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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
ALOK ARADHE, N.V. SHRAVAN KUMAR, JJ.
Telangana State Southern Power Distribution Company Limited, Rep. by its Chairman and Managing Director and Others – Petitioners
Versus
Union of India, Through Ministry of Power, Represented by the Secretary/Ministry of Power and Others - Respondents
Writ Petition Nos.37555 and 37599 Of 2022
Decided On : 19-10-2023
| Table of Content |
|---|
| 1. petitioners challenge validity of governmental order. (Para 1 , 2 , 3) |
| 2. background on power purchase agreements and cancellations. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 3. process of governmental intervention and continued disputes. (Para 11 , 12 , 13 , 14 , 15 , 16) |
| 4. petitioners argue against governmental order and non-application of statutory provisions. (Para 17 , 18 , 19 , 20) |
| 5. concerns raised about the lack of opportunity for hearing. (Para 21 , 22 , 23 , 24 , 25 , 26) |
| 6. arguments from additional solicitors general and conflicting arguments. (Para 27 , 28 , 29 , 30) |
| 7. discussions around maintaining a just process in disputes. (Para 31 , 32 , 33) |
| 8. court's findings on legal standards and natural justice. (Para 34 , 36 , 37 , 38) |
| 9. importance of clear and unambiguous admissions. (Para 39 , 40 , 41 , 42 , 43 , 44) |
| 10. analysis of the proceedings and decision-making process. (Para 45 , 46 , 47 , 48 , 49) |
| 11. requirement of giving reasons and following principles of natural justice. (Para 50 , 51 , 52 , 53) |
| 12. assessment of court findings on the impugned order. (Para 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62) |
| 13. conclusion on the legal framework and implications for the states. (Para 63 , 64 , 65 , 66) |
| 14. final ruling quashing impugned order and suggesting mediation. (Para 67 , 68) |
ORDER :
(Alok Aradhe, J.)
W.P.No.37555 of 2022 is filed by the Telangana State Southern Power Distribution Company Limited, Telangana State Northern Power Distribution Company Limited and the Telangana State Power Coordination Committee, whereas W.P.No.37599 of 2022 is filed by the State of Telangana.
2. In both these petitions, petitioners have assailed the validity of the order dated 29.08.2022 passed by the Union of India under Section 92 of the Andhra Pradesh Reorganization Act, 2014 (hereinafter referred to as, “the 2014 Act”). By the said order, the Government of Telangana has been directed to pay a sum of Rs. 3441.78 crores towards the principal amount and a further amount of Rs.3315.14 crores towards the late payment surcharge to Government of Andhra Pradesh within a period of thirty days. In order to appreciate the grievance of the petitioners, relevant facts need mention which are stated infra.
3. The petitioners in W.P.No.37555 of 2022 are the Power Distribution Companies for the State of Telangana incorporated under the Companies Act. The petitioners are wholly owned by the Government of Telangana. The petitioners procure power from the State Generating Companies, Central Generating Stations and Renewable Power Generating Companies and supply the same to several categories of consumers in the State of Telangana.
(i) FACTS:
4. Three Power Purchase Agreements (PPAs) have been executed on 22.12.2009 between the Andhra Pradesh Power Generation Corporation Limited (APGENCO) and Andhra Pradesh Distribution Companies for the period between 01.04.2006 and 31.03.2019. The erstwhile State of Andhra Pradesh was bifurcated into two successor States, namely State of Telangana and State of Andhra Pradesh with effect from 02.06.2014 under the 2014 Act.
5. The State of Andhra Pradesh on 16.06.2014 unilaterally cancelled the PPAs. A communication dated 17.06.2014 was sent by the Government of Andhra Pradesh, Energy Department, to the Chairman & Managing Director, Transmission Corporation of Andhra Pradesh (APTRANSCO), to schedule power in the ratio of 65:35 from the projects located in Andhra Pradesh. It was stated therein that the Managing Director, APGENCO, had reported that the APGENCO had rescinded its PPAs for which there is no approval of Andhra Pradesh Electricity Regulatory Commission (APERC). It was further stated in the aforesaid communication that CMD of APTRANSCO was requested to schedule the power generated in the projects located in State of Andhra Pradesh in respect of which PPAs have been rescinded in the ratio of 65:35, from the date of communication, to the Andhra Pradesh State Power Distribution Company Limited (APSPDCL
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