M/S. PAWAN ALLOYS AND CASTING PVT. LTD., MEERUT ETC. ETC. v. U.P. STATE ELECTRICITY BOARD AND ORS.

A the mid-Victorian years found himself struggling to adjust his simple conceptions of contract to the demands of such powerful bodies as the railway companies. But in the present century many corporations, pubic and private, have found it useful to adopt, as the basis of their transactions, a series of standard forms with which their customers can do little but comply. B Lord Diplock has recently pointed out that

Standard forms of contracts are of.two kinds. The first of very ancient origin, are those which set out the ter.ms on which c mercantile transactions of common occurrence are to be carried out. Examples are bills of lading, charterparties, policies of insurance, contracts of sale in the commodity markets. The standard clauses in these contracts have been settled over the years by negotiation by representatives of the commercial interests involved and have been widely adopted D because experience has shown that they facilitate the conduct of trade. Contracts of these kinds affect not only the actual parties to them but also others who may have a commercial interest in the transactions to which they relate, as buyers or sellers, charterers or shipowners, insurers or bankers. If fair- E ness or reasonableness were relevant to their enforceability the fact that they are widely used by parties whose bargaining power is fairly matched would raise a strong presumption that their terms are fair and reasonable.

F The same presumption, however, does not apply to the other kind of standard form of contract. This is of comparatively modern origin. It is the result of the concentration of par- ticular kinds of business in relatively few hands. The ticket cases in the 19th century provide what are probably the first examples. The terms of this kind of standard form of contract have not been the subject of negotiation between the parties to it, or approved by any organisation representing the inter- ests of the weaker party. They have been dictated by that party whose bargaining power, either exercised alone or in conjunction with others providing similar goods or services, enables him to say; 'If you want these goods or services at all,

PA WAN ALLOYS ANO CASTING PVT. LTD. '· U.P. STATE ELECTRICITY BO. [S.B. MAJMUOAR, J.] 307 these are the only terms on which they are obtainable. Take A it or leave it'.

It is fair to add that even in Lord Diplock's second class there are good as well as bad reasons for the adoption of standard form contracts. In many cases the actual conclusion of the contract is in the hands of relatively junior persons who are not trained in B contract negotiation and drafting and there are enormous economies to be· effected if the company only employs one (or at most a few) standard forms of agreement. As regards the frrst class, we should note that whole areas of English commercial practice are governed by the prevalent standard forms which exist in a C symbiotic relationship with the courts, so that an historical analysis of the development of a particular form would show that the clause represented a response to a decision in the past.

In the•complex structure of modern society the device of the standard form contract has become prevalent and pervasive. The D French, though not the English, lawyers have a name for it.

The term contract d' adhesion is employed to denote the type of contract of which the conditions are fixed by one of the parties in advance and are open to acceptance by anyone. E The contract, which frequently contains many conditions is presented for acceptance en bloc and is not open to discus- sion. n

Similar observations are found in Anson's Law of Contract, 26th Edn. at page 136 the learned author has dealt with the question pertaining to construction of terms in a written contract as under :

"3. 'An agreement ought to receive that construction which its language will admit, which will best effectuate the intention of the parties, to be collected from the whole of the agreement, and greater regard is to be had to the clear intent of the parties than to any particular words which they may have used in the expression of their intent.' The proper mode of construction is to take the instrument as a whole, to collect the meaning of words and phrases from their general context, and to try and give effect to every part of it. However, if the words of the particular clause are clear and H

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A unambiguous, they cannot be modified by reference to the other · clauses in the agreement."

Dealing with the Construction of Exemption Clause found in standard form contracts t~e learned author at page 144 has made the following pertinent observations : B "Assuming that reasonably sufficient notice of a standard form contract has been. given to the person who receives the printed document, we must now consider the way in which the terms of the document are to be construed. Such is the disparity between c the bargaining power of large enterprises (both private and public) and the consumer that terms have often been imposed upon him which are onerous or unfair in their application and which exempt the party putting forward the document, either wholly or in part, from his just liability under the contract. This may be one of the reasons why, at common law, the Courts evolved "certain ca~ons of D construction which normally work in favour of the party seeking to establish liability and against the party seeking to claim the benefit of the exemption. The impression should not be given, however, that appliqtion of these canons of construction render exemption clauses generally ineffective. If the clause is ap- E propriately drafted so as to exclude or limit the liability in question, then the Courts must (subject to the powers now conferred on them by the Unfair Contract Terms Act 1977) give effect to the clause. Moreover, as between businessmen, exemption clauses can perform a useful function in that they may, for example, anticipate future contingencies which hinder or prevent performance, estab- lish procedures for the making of claims and provide for the allocation of risks as between the parties to the contract. In a business transaction, the effect of an exemption Clause may simply be to determine which of the parties is to insure against a particular risk. Exemption clauses in business transactions are not necessarily unfair or inequitable. But even in business transactions the Courts must be satisfied that the clause, on its wording, does have the effect contended for by the person relying on it, that is, the party seeking to exclude or restrict his liability.

H (a) Strict interpretation of the clause.

·. PAWAN ALLffl'.SANDCASTING P.vr. LTD.>. U.P. STATE EL~CTRICITYBD. [S.B. MAJMUDAR, l.J 309

'If a person is under a legal liability and wishes to get rid of it, . A he ·can only do so by using clear words.' The words of the exemp- tion clause must, therefore, exactly cover the liability which it is sought to exclude. S9 an exemption clause in a contract excluding· liability for 'latent' defects' will not exclude the condition as to fitness for purpose implied by the Sale of Goods Act; ... " ·B

·Our attention was also invited to a decision of a Division Bench of the Rajasthan High Court in the case of D.C.M. Ltd. and Another v. Assistant Engineer (HMT Sub-Division), Rajasth.an State Electricity Board, Kota and Another, AIR (1988) Rajasthan 64. In that. case a Division Bench speaking through J.S<Verma, CJ. (as His Lordship then was) h~d to consider the question whether the Rajasthan State Electricity Board functioning under th~ Electricity Act of 1910 and the Electricity (Supply) Act, 1948 could in · exercise 9f its powers under Section 49 of the Supply Ai:t require .the consuiner- ·appellant before them to pay by way of minimum charges at · nearly-three times the normal rate charged from other ·consumers being heavy industries consuming heavy demand of 25 M;W. Even though the appellant before them, D.C.M. Ltd., had entered into su_ch an agreement with the Board it was held that the said term in the agreement was unreasonable and consequently the demand of such excessive minimum consumption charges was not justified and could not be countenanced on the touchstone of Article 14 of the Constitution of Indil! as the Electricity E Board was an instrumentality of the State. The Court in this connection had to consider the nature of the written agreements entered intci by the consumers of the electricity with. the Board which was a monopolist and the further question whether an appar.ently inconceivable and unjust term· in the written ·cont(act could be enforced by the Board against the con- sumer. Frowning upon impugned clause 16(c) in the written agreement got executed by the Board· from the c~nsumer the following pertinent .obser.- vations were made by J.S. Verma CJ. in paragraph 24 of the Report : ·

": .. We may further add that for. the reasons already given it is obvious that the giving of such an undertaking by execution of the agreement was no doubt a conscious act of the petitioner, but in the circumstances it cannot be held to indicate the petitioner's willingness to be bound by such an onerous condition, if it had the option. It is obvious that there was no option to the petitioner and, therefore, it cannot be said that the petitioner voluntarily and willingly chose and accepted the more onerous condition of a H

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A higher rate instead of the normal rate for payment of minimum charges. The willingness to accept such an onerous term with free consent can be assumed only where a consumer has an option or in other words he can get the supply of electricity he wants even without agreeing to any such term specified by the Board for being incorporated in the written contract without execution of which B the consumer cannot insist on supply of electricity to him. It is not the Board's case that it was willing to honour the petitioner's requisition and m~e the supply even without the petitioner un- dertaking in writing to pay minimum charges according to Cl. 16(c). How can it then be said that the petitioner willingly accepted c this term when the fact is that it had no option in the matter ....."

We are of the view that the aforesaid observations of the Rajasthan High C:ourt are in accordance with the correct legal position. In the light of the above legal position, we have to appreciate the express terms found in the written agreements of identical nature entered into by the appelfa,,c-new industrialists when they were supplied electric connections for the first time at their factory premises by the Board. When we turn to the express terminology of these written agreements as found in Clause 7(a) extracted earlier, it becomes at once clear that the consumer had agreed to pay for the supply .· of electric energy at the rates enforced by the supplier from time to time as may be applicable to the consumer. So for as this clause is concerned it runs parallel to Section 49( 1) which entitles the Board to fix the tariff for sale of electricity to the consumers. Therefore, in absence of such a clause the requirement of Section 49(1) would have called upon the consumer to pay for the supplied electricity at the rates fixed from time to time by the Board. It would, however be a uniform tariff fixed by t!1e Board F for such class of consumers. So far as Clause 7(b) is concerned it deals with the existing rate schedule annexed to the agreement. Moment we turn to the rate schedule annexed to the agreement we find diverse items dealing with the computation of electricity bill as found in Items 1 to 7. The Board would be entitled to bill the consumer in the light of the rates G mentioned and the procedure prescribed for billing them as laid down in these items 1 to 7. The 5th item at page 94 as found in the rate schedule annexed to the agreement is worth nothing. It deals with 'Extra charge of rebate'. It contemplates a type of general rebate. It reads as under :

H "5. Extra charge of rebate.

PAWAN ALLOYS AND CASTING PVT. LTD. v. U.P. STATE ELECTRICITY SD. (S.S. MAJMUDAR, J.] 311

(a) In case of supply given at 400 volts the consumer shall be A required to pay an extra charge of 7.5 per cent on the amount calculated at the rate of charge.

The said clause in the rate schedule leaves no room for doubt that while computing the bill of electricity consumed by the consumer the Board will be entitled to require the consumer to pay extra charge as contemplated by Item 5(a). Converse is the situation found in Item 5(b) which deals with C giving a rebate of 5% under circumstances contemplated therein. This rebate clause has nothing to do with incentives. It is not an incentive rebate but it is a rebate available to all consumers of electricity if circumstances mentioned in Item 5 are satisfied. Then follows Item 6 which deals with 'Minimum consumption guarantee'. Next is Item 7 dealing with 'Deter- D mination of demand'. It refers to the procedure for preparation of bill. And then follows Item 8 dealing with 'Incentive to new industries', first para- graph whereof stood deleted as noted earlier by the impugned notification with effect from 1st August 1986. When these relevant items and the rate schedule which is an annexure to the agreement are read in a comprehen- sive manner it becomes obvious that what the signatory to the agreement E was trying to agree as per Clause 7(b) was that the rates of electricity charges as computed in the light of diverse items 1 to 7 in the rate schedule would be paid by the consumer. Item 8, though part and parcel of the rate schedule, does not deal with the computation of bill for consumption of electricity in the light of the general tariff. rates as fixed by the Board·. It F deals with entirely a different topic of an.incentive rebate. A close look at Item 8 of the rate schedule clearly indicates that this development rebate ' of 10% was to be paid on the amount of the bill pertaining to the energy charge as computed under Items 4 and 7 which were mentioned earlier in the rate schedule. Once the stage of Item 7 was readied the ·total bill regarding consumption of electricity would be ready for being delivered to G the consumer and on that total amount of bill incentive development rebate of 10% would be available as per Item 8.

Therefore, it cannot be said that when Clause 7(b) referred to rate schedule applicable to the consumer it contemplated even the scheme of H

312. SUPREME COURT REPORTS (1997] SUPP. 3 S.C.R. . . . A devel~pment .rebate. The rate schedule flicing the general rates of charges ·of electricity would, as mentioned in. Items 4. and 7, result in preparation of the bill. At that st~ge fixed schedule rates for charge of electricity would .complete their task and would get exhausted as the bill would be prepared in that light after following the procedure laid down by these items. Ad· hoc lumpsum·10% development rebate on the total bill which was treated as an incentive to new. industries in Ite.m 8, therefore, would obviously go beyond the scope of computation of electricity consumption bills as pe·r the rate schedule. ·

· It must, therefore, be held that. Clause '7(b} of the agreement was not even remotely connected with the question of development rebate which stood on its own and had no part to play i.n the computation and prepara- . tion of the bill for electricity consumption charges. Item 8 operated at a stage posterior to the computation of electricity charges bill in the light of the rate schedule. Tl:erefore, when the term 'rate. schedule' is employed in D Clause. 7(b) of the agreement it only deals with the general rates for the charge.of electricity as fixed by the Board from time to time under Section. 49(1). On the same line of reasoning the words 'rate schedule' as employed by Clause 7(c) have to be understood. Consequently what the consumer as a contracting party agreed under Clause 7(b) ·Was to the effect that the general rate schedule as mentioned in Annexure 2 at the time of the E execution of the agreement could be .revised and that the general rates of electricity charges could be either increased or decreased by the supplier from time to time and to that exercise undertaken by the. Board, that is the supplier of the electricity, the consumer would have no objection as a contracting party. The term 'revis~on of rate schedule' as employed by F Clause 7(c) itself indicates that the rate.s of charges of electricity .being general .tariff could be either increased or decreased. That has nothing to do with the scheme of incentive· development rebate which is entirely a different concept and withdrawal of development rebate cannot be said to be an upward revision of the general rate schedule for charging the consu~er while being supplied the electricity. These types of standard G contracts have to be examined in the light of the express language found therein and by implication nothing can be read which obviously would be miles away from the real intention of the persons signing such contracts in standard forms.

H It is difficult to appreciate how the High Court could persuade itself

PAWAN ALLOYS AND CASTING PVT. LTD.'· U.P. STATE ELECTRICITY BD. [S.B. MAJMUDAR,l.J 313

to hold in the light of Clause 7(c) that thb appellants while signing such agreements for taking electricity supply for the first time for their new industries as if by sidewind agreed of give up their right to claim development rebate by handing over. on a platter an absolute right to the Board to totally withdraw such development rebate at any time it liked before the three years' period, for which incentive was meant to be guaranteed, would have expired. On the express language of Clause 7(a), (b) and (c) such a conclusion is impossible to be arrived at.

It is also necessary to visualize that under the incentive to new industries scheme as offered by the Board as per Item 8 found in the rate schedule annexed as Annexure 2 to tl>e agreement, the Board had agreed c that the new industrial units will be given for a period of three years from the date of commencement of supply, 10% development rebate on the amount of the bill pertaining to the energy charges incurred by the concerned consumers. It is also obvious that before any new industrial unit can get commencement of supply of electricity it has to enter into such D standard form agreement which included Clause 7(a), (b) and (c). For the very purpose of the incentive to new industries the starting point would be entering into such a written agreement on the basis of which the electric energy supply would commence at these new industrial units. E It would be totally absurd and incongruous to suggest on behalf of the Board that on the one hand it guaranteed to the new industrial units for a period of three years from the date of commencement of supply 10% development rebate of the total amount of the bill and on the other hand moment such supply started pursuant to the written agreement the very incentive could be withdrawn by it from its inception as new industrial unit had to sign a written agreement containing Clause 7 (a), (b) and ( c). If that submission on behalf of the Board which appealed to the High Court is accepted a most incongruous, unreasonable and absurd result would follow. It can then be said that the Board on the one hand had given incentive to new industries by guaranteeing development rebate of 10% on the total bill of consumption of electricity for a period of three years from the date of commencement of supply but from the very inception of that period the Board on the other han<l as per the very agreement with the promisee was enabled to immediately withdraw the very same development rebate in exercise of its contractual powers as per clause 7(c) of that very H

314 SUPREME COURT REPORTS [1997) SUPP. 3 S.C.R.

A agreement. If that happens the Board would be giving on the one hand incentive to new industries by way of development rebate of 10% and by another hand would immediately and almost simultaneously be withdrawing the said incentive by pinning down the consumer to the terms · of the agreement as found at clause 7(a), (b) and (c). This would result in B a total exercise in futility. The incentive development rebate scheme would in such an eventuality be still-born. It is also easy to visualize that a new industrial unit which spends large amounts for establishing its infrastructure and gets lured in the light of the representation held out by the Board and establishes its plant and machinery in the new unit, would C not simultaneously and voluntarily agree by signing such an agreement with the Board to give up the very same benefit of incentive by permitting the latter to withdraw it at any time it likes. That would be doing violence to common sense and business approach of an ordinarily prudent businessman. No businessman in his senses would ever voluntarily to such an absurd, incongruous and inconsistent predicament. D It is, therefore, too much to imply any written consent on the part of a prudent consumer who established new industrial units to at once give up the incentive of development rebate guaranteed in his favour by the Board. Consequently it is not possible for us to endorse the reasoning which appealed to the High Court which decided Issue No. 2 against the appellants.

We, therefore, hold that the new industrial units while signing the written agreements and agreeing .to Clause 7(a), (b) and (c) found in the standard contract forms had only undergone. a formality of signing such agreements before the electric supply could commence at their new units and such clauses only re-affirm the statutory power of the_ Board under Section 49(1) of the Act and had nothing to do with the scheme of incentive development rebate. They had not voluntarily or by even remotest chance agreed to give up the benefit given to them by clear representation held out by the Board as per Item 8 of the rate schedule in the light of the earlier three notifications promulgated by the Bard in exercise of its powers under Section 49 read with Section 78A of the Act.

It must also be held that they have neither expressly nor impliedly agreed that the Board will have absolute power and discretion to withdraw thi~ incentive of development rebate at any time prior to the expiry of three

PAWAN ALLOYS AND CASTING PVT. LTD." U.P. STATE ELECTRICITY BO. [S.S. MAJMUDAR, l.J 315 years for which it was guaranteed to them by the earlier representation held out by the Board and which representation resulted into promissory estoppel against the Board and in favour of the appellants ..

In this connection we may note one aspect of the matter. As per Clause 7( c) the Board could revise upwards the general rates of electricity charges at any time it liked. This had nothing to do with the scheme of incentive rebate. Learned advocates for the appellants conceded this ·authority of the Board. This authority was clearly available to the Board as per Clause 7(c) of the agreement read with Section 49 of the Act. But this increase of general tariff rate would not adversely affect incentive available to new and infant industries. C

Let us take an example to clarify this aspect. If a general rate of electricity tariff for a given class of industries is Rs. 100 per KW and if 10% rebate by way of development incentive is given to new industries, the latter will pay Rs. 90 per KW while other well established industries will pay Rs. D 100 per KW. Thus the goods manufactured by new industries would be cheaper costwise as compared to goods manufactured by well established industries in the region. That will enable the newly established industries to compete more effectively with their senior counterparts. Now if the general rate is increased by the Board even within the three years of the currency of the incentive scheme, to Rs. 200 per KW all the well established industries will have to pay Rs: 200 per KW for the electricity consumed while the new industries which were earlier getting infancy benefit will ·pay Rs. 180 per KW as 10% rebate will still be available to them by way of development rebate. Thus benefit of infancy protection will remain avail- able to the new industries for competing with the old ones even if general tariff rate gets revised upwards for a given class of consumers comprising of new as well as old industries in the field. New industries will, therefore, despite such increase in general tariff rate will be able to sell their products in the same manner as compared to the old established industries as they were doing earlier. Thus the cloak of protection available to them against old competitors in the field will still be available despite any upward revision of the general tariff by the Board in exercise of its powers under Clause 7( c) of the agreement read with Section 49 of the Act. Consequently the provision of revision of general rates under Clause 7( c) of the agree- ment cannot be treated to be conferring any further power on the Board to tinker with the development rebate provision within the guaianteed H

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A period of three years as wrongly assumed by the High Court. Point No. 2 is decided accordingly in the negative in favour of the appellants and against the Board.

PAWAN ALLOYS AND CASTING PVT. LID.'· U.P. STATE ELECTRICITY BD. (S.B. MAJMUDAR, J.) 317

and after 1st August 1986 could not get the benefit of incentive of 10% A development rebate and (ii) all existing new industries which were armed with the guarantee of 10% development rebate under the earlier notifica- tions and had unexpired period out of the three years from the date of earlier commencement of supply of electricity to their concerns lost the benefit for that unexpired period which otherwise would have been avail- B able to them from 1st August 1986 onwards till the entire three years' period which had already commenced would have been over. Both these effects of the notification of 31st July 1986 were purely prospective in character and had no retrospective effect. Consequently it cannot be said that the said notification was liable to be struck down on the score of being retrospective in nature. The third point for consideration, therefore; is answered in the negative.

Point No. 4

In view of our answer to the aforesaid three points, Point No. 4 does not survive for consideration.

As a result of the aforesaid discussion on these points the conclusion becomes· inevitable that the appellants are entitled to succeed. It must be held that the impugned notification of 31st July 1986 will have no adverse effect on the right of the appellant-new industries to get the development rebate of 10% for the unexpired period of three years from the respective dates of commencement of electricity supply at their units from the Board with effect from 1st August 1986 onwards till the entire three years period for each of them got exhausted. This result logically follows for the appellants who have admittedly entered into supply agreements with the Board as new industries prior to 1st August 1986. However those appellants who entered into such agreement after 1st August 1986 cannot get benefit of development rebate any longer after 1st August 1986. This conclusion of ours pertains to the question which is no longer res integra. It is already so held by this Court in S.L.P. (C) No. 11906 of 1994 and others decided by a Bench of this Court consisting of A.M. Ahmadi, CJ. (as His Lordship then was) and S.P. Bharucha, J., in the case of Hotz Hotel Pvt. Ltd. Etc. Etc./Vaidya Ply Board & Anr. v. U.P.S.E.B. & Anr. Etc. Etc. on 3rd October 1994. We find that the appellant in Civil Appeal No. 1713 of 1991 executed agreement with the Board for the first time on 5th May H

318 SUPREME COURT REPORTS (1997] SUPP. 3 S.C.R.

A 1987. Similarly appellant in Civil Appeal No. 3534 of 1991 executed agreement with the Board for the first time after 1.8.1986. These appellants, therefore, will not be entitled to get out of the sweep of the impugned notification. These appeals will, therefore, have to be dismissed.

B It is obvious that after the expiry of the aforesaid three years' period available to them under the earlier notifications the appellants would be liable to pay full electricity charges billed to them by the Board without any development rebate as after the expiry of the said period they would not be protected under any promise by the Board. On the contrary from 31st July 1986 the Board made it very clear to all concerned that no new industry thenceforth would be entitled to any development rebate on getting new supply connections. Thus the appellants also will stand at par with all other industries and will not get benefit of any further development rebate incentive after the aforesaid three years' period in case of each of them had worked itself out. In fairness to the appellants it must be stated that even they did not claim any such extra benefit. It is also true that the present proceedings are confined only to the claim of 10% development rebate on the bills of consumption of electricity _which according to the appellants is available to them for the unexpired period of three years from 1st August 1986 onwards and which development rebate according to the E Board was not available to them.

However before parting with the present appeals we have to clarify two ancillary aspects pertaining to the controversy in these proceedings. At the time of issuing notice in the SLPs as noted earlier the recovery of development rebate charges was not stayed in most of the matters, though as we are informed in some of the matter even that stay came to be indirectly granted. Those appellants who were protected by the grant of stay of recovery of the impugned development rebate charges naturally will not be entitled to claim any refund from the Board even though they succeed in these appeals and the respondent-Board will be permanently restrained from recovering the disputed development rebate charges from them.

However so far as the appellants who were not granted stay by this Court and who have already paid up the disputed development rebate charges to the Board in the light of the High Court's common decision are

PAWAN ALLOYS AND CASTING PVf. LTD.'· U.P. STATEELECTR!Cfrv BD. [S.B. MAJMUDAR.J.] 319

concerned, it must be stated that they represent two types of industries • A (i) those appellants whose industries are still running and who continue to be enrolled as consumers of electricity by the Board; and (ii) those of the appellants who had established their industries but by now who might have ceased to be consumers of electricity from the respondents in any of the areas ~thin.the jurisdiction of the Board on account of closure of their industries in the State ofU.P. So far as the first category of such appellants is concerned, instead of directing refund of the amount of disputed development rebate charges which they might have paid to the Board it will be in the fitness of things to direct the Board to credit this amount to the respective running accounts of such appellants concerned and the future bills of electricity which the appellants may be required to pay to the Board may be adjusted from thi~ credited account so that the appel- lants as consumers may not have to pay all future bills of electricity consumed by their industries till the entire credit out standing in their respective accounts in this connection gets exh.austed. The Board shall give written intimation to the appellants concerned regarding posting of such credit entries in their respective accounts.

So far as the second category of appellants are concerned as they are no longer consumers of electridty from the Board in any part of the State of U.P. appropriate order will be to direct the Board to return the disputed development rebate charges collected from them from 1st August 1986 E onwards for the unexpired period of three years within three months of the receipt of a copy of this order at its end.

Now remains the question of interest to be payable to the appellants on the disputed amount which is either to be credited to their accounts or refunded to them as per the aforesaid directions. Shri Dave, learned senior counsel for the Board was right when he contended that all these appel- lants are commercial concerns and when they purchase electricity the cost of electricity would normally not be borne by these industrialists but they would see to it that the said expenditure enters their cost structure and pricing so that ultimately the burden would be passed on to the purchasers of the items manufactured by them by utilising the electric supply pur- chased from the Board. Even though the appellants might have paid these disputed amounts to the Board as stay was refused by this Court so far as development rebate charges are concerned, they would in all probability have spread the said burden in a phased manner by including it in the cost H

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A structure on the basis of which they would have worked out their future pricing for the goods manufactured by them and sold to consumers or outside wholesale dealers. Consequently, according to Shri Dave, on the principle of unjust enrichment even they would not be entitled to get refund of the amount, much less any interest thereon.

B So far as the refund question is concerned, on the basic principle of restitution and in the absence of any clear evidence or even averment on this aspect it is not possible for us to come to any definite finding that all the disputed amounts of development rebate charges would have entered the cost structure of the appellants after the earlier three years period had run out. As we have seen earlier, the dispute centered round only the unexpired period of three years from the commencement of electric supply for t!i.ese new industries as was available to them after 1st August 1986.

Even assuming about two and a half years period would have been available to some of them at the highest, that period would have been over by the beginning of year 1989 and the stay was refused by this Court on 6th February 1991. Till that time all the appellants were protected by the interim relief earlier granted by the High Court. Consequently it would not be possible to clearly visualize with any degree of certainty that for the goods which the appellants might have manufactured after February 1991 E they would have spread over in a phased manner burden of the past disputed development rebate charges for a period which already got ex- hausted at least two years before 1991.

However this aspect may have some relevance from the practical p viewpoint when we have to deal with the claim for interest on disputed amounts raised by worldly businessmen like the appellant-industrialists carrying on commercial transactions. Their claim for interest, in our view, deserves to be rejected in exercise of our powers under Article 142 of the Constitution of India on the peculiar facts and circumstances of these cases as indicated earlier when at least the possibility cannot be ruled out that while pricing the manufactured goods in future the appellants, as shrewd businessmen and men of commercial world, would have seen to it that ultimately the burden borne by them by way of recovery of development rebate charges gets passed on to their consumers in long run and their profits would remain in tact. Keeping in view this possibility we deem it fit in interest of justice and in exercise of our powers under Article 142 of the

PAWAN ALLOYS AND CASTING PVT. L'ID. '· U.P. STATl!ELECTRICITYBD. (S.B. MAJMUDAR,J.) 321

Constitution of India to desist from mulcting the Board with interest on A , the refund of development rebate charges which the Board has to make available to them pursuant to the present order.

We, however, make it clear that the Board shall, within a period of three months, for appellants falling in category (i) above give full credit in their respective running accounts for the disputed amount of development rebate charges which the Board recovered from them after this Court denied interim relief to them on 6th February 1991 and within the same period of three months it will refund the principal amount of recovered disputed development rebate charges without any interest to the appellants falling in category (ii) who might have ceased to be consumers of electricity from the Board in any part of the Stat'e of U.P. It is further directed that in case such credit is. not given within that period or refund is not made available within that period to the appellants falling in these respective two categories then on the expiry of the period of three months' such amount shall start earning interest at the rate of 12% p.a. for the benefit of the appellants concerned till actual effecting of credit entries in their respective accounts or till actual payment to the appellants concerned, as the case maybe.

All appeals (except Civil Appea!Nos.1713of1991and3534of1991) are allowed accordingly. The common judgment of the High Court in these appeals is sci aside. Writ petitions filed by these appellants will stand allowed in the aforesaid terms. However Civil Appeal Nos. 1713 and 3534 of 1991 will stand dismissed. In the facts and circumstances of the cases there will be no order as to costs in each of these appeals.

S.V.K.I. Appeals allowed. p