[Cites 93, Cited by 0]
Chattisgarh High Court
Jindal Steel And Power Ltd vs Chhattisgarh State Electricity ... on 30 March, 2026
1
2026:CGHC:14839
AFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 1927 of 2016
Order reserved on 19/12/2025
Order delivered on 30/03/2026
1 - Jindal Steel And Power Ltd. S/o A Company Registered Under The
Provisions Of Companies Act, 1956, Having Its Corporate Office At Jindal
Centre, 12 Bhikaji Cama Place, New Delhi- 110066, Through Mr. Rajesh
Agrawal, Associate- Vice- President., Delhi
2 - Mr. Rajesh Agrawal, S/o Shri B.K. Agrawal Aged About 45 Years
Shareholder Of Petitioner No.1, A V P- Electrical Power System, Jindal
Steel And Power Ltd., R/o Hill View Colony, J S P L, Raigarh, Chhattisgarh,
District : Raigarh, Chhattisgarh
... Petitioners
versus
1 - Chhattisgarh State Electricity Regulatory Commission Irrigation Colony,
Shanti Nagar, Raipur, Chhattisgarh 492001, Chhattisgarh
2 - Chhattisgarh State Power Distribution Company Ltd., A Successor
Company Of C S E B, 4th Floor, Vidyut Sewa Bhavan, Daganiya, Raipur,
Chhattisgarh 492013, District : Raipur, Chhattisgarh
3 - Chhattisgarh State Power Transmission Company Ltd., A Successor
Company Of C S E B, Energy Info Tech Centre, Danganiya, Raipur,
VED Chhattisgarh 492013, District : Raipur, Chhattisgarh
PRAKASH
DEWANGAN ... Respondents
VED PRAKASH (Cause title taken from Case Information System)
For Petitioners : Mr. Abhimanyu Bhandari, Senior
Advocate (through virtual mode) along
with Mr. Bhaskar Payasi, Mr. Jai
Dhanani, Ms. Divya Chaturvedi, Mr.
Saransh Shaw, Mr. Pranav Sood and Mr.
Pankhuri Gupta, Advocates
For Respondent No.1 : Mr. Adhiraj Surana, Advocate
For Respondents No. 2 & 3 : Mr. Rajkumar Mehta, Advocate (through
virtual mode) with Mr. Varun Sharma,
Advocate
Hon'ble Shri Justice Ravindra Kumar Agrawal
C.A.V. Order
1. For the sake of convenience, the following terms shall hereinafter be
referred to as under:
Power Purchase Agreement - "PPA"
Chhattisgarh State Power Distribution Co. Ltd. - "CSPDCL"
Chhattisgarh State Power Transmission Co. Ltd. - "CSPTCL"
Short Term Open Access - "STOA"
Indian Electricity Grid Code - "IEGC"
Inter State Generating Station - "ISGS"
Availability Based Tariff - "ABT"
State Load dispatch Centre - "SLDC"
Electricity Power Survey - "EPS"
Inter State Generation Station - "ISGS"
Load Factor - "LF"
National Electricity Policy - "NEP"
2. The petitioners have filed the present writ petition challenging the
judgment dated 26-05-2016 (Annexure P-1) passed by the Appellate
Tribunal for Electricity, in Appeal Nos. 41 and 67 of 2015, and also
against the demand notice dated 07-07-2016 (Annexure P-2) issued
by the Respondent No. 2, letter dated 21-07-2016 (Annexure P-3),
letter dated 25-07-2016 (Annexure P-4), to issue No Objection
Certificate to allow the petitioner to open access from the
Respondent No. 3, and also to declare that the petitioner No. 1 is not
liable to refund of amount of Rs. 153.55 Crore to the Respondent No.
2, and prayed for the following reliefs:-
"It is therefore most respectfully prayed that this
Hon'ble Court may be pleased to:
10.1. Admit the Petition and set aside the Impugned
Judgment dated 26.05.2016 (marked as Annexure P-
1) passed by the Appellate Tribunal for Electricity in
Appeal Nos. 41 & 67 of 2015 : CSPDLC vs. CSERC;
10.2. Quash the Impugned Demand Notice dated
07.07.2016 (marked as Annexure P-2) passed by the
Chhattisgarh State Power Distribution Company Ltd.;
10.3. Quash the Impugned Letter dated 21.07.2016
(marked as Annexure P-3) passed by the Chhattisgarh
State Power Distribution Company Ltd.;
10.4. Quash the Impugned Rejection Letter dated
25.07.2016 (marked as Annexure P-4) passed by the
Chhattisgarh State Power Distribution Company Ltd.;
10.5. Direct the Chhattisgarh State Power Distribution
Company Ltd. to issue No Objection Certificate to
allow the Petitioner No.1 to avail Open Access from
the Chhattisgarh State Power Transmission Co. Ltd;
10.6. Direct the Chhattisgarh State Power
Transmission Company Ltd. to grant open access to
the Petitioner No.1 to supply power;
10.7. Declare that Petitioner is not liable to refund
Rs.153.55 Crore to the Chhattisgarh State Power
Distribution Company Ltd. in relation to the power
supplied to it in the FY 2011-12 and FY 2012-13; and
10.8. Pass any such other Order or Orders as this
Hon'ble Court may deem fit and proper in facts of the
present case."
3. Petitioner No.1 is a company incorporated under the Companies Act,
1956 and is engaged inter-alia in the business of manufacturing
sponge iron and steel, as well as the generation of power. The
Petitioner No.1 has established Captive Power Plants (CPPs) at
Village Patrapali, District Raigarh, and is a "generating company"
within the meaning of Section 2(28) of the Electricity Act, 2003. The
installed capacity of its captive power plant was initially 265.7 MW,
which was subsequently enhanced to 325.7 MW. Mr. Rajesh Agarwal
has been authorized to prosecute the petition on behalf of Petitioner
No.1 by virtue of a Board Resolution dated 26.07.2016.
4. On 02-11-2011, a PPA was executed between the Petitioner No. 1
and the Respondent No. 2, CSPDCL, for the supply of Electricity.
The initial PPA provided for the sale of 150 MW power for the period
01.11.2011 to 30.06.2012 and incorporated specific provisions
regarding load factor calculation, scheduled power, and tariff
determination based on formulae adopted from the State
Commission's Suo Motu Order. The agreement permitted injection of
power up to 110% during off-peak hours and 120% during peak
hours, with excess supply beyond these limits compensated at Rs. 1
per unit. The tariff was linked to the load factor, with a minimum
effective rate of Rs. 1.50 per unit.
5. Subsequently, supplementary PPAs were executed on 12.07.2012,
13.08.2012, and 24.01.2013 covering different periods up to
30.06.2013, including variation in contracted capacity (150 MW and
later 75 MW). The Petitioner supplied power in terms of these
agreements during Financial Years 2011-12 and 2012-13 and
raised invoices, including load factor-based billing and concessional
rates for excess injection. Respondent No.2 accepted the supplies
and made payments without any protest, at average rates of Rs. 2.42
per kWh and Rs. 2.66 per kWh, respectively.
6. In 2014, Respondent No.2 filed Tariff Petition No. 07/2014 before the
State Commission seeking true-up and tariff determination. By order
dated 12.06.2014, the State Commission approved a minimum base
rate of Rs. 1.50 per kWh for power procured from the Petitioner,
treating such power as "non-firm". It is the case of the petitioners that
this classification was not contemplated under the agreements
between the parties. A Review Petition was filed by Respondent No.2
before the State Commission, which was dismissed on 08.12.2014,
affirming the earlier findings.
7. The Respondent No.2 thereafter challenged the tariff and review
orders before the Appellate Tribunal for Electricity in Appeals Nos. 41
and 67 of 2015. By judgment dated 26.05.2016, the Appellate
Tribunal upheld the orders of the State Commission. Following the
Tribunal's judgment, Respondent No.2 issued a demand notice dated
07.07.2016 claiming a refund of Rs. 153.55 crore along with interest,
alleging overcharging by the Petitioner for power supplied during FYs
2011-12 and 2012-13. The Petitioner disputes this demand as
arbitrary and contrary to the binding contractual terms, emphasizing
that all invoices were raised strictly in accordance with the PPAs and
duly honoured without objection at the relevant time.
8. The Petitioner sought Short Term Open Access (STOA) in July 2016
for the supply of power through power exchanges. However,
Respondent No.2 refused to grant a No Objection Certificate (NOC),
citing the alleged outstanding dues arising from the impugned
demand. Consequently, Respondent No.3 (CSPTCL) also rejected
the Petitioner's application for open access on 25.07.2016 on the
same ground, thereby preventing the Petitioner from participating in
power exchange transactions.
9. It is also the case of the petitioner that the Petitioner No.1 duly
supplied power to Respondent No.2/CSPDCL during FYs 2011-12
and 2012-13 and raised invoices in accordance with the terms of the
PPAs, computing tariff on the basis of load factor during peak and
off-peak hours and charging only Re. 1.00 per kWh for power
injected beyond 110% (off-peak) and 120% (peak) limits, with load
factor calculated on a weekly basis. Respondent No.2 accepted such
supplies and made payments at average rates of Rs. 2.42 per kWh in
FY 2011-12 and Rs. 2.66 per kWh in FY 2012-13 without any
objection, and at no point prior to the impugned demand did it allege
that the power supplied was non-firm or that the Petitioner had
overcharged. The PPAs, being binding contracts, cannot be
unilaterally disregarded by Respondent No.2 after a lapse of several
years to seek refund of amounts already paid. It is further apparent
that the said PPAs were neither placed before the State Commission
under Section 62 of the Electricity Act, 2003 nor adequately
explained during tariff proceedings, thereby depriving the
Commission of the opportunity to examine their terms. Significantly,
Respondent No.2 itself admitted in the Review Order that the PPAs
were in consonance with the State Commission's orders, that
payments were made in accordance with their terms, and that no
retrospective alteration of such concluded transactions is
permissible.
10. The Petitioners also challenged the demand notice and denial of
NOC through representations dated 22.07.2016 and 23.07.2016,
asserting that no direction had been issued by the State Commission
or the Appellate Tribunal requiring refund, and that liability could not
be imposed without affording the Petitioner an opportunity of hearing.
The Petitioner further contended that the PPAs were binding and
could not be retrospectively altered, particularly after full performance
and settlement of payments.
11. Aggrieved by the demand of Rs. 153.55 crore, denial of open access,
and reliance on orders passed in proceedings to which it was not a
party, the Petitioner has filed the present petition seeking quashing of
the Appellate Tribunal's judgment dated 26.05.2016, the demand
notice, and related communications. The Petitioner also seeks
directions restraining Respondent No.2 from recovering the said
amount and for the grant of NOC and open access facilities.
12. The Respondent No. 1, Chhattisgarh State Electricity Regulatory
Commission, contested the claim of the petitioner and filed its return
with the preliminary objection that the present petition is not
maintainable and is liable to be dismissed in limine on account of the
availability of efficacious alternative remedies under the provisions of
the Electricity Act, 2003. It is submitted that the Petitioner has a
statutory remedy under Section 125 of the Act of 2003 to assail the
order dated 26.05.2016 passed by the Appellate Tribunal before the
Hon'ble Supreme Court. Further, the Petitioner could have availed
the remedy of review under Section 120(2)(f) of the Act before the
Appellate Tribunal, particularly on the ground of alleged denial of
opportunity of hearing. It is also pleaded that the Petitioner has an
alternative remedy under Section 86(1)(f) of the Act to approach the
State Commission for adjudication of disputes, which remedy has not
been exhausted. The consequential proceedings, including the
demand notice dated 07.07.2016, emanate from the order of the
Appellate Tribunal, and therefore, unless the said order is set aside
by the competent forum, no interference with the consequential
actions is warranted.
13. The Respondent No. 1 also pleaded that the demand raised against
the Petitioner is justified and in consonance with the Tariff Orders
dated 12.06.2014 and 08.12.2014 passed by the State Commission
in exercise of its statutory powers. The Commission, while
undertaking the true-up exercise for FYs 2011-12 and 2012-13,
examined the nature of power supplied by the Petitioner and found
the same to be non-firm and unstable, based on load curve analysis
and findings recorded in earlier appellate proceedings. The
Commission accordingly approved only a minimum base rate of Rs.
1.50 per kWh for such power, observing that the burden of procuring
non-firm power at higher rates cannot be passed on to consumers. It
is further pleaded that the PPAs themselves contained a stipulation
making them subject to directions and guidelines issued by the
Commission, thereby rendering the tariff orders binding upon the
parties.
14. It is also the reply of the Respondent No. 1 that due process was
followed by the State Commission as well as the Appellate Tribunal,
including issuance of public notices and affording opportunity of
hearing to stakeholders. The notices of tariff and review proceedings
were published in newspapers, and that a representative of the
Petitioner had participated in the review proceedings, thereby
negating the plea of lack of opportunity of hearing or knowledge of
the proceeding. Similarly, the Appellate Tribunal also issued public
notices prior to deciding the appeals. Therefore, the Petitioner cannot
now claim ignorance of the proceedings or violation of principles of
natural justice.
15. The Respondent No. 2/CSPDCL have filed their return and have
raised a preliminary objection as to the maintainability of the present
writ petition on the ground that the petitioners had an effective and
statutory alternative remedy. It is submitted that the order dated
12.06.2014 passed by the State Commission in Petition Nos. 05 to
08 of 2014 (T), including Petition No. 07/2014 filed by respondent No.
2, was subjected to challenge before the Appellate Tribunal for
Electricity (APTEL) by way of Appeal Nos. 41 and 67. The said
appeals, directed against both the original order and the review order
dated 08.12.2014, were dismissed by APTEL by a common judgment
dated 26.05.2016. The petitioners have not preferred any appeal
before the Hon'ble Supreme Court under Section 125 of the
Electricity Act, 2003. Therefore, the judgment of APTEL has attained
finality and is binding on the petitioners, thereby precluding the
petitioners from re-agitating the same issues in the present writ
proceedings.
16. It is further pleaded that the petitioner company had entered into
Power Purchase Agreements offering 150 MW of firm power on a
round-the-clock basis, with a permissible reduction up to 20% and a
guaranteed minimum supply of 120 MW, subject to the provisions of
the Electricity Act, 2003 and regulatory guidelines issued by the State
Commission from time to time. Respondent No. 2, being a
distribution licensee under Section 14 of the Act, procured power on
a short-term basis in accordance with tariff orders and regulatory
framework evolved by the State Commission through various suo
motu proceedings since 2009, wherein ceiling tariffs and
procurement conditions were determined after due public
consultation and stakeholder participation, including that of the
petitioners. In continuation thereof, the State Commission, while
determining tariff in Petition Nos. 05 to 08 of 2014 (T), examined the
short-term power purchases made by respondent No. 2 from the
petitioner and, on analysis of the load curve and injection pattern,
concluded that the power supplied was intermittent and non-firm in
nature, causing grid disturbances, and accordingly restricted the tariff
to a lower rate treating it akin to infirm power. Though respondent
No. 2 initially contested these findings, its challenge failed, as the
review petition was partly allowed and the subsequent appeals
preferred before APTEL against the orders dated 12.06.2014 and
08.12.2014 were dismissed by a common judgment dated
26.05.2016, affirming that unstable and fluctuating power supply
cannot be equated with firm power and must be compensated at a
lower tariff.
17. It is further pleaded that the proceedings before the State
Commission were conducted in accordance with the Chhattisgarh
State Electricity Regulatory Commission (Conduct of Business)
Regulations, 2009. Under the said Regulations, individual notices to
stakeholders are not mandatory; rather, the procedure contemplates
issuance of public notice to ensure wider participation. In the present
case, the petitions were uploaded on the Commission's website,
copies were made available at the offices of the petitioners, and a
public notice along with the gist of the petitions was published in
newspapers inviting objections and suggestions. Public hearing was
conducted at Raipur on 21.05.2014, followed by a separate
interaction on 22.05.2014 with representatives of industries, HT
consumers, and industrial associations. Additionally, consultations
were held with members of the State Advisory Committee. The
Commission, after considering all objections and performing due
diligence, finalized its findings. A further public notice dated
26.04.2014 was also issued. Thus, the petitioners were duly notified
and had full opportunity to participate.
18. The respondent No. 2 had filed Review Petition No. 35 of 2014 on
31.07.2014 before the State Commission. During the course of
hearing on 28.10.2014, the authorized representative of petitioner
No. 1, namely N.K. Chandiramani (DGM, JSPL), was present, as
reflected in the order sheet. The review petition was ultimately
disposed of on 08.12.2014. Despite having knowledge of and
participating in the proceedings, the petitioners failed to effectively
pursue their remedies or challenge the outcome at the appropriate
stage. Even thereafter, when APTEL dismissed the appeals on
26.05.2016, the petitioners did not avail the statutory remedy of
appeal before the Hon'ble Supreme Court. The respondents submit
that such conduct demonstrates negligence and attracts the doctrine
of acquiescence.
19. It is also pleaded that the dispute pertains to highly technical issues
involving tariff determination, nature of power supply, and grid
stability. The State Commission, exercising powers under Sections
62 and 86 of the Electricity Act, examined the power purchase
agreements, load curves, and injection patterns, and concluded that
the power supplied by the petitioner was non-firm in nature due to its
fluctuating and unstable characteristics. Consequently, the tariff was
restricted in line with the treatment of infirm power. This finding was
specifically affirmed by APTEL, which observed that such unstable
injection patterns create commercial complications and disturb the
demand-supply balance. The respondents contend that such
findings, based on technical data and expert analysis, are not
amenable to judicial review under Article 226, particularly where
disputed questions of fact are involved.
20. The respondent No. 2 further pleaded that the present petition suffers
from non-joinder of necessary and proper parties. Several
stakeholders, including industries and associations, who participated
in the proceedings before the State Commission and opposed the
claims, have not been impleaded in the present writ petition.
Additionally, the petitioners have not challenged the foundational
order dated 12.06.2014 or the applicability of the 2009 Regulations,
which governed the entire process. In the absence of such challenge,
the relief sought becomes untenable. It is also pleaded that the
petitioners had knowledge of the APTEL judgment at least by
07.07.2016 through the demand notice issued by respondent No. 2,
yet failed to take any appropriate remedial steps.
21. On the issue of recovery, the respondent No. 2 pleaded that the
demand raised is in accordance with Section 62(6) of the Electricity
Act, 2003, which mandates that any excess tariff recovered by a
generating company shall be refundable along with interest at the
bank rate. The demand of Rs. 153.55 crore has been raised pursuant
to the findings of the State Commission and APTEL, and is
supported by audited accounts and financial records considered
during tariff determination. It is also pleaded that permitting the
petitioners to retain such excess amount would result in unjust
enrichment and would be contrary to public interest, particularly as
respondent No. 2 is a public utility accountable to consumers.
22. Respondent No. 3 has also filed its return separately and in
preliminary submissions, have pleaded the statutory framework of
the Electricity Act, 2003, to justify their actions. It is pleaded that
under Section 31 of the Act, the State Load Dispatch Centre (SLDC)
has been constituted as the apex body for integrated operation of the
power system within the State, and is operated by the State
Transmission Utility in terms of Section 39. The SLDC is statutorily
prohibited from engaging in the trading of electricity and is entrusted
with critical operational responsibilities relating to grid management,
scheduling, and dispatch. Further, under Section 86(1) of the Act, the
State Regulatory Commission is vested with wide powers, including
the determination of tariff, the regulation of procurement of electricity
by distribution licensees, facilitation of intra-State transmission,
adjudication of disputes, and specification of the State Grid Code,
while ensuring transparency and adherence to national policies. In
furtherance of its statutory functions, the State Commission has
notified the Chhattisgarh State Electricity Grid Code, 2011, and the
SLDC discharges its functions under Section 32 of the Act, which
include ensuring optimum scheduling and dispatch of electricity,
monitoring grid operations, maintaining quality of electricity,
supervising intra-State transmission, and carrying out real-time grid
control for secure and economic operation. Additionally, under
Section 33, the SLDC is empowered to issue binding directions to
generating companies and licensees to maintain grid discipline, and
such directions are mandatorily required to be complied with, failing
which penal consequences may follow. The SLDC is also obligated
to act in coordination with higher load dispatch centres and to ensure
safe and stable grid operations.
23. The Respondent No. 3 further pleaded that the petitioner No. 1 has
consistently injected fluctuating and non-firm power into the State
grid over a prolonged period of time, including during the subsistence
of the Power Purchase Agreements executed with respondent No. 2.
The SLDC had repeatedly issued communications and directions to
the petitioners, calling upon them to adhere to scheduled injection
and grid discipline. The petitioner not only failed to comply but also
admitted its inability to supply firm power on account of fluctuating
internal consumption patterns. The SLDC, in multiple letters dated
between 2014 and 2016, highlighted substantial deviations in
injection ranging from zero to excessive levels, violation of open
access regulations, and potential threat to grid security, even warning
of disconnection in case of continued non-compliance.
Simultaneously, the SLDC also apprised the State Commission of
the persistent issues arising from such fluctuating power supply and
sought appropriate guidelines for the identification and treatment of
"non-firm" or "poor quality" power. Several communications
addressed to the Commission between 2014 and 2016 emphasized
the operational difficulties faced in maintaining grid discipline,
including warnings received from higher load dispatch centres. The
SLDC specifically requested clarity on the criteria for non-firm power,
permissible actions against defaulting generators, and the
permissibility of granting open access in such cases. These
communications were made in discharge of statutory obligations,
including under Section 33(4) of the Act.
24. It is further pleaded that the State Commission, while passing the
tariff order dated 12.06.2014 in Petition No. 07 of 2014 (T), examined
the load curve and injection pattern of the petitioner and recorded a
categorical finding that the power supplied was highly fluctuating,
unstable, and non-firm in nature. It was observed that such erratic
supply adversely impacted grid stability and compelled the
distribution licensee to resort to overdrawal or underdrawal from the
grid, attracting penalties. Consequently, the Commission held that
such power could not be treated at par with firm power and restricted
the tariff to a base rate of Rs. 1.50 per unit, further issuing specific
directions to discourage procurement and injection of such non-firm
power and mandating the SLDC to monitor and regulate the same.
25. The review petition filed by respondent No. 2 was disposed of on
08.12.2014, wherein the Commission reaffirmed its earlier findings,
noting that no new material or error apparent on record had been
brought forth. The Commission also relied on independent studies
and consistent observations of the SLDC regarding the fluctuating
injection pattern of the petitioner. The directives issued in the original
order, including those relating to grid discipline and monitoring of
non-firm power, thus attained finality at the regulatory level.
Aggrieved thereby, respondent No. 2 preferred appeals before the
Appellate Tribunal for Electricity (APTEL), which, by its judgment
dated 26.05.2016, upheld the findings of the State Commission in
entirety. The Tribunal took note of the petitioner's own admissions in
earlier proceedings regarding the fluctuating nature of surplus power
and inability to supply consistent power due to variable industrial
demand. It was categorically held that such an unstable power
supply has commercial as well as operational implications, disturbs
demand-supply balance, and cannot be equated with firm power. The
Tribunal affirmed that such power must be treated as akin to infirm
power and compensated at a significantly lower rate.
26. It is further pleaded that the petitioners have neither challenged the
tariff order dated 12.06.2014 nor the directives issued therein, nor the
judgment of APTEL. In compliance with the said binding decisions
and statutory mandate, the SLDC has continued to regulate and
restrict open access to the petitioner in view of its non-compliance
with grid discipline and continued injection of non-firm power. The
rejection of short-term open access applications made by the
petitioners in July-August 2016 was thus based on statutory
obligations, regulatory directives, and binding judicial findings, and
not merely on account of any monetary dispute as alleged. The
answering respondent has acted strictly within the framework of the
Electricity Act, 2003, the State Grid Code, and the binding directions
of the State Commission and APTEL. The continued conduct of the
petitioner in injecting fluctuating power, coupled with its admitted
inability to maintain firm supply, justified regulatory intervention and
denial of open access in the interest of grid security, discipline, and
public interest.
27. Learned counsel for the petitioners would submit that the present writ
petition has been filed by the Petitioner, Jindal Steel & Power Limited
(JSPL), assailing the demand notice dated 07.07.2016 issued by the
Respondent No. 2, Chhattisgarh State Power Distribution Company
Limited (CSPDCL), seeking recovery of Rs. 153.55 crores, along with
the consequential denial of open access and the underlying judgment
dated 26.05.2016 passed by the Appellate Tribunal for Electricity
(APTEL). The core challenge of the Petitioner is that the impugned
demand is wholly without jurisdiction, contrary to the settled
principles of law, and has been raised in complete violation of
principles of natural justice.
28. The undisputed fact that the Petitioner was never impleaded as a
party in the proceedings before the State Commission or before
APTEL. The true-up proceedings initiated by CSPDCL, the
subsequent review proceedings, and the appeals before APTEL
were all conducted without issuing any notice to the Petitioner,
despite the fact that the entire dispute pertained to power supplied by
the Petitioner under duly executed Power Purchase Agreements.
The Petitioner was thus denied any opportunity to place its case,
clarify the nature of supply, or defend the contractual arrangement. It
is a settled proposition of law that no adverse order can be passed
against a party without affording it a reasonable opportunity of
hearing, and any action taken in breach thereof stands vitiated. The
impugned demand is ex facie illegal, as it seeks to impose a financial
liability upon the Petitioner on the basis of proceedings to which it
was not a party and in which no findings have been recorded against
it. A perusal of the true-up order, review order, and the appellate
judgment would reveal that the findings, if any, are against CSPDCL
alone, particularly attributing negligence to it in procuring power.
There is not even a whisper in the said orders directing recovery from
the Petitioner or holding that the Petitioner is liable to refund any
amount. In such circumstances, the unilateral issuance of the
demand notice is nothing but an afterthought and is wholly
unsustainable.
29. Learned counsel for the petitioners further submits that it had no
occasion to challenge the orders passed by the State Commission or
APTEL, as it was neither a party to those proceedings nor was any
liability fastened upon it therein. The cause of action for the Petitioner
arose only upon issuance of the impugned demand notice dated
07.07.2016. Therefore, the contention of CSPDCL that the Petitioner
ought to have availed alternative remedies is misconceived. It is well
settled that where a party has not been heard and suffers civil
consequences, the writ jurisdiction of this Hon'ble Court can be
directly invoked. The Petitioner was a necessary party to the
proceedings before the State Commission and APTEL, as the
adjudication directly concerned the nature of power supplied by it and
the payments made under the PPAs. In the absence of the
Petitioner, no effective or binding determination could have been
made on issues that ultimately form the basis of the impugned
demand. The failure of CSPDCL to implead the Petitioner, despite
having full knowledge of the contractual relationship and
transactions, renders the entire exercise procedurally flawed. Such
omission cannot now be used to prejudice the Petitioner by fastening
liability upon it without due process.
30. It is further argued that the petitioner had supplied electricity strictly in
terms of the Power Purchase Agreements executed with CSPDCL,
which were based on the Suo-Motu Order passed by the State
Commission. The contractual framework specifically recognized the
nature of supply from captive generating plants, including permissible
variations and the mechanism for computation of tariff through load
factor and eligible units. The invoices raised by the Petitioner were in
accordance with these agreed terms and were duly verified and paid
by CSPDCL without any demur. It is an admitted position that
CSPDCL accepted the power supplied by the Petitioner, utilized the
same for distribution to consumers, and recovered the corresponding
tariff. Payments were made over the relevant period in full
satisfaction of contractual obligations, and at no stage during the
subsistence of the PPAs did CSPDCL raise any dispute regarding
the nature or quality of power supplied. In such circumstances, the
attempt to retrospectively reclassify the supply as "non-firm" and
seek recovery of amounts already paid is impermissible in law and
contrary to the doctrine of finality of concluded transactions.
31. The impugned demand, in effect, seeks to compel the Petitioner to
refund monies for electricity that has already been generated,
supplied, consumed, and paid for. Such a course of action is not only
inequitable but also legally untenable, as there exists no provision in
the PPAs or under any statutory framework permitting such recovery.
In the absence of any contractual stipulation or regulatory direction
requiring refund, CSPDCL cannot unilaterally impose a financial
burden upon the Petitioner. Further, the findings of the State
Commission, as affirmed by APTEL, clearly attribute negligence to
CSPDCL in procuring power without due prudence. The regulatory
authorities have held that the consequences of such negligence
cannot be passed on to consumers. However, CSPDCL now seeks
to shift this very burden onto the Petitioner, who was not even heard
in the proceedings. This attempt to transfer liability is contrary to the
findings of the regulatory authorities themselves and is legally
impermissible.
32. It is further argued that the objection raised by CSPDCL regarding
the availability of an alternative remedy under Section 125 of
the Electricity Act, 2003 is wholly misconceived and untenable in the
facts of the present case. The remedy of appeal to the Hon'ble
Supreme Court under Section 125 is available only to a "person
aggrieved" by an order passed by the Appellate Tribunal for
Electricity (APTEL). In the present case, the Petitioner was neither a
party to the proceedings before the State Commission nor before
APTEL, and no adverse findings or directions have been issued
against it in the impugned judgment. Consequently, the Petitioner
cannot be said to be an "aggrieved person" within the meaning of
Section 125 so as to avail the said appellate remedy. The cause of
action for the Petitioner arose only upon issuance of the impugned
demand notice dated 07.07.2016, whereby, for the first time, a
liability has been sought to be imposed upon it without any
adjudication or hearing. It is a settled principle of law that the
existence of an alternative remedy does not bar the exercise of writ
jurisdiction under Article 226 of the Constitution of India, particularly
where the impugned action is wholly without jurisdiction, violative of
principles of natural justice, or results in manifest injustice. In the
present case, the Petitioner has been fastened with a substantial
financial liability without being heard and without any legal basis, and
therefore, the writ petition is not only maintainable but constitutes the
only efficacious remedy available to the Petitioner.
33. The action of CSPDCL is also hit by the principles of estoppel,
approbation and reprobation. Having accepted the contractual terms,
acted upon them, and derived benefit from the Petitioner's
performance, CSPDCL cannot now take a contradictory stand to the
detriment of the Petitioner. The law does not permit a party to accept
benefits under a contract and subsequently challenge its validity or
seek restitution without any legal basis. The impugned demand
notice is vitiated by violation of principles of natural justice, absence
of jurisdictional foundation, lack of contractual or statutory basis, and
arbitrariness. The Petitioner, having neither been heard nor held
liable in any adjudicatory proceedings, cannot be subjected to
recovery of amounts already paid for duly supplied electricity.
Accordingly, the impugned demand and all consequential actions
deserve to be quashed, and the Petitioner is entitled to appropriate
reliefs from this Hon'ble Court.
34. In support of his submission, he would rely upon the judgments of
"Ramesh Hiranand Kundanmal v. Municipal Corporation of
Greater Bombay" 1992 (2) SCC 524, "Whirlpool Corporation v.
Registrar of Trade Marks" 1998 (8) SCC 1, "State of Himachal
Pradesh v. Gujarat Ambuja Cement Ltd." 2005 (6) SCC 499,
"Harbans Lal Sahnia v. Indian Oil Corporation Ltd." 2003 (2) SCC
107, "Dhampur Sugar Mills Ltd. v. State of U.P. and Others" 2007
(8) SCC 338, "Har Shankar and Others v. Dy. Excise and
Taxation Commissioner and Others" 1975 (1) SCC 737, "State
Bank of Haryana and Others v. Jage Ram and Others" 1980 (3)
SCC 599, "Mumbai International Airport (P) Ltd. v. Golden
Chariot Airport" 2010 (10) SCC 422, "Hari Bans Lal v. Sahodar
Prasad Mahto" 2010 (9) SCC 655, "Mohindar Singh Gill v. Chief
Election Commissioner, New Delhi" 1978 (1) SCC 405, "Sharda
Singh v. State of U.P." 2009 (11) SCC 683, "Chandi Prasad v.
Jagdish Prasad" 2004 (8) SCC 724, "Pimpri Chinchwad New
Town Development Authority v. State of Maharashtra" 2005 (4)
Mh.L.J. 941, "Haryana Power Purchase Centre v. Sasan Power
Ltd. and Others" 2023 SCC OnLine SC 577, "Karnataka Power
Corporation Limited v. EMTA Coal Limited and Another", order
dated 20-05-2022, by Hon'ble Supreme Court in Civil Appeals Nos.
5401-5404 of 2017, "Gujarat Urja Vikas Nigam Limited v. Solar
Semiconductor Power Company (India) Private Limited and
Another" 2017 (16) SCC 498.
35. Per contra, learned counsel appearing for the Respondent Nos. 2
and 3, at the outset, raises a preliminary objection regarding the
maintainability of the present writ petition on the ground of the
availability of efficacious statutory remedies under the Electricity Act,
2003. It is submitted that the petitioners had the remedy of filing an
appeal before the Hon'ble Supreme Court under Section 125 against
the judgment dated 26.05.2016 passed by the Appellate Tribunal for
Electricity (APTEL), which has not been availed. The said judgment
has thus attained finality and is binding upon the parties. The
petitioners, by invoking writ jurisdiction, are impermissibly seeking to
reopen issues already adjudicated by expert statutory forums, which
is contrary to settled principles governing the exercise of jurisdiction
under Article 226 of the Constitution of India.
36. It is further submitted that the dispute in question arises out of tariff
determination and true-up proceedings undertaken by the State
Commission in exercise of its statutory powers under Sections 62
and 86 of the Electricity Act, 2003. The State Commission, after
detailed examination of load curves, injection patterns, and
operational data, recorded a categorical finding that the power
supplied by the petitioner was non-firm, intermittent, and unstable in
nature. Such findings, based on technical expertise and regulatory
analysis, were affirmed by APTEL. The respondents submit that
these concurrent findings of fact are not amenable to judicial review
in writ jurisdiction, particularly when they involve highly technical and
disputed questions requiring specialized adjudication.
37. It is further submitted that the Power Purchase Agreements (PPAs)
relied upon by the petitioners were expressly subject to the
provisions of the Electricity Act, 2003 and regulatory directions
issued by the State Commission from time to time. Therefore, tariff
determination by the Commission overrides contractual stipulations
to the extent of inconsistency. The Commission, in its tariff order
dated 12.06.2014, lawfully restricted the tariff for non-firm power to a
base rate of Rs. 1.50 per kWh, in order to safeguard consumer
interest and prevent undue financial burden on the distribution
licensee. The petitioners cannot rely on contractual terms to defeat
statutory tariff orders having an overriding effect. The demand of Rs.
153.55 crore has been raised strictly in accordance with Section
62(6) of the Electricity Act, 2003, which mandates the refund of
excess tariff recovered by a generating company along with
applicable interest. The excess amount was computed on the basis
of audited financial data and in line with the findings recorded in the
tariff and appellate proceedings. Retention of such an excess amount
by the petitioner would result in unjust enrichment at the cost of
public funds and electricity consumers, which is impermissible in law.
38. Learned counsel for Respondents Nos. 2 and 3 further submits that
the petitioners were not denied an opportunity of hearing, as alleged.
The proceedings before the State Commission were conducted in
accordance with the applicable Conduct of Business Regulations,
which provide for the issuance of public notices rather than individual
notices. The tariff petitions were widely publicised through
newspapers and the official website, and public hearings were
conducted wherein stakeholders, including industry representatives,
were given an opportunity to participate. In fact, the authorized
representative of the petitioner was present during the review
proceedings, demonstrating knowledge and participation in the
process. Similarly, APTEL also issued public notices before deciding
the appeals. It is also submitted that the petitioners, despite having
knowledge of the proceedings and their outcome, failed to avail
appropriate remedies at the relevant stages, including review before
APTEL or appeal before the Hon'ble Supreme Court. Such inaction
and acquiescence disentitle the petitioners from seeking
discretionary relief under Article 226. The writ petition is thus liable to
be dismissed on the ground of delay, laches, and waiver, apart from
being an attempt to bypass statutory remedies.
39. It is further submitted that under Sections 31, 32, and 33 of the
Electricity Act, 2003, the State Load Dispatch Centre (SLDC) is
entrusted with the responsibility of maintaining grid discipline,
ensuring secure and economic operation of the power system, and
issuing binding directions to generating companies. The petitioner,
however, has consistently violated grid discipline by injecting highly
fluctuating and non-firm power, thereby jeopardizing grid stability.
Repeated communications and directions were issued by the SLDC
to the petitioner between 2014 and 2016, calling upon it to adhere to
scheduled generation and maintain consistency in power supply. The
petitioner not only failed to comply but also admitted its inability to
supply firm power due to fluctuating internal consumption. Such
erratic injection patterns caused operational difficulties, including
overdrawal and underdrawal situations, attracting penalties and
affecting overall grid management. The State Commission, taking
note of these issues, issued directions to regulate and discourage
such non-firm power. Denial of No Objection Certificate (NOC) and
rejection of Short Term Open Access (STOA) applications were not
arbitrary but were based on statutory obligations, regulatory
directives, and the petitioner's continued non-compliance with grid
discipline. Grant of open access to an entity injecting unstable power
would pose a serious threat to grid security and reliability. The
impugned actions were therefore taken in the interest of maintaining
stability of the power system and in compliance with binding
directions of the State Commission and APTEL.
40. Lastly, it is also submitted that the present writ petition suffers from
non-joinder of necessary parties, including stakeholders who
participated in the tariff proceedings and whose interests are affected
by the outcome. The petitioners have also failed to challenge the
foundational tariff orders and regulatory framework, which form the
basis of the impugned actions. In the absence of such a challenge,
the reliefs sought are untenable. The respondents thus pray for
dismissal of the writ petition as being devoid of merit, not
maintainable, and contrary to the statutory scheme of the Electricity
Act, 2003.
41. He would rely upon the judgment of "Power Grid Corporation of
India Limited v. Madhya Pradesh Power Transmission Company
Limited and Others" 2025 (8) SCC 705, "State of Himachal
Pradesh and Another v. JSW Hydro Energy Limited and Others"
2025 SCC OnLine SC 1460, "Jaipur Vidyut Vitran Nigam Limited
and another v. MB Power (Madhya Pradesh) and Others" 2024
(8) SCC 513, "Educanti Kistamma (Dead) through L.Rs. v. S.
Venkatareddy (Dead) through L.Rs. and Others" 2010 (1) SCC
756, "Uttar Haryana Bijli Vitran Nigam Limited and Another v.
Adani Power (Mundra) Limited and Others" 2023 (14) SCC 736,
"Maharashtra State Electricity Distribution Company Limited v.
Adani Power Maharashtra Limited and Others" 2023 (7) SCC 401,
"GMR Warora Energy Ldt. V. CERC" 2023 (10) SCC 401, "R.
Muthukumar and Others v. Chairman and managing Director
TANGEDCO and Others" 2022 SCC OnLine SC 151.
42. Learned Counsel appearing for the Respondent No. 1 would submit
that the present writ petition under Article 226 of the Constitution of
India is not maintainable. The petitioners have a complete and
efficacious statutory remedy under Section 125 of the Electricity Act,
2003, to challenge the judgment dated 26.05.2016 of the Appellate
Tribunal for Electricity (APTEL) before the Hon'ble Supreme Court. In
addition, Section 120(2)(f) provides a remedy of review before
APTEL. The petitioners' failure to exhaust these statutory remedies
precludes interference under writ jurisdiction as held in "Union of
India v. Satyawati Sharma", (1965) 1 SCR 363, writ jurisdiction is
discretionary and cannot be exercised where an alternative statutory
remedy exists. By adopting the submissions made by learned
counsel for the Respondents Nos. 2 and 3, he would submit that
functions under the Electricity Act, 2003, with statutory powers
defined under Sections 61, 62, and 86. Section 61 empowers the
Commission to specify the principles for the determination of tariffs.
Section 62 empowers the Commission to determine the tariff for the
supply of electricity by a generating company to a distribution
licensee. Section 86(1)(b) and (f) authorise the Commission to
adjudicate disputes between licensees and generating companies,
and to ensure compliance with the Act. All actions of the
Commission, including the tariff orders dated 12.06.2014 and review
dated 08.12.2014, were taken within the statutory framework,
following due process. The Commission, in Petition No. 07/2014,
undertook the true-up exercise for FYs 2011-12 and 2012-13 and
determined the minimum base tariff at Rs. 1.50 per unit for non-firm
power. Section 62(3) and 62(6) mandate that only the tariff
determined under the Act is payable, and any excess collection must
be refunded with interest. The petitioner's claim to receive a higher
tariff or to avoid refund is contrary to statutory provisions and the
principle that regulatory tariffs prevail over contractual agreements in
matters of public utility and consumer interest.
43. He would further submit that principles of natural justice were fully
complied with. Regulation 10 of the CSERC (Conduct of Business)
Regulations, 2009, provides that public notices are sufficient to afford
hearing to stakeholders. Notices were published in newspapers,
petitions were uploaded on the Commission's website, and public
hearings were conducted at Raipur on 21-22.05.2014.
Representatives of the petitioner, including DGM N.K. Chandiramani,
were present and participated in the review proceedings. Thus, the
claim of denial of opportunity of hearing is wholly misconceived. The
tariff orders passed by the Commission and affirmed by APTEL are
binding on the parties under Section 62(6) and Section 111. The
petitioners cannot seek collateral review through a writ petition to
avoid statutory obligations. It is well-settled that once an order of a
specialised tribunal attains finality, collateral attack under writ
jurisdiction is impermissible (NTPC Ltd. v. CERC & Ors., 2006 11
SCC 154). Any attempt to circumvent these orders undermines the
statutory framework.
44. It is further argued that petitioners supplied fluctuating, non-firm
power, which was duly examined in tariff proceedings. Sections 32
and 33 empower the SLDC and the Commission to monitor grid
operations and issue binding directions for maintaining system
stability. The petitioner's continued injection of unstable power
created operational and commercial risks, which the Commission
duly considered while limiting tariff. The denial of open access by the
licensee (Respondent No. 2) was in conformity with the
Commission's directives. The petitioners had full knowledge of the
tariff orders, review proceedings, and APTEL judgment. Their failure
to challenge the orders before the Supreme Court demonstrates
acquiescence. The orders under challenge are in furtherance of
public interest and consumer protection, as mandated under Section
61(g) and 86(1)(b) of the Electricity Act, 2003. Allowing the
petitioners to retain amounts already paid in excess of the statutory
tariff would result in unjust enrichment and adversely affect
consumers. The Commission's regulatory mandate cannot be
undermined by private contractual claims. In view of the foregoing,
he also prays that the writ petition be dismissed on the grounds of (i)
non-maintainability due to existence of alternative statutory remedies,
(ii) compliance with principles of natural justice and due process, (iii)
binding nature of tariff orders and APTEL judgment, (iv) technical and
regulatory basis of the orders, and (v) protection of public interest.
The petitioners' claims are wholly unsustainable in law.
45. I have heard learned counsel for the respective parties and gone
through the pleadings and documents annexed thereto.
46. The present writ petition consists of the challenge to the demand
notice dated 07.07.2016 issued by Respondent No. 2 (CSPDCL), the
consequential denial of Short Term Open Access (STOA) and No
Objection Certificate (NOC), and the extent to which the judgment
dated 26.05.2016 passed by the Appellate Tribunal for Electricity
(APTEL) can be relied upon to fasten liability upon the petitioner. The
foundational question which arises is whether the petitioner No. 1,
admittedly not impleaded in the tariff proceedings before the State
Commission or in the appellate proceedings before APTEL, can be
subjected to adverse civil and pecuniary consequences on the
strength of findings recorded in such proceedings, and whether such
action satisfies the mandate of the Electricity Act, 2003 and the
settled principles of natural justice.
47. Before adverting to the merits of the controversy, it is necessary to
deal with the preliminary objection raised by the respondents with
regard to the maintainability of the present writ petition. The objection
proceeds on the footing that the petitioner had efficacious alternative
remedies under Sections 120(2)(f), 125, and 86(1)(f) of the Electricity
Act, 2003, and having failed to avail the said remedies, the present
writ petition ought not to be entertained. This Court is unable to
accept the said contention for more than one reason.
48. It is trite that the rule of alternative remedy is a rule of self-imposed
restraint and not a jurisdictional bar. The power of judicial review
under Article 226 of the Constitution of India is plenary in nature and
cannot be curtailed by statutory provisions. The Hon'ble Supreme
Court in "Whirlpool Corporation v. Registrar of Trade Marks",
(1998) 8 SCC 1, has authoritatively held that in at least three
contingencies, namely, where the writ petition seeks enforcement of
fundamental rights, where there is violation of principles of natural
justice, and where the impugned orders are wholly without
jurisdiction, the existence of an alternative remedy would not operate
as a bar. This principle has been consistently reiterated
in "Harbanslal Sahnia v. Indian Oil Corporation Ltd.", (2003) 2
SCC 107, wherein it has been held that the rule of exclusion of writ
jurisdiction in view of the availability of an alternative remedy is a rule
of discretion and not one of compulsion.
49. In the case of "Whirlpool Corporation" (supra), the Hon'ble
Supreme Court has held that:-
"15. Under Article 226 of the Constitution, the High
Court, having regard to the facts of the case, has a
discretion to entertain or not to entertain a writ petition.
But the High Court has imposed upon itself certain
restrictions one of which is that if an effective and
efficacious remedy is available, the High Court would
not normally exercise its jurisdiction. But the alternative
remedy has been consistently held by this Court not to
operate as a bar in at least three contingencies, namely,
where the writ petition has been filed for the
enforcement of any of the Fundamental Rights or where
there has been a violation of the principle of natural
justice or where the order or proceedings are wholly
without jurisdiction or the vires of an Act is challenged.
There is a plethora of case-law on this point but to cut
down this circle of forensic whirlpool, we would rely on
some old decisions of the evolutionary era of the
constitutional law as they still hold the field."
50. In the case of "Harbanslal Sahnia" (supra), it has been held by their
lordships of the Hon'ble Supreme Court that:-
"7. So far as the view taken by the High Court that the
remedy by way of recourse to arbitration clause was
available to the appellants and therefore the writ petition
filed by the appellants was liable to be dismissed is
concerned. suffice it to observe that the rule of
exclusion of writ jurisdiction by availability of an
alternative remedy is a rule of discretion and not one of
compulsion. In an appropriate case, in spite of
availability of the alternative remedy, the High Court
may still exercise its writ jurisdiction in at least three
contingencies: (i) where the writ petition seeks
enforcement of any of the fundamental rights; (ii) where
there is failure of principles of natural justice: or (n)
where the orders or proceedings are wholly without
jurisdiction or the vires of an Act is challenged. (See
Whirlpool Corpn. v. Registrar of Trade Marks The
present case attracts applicability of the first two
contingencies. Moreover, as noted, the petitioners
dealership, which is their bread and butter, came to be
terminated for an irrelevant and non-existent cause. In
such circumstances, we feel that the appellants should
have been allowed relief by the High Court itself instead
of driving them to the need of initiating 9 arbitration
proceedings."
51. In the case of "Gujarat Ambuja Cement Ltd." (supra), it has been
held that:-
"18. The Constitution Benches of this Court in K.S.
Rashid and Son v. Income Tax Investigation
Commission, AIR 1954 SC 207; Sangram Singh v.
Election Tribunal, Kotah, AIR 1955 SC 425; Union of
India v. T.R. Varma, AIR 1957 SC 882; State of U.P. v.
Mohd. Nooh, AIR 1958 SC 86 and K.S. Venkataraman
and Co. (P) Ltd. v. State of Madras, AIR 1966 SC 1089
held that Article 226 of the Constitution confers on all
the High Courts a very wide power in the matter of
issuing writs. However, the remedy of writ is an
absolutely discretionary remedy and the High Court has
always the discretion to refuse to grant any writ if it is
satisfied that the aggrieved party can have an adequate
or suitable relief elsewhere. The Court, in extraordinary
circumstances, may exercise the power if it comes to
the conclusion that there has been a breach of
principles of natural justice or procedure required for
decision has not been adopted.
19. Another Constitution Bench of this Court in State of
M.P. v. Bhailal Bhai, AIR 1964 SC 1006 held that the
remedy provided in a writ jurisdiction is not intended to
supersede completely the modes of obtaining relief by
an action in a civil court or to deny defence legitimately
open in such actions. The power to give relief under
Article 226 of the Constitution is a discretionary power.
Similar view has been reiterated in N.T. Veluswami
Thevar v. G. Raja Nainar, AIR 1959 SC 422; Municipal
Council, Khurai v. Kamal Kumar, AIR 1965 SC 1321;
Siliguri Municipality v. Amalendu Das, (1984) 2 SCC
436; S.T. Muthusami v. K. Natarajan, (1988) 1 SCC
572; Rajasthan SRTC v. Krishna Kant, 1995) 5 SCC 75;
Kerala SEB v. Kurien E. Kalathil, (2000) 6 SCC 293; A.
Venkatasubbaiah Naidu v. S. Chellappan, (2000) 7
SCC 695; L.L. Sudhakar Reddy v. State of A.P., (2001)
6 SCC 634; Shri Sant Sadguru Janardan Swami
(Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha
v. State of Maharashtra, (2001) 8 SCC 509; Pratap
Singh v. State of Haryana, (2002) 7 SCC 484 and GKN
Driveshafts (India) Ltd. v. ITO, (2003) 1 SCC 72.
20. In Harbanslal Sahnia v. Indian Oil Corpn. Ltd.,
(2003) 2 SCC 107, this Court held that the rule of
exclusion of writ jurisdiction by availability of alternative
remedy is a rule of discretion and not one of compulsion
and the Court must consider the pros and cons of the
case and then may interfere if it comes to the
conclusion that the petitioner seeks enforcement of any
of the fundamental rights; where there is failure of
principles of natural justice or where the orders or
proceedings are wholly without jurisdiction or the vires
of an Act is challenged.
21. In G. Veerappa Pillai v. Raman & Raman Ltd., AIR
1952 SC 192; CCE v. Dunlop India Ltd., (1985) 1 SCC
260; Ramendra Kishore Biswas v. State of Tripura,
(1999) 1 SCC 472; Shivgonda Anna Patil v. State of
Maharashtra, (1999) 3 SCC 5; C.A. Abraham v. ITO,
AIR 1961 SC 609; Titaghur Paper Mills Co. Ltd. v. State
of Orissa, (1983) 2 SCC 433; H.B. Gandhi v. Gopi Nath
and Sons, 1992 Supp (2) SCC 312; Whirlpool Corpn. v.
Registrar of Trade Marks, (1998) 8 SCC 1; Tin Plate
Co. of India Ltd. v. State of Bihar, (1998) 8 SCC 272;
Sheela Devi v. Jaspal Singh, (1999) 1 SCC 209 and
Punjab National Bank v. O.C. Krishnan, (2001) 6 SCC
569, this Court held that where hierarchy of appeals is
provided by the statute, party must exhaust the
statutory remedies before resorting to writ jurisdiction.
22. If, as was noted in Ram and Shyam Co. v. State of
Haryana, (1985) 3 SCC 267 the appeal is from "Caesar
to Caesar's wife" the existence of alternative remedy
would be a mirage and an exercise in futility. In the
instant case the writ petitioners had indicated the
reasons as to why they thought that the alternative
remedy would not be efficacious. Though the High
Court did not go into that plea relating to bias in detail,
yet it felt that alternative remedy would not be a bar to
entertain the writ petition. Since the High Court has
elaborately dealt with the question as to why the
statutory remedy available was not efficacious, it would
not be proper for this Court to consider the question
again. When the High Court had entertained a writ
petition notwithstanding existence of an alternative
remedy this Court while dealing with the matter in an
appeal should not permit the question to be raised
unless the High Court's reasoning for entertaining the
writ petition is found to be palpably unsound and
irrational. Similar view was expressed by this Court in
First ITO v. Short Bros. (P) Ltd., AIR 1967 SC 81 and
State of U.P. v. Indian Hume Pipe Co. Ltd., (1977) 2
SCC 724 That being the position, we do not consider
the High Court's judgment to be vulnerable on the
ground that alternative remedy was not availed. There
are two well-recognised exceptions to the doctrine of
exhaustion of statutory remedies. First is when the
proceedings are taken before the forum under a
provision of law which is ultra vires, it is open to a party
aggrieved thereby to move the High Court for quashing
the proceedings on the ground that they are
incompetent without a party being obliged to wait until
those proceedings run their full course. Secondly, the
doctrine has no application when the impugned order
has been made in violation of the principles of natural
justice. We may add that where the proceedings itself
are an abuse of process of law the High Court in an
appropriate case can entertain a writ petition."
52. Tested on the anvil of the aforesaid principles, the facts of the
present case clearly bring it within the well-recognized exceptions.
The petitioner was neither impleaded nor afforded any effective
opportunity of hearing in the proceedings before the State
Commission or before APTEL, despite the fact that the entire subject
matter of those proceedings pertained to power supplied by the
petitioner under duly executed Power Purchase Agreements.
53. The contention of the respondents that the petitioner ought to have
availed the appellate remedy under Section 125 of the Electricity Act,
2003 also does not merit acceptance. The said provision enables an
appeal to the Hon'ble Supreme Court by a "person aggrieved" by an
order of APTEL. In the present case, the petitioner was not a party to
the proceedings before APTEL, nor does the impugned judgment
record any finding or direction against it. In the absence of any lis
involving the petitioner or any adjudication affecting its rights, it
cannot be said that the petitioner was a "person aggrieved" so as to
invoke Section 125. A remedy which is illusory or not efficacious in
the given factual matrix cannot be pressed into service to non-suit
the petitioner. It is necessary here to notice Section 125 of the
Electricity Act, 2003, which reads as under:-
"Section 125. (Appeal to Supreme Court):
Any person aggrieved by any decision or order of the
Appellate Tribunal, may, file an appeal to the Supreme
Court within sixty days from the date of
communication of the decision or order of the
Appellate Tribunal, to him, on any one or more of the
grounds specified in section 100 of the Code of Civil
Procedure,1908:
Provided that the Supreme Court may, if it is satisfied
that the appellant was prevented by sufficient cause
from filing the appeal within the said period, allow it to
be filed within a further period not exceeding sixty
days."
54. Similarly, the remedy of review under Section 120(2)(f) before
APTEL cannot be said to be efficacious, as the petitioner was not on
record in the appellate proceedings and could not have sought
review of an order passed in a matter to which it was not a party. The
suggestion that the petitioner could approach the State Commission
under Section 86(1)(f) for adjudication of disputes is equally
misconceived, inasmuch as the impugned demand has already been
raised unilaterally on the basis of concluded proceedings, and the
petitioner cannot be relegated to initiate fresh adjudicatory
proceedings merely to contest an action of recovery of Rs. 153.55
crores.
55. It is also significant to note that the cause of action for the petitioner
arose only upon issuance of the demand notice dated 07.07.2016,
whereby, for the first time, a concrete and enforceable liability was
sought to be imposed. Prior to this, there was neither any
adjudication against the petitioner nor any indication that the
amounts received under the PPAs were liable to be refunded.
Therefore, the petitioner cannot be faulted for not challenging the
tariff order or the APTEL judgment, as no prejudice had been caused
to it at that stage.
56. The objection of the respondents, if accepted, would lead to a
situation where a party is saddled with serious civil consequences
without being heard, and is then denied access to judicial review on
the ground that it failed to challenge proceedings to which it was not
even a party. Such an interpretation would be wholly unjust and
contrary to the basic tenets of fairness embedded in Article 14 of the
Constitution.
57. In view of the foregoing discussion, this Court is of the considered
opinion that the present case falls squarely within the recognized
exceptions to the rule of alternative remedy, namely, violation of
principles of natural justice. The remedies suggested by the
respondents are neither efficacious nor available in the true sense to
the petitioner in the peculiar facts of the case. Accordingly, the
preliminary objection regarding maintainability is rejected, and the
writ petition is held to be maintainable for adjudication on merits.
58. The factual matrix, as borne out from the record, indicates that the
petitioner had entered into multiple Power Purchase Agreements
(PPAs) with CSPDCL during the period between 2011 and 2013 for
the supply of electricity, which were acted upon by both parties. The
petitioner supplied electricity and raised invoices in terms of the
agreed contractual mechanism, including a load factor-based tariff. It
is also not in dispute that CSPDCL accepted such supply and
effected payments during the relevant financial years. However, the
mere fact that payments were made at a particular point in time, or
that the transactions were not immediately disputed, cannot be
construed to mean that such transactions attained irrevocable finality
so as to be insulated from subsequent statutory scrutiny. It is
necessary to notice here the initial PPA dated 02-11-2011, which is
as under:-
POWER PURCHASE AGREEMENT
******* THIS AGREEMENT made on this 2nd day of
November 2011 between the Chhattisgarh state
Power Distribution Co. Ltd. (A Government of
Chhattisgarh undertaking, a successor company of
Chhattisgarh State Electricity Licensee, hereinafter
referred to as "Licensee") which expression shall
where the context so admits shall include its
successors in office and assigns of the one part and
M/s Jindal Steel & Power Limited (hereinafter referred
as Company) a company incorporated under the
companies Act 1956 having it's registered office at
O.P. Jindal Marg, Hisar - 125005, Haryana which
expression shall where the context so admits includes
its successors in business executors administrators,
legal representatives, and assigns of the other parts.
******* AND WHEREAS the company has set up the
Captive Generating Plant at Dongamahua, District
Raigarh and whereas the company has offered to sell
power on firm basis to the Licensee based on
anticipated availability, which has been accepted by
the Licensee vide letter No.02-02/ACE-I/2124 dt.
21.10.2011.
******* NOW This agreement witnesses and the
parties hereto have agreed as below:-
(1) (a) The Company has offered 150 MW firm power
on Round the Clock basis i.e. 00.00 hrs to 24.00 hrs,
hereinafter referred to as maximum contracted
quantum of power. The Company may reduce the
quantum of power supply to the extent of 20% of
maximum contracted power due to the reason which is
not under the control of company to supply maximum
contracted power. The minimum contracted power
shall be 120 MW, which is not less than 80% of
maximum contracted power. Load factor of company
having minimum contracted power less than 10 MW
will be calculated on monthly basis and having
minimum contracted power of 10 MW and above will
be calculated on weekly basis, during the term of this
agreement the Licensee has agreed to purchase
power generated by the company as per contracted
capacity subject to the provisions contained in the
Electricity Act, 2003 (herein after referred as 'the Act')
and rules made there under as per Chhattisgarh State
Electricity Regulatory Commission (CSERC) guideline
for power purchase and procurement and the terms
and conditions of power purchase by Licensee as
approved by CSERC from time to time.
(1) (b) The billing and scheduling modalities are as
under:-
(i) Agreed rate:- Rs.3.00 (Rs.Three) per kWh for RTC
power.
(ii) Merit order purchase:-
******* The power from the company will be purchased
in accordance to merit order purchase principle under
Section 32(2) of the Act. The State Load Despatch
Centre (SLDC) will carry out real time operation for
grid control and dispatch of electricity within the state
through secured and economic operation of the grid.
Both parties of this agreement shall abide themselves
by the instructions issued by the SLDC for maintaining
grid discipline. The SLDC may restrict power supply
from the company by backing down of the generation /
reduction in injection, if required, for secured and
economic operation of the State grid. In case of clear
instruction from SLDC, if, the company do not back
down their generation / reduce their injection to the
quantum as required by the SLDC, the company shall
be liable for the payment at the rate which may be
imposed on the licensee due to congestion in grid, or
panel UI charges or any other penalty in any form due
to over injection in the grid.
******* In case, supply of power by the company is
restricted by SLDC due to backing down of the
generation / reduction in injection, then that backing
down period of supply shall be considered as deemed
generation with respect to the scheduled quantum of
power and this deemed generation shall be taken into
account for calculation of load factor, subject to
certification of deemed generation from SLDC. The
quantum of deemed generation will be considered for
purpose of calculation of load factor only. Payment for
purchase of power shall be done on the basis of actual
energy injection.
(3) Scheduling:-
******* Company shall give a monthly schedule of
quantum of power intended to be supplied to the
Licensee for the ensuing month by 23rd of the month.
The scheduled quantum of power shall be either
maximum / minimum contracted power or between
minimum and maximum contracted power. In case the
monthly schedule for month is not submitted by the
company upto prescribed date, to SLDC under
intimation to the Licensee then the running schedule
shall be considered as schedule for ensuing month
also.
(4) Limit of Power Injection:-
(a) During off peak hour (00.00 to 18.00 hrs & 23.00
hrs to 24.00 hrs)
The company shall be permitted to inject up to 110%
of scheduled power for off peak hours i.e. 00.00 hrs to
18.00 hrs & 23.00 hours to 24.00 hours subject to the
technical limitation of equipment / line rating at
sending and receiving ends. However, payment @
Rs.1.00 (Rs.One only) per unit shall be made for the
energy injected over & above 110% of schedule
subject to condition that technical limitation to be
observed by Supplier. Units supplied upto permitted
injection rate of 110% will be taken as eligible units for
calculation of load factor and payment. Eligible units
shall mean the units (energy) supplied upto permitted
injection rate of 110% of schedule (schedule energy in
time block) during off peak hours.
(b) During peak hours (18.00 hrs to 23.00 hrs)
The company shall be permitted to inject upto 120% of
schedule for peak hours i.e. 18.00 hrs to 23.00 hrs
subject to the technical limitation of equipment / line
rating at sending and receiving ends. However,
payment @ Rs.1.00 (Rs.One only) per unit shall be
made for the energy injected over & above 120% of
schedule subject to condition that technical limitation
to be observed by supplier. Units supplied upto
permitted injection rate of 120% will be taken as
eligible units for calculation of load factor and
payment. Eligible units shall mean the units (energy)
supplied upto permitted injection rate of 120% of
schedule (schedule energy in time block) during peak
hours.
(5) Load Factor:-
(a) For the power supplied the load factor will be
calculated as below:-
LF = Number of eligible units supplied during a month /week
Monthly schedule quantum of power×24 hrs.×No. of days in a month/week
Effective Rate in Rs. = 3.00×Actual LF % (monthly / weekly)
80%
In addition to the above, the following modalities for
accounting & calculation of LF shall be taken into
account :-
(i) Schedule power means quantum of power declared
by generator for the month which is equal to maximum
/ minimum contracted power or in between maximum
contracted power and minimum contracted power as
per clause 1(a).
(ii) Load Factor shall be calculated on monthly /
weekly basis as per clause 1(a).
(iii) The payment will be done on monthly basis.
(iv) The minimum effective rate shall be Rs.1.50 per
unit.
(6) Rate of Infirm power:-
Power supplied by the company after synchronization
with licensee's grid and before the COD (date of
commercial operation) of their power plant shall be
treated as infirm power and shall be paid @ Re.1/- per
unit. This rate of infirm power is applicable to the
power plant who enters PPA with licensee.
(7) The company having power purchase agreement
with licensee only for peak hours, the injected
between 17.30 hrs to 18.00 hrs and 23.00 hrs to 23.30
hrs shall be paid at a fixed rate of Rs 1.00 (Rs one
only) per unit. No payment will be made for any
injection prior to 17.30 hrs and after 23.30 hrs.
However, if the company is having contract /
agreement with other than licensee to supply of power
during off peak hours i.e. between 23.00 hrs to 18.00
hrs, next day, no payment will be made for the power
injected between 17.30 hrs to 18.00 hrs and 23.00 hrs
to 23.30 hrs.
(8) Notwithstanding to the above in case the CSERC
issues any other guidelines or specifies / modifies
terms and conditions of power purchase by the
licensee, the same shall be acceptable and binding on
both the parties.
(9) Company shall abide by the grid discipline as per
the provisions of State Electricity Grid Code and shall
maintain technical parameters regarding voltage,
frequency, power factor, within the limit as per prudent
utility practices, subject to the technical plant limits
and in Line with prudent utility practices, the company
shall operate and maintain the plant in such a manner,
so as not to have an adverse effect on the operation of
Licensee's Grid System. In case arry violation is noted
in abiding by Grid Discipline, the Licensee/SLDC may
isolate company's power supply from its grid system,
will out any liability on the licensee when system
security aspect of the State grid is involved, taking into
consideration the provision of State Grid Code.
(10) For power supplied to Licensee, joint
monthly/weekly reading or any other mechanism
(AMR) as approved by CSERC. in respect of power
exported to Licensee shall be laken by the authorized
representative of company and Licensee. Company
shall submit monthly invoice of energy sold to
Licensee, to Superintending Engineer (O&M)
CSPDCL at Raigarh under intimation to Chief
Engineer (Comm.) of Licensee. Reinur after each
monthly / weekly metar reading duly supported by the
documents.
(11) PAYMENT
Normally, licensee shall make the payment within 30
days from the date of receipt of bill in the office of the
Superintending Engineer(O&M) CSPDCL at Raigarh
under intimation to Chief Engineer(Comml) (licensee)
Raipur. However, in case the company desires
payment within fifteen days from the date of
presentation of bill, they shall allow 2% (Two percent)
rebate on the billed amount for supply of power
Further, in case payment is made after 30 days, a
delayed payment surcharge of 1.00% (one percent)
per month shall be paid by licensee. This delayed
payment surcharge shall be calculated on simple
interest basis on the number of days outstanding after
the said period. In the event of 15/30th day being a
holiday, the next working day shall be the due date for
the payment for this purpose.
(12) METERING
12.1 The metering point for power purchese arid billing
purpose for generating plants which are connected to
gnd shall be at point of injection at Licensee /
Chhattisgarh State Power Transmission Co. Ltd.
(herein after referred as CSPTCL) sub-station. The
provision related to metering shall be governed by the
Central Electricity Authority (Installation and Operation
of Meters) Regulation, 2006 as amended from time to
time.
12.2 The energy loss for dedicated lines, ie. from the
power plant to the point of injection at the sub-station
is to be borne by the company. The energy. loss from
the point of Injection onwards has to be acrne by the
licensee. In case billing and check meter installed at
metering point l.e. at sul station end becomes
defective, then the billing shall be done on the basis of
injection recorded at generating station end meter if
found functioning properly. However, in this case the
company shall have to bear line loss as approved by
CSERC.
12.3 Export/Import meters capable of recording active
as well as reactive power shall be installed at the
interconnection point. Reactive energy billing shall be
as per the orders of CSERC issued from time to time:
In case the CSERC approves reactive power billing on
the basis of ABT meter then the rates and other
modalities shall be as per CSERC's order.
12.4 The specifications of the Special Energy Meters
shall be as approved by The Licensee/CSPTCL.
12.5 The meter shall be jointly tested and inspected
and sealed on behalf of both the parties and shall not
be interfered by either party except in the presence of
the other party or its representatives.
12.6 Billing meters and the check meters (wherever
provided) shall be tested for accuracy once in a year
in presence of both the parties.
12.7 The meters shall be deemed to have working
satisfactorily if the errors as determined in the tests
are within the permissible limits as allowed in the
relevant IS specifications or I.E. rules, 1958 applicable
to high precision energy meters.
12.8 If during the periodical testing the billing meter is
found to have errors, beyond permissible limits but the
check meters (wherever provided) are found to have
error within the permissible limit, billing shall be
revised on the basis of generation / injection recorded
by the check meter. However, billing meter shall be
attended / replaced immediately and biling thereafter
shall be as per generation / injection recorded by new
tested biling meter.
12.8 If during the periodical testing both billing & check
meters (wherever provided) are found to have error
peyond permissible limits, the bill shall te revised by
applying correction factor to the injection registered by
the billing meter. The correction factor shall mean the
percentage of error between the R.S.S. meter & billing
meters.
12.10 If both the meters i.e. the billing meter and the
check meter (wherever provided) fall to record or if
any of the PT fuse is blown out, then the energy
accounting shall be done as per clause 12(2) or on a
mutually agreeable basis between licensee and the
company, in case the generator end meter also found
defective.
12.11 All the tests on the billing and check meters
(wherever provided) shall be conducted by the meter
relay testing staff of the Licensee/CSPTCL jointly with
the staff of company.
12.12 The licensee / CSPTCL will have access to the
meters and metering equipments at any point of time
for which company woule provide entry to the
Licensee/CSPTCL staff authorized "or this purpose.
12.13 All the data transfer facilities shall be provided
by the Company for monitoring, billing and other
accounting purpose.
(13) Dispute Resolution: in the event of any dispute
arising between the Company and the licensee as
regards to the interpretation of this agreement or any
other matter arising out of or in connection with this
agreement, such dispute or difference shall be
referred to the CSERC for settlement of the dispute.
(14) FORCE-MAJEURE AND OUTAGE:
14.1 Force Majeure: Any event which is beyond the
control of the agencies involved which they could not
foresee or with a reasonable amount of diligence
could not have foreseen or which could not be
prevented and which substantially affect the
performance by either of the agency such as but not
limited to:
(a) Acts of God, natural phenomena, including but not
limited to floods, droughts, earthquakes and
epidemics.
(b) Acts of any Government domestic or foreign,
including but not limited to war declared or
undeclared, hostilities priorities, quarantines,
embargoes,
(c) Riol or Civil Commotion
(d) Grid's failure not attributable to agencies involved
During force majeure period neither party shall be
entitled for claiming compensation for damages in the
event of force majeure.
14.2 Forced Outage: An outage of Generating Unit(s)
of the compary due to a fault or other reasons which
has not been planned shall be considered as forced
outage. The company supplying power to the licensee
shall be eligible to claim a maximum of 240 hours in a
year as forced outage period. There shall not be any
requirement to verify the forced outage of the power
plant of the company but company will intimate
licensee and SLDC immediately in writing (by fax)
regarding breakdown / forced cutage and probable
time to restore power supply and subsequently inform
wnen generator comes on the bus. The forced outage
period of maximum 240 hours in a year shall be
considered for LF calculation.
14.3 Planned Outage: The power plant of the
company shall be eligible for maximum 15 days in a
year for planned outage. The company shall declare
about their outage planning to the licensee and SLDC
well in advance at least 15 days from the date of
starting of planned outage. The planned outage period
shall be considered for L.F. calculation maximum to 15
days in a year.
14.4 The provision under clause 14.2 i.e. maximum
240 hours for force outage and urider clause 14.3 i.e.
maximum 15 days for planned outage in a year shall
be considered for the purpose of LF calculation only, if
company executes PPA with licensee for complete
one year.
14.5 In case the company falls to supply power to the
licensee for all the 12 months le. contracted period the
company will not be entitled to get benefit of
forced/planned outage for considering load factor
calculation purpose. In such case the benefit avalled
by the company in this caspect shall be refundable to
the licensee.
(15) DURATION:
This agreement shall remain operative for a period
upto 30 June 2012 from the fate of commencement of
the agreement. The date of commencement of this
agreement shall be 1" November 2011 and cease to
operate automatically without any notice after 30 June
2012.
Notwithstanding to the above, this agreement shall be
terminable during the currency period of the
agreement by either party by serving one month notice
or on the specific direction from CSERC.
(16) IDEMNITY: Company shall indemnify the
Licensee/CSPTCL from any all damages which may
occur to the Licensee/CSPTCL personnel duning the
operation of the interconnection
(17) INSPECTION BY LICENSEE/ CSPTCL,
Company shall allow and accord necessary facilities
for inspection at all times of its generation,
interconnection equipments and records by personnel
of the licenseal CSPTCL to ensure their proper
functioning. Records or such inspections shall be
signed by the authorized representatives of company
and licensee/CSPTCL.
(18) NOTICES- All notices shall be deemed to have
been served when sent ty registered post at the
address given below:
(1) The Managing Director.
Chhattisgarh State F'ower Distribution Company Ltd.,
Vidyut Sewa Bhawan, PO: Sunder Nagar
Danganiya, Raipur-492013.
(ii) The Executive Director
M/s. Jindal Steel & Power Ltd.
Post Box No.16. Kharsia Road
Raigarh-496001 Chhattisgarh
(19) LOAD MANAGEMENT: The licensee shall
endeavor to evacuate all the electricity offered by
Company as per this agreement. However, licensee/
CSPTCL may ask the company to temporarily curtait
or stop its electricity export to grid when necessary on
account of.
(a) Inspection/repair/maintenance to its transmission
network and associated equipments.
(b) Safety of equipment of the licensee/CSPTCL and
(c) Force-maieure conditions.
No compensation, whatsoever shall be paid by the
licensee / CSPTCL due to non-evacuation of the
power due to reasons stated above.
(20) NO WAIVER- No waiver of any of the terms &
conditions of this agreement shall ce binding or
effectual for any purpose, unless expressed in writing
and signed by the party giving the same and any such
waiver shall be effective only in the specific instance
and for the purpose given, No failure or delay on the
part of either party hereto in exercising any right,
power of privilege hereunder shall operate as a waiver
thereof.
(21) The terms and conditions (except rate) as
mentioned in the CSERC order dated 30.04.2010
passed in suo motu petition No.05 of 2010 & orrler
dated 15.07 2011 pessed in suo motu petition No.23
of 2011 are applicable for this PPA Any change in the
existing rates and terms and conditions of power
purchase of licensee, by CSERC will be made
applicable to this power purchase agreement In that
case supplementary PPA to incorporate such
changes! modification shall be executed between
licensee and company.
IN WITNESS WHEREOF parties through their
respective duly authorized Officer/ representative have
signed this agreement.
59. Paragraph (1)(a) of the said PPA clearly stipulates that "During the
term of this agreement, the licensee has agreed to purchase
power generated by the company as per contracted capacity
subject to the provisions contained in the Electricity Act, 2003,
(hereinafter referred as "the Act") and rules made there under
as per Chhattisgarh State Electricity Regulatory Commission
(CSERC) guideline for power purchase and procurement and the
terms and conditions of power purchase by Licensee as
approved by CSERC from time to time." So, the PPA was
governed under the terms of the Electricity Act, 2003 and guideline
of CSERC.
60. The CSERC in its suo motu Petition No. 05 of 2010, decided on 30-
04-2010, observed the Limits on over-injection that:-
"7. Limits on over-injection
******* The CSPDCL has requested to impose limits
on over-injection during peak hour supply of power
also. CSPDCL has submitted that, unrestricted
injection during peak hours is misutilized by some of
the generators to avail undue benefit from the market.
The CSPDCL has proposed to limit injection rate to
110% throughout the day. Chhattisgarh Vidhyut
Mandal Abhiyanta Sangh has requested the
Commission to investigate into the matter and then
proceed in this case. M/s JPL, M/s BMPL, CII, CUM,
UIA, BALCO and others had opposed this proposal of
CSPDCL and suggested to continue the existing
mechanism. CSPDCL submitted that over-injection by
the generators resulted into under-drawal by State,
and the average rate for Ul under-drawal for three
consecutive months was about Rs 2.50 per unit. This
position of the State requires attention. Although the
CSPDCL has not submitted any fact or analysis on
commercial Implications of such under-drawal, but
what we understand is that, if the average cost of
short-term power purchase of CSPDCL is more than
Rs 2.50 per unit in the respective three months (as
indicated by CSPDCL) then this would adversely
affect the commercial aspect of CSPDCL and
ultimately the end consumers of the State. The tariff
order 2009-10 emphasized to adopt merit order
purchase principle during power procurement. The
previous three tariff orders also directed the licensee
to adopt merit order purchase principle. A mechanism
was already in place, to prevent such situation, but
whether it has been followed or not is not known to us.
This may be examined in detall during truing up
exercise of CSPCL's petition.
******* However, the fact submitted by CSPDCL
cannot be overlooked. The loss on account of such
power procurement by the CSPDCL will affect the
consumers of the State. One more aspect needs to be
seen. The CSPDCL is a Ul pool member (regional
entity as per IEGC) for regional grid operations. The
Central commission has passed an order in suo-motu
petition No. 01/2010 "in the matter of rate of
congestion charge in real time operation in inter-State
transmission of electricity". para 2(5) of this order
says:
******* "It is important to note that at a frequency
greater than 50 Hz, the congestion would not be
caused by the overdrawing utility but by the utility
injecting power into the congested transmission
corridor and the congestion charge would instead be
applied on the Injecting utility. The detailed procedure
for levy of congestion charge is given in the
Congestion Charge Regulations. For the injecting
utility, the remedy would be to reduce injection through
reduction of generation in its control area.
******* Further 22 (c) of the referred CERC order says:
******* "at frequency below 50 Hz, congestion charge
would be levied for over-drawal in the importing
control area and at frequencies above 50 Hz,
congestion charge would be levied for under-drawal in
the exporting control area."
******* These two provisions of CERC relating to
congestion charges requires special attention. As
mentioned above, CSPDCL is a regional entity and UI
pool member for inter-State power transactions. The
power developers connected to the State grid are the
intra-State entities. Now, at a situation when there is
under-drawal position by CSPDCL, at frequency
above 50 Hz, if power injection (supply) is not
regulated then the CSPDCL is liable to pay congestion
charge at Rs 5.45 per kwh. This penal clause will
definitely have an adverse impact. This situation can
be avoided mainly by two methods. First, by adopting
merit order purchase principle and second by properly
controlling and regulating the Injection into the State
grid. The first method of regulating power supply by
adopting merit order purchase will be discussed in
coming paragraphs. So here we will examine the
second point i.e. injection limit only. There are two
modes of power purchase by CSPDCL, long-term and
short-term. Major portion of CSPDCL's power
purchase is through long-term route. The rate of
power purchase through long-term route is generally
less than short-term power purchase price. For
Central generating station, the IEGC and UI
Regulations specifies provisions for controlled
injection to avoid over-injection, misuse and gaming.
The CSPGCL supplies its full power to State and also
the tariff of State generating utility is less than rates of
short-term power purchase by CSPDCL. So the
supply from CSPGCL into the grid can not be
restricted except otherwise under an extreme grid
emergency conditions and for safety purpose. Hence,
among the entities which are connected to the State
grid, the remaining is the suppliers who supply power
through short-term route. According to the existing
terms and conditions of short-term power supply, for
off-peak hours there is an over-injection limit of 110%,
which may take care of the situation to some extent.
For off-peak hours supply, there is disincentive, if the
IPPs/CGPs continue supplying power beyond 110% of
the contracted quantum. For short-term peak hours
supply, there is no limit of injection. Of course a power
plant can supply power only upto its capacity of
generation, but here in the State, most of the power
plants who supply power to CSPDCL are CGPs which
have in house captive load. The supply to the grid can
vary (upto the capacity of generation), depending
upon drawal of their captive load. Some IPPs supply
power to the buyers outside the State, during peak
hours also. Such IPPs may vary the quantum of power
injection into the State grid as per their commercial
interest. If an IPP or CGP understates Its capacity and
enters into contract for less quantum of power than
what it can actually supply (for power supply during
the peak hours) it has no disincentive as it can inject
power to the extent to attain load factor of 80% and
get the full rate (price) for supply of power though It
may cause under-drawal by CSPDCL and congestion
in the system. The associations and some generators
have stated that there is TOD tariff for peak hours and
so there should not be any injection limit. On this
point, the Commission would like to clarify that TOD is
the tariff for supply to consumers during peak and
other hours and here we are concerned with quantum
of injection and drawal. In the order dated 18.04.09,
the over-injection limit was kept at 110% for peak
hours supply also, but on the request of the power
developers and keeping in view that CSPDCL faces
shortage of power specially during peak hours, this
restriction was removed by order dated 23.06.09.
******* In the light of above discussions, the
Commission comes into conclusion that there is a
need to impose over-injection limit for peak hour short-
term supply also. Summing up this issue, there are
three main reasons for imposing injection limit during
peak hour. First, commercial Implication to the State
because of congestion charges. Second, to avoid
possibility of misuse of the existing provisions for
unlimited injection (for short-term supply) during peak
hours. The third reason for imposing such limitation
shall be covered in succeeding paragraphs 9 below.
******* Now what shall be the limit of over-injection is
another important issue. Except a few, most of the
power plants in the State are of low capacity. So in a
general context, taking a liberal view the Commission
fixes an over-injection limit of 120% for peak hours
supply, however, for off-peak hours the injection limit
of 110% is maintained.
******* The over-injection limit has to be monitored on
real time basis by SLDC. The real time data may not
be available to SLDC in some cases. The Commission
is of the view that apart from monitoring injection
during real time operations, there should be a
disincentive if the suppliers continue supplying power
over the specified limit. For power supply during off-
peak hours, the rate of power supply beyond the
specified limits, was fixed at Re 1/- per unit which is
maintained during 2010-11 also. This provision was
incorporated with a view to discourage injection
beyond the permissible limits and the same shall be
continued for the year 2010-11. This rate of Re.1/- per
unit shall also be applicable for supply during peak
hour beyond the permissible limit."
61. After having considered all the surrounding circumstances and the
nature of the transaction and supply of electricity, the Commission
decided the base rate, effective rate, minimum effective rate during
the off-peak hours and peak hours, which is as under:-
"18. In view of the above, the Commission decides
as follows:
(1) The maximum base rate for power supply at 80%
and above load factor of the schedule power shall be
Rs. 3.10 per kwh, which is 5% more as compare to the
maximum base rate for the year 2009-10.
(2) The effective rate for power supply below 80% load
factor will be calculated as follows:
Effective Rate in Rs. - Agreed base rate XLFN
80%
The agreed base rate is the rate agreed between the
supplier and CSPDCL, which may be equal to or less
than the maximum base rate of Rs. 3.10 per kwh.
(3) The minimum effective rate shall be Rs 1.50 per
unit.
(4) The rate for power supply during peak hours i.e.
18:00 hrs. to 23:00 hrs. shall be 5% more than the
agreed base rate /effective rate, as the case may be.
(5) Rate for power supplied beyond over-injection limit:
Off peak hour supply: The rate for excess supply, i.e.
for over-injection over and above 110% of scheduled
energy in time block, Re 1/- per KWh.
Peak hour supply: The rate for excess supply, l.e. for
over-injection over and above 120% of scheduled
energy in time block, Re. 1/- per Kwh.
(6) The rate of infirm power, i.e. power supplied by any
CGP/IPP, before the date of COD of their power plant
shall be Rs. 1/- per unit. This rate of infirm power is
applicable to the power plants who may enter PPA
with CSPDCL."
62. In the case of "Power Grid Corporation of India Ltd." (supra), it has
been considered that:
"11.4. Further, APTEL had already addressed a similar
question in Nuclear Power Corpn. of India Ltd. v. CERC
wherein it was held as under: (SCC OnLine APTEL
para 10)
"10. ... 10.5. Accordingly, in absence of specific
provisions in the Sharing Regulations/Tariff
Regulations, 2014 to deal with the situation under
question the Central Commission through exercise
of its regulatory powers has prescribed a principle for
sharing of transmission charges of the Transmission
System of Respondent 2 in the impugned order.
Thus, it is observed that by way of exercising its
regulatory power by a way of judicial order(s) the
Central Commission has laid down the principles of
payment of transmission charges in such an
eventuality. However, it is felt that the Central
Commission in the impugned order has abruptly
concluded the payment liability on the appellant just
by referring to its earlier orders and not establishing
the linkage with the present case explicitly. This
Tribunal would like to clarify the same."
Respondent 1 submitted that APTEL had taken a
peculiar view of the matter. Although CERC exercises
twin powers of adjudication and regulation, yet the f fact
remains that the regulatory power cannot be exercised
by way of a judicial order. Since APTEL took a contrary
view on the issues at hand, Respondent 1 was of the
view that no useful purpose would be served by filing an
appeal under Section 111.
12. Having heard the parties, the High Court affirmed
that despite the availability of an alternative remedy, a
writ petition can be entertained if any of the factors
mentioned in Whirlpool are satisfied. Since Respondent
1 had challenged the constitutionality of the orders of
CERC dated 21-1-2020 and 27-1-2020, respectively, on
the grounds that the power exercised by CERC was
beyond the powers vested in it as per the relevant
regulation and that the relief granted to the appellant
was beyond the reliefs prayed for, the High Court was
of the opinion that the principles of natural justice were
breached. Therefore, despite the availability of an
alternative remedy, the writ petition deserved to be
entertained. Having held so, the High Court admitted
the writ petition for hearing on merits.
67. In view of the aforesaid exposition of law, we find
that this Court's observations in Whirlpool are of no
avail to Respondent 1 as the present matter falls in
none of the cases enumerated therein. Therefore, there
was no occasion for the High Court to admit the writ
petition of Respondent 1.
68. For all the foregoing reasons, we have reached the
conclusion that the High Court committed an egregious
error in passing the impugned judgment. We are left
with no other option but to set aside the impugned
judgment and order dated 25-2-2021 passed by the
High Court and dismiss both the writ petitions. In the
result, the appeals succeed and are hereby allowed."
63. In a regulated sector such as electricity, all commercial arrangements
remain subject to statutory tariff determination and regulatory
oversight under the Electricity Act, 2003. Reliance has been placed
on the judgment of "Haryana Power Purchase Centre v. Sasan
Power Ltd. and Others", 2023 SCC OnLine SC 577, wherein it has
been held that:-
"95. We are of the view that what the parties
contemplated under Article 13.2 was that change in
law must be viewed through the specific provisions of
clauses (a) and (b). In other words, a change in law
may occur during the period of construction. Then it is
to be treated as falling under Article 13.2 (a). A
change in law may occur during the period of its
operation. It would then appear to be dealt with under
clause (b). If a change in law takes place during the
period of construction then its impact is to be
measured with reference to the capital cost of the
project. The word "capital cost" understandably has
been defined in PPA. A formula has been engrafted.
The formula contemplates that for every
increase/decrease of each Rs 50 crores in the capital
cost as a result of the change in law, the
increase/decrease in the non-escalable capacity
charges is to be 0.267% of the non-escalable capacity
charges. No doubt, this is if the seller provides to the
procurers documentary proof of such
increase/decrease in establishing the impact of such
change.
96. In other words, the effect of change in law during
the construction period is captured by Article 13.2(a).
We must understand that this is a meticulously
thought through contract which emerged after a long
rigorous process. Parties were clear about how the
change in law had to be compensated and
methodology has been set out clearly. Therefore, any
appeal made to the general part in Article 13.2 which
speaks about the affected party being restored to the
same economic condition as if such change in law had
not occurred cannot result in departing from the
specific formula which has been set in place. This
meaning is inevitable from the words "to the extent
contemplated in this Article 13", which precedes the
general words."
64. The proposition emerging from paragraph 95 of "Haryana Power
Purchase Centre" (supra), that regulatory authorities cannot
override contractual terms, is not of universal application and is
confined to the specific context of tariff discovered through
competitive bidding under Section 63 of the Electricity Act, 2003. This
position is qualified by earlier decisions of the Hon'ble Supreme
Court, which have consistently held that contractual arrangements in
the electricity sector are subservient to statutory regulation and public
interest. In All India Power Engineer Federation v. Sasan Power
Ltd., (2017) 1 SCC 487, the Hon'ble Supreme Court categorically
held that even contractual waivers or arrangements cannot be
enforced if they are contrary to public interest or affect tariff
determination, emphasizing the primacy of Sections 61 to 63 of the
Act. Further, in "Energy Watchdog v. Central Electricity
Regulatory Commission", (2017) 14 SCC 80, the Hon'ble Supreme
Court has reiterated that tariff fixation is a statutory function of the
Regulatory Commission and cannot be left to private agreements
between parties, thereby underscoring that PPAs operate within, and
are subject to, the regulatory framework particularly in matters
affecting tariff and public interest. These decisions clearly establish
that tariff fixation is not a matter of private contract alone but is
governed by statutory regulation.
65. In the case of "Adani Power Maharashtra Ltd." (supra), the Hon'ble
Supreme Court has observed that:
"119. In this respect, we may refer to the following
observations of this Court in Reliance Infrastructure Ltd.
v. State of Maharashtra18: (SCC pp. 376-77, paras 38-
39)
"38. MERC is an expert body which is entrusted with
the duty and function to frame regulations, including
the terms and conditions for the determination of
tariff. The Court, while exercising its power of judicial
review, can step in where a case of manifest
unreasonableness or arbitrariness is made out.
Similarly, where the delegate of the legislature has
failed to follow statutory procedures or to take into
account factors which it is mandated by the statute
to consider or has founded its determination of tariffs
on extraneous considerations, the Court in the
exercise of its power of judicial review will ensure
that the statute is not breached. However, it is no
part of the function of the Court to substitute its own
determination for a determination which was made
by an expert body after due consideration of material
circumstances.
39. In Assn. of Industrial Electricity Users v. State of
A.P.19 a three-Judge Bench of this Court dealt with
the fixation of tariffs and held thus: (SCC p. 717,
para 11)
'11. We also agree with the High Court20 that the
judicial review in a matter with regard to fixation
of tariff has not to be as that of an appellate
authority in exercise of its jurisdiction under
Article 226 of the Constitution. All that the High
Court has to be satisfied with is that the
Commission has followed the proper procedure
and unless it can be demonstrated that its
decision is on the face of it arbitrary or illegal or
contrary to the Act, the court will not interfere.
Fixing a tariff and providing for cross-subsidy is
essentially a matter of policy and normally a court
would refrain from interfering with a policy
decision unless the power exercised is arbitrary
or ex facie bad in law."
66. In the case of "Sasan Power Ltd. (2017)" (supra), the Hon'ble
Supreme Court has held that:-
"21. Regard being had to the aforesaid decisions, it is
clear that when waiver is spoken of in the realm of
contract, Section 63 of the Indian Contract Act, 1872
governs. But it is important to note that waiver is an
intentional relinquishment of a known right, and that,
therefore, unless there is a clear intention to relinquish
a right that is fully known to a party, a party cannot be
said to waive it. But the matter does not end here. It is
also clear that if any element of public interest is
involved and a waiver takes place by one of the
parties to an agreement, such waiver will not be given
effect to if it is contrary to such public interest. This is
clear from a reading of the following authorities.
22. In Lachoo Mal v. Radhey Shyam, (1971) 1 SCC
619, it was held:-
"The general principle is that everyone has a right to
waive and to agree to waive the advantage of a law or
rule made solely for the benefit and protection of the
individual in his private capacity which may be
dispensed with without infringing any public right or
public policy. Thus the maxim which sanctions the
non-observance of the statutory provision is cuilibet
licet renuntiare juri pro se introducto. (See Maxwell on
Interpretation of Statutes, Eleventh Edn., pp. 375 and
376). If there is any express prohibition against
contracting out of a statute in it then no question can
arise of anyone entering into a contract which is so
prohibited but where there is no such prohibition it will
have to be seen whether an Act is intended to have a
more extensive operation as a matter of public policy."
23. In Indira Bai v. Nand Kishore, (1990) 4 SCC 668, it
was held:-
"The test to determine the nature of interest, namely,
private or public is whether the right which is
renunciated is the right of party alone or of the public
also in the sense that the general welfare of the
society is involved. If the answer is latter then it may
be difficult to put estoppel as a defence. But if it is right
of party alone then it is capable of being abnegated
either in writing or by conduct."
24. In Krishna Bahadur v. Purna Theatre, (2004) 8
SCC 229, it was held:
"9. The principle of waiver although is akin to the
principle of estoppel; the difference between the two,
however, is that whereas estoppel is not a cause of
action; it is a rule of evidence; waiver is contractual
and may constitute a cause of action; it is an
agreement between the parties and a party fully
knowing of its rights has agreed not to assert a right
for a consideration.
10. A right can be waived by the party for whose
benefit certain requirements or conditions had been
provided for by a statute subject to the condition that
no public interest is involved therein. Whenever waiver
is pleaded it is for the party pleading the same to show
that an agreement waiving the right in consideration of
some compromise came into being. Statutory right,
however, may also be waived by his conduct."
25. It is thus clear that if there is any element of public
interest involved, the court steps in to thwart any
waiver which may be contrary to such public interest.
26. On the facts of this case, it is clear that the
moment electricity tariff gets affected, the consumer
interest comes in and public interest gets affected.
This is in fact statutorily recognized by the Electricity
Act in Sections 61 to 63 thereof. Under Section 61, the
appropriate commission, when it specifies terms and
conditions for determination of tariff, is to be guided
inter alia by the safeguarding of the consumer interest
and the recovery of the cost of electricity in a
reasonable manner. For this purpose, factors that
encourage competition, efficiency and good
performance are also to be heeded. Under Section 62
of the Act, the appropriate commission is to determine
such tariff in accordance with the principles contained
in Section 61. The present case, however, is covered
by Section 63, which begins with a non obstante
clause stating that notwithstanding anything contained
in Section 62, the appropriate commission shall adopt
the tariff if such tariff has been determined through a
transparent process of bidding in accordance with the
guidelines issued by the Central Government. The
guidelines dated 19.1.2005 issued by the Central
Government under Section 63 make it clear that such
guidelines are framed with the following objectives in
mind:
"These guidelines have been framed under the above
provisions of section 63 of the Act. The specific
objectives of these guidelines are as follows:
1) Promote competitive procurement of electricity by
distribution licensees;
2) Facilitate transparency and fairness in procurement
processes;
3) Facilitate reduction of information asymmetries for
various bidders;
4) Protect consumer interests by facilitating
competitive conditions in procurement of electricity;
5) Enhance standardization and reduce ambiguity and
hence time for materialization of projects;
6) Provide flexibility to suppliers on internal operations
while ensuring certainty on availability of power and
tariffs for buyers.
Clause 2.3 of the said guidelines reads as follows:
"2.3. Unless explicitly specified in these guidelines, the
provisions of these guidelines shall be binding on the
procurer. The process to be adopted in event of any
deviation proposed from these guidelines is specified
later in these guidelines under para 5.16."
27. Paragraph 4 of the aforesaid guidelines relates to
tariff structure and paragraph 4.11 in particular, which
relates to energy charges, is as follows:-
"4.11 Where applicable, the energy charges payable
during the operation of the contract shall be related on
the base energy charges specified in the bid with
suitable provision for escalation. In case the bidder
provides firm energy charge rates for each of the
years of the contract term, the same shall be permitted
in the tariffs."
28. Para 5.4 then speaks of a model power purchase
agreement proposed to be entered into with the seller
of electricity as follows:-
"(ii) Model PPA proposed to be entered into with the
seller of electricity. The PPA shall include necessary
details on:
(a) Risk allocation between parties;
(b) Technical requirements on minimum load
conditions;
(c) Assured offtake levels;
(d) Force majeure clauses as per industry standards;
(e) Lead times for scheduling of power;
(f) Default conditions and cure thereof, and penalties;
(g) Payment security proposed to be offered by the
procurer."
29. Paragraph 5.16 then goes on to state:-
"Deviation from process defined in the guidelines
5.16 In case there is any deviation from these
guidelines, the same shall be with the prior approval of
the Appropriate Commission. The Appropriate
Commission shall decide on the modifications to the
bid documents within a reasonable time not exceeding
90 days."
30. A perusal of the CERC tariff adoption order in the
present case dated 17.10.2007 makes it clear that the
tariff is adopted by the Commission only because the
competitive bidding process which has been
undertaken is in accordance with the guidelines so
issued.
31. All this would make it clear that even if a waiver is
claimed of some of the provisions of the PPA, such
waiver, if it affects tariffs that are ultimately payable by
the consumer, would necessarily affect public interest
and would have to pass muster of the Commission
under Sections 61 to 63 of the Electricity Act. This is
for the reason that what is adopted by the Commission
under Section 63 is only a tariff obtained by
competitive bidding in conformity with guidelines
issued. If at any subsequent point of time such tariff is
increased, which increase is outside the four corners
of the PPA, even in cases covered by Section 63, the
legislative intent and the language of Sections 61 and
62 make it clear that the Commission alone can
accept such amended tariff as it would impact
consumer interest and therefore public interest."
67. Thus, the ratio in Sasan Power (2023) cannot be read as excluding
regulatory intervention altogether; rather, it is confined to situations
where the statute expressly preserves the sanctity of competitively
discovered tariff. In cases falling under Section 62, or involving
issues of grid discipline, public interest, or statutory compliance, the
regulatory authorities retain full jurisdiction, and contractual terms
cannot be enforced in derogation of statutory mandate.
68. It is equally borne out that CSPDCL initiated tariff and true-up
proceedings before the State Commission in 2014, wherein the
Commission, upon detailed examination of load curve data, injection
patterns, and operational parameters, recorded a categorical finding
that the power supplied by the petitioner was non-firm, intermittent,
and unstable in nature. Based on such technical evaluation, the
Commission determined that such power could not be equated with
firm power and accordingly restricted the tariff to a minimum base
rate of Rs. 1.50 per kWh. The said findings were subjected to review
and thereafter carried in appeal before the Appellate Tribunal for
Electricity (APTEL), which, by its judgment dated 26.05.2016,
affirmed the conclusions of the State Commission. These findings,
having attained finality within the statutory framework, are binding
and cannot be lightly interfered.
69. The principal contention advanced by the petitioner is that it was not
impleaded as a party to the tariff or appellate proceedings and was
not afforded any opportunity of hearing before imposing liability, and
therefore, the subsequent demand raised against it is vitiated for
violation of principles of natural justice. While the doctrine of audi
alteram partem is indeed a fundamental facet of fair procedure, its
application must be understood in the context of the nature of the
proceedings in question. The tariff determination and true-up
exercise undertaken by the State Commission are legislative or
quasi-legislative in character, carried out in accordance with the
Conduct of Business Regulations, which contemplate issuance of
public notices and stakeholder participation rather than individual
impleadment of every entity that may be indirectly affected. The
record reflects that public notices were duly issued, proceedings
were conducted transparently, and representatives of industry,
including that of the petitioner, had participated at various stages. In
such circumstances, it cannot be said that the petitioner was wholly
unaware of or excluded from the regulatory process.
70. Moreover, the impugned demand does not arise in isolation but is a
direct consequence of the tariff determination made by the State
Commission and affirmed by APTEL. The statutory scheme under
Sections 61 and 62 of the Electricity Act, 2003, vests exclusive
authority in the Commission to determine tariffs, and such
determination overrides any contractual arrangement to the contrary.
It is well settled that in matters of tariff, the regulatory framework
prevails over private agreements, as the same is guided by
considerations of public interest and consumer protection. Therefore,
even if the PPAs provided for a particular pricing mechanism, the
same would remain subject to the tariff ultimately determined by the
Commission.
71. The submission that the tariff orders did not specifically direct
recovery from the petitioner does not advance the case of the
petitioner. Once it is found, in accordance with law, that the tariff
applicable to the supply in question is lower than what has been paid,
the consequence of adjustment or recovery necessarily follows under
Section 62(6) of the Act, which mandates refund of excess tariff
recovered by a generating company. The absence of an express
direction against the petitioner in the tariff order does not negate the
statutory obligation arising therefrom. The demand raised by
CSPDCL is thus traceable to and supported by the binding tariff
orders and appellate judgment.
72. The argument that concluded transactions cannot be reopened is
also devoid of merit in the present context. The true-up exercise
undertaken by the Commission precisely envisages the adjustment
of past transactions based on actual data and a prudence check.
Such retrospective correction is an integral feature of tariff regulation
and is intended to balance the interests of utilities and consumers.
Accepting the petitioner's contention would defeat the very purpose
of the statutory mechanism and permit retention of amounts found to
be in excess of the permissible tariff, thereby resulting in unjust
enrichment. In this regard, the judgment of Hon'ble Supreme Court in
the case of "Indian Council for Enviro-Legal Action v. Union of
India" 2011 (8) SCC 161 is relevant, in which it has been held that:
"151. Unjust enrichment has been defined as:
"Unjust enrichment. A benefit obtained from another,
not intended as a gift and not legally justifiable, for
which the beneficiary must make restitution or
recompense."
See Black's Law Dictionary, 8th Edn. (Bryan A. Garner)
at p. 1573. A claim for unjust enrichment arises where
there has been an "unjust retention of a benefit to the
loss of another, or the retention of money or property of
another against the fundamental principles of justice or
equity and good conscience".
152. "Unjust enrichment" has been defined by the court
as the unjust retention of a benefit to the loss of
another, or the retention of money or property of
another against the fundamental principles of justice or
equity and good conscience. A person is enriched if he
has received a benefit, and he is unjustly enriched if
retention of the benefit would be unjust. Unjust
enrichment of a person occurs when he has and retains
money or benefits which in justice and equity belong to
another.
153. Unjust enrichment is "the unjust retention of a
benefit to the loss of another, or the retention of money
or property of another against the fundamental
principles of justice or equity and good conscience". A
defendant may be liable "even when the defendant
retaining the benefit is not a wrongdoer" and "even
though he may have received [it] honestly in the first
instance". (Schock v. Nash, A 2d, 232-33.)
154. Unjust enrichment occurs when the defendant
wrongfully secures a benefit or passively receives a
benefit which would be unconscionable to retain. In the
leading case of Fibrosa Spolka Akcyjna v. Fairbairn
Lawson Combe Barbour Ltd 62, Lord Wright stated the
principle thus: (AC p. 61)
"... [A]ny civilised system of law is bound to provide
remedies for cases of what has been called unjust
enrichment or unjust benefit, that is to prevent a man
from retaining the money of or some benefit derived
from another which it is against conscience that he
should keep. Such remedies in English law are
generically different from remedies in contract or in
tort, and are now recognised to fall within a third
category of the common law which has been called
quasi-contract or restitution."
155. Lord Denning also stated in Nelson v. Larholt63 as
under: (KB p. 343)
"... It is no longer appropriate, however, to draw a
distinction between law and equity. Principles have
now to be stated in the light of their combined effect.
Nor is it necessary to canvass the niceties of the old
forms of action. Remedies now depend on the
substance of the right, not on whether they can be
fitted into a particular framework. The right here is
not peculiar to equity or contract or tort, but falls
naturally within the important category of cases
where the court orders restitution, if the justice of the
case so requires."
73. Insofar as the reliance placed by the petitioner on principles of
natural justice is concerned, it must be noted that no prejudice, in the
legal sense, has been demonstrated. The characterization of the
power as non-firm is based on objective technical data relating to
injection patterns, which have been consistently recorded by the
State Commission and affirmed by APTEL. The petitioner has not
placed any material before this Court to dislodge these findings or to
demonstrate that the tariff applied by it was in conformity with the
statutory determination. In the absence of any substantive challenge
to the foundational findings, the plea of violation of natural justice
cannot be invoked as a mere technical ground to invalidate
consequential action.
74. The contention that the dispute involves complex technical issues
further weighs with this Court in declining interference. The
determination of the nature of power supply, its impact on grid
stability, and the appropriate tariff are matters falling within the
domain of expert regulatory bodies. The State Commission and
APTEL, being specialized forums, have examined these aspects in
detail. It is not the function of this Court, in exercise of writ
jurisdiction, to reappreciate such technical findings or sit in appeal
over the conclusions reached by expert bodies.
75. The denial of No Objection Certificate (NOC) and the consequent
rejection of the petitioner's applications for Short Term Open Access
(STOA) by Respondent No. 3 also do not warrant interference. A
scrutiny of the statutory scheme and the material placed on record
would demonstrate that such action is rooted not merely in the
existence of alleged outstanding dues, but in the larger and
paramount consideration of maintaining grid discipline and ensuring
secure, reliable, and economic operation of the power system within
the State. Under Section 31 of the Electricity Act, 2003, the State
Load Dispatch Centre (SLDC) is constituted as the apex body for
integrated operation of the power system within the State, and under
Section 32, it is entrusted with critical functions including scheduling
and dispatch of electricity, monitoring grid operations, keeping
accounts of electricity transmitted, and exercising supervision and
control over intra-State transmission. These functions are not merely
administrative but are technical and operational in nature, requiring
continuous real-time assessment of grid conditions. Further, Section
33 confers wide powers upon the SLDC to issue binding directions to
generating companies, licensees, and other participants in the grid to
ensure stability and discipline. Compliance with such directions is
mandatory, and any deviation has the potential to jeopardize the
entire grid system.
76. In the present case, the record reveals that the petitioner had a
consistent history of injecting power in a fluctuating and
unpredictable manner, with significant variations in generation
ranging from negligible or zero output to sudden high injections. Such
erratic patterns of supply have been specifically noted by the SLDC
in multiple communications issued over a period of time, wherein the
petitioner was repeatedly called upon to adhere to scheduled
generation and maintain grid discipline. These deviations were not
isolated or sporadic but constituted a recurring operational concern,
affecting load management and requiring compensatory adjustments
by the system operator. The consequences of such non-firm and
unstable injection are far-reaching. The grid operates on a delicate
balance between supply and demand, and any significant deviation
can result in overdrawal or underdrawal situations, frequency
fluctuations, and potential grid disturbances. These, in turn, may
attract penalties under applicable regulations and may even pose
risks to the stability and integrity of the transmission system. It is in
this backdrop that the State Commission, in its tariff order, also
recognized the adverse impact of non-firm power on grid operations
and issued directions to discourage such practices.
77. In light of these statutory responsibilities and technical
considerations, the SLDC is duty-bound to exercise caution while
granting open access to any entity. The grant of STOA is not a
matter of right but is subject to the fulfilment of regulatory conditions,
including adherence to grid discipline, technical feasibility, and
system security. Where an entity has demonstrated a pattern of non-
compliance with scheduling norms or has been found to inject power
in a manner detrimental to grid stability, the SLDC would be justified
in withholding or regulating access in the larger public interest.
78. The contention of the petitioner that the denial of NOC was solely on
account of the alleged outstanding dues does not find full support in
the record. While the existence of dues may have been one of the
factors considered, it is evident that the decision was also influenced
by the petitioner's past conduct in relation to grid operations and its
inability to ensure firm and reliable supply. The communications
issued by Respondent No. 3 reflect concerns regarding operational
discipline, compliance with scheduling instructions, and the potential
risk posed to the grid. Therefore, the decision cannot be
characterized as arbitrary or extraneous.
79. It is also pertinent to note that the statutory framework casts a
responsibility upon the SLDC to act in a preventive manner rather
than a reactive one. The objective is to ensure that grid disturbances
are avoided, rather than remedied after occurrence. In such a
scenario, the SLDC is entitled to take into account the past
performance and operational behaviour of an applicant while
considering the grant of open access. The petitioner, having been
repeatedly cautioned and having failed to demonstrate consistent
compliance, cannot claim an indefeasible right to open access.
Judicial review in such matters is necessarily limited. The decision to
grant or deny open access involves technical assessment,
operational expertise, and real-time considerations, which fall within
the domain of specialized authorities. Unless the decision is shown to
be mala fide, perverse, or in clear violation of statutory provisions,
this Court would be slow to interfere. In the present case, no such
infirmity has been demonstrated.
80. The another submission raised by learned counsel for the petitioners
that with respect to other power generators, who are similarly
situated, no order has been passed by the respondents. By
submitting the said contention, the petitioners are claiming negative
parity, which cannot be claimed, as has been held by the Hon'ble
Supreme Court in the case of "R. Muthukumar and others" (supra),
in which in para 28 and 29, it has been held that:
"28. A principle, axiomatic in this country's constitutional
lore is that there is no negative equality. In other words,
if there has been a benefit or advantage conferred on
one or a set of people, without legal basis or
justification, that benefit cannot multiply, or be relied
upon as a principle of parity or equality. In Basawaraj v.
Special Land Acquisition Officer, this court ruled that:
"8. It is a settled legal proposition that Article 14 of
the Constitution is not meant to perpetuate illegality
or fraud, even by extending the wrong decisions
made in other cases. The said provision does not
envisage negative equality but has only a positive
aspect. Thus, if some other similarly situated
persons have been granted some relief/benefit
inadvertently or by mistake, such an order does not
confer any legal right on others to get the same
relief as well. If a wrong is committed in an earlier
case, it cannot be perpetuated."
29. Other decisions have enunciated or applied this
principle (Ref: Chandigarh Admn. v. Jagjit Singh, Anand
Buttons Ltd. v. State of Haryana, K.K. Bhalla v. State of
M.P.17; Fuljit Kaur v. State of Punjab, and Chaman Lal
v. State of Punjab). Recently, in The State of Odisha v.
Anup Kumar Senapati this court observed as follows:
"If an illegality and irregularity has been committed in
favour of an individual or a group of individuals or a
wrong order has been passed by a judicial forum,
others cannot invoke the jurisdiction of the higher or
superior court for repeating or multiplying the same
irregularity or illegality or for passing a similarly
wrong order. A wrong order/decision in favour of any
particular party does not entitle any other party to
claim benefits on the basis of the wrong decision."
81. Accordingly, this Court is of the considered view that the denial of
NOC and rejection of STOA applications by Respondent No. 3 is in
consonance with the statutory mandate under Sections 32 and 33 of
the Electricity Act, 2003, and is justified on grounds of maintaining
grid discipline, system security, and public interest. The action,
therefore, cannot be termed as arbitrary, unreasonable, or without
authority of law.
82. The plea based on the doctrine of approbation and reprobation is
equally untenable. CSPDCL, being a distribution licensee, is bound
to act in accordance with statutory tariff orders and cannot be
estopped from enforcing the same merely because payments were
earlier made under a different understanding. The doctrine of
estoppel cannot operate against a statute, nor can it be invoked to
defeat public interest embedded in tariff regulation. The recovery
sought is not in the nature of repudiation of contract, but in
furtherance of statutory compliance.
83. Having regard to the totality of circumstances, this Court is of the
considered opinion that the demand notice dated 07.07.2016 is not
without jurisdiction, but is a consequential action flowing from binding
tariff orders and the judgment of APTEL. The petitioner has failed to
establish any ground warranting interference under Article 226 of the
Constitution. The issues raised pertain to matters of tariff
determination, technical evaluation, and regulatory policy, which
have already been adjudicated by competent statutory forums.
84. Accordingly, this Court finds no merit in the writ petition. The same is
liable to be and is hereby dismissed. No order as to costs.
85. Interim order granted earlier also stands vacated.
Sd/-
(Ravindra Kumar Agrawal)
Judge
ved
HEAD NOTE
The principle that regulatory authorities cannot
override contractual terms is not of universal application.
Tariff fixation is a statutory function of the Regulatory
Commission and cannot be left to private agreements
between the parties; it is subject to the regulatory
framework, particularly in matters affecting tariff and
public interest.
