M/S. NAVA BHARAT FERRO ALLOYS LTD.versusTRANSMISSION CORPORATION OF A.P. LTD. AND ANR

                  [2010] 14 (ADDL.) S.C.R. 900


A          M/S. NAVA BHARAT FERRO ALLOYS LTD.
                                 v.
    TRANSMISSION CORPORATION OF A.P. LTD. AND ANR ..,
              (Civil appeal No. 1607 of 2004)
                      NOVEMBER 18, 2010
B
        [MARKANDEY KATJU AND T.S. THAKUR, JJ.)

       Interim order: Held: A party who fails in the main
  proceedings cannot benefit from the interim order issued
C during the pendency of such proceedings - On facts, in a writ
  petition, interim order of stay was passed against the
  collection of the disputed amount in favour of c,onsumers -
  However, writ petition was dismissed by the Court - The fact
  that consumers did not make the payment on account of the
D operation of interim stay would not affect the enforceability of
  the demand of the disputed amount - Demand for payment
  of additional charges recoverable on account of the delay in
  the payment of the outstanding dues upheld - Electricity laws
  - Electricity (Supply) Act, 1948 - s.49 - Clause 32.2.1.and
E 34 of the Terms and Conditions of supply (TCS).
       The instant appeals by special leave arise out of an
  order passed by the High Court whereby writ petitions
  filed by the appellant were dismissed and the demand for
  additional charges/surcharge payable on the delayed
F payment of outstanding electricity dues raised under
  Clause 32.2.1 and 34 of the Terms and Conditions of
  supply (TCS) was upheld.

      The High Court had held that TCS were statutory in
G character and were not in conflict with any provision of
  the Electricity Supply Act or the Constitution of India. It
  also held that Clause 32.2.1 and Clause 34 of the said
  Terms and Conditions of Supply upon which the Board
  placed reliance for its demand did not violate any
                                 900
 NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 901
              CORPN. OF A.P. LTD.

 constitutional or statutory provision. The stipulated terms A
 and conditions were, according to the High Court,
 intended to achieve the objective mentioned in Clause (b)
 of sub-section 2 of Section 49 of the Act, -namely, to
 discourage delayed payment of electricity dues and to
 compensate the Board in cases of delay in the making B
 of the payment. Both these conditions, according to the
 High Court were intended to sustain the economic health
 of the Board.

       The appellants contended tJ1at the High Court had
  fallen in error in declining relief to the appellant which C
  according to them was due to it on the analogy of the
  orders of this Court in Kera/a State Electricity Board's
  case. It was submitted that in the light of the decision of
  this Court in Kera/a State Electricity Board's case the
  appellant-consumers could not be said to be in. default D ·
  of payment of the outstanding amount during the period
  the interim order passed by the High Court in its favour
  had remained operative. It was further contended that this
  Court had in the above case and in Kanoria Chemicals's
  case dealt with a similar fact situation and granted relief, E ·
  by awarding interest@ 18% to the Board to compensate
  it for the monetary loss that it may hav,e suffered on
  account of delay in the making of such payment and to
  prevent any prejudice and consequent injustice to the
  Board on account of the direction issued by the Court. It . F
  was argued that the appellant-company was ready and
  willing to pay interest @ 18% p.a. on the outstanding
. amount for the relevant period but the demand raised by
  the Board being far in excess, deserves to be suitably
  reduced.                                                     G

      Dismissing the appeals, the Court

     HELD:1.1. There is a basic fallacy in the analogy
 which the appellant draws between its case and the
                                                               H
    902   SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A   cases referred to above. What is overlooked by the
    appellant is the fact that the decision of this Court in the
    Kera/a State Electricity Board's case enforced the terms
    under which the supply of energy was made to the
    consumers in that case. Award of interest@ 18% p.a. is
B   not an innovation of this Court. The consequence of non-
    payment of the amount within the time stipulated was on
    the contrary prescribed in the tariff/ conditions subject to
    which energy was supplied to MRF the consumer in that
    case. It would not, therefore, be correct to apply the tariff
c   conditions relevant to that case to the case at hand
    where such conditions are materially different. In that
    case, it is quite evident that this Court had upheld the
    claim for payment of interest @ 18% p.a. primarily
    because of the stipulation contained in the tariffs/
    agreement executed between the Board and the
D
    consumer providing for payment of interest at that rate
    in the event of delay in the payment/discharge of the bills
    raised against the consumer. It is not as though this Court
    had refused to enforce the stipulation contained in the
    tariffs providing for recovery of interest from the
E   consumer if the latter failed to pay the amounts within the
    time stipulated. It is also manifest that this Court had in
    no uncertain terms held that even after the upward
    revisions of the tariffs had remained unenforceable for a
    certain period on account of erroneous judgment of the
F   High Court, the moment the said judgment was set aside
    in appeal, the liability to pay revived with full force from
    the date the revisions were made effective. The very fact
    there was during the intervening period an erroneous
    decision of the High Court obliterating the revision in full
G   or in part would make little difference in so far as the
    liability to pay the amount under the revised tariffs was
    concerned. So also the fact that the consumers were not
    deliberately in default on account of the judgment of the
    High Court did not affect the enforceability of the demand
H
NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 903 .
             CORPN. OF A.P. LTD.

arising from the revised tariffs or the stipulation              A
regarding payment of interest demanded on the same on
account of the non-payment or delayed payment of the
amount recoverable by the Board. [Paras 10, 18] (911-A-
D; 915-8-G]
                                                                 B
      1.2. The decision of this Court in the case of Kera/a
State Electricity Board does not grant any relief to a
defaulting consumer once the demand is upheld nor does
it interfere with the principle of restitution which would
entitle the successful party to be relegated back to the         C
position it would hold had there been no judgment
adverse to it. (Para 19] [915-H; 916-A]

      1.3. Super added to all this is the fact that this Court
was dealing with a case where the High Court had finally
struck down the revised tariff, but the said decision was        D
reversed in appeal. In the present case the appellant had
obtained only an ad interim order of stay against the
enforcement of the tariffs. There is a qualitative difference
in the two situations. Even if one were to take a
charitable view of the legal effect of any direction of the      E
High Court, pending adjudication by the Court, cases in
which the High Court finally held the tariffs to be bad
would stand on a different footing than cases where the
party obtains an order granting interim protection to it.
While there is an element of finality in the case of a final     F
adjudication by a competent Court in so far as that Court
is concerned, an interim order can be vacated at any
stage. The interim order may not even prevent a prudent
party from paying the charges according to the revised
tariffs if it does not propose to take any chance and suffer     G.
recovery of an additional amount on account of the non-
payment of tile dues by the date stipulated for the
purpose. [Para 20] (916-A-E]

    1.4.The decision of this Court in Kera/a State
Electricity Board's case does not lend any support to the        H
    904   SUPREME COURT REPORTS [2010) 14 (ADDL.) S.C.R.


A appellant-company in its endeavour to avoid payment of
  the amount which became recoverable from it no sooner
  the judgment of the High Court was reversed in the earlier
  round of litigation upholding the revision of the tariffs.
  [Para 21) [917-A-B]
B
       2. The decision of this Court in Kanoria Chemicals
  and Industries Ltd. was also a case where the validity of
  a notification issued by the U.P. State Electricity Board
  revising the electricity rates/tariffs under Section 49 of the
  Electricity (Supply) Act, 1948 was challenged by the
C consumers. Interlocutory applications filed in the writ
  petitions for stay of the operation of the impugned
  notification were eventually dismissed by the High Court
  whereupon the consumers deposited the differential
  amount between the pre-revised and the revised
D electricity rates. Consumers did not, however, deposit the
  late payment surcharge "recoverable" in terms of Clause
  7(b) of the notification. Notices of demand were, therefore,
  issued to the consumers which were challenged in a
  fresh batch of writ petitions filed by them. The main
E contention urged by the consumers before the High
  Court was that since the operation of the notification
  revising the tariffs had been stayed, no late payment
  surcharge could be levied on the amount withheld by the
  petitioners under the orders of the Court, no matter the
F writ petitions were finally dismissed. That contention was
  rejected by a Division Bench of the High Court of
  Allahabad. The matter was then brought up to this Court
  in appeal by the consumers, inter alia, contending that
  the stay of the operation of the impugned notification
G relieved the consumers of the obligation to pay the
  revised tariffs/rates and consequently additional charges
  for late payment, if any. Both on the question of restitution
  of the benefit drawn by a party during legal proceedings
  that eventually fail as also on the general principle that a
H
NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 905
             CORPN. OF A.P. LTD.

party who fails in the main proceedings cannot benefit A
from the interim order issued during the pendency of
such proceedings, this Court fo.und against the
consumers and upheld the demand for payment of
additional charges recoverable on account of the delay
in the payment of the outstanding dues. Far from lending. s
any assistance to the appellant-company the decision.
squarely goes against it. [Paras 22, 24) (917-8-G; 920-A;
919-G-H]
     Kera/a State Electricity Board v. MRF Limited (1996) 1 .
SCC 597; Kanoria Chemicals and Industries Ltd. and Ors. C
v. U.P. State Electricity Board and Ors. (1997) 5 SCC 772;
Shree Chamundi Mopeds Ltd. v. Church of South India Trust
Association CS/ Cinod Secretariat, Madras 1992 (3) SCC 1;
Adoni Ginning Factory v. Secy. A.P. Electricity Board (1979)
4 SCC 560 - referred to.           .                         .D

    Rodger v. Comptoir D'Escompte de Paris 1871 (3) PC
465 - referred to.
                     Case Law Reference:
                                                              .E
    (1996) 1 sec 597           referred to        Para 6
    (1997) 5 sec 112           referred to        Para 6
    1871 (3) PC 465            referred to        Para 16
                                                              F
    1992 (3) sec 1             referred to        Para 20
    (1979) 4 sec 560           referred to        Para 22
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1607 of 2004.                                                 G
     From the Judgment & Order dated 06.06.2002 of the High
Court of Judicature of Andhra Pradesh at Hyderabad in Writ
Petition No. 13458 of 1993.

                                                              H
    906    SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A                                  WITH

    C.A. Nos. 1608-1609 of 2004 & 4741 of 2006.

        Sudheer Chandra Agarwal, C. Kodanda Ram, Vismai
    Rao, Hari Shankar, K., T. Vikaram, Y. Raja Gopala Rao for the
B   Appellant.

          Rakesh K. Sharma for the Respondents.

          The Judgment of the Court was delivered by
c        T.S. THAKUR, J. 1. These appeals by special leave arise
    out of an order dated 6th June, 2002 passed by the High Court
    of Andhra Pradesh whereby Writ Petitions No.9081 of 1999
    and 13458 of 1993 filed by the appellant have been dismissed
    and the demand for additional charges/surcharge payable on
D   the delayed payment of outstanding electricity dues raised
    under Clause 32.2.1 and 34 of the Terms and Conditions of
    supply (TCS) upheld. Facts necessary for the disposal of these
    appeals may be summarised as under:

E       2. The appellant is a public limited company engaged in
   the manufacture of Ferro Silicon. The industry set up by the
   appellant is energy intensive in as much as it consumes
   approximately 10,000 units of electricity for every ton of Ferro
 . Silicon produced. The appellant's case is that the respondent-
F Electricity Board had initially agreed to supply power to the
   appellant @ 6 paise per unit but revised the said rate to 11
   paise per unit in the year 1975. The revised rate was in the
   beginning applicable only to four consumers who were similarly
   situate but the number of such power intensive consumers
G gradually rose to 84. On 13th December, 1983 the Board
   revised the general tariff but a separate order applicable to
   power intensive consumers like the appellant was issued on
   29th January, 1984. Aggrieved by the said order which
   permitted charging of a higher rate of tariff, the appellant and
   few others filed writ petitions before the High Court of Andhra
H Pradesh, which were dismissed by a Division Bench of that
NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 907
      CORPN. OF A.P. LTD. [T.S. THAKUR, J.]

Court on 3rd April, 1985. During the pendency of the writ             A
petition, however, the- High Court had granted an interim order
of stay against the collection of the disputed amount in the
following terms:

    "There shall be stay of operation of the order in so far as
                                                                     8
    writ petition is concerned, subject to the condition if the writ
    petitioner pays at the rate of 47.89 paise per unit with
    effect from April 1984 onwards, furnishing Bank guarantee
    for the balance to the satisfaction of the Superintending
    Engineer concerned in four weeks from today. In default
    of any of the conditions, the stay stands vacated. The bank C
    guarantee furnished shall be renewed for every 3 months.
    If the petitioner has already paid the demand for the month
    of April, on the basis of the impugned order, this order
    passed by me shall be effective from the month of May
    1984 otherwise it will be operative from April, 1984."           D

     3. The dismissal of the writ petitions filed by the appellants
was assailed by them before this Court by way of special leave
petitions nos.9206-9207/1985 (C.A. Nos.2569-2570/1985).
This Court by an order dated 22nd July, 1985 while granting           E
leave to appeal directed continuation of interim arrangement
made by the High Court in the following terms:

     "As regards stay, after hearing learned counsel for the
     parties we felt that the order passed by the High Court
     dated 24.4.1984 which operated during the pendency of            F
     the writ petitions will continue to operate during the
     pendency of the appeals with the modification that the rate
     of 47.89 paise per unit mentioned in the order is rounded
     to 48 paise per unit.
                                                                      G
     We would, however, like to make it clear that because of
     the High Court's order dated 13.4.1985, for a couple of
     months, there was no such orders in regard to future
     payments and the Electricity Board has received the dues
     at the enhanced rates in lump sum from some of the               H
    908     SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A         consumers. There will no question of refunding the amounts
          back to these consumers.

          The bank guarantee already furnished by the petitioners/
          appellants will be kept alive from time to time and will cover
B         all the differences including the future difference."

       4. It is not in dispute that the above order was modified
  subsequently in respect of the bills issued from 16th March,
  1990 onwards. The appeals, eventually failed and were
  dismissed by this Court by an order dated 2nd May, 1991 .. In
C I.As. filed by the appellant post-dismissal of the appeals, tbiS
  Court passed an order on 9th May, 1991 to the effect that the
  appellants could after paying outstanding 50% of the amount
  due under the subsisting bank guarantee make representation
  to the Board for payment of the balance aniount in instalments
D keeping in view the circumstances and the hardships in each
  individual case. Consequently, the appellants made a
  representation to the Board praying for grant of installments for
  payment of the balance amount. While the said request was
  under consideration, the appellant received a communication
E dated 14th June, 1991 from the Superintending Engineer
  pointing out that an amount of Rs.5,57,66,539.18 was
  recoverable from the appellant for the period April 1984 to
  August 1987. For the recover of the outstanding amount the
  Board invoked the bank guarantee furnished to if for a sum of
F Rs.2,83,53, 120.93 thereby leaving a balance of
  Rs.2, 74, 13,218.25 due and payable which amount the appellant
  was requested to arrange. The communication also pointed out
  that in addition to the above amount arrears of
  Rs.4,45,63,903.21 for the period from August 1987 to July
G 1989 were also payable besides additional charges for
  delayed payments of the said amount which the latter proposed
  to communicate separately.

        5. The request made by the appellant fo• payment of the
    balance amount of tariff arrears was accepted by the Board in
H   terms of communication dated 9th July,· 1999. It was in the
NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 909
      CORPN. OF A.P. LTD. [T.S. THAKUR, J.]
above background that the appeliant filed writ petitions No.9081      A
of 1999 and 13458 of 1993 raising common questions of law
relevant to two different periods in the· High Court of Andhra
Pradesh, inter alia, assailing the demand of additional charges
and interest on the delayed payment of the amounts determined
pursuant to the judgment of this Court. By the order impugned         B·
in these appeals the said petitions have been dismissad by the
High Court. The High Court held that the Terms and Conditions
of Supply (TCS) were statutory in character and were not in
conflict with any provision of the Electricity Supply Act or the
Constitution of India. It also held that Clause 32.2.1 and Clause     c
34 of the said Terms and Conditions of Supply upon which the
Board placed reliance for its demand did not violate any
constitutional or statutory provision. The stipulated terms and
conditions were, according to the High Court, intended to
achieve the objective mentioned in Clause (b) of sub-section
                                                                      0
2 of Section 49 of the Act, namely, to discourage delayed
payment of electricity dues and to compensate the Board in
cases of delay in the making of the payment. Both these
conditions, according to the High Court were intended to sustain
the economic health of the Board.
                                                                      E
      6. The High Court further held that the decisions of this
Court in Kera/a State Electricity Board v. MRF Limited (1996)
1 SCC 597 and Kanoria Chemicals and Industries Ltd. v. U. P.
State Electricity Board (1997) 5 SCC 772 were. of no
assistance to the appellants. The High Court noted the factual        F
background in which the said decisions were rendered and
found that in cases before it there was no justification for
nullifying the effect of the Clauses 32.2.1 and 34 of the T.C.S.

    7. Appearing for the appellants Mr. Sudheer Chandra               G
Agarwal, learned senior counsel, strenuously agued that the
High Court had fallen in error in declining relief to the appellant
which according to the learned counsel was due to it on the
analogy of the orders of this Court in Kera/a State Electricity
Board's case (supra). It was submitted that in the light of the
                                                                      H
    910   SUPREME COURT REPORTS [2010] 14 (ADDL) S.C.R.


A decision of this Court in Kera/a State Electricity Board's case
  (supra) the appellant-consumers could not be said to be in
  default of payment of the outstanding amount during the period
  the interim order passed by the High Court in its favour haa
  remained operative. It was further contended that this Court had
B in the above case and in Kanoria Chemicals's case (supra)
  dealt with a similar fact situation and granted relief, by awarding
  interest @ 18% to the Board to compensate it for the monetary
  loss that it may have suffered on account of delay in the making
  of such payment and to prevent any prejudice and consequent
c injustice to the Board on account of the direction issued by the
  Court. It was argued that the appellant-company was ready and
  willing to pay interest@ 18% p.a. on the outstanding amount
  for the relevant period but the demand raised by the Board
  being far in excess, deserves to be suitably reduced.
D       8. On behalf of the respondent it was, on the other hand,
  argued by Mr. C. Kodanda Ram, learned senior counsel, that
  the High Court was, in the facts and circumstances of the case,
  right in distinguishing the decisions relied upon by the appellant
  and declining the relief prayed for before it. It was submitted
E that the facts situation in which the relief was granted in those
  cases was different from that of the present case. 'It was further
  argued that the additional charges and interest were payable
  in terms of the TCS which was statutory in character and to
  which the appellant had agreed to abide by. The amount which
F the appellant had not paid would have been utilized by it in its
  commercial ventures to make profits. Non-payment of the dues
  recoverable from the appellant would, therefore, expose the
  Board to serious financial prejudice and loss.

       9. The case of the appellant-company rests entirely upon
G the decisions of this -Court in the case of Kera/a State
  Electricity Board (supra) and that delivered in the case of
  Kanoria Chemicals Ltd. (supra). The argument advanced on
  behalf of the appellant in essence is that the fact situation in
  the said two cases being similar to the one at hand grant of
H
NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 911
      CORPN. OF A.P. LTD. [T.S. THAKUR, J.]

interest @ 18% p.a. on the outstanding amount would meet the          A
ends of justice in the instant case also.

      1O. There is, in our opinion, a basic fallacy in the analogy
which the appellant draws between its case and the cases
referred to above. What is overlooked by the appellant is the
                                                                     8
fact that the decision of this Court in the Kera/a State Electricity
Board's case (supra) has enforced the terms under which the
supply of energy was made to the consumers in that case.
Award of interest @ 18% p.a. is not an innovation of this Court.
The consequence of non-payment of the amount within the time
stipulated was on the contrary prescribed in the tariff/ conditions C
subject to which energy was supplied to MRF the consumer in
that case. It would not, therefore, be correct to apply the tariff
conditions relevant to that case to the case at hand where such
conditions are materially different. It is on the contrary necessary
to cull out the principle of law settled in the said case for D ·
application to the case at hand. This may require recapitulation
of a few facts in the backdrop whereof the decision in the
Kera/a State Electricity Board's case (supra) was delivered.

     11. MRF was engaged in manufacturing automobile tubes            E
and tread rubber in the State of Kerala. The company entered
into an agreement with the Kerala State Electricity Board for
supply of power to the factory set up by it. The agreement
contained a provision for payment of power and energy
supplied to the company by the Board within 15 days from the          F
date of the receipt of the invoice by the consumer-company.
The agreement further provided that in the event of a default in
the payment of the amount within the stipulated period, interest
@ 18% p.a. or at such other rate as may be fixed by the Board
from time to time would be chargeable.
                                                                      G
      12. The Board revised the tariff for the electricity supplied
by it in 1980, 1982 and 1984. These revisions were challenged
by MRF in a writ petition filed before the High Court of Kerala,
which was together with other similar petitions disposed of by
a common order by which the revisions made by the Board               H
    912   SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A   were struck down. Consequently MRF Limited and other
    consumers became entitled to the refund of the excess amount
    paid by them pursuant to the revised tariffs. The High Court of
    Kerala directed the adjustment of such amounts towards future
    bills to be issued by the Board.
B
         13. Aggrieved by the order passed by the Kerala High
    Court the Board filed special leave petitions before this Court
    which were entertained by this Court and an interim order
    passed, inter alia, directing that pending disposal of the
    appeals before this Court, the refund of charges already
C   collected shall remain stayed. It was further directed that the
    future charges would be collected to the extent of 50% only and
    the balance adjusted towards the past charges.

          14. The appeals filed by the Board were finally allowed by
O   this Court by its judgment dated 26th August, 1986 upholding
    the validity of the revision of the tariffs by the Board. The
    inevitable conclusion flowing from that decision was that the
    consumer-company and other consumers became liable to pay
    the amounts due on the basis of the revision of tariffs including
E   those that had since been adjusted by them pursuant to the
    interim directions of this Court. Consequently, the Board raised
    a demand for the payment of the amount inclusive of interest
    @ 18% p.a. While the company did not challenge the liability
    to pay the excess amount pursuant to the revision that had been
F   upheld by this Court it refused to pay the interest and challenged
    the demand to that extent before the High Court of Kerala in a
    writ petition filed before it. The Single Judge as also the
    Division Bench of the High Court in appeal held that the
    consumer-company could not be said to be in default for non-
G   payment of liability which did not factually exist at the relevant
    time and struck down the demand for payment of interest.

         15. The Electricity Board appealed to this Court against
    the said judgment of the High Court. Allowing the appeals
    preferred by the Board this Court took the view that while the
H   consumers had no obligation to take notice of the revised tariffs
  NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 913
        CORPN. OF A.P. LTD. [T.S. THAKUR, J.]

  and to make any payment on the basis thereof after the                A
  judgment of the High Court of Kerala till the said decision was
  reversed by this Court, yet no sooner the decision of this Court
  upheld the upward revision of the tariffs, the Board's entitlement
  to draw bills on the basis of the revisions and consequently
  enforce payment of such bills by the consumers revived with full      B,
  force~ This Court repelled the contention that the liability to pay
  the revised tariffs accrued only after the pronouncement of the
  judgment of this Court upholding the upward revision and not
  from any date prior t::> that. This Court held that once the upward
   revision was found to be valid and enforceable such revision         c.
  would be effective from the date the revision was made, no
   matter such revision had remained unenforceable for some
   period on account of the decision of the High Court. The
· following passage from the decision of this Court is in this
   regard apposite:
                                                                        D
      "But after the decision· of this Court upholding upward
      revisions of tariffs, the Board's entitlement to draw bills on
      the basis of upward revisions and consequential
      enforceability of payment of such bills by the consumers
      revived with full force. Hence, it would not be correct to E
      contend that although the Company or for that matter other
      consumers were required to pay on the basis of revisions
      of tariffs from the dates when such revisions became
      effective, liability for such payment would accrue only from
      the date of pronouncement of the judgment by this Court F
      upholding upward revisions and not from any date prior to
      that. If the upward revisions are held as valid, enforceability
      of such upward revisions being consequential to such
      revisions, though it had remained unenforceable for some
      period on account of the decision of the High Court, cannot G
      but revive from the dates of upward revisions."

     16. This Court then applied the principle of restitution as
 enunciated by the Privy Council in Rodger v. Comptoir
 D'Escompte de Paris 1871 (3) PC 465 and held that it will be
                                                                        H
    914    SUPREME COURT REPORTS (2010] 14 (ADDL.) S.C.R.


A   the endeavour of the Court to ensure that a party who had
    suffered on account of a decision that is finally reversed should
    be put back in the same position as far as the same is
    practicable, in which he would have been if the decision of the
    Court adversely affecting him had not been passed. This Court
B   observed:

          "In giving full and complete relief in an action for restitution,
          the court has not only power but also a duty to order for
          mesne profits, damages, costs, interest etc. as may deem
          expedient and fair conforming to justice to be done in the •
c         facts of the case. But in giving such relief, the court should
          not be oblivious of any unmerited hardship to be suffered
          by the party against whom action by way of restitution is
          taken. In deciding appropriate action by way of restitution,
          the court should take a pragmatic view and frame relief in
D         such a manner as may be reasonable, fair and practicable
          and does not bring about unmerited hardship to either of
          the parties."

         17. Applying the above principle to the case before it this
E   Court held that the consumer-company was an on-going
    business concern who must have gainfully utilized the money
    saved on account of the decision of the High Court, in its
    commercial activities. The Court further held that the Board had
    to suffer financial loss because of the erroneous decision
F   delivered by the High Court and that conforming to equity as
    well as well-established principle of restitution the Board could
    claim interest@ 18% p.a. on the unpaid portion of the bill drawn
    on the basis of the revised tariffs to which the consumer-
    company had agreed. The Court observed:

G         "The Company is an ongoing business concern and must
          have utilised the money, saved on account of the decision
          of the High Court, gainfully in its commercial activities.
          Similarly, other consumers have gainfully utilised the
          amount saved for being not required to pay on the basis
H         of revised tariffs. The Board had to suffer financial loss
NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 915
      CORPN. OF A.P. LTD. [T.S. THAKUR, J.]

    because of the said erroneous decision of the High Court. A
    In the aforesaid circumstances, it will be lawful, conforming
    to equity and well-established principle of restitution for the
    Board to claim interest at 18% on the unpaid portion of
    the Bill drawn on the basis of revised tariffs. The Company
    had agreed to pay interest at 18% on the bills if not paid B
    when it became due and payable."

        18. It is quite evident that this Court had upheld the claim
for payment of interest @ 18% p.a. primarily because of the
stipulation contained in the tariffs/agreement executed between C
the Board and the consumer providing for payment of interest
at that rate in the event of delay in the paymenUdischarge of
the bills raised against the consumer. It is not as though this
Court had refused to enforce the stipulation contained in the
tariffs providing for recovery of interest from the consumer if the
latter failed to pay the amounts within the time stipulated. It is D
also manifest that this Court had in no uncertain terms held that
even after the upward revisions of the tariffs had remained
unenforceable for a certain period on account of erroneous
judgment of the High Court, the moment the said judgment was
set aside in appeal, the liability to pay revived with full force from E   '
the date the revisions were made effective. The very fact there
was during the intervening period an erroneous decision of the
 High Court obliterating the revision in full or in part would make
 little difference in so far as the liability to pay the amount under
the revised tariffs was concerned. So also the fact that the F
consumers were not deliberately in default on account of the
judgment of the High Court did not affect the enforceability of
the demand arising from the revised tariffs or the stipulation
 regarding payment of interest demanded on the same on
 account of the non-payment or delayed payment of the amount G
 recoverable by the Board.

     19. Suffice it so say that the decision of this Court in the
case of Kera/a State Electricity Board (supra) does not grant
any relief to a defaulting consumer once the demand is upheld
                                                                      H
    916     SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A   nor does it interfere with the principle of restitution which would
    entitle the successful party to be relegated back to the position
    it would hold had there been no judgment adverse to it.

          20. Super added to all this is the fact that this Court was
    dealing with a case where the High Court had finally struck
B
    down the revised tariff, but the said decision was reversed in
    appeal. In the present case the appellant had obtained only an
    ad interim order of stay against the enforcement of the tariffs.
    There is a qualitative difference in the two situations. Even if
    one were to take a charitable view of the legal effect of any
C   direction of the High Court, pending adjudication by the Court,
    cases in which the High Court finally held the tariffs to be bad
    would in our opinion stand on a different footing than cases
    where the party obtains an order granting interim protection to
    it. While there is an element of finality in the case of a final
D   adjudication by a competent Court in so far as that Court is
    concerned, an interim order can be vacated at any stage. Tile
    interim order may not even prevent a prudent party from paying
    the charges according to the revised tariffs if it does not
    propose to take any chance and suffer recovery of an additional
E   amount on account of the non-payment of the dues by the date
    stipulated for the purpose. We may in this regard refer to the
    following observations of this Court in Shree Chamundi
    Mopeds Ltd. v. Church of South India Trust Association CS/
    Cinod Secretariat, Madras 1992 (3) SCC 1:
F
            "While considering the effect of an interim order staying
            the operation of the order under challenge, a distinction has
            to be made between quashing of an order and stay of
          · operation of an order. Quashing of an order results in the
            restoration of the position as it stood on the date of the
G           passing of the order which has been quashed. The stay
            of operation of an order does not, however, lead to such
            a result. It only means that the order which has been stayed
            would not be operative from the date of the passing of the
            stay order and it does not mean that the said order has
H           been wiped out from existence."
NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 917
      CORPN. OF A.P. LTD. [T.S. THAKUR, J.]
     21. Suffice it to say that the decision of this Court in Kera/a A
State Electricity Board's case (supra) does not lend any
support to the appellant-company in its endeavour to avoid
payment of the amount which became recoverable from it no .
sooner the judgment of the High Court was reversed in the
earlier round of litigation upholding the revision of the tariffs.   B

       22. That brings us to the decision of this Court in Kanoria
 Chemicals and Industries Ltd. and Ors. v. U.P. State Electricity·
 Board and Ors. (1997) 5 sec 772. That was also a case
 where the validity of a notification issued by the U.P. State . C
 Electricity Board revising the electricity rates/tariffs under
 Section 49 of the Electricity (Supply) Act, 1948 was challenged
 by the consumers. Interlocutory applications filed in the writ
 petitions for stay of the operation of the impugned notification
 were eventually dismissed by the High Court whereupon the
 consumers deposited the differential amount between the pre- D
 revised and the revised electricity rates. Consumers did not,
 however, deposit the late payment surcharge "recoverable" in
 terms of Clause 7(b) of the notification. Notices of demand
 were, therefore, issued to the consumers which were ·
 challenged in a fresh batch of writ petitions filedby them. The E
 main contention urged by the consumers before the High Court
 was that since the operation of the notification revising the tariffs
 had been stayed between 25th July, 1990 and 1st March, 1993,
 no late payment surcharge could be levied on the amount
 withheld by the petitioners under the orders of the Court, no F
 matter the writ petitions were finally dismissed. That contention
 was rejected by a Division Bench of. the High Court of
 Allahabad. The matter was then brought up to this Court in
 appeal by the consumers, inter alia, contending that the stay
 of the operation of the impugned notification relieved the G
 consumers of the obligation to pay the revised tariffs/rates and
 consequently additional charges for late payment, if any.
 Reliance in support of that submission was placed by the
·consumers upon the decision of this Court in Adoni Ginning
 Factory v. Secy. A.P. Electricity Board (1979) 4 SCC 560. H
         918 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


.,.. ASpeaking for the Court, Hon'ble B.P. Jeevan Reddy, J. held that
      the decision of this Court in Adoni Ginning Factory's case
      (supra) had no application to the case at hand nor could it be
      understood to mean that during the period covered by the stay
      no demand could be made against the consumers as no such
    B issue has been raised before this Court in Adoni Ginning
      Factory's case (supra). This Court observed:

              " .............. We, therefore, agree with the High Court that
              Adoni Ginning 1 cannot be read as laying down the
              proposition that the grant of stay of a notification revising
    c         the electricity charges has the effect of relieving the
              consumers/petitioners of their obligation to pay late
              payment surcharge/interest on the amount withheld by
              them even when their writ petitions are dismissed
              ultimately. Holding otherwise would mean that even though
    D         the Electricity Board, who was the respondent in the writ
              petitions succeeded therein, is yet deprived of the late
              payment surcharge which is due to it under the tariff rules/
              regulations. It would be a case where the Board suffers
              prejudice on account of the orders of the court and for no
    E         fault of its. It succeeds in the writ petition and yet loses.
              The consumer files the writ petition, obtains stay of
              operation of the notification revising the rates and fails in
              his attack upon the validity of the notification and yet he is
              relieved of the obligation to pay the late payment surcharge
    F         for the period of stay, which he is liable to pay according
              to the statutory terms and conditions of supply - which
            · terms and conditions indeed form part of the contract of
              supply entered into by him with the Board. We do not think
              that any such unfair and inequitable proposition can be
    G         sustained in law ........... "

              23. This Court further clarified that the terms in which the
         prayer in the stay application was made by the consumers did
         not determine the effect of the order issued by the Court in the
         writ petitions raising similar questions of law. The phraseology
    H
NAVA BHARAT FERRO ALLOYS LTD. v. TRANSMISSION 919
      CORPN. OF A.P. LTD. [T.S. THAKUR, J.]

used in the prayer for interim orders could be materially different A
though in essence the relief may be similar. On a question of
principle this Court held that the impugned order coming to an
end upon dismissal of the substantive proceedings, it is the duty
of the Court to put the parties in the same position as they would
have occupied but for the interim orders of the Court for B
otherwise it would give rise to unjust results. This Court said:

    " .............. It is equally well settled that an order of stay
    granted pending disposal of a writ petition/suit or other
    proceeding, comes to an end with the dismissal of the
    substantive proceeding and that it is the duty of the court C
    in such a case to put the parties in the same position they
    would have been but for the interim orders of the court. Any
    other view would result in the act or order of the court
    prejudicing a party (Board in this case) for no fault of its
    and would also mean rewarding a writ petitioner in spite D
    of his failure. We do not think that any such unjust
    consequence can be countenanced by the courts. As a
    matter of fact, the contention of the consumers herein,
    extended logically should mean that even the enhanced
    rates are also not payable for the period covered by the I;
    order of stay because the operation of the very notification
    revising/enhancing the tariff rates was stayed. Mercifully,
    no such argument was urged by the appellants. It is
    ununderstandable how the enhanced rates can be said to
    be payable but not the late payment surcharge thereon, F,
    when both the enhancement and the late payment
    surcharge are provided by the same notification - the
    operation of which was stayed ............... "

     24. It is manifest from the above that both on the question
of restitution of the benefit drawn by a party during legal G'
proceedings that eventually fail as also on the general principle
that a party who fails in the main proceedings cannot benefit
from the interim order issued during the pendency of such
proceedings, this Court found against the consumers and H
    920      SUPREME COURT REPORTS (2010] 14 (ADDL.) S.C.R.


A   upheld the demand for payment of additional charges
    recoverable on account of the delay in the payment of the
    outstanding dues. Far from lending any assistance to the
    appellant-company the decision squarely goes against it and
    has been correctly appreciated and applied by the High Court.
B
        25. In the result these appeals fail and are hereby
    dismissed but without any orders as to costs.

    B.B.B.                                  Appeals dismissed.