Telangana High Court
Sri. Kalvakuntla Chandrashekar Rao vs The State Of Telangana on 1 July, 2024
THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
AND
THE HON'BLE SHRI JUSTICE ANIL KUMAR JUKANTI
WRIT PETITION No.16588 OF 2024
ORDER:
(Per the Hon'ble the Chief Justice Alok Aradhe)
Dr. Aditya Sondhi, learned Senior Counsel appears for
Mr. S.Santosh Kumar, learned counsel for the petitioner.
Mr. A.Sudershan Reddy, learned Advocate General for the
State of Telangana.
2. Heard on the question of admission.
3. In this writ petition, the petitioner has assailed the validity
of G.O.Ms.No.9, Energy (Power.II) Department, dated 14.03.2024
issued by the State Government by which Commission has been
appointed to conduct an enquiry into the correctness and
propriety of the decision taken by the erstwhile Government of
Telangana on procurement of power from the Distribution
Companies (hereinafter referred to as 'the DISCOMS') of the
State of Chhattisgarh and to enquire into correctness as well as
the propriety of the decision taken by the erstwhile State
Government of Telangana to establish Bhadradri Thermal Power
Station (BTPS) at Manuguru and Yadadri Thermal Power Station
(YTPS) at Damaracherla. In order to appreciate the grievance of
the petitioner, the relevant facts need mention, which are stated
infra.
4. The State of Telangana was formed with effect from
02.06.2014. The petitioner served the State as the Chief Minister
of the State for two terms i.e., from June, 2014 till 2018 and
thereafter for a period from 2018 till 2023. As per the averments
made in the writ petition, the State was facing acute power crisis
and public in general suffered on account of deficit power
supply. Therefore, the erstwhile State Government in order to
tide over the immediate electricity crisis was required to take
immediate medium and long term measures and to build power
generating capacity in the State. The erstwhile State
Government, therefore in the year 2014 decided to procure 1000
MW of power from the DISCOMS of the State of Chattisgarh and
Power Purchase Agreement (PPA) was signed on 22.09.2015 for
procurement of 1000 MW of power from the DISCOMS. The
erstwhile State Government also took a decision to establish
Bhadadri Thermal Power Station (BTPS) at Munuguru with
subcritical technology and another Power Generation Station,
namely Yadadri Thermal Power Station (YTPS) at Damaracherla
with coal supply.
5. The election of the State Assembly were held in the month
of November, 2023. Thereafter, a new Government in the State
was formed. The State Government in exercise of powers under
the Commissions of Inquiry Act, 1952 by an order dated
14.03.2024 constituted a Commission to enquire into
irregularities relating to procurement of power from Chattisgarh
by Telangana State DISCOMS and construction of Bhadradri
Thermal Power Station (BTPS) at Manuguru and Yadadri
Thermal Power Station (YTPS) at Damaracherla by the erstwhile
State Government.
6. The Commission, thereupon, by a communication dated
14.04.2024 requested the petitioner to apprise the Commission
with regard to the role played by the petitioner in the matters
mentioned in the Terms of Reference and requested him to visit
the office of the Commission and present his oral version.
7. The petitioner responded to the aforesaid notice by a
communication dated 01.05.2024 and in which inter alia it was
mentioned that General Elections for the Lok Sabha is
scheduled to be held on 13.05.2024 and the results will be
declared on 04.06.2024. It was further stated in the aforesaid
reply that the petitioner being President of Bharatiya Rashtra
Samithi (BRS) and being the Star Campaigner of the party in the
elections, is unable to respond, and therefore, the Commission
was requested to entend the time till 30.06.2024. Thereupon the
Commission by a communication dated 04.05.2024 informed
the petitioner that the Commission is required to submit the
Report within a period of three months. The petitioner, therefore,
was requested to make available his version either by
31.05.2024 or latest by 15.06.2024.
8. The Commission in the meanwhile recorded the Statement
of fifteen witnesses. The Commission, thereafter, held a Press
Conference on 11.06.2024. The petitioner by a communication
dated 15.06.2024 requested the respondent No.3 to recuse
himself from the responsibilities of heading the Commission on
the ground that the respondent No.3 has a
pre-determined opinion and his views reflect the bias. The
Commission, thereafter, in exercise of powers under Sections 8B
and 8C of the Commissions of Inquiry Act, 1952 issued a notice
dated 19.06.2024 to the petitioner, by which the petitioner was
asked to appear before the Commission within one week after
receipt of the aforesaid communication. The petitioner
thereupon has filed the instant writ petition on 24.06.2024
seeking quashment of G.O.Ms.No.9, dated 14.03.2024.
9. Learned Senior Counsel for the petitioner has made the
following submissions:
(i) The impugned order dated 14.03.2024, constituting
Commission to enquire into the correctness and propriety of
the decision taken by the then Government to procure power
from the State of Chhattisgarh is ultra vires the provisions of
the Commissions of Inquiry Act, 1952.
(ii) The impugned order dated 14.03.2024 is without
jurisdiction as the terms of reference were subject matter of
adjudication before both Telangana and Chhattisgarh State
Electricity Regulatory Commissions and the Commission of
Inquiry constituted under the Commissions of Inquiry Act,
1952 has no jurisdiction to record a finding with regard to
the adjudication made by a quasi-judicial authority.
(iii) The petitioner was asked to file a reply before the
Commission on or before 15.06.2024. However, even before
the petitioner could submit the reply, the Commission
headed by the respondent No.3 held a press conference in
which the opinion with regard to involvement of the
petitioner was expressed. It is, therefore, submitted that the
proceeding initiated by the Commission suffers from bias and
the issue pending before it has already been pre-judged, and
(iv) Notice issued under Section 8B of the Commissions
of Inquiry Act, 1952 is in violation of the law laid down by a
Division Bench of this Court in K.Vijaya Bhaskar Reddy v.
Government of Andhra Pradesh 1, which has been upheld
by the Supreme Court in Ghanshyam Upadhyay v. State of
Uttar Pradesh 2.
10. On the other hand, learned Advocate General, who has
appeared on advance notice, submits that the writ petition
preferred by the petitioner is not maintainable in view of the law
laid down by the Andhra Pradesh High Court in K.Vijaya
Bhaskar Reddy (supra) as well as the decision of the Supreme
Court in Ghanshyam Upadhyay (supra) and the same have no
application to the facts of the case. The attention of this Court
has also been invited to the communication sent by the
respondent No.3 to the petitioner and it has been contended that
1 AIR 1996 AP 62 : 1995 SCC OnLine AP 356 : (1995) 3 ALD 534
2 (2020) 16 SCC 811
the averments with regard to bias made in the writ petition are
imaginary. It is further submitted that the news item does not
disclose any bias on the part of the respondent No.3 and the writ
petition has been filed with sole object to stall the proceedings
before the Commission. It is contended that the allegation of
bias has to be responded to by the respondent No.3.
11. Learned Senior Counsel for the petitioner by way of
rejoinder has submitted that in the case of K.Vijaya Bhaskar
Reddy (supra), Division Bench of Andhra Pradesh High Court
has held that rule against bias applies to proceeding under the
1952 Act and the proceeding before the Commission are vitiated
as the respondent No.3 has already pre-judged the issue
pending before him.
12. We have considered the submissions made on rival sides
and have perused the record.
13. Before proceeding further, it is apposite to take note of the
provisions of the Commissions of Inquiry Act, 1952 (hereinafter
referred to as 'the 1952 Act') and the Electricity Act, 2003. The
1952 Act is an Act to provide for appointment of Commissions of
Inquiry and vesting such Commission with certain powers.
Under Section 3 of the 1952 Act, appropriate Government may,
if it is of opinion that it is necessary so to do, and shall, if a
resolution in this behalf is passed by each House of Parliament,
or as the case may be, the Legislature of the State, by
notification in the Official Gazette, appoint a Commission of
Inquiry for the purpose of making an inquiry into any definite
matter of public importance and performing such functions and
within such time as may be specified in the notification. Sections
4 and 5 of the 1952 Act deal with power and additional powers
of the Commission. Section 8B of the Act incorporates the
principles of natural justice and provides that if, at any stage of
the inquiry, the Commission considers it necessary to inquire
into conduct of any person or is of opinion that the reputation of
any person is likely to be prejudicially affected by the inquiry,
the Commission shall give to such person a reasonable
opportunity of being heard in the inquiry and to produce
evidence in his defence.
14. Thus from perusal of the Scheme of the 1952 Act, it is
evident that a Commission of Inquiry appointed under the Act is
purely a fact finding body. The Commission is required to collect
facts through evidence led before it and on a consideration
thereof, is required to submit its Report, which the appointing
authority may or may not accept. The Commission of Inquiry
has neither any power to pronounce a binding or definitive
judgment nor has power to enforce its Report. It has been held
by the Supreme Court that sensitive matters of public
importance, if left to normal investigation agencies, can create
needless controversies and generate an atmosphere of suspicion.
Therefore, in the larger interest of the community, such matters
should be inquired into by a high-powered Commissions
consisting of persons whose findings can command the
confidence of the people (see Ram Krishna Dalmia vs.
S.R.Tendolkar 3 and State of Karnataka vs. Union of India
and another 4).
15. The Electricity Act, 2003 is an Act inter alia 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 etc. Section
86(1)(f) of the Act provides that the State Commission shall
adjudicate the disputes between the licensees and generating
companies and to refer any dispute to arbitration. Section 111 of
the Act provides for an Appeal to Appellate Tribunal for
AIR 1958 SC 538
AIR 1968 SC 78
electricity. An Appeal against an order of the Appellate Tribunal,
under Section 125 of the Act can be filed before the Supreme
Court.
16. After having noticed the relevant provisions, we may advert
to the issues which arise for consideration in this petition.
(i) Whether the Commission has jurisdiction to enquire
into correctness and propriety of the decision taken by the then
Government to procure power from the DISCOMS of the State of
Chhattisgarh and in establishing Bhadradri Thermal Power
Station (BTPS) at Manuguru and Yadadri Thermal Power Station
(YTPS) at Damaracherla, as the issue has already been
adjudicated by State Electricity Regulatory Commissions? and
(ii) Whether the proceeding before the Commission
suffers from bias as the respondent No.3 in a Press Conference
held on 11.06.2024 has pre-judged the issues pending before
the Commission of Inquiry?
17. Firstly, we deal with the first issue. Admittedly, Power
Purchase Agreement (PPA) was entered into on 22.09.2015
between Chattisgarh State Power Distribution Company Limited
(CSPDCL) and Southern Power Distribution Company of
Telangana Limited (TSSPDCL) & Northern Power Distribution
Company of Telangana Limited (TSNPDCL). Several persons,
who were aggrieved by the proposed tariff determination under
the said PPA, approached the Telangana State Electricity
Regulatory Commission. The Telangana State Electricity
Regulatory Commission after holding the public hearing, passed
order on 31.03.2017 in O.P.No.93 of 2015, by which tariff was
determined at the rate of Rs.3.90 per KWH. The said
Commission further directed that the Telganana DISCOMS
should get the tariff fixed by the Chattisgarh State Electricity
Regulatory Commission. The Chattisgarh State Electricity
Regulatory Commission vide order dated 07.07.2018 determined
the project cost for arriving at tariff. The Telangana DISCOMS
against the aforesaid order have filed an Appeal under Section
111 of the before the Appellate Tribunal, namely Appeal No.391
of 2018 which is pending before the Appellate Tribunal.
However, the copies of the orders passed either by the Telangana
State Electricity Regulatory Commission or by the Chattisgarh
State Electricity Regulatory Commission have not been annexed
with the petition. However, as per the averments made in the
writ petition itself, it is evident that the issue with regard to
project cost and fixation of tariff was adjudicated by the
Telangana State Electricity Regulatory Commission and the
Chattisgarh State Electricity Regulatory Commission.
18. The Terms of Reference for inquiry read as under:
Notification-I
3. The above Commission of Inquiry shall have the
following Terms of Reference for inquiry:
A. To enquire into the correctness and propriety of the
decision taken by the Government of Telangana:
i. in the year 2014 to procure power from
the DISCOMS of the State of
Chhattisgarh, without following the
process of open competitive bidding but
on nomination basis,
ii. directing its DISCOMS to apply for
corridor for 2000 MW with PGCIL solely
on the basis of anticipation against the
contracted capacity of 1000 MW.
iii. to make full payment to PGCIL with
respect to corridor for the full contracted
capacity i.e., 1000 MW from the State of
Chhattisgarh despite scheduling of power
much below the contracted capacity,
leading to huge financial implications for
the State of Telangana.
B. To enquire into the correctness and propriety of
the decision taken by the Government of Telangana:
i. to establish the Bhadradri Thermal Power
Station (BTPS) at Manuguru with
"subcritical" technology rather than the
more efficient "supercritical" technology
on the grounds of shorter implementation
timeframe of two years while taking seven
years to complete the project with
significant cost overrun,
ii. in awarding the EPC contract for
establishment of the said unit without
taking recourse to the process of open
competitive bidding but purely on
nomination basis.
C. To enquire into the correctness and propriety of
the decision taken by the Government of Telangana:
i. for establishing Yadadri Thermal Power
Station (YTPS) at Damaracherla with coal
supply from the coalfields of Singareni
Collieries Company Limited located at
distances ranging from 179 to 388 km
resulting in considerable coal transport
cost leading to higher cost of power for
DISCOMs,
ii. in awarding the EPC contract for
establishment of the said unit without
taking recourse to the process of open
competitive bidding but purely on
nomination basis.
19. Para 4 of the Terms of Reference provides that in addition
to Terms of Reference made in para 3 of the Notification, the
Commission shall also fix the responsibility for the lapses that
may be identified in the matters and indicate financial
implications of the lapses, so identified. The Commission is
required to submit its Report to the State Government by 30th
June, 2024. Thus, it is evident that the Terms of Reference are
far more wider than the issues adjudicated by the State
Regulatory Commissions with regard to fixation of tariff and do
not include the issues adjudicated by the aforesaid
Commissions. Therefore, the contention that the Commission
does not have jurisdiction to adjudicate the issues which have
been decided by the Telangana State Electricity Regulatory
Commission and the Chattisgarh State Electricity Regulatory
Commission, which are quasi judicial bodies, does not deserve
acceptance. Accordingly, the first issue is answered in the
affirmative by stating that the Commission has jurisdiction to
enquire into the Terms of Reference.
20. Now we may advert to the second issue. "Bias" in common
English parlance means and implies predisposition or prejudice.
It may be defined as a pre-conceived opinion or a pre-
determination or a pre-disposition to decide a case or an issue in
a particular manner. It can be said to be a predisposition to
decide for or against one party without proper regard to the true
merits of the dispute (see Secretary to Government, Transco
Department vs. Munuswamy Mudaliar 5). "Bias" is in fact can
be described as a condition of mind which sways judgments and
AIR 1988 SC 2232
renders the judge unable to exercise impartiality in a particular
case (see A.K.Kraipak vs. Union of India 6 and State of West
Bengal vs. Shivananda Pathak 7 ). It is well settled legal
proposition that presumption of bias is not legally available and
the question of bias has to be established and not inferred (see
State of Rajasthan vs. Ram Chandra 8). The allegation of bias
must be genuine and sufficient material in support thereof has
to be furnished (see Union of India vs. Vijay Kumar Garg 9).
"Bias" has three major limbs, namely pecuniary bias, personal
bias and official bias. It is equally well settled in law that to
decide whether a proceeding may be vitiated by bias or not, the
test always is whether there is a reasonable ground for believing
that decision maker was likely to be biased. Therefore, the test of
real likelihood of bias has to be applied to ascertain whether a
proceeding is vitiated in law on account of bias.
21. Before issuing notice to the respondent No.3, the Court is
required to satisfy, whether prima facie the allegation of bias
against the respondent No.3 is made out. In the backdrop of the
aforesaid well settled legal principles, we may now refer to the
AIR 1970 SC 150
AIR 1998 SC 2050
AIR 2005 SC 2221
1997 (1) SCALE (SP) 24
facts of the case in hand. The respondent No.3 had sent a notice
dated 14.04.2024 to the petitioner. The relevant paragraphs read
as under:
"2. During the course of preliminary examination
and perusal of the relevant files, it is prima facie noticed that
you have taken part in the decision making process, in
relation to the above cited matters.
3. It is felt that the information or inputs from you
will help the Commission in arriving at proper conclusions
and in recording correct findings.
4. You are therefore requested to apprise the
Commission, of the role played by you in the matters
mentioned in the Terms of Reference, extracted above or any
of them. A written version of your view on the above subject
may be forwarded to the Office of the Commission or
through e-mail at [email protected] within 15 days
from the date of receipt of a copy of this letter. If you wish to
peruse the relevant records, you may indicate the same and
the Office of the Commission will make necessary
arrangements in this behalf.
5. The Commission will be grateful to you, if you
can make it convenient to visit the office and present your
oral version, which would be recorded in accordance with
law. In case, you express your willingness in this behalf, a
convenient date and time will be fixed for this purpose by
the Office of the Commission. You will also be extended the
facility under Sections 8B and 8C of the Commissions of
Inquiry Act, 1952."
22. The petitioner thereupon made a request on 01.05.2024
for extension of time on the ground that elections to the
Parliament are due and sought time till the end of June, 2024.
The respondent No.3 thereupon by a communication dated
04.05.2024 informed the petitioner as follows:
"3. I would like to impress upon you that the
Commission is required to submit its report within 3
months. Since the Polling in the Telangana State is taking
place on 13.05.2024, you may consider the feasibility of
making your version, in relation to the Terms of Reference
by 31st May, 2024 or latest by 15th June, 2024. Your gesture
in this behalf would be highly appreciated."
23. Thereafter, the respondent No.3 held a Press Conference
on 11.06.2024. The translated version of extract of the press
conference annexed to the writ petition, reads as under:
"Press Reporters will be informed about the details of what
happened in this Commission so far:-
1. Power Purchase Agreement
2. Bhadradri Thermal Power Station
3. Yadadri Thermal Power Station
All the three projects were awarded without tender
process and awarded with direct negotiation. Firstly to
Chhattisgarh Power Agency and secondly for construction,
BHEL Contracts.
We have identified around 25 people (officials/un-
officials) who have been involved in the contract and notices
were served to all. Replies were received from all except Sri
Chandrashekar Rao Garu, Former Chief Minister of
Telangana, requested time till 30th July, but we are
addressing a letter to him stating to submit the reply before
15th June, as time is limited.
On the basis of the information secured and gathered,
after the interaction with the former CMD of BHEL and the
present CMD Sri Prabhakar Rao, Former CMD of GENCO
and Sri Suresh Chandra, the then Principal Secretary, we
asked them on what circumstances these contracts were
signed. They stated that the decision was only taken by the
then State Government. GENCO and other agencies were not
involved in the contract.
Yesterday, Suresh Chandra said that he was in a
limited period and he had not taken any decision on the
project. Today we had an interaction with SK Joshi and
Arvind Kumar. Sri SK Joshi said initially a Government
Order (GO) was issued in which there was an acute power
shortage in Telangana in the year 2014. 2000 megawatts of
power purchase is required to negotiate with southern
states.
It was further observed that after two months of
issuance of the above said GO, an amendment was carried
out in the GO. Initially the power can be purchased only
from the southern states but after the amendment it was
modified to the power can be purchased from anywhere in
the country.
In the meanwhile, MOU was executed with
Chattisgarh. After that Power Purchase Agreement was
executed by CPDCL (Power Distribution Company) in which
Government officials was not involved. Sri Arvind Kumar
garu addressed a detailed letter at the end of November,
2016, letter to the Regulatory Commission, saying that after
the execution of Power Purchase Agreement with
Chhattisgarh, there is a lot of financial burden. They can
save a lot of money if they go through the bidding process in
the open market.
Sri Suresh Chandra said he was not in the post of
Secretary, he was transferred to another post, he was
looking for all the files for further developments, who has
done what, after considering the detailed letter dated
30.11.2006, I have passed an interim order, after execution
of Power Purchase Agreement (PPA). The Authority was given
to only Chhattisgarh Regulatory Commission. Actually the
Central Regulatory Commission is the competent authority.
But, both States agreed and given to Chhattisgarh. Sri
Arvind Kumar addressed a letter to State ERC, they advised
that the matter shall be looked by the States only not here.
Overall he suggested to go for the Chhattisgarh State only.
The result is that there is a financial implication and we
have not worked out in detail. According to the information
given by them, costs will be very heavy.
The question is that why did tender process was not
adopted, due to acute shortage power and in emergency
direct nomination was adopted. But as per the record, the
power plant is not in existence, it is under construction, it
was started somewhere in the year 2017, it was supplied for
three to four years, after that it was also stopped. We need to
check in the entire process how much loss occurred.
Coming to Bhadradri, throughout India there is
supercritical technology, but here subcritical has been
adopted, subcritical technology causes not only pollution
but we also have economic losses some persons estimated
roughly around 1000 crores. We have arrived at a
preliminary estimate that the loss will be around 250 to 300
crores through an extra coal. It was done for the reason that
we will get immediate access, but the Telangana Government
has already established a super critical unit at Kothagudem
and we got the information.
Coming to Yadadri, it was allotted under the
nomination basis, but till now the production has not
started, so it was initially imported and then the Indigenous
pool, the railway line has not even finished. When I visited
recently, they said that they will start the production of one
unit by August, I have got my own doubts about the
completion of railway line. Unless there is availability of coal,
the railway line would not be able to finish. Apart from the
officials, there have been suggestions from some other
people too, especially Sri Raghu, Kodandaram and
Venugopal, we are trying to get their opinion as well.
Thank you"
24. Thus, from perusal of the aforesaid relevant extract, it is
evident that the conference was held to update the Media about
the status of the proceeding before the Commission. The
statement that "power plant is not in existence, it is under
construction" is based on record. The relevant extract does not
contain any material so as to indicate that the respondent No.3
has pre-judged the issues pending before him. The Commission
is required to record the findings on the basis of material
produced before it. We cannot also lose sight of the fact that the
respondent No.3 held the Constitutional Office of the Chief
Justice and has worked as constitutional functionary. The
allegation of bias against the respondent No.3 is solely based on
the statement reportedly made in the press conference and no
other material has been produced to show that the proceeding
before the respondent No.3 is vitiated on account of personal
bias. The allegation of bias cannot be inferred but have to be
established. In the facts and circumstances of the case, we hold
that the petitioner has failed to prove the plea of bias against the
respondent No.3. Therefore, the proceeding before the
respondent No.3 is not vitiated on the ground of bias. The
second issue is therefore answered in the negative.
25. The contention that the order dated 14.03.2024 has been
issued in violation of 1952 Act does not deserve acceptance.
Similarly, the contention that the Notice issued under Section
8B of the 1952 Act is in violation of Section 8B of 1952 Act does
not deserve acceptance as in the said Notice, it has been stated
that from a perusal of relevant files prima facie, it appears that
the petitioner had participated in the decision making.
26. In view of preceding analysis, we do not find any merit in
the writ petition and the same fails.
In the result, the writ petition is dismissed in limine. There
shall be no order as to costs.
Miscellaneous petitions, pending if any, shall stand closed.
_______________________________
ALOK ARADHE, CJ
_______________________________
ANIL KUMAR JUKANTI, J
01.07.2024
Pln
