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2019 Supreme(Kar) 423
IN THE HIGH COURT OF KARNATAKA
S. SUJATHA, J.
Renew Power Limited – Appellant
Versus
Bangalore Electricity Supply Company Ltd. – Respondent
Writ Petition Nos. 22838, 22841, 22842, 23069, 23070, 23078, 23080, 23085, 23086, 23108, 23109, 23116, 23118, 23119, 23158, 23159, 23160, 23161, 23162, 23242, 23449- 23457, 23696, 23700, 23851, 23990, 23991, 23992, 23993, 23994, 23995, 24248, 24249, 24250, 24251, 24252, 24253, 24254, 24255, 24256, 24257, 24258, 24259, 25090, 26480, 28622, 39329, 53531 of 2018
Decided On : 13-03-2019
Advocate Appeared:
Aditya Sondhi, Shahbaaz Hussain, S.S. Naganand, S. Sriranga, M.C. Nagashree, Murugesh V. Charati, H.V. Devaraju, B.N. Prakash, Prabhuling K. Navadgi, N. Venkataraman, Suraj Govinda Raj, Nikhilesh Rao, Jyothi, Aravind Kamath, S.S. Nagananda, Arvind Kamath K., Rajeswara P.N., C. Muralidhara, Shahabaaz Hussain, Prashant T. Pandit, Dhyan Chinnappa, Shanmuka G.C., Prashanth T. Pandit, Harikrishna S. Holla, Shivaprasad Shantanagoudar, Devaraju H.V., G.C. Shanmukha, Ravindra Reddy, Reuben Jacob, Shridhar Prabhu, Shodhan Babu A.M.
Headnote:
Constitution of India,1950 - Articles 14, 5 , 226 and 227 - Open Access Regulations 2004 - sections 42(2), 61 and 62 of the Act, Rule 11 - General Clauses Act, 1897 - Section 21 - Civil Procedure Code,1908 - Section 151 - Gross subsidy surcharge - Transmission losses and cross subsidy Surcharge of Renewable Energy - Whether concession for wheeling and banking ought to be given - Whether requirement of non-judicial member was legal - Orders passed by commission are in accordance with law and have been passed in exercise of the jurisdiction vested in it - Whether writ petitions are maintainable circumventing alternative remedy of appeal provided under Section 111 of the Act - Whether KERC is estopped from withdrawing the exemption granted on the wheeling and banking charges before the completion of term period by virtue of doctrine of promissory estoppels - Whether the order impugned suffers from discrimination and thus hit by Article 14 of the Constitution of Indi - Whether existence of judicial member is sine qua non for the Tribunal to pass the orders - Whether in the absence of the Regulation framed under Section 181 of the Act, the KERC is empowered to interfere or revise the wheeling and banking charges with the existing contractual relationship between the regulated entities - Petitioners have challenged the order dated 14.5.2018 (impugned order) passed by the Karnataka Electricity Regulatory Commission (KERC), Bengaluru under the provisions of the Electricity Act, 2003 [Act for short] and the KERC (Terms and Conditions for Open Access) Regulations, 2004, which deals with open access charges including wheeling and banking charges, transmission losses and cross subsidy surcharge of Renewable Energy [RE] projects commissioned between 01.04.2013 and 31.3.2018. The open access charges for RE projects commissioned between 01.04.2013 and 31.3.2018 were governed by two separate orders of the KERC - Mini hydel power plants and the order dated 18.8.2014 dealt with solar power plants. The wind/Mini hydel power plants under order dated 4.7.2014 were required to pay 5% wheeling charges of the injected energy - exempt from paying wheeling and banking charges and gross subsidy surcharge for a period of 10 years from the date of commissioning provided that their power plants were commissioned - Held, Commission and the State that the Commission has been conferred with the power to determine the tariff from time to time and it cannot be said that the Commission is functus officio once it has determined the price. The phrase time to time emphasized would only mean that the KERC can determine wheeling and banking charges prospectively. Sections 62 and 64 conferred the power on the Commission to determine the tariff and once settled contracts have been entered into, based on the tariff orders, sans any request made by the either of the parties to the PPA, the KERC has not been conferred with the power to determine tariff from time to time - Court in the case of Shree Sidhabali Steel vs. State of Uttar Pradesh, (2011) 3 SCC 193 as well as Tarini Infrastructure Limited and Others, supra, considering the wider impact of withdrawing the exemption/concession by the KERC suo moto as observed by the Honble Apex Court in PTC India Limited (supra) and Gujarat Urja Vikas Nigam Limited (supra) inasmuch as exercising the inherent powers in terms of Regulation No. 11 of OA Regulations, Regulation under Section 181 would have been appropriate which has a general application to the entire trading activity - Writ petitions are allowed
S. SUJATHA, J.
1. These petitions involving similar and akin issues, have been considered together and are taken up for final disposal at this stage with the consent of the learned counsel appearing for the parties.
2. Facts of the case:
The petitioners have challenged the order dated 14.5.2018 (impugned order) passed by the Karnataka Electricity Regulatory Commission (KERC), Bengaluru under the provisions of the Electricity Act, 2003 [Act for short] and the KERC (Terms and Conditions for Open Access) Regulations, 2004, which deals with open access charges including wheeling and banking charges, transmission losses and cross subsidy surcharge of Renewable Energy [RE] projects commissioned between 01.04.2013 and 31.3.2018. The open access charges for RE projects commissioned between 01.04.2013 and 31.3.2018 were governed by two separate orders of the KERC. The order dated 4.7.2014 dealt with wind based as well as Mini hydel power plants and the order dated 18.8.2014 dealt with solar power plants. The wind/Mini hydel power plants under order dated 4.7.2014 were required to pay 5% wheeling charges of the injected energy. The banking charges were specified at 2% of the injected energy. The solar power generators as per the order dated 18.8.2014 were exempt from paying wheeling and banking charges and gross subsidy surcharge for a period of 10 years from the date of commissioning provided that their power plants were commissioned between 1.4.2013 and 31.3.2018. It appears that the petitioners have complied with the conditions in the orders dated 4.7.2014 and 18.8.2014 and commissioned their respective projects prior to 31.3.2018. However, KERC by the order impugned herein continued the exemption on the wheeling and banking charges to the solar projects commissioned on or earlier to 31.3.2017 and all the RE Projects [other than the captive generators] availing of the benefit of the Renewable Energy Certificate [REC], which have not yet completed ten years from the date of commercial operation as on 31.03.2018 are made liable to pay 25% of the normal transmission charges and/or wheeling charges and banking charges of two percent in kind. In case of wind/Mini hydel power projects commissioned during the period between 10.10.2013 and 3.9.2017, 25% of the normal transmission charges and/or wheeling charges have been levied. The line losses were to be exempted in kind. The banking charges were retained at 2% for projects commissioned between 10.10.2013 and 3.9.2017. The other applicable charges are liable to be levied in respect of wind projects as well. Being aggrieved by the order impugned, these petitions are filed.
3. Submissions on behalf of M/s. Renew Power Limited and others:-
The impugned order suffers from jurisdictional error being contrary to sections 42(2), 61 and 62 of the Act, Rule 11 of the Open Access Regulations 2004 [OA Regulations for short] as well as the judgment of the Hon'ble Apex Court in PTC India limited vs. Central Electricity Regulatory Commission, (2010) 4 SCC 603. It was contended that the respondent KERC has no jurisdiction to interfere with the settled contract under the provisions of the Act, Regulations 2004 and in terms of the contract entered into between the parties. The KERC has not traced the power to re-determine the tariff to any provision under the Act. Settled contract cannot be unsettled except by way of fresh regulation in exercise of the legislative function of the state commission.
The statutory contracts have to be read with the Act and the regulations governing the statutory contract. Any amendments to statutory contract have to be in conformity with the parent statute and the specific regulations that govern the statutory contract in question. A generic order made applicable to multiple projects may only be revised by resorting to a regulation under section 181 of the Act and not under the quasi judicial functions of the KERC.
It was submitted that the amendment can only be carried out
