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2011 Supreme(Mad) 2550
High Court of Judicature at Madras
S. NAGAMUTHU
E.I.D. Parry (I) Ltd, Chennai & Others
Versus
The State of Tamil Nadu Rep by Principal Secretary to Government, Chennai & Others
Writ Petition Nos.20820, 20821 of 2000, 20624 to 20629 of 2000, 20730 to 20733 of 2000 & 29752 to 29757 of 2010
Decided on : 06-06-2011
For the Petitioners:Mr. Gopal Choudary, Senior Counsel, M/s. ABdul Hameed, Advocate, Mrs. Nalini Chidambaram, Senior Counsel, Mr. Rahul, Advocate.
For the Respondent:R1, Mr. V. Srikanth, Addl. Government Pleader, R2, Mr.P.S.Raman, Advocate General for Mr. A. Selvlendran, R3, Mr. V.M.G. Rama Kannan, Advocates.
A right accrued in favour of an individual whether on account of a Statute or otherwise, can be waived by him. Such relinquishment can be either by means of an express agreement or by the conduct of the parties.
Headnote:
The petitioners, sugar mills, challenged the fixation of price for the electricity supplied by them to the Tamil Nadu Electricity Board (TNEB). The main dispute was whether the price should be fixed as per G.O.Ms.No.230 issued by the Government of Tamil Nadu or as per the Board Proceedings issued by the TNEB. The petitioners contended that G.O.Ms.No.230 was binding on the TNEB as it was issued under Section 78-A of the Electricity (Supply) Act, 1948, and that they were entitled to the price fixed by the G.O. The TNEB, on the other hand, contended that G.O.Ms.No.230 was not binding on it and that the price should be fixed as per the Board Proceedings.
Fact of the Case:
The petitioners, sugar mills, had set up co-generation units to generate electricity and supply the surplus electricity to the TNEB. The price for the electricity supplied was to be fixed as per the agreements entered into between the petitioners and the TNEB. However, the petitioners challenged the price fixed by the TNEB, contending that it was contrary to G.O.Ms.No.230 issued by the Government of Tamil Nadu.
Finding of the Court:
The court held that G.O.Ms.No.230 was binding on the TNEB as it was issued under Section 78-A of the Electricity (Supply) Act, 1948. The court also held that the petitioners were entitled to the price fixed by the G.O. However, the court dismissed the writ petitions on the ground that the petitioners were guilty of laches and that they had waived their right to claim the price fixed by the G.O.
Issues: 1. Whether G.O.Ms.No.230 was binding on the TNEB? 2. Whether the petitioners were entitled to the price fixed by G.O.Ms.No.230? 3. Whether the petitioners were guilty of laches? 4. Whether the petitioners had waived their right to claim the price fixed by G.O.Ms.No.230?
Ratio Decidendi: 1. G.O.Ms.No.230 was binding on the TNEB as it was issued under Section 78-A of the Electricity (Supply) Act, 1948. 2. The petitioners were entitled to the price fixed by G.O.Ms.No.230. 3. The petitioners were guilty of laches as they had delayed in filing the writ petitions. 4. The petitioners had waived their right to claim the price fixed by G.O.Ms.No.230 by entering into agreements with the TNEB for the supply of electricity at a price lower than that fixed by the G.O.
Final Decision: The writ petitions were dismissed.
1. The petitioners in these writ petitions are all Sugar Mills in the State of Tamil Nadu who have set up Co-generation plants to generate electricity and to supply the surplus electricity to the Tamil Nadu Electricity Board as per the agreements entered into with the Tamil Nadu Electricity Board in accordance with the provisions of the Electricity (Supply) Act of 1948. The main dispute in all these writ petitions is in respect of the fixation of price for the electricity supplied by these sugar mills to the Tamil Nadu Electricity Board.
2. Since common issues are involved in these writ petitions, they were all heard together and disposed of by means of this common order.
3. These writ petitions have come to be filed in the following background:-
Prior to 1991, private sector entrepreneurs cannot set up thermal projects, coal/lignite or gas based hydel projects and wind/solar energy projects of any size. However, the Electricity (Supply) Act, 1948 was so amended in 1991 by which private sector entrepreneurs were allowed to set up enterprises, either as Licensees, or as generating companies. Now, licenses under Section 3 of the Indian Electricity Act can be issued by the State Governments to private units willing to enter the electricity sector as licensee companies to supply and distribute energy in a specified area, who may or may not have a generating station. Prior to 1991, generating companies could be set up only by the Central or State Governments or both. After 1991, generating companies can now be set up and such companies can set up one or more generating stations and offer to sell electricity to the grid, unlike licensees, who supply and distribute energy within a specified area and who may or may not have generating stations. It is thus possible for an enterprise to combine the functions of a generating company in one area and that of a lincensee in another area. The generating company, will sell power to State Electricity Boards (SEBs), on the basis of an agreement, and, at tariff based on parameters applicable to generating companies. Power plants in the private sector are captive power plants, set up to serve an industrial or other unit, where the requirement of that unit is for a large/continuous supply of electricity and a reliable source of electricity is necessary. Surplus electricity from captive power plants can be offered for sale to the State Electricity Boards. In this regard, the Government of India, Ministry of Power, issued a policy known as "Policy on Private Participation in the Power Sector" dated 22.10.1991.
4. As per Clause 4(5) of the said policy published in the Government Gazette of India dated 22.10.1991, generating companies can enter into a contract for the sale of electricity generated by it with the State Electricity Board in any State where it owns/operates generating station(s) or in any other State where it is carrying on its activities or with any other person with the consent of the competent Government. To suit this, amendment has been incorporated in Section 43(A) of the Electricity (Supply) Act,1948.
5. In pursuance of the above policy decision, the petitioners herein, who are the companies manufacturing sugar in their respective mills in various places in the State of Tamil Nadu offered to set up co-generation units in their respective factories. The main by-product which emerges in the manufacture of sugar in these factories is bagasse which is used in co-generation plants as fuel.
6. On account of the above policy and the amendments brought in the Electricity (Supply) Act 1948, they set up co-generation plants in their respective sugar mills after getting necessary consent under Section 44 (1) of the Electricity (Supply) Act. After erecting power generation units, they entered into Power Purchase Agreements with Tamil Nadu Electricity Board. As per the said Power Purchase Agreements (hereinafter referred to as PPA), the surplus power exported by Sugar Mills to Tamil Nad
