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2021 Supreme(AP) 891

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
M. Venkata Ramana, J.
Southern Power Distribution Company of Andhra Pradesh Ltd. and Ors. – Appellants
Versus
Union of India and Ors. – Respondents
IA No. 1 of 2019 in WP No. 15950 of 2019 and Vacate Stay Petition No. 4 of 2019
Decided On : 15-03-2021

Advocates:
Advocate Appeared:
For the Appellant : S. Sriram
For the Respondent: Sajjan Puvayya, Challa Gunaranjan, T. Surya Karan Reddy, Anikith Prasoon and P. Sri Raghuram

Headnote:

Constitution of India - Article 14 - Electricity Act, 2003 - Section 28(3)(a), 32(2)(a), 29(5), 37, 25, 26, 27, 28 - A.P. Electricity Act - Sections 42 and 59 - There was large scale default in payments by State Distribution Companies all over country and situation went to extent of representing to Ministry of Power, Government of India of their concern, since it was leading to drying up of investments from foreign sources in event payment security is not honoured - This payment security is by way of either advance payment or by opening a Letter of Credit as per Power Purchase Agreement, which a licencee distributor under Electricity Act, 2003 enters into with power generator - This mechanism is to ensure payments for power purchased - Whether in circumstances of case, directions of 3rd respondent by its letter be suspended and an interim order of nature requested by petitioners, be granted – Held, if proposed action of respondent No. 3 materializes, it is public at large, consumers of electricity that suffer immensely - Element of public interest is involved in coming with this request by petitioners to this Court - Though contentions are advanced for respondents that action of respondents 1 to 3 is for good of everyone, in public interest, concern appears more to settle issue relating to power generators, for their receivables, majority of whom are private players in field - When imminent threat is perceived by petitioners in proposed action of third respondent, interim order as requested by them should be granted - Unofficial respondents have sought in their vacate petitions, a direction to petitioners to pay their dues - Scope of this petition and matter in issue would not permit enlarging purview of adjudication to that extent - Already certain measures are in place, in this direction in between these parties and this question is a subject-matter for consideration in other matters pending in between these parties - No relief in this direction can be granted now to unofficial respondents - IA allowed.

ORDER :

M. Venkata Ramana, J.

1. This writ petition is filed by two Power Distribution Government companies in the State of Andhra Pradesh against the respondents 1 and 2, which are the Ministries of the Government of India and third respondent being a Government Corporation of Union of India for the following reliefs:

    "To issue a writ or direction more particularly in the nature of writ of mandamus declaring the action of the respondents 2 and 3 in requiring the petitioners to comply with the requirement of opening Letters of Credit in respect of long term PPAs with Solar and Wind power developers with a consequence of depriving the petitioners of access to power from power exchange and short-term open access vide the impugned proceeding dated 10.10.2019 in pursuance of the impugned communication dated 6.9.2019 addressed by the 2nd respondent to the 3rd respondent as illegal, arbitrary, contrary to the provisions of The Electricity Act, 2003 and consequently set aside the same with a direction to the respondents not to interfere with the operations of the petitioners including power procurement from power exchange and open access and pass such other order or orders as are deemed fit and proper in the facts and circumstances of the case."

2. This Court granted an ad-interim order restraining the respondents 1 to 3 from disallowing the power transactions under STOA (Short Term Open Access) or through power exchange, on 15.10.2019. Respondents 4 to 20 got themselves impleaded filing IA Nos. 2, 3, 5, 7, 8 and 12 and as per orders therein dated 28.11.2019.

3. Except respondent No. 8, others among the respondents 4 to 20 are power generators. Respondents 4 to 7, 9, 10 and 20 have installations (Wind Farms) in the State of Andhra Pradesh in different locations producing wind energy. Respondents 11 to 19 have been producing solar energy in different locations having their installations in the State of Andhra Pradesh. They came up with petitions in IA Nos. 4, 6, 9, 10, 11 and 13 to 16 to vacate the aforestated interim order raising several grounds. Among them IAs. 9 to 11 are filed on behalf of the respondents 1 to 3.

4. Special Leave Petitions (Civil) Nos. 432 of 2021 and 408 of 2021 were filed by the respondents 18 and 19, against the order dated 15.10.2019 whereby an order dated 1.2.2021 the Hon'ble Supreme Court was pleased to direct as follows:

    "In the meantime, the High Court may hear and decide the applications which have been filed by the petitioners for vacating or, as the case may be, modification of the interim orders dated 15.10.2019."

5. By another order dated 22.2.2021, the Hon'ble Supreme Court directed this Court to hear the applications filed by the petitioners therein, viz., respondent Nos. 18 and 19, viz., M/s. Tata Power Renewable Energy Limited and M/s. Walwhan Renewable Energy Limited (formerly M/s. Welspun Renewable Energy Pvt. Ltd.) and dispose of the same for vacating or as the case may be, modification of the interim order dated 15.10.2019 on or before 12.3.2021. It was further ordered that the ad interim order dated 15.10.2019 shall be limited in terms of its tenure until 12.3.2021 by which date a fresh reasoned order be passed either confirming, modifying or vacating the interim order in terms of the order referred to above.

6. The parties as arrayed in writ petition shall be referred to hereinafter, for convenience.

7. The Government of India and the Government of Andhra Pradesh initiated certain measures to augment power generation including by means of non-conventional or renewable sources of energy and unveiled policies. Solar and wind energies are among them. A target of solar power and wind generation of 9,000 MW by 2021-2022 is sought to be achieved on account of these efforts for DISCOMs in the State of Andhra Pradesh. In this process, private investments were also encouraged and the power generating companies were allowed to borrow their working capital from financial institutions to a limited extent and bey

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