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2025 Supreme(Kar) 1774

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ANU SIVARAMAN, RAJESH RAI K., JJ.
 
State Load Dispatch Center, Operated By Karnataka Power Transmission Corporation Limited, Represented By Its Chief Engineer – Appellant
Versus
NSL Sugars Limited, Represented By Its Authorised Signatory – Respondent
Writ Appeal No. 529 Of 2024 (GM-KEB) C/W Writ Appeal No. 526 Of 2024 (GM-KEB) Writ Appeal No. 530 Of 2024 (GM-KEB), Writ Appeal No. 557 Of 2024 (GM-KEB), Writ Appeal No. 623 Of 2024 (GM-KEB)
Decided On : 19-12-2025
 

Advocates Appeared:
For the Appellant : Sri. S.S. Naganand, Senior Counsel For Smt. Sumana Naganand, Adv.
For the Respondent: Sri. Shridhar Prabhu, Sri. H. Shanthibhushan, Dsgi, Sri. Shashikiran Shetty, Ag A/w Smt. Mamatha Shetty, Aga, Adv.

The appropriate government under Section 11 of the Electricity Act is the State Government for embedded generators facing state-specific extraordinary circumstances, reaffirming that jurisdiction does not extend to interstate generating companies under normal interpretations.

Headnote:(A) Electricity Act, 2003 - Sections 2(5), 2(36), and 11 - Government Order on electricity procurement in light of a power shortage crisis quashed by the Single Judge - Appeals by State Load Dispatch Centre and KPTCL challenging the restoration of approvals - Court finds appropriate government to issue direction under Section 11 of the Act is the State Government for embedded generators in extraordinary circumstances relating to regional power shortages. (Paras 1, 2, 6, 18, 41)

(B) Jurisdiction of appropriate government - The distinction between inter-state and intra-state generating companies defines the extent of jurisdiction over emergency powers as per Section 11 of the Act - Government's powers can only apply in circumstances of local crises affecting supply within the State. (Paras 5, 12, 29, 42)

(C) Procedural context - The respondents, primarily sugar producers, alleging restrictions due to the orders affecting their ability to fulfill Power Purchase Agreements, do not qualify as inter-state generating companies under the definitions in law, hence lack standing to challenge the Government’s Orders directed towards generators. (Paras 49, 52)

Findings of Court:
The learned Single Judge's interpretation incorrectly applied Energy Watchdog's dictum as binding precedent, overlooking the specific contextual application of law and jurisdiction regarding embedded generators.

Issues: Whether the observations in Energy Watchdog are ratio decidendi binding on the interpretation of Section 11 of the Act; whether the State Government has jurisdiction over embedded generators experiencing local extraordinary circumstances; whether a non-generating trader can challenge government directions issued under Section 11 of the Act.

Ratio Decidendi: The court held that the appropriate government under Section 11 of the Act in this context is the State Government as emergencies and crises are region-specific, reaffirming local jurisdiction over embedded generators.

Result: Appeals allowed, impugned judgment set aside.

Table of Content
1. writ appeals allowed; judgment of learned single judge set aside. (Para 1)
2. background facts regarding electricity generation in karnataka. (Para 2 , 3 , 4 , 5)
3. court's observations on jurisdictional implications. (Para 6 , 8 , 20 , 21)
4. arguments concerning the jurisdiction of appropriate government. (Para 7 , 9 , 10 , 11 , 12 , 19)
5. interpretation of statutory provisions regarding emergency powers. (Para 18 , 33 , 34 , 35 , 43)
6. clarification on the applicability of section 11 of the act. (Para 49)

JUDGMENT :

RAJESH RAI K., J.

1. Writ Appeals No.529/2024, 526/2024 and 530/2024 are by State Load Despatch Centre (SLDC), Writ Appeal No.557/2024 is by the Karnataka Power Transmission Corporation Limited (KPTCL) and Writ Appeal No.623/2024 is by the State of Karnataka, challenging the common order dated 11.03.2024 passed by the learned Single Judge in W.P.No.24998/2023, 24239/2023, 26833/2023 and 26324/2023, whereby the learned Single Judge has allowed the said petitions as under:

"The petitions are allowed quashing the impugned State Government’s Order dated 16.10.2023 in No. ENERGY 82 PPT 2023 insofar as it extends to those engaged in inter-state transmission of electricity and the following consequential withdrawal of approval / No-Objections issued by M/s KPTCL [the State Load Dispatch Centre] to the respective petitioners.

[A] the Communication dated 18.09.2023 [Annexure - B in WP No.24998/2023]

[B] the Communication dated 17.10.2023 [Annexure - B in WP No. 26324/2023]

[C] the Communication dated 18.10.2023 [Annexure - B in WP No. 26833/2023]

Consequentially, M/s KPTCL, the State Load Dispatch Centre, is directed to reinstate the corresponding approvals/No-objection issued to the petitioners in W.P.No.24998/2023 and W.P.No.23624/2023, and insofar as the petitions in W.P.No.24239/2023 and W.P.No.26833/2023, M/s KPTCL is directed to consider the respective requests in the light of this order."

2. The abridged facts for disposal of these collective Writ Appeals are as under:

Electricity generation in the State of Karnataka is primarily dependent on renewable and hydel sources. Owing to depleted reservoir levels in major dams, the State Load Dispatch Centre was compelled to implement load management measures since the August of 2023. As the Electricity Supply Companies’ effort to procure power from exchanges at maximum cap rates proved insufficient, the Government of Karnataka issued the Government Order dated 16.10.2023 under Section 11 (1) of the Electricity Act, 2003 (hereinafter referred to as "the Act") directing all generators within the State to operate and maintain generating stations at maximum exportable capacity and supply all electricity generated to the State Grid at a provisional tariff of Rs.4.86 per unit, subject to final determination by KERC under (2) of the Act, which reads as under:

GOVERNMENT ORDER No. ENERGY 82 PPT 2023, BENGALURU, Dated 16.10.2023

In the circumstances explained in the Preamble and in exercise of the power conferred under Section.11 of Electricity Act, 2003, the State Government in the public interest hereby issues the following Directions, with immediate effect and until further orders.

1. All the Generators in the State of Karnataka shall operate and maintain their generating stations to maximum exportable capacity and supply all the electricity generated to State Grid subject to the following conditions:

[a] ESCOMs shall pay at Rs.4.86/unit provisionally subject to KERC orders thereon.

[b] The balance capacity of UPCL plant, over and above the contracted capacity with the ESCOMs under the PPA shall be supplied to State Grid at PPA rates.

[c] Joint meter readings shall be the basis for raising the monthly invoices.

[d] Rebate of 2% shall be allowed on the bill amount if payment is made within 5 days from the date of presentation of bill or otherwise 1% shall be allowed if the payments are made within 30 days.

[e] Due date for making payment shall be 30 days from the date o

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