A.P.Transco has authority under MoUs to issue revised demands in respect of surplus energy supplied to participating industries, but it has no authority to recover the amount due on account of supply of surplus energy without affording an opportunity of hearing to participating industries about the quantum of the amount.

JUDGMENT :

These intra-court appeals filed by the participating industries and the Transmission Corporation of Andhra Pradesh Limited (hereinafter referred to as ‘A.P.Transco’) emanate from common orders dated 06.12.2004 and 20.12.2004 passed by the learned Single Judge by which writ petitions preferred by the participating industries have been partly allowed.

2. On admitted facts, common issues of law arise for consideration in this batch of appeals and in the writ petition i.e., W.P.No.8964 of 2004 and therefore, we have heard the same analogously and this batch of cases is decided by this common judgment. For the facility of reference, facts from W.A.No.58 of 2005 are being referred to.

(i) Facts:

3. The appellant is a Private Limited Company engaged in the manufacture of co-extruded polyethylene film. The industrial activity of the appellant requires continuous and uninterrupted supply of electrical power. The appellant industry suffered due to severe power cuts imposed by the erstwhile Andhra Pradesh Electricity Board, which in turn crippled the functioning of the appellant industry.

4. In the year 1988, A.P.Transco, T.S.Transo and six other companies of public and private sector entered into a Memorandum of Understanding dated 17.10.1988 (hereinafter referred to as ‘MoU-I’) for formation of a new company namely, Andhra Pradesh Gas Power Corporation Limited (hereinafter referred to as ‘APGPCL’). The said company was formed with an object to set up a natural gas based power generation station of 100 MW capacity in the erstwhile State of Andhra Pradesh.

5. Various medium and large scale industries located in the State of Andhra Pradesh volunteered to join the venture of setting up of generation station and invest in the equity capital of APGPCL which are referred to as ‘participating industries’ who are also appellants before us.

6. Clause 3 of MoU-I, dated 17.10.1988 provides for sharing of the energy generated from aforesaid generating plant by the participating industries and A.P.Transco in proportion to their paid-up share capital for the generating plant under MoU-I. A.P.Transco has the right to sell share of energy and power to its consumers which may include members of APGPCL.

7. Thereafter, another Memorandum of Understanding, dated 19.04.1997 (hereinafter referred to as ‘MoU-II) was executed between APGPCL, A.P.Transco/TS Transco and shareholders of APGPCL i.e., participating industries for setting up additional capacity of 172 MW fuel based power generation station at Vijjeswaram, West Godavari District.

8. Clause 2.1 of the MoU-II provides for sharing of the energy generated from 172 MW generating station by the participating industries and A.P.Transco, in proportion to the number of shares held by them. Clause 2.6 of MoU-II provides that when a participating industry, for any reason, is unable to utilise its full share of energy from APGPCL, participating industry shall give advance notice of fifteen days before billing month to APGPCL and there upon APGPCL shall reallocate the surrendered energy to the participating industry on prorata basis, among those of the rest of the participants who require additional power. When such advance notice is not received by APGPCL within the stipulated period of fifteen days, the unutilised power shall be fully allocated to A.P.Transco.

9. The Andhra Pradesh Electricity Reforms Act, 1998 (hereinafter referred to as ‘the Reforms Act’) was brought into force with effect from 01.02.1999. Section 14(4) of the Reforms Act requires a licence for transmission and supply of electricity. A provisional licence was granted to APGPCL for a period of twelve months from 01.02.1999. The Andhra Pradesh Electricity Regulatory Commission (hereinafter referred to as ‘APERC’) by an order dated 07.07.2000 inter alia held that licence is required by APGPCL for generation of power and conditional exemptio