In Brief
The Madras Aluminium Company, a power-intensive sick industrial unit, requested reduction of its contracted electricity demand from 23,000 KVA to 10,000 KVA in December 2001. The Tamil Nadu Electricity Board took over two and a half years to process this request, meanwhile charging for the full 23,000 KVA despite the company consuming less. The Supreme Court held that State action in contractual matters must comply with Article 14 of the Constitution. The Board's unreasonable delay in deciding the application—while similar requests by others were processed promptly—was arbitrary. The Court ordered refund of charges paid for the 13,000 KVA difference from six months after application until agreement execution, plus simple interest at 6% per annum.
The lawyer headnote and full judgment text are available to registered users.