Madras High Court
Shree Kumaran Alloys vs The Superintending Engineer on 25 August, 2022
Author: Mohammed Shaffiq
Bench: Mohammed Shaffiq
W.P.Nos.23552 & 23562 of 2014.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 25.08.2022
CORAM:
THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ
W.P. Nos.23552 & 23562 of 2014
and
M.P. Nos.1 & 1 of 2014
Shree Kumaran Alloys,
H.T.S.C.No.386,
Represented by its Partner Mr.V.Rajappan,
S.F.No.461,Telungupalayam Road,
Ellapalayam Post,
Coimbatore – 641 697. ... Petitioner in W.P.No.23552 of 2014
SPB Alloys Steel Private Limited,
H.T.S.C.No.498,
Represented by its Managing Director Mr.S.Palaniswamy,
S.F.No.2/4,B-3, B-4 Telungupalayam Road,
Ellappalayam Post,
Coimbatore – 641 697. .... Petitioner in W.P.No.23562 of 2014
Vs.
The Superintending Engineer,
Tamil Nadu Generation and Distribution Corporation
Limited, (TANGEDCO),
Coimbatore EDC/North,
Coimbatore 641 012. ... Respondent in both W.Ps.
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W.P.Nos.23552 & 23562 of 2014.
Prayer in W.P.No.23552 of 2022 : Writ petition filed under Section Article
226 of the Constitution of India, to issue a Writ of Certiorarified
Mandamus, calling for the records of the respondent culminating in his
impugned Lr.No.SE/CEDC/N/CBE/AO/Rev/A5/HT SC No.386/D.877/14
dated 25.07.2014 issued to the petitioner for their HT SC No.386, quash the
same and forbear the respondent, his men, officers, agents, representatives
and assigns from making any such demand as made in the impugned
communication from the petitioner without obtaining prior sanction from the
Tamil Nadu Electricity Regulatory Commission (TNERC).
Prayer in W.P.No.23562 of 2022 : Writ petition filed under Section Article
226 of the Constitution of India, to issue a Writ of Certiorarified
Mandamus, calling for the records of the respondent culminating in his
impugnedLr.No.SE/CEDC/N/CBE/DFC/AO/Rev/A5/HTSCNo.498//D.896/1
4 dated11.08.2014 issued to the petitioner for their HT SC No.498, quash
the same and forbear the respondent, his men, officers, agents,
representatives and assigns from making any such demand as made in the
impugned communication from the petitioner without obtaining prior
sanction from the Hon'ble Tamil Nadu Electricity Regulatory Commission .
For Petitioner : Mr.Arun Anbumani
For Respondent : Mr.Abul Kalam
Standing Counsel
*****
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W.P.Nos.23552 & 23562 of 2014.
C OM M O N O R D E R
The Writ Petitions have been filed to issue a Writ of Certiorarified Mandamus, calling for the records of the respondent, culminating in his impugned Lr. No. SE/ CEDC/ N/ CBE/ DFC/ AO/ Rev/ A5 /HT SC No. 498//D.896/14 dated 11.08.2014 and issued to the petitioner in W.P.No.23562 of 2014 for their HT SC No.498, and Lr.No.SE/CEDC/N/CBE/AO/Rev/A5/HT SC No.386/D.877/14 dated 25.07.2014 issued to the petitioner in W.P.No.23552 for their HT SC No.386 and quash the same and forbear the respondent, his men, officers, agents, representatives and assigns from making any such demand as made in the impugned communication from the petitioners without obtaining prior sanction from the Tamil Nadu Electricity Regulatory Commission (TNERC).
2. Brief facts:
The petitioners are firms engaged in manufacturing of quality castings, in carbon steel, alloy steel, stainless steel, duplex, steel, nickel based alloys and heat resistant steels. The petitioners have High Tension Electricity Service Connections bearing HT SC Nos.498 and 386 with the 3/14 https://www.mhc.tn.gov.in/judis W.P.Nos.23552 & 23562 of 2014.
sanction demand of 890 KVA and 700 KVA respectively. The Tamil Nadu Electricity Board had imposed certain Restrictions and Control Measures (hereinafter referred to as ''RCM'') on electricity consumption to overcome the power shortage which was applicable to the petitioners also. These measures were called Restrictions and Control Measures (RCM). The power position was reviewed from time to time and the rate of power cut has been increased or decreased according to the availability of power. The permitted consumption is called quantum energy and the permitted demand called the demand quantum which is fixed by the respondent Department depending upon the availability of power. One of the restrictions and control measures which was sanctioned by TNERC which was applicable to H.T Consumers including the petitioners were allowed to use the respondent's power continuously only for a given number of days in a month and it is prohibited from using the power of the respondent's Department during the other days of the month. This limitation was called as ''optimum demand facility''. The days on which the petitioner was not permitted to use the respondent's power, are called ''holiday period'', which was fixed on a monthly basis by the respondent from time to time.4/14
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3. The petitioners, with a view to get over the above restrictions, inasmuch as it would not be commercially feasible, for the petitioners to keep the plant and machineries idle on reaching optimum demand facility in terms of RCM, the petitioners purchased power from third party generator, keeping in view the ''optimum sanctioned demand''. In other words, the energy supplied by the Board for consumption i.e., optimum demand'' plus the energy procured from the third party sources, would not exceed the sanctioned demand quota.
4. While so, vide memo dated 29.02.2012, certain instructions were issued by the Board which are as follows:
"4. Banking adjustment for HT consumers using wind energy, is withdrawn up to 31.03.2012.
5. HT consumers are permitted to purchase third party/Exchange power daily during day time peak hour and night off- peak hours except power holidays and load shedding period.
6. HT consumers are permitted to wheel the energy from wind mill/CPP during day time, peak hours 5/14 https://www.mhc.tn.gov.in/judis W.P.Nos.23552 & 23562 of 2014.
except power holidays and load shedding period."
5. Importantly Clause 6 of the memorandum dated 29.02.2012 imposed a limitation which created an embargo against the wheeling of energy from the wind mill/CPP during power holidays and load shedding period. The above clause came to be challenged before the TNERC in M.P.No.10 of 2012. The following issues were framed by the TNERC in the said M.P.No.10 of 2012 :
i. Whether circulars dated 25.02.2012 and 29.2.2012 of TANGEDCO are vaild vis-a-vis Regulation 38 of the Tamil Nadu Electricity Distribution Code and whether the said circulars have enlarged the scope of Regulation 38 of the Tamil Nadu Electricity Distribution Code?
ii. Whether the circulars dated 25.02.2012 and 29.02.2012 have transgressed the rights of Open Access Consumers under Section 42 of the Electricity Act, 2003 and Captive Consumers under Section 9 of the Electricity Act, 2003?
iii. Whether the approval of the Commission is mandatory for restriction and control measures, in the light of the stand taken by 6/14 https://www.mhc.tn.gov.in/judis W.P.Nos.23552 & 23562 of 2014.
TANGEDCO and there is no such requirement under Regulation 38 of the TN Electricity Distribution Code?
6. TNERC proceeded to examine the legality of the above restrictions in particular, clauses 5 & 6 of the memo dated 29.02.2012, which the present petitioners are concerned with and it was held that:
"It may also be seen that para 5 of the impugned memo seeks to impose restrictions on third party power purchase and purchase of power from exchange on power holidays and load shedding period. Similarly, para 6 of the impugned memo seeks to place restrictions on wheeling of energy from wind mill/CPP during power holidays and load shedding period . In this connection, it is relevant to refer to order dated 7.9.2010 of the Commission in M.P.Nos.6 of 2010, 9 of 2010 and 17 of 2010 and D.R.P.No.9 of 2010 which reads as follows.
4.4. The consumer is at present permitted to utilise power from captive sources. The present order would enable a consumer to purchase power from third party sources as well. Procurement of power by a consumer through Open Access is protected by the Electricity Act, 2003. The role of licensee is limited to that of a carrier. Procurement through Open Access will be treated as an additionality. The ceiling, upto which a consumer can utilise power including the TNEB quota demand, captive power and third 7/14 https://www.mhc.tn.gov.in/judis W.P.Nos.23552 & 23562 of 2014.
party purchase would be the sanctioned demand. In such situation, their would be no need for advance declaration by the consumer of procurement of captive power as stipulated in S.M.P.No.1 of 2009 or procurement of third party power as stipulated in the interim order dated 17.08.2010. As the TNEB had allowed procurement of power upto the sanctioned demand in their communication dated 17.07.2009 ''procedure for allowing third party sale/purchase under intra state open access'', there should be no difficulty in allowing the consumer to procure power upto the sanctioned demand.
4.5 The equivalent demand brought in by the consumer from captive and third party sources should be subtracted from the maximum demand recorded by the meter of the consumer. Balance would be the demand actually by the TNEB. If this figure exceeds the quota demand of the TNEB, the consumer would be liable to pay excess demand charges at the rates stipulated in the order of the Commission in M.P.No.42 of 2008. Similarly the energy purchased from captive and third party sources would be subtracted from the total energy consumed by the consumer. The balance would be deemed to the energy actually supplied by the TNEB. If this quantum exceeds the energy quota of the TNEB, the consumer would be liable to pay excess energy charges at the rates stipulated in the order of the Commission in M.P.No.42 of 2008.
4.6. To summarise the present order enables a consumer to 8/14 https://www.mhc.tn.gov.in/judis W.P.Nos.23552 & 23562 of 2014.
consume power up to sanctioned demand including TNEB quota demand and procurement of power from captive sources and third party sources. The need for advance declaration of the consumer for procurement of power through open access is dispensed with for the purpose of this order”.
It may be seen from the above that the role of the licensee is limited to that of a carrier and procurement to open access will be treated as an additionality. The ceiling, upto which a consumer can utilise power including the TNEB quota demand, captive power and third party purchase would be the sanctioned demand. Such being the case, the para numbers 5 and 6 of the impugned memo 29.02.2012 which seeks to place undue restrictions on the purchase of energy during power holidays and load shedding are violative of the orders of the Commission, more so, when no prior approval of the Commission was obtained for introduction of power holidays. In the result, the said paragraph Nos.5 and 6 are also liable to be set aside.
................
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Therefore, the present circulars which seek to impinge upon the rights of the captive consumers and open access consumers are ultra vires of section 9 and 42 of the Electricity Act. These circulars are also in violation of para 4.6 of the order dated
7.9.2010 in MP.Nos.6 of 2010, 9 of 2010 and 17 of 2010 and DRP No.9 of 2010. In the result, the second issue is also debited against 9/14 https://www.mhc.tn.gov.in/judis W.P.Nos.23552 & 23562 of 2014.
the Petitioner TANGEDCO.''
7. In view of the same, any restriction imposed on the petitioners with regard to the procurement of energy from third party wind mills during the power holidays, within the sanctioned demand would be in conflict with the orders of TNERC.
8. This Court finds that the impugned communications whereby the demand has been raised are made on the basis of instructions, whereby once again the very same limitation/restriction is imposed though couched differently or rather in the negative. This would be clear from the following table contrasting clause 6 held to be bad by TNERC and the instructions sought to be relied upon in the impugned order as set out therein: 10/14
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6.HT consumers are HT billing instruction received from permitted to wheel the energy our Head Quarters in which it is from wind mill/CPP during instructed that in respect of HT day time, peak hours except consumers who have been permitted power holidays and load to avail optimum demand facility and shedding period. who is having wind energy adjustment, the wind energy generation shall be adjusted against working day consumption only and balance kept in banking to adjustment in the following months.
9. As could be seen from the Memo dated 29.02.2012, providing for certain restrictions, the H.T consumers were permitted to wheel the energy on days other than power holidays. The instruction which is sought to be relied upon in the impugned communications provides that wind energy shall be adjusted against the working day consumption only. This Court finds that the instructions which are not referred to in the impugned communications and which have not been placed before this Court by the respondent, could not have imposed the restrictions in the manner in which it has been understood in the impugned communications, for any such restriction would clearly be in conflict with and contrary to the TNERC's order which is binding.
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10. It may also be relevant to note that the TNERC has made it clear that any further restriction could be made only with its prior approval. It is not brought to the notice of this Court that any such approval has been obtained from TNERC, which is mandatory for imposing any additional restriction or control. It has also been informed that the TNERC order has not been challenged and has attained finality.
11. The impugned demands being contrary to the TNERC order, is unsustainable and thus liable to be set aside.
12. In conclusion, the Writ Petitions are allowed. No Costs. Consequently, connected miscellaneous petitions are closed.
25.08.2022 mfa Index:yes/No Internet:yes/No To:
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The Superintending Engineer, Tamil Nadu Generation and Distribution Corporation Limited, (TANGEDCO), Coimbatore EDC/North, Coimbatore 641 012.
MOHAMMED SHAFFIQ, J., mfa W.P.Nos.23552 & 23562 of 2014 and M.P.Nos.1 & 1 of 2014 13/14 https://www.mhc.tn.gov.in/judis W.P.Nos.23552 & 23562 of 2014.
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