed and should not levy minimum demand charges. However, the application for modification was withdrawn. In spite of withdrawal of the application for modification, by order dated 19.6.2003 the BIFR directed that the IPISTEEL would be liable for payment for the energy actually consumed and for prorating of demand charges during the period of break-down/ rehabilitation. Circumstance of filing of application for modification by IPISTEEL itself indicates that IPISTEEL had understood clause 8 of page 7 of the Scheme to mean that IPISTEEL would be liable for payment for the energy actually consumed and for prorating of demand charges during the period of break-down, power cuts/ discontinuance/ reduced power supply only, and not during entire period of rehabilitation. Such benefit has all along been extended to IPISTEEL by the CESCO. It is further contended that Note Sheet at Annexure- 11 cannot be said to be an order passed by the BIFR in exercise of provisions under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Order dated 17.4.2007 passed by the BIFR at Annexure-12 directing implementation of direction made in the Sanctioned Scheme and Modified Scheme, in the manner as communicated by the Secretary, BIFR under the letter at Annexure- 4 was challenged by the CESCO before the AAIFR in Appeal No.220 of 2007.
13. It was contended by Sri R.K.Rath, learned Senior Advocate appearing for the opposite parties that in the meanwhile Appeal No.220 of 2007 has been disposed of by AAIFR by order 16 dated 8.3.2011 holding that order of the BIFR directing CESCO to grant reliefs to IPISTEEL in the manner as communicated by Secretary, BIFR in its letter at Annexure-4 is not sustainable. The BIFR restrained itself from passing any direction on the basis of Note Sheet at Annexure-11 since issue of validity of the Note Sheet dated 27/29.10.2003, pursuant to which clarificatory letter was issued by the Secretary, was sub judicial in this writ petition.
14. Learned Senior Advocate appearing for CESCO, in course of his argument, reiterated the contentions raised in the counter affidavit. It was vehemently contended that all along during the period of rehabilitation IPISTEEL understood that reliefs envisaged under clause 8 of page 7 of the Revised Scheme at Annexure-1 is for the period of electrical breakdown only. For that reason IPISTEEL from time to time furnished information under Annexure-J series to CESCO regarding the period during which there was break-down/power cut etc. It is also evident from Annexure-I the Summery Record of Proceedings of the Review Hearing of the BIFR dated 4.10.2001 at paragraph-10 that IPISTEEL submitted letter dated 29.9.2001 requesting for certain modifications in the Revised Scheme at Annexure-1 including a direction to the effect that during the period of rehabilitation, GRIDCO/CESCO should charge for energy actually consumed and should not levy minimum demand charges. However, application for modification was withdrawn as the BIFR suggested that any modification of the scheme at that stage would automatically withdraw the consent given earlier. Thereafter, for the first time, by letter dated 20.12.2002 at Annexure-B, IPISTEEL raised the plea that in view of clause 8 of page 7 of the Revised Scheme at Annexure-1, the company is entitled to benefit of payment on the basis of actual quantity of demand and/or energy during entire period of rehabilitation, and not only during the period of break-
17down. By order dated 19.6.2003 at Annexure-3, BIFR reiterated the direction to the CESCO as was made at clause 8 of page 7 of the Revised Scheme at Annexure-1. In such circumstances, CESCO filed application dated 28.7.2003 at Annexure-D to the BIFR seeking review/modification/clarification of the Scheme at Annexure-1 and order at Annexure-3 to the effect that benefit contemplated under the Scheme was for payment of charges on the basis of actual quantity of demand and/or energy during the period of power cuts/ discontinuance/reduced supply/break-down only. It was vehemently contended that no order was ever passed by the BIFR modifying or clarifying the nature of reliefs envisaged under clause 8 of page 7 of the Revised Scheme at Annexure-1. Instead, the so called clarificatory letter dated 5.11.2003 under Annexure-4 from the Secretary, BIFR was received by CESCO. The letter of the Secretary at Annexure-4 has been held to be not an order by the Hon'ble Supreme Court in Civil Appeal No. 4602 of 2005 (arising out of SLP (C) No. 23526 of 2004). Though CESCO applied to the BIFR for certified copy of Note Sheet at Annexure-11, the BIFR declined to provide the same on the ground that the certified copies of the Note Sheets cannot be provided. It was argued that content of the Note Sheet at Annexure-11 does not amount to an order of BIFR. Order passed therein to address a clarificatory letter was passed without notice to the CESCO and without giving the parties any opportunity of being heard. Therefore, no direction can be issued on the basis of clarification made in the Note Sheet at Annexure-11, the same also being not an order of the BIFR. It was vehemently argued that on the face of it, concession envisaged at clause 8 of page 7 of Annexure-1 means and contemplates that IPISTEEL is entitled to avail the benefit from the CESCO for the period of electrical break-down only.
15. In view of the admitted facts as well as the rival pleadings and submissions, it is evident that the only question that 18 arises for determination in this writ petition is with regard to the import and implication of concessions envisaged by BIFR at clause 8 of page 7 of the Modified Scheme at Annexure-1.
16. Petitioners' case is that the concession envisaged is for the entire period of rehabilitation from 1.7.1995 to 30.6.2002 whereas opposite parties insist that IPISTEEL is entitled to concession there under whenever there was electrical break-down during the rehabilitation period. In this context, letter of the Secretary, BIFR at Annexure-4 has already been held to be not an order by the Hon'ble Supreme Court. While setting aside order of this Court passed in W.P.(C) No. 13432 of 2003, Hon'ble Supreme Court by order at Annexure-8 passed in Civil Appeal No. 4602 of 2005 (arising out of SLP(C) No. 23526 of 2004) granted liberty to IPISTEEL to seek enforcement of the order on the basis of which communication under Annexure-4 was made by the Secretary, BIFR, if and when such an order is produced. IPISTEEL has produced the order in the Note Sheet at Annexure-11 to urge that order was passed by BIFR to clarify that reliefs and concessions envisaged at clause 8 of page 7 of the Modified Scheme at Annexure- 1 are for the entire period of rehabilitation and not restricted to the periods pertaining to power cuts, break downs etc. during the rehabilitation period, as is being interpreted by CESCO.
17. In Note Sheet at Annexure-11, a copy of which is also at Annexure-P to the counter affidavit, it has been categorically mentioned that order in the Note Sheet was passed in response to application filed by CESCO to clarify/modify/review the Modified or Revised Scheme at Annexure-1 and subsequent order dated 19.6.2003 at Annexure-3, and BIFR did not find any merit in the review application. However, considering the contentions raised by IPISTEEL to the effect that CESCO has not been properly interpreting the reliefs as contained in clause 8 of page 7 of the 19 Scheme at Annexure-1 and also in para 5(i) and 5 (ii) of the order at Annexure-3, the Secretary was directed to issue clarificatory letter. Authenticity of Note Sheet of BIFR is not in question. By the order passed in the Note Sheet, neither the Scheme nor any earlier order has been reviewed or modified. The view expressed in the Note Sheet to the effect that reliefs envisaged at clause 8 of page 7 of the Scheme at Annexure-1 is for the entire period of rehabilitation and not restricted to the periods pertaining to power cut/break-down only has been reiterated and ratified by order dated 17.4.2007 at Annexure-12 reproduced above, by observing that as there was, prima facie, an ambiguity in respect of the reliefs and concessions envisaged from CESCO in clause 8 of page 7 of the Scheme at Annexure-1, the Bench directed, on file, to issue a clarification to CESCO stating inter alia therein that the reliefs as contained in the said para of the Scheme at Annexure-1 would not be restricted only to the break-down period(s) and would be for the entire rehabilitation period. Thus, in course of review hearing, in Case No. 128/90(47/94): M/s. IPISTEEL Ltd.(IPISL) held on 17.4.2007 at Annexure-12, it has been held that reliefs and concessions envisaged at clause 8 of page 7 of the Scheme at Annexure-1 would not be restricted only to the break-down period(s).
18. Otherwise also, in order to understand the import and implication of the reliefs and concessions envisaged at clause 8 of page 7 of the Scheme at Annexure-1, a reference may be made to the observations of the BIFR in the Scheme on the basis of which specific reliefs and concessions were granted. While dealing with BACKGROUND at page 2 of the Scheme it has been observed that IPISTEEL failed to make payments as per the OTS mainly in view of non-compliance of various conditions of the BIFR approved scheme by the Government of Orissa, poor profitability arising out of frequent mechanical break-down at the mill and non-availability of 20 need-based working capital funds from the banks. Upon reference to FINANCIAL PERFORMANCE, at page 4 it has been pointed out that the IPISTEEL's operations had been unsatisfactory during the period under review mainly due to low capacity utilization on account of non-availability of power, unfavourable market conditions, labour problems and delay in sanction of reliefs and concessions from the Government of Orissa as per the BIFR approved scheme, and that profitability margin of the company decreased over the period on account of competitive market conditions and increase in the production cost due to frequent mechanical breakdowns at the mill. Also at page 4, under the heading REHABILITATION SCHEME it has been observed that the company's performance had been unsatisfactory due to shortage of power, labour problems, market recession and non-availability of reliefs and concessions from Government of Orissa as envisaged in the BIFR Scheme. Thus, it appears that there is no reference to 'electrical breakdown'. Rather the Scheme refers to frequent 'mechanical breakdowns' as one of the factors which rendered the IPISTEEL sick. In such circumstances, there is no scope to restrict the meaning of words 'break-down/rehabilitation' as used in clause 8 of page 7 of the Scheme to the period of electrical breakdown only.
19. It is also pertinent to point out that clause 8 of page 7 occurs under the general heading "Relief and Concessions" and the specific heading of reliefs and concessions envisaged from the 'State Government'. Reliefs and concessions envisages at clauses 3 and 4 of page 6 also relate to reliefs and concessions envisaged from electricity supply company. Clause 3 reads as follows:
"3. GRIDCO (erstwhile Orissa State Electricity Board) to continue to charge concessional power tariff as per the directive of the State Government during the period of 21 rehabilitation and to provide concession on maximum demand charged as already approved by the Nodal Committee/Government of Orissa/BIFR."
Clause 4 reads as follows:
"4. GRIDCO to charge electricity tariff as per the provisions laid down in the Industrial Policy-1992 of the State of Orissa, whereby in view of power cuts, discontinuance/reduced supply including reduced supply during the period of break-down in the plant of the consumer, the company shall not be liable to pay minimum charges in accordance with the agreement and shall pay maximum demand charge on prorated basis based on energy consumed."
Thus clause 3 specifically envisages that concession therein is to be granted during the period of rehabilitation. Concession and reliefs envisaged at clause 4 is also not confined to period of electrical breakdown only. Similarly, reliefs envisaged under clause 9 of page 7 of the Scheme has been specifically extended for the entire period of rehabilitation. Clause 9 reads as follows:
"9. GRIDCO shall not levy electricity duty, any penal charges like delayed payment surcharge and low power factor penalty during the period from July 1,1995 to June 30, 2002 i.e. during the period of rehabilitation."
20. None of the reliefs and concessions envisaged from CESCO being confined to the period of electrical breakdown only and in the absence of any reference to "electrical breakdown" as pointed out above, there is no scope to restrict the period of reliefs and concessions envisaged under clause 8 of page 7 of the Scheme to the period of electrical breakdown only. Assigning such a meaning to the expression 'breakdown/rehabilitation' would not only render the word 'rehabilitation' redundant and meaningless but also would be inconsistent with the nature and extent of reliefs and concessions envisaged under clauses 3, 4 and 9, referred to above, and contrary to the observations of the BIFR in the Note Sheet at Annexure-1 as well as order dated 17.4.2007 of the BIFR at Annexure-12.
2221. In view of the above discussions, the writ petition is allowed and the opposite parties are directed to extent the benefits and concessions envisaged at clause 8 of page 7 of the Modified Scheme at Annexure-1 to the petitioners for the entire rehabilitation period.
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B.K. Patel, J.
Orissa High Court, Cuttack, Dated 19th August,2014/Palai