PASCHIMANCHAL VIDYUTVITRAN NIGAM LTD. & ORS.versusM/SADARSH TEXTILES & ANR.

                      [2014] 14 S.C.R. 482


A    PASCHIMANCHAL VIDYUTVITRAN NIGAM LTD. & ORS.
                                v.
                M/SADARSH TEXTILES &ANR.
                (Civil Appeal No. 10707 of 2014)
B                     DECEMBER 3, 2014
     [JAGDISH SINGH KHEHAR AND ARUN MISHRA, JJ.]
                      c               I
        Electricity Act, 2003 - ss. 62, 65 and 108 - Uttar
  Pradesh Electricity Reforms Act, 1999 - s. 12 -Policy
C decision dated 14. 06. 2015 of State qovernment- Regarding
  supply of electricity to power loom bunkers on flat rate -
  Whether could have been applied by the Electricity
  Regulatory Commission to the industries availing HV-2
  category connection - Held: The decision of State
  Government in the matter of policy, subsidy and public
0
  interest is final and binding on the Commission - The policy
  dated 14.06.2006 never intended to extend the benefit of
  subsidy to HV-2 consumers - Grant of subsidy being
  prerogative of the State, it was not open to the. Commission
E to direct the State to release the subsidy to HV-2 consumers
  - Principle of promissory estoppel is not applicable in the
  present ca.se as the State Government (the competent
  authority) had not given any assurance to extend the subsidy
  to HV-2 consumers - Principle of promissory estoppels.
F        Administrative Law - Promissory estoppel - An
    assurance, to form promissory estoppel, must come from
    the person in authority having competence to extend it.
         Words and Phrases:
         'Weaving' - Meaning of
G
         Disposing of the appeals, the Court
         HELD: It is apparent from a bare reading of ss. s2;
    65 and 108 of Electricity Act, 2003 and s. 12 of U.P.
    Electricity Reforms Act, 1999 that in discharge of its
H
                              482
 PASCHIMANCHAL VIDYUTVITRAN NIGAM LTD. & ORS.               483
        .v. M/SADARSH TEXTILES &ANR.

functions, the State Commission shall be guided by such     A
directions in matters of policy involving publfo interest
as the State Government may give to it in writing. Such
decision/direction of the State Government in the matter
of policy, subsidy and public interest shall be final.
[Para 25][494-F-G] .                                        8
      2. On considering the policy d.ecision of the State
Government dated 14.6.2006 read with communications
dated 6.10.2006, dated 24.2.2007 and lastly dated
1.5.2007, it is evident that the State Government never
intended to extend the benefit of the subsidy to HV-2       C
category consumers. It had not made any provision for
extending subsidy to HV-2 consumers. The Commission
in order dated 11.7.2006 itself has confined \he tariff
respite to LMV-2 and LMV-6 consumers. It was not open
to the Commission to issue clarification dated 14-15/9/     D
2000, as the matter of providing subsidy was clearly
prerogative of ·the State Government under the
provisions of Section 65 read with Section 108 of the
Act of 2003 and Section 12 of Reforms Act, 1999, hence
 Commission could not have accepted on its own, or          E ·
 directed the State Government to release the subsidy to
 HV-2 consumers and that too unilaterally. [Para 26]
 [495-B-E]
     3. It can be culled out from order dated 14.6.2006
that the State Government intended the benefit to be F
extended to power loom 'weavers' alike farmers. The
activity of manufacturing textile is generally understood
as the weaving of such textile and man who is engaged
in such power loom activity is known as weaver.
Weaving means: to form a fabric by interlacing yarn on G
a loom. It also means the method of pattern of weaving
or the structure of a woven fabric. [Para 28][495-G-H;
496-A-B]

                                                            H
484        SUPREME COURT REPORTS                [2014) 14 S.C.R.


A         Ess pee Carpet Enterprises v. Union of India (UO/)
          and Ors. (1990) 1 SCC 461 : 1989 (2) Suppl. SCR
          417- referred to.
            4. It was incumbent upon the Commission to
      consult the State Government before passing
B     clarification order dated 14-15/9/2006 while applying its
      order dated 11.7.2006 to HV-2 consumers. When the
      State Government has written to the Commission on
      6.10.2006, thereafter there was no justification for the
      Commission not to recall the clarification issued on 14-
C     15/9/2006 as it was the prerogative of the State
      Government to extend the benefit of subsidy to a class '
      or particular class of consumers and subsidy being a
      concession could not have been enforced as a matter
      of right. The Commission was bound to act as per such
D     directives of State Government. [Para 28][496-B-E]
            5.1 The principle of promissory estoppel is not
      attracted in the instant case as the State Government
      has not extended any assurance by its conduct much
      less unequivocal one, thus there was no question of the
 E    industries acting upon it. The State Government had not
      extended any assurance to extend the subsidy and, on
      th!) other hand, it had made its stand clear and objected
      to the Commission's clarification by writing a letter on
      6.10.2006. [Para 29][496-F-H; 497-B-D]         .
 F
        · 5.2 In the agreement which has been entered into
  .for supply of electrical energy, there is no mention as to
   the subsidy to be extended by the State Government.
   Even otherwise the agreements can also not be said to
   be binding upon the State Government as the
G Commission/Corporation had no authority to burden the
   State with the subsidy when it had made no such
   provision for HV-2 consumers. The assurance to form
   promissory estoppel must come from the person in
                              '·
 H
 PASCHIMANCHAL VIDYUTVITRAN NIGAM LTD. & ORS.                485
         v. M/SADARSH TEXTILES &ANR.

authority having competence to extend it. The A
Commission and the Corporation had no jurisdiction in
the matter of subsidy which is the domain of the State
Government. [Para 30](497-C-G]
     Gujarat State Financial Corporation v. Mis. Lotus
     Hotels Pvt. Ltd. 1983 (3) SCC 379 ; Motile/             B
     Padampat Sugar Mills Co. Ltd. v. State of U.P. &
     Ors. 1979 (2) sec 409 : 1979 (2) SCR 641 -
     referred to.
                CASE LAW REFERENCE
                                                             c
1989 (2) Suppl. SCR 417 referred to               Para 28
1983 (3) SCC 379            referred to           Para 29
1979 ( 2) SCR 641           referred to           Para 30
    CIVIL APPELLATE JURISDICTION: Civil Appeal No.           D
10707 of2014.
     From the Judgment and Order dated 23-03-2010 of the
High Court of Judicature at Allahabad ih C.M.W.P. No. 8765
of2008.
                            With                           E
     Civil Appeal Nos. 10708, 10709, 10710 and 10711 of
2014.
     Pradeep Mishra, Suraj Singh, Ajay Singh Manish Pratap
Singh (For Pahlad Singh Sharma) Aredhendumauli Kumar         F
Prasad, Ms. Garima. Prashad, Vinay Garg, TanmayaAgarwal,
Uday Singh, Advs. for the appearing parties.
     The Judgment of the Court was delivered by
     ARUN MISHRA, J.
     1. Leave granted in all the special leave petitions.    G
     2. The question involved in the appeals is whether policy
decision c!,ated 14.6.2006 issued by the Government of Uttar
Pradesh regarding supply of the electricity to power loom
bunkers on the flat rate could have been applied by the U.P. H
486         SUPREME COURT REPORTS                   [2014] 14 S.C.R.


A     Electricity Regulatory Commission (hereinafter referred to as
      "the Commission") to the industries availing HV-2 category
      connection.
       3. To dispose of the appeals, we notice facts from civil
  appeal arising out of SLP (Civil) No.9869 of 2008. The
B backdrop facts indicate that the Commission fixed tariff for
  the year 2004-2005, whereby retlate of Rs.5,000/- per
  consumer was granted to power loom bunkers availing LMV-
  2 and LMV-6 connections in acc9rdance with policy of the U.P.
  Government.
c          4. LMV-2 is a non domestic light, power and electricity
      connection, LMV-6 electricity connection is of small and
      medium power having connected load up to 100 HP for
      industrial/processing or agro-industrial purposes, power loom,
      etc. HV-2 connection is provided for utilising large and heavy
0     power for industrial and other purposes having oontracted load
      of above 100 HP. Industries which are having load more than
      100 HP are covered by tariff HV-2.
             5. The State Government had issued order dated
E     14.6.2006 to Managing Director, U.P. Power Corporation Ltd.
      (hereinafter referred to as 'Corporation'). The Commission
      opined. that it has the effect of altering the rate schedule
      approved by it. The Commission, in turn, issued order dated
      3. 7 .2006 restraining all electricity supply undertakings in the
.F    State of U.P. from implementing the provisions of State
      Government order dated 14.6.2006. ·
         6. The Commission took u'p the matter to work out
    modalities as per the Government order. Chairman of the U.P.
    Power Corporation Limited filed an affidavit before the
G . Commission providing a new scheme compatible with legal
    framework along with a directive from the Sta,te Government
    issued urider Section 108 of the Electricity Act, 2008. The
    scheme as proposed in the affidavit states that despite the
    aforesaid order, the norm.al billing as per applicable tariff shall
H · be made but payment shall be colleCted as per the directions
 PASCHIMANCHAL VIDYUTVITRAN NIGAM LTD. & ORS.                      487
  v. M/SADARSH TEXTILES &ANR, [ARUN MISHRA, J.]

of the Government at normal billing cycle and that the advance A
subsidy shall be collected from the Government in one
instalment or maximum two half yearly instalments. Pursuant
thereto the Commission on 11. 7 .2006 passed order in which
 it had prescribed the rate for LMV-2 and LMV-6 consumers
 only. However, Commission also opined that the State B
 Government has permitted realization on flat rate depending
 upon reed space, number of looms, etc. It appeared to be the
·case of altering the rate schedule of the tariff order fixed by it
which is not permissible within the legal framework to be
 attempted by the State Government. The State Government c
 also did not spell out compliance of the advance subsidy
 payment as envisaged under Section 65 of the Electricity Act,
 2003. While dealing with the matter, the Commission observed
that billing of the power loom be done strictly in accordance
with prevalent schedule.                                           o
      7. It is pertinent to mention that tariff order 2004-2005
was issued by the Commission for providing benefit to LMV-2
and LMV-6 consumers, it admittedly did not cover HV-2
consumers. The Commission ultimately directed that billing
of the power loom consumers shall be done strictly in              E
accordance with prevalent rate schedule of tariff order 2004-
2005 on monthly basis. It issued further directions with respect
to the collection of the subsidy. It also directed that payment
from the power loom consumers shall be collected as per the
policy direction of the Government on monthly basis. It also       F
directed that Government should earmark capital subsidy for
providing free of cost meters to power loom consumers in case
of new connections.
      8. Later on, industries enjoying HV-2 connection
 approached the Electricity Regulatory Commission to clarify G
that whether the order of the Commission dated 11.7.2006 in
the matter of subsidized electricity rates for power loom
 consumers shall be applicable to them also, as the benefit of
.the said order was not extended to them by the concerned
 authorities.                                                  H
488         SUPREME COURT REPORTS                 (2014] 14 S.C.R.


A            9. The Commission passed an order on 14-15/9/2006
      that the order dated 1.1 .7 .2006 shall apply mutatis mutandis
      for even HV-2 power loom consumers irrespective of their load.
      It also directed that subsidy provision shall accordingly apply
      to them also.
B         10. The Secretary, Government of U.P. wrote to the
  Chairman, U.P. State Electricity Regulatory Commission on
  6.10.2006 drawing their attention to the Commission's letter
  dated 141h/15'h September, 2006 clarifying that only those
  consumers to whom the State Government was giving subsidy
C under Section 65 of Electricity Act, 2003 were entitled for
  benefit of Government order dated 14.6.2006. The scheme
  to supply electricity on flat rate to the power loom bunkars has
  been made for LMV-2 and LMV-6 consumers for whom earlier
  also provisions of subsidy had been made. The U.P.
D Government has not made provisions of any subsidy for
  industries availing HV-2 category connection. Therefore,
  distributing companies of U.P. could not give facility of flat rate
  tariff to HV-2 consumers.
           11. The aforesaid communication was not dealt with by
 E    the Commission but Secretary of the Commission vide letter
      dated 18.10.2006 advised the Principal Secretary, Energy,
      Government of U.P. to amend the Government order dated
      14,6.2006 so as to confine subsidy to LMV-2 and LMV-6
      consumers only.
 F
        12. On 24.2.2007 Chief Engineer (Commercial), U.P.
   Power Corporation Ltd., Commercial Cell wrote to Chief
   Engineer (Distribution) Purvanchal VidyutVitran Nigam Ltd.,
   Varanasi Region, Varanasi that present tariff is applicable to
 G LMV-2 and LMV-6 consumers and subsidy is not admissible
   to HV-2 consumers.
        ' 13. On 1.5.2007 the Secretary of the Government of U.P.
   wrote to the Managing Director of U.P. Power Corporation Ltd.
   that only the weaver-consumers falling under rate schedule
 H LMV-2 and LMV-6 would be covered by the flat rate for the
   supply of electricity to bunkars.
 PASCHIMANCHAL VIDYUTV.ITRAN NIGAM LTD. & ORS.                       489
  v. M/SADARSH TEXTILES &ANR. [ARUN MISHRA, J.)

      14. One of the industry, namely Mis Hiltrex Industrial          A
Fabrics Pvt. Ltd., Sahjani, Magarwara, District Unnao, availing
HV-2 connection, filed W.P. No.2204 (M/B) of 2007 before the
High Court of Judicature at Allahabad, Lucknow Bench,
Lucknow. The writ petition was dismissed. It was held by the
Division Bench that subsidy paid by the Government was to             B
help person or class of persons by keeping the prices down.
The earlier decision dated 14.6.2006 was intended to give
benefit to weavers, who were members ofthe weaker section
of the society, not to consumers like the petitioners.
     15. Thereafter, the U.P. Electricity Regulatory C
Commission issued a letter dated 10.10.2007 in the matter of
extension of rebate/subsidized power loom flat rate tariff to
HV-2 category consumers, duly noticing the decision of the
Lucknow Bench in order dated 16.8.2007 rendered in the
aforesaid writ petition, it clarified that the provision of tariff for D ·
2006-2007 shall not be attracted in case of HV-2 power loom
consumers in consonance with the findings of the High Court.
      16. Thereafter, in the instant matters the writ petitions
were filed by the industries seeking extension of benefit for
HV-2 power loom consumers questioning the aforesaid                  E
adverse decisions. A Division Bench of the High Court of
Allahabad in CMWP No.32401 of 2007 Mis. Maa Vind Vasini
Industries GorakhpurandAnotherv. Purvanchal Vidyut
Vitran Nigam Ltd. and others, allowed the writ petition vide
order dated 12.12.2007. The said order has been followed in           F
CMWP No. 8765 of 2008 Mis. Adarsh Textiles v.
Paschimanchal Vidyut Vitran Nigam Ltd. & Ors., and
CMWP No. 8763 of 2008- Mis Amit Textiles v.
Paschimanchal Vidyut Vitran Nigam Ltd.
                                                                     G
      17. In CMWP No.63293 of 2007, Mis. Vikas Textile
Company and anotherv. State of U.P. and others, though
following the decision in Mis Maa Vind Vasinl Industries and
another v. Purvanchal Vidyut Vitran Nigam Limited
Varanasi and others, it has been ordered by the High Court                   •
on 13.8.2009 that the Corporation shall charge petitioners in         H
    490         SUPREME COURT REPORTS                  (2014] 14 S.C.R.


    A     accordance with the Government order dated 11. 7.2007. The
          petitioner shall r:iot be entitled to the relief provided by the
          Government orders dated 14.6.2006 and 31.3.2007.
             18. Aggrieved by the order dated 13.8.2009; Vikas Textile
        has filed SLP (Civil) No.30528 of 2009 and prayed for
    B enforcement of the Government Order dated 14.6.2006 and
        question of demand raised by respondent No.6 (Executive
        Engineer (Distribution), Electricity Distribution Division - I,
        Hathras, of Rs.4,43,904/- for the period from April 2007 to
        December 2007. The said amount had been deposited 'under
    C · protest' on 23. 9.2009 and a direction is sought to refund the
        aforesaid amoµnt with interest.
             19. We have heard learned counsel for the parties. It
      was submitted .on behalf of the appellants that policy decision
      reflected in the order of the State Government dated 14.6.2006
    D was not applicable to HV-2 consumers. The State Government
      intended to grant benefit to the weavers alike to farmers. It
      has extended the benefit in the previous years to LMV-2 and.
      LMV-6 consumers and not to HV-2 category industries and no
      provision for subsidy had been made by the State Government
    E for HV-2 cons1.1mers. Thus, it was not open to the Commission
      to fix the tariff for HV-2 industries and compel the State
      Government to release the subsidy. The ,Government had
      clarified its stand on 6.10.2006. It was also apparent from the
      communication dated 24.2.2007 of Chief Engineer
    F (Commeri:ial) of the Corporation to one of the distributors. The
      Commission has acted beyond the powers while fixing the tariff
      for HV-2 category consumers and based thereupon in directing
      the State Government to release subsidy. The decision of the
      Lucknow Bench could not have been ignored and was binding
    G on the Coordinate Bench of the same High Court. The decision
      of the Lucknow Bench could not be said to be per incuriam. It
      was not open to CorT)mission to pass ex parte clarification on
      14/15" September, 2006 without hearing the interested parties
•     and also State Government.
    H
 PASCHIMANCHAL VIDYUTVITRAN NIGAM LTD. & ORS.                          491
  v. M/SADARSH TEXTILES &ANR. (ARUN MISHRA, J.]

      20. It was contended on behalf of the intlustries availing       A
HV-2 connection that benefit of the order dated 14.6.2006 had
rightly been extended by the Commission to such industries.
The' view taken by the High Court of Allahabad in the
subsequent impugned decisions is in accordance with law.
       21. Prior to 14.1.2000 electricity was being generated,         B
distributed and transmitted in the State of U.P. by the erstwhile
Uttar Pradesh State Electricity Board constituted under Section
5 of the Electricity (Supply) Act, 1948.
      22. The Uttar Pradesh Electricity Reforms Act, 1999
(hereinafter referred to as "the Reforms Act, 1999") came. to C
be enacted which authorised/empowered the State
Government, time to time issue directions on a policy matter
in regard to the electricity and subsidy as per the provisions
contained in Section 12 of the Reforms Act, 1999. Same is
reproduced hereunder:                                          D
           "12 Power of the State Government. ( 1) The State
      Government may, from time to time, issue directions not
      inconsistent with this Act, on a policy matter in regard to
      electricity and if any dispute arises between the                E
      Commission and the State Government as to whether a
      question is or is not a policy matter it shall, be referred to
      the Central Electricity Regulatory Commission whose
    · decision thereon shall be final and binding. ·
           (2)(a) The State Government shall be entitled to            F
     issue policy directions with respect to the sub.sidies to
     be granted for supply of electricity to any class or classes
     of persons or in respect of any area in addition to the
     subsidies adjusted by the Commission while regulating
     and approving the tariff structure:                               G
           Provided that the State Government shall contribute
     the amount to compensate the licensee or person
     affected by the grant of the subsidies to the extent of the
     subsidies granted.
                                                                       H
492       SUPREME COURT REPORTS                  (2014] 14S.C.R.


A               (b) the amount of the subsidy to be paid under
          clause (a) and the method and manner of payment and
          the time within which such amount is to be paid by the
          state Government shall be determined by the
          Commission and the Commission will calculate such
B         amount in accordance with the procedure provide in the
          regulations."
        23. The Electricity Act, 2003 was enacted by the
  Parliament. Section 62 whereof confers the power upon
  Commission to determine the tariff. Section 65 of the Electricity
C Act, 2003 enables the State Government to grant subsidy to
  any· consumer or class of consumers in the tariff determined
  by the State Commission under Section 62.
           24. Section 108 of the Act of 2003 deals with the power
    to issue directions by the State Government. The Commission
0 shall be guided by such directions in the matter of policy
    involving public interest as the State Government may give to
  . it in writing.
         Sections 62, 65 and 108 of the Electricity Act, 2003 are
 E _reproduced hereunder:
            "Section 62. (1) The Appropriate Commission shall
          determine the tariff in accordance with provisions of this
          Act tor-
           . (a) Supply of electricity by a generating company to a
 F        distribution licensee:
            ·Provided that the Appropriate Commission may, in
          case of shortage of supply of electricity, fix the minimum
          and maximum ceiling of tariff for sale or purchase of
          electricity in pursuance of an agreement, entered into
 G        between a generating company and a licensee or
          between licensees, for a period not exceeding one year
          to ensure reasonable prices of electricity;
             (b) transmission of electricity;
 H           (c) wheeling of electricity;
PASCHIMANCHAL VIDYUTVITRAN NIGAM LTD. & ORS.                       493
 v. M/SADARSH TEXTILES &ANR. [ARUN MISHRA, J.]

      (d) retail sale of electricity.                              A
      Provided that in case of distribution of electricity in
   the same area by two or more distribution licensees, the
   Appropriate Commission may, for promoting
   competition among distribution licensees, fix only
   maximum ceiling of tariff for retail sale of electricity.       B
   (2) The Appropriate Commission may require a licensee
   or a generating company to furnish separate details, as
   may be specified in respect of generation, transmission
   and distribution for determination of tariff.
                                                                   c
   (3) The Appropriate Commission shall not, while
   determining the tariff under this Act, show undue
   preference to any· consumer of electricity but may
   differentiate according to the consumer's load factor,
   power factor, voltage, total consumption of electricity         0
   during any specified period or the time at which the
   supply is required or the geographical position of any
   area, the nature of supply and the purpose for which the
   supply is required.
   (4) No tariff or part of any tariff may ordinarily be amended   E
   more frequently than once in any financial year, except in
   respect of any changes expressly permitted under the
   terms of any fuel surcharge formula as may be specified.
   (5) The commission may require a licensee or a
   generating company to comply with such procedures as            F
   may be specified for calculating the expect~d revenues
   from the tariff and charges which he or it is permitted to
   recover.
   (6) If any licensee or a generating company recovers a
   price or charge exceeding the tariff determined under           G
   this section, the excess amount shall be recoverable by
   the person who has paid such price or charge along with
   interest equivalent to the ban)< rate without prejudice to
   any other liability incurred by the licensee."
                                                                   H
494         SUPREME COURT REPORTS                   [2014] 14 S.C.R.


 A          "Section 65. If the State Government requires the grant
            of any subsidy to any consumer or class of consumers in
            th_e tariff determined by the State Commission under
            section 62, the State Government shall, notwithstanding
            any direction which may be given under section 108, pay,
 B          within in advance in the manner as may be specified, by
            the State Commission the amount to compensate the
            person affected by the grant of subsidy in the manner
            the State Commission may direct, as a conditi9n for the
            licence or any other person concerned to implement the
. C         subsidy provided for by the siate Government:
               Provided that no such direction of the State
            Government shall be operativ~ if the payment is not made
            in accordance with the provisions "contained in this section
            and the tariff fixed by State Commission shall be
 0          applicable from the date of issue of orders by the
            Commission in this regard."
              "Section 108 (1) In the discharge of its functions,. the
            State Commission shall be guided by such directions in
            matters of policy involving public interest as the State
 E    ··'   .     '                               "
            Government may give to it in writing.     ·
               (2) If any question arises as to whether any such
            direction relates to a mattef of policy involving public
            interest, the decision of the State Government thereon
            shall be final."
 F
          25. It is apparent from a bare reading of the aforesaid
   provisions of Electricity Act, 2003 and Reforms Act 1999 that
   in discharge of its functions, the State Commission shall be
   guided by such directions in matters of policy involving public
 G interest as the State Government may give to it in writing. Such
   decision/direction of the State Government in the matter of
   policy, subsidy and public interest ~hall be final. Under Section
   65 it is a prerogative of the State Government to grant any
   subsidy to any consumer or class of consumers in the tariff
 H determined by the Commission under Section 62. It is
 PASCHIMANCHAL VIDYUTVITRAN NIGAM LTD. & ORS.                     495
  v. M/SADARSH TEXTILES &ANR. [ARUN MISHRA, J.]

apparent from the provisions contained in Sections 65 and         A
108 of Act of 2003 that to grant subsidy to any consumer or
class of consumers is the prerogative of the State Government
and such other direction issued in the public interest shall be
binding upon the Commission.
          26. When we consider the policy decision of the State B
  Government dated 14.6.2006 read with communications dated
  6.10.2006, dated 24.2.2007 and lastly dated 1.5.2007, the
  State Government never intended to extend the benefit of the
  subsidy to HV-2 category consumers. It had not made any
  provision for extending subsidy to HV-2 consumers. The C
  Commission in order dated 11.7.2006 itself has confined the
  tariff respite to LMV-2 and LMV-6 consumers. It was not open
  to the Commission to issue clarification dated 14-15/9/2006,
  as the matter of providing subsidy was clearly prerogative of
. the State Government under the provisions of Section 65 read D
  with Section 108 of the Act of 2003 and Section 12 of Reforms
  Act, 1999 hence Commission could not have accepted on its
  own, or directed the State Government to release the subsidy
  to HV-2 consumers and that too unilaterally.
        27. When we read the order dated 14.6.2006 it becomes E
 clear that the State Government has granted approval for supply
 of electricity to "power loom bunl<ers on flat rate as extended
 to farmers". It has fixed the tariff for the loom having 60 inches
 reed space, Rs.65/- per loom and it will be presumed that load
 of loom is 0. 5 H.P. and for looms having reed space of more F
 than 60 inches, Rs.130/- per month will be charged and it will
 be presumed that load of the loom is 1 H.P. In additional
 machines in urban areas, Rs.130/HP/month would be charged
 ;;ind in· rural area 75/HP/month would be charged. It also
 provided that the expenses for new meter will not be taken . G
 from consumers.
       28. It can be culled out from order dated 14.6.2006 that
 the State Government intended the benefit to be extended to
 power loom 'weavers' alike farmers. The activity of              H
496         SUPREME COURT REPORTS                   [2014) 14 S.C.R.


A ·manufacturing textile is generally understood as the weaving
   of such .textile and man who is engaged in such power loom
   activity is known as weaver. Weaving means: to form a fabric
   by interlacing yarn on a lciom. It also means the method of
   pattern of weaving or the structure of a woven fabric, as
B observed by this Court in Ess Dee Carpet Enterprises v.
   Union of India (UO/) and Others (1990) 1 SCC 461. The
   State Government th us, never intended the benefit to be given
   to big industries like HV-2 industries. In the circumstances, it
   was incumbent upon the Commission to consult the State
c  Government before passing clarification order dated 14-15/
   9/2006 while applying its order dated 11. 7 .2006 to HV-2
   consumers. When the State Government has written to the
   Commission on 6.10.2006, thereafter there was no justification
   for the Commission not to recall the clarification issued on 14-
D 15/9/2006 as it was the prerogative of the State Government
   to extend the benefit of subsidy to a class or particular class of
   consumers and subsidy being a concession could not have
   been enforced as a matter of right. The Commission was
   bound to act as per such directives of State Government.
 E          29. The submission that the State is bound by the principle
      of promissory estoppel to extend the benefit of subsidy to HV-
      2 consumers is also devoid of merit. This Court in Gujarat
      State Financial Corporation vs. Mis. Lotus Hotels Pvt.
      Ltd. (1983 (3) SCC 379) had referred to Motilal Padampat
.F    Si.igar Mills Co. Ltd. vs. State of U.P. & Ors. [1979 (2) SCC
                                      1
      409) and observed as under :       ·

              "The true principle of promissory estoppel, therefore,
           seems to be that where one party has by his words or
           conduct made to the other a clear and unequivocal
G          promise which is intended to create legal relations or
           affect a legal relationship to arise in the future, knowing
           01 intending that it would be acted upon by the other party
           to whom the promise is 'made and it is in fact so acted
           upon by the other party, t.he promise would be binding on
 H
 PASCHIMANCHAL VIDYUTVITRAN NIGAM LTD. & ORS.                      497
  v. M/SADARSH TEXTILES &ANR. [ARUN MISHRA, J.]

      the party making it and he would not be entitled to go A
      back upon it, if it would be inequitable to allow him to do
      so having regard to the dealings which have taken place
      between the parties, and this would be so irrespective
      of whether there is any pre-existing relationship between
      the parties or not."                                         B
      The aforesaid principle is not attracted in the instant case
as the State Government has not extended any assurance by
its conduct much less unequivocal one, thus there was no
question of the industries acting upon it. The State Government
had not extended any assurance to extend the subsidy and, C
on the other hand, it had made its stand clear and objected to
the Commission's clarification by writing a letter on 6.10.2006.
       30. Equally futile is the reliance upon the agreements
which have been entered into for supply of electrical energy
after the clarification was issued by the Commission. It was       D
on the basis of the directive issued by the Commission that
the said agreements have been entered into by the consumers
with the Corporation. However, a perusal of the agreement
makes it clear there is no mention as to the subsidy to be
extended by the State Government. The only stipulation is that     E
the supply would be made at the rate specified by the
Commission. Thus, the agreement does not deal with the
question of subsidy at all. Even otherwise the agreements can
also not be said to be binding upon the State Government as
the Commission/Corporation had.no authority to burden the          F
State with the subsidy when it had made no such provision for
HV-2 consumers. It is a settled proposition that the assurance
to form promissory estoppel must come from the person in
authority having competence to extend it. The Commission
and the Corporation had no jurisdiction in the matter of subsidy   G
which is the 9omain of the State Government.
      31. For the foregoing reasons, we find that the view taken
by the High Court of Allahabad cannot be said to be sustainable
while extending the benefit of order dated 14.6.2006 to the        H
498          SUPREME COURT REPORTS          [2014] 14 S.C.R.


A HV-2 consumers. The demand raised in Vikas Textiles' case
  for the period from April, 2007 to December, 2007 was also
  appropriate. In view of the aforesaid decision, the appeals
  arising from SLP (C) Nos.29322/10, 9869/2008, 29320/2010
  and 29324/2010 are allowed and the appeal arising from
B SLP(C) No. 30528/2009 is dismissed. Parties to bear their
  own cost!?.

      Kalpana K. Tripathy                   Appeals disposed of.