Andhra Pradesh High Court - Amravati
Hindustan Shipyard Ltd vs Eastern Power Distribution Company Of ... on 18 June, 2024
Author: Ninala Jayasurya
Bench: Ninala Jayasurya
1
NJS, J
WP_20857_2023
APHC010405982023
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3209]
(Special Original Jurisdiction)
TUESDAY ,THE EIGHTEENTH DAY OF JUNE
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE NINALA JAYASURYA
WRIT PETITION N
No: 20857 of 2023
Between:
Hindustan Shipyard Ltd., ...PETITIONER
Rep.by its Senior Manager (Plant Maintenance)
AND
Eastern Power Distribution Company of Andhra Pradesh
Ltd., and Others .......RESPONDENT(S)
...RESPONDENT(S)
Counsel for the Petitioner(S):
1. Mr.K.Gopal
K.Gopal Chowdary,
Chowdary learned counsel for
Mr.Challa Guna Ranjan, Advocate
Counsel for the Respondent(S):
1. Mr.Metta Chandra Sekhara Rao, Standing Counsel for APEPDCL
The Court made the following Order:
The Writ Petition is filed challenging the Provisional Assessment Order
dated 19.01.2023 of the 3rd respondent and Final Assessment Order of the 2nd
respondent dated 13.07.2023 on various grounds.
2. The relevant facts of the case as set out in the affidavit ffiled
iled in support
of the writ petition may briefly be stated as follows:
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The petitioner is a Government Company wholly owned by the
Government of India and under the control of the Ministry of Defence. It is
engaged in the construction and repairs of ships and sub-marines vital to the
National Security and Defence of India. It is availing electricity supply from the
1st respondent / Distribution Licensee vide Service Connection No.VSP012
with a Contracted Maximum Demand (CMD) of 3500 KVA.
3. The Government of India came out with the National Action Plan for
Climate change and the National Solar Mission was one of the flagship
programmes. A target of 100 Giga Watts (GW) was declared by the Ministry of
New & Renewable Energy, out of which 40 GW was to be achieved by various
small rooftop and distributed solar power plants. The Ministry of New &
Renewable Energy issued a communication dated 07.01.2015 conveying the
sanction of the President of India for setting up over 300 MW of grid-
connected and off-grid solar power projects by the Defence Establishments
under the Ministry of Defence and the Para-Military Forces under the Ministry
of Home Affairs providing for Viability Gap Funding. The petitioner was
among those mandated by the Government of India to set up rooftop solar
power projects and to use the energy generated therein for its own use.
4. The petitioner was allotted rooftop solar power plant with a capacity of 3
MW, to be installed on various vacant roofs of the buildings within the
premises of the Naval Shipyard at Visakhapatnam. The installation and
commissioning of 2 MWp ( 500 KWp x 4) was undertaken with the guidance,
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approval and supervision of the Solar Energy Corporation of India Ltd.,
(SECI), a Government of India undertaking under the Ministry of New &
Renewable Energy (MNRE) and the same was commissioned in June, 2018.
Thereafter, the installation and commissioning of 1 MWp ( 500 KWp x 2) was
undertaken under the guidance, approval and supervision of the New &
Renewable Energy Development Corporation of Andhra Pradesh
(NREDCAP), which is the nodal agency set up by the State Government and
the same was commissioned in August, 2019. Both the rooftop solar power
plants were set up and operated as Off-Grid solar power plants under
Renewable Energy Service Company (RESCO) mode by M/s.Clean Max
Enviro Energy Solutions Pvt. Ltd., being the successful bidder identified by
'SECI' under competitive bidding and Power Purchase Agreements were
entered into for the energy generated and delivered by the said entity from the
rooftop solar power plants in the petitioner's premises for consumption by the
petitioner through the dedicated internal electrical lines within the petitioner's
premises. The energy generated from the rooftop solar power plants was
conveyed to various load centers within the petitioner's premises through
dedicated internal electrical lines in island mode. Statutory approvals by the
Chief Electrical Inspector to the Government of India under the Regional
Inspectorial Organization of the Central Electricity Authority in terms of Central
Electricity Authority (Measures relating to Safety and Electrical Supply)
Regulations 2010 for energizing the rooftop solar power plants were
sanctioned through Letters dated 16.11.2018 and 29.09.2020. Thereafter, the
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energy generated from the rooftop solar plants in the petitioner's premises has
been continuously consumed by the petitioner's loads within the petitioner's
premises through the dedicated internal electrical lines.
5. On 28.06.2022, the 4 th respondent carried out a routine inspection of
the service connection of the petitioner bearing No.VSPO12 and prepared an
inspection report. On the basis of the said report, the 3rd respondent issued a
Provisional Assessment Order dated 19.01.2023 purportedly in terms of
Section 126 (2) of the Electricity Act, 2003(for short 'the Act') and based on
Assessment Rules contained in Appendix XII read with Clause 9.3 of the
General Terms and Conditions of the Supply (GTCS), wherein it is inter alia
alleged that the petitioner "is guilty of unauthorized use of Electricity under
Section 126 of the Act owing to usage of Electricity by a means not authorized
by the Company" and electricity charges allegedly due to the 1st respondent
were assessed at Rs.3,54,13,885/-. The petitioner submitted a representation
dated 03.02.2023 by way of objections to the said Provisional Assessment
setting out the relevant aspects. Thereafter, the 2nd respondent issued a
Notice dated 13.04.2023 to the petitioner and fixed a date i.e., 19.04.2023 for
personal hearing and passed the impugned Final Assessment Order dated
13.07.2023.
6. Heard Mr.K.Gopal Chowdary, learned counsel for the petitioner and
Mr.Metta Chandra Sekhar Rao, learned counsel appearing on behalf of the
respondents. Perused the material on record.
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7. The learned counsel for the petitioner made elaborate submissions with
reference to the provisions of the Act. It is his foremost contention that the
impugned Assessment Order is without jurisdiction and contrary to the
provisions of the Act. He contends that invocation of Section 126 of the Act, in
the facts and circumstances of the case, is wholly misconceived and the
impugned order on the basis of the Inspection Report of the 4 th respondent is
liable to be set aside. Referring to the said report dated 28.06.2022, the
learned counsel submits that there is no allegation of tampering of seals,
much less theft of energy by the petitioner, that it is not even the case of the
respondents that there was any electricity supplied by the licensee that has
been used unauthorizedly or by means not authorized by it.
8. In elaboration, he submits that Section 126 of the Act applies only to the
electricity supplied or arranged to be supplied by the licensee and has no
application to the electricity generated from the rooftop solar power plants
installed in the petitioner's premises and consumed by it within its premises
through the internal lines and without use of licensee's transmission lines or
network.
9. Referring to Section 7 of the Act, he contends that a generating station
may be established, operated and maintained without obtaining a license. He
submits that as the electricity is generated from the rooftop solar power plants
installed in the petitioner's premises which is meant for it's consumption within
it's premises, the question of connectivity with the Grid of the 1st respondent
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does not arise at all and therefore, the consumption of power injected to the
Grid through the transmission lines of the licensee / 1st respondent would not
arise at all. Further, that there is no provision of Law, Rule or Regulation which
contemplates permission / approval of the 1st respondent for installation of a
rooftop solar power plant, much less for consumption of energy generated
from the rooftop solar power plants for self utilization. He also submits that the
petitioner in terms of the scheme notified by the Ministry of New & Renewable
Energy is consuming the energy generated from the rooftop solar power plant
which has got the approval of the statutory authority i.e., Chief Electrical
Inspector and in such circumstances, the allegation that the petitioner is
unauthorizedly using the electricity without obtaining permission or approval of
the respondents is untenable and misconceived.
10. While stating that though no approval or permission is required, much
less from the 1st respondent for installation of rooftop solar power plant, the
learned counsel drawing the attention of this Court to the Letters of the
petitioner dated 04.12.2021, 08.02.2022 and 04.04.2022 submits that despite
the said communications, nothing was heard from the respondents. Therefore,
the petitioner's representatives / General Manager (Technical) and Director
(Corporate Planning) met the Chairman and Managing Director of the 1 st
respondent, but the same did not evoke any response. In those
circumstances, he submits that the action of the respondents and the
impugned order on the premise that the petitioner is indulging in unauthorized
use of electricity without approval of the 1st respondent is not tenable. He also
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submits that the Order under challenge has been passed without considering
the several contentions with regard to scope and applicability of the Section
126 of the Act advanced on behalf of the petitioner during the personal
hearing.
11. The learned counsel further contends that the 2nd respondent while
passing the Final Assessment Order have taken irrelevant aspects into
consideration and therefore the impugned order is liable to be set aside on
that ground also. It is his contention that Regulation 3 of 2017 framed by the
Andhra Pradesh Electricity Regulatory Commission (A.P.E.R.C.), is not
applicable to the facts of the case, that Andhra Pradesh Solar Power Policy,
2018 referred to in the impugned order is in respect of solar power plants
connected with the Grid or open access is required. He submits that the
petitioner never availed the open access in terms of the Section 2 (47) of the
Act and further that in the impugned order, there is no reference as to the
provision / regulation which is infringed by the petitioner or that prohibit it from
injecting the power generated through the rooftop solar power plant for the
petitioner's own consumption through the internal supply system. Laying much
emphasis that the energy generated through rooftop solar power plant is not
the energy supplied by the licensee, he contends that the assessment made
purportedly on the basis of GTCS is wholly misconceived. He submits that in
terms of proviso to Section 42 (2) of the Act, open access is necessary for
levy of cross subsidy charges and when no open access is availed, imposition
of cross subsidy surcharge in the impugned order reflects non-application of
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mind by the authorities. Insofar as the Circular Memo dated 02.08.2023
referred to in the counter-affidavit, the learned counsel submits that the
procedure and conditions mentioned in the said Circular are unreasonable
and without jurisdiction and at any rate, the same cannot be made applicable
to the inspection conducted on 28.06.2022, much prior to the issuance of the
said Memo. He submits that the impugned order is without jurisdiction and the
writ petition is maintainable. Making the said submissions, the learned counsel
seeks to allow the writ petition.
12. Mr.Metta Chandra Sekhara Rao, learned counsel for the respondents,
on the otherhand, contends that the writ petition is misconceived. He submits
that as the matter involves determination of questions of fact, the writ petition
under Article 226 of the Constitution of India is not maintainable. He submits
that Section 86 of the Act provides for adjudication of disputes and in view of
the availability of effective alternative remedies against the impugned order
including the provision for appeal, the writ petition is liable to be dismissed.
Without prejudice to the said contentions, he submits that the lines through
which the power generated from the rooftop solar power plants is drawn
belongs to DISCOM / 1 st respondent and as the petitioner had not obtained
the mandatory permission for rooftop solar power plant, the order passed by
the 2nd respondent pursuant to the inspection dated 28.06.2022 is legal, valid
and within the jurisdiction of the respondent-authorities. He submits that all the
solar power plants with capacity greater than the 1 MW require permission
from the 1st respondent before commissioning of the project and connecting to
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the internal Grid of the consumer or to the Grid of the distribution company.
He submits that in the present case, the petitioner without obtaining any
permission from the 1st respondent, installed 3 MWP rooftop solar power
plant, which is not permissible. He also submits that the petitioner entered
into an agreement with M/s.Clean Max Enviro Solutions Private Limited to
purchase solar power generator by the said Company and therefore
Regulation No.3 of 2017 is applicable and the contentions contra are not
tenable. He submits that as the petitioner had indulged in unauthorized use of
electricity without obtaining approvals / permission from the 1st respondent as
required under Regulation 3 of 2017 as also in terms of the Memos issued by
the 1st respondent, the 2nd respondent is justified in passing the order under
challenge. It is also his contention that the General Terms and Conditions of
Supply (GTCS) are applicable as the petitioner is a consumer of 1st
respondent and the impugned Assessment Order is in accordance with the
relevant Terms and Conditions of Supply. He places reliance on the decisions
of the Hon'ble Supreme Court in Reliance Infrastructure Ltd., v. State of
Maharastra 1, PTC India Ltd., v. Central Electricity Regulatory Commission 2
and the decision of a Division Bench of the erstwhile High Court of Andhra
Pradesh at Hyderabad in CMD, SP DCL v. Sudalagunta Sugars Ltd., 3 and
urges for dismissal of the writ petition.
2019 (3) SCC 352
2010 (4) SCC 603
2013 (1) ALD 395
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Consideration by the Court:
13. On an appreciation of the rival contentions, the points that falls for
adjudication by this Court are:
(i) Whether the Orders under challenge are valid, legal and within the
jurisdiction of the respondent-authorities and sustainable in Law?
(ii) Whether the writ petition is maintainable?
14. At the outset, it may be appropriate to note that even as per the
admitted case of the respondents at the time of inspection of the petitioner's
premises / metering equipment, it was found that all the seals were in tact and
there is no suspected theft of energy (Ex.P5 dated 28.06.2022), but the
respondent authorities passed the orders under challenge inter alia, on the
premise that the solar generators are connected directly to the L.T.Network at
12 Numbers locations and the petitioner is utilizing solar power generated
without taking prior approvals from A.P.E.P.D.C.L. / A.P.TRANSCO and thus,
committed unauthorized use of electricity as per Section 126 (6)(b) (ii) of the
Act. Thus, no factual controversies are involved and the main issue which is
required to be adjudicated is whether Section 126 of the Act is applicable to
the facts of the case and the Orders under challenge are liable to be set aside
for the reason that the same are without jurisdiction.
15. Section 126 of the Act inter alia deals with Assessment, which is
extracted hereunder for ready reference:
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Assessment :- (1) If on an inspection of any place or premises or after
inspection of the equipments, gadgets, machines, devices found
connected or used, or after inspection of records maintained by any
person, the assessing officer comes to the conclusion that such person is
indulging in unauthorized use of electricity, he shall provisionally assess to
the best of his judgment the electricity charges payable by such person or
by any other person benefited by such use.
(2)...........
(3)...........
(4)...........
(5)...........
(6)...........
16. As per the explanation (b) provided under Section 126 of the Act,
"unauthorized use of electricity" means the usage of electricity -
(i) by any artificial means; or
(ii) by a means not authorized by the concerned person or authority
or licensee; or
(iii) through a tampered meter; or
2 [(iv) for the purpose other than for which the usage of electricity
was authorized; or
(v) for the premises or areas other than those for which the supply of
electricity was authorized."
17. In the present case, Section 126 (6) (b) (i), (iii), (iv) and (v) are not
attracted and even according to the respondents, the only allegation /
irregularity is that the petitioner had committed unauthorized use of electricity
which falls under Section 126 (6)(b)(ii) of the Act. According to them, as the
petitioner utilized the solar power generated without taking prior approvals
from the A.P.E.P.D.C.L / A.P. TRANSCO, the same amounts to unauthorized
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use of electricity. It is not their case that the petitioner is unauthorizedly using
the electricity supplied by the 1st respondent nor is it their case that the
petitioner is availing solar power generated by an agency and injected to the
Grid maintained by the 1st respondent / Distribution company, without any
permission or approval as required under Law / Regulations. No provision
which require prior permission / approval for utilization of the solar power
generated through the rooftop solar power plant for consumption by the
petitioner within its premises has been pointed out by the respondents. Even
according to the respondents, the solar power generated is being utilized
within the premises of the petitioner and the only feature according to them is
the solar generators are connected directly to the L.T.Network at 12 Number
locations. However, they failed to explain / establish in what manner, the same
amounts to unauthorized use of electricity, which is undisputedly not being
supplied by the 1st respondent, much less through the transmission lines laid
by it or that by virtue of the same, the 1st respondent had sustained any loss.
In view of the same, this Court finds merit in the contentions of the learned
counsel for the petitioner that the provisions of the Act are not attracted and
invocation of Section 126 of the Act is without jurisdiction.
18. Further, as seen from the impugned order, no reference is made to any
provision requiring the permission for setting up of rooftop solar power plant
and non compliance of the same by the petitioner. In fact as seen from the
material on record, the petitioner had addressed as many as three letters to
the respondent authorities (Ex.P4) informing them about the installation and
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commissioning of rooftop solar power plants as part of clean and green
initiative and also obtained necessary approvals from the Central Electricity
Authority / Chief Electricity Inspector to Government. To none of the
communications addressed by the petitioner, was there any reply and in the
said circumstances, the assessment on the premise that the petitioner
committed unauthorized use of electricity is not just or tenable. The Circular
Memo dated 02.08.2023 referred to in the counter affidavit requiring
permission from the 1st respondent before commissioning of the power plants
with capacity of more than 1 MW and the procedure to be followed for
synchronization of solar power plants in house for captive use, irrespective of
the validity or otherwise of the same, cannot have any retrospective effect.
The respondents have not placed any material on record to establish that as
on the date of inspection, the petitioner is required to obtain permission /
approvals for installation and synchronization of the solar power generated for
its captive use, in the absence of which, no conclusions can be arrived at by
this Court that the solar power utilized for the petitioner's captive use is
without any authorization / approval of the respondent authorities.
19. Insofar as the A.P.Solar Power Policy, 2018 referred to in the impugned
order is concerned, the same cannot be made applicable to the petitioner's
case. The policy of the Government as setout in G.O.Ms.No.1 dated
03.01.2019 (Ex.P15) is in respect of the solar power plants / project
synchronized with the Grid and as noted above, there is no Grid connectivity
much less, evacuation of power through the Grid. Therefore, reliance on the
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said policy is misconceived and the said view of this Court is equally
applicable to the contentions advanced with reference to the Regulation No.3
of 2017 concerning the Power Evacuation from Captive Generation,
Cogeneration and Renewable Energy Power Plants. As per Para No.4 (16) of
the said Regulation, power evacuation means "the facility that allows
generated power to be immediately transferred from a generating plant to the
Grid for further transmission / distribution to load centers." In the present
case, there is no evacuation of power generated through the rooftop solar
power plant set up on the petitioner's premises to the Grid and therefore
application of the said Regulation would not arise at all.
20. This Court on a thorough consideration of the matter has no hesitation
to hold that the provisions of the Act are not applicable to the case on hand
and as such, the General Terms and Conditions of Supply are also not
applicable. Be that as it may.
21. The learned counsel for the petitioner also raised contentions with
reference to the levy of cross subsidy surcharge in the impugned order by
drawing the attention of this Court to Section 2 (47) of the Act. As rightly
contended, in the absence of use of any Transmission / distribution network of
the 1st respondent / licensee, the question of open access would not arise at
all. The levy of cross subsidy surcharge would arise, in the event of the
petitioner availing the open access only and in fact, as per provisos to Section
42 (2) of the Act, such open access shall be allowed on payment of surcharge
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in addition to the charges for wheeling as may be determined by the State
Commission and the surcharge shall not be leviable in case, open access is
provided to a person who has established a captive generating plant for
carrying electricity to the destination of his own use.
22. In the present case, as seen from the impugned orders, there is no
reference to wheeling charges which clearly establishes that no power is
being wheeled through the distribution system of the 1st respondent under
open access and therefore the levy / imposition of cross subsidy surcharge is
unjust, without application of mind and jurisdiction. The impugned order is
therefore is not sustainable on that ground also.
23. Though the contentions advanced by the learned counsel for the
respondents that the petitioner can seek adjudication of the dispute under
Section 86 of the Act or by filing an appeal against the order of the 2nd
respondent may merit appreciation in a given case, but the facts and
circumstances of the present case do not warrant acceptance of the same, the
writ petition is maintainable and invocation of Section 126 of the Act is not
tenable.
24. So far as the decisions relied on by the learned counsel for the
respondents i.e., Chairman and Managing Director, Southern Power
Distribution Company Limited of A.P., v. Sudalagunta Sugars Ltd., is with
reference to a dispute between the parties concerning bills issued to the
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respondent-Company and the said decision is not applicable to the facts of the
present case.
25. Reliance Infrastructure Limited v. State of Maharashtra, is a case
where there is a challenge to the tariff regulation framed by the Maharashtra
Electricity Regulatory Commission and the said decision is of no aid to the
respondents.
26. In PTC India Limited case, the Hon'ble Supreme Court inter alia, was
dealing with the powers of the Appellate Tribunal under the Electricity Act to
examine the validity of the CERC (Fixation of Trading Margin) Regulations,
2006 and the said case is based on a different fact situation.
27. Considering the matter in its entirety and in view of the conclusions
arrived at supra, the orders under challenge are not sustainable as the same
suffers from non-application of mind and without jurisdiction.
Point Nos.1 and 2 are answered accordingly.
28. In the result, the writ petition is allowed and the impugned orders are set
aside. There shall be no order as to costs. As a sequel, all pending
applications shall stand closed.
__________________________
JUSTICE NINALA JAYASURYA
Dated 18.06.2024
BLV
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THE HON'BLE SRI JUSTICE NINALA JAYASURYA
WRIT PETITION No.20857 of 2023
Date: 18.06.2024
BLV
