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2002 Supreme(Ori) 628
IN THE HIGH COURT OF ORISSA
B.P. Das, J.
GRID CORPORATION OF ORISSA LIMITED - APPELLANT
Versus
ORISSA POWER GENERATION CORPORATION LIMITED AND ANOTHER - RESPONDENT
O.J.C. No. 6819 of 2001
Decided On : 15-07-2002
N.C. Panigrahi, S.C. Dash, G.S. Das and S.R. Panigrahi, for the Appellant; Jayant Das, A.N. Dash, A.N. Pattnaik, N. Sarkar, R.K. Mohapatra, B. Misra and J.P. Patnaik, for the Respondent
The main legal point established in the judgment is that OPGC had a public duty in the matter of electricity generation and supply, and its actions were found to be arbitrary and illegal.
Headnote:
GRIDCO - Electricity Supply Dispute - Indian Electricity Act, 1910, Electricity (Supply) Act. 1948, Orissa Electricity Reforms Act, 1995 - The court quashed the impugned communication in Annexure 5 and 6 and declared the action of the OPGC as illegal, arbitrary and without jurisdiction and directed OPGC to continue to supply power to GRIDCO from the units of ITPS as before.
Fact of the Case:
The dispute arose when OPGC decided not to resume generation of electricity in one of its units and to stop supply of electricity to GRIDCO unless significant reduction in outstanding dues was made by GRIDCO. GRIDCO alleged that OPGC's action was illegal and arbitrary.
Finding of the Court:
The court found that the impugned communication and action of OPGC were illegal, arbitrary, and without jurisdiction. It directed OPGC to continue supplying power to GRIDCO.
Issues: The issues included the maintainability of the writ petition, the court's jurisdiction to go into the dispute despite the existence of an arbitration clause, the interplay between the payment obligations of GRIDCO, OPGC, and CESCO, and the public duty attached to OPGC in the matter of electricity generation and supply.
Ratio Decidendi: The court held that the writ petition was maintainable, and it could go into the dispute despite the existence of an arbitration clause due to the emergent situation. It also found that OPGC had a public duty in the matter of electricity generation and supply, and its actions were arbitrary and illegal.
Final Decision: The court quashed the impugned communication in Annexures 5 and 6 and directed OPGC to continue supplying power to GRIDCO.
JUDGMENT :
B.P. Das, J. - This writ petition under Articles 226 and 227 the Constitution of India has been filed by the Grid Corporation of Orissa, Ltd. (in short 'G'RIDCO'), a Government Company, impleading the Orissa Power Generation Corporation Ltd. (in short OPGC), in which the Govt, of Orissa has 51% share and AES Corporation of U.S.A. which is in the day-to-day management of OPGC, has 49% share, and the Central Electricity Supply Company of Orissa Ltd. (in short 'CESCO'). an existing company within the meaning of the Companies Act, 1956 and a licensee for supply of electricity to the consumers within the Central zone of Orissa, as opposite parties.
2. Challenge in this writ petition is made to the Fax letters dated 17.5.2001 and 18.5.2001 issued by the OPGC, vide Annexure 5 and 6 respectively, by which the OPGC decided not to' resume generation of electricity in one of its units, i.e. Unit 2 of IB Thermal Power Station (in short "ITPS'), and to stop supply of electricity to GRIOCO unless significant reduction in outstanding dues was made by the GRIOCO.
3. Before proceeding to examine the rival contentions of the parties, it is worthwhile to have a lock at the manner of functioning of the GRIOCO as well as OPGC and CESCO and the inter se relationship between the parties.
4. GRIDCO and OPGC are Government companies and are engaged in bulk supply the transmission of electricity, and generation and supply of electricity in the State of Orissa CESCO is the distribution and retail supply licensee of electricity for the central zone of Orissa. Both the opposite parties, i.e. OPGC and CESCO, are managed by AES Corporation of U.S.A. and AES Orissa Distribution (P) Ltd., a subsidiary of AES Corporation of U.S.A. respectively. An agreement called "Power Purchase Agreement" (shortly stated 'PPA') was executed between the GRIDCO and OPGC on 13.8.1996 wherein it was agreed that OPGC shall make available to GRIDCO the full quantum of electricity (energy) generated at the power generating stations of ITPS (Units 1 and 2) through the out-going 220 KV lines emanating from ITPS to evacuate and transmit the same through GRIDCO's own transmission system, subject' to the stipulations made in Clauses 2 and 3 of the PPA. In other words, the total available capacity of energy generated by Units 1 and 2 of ITPS will be fully allocated to the GRIDCO, which in its turn agreed to transmit and utilise the same through its own system as per Schedule I to the PPA, which is Annexure-1 to the writ petition. It is also stipulated in the said PPA that OPGC shall not make available to a third party any part of the capacity, of ITPS or sell to a third party or consume for any purpose other than ITPS, any energy generated by ITPS during the term of the agreement except with the GRIDCO's prior written consent. After the GRIDCO entered into the PPA on 13.8.1996. (Annexure-1) on 18.10.1998 a Tripartite Agreement was executed between the Govt, of Orissa GRIDCO and OPGC, vide Annexure-2, in which the mode of payment was prescribed. On 30.11.1998 Escrow and Security Agreement was signed by and executed along GRIDCO, OPGC and Union Bank of India, vide Annexure-3, wherein it was agreed that the entire receivables and payments from the consumers and purchasers of electric capacity and or energy from CESCO are to be utilised for payment of the monthly invoices of GRIDCO in order to enable GRIDCO to duly pay and discharge the amount becoming due for power purchased by GRIDCO from OPGC. Clause 3.1 of the aforesaid Escrow and Security Agreement stipulated the detailed arrangement for the same. In terms of the Escrow and Security Agreement. Bulk Supply agreement was executed on 18.9.1999 between GRIDCO and CESCO, vide Annexure-4. From the facts narrated in the wit petition, it further reveals that the GRIDCO is the Bulk Supplier of electricity to four distribution companies, one' of such being CESCO, which in their turn being the licensees are to supply electricity to various
