Karnataka High Court
M/S Techno Electric And Engineering ... vs Karnataka Renewable Energy ... on 14 October, 2024
Author: N S Sanjay Gowda
Bench: N S Sanjay Gowda
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NC: 2024:KHC:41455
WP No. 13471 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 14TH DAY OF OCTOBER, 2024
BEFORE
THE HON'BLE MR JUSTICE N S SANJAY GOWDA
WRIT PETITION NO. 13471 OF 2023 (GM-KEB)
BETWEEN:
1. M/S TECHNO ELECTRIC AND ENGINEERING
COMPANY LTD.,
A COMPANY INCORPORATED UNDER THE
PROVISIONS OF THE COMPANIES ACT 1956
HAVING ITS REGISTERED OFFICE AT
C-218, GROUND FLOOR (GR-2) SECTOR 63
GAUTAM BUDDHA NAGAR
UTTAR PRADESH 201307
(REP BY ITS AUTHORISED SIGNATORY)
VIKRAM JHUNJHUNWALA
...PETITIONER
(BY SRI. SHRIDHAR PRABHU., ADVOCATE)
AND:
1. KARNATAKA RENEWABLE ENERGY
Digitally
signed by DEVELOPMENT LIMITED
KIRAN A COMPANY INCORPORATED UNDER THE
KUMAR R PROVISIONS OF THE COMPANIES ACT 1956
Location: HAVING ITS REGISTERED OFFICE AT NO 39
HIGH SHANTHI GRUHA
COURT OF
KARNATAKA BHARATH SCOUTS AND GUIDES BUILDING
PALACE ROAD, BENGALURU 560001
(REP BY ITS MANAGING DIRECTOR)
2. STATE OF KARNATAKA,
DEPARTMENT OF ENERGY,
VIKASA SOUDHA,
BENGALURU-560 001.
3. BANGALORE ELECTRICITY SUPPLY
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WP No. 13471 of 2023
COMPANY LIMITED
A COMPANY REGISTERED
UNDER COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
K.R.CIRCLE, BENGALURU-560 001.
REPRESENTED BY ITS MANAGING DIRECTOR
4. CHAMUNDESHWARI ELECTRICITY SUPPLY
CORPORATION LIMITED
A COMPANY REGISTERED
UNDER COMPAINES
ACT, 1956
HAVING ITS CORPORATE
OFFICE AT No.29,
VIJAYANAGARA 2ND STAGE,
HINKAL,
MYSURU-570 017.
REPRESENTED BY ITS
MANGING DIRECTOR.
5. KARNATAKA ELECTRICITY REGULATORY
COMMISSION
VASANT NAGAR, BENGALURU-52
BY CHAIRMAN.
...RESPONDENTS
(BY SRI. PRASHANTH KUMAR., ADVOCATE FOR R-1;
SMT. HEMALATHA.V., AGA FOR R-2;
SRI. SHABAAZ HUSSAIN, ADVOCATE FOR R-3 & R-4;
SRI. B.N.PRAKASH., ADVOCATE FOR R-5)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
ORDER OR DIRECTION, TO THE RESPONDENT TO EFFECT THE
CHANGE OF NAME FROM M/S. SIMRAN WIND PROJECT
LIMITED TO M/S. TECHNO ELECTRIC AND ENGINEERING
COMPANY LIMITED IN THE EXISTING POWER PURCHASE
AGREEMENT (PPA) DATED 12TH AUGUST 2009 EXECUTED WITH
THE BESCOM AND PPA DATED 25TH JULY 2009 EXECUTED
WITH CESC BOTH PRODUCED AT ANNEXURE-A AND
ANNEXURE-B RESPECTIVELY.
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WP No. 13471 of 2023
THIS PETITION, COMING ON FOR FURTHER
CONSIDERATION, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR JUSTICE N S SANJAY GOWDA
ORAL ORDER
1. On 25.07.2009, M/s.Simran Wind Project Private Limited, having its registered office at Pune, entered into Power Purchase Agreement (PPA) with Bangalore Electricity Supply Company Limited (BESCOM).
2. On 12.08.2009, it also entered into another PPA with Chamundeshwari Electricity Supply Corporation Limited.
3. It may be pertinent to state here that in both these agreements, the term "Company" is specifically stated to mean "its successors and permitted assigns".
4. On 08.08.2011, M/s.Simran Wind Project Private Limited changed its registered office from Pune, Maharashtra to Kolkata, West Bengal and necessary changes were made by the Registrar of Companies and a -4- NC: 2024:KHC:41455 WP No. 13471 of 2023 certificate was also issued and a new Corporate Identification Number (CIN) was also issued to them.
5. On 23.06.2017, M/s.Simran Wind Project Private Limited changed its registered office from Kolkata, West Bengal to Gautam Buddha Nagar in Uttar Pradesh. Once again the Ministry of Corporate Affairs incorporated the change of Head Office and issued a certificate of registration to them.
6. On 05.09.2018, M/s.Simran Wind Project Private Limited changed its name to "M/s.Techno Electric and Engineering Company Limited". The Ministry of Corporate Affairs acknowledged this change of name and noticed that this was pursuant to the order dated 20.07.2018 passed by the National Company Law Tribunal, Allahabad Bench, which had sanctioned the Scheme of Amalgamation.
7. M/s. Techno Electric and Engineering Company Limited, thereafter, submitted a letter to Karnataka Renewable Energy Development Limited ("KREDL") - 1st -5- NC: 2024:KHC:41455 WP No. 13471 of 2023 respondent herein and requested that the name of the Company be changed in the PPAs.
8. The KREDL then proceeded to demand a sum of Rs.21,94,800/- as transfer fee for effecting change of name and making necessary changes in the PPAs. This demand was refuted by the petitioner but, ultimately, said payments were made under protest. The petitioner, thereafter, issued a legal notice for refund of said transfer fee and since this demand was not complied with, the present writ petition has been preferred seeking refund of transfer fee.
9. As already noticed above, the PPA itself spelt out that the Company i.e., M/s.Simran Wind Project Private Limited would also include its successors and permitted assigns. Both the parties to the PPA were therefore conscious of the fact that the Company could be succeeded to by another company or could be the subject matter of assignment.
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10. The KREDL, however, has taken up the contention that it was a Nodal Agency established by the Government of Karnataka to ensure implementation of Karnataka Renewable Energy Policy and this policy empowered it to collect the transfer fee. It has also been contended that the demand for transfer fee can also be traced to a Government Order dated 06.07.2010 which permitted KREDL to collect transfer fee of Rs.1.5 lakh per megawatt if the CIN of Wind Projects issued by Registrar of Companies was changed. It is stated that the petitioner herein, being a company established for the purposes of generating electricity from wind, it is covered under the said Government Order.
11. The contention of the petitioner - Company is that KREDL has no authority in law to demand a transfer fee. It is the case of the petitioner that the KREDL is no doubt a Nodal Agency established to facilitate setting up of Energy Projects, but that does not entitle it to demand transfer fee especially after a project has been established -7- NC: 2024:KHC:41455 WP No. 13471 of 2023 successfully. It is also contended that the concept of transfer fee under the policy cannot be made applicable in respect of a project which is already established and is running successfully.
12. The KREDL, on the other hand, contends that whenever a different CIN is assigned, it would amount to a transfer of project from one Company to other and therefore, it would be entitled to collect the transfer fee.
13. Since a question arose regarding the validity of such a transfer fee, the Karnataka Electricity Regulatory Commission ("KERC") was also impleaded as an additional respondent to this writ petition.
14. The KERC has filed its counter, in which, it has taken up a specific stand that KREDL is not a body created under any of the provisions of the Electricity Act, 2003 and does not come within the administrative control of the KERC. It is also stated that the KERC has not authorized anyone to collect any fee or charges for any of the services rendered -8- NC: 2024:KHC:41455 WP No. 13471 of 2023 to power project proponents and there was no such provision under the Electricity Act to collect such a fee.
15. It is also stated that it is only the KERC which is authorized under the Electricity Act to collect a license fee from the licensees of distribution, transmission and trading of electricity.
16. It is thereafter specifically stated that for the purpose of tariff determination, the KERC would not consider the levy of fee for changing the name in PPA which was imposed by the KREDL and the levy of fee by KREDL for said purpose was outside the purview of tariff determination by the KERC. It is thus stated that the KERC is not in a position to justify the levy of fee for the aforesaid purpose by KREDL.
17. It cannot be in doubt that the power to regulate functioning of a Electricity Generator can only be by the KERC. The establishment of a Nodal Agency to facilitate setting up of power projects would not, by itself, entitle -9- NC: 2024:KHC:41455 WP No. 13471 of 2023 the KREDL to levy a fee especially in matters relating to a change in the name of Company, as in the instant case.
18. As noticed earlier, the agreement itself spelt out that the Company which had entered into a PPA would also include its successors and permitted assigns, and the KREDEL which was overseeing this entire transaction was actually aware about the fact that the Company could be transferred. Further, once the PPA, as provided under the Regulation, has been entered into and the power project has been established, the role of KREDL would come to an end.
19. In this view of the matter, and in my view, the demand of KREDL for transfer fee to substitute the name of M/s.Simran Wind Project Private Limited with M/s.Techno Electric and Engineering Company Limited would not be justified.
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20. It is to be stated that even according to the KERC, there was no statutory provision under which KREDL can demand a transfer fee from the petitioner.
21. It would also be relevant to state here that KREDL was established only to facilitate setting up of power projects and once the power project is established and running successfully, the role of KREDL would basically come to an end and on that score also, KREDL would have no authority to demand transfer fee from the petitioner. KREDL is therefore directed to refund to the petitioner the transfer fee paid by it within a period of two months from the date of receipt of a copy of this order.
Sd/-
(N S SANJAY GOWDA) JUDGE PKS List No.: 1 Sl No.: 47