2019 Supreme(SC) 1311

SUPREME COURT OF INDIA
Arun Mishra, M.R. Shah, B.R. Gavai, JJ.
TRANSMISSION CORPORATION OF ANDHRA PRADESH LIMITED – APPELLANT
VERSUS
M/S RAIN CALCINING LIMITED & OTHERS – RESPONDENTS
CIVIL APPEAL NOS. 4569, 5085, 5084, 5052, 5083, 5079, 5057, 5053, 5066, 5064, 5068, 5054, 5071, 5056, 5077, 5063, 5055, 5080, 5062, 5073, 5069, 5081, 5076, 5059, 5065, 5067, 5075, 5058, 5082, 5061, 5072, 5070, 5074, 5060, 5078, 7093, 7103, 7085, 7086, 7080, 7090, 7079, 7084, 7088, 7104, 7091, 7089, 7041, 7083, 7092, 7087, 7042, 7102, 7043-7078, 8969, 8970, 8971, 8974, 8978, 8972, 8976, 8975, 8977 & 10125-10132 of 2003 With CIVIL APPEAL NO. 1945 OF 2004 AND CIVIL APPEAL NOS. 1946-1947 OF 2004 AND CIVIL APPEAL NOS.7029-7062 OF 2008
Decided On : 29-11-2019

IMPORTANT POINTS
Regulatory powers are extensive and they include whatever needs to be done for achieving the objects and purposes of the Act.
Commission is empowered to fix wheeling charges.
Regulations made u/s 178 of Electricity Act, 2003 intervene and override existing contracts between regulated entities.
High Court could not have interfered with the findings of experts on merits.

Headnote:

(a) Reforms Act, 1998 - Section 11(1) r/w sections 14 and 15 - Determination of wheeling charges - Tariff fixation - Legislative function - APERC exercises the powers of a regulator - Such powers are extensive and they include whatever needs to be done for achieving the objects and purposes of the Act - Wheeling charges being part of tariff, and the provisions of Section 11 being inclusive and primarily dealing with the generation, transmission, and distribution - Held, Section 11 does include the power to fix the wheeling charges relating to the generation, transmission, distribution, supply, and utilization of electricity. (Para 29, 34, 35, 38)

(b) Electricity Act, 2003 - Section 178 - Empowering Central Commission to make regulations - Such Regulation intervenes and overrides existing contracts between regulated entities - However, fixation of tariff not dependent upon framing of regulation. (Para 41)

(c) Conduct of Business Regulations, 2000 - Regulation 45-A r/w section 26(5), Reforms Act, 1998- It is open to the Commission to fix a tariff - Commission having plenary power to prescribe the tariff and charges concerning Transmission and Bulk Supply or Distribution and Retail Supply - No estoppel is created against Commission in respect of concluded contracts. (Para 45, 46, 47, 49)

(d) Promissory estoppel - There is no question of promissory estoppel as regards fixation of wheeling charges. (Para 54)

(e) Interpretation of statute - Repugnancy - Question of repugnancy of Reforms Act, 1998 raised - Validity of no provision of the Act challenged - The question not raised before High Court - Cannot be raised before Supreme Court. (Para 55)

(f) Interpretation - Agreement - Clauses in an agreement ought to be given a plain, literal, and grammatical meaning of the expression - However, provisions of the Reforms Act, 1998 clearly empower the Commission to determine the charges. (Para 57)

(g) Licence No.1/2000 to APTRANSCO - Clause 20 r/w 22 - Incumbent upon APTRANSCO to refer table of tariffs or even system charges/losses incurred under the system - There being integration between transmission and distribution systems it is not joint application but an obligation under the licence, causing no prejudice - Joint application held maintainable. (Para 58, 59)

(h) Reforms Act, 1998 - Section 11(1) - Wheeling charges - Determined by experts - High Court could not have interfered with the findings on merits - That too, without entering into the various aspects considered by the Commission. (Para 61, 62)

(i) Section 11(1) - Grid support charges - No Government Order or Incentive Scheme governing Grid Support Charges - Grid Code as the basis for levy of Grid Support Charges approved by the Commission - No fault. (Para 64)

(j) Electricity Act, 2003 - Section 62 - Government Orders issued on 18.11.1997 and 22.12.1998 extending specific incentives to producers of electricity from non-conventional energy resources -

Scheme confined to three years - No unequivocal commitment to extend the benefits - After three years State Electricity Board required to submit suitable proposals for continuance of incentives in the present form or modified form - Commission extending benefits till 2001 and thereafter while fixing tariff deciding not to extend the benefits - Doctrine of promissory estoppel not attracted. (Para 69, 71)

Facts of the case:

There are three batches of appeals.

In the first batch of appeals, the question arises for consideration concerning the levy of wheeling charges by the appellant – Transmission Corporation of Andhra Pradesh Limited (APTRANSCO). In the second batch of appeals, the question arises for consideration regarding the competence of the APTRANSCO to levy the grid support charges. Admittedly, the outcome of the third batch of appeals depends on the outcome of the first batch of appeals. In the third batch of appeals, the question arises for consideration as to continuance of incentives in respect of wheeling charges granted as per Government Order issued during the year 1997-1998, had to be continued, and whether Commission had the power to review them.

The APTRANSCO proposed a wheeling charge of Rs.1 per Kwh for energy it transmitted through its network. On 24.3.2002, the Commission determined that the wheeling charges for the year 2002-2003 effective from 1.4.2002 would be Paise 50 per Kwh for energy it transmitted through its network. Besides, wheeling charges of 28.4 percent of energy input by the project developer into the licensee’s grid being the system loss was also to be factored. The order of the Commission was questioned before the High Court and the High Court allowed the appeal, setting aside the order dated 24.3.2002 of the Commission.

In the second batch of appeals The Commission held that grid support charges would be payable at the rate of 50 percent of prevailing demand charges on the differential of CPP capacity and CMD. The High Court has set aside the order passed by the Commission.

Finding of the Court:

Regulatory powers are extensive and they include whatever needs to be done for achieving the objects and purposes of the Act.

Commission is empowered to fix wheeling charges.

Regulations made u/s 178 of Electricity Act, 2003 intervene and override existing contracts between regulated entities.

High Court could not have interfered with the findings of experts on merits.

Result: Appeals allowed.