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Electricity & Energy LawSupreme Court of India

Edcons(MKS) Castings Pvt. Ltd. v. West Bengal State Electricity Board

Civil Appeal · 2025 INSC 1006Decided 7 Aug 2025
C.A. No.-002592-002592 - 2013
Justice Pamidighantam Sri Narasimha · Justice Atul S. Chandurkar

Background

A cast-iron manufacturing company in West Bengal upgraded its factory and, in 1998-99, obtained a High Tension/Bulk Power Supply connection from the State Electricity Board, which had formally sanctioned and agreed in writing to give it a 25% tariff concession for three years as a "New Industry." The company received the concession for a few months, then the Board suddenly withheld it, first demanding certificates proving the company hadn't availed any state subsidy (which the company duly furnished), and after that too was satisfied, springing an entirely new objection more than two years later: that the company wasn't a "New Industry" at all. Both the Single Judge and Division Bench of the Calcutta High Court upheld the Board's denial of the concession.

Decision Breakdown

The Supreme Court held that the Board could not lawfully change its position after having sanctioned the connection, entered into a formal agreement, implemented it, and even paid out the concession for several months, only to raise a fresh objection over two years later without justification. It found the Board's letter withdrawing the concession "unsustainable, illegal and arbitrary" and held that both lower courts erred by not scrutinising this letter against the admitted, undisputed facts. The appeal was allowed, the Board's withdrawal order was set aside, and the company was held entitled to the full 25% concession for three years as originally agreed.

Lesson Learnt

Once a government body or public utility formally agrees to a benefit and acts on that agreement, it cannot arbitrarily reverse its position years later on a new, unrelated ground: public authorities are bound by fairness and consistency in dealings with citizens and businesses, not just technical compliance.

Edcons(MKS) Castings Pvt. Ltd. v. West Bengal State Electricity Board – Legal Case Shots | LegalAware