Madras High Court
Indian Wind Power Association vs Tamil Nadu Generation And ... on 8 December, 2021
W.P.No.22406 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 08.12.2021
Coram
The Honourable Mr.Justice Krishnan Ramasamy
W.P.No.22406 of 2017
and
W.M.P.No.22503 of 2017
Indian Wind Power Association,
rep. by its Secretary General,
Door No.E, 6th Floor,
Shakti Towers -II,
766, Anna Salai,
Chennai – 600 002. ...Petitioner
Vs.
1. Tamil Nadu Generation and Distribution,
Corporation Ltd., (TANGEDCO)
rep. by its Chairman and Managing Director,
10th Floor, 144, Anna Salai,
Chennai -600 002.
2. Tamil Nadu Electricity Regulatory Commission,
rep. by its Secretary,
19-A, Rukumini Lakshmipathy Salai,
Egmore, Chennai – 600 008. ...Respondents
1/11
https://www.mhc.tn.gov.in/judis
W.P.No.22406 of 2017
Writ Petition filed under Article 226 of the Constitution of India
praying for the issuance of a Writ of Mandamus, directing the first respondent
to release the interest on delayed payments, in terms of the order of the
Hon'ble Supreme Court, dated 08.07.2016, in I.A.No.4 of 2016, in Civil
Appel No.2937 of 2014 and Honourable Appellate Tribunal for Electricity in
a time bound manner.
For Petitioner : Mr.Rahul Balaji
For Respondent-1 : Mr.L.Jai Venkatesh
Standing Counsel
ORDER
This Writ Petition is filed, seeking for a mandamus directing the first
respondent to release the payment pertaining to the interest on delayed
payments, in terms of the order of the Hon'ble Supreme Court, dated
08.07.2016, in I.A.No.4 of 2016, in Civil Appel No.2937 of 2014 and
Honourable Appellate Tribunal for Electricity in a time bound manner
2. The petitioner herein is an Association represented by its Secretary
General. The petitioner-Association is a registered association, consisting of
members, who have invested in the putting up of Windmills in India. The
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W.P.No.22406 of 2017
members of the petitioner-Association have established Wind Power
Generation Projects for the purpose of sale of power generated and has
entered into power purchase agreements with the first respondent-
TANGEDCO. The power generated by these units is being sold to
TANGEDCO under respective agreements. The grievance of the petitioner is
that, the members of the petitioner-Association has been raising invoices from
time to time in accordance with the contracts and Tarriff Orders. However,
the payments that have been received from respondent-TANGEDCO are
being consistently delayed, that too, without any interest for such belated
payment. Such non payment of interest is a denial of a valuable right
conferred by specific Tariff orders and the judgments of the Honourable
Supreme Court and APTEL. Hence, the present Writ Petition is filed seeking
for the aforesaid relief.
3. The learned counsel appearing for the petitioner submits that, in
the light of the order passed by the Appellate Tribunal for Electricity in
Appeal No.11 of 2012, dated 17.04.2021, which was also confirmed by the
Honourable Supreme Court, in I.A.No.4 of 2016 in Civil Appeal (No) S.2937
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W.P.No.22406 of 2017
of 2014, dated 08.07.2016, the petitioner is entitled for the interest at the rate
of 10%p.a. towards the payments made belatedly. Despite the said order,
the respondent-TANGEDCO has not paid the interest for the belated
payments made by them.
4. Mr.L.Jai Venkatesh, learned Standing Counsel for the respondent-
TANGEDCO fairly admitted that in the light of the orders relied upon by the
learned counsel for the petitioner, the petitioner is entitled to the interest at
the rate of 10% on such belated payments made by the respondent-
TANGEDCO and the same will be paid, if a direction is issued by this Court.
5. During the course of arguments, the learned counsel for the
petitioner expressed his anguish that despite Section 86 of the Electricity Act,
2003, which clearly enumerates as to what are the functions of the State
Commission to be performed and despite the Hon'ble Supreme Courts
expressing its peevishness over the conduct of the State Commission in not
functioning, with what purpose, it is purported to act upon, viz, in the
decision rendered in the case of Maharashtra State Electricity Distribution
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W.P.No.22406 of 2017
Company Ltd., Vs. Maharastra Electricity Regulatory Commission,
reported in 2021 SCC Online APTEL 65, the learned counsel states that
the State Commission carred pittance over the same. Hence, the learned
counsel seeks for specific direction of this Court, directing the Tamil Nadu
Electricity Regulatory Commission to monitor entire activities of the
TANGEDCO, including payment of interest by the first respondent to the
members of the petitioner-Association in terms of the order passed by the
Honourable Supreme Court, in Appeal No.386 of 2019, referred to above,
and in terms of Section 86 of the Electricity Act, 2003.
6. This Court finds sum and substance in the point urged before this
Court by the learned counsel for the petitioner. Obviously, Section 86
contemplates on what are the functions of the State Commission to be
performed for promotion of investment in electricity industry; for promotion
of competition, efficiency and economy in activities of the electricity industry;
and so on, and in this connection, it would be useful to refer to the said
Section, which is extracted herein below:-
Section 86. (Functions of State Commission): -
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W.P.No.22406 of 2017
(1) The State Commission shall discharge the
following functions, namely: -
(a) determine the tariff for generation, supply,
transmission and wheeling of electricity, wholesale,
bulk or retail, as the case may be, within the State:
Provided that where open access has been permitted to
a category of consumers under section 42, the State
Commission shall determine only the wheeling
charges and surcharge thereon, if any, for the said
category of consumers;
(b) regulate electricity purchase and procurement
process of distribution licensees including the price at
which electricity shall be procured from the generating
companies or licensees or from The Electricity Act,
2003 other sources through agreements for purchase of
power for distribution and supply within the State;
(c) facilitate intra-State transmission and wheeling of
electricity;
(d) issue licences to persons seeking to act as
transmission licensees, distribution licensees and
electricity traders with respect to their operations
within the State;
(e) promote co-generation and generation of electricity
from renewable sources of energy by providing
suitable measures for connectivity with the grid and
sale of electricity to any person, and also specify, for
purchase of electricity from such sources, a percentage
of the total consumption of electricity in the area of a
distribution licensee;
(f) adjudicate upon the disputes between the licensees,
and generating companies and to refer any dispute for
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W.P.No.22406 of 2017
arbitration;
(g) levy fee for the purposes of this Act;
(h) specify State Grid Code consistent with the Grid
Code specified under clause (h) of sub-section (1) of
section 79;
(i) specify or enforce standards with respect to quality,
continuity and reliability of service by licensees;
(j) fix the trading margin in the intra-State trading of
electricity, if considered, necessary; and
(k) discharge such other functions as may be assigned
to it under this Act.
(2) The State Commission shall advise the State
Government on all or any of the following matters,
namely :-
. (i) promotion of competition, efficiency and
economy in activities of the electricity industry;
(ii) promotion of investment in electricity industry;
(iii) reorganization and restructuring of electricity
industry in the State; The Electricity Act, 2003
(iv) matters concerning generation, transmission,
distribution and trading of electricity or any other
matter referred to the State Commission by that
Government.
(3) The State Commission shall ensure transparency
while exercising its powers and discharging its
functions.
(4) In discharge of its functions, the State Commission
shall be guided by the National Electricity Policy,
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W.P.No.22406 of 2017
National Electricity Plan and tariff policy published
under section 3''.
6.1 A perusal of the above Section would show that, it is the duty of
the TNERC to adjudicate upon the dispute arising between the licensees and
Generating Companies, and in fit case, to refer the dispute for arbitration
proceedings. In the present case, the respondent-TANGEDCO has been
making delayed payment to the members of the petitioner-Association. In
case of delay, the members of the petitioner-Association are entitled for
interest and the said interest would be on commercial rate. In fact, the
Hon'ble Supreme Court also upheld the payment of interest by the Electricity
Generating Companies to the licensees in the case of belated payment, in
I.A.No.4 of 2016, in Civil Appeal No.2937 of 2014, dated 08.07.2016 and in
Appeal No.386 of 2019.
6.2 Therefore, this Court is of the view that the present transaction
between the petitioner-Association and the respondent-TANGEDCO, which
is with regard to supply of energy is no doubt a commercial transaction.
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W.P.No.22406 of 2017
Therefore, the members of the petitioner-Association are entitled to the
interest for such belated payment at commercial rate. However, the Hon'ble
Supreme Court rationalized the said commercial interest at 10%, which would
be just and reasonable.
6.3 Hence, this Court directs the respondent-TANGEDCO to pay
interest, wherever, there is delay in settling the dues to the members of the
petitioner-Association more than 60 days. From 61st day and till the date of
clearing the entire dues to the members of the petitioner-Association, interest
shall be paid at the rate of 10% by the respondent-TANGEDCO. It is made
clear that, this Court is passing this order due to the fact that the second
respondent-TNERC has not taken any steps to decide the present dispute,
which, it ought to have done, as per the provisions contemplated under
Section 86 of the Electricity Act, 2003. It is further made clear that, in case,
the members of the petitioner-Association made any claim seeking interest
more than 10%, the second respondent-TNERC is always at liberty to
consider and decide the same in accordance with law.
7. With the above observations and directions, the Writ Petition
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W.P.No.22406 of 2017
stands disposed of. No costs. Consequently, connected Miscellaneous
Petition is closed.
08.12.2021
sd
Index : yes/no
Speaking Order/Non speaking order
To
1. Tamil Nadu Generation and Distribution,
Corporation Ltd., (TANGEDCO)
rep. by its Chairman and Managing Director,
10th Floor, 144, Anna Salai,
Chennai -600 002.
2. Tamil Nadu Electricity Regulatory Commission,
rep. by its Secretary,
19-A, Rukumini Lakshmipathy Salai,
Egmore, Chennai – 600 008.
Krishnan Ramasamy,J.,
https://www.mhc.tn.gov.in/judis
W.P.No.22406 of 2017
sd
W.P.No.22406 of 2017
08.12.2021
https://www.mhc.tn.gov.in/judis
