Content Provider | Supreme Court of India |
---|---|
e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Restitution |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Restitution-Principle of-Duty of Court-Electricity charges-Upward revision of tariffs-Struck down by High Court as invalid-Appeal-Revisions upheld-Board's claim of interest on unpaid bill drawn on basis of revised tariff-Maintainable.Respondent Company entered into an agreement with the kerala State Electricity Board for supply of electricity to the factory of the High Court in its favour and in terms of interim order passed by this company. The agreement contained a provision for payment of power and energy supplied to the company by the Board within 15 days from the date of the receipt of the invoice by the consumer, namely the company and that in default of payment within the stipulated time, the payment was to be made with interest @18% per annum or at such other percentage as would be fixed by the Board from time to time. The Board revised the tariffs for the electricity supplied it in 1980, 1982 and 1984. The respondent company and other consumers challenged such revisions by filing writ petitions. The High Court struck down the revisions of tariff by the Board holding that the respondent company and other consumers were, therefore, entitled to the refund of excess amount on account of the payment of revised tariffs and that such amount paid in excess would be adjusted towards future bills to be issued by the Board. The Board filed Special Leave Petitions challenging the order of the High Court. All the appeals were allowed by this Court upholding the validity of revisions of tariffs by the Board making the respondent company and other consumers liable to pay the amounts due on the basis of revisions of tariff including the amounts since adjusted by them. The Board thereafter raised a demand for payment of the amount by the respondent inclusive of interest @18% p.a. The respondent company while not challenging the liability to pay the excess amount refused to pay interest as demanded by the Board. Such claim of interest was challenged by filing a writ petition. The Single Judge quashed the demand for interest holding that the demand was not justified. The Board filed an appeal against the judgment of the Single Judge. The Division Bench while dismissing the appeal held that after the High Court had struck down the revisions of tariffs and directed adjustment of the excess amount paid towards future demands, the respondent company was justified in not making payment of amounts which became due and therefore, it could not be held that the respondent company had defaulted in payment of amount, and that there was no enforceable demand after the decision of the High Court and therefore, the order quashing the demand for the interest by the Single Judge was justified. These appeals had been filed against the judgment of the Division Bench of the High Court. The appellants contended that the High Court on a total misconception on the fact and the legal position, bad held that at the relevant time, when the order of the High Court striking down the upward revisions of tariffs and subsequently when interim order passed by this Court during the pendency of the special leave petitions was subsisting, no liability had accrued for the respondent company to make payment on the basis of the revised tariffs; that in law such liability was always there because the revisions of tariff were held valid by this court and because of the erroneous judgment of the High Court striking down the upward revisions of tariff such liability remained suspended till the correct position in law was finally determined by this court with which the liability revived; that as the liability of the respondent company to pay on the basis of the revised tariffs was always there and as such payment had not been made by the respondent company by taking advantage to the erroneous decision of the High Court, the respondent company should not be permitted to claim any immunity on its liability to pay interest on the unpaid amount of enhanced bill after the correct legal position was finally determined by this Court; that when a party to a legal proceeding has suffered on account of an erroneous adjudication by a court of law, the court has imperative duty to restore the party which has suffered on account of such erroneous order, to the position, as far practicable, as would have prevailed, had there been no such erroneous decision of the court; that in the instant case when the company had enjoyed the fruits of erroneous decision in its favour in as much as the company not only did not pay on the basis of the revised tariffs but whatever amount had been paid on the basis of revised tariff for the earlier period was allowed to be adjusted by the company against its future liability only on the basis of unrevised tariffs, and when the correct position in law was settled by this court by holding that the upward revisions of tariffs were fully justified, it was the bounden duty of the respondent company to not only pay the unpaid amount of the bill due on account of revisions of tariffs but also the agreed rate of interest @18% on such unpaid amount; that the respondent company being the manufacturing company and an on going concern, had gainfully utilised the amount which it did not pay, the company had obligation, both moral and legal, to repay the unpaid portion of the bill With interest; that the Board was entitled to demand for payment of electricity charge consumed by the company on the basis of revised tariffs and also the interest on such amount by way of restitution.The respondent contended that the Company had not taken any illegal and undue advantage and only on the basis of the decision of the High Court in its favour and in terms of interim order passed by this Court, it paid the recoverable dues on account of the electricity bill and got the claim of refund of the Company slowly adjusted against future bills and if on such facts and circumstances, the High Court had struck down the claim of interest by the Board on the ground that the amount on which interest was claimed was not due and recoverable at the relevant period and the Company could nut be held to have defaulted in payment of any sum on which the interest might be claimed, no exception could be taken to such decision; that it is not an inflexible rule that in all cases in order to give effect to restitution, mesne profits and damages including interest are to be given; that even if the company had a liability to pay on the basis of revised tariffs, since upheld by this Court, the liability to pay revived only prospectively from the date of the decision of this Court and not from any earlier period and as the Company accepting such liability had paid the demand on account of enhancement, it had rightly refused to pay interest on such excess amount claimed on the footing that demand for excess amount was also enforceable from the dates of revision of tariffs and the High Court was, therefore, fully justified in quashing the memo claiming interest on the excess dues by indicating cogent reasons and no interference by this Court was called for. Allowing the appeals |
Judge | Hon'ble Mr. Justice G.N. Ray |
Neutral Citation | 1995 INSC 880 |
Petitioner | The Special Officer (revenue) Kerala State Electricity Board And Anr. Etc. Etc. |
Respondent | M.r.f. Limited Etc. Etc. |
SCR | [1995] Supp. (6) S.C.R. 599 |
Judgement Date | 1995-12-12 |
Case Number | 11737 |
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