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High Court Of Calcutta
Arun Mishra, J.
Superpack - Appellants
Vs
M P State Electricity Board - Respondents
Decided on: Aug 27, 2002
ELECTRICITY - CAPTIVE POWER POLICY - RETROSPECTIVE APPLICATION - NOT APPLICABLE TO PRE-EXISTING CAPTIVE POWER PLANTS: Madhya Pradesh State Electricity Board's Captive Power Policy, 2001, requiring consumers to draw at least 50% of their electricity from the Board, does not apply retrospectively to captive power plants established before the policy's issuance.
Fact of the Case:
Petitioner, a manufacturing company, challenged the Madhya Pradesh State Electricity Board's (Board) bills and orders requiring it to draw at least 50% of its electricity from the Board under the Captive Power Policy, 2001. The petitioner argued that the policy was not applicable to its captive power plants, which were installed before the policy's issuance and had unlimited permission to operate.
Finding of the Court:
The court held that the Captive Power Policy, 2001, is not applicable to captive power plants established with prior permission granted by the Board for an unlimited period of time under Section 44 of the Electricity (Supply) Act, 1948.
Issues: 1. Whether the Captive Power Policy, 2001, applies retrospectively to captive power plants established before its issuance? 2. Whether the Board can impose restrictions on captive power plants that were granted unlimited permission to operate under Section 44 of the Electricity (Supply) Act, 1948?
Ratio Decidendi: 1. The court interpreted Clause 3 of the Captive Power Policy, 2001, which states that the restriction to draw at least 50% from the Board applies only to those to whom permission is granted after the policy's issuance. 2. The court held that the policy is prospective and does not apply to existing captive power plants that were granted permission under Section 44 of the Electricity (Supply) Act, 1948. 3. The court reasoned that the policy does not contain any provision that expressly or impliedly gives the Board the authority to impose restrictions on captive power plants that were granted unlimited permission to operate under Section 44 of the Act.
Final Decision: The court allowed the petition, quashed the Board's demand raised as per the bills, and directed the Board to raise the demand afresh in accordance with the court's decision.
1. PETITIONER in this writ petition is seeking quashment of the order (P-12) dated 4-4-2001 issued by the Superintendent Engineer, Madhya Pradesh State Electricity Board, Chhindwara, and the bills (P-10 and P-11) dated 16-8-2001. This challenge is based on the ground that Captive Power Policy, 2001 issued on 20th February, 2001, by the State Government is not applicable with respect to the petitioner Unit.
2. AS per Captive Power Policy, 2001, captive power plant shall have to be used by the consumer to whom permission is granted. After issue of this notification, he shall be bound to draw atleast 50% of electricity from Madhya Pradesh Electricity Board out of its total monthly requirement. The bills have been raised by the M. P: Electricity Board applying new policy in case of petitioner. The petitioner is a company having its factory at Village Sausar, District Chhindwara, manufacture HDPE/pp Woven Fabrics, Bags and Master Batches. For running of the factory, the petitioner entered into power supply agreements with the respondent Madhya Pradesh State Electricity Board. Petitioner has installed Captive Power Generating Sets (DG sets) for meeting its power requirement before coming into force of new Captive Power Policy on 21-2-2001, As per new Policy, petitioner is being asked to draw atleast 50% of the electricity from Madhya Pradesh Stale Electricity Board, successor of Madhya Pradesh Electricity Board. Madhya Pradesh Electricity Board, now succeeded by Madhya Pradesh State Electricity Board (hereinafter referred to as "board"), is established under Section 5 of Indian Electricity (Supply) Act, 1948. In the year 1992-93, petitioner was fulfilling the requirement of 2900 KVA by purchasing electricity from erstwhile Madhya Pradesh Electricity Board, The demand of the petitioner Company thereafter reduced to 1000 KVA, The agreement (P-1) for 1000 KVA was entered into on 16th September, 1998. Supplementary agreement (P-2) for 600 KVA was entered into on 16-3-2001. Petitioner is drawing 1600 KVA from the M. P. State Electricity Board to meet its demand.
3. PETITIONER company had also installed four Captive Power Generating Plants under the due permission granted by the Madhya Pradesh State Electricity Board. The first Captive Power Plant was set up by permission granted on 10-2-1986 for the capacity 1250 KVA. Second Captive Power Plant is DG-1 set for the capacity 750 KVA, for which permission was granted on 19-4-1995 for a period of 5 years. For Captive Power Plant, DG-2 Set, permission (P-7) was granted on 20-1-1997. It is for the capacity 850 KVA without any time limit. Similarly, another Captive Power Plant, DG-3 Set was allowed under permission dated 20-10-1997 for capacity 1250 KVA. It is also relevant to mention that it is without any time limit. This is also not a stand by set. Thus, petitioner without any limit of time to enjoy the facility of Captive Power Plant, DG Sets 2/3 to the strength of 2100 KVA as per permissions granted in which condition No. 6 was imposed to the effect that rules, regulations, directions issued by the State Government and Central Government time to time shall be binding on the petitioner.
4. PETITIONER submits that petitioner company has installed four Captive Power Generating Plants under the aforesaid permissions. Now as per the Bills (P-10 and P-11), he is being asked not to operate the DG Sets beyond 50% of the total consumption. In other words, the production made by the petitioner by utilising raw material is being charged by M. P. S. E. B. as if that is the electricity supplied by the M. P. S. E. B. presumably on the basis that they are entitled to do so under Captive Power Policy, 2001 issued by the State Government w. e. f. 20th February, 2001. Petitioner further submits that said Captive Power Policy, 2001 is not applicable in the case of the petitioner as it applies to those Captive Power Plants to whom permission is granted after issue of notification dated 20th February, 2
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