STATE OF GUJARAT & OTHERSversusESSAR OIL LIMITED AND ANOTHER

                    [2012) 2 S.C.R. 1127


             STATE OF GUJARAT & OTHERS                             A
                              v.
           ESSAR OIL LIMITED AND ANOTHER
              (Civil Appeal No. 599 of 2012)
                     JANUARY 17, 2012
                                                                   B
             [ASOK KUMAR GANGULY AND
             JAGDISH SINGH KHEHAR, JJ.]

     Sales Tax - Tax incentive scheme - For new industrial
units - Units seeking benefit under the scheme were required       C
to commence commercial production within a particular time
frame - Respondent sought to set up a new Oil refinery
project - Pipelines for the project were required to be laid
through forest land including national park and sanctuary area
- Respondent could not obtain requisite permission/licence         D
from the State Government for laying down the pipelines in
view of injunction/restraint orders passed by the High Court.
in certain PILs - High Court orders subsequently set aside
by Supreme Court and requisite permission/licence thereafter
granted to respondent - Respondent commenced                       E
commercial production, albeit after the time frame stipulated
under the incentive scheme - It filed writ petition contending
that the delay in commencement of commercial production
was on account of the injunction granted by the High Court;
that this situation continued till respondent was granted          F
permission/licence pursuant to the judgment of Supreme
Court, and therefore it was entitled to get benefit of exclusion
of the intervening period for calculating the time limit for
commencement of commercial production - High Court
excluded the intervening period and granted respondent the
benefit of the incentive scheme on the principle of restitution    G
and on the ground that respondent could not be made to lose
benefit under the scheme, for an act of Court - Justification
of - Held: Not justified - Principle of restitution was not
 applicable against the appellant-State Government since it
                             1127             -                    H
    1128    SUPREME COURT REPORTS                  [2012] 2 S.C.R.


A was nobody's case that it received any unjust benefit or any
  unjust enrichment in view of stay orders passed by the High
  Court on the P/Ls - Order passed by High Court in the P/Ls
  was overturned by Supreme Court on a different interpretation
  of s.29 of,fhe WPA - In case of a mere erroneous judgment
  of a Court the principle of "actus curiae" cannot be invoked -
8
  A mere mistake or error committed by Court cannot be a
  ground for restitution - The exercise undertaken by the High
  Court in the impugned judgment by directing various
  adjustments which virtually re-wrote the State's exemption
C scheme, was an exercise which was neither warranted in Jaw
  nor supported by precedents - There was no question of
  equity - Wildlife Protection Act - ss. 29 and 35.

         Doctrines - Doctrine of Restitution - Principles and
    applicability of - Discussed - Held: The concept of restitution
D is basically founded on the idea that when a decree is
    reversed, Jaw imposes an obligation on the party who received
    an unjust benefit of the erroneous decree to restitute the other
    party for what the other party Jost during the period the
    erroneous decree was in operation - The Court while granting
E restitution is required to restore the parties as far as possible
  · to their same position as they were in at the time when the
    Court by its erroneous action displaced them - A person who
    has conferred a benefit upon another in compliance with a
   judgment or whose property has been taken thereunder, is
F entitled to restitution if the judgment is reversed or set-aside,
    unless restitution would be inequitable.

        Maxims - "actus curiae neminem gravabit" - Concept
    and applicability of.

G      Taxation - Sa/es tax - Exception/Exemption provision -
  Interpretation of - Held: The principle that in case of
  ambiguity, a taxing statute should be construed in favour of
  the assessee, does not apply to the construction of an
  exception or an exempting provision, as the same have to be
H construed strictly - Further a person invoking an exception
  STATE OF GUJARAT & ORS. v. ESSAR.OIL LTD 1129
                 AND ANR.
or an exemption provision to relieve him of the tax liability A
must establish clearly that he is covered by the said provision
and in case of doubt or ambiguity, benefit of it must go to the
State - An exemption is a stand alone process - Either an .
industry claiming exemption comes within it or it does· not.
                                                                B
     In 1995, the appellant-State Government introduced
a Capital Investment Incentive Scheme which envisaged
grant of Sales Tax incentives by way of sales tax
exemption/ deferment for new industrial units. Units
seeking benefit of sales tax exemption /deferment under         C
the scheme were required to commence commercial
production within a particular time frame, i.e. upto 15-8-
2003. Respondent no.1-Essar, which sought to set up a
100% export oriented unit for refining of petroleum
products, had opted for the sales-tax deferment scheme.
It had filed application for right of way over 15.49 hectares   D
of forest land for laying pipelines for establishment of the
said oil Refinery Project. The said 15.49 hectares of forest
land included 8.79 hectares of Marine National Park and
Sanctuary. Permission under Section 2 of the Forest
Conservation Act ("FCA") was required for the entire            E
15.49 hectares, which was granted to respondent no.1.

     However, respondent no.1 also required permission
of the State Government under the Wildlife Protection Act
("WPA") for the said 8.79 hectares of Marine National Park      F
and Sanctuary. But, in view of the orders of the High
Court dated 13.07.2000/ 03.08.2000 in certain Public
Interest Litigations (Plls), whereby the State Government
was restrained from granting further permission under
the WPA, Respondent no.1-Essar was not given                    G
permission to lay down pipelines by the State
Government.
      ,.
     Respondent no.1-Essar challenged the said orders
of the High Court before this Court. This Court initially
stayed the High Court order insofar as Essar was                H
    '1130   SUPREME COURT REPORTS             [2012] 2 S.C.R.

A concerned and ultimately set aside the judgment of High
  Court and directed the State Government to issue
  authorization to Essar under Sections 29 and 35 of the
  Wild Life (Protection) Act after disapproving the
  interpretation placed by the High Court on the provisions
B of the Wild Life (Protection) Act, 1972. Consequently, on
  27-2-2004, Essar was given permission for laying pipeline
  iin the National Marine Park/Sanctuary area and
  ~hereafter, on 26-11-2006, respondent no.1-Essar
  commenced commercial production.
c      Respondent no.1 filed writ petition before the High
  Court contending that the reason for delay in
  commencement of commercial production was on
  account of the injunction granted by the High Court on
  13.07.2000 /03.08.2000; that this situation continued till
D 27.02.2004, when pursuant to the judgmentof this Court,
  IEssar was granted requisite permission under the Wildlife
  Protection Act; and therefore Essar was entitled to get
  l:>enefit of the exclusion of the said intervening period of
  from 13.07.2000 to 27.02.2004 in calculating the time limit
E for commencement of commercial production for
  !Purpose of availing benefit under the said tax deferment
  scheme.

      The High Court excluded the aforesaid intervening
F period and granted respondent no.1 the benefit of the said
  sales tax incentive scheme on two basic line of
  reasoning- that the respondents were entitled to the
  benefit of sales tax waiver scheme firstly on the principle
  of restitution and secondly, that the respondents could
G not be made to lose benefit under the sales tax waiver
  scheme, for an act of Court. Hence the present appeal.

        Allowing the appeal, the Court

      HELD: 1.1. The concept of restitution is basically
H founded on the idea that when a decree is reversed, law
  STATE OF GUJARAT & ORS. v. ESSAR OIL LTD             1131
                 AND ANR.
 imposes an obligation on the party who received an             A
·unjust benefit of the erroneous decree to restitute the
 other party for what the other party has lost during the
 period the erroneous decree was in operation. Therefore,
 the Court while granting restitution is required to restore
 the parties as far as possible to their same position as       8
 they were in at the time when the Court by its erroneous
 action displaced them. [Para 60] [1154-C-E]

       1.2. The concept of restitution is virtually a common
  law principle and it is a remedy against unjust enrichment
. or unjust benefit. The core of the concept lies in the        C
  conscience of the Court which prevents a party from
  retaining money or some benefit derived from another
  which he has received by way of an erroneous decree
  of Court. Such remedy in English Law is generally
  different from a remedy in contract or in tort and falls      D
  within a third category of common law remedy which is
  called quasi contract or restitution. [Para 62] [1155-8-C]

    1.3. The obligation to restitute lies on the person or
the authority that has received unjust enrichment or            E
unjust benefit. [Para 63] [1155-D]

     1.4. A person is enriched if he has received a benefit
and similarly a person is unjustly enriched if the retention
of the benefit would be unjust. Now the question is what
constitutes a benefit. A person confers benefit upon            F
another if he gives to the other possession of or some
other interest in money, land, chattels, or performs
services beneficial to or at the request of the other,
satisfies a debt or a dl,Jty of the other or in a way adds to
the other's security or advantage. He confers a benefit         G
not only where he adds to the property of another but
also where he saves the other from expense or loss. Thus
the word "benefit" therefore denotes any form of
advantage. Ordinarily in cases of restitution if there is a
benefit to one, there is a corresponding loss to other and      H
    1132   SUPREME COURT REPORTS              [2012] 2 S.C.R.


A in such cases; the benefiting party is also under a duty
  to give to the losing party, the amount by which he has
  been enriched. A person who has conferred a benefit
  upon another in compliance with a judgment or whose
  property has been taken thereunder, is entitled to
8 restitution if the judgment is reversed or set-aside, unless
  restitution would be inequitable. [Paras 64, 65 and 66)
  [1155-E-H; 1156-A-B]

      1.5. Equity demands that if one party has not been
  unjustly enriched, no order of recovery can be made
C against that party. Other situation would be when a party
  acquires benefits lawfully, which are not conferred by the
  party claiming restitution, Court cannot order restitution.
  [Para 67) [1156-C-D]

D       Lal Bhagwant Singh v. Sri Kishen Das AIR 1953 SC 136
    and Binayak Swain v. Ramesh Chandra Panigrahi and
    another AIR 1966 SC 948 : 1966 SCR 24 - relied on.

       Halsbury's Laws of England, Fourth Edition, Volume 9,
    page 434 and Restatement of the Law of Restitution by
E American Law Institute (1937 American Law Institute
  Publishers, St. Paul) - referred to.

      2.1. From the facts of the case, it is debatable whether
  the respondent's inability to avail benefit under the said
F Scheme is because of its own act or because of the act
  of the appellant. There is a reasonable basis in the
  argument of the appellant that after this Court granted the
  stay order on 11.5.2001 on the special leave petition filed
  by Essar, the respondents should have made an effort
G of obtaining the necessary licence by again coming to
  the Court. Admittedly Essar did not do it. Essar merely
  represented to the State for grant of licence. Assuming
  that the State had not responded favourably to the
  representation of Essar by giving the clearance, it was
H open to Essar to approach this Court for some order as
  STATE OF GUJARAT & ORS. v. ESSAR OIL LTD 1133
                 AND ANR.
its special leave petition was pending before this Court.       A
Essar did not do it. Therefore, the question remains
whether Essar acted with due diligence in obtaining the
equitable remedy of restitution. It is well known that due
diligence must be exhibited by the party to seek equity.
[Para 68] [1156-E-G]                                            B

      2;2. Now, if the case of Essar is taken on a higher
plain that it has done its duty even then it has been
denied of the benefit of the said scheme, even then there
is no question of restitution by the State for the simple . C
.reason that it is nobody's case that State has received
any unjust benefit or any unjust enrichment in view of
stay order given by the High Court in the Plls filed in t_he
High Court. On the contrary, it is clear from the record that
the State contested those proceedings and specially,
challenging the orders of the Gujarat High Court dated D
 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and
03.08.2000 on the Pl Ls, the State has filed its SLP.
Therefore, the State has not at all gained or received any
 benefit as a result of the orders passed by the High Court
 on the Plls. Therefore, the principle of restitution cannot E
 be applied against the State, the appellant. The judgment
 of the High Court to that extent is erroneous. [Para 69]
 [1156-H; 1157-A-C]                                         '

     2.3. The principle that an act of court cannot prejudice   F
anyone, based on latin maxim "actus curiae neminem
gravabit" is also encompassed partly within the doctrine
of restitution. This actus curiae principle is founded upon
justice and good sense and is a guide for the
administration of law. [Para 70] [1157-D]                       G
    2.4. When Court passes an order, which is rendered
per incuriam, and the party suffered because of the
mistake of the Court, it is the Court's duty to rectify the
said mistake. It is in that context that the concept of actus
curiae can be invoked. In the instant case the order            H
    1134    SUPREME COURT REPORTS               [2012] 2 S.C.R.


A passed by the High Court in the Plls was overturned by
  this Court by its order-dated 19.01.2004 on a different ·
  interpretation of section 29 of the WPA. This Court while
  giving a different interpretation of section 29 of WPA
  never held that High Court acted per incuriam in
B rendering its judgment. Therefore in the case of a mere
  erroneous judgment of a Court the principle of "actus
  curiae" cannot be invoked. A mere mistake or error
  committed by Court cannot be a ground for restitution.
  [Paras 73, 74 and 77] [1158-D-F; 1159-G]
c       2.5. In the instant case, it is clear that the appellant
   tiad also challenged this restraint order (passed by the
   High Court) before this Court. It cannot be said by this
   restraining order the appellant had gained any undue
   advantage. On the contrary, twin objects of development
D of the backward areas and employment opportunities,
   which were sought to be achieved by the appellant by
   floating the said scheme, were adversely affected. [Para
  '78] [1160-B-C]

E       2.6. No inaction on the part of appellant was pleaded
   by Essar. In fact before the High Court, Essar expressly
   gave up its plea of delay against the appellant. In fact the
  ·High Court passed the injunction order not because of
   the inaction of the appellant but the said order was
F passed in a proceedings which was opposed by
   appellant right upto this Court. [Para 84] (1161-H; 1162-
   A-B]

        A. R. Antulay v. R. S. Nayak & another (1988) 2 SCC 602
    : 1988 (1) Suppl. SCR 1 - relied on.
G
       South Eastern Coalfields Ltd. v. State of M. P. & others
  (2003) 8 sec 648 : 2003 (4) Suppl. SCR 651; Mumbai
  International Airport Pvt. Ltd v. Golden Chariot Airport &
  another, (2010) 10 sec 422 : 2010 (12) SCR 326; Karnataka
H Rare Earth & Anr. v. Senior Geologist, Department of Mines
  STATE OF GUJARAT & ORS. v. ESSAR OIL LTD               1135
                 AND ANR.
& Geology and Anr., (2004) 2 SCC 783 : 2004 (1) SCR 965           A
and Bareilly Development Authority v. Methodist Church of
India & Anr. (1988) Supp SCC 174 - held inapplicable.
    Hitech Electrothermics & Hydro Power Ltd. v. State of
Kera/a & Ors. (2003) 2 SCC 716: 2002 (5) Suppl. SCR 128
and /sh war Dutt v. Land Acquisition Collector & another (2005)   8
7 SCC 190: 2005 (1) Suppl. SCR 903 - distinguished.
    R.S. Nayak v. A.R. Antu/ey, (1984) 2 SCC 183 : 1984
(2) SCR 495 and The State of West Bengal v. Anwar Ali
Sarkar & another AIR 1952 SC 75 : 1952 SCR 284 -                  c
referred to.
    Rodger v. Comptoir D'escompte De Paris, (1869-71) LR
3 PC 465 - referred to.
     3.1. The principle that in case of ambiguity, a taxing       D
statute should be construed in favour of the assessee,
do.es not apply to the construction of an exception or an
exempting provision, as the same have to be construed
strictly. Further a person invoking an exception or an
exemption provision to relieve him of the tax liability must      E
establish clearly that he is covered by the said provision
and in case of doubt or ambiguity, benefit of it must go
to the State. [Para 88] (1163-A·B]
     3.2. In this case, Essar was categorically told by letter
dated 28.05.2002, which is much prior to the expiry of the        F
period, that time for availing the exemption cannot be
extended. Admittedly, Essar failed to meet the deadline.
In that factual scenario, the exercise undertaken by the
High Court in the impugned judgment by directing
various adjustments which virtually re-wrote the State's          G
exemption scheme, is an exercise which is neither
warranted in law nor supported by precedents. There is
no question of equity here, an exemption is a stand alone
process. Either an industry claiming exemption comes
within it or it does not. [Para 89] (1163-C-E]                    H
       1136   SUPREME COURT REPORTS               (2012) 2 S.C.R.


A          Novopan India Ltd. Hyderabad v. Collector of Central
       Exercise and Customs, Hyderabacl (1994) Supp 3 SCC 606
       : 1994 (3) Suppl. SCR 549 - relied on.

      Union of India & others v. Wood Papers Ltd & another
B (1990) 4 SCC 256 : 1990 (2) SCR 659 - refer~ed to.
                           Case Law Reference:

         AIR 1953 SC 136             relied on           Para 60

         1966 SCR 24                 relied on           Para 61
c
        1988 (1) Suppl. SCR 1       relied on            Para 71
        (1869-71) LR 3 PC 465       referred to          Para 71

        1984 (2) SCR 495            referred to          Para 72
D .,
        1952 SCR 284                referred to          Para 72
        2003 (4) Suppl. SCR651      held inapplicable Para 75
        2010 (12) SCR 326           held inapplicable Para 80
E       2004 (1) SCR 965            held inapplicable Para 81
        (1988) Supp sec 174         held inapplicable Para 82
        2002 (5) Suppl. SCR 128 distinguished          - Para 83

        2005 (1) Suppl. SCR 903 distinguished            Para 85
F
        1994 (3) Suppl. SCR 549 relied on                Para 87
        1990 (2) SCR 659            referred to          Para 87

       CIVIL APPELLATE JURISDICTION : Civil Appeal No. 599
G of 2012.

        From the Judgment & Order dated 22.04.2008 of the High
    Court of Gujarat at Ahmedabad in Special Civil Application No.
    24233 of 2007.
H
  STATE OF GUJARAT & ORS. v. ESSAR OIL LTD                 1137
                 AND ANR.

    Parag M. Tripathi, ASG, Hemantika Wahi, Ena Toli Serna,         A
Mahima Gupta, Suveni Banerjee, Rojalin Pradhan for the
Appellants.

    Gopal Subramanium, Dewal Banerjee, Harish N. Salve,
Mahesh Agarwal, Devansh Mehta, Neeha Nagpal, E.C.                   B
Agarwala for the Respondents.

    The Judgment of the Court was delivered by

    GANGULY, J. 1. Leave granted.
                                                                    c
     2. This appeal is directed against the judgment of the High
Court of Gujarat dated 22.04.2008 in Special Civil Application
No.24233/2007, whereby the Respondent No; 1 herein, Essar
Oil Limited (hereinafter "Essar") was given the benefit of Sales
Tax incentive under the Government of Gujarat "Capital
Investment Incentive to Premier/Prestigious Unit Scheme, 1995-      D
2000" (hereinafter "the said Scheme")

     3. The State Government in the Industries and Mines
Department vide Resolution dated 11.09.1995 introduced the
said scheme to accelerate development of the backward area          E·
of the State and to create large-scale employment
opportunities.

     4. The operative period of the said scheme was from
16.08.1995 upto 15.08.2000, during which new units have to          F
go into commercial production.

     5. The Scheme envisaged grant of Sales Tax incentives
by way of Sales Tax Exemption or Sales Tax Deferment or
Composite Schemes, for Premier/Prestigious Units according
to the location, investment and status of the project. Essar fell   G
in the category of premier unit i.e. new industrial unit having a
project cost of more than Rs.1,000/- crores and employing 100
workers on a regular basis and following the employment policy
of the State Government. Clause (v) of the Scheme defined
premier unit in the following terms:-                               H
    1138    SUPREME COURT REPORTS                  [2012] 2 S.C.R.


A        "(v) PREMIER UNIT
        A new industrial unit or industrial complex fulfilling the
        following criteria will be considered for granting status of
        a "Premier Unit".
B       (a) The industrial unit shall have a project cost of Rs.500
        crores or more. Such units having project cost of Rs.1.,000
        crores and above shall be entitled for extended period to
        avail incentive as provided under para 6 B.

c       (b) Only one unit per taluka will be eligible for the Premier
        Unit status. In banned area no unit is permitted.
        (c) The unit shall employ at least 100 workers on a regular
        basis arid shall follow the employment policy of the State ·
        Government."
D
       6. Part II of the said Scheme provided that the rate of
  incentive would depend on the location, investment and status
  of the project. The incentives offered were sales-tax exemption
  or sales-tax deferment or composite scheme. There is no
E dispute about the fact that Essar opted for sales-tax deferment
  scheme. As per clause 6(i)(B), the rate of incentive applicable
  to Essar was the rate available for the most backward area.
  The extent of exemption was 125% of eligible fixed capital
  investment.                       ·
F
       7. Part II Clause (iii) (b) provided that Under the Sales Tax
  Deferment incentive scheme, the recovery of sales tax
  connected by the unit on sale of goods manufactured by it
  including intermediate products, by products and scrap/waste
G generated as incidental to manufacturing activities and turnover
  tax, leviable to Government will be deferred and amount so
  deferred will be recovered in six equal annual installments by
  Sales Tax Department beginning from the financial year
  subsequent to the year in which the unit exhausts limit of
  incentive granted to it under the scheme or after the expiry of
H
  STATE OF GUJARAT & ORS. v. ESSAR OIL LTD 1139
     AND ANR. [ASOK KUMAR GANGULY, J.]

relevant period or time limit during which deferment is available   A
or whichever is earlier.

    8. Since Essar's investment was going to be more than
Rs.1,000 crores, the duration of incentive of sales-tax
deferment was to be for a period of 17 years from the date of
                                                                    8
commercial production.

     9. Clause 6(v) of the said Scheme provided for effective
steps for extending date of commercial production in the
following terms :
                                                                    c
    "6(v) Effective steps for extending date of commercial
    production :

    The unit which cannot go into commercial production
    before expiry of the scheme will be allowed to go into
    commercial production beyond the last date of the scheme        D
    provided it has taken the following effective steps:

    (1) The industrial unit should have obtained provisional
    registration. as a Prestigious/Premier unit before
    15th August 2000.                                               E
    (2) 25% of project cost should have been incurred before
    15th August 2000. The unit which has taken above
    effective steps will be allowed to go into commercial
    production as shown below:
                                                                    F
     (a) The unit with project cost above Rs.100 crores but
   · below Rs.300 crores should go into commercial
     production on or before 15th August 2002.

    (b) The unit with project cost more than Rs.300 crores          G
    should go into commercial production on or before
    15th February 2003.

    Such units shall have to apply to industries Commissioner
    for extending date of commercial production by 31st August
    2000."                                                          H
     1140    SUPREME COURT REPORTS                  [2012] 2 S.C.R.


.A        10. A High Power State Level Committee (hereinafter
     "HPSLC") was the Sanctioning Authority for granting permanent
     registration of all the Prestigious/Premier Units

          11. Part Ill provides the procedure for Registration for
     Premier/Prestigious Status, the relevant clause of the said Part
8    in respect of instant case is set out below:

         ''An Industrial unit eligible for Prestigious/Premier status
         under the scheme will apply to Industries Commissioner
         in prescribed form before expiry of the scheme along with
c        details of following effective steps.

         (i) Possession of plot or shed in GIPC Estate. For units
         located outside GIDC Estate, the unit must be in legal
         possession of land with valid non-agricultural use
         permission of industrial use or as per Revenue Act as
D
         modified from time to time.

         (ii) The Letter of intent/Letter of Approval or Registration/
         obtained receipt against filling of IEM to the appropriate
         authority.
E
         (iii) NOC of GPCB (Gujarat Pollution Control Board)

         (iv)_ Detailed Project Report.

         The following procedure will be adopted for granting the
F        temporary and permanent Prestigious/Premier registration.

         (a) The Industries Commissioner shall give provisional
         registration to the eligible prestigious/premier unit after
         approval of committee where applicable.
G        (b) The eligible unit after completion of project will apply
         to Industries Commissioner for permanent prestigious/
         premier registration, Industries Commissioner will carryout
         the assets verification and submit a verification report to
         the High Power State Level Committee, for granting
H        permanent rE'.gistration."
    STATE OF GUJARAT & ORS. v. ESSAR OIL LTD                   1141
       AND ANR. [ASOK KUMAR GANGULY, J.]

      12. Some relevant facts which arose prior to the floating         A
 of the Scheme and which are necessary for appreciating the
 said Scheme, as contended by Essar and which the records
 also shows, are as under.

      13. Essar was encouraged by the State Government to set           B
 up a major venture at Vadinar in Jamnagar District of Gujarat
 as a 100% export oriented unit for refining of petroleum
 products with a capacity of 9 Million Tons per annum at an
 estimated project cost of Rs. 1900 crores in collaboration with
 M/s Bechtel Inc., USA.
                                                                        c
        14. By letter dated 11th April, 1990, the then Chief Minister
  of the State of Gujarat wrote to the Ministry of Planning,
  Government of India, stating that the project was expected to
  generate foreign exchange earnings of over Rs.3000 crores
  within a period of 5 years and that it was expected to be set         D
  up in 36 months. It was anticipated by the State Government
. that the project would "completely change the face of the
  Vadinar area, which is traditionally a backward area of Gujarat
  offering· direct and indirect employment and will encourage
  growth of various other ancillary industries in that region". The     E
  letter further said that the project had the full support of the
  Government of Gujarat and it was being accorded highest
  priority and that Essar's proposal for setting up the oil refinery
  should be cleared by the Government of India urgently. The
  clearance for setting up the oil refinery was then granted by the     F
  Government of India.

      15. In January, 1993, Essar applied to the Gujarat Pollution
 Control Board (GPCB) for grant of a 'No Objection Certificate'
 to establish the refinery for manufacturing several kinds of
 petroleum products. By letter dated 15th February, 1993, the           G
 GPCB stated that it had no objection from the Environmental
 Pollution potential point of view in the setting up of the refinery
 project subject to certain environmental pollution control
 measures to be taken by the appellant. Essar's !Jroposal
 regarding the environmental pollution control system was               H
    1142   SUPREME COURT REPORTS                [2012] 2 S.C.R.


A approved by the GPCB on 17th April, 1993 and a Site
  Clearance Certificate was issued on that date.

       16. On 10.11.1994, Essar filed an application for right of
  way over 15.49 hectares of forest land for laying Submarine
B Crude Oil Pipeline, Cooling Water/Return Water Pipeline and
  Product Jetty for establishment of its Refinery Project at
  Vadinar, District Jamnagar, to the Conservator of Forests,
  Marine National Park, Jamnagar. Undisputedly, 15.49 hectares
  of forest land applied for includes 8.79 hectares of Jamnagar
C Marine National Park and Sanctuary. Therefore, permission
  under Section 2 of the Forest Conservation Act ("FCA") was
  required for the entire 15.49 hectares. At the same time,
  pennission of State Government was required under the Wildlife
  Protection Act ("WPA") for 8. 79 hectares.

D      17. On 13.02.1995, the State Government requested the
  Chief Conservator of Forests, Regional Office, Western
  Region, Bhopal, to move the Government of India to issue
  suitable orders to allow Essar to make geophysical survey in
  Marine National Park/Sanctuary area. The proposal was
E forwarded by the Chief Conservator of Forests, Bhopal to the
  Government of India on 15.05.1995.

       18. The Conservator of Forests recommended and
  forwarded the proposal of Essar for Right of Way to the Chief
  Conservator of Forests (WL) by letter dated 2nd June, 1995
F along with an application in the prescribed form seeking prior
  approval from the Central Government under Section 2 of FCA.
  The application with its enclosures together with the
  rec:ommendation of the State Government that 15.49 hectares
  of forest land be made available to the appellant, was
G forwarded to the Central Government by the Central Chief
  Conservator of Forests on 3rd February, 1997. Upon receipt
  of the proposal of the State Government, the Central
  Government constituted a team for joint inspection of the area.
  The report of the joint inspection team was that the proposed
H activity of the appellant would not have much ramification from
  STATE OF GUJARAT & ORS. v. ESSAR OIL LTD                    1143
     AND ANR. [ASOK KUMAR GANGULY, J.]

the forestry point of view and the damage would only be                A
temporary in nature in a localized area during the construction
phase.

     19. On 08.09.1995, the State Government in its Forests
and Environment Department informed the Government of India
                                                                       B
in the Ministry of Environment and Forests, inter alia, that the
approval "in principle" was granted to Essar to install Single
Buoy Mooring I Crude Oil Terminal I Jetty and connecting
pipeline in the National Marine Park and Sanctuary area in
Vadinar, District Jamnagar on the terms and conditions to be           C
decided in due course by the State Government.

     20. On 11.09.1995 the said Scheme was announced and
thereafter on 01.02.1996 Essar applied in the new format to
the Industries Commissioner, Gandhinagar for registering the
Industrial Undertaking as a "Premier/Prestigious Unit" under the       D
said Scheme.

     21. On 29.05.1996 the Forest and Environment
Department, State of Gujarat made a proposal to Government
of India seeking approval under Section 2 of FCA for diversion
                                                                       E
of 15.49 hectares of forest land for construction and operation
of certain offshore and onshore facilities for a grass root refinery
project of Essar.

    22. On the basis of the letter-dated 30.09.1997 of the
Principal Chief Conservator of Forests, the State Government           F
conveyed on 16.10.1997 its permission under section 29 of
WPA to Essar's proposal of right to way through the National
Park and Sanctuary subject to Essar's compliance with certain
terms and conditions including obtaining permission of the
Central Government under the FCA, 1980. (which was granted             G
on 08.12.1999, mentioned later) and also getting clearance
under the Coastal Regulation Zone (CRZ) Regulations, which
was granted on 03.11.2000.

     23. This permission was conveyed to Essar by the
                                                                       H
    1144    SUPREME COURT REPORTS                 [2012] 2 S.C.R.


A   Conservator of Forests under cover of his letter-dated
    18.10.1997. The permission was, however, restricted to the
    Kandla Port Trust area. Kandla Port Trust granted permission
    to Essar to install "marine facilities" on 10.10.1997.

        24. On 27.11.1997 the Ministry of Environment & Forest,
8
    Government of India granted "in-principle" approval to Essar
    under FCA, 1980 for diverting 15.49 hectares of forest land for
    non-forest purpose.

      25. On 25.06.1999 Essar was issued the provisional
C Premier Registration Certificate by the Industries
  Commissioner. The provisional certificate was valid upto
  15.08.2000 i.e. the last date of Scheme, within this time period
  Essar was obliged to start commercial production, failing which
  Essar would have to apply for extension of date of commercial
D production.

       26. In the meantime in view of the permissions granted to
  install "marine facilities", Essar started construction work of
  laying of water in-take jetty and product jetty in the forest area
E of Marine National Park and Marine Sanctuary. Essar's
  grievances ~re that despite the aforesaid permissions being
  given to them for construction, the State Forest Department
  forced Essar to stop work and further lodged on 19.3.1999 a
  criminal complaint against Essar and its contractor, for offence
F committed under sections 17(A), 29, 35(6), 51 (1) and 58 of the
  WPA and section 26 of the Indian Forests Act.

     .. 27. In April 1999, a writ petition being Special Civil
  Application No.2840/1999 in the nature of Public Interest
  Litigation was filed before the High Court of Gujarat by one
G Halar Utkarsh Samiti (hereinafter "Samiti") alleging serious
  violations of several environmental legislations on the part of
  Essar, who was impleaded as Respondent No.4 in the petition.

       28. By interim order-dated 20.04.1999 passed in that PIL
  High Court directed Essar not to carry on any construction
H activity in the Marine National Sanctuary and Marine National
    STATE OF GUJARAT & ORS. v. ESSAR OIL LTD                  1145
       AND ANR [ASOK KUMAR GANGULY, J.]

  Park in violation of the statutory provisions including the         A
· provisions contained in Wildlife (Protection) Act, 1972.

      29; By order-dated 20.08.1999 the High Court disposed
 of the said PIL in which Essar undertook to file an Undertaking
 to the effect that they would not carry out any construction         B
 activities at the site in question, without obtaining the approval
 from the authorities. Pursuant to the said order. on 28.09.1999
 Essar filed an undertaking to the following effect:

      " ... no construction activities or marine facilities will be
      undertaken without obtaining the approval from the              C
      authorities including those which are under process before
      the authorities.

      This undertaking is given without prejudice to the rights and
      contentions of the Respondent No.4.                             D

     This undertaking will come to an end as and when the
     permission is granted by the authorities."

       30. In the meantime on 09.09.1999, a charge sheet was
 filed against the officers of Essar and its contractor in respect    E
 of earlier mentioned offences allegedly committed by them
 under the WPA and FCA.

    31. On 08.12.1999 the Ministry of Environment and Forest,
 Government of India granted approval under section 2 of the
                                                                      F
 FCA for the total land of 15.49 hectares of forest land.

      32. In April 2000, said Samiti filed another PIL being
 Special Civil Application No.1778, and subsequently two other
 PILs were also filed by one Jan Sangarsh Manch and one Shri
 Alpesh Y. Kogje, being Civil Application Nos.5476 and 5928           G
 of 2000, (hereinafter "second PILs") in the High Court of Gujarat
 challenging, inter alia, the permission granted by the State
 Government to one Bharat Oman Refineries Ltd. ('BORL') to
 lay pipeline in the Marine National Park and Sanctuary Area. It
                                                                      H
    1146     SUPREME COURT REPORTS                 [2012] 2 S.C.R.

A   is pertinent to note here that Essar was not a party to these
    petitions.

         33. On 29.04.2000 the Government of Gujarat
    discontinued the said Scheme with effect from 01.01.2000.
    However, vide the same Government Resolution dated
8
    29.04.2000, it was specifically mentioned that industry units in
    pipelines cases which have been registered should start
    production within two years from January 1, 2000 failing which
    such units shall be rendered ineligible for sales tax incentive.
    Therefore, the time to start commercial production was thus
C   extended to 01.01.2002. It is common ground that Essar, being
    a registered unit, was entitled to the benefit of the said
    extension.

        34. Before the High Court, when proceedings in respect
D   of the second Pl Ls were going on, the counsel of Government
    of Gujarat placed a copy of the letter-dated 25.07.2000.
    Relying on the letter, the High Court noted that there were tWo
    more pending proposals for laying pipeline in the Marine Park/
    Sanctuary Area with the State Government - one from Essar
E   and the other from one Gujarat Poshitra Port Ltd.

           35. Before the High Court, the State Government
    submitted that the proposal from Essar for laying down
    pipelines in Marine National Park and Marine Sanctuary,
    Vadinar in Jamnagar District has been only approved 'in
F   principle' vide letter-dated 08.09.1995. However, formal
    sanction under section 29 of the WPA, 1972 is yet to be given
    by the State Government.

      36. By judgment and order dated 13.07.2000, 18.07.2000,
G 20.07.2000, 27.07.2000 and 03.08.2000 the High Court, in the
    second Plls, restrained the Government of Gujarat from
    granting any more authorization and permission for laying
    down any pipeline in any part of the sanctuary or the national
    park. As a result of this order, Essar was not given permission
H   to lay down pipelines by the State Government.
     STATE OF GUJARAT & ORS. v. ESSAR OIL LTD                1147
        ANIJ ANR. [ASOK KUMAR GANGULY, J.]

         37. Being aggrieved, inter alia, on the ground that it was   A
. , not a party to the second PILs, Essar filed a review/recall
    application before the High Court being MCA No.250 of 2011
    in SCA No.1778 of 2000, inter alia, seeking review and recall
    of the judgment and order dated 13.07.2000, 18.07.2000,
    20.07.2000, 27.07.2000 and 03.08.2000 passed in the second        B
    PILs by the High Court and a further declaration to the effect
    that Essar's project at Vadinar was not affected in any manner
    by the said judgment.

       38. By judgment and order dated 23.02.2001 the High
  Court rejected the said application for review on the ground that   C
  there was a factual controversy between Essar and the State
  Government and that therefore the grievance of Essar was
  beyond the scope of review.

       39. Meanwhile, on 12.04.2001 the Government of Gujarat         D
  extended the time for going into commercial production upto
  15.08.2003 for various pipeline units including Essar, vide
  Government Resolution dated 12.04.2001. By that time Essar
  had obtained Provisional Premier Unit Registration before
  15.08.2000 and had also incurred 25% of the Project Cost            E
  before 15.08.2000 and therefore, it was entitled to the benefit
  of this extension.

      40. Essar challenged the aforesaid judgment and order
  dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000,
  03.08.2000 and 23.02.2001 of the High Court delivered in the        F
  second PILs and the rejection of its review petition in that
  second Pl Ls respectively by way of filing Special Level Petition
  being (SLP) CC No.3654 of 2001 [later SLP No.9454-9455
  of 2001] before this Hon'ble Court.
                                                                      G
       41. By interim order-dated 11.05.2001 this Court granted
  stay of. the judgment of the High Court in so far as Essar was
  concerned in SLP No.9454-9455 of 2001 i.e. SLP filed by
  Essar. The text of the order of this Court is set out:
                                                                      H
    1148    SUPREME COURT REPORTS                 [2012.] 2 S.C.R.


A       "Permission to file Special Leave Petition is granted.

        Issue notice.

        Stay of the High Court judgment in so far as the petitioner
        is concerned.
B
        Counter affidavit be filed within four weeks. Rejoinder be
        filed within four weeks thereafter. List after eight weeks."

        42. In view of the above stay order granted by this Court,
C Essar moved the State Government for permitting it to proceed
  with the construction of jetty and laying the pipeline. By letter
  dated 29.10.2001, the State Government in the Forests and
  Environment Department specifically called Essar to ensure that
  no construction activities were commenced before obtaining all
  necessary clearances from different Government departments,
D agencies and the conditions stipulated by the Ministry of
  Environment and Forests, Government of India as well as the
  Forests and Environment Department of the State Government
  were strictly complied with. However, Essar did not commence
  the construction of jetty or laying down the pipeline in the
E National Marine Park/Sanctuary area. One thing which is of
  some importance is that despite the stay of this Court and the
  Government letter dated 29.10.2001, Essar did not challenge
  the Government stand in the pending special leave petition filed
  by it in this Court.
F
        43. It is also pertinent to note that the Government of
  Gujarat had also challenged the judgment and order dated
  13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and
  03.08.2000 of the High Court passed in the second PILs by
G way of filing Special Leave Petition being (SLP) CC No.5123-
  5125 of 2001 (later SLP No.17694-96 of 2001) before this
  Court, wherein by interim order dated 24.09.2001 this. Court
  passed the following operative order:

        "Issue notice.
H
  STATE OF GUJARAT & ORS. v. ESSAR OIL LTD 1149
     AND ANR. [ASOK KUMAR GANGULY, J.]
     Tag with SLP(C) 9454-9455/2001.                              A
    There will be status quo as of today with the result that any
    permission which has been granted is not stayed. It will be
    open to the State Government to consider the granting of
    further permission which will be subject to the outcome of
    this appeal."                                                 B

     44. Essar just requested by its letter dated 11.04.2002 the
Industries Commissioner to extend the date of commercial
production to 30.11.2004 instead of 15.08.2003 for the purpose
of availing the incentive benefit under the Scheme and cited C
that the delay in completing the project and consequent delay
in starting commercial production was due to the factors
beyond the control of Essar. Further by letter-dated 07.05.2002
Essar in continuation of the letter-dated 11.04.2002 requested
the Industries Commissioner to extend the date of commercial o·
production to August 2006.

     45. The Industries Commissioner refused to grant any
further extension of time vide its letter-dated 28.05.2002 and
also made it clear to Essar to go into commerdal production
within the specified time i.e. till 15.08.2003.. Essar, therefore, E
submitted a representation dated 19.06.2002 to the Chief
Minister pointing out the circumstances which had delayed the ,
completion of the project. Similar representations were
thereafter made to different authorities of the State Government
on 27.-06.2002, 14.03.2003, 30.07.2003, 02.12.2003 and F
26.12.2003. It appears that the said representations were not
responded to.

     46. By an order-dated 19.01.2004, this Court quashed and
set aside the judgment dated 03.08.2000 of High Court and G
directed the State Government to issue the authorization to
Essar in the requisite format under Sections 29 and 35 of the
Wild Life (Protection) Act within a fortnight after disapproving
the interpretation placed by the High Court on the provisions
of the Wild Life (Protection) Act, 1972. This Court took the view H
     1150   SUPREME COURT REPORTS                  [2012] 2 S.C.R.


A that the permission granted by the State Government on
  16.10.1997 was the permission cont~mplated by Section 29
  of the Wild Life (Protection) Act.

       47. In compliance with the above judgment, by letter dated
  12.02.2004, the State Government authorized the Chief Wild
8
  Life Warden, Gujarat State under Sections 29 and 35 (6) of the
  Wild Life (Protection) Act to permit Essar for laying oil pipeline
  in the National Marine Park/Sanctuary area. The Chief Wild Life
  Warden also issued the requisite permission on 27.02.2004.

C     48. In the meantime, the accused i.e. officials and
  contractors of Essar involved in the Criminal Case of 1999
  moved an application for discharge before the Metropolitan
  Magistrate at Khambalia. By order-dated 27.05.2004 the
  Magistrate allowed the said application and discharged the
D accused persons from all the charges levelled against them.

        49. In view of the above permission granted by the Chief
  Wild Life Warden under Sections 29 and 35 of the Wild Life
  (Protection) Act, Essar again sent representations dated
E 06.04.2004, 12.07.2004, 27.07.2004 and 22.12.2004 to the
  Government requesting extension of time limit for
  commencement of commercial production for the purpose of
  sales tax deferment incentive scheme. In view of the above
  representations, the State Government in the Industries and
  Mines Department vide Resolution dated 10.05.2006
F constituted a Committee comprising of the Advisor to the Chief
  Minister, the then Additional Chief Secretary, Finance
  Department and the then Principal Secretary, Industries and
  Mines departm~nt. The Committee was constituted to consider
  various such representations of Essar and other Companies.
G
        50. On 26.11.2006 Essar commenced commercial
  production and started paying sales tax on the products sold
  by it, under protest.

        51. As nothing was heard from the said Committee
H.
  STATE OF GUJARAT & ORS. v. ESSAR OIL LTD 1151
     AND ANR. [ASOK KUMAR GANGULY, J.]

constituted in the year 2006 and the representations made by         A
Essar in respect of granting Sales Tax Deferment were
undecided, Essar filed a writ petition being Special Civil
Application No. 24233/2007 before the High Court contending
that for no fault of it, Essar was prevented from completing the
project and that it was on account of being so prevented, Essar      B
could not commence the commercial production within the time
limit of 15.08.2003.

    52. It is pertinent to note at this stage that before the High
Court, Essar had expressly withdrawn the allegation that
Department of Forest and Conservation, Government of Gujarat         C
was guilty of delay. This is noted in para 6.2 of the High Court
judgment which is set out below:

     "6.2 While in the memo of the petition some allegations/
     submissions have been made attributing the delay to the         D
     Forests and Conservation Department of State
     Government, but the petitioner Company is not interested
     in pursuing those allegations and in fact would like to
     withdraw those allegations and the petitioner would like to
     invoke the following maxims of equity:-                         E

     (i) "An act of the Court shall prejudice no man", and

     (ii) "The law does not compel a man to do that which he
     cannot possibly perform."
                                                                     F
      53. Before the High Court Essar contended that reason
for delay in commencement of commercial production was on
account of the injunction granted by the High Court on
13.07.2000/03.08.2000, restraining the State from granting
further permission under Section 29 of the WPA in the second         G
Pl Ls (where Essar was not a party). And this situation continued
till 27.02.2004, when pursuant to the judgment-dated
19.01.2004 of this Court the Chief Warden granted the said
permission. Therefore Essar was entitled to get benefit of the
exclusion of the said intervening period of from 13.07.2000 to       H
    1152        SUPREME COURT REPORTS               [2012] 2 S.C.R.


A   27.02.2004 i.e. three years and 230 days in calculating the time
    limit for commencement of commercial production.

          54. By impugned order-dated 22.04.2008 the High Court
    excluded the aforesaid intervening period and as such extended
    the time limit for commencement of commercial production from
8
    15.08.2003 to 02.04.2007 after observing in the impugned
    judgment as under:

        "17 .... In the facts of the present case also, the State
        Government had granted the permission on 16.10.1997 ·
C       and the Central Government had granted the permission
        on 08.12.1999. The very fact that the Chief Wild Life
        \Narden issued the permission on 27.02.2004 after the
        decision of the Apex Court on 19.01.2004 is itself sufficient
        to show that the request made by the petitioner for
D       excluding the intervening period between 13th July/
        :1rd August, 2000 and 27.02.2004 is reasonable."

       55. It is also pertinent to note herein that in the impugned
  order; a direction was given to the State Government that while
E considering Essar's application for the incentives, the State
  Government shall stipulate the following conditions, provided
  the final eligibility certificate is issued within one month from
  the date of receipt of the judgment:-

        "22 ....
F
        (i) The petitioner shall not be given the benefit of deferment
        of Sales-taxNalue Added Tax beyond 14th August, 2020.

        (ii) The amount of Sales-taxNAT already paid/payable by
        the petitioner for the period upto today shall not be refunded
G       to the petitioner.
        '   .
        (The above amount is stated by the petitioner company to
        be above Rs.300 crores)

H       (iii) Without adjusting the Sales-taxNAT paid for the period
                        .-~                               .
    STATE OF GUJARAT & ORS. v. ESSAR OIL LTD 1153
       AND ANR. [ASOK KUMAR GANGULY, J.]

      upto today as aforesaid, the amount otherwise computable         A
      under the Incentive Scheme on the basis of the eligible
      capital investment made by the petitioner in the unit under
      consideration shall be reduced by Rs.700 crores."

       56. The above direction is based on the submissions of
                                                                 8
 the counsel of both the parties, which were made without
 prejudice to their respective cases. The counsel of Essar
 submitted a proposal that Essar was ready to make the above
 mentioned concessions no. (i) & (ii) if the State Government
 does not challenge the decision of the High Court and within C
 one month from that day the State Government grants Essar
 the benefit of the Sales TaxNAT deferment as per the said
 scheme. In resp,onse to the said proposal the learned counsel
 for the State Government replied that assuming that i=:ssar was
 found to be eligible under the said Scheme, the amount
 otherwise computable under the Incentive Scheme on the basis D
 of the eligible capital investment made by Essar in the unit
 under consideration shall be reduced by Rs.700 crores.

      57. The .learned counsel for the respondents made an
 attempt to urge that the judgment of the High Court was virtually     E
 rendered by way of a concession and the impugned judgment
 is a consent order. As such the appeal, at the instance of the
 State.• is not maintainable. Learned counsel. for the State
 strongly opposed this contention and submitted that the same
 contention was raised at the time of admission of the special         F
 leave petition. Then, further affidavit was filed by the State with
 the leave of the Court. The Court was satisfied and then issued
·notice.

      58. Ultimately, the matter was argued on merits before this
 Court and it was common ground that the impugned judgment             G
 is not by consent.

      59. The impugned judgment of the High Court is based
 on two basic line of reasoning that the respondents are entitled
 to the benefit of Sales Tax Waiver Scheme firstly on the              H
    1154      SUPREME COURT REPORTS                      [2012] 2 S.C.R.


A principle of restitution and secondly, that the respondents cannot
  be made to lose the benefit under the Sales Tax Waiver
  Scheme, for an act of Court. In this regard it has been urged
  that the respondents could not set up the plant for the purpose
  of commercial production within 15th August, 2003 as it was
B prevented from doing so by an order of injunction of the High
  Court. An order of injunction is an act of Court and an act of
  High Court cannot prejudice anyone. The loss of time suffered
  by the respondent as a result of the injunction order cannot
  cause any prejudice to the respondent.
c        60. Examining the aforesaid two contentions, this Court
   finds that there is an overlapping area between the two. The
   concept of restitution is basically founded on the idea that when
   a decree !s reversed, law imposes an obligation on the party
   who received an unjust benefit of the erroneous decree to
.D restitute the other party for what the other party has lost during
   the period the erroneous decree was in operation. Therefore,
   the Court while granting restitution is required to restore the
   parties as far as possible to their same position as they were
   in at the time when the Court by its.erroneous action displaced
 E them. In the case of Lal Bhagwant Singh v. · Sri Kishen Das
   reported in AIR 1953 SC 136, Justice Mahajan speaking for a
   unanimous three-Judge Bench of this Court explained the
   doctrine of restitution in the following words:-

F          ": .. the principles of the doctrine of restitution which is that
           on the reversal of a judgment the law raises an obligation
           on the party to the record who received the benefit of the
           erroneous judgment to make restitution to the other party
           for what' he had lost and that it is the duty of the Court to
           enforce that obligation unless it is shown that restitution
G
           would be clearly contrary to the real justice of the case ... "
      61. Subsequently, in Binayak Swain v. Ramesh Chandra
  Panigrahi and another (AIR 1966 SC 948) this Court relied on
  the principles in Bhagwant Singh (supra) and explained the
H concept of restitution as follows:-
  STATE OF GUJARAT & ORS. v. ESSAR OIL LTD                      1155
     AND ANR. [ASOK KUMAR GANGULY, J.]

     " ... The principle of the doctrine of restitution is that on the   A
     reversal of a decree, the law imposes an obligation on the
     party to the suit who received the benefit of the erroneous
     decree to make restitution to the other party for what he
     has lost."
                                                                         B
     62. The concept of restitution is virtually a common law
                   a
principle and it is remedy against unjust enrichment or unjust
benefit. The core of the concept lies in the conscience of the
Court which prevents a party from retaining money or some
benefit derived from another which he has received by way of             C
an erroneous decree of Court. Such remedy in English Law is
generally different from a remedy in contract or in tort and falls
within a third category of common law remedy which 'is called
quasi contract or restitution.

     63. If we analyze the concept of restitution one thing              D ·
emerges clearly that the obligation to restitute lies on the person
or the authority that has received unjust enrichment or unjust
benefit (See Halsbury's Laws of England, Fourth Edition,
Volume 9, page 434).
                                                                         E
     64. If we look at Restatement of the Law of Restitution by
American Law Institute (1937 American Law Institute
Publishers, St. Paul) we get that a person is enriched if he has
received a benefit and similarly a person is unjustly enriched if
the re.tention of the benefit would be unjust. Now the question
is what constitutes a benefit. A person confers benefit upon             F
another if he gives to the other possession of or some other
interest in money, land, chattels, or performs services beneficial
to or at the request of the other, satisfies a debt or a dutY of
the other or in a way adds to the other's security or advantage.
He confers a benefit not only where he adds to the property of           G
another but also where he saves the other from expense or
loss. Thus the word "benefit" therefore denotes any form of
advantage (page 12 of the Restatement of the Law of
Restitution by American Law Institute).
                                                                         H
    1156     SUPREME COURT REPORTS                    [2012] 2 S.C.R.


A        65. Ordinarily in cases of restitution if there is a benefit to
    one, there is a corresponding loss to other and in such cases;
    the benefiting party is also under a duty to give to the losing
    party, the amount by which he has been enriched.

       66. We find that a person who has conferred a benefit upon
8
  another in compliance with a judgment or whose property has
  been taken thereunder, is entitled to restitution if the judgment
  is reversed or set-aside, unless restitution would be inequitable
  (page 302 of the Restatement of the Law of Restitution by
C American Law Institute).

       67. Equity demands that if one party has not been unjustly
  enriched, no order of recovery can be made against that party.
  Other situation would be when a party acquires benefits lawfully,
  which are not conferred by the party claiming restitution, Court
D cannot order restitution.

        68. From the facts of the case which has been discussed
  above it is debatable whether the respondent's inability to avail
  benefit under the said Scheme is because of its own act or
E because of the act of the appellant. There is a reasonable basis
  in the argument of the appellant that after this Court granted the
  stay order on 11.5.2001 on the special leave petition filed by
  Essar, the respondents should have made an effort of obtaining
  the necessary licence by again coming to the Court. Admittedly
F Essar did not do it. Essar merely represented to the State for
  grant of licence. Assuming that the State had not responded
  favourably to the representation of Essar by giving the
  clearance, it was open to Essar to approach this Court for some
  order as its special leave petition was pending before this
  Court. "Essar did not do it. Therefore, the question remains
G whether Essar acted with due diligence in obtaining the
  equitable· remedy of restitution. It is well known that due
  diligemce must be exhibited by the party to seek equity.

       69. Now, if we take the case of Essar on a higher plain
H that it has done its duty even then it has been denied of the
   STATE OF GUJARAT & ORS. v. ESSAR OIL LTD 1157
      AND ANR. [ASOK KUMAR GANGULY, J.]

benefit of the said scheme, even then there is no question of        A
restitution by the State for the simple reason that it is nobody's
case that State has received any unjust benefit or any unjust
enrichment in view of stay order given by the High Court in the
second PILs filed in the High Court. On the contrary, it is clear
from the record that the State contested those proceedings and       B
specially, challenging the orders of the Gujarat High Court dated
13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and
03.08.2000 on the second PILs, the State has filed its SLP.
Therefore, the State has not at all gained or received any benefit
as a result of the orders passed by the High Court on the            c
second PILs. Therefore, the principle of restitution cannot be
applied against the State, the appellant before us. The
judgment of the High Court to that extent is erroneous. ·

        70. The second principle that an act of court cannot
  prejudice anyone, based on latin maxim "actus curiae neminem       D
. gravabit" is also encompassed partly within the doctrine of
  restitution. This actus curiae principle is founded upon justice
  and good sense and is a guide for the administration of law.

     71. The aforesaid principle of "actus curiae" was applied       E
in the case of A.R. Antulay v. R.S. Nayak & another reported
in (1988) 2 SCC 602, wherein Sabyasachi Mukharji, J (as his
lordship then was) giving the majority judgment for the
Constitution Bench of this Court, explained its concept and
application in para 83, page 672 of the report. His lordship         F
quoted the observation of Lord Cairns in Rodger v. Comptoir
D'escompte De Paris, [(1869-71) LR 3 PC 465 at page 475)
which is set out below:

     "Now, their Lordships are of opinion, that one of the first
     and highest duties of all Courts is to take care that the act   G
     of the Court does no injury to any of the Suitors, and when
     the expression 'the act of the Court' is used, it does not
     mean merely the act of the Primary Court, or of any
     intermediate Court of .appeal, but the act of the Court as
     a whole, from the lowest Court which entertains jurisdiction    H
    1158      SUPREME COURT REPORTS                [2012) 2 S.C.R.


A       over the matter up to the highest Court which finally
        disposes of the case. It is the duty of the aggregate of
        those Tribunals, if I may use the expression, to take care
        that no act of the Court in the course of the whole of the
        proceedings does an injury to the suitors in the Court."
B
       72. In the Antu/ay case (supra), ;twas found that directions
  of this Court in its order-dated 16.02.1984 in the previous
  Antulay Case {R.S. Nayak v. A.R. Antuley, (1984) 2 SCC 183}
  was given per incuriam and without noticing the provisions of
  section 6 and 7 of the Criminal Law Amendment Act, 1952 and
C also the binding nature of the Larger Bench decision in The
  State of West Bengal v. Anwar Ali Sarkar & another (Al R 1952
  SC 75).

           73. It was made clear in the Antulay Case [(1988) 2 SCC
D 602) that when Court passes an order, which is rendered per
  incuriam, and the party suffered because of the mistake of the
  Court, it is the Court's duty to rectify the said mistake. It is in
  that context that the concept of actus curiae can be invoked. In
  the instant case the order passed by the High Court in the
E second PILs was overturned by this Court by its order-dated
  19.01.2004 on a different interpretation of section 29 of the
  WPA.

         74. This Court while giving a different interpretation of
    section 29 of WPA never held that High Court acted per
F   incuriam in rendering its judgment on second PIL filed by the
    Samiti. Therefore in the case of a mere erroneous judgment
    of a Court the principle of "actus curiae" cannot be invoked.

           75. The learned counsel for Essar in support of the
G applicability of Doctrine of Restitution has cited the case of
    South Eastern Coalfields Ltd. v. State of M.P. & others
    reported in (2003) 8 SCC 648 wherein this 9ourt through R.C.
    Lahoti, J (as his Lordship then was) in para 27 had observed
    that:
H
  STATE OF GUJARAT & ORS. v. ESSAR OIL LTD 1159
     AND ANR. [ASOK KUMAR GANGULY, J.]

    "Section 144 C.P.C. is not the fountain source of                A
    restitution, it is rather a statutory recognition of a pre-
    existing rule of justice, equity and fair play. That is why it
    is often held that even away from Section 144 the Court
    has inherent jurisdiction to order restitution so as to do
    complete justice between the parties."                           B

    76. His Lordship at para 28 observed as under:

    "That no one shall suffer by an act of the court is not a rule
    confined to an erroneous act of the court; the 'act of the
    court' embraces within its sweep all such acts as to which       C
    the court may form an opinion in any legal proceedings
    that the court would not have so acted had it been correctly
    apprised of the facts and the law. The factor attracting
    applicability of restitution is not the act of the Court being
    wrongful or a mistake or error committed by the Court; the       D
    test is whether on account of an act of the party persuading
    the Court to pass an order held at the end as not
    sustainable, has resulted in one party gaining an
    advantage which it would not have otherwise earned, or
    the other party has suffered an impoverishment which it          E
    would not have suffered but for the order of the Court and
    the act of such party. The quantum of·restitution,
    depending on the facts and circumstances of a giyen
    case, may take into consideration not only what the party
    excluded would have made but also what the party under           F
    obligation has or might reasonably have made."

    77. As discussed earlier a mere mistake or error
committed by Court cannot be a ground for restitution. Now in
view of the above, two questions arise for consideration:
                                                                     G
    (i) Whether the orders dated 13.07.2000, 18.07.2000,
    20.07.2000, 27.07.2000 and 03.08.2000 of the High
    Court whereby the appellant was restrained from giving
    any further permission for laying pipelines has resulted in
    any undue advantage to appellant?                                H
    1160    SUPREME COURT REPORTS                  [2012]. 2 S.C.R.


A       (ii) Whether in respect of the order dated 13.07.2000,
        18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 of
        the High Court, later on reversed by this Court on
        19.01.2004 on a different interpretation of Section 29 of
        WPA, the actus curiae principle can be invoked.
B
        78. Coming to the first question, as mentioned above, it
  is clear that the appellant had also challenged this restraining
  order before this Court. It cannot be said by this restraining
  order the appellant had gained any undue advantage. On the
C contrary, twin objects of development of the backward areas
  and employment opportunities, which were sought to be
  achieved by the appellant by floating the said scheme, were
  adversely affected.

      79. Therefore the principles in South Eastern Coalfield Ltd.
D (supra) are not attracted here.

   .   80. In Mumbai International Airport Pvt. Ltd v. Golden
  Chariot Airport & another, (2010) 10 SCC 422, after a. Civil
  Court returned the plaint filed by respondent, the respondent
E came up in appeal against the said order before the High Court
  and expressly gave up its claim of irrevocable license in order
  to revive the-suit and on such stand, the High Court remanded
  the suit for trial. Thereafter the respondent therein tried to urge
  the same plea of irrevocable license before the Trial Court and
  this Court. This Court did not accept the plea holding that the
F common law doctrine of approbation and reprobation is well
  established in our jurisprudence and applicable in our laws too.
  That principle has no application to the facts of this case.

        81. The principles decided in the case of Karnataka Rare
G Earth & Anr. v. Senior Geologist, Department of Mines &
   Geology and Anr., reported in (2004) 2 SCC 783 is equally of
   no assistance to Essar. In that case both the doctrines of "actus
   curiae" and "restitution" were discussed together. We have
   already held that these equitable doctrines are not applicable
H 'in the facts of the present case. In Karnataka Rare Earth
   STATE OF GUJARAT & ORS. v. ESSAR OIL LTD                    1161
      AND ANR. [ASOK KUMAR GANGULY, J.]

(supra), the appellants, on the basis of an interim order granted       A
by this Court, extracted minerals and disposed of the same.
Ultimately the interim order was vacated by this Court and the
appeal filed by Karnataka Rare Earth was dismissed. In that
context this Court held that the appellants cannot enjoy the
benefits earned by them under the interim order of this Court           B
and this Court held that the demand of the State for the price
of mines and minerals from the appellant is neither
unreasonable nor arbitrary.

     82. Reliance was placed on the judgment of this Court in
Bareil/y Development Authority v. Methodist Church of India             C
& Anr., reported in (1988) Supp SCC 174. In that case no
principle was decided but the case was decided on its facts.
In Bareilly Development Authority (supra), a commercial
complex was to be constructed within a time schedule. During
the said period of construction, the work had to be stopped in          D
view of the demolition order passed by the authority. This Court
held that the said period has to be excluded in computing the
period of completion. It was not a case of construing any
exemption scheme. What was construed was condition 6 of the
construction sanction plan. Therefore principles of Bareilly            E
Development Authority (supra) cannot be applied.

     83. In the case of Hitech Electrotherrnics & Hydro Power
Ltd. v. State of Kera/a & Ors., reported in (2003) 2 SCC 716
it is true that this case is one relating to grant of concessional      F
tariff rate. However the fact shows that in that case the Electricity
Board provided power to the appellant only in the year 1998
and the Court found that the delay in giving power was for sheer
inaction on the part of Electricity Board. In that context this Court
held that literal construction to the entitlemei:it of concessional     G
tariff rate should not be done and the Court also noted that the
appellant enjoyed concessional tariff rates on the basis of
interim order of Court.
    84. In the instant case, no inaction on the part of appellant
was pleaded by Essar. In fact before the High Court, Essar              H
                             '
    1162    SUPREME COURT REPORTS                     [2012] 2 S.C.R.


A expressly gave up its plea of delay against the appellant. In fact
  the High Court passed the injunction order not because of the
  inaction of the appellant but the said order was passed in a
  proceedings which was opposed by appellant right upto this
  Court. Therefore, the case of Hitech Electrothermics (supra)
B is clearly distinguishable on facts.

         85. The learned counsel for Essar relied on a decision of
    this Court in lshwar Dutt v. Land Acquisition Collector &
  another reported in (2005) 7 SCC 190. But no question of issue
  estoppel was argued before the High Court and no such
C question actually has fallen for consideration in the course of
  argument before this Court. Therefore reliance on the principle
  of issue estoppel on the basis of lshawar Dutt (supra) is not
  relev~nt at all.

D       86. In this case we are to interpret the provisions of
    exemption scheme.

       87. In Novopan India Ltd. Hyderabad v. Collector of
  Central Exercise and Customs, Hyderabad [(1994) Supp 3
E SCC 606] the question for consideration before this Court was
  that, in case of ambiguity, which rule of construction will be
  applicable to exemption provision. This Court relied on the case
  of Union of India & others v. Wood Papers Ltd & another
  reported in (1990) 4 sec 256, wherein at para 4, page 260
  this Court observed as under:
F
        " ... Truly speaking liberal and strict construction of an
        exemption provision are to be invoked at different stages
        of interpreting it. When the question is whether a subject
        falls in the notification or in the exemption clause then it
G       being in nature of exception is to be construed strictly and
        against the subject but once ambiguity or doubt about
        applicability is lifted and the subject falls in the notification
        then full play should be given to it and it calls for a wider
        and liberal construction."
H
   STATE OF GUJARAT & ORS. v. ESSAR OIL LTD 1163
      AND ANR. [ASOK KUMAR GANGULY, J.]

      88. This Court held that the principle that in case of           A
ambiguity, a taxing statute should be construed in favour of the
assessee, does not apply to the construction of an exception
or an exempting provision, as the same have to be construed
strictly. Further this Court also held that a person invoking an
exception or an exemption provision to relieve him of the tax          B
liability must establish clearly that he is covered by the said
provision and in case of doubt or ambiguity, benefit of it must
go to the State.

     -89. In this case, Essar was categorically told by letter datea
28.05.2002, Which is much prior to the expiry-Gt tfie period, that     C
time for availing the exemption cannot be extended. Admittedly,
Essar failed to meet the deadline. In that factual scenario, the
exercise undertaken by the High Court in the impugned
judgment by directing various adjustments which virtually re-
wrote the State's exemption scheme, is an exercise which is,           D
with great respect, neither warranted in law nor supported by
precedents. There is no question of equity here, an exemption
is a stand alone process. Either an industry claiming exemption
comes within it or it does not.
                                                                       E
    90. For the reasons aforesaid we allow the appeal. The
High Court judgment is set aside.

     91. The parties are left to bear their own costs.

B.B.B.                                           Appeal allowed.       F