Holding

The Uttar Pradesh Electricity Regulatory Commission alone has exclusive jurisdiction to determine and modify tariffs, and the doctrine of promissory estoppel applies, so the earlier LML Ltd. judgment stands.

Summary

The appellant, M/s Badri Kedar Paper Pvt Ltd, challenged the withdrawal of a circular issued by U.P. Power Corporation Ltd that affected the surcharge for a guaranteed 500‑hour power supply. The issue was whether the Uttar Pradesh Electricity Regulatory Commission (UPERC) alone has exclusive jurisdiction to determine and modify electricity tariffs under the Uttar Pradesh Electricity Reforms Act, 1999, and whether the doctrine of promissory estoppel could bind the corporation to its earlier circular. The Supreme Court reaffirmed that, under s.24 of the 1999 Act, only UPERC may determine or alter tariffs, and any modification by a licensee must be under the Commission’s direction following the prescribed regulations. It held that the doctrine of promissory estoppel applies as earlier decided in LML Ltd., so the earlier judgment need not be revisited. Consequently, the appeal was allowed, directing the respondents to refund the entire amount paid by the appellant within four weeks and to bear costs, including a counsel’s fee.

Issues considered

The exclusive jurisdiction of the Uttar Pradesh Electricity Regulatory Commission to determine and modify electricity tariffs under s.24 of the Uttar Pradesh Electricity Reforms Act, 1999.
The applicability of the doctrine of promissory estoppel to the circular issued by U.P. Power Corporation Ltd.
Whether the earlier Supreme Court decision in LML Ltd. v. State of Uttar Pradesh requires reconsideration.
The validity of the withdrawal of the circular concerning the 15% surcharge for a 500‑hour supply guarantee.

Legislation cited

Uttar Pradesh Electricity Reforms Act, 1999s. 24, s. 24(6)

Subjects

electricity tariffregulatory commissionexclusive jurisdictionpromissory estoppelUttar Pradesh Electricity Reforms Actcircular withdrawalconsumer protectionlicensee modification

Judgment

[2008] 17 S.C.R. 1555

M/S BADRI KEDAR PAPER PVT. LTD. A
v.
U.P. ELECTRICITY REGULATORY COMMN. & ORS.
--\
(Civil Appeal No. 7433 of 2008)
DECEMBER 19, 2008
B
[S.B. SINHA AND CYRIAC JOSEPH, JJ.]

Uttar Pradesh Electricity Reforms Act,_ 1999 - s.24 -
Electricity tariff- Determination/modification of- Held: In view
of provisions of the Act as also regulations framed thereunder, C
U.P. Electricity Regulatory Commission alone has exclusive
jurisdiction to determine tariff - Even for modification and/or
alteration of tariff, the Commission must be approached -
Tariff in terms of s.24(6) to be modified by licensee albeit in
terms of direction issued by Commission, wheretobefore all D
procedures laid down in that behalf in terms of the regulations
are required to be complied with.
Doctrines - Doctrine of promissory estoppel - 1

Applicability of- In matter of implementation of electricity tariff.
Validity of the action of withdrawal of a circular letter E
issued by the U.P. Power Corporation Ltd. (respondent
No.2) was the subject matter of the writ petitions filed
before the High Court. The writ petitions were dismissed.
The writ petitioners filed appeals before this Court.
Earlier in LML Ltd. case, this Court had allowed
appeals against the Corporation. It is the contention of
the Corporation that the decision in LML case required
re-consideration.
Allowing the appeal with directions, the Court
G
HELD:1.1. In LML Ltd. case, this Court proceeded on
the basis that it was the U.P. Electricity Regulatory
Commission alone who had the exclusive jurisdiction to
determine the tariff. In view of the provisions of the Uttar
1555 H
1556 SUPREME COURT REPORTS [2008] 17 S.C.R.

A Pradesh Electricity Reforms Act, 1999 as also the
regulations framed thereunder, as the law stands now,
there cannot be any doubt or dispute tha_t the ,J-L
Commission alone has the exclusive jurisdiction and
even for the purpose of modification and/ or alteration of
B tariff, the Commission must be approached. The
submission on behalf of the respondent that in that
judgment, this Court had held that sub-section (6) of s.24
of the 1999 Act empowers the holders of the licence to .
modify the tariff, is incorrect. The tariff in terms of Sub-
c section (6) of s.24 has to be modified by the licensee
~
albeit in terms of a direction issued by the Commission,
wheretobefore all procedures laid down in that behalf in
terms of the regulations are required to be complied with. -;
There cannot further be any doubt or dispute that the
D Commission has the exclusive jurisdiction to determine
the tariff. [Paras 12, 13 and 14] [1564-C-G]
1.2. This Court in LML Ltd. however, proceeded to hold
in favour of the consumers of electrical energy on the
premise that the Corporation was bound by the doctrine
E of promissory estoppel. The matter as regards fulfillment
of the conditions of licence granted by the Commission
in favour of the licensee is a matter between the parties
thereto. If the Corporation fails to comply with any of the
conditions laid down in the licence or violates the tariff,
the licence of the licensee may be revoked. A penal action
F
may also be taken. But the same would not mean that the
licensee can be permitted to take advantage of its own J
wrong. It can approbate and reprobate, particularly when
it is the beneficiary thereof. It is furthermore well known
that even a right under a mandatory provision can be
G waived. If it had made a representation pursuant whereto
or in furtherance whereof a consumer of electrical energy
had altered its position, the doctrine of promissory
estoppel shall apply. The doctrine of promissory estoppel (
applies also in the realm of a statute. It is not the
H
,,
M/S SADRI KEDAR PAPER PVT. LTD. v. U.P. 1557
ELECTRICITY REGULATORY COMMN. & ORS.

contention of respondent that in the matter of A
implementation of tariff the doctrine of promissory
'-4
estoppel will have no application. If it applies, correctness
of LML Ltd. cannot be questioned and therefore, LML Ltd
does not require reconsideration. This appeal shall also
be governed by the aforementioned judgment. [Paras 15, B
16 and 18] (1564-G-H; 1565-A-F; 1566-B-C]
BSES Ltd. v. Tata Power Co. Ltd. and Others ((2004) 1
SCC 195]; West Bengal Electricity Regulatory Commission
~
v. CESC Ltd. [(2002) 8 SCC 715]; Association of Industrial
Electricity Users v. State of A.P. and Others [(2002) 3 SCC c
711]; LML Ltd. v. State of Uttar Pradesh and Others (2008) 3
SCC 128; Nagubai Ammal v. B. Shama Rao (1956) SCR
451; C. Beepathuma v. Velasari Shankaranarayana
Kadambolithaya (1964) 5 SCR 836; State of Punjab v. Nestle
India Ltd. and Another (2004) 6 SCC 465 and Southern! D
Petrochemical Industries Co. Ltd. v. Electricity Inspector &
ETIO and Others (2007) 5 sec 447, relied on.
~

j
Ambu Nair and Kelu Nair (1932-33) 60 Indian Appeals
266, referred to.
Halsbury's Laws of England, Fourth Edition, Vol. 16, E
pages 1012-1013- referred to.
Case Law Reference:
(2008) 3 sec 128 relied on Para 3
(2004) 1 sec 195 relied on Para 9 F
(2002) 8 sec 115 relied on Para 9
"" (2002) 3 sec 111 relied on Para 9
(1956) SCR 451 relied on Para 15
(1964) 5 SCR 836 relied on Para 15 1

(1932-33) 60 Indian referred to Para 15 G
Appeals 266
...__~
(2008) 8 SCALE 206 relied on Para 15
(2004) 6 sec 465 relied on Para 15
(2001) 5 sec 447 relied on
• Para 15
H·
1558 SUPREME COURT REPORTS [2008] 17 S.C.R.

A CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7433 of 2008.
From the final Judgment and Order dated 19.10.2006 of
v
the High Court of Judicature at Allahabad, Lucknow Bench,
Lucknow in Writ Petition No. 7279 (M/B) of 2002.
B
Ankur Saigal, Bina Gupta and Gaurav Singh for the
Appellant.
Pradeep Misra and Suresh Chandra Tripathy for the
Respondents. ~

c The Judgment of the Court was delivered by ~

S.B. SINHA, J.1. Leave granted.
2. Validity of an action of withdrawal of a circular letter
dated 8.09.2000 issued by the U.P. Power Corporation Ltd.
(Respondent No. 2 herein) was the subject matter of ten writ
D applications filed before the High Court. The said writ petitions
were dismissed.
3. The writ petitioners preferred appeals before us upon .
\
obtaining special leave. This Court in LML Ltd. v. State of Uttar
Pradesh and Others [(2008) 3 SCC 128) allowed the appeals
E
against the Corporation. The appellant before us is against the
said common judgment of the High Court. In LML Ltd. (supra),
this Court, inter alia, held:
"50. The proximity of issuance of the circular vis-a-
vis notification must also be noticed. The tariff was framed
F
on 7-8-2000 which came into force tr9m 9-8-2000
whereas the Circular was issued on 8-9-2000. The
,.
consumers exercised their option on 31-10-2000. The
judgment in LML 1 was delivered on 25-4-2001. The
Circular dated 31-8-2001 undoubtedly was issued in view
G of the said judgment. The said judgment did not deal with ,.
the questions raised before us. In any event if the licensee
violates the tariff approved by the Commission appropriate
legal action can be taken against it. But it would be too f
much to contend that for a mistake on the part of the
H ~
SADRI KEDAR PAPER PVT. LTD. v. U.P. 1559
ELECTRICITY REGULATORY COMMN. [S.S. SINHA, J.]

Corporation, the consumers would suffer. In this view of the A
matter, we are of the· considered view that the doctrine of
~ estoppel shall apply in the cases where the promise was
made. However, the principle of said doctrine would,
however, not be applicable where no such promise was
made." B
4. Mr. Pradeep Misra, learned counsel appearing on
behalf of the respondent No. 1 - corporation, however, would
submit that the said decision should not be followed by us as
a review petition had been filed. It was urged that in any event
the said decision requires reconsideration. c
The said review petition, we may place on record, has been
dismissed by a Bench of this Court by an order dated
20.02.2008.
5. We, therefore, proceed to deal with the submission. of
D
Mr. Misra before us that the said decision requires
reconsideration.
For the purpose of appreciating the said contention, we
may notice at the outset the basic fact of the matter.
Legislature of the State of Uttar Pradesh-enacted the Uttar E
Pradesh Electricity Reforms Act, 1999 (for short "the 1999
Act") in terms whereof the U.P. Electricity Regulatory
Commission (for short "the Commission") was constituted. For
determination of tariff in terms of the 1999 Act, the Commission
was approached by the respondent No. 2. Tariff was F ·--
determined, relevant portion whereof reads as under:
"RATE SCHEDULE HV-2
LARGE AND HEAVY POWER
1. Applicability
G
This rate schedule shall apply to all consumers who
have contracted load of more than 75 kW (100 BHP) for
industrial and/or processing purposes as well as to Arc/
induction, furnaces rolling/re-rolling mills, mini steel plants
....,.... ,r
and to any other power consumers not covered under any
...., H
,,.
1560 SUPREME COURT REPORTS [2008] 17 S.C.R.

A other rate schedule.
This rate schedule shall also apply to commercial
r-~
light, fan and power consumers (LMV-2) and power
consumers of Rate Schedule LMV-6, subject to the
condition that they opt for this rate schedule.
B
The contracted demand shall be expressed in whole
number only.
2.-3. * * *
4. Rate of charge
c Description Demand charge
~

Energy charge
A. Basic rate (applicable to urban consumers) Rs
130 per kVA/month PLUS 390 paise/
kWh
D
Notes.-(a) In respect of consumers who opt for power
supply during restricted/peak hours an additional surcharge
of 15% on the amount billed at the "Rate of Charge" under
\
Item 4'"A above i.e. demand charge and energy charge
shall be levied.
E
However, in respect of consumers getting power :..,
supply on independent feeders emanating from 400/220/
132 kV substations an additional surcharge of 15% on
demand and energy charges shall be charged further
subject to the condition that these consumers will get an (·
F '
assured supply of minimum 500 hours in a month. In case 4

of shortfall in above guaranteed hours of supply a rebate
J ,,
@ 1% for each 10 hours' shortfall will be admissible on
the bill amount computed under "Rate of Charge".
(b)-(c) * * *
G
(d) In respect of supply during peak hours/restricted
hours, the consumers shall have to take the permission ~

from UPPCL."
6. A confusion arose as regards interpretation of the "'
H
....
"'
SADRI KEDAR PAPER PVT. LTD. v. U.P. 1561
ELECTRICITY REGULATORY COMMN. [S.B. SINHA, J.]

purported levy. The U.P. Power Corporation issued a circular A
calling for options from the consumers of electrical energy as
•
-..
.....__

to whether they intended to have a continuous power supply of
500 hours in a month. Pursuant to or in furtherance of the said
circular, appellant along with others exercised an option stating
that they did not intend to have 500 hours of continuous supply. B
Another circular letter was issued by the U.P. Power

... Corporation Ltd. on 15.12.2000, the relevant portion whereof
reads, thus:
"U.P. Electricity Regulatory Commission in its
f c.
revised tariff for the year 2000-2001 applicable to HV-2
rate schedule consumers who are getting supply from
independent feeders for levy of 15% surcharge on the
guarantee of 500 hours of power supply per month.
In this regard, detailed guidelines have been issued
D
by this office vide Letter No. 1423 dated 9-8-2000.
In this regard, it is directed that those consumers
who will exercise option, of not availing 500 hours'
guaranteed supply, through a registered letter to Executive-
Engineer (Distribution) by 31-12-2000, they will not be E
charged 15% surcharge from the very date of its
applicability i.e. 7-8-2000. For consumers, who will submit
their option after 31-12-2000, this facility will be applicable
from the date of receipt of the application."
The said policy decision, however, was not adopted by F
~
other suppliers of electricity.
7. Indisputably, LML Ltd. filed a writ application before the
High Court. A Division Bench of the Allahabad High Court in a
judgment (since reported in AIR 2001 All 321) inter alia held
that the said circular letters were illegal and, thus, void opining G
that it was the Commission alone who could fix the tariff and,
thus, the same could not have been modified or altered by any
......
licensee.
The impugned circular was, thereafter, issued withdrawing
H
1562 SUPREME COURT REPORTS [2008) 17 S.C.R.

A the aforementioned circulars.
•
8. At the outset, Mr. Pradeep Misra, learned counsel ,,.._,,_'
appearing on behalf of the respondents, would submit that in
the writ petition an order of stay was granted which was later
on v~cated. However, the appellant herein prayed for payment
B of dues in instalments which was allowed by an office memo
16.03.2004, the relevant portion whereof reads as under:
"6. According to the own request of the consumer,
-4,,;._
he will submit an affidavit to the concerned Executive
Engineer (Distribution) that if he gets any order from ~
c Hon'ble Court in. this case for stay of this amount then also
he will continue to pay the installments regularly till the
entire payable amount is not paid."
A Director of the appellant - company is said to have
affirmed an affidavit pursuant thereto, stating:"'
D
"3. That on my application Managing Director,
Pashchimanchal Vidyut Vitran Nigam Ltd., Meerut vide
letter No. 1670 dated 16.03.2004 has issued order to
deposit the aforesaid outstanding amount in six monthly
installments.
E
4. That besides the conditions mentioned in the
aforesaid letter, I further assure that even if we get any stay
order regarding the said amount by Hon'ble High Court in
the said case, we will continue to pay six monthly
F installments regularly."
Indisputably, the entire amount of Rs. 21, 13,031/- together
with interest amounting to Rs. 10, 16,815/- had been deposited
in terms of the said undertaking.
9. Mr. Misra would submit that in that view of the matter,
G this special leave petition is not maintainable.
The learned counsel would further contend that even
~
otherwise the judgment of this Court requires reconsideration ~
as it had wrongly been held in paragraph 43 thereof that the
Commission did not take any decision despite repeated
H
SADRI KEDAR PAPER PVT. LTD. v. U.P. 1563
ELECTRICITY REGULATORY COMMN. [S.B. SINHA, J.]
communications by the Power Corporation praying for A
modification of the tariff in terms of the provisions of the 1999
.....,
.... Act and the regulations framed thereunder and in that view of
the matter, it was only the Commission which could not only
frame tariff but also make amendments thereto. It was urged
that finding of this Court that Sub-section (6) of Section 24 of B.
the 1999 Act inter alia empowers the holders of the licence to
modify the tariff is patently incorrect. In support of the said
contention reliance has been placed on BSES Ltd. v. Tata
.> Power Co. Ltd. and Others [(2004) 1 SCC 195], West Bengal
Electricity Regulatory Commission v. CESC Ltd. [(2002) 8 c
' SCC 715] and Association of Industrial Electricity Users v.
State of A.P. and Others [(2002) 3 SCC 711]
10. It was contended that in LML Ltd. (supra), the
regulations framed by the State had inadvyrtently not been
placed; from a perusal whereof it would appear that it was the o'
Commission only who could amend the tariff.
11. We are unable to agree with Mr. Misra on any of the
aforementioned contentions.
When questioned, Mr. Misra concede.d that the affidavit
affirmed in support of the representation filed by the appellant E
as regards payment of the amount had not been brought to the
notice of the High Court. Concededly again it had also not been
contended before the High Court that in view of the
aforementioned event subsequent to the filing of the writ
application by the appellant, the writ petition became F
infructuous. Had such contention been raised before the High
Court, it might not have exercised its discretionary jurisdiction.
Such a contention had not only been raised before the High
Court, the respondent No. 1 allowed the High Court to
determine the issues arising therein on their own merit, without G
any demur whatsoever.
In our opinion, the respondent No. 1 cannot be permitted
._
\ to raise such a contention befor~ us for the first time. Even
otherwise in the affidavit, the appellant merely stated that even
• H
1564 SUPREME COURT REPORTS [2008] 17 S.C.R.

A
if a stay order is granted by the High Court, the six-monthly
instalments would be paid regularly. Appellant had not
contended that the writ petition would be withdrawn or even if
the writ petition is allowed, it would not ask for refund of the
amount deposited. It is neither in doubt nor in dispute that such
8
an undertaking had to be given by the appellant only with a view
to avoid disconnection of electrical energy. If by reason of the
circular impugned before the High Court, the appellant was
entitled to maintain a writ application; by reason of such
C representation, it did not waive its right.
12. In LML Ltd. (supra), this Court proceeded on the basis
that it was the Commission alone who had the exclusive
jurisdiction to determine the tariff. In view of the provisions of
the 1999 Act as also the regulations framed thereunder, as the
law stands now, there cannot be any doubt or dispute that the
0
Commission atone has the exclusive jurisdiction and even for
the purpose of modification and/ or alteration of tariff, the
Commission must be approached.
13. Submission of Mr. Misra that in paragraphs 43 and 44
E of the judgment this Court had held that s\,Jb-section (6) of
Section 24 of the 1999 Act empowers the holders of the
licence to modify the tariff, is incorrect. The tariff in terms of
Sub-section (6) of Section 24 has to be modified by the licensee
albeit in terms of a direction issued by the Commission,
F wheretobefore all procedures laid down in that behalf in terms
of the regulations are required to be complied with. The
statement made in paragraph 44 of the said decision cannot
be read in isolation.
14. There cannot further be any doubt or dispute in view
G of the binding precedent of this Court in Tata Power CQ. Ltd.
(supra), CESC Ltd. (supra) and Association of Industrial
Electricity Users (supra) that the Commission has the exclusive
jurisdiction to determine the tariff.
15. This Court in LML Ltd.- (supra), however, proceeded
H to hold in favour of the consumers of electrical energy on the ...
SADRI KEDAR PAPER PVT. LTD. v. U.P. 1565
ELECTRICITY REGULATORY COMMN. [S.B. SINHA, J.]

premise that the respondent No. 1 is bound by the doctrine of A
promissory estoppel.
....._
~
The matter as regards fulfillment of the conditions of licence
granted by the Commission in favour of the licensee is a matter
between the parties thereto. If the Corporation fails to comply
with any of the conditions laid down in the licence or violates 8
the tariff, the licence of the licensee may be revoked. A penal
action may also be taken. But the same would not mean that
the licensee can be permitted to take advantage of its own
wrong. It can approbate and reprobate, particularly when it is
~ the beneficiary thereof. [See Halsbury's Laws of England, Fourth c
Edition, Vol. 16, pages 1012-1013, Nagubai Ammal v. B.
Shama Rao (1956) SCR 451, C. Beepathuma v. Velasari
Shankaranarayana Kadambolithaya (1964) 5 SCR 836 and
Ambu Nair and Kelu Nair (1932-33) 60 Indian Appeals 266
at 271-272] It is furthermore well known that even a right under D
a mandatory provision can be waived. [See Babula/
Badriprasad Varma v. Surat Municipal Corporation & Ors.
2008 (8) SCALE 206] If it had made a representation pursuant
whereto or in furtherance whereof a consumer of electrical
energy had altered its position, the doctrine of promissory E
estoppel shall apply. The doctrine of promissory estoppel, it is
now well-settled, applies also in the realm of a statute. [See
State of Punjab v. Nestle India Ltd. and Another (2004) 6 SCC
465 and Southern Petrochemical Industries Co. Ltd. v.
Electricity Inspector & ETIO and Others (2007) 5 SCC 44 7]
F
16. It is not the contention of Mr. Misra that in the matter of
i-.
implementation of tariff the doctrine of promissory estoppel will
have no application. If it applies, correctness of LML Ltd.
(supra) cannot be questioned.
Furthermore, the Allahabad High Court in the first round G
of litigation was not required to go into the question as to
whether the LML Ltd. could enforce a circular as against the
..,.. Kanpur Electricity Supply Company although it did not make
\
any representation. The question of the tariff prevailing over
such circular did not arise therein as no such circular had been H
1566 SUPREME COURT REPORTS [2008] 17 S.C.R.

A issued by the Kanpur Electricity Supply Company at all.
17. The circular impugned before the High Court was
undoubtedly issued pursuant to the judgment of the Division
Bench of the Allahabad High Court but then whether having
regard to the doctrine of promissory estoppal the same could
B have been withdrawn or not, further determination in that behalf
was not warranted.
18. We, therefore, are of the opinion that LML Ltd. (supra)
does not require reconsideration. This appeal shall also be
governed by the aforementioned judgment. The appeal Is
C allowed with the direction to refund the entire amount within four
-
weeks. Respondent shall bear the costs of the appellant
throughout. Counsel's fee assessed at Rs. 1,00,000/-.
B.B.B. Appeal allowed.

-
,
>-.