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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.M. Subramaniam, J.
Pat Spin India Ltd. – Appellant
Versus
Chairman and Managing Director Tamil Nadu Generation and Distribution Corporation Limited – Respondent
W.P. Nos. 8515, 36031, 36032, 36033, 36034, 36629, 36630, 36631, 36632, 36720, 36721, 36722 of 2015 and Miscellaneous Petition Nos. 1, 2, 3 of 2015 and Writ Miscellaneous Petition Nos. 943, 944, 945, 1554, 1555, 1557, 1558, 1560, 1561, 1563, 1564 of 2016
Decided On : 01-10-2018
Deemed Demand Charges - Electricity Consumers - Electricity Act, 2003, Section 42 - The court discussed the adjudicative process before the Tamil Nadu Electricity Regulatory Commission, the order dated 15.05.2006 in petition No. TP 1/05, and the withdrawal of concession granted to the writ petitioners. The court highlighted the importance of following the procedures and principles of natural justice in withdrawing concessions and emphasized the power of the Regulatory Commission to revise concessions, either suo-motu or through an application, and the need for an independent adjudication process.
Fact of the Case:
The writ petitioners, High Tension Electricity Consumers, sought to quash the order of cancellation of the benefit of Deemed Demand Charges issued by the second respondent. The petitioners purchased electricity power from third parties and adjusted it for their establishments based on terms and agreements agreed upon through an adjudicative process before the Tamil Nadu Electricity Regulatory Commission.
Finding of the Court:
The court found that the withdrawal of the concession granted to the writ petitioners was arbitrary and unsustainable, emphasizing the necessity of following the adjudicative process and principles of natural justice in withdrawing concessions. The court highlighted the power of the Regulatory Commission to revise concessions and the need for an independent adjudication process.
Issues: The issues revolved around the withdrawal of the concession of Deemed Demand Charges granted to the writ petitioners, the authority of the Electricity Board to unilaterally cancel the concession, and the necessity of following the adjudicative process and principles of natural justice in withdrawing concessions.
Ratio Decidendi: The court held that the concession granted through an adjudicative process can only be withdrawn by following the procedure and emphasized the importance of providing an opportunity to the stakeholders and conducting an independent adjudication process before withdrawing concessions. The court highlighted the power of the Regulatory Commission to revise concessions, either suo-motu or through an application, and the need for an independent adjudication process.
Final Decision: The impugned order of cancellation of the benefit of Deemed Demand Charges was quashed, and the writ petitions were allowed. The court emphasized the necessity of following the adjudicative process and principles of natural justice in withdrawing concessions and highlighted the power of the Regulatory Commission to revise concessions and the need for an independent adjudication process.
1. The order of cancellation of the benefit of Deemed Demand Charges issued by the second respondent in proceedings dated 29.07.2013 is sought to be quashed in all these batch of writ petitions.
2. The writ petitioners are the High Tension Electricity Consumers and they are purchasing the electricity power from the third parties for generating power and adjusting the same for the benefit of petitioners establishments.
3. In this regard certain terms and agreements were agreed upon between the parties by way of adjudicative process before the Tamil Nadu Electricity Regulatory Commission.
4. The learned senior counsel appearing on behalf of the writ petitioner contented that the unilateral withdrawal of concession granted to the writ petitioners are arbitrary and unsustainable in view of the order dated 15.05.2006 in petition No. TP 1/05 by the Tamil Nadu Electricity Regulatory Commission. It is contended that the adjudicative process had been conducted statements, objections and suggestions were received from all stakeholders and thereafter a decision was taken by the Tamil Nadu Electricity Regulatory Commission, Chennai in petition No. T.P. 1/2005 and an order was passed in order No. 2 dated 15.05.2006. The preamble of the order stipulates as follows:-
Sub-section (2) of Section 42 of the Electricity Act, 2003, stipulates that the State Commission shall introduce open access in such phases and subject to such conditions as may be specified, within one year of the appointed date. Accordingly, the Commission has notified the Tamil Nadu Electricity Regulatory Commission Intra State Open Access Regulations 2005 in the Tamil Nadu Government Gazette dated the 3rd August, 2005 so as to introduce open access in Tamil Nadu. As per Regulation 9 of the aforesaid Regulations, various charges payable to State Transmission Utility/Transmission Licensee and Distribution Licensee by an open access customer have to be determined by the Commission. As directed by the Commission, the TNEB filed a petition for determination of the above charges on 26.09.2005 and the Petition was registered and numbered as T.P. 1 of 2005.
In exercise of the powers conferred by section 42 of the Electricity Act, 2003 (Act 36 of 2003) and all other powers enabling it in this behalf, the Tamil Nadu Electricity Regulatory Commission (TNERC) after having considered the written objections, consulted the members of the State Advisory Committee, heard the issues raised by the stakeholders in a public hearing, the reply of the Tamil Nadu Electricity Board, the applicant herein, and having considered the relevant documents available on record, passes this order, fixing the transmission charges, wheeling charges and other charges specified under the aforesaid Open Access Regulations and payable by an open access customer.
Sd/-
S. Thangarathnam
Member
Sd/-
B. Jeyaraman
Member
Sd/-
A. Balraj
Chairman
5. The learned senior counsel relied on the preamble of the said order, which states that the Regulatory Commission considered the written objections, consulted the members of the State Advisory Committee, heard the issues raised by the stakeholders by way of public hearing and the reply from the Tamil Nadu Electricity Board and considered all the issues. Pursuant to the said order dated 15.05.2006 the applicability of Deemed Demand Charges has been stipulated and in respect of Deemed Demand Charges it is stated that the transmission losses in each voltage play a vital role in deciding the deemed demand. The loss levels at each voltage are given above. The loss factor depends on the voltage at which the power is injected and the voltage at which the open access user draws. Since various combinations are possible, a simple methodology is adopted to approximate the loss factor under various scenarios. Even though the power, in an interconnected grid, flows by displacement and does no
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