KANPUR ELECTRICITY SUPPLY CO. LTD. & ANR. versus M/S. L.M.L. LIMITED & ORS.

KANPUR ELECTRICITY SUPPLY CO. LTD. & ANR. versus M/S. L.M.L. LIMITED & ORS.

KESCO's insistence on a bank guarantee and refusal to accept the Bond, despite agreements, regulatory approval, and compliance by the respondent company, was unjustified and negated the rehabilitation efforts for a sick industrial unit. The relief undertaking and BIFR directions required flexible application of the Supply Code, and petitioner’s rigid approach obstructed respondent’s revival.

Parties
Petitioner: Kanpur Electricity Supply Co. Ltd.; Respondent: L.M.L. Limited
Jurisdiction
India
Judgment Date
07 May 2010
Procedural Posture
SLP (civil) No. 33984 of 2009 / Supreme Court: Special Leave Petition
Outcome
Special Leave Petition dismissed
Legal Topics
Load Reduction, Contracted Load, Relief Undertaking, Sick Industrial Companies, Supply Code Compliance
Electricity Law Industrial Law Load Reduction Contracted Load Relief Undertaking Sick Industrial Companies Supply Code Compliance

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 3 Authorities cited 6 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Kanpur Electricity Supply Co. Ltd.

Petitioner

L.M.L. Limited

Respondent

Procedural Posture

SLP (civil) No. 33984 of 2009 / Supreme Court: Special Leave Petition

Legal Issues

  1. 1 Whether KESCO was justified in refusing reduction of contracted electricity load from 8 MVA to 1.25 MVA despite agreement and compliance by respondent company.
  2. 2 Whether insistence on bank guarantee under amended Clause 4.49 was lawful despite respondent company's financial status and BIFR directions.

Ratio Decidendi

KESCO's insistence on a bank guarantee and refusal to accept the Bond, despite agreements, regulatory approval, and compliance by the respondent company, was unjustified and negated the rehabilitation efforts for a sick industrial unit. The relief undertaking and BIFR directions required flexible application of the Supply Code, and petitioner’s rigid approach obstructed respondent’s revival.

Court Disposition

Special Leave Petition dismissed

Orders

  • No interference with the High Court order
  • Petitioner-Company is not prevented from taking appropriate steps against the Respondent-Company if instalment payments or current electricity bills are defaulted