The Union Territory of Puducherry is determined not to be a HT consumer; therefore, it should pay only actual charges under inter-state sales obligations, rejecting the imposition of HT rates.

The Government of India issued directives to the Neyveli Lignite Corporation Limited (hereinafter referred to as " NLC") to divert energy to the Union Territory of Puducherry to the extent indicated in the Government Order. The agreement executed between the NLC and Tamil Nadu Electricity Board (hereinafter referred to as "TNEB") on 9 March 2001 contained a mandatory provision that supply should be made to the Union Territory of Puducherry treating the transaction as an inter - state sale. The TNEB initially supplied electricity to Puducherry treating it as an industrial consumer and collected only the cost payable to NLC together with wheeling charges at 10 paise per KWH. However, in the subsequent Order issued by the Government of Tamil Nadu in G.O.(Ms).No.95 Energy Department, dated 28 November 2001, making amendment to the Schedule to the Tamil Nadu Revision of Tariff Rates on supply of Electrical Energy Act, 1978, the Union Territory of Puducherry was considered as a HT consumer like other HT consumers in the State of Tamil Nadu.

2. The TNEB raised bills at the rate of Rs.3 per KWH treating the sale in favour of the Union Territory of Puducherry as an intra - state sale. When TNEB approached the Tamil Nadu Electricity Regulatory Commission (hereinafter referred to as "Regulatory Commission") for fixing the tariff with effect from 16 March 2003, taking into account the objection raised by the Union Territory of Puducherry, the Commission held that Union Territory of Puducherry cannot be considered as a HT Consumer of the TNEB for fixation of tariff. However, after saying so, the Commission directed the parties to maintain status quo as regards the existing tariff of Rs.3/- per KWH, meaning thereby, to continue to treat the Union Territory of Puducherry as a HT Consumer. The writ petition filed against the order passed by the Regulatory Commission was dismissed by the Writ Court giving rise to the intra court appeal.

3. The TNEB has now raised a bill for a sum of Rs.1663.75 crores as on 18 August 2016 payable by the Union Territory of Puducherry.

4. The Union Territory of Puducherry is before this Court challenging the order passed by the Regulatory Commission, dated 15 March 2003 and the related order passed by the Writ Court dated 26 July 2004 in W.P.No.27667 of 2003.

5. Brief Facts

The Union Territory of Puducherry has been receiving power for its Puducherry and Karaikal region from the NLC through the TNEB. Initially, the Electricity Department of Puducherry purchased power for its Puducherry Region from the TNEB through 22 KV Villanur and Manalmedu points of supply. Similarly, power to the Karaikal regional was purchased from TNEB through 11 KV Velangudi and Vanjiur points of supply.

6. The Union Territory of Puducherry commissioned 230/11 KV Auto sub-station at Villianur, Puducherry during 1987. The sub-station started availing power from Neyveli Thermal Station II through the radically connected 230 KV Neyveli - Villanur feeder. The Union Territory of Puducherry started drawing its share allocated from the Central Generating Stations in the southern region. The power from TNEB grid was continued to be utilised at Bahour point of supply in the Puducherry region and Sorakudi point of supply in Karaikal Region.

7. The Government of India directed the NLC to supply energy to the Union Territory of Puducherry. The Government of India made it clear that the diversion of energy to Puducherry shall be on the basis of their normal requirements and not merely based on times of power s