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2005 Supreme(Ori) 171
High Court Of Orissa
A. K. PATNAIK, A. K. PARICHHA
ORISSA POWER GENERATION CORPN.LTD. - Appellant
Versus
ORISSA ELECTRICITY REGULATORY Commission - Respondent
Misc. 2460 Of 2002
Decided On : 02/22/2005
Advocates: A.DAS, A.K.RATH, A.N.Das, A.N.PATNAIK, B.B.RATHOD, B.K.NAYAK, B.SHARMA, BISWANATH RATH, D.K.Mohanty, G.S.Das, I.MOHANTY, J.DAS GUPTA, J.N.RATH, K.A.Guru, K.K.RAGHAVARI, L.K.BHUSHAN, M.K.PANDA, M.K.SINGH, N.C.PANIGRAHI, N.K.TRIPATHI, N.R.ROUT, N.SARKAR, P.R.SAHU, P.S.SAMANTRAI, R.K.MOHAPATRA, R.K.RATH, R.SOOD, S.C.Dash, S.K.JETHY, S.PATTANAIK, S.R.PANIGRAHI, S.S.PATRA, SAMARESHWAR MOHANTY,
Headnote:
The Orissa Electricity Reforms Act, 1995 (Act, 1995) came into force with effect from 1-4-1996 and under the provisions of the Act, 1995 the Orissa Electricity Regulatory Commission (Commission) was established for regulating the electricity sector in the State of Orissa. The petitioner, orissa Power General Corporation Limited (OPGC) is a Limited Company in which the State Government of Orissa holds 51 per cent of equity shares and ALS corporation, U. S. A. holds 49 per cent of equity shares. OPGC carries on the business of generation of electricity from thermal energy at its Thermal Station called "Ib Thermal Station". The opposite party No. 2, Grid Corporation of Orissa Ltd. (Gridco) is a Government company and is engaged in the business of bulk purchase and supply and transmission of electricity in the State of Orissa. The Orissa Electricity Reforms Act, 1995 (Act, 1995) came into force with effect from 1-4-1996 and under the provisions of the Act, 1995 the Orissa Electricity Regulatory Commission (Commission) was established for regulating the electricity sector in the State of Orissa. The petitioner, orissa Power General Corporation Limited (OPGC) is a Limited Company in which the State Government of Orissa holds 51 per cent of equity shares and ALS corporation, U. S. A. holds 49 per cent of equity shares. OPGC carries on the business of generation of electricity from thermal energy at its Thermal Station called "Ib Thermal Station". The opposite party No. 2, Grid Corporation of Orissa Ltd. (Gridco) is a Government company and is engaged in the business of bulk purchase and supply and transmission of electricity in the State of Orissa.
Fact of the Case:
The petitioner filed this writ petition on 5-10-2001 praying for a writ of mandamus quashing the said order of the commission permitting CESCO to relax the escrow arrangement and praying for a declaration that the said order passed by the commission was illegal, arbitrary and without jurisdiction and also praying for a writ of mandamus directing CESCO to comply with its contracted terms of the Bulk Supply Agreement dated 18-9-1999 and Escrow agreement dated 11-7-2000 and for a writ of mandamus directing Gridco to act in terms of the PPA and Escrow and Security agreement dated 30-11-1998.
Finding of the Court:
The Commission has observed in the order dated 30-1-2002 that Gridco filed an application before the Commission and prayed inter alia that the Commission should direct CESCO to pay forthwith all amounts due to Gridco and while disposing of the said application of the Gridco, the Commission ordered in case No. 31 of 2000 that CESCO and Gridco must strictly follow the terms and conditions laid down in the agreement on which they have entered into. The said order passed by the Commission was however violated by cesco and Gridco made another application before the Commission for a direction to the CESCO to comply with the commission's ordpr in Case No. 31 of 2000 and the managing Director, CESCO pleaded thai diversion of funds was necessary in order to make payment towards salaries, wages and statutory dues and for maintenance of distribution network but the Commission ordered that diversion of funds or utilization of the past receivables for other purposes would be irregular. CESCO thereafter asked gridco to stop further supply of power and intimated Gridco that any action for continuing supplyiof power would be at the risk of Gridco. The Commission took a view that this was a fundamental breach of CESCO's licence condition inasmuch as the basic purpose of licence was to maintain continuity in supply of electricity to the consumers in its licensed area and this act of CESCO would have plunged a huge densely populated area into total darkness and in these circumstances the Commission initiated proceedings under Section 28 of the Act, 1995 for enforcement of the licence conditions by order dated 24-8-2001 and pending inquiry and final disposal of such proceedings, as an interim measure, passed an order on 27-8-2001 under Section 30 (3) of the Act, 1995 vesting the management and control of the undertaking of CESCO in an officer of the State Government designated as Chief Executive Officer of CESCO. The commission has taken a view that this was an emergency measure intended to safeguard the public interest.
Issues: 1. Whether the Commission had powers to relax the Escrow agreement between Gridco and CESCO? 2. Whether the Commission had the jurisdiction to observe that the Escrow agreement between OPGC and Gridco was void for lack of consent by the Commission under Section 21 (4) read with Section 21 (5)of the Act, 1995?
Ratio Decidendi: 1. The Commission could in exercise of its powers both under Section 28 and un der Section 30 (3) of the Act, 1995 pass an internm order to maintain continued supply of electricity by CESCO to the consumers in its licensed area including an order relax ing the Escrow Agreement between CESCO and Gndco 2. The Escrow Agreement between OPGC and Gridco cannot be given effect to as it was void being hit by Section 21 (4) (b) read with Section 21 (5) of the Act, 1995.
Final Decision: The writ petition is allowed.
A. K. PATNAIK, J.
( 1 ) THE petitioner, orissa Power General Corporation Limited (for short, "opgc") is a Limited Company in which the State Government of Orissa holds 51 per cent of equity shares and ALS corporation, U. S. A. holds 49 per cent of equity shares. OPGC carries on the business of generation of electricity from thermal energy at its Thermal Station called "ib thermal Station". The opposite party No. 2, Grid corporation of Orissa Ltd. , (for short, "gridco") is a Government company and is engaged in the business of bulk purchase and supply and transmission of electricity in the State of Orissa. The Orissa Electricity reforms Act. 1995 (for short, "the Act, 1995")came into force with effect from 1-4-1996 and under the provisions of the Act, 1995 the opposite party No. 1, Orissa Electricity regulatory Commission (for short, "the Commission")was esiablished for regulating the electricity sector in the State of Orissa. Thereafter, on 13-8-1996, a Power Purchase agreement (for short, "ppa") was entered into between the OPGC and Gridco whereunder opgc agreed to supply electricity to the extent of the total available capacity of its Ib thermal Station to Gridco. The PPA was approved by the Government of Orissa, Department of Energy by letter dated 24-12 1996 under Section 43a of the Electricity (Supply) Act, 1948 (for short, "the Act. 1948 ). Thereafter on 18-10-1998, a tripartite agreement was entered into by the Government of Orissa, Gridco and OPGC for making some changes in the provisions in the PPA relating to payment by Gridco to OPGC for supply of power. The changes suggested where that Gridco shall set up an Escrow Account mechanism to ensure timely payment of energy bills to OPGC and such Escrow Account Mechanism inter alia shall provide that proceeds from the sale of power by gridco in pre-determined distribution zones every month will be transferred to a separate bank account designated as the Escrow account and after payment of dues to OPGC, any balance in the Escrow Account will be transferred to the General Account of the gridco. The opposite party No. 3, the central Electricity Supply of Orissa Limited (for short,"cesco") carries on the business of distribution and retail supply of electricity in the electrical circles of Bhubaneswar, cuttack, Dhenkanal and Paradeep and for the said business purchases power from gridco under a Bulk Supply Agreement dated 18-9-1999. An Escrow and Security agreement was entered into between the opgc, Gridco and Union Bank of India on 30-11-1998 providing for establishment of a Gridco Escrow Account in the Union Bank of India (opposite party No. 4) and for deposit in such Gridco Escrow Account of all amounts received by Gridco from CESCO. In the Bulk Supply Agreement dated 18-9-1999 entered into by Gridco and CESCO it was provided that CESCO will transfer all the receivables to Gridco in compliance with the Escrow Agreement and cannot utilise the same to meet the specified expenses so long as the existing Escrow arrangement continues. An Escrow Agreement was also entered into between Gridco, CESCO and Union bank of India on 11-7-2000 which authorised the Union Bank of India, the escrow agent, to receive all receivables for electricity sold or supplied by CESCO and payments from customers and purchase of electricity capacity/energy from CESCO in the exclusive account to be maintained by the Union Bank of India as CESCO Escrow account and to make payment from such cesco Escrow Account to Gridco Escrow account and discharge all outstanding dues of CESCO to Gridco. In terms of the aforesaid escrow arrangements, CESCO remitted all its receivables out of the sale of energy as and when received from the consumers of electricity to the Union Bank of India.
( 2 ) WHEN CESCO failed to pay its dues to gridco towards purchase of power, Gridco filed case No. 31 of 2000 under Section 37 of the Act, 1999 before the Commission and commission passed an order on 19-4-2001 directing inter alia
