A Division Bench of Justice L. Nagaswara Rao and Justice B.R. Gavai observed that the two conditions mentioned under sub- rule (1) of Rule 3 of the said rules were satisfied in the instant case and therefore, the appeal instituted by the appellant to assail the electricity supply to SMBPL, the sister concern of SBPIL was dismissed.
The appeals in the present case assailed the judgment dated December 6, 2007 passed by the Appellate Tribunal for Electricity, thereby dismissing the appeals filed by the present appellant.
Facts in brief were that the M/s Shri Bajrang Power and Ispat Ltd. established a Captive Generation Plant. M/s Shri Bajrang Metallics and Power Ltd, referred as, SBMPLwas a sister concern of SBPIL.
SBPL instituted a petition to the Chhattisgarh State Electricity Regulatory Commission for providing open access and wheeling of power through the transmission system of the appellant for captive use by SBMPL.
The Commission through its order dated October 14, 2005, observed that SBPIL was entitled to provide the electricity supply to its sister company SBMPL and the same would qualify to be treated as “own consumption” stated under Section 9 read with Section 2 (8) of the Electricity Act, 2003 and Rule 3 of the Electricity Rules, 2005.
Being aggrieved by the same, the appellant approached APTEL. However, APTEL also dismissed the aforesaid appeals through the impugned judgment dated December 6, 2007. Hence, the present appeal.
The Counsel for the appellant contended that the order passed by the Commission and the impugned judgment passed by the APTEL were in contradiction with Rule 3 of the said rules. It was also contended that unless SBPIL conumses 51% of the aggregate electricity generated by it, it cannot seek benefit under Section 9 of the Act.
On the contrary, the Counsel for the respondents relied to the case of Maharashtra State Electricity Distribution Company Limited v. JSW Steel Limited and Others, wherein it was held that no permission is required from the Commissioner for supply of electricity for your own use.
After hearing the submissions of the rival parties, the Court deemed it fit to refer to Clauses (8) and (49) of Section 2 as well as Section 9 and sub- sections (1) and (2) of Section 42 of the said Act. After going through the relevant clauses, the question that was posed for consideration before this Court was whether the open access for transmitting electricity from SBPIL to SBMPL was for its own use or not.
To answer the same, the Court took into consideration Rule 3 of the Electricity Rules, 2005.
The Court noted that under sub- rule (1) of Rule 3 of the said rules, stipulates certain conditions for a power plant to qualify as “Captive Generating Plant” under Section 9 read with clause (8) of Section 2 of the said Act. The conditions were that a minimum 26% of the ownership should be held by the captive users and minimum 51% of the aggregate electricity generated in the plant is consumed for the captive use on an annual basis.
In view of the same, the Court observed that SBMPL holds 27.6 equity shares in SBPIL, thus the condition of minimum 26% of shareholding was satisfied in the instant case. The other condition pertaining to the combined consumption of SBPIL and SMBPL should not be less than 51% of the power generated was also fulfilled in the present case and indeed the same was more than 51%, the Court observed. Thus both prerequisites mentioned under Rule 3 were satisfied, the Court stated.
Further, the National Electricity Policy, 2005 was also referred to wherein clauses 5.2.24 to 5.2.26 dealt with “Captive Generation”. The Court out of the said policy construed that the objective of establishing a power plant was not only limited to securing reliable, quality and cost effective power but was also to facilitate creation of employment oppurtunites through speedy and efficient growth of industry. It was further observed that the said policy was in complete alignment with the provisions contained in Section 9 and Clause (8) of Section 2 of the said Act.
It was also stated that it is a settled proposition of law that the interpretation that advances the object and purpose of the Act, has to be preferred. Reliance was placed on the cases, Administrator, Municipal Corporation, Bilaspur v. Dattatraya Dahankar, Advocate and Another , S. Gopal Reddy v State of A.P. and Ahmedabad Municipal Corporation and Another v. Nilaybhai R. Thakore and Another with respect to the same.
Thus, the Court opined that in the instant case there was no interference needed in the order passed by the Commission and the impugned judgment dated December 6, 2007 passed by the APTEL. Accordingly, the appeals were dismissed on the account of being meritless.
Case name: CHATTISGARH STATE POWER DISTRIBUTION COMPANY Ltd. Vs. CHATTISGARH STATE ELECTRICITY REGULATORY COMMISSION AND ANOTHER
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