Punjab & Haryana High Court Quashes Electricity Disconnection and SSI Withdrawal Orders, Holds Industries Entitled to One-Year Shifting Period from Development Completion Date
Case Name: M/s Rolex Fuel Pipes v. State of Punjab and Others; M/s A.S. Steel Limited v. State of Punjab and Others; M/s Bhalla Ball Bearing Industries and Another v. State of Punjab and Others; Vidya Bhullar and Another v. Karan Avtar Singh and Others
Date of Judgment: January 6, 2015
Citation: CWP No. 25891 of 2013, CWP No. 25946 of 2013, CWP No. 26834 of 2013 & COCP No. 2545 of 2013
Bench: Hon’ble Mr. Justice K. Kannan
Held: The Punjab & Haryana High Court allowed three connected writ petitions filed by industrial units and dismissed a related contempt petition, holding that the disconnection of electricity and withdrawal of SSI registration by authorities was unjustified and contrary to the terms of allotment. Justice K. Kannan ruled that the industries were entitled to operate for one year from the completion of basic development works in the newly allotted industrial plots and that the earlier six-month relocation period granted in 2006 had merged with the Division Bench order acknowledging the subsequent 2012 government notification. The Court clarified that there was no breach of the earlier order, and therefore the contempt proceedings and coercive administrative actions lacked legal basis.
Summary: The litigation stemmed from CWP No. 20792 of 2006, where the High Court had directed industrial units functioning in residential zones of Phagwara to relocate within six months. During appeal, the Punjab Government issued a notification dated July 30, 2012, introducing a relocation scheme offering one-year time to shift units to the new Industrial Area, Town Planning Scheme No. 5, Part-II, Phagwara. The appeal was disposed of as infructuous in light of this notification. Subsequently, fresh allotment letters dated October 15, 2013, were issued to the petitioners, including M/s Rolex Fuel Pipes, M/s A.S. Steel Ltd., and M/s Bhalla Ball Bearing Industries, requiring shifting within one year of allotment. Clause 7 of the allotment and Note 6 clarified that if basic development works in a particular pocket were completed later, the one-year period would commence from the date of such completion.
When the petitioners allegedly failed to relocate, the Punjab State Power Corporation disconnected electricity, and SSI registration was withdrawn. A contempt petition was also filed alleging violation of the 2006 judgment. Justice Kannan found that the contempt plea was misconceived because the 2006 order had merged with the Division Bench’s 2012 order, which redefined the parties’ rights through the new scheme. He noted that the government itself confirmed that the development work in the relevant industrial pockets was completed on January 20, 2014. Accordingly, the one-year relocation period had to be counted from that date, and any punitive action before January 20, 2015, was premature and invalid.
The Court also observed that enforcement agencies had misinterpreted the original High Court order and that industrial units could not be penalized for administrative confusion. It emphasized that coercive steps such as disconnection of essential utilities or withdrawal of registrations must strictly conform to the terms of allotment and cannot precede the lapse of the stipulated relocation period.
Decision: The High Court quashed the impugned orders of electricity disconnection and SSI withdrawal, declaring them unsustainable. It dismissed the contempt petition as misconceived, holding that no violation of the 2006 order occurred. The Court directed restoration of power supply and upheld the petitioners’ right to continue operations until expiry of the one-year period from January 20, 2014, as per the relocation scheme.