IN THE APPELLATE TRIBUNAL FOR ELECTRICITY (Appellate Jurisdiction)

APPEAL No. 224 of 2016 Dated : 28^th April, 2025 Present: Hon’ble Mr. Sandesh Kumar Sharma, Technical Member Hon’ble Mr. Virender Bhat, Judicial Member In the matter of:

M/s. K.M. Sugar Mills Ltd Motinagar, Faizabad, (Uttar Pradesh) 224001 Through its Director … Appellant Versus

1. Uttar Pradesh Electricity Regulatory Commission IInd Floor, Kisan Mandi Bhawan, Gomti Nagar, Vibhutikhand, Lucknow – 226010 Through its Secretary

2. Uttar Pradesh Power Corp. Ltd Through its Managing Director

14^th Floor, Shakti Bhawan, 14 Ashok Marg Lucknow – 226001

3. Madhyanchal Vidyut Vitran Nigam Ltd Prag Narayan Rd, Butler Colony, Lucknow, Uttar Pradesh 226001 Through its Managing Director

4. Executive Engineer Electricity Distribution Division Faizabad

5 Chief Engineer (PPA)

Uttar Pradesh Power Corp. Ltd.

14^th Floor, Shakti Bhawan

14 Ashok Marg Lucknow 226001

6. Superintending Engineer Import Export & Payment Cycle Uttar Pradesh Power Corp. Ltd

14^th Floor, Shakti Bhawan

14 Ashok Marg, Lucknow 226001 … Respondent (s)

Counsel for the Appellant(s) : Vishal Gupta Kumar Mihir for App. 1 Counsel for the Respondent(s) : C.K. Rai for Res. 1 Rajiv Srivastava for Res. 2 to 6

J U D G M E N T

PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER

1. The Appellant is aggrieved by the order dated 16^th June, 2016 passed by the 1^st Respondent, Uttar Pradesh Electricity Regulatory Commission (herein after referred to as “Commission”) whereby the Commission rejected the petition of the Appellant seeking payment of its bills w.e.f. April, 2007.

2. The Appellant is engaged in the business of manufacture of sugar and other incidental products. Its sugar mill has sanctioned load of 2 MW. It has generating plant of the capacity of 1.5 MW + 2.5 MW + 3 MW (total 7 MW) for its captive use only. No part of electricity generated from the said 7 MW generating plant was ever being supplied to 2^nd Respondent – Uttar Pradesh Power Corporation Limited (in short “UPPCL”) nor has any power purchase agreement being executed with regard to the same between the Appellant and Respondent No. 2.

3. The Appellant set up a bagasse based 25 MW generating plant (1x10 MW and 1x15 MW) in its sugar mill. The two units of the said generating plant were commissioned on 18^th March, 2007 and 29^th April, 2007 respectively. In order to sell the 20 MW surplus electricity from the said 25 MW plant, the Appellant executed the power purchase agreement (PPA) dated 4^th January, 2006 with 3^rd Respondent Madhyanchal Vidhyut Vitran Nigam Limited (MVVNL) which contained the terms and conditions for supply of electricity as well as the applicable tariff.

4. In order to facilitate evacuation of power generated from the said new 25 MW generating plant in pursuance to the power purchase agreement dated 4^th January, 2006, 132 KV transmission line was constructed as per the terms of the said PPA at the Appellant’s cost between the sugar mill and 132 KV sub-station at Darshan Nagar which was commissioned on 18^th March, 2007. Subsequently, the supply of electricity was commenced by the Appellant to the 3^rd Respondent on 18^th March, 2007 and 29^th April, 2007 upon commissioning of the two units of the power plant. Accordingly, first bill was raised by the Appellant on 5^th April, 2007 in respect of the power supplied by it to the 3^rd Respondent which was addressed to Respondent No. 4 who forwarded the same to Respondent No. 6 for payment. However, the Respondent No. 6 returned the bill with the directions that it should be revised and verified by applying weighted average rate and not the rate applicable for the power plants commissioned in the year 2006-07. The decision of Respondent No. 6 appears to have been based upon the following recital in the PPA dated 4^th January, 2006;

“Whereas, the Mill has undertaken to implement the power generation by installing Plant and Equipment having co- generation/Renewable capacity of 20 MW at its production facility in addition to existing 1