Kerala High Court

Kerala High Court: While deciding the petition, the bench of Amit Rawal, J., held that principle of promissory estoppel arises while extending the promise of subsidy and the benefit cannot be taken away after expiry of number of years, if steps have been taken by other party considering the factor of subsidy.

In the present case, the Government of Kerala passed an order, under which few benefits like concession in electricity charges were to be given to industrial units like Five Star Hotels. The petitioner established a Five Star Hotel and claimed tariff concession for the electricity for 5 years i.e., 2013-2018 based on government's order. Later, the Government of Kerala, passed another order to withdraw the electricity subsidy w.e.f. 2015. The petitioner, aggrieved by this order filed a petition before this Court.

The issue in the present case is whether the impugned order passed by the Government shall be construed prospectively or retrospectively.

The Court said that the benefit cannot be taken away after expiry of number of years, if steps have been taken by the party, considering the factor of subsidy. The principle of promissory estoppel applies to it.

The Court further said that there is no bar for the Government to stop the concession or benefit of subsidy prospectively for the units which have already raised to construction with a project considering the factor of subsidy. The intention of the Government was to attract the persons like that of the petitioner and give the financial benefits. In case such subsidy is not paid to such persons, the affected parties would be liable to pay the charges along with interest for no rhyme and reasons.

The Court referred to Kusumam Hotels Pvt. Ltd. v. KSEB, (2008) 13 SCC 213 in which it was held that administrative orders ordinarily are to be considered prospective in nature unless retrospective operation is expressly stated.

The Court noted that the impugned order did not reveal any retroactive operation and it was neither published in any gazette nor uploaded on the website.

Hence, the Court quashed the impugned order and issued writ of mandamus, directing the respondent to disburse the electric tariff concession to the petitioner.

[Vasu Coco Resorts Pvt. Ltd. v. State of Kerala, WP(C) No. 16882 OF 2019, decided on 10-01-2023]

Advocates who appeared in this case :

Counsel for Petitioner: – Advocate P. B. Sahasranaman, Advocate T. S. Harikumar

Counsel for Respondent:- Advocate Justin Jacob, Advocate G. Keerthivas

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