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1998 Supreme(Bom) 93
Bombay High Court
N.J.PANDYA,R.K.BATTA
J.C.Almeida, IAS (Retd.) - Appellant
Versus
State of Goa - Respondent
Decided On : 02/12/1998
Ms. Norma Alvares, for Petitioner and Intervenor; V. B. Nadkarni, Advocate General with C. A. Ferreira, Addl. Govt. Advocate (for No. 2), Milind Sathe with A. N. S. Nadkarni, Ravi Gandhi and P. A. Kamat (for No. 2), for Respondents.
The Court's decision highlights the limited scope of judicial review in matters involving policy decisions and commercial exigencies, particularly in specialized projects like power generation.
Headnote:
ELECTRICITY - POWER PURCHASE AGREEMENT - VALIDITY - CHALLENGED - GROUNDS - HIGHER COST OF ELECTRICITY - INADEQUATE SUPPLY OF WATER - NON-SYNCHRONIZATION OF POWER - HELD - NO BASIS - PETITION DISMISSED.
Fact of the Case:
Petitioner, a retired IAS officer, challenged the Power Purchase Agreement (P.P.A.) between the State of Goa and a private company, alleging that it would lead to higher electricity costs, inadequate water supply, and non-synchronization of power. The petitioner sought certified copies of the agreement and related documents to substantiate his claims.
Finding of the Court:
The Court examined the P.P.A., supplementary documents, and expert reports. It found that the apprehension of a significant increase in electricity tariffs was unfounded, as the average increase would be marginal and the State had assured that domestic consumer tariffs would not be raised by more than 10-15% annually. The Court also noted that the State had taken steps to strengthen the power distribution system and improve voltage profiles. Regarding the water requirement for the power plant, the Court clarified that the daily consumption would be within a manageable range and that the State's responsibility to provide water was a policy decision not subject to judicial interference. The Court further found that synchronization of power from the plant with the existing grid would be the norm, with islanding only as an emergency measure.
Issues: 1. Whether the Power Purchase Agreement (P.P.A.) between the State of Goa and a private company would lead to higher electricity costs, inadequate water supply, and non-synchronization of power. 2. Whether the State's decision to provide water to the power plant was a policy decision not subject to judicial interference.
Ratio Decidendi: 1. The Court held that the apprehension of a significant increase in electricity tariffs was unfounded, as the average increase would be marginal and the State had assured that domestic consumer tariffs would not be raised by more than 10-15% annually. The Court also noted that the State had taken steps to strengthen the power distribution system and improve voltage profiles. 2. The Court held that the State's decision to provide water to the power plant was a policy decision not subject to judicial interference.
Final Decision: The Court dismissed the petition, finding no basis for the petitioner's claims and holding that the P.P.A. was valid.
PANDYA, J. :- Admit. The letter dated 19th February, 1997, written by the petitioner addressed to the Senior Judge of this Court was received by the office. It was placed before the concerned learned Judge and he along with his companion learned Judge passed an Order on 3rd March, 1997. Noting the fact that according to the said Communication the cost of electricity which would be Rs. 2.69 p. per unit as against the present rate of Rs. O. 95 p. per unit, which is substantially low because the State receives power from the Southern Grid at O. 95 p. and the Western Grid at O. 25 p. respectively, this wide difference would raise suspicion about the intention behind the power Purchase Agreement. The learned Judges therefore felt that the allegations contained in the letter were required to be gone into and therefore, it was converted into a Writ Petition. This set a chain of events in motion which during the pendency of the petition had attracted intervenors represented by Ms. Norma Alvares. The petitioner had chosen to argue the matter in person.
2. The petitioner is a retired I.A.S. Officer and had occasion to serve the State in various posts, including that of Chief Secretary of the erstwhile Union Territory of Goa, Daman and Diu. After retirement also, he had held many important positions.
3. In paragraph 2 of the said letter he has drawn attention to the fact that the proposed power plant is going to be naptha based. Naptha is known to be expensive and highly volatile. It is also noted that the fuel is required to be imported. This and other factors referred to in paragraph 2 led the petitioner to believe that as result of the entire exercise consumers of energy in Goa are going to be burdened with higher costs.
4. He has also referred to the consultants who were brought into the picture to evaluate the project. The name of the consultants is M/s. CRISIL, the full name being Credit Rating Information Services of India Limited, an advisory services group. As per the Report of this group the cost of energy is going to be somewhere at Rs. 2.69 p. per unit. Thereafter the letter refers to allotment of electricity energy to the extent of 380 MW as against which the State Electricity Department is found to be drawing 210 MW to 240 MW of power. From other sources also as recorded in the letter at page 2, power is available but Government has decided not to take it because the rates are likely to be Rs. 2.20 p. per unit. This had led the petitioner to believe that the power Purchase Agreement entailing higher cost per unit is likely to be for some personal benefit at the cost of the public. He also felt that the State of Goa is not short of energy, but transmission line and distribution system are to be strengthened.
5. Later on he refers to the fact that he is a consumer of energy and he is not in a position to afford any higher price for the cost of energy and therefore, had approached various authorities in the State Government to obtain the certified copy of the agreement and other related papers. He waited for five weeks, but did not receive any response. He therefore approached this Court by way of the aforesaid letter requesting it to intervene in the matter. In paragraph 5 he has specifically requested the Court to issue appropriate direction to the Government of Goa to make available to the petitioner the certified copies of the agreements and other related papers. The petitioner is right in pointing out that only on these documents being produced can it be found out as to whether the said Agreement is against the interest of the people of Goa or not.
6. It may be mentioned here that the Power Purchase Agreement and other supplementary documents are all produced on record. The copy of the Report of the CRISIL is also produced. In the course of this Judgment the agreement between the respondent No. 2, Company and the respondent No. 1, State, will hereinafter be referred to as "P.P.A." (Power Purchase Agreement). The respo
