Bhilai Power Supply Company Ltd. Vs. State of M.P. and Ors.
EmailAppeal: Interlocutory Application Nos. 13-16
in
Civil Appeal Nos. 1144-1147/2000
(From the Judgement and Order dated 25.6.1999 of the High Court of Madhya Pradesh in LPA Nos.70,95,&114 of 1999 and W.P.No. 1685 of 1999)
Petitioner: Bhilai Power Supply Company Ltd.
Respondent: State of M.P. and Ors.
Apeal: Interlocutory Application Nos. 13-16
in
Civil Appeal Nos. 1144-1147/2000
(From the Judgement and Order dated 25.6.1999 of the High Court of Madhya Pradesh in LPA Nos.70,95,&114 of 1999 and W.P.No. 1685 of 1999)
Judges: SHIVARAJ V. PATIL & ARIJIT PASAYAT, JJ.
Date of Judgment: Jan 21, 2003
Appearances:
Mr. Arvind Sawant, Mr. P. Chidambaram, Mr. K. Parasaran, Mr. C.S. Vaidyanathan, Senior Advocates, Mr. Bharat Sangal, Mr. Girish Gokhale, Ms. Sangeeta Panicker, Mr. Rana Ranjit Kumar Singh, Mr. P.S. Shroff, Mr. Sunil Dogra, Ms. P.K. Parbhat, for M/s. S.A. Shroff & Co., Mr. Vivek Tankha, Advocate General, Mr. S.K. Agnihotri, Ms. Yogmaya, Mr. Anil K. Pandey, Mr. Sakesh Kumar, Mr. Rameshwar Prasad Goyal, Mr. Ravindra Shrivastava, Advocate General, for Chattisgarh, Mr. Prakash Shrivastava, Ms. Superna Shrivastava, Mr. Sanjay Kapur, Ms. Shubhra Kapur, Ms. Manik Karanjawala, Mr. Pramod Dayal, Mr. Manoj Swarup, Advocates for the appearing parties.
Head Note:
CONTRACTS
Contracts – Security deposit – Refund – Directions for – Madhya Pradesh Electricity Board taking security deposits from appellant company – In terms of earlier order of court deposits becoming refundable – Subsequent reorganisation of the M.P. State – Original electricity board succeeded by two boards, one of M.P. State and the other of Chattisgarh State – M.P. Board taking the stand that the liability should be discharged by the Chattisgarh Board – Whether such stand tenable – What is the effect of Madhya Pradesh Reorganisation Act, 2000 on the liability of the original M.P. Board to refund the deposits. Held rights available under the Reorganisation Act of 2000 were of no consequence for the present petitions. Original M.P. Board having taken the deposits and being still in existence, is bound to refund the deposits with interest without prejudice to its right in getting adjustment or recovery from the Chattisgarh Board in accordance with the Reorganisation Act. (Para 4)
JUDGEMENT:
ARIJIT PASAYAT, J.
I.A.Nos. 13-16/2002
1. Prayer in these IAs is for direction to the M.P. state electricity board (in short ‘the MP Board’) to refund security deposits made along with interest thereupon, in compliance with the judgment of this Court in C.A.Nos. 1140-1143/2000.
2. The prayer has been resisted by the M.P. board on the ground that pursuant to the Madhya Pradesh Reorganisation Act, 2000 (in short ‘the Reorganisation Act’) the original board has been succeeded by the two boards i.e. M.P. board and the Chattisgarh electricity board (in short ‘Chattisgarh board’). The liability, if any, should be discharged by the Chattisgarh board. It is pointed out that originally there were 9 projects which were involved and 7 related to the reorganised M.P. state while 2 related to the newly constituted Chattisgarh state. Two projects have not come into existence is the stand of the Chattisgarh state. It was further submitted that in terms of section 58 of the Reorganisation Act, the central government has to quantify the assets and liabilities and the follow-up action to be taken. Since that has not been done finally, it would be inappropriate to direct the M.P. board to liquidate the liabilities.
3. A somewhat similar stand was adopted by the state of M.P. In response, learned counsel for the Chattisgarh state and the Chattisgarh board submitted that the amounts collected as security deposit were kept as fixed deposits in scheduled banks by M.P. board and, therefore, it is the responsibility of the M.P. board to liquidate the liability. Reference was also made to an order passed by this Court in IAs 37-40 in C.A.Nos. 1140-1143/2000 where the M.P. board had undertaken to refund the security deposits.
4. What would be the rights available to the states of M.P. and Chattisgarh under the Reorganisation Act is really of no consequence so far as the present petitions are concerned. The undisputed position is that the applicants in the IAs are entitled to refund of the security deposits made. They cannot be made to suffer because the two states and two boards do not appear to have reached an agreement so far as sharing the assets and liabilities and other connected aspects are concerned. The original M.P. board took security deposits with clear undertaking to refund the same with interest. It is the said board which has kept the security deposit amount in fixed deposit in nationalized bank earning interest. This fact is not disputed. Admittedly the original M.P. board continues to exist as on today. Hence, it is the original M.P. board, which is bound to refund the security deposits with interest as undertaken at the time of accepting the same and the said amount is to be paid without prejudice to the right of the electricity board concerned in getting adjustment or recovery from the state of Chattisgarh or the electricity board of Chattisgarh as the case may be. Although it is noticed in the order dated 29.11.2001 made in IAs 37-40 that the learned counsel for the board made a plea that it may not be made precedent in regard to other claims but in order to be just, fair, consistent and having regard to what is stated above, we think it appropriate to pass a similar order. Hence, we direct the original M.P. electricity board to pay a sum of Rs.55.23 crores to the appellants along with interest at the rates charged by the bank for fixed deposits in 12 equal monthly instalments commencing from 1.3.2003. The said payment would be made without prejudice to the right of the electricity board concerned in getting adjustment or recovery of the amount from the Chattisgarh electricity board or state of Chattisgarh as the case may be in accordance with the provisions of Reorganisation Act.
5. The learned counsel for the parties made some submissions in support of the respective contentions as to the rights and liabilities of the respective states or the boards based on section 58 of the Reorganisation Act. In our opinion, it is neither desirable nor necessary to express our opinion on the rival contentions for the limited purpose of dealing with the IAs for refund of the security amount deposited. All the contentions of the parties on larger questions as to the respective rights and liabilities between the two states and the respective state electricity boards are available to them to be urged in other proceedings, if need be. Our observations made in this order are confined only for the disposal of the present I.As.
Transfer Petition (C) No. 769/2002
6. Transfer of an appeal pending before the High Court of Madhya Pradesh was sought for on the ground of pendency of IAs 13-16 before this Court. Since we have disposed of the IAs, the prayer for transfer is not accepted, as the appeal in question can be adjudicated by the High Court of Madhya Pradesh.
The transfer petition is disposed of accordingly.
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I.A.Nos. 13-16/2002
1. Prayer in these IAs is for direction to the M.P. state electricity board (in short ‘the MP Board’) to refund security deposits made along with interest thereupon, in compliance with the judgment of this Court in C.A.Nos. 1140-1143/2000.
2. The prayer has been resisted by the M.P. board on the ground that pursuant to the Madhya Pradesh Reorganisation Act, 2000 (in short ‘the Reorganisation Act’) the original board has been succeeded by the two boards i.e. M.P. board and the Chattisgarh electricity board (in short ‘Chattisgarh board’). The liability, if any, should be discharged by the Chattisgarh board. It is pointed out that originally there were 9 projects which were involved and 7 related to the reorganised M.P. state while 2 related to the newly constituted Chattisgarh state. Two projects have not come into existence is the stand of the Chattisgarh state. It was further submitted that in terms of section 58 of the Reorganisation Act, the central government has to quantify the assets and liabilities and the follow-up action to be taken. Since that has not been done finally, it would be inappropriate to direct the M.P. board to liquidate the liabilities.
3. A somewhat similar stand was adopted by the state of M.P. In response, learned counsel for the Chattisgarh state and the Chattisgarh board submitted that the amounts collected as security deposit were kept as fixed deposits in scheduled banks by M.P. board and, therefore, it is the responsibility of the M.P. board to liquidate the liability. Reference was also made to an order passed by this Court in IAs 37-40 in C.A.Nos. 1140-1143/2000 where the M.P. board had undertaken to refund the security deposits.
4. What would be the rights available to the states of M.P. and Chattisgarh under the Reorganisation Act is really of no consequence so far as the present petitions are concerned. The undisputed position is that the applicants in the IAs are entitled to refund of the security deposits made. They cannot be made to suffer because the two states and two boards do not appear to have reached an agreement so far as sharing the assets and liabilities and other connected aspects are concerned. The original M.P. board took security deposits with clear undertaking to refund the same with interest. It is the said board which has kept the security deposit amount in fixed deposit in nationalized bank earning interest. This fact is not disputed. Admittedly the original M.P. board continues to exist as on today. Hence, it is the original M.P. board, which is bound to refund the security deposits with interest as undertaken at the time of accepting the same and the said amount is to be paid without prejudice to the right of the electricity board concerned in getting adjustment or recovery from the state of Chattisgarh or the electricity board of Chattisgarh as the case may be. Although it is noticed in the order dated 29.11.2001 made in IAs 37-40 that the learned counsel for the board made a plea that it may not be made precedent in regard to other claims but in order to be just, fair, consistent and having regard to what is stated above, we think it appropriate to pass a similar order. Hence, we direct the original M.P. electricity board to pay a sum of Rs.55.23 crores to the appellants along with interest at the rates charged by the bank for fixed deposits in 12 equal monthly instalments commencing from 1.3.2003. The said payment would be made without prejudice to the right of the electricity board concerned in getting adjustment or recovery of the amount from the Chattisgarh electricity board or state of Chattisgarh as the case may be in accordance with the provisions of Reorganisation Act.
5. The learned counsel for the parties made some submissions in support of the respective contentions as to the rights and liabilities of the respective states or the boards based on section 58 of the Reorganisation Act. In our opinion, it is neither desirable nor necessary to express our opinion on the rival contentions for the limited purpose of dealing with the IAs for refund of the security amount deposited. All the contentions of the parties on larger questions as to the respective rights and liabilities between the two states and the respective state electricity boards are available to them to be urged in other proceedings, if need be. Our observations made in this order are confined only for the disposal of the present I.As.
Transfer Petition (C) No. 769/2002
6. Transfer of an appeal pending before the High Court of Madhya Pradesh was sought for on the ground of pendency of IAs 13-16 before this Court. Since we have disposed of the IAs, the prayer for transfer is not accepted, as the appeal in question can be adjudicated by the High Court of Madhya Pradesh.
The transfer petition is disposed of accordingly.
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