ORDER :- Both these writ petitions are filed by A.P. Gas Power Corporation Limited (APGPCL), aggrieved by a common order passed by A.P. Electricity Regulatory Commission (APERC), the first respondent herein, in O.P. (SR) Nos. 19 and 20 of 2004 dated 4-6-2004. This common order shall dispose of both the writ petitions.

2. O.P. (SR) No. 19 of 2004 was filed by A.P. Transmission Corporation Limited (A.P. TRANSCO) under Section 86(1)(f) of the Electricity Act, 2003 (the Act, for brevity) seeking orders from APERC to direct APGPCL to allocate surrendered energy to A.P. Transco from latter's 172 MW, Stage II Power Plant on pro rata basis from the date of Memorandum of Understanding-II (MoU-II). O.P. (SR) No. 20 of 2004 was also filed by A.P. Transco under Section 86(1)(f) of the Act praying APERC to pass orders directing APGPCL that allocation of power from latter'sn power plants cannot be made to consumers other than HT Industrial Consumers as per provisions of MoU-I and MoU-II.

3. A. P. TRANSCO in its application being O.P. (SR) No. 19 of 2004 contended that as per clause 6 of MoU-II, it is entitled for full allocation of unutilized power by any participating industry and that in spite of repeated demands made by it, APGPCL did not allocate unutilized/surrendered energy by participants to A.P. TRANSCO . In its application, O.P. (SR) No. 20 of 2004, A.P. TRANSCO pleaded as follows. APGPCL has two Gas Power Plants at Vijjeswaram of capacity 100 MW and 170 MW. The power generated by APGPCL is shared by participating industries in proportion to the equity contributed by them in the power plants. As per MoU-II, a participating industry can transfer their shares to medium and large scale industries having industrial connections with A. P. TRANSCO. But M/s. VBC Ferro Alloys, a participating industry sold 1.0 MW share in Stage II to M/s. Tata Tele Services Limited which comes under commercial category. By reason of this, A. P. TRANSCO will lose revenue equivalent to difference between tariff of HT commercial and industrial consumers and the loss of revenue Rs. 0.90 ps per unit. Though A. P. TRANSCO refused to give effect to transfer of shares by M/s. VBC Ferro Alloys to M/s. Tata Tele Services Limited on the ground that the latter is a commercial category consumer, APGPCL continued to allocate power to M/s. Tata Tele Services Limited and therefore a direction was sought to APGPCL not to allocate power to consumers other than HT Industrial consumers as per MoU-I and MoU-II.

4. APERC thought it necessary to issue notice to A. P. TRANSCO and APGPCL before admitting the two original petitions. Accordingly, notices were issued. In response to notices, APGPCL filed countries in both the original petitions, inter alia, making identical averments on the question of jurisdiction. APGPCL contended that the disputes raised by A. P. TRANSCO did not fall within the jurisdiction of APERC as per Section 86(1)(f) or Section 158 of the Act, that the relationship between A. P. TRANSCO and APGPCL in the matter of power allocation, power sharing and power transfer are governed by MoU-I or MoU-II entered among the shareholders and APGPCL and therefore the dispute, if any, does not fall within Section 86(1)(f) of the Act. It was also urged that any dispute in relation to or arising out of MoU-II has to be settled by way of arbitration and that APERC has no jurisdiction to resolve the dispute under 86(1)(f) of the Act. The APERC considered these aspects in the background of the provisions of the Act and came to the conclusion that disputes raised by A. P. TRANSCO are those which arose between the licensee and generating company and therefore APERC has got jurisdiction to adjudicate upon the disputes.

5. The learned counsel for APGPCL, Sri C. V. Nagarjuna Reddy, submits that APERC has no jurisdiction to entertain and adjudicate the dispute raised by A. P. TRANSCO as no dispute pertaining to functions of A. P. TRANSCO arose. As investment made by it in the c