Karnataka High Court
State Load Dispatch Centre Operated By ... vs M/S Shree Renuka Sugars Limited on 10 March, 2025
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WA No. 1753 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF MARCH, 2025
PRESENT
THE HON'BLE MR N. V. ANJARIA, CHIEF JUSTICE
AND
THE HON'BLE MR JUSTICE M.I.ARUN
WRIT APPEAL NO.1753 OF 2024 (GM-KEB)
BETWEEN:
1. STATE LOAD DISPATCH CENTRE
OPERATED BY KARNATAKA POWER
TRANSMISSION CORPORATION LIMITED
A BODY ESTABLISHED UNDER
SECTION 31 OF THE ELECTRICITY ACT 2003
SLDC, RACE COURSE CROSS ROAD
ANAND RAO CIRCLE
BENGALURU - 560 009
[REPRESENTED BY ITS CHIEF ENGINEER].
Digitally
signed by H
K HEMA
Location: ...APPELLANT
High Court
of (BY SRI S.S. NAGANAND, SENIOR ADVOCATE
Karnataka
ALONG WITH SMT. SUMANA NAGANAND, ADVOCATE)
AND:
1. M/S. SHREE RENUKA SUGARS LIMITED
A COMPANY REGISTERED UNDER COMPANIES
ACT 2013, HAVING ITS ADMINISTRATIVE OFFICE AT
NO.7, (OLD NO.24)
1ST AND 2ND FLOORS 'SUNANJAYA'
1ST CROSS
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WA No. 1753 of 2024
KUMARA KOT ROAD
BEHIND HOTEL JANARDHAN
RACE COURSE ROAD
BENGALURU - 560 001
REPRESENTED BY ITS AUTHORIZED
REPRESENTATIVE/
ASSISTANT MANAGER
SRI VINAYAK PURANIK.
2. SRI. REVANSIDAPPA KADAKOL
AGED ABOUT 49 YEARS
SHAREHOLDER OF SHREE RENUKA SUGARS
R/O HAVALAGA VILLAGE
AFZALPUR
KALABURAGI - 585 301.
3. STATE OF KARNATAKA
DEPARTMENT OF ENERGY
ROOM NO.236, 2ND FLOOR
VIKASA SOUDHA
DR B.R AMBEDKAR STREET BANGALORE - 560 001
[REPRESENTED BY ITS
ADDITIONAL CHIEF SECRETARY].
4. UNION OF INDIA
MINISTRY OF POWER AND NEW
AND RENEWABLE ENERGY
SHRAM SHAKTI BHAWAN
RAFI MARG
NEW DELHI - 110 001
[REPRESENTED BY ITS SECRETARY (POWER)].
5. CENTRAL ELECTRICITY REGULATORY
COMMISSION,
A STATUTORY BODY FUNCTIONING UNDER
SECTION 76 OF THE ELECTRICITY ACT 2003
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WA No. 1753 of 2024
CORE-3, SCOPE COMPLEX
6TH FLOOR, LODHI ROAD
NEW DELHI - 110 003.
[REPRESENTED BY ITS REGISTRAR].
...RESPONDENTS
(BY SRI P.N. MANMOHAN, ADVOCATE FOR R.1;
R.2 IS SERVED AND UNREPRESENTED;
SRI K.S. HARISH, GOVERNMENT ADVOCATE FOR R.3;
SMT. M.R. SINCHANA, CGC FOR R.4;
SRI PRADEEP NAYAK, ADVOCATE FOR R.5.)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT, 1961, PRAYING TO SET
ASIDE THE ORDER DATED 23.07.2024 PASSED BY THE
LEARNED SINGLE JUDGE IN W.P.NO.1509/2024 (GM-KEB)
AND CONSEQUENTLY DISMISS THE WRIT PETITION, IN THE
INTEREST OF JUSTICE.
THIS APPEAL, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN
AS UNDER:
CORAM: HON'BLE THE CHIEF JUSTICE MR. JUSTICE
N. V. ANJARIA
and
HON'BLE MR JUSTICE M.I.ARUN
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WA No. 1753 of 2024
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE M.I.ARUN)
Aggrieved by the order dated 23.07.2024 passed by the
learned Single Judge in Writ Petition No.1509 of 2024, respondent
no.2 therein has preferred this appeal.
2. For the sake of convenience, the parties are referred to herein
as per their status in the writ petition.
3. Petitioner No.1 is involved in the business of generating
power. Private generators of electricity are at liberty either to sell
the electricity generated in favour of the State where it is generated
or to third parties as per the policy of the Government. The
Electricity Act, 2003 (hereinafter referred to as 'the Act') has been
passed with the following object and reasons:
"An Act to consolidate the laws relating to generation,
transmission, distribution, trading and use of electricity
and generally for taking measures conducive to
development of electricity industry, promoting
competition therein, protecting interest of consumers
and supply of electricity to all areas, rationalization of
electricity tariff, ensuring transparent policies regarding
subsidies, promotion of efficient and environmentally
benign policies, constitution of Central Electricity
Authority, Regulatory Commissions and establishment
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of Appellate Tribunal and for matters connected
therewith or incidental thereto."
4. As per Section 11 of the Act, certain directions can be issued
to the electricity generating companies in public interest. Section
11 of the Act reads as under:
"11. Directions to generating companies.-
(1) Appropriate Government may specify that a
generating company shall, in extraordinary
circumstances operate and maintain any generating
station in accordance with the directions of that
Government.
Explanation. - For the purposes of this section,
the expression "extraordinary circumstances" means
circumstances arising out of threat to security of the
State, public order or a natural calamity or such other
circumstances arising in the public interest.
(2) The Appropriate Commission may offset the
adverse financial impact of the directions referred to in
sub-section (1) on any generating company in such
manner as it considers appropriate."
5. The State of Karnataka, in public interest, issued the
Government Order dated 16.10.2023 under Section 11 of the Act,
which reads as under:
"GOVERNMENT ORDER No.ENERGY 82 PPT 2023,
BENGALURU, DATED: 16.10.2023
In the circumstances explained in the Preamble
and in exercise of the power conferred under Section,
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11 of Electricity Act, 2003, the State Government in the
public interest hereby issues the following Directions,
with immediate effect and until further orders.
1. All the Generators in the State of Karnataka shall
operate and maintain their generating stations to
maximum exportable capacity and supply all the
electricity generated to State Grid subject to following
conditions:
a. ESCOMs shall pay at Rs.4.86/unit
provisionally subject to KERC orders
thereon.,
b. The balance capacity of UPCL plant, over
and above the Contracted capacity with the
ESCOMs under the PPA shall be supplied
to State at PPA rates.
c. Joint meter readings shall be the basis for
raising the monthly invoices.
d. Rebate of 2% shall be allowed on the bill
amount if payment is made within 5 days
from the date of presentation of bill or other
wise 1% shall be allowed if the payments
are made within 30 days.
e. Due date for making payment shall be 30
days from the date of presentation of the
bill.
f. Late Payment Surcharge shall be payable
at one-year marginal cost of lending rate
(MCLR) of the State Bank of India issued
as on 1ST April plus 350 basis points; per
month, if the payments are made beyond
due date.
g. The Jurisdictional Distribution Licensee
shall deduct the energy at 115% for the
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energy, if imported by the Generators
covered by this Section 11 order.
h. Energy injected by Generators under
Section 11 shall be allocated amongst
ESCOMs as per the quantum approved by
KERC in the Tariff order dated 12.05.2023
for the FY 24, is as follows:
BESCOM 46.51%
MESCOM 8.57%
CESC 11.14%
HESCOM 20.60%
GESCOM 13.18%
Total 100.00%
j). The Generators shall raise the bills in the
above proportion to respective ESCOMs.
2. The above directions shall not be applicable for
the Intra-State Generators who are having valid
PPA's with the Distribution Licensees in the State
of Karnataka.
3. All State Electricity Supply Companies
(ESCOMS) shall file a petition within 15 days from
date of this order before the Karnataka Electricity
Regulatory Commission (KERC) for approval of
tariff specified in this order."
6. The petitioners have challenged the said Government Order
in Writ Petition No.1509 of 2024 and prayed the following:
"Wherefore it is prayed that this Hon'ble Court
may be pleased to:
(i) Issue a Writ of Certiorari and quash the order
dated 16.10.2023 bearing No.Government order
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No. Energy 82 PPT 2023, passed by the 1st respondent
(produced as ANNEXURE-"J") and consequently direct
the 2nd respondent to issue NOC/permit to the petitioner
to supply power through open access; and
(ii) Pass such other Writ or order as deemed fit in the
circumstances of the case, in the interest of justice and
equity."
7. The learned Single Judge upheld the said Government Order,
except the condition in Clause 1(d), which reads as under:
"d. Rebate of 2% shall be allowed on the bill amount
if payment is made within 5 days from the date of
presentation of bill or other wise 1% shall be
allowed if the payments are made within 30 days."
8. The operative portion of the order in Writ Petition No.1509 of
2024 reads as under:
"41. The present writ petition is accordingly allowed
and the impugned order, insofar as it relates to the
condition in Clause 1(d) of said order alone, in
quashed."
9. Aggrieved by the same, respondent No.2 has preferred this
writ appeal.
10. Respondent No.1-State supports the contention of
respondent No.2-appellant herein.
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11. The case of respondent No.2 is that in public interest, as per
Section 11 of the Act, the appropriate Government is entitled to
issue a direction, directing that all the power generating companies
to supply the electricity generated only to the State Grid and is also
entitled to fix the rate at which it has to be supplied, provisionally.
It includes, the rebate at which the electricity has to be supplied on
the rate provisionally fixed, if the payment is made by the State
promptly, as in the instant case. It is further submitted that the
power generating companies have the right to approach the
appropriate Commission to offset the adverse financial impact of
any of the directions issued by the State Government and the
petitioners-respondent Nos.1 and 2 in the writ appeal, have the
power to approach the Karnataka Electricity Regulatory
Commission for fixing the necessary rate for the unit of electricity
sold including the rebate ordered by the State.
12. Per contra, original petitioner No.1 submits that the State
under Section 11 of the Act can issue a direction that the electricity
generated by the power generating companies has to be supplied
only to the State Grid at a particular rate. It is contended that the
rebate as mentioned in the condition in clause 1(d) of the
Government Order impugned in the writ petition cannot be
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prescribed by the State and that cannot be a subject matter before
the Karnataka Electricity Regulatory Commission or the Appellate
Authority, as the case may be. For the said reason, original
petitioner No.1 justifies the order passed by the learned Single
Judge and prays for dismissal of the appeal.
13. Original petitioner No.1 has not challenged the order of the
learned Single Judge wherein the impugned Government Order in
the writ petition except the condition in clause 1(d), has been
otherwise upheld.
14. Thus, the only question that arises for consideration in the
instant writ appeal is whether the learned Single Judge erred in
quashing the condition in clause 1(d) of the Government Order?
15. As already stated above, Section 11 of the Act confers power
to the appropriate Government to issue directions to the electricity
generating companies to sell the electricity generated solely to the
State in public interest. The order so passed under Section 11 of
the Act may contain the provisional procurement price or not.
Section 11 of the Act also extends a right to the electricity
generating companies to approach the appropriate commission
which is the Karnataka Electricity Regulatory Commission in this
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case, to offset the adverse financial impact of the directions issued
by the appropriate Government to the electricity generating
companies and the Karnataka Electricity Regulatory Commission,
after examining all the materials placed before it, is entitled to fix
such rate that the State is liable to pay the electricity generating
companies for compulsorily availing the power from them.
16. When the appropriate Government is empowered to fix the
provisional rate at which it intends to procure the electricity, it
includes the manner and method of payment and also the rebate
for prompt payment or surcharge for late payment. If the power
generating companies are not happy about the same, they are also
entitled to challenge the same before the Karnataka Electricity
Regulatory Commission while making an application for fixing a
price for compulsory procurement of the electricity to offset the
adverse financial impact on them. The Karnataka Electricity
Regulatory Commission or the Appellate Authority, is competent to
rule on the rebate or surcharge.
17. When the learned Single Judge concluded that the
Government Order dated 16.10.2023 to be otherwise valid, could
not have quashed the condition in clause 1(d) alone, as the
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Karnataka Electricity Regulatory Commission or the Appellate
Authority can rule on the rebate mentioned in the said condition as
stated above.
18. For the aforementioned reasons, we are of the opinion that
the order of learned Single Judge insofar as it relates to quashing
the condition in clause 1(d) of the Government Order is liable to be
set aside. Hence, the following:
ORDER
(i) The order of the learned Single Judge dated 23.07.2024
passed in Writ Petition No.1509 of 2024 insofar as it relates
to quashing the condition in clause 1(d) of the Government
Order dated 16.10.2023 impugned in the said writ petition is
hereby set aside;
(ii) Consequently, writ petition No.1509 of 2024 is hereby
dismissed;
(iii) The writ appeal stands disposed of accordingly.
Pending applications, if any, stand disposed of. No order as
to costs;
(iv) It is hereby clarified that liberty is reserved for original
petitioner No.1 to challenge the rebate granted as per the
condition in clause 1(d) of the Government Order dated
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16.10.2023 before the Karnataka Electricity Regulatory
Commission or the Appellate Authority, as the case may be.
Sd/-
(N. V. ANJARIA)
CHIEF JUSTICE
Sd/-
(M.I.ARUN)
JUDGE
hkh.
