Madras High Court
M/S.Klf Nirmal Industries (P) Ltd vs The Chairman on 29 July, 2022
Author: R.Subramanian
Bench: R.Subramanian
W.P.No.27613 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 29.07.2022
CORAM:
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
W.P.No.27613 of 2017
and WMP Nos.29535 to 29537 of 2017
M/s.KLF Nirmal Industries (P) Ltd.,
Rep. By its Managing Director,
SF No.31/1, 2, 3, 4, 5, 6, 7, 8 Part,
9 Part, Kallakulam Village,
Thingalore (Via), Perundurai 638 055. .. Petitioner
Vs.
1.The Chairman
Tamil Nadu Generation and Distribution
Corporation Limited,
144, Anna Salai, Chennai 600 002.
2. Director Finance,
Tamil Nadu Generation and Distribution,
Corporation Limited,
144, Anna Salai, Chennai 600 002.
3. The Chief Financial Controller,
Tamil Nadu Generation and Distribution,
Corporation Limited,
144, Anna Salai, Chennai 600 002.
4. The Superintending Engineer,
Erode Electricity Distribution Circle,
948, EVN Road, Erode 638 009.
1/8
https://www.mhc.tn.gov.in/judis
W.P.No.27613 of 2017
5. The Tamilnadu Electricity Regulatory Commission,
Rep. By its Secretary,
No.19A, Rukmini Lakshmipathi Salai,
Egmore, Chennai 600 008. ..Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India
seeking issuance of Writ of Certiorarified Mandamus calling for the records
of the third respondent bearing Lr.No.CFC/FC/REV/AAO /HT/D.419/2014
dated 11.07.2014 and all proceedings consequent or pursuant thereto,
including the impugned letter of the fourth respondent dated 19.07.2017
bearing Lr.No.SE/EEDC/ED/AO/HT/AS/A5/HTSC No.369/D.60/17 and
quash the same as being arbitrary, illegal and without authority of law and
contrary to the provisions of the Electricity Act 2003 and consequently direct
the second respondent to make payment.
For Petitioner : Mr.Rahul Balaji
For Respondents : Mr.M.Abulkalam,
Standing Counsel
ORDER
Challenge in this writ petition is to the demand of the TANGEDCO made on the assumption that the petitioner has lost its captive status due to non-compliance with the conditions viz., non-usage of 51% of the aggregate 2/8 https://www.mhc.tn.gov.in/judis W.P.No.27613 of 2017 electricity generated in such plant for captive use.
2. The petitioner who is a wind energy generator is also engaged in extraction of coconut oil. According to the petitioner, because of the drought conditions that prevailed during the year 2016, the yield of coconut was less, which laid to the crushing activity of the petitioner being crippled.
3. Be that as it may, the issue as to whether the petitioner should use 51% of the power for its own purpose and whether the TANGEDCO would be entitled to withdraw the captive status and make demand on the petitioner to pay for the electricity consumption as well as the cross subsidy surcharge and treat the generated units banked with the TANGEDCO as lapsed.
4. This question was considered by the Tamil Nadu Electricity Regulatory Commission (TNERC) in DRP.No.1 of 2016 and the TNERC in its order dated 03.08.2021 concluded as follows:-
“6.9 At this juncture, it would be relevant to refer the 3/8 https://www.mhc.tn.gov.in/judis W.P.No.27613 of 2017 Clause 10 of the Energy Wheeling Agreement executed between the parties:~ “10. Agreement Period:
a. This agreement shall come into force from the date of execution and shall remain in full force for a period of twenty (20) years.
b. In case of any breach or violation of any of the clauses in this agreement, by any party, the other party shall be at liberty to terminate this agreement after giving three months notice.
c. It is agreed that the change of utilisation of wind energy, from captive consumption to sale may be done after giving three months notice by the Wind Energy Generator to the Board and after executing energy purchase agreement on the terms applicable as per Order Nos.2 and 3 dated 15.05.2006.?” Though the petitioner in HT SC.1797 M/s.R.K.K.R. Steels is the 100% user of the power generated from WF.HT.SC.D.112, the disconnection and Account closure of the user end HT.SC.1797 was not immediately informed to first respondent by the second respondent. This might be one of the reasons that, the first respondent has not issued any notice to terminate the Energy Wheeling Agreement. In the absence of any such notice from the respondents towards -termination of EWA-, the Energy Wheeling 4/8 https://www.mhc.tn.gov.in/judis W.P.No.27613 of 2017 Agreement cannot be considered as void.
6.10. The petitioner has executed the EWA based on the Commission-s T.O.No.3 of 2006 dated 15.05.2006, hence the provisions of banking referred in that order is applicable to the petitioner-s case as below:~ “ 10.4 Banking xxx xxx xxx The Commission fixes the banking charges as 5% for WEG.
The Licensee shall pay at a rate of 75% of normal purchase rate for the unutilised portion of energy banked by the NCES based wind electric generators......? “ The same has been well inserted into the Energy Wheeling Agreement of the petitioner as below ~ “ 5. Banking:
a. The Wind Energy Generator shall bank the energy generated in the Wind Mill and the Banking period shall be one year from April to March.
b. The unutilised portion of banked energy if any shall be purchased by the Licensee at the rate of 75% of the normal purchase rate.
c. The Banking shall be done slot wise to enable unit~to~unit adjustment.“ It is evident from the Wind Energy Statement issued by the first 5/8 https://www.mhc.tn.gov.in/judis W.P.No.27613 of 2017 respondent during the period from 04/2014 to 07/2015 that the entire energy generated by the petitioner was accepted by the first respondent into its grid. In this circumstance, the unutilised portion of power generated becomes eligible for payment under para 10.4 of the T.O.No.3 of 2006 and clause 5(b) of the Energy Wheeling Agreement.”
5. In view of the above opinion expressed by the TNERC, the TANGEDCO demand is opposed to the finding of the Commission and hence the demand will have to be set aside. The writ petition is therefore allowed.
The demand made is set aside and the TANGEDCO is directed to re-calculate the value of the un-utilised and banked units and make payment to the petitioner. Such exercise shall be carried out within a period of 4 months from the date of receipt of a copy of the order. No costs. Consequently, the connected writ miscellaneous petitions are closed.
29.07.2022 dsa Index:Yes/No Internet:Yes/No Speaking order/Non-Speaking order 6/8 https://www.mhc.tn.gov.in/judis W.P.No.27613 of 2017 To:-
1.The Chairman Tamil Nadu Generation and Distribution Corporation Limited, 144, Anna Salai, Chennai 600 002.
2. Director Finance, Tamil Nadu Generation and Distribution, Corporation Limited, 144, Anna Salai, Chennai 600 002.
3. The Chief Financial Controller – Revenue, Tamil Nadu Generation and Distribution, Corporation Limited, 7th Floor, 144, Anna Salai, Chennai 600 002.
4. The Superintending Engineer, Erode Electricity Distribution Circle, 948, EVN Road, Erode 638 009.
5. The Secretary, Tamilnadu Electricity Regulatory Commission, No.19A, Rukmini Lakshmipathi Salai, Egmore, Chennai 600 008.7/8
https://www.mhc.tn.gov.in/judis W.P.No.27613 of 2017 R.SUBRAMANIAN, J.
dsa W.P.No.27613 of 2017 and WMP Nos.29535 to 29537 of 2017 29.07.2022 8/8 https://www.mhc.tn.gov.in/judis