Holding

A stay of operation of a Notification does not relieve the consumer of liability to pay the late payment surcharge; the surcharge remains payable, albeit at a reduced rate of 18% per annum for the period of the stay.

Summary

The Uttar Pradesh State Electricity Board revised electricity tariffs and imposed a late payment surcharge under a Notification issued pursuant to Section 49 of the Electricity (Supply) Act, 1948. Several consumers, including Mis. Kanoria Chemicals, obtained a stay of the Notification in writ petitions, but the petitions were later dismissed. After dismissal, the Board demanded the surcharge, which the appellants refused to pay, arguing that the stay rendered the surcharge inoperative and that the surcharge was penal. The Supreme Court held that a stay of operation of a Notification does not extinguish the liability to pay the surcharge; the Board is entitled to recover it for the period of the stay, though the rate is reduced to 18% per annum in view of the circumstances. The Court dismissed the appeals, subject to the reduced rate direction.

Issues considered

The effect of a stay of operation of a Notification on the liability to pay late payment surcharge after dismissal of the writ petition.
Whether the late payment surcharge under clause 7(b) of the Notification is penal in nature.
The applicability of the decision in Adoni Ginning Factory v. Secretary, Andhra Pradesh State Electricity Board to the present facts.
The impact of variations in the language of interim orders on the parties' obligations.

Legislation cited

Electricity (Supply) Act, 1948s. 49

Subjects

interim staylate payment surchargeElectricity (Supply) ActSection 49penal interestconsumer liabilitywrit petitionArticle 226Adoni GinningShree Chamundi Mopedsrate reduction

Judgment

A MIS. KANORIA CHEMICALS AND INDUSTRIES LTD.
v.
U.P. STATE ELECTRICITY BOARD & ORS.

MARCH 10, 1997

B (B.P. JEEVAN REDDY AND K.S. PARIPOORNAN, JJ.)

Constitution of India, 1950 : Article 226.

Interim/interlocutory order or injunction-Effect of-Duty of Court-On
C dismissal of writ petition-State Electricity Board issued Notification under
S.49 of Electricity (Supply) Act levying 'late payment surcharge'-Notification
challenged in writ petition by consumers-High Court granted interim stay of
operation of Notification-Subsequently, writ petition dismissed-Held : In-
terim order only rendered order/Notification inoperative from date of passing
of stay order and did not wipe out order/Notification from eiistenc~After
D . dismissal of writ petition consumers would not be relieved of their obligation
to pay 'late payment surcharge' for the period stay order had remained
operative i.e. from date of stay order till dismissed of writ petition. ·

Electricity (Supply) Act, 1948 : Section 49.
E
Notification-Levied 'late payment surcharge' obliging consumers to
pay an additional charge of seven paise per day per Rs. JOO on unpaid
amount of bill-Held : Surcharge not penal in nature-Consumers had
withheld payment having understood the decision in Adoni Ginning's case as
relieving them of their obligation to pay interest/late payment surcharge for
F period of stay of operation of Notification and that they were acting bona
fid~Hence, rate of payment was reduced to 18 per cent-However, this
direction was confined only to the period covered by stay orders in writ
petitions filed challenging notification and limited to the date on which those
writ petitions were dismissed.
G Practice and Procedure:

Additional Charge-levy of-By Notification-Demand Notice issued
on that basis Interim stay/injunction asked for by affected persons-Stay
petitions worded differentl>-Interim orders made by Court also varied in
H phraseology-Held : Variation in language immate1ial for grant of relief
844
KC.LL. v. U.P. STATE ELECTRICITY BOARD 845

The respondent-Board by a Notification had revised the electricity A
rates/tarilTs under Section 49 of the Electricity (Supply) Act, 1948, The
Notification provided for 'late payment surcharge'/interest of seven paise
per day per Rs. 100 on unpaid amount of bill within the specified period.
The appellant challenged the validity of the aforesaid Notification before
the High Court. The High Court stayed the operation of the Notification B
till the disposal of the writ petition. Subsequently, the High Court dis-
missed the writ petition.

After the dismissed of the writ petition the appellant deposited the
difference amount between pre-revised and the revised electricity rates. It
did not, however, deposit the 'late payment surcharge'. Thereupon the C
respondent issued a notice of demand calling upon the appellant to pay
'late payment surcharge'. The appellant filed a writ petition before the
High Court questioning the notice demanding 'late payment surcharge',
which was dismissed. Hence this appeal.
D
On behalf of the appellants it was contended that when the operation
of the Notification it self was stayed, no surcharge could be demanded
upon the amount withheld; that the rate of 'late payment charge' was penal
in nature; that the appellants understood the decision in Adoni Ginning's
case as relieving them of their obligation to pay 'late payment surcharge'
for the period covered by the interim order and that since they were acting E
bona fide they should not be made liable to pay the 'late payment
surcharge',

Dismissing the appeal, this Court
F
HELD: 1. Stay of operation of order or Notification only means that
the order which had been stayed would not be operative from the date of
the passing of the stay order and it does not mean that the said order has
been wiped out from existence, An order of stay granted pending disposal of
a writ petition/suit or other proceeding, comes to an end with the dismissal of
the substantive proceeding and that it is the duty of the court in such a case G
to put the parties in the same position they would have been but for the interim
orders of the court. [855-H, 856-A]

Shree chamundi Mopeds Ltd. v. Church of South India Trust Associa-
tion, Madras, [1992] 3 sec 1, followed. H
846 SUPREME COURT REPORTS [1997] 2 S.C.R.

A 2. The grant of stay of a Notification revising the electricity charges had
not the effect of relieving the consumers/petitioners of their obligation to pay
late payment surcharge/interest on the amount withheld by them even when
their writ petitions were dismissed ultimately. Holding otherwise would mean
that even though the Electricity Board, which was the respondent in the
B writ petitions succeeded therein, is yet deprived of the late payment sur-
charge, which is due -to it under the tariff rules/regulations. It would be a
case where the Board suffers prejudice on account of the orders of the
court and for no fault of its. It succeeds in the writ petition and yet loses.
The consumer files the writ petition, obtains stay of operation of the
Notification revising the rates and fails in his attack upon the validity of
C the Notification and yet he is relieved of the obligation to pay the late
payment surcharge for the period of stay, which he is liable to pay accord-
ing to the statutory terms and conditions of supply - which terms and
conditions indeed form part of the contract of supply entered into by him
with the Board. The contention that when the operation of the Notification
D itself was stayed, no surcharge could be demanded upon the amount
withheld cannot be accepted. Several petitioners (their counsel) word the
stay petition differently. One petitioner may ask for injunction, another
may ask for stay of demand notice, the third one may ask for stay of
collection of the amount demanded and· the fourth one may ask for the
stay of the very Notification. Such distinctions are bound to occur where
E a large number of writ petitions are filed challenging the same Notification.
The interim orders made by the Court may also vary in their phraseology
in such a situation. The acceptance of the appellants' argument would thus
bring about a discrimination between a petitioner and a petitioner just
because of the variation of the language employed by the court while
F granting the interim order though in substance and in all relevant aspects,
they are similarly situated. (854-B-F, 855-C]

Mis. Hin.dalco Industries Ltd. v. State of U.P. SLPs (C) Nos. 9087.-88
of 1996, decided 011 23-4-1996, held inapplicable.
-
G 3. The decision in Adoni Ginning's case does not lay down the
proposition that in respect of the period covered by stay, no demand can
be made. No such proposition can be deduced for the reason that the
liability for the said period was not at all in issue in the said decision.
Unless put in issue and pronounced upon, it cannot be said that there was
H a decision on the said issue. There was no /is between the parties with
K.C.l.L. v. U.P. STATE ELECTRICITY BOARD [B.P. JEEVAN REDDY,J.] 847

respect to the period covered by the stay order of the High Court. If so, it A ·
cannot be said that any decision was rendered by this Court on the said
issue or aspect, as it may be called. [853-G-H, 854-A]

Adoni Ginning Factory v. Secretary, Andhra Pradesh State Electricity
Board [1979] 4 SCC 560, held inapplicable.
B
4. The rate of late payment surcharge is not penal, but having regard
to the particular facts and circumstances of this case and having regard
to the fact that the petitioners could possibly have understood the decision
in Adoni ginning's case as relieving them of their obligation to pay inter-
est/late payment surcharge for the period of stay, as they were acting bona C
fide, the rate of late payment surcharge is reduced to eighteen per cent.
But this direction is confined only to the period covered by the stay orders
in writ petitions filed challenging the Notification and limited to the date
on which those writ petitions were dismissed. [856-C-D]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1836 of D
1997 Etc.

From the Judgment and Order dated 9.7.93 of the Allahabad High
Court in C.M.W.P. No. 10755 of 1993.
E
H.N. Salve, C.S. Vaidyanathan, DA. Dave, Ms. Kiran Budhiraja,
(Ms. Nina Gupta for Vineet Kumar, Prag Tripathi, A.T. Patra, Gautam
Khaitan, P.P. Tripathi, Rajesh Kumar Singh, Sahahid Rizvi, Suman J.
Khaitan, Raj Kumar Gupta, H.V.P. Sharma, Rajesh, Anil Kumar Jha,
(NP)R.B. Misra (NP), Sunil Kumar Jain, Vijay Hansaria, Pradeep Misra
and T. Mahipal for the appearing parties. F

The Judgment of the Court was delivered by :

B.P. JEEVAN REDDY, J. Civil Appeals (Arising out of SLP (C) Nos.
6588194, 21905-06/93, 21913-14193, 6479/94 & 23250/94.
G
Leave granted in Special Leave Petitions.

These appeals are preferred against the judgment of a Division
Bench of the Allahabad High Court dismissing the writ petitions filed by
the appellants. The appellants are large consumers of electricity. H
·~

848 SUPREME COURT REPORTS [1997] 2 S.C.R.

A By a Notification dated April 21, 1990, the Uttar Pradesh State
Electricity Board had revised the electricity rates/tariffs under Section 49
of the Electricity (Supply) Act, 1948. The Notification inter alia provided
for payment of interest in case the bill amount is not paid within the
specified period. Clause 7(b) read as follows :

B "7(b) For delayed payment:
In the event of any bill of whatever nature it may be not being paid ·
by the due date specified therein, the consumer shall pay an addi-
tional charge per day of seven paise per hundred rupees or part ,
thereof on the unpaid amount of the bill for the period by which
c the payment is delayed, beyond the due date specified in the bill,
without prejudice to the right of the Board to disconnect the
supply."

The validity of the aforesaid Notification was questioned in the
Allahabad High Court by way of a writ petition filed by the Eastern U.P.
D Chamber of Commerce and Industry, Allahabad and certain individual
consumers. On the Interlocutory Application filed in the said writ petition,
the High Court passed the following Order on July 25, 1990:

"In this case S/Sri Sudhir Agarwal and S.C. Budhwar have filed
E appearance on behalf of Respondents. They pray for and are
granted two weeks' time for filing rejoinder affidavit. List this
petition for disposal, if possible at the admission stage, on 16th
August, 1990. This is necessary in view of recurrence of this matter
in large number of cases and revenue in large scale being affected
for electricity charges. Meanwhile till 23-8- 1990 unless recalled
F earlier, the operation of the notification dated 21. 4.1990 shall remain
stayed. The respondents are restrained from realising the additional
amount of electricity charges from petitioners in pursuance of the
said notification. However, the petitioners shall continue to pay at
the old rate."
G
Emphasis added)

The said order was continued by subsequent Orders dated August
30, 1990 and September 7, 1990.

H It appears that besides the above writ petition, several other writ
K.CJ.L. v. U.P. STATE ELECTRICITY BOARD [B.P. JEEVAN REDDY, J.] 849

petitions were filed questioning the aforesaid Notification. In every writ A
petition, there was an Interlocutory Application praying for stay of operation
of the said Notification but there does not appear to be any uniformity in
the interim orders made by the High Court in those writ petitions. For
example, in Writ Petition No. 30097 of 1990 filed by the Employers Associa-
tion of Northern India, the interim order was to the following effect:
B
"Meanwhile effect shall not be given to the notification dated 21st ·
April, 1990 as against the petitioners. However, it is made clear that
in the event offailure of the writ petition the petitioners shall deposit
with the relevant authority within a period of one month from the
date of dismissal of the writ petition the difference between the C
amount of electricity dues, which will be paid hereinafter by the
petitioners under our order and the sum which may be calculated on
the basis of the impugned notification. "

(Emphasis added)
D
All the said writ petitions challenging the said Notification were
ultimately dismissed by a Division Bench on March 1, 1993.

From this stage· onwards, we will refer to the facts and contentions
·in civil appeal arising from Special Leave Petition (C) No. 6588 of 1990 E
(preferred by M/s. Kanoria Chemicals and Industries Limited), as repre-
sentative of the facts and contentions in all the matters being disposed of ·
under this judgment. Though the individual facts vary, the questions arising
in these appeals are common.

After the dismissal of the writ petitions on March 1, 1993 as F
aforesaid, Kanoria says, it deposited_ the difference amount between pre-
revised and the revised electricity rates. It did not, however, deposit the
"additional charges" leviable under clause 7(b), referred to above, which
are generally referred to - and referred to hereinafter - as "late payment
surcharge". Thereupon, the Board issued a notice of demand calling upon
· Kanoria to pay the late payment surcharge in a sum of Rs. 3,27,01,408.88. G
(calculated upto February 28, 1993). Similar demand notices were served
upon other appellants also. A fresh batch of writ petitions were filed by
several consumers incl~ding the appellants herein questioning the notices
demanding late payment surcharge under clause 7(b). The main contention
of the appellants before the High Court was that inasmuch as the High H
850 SUPREME COURT REPORTS [1997] 2 S.C.R.

A Court had stayed the operation of the Notification dated April 21, 1990 (by
its Order dated July 25, 1990 as continued from time to time), clause 7(b)
remained inoperative during the period July 25, 1990 to March 1, 1993 and,
therefore, no late payment surcharge can be levied on the amount withheld
by the appellants under the orders of the court, even though their writ
petitions were dismissed ultimately. According to the appellants, it was not
B a case where the court injuncted the Board from collecting the dues
according to the aforesaid Notification, nor was it a case where the
collection of bill amount was stayed simplicitor. It was a case, they sub-
mitted, Where the operation of the very Notification was stayed which meant
that from the date of the stay order, clause 7(b) did not operate and was not
C effective till the dismissal of the writ petitions. Strong reliance was placed
upon the decision of this Court in Adoni Ginning Factory v. Secretary,
Andhra Pradesh State Electricity Board, [1979] 4 S.C.C. 560. The said
contention has been rejected by the Division Bench. R.A. Sharma, J.,
speaking for the Division Bench, first examined the nature and effect of
D the interim orders passed by courts pending disposal of substantive matters
and then opined that in Adoni Ginning, this Court cannot be said to have
held that in the case of stay of operation of the Notification, interest does
not accrue at all. Sharma, J. pointed out that the said decision was
concerned only with the period during which an order of injunction
restraining the Board from collecting the revised charges was in operation
E and this Court opined that an order of injunction does not prevent the
accrual of interest provided by the relevant tariffs/rules. Sharma, J. pointed
out that the recoverability of the interest amount for the period covered by
an order of stay of the Notification was not at all in issue in Adoni Ginning
and, therefore, it cannot be said that there is any decision on the said
question. Affirming the optrepeated principle that a decision is an
F
authority only for what it actually decides, the learned Judge opined that
the consumers are liable to pay the late payment surcharge under clause
7(b) of the said Notification even for the period covered by the aforemen-
tioned order dated July 25, 1990 (as extended from time to time). The
learned Judge also pointed out that the interim orders passed in various
G writ petitions were not uniform and by way of illustration set out in the
interim order in Writ petition No. 30097 of 1990 (quoted by us
hereinabove). The correctness of the judgment is called in question in this
batch of appeals.

H Sri R. Vaidyananthan, who led the arguments on behalf of the
K.C.I.L. v. C.P. STATE ELECTRICITY BOARD [B.P. JEEVAN REDDY, J.] 851

appellants, submitted that the impugned decision of the High Court is A
clearly contrary to the principles enunciated by this Court inAdoni Ginning
and cannot, therefore, stand. Counsel rdied upon another order of this
Court dated April 23, 1996 in Special Leave Petition (C) No. 9087-88 of
1996 (M/s. Hindalco Industries limited v. State of Uttar Pradesh), Learned
counsel submitted that clause 7(b) of the Notification dated April 21, 1990 B
was penal in nature inasmuch as the late payment surcharge provided by
it works out to 25.5 interest per annum. Such high rate of interest, learned , ·r.·~
.,,..~:~~.-.
counsel submitted, cannot but be characterized as penal.

Inasmuch as the decision in Adoni Ginning constitutes the sheet-
anchor of the appellant's case, it is necessary to closely examine the facts C

- and ratio of the said decision. Electricity charges were enhanced by the
Government of Andhra Pradesh under an Order dated 30th January, 1995.
The enhancement was questioned by certain consumers by way of writ
petitions in the Andhra Pradesh High Court. The High Court stayed the
operation of the Government Order enhancing the rates. The writ petitions D
came up for hearing before a learned Single Judge on February 22, 1957
and were allowed. The Government of Andhra Pradesh preferred writ
appeals which were allowed by a Division Bench of that court on 19th
December, 1958 upholding the validity of the enhancement. Thereafter, the
Andhra Pradesh State Electricity Board to whom the government had
transferred the Electricity Undertakings with effect from 1st April, 1959 E
issued bills to several consumers calling upon them to pay the arrears of
enhanced charges. No demand was made under these notices for surcharge
(for delayed payment of Bill amount) on the arrears. Meanwhile several
consumers approached this court and obtained orders of injunction
restraining the Government/Board from realising from them the "amount p
of arrears occasioned by the enhancement of rates". Injunction was granted
by this Court subject to certain conditions including the condition that in
the event of the dismissal of their appeals, the appellants shall pay the
arrears with interest calculated @ one percent per annum. All the appeals
were dismissed by this Court on 25th March 1964. Thereafter, the
Electricity Board issued demand notices calling upon the consumers to pay G
surcharge @ twelve percent per annum on the a"ears in respect of which
they had obtained orders of injunction pending their appeals before this court.
On receipt of these demand notices, the consumers again approached the
High Court by way of writ petitions questioning the demand. Their writ
petitions were allowed by a learned Single Judge observing that no sur- H
·~·

852 SUPREME COURT REPORTS [1997) 2 S.C.R.
1

''
A charge was leviable during the period when the order of injunction granted
by this Court was in operation. The writ appeals preferred by the Board
were, however, allowed by a Division Bench against which decision some
of the consumers approached this Court again. It is, therefore, clear that
the only dispute in Adoni Ginning pertained to the liability of the con-
sumers to pay surcharge @ twelve percent per annum on the amount not
B collected from them under the orders of injunction granted by this Court
pending their appeals, It is significant to notice that the dispute in the said
case did not pertain to the liability of the consumers to pay the surcharge
amount for the period covered by the order of stay granted by the High
Court; the Board did not choose to demand any surcharge for that period.
C The contention of the appellants in Adoni Ginning was that by virtue of the
injunction order granted by this Court, the consumers cannot be said to be
in default in paying the electricity charges and, therefore, no surcharge was
leviable. The contention was rejected by this Court (D.A. Desai and 0.
Chinnappa Reddy, JJ.). The Court pointed out that according to clause
D (9), a consumer was liable to pay the bill amount within thirty days, in
default of which he was liable to pay "an additional charge of one percent
on the amount of the bill for every month of delay or part thereof'. The
contention urged by the appellant therein was repelled in the following
words:
'•, E
., The injunction granted by this court restrained the governed from
realising the arrears of enhanced charges ....... All that the injunc-
tion did was to restrain the Board from realising the arrears which
nieant that the Board was restrained from taking any coercive
action such as disconnection of supply of electricity etc. for the
F realisation of the arrears. The operation of G. O. No. 187 dated 30th
January, 1955, as such was not stayed. Thus the obligation of the
consumers to pay charges at the enhanced rates was not
suspended though the Electricity Board was prevented from
realising the arrears. It was up to the consumes to pay or not
G to p~y the arrears. If they paid the arrears they relieved them-
selves against the liability to pay surcharge. If they did not pay
the arrears they were bound to pay the surcharge if they failed
in the appeals before the Supreme Court. This was precisely
what was pointed out by the Electricity Board in the Bills issued
H to the consumes after the Supreme Court granted the injunction.
K.C.l.L. v. U.P. STATE ELECTRICITY BOARD [B.P. JEEVAN REDDY, J.) 853

We may mentioned here that the Electricity Board is not demand- A
ing any surcharge on the arrears for the period during which the
Andhra Pradesh High Court had granted stay. It was explained by
the learned Counsel for the Electricity Board that no surcharge was
claimed for that period as the operation of G.O. No; 187 dated 30th
January 1955 had itself been stayed at that time. Surcharge was B
claimed for the period during which the appeals were pending in
the Supreme Court since·the Supreme Court did not stay the
operation of G.O. No. 187 but only restrained the Board from
collecting the arrears. That no stay of G.O. No. 187 was ever
intended to be granted by the Supreme Court is also clear from . C
the circumstance that there was no injunction restraining the
Electricity Board from collecting future charges at the enhanced
rates. The Electricity Board was, therefore, right in claiming surcharge
for the period during which the appeals were pending in the Supreme
Court and not claiming surcharge for the period during which· the D
Writ Petition and Writ appeals were pending in the High Court."

Emphasis added)

The learned counsel for the appeilants in the appeals before us
rely upon the portions underlined in the above passage as a decision E
supporting their contention that where the operation of Government
order is stayed, no surcharge can be demanded upon the amount with-
held. We find it difficult to agree. In our respectful opinion, the under-
lined portions do not constitute the decision of the court. They merely
refer to the fact that the Board itself did not make a demand for
surcharge amount in respect of the period covered by stay under its own F
understanding of the effect of the stay order granted by the High Court
and that it was justified in its opinion. The demand was, the court
pointed out, in respect of the period covered by the order of injunction
granted by this Court. This Court held expressly that the grant of an
injunction does not relieve the consumes of their obligation to pay the G
charges at the enhanced rates and, therefore, the deniand for sur-
charge/interest for such period is not illegal. The portions underlined
cannot be understood as laying· down the proposition that in respect of
the period covered by stay, no demand can be made. No such proposi-
tion can be deduced from the said passage for the reason that the
liability for the said period was not at all in issue in the said decision. H
854 SUPREME COURT REPORTS (1997] 2 S.C.R.

A Unless put in issue and pronounced upon, it cannot be said that there was
a decision on the said issue. There was no /is between the parties with
respect to the period covered by the stay order of the High Court. If so, it
cannot be said that any decision was rendered by this Court on the said
issue or aspect, as it may be called. We, therefore, agree with the High
Court that Adoni Ginning cannot be read as laying down. the propo~ition
B that the grant of stay of a Notification revising the electricity charges has the.
effect of relieving the consumers/petitioners of their obligation to pay late
payment surcharge/interest on the amount withheld by them even when their
writ petitions are dismissed ultimately. Holding otherwise would mean that
even though the Electricity Board, which was the respondent in the writ
C petitions succeeded therein, is yet deprived of the late payment surcharge
which is due to it under the tariff rules/regulations. It would be a case
where the Board suffers prejudice on account of the orders of the court
and for no fault of its. It succeeds in the writ petition and yet loses. The
consumer files the writ petition, obtains stay of operation of the Notifica-
tion revising the rates and fails in his attack upon the validity of the
D Notification and yet he is relieved of the obligation to pay the late payment
surcharge for the period of stay, which he is liable to pay according to the
statutory terms and conditions of supply - which terms and conditions
indeed form part of the contract of supply entered into by him with the
Board. We do not think that any such unfair and inequitable proposition
can be sustained in law. No such proposition flows from Adoni Ginning. It
E is a matter of common knowledge that several petitioners (their counsel)
word the stay petition differently. One petitioner may ask for injunction,
another may ask for stay of demand notice, the third one may ask for stay
of collection of the amount demanded and the fourth one may ask for the
stay of the very Notification. Such distinctions are bound to occur where a
F large number of writ petitions are filed challenging the Same Notification.
The interim orders made by the Court may also vary in their phraseology
in such a situation. Take this very case: while the consumers had asked for
stay of operation of the Government Order revising the rates, those very
consumers asked for an injunction when they came to Supreme Court.
Furthermore, as pointed out rightly by the High Court, the order of stay
G granted by the High Court in writ petitions questioning the validity of the
Notification dated April 21, 1990 were not uniform. In the case of writ
petition filed by the Eastern U.P. Chamber of Commerce and Industry,
Allahabad, the operation of the Notification was stayed while in the case
of the writ petition filed by the Employers Association of Northern India,
it was directed that "effect shall not be given to the notification dated 21st
H
K.C.l.L. v. U.P. STATE ELECTRICITY BOARD [B.P. JEEVAN REDDY, J.] 855

April, 1990 as against the petitioner", while clarifying at the same time that A
"in the event of failure of the writ petition, the petitioner shall deposit with
the relevant authority within a period of one month from the date of
dismissal of the writ petition the difference between the amount of
electricity dues to be paid hereinafter by the petitioners under our orders
and the sum which may be calculated on the basis of the impugned
notification". The words "sum which may be calculated on the basis of the B
impugned notification" in the later order clearly mean and include the late
payment surcharge as well. The acceptance of the appellants' argument
would thus bring about a discrimination between a petitioner and a
petitioner just because of the variation of the language employed by the
court while granthing the ~nterim ~rder dthough in substance andd in all C
1
relevant aspects, t ey are similar y situate . It is equally well settle that an
order of stay granted pending disposal of a writ petition/suit or other proceed-
ing, comes to an end with the dismissal of the substantive proceeding and .
that it is the duty of the court in such a case to put the parties in the same
position they would have been but for the interim orders of the court. Any
other view would result in the act or order of the court prejudicing a party D
(Board in this case) for no fault of its and would also mean rewarding a
writ petitioner inspite of his failure. We do not think that any such unjust
consequence can be countenanced by the courts. As a matter of fact, the
contention of the consumers herein. extended logically should mean that
even the enhanced rates are also not payable for the period covered by the
order of stay because the operation of the very Notification revising/en- E
hancing the tariff rates was stayed. Mercifully, no such argument was urged
by the appellants. It is ununderstandable how the enhanced rates can be
said to be payable but not the late payment surcharge thereon, when both
the enhancement and the late payment surcharge are provided by the same
Notification - the operation of which was stayed.
F
As has been pointed out by S.C. Agrawal, J., speaking for a three-
Judge Bench in Shree Chamundi Mopeds Ltd. v, Church of South India
Tmst Association, Madras, [1992] 3 S.C.C. 1, "while considering the effect
of an interim order staying the operation of the order under challenge,a
distinction has to be made between quashing of an order and stay of G
operation of an order. Quashing of an order results in the restoration of
the position as it stood on the date of the passing of the order which has
been quashed. The stay of operation of an order does not, however, lead
to such a result. it only means that the order which has been stayed would
not be operative from the date of the passing of the stay order and . it does H
856 SUPREME COURT REPORTS [1997] 2 S.C.R.

A not mean that the said order has been wiped.out from existence."

Sri vaidyanathan relied upon an unreported order dated April 23,
1996 in Special Leave Petition (C) Nos. 9087-88 of 1996 (Hindalco In-
dustries v. State of U.P.). We have seen the order but we do not find
anything in the said order supporting the contention of the learned counsel.
B
Sri Vaidyanathan than contended that the rate of 'late payment
surcharge' provided by clause 7(b) is really penal in nature inasmuch as it
works out to 25.5 percent per annum. Learned counsel also submitted that
the petitioners understood the decision in Adoni Ginning as relieving them
C of their obligation to pay interest for the period covered by the interim
order and that since they were acting bonafide they should not be mulcted
with such high rate of interest. We cannot agree that the rate of late
payment surcharge provided by clause 7(b) is penal, but having regard to
the particular facts and circumstances of this case and having regard to the
fact that petitioners could possibly have understood the decision in Adoni
D Ginning as relieving them of their obligation to pay interest/late payment
surcharge for the period of stay, we reduce the rate of late payment
surcharge payable under clause 7(b) to eighteen percent. But this direction
is confined only to the period covered by the stay orders in writ petitions .
filed challenging the Notification dated April 21, 1990 and limited to March
E 1, 1993, the date on which those writ petitions were dismissed.

For the above reasons, the appeals fail and are dismissed subject to
the above mentioned direction with respect to the rate of levy of late
payment surcharge under clause 7(b) of the Notification dated April 21,
1990.
F
Writ Petition (C) No. 761 of 1993:

Writ Petition (C) 761 of 1993 too is dismissed for the same reasc:ms.

No costs.
G
v.s.s. Appeals and Petition dismissed.