Supreme Court Holds Companies Not Entitled To 25% Power Tariff Rebate Where Supply Commenced After Rescission; Upholds Recovery Under Goa 2002 Act

A bench of Justices Dipankar Datta and Sandeep Mehta heard a batch of civil appeals by several alloy and induction companies challenging High Court orders that upheld demand notices issued by the State of Goa seeking recovery of 25% electricity tariff rebate. The appeals raised the narrow question whether the appellants were entitled to the rebate under the notification dated 30.09.1991 or were liable to refund amounts under the Goa (Prohibition of Further Payments and Recovery of Rebate Benefits) Act, 2002.

The Court dismissed the principal appeals and held that the appellants were not entitled to the 25% rebate under the 1991 notification because, in most cases, electric supply was effected after the notification had been rescinded w.e.f. 01.04.1995. The Court upheld the validity and operation of the 2002 Act insofar as it sought recovery of rebate granted under the subsequent notifications and accepted the High Court's conclusion that res judicata and earlier decisions governed the dispute. The Court observed that previous High Court rulings had taken a "balanced view" and that the appellants could not re-open issues already finally decided. The Court, in its reasoning, observed: "First, the notification dated 30.09.1991 made the rebate available for five (5) years from the date on which electric supply was effected to the appellant-companies. As seen in the table above, supply of electricity was effected to all the appellant-companies, except M/s Karthik Alloys, on varying dates beyond 31.03.1995; however, the notification dated 30.09.1991 had life till 31.03.1995 whereafter it stood rescinded, leaving no option but to decline acceptance of their pleas." The Court also quoted the settled principle that "The principle of res judicata is based on the need of giving a finality to judicial decisions."

Background

The dispute originated from a sequence of Government of Goa notifications regulating electricity tariffs. The notification dated 30.09.1991 granted a 25% rebate for industrial consumers for five years from the date supply was effected. That notification was rescinded by a notification dated 31.03.1995 (effective 01.04.1995). Subsequent amending notifications of 15.05.1996 and 01.08.1996 purported to extend benefits, but the High Court in Manohar Parrikar held those amending notifications void for non-compliance with Rules of Business; that decision was followed by this Court in later proceedings.

Several appellant companies applied for power in 1992–1994 but, save for one, received supply only after 01.04.1995. The State issued demand notices under Section 3 of the 2002 Act (enacted in 2002) seeking recovery of rebate amounts that had been disbursed. The Bombay High Court (Goa Bench) dismissed writ petitions challenging the demands and later dismissed review applications. The High Court relied on prior decisions including GR Ispat and subsequent Supreme Court rulings (noting that earlier orders had been left undisturbed), held that the 1991 notification did not cover supplies effected after its rescission, and treated the 2002 Act as a valid recovery mechanism for rebate disbursed pursuant to the amending notifications.

Before the Supreme Court, appellants argued that rights crystallised upon application for supply and invoked promissory estoppel and reliance (drawing on Pawan Alloys), contending that they had invested expecting the rebate. The State counsel maintained that the 1991 scheme had ceased to operate for new supplies after 01.04.1995, the amending notifications were void, and the 2002 Act lawfully enabled recovery. The Court disagreed with appellants on both counts, applying res judicata principles and public interest reasoning accepted in earlier decisions. Civil Appeal No.4556/2012 was dismissed as not pressed. The remaining consolidated appeals were dismissed and the Court made no order as to costs.

Case Details: Case No.: 2025 INSC 217 Case Title: Puja Ferro Alloys P Ltd. v. State of Goa and Ors. (Lead matter in a batch of civil appeals) Appearances: For the Petitioner(s): Mr. Santosh Paul, Senior Advocate For the Respondent(s): Mr. Abhay Anil Anturkar, Standing Counsel