(B.V. Nagarathna and R. Mahadevan, JJ.)
Civil Appeal No. 8517 of 2011, decided on September 11, 2025
U.P. Power Corporation Ltd. and Another ___________ Appellant(s);
v.
Jagannath Steels Pvt. Ltd. and Others _______________ Respondent(s).
With
I.A. Nos. 1-4 of 2011
In
Civil Appeal No. 1622 of 2007
Civil Appeal No. 1361 of 2013
Civil Appeal No. 1368 of 2013
Civil Appeal No. 8517 of 2011; I.A. Nos. 1-4 of 2011; Civil Appeal No. 1622 of 2007; Civil Appeal No. 1361 of 2013; and Civil Appeal No. 1368 of 2013
The Judgment of the Court was delivered by
B.V. Nagarathna, J.:—
1. The U.P. Power Corporation Limited (UPPCL) and others, who are the appellants herein, are aggrieved by the directions issued by the Allahabad High Court in the impugned orders passed in the respective Writ Petitions/First Appeals directing that the appellants had no authority to demand a 15% surcharge, or retain the amounts deposited by the respondents herein towards the same, in view of the circular issued by UPPCL dated 08.09.2000. Consequently, the demands for surcharge were quashed and directions were issued to refund the amounts to the respondents herein. The correctness of the said orders are assailed by the appellants in these appeals. The applications filed in C.A. No. 1622/2007, assailing a lodgement order passed by the Registrar of this Court and also seeking directions with respect to the judgment of this Court in LML Ltd. v. State of U.P., (2008) 3 SCC 128 (“LML Ltd.”), are also heard along with these appeals.
2. Since common questions of facts and law arise in these appeals and applications, we dispose of these appeals and applications by this common judgment.
3. For the sake of convenience, the details of the appeals and applications are formulated in the form of the following table:
| Sr. No. | Case No. & Cause Title | Details of the Impugned Order |
| 124 | Civil Appeal No. 8517 of 2011 U.P. Power Corporation Ltd. v. M/s. Jagannath Steels Pvt. Ltd. | Writ Petition No. 9676 (M/B) of 2010, dated 31.05.2011 passed by the High Court of Judicature at Allahabad sitting at Lucknow. |
| 124.1 | I.A. Nos. 1-4 of 2011 in Civil Appeal No. 1622 of 2007 Diamond Cement (Proprietor M/s. Mysore Cement Ltd. v. U.P. Power Corporation Ltd. | Order dated 18.11.2010 passed by the Registrar of the Supreme Court in Civil Appeal No. 1622 of 2007. |
| 124.2 | Civil Appeal No. 1361 of 2013 U.P. Power Corporation Ltd. v. M/s. Bharat Udyog Ltd. | Civil Misc. Writ Petition No. 54634 of 2005 dated 26.03.2008 passed by the High Court of Judicature at Allahabad. |
| 124.3 | Civil Appeal No. 1368 of 2013 U.P. Power Corporation Ltd. v. M/s. Mool Chand Steel (Pvt.) Ltd. | First Appeal from Order No. 2363 of 2002 dated 24.09.2012 passed by the High Court of Judicature at Allahabad. |
4. The brief facts of this set of related appeals are that the ‘First Tariff order’ under the Uttar Pradesh Electricity Reforms Act, 1999 was issued by the Uttar Pradesh Electricity Regulatory Commission (UPERC) on 27.07.2000, which came into force on 09.08.2000. The order pertained to ‘heavy industry consumers’, and it stipulated that if electrical consumers opted for electrical supply during restricted/peak hours, they would be charged an additional surcharge of 15% on their electricity bills. The order also stated that if industrial consumers take electricity from an ‘independent feeder’ and want a minimum assured supply of 500 Hrs. electricity in a month then they would be liable to pay an additional surcharge of 15% on their bills.
5. On 08.09.2000, UPPCL issued a circular that stated that if such industrial consumers taking electricity from independent feeders do not want the above assured supply of electricity, then they could submit an undertaking to UPPCL and be exempted from the 15% additional surcharge.
6. However, the High Court of Judicature at Allahabad, by judgment dated 25.04.2001 in CMWP No. 40692/2000, ruled that the above circular was not legal, since UPPCL had no jurisdiction to modify the tariff order issued by UPERC. Therefore, UPPCL, by circular dated 31.08.2001, withdrew the earlier circular dated 08.09.2000. Thereafter, it raised a demand for the 15% surcharge from the consumer industries herein.
7. The above judgment of the Allahabad High Court was challenged before this Court in several Special Leave Petitions and the main appeal was registered as C.A. No. 5789/2002 – LML Ltd. v. State of U.P. By interim orders of this Court in C.A. Nos. 8517/2011 and 1622/2007, the respondent and applicant industries herein were made to deposit 50% of the surcharge amount demanded. On 13.12.2007, a two-judge bench of this Court (S.B. Sinha and H.S. Bedi, JJ.) passed its judgment in the case of LML Ltd. This Court allowed the appeals to the extent that UPPCL was bound by all assurances that it had made in its circular dated 08.09.2000, by virtue of the principle of ‘promissory estoppel’. Therefore, notwithstanding the subsequent repeal of the circular dated 08.09.2000, UPPCL was bound to the extent that it had made promises to consumers who had opted out of the minimum assured supply expecting to be relieved of the additional surcharge.
8. Three of the present appeals – C.A. No. 8517/2011, C.A. No. 1361/2013 and C.A. No. 1368/2013 – arise out of different orders of the Allahabad High Court, all of which relied upon the above decision of this Court in LML Ltd. in order to quash UPPCL’s demand for independent feeder surcharge against the consumers therein, and direct refund of deposits made where necessary.
9. In the other matter, i.e., I.A. Nos. 1-4 in C.A. No. 1622/2007, the applicant consumer (M/s Diamond Cements) had similarly opted out of the assured supply of 500 Hrs. by a letter dated 11.09.2000. However, the same dispute arose once the UPPCL circular was declared illegal by the High Court and UPPCL subsequently demanded the surcharge amount. Aggrieved, the applicant approached the Allahabad High Court. However, by judgment dated 19.10.2006, the High Court held itself bound by its earlier judgment dated 25.04.2001 in CMWP No. 40692/2000 (referred to above) and permitted the demand for surcharge raised by UPPCL.
10. Aggrieved, the applicant approached this Court through SLP (C) No. 1742/2007, which was converted to C.A. No. 1622/2007 and tagged with the main appeal in LML Ltd.
11. However, the subsequent controversy between the parties is regarding whether the judgment of this Court in LML Ltd. conclusively settled the matter in C.A. No. 1622/2007 or not. The UPPCL relied on the following observations made by this Court in LML Ltd.
“53. In view of the fact that several matters are pending before the Commission on question of independent feeder we need not express any opinion thereupon. If any appeal is pending before the Commission on the said question it would decide the same independent of the same irrespective of the result of this decision.. We, therefore, without expressing any opinion on the said question, permit the appellants to agitate the same point before the Commission.
54. We, therefore, allow these appeals only to the extent mentioned hereinbefore in terms of the promise made by the U.P. Power Corporation and allow the appeals on question of independent feeder to be withdrawn subject to the observations made by us hereinabove.”
12. Therefore, after the judgment in LML Ltd., while the applicant industry sought refunds of the surcharge amounts paid, UPPCL did not immediately refund the same on the ground that C.A. No. 1622/2007 was an appeal on the question of independent feeder and was hence withdrawn. Thereafter, both parties filed ‘clarification applications’ before this Court to determine the true import of the judgment in LML Ltd. This culminated in the applicant industry filing an application for clarification and specific directions for the amount paid by them to be refunded. However, this application was ‘lodged’ by the Registrar of this Court by order dated 18.11.2010 under Order XVIII, Rule 5 and Order X, Rules 6(3) and 6(4) of the Supreme Court Rules, 1966 on the ground that the applicant had not cured the defects indicated by the Registry. Therefore, the applicant has preferred the present I.A. Nos. 1-4/2011 in C.A. No. 1622/2007, praying for the above order of the Registrar to be set aside and for its application for clarifications and directions to be considered on merits.
Submissions:
13. We have heard learned counsel for the appellants and learned senior counsel and counsel for the respective respondents, at length.
We have perused the material on record.
Submissions in C.A. Nos. 8517/2011, 1361/2013 and 1368/2013:
14. In C.A. Nos. 8517/2011, 1361/2013 and 1368/2013, learned counsel for the appellant UPPCL submitted that this Court in Uttaranchal Power Corpn. v. Kashi Vishwanath Steels Ltd., (2010) 6 SCC 738 (“Kashi Vishwanath Steels”) clarified the judgment in LML Ltd. and held that for the application of the principle of promissory estoppel, a party has to demonstrate its applicability in the facts of the case. It was also submitted that in the case of Shree Sidhbali Steels Ltd. v. State of U.P., (2011) 3 SCC 193 (“Shree Sidhbali Steels”), a three-judge bench of this Court held that the doctrine of promissory estoppel “cannot be invoked for enforcement of a promise made contrary to law, because none can be compelled to act against the statute. Thus, the Government or public authority cannot be compelled to make a provision which is contrary to law”. Therefore, the appellant submitted that the judgment of the High Court dated 25.04.2001 is legally correct, and that promissory estoppel cannot be used to reach a conclusion contrary to the same.
15. Learned counsel for the appellant UPPCL submitted that the High Court, in all the impugned orders, had disposed of the matters without assessing the merits of the cases. Rather, it had only relied on the judgment in LML Ltd. It was also submitted that under Section 24 of the U.P. Electricity Reforms Act, 1999, the order passed by the UPERC cannot be modified by a licensee. Therefore, the circular dated 08.09.2000 had no basis in law, and could not be used as the foundation for a claim based on promissory estoppel. Further, with regard to C.A. Nos. 8517/2011 and 1368/2013, it was submitted that during the relevant period, the respondent industries got more than 500 Hrs. of supply in a month, despite opting out of the assured supply arrangement. Hence, these appeals may be allowed by setting aside the impugned orders.
16. Per contra, learned counsel for the respondents submitted that they did not opt for a guaranteed supply of 500 Hrs. of electricity. On the other hand, even in the absence of such a guarantee, if they had exceeded 500 Hrs. of consumption, they have paid appropriately for the said consumption of electricity. Therefore, the issue regarding the guarantee of 500 Hrs. insofar as these respondents are concerned is irrelevant. It is therefore, their contention that the demand for 15% surcharge was not in accordance with law. Hence, the High Court was justified in quashing the demand and directing refund of the amount, which they had deposited in terms of the interim order of this Court as the appellant/UPPCL had no legal authority to retain the said amount on the premise that the respondents had an obligation to pay 15% additional surcharge in view of circular dated 08.09.2000. Therefore, the High Court rightly quashed the demand and directed refund to the respondents herein. Learned counsel for the respondents further submitted that the rescinding of circular dated 08.09.2000 by virtue of circular dated 31.08.2001 in effect, resulted in the withdrawal of the option granted to the respondents herein. Consequently, they had to compulsorily pay the 15% surcharge. Therefore, the controversy arose as to whether they were really liable to pay the 15% surcharge in these cases.
17. Learned counsel for the respondents further submitted that the fact that the respondents had the benefit under circular dated 08.09.2000 had been endorsed by this Court in LML Ltd. by holding that the appellants were bound by that circular on the principle of promissory estoppel. In LML Ltd., the appellants therein were bound to provide the benefit of circular dated 08.09.2000 on the principle of promissory estoppel. Therefore, the High Court has rightly followed the judgment of this Court in LML Ltd. and granted the relief to the respondents herein by quashing the demand and directing refund/release of the amount which they had deposited, i.e., 50% of the surcharge demanded, pursuant to an interim order passed by this Court.
Submissions in I.A. Nos. 1-4/2011 in C.A. No. 1622/2017:
18. In I.A. Nos. 1-4/2011 in C.A. No. 1622/2017, learned counsel for the applicant-industry (M/s Diamond Cements) submitted that the impugned order of the Registrar fails to consider that the only possible sequitur to the judgment in LML Ltd. is that those consumers who had deposited amounts with UPPCL pursuant to the demand for the impugned additional surcharge were entitled to a refund. Further, since the respondent-UPPCL failed to comply with the above spirit of the judgment, the applicant industry had no choice but to approach this Court for directions/clarifications with respect to the judgment in LML Ltd.
19. Per contra, learned counsel for the UPPCL submitted that the applicant-industry consumed more than 500 Hrs. of electricity in every month during the relevant period, and even during restricted/peak hours. Therefore, according to the circular dated 08.09.2000, they should be charged with a 30% surcharge (15% + 15%). This Court in LML Ltd. was conscious of the same and deliberately did not direct that the amount be refunded. Therefore, the applicant is not entitled to a refund of the amount simply on the basis of the judgment in LML Ltd. It was also submitted that the judgment of this Court in Shree Sidhbali Steels holds the field.
Analysis:
20. Having heard learned counsel for the respective parties and bearing in mind the facts which arise in these appeals and the applications, we find that the High Court has passed consequential orders pursuant to the judgment of this Court in LML Ltd. For ease of reference paragraphs 50 to 58 of the said judgment are extracted as under:
“50. The proximity of issuance of the circular vis-a-vis notification must also be noticed. The tariff was framed on 7-8-2000 which came into force from 9-8-2000 whereas the Circular was issued on 8-9-2000. The consumers exercised their option on 31-10-2000. The judgment in LML! was delivered on 25-4-2001. The Circular dated 31-8-2001 undoubtedly was issued in view of the said judgment. The said judgment did not deal with the questions raised before us. In any event if the licensee violates the tariff approved by the Commission appropriate legal action can be taken against it. But it would be too much to contend that for a mistake on the part of the Corporation, the consumers would suffer. In this view of the matter, we are of the considered view that the doctrine of estoppel shall apply in the cases where the promise was made. However, the principle of said doctrine would, however, not be applicable where no such promise was made.
51. The respondent Kanpur Electricity Supply Company would not be bound thereby. Tariff is fixed for providing a service. Supply of electrical energy is a public utility service. While carrying out a function of this nature, the court of law must keep in mind the equitable principles also. Equity does not postulate that although the supplier did not fulfil its obligation, still it would be entitled to the benefits envisaged under the law.
52. Similarly, Uttaranchal Power Corporation also does not appear to have made such a promise. The doctrine of promissory estoppel in those cases also will have no application.
53. In view of the fact that several matters are pending before the Commission on question of independent feeder we need not express any opinion thereupon. If any appeal is pending before the Commission on the said question it would decide the same independent of the same irrespective of the result of this decision. We, therefore, without expressing any opinion on the said question, permit the appellants to agitate the same point before the Commission.
54. We, therefore, allow these appeals only to the extent mentioned hereinbefore in terms of the promise made by U.P. Power Corporation and allow the appeals on question of independent feeder to be withdrawn subject to the observations made by us hereinabove.
55. Civil Appeal No. 5789 of 2002 which relates to Kanpur Electricity Supply Company is dismissed.
56. Civil Appeal No. 1106 of 2007 filed on behalf of Uttaranchal Power Corporation is allowed.
57. There shall, however, be no order as to costs.
SLP (C) No. 6721 of 2007
58. The only issue involved in this petition is the question of independent feeder and the appeal being pending before the Commission, this special leave petition is permitted to be withdrawn.”
21. However, learned counsel for the appellants brought to our notice the judgment of this Court in Kashi Vishwanath Steels. Paragraphs 24-27 of the said judgment read as follows:
“24. In Writ Petition No. 942 of 2001 filed by the respondent-KVSL the material facts were not disputed. It was unequivocally admitted that the respondent-company was a consumer getting supply from an independent feeder emanating from 400/220/132 KV sub station. It was also not in dispute that with the coming into existence of State of Uttarakhand w.e.f. 9th November, 2000 a new Power Corporation for the said State was established on 1st April, 2001. The respondent-company’s further case is that Uttarakhand Power Corporation did not charge 15% surcharge on monthly demand and energy charges for the period April 2001 to October, 2001 and that it is only on 7th December, 2001 that the applicant received an intimation that circular dated 8th September had been revoked and letter dated 24th October cancelled. That the U.P. Electricity Regulatory Commission had approved a new tariff by order dated 1st September, 2000 and U.P. State Power Corporation had issued a consequential Notification dated 10th July, 2001 is also not in dispute. The said notification, it is noteworthy, does not any longer provide for 15% surcharge from consumers getting supply of energy from independent feeders.
25. Suffice it to say that while according to the applicant-KVSL circular issued by the U.P. Power Corporation dated 8th September, 2001 giving an option to the consumers was valid and in accordance with law, there is not even a murmur in the writ petition filed by the respondent-company to the effect that either the U.P. Power Corporation or its successor had at any point of time made any promise to the company that supply of energy would be without any surcharge notwithstanding the fact that the tariff prescribed by the Regulatory Commission envisaged the levy of surcharge on electricity supplied directly from an independent feeder. There is similarly no averment whatsoever in the writ petition to the effect that the respondent-KVSL had altered its position acting upon any such promise. Not only that the agreements executed between the parties, namely, KVSL on the one hand and Power Corporation on the other also did not contain any unequivocal promise for supply of energy, no matter the supply was made from an independent feeder.
26. In the absence of even an averment to the effect that there was a promise made by the U.P. State Power Corporation regarding supply of energy without payment of surcharge and in the absence of any material to show that the respondent-KVSL had indeed acted upon any such promise it is difficult to see how the said company can insist upon any such non-existent promise being made good.
27. It is trite that before a party can rely upon on the doctrine of promissory estoppel it must make a specific averments and place material on record to demonstrate that a promise was indeed made to it. There is neither any averment nor any material to support the plea of promissory estoppel in the case at hand.”
22. We have gone through the aforesaid judgment in detail. The above paragraphs clearly indicate that this Court considered the peculiar facts in the said case inasmuch as the absence of averments and pleadings for a claim on the principle of promissory estoppel was significant, and this Court consequently allowed the appeal and denied relief to the respondent – Kashi Vishwanath Steels Ltd. therein.
23. A close reading of the above paragraphs would indicate that this Court observed that there was no categorical pleading as to the nature of the respondent-company therein insofar as whether it came within the scope of the independent feeder category or not. We therefore find that not much assistance can be derived by the appellants from the judgment of this Court in Kashi Vishwanath Steels.
24. We revert to the impugned order in Civil Appeal No. 8517 of 2011 which arises from W.P. No. 9676 (M/B) of 2010. It has been categorically recorded by the High Court that the said respondent-entity was not interested in the guaranteed supply of electricity and an express undertaking to that effect was given by the said respondent. Consequently, the requirement of 15% surcharge did not arise at all.
25. However, since UPPCL issued demand notices for the surcharge, and the respondents in C.A. No. 8517/2011 as well as the applicant M/s Diamond Cements had deposited 50% of the amount demanded bearing in mind the interim dictum of this Court in LML Ltd., the need to file the Writ Petitions/First Appeals seeking quashing of the demands and refunds of the deposits arose. In our view, the High Court has rightly quashed the demands, and directed refunds of the amounts deposited where necessary. We find no reason to interfere with the impugned directions issued by the High Court.
26. Hence, Civil Appeal Nos. 8517 of 2011, 1361 of 2013 and 1368 of 2013 stand dismissed.
27. Consequently, the order of interim stay stands vacated.
28. The appellants are directed to refund the amount within a period of six weeks from the day this judgment is made available, without driving the respondents to take coercive action against the appellants herein.
29. In view of the above, I.A. Nos. 1-4 of 2011 in Civil Appeal No. 1622/2007 filed by M/s Diamond Cements are allowed. The respondents are directed to refund the amount within a period of six weeks from the day this judgment is made available, without driving the applicant to take coercive action against the respondents herein.
No costs.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No 2608/2013
Uttar Pradesh Power Corporation Limited and Anr.….Appellant(s)
Versus
Bhushan Steels & Strips Ltd. & Anr.….Respondent(s)
ORDER
Learned senior counsel, Mr. Joy Basu appearing for the respondents submitted that this appeal may be disposed of in terms of the judgment of this Court in the case of Ghanashyam Mishra and Sons Private Limited through the authorized signatory v. Edelweiss Asset Reconstruction Company Limited, (2021) 9 SCC 657 (“Ghanashyam Mishra”) as the appellants herein had not made any claim before the Resolution Professional inasmuch as the erstwhile company Bhushan Steels & Strips Ltd. was undergoing proceedings under Insolvency and Bankruptcy Code, 2016 (for short, “IBC”) and there was no claim made by the appellants herein before the concerned Resolution Professional. Therefore, applying the aforesaid dictum, this appeal may be accordingly closed and disposed of.
2. Learned senior counsel further submitted that a sum of Rs. 5,00,000/- (Rupees Five lakhs Only) was deposited by erstwhile company with the appellants herein and therefore liberty may be reserved to the respondents herein to seek recovery of the said amount deposited with the appellants herein in accordance with law.
3. By way of response, learned counsel for the appellant submitted that the dictum in Ghanashyam Mishra may not be applicable in this case as no claim of the appellant has been crystallised yet and therefore the appeal may be heard on merits.
4. He further submitted that in the impugned order there was no liberty reserved for the respondents to seek recovery of the deposited amount of Rs. 5,00,000/-, therefore appropriate orders may be made in this appeal.
5. Taking note of the submissions made at the bar, we note that admittedly no claim was made by the appellants before the concerned Resolution Professional when the erstwhile company namely corporate debtors (Bhushan Steels Ltd.) was undergoing proceedings under the IBC. Consequently, the dictum of the judgment of this Court in Ghanayshyam Mishra squarely applies herein and therefore the appeal stands disposed of.
6. However, liberty is reserved to the respondents herein who are the successors to the erstwhile corporate debtors to seek recovery of the deposited amount of Rs. 5,00,000/- along with other deposits, if any, in accordance with law.
7. It is needless to observe that if such a proceeding is initiated by the respondents herein, the same shall be considered and disposed of in accordance with law.
This appeal is disposed of in the aforesaid terms.
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
Civil Appeal No(S).8517/2011
U.P. Power Corporation Ltd.. & Anr.….Appellant(s)
Versus
M/s. Jagannath Steels Pvt. Ltd. & Ors.….Respondent(s)
With
C.A. NO. 1622/2007 (III-A)
FOR [APPLN. AGAINST THE ORDER 18.11.2010 OF LD. REG.] ON IA 1/2011 FOR EXEMPTION FROM FILING O.T. [DIRECTIONS AND EXEMPTION OT] ON IA 4/2011
IA NO. 1/2011 – APPLN. AGAINST THE ORDER 18.11.2010 OF LD. REG.
IA NO. 4/2011 – EXEMPTION FROM FILING O.T. C.A. NO. 1361/2013 (III-A)
IA NO. 108961/2019 – EXEMPTION FROM FILING O.T.
IA NO. 108958/2019 – PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/ANNEXURES
C.A. NO. 1368/2013 (III-A)
C.A. NO. 2608/2013 (III-A)
IA No. 24099/2023 – APPLICATION FOR SUBSTITUTION
UPON hearing the counsel the Court made the following
ORDER
C.A. No. 1622 of 2007:
IA Nos. 1-4 of 2011 in C.A. No. 1622 of 2007 are allowed in terms of the signed order, which is placed on file.
C.A.No(s). 8517 of 2011; 1361 of 2013; 1368 of 2013:
Appeals are dismissed in terms of the signed order, which is placed on file.
C.A. NO. 2608 of 2013:
Appeal is disposed of in terms of the signed order, which is placed on file.
Pending application(s), if any, shall stand disposed of.
———
