Appellate Tribunal For Electricity
Tata Power Company Limited vs Maharashtra Electricity Regulatory ... on 14 November, 2013
Appeal No175 of 2012
Appellate Tribunal for Electricity
(Appellate Jurisdiction)
APPEAL No.175 of 2012
Dated: 14th Nov, 2013
Present: HON'BLE MR. JUSTICE M KARPAGA VINAYAGAM,
CHAIRPERSON
HON'BLE MR. V.J TALWAR, TECHNICAL MEMBER
In the Matter of:
TATA Power Company Limited.,
Bombay House,
24, Homi Mody Street,
Mumbai-400 001
...Appellant
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1,
13th Floor, Cuffe Parade,
Colaba, Mumbai-400 001
2. Maharashtra State Load Dispatch Centre
(Maharashtra State Electricity Transmission Co Ltd)
Office of the Chief Engineer
State Load Dispatch Centre,
Thane-Belapur Road,
PO-Airoli, Navi Mumbai-400 708
3. Maharashtra State Electricity Transmission Co. Ltd.,
C-19, E Block, Prakashganga
Bandra Kurla Complex, Barora,
East Mumbai-400 051
4. Reliance Infrastructure Limited
Reliance Energy Centre
Santa Crux (East)
Mumbai
Page 1 of 72
Appeal No175 of 2012
...... Respondent(s)
Counsel for the Appellant(s) : Mr. Krishanan Venugopal,Sr.Adv
Mr. Sitesh Mukherjee
Mr. Sakya S Chaudhuri
Mr. Anand Kumar Shrivastava
Ms. Mandakini Ghosh
Mr. Avijeet Kumar Lala
Ms. Anusha Nagarajan
Counsel for the Respondent(s): Mr. M Y Deshmukh
Mr. Yatin Jagtap
Mr. B C Gujarathi
Mr. Shrikant R Deshmukh for R
2&3
Mr. J J Bhatt, Sr Adv
Ms. Anjali Chandurkar
Mr. Hasan Murtaza
Mr. SaswatPatnaik for R-4
J U D G M E NT
PER HON'BLE MR. JUSTICE M. KARPAGA VINAYAGAM,
CHAIRPERSON
1. Tata Power Company is the Appellant herein.
2. The Appellant filed a Petition before the Maharashtra State
Commission praying for the compensation to be paid by the
State Load Despatch Centre to the Appellant for the losses
suffered by it on account of failure on the part of the State
Load Despatch Centre to schedule the power generated
between 1.2.2011 and 31.3.2011 for the Appellant's
Page 2 of 72
Appeal No175 of 2012
generation facility to its distribution facility. However, the
State Commission dismissed the said Petition by the
impugned order dated 18.7.2012. Hence, this Appeal.
3. The short facts are as follows:
(a) The Appellant is a Generating Company having a
total generation capacity of about 2027 MW. The
Appellant is also involved in the distribution of electricity
in the city of Mumbai.
(b) State Commission is the 1st Respondent.
Maharashtra State Load Despatch Centre is the
Second Respondent. It is a Statutory Authority under
the Act which has been vested with the functions of
carrying out optimum scheduling and despatch of
electricity within the State in accordance with the
contract entered into by Licensees and Generating
Companies within the State. The power from the
Appellant's Generating Station was required to be
scheduled to its Distribution Business for onward
supply to the Appellant's Consumers.
(c) The Reliance Infrastructure Limited is the 4th
Respondent.
(d) At the instance of the Reliance Infrastructure
Limited (the 4th Respondent) the Government of
Maharashtra issued a Memorandum dated 7.5.2010
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Appeal No175 of 2012
advising the Appellant to supply to Reliance
Infrastructure (R-4) 360 MW of power till 30.6.2010 and
thereafter, 200 MW of power. The State Government
also issued another Memorandum dated 19.5.2010
directing the State Transmission Company to maintain
status-quo.
(e) This power was being sought to be scheduled by
the Appellant to its Distribution Business through Open
Access. Hence, the Appellant approached the State
Dispatch Centre for scheduling.
(f) In spite of several requests made by the
Appellant to the State Load Despatch Centre (R-2) on
various occasions, it refused to schedule the power
from the Appellant's Generating Stations on the ground
that it had been advised by the Senior Authorities to
maintain the status-quo till further instructions from the
State Government or the State Commission, were
received.
(g) The Appellant had challenged the said decision
of the State Load Despatch Centre of its refusal in
scheduling of power by filing a Petition in case No.37 of
2010 before the State Commission. The Appellant had
also sought for compensation and penalty from the
State Load Despatch Centre in the same proceeding.
Page 4 of 72
Appeal No175 of 2012
However, the State Commission by the order dated
29.9.2010 dismissed the said Petition and up-held such
refusal of scheduling of Appellant's power by the State
Load Despatch Centre.
(h) Aggrieved by this, the Appellant filed an Appeal
before this Tribunal in Appeal No.32 of 2010
challenging the order of the State Commission dated
29.9.2010.
(i) In the meantime, the Appellant also filed a Writ
Petition for quashing the Memorandum dated 7.5.2010
and 19.5.2010 issued by the State Government.
(j) Ultimately on 18.1.2011, the Bombay High Court
quashed both the Memorandums dated 7.5.2010 and
19.5.2010. On the basis of this order, the Appellant
again requested the State Load Despatch Centre to
carry out scheduling of power with effect from 1.2.2011
as per the schedule set-out by the Appellant in the
letter. The State Load Despatch Centre sent a reply on
29.1.2011 informing the Appellant that the Bombay
High Court had quashed only the Government
Memorandums dated 7.5.2010 and 19.5.2010 but had
not quashed the Order dated 29.9.2010 passed by the
State Commission. It was further indicated in the letter
that it would maintain the status-quo in respect of
Page 5 of 72
Appeal No175 of 2012
scheduling of 200 MW of power to the Maharashtra
State Electricity Transmission Company (3rd
Respondent) till further directives were received from
the State Commission.
(k) Aggrieved by the refusal of the State Load
Despatch Centre to schedule power despite the High
Court's Order dated 18.1.2011 quashing the
Memorandums dated 7.5.2010 and 19.5.2010, the
Appellant filed a Petition in Petition No.22 of 2011
before the State Commission for quashing the letter
dated 29.1.2011 sent by the State Load Despatch
Centre(R2) and for consequential directions to
schedule the power as per instructions issued by the
Appellant. Besides this, the Appellant also claimed
compensation against the State Load Despatch Centre
and sought imposition of penalty on State Load
Despatch Centre for contravening the provisions of the
Act.
(l) In the meantime, the Appeal No.32 of 2011 which
was filed by the Appellant before this Tribunal was
taken-up and heard.
(m) Ultimately, on 30.5.2010, this Tribunal allowed
the said Appeal in Appeal No.32 of 2011 and set-aside
the order of the State Commission dated 29.9.2010
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Appeal No175 of 2012
holding that the State Load Despatch Centre having full
knowledge that the Memorandum issued by the
Government was not binding on them, yet they wrongly
denied the scheduling of power to the Appellant to
regulate the allocation of generation Company of the
Appellant.
(n) However, this Tribunal by the judgment dated
30.5.2012 did not incline to grant any compensation to
the Appellant since at the time when the Order was
passed by the State Commission on 29.9.2010, the
Memorandums dated 7.5.2010 and 19.5.2010 were in
existence which in fact influenced the decision of the
State Load Despatch Centre to deny the scheduling at
that stage which may be bona-fide.
(o) Thereafter, the Petition which was filed by the
Appellant before the State Commission in Petition No.
22 of 2011 seeking to set-aside the letter dated
29.1.2011 issued by the State Load Despatch Centre
and also claiming compensation was taken-up for
hearing. Ultimately, on 18.7.2012, the State
Commission disposed of the said Petition on the basis
of the judgement of Tribunal in Appeal No.32 of 2011,
and set-aside the letter dated 29.1.2011 issued by
State Load Despatch Centre by holding that it was
unjustifiable. However, it declined to grant the
Page 7 of 72
Appeal No175 of 2012
Appellant any compensation for the losses suffered by
the Appellant due to the refusal of the State Load
Despatch Centre to schedule 200 MW of power from
1.2.2011 to 31.3.2011.
(p) The Appellant, having aggrieved over the portion
of the Impugned Order dated 18.7.2012, declining to
grant compensation even though it set- aside the letter
dated 29.1.2011 issued by the State Load Despatch
Centre, has presented this Appeal.
4. The learned Senior Counsel for the Appellant has made
the following submissions:
i) The State Load Despatch Centre was not
justified in refusing the scheduling of the power to the
extent of 200 MW to the Appellant, which was being
scheduled to R-Infra pursuant to Government
Memorandums dated 7.5.2010 and 19.5.2010 even
though the Bombay High Court quashed those
Government memorandums by the order dated
18.1.2011.
ii) The State Load Despatch Centre denied
Appellant's request for scheduling power on
considerations that are totally extraneous to statute
namely the State Load Despatch Centre was bound to
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Appeal No175 of 2012
follow the State Government's dictates, even if they
conflicted with its statutory obligations.
iii) Admittedly, the Government Memorandums
dated 7.5.2010 and 19.5.2010 had been quashed by
the Bombay High Court through the order dated
18.1.2011. This order had not been challenged. Not
having done so, the State Load Despatch Centre can
not be allowed to rely upon the Government
Memorandums just to justify its refusal to schedule
power. This is more so, when in its letter dated
29.1.2011, the State Load Despatch Centre stated in
so many words that even when the Government
Memorandums had been quashed, the State
Commission's order dated 29.9.2010 had not been
quashed by the High Court and therefore they would
maintain status quo. This reasoning is totally
misconceived.
iv) The order of the State Commission dated
29.9.2010 which had upheld the refusal of the
scheduling of power by the State Load Despatch
Centre earlier during the subsistence of the
Government Memorandums was not of any
consequence after the Government Memorandum was
quashed. Hence, the same could not be relied upon by
the State Load Despatch Centre after 18.1.2011, on
Page 9 of 72
Appeal No175 of 2012
which the Government Memorandums were quashed
by the High Court.
v) In any event, the State Commission's order dated
29.9.2010 was the subject matter of challenge by the
Appellant before this Tribunal in Appeal No.32 of 2011.
The letters of State Load Despatch Centre were finally
quashed by this Tribunal by its order dated 30.5.2012.
In that order the Tribunal has observed that the State
Load Despatch Centre was an independent statutory
body under the Act and that despite being aware of the
non-binding nature of the Government Memorandums,
it continued to refuse scheduling Appellant's generation
capacity to its distribution business. In these
circumstances, the State Load Despatch Centre could
not rely upon the State Commission's order dated
29.9.2010 which has already been quashed by the
Tribunal. The State Commission also passed the
impugned order in the same line.
vi) The State Commission has wrongly concluded
that it was mandatory for the Appellant to demonstrate
malice in fact or factual mala-fides to hold the State
Load Despatch Centre, guilty of the failure to schedule
or misfeasance and liable to compensate the Appellant
for the losses suffered by it.
Page 10 of 72
Appeal No175 of 2012
vii) To establish misfeasance on the part of the State
Load Despatch Centre, it is enough for the Appellant to
show that the State Load Despatch Centre is guilty of
legal mala-fides by knowingly breaching its statutory
duty and with the knowledge that its actions were likely
to cause losses to the Appellant. Though this aspect
has been established by the Appellant in this case, the
State Commission has overlooked this.
5. In order to elaborate these issues, learned Senior Counsel
for the Appellant has cited various authorities of the High
Court which we shall see later.
6. In reply to the above submissions, the learned Counsel for
the State Load Despatch Centre, Respondent-2, made the
following submissions in support of the impugned order:-
i) This Appeal preferred by the Appellant is not
maintainable. It was the Tata Power Trading
Company Ltd., who had availed the Open Access.
The said Company was the petitioner before the State
Commission. Therefore, the Appellant being the
generating company had no cause of action and as
such, it cannot be considered to be the aggrieved
party in terms of Section 111 of the Act, 2003.
ii) The prayers for penalty and compensation made
by the Appellant in the present Appeal are hit by
Page 11 of 72
Appeal No175 of 2012
Section 11 of the Code of Civil Procedure, because,
the said prayer had already been rejected by the State
Commission in its order dated 3.8.2010 passed in the
case No.16 of 2010 which had already attained
finality. Thus, the Appellant cannot re-open the claim
for compensation.
iii) The State Load Despatch Centre is neither an
independent authority nor an independent system
operator nor an autonomous body. Admittedly, the
State Load Despatch Centre has not been notified by
the Government under Section 31(2) of the Act, 2003.
Under Section 31(2) of the Act, 2003, the State
Government is required to establish or constitute a
State Load Despatch Centre and the said
establishment has to be notified by the State
Government. In the present case, there is no such
notification in respect of Maharashtra State Load
Despatch Centre. Therefore, the State Load
Despatch Centre on the instructions of the senior
authority had to wait till further instructions for the
same and consequently, the Open Access was
deferred by the State Load Despatch Centre.
iv) The Government Memorandum dated 19.5.2010
issued by the Maharashtra was a clear direction to the
State Load Despatch Centre to maintain the status
Page 12 of 72
Appeal No175 of 2012
quo in respect of the scheduling of the power till
further directions were received from the State
Government or State Commission. The State Load
Despatch Centre, being institution subordinate to the
Government was required to act in accordance with
the two Memorandums which were legally binding on
it.
v) The findings recorded by this Tribunal in its
earlier order in Appeal No.32 of 2011 dated 30.5.2010
to the effect that the State Load Despatch Centre is an
autonomous body and as such the Government
Memorandums are not binding on them, is totally
erroneous.
vi) The said findings have been recorded by this
Tribunal without considering the fact that there is no
notification by the State Government under Section
31(2) of the Act notifying State Load Despatch Centre
as an independent system operator. Thus, when the
State Load Despatch Centre is not an autonomous
body and it is working under the control of
Maharashtra Government, it had to obey and execute
the instructions issued by the Government by virtue of
two Memorandums dated 7.5.2010 and 19.5.2010.
Therefore, the question of compensation or penalty
would not arise.
Page 13 of 72
Appeal No175 of 2012
vii) That apart, the findings recorded by this Tribunal
in Appeal No.32 of 2011 have not achieved finality as
State Load Despatch Centre and Transmission
Company have already filed civil Appeal D.No.12471
of 2013 before the Hon'ble Supreme Court of India.
Therefore, reliance cannot be placed by the Appellant
on the findings rendered by this Tribunal in Appeal
No.32 of 2011.
viii) In the present case, the act of State Load
Despatch Centre cannot be actuated by malice,
misfeasance or mala-fide motive. As such, the
Doctrine of Misfeasance cannot be invoked to award
compensation to the Appellant. The element of malice
or bad faith on the part of the State Load Despatch
Centre is clearly missing. Misfeasance necessarily
imports intention, knowledge and malice. This is not
available in the present case as rightly pointed out by
the State Commission in the impugned order. In the
light of the Memorandums issued by the State
Government, the State Load Despatch Centre had to
abide by the directions issued by the Government and
therefore, it had to defer its decision regarding
scheduling of generating capacity as sought for by the
Appellant.
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Appeal No175 of 2012
7. To substantiate this plea the learned Counsel for
Respondent State Load Despatch Centre also has cited
some authorities. We will consider those authorities at later
point of time.
8. In the light of the rival contention urged by both the parties
the following questions of law may arise for consideration.
(a) Whether State Load Despatch Centre (R-2) was
justified in refusing to schedule 200 MW of power
generated by the Appellant relying on the Memoranda
dated 7.5.2010 and 19.5.2010 (the "Government
Memoranda") issued by the Government of
Maharashtra after the Hon'ble High Court of Bombay
had quashed the Government Memoranda by its order
dated 18.01.2011 in Writ Petition (L) No.1224 of 2010
filed by the Appellant?
(b) Whether the earlier order passed by the State
Commission dated 29.9.2010, which had upheld the
refusal of scheduling of power by Respondent No.2
based on the Government Memorandums not having
been set aside be relied upon by State Load Despatch
Centre(R2) in the present case especially when the
High Court by the order dated 18.1.2011 quashed the
Government memorandums dated 07.5.2010 and
19.5.2010?
Page 15 of 72
Appeal No175 of 2012
(c) Whether the State Commission was correct in
concluding that unless Appellant could demonstrate
malice in fact or factual mala fides on the part of State
Load Despatch Centre (R2), Appellant was not entitled
to any compensation for misfeasance committed by the
State Load Despatch Centre(R2)?
9. All these three questions invoke a common issue which is as
follows:-
"Whether the Appellant is entitled to the grant of
compensation due to the default or misfeasance
committed by the State Load Despatch Centre by
illegally refusing to schedule power to the
Appellant in the facts and circumstances of the
case?
10. Before dealing with this issue, it would be better to recall
the factual background of this case to understand the core of
the issue in the proper perspective. Those detailed facts are
summarised as follows:-
i) There are three distribution licensees operating
in Mumbai city. They are BEST, R-Infra and
TPCTL(TATA). They were procuring power from Tata
Power Generation Company. BEST had been
procuring power through agreements with Tata Power
Generation. However, R-Infra refrained from signing
Page 16 of 72
Appeal No175 of 2012
any PPA with Tata Power Generation for procurement
of supply. In the meantime, BEST and Tata Power
Distribution approached the State Commission for
approval on their power purchase agreement with
Tata Power Generation. This was challenged by R-
Infra on the ground that it was entitled to majority of
the power generated by Tata Power Generation.
Consequently, R-Infra prayed to State Commission to
issue directions to Tata Power Generation to supply
about 760 MW of power to R-Infra. This matter finally
went up to the Hon'ble Supreme Court.
ii) The Hon'ble Supreme Court by the judgement
dated 6.5.2009 rejected the contention of R-Infra and
held that the Generating Companies have freedom to
enter into a contract with any party to sell the power
generated by it and they cannot be directed to sell the
power to a particular party in the absence of any
agreement.
iii) In pursuance of this judgement, the Tata Power
Generation sent a letter to R-Infra on 25.6.2009 about
their decision to discontinue supply of such power to
R-Infra which was supplied on ad-hoc with effect from
01.4.2010.
Page 17 of 72
Appeal No175 of 2012
iv) In view of the above developments the
Government of Maharashtra issued two
Memorandums one on 7.5.2010 and the other on
19.5.2010.
v) The Memorandum dated 7.5.2010 issued by the
Government of Maharashtra gave direction to the
State Commission in relation to the generation assets
of the Appellant. In the same Memorandum, the State
Commission advised the Appellant to supply 360 MW
power to R-Infra on 30.6.2010 and thereafter 200 MW
to R-Infra on 31.3.2011.
vi) After the issuance of the Memorandums, the
Appellant addressed various letters dated 13.5.2010,
15.5.2010 and 16.5.2010 requesting the State Load
Despatch Centre to schedule 100 MW of power to
BEST and 160 MW of power to its Distribution
business with effect from 17.5.2010. However, the
State Load Despatch Centre through its letters dated
16.5.2010 and 18.5.2010 refused scheduling of the
Appellant's generating capacity on the ground that the
State Load Despatch Centre had received instructions
from the senior authority to await further instructions
as the matter had been referred by the State
Government to the State Commission.
Page 18 of 72
Appeal No175 of 2012
vii) At that stage, on 19.5.2010, the Appellant
approached the Bombay High Court by way of writ
petition assailing the Memorandum dated 7.5.2010
issued by the State Government and also prayed to
restrain the Government from giving any effect to the
said Memorandum.
viii) In the meantime another Memorandum had been
issued by the State Government dated 19.5.2010
directing the State Load Despatch Centre to maintain
the status-quo regarding the scheduling of the
Appellant's power.
ix) The State Load Despatch Centre after receipt of
this direction issued a letter to the Appellant dated
20.5.2010 informing that it would maintain status quo
regarding the scheduling of power in the light of the
above Memorandum.
x) On the same day, the Appellant challenged the
letters dated 16.5.2010 and 18.5.2010 issued by the
State Load Despatch Centre before the State
Commission in case No.16 of 2010. At that stage, the
writ petition was taken up for hearing with regard to
interim relief on 11.6.2010 before the High Court.
xi) While hearing the interim petition, the Advocate
General appearing for the Government clarified to the
Page 19 of 72
Appeal No175 of 2012
Bombay High Court that the Government of
Mahararashtra had not passed any directions under
Section 11 and 37 of the Act, 2003 and the
Government Memorandums was only the suggestion
of a pro-tem order between the parties till the
directions were carried out by the State Commission.
Such a submission of the Advocate General on behalf
of the Government of Maharashtra was duly recorded
by the High Court and thereby felt no interim order
was necessary. This order was passed on 11.6.2010.
xii) In the light of the order of the Bombay High Court
on 11.6.2010, the Appellant sent another letter calling
upon the State Load Despatch Centre to maintain the
schedule with effect from 14.6.2010 for the power
contracted by the Appellant. However, the State Load
Despatch Centre sent a reply on 12.6.2010 insisting
that it would continue to maintain status quo with
respect to the scheduling till it receives further
instructions from the State Commission or from the
Government of Maharashtra. This refusal was in spite
of the fact that the Government of Maharashtra
clarified before the High Court that it had not issued
those Government Memorandums giving directions
under Section 11and 37 of Act, 2003. At that stage,
the Appellant on 23.6.2010 filed a petition for
Page 20 of 72
Appeal No175 of 2012
maintaining of Writ petition to implead State Load
Despatch Centre and the State Commission and also
to include additional prayers on account of repeated
refusal of the State Load Despatch Centre to schedule
the power as requested by the Appellant. The
impleading petition was allowed.
xiii) Thereafter, on 26.6.2010, the Appellant made a
representation before the State Load Despatch Centre
requesting the scheduling of 100 MW generation
capacity of the Appellant to Tata Power Distribution for
the period from 1.7.2010 to 31.7.2010.
xiv) Rejecting the said request, the State Load
Despatch Centre informed the Appellant by recording
in the said representation that the application can not
be considered at that stage and the same shall be
considered only after disposal of the petition pending
before the State Commission.
xv) Thereupon, the State Commission by the order
dated 3.8.2010 dismissed the case No.16 of 2011 filed
by the Appellant before the State Commission
challenging the letters of State Load Despatch Centre
dated 16.5.2010 and 18.5.2010 for refusing to
schedule, in view of the fact that the issue of relief
Page 21 of 72
Appeal No175 of 2012
claimed in the said petition was pending before the
High Court.
xvi) When this was reported to the High Court on
9.8.2010, the High Court granted leave to the
Appellant to approach the State Commission to
challenge all the letters of State Load Despatch
Centre 16.5.2010, 18.5.2010, 12.6.2010 and
30.6.2010 by which State Load Despatch Centre
refused scheduling of the Appellant.
xvii) The High Court further clarified in the order directing
State Commission to entertain the petition to be filed
by the Appellant notwithstanding the dismissal of case
No.16 of 2010 on the basis of withdrawal.
xviii) In pursuance of the above order of High Court
dated 9.8.2010, the Appellant filed case No.37 of 2010
before the State Commission challenging those letters
by which the State Load Despatch Centre refused to
schedule the power. The State Commission
dismissed the case No.37 of 2010 by the order dated
29.9.2010 holding that the refusal to schedule of
power by State Load Despatch Centre cannot
questioned since the action of SDLC could not be
faulted due to the Memorandums issued by the
Government.
Page 22 of 72
Appeal No175 of 2012
xix) Aggrieved by this order passed by the State
Commission, the Appellant filed another writ petition to
challenge the order dated 29.9.2010 passed by the
State Commission before the High Court.
xx) However, High Court dismissed the writ petition by
granting liberty to the Appellant to file statutory Appeal
to challenge the order of the State Commission dated
29.9.2010 before this Tribunal.
xxi) In the meantime, on 18.1.2011, the High Court of
Bombay took up the writ petition challenging the
Government Memorandum and allowed the writ
petition setting aside the same by declaring that those
Memorandums are ultra-vires of the Act.
xxii) At this stage, the Appellant filed the Appeal
No.32 of 2011 challenging the order passed by the
State Commission dated 29.9.2010.
xxiii) Meanwhile, the Appellant in the light of the fact
that the Government Memorandums were quashed by
the Bombay High Court by the order dated 18.1.2011,
sent another letter dated 25.1.2011 to the State Load
Despatch Centre requesting them to schedule their
generation capacity intimating about the quashing of
the Government Memorandums. This request for
scheduling was once again refused by the State Load
Page 23 of 72
Appeal No175 of 2012
Despatch Centre on 29.1.2011 on the ground that only
those Government Memorandums were quashed by
the High Court, but the order passed by the State
Commission dated 29.9.2010 had not been quashed
by the High Court and therefore, State Load Despatch
Centre would maintain the status quo in respect of
scheduling 220 MW to R-Infra till further directions are
received from the State Commission.
xxiv) Aggrieved over this letter dated 29.1.2011, the
Appellant filed a petition in the month of Feb, 2011
before the State Commission in case No.22 of 2011
seeking for quashing the said letter dated 29.1.2011
issued by State Load Despatch Centre and also
sought for compensation for the procurement from
other sources.
xxv) At this stage, the Tribunal took up the hearing in
Appeal No.32 of 2011 which was already filed as
against the order dated 29.9.2010 passed by the Ste
Commission for final disposal.
xxvi) Ultimately this Tribunal by the judgement dated
30.5.2012 in Appeal No.32 of 2010 allowed the
Appeal and set-aside the letters of State Load
Despatch Centre dated 16.5.2010, 18.5.2010,
12.6.2010 and 30.62010.
Page 24 of 72
Appeal No175 of 2012
xxvii) In the said judgement, the Tribunal
specifically held that there is no legal justification on
the part of the State Load Despatch Centre to decide
not to schedule power according to the instructions of
the Appellant. However, the Tribunal concluded that
the act of State Load Despatch Centre in refusing to
schedule in favour of the Appellant was not actuated
by the malice and therefore the Appellant is not
entitled for compensation as prayed for by the
Appellant.
xxviii) At that stage, the State Commission heard
the parties in petition No.22 of 2011 and passed the
order on 18.7.2012 by setting aside the letter of State
Load Despatch Centre dated 29.1.2011 but refused to
grant the Appellant any compensation for the loss
suffered by the Appellant due to the default of the
State Load Despatch Centre to schedule power.
xxix) On being aggrieved over the portion of the order
with regard to the refusal of the grant of compensation
the Appellant has filed this Appeal No.175 of 2012
before this Tribunal.
11. In the light of above factual background we shall now deal
with the issues raised in this Appeal. While dealing with the
issues, it will become necessary to quote the reasonings
Page 25 of 72
Appeal No175 of 2012
given in the impugned order refusing to give compensation
even after having held that the action of the State Load
Despatch Centre to refuse scheduling of power was totally
unfair and erroneous.
12. Let us refer to the findings contained in the impugned
order:-
"20. Having heard the parties and after considering
the materials placed on record, the Commission is of
the view that the main basis on which the Respondent
No.1 has tried to justify its action of refusing to
schedule 200 MW of power w.e.f. 1 February 2011 is
that it was to comply with the directions of the
Government of Maharashtra vide Memorandum dated
19 May,2010 to maintain status quo till further
directives are received from this Commission or till
further orders/directions in this behalf are issued by
GOM. Respondent No;1 has also tried to justify its
action on the ground that although the Hon'ble
Bombay high Court had vide Judgement dated 18
January,2011 set aside the GOM memoranda dated 7
May,2010 and 19 May,2010, the Hon'ble High Court
has not set aside this Commission's Order dated 29
September,2010. According to the Respondent No.1
there is no change in this circumstances whereby this
Commission's Order dated 29 September, 2010
requires to be reviewed. During the proceedings, the
Respondent No.1 has stated that the Petitioner has by
filing an interim application before the Hon'ble ATE in
Appeal No.32 of 2011 raised the same issues as have
been raised before this Commission. The
Commission is of the view that although the periods in
question and the quantum of power for scheduling
involved in the present petition are different from the
ones underlying Appeal No.32 of 2011, the legal
Page 26 of 72
Appeal No175 of 2012
issues are similar. The Hon'ble ATE delivered
Judgement dated 30 May, 2010 in Appal No.32 of
2011 setting aside this Commission's Order dated 29
September,2010, Hence, this Commission has taken
some time to dispose of this present Petition.
21. The Hon'ble ATE has held that MSLDC
(Respondent No.1 herein) could not have acted on
Government instructions contained in the
aforementioned Memoranda and refuse to schedule
power as requested by TPC because the Hon'ble
Bombay High Court in Writ Petition of 71 of 2011 held
in its Judgment that the GOM swore an affidavit on 11
June,2010 to the effect that the Government did not
exercise its power under Section 11 or Section 37 of
the EA 2003 and that the aforementioned Memoranda
are merely advisory in nature. The learned Advocate
General of Maharashtra made a submission before
the Hon'ble Bombay High Court that the Memorandum
was only a request to this Commission and not a
statutory directive, and it was recorded in the Hon'ble
High Court's orders dated 11 June,2010 and 16 June
2010. The Hon'ble ATE has also held that after the
aforesaid developments MSLDC could not have been
said to be in a state of flux.
22. In view of the above, the Commission holds that
the action of Respondent No.1 to refuse scheduling of
power undoubtedly needs to be deprecated. The
action of Respondent No.1 can only restrict the
scheduling if there are technical constraints or other
reasons contemplated in the statute but should not
have refused to schedule power by mechanically
referring to the Commission's order dated 29
September,2010. The Hon'ble ATE has held in its
aforesaid Judgment that MSLDC is undoubtedly a
statutory body designed to ensure integrated
operation of power system and it acts in terms of
Section 33 of the EA 2003. It was not the case of
Page 27 of 72
Appeal No175 of 2012
MSLDC that there was network constraint or
congestion and lack of required metering
infrastructure. The grounds of refusal must be within
the parameters of the law and any action which is not
within the domain of the Authority would be without
jurisdiction. The Commission agrees with the said
view and reiterates the same.
23. Hence, the action of Respondent in refusing the
scheduling of 200 MW power for the petitioner cannot
be sustained. Accordingly, letter dated 29 January,
2011 issued by the Respondent No.1 is hereby set
aside. The question of compensation and damages
on account of unlawful action on part of MSLDC also
arose in Appeal No.32 of 2011. The Hon'ble ATE held
that such a claim was a far fetched one. As the
Respondent No.1is a statutory body, an award of
damage can only be made if it can be said that the
actions are actuated by malice, misfeasance, malafide
motive and negligent discharge of duties. The
Commission is not able to attribute these conducts to
Respondent No.1 or Respondent No.2. These can
not be attributed without proper evidence and nothing
of the sort has been placed in proof against
Respondents. Hence, the Commission cannot accede
to the prayer claiming compensation from Respondent
No.1 and/or Respondent No.2".
13. The gist of the discussion and finding by the State
Commission in the impugned order is extracted which is as
follows:-
i) The main basis on which State Load Despatch
Centre tried to justify its action for refusing to schedule
the power is that it was to obey the directions of the
Government of Marharashtra to maintain the status
Page 28 of 72
Appeal No175 of 2012
quo till further directions were received. It is also
contended by the State Load Despatch Centre that
although Bombay High Court set aside the
Government Memorandums dated 7.5.2010 and
19.5.2010 through its order dated 18.1.2011 the High
Court has not set aside the State Commission's earlier
order dated 29.9.2010 and therefore State Load
Despatch Centre is not bound to schedule the power
as per the instructions of the Appellant. This
contention of the State Load Despatch Centre is
totally misconceived.
ii) The Tribunal in Appeal No.32 of 2011 in the
order dated 30.5.2012 set aside the State
Commission's order dated 29.9.2010. In that order,
the Tribunal held that the State Load Despatch Centre
could not act on Government instructions contained in
the Memorandums and could not refuse to schedule
the power as requested by the Tata Power Company
because the Bombay High Court recorded the
statement of Advocate General that the
Memorandums were not in the nature of directions
under Section 11 and 37 of the Act, 2003 and they are
merely advisory in nature. In the light of this
representation by the Government through Advocate
General, the Tribunal held that the State Load
Page 29 of 72
Appeal No175 of 2012
Despatch Centre could not act upon those
Memorandums. The State Commission agrees with
the said findings of the Tribunal and reiterates the
same by holding that action of the State Load
Despatch Centre to refuse scheduling of power is
totally erroneous.
iii) Consequently, the action of State Load Despatch
Centre to refuse scheduling of power for the Tata
Power Company can not be sustained. Accordingly,
the letter dated 29.1.2011 issued by the State Load
Despatch Centre refusing to schedule power is set
aside.
iv) However, the question of compensation can not
arise in this case on account of unlawful action on the
part of the State Load Despatch Centre as held by the
Tribunal in Appeal No.32 of 2011. In the decision, the
Tribunal held that State Load Despatch Centre being
the statutory body, cannot be directed to pay
compensation unless actions of the State statutory
body are actuated by malice, misfeasance, mala-fide
motive and negligence in discharge of duties. The
State Commission is not able to attribute this conduct
to State Load Despatch Centre especially when no
proper evidence has been placed by the Tata Power
Company before the State Commission.
Page 30 of 72
Appeal No175 of 2012
v) The perusal of the impugned order would show
that the above conclusion was arrived at by the State
Commission quashing the letter of State Load
Despatch Centre and declining the grant of
compensation was purely on the basis of the
judgement given by this Tribunal in Appeal No.32 of
2011 on 30.5.2012.
14. In this context, we have to consider the question as to
whether the finding with reference to the compensation
rendered by this Tribunal, would apply to the present case
in the light of the present facts and circumstances of the
case.
15. Before considering the question, it would be appropriate to
deal with the preliminary objections which have been raised
by the learned Counsel for the State Load Despatch Centre
with reference to the maintainability of the Appeal as well
as the status of the State Load Despatch Centre.
16. The learned Counsel for the State Load Despatch Centre
(R2) has contended that the Appeal is not maintainable in
view of the fact that the petition filed before the State
Commission by the Tata Power Generating Company who
has actually suffered no loss due to the action of State
Load Despatch Centre but the loss, if any, has been
suffered by Tata Power Distribution Company, which it was
Page 31 of 72
Appeal No175 of 2012
not a party before the State Commission and therefore the
Appeal is not maintainable. This contention urged by the
learned Counsel for the Respondent is totally misplaced.
Tata Power Company is not merely a generating company
but it is a company engaged in the business of generation,
transmission and distribution of electricity. Tata Power
Distribution Company is a division of Tata Power Company
(TPCL), involved in distribution of electricity in the city of
Mumbai. As such, it is the licensee of the State
Commission under 2003 Act. Thus, loss to Distribution
business is a loss to Tata Power Company Limited.
17. The main contention of the State Load Despatch Centre in
this present Appeal is that it is not an independent
autonomous body created under the Act especially when
Government of Maharashtra has not issued any notification
for its creation and it is only an approved Maharashtra
State Transmission Company which functions under the
control of State Government and therefore it had to obey
the direction of the Government. The very same contention
has been urged by the State Load Despatch Centre even in
the earlier Appeal before the Tribunal. On consideration of
this contention, the Tribunal in Appeal No.32 of 2011 has
rejected this contention and categorically held that State
Load Despatch Centre is an independent autonomous
body.
Page 32 of 72
Appeal No175 of 2012
18. It is quite unfortunate on the part of the learned Counsel
appearing for State Load Despatch Centre to address the
argument before this Tribunal to the effect that this Tribunal
committed a wrong in making such an observation in
Appeal No.32 of 2011. This contention was urged bythe
learned Counsel for the SLDC without understanding the
basis legal jurisprudence. So long as the ratio decided by
the Tribunal in Appeal No.32 of 2011 is intact which has not
been disturbed by the Hon'ble Supreme Court, the law on
the ratio has to be followed, which is a settled law. Despite
this, the learned Counsel for the Respondent (State Load
Despatch Centre) has the audacity to raise the same point
before the Tribunal even though this point had already
been answered by this Tribunal in Appeal No.32 of 2011 as
against the State Load Despatch Centre further contending
that the said conclusion by the Tribunal in the earlier
Appeal was erroneous. This conduct of the learned
Counsel for the Appellant criticising the judgement of this
Tribunal earlier rendered, before this Tribunal itself is highly
unwarranted.
19. Let us now quote the relevant portion of judgment of this
Tribunal. The same is as follows:-
"60. The very thesis of the MSLDC which has been
subscribed to by the Commission that the MSLDC is
subordinate to Government or that it is an organ of the
Government and it is obliged to act as a subordinate
Page 33 of 72
Appeal No175 of 2012
authority is unknown to the law. The scheme of the
Act does nowhere provide that the Legislature
intended that the SLDC or RLDC would be acting not
independently, not as an autonomous statutory body
but as being a subordinate department of the
Government. ... The stand of the MSLDC is stultifying
in this that if it was the consistent stand of the MSLDC
that it was a subordinate organ of the Government
and is designed to serve the Government, then it does
not lie in their mouth to say even on 12.6.2010 after
the Government has made it clear before the High
Court that the two memoranda were not issued under
section 11 or 37 of the Act that it would still await
further order of the Government, and again say in this
Appeal that the Government stand made through the
learned Advocate General before the High Court does
not bind the MSLDC and all their letters in question
even after such stand of the Government was made
known to the MSLDC were issued under section 33 of
the Act which as we have seen above does not
authorize the MSLDC to do so. This speaks in volume
the conduct of the statutory body and it is not difficult
to decipher that all its actions after the High Court's
first order clearly indicating the position of the
Government were unlawful."
20. Despite this ratio decided by the Tribunal, the learned
Counsel for LSDC has ventured to reiterate his original
stand to the effect that it is not an autonomous body in the
absence of notification under Section 31 of the Act.
21. Let us now refer to Section 31 of the Act, which is
reproduced below:-
Page 34 of 72
Appeal No175 of 2012
"31. Constitution of State Load Despatch
Centres.--
(1) The State Government shall establish a Centre to
be known as the State Load Despatch Centre for the
purposes of exercising the powers and discharging the
functions under this Part.
(2) The State Load Despatch Centre shall be operated
by a Government company or any authority or
corporation established or constituted by or under any
State Act, as may be notified by the State Government:
Provided that until a Government company or any
authority or corporation is notified by the State
Government, the State Transmission Utility shall
operate the State Load Despatch Centre:
Provided further that no State Load Despatch Centre
shall engage in the business of trading in electricity.
22. The perusal of Section 31 would reveal that that the State
Government would establish State Load Despatch Centre
to be operated by a Government Company or any other
authority or corporation. Establishment of SLDC would not
require any government notification. It is the Government
Company or 'any other authority' or 'corporation', which
would operate the SLDC is required to be established
under the State Act and notified by the State Government.
Section further provides that till such Government
Company etc are notified, SLDC established under sub-
section 1 of Section 31 would be operated by State
Transmission Utility. Section 39 of the Act requires State
Government to establish and notify a State Transmission
Utility. Maharashtra Government has already notified
Page 35 of 72
Appeal No175 of 2012
MSETCL as STU. Thus, SLDC operated by the State
Transmission Utility is not required to be notified
separately.
23. The argument of the SLDC that in the absence of
notification under Section 31(2) of the Act, it is a
subordinate body to the Government of Maharashtra and is
bound to follow its orders is highly misplaced. No doubt, at
present, SLDC is operated by the Transmission Utility duly
notified by the State Government. Since the Transmission
Company has been notified as a State Transmission Utility,
it is expected to act independently in accordance with the
provisions of the Act. Since the Transmission Company is
also operating SLDC, it is expected to perform functions of
the SLDC under Section 33 of the Act independently.
Therefore, it can not be construed to be independent but
subordinate to the State Government. Therefore, the
argument advanced by the learned Counsel for SLDC is
totally misconceived and the conduct of the learned
Counsel for the SLDC also in criticising our earlier order is
highly condemnable and despicable.
24. One more contention of the SLDC (R2) urged is regarding
the so-called concession given by the learned Advocate
General before the High Court. According to the learned
Counsel for SLDC, the Memorandums dated 7.5.2010 and
19.5.2010 read together would make it clear that the State
Page 36 of 72
Appeal No175 of 2012
Government in exercise of its powers under Section 37 of
the Act, in fact gave directions and as such, the
representation made by the Advocate General as a
Counsel for the Government was only a concession of a
Counsel and it can not over-ride mandatory statutory
provision and as such the concession given by the Counsel
to the Court would not change the status of memorandums
issued by the Government and therefore said concession
have got to be ignored. This submission which is very
unfortunate deserves outright rejection for two reasons-
firstly, the Advocate General appearing for the State can
not be considered to be mere Counsel to the party.
Advocate General is a Constitutional body established
under Article 165 of the Constitution. The Advocate
General is appointed by the Governor of the State under
Article 165 of the Constitution. The Advocate General is a
person who can participate in the Cabinet proceedings as
well as in the Assembly proceedings as he has got a
special status. He has got a duty to advise the State
Government upon legal matters. Advocate General
represents the entire State Government in the Courts and
his stature is higher than any Counsel and his statement in
the Court could not be treated as mere concession, in fact,
accepting the interpretation made by the Advocate General
that it was not direction either under Section 11 of the Act
and 37 of the Act, the High Court recorded the said
Page 37 of 72
Appeal No175 of 2012
statement in its order. Due to this statement, the High
Court felt it unnecessary for giving interim relief as sought
for in the writ petition. Secondly, the very same argument
had been advanced by the SLDC in the earlier Appeal
No.32 of 2011 which had been rejected by this Tribunal.
The relevant portion of the finding of the Tribunal in Appeal
No.32 of 2011 is quoted as below:-
"But, before this Tribunal the MSLDC maintained a
stand that it was an organ of the Government with no
notification having been issued by the Government to
be an independent statutory authority. Together with
this the MSLDC put forth in writing that the submission
of the learned Advocate General was a mere
concession of what has not been authorized by the
law. It further maintained before this Tribunal that the
two Government Memoranda were in fact directions
under section 37 of the Act.
Again, the position maintained by the MSLDC in this
Appeal that the statement of the learned Advocate
General who represented the Government was a
mere concession and does not bind the MSLDC is
thoroughly unacceptable.
This is begging the question, for on 11.6.2010, it was
made clear to the MSLDC that the Government made
its position clear that despite the languages employed
therein the two Memoranda of the Government were
not issued under section 11 or 37 of the Act. Nor was
it the case of the Government at any point of time that
they were to be treated as directions under section
108 of the Act. Then, in such circumstances, after
11.6.2010, there was no justification on the part of the
MSLDC to say that it should treat the two Memoranda
as directions and still go on refusing scheduling.
Page 38 of 72
Appeal No175 of 2012
In the face of the submission of the Learned Advocate
General of Govt of Maharashtra, the High Court did
not upon recording of such submission think it
necessary to give any interim order on the application
of the appellant. If the MSLDC was of the opinion that
it was not an independent organ but was a department
of the Govt. then it does not lie in the mouth of the
MSLDC to say that what the learned Advocate
General had submitted before the Bombay High Court
does not bind the MSLDC. The MSLDC cannot blow
hot and cold at one and the same time. It cannot
approbate and reprobate.
As already stated, the Govt. of Maharashtra in affidavit
before the Bombay High Court on 11.6.2010 clarified
that the Memorandum dated 7.5.2010 was not any
statutory directive but constituted only a request to the
Commission. The High Court recorded in the order
dated 11.6.2010 that the Govt. did not exercise any
power under Section 11 or Section 37 of the Act.
It cannot be said that the learned Advocate General
made such submission without being instructed by the
Govt. Therefore, by no stretch of imagination, it can be
said that the submission of the Learned Advocate
General was simply a concession against the law and
that what the MSLDC or the State Commission would
say would be the law for all time to come.
The moment the Govt. took the stand before the High
Court through the Learned Advocate General that the
two Govt. memoranda were simply request or
suggestions the very thesis that public interest was of
so paramount in nature that deferment of scheduling
was a necessity lost its force.
The MSLDC or the Commission has not been briefed
by the Govt. of Maharashtra to plead in this appeal
that the two Govt. Memoranda contrary to the
submission of the Learned Advocate General were
Page 39 of 72
Appeal No175 of 2012
orders/directions upon the Commission or the
MSLDC. The Govt. of Maharashtra is also a party
respondent in this Appeal but it did not enter
appearance to plead contrary to the submission of the
learned Advocate General in the Bombay High Court.
..."
25. The crux of the findings as rendered to above is as follows:-
i) The SLDC maintained a stand that it was a
subordinate authority of the Government and the
submission of the Advocate General that it was not a
direction, but it is only a suggestion was merely a
concession and the same has been authorised by the
law. Therefore, the concession given by the Advocate
General as a Counsel would not bind the SLDC. This
stand taken by the SLDC is thoroughly against law
and thoroughly unacceptable.
ii) When the Government through the Advocate
General made its position clear that it was not
direction and when the stand of the Government was
recorded by the High Court in the order passed on
11.6.2010 there was no justification on the part of the
SLDC to say that the said directions and the
Government Memorandums should be treated as
directions and as such they would go on refusing
scheduling.
Page 40 of 72
Appeal No175 of 2012
iii) In the light of the submission of the Advocate
General appearing on behalf of the State Government
that too through affidavit filed by the Government, the
High Court did not think it fit to give any interim order
on the petition of the Appellant. The very same thing
was recorded in its order dated 11.6.2010 to the effect
that the Government did not exercise its power under
Section 11 and 37 of the Act. Therefore, it can not be
said that the Advocate General made such
submission without being instructed by the
Government nor contended that the submission of the
Advocate General was simply a concession against
the law.
iv) Once the Government took a stand before the
High Court that the Government's two memorandums
were simply suggestions, the deferment of scheduling
the power was a necessity, lost its force.
v) Even before this Tribunal SLDC which claims
itself as subordinate authority to the Government has
not been supported by the State Government in this
Appeal even though the State Government is party
Respondent in this Appeal.
26. The above findings are very clear to the effect that the plea
of the SLDC that it is subordinate authority of the
Page 41 of 72
Appeal No175 of 2012
Government and the Advocate General submission before
the High Court was only a concession has been out-rightly
rejected. Despite such findings in the earlier Appeal, the
SLDC (R2) has repeated the same plea before this
Tribunal. This finding is binding on SLDC so long as it is
not disturbed by the Appellant Forum. This settled law has
not been properly understood not only by the SLDC but
also by learned Counsel appearing for the SLDC.
27. Let us now consider the each of the grounds urged by the
Appellant in this present Appeal.
28. First submission made by the Appellant is as follows:-
"SLDC(R2) was not justified in refusing scheduling of
power to the extent of 200 MW to the Appellant, which
was being scheduled to R-Infra pursuant to the
Government memorandums dated 7.5.2010 and
19.5.2010 which were ultimately quashed by the
Bombay High Court through order dated 18.1.2011."
29. Let us now discuss this issue. The State Load Despatch
Centre (R2) is constituted under Section 31(1) of the Act as
an independent body which was responsibly for carrying
out optimal scheduling and despatch of electricity within the
State. SLDC while despatching its statutory function is
covered by the provisions under Section 33(1) of the Act.
Under Section 33(1) of the Act, SLDC has to decide the
Page 42 of 72
Appeal No175 of 2012
request for scheduling made by the Appellant only in
accordance with the parameters prescribed under the Act.
Thus, SLDC is required to take into account only issues
relating to transmission and the transmission network when
deciding any request for scheduling of power.
30. The consistent stand taken by the SLDC before this
Tribunal that since SLDC is the part of the State
Transmission Company which in turn is an arm of
Government of Maharashtra, it was bound to obey the
directions given by the State Government in the
memorandums dated 7.5.2010 and 19.5.2010. This stand
taken by the SLDC even after those Memorandums had
been quashed by the High Court orders dated 18.1.2011.
Not only that the SLDC continued to take the very same
stand even after this Tribunal quashed the refusal letter
issued by SLDC and held in Appeal No.32 of 2011 dated
30.5.2011 that SLDC is an independent autonomous body.
31. It is therefore clear that the SLDC denied the Appellant's
request for scheduling of power on considerations that are
totally extraneous to the statute.
32. In fact, during the pendency of writ petition against the
Government filed by the Appellant in WP No.1224 of 2011,
the Appellant impleaded SLDC as a party Respondent in
the writ petition. Therefore, the finding rendered by the
Page 43 of 72
Appeal No175 of 2012
High Court in the order dated 18.1.2011 is not only binding
on the Government but also on the SLDC especially when
it claimed that it is part of the organ of the Government. If
SLDC was aggrieved by the High Court order dated
18.1.2011 quashing those Government Memorandums on
which SLDC placed reliance, SLDC could have challenged
the said order of the High Court before the Hon'ble
Supreme Court of India. That has not been done
admittedly. Having not done so, SLDC cannot be now
allowed to rely upon the Government Memorandums to
justify its refusal to schedule power. This is more so, when
its letter dated 29.1.2011 stated that even if the
Government Memorandums had been quashed by the High
Court, the State Commission's order dated 29.9.2010 was
still subsisting as the Appellant's earlier Appeal No.32 of
2011 had not been decided at that stage. This stand is
quite contrary to the earlier stand taken with regard to the
validity of the memorandums issued on 7.5.2010 and
19.5.2010.
33. From this, it is so evident that the State Commission in the
impugned order has not taken into consideration about
nature of the order of the High Court quashing the
Government Memorandums to answer the question
whether SLDC was justified in refusing scheduling of power
Page 44 of 72
Appeal No175 of 2012
on the strength of the said Memorandums. So, this point is
answered accordingly in favour of the Appellant.
34. The second submission made by the Appellant is as
follows:-
"The order of the State Commission dated 29.9.2010
(earlier order) which had upheld refusal of scheduling
of power by SLDC during the subsistence of the
Government Memorandums was not of any
consequence after the Government Memorandum
were quashed by the High Court and therefore, the
said order dated 29.9.2010 could not be relied upon
by the SLDC after 18.1.2011 i.e. the date of order of
the High Court. SLDC, after the Government
Memorandums have been quashed by the High Court
was approached by the Appellant for scheduling of
power. Even then, SLDC again refused to schedule
the power through its letter dated 29.1.2011 stating
that even though the Government Memorandums
have been quashed by the High Court, the earlier
order passed by the State Commission in case No.37
of 2010 dated 29.9.2010 had not been quashed at the
relevant time. This is clearly unjustified justification for
the reasons mentioned in the Appeal".
Page 45 of 72
Appeal No175 of 2012
35. The earlier order passed by the State Commission dated
29.9.2010 relates to the proceedings in case No.37 of 2010
filed by the Appellant before the State Commission. In this
proceeding, the Appellant challenged the letters dated
16.5.2010, 18.5.2010, 12.6.2010 and 30.6.2010 by which
SLDC refused to schedule power. In those letters, SLDC
refused to schedule power at Appellant's request at the
time when the Memorandums were subsisting and had not
been quashed by the Bombay Hight Court. On that reason
the State Commission in its earlier order dated 29.9.2010
only held that although SLDC refused to schedule power
was contrary to the provisions of the Act, SLDC could not
be faulted for refusing to schedule power in view of the
"state of flux created by the Government Memorandums
dated 7.5.2010 and 19.5.2010. So, this justification as
referred to in the order dated 29.9.2010 would not apply to
the present proceedings because these proceedings would
relate to the refusal letter dated 29.1.2011 after the
Government memorandums have been quashed by the
High Court. In short, the SLDC's justification in its letter
dated 29.1.2011 that even though the Government
Memorandums have been quashed, the earlier order
passed by the State Commission dated 29.9.2010 had not
been quashed would amount to taking the stand again that
it was bound by the directions given in the Government
Page 46 of 72
Appeal No175 of 2012
Memorandums even though they had been quashed by the
order dated 18.1.2011.
36. In any event, the earlier order passed by the State
Commission dated 29.9.2010 was a subject matter of the
challenge by the Appellant before this Tribunal in Appeal
No.32 of 2011. In that Appeal, the letters of refusal by
SLDC were finally quashed by this Tribunal in its judgment
dated 30.5.2012. While quashing those letters of refusal
this Tribunal has given a categorical finding that the SLDC
was an independent statutory authority under the Act and
that despite being aware of the non-binding nature of the
Government Memorandums, the SLDC continued to refuse
scheduling of power to the Appellant. Even though the
Tribunal did not incline to award any damages in view of
the fact that at the relevant point of time, the Government
Memorandums have not been quashed. The Tribunal
specifically held that subsequent to quashing of the
Government memorandums on 18.1.2011, the SLDC would
not claim that it was bound by the directions of the
Government and on that ground it could not continue to
refuse scheduling of power. The relevant portions of the
judgment in Appeal No.32 of 2011 passed by this Tribunal
dated 30.5.2012 are as follows:-
"Neither of the two sections referred to above
confers any power either upon the SLDC or the
Page 47 of 72
Appeal No175 of 2012
State Commissionor the Government to negate
scheduling power at the request of a generating
company for distribution through open access.
Nor these provisions restrict and control the ambit
and scope of section 42. Scheduling through open
access cannot be said to be dehors the public
interest."
" 60. The very thesis of the MSLDC which has been
subscribed to by the State Commissionthat the MSLDC is
subordinate to Government or that it is an organ of the
Government and it is obliged to act as a subordinate
authority is unknown to the law.
" .... Then, in such circumstances, after 11.6.2010,
there was no justification on the part of the MSLDC to
say that it should treat the two Memoranda as
directions and still go on refusing scheduling. The
conduct subsequent to the High Court's Order
dated 18.1.2011 cannot, however, be kept out of
context, and the State Commissionwill deal with
petition, if filed ,subsequent to the High Court's
final order dated 18.1.2011 according to the law."
"... The MSLDC, it cannot be questioned, is an
independent statutory authority constituted under Section
31 of the Act and is responsible for carrying out optimal
scheduling and despatch of electricity within the State.
The decision of the MSLDC to defer scheduling
the appellant's generation capacity allegedly in
the public interest is clearly contrary to the
provision of Section 33 of the Act. It is important
to remember that the State Commissionin the
impugned order has made it clear that the letters
Page 48 of 72
Appeal No175 of 2012
issued by the MSLDC were beyond the scope and
ambit of Section 32 and Section 33 of the Act."
" 64. It is not that the MSLDC was unaware of all these
legal provisions. In fact, it allowed open access to the
appellant in the matter of scheduling the appellant's
generation capacity in favour of TPC-D. Therefore, the
arguments advanced to the effect that MSLDC is a
subordinate organ of the Govt. with no independence is
not acceptable. ..."
On close reading of the Counter-Affidavit of the MSLDC,
it would appear that it is taking contradictory stand in the
sense that once it says that it acted at the behest of the
Govt. orders as it is subordinate to the Govt. and at the
same time, it submits that all its actions including the four
letters in question were in exercise of power under Section
33 of the Act. Section 33 does not have any connection
with the deferring of Scheduling of generation capacity of
the appellant and the State Commissionobserved that the
letters issued by the MSLDC were not under the ambit of
Section 32 or Section 33 of the Act. When on 11.6.2010,
the appellant communicated to MSLDC about the High
Court's order wherein the submission of the learned
Advocate was recorded, there was no legal justification on
the part the MSLDC to say that it would still continue to
maintain status quo till it received further instruction,
either from the State Commissionor from the Government.
Page 49 of 72
Appeal No175 of 2012
The MSLDC is undoubtedly a statutory body designed to
ensure integrated operation of power system and it acts in
terms of Section 33 of the Act. It was not the case of the
MSLDC that there was network constraint or congestion
and lack of required metering infrastructure. The grounds
of refusal must be within the parameters of the law and
any action which is not within the domain of the authority
would be without jurisdiction. The Act does not
contemplate that in the matter of scheduling power any
statutory authority other than the transmission utility can
interfere with the jurisdiction and authority of that
authority which is entrusted under the law with the task of
scheduling of power.
The MSLDC had full knowledge that the
Government memorandum were not binding on
them but still it went on refusing to schedule
generation of appellant's power. It has been
rightly submitted that the two Govt. memoranda
were in violation of the regulatory reforms
introduced by the Hon'ble Supreme Court in the
decision in Tata Power Company Ltd. Vs. M.E.R.C.
& Ors.. Ultimately, the two Govt. memoranda were
by order dated 18.1.2011 declared ultra vires. The
MSLDC contrary to the Spirit of Law and the
decision of the Hon'ble Supreme Court attempted
to regulate in the guise of public interest the
allocation of the generation capacity of the
appellant by directing it to supply its capacity to a
particular licensee. The Govt. closed the issue by
Page 50 of 72
Appeal No175 of 2012
saying before the High Court that the two
Memoranda were not directions but the MSLDC
was so deliberate in refusing to schedule the
generation capacity of the appellant that it
deliberately chose not to read the writing of the
wall. Thus, unreasonableness which is repugnant
to the rule of law was manifest in the conduct of
the MSLDC. What is more shocking is that the
Hon'ble High Court by order date d 18.1.2011
quashed the two Govt. Memoranda to be ultra
vires but still the MSLDC by the letter dated
29.1.2011 continued to refuse scheduling the
generation capacity of the appellant. This letter
has been produced before this Tribunal and there
is no valid answer to the issuance of the letter."
... An act does not make a person guilty unless mind
is guilty. Malafide conduct, malice and misfeasance
arise out of guilty mind. In the circumstances, the
prayer for compensation is difficult to accept. While
saying so, we have no manner of doubt that after
the High Court quashed the two Memoranda, there
was hardly any scope on the part of the MSLDC to
defer scheduling appellant's Generation Capacity
in favour of the TPC-D".
37. The above findings would make it clear that the Tribunal
has decided 3 aspects - 1) the refusal made by the SLDC
to schedule power at the request of the Appellant was not
in accordance with the law especially when the
Government Memorandums which were mere suggestions
were not binding on the SLDC, which is an independent
Page 51 of 72
Appeal No175 of 2012
body and therefore the refusal is not in accordance with
law. 2) Till the date on which the Government
Memorandum had been quashed by the High Court, the
refusal even though the same is not in accordance with law
can not be said to be mala-fide in view of the fact that
during that period the Government memorandums were in
subsistence. 3) However, SLDC can not refuse to
schedule power after the order passed by the High Court
quashing those Government memorandums. Hence, there
can not be any scope on the part of SLDC to defer
scheduling of power after the said date after the High Court
of Bombay quashed the Government memorandums by the
order dated 18.1.2011
38. In this context, it is submitted by the Appellant that the
SLDC's action to rely upon the State Commission's order
dated 29.9.2010 even after the High Court order quashing
the Government memorandums dated 18.1.2011 is nothing
but a colourable exercise of power with extraneous motive
to refuse to schedule power thereby continuing to
implement the directions contained in the Government
memorandums. This submission has got some force.
39. That apart, the stand of the SLDC in its letter dated
29.1.2011 that it would maintain the status quo with regard
to scheduling of 200 MW power to Appellant's Distribution
division due to the subsistence of State Commission's
Page 52 of 72
Appeal No175 of 2012
order dated 29.9.2010 even after the High Court's order
can not be considered to be a genuine refusal. On the
other hand, it is clear that the SLDC only wanted to
implement the Government directions contained in the
Government Memorandums that it should maintain the
status quo.
40. To put in a nut-shell, the present dispute deals with the
period subsequent to the High Court's order quashing of
the Government memorandums. Therefore, the
Government Memorandums can no longer be relied upon
by the SLDC to justify its non-scheduling of Appellant's
power. In all its pleadings before this Tribunal, the SLDC in
order to justify its non-scheduling, continued to rely upon
the Government memorandums even though there are
nonest in the eye of law after the order of High Court dated
18.1.2011.
41. As indicated above, SLDC was impleaded as one of the
party Respondents in the Writ Petition. Even then, the
order dated 18.1.2011 passed by the High Court had not
been challenged by the SLDC and as such it has attained
finality.
42. In fact, SLDC has not provided any valid justification for
issuing its letter dated 29.2.2011 in which it sought to rely
upon the order of the State Commission dated 29.9.2010
Page 53 of 72
Appeal No175 of 2012
which in turn, proceeded solely on the basis that the
Government Memorandums were in existence at the
relevant time. Therefore, it has to be construed that SLDC's
reliance on the State Commission's order dated 29.9.2010
was just a ploy to divert the attention from the real reason.
As a mater of fact, it has to be observed that SLDC was
fully aware that 1) while writing refusal letter dated
29.1.2011 the Government memorandums had no
existence in the eye of law, after the Bombay High Court
quashed them on 18.1.2011; 2) SLDC was doing so in
violation of the statutory obligations as per the State
Commission's order dated 29.9.2010. Accordingly, this
issue is also decided as against the SLDC.
43. The only remaining issue before this Tribunal is relating to
the claim of compensation for the loss suffered by the
Appellant. On this point the learned Counsel for the
Appellant has made the following submissions:
"The State Commission has gone wrong in concluding
that it was necessary for the Appellant to demonstrate
malice in fact or factual mala-fides to hold SLDC (R2)
guilty of misfeasance and liable to compensate
Appellant for the losses suffered by it. However, to
establish misfeasance on the part of the SLDC, it is
enough for the Appellant to show that SLDC is guilty
of legal mala-fides by knowingly breaching its
Page 54 of 72
Appeal No175 of 2012
statutory duty and with the knowledge that its actions
were likely to cause losses to the Appellant. This
aspect has been established which the State
Commission omitted to consider in the impugned
order"
44. On the other hand, it was contented by the SLDC in
justification of the impugned order that in the present case,
SLDC can not be said to have been actuated by malice,
misfeasance or mala-fide motive and as such the Doctrine
of Misfeasance, cannot be invoked to award damages to
the Appellant since the element of malice or bad faith on
the part of SLDC is clearly missing as correctly pointed by
the State Commission in the impugned order.
45. Before dealing with the present facts of the case in order to
find out whether the Appellant is entitled to the
compensation from SLDC or not , it would be worthwhile to
deal with the legal question as to when a person is entitled
to claim compensation from the other party. On this point,
both the parties have cited various decisions. Those
decisions are as follows. Let us first see the authorities
cited by the Appellant:-
i) 1999(6) SCC 667 in Common Cause, A
Registered Society Vs. Union of India.
Page 55 of 72
Appeal No175 of 2012
ii) 1994(1) SCC 243 in Lucknow Development
Authority Vs. M.K. Gupta
iii) 1973 (1) SCC 788 in Lala Bishambar Nath and
Ors. Vs. The Agra Nagar Mahapalika, Agra and Anr.,
iv) 2009 (13) SCC 758 in Swaran singh Chand Vs.
Punjab State electricity Board & Anr.
46. Let us look into these cases one by one:
"In Case No.1999(6) SCC 667 in Common Cause, A
Registered Society Vs. Union of India, the Hon'ble
Supreme Court has held that the tort of "misfeasance
in public office" is concerned with a deliberate and
dishonest wrongful abuse of the powers given to a
public offer and the purpose of the tort was to provide
compensation to those who suffered loss as a result of
improper abuse of power. In this judgement it has
further been held that so far as the malice is
concerned, while actual malice, if proved, would
render Respondent's action ultra vires and tortious
and it would not be necessary to establish actual
malice in every claim for misfeasance in public office.
This judgement was rendered by Hon'ble Supreme
Court on the basis of the various English cases. The
relevant extract of the judgement is as follows:-
Page 56 of 72
Appeal No175 of 2012
(6) Where a plaintiff establishes (i) that the
defendant intended to injure the plaintiff or a
person in a class of which the plaintiff is a
member (limb one) or that the defendant knew
that he had no power to do what he did and that
the plaintiff or a person in a class of which the
plaintiff is a member would probably suffer loss
or damage (limb two) and (ii) that the plaintiff has
suffered loss as a result, the plaintiff has a
sufficient right or interest to maintain an action for
misfeasance in public office at common law. The
plaintiff must of course also show that the
defendant was a public officer or entity and that
his loss was caused by the wrongful act.
98. So far as malice is concerned, while actual
malice, if proved, would render the defendant's
action bom ultra vires and tortious, it would not
be necessary to establish actual malice in
every claim for misfeasance in public office. In
Bourgoin SA v. Ministry of Agriculture,
Fisheries and Food (1985) 3 All ER 585 to
which a reference has already been made
above, the plaintiffs were French turkey
farmers who had been banned by the Ministry
from exporting turkeys to England on the
ground that they would spread disease. The
Ministry, however, subsequently conceded that
the true ground was to protect British turkey
farmers and that they had committed breach of
Article 30 of the EEC Treaty which prohibited
unjustifiable import restrictions. The defendants
denied their liability for misfeasance claiming
that they were not actuated by any intent to
injure the plaintiff but by a need to protect
British interest. It was held by Mann, J., which
was upheld by the Court of Appeal, that proof
Page 57 of 72
Appeal No175 of 2012
of actual malice, ill-will or specific intent to
injure is not essential to the tort. It was enough
if the plaintiff established that the defendant
acted unlawfully in a manner foreseeable
injurious to the plaintiff. In another decision in
Bennett v. Commr. of Police of the Metropolis
(1995)2 All ER 1, which was considered in
Three Rivers's case 1996 (3) All ER 558
(supra), it was held that the tort of misfeasance
in public office required express intent to
injure."
47. The proposition which would emerge from the judgement in
Common Cause is that to maintain an action for
misfeasance in public office at common law, the party
should establish the following ingredients of the tort for
claiming compensation:-
i) It must be established that the defendant was a
public officer or public entity and that the plaintiff's
loss was caused by the wrongful act;
ii) It must be established that the defendant
intended to injure the plaintiff or the defendant had the
knowledge that he had no power to do what he did and
due to the said act, the plaintiff would probably suffer
loss or damage.
iii) The plaintiff has suffered loss as a result of the
action of the defendant.
Page 58 of 72
Appeal No175 of 2012
48. In Case No. 1994(1) SCC 243 in Lucknow Development
Authority Vs. M.K. Gupta, the relevant observations made in
the judgement are as follows:-
"8. ... The administrative law of accountability of
public authorities for their arbitrary and even ultra
vires actions has taken many strides. It is now
accepted both by this Court and English courts
that the State is liable to compensate for loss or
injury suffered by a citizen due to arbitrary actions
of its employees. In State of Gujarat v. Memon
Mahomed Haji Hasam, AIR (1961) SC 1885 the order
of the High Court directing payment of compensation
for disposal of seized vehicles without waiting for the
outcome of decision in appeal was upheld both on
principle of bailee's, 'legal obligation to preserve the
property intact and also the obligation to take
reasonable care of it to return it in same condition in
which it was seized' and also because the government
was, 'bound to return the said property by reason of its
statutory obligation or to pay its value if it had disabled
itself from returning it either by its own act or by act of
its agents and servants'. It was extended further even
to bonafide action of the authorities if it was contrary
to law in Lala Bishambar Nath v. The Agra Nagar
Mahapalika, Agra, : [1973]3SCR777 . It was held that
where the authorities could not have taken any action
against the dealer and their order was invalid, 'it is
immaterial that the respondents had acted bonafide
and in the interest of preservation of public health.
Their motive may be good but their orders are illegal.
They would accordingly be liable for any loss caused
to the appellants by their action.' The theoretical
concept that King can do no wrong has been
abandoned in England itself and the State is now held
responsible for tortuous act of its servants. The first
Law State Commissionconstituted after coming into
Page 59 of 72
Appeal No175 of 2012
force of the Constitution on liability of the State in Tort,
observed that the old distinction between sovereign
and non-sovereign functions should no longer be
invoked to determine liability of the State.
...
49. In the above case, the Hon'ble Supreme Court has held that the officers of Lucknow Development Authority were not immuned from tortuous liability. It also proceeded to hold that the National Consumer Dispute Redressal State Commission was not only entitled to pass the award the value of the goods but also to compensate the consumer for the injustice suffered by the consumer on the ground that the actions of Lucknow Development Authority would amount to harassment, mental torture and agony of the party.
50. In Case No. 1973 (1) SCC 788 in Lala Bishambar Nath and Ors. Vs. The Agra Nagar Mahapalika, Agra and Anr., it is held by the Hon'ble Supreme Court that it is immaterial whether the Respondent acted in a bona-fide manner or in the interests of the preservation of the public health but if the orders of the Administrative Body are illegal, the Administrative Body would be liable for any loss caused to person by its actions. The relevant extract of the order is as follows:-
"12. It is immaterial that the respondents had acted bona fide and in the interest of preservation of public Page 60 of 72 Appeal No175 of 2012 health. There motive may be good but their orders are illegal. They would accordingly be liable for any loss caused to the appellants by their action."
51. Next decision is in Case No. 2009 (13) SCC 758 in Swaran Singh Chand Vs. Punjab State electricity Board & Anr. In this judgement, it has been held by the Hon'ble Supreme Court that when an order suffers from malice in law, neither any averment as such is required to be made not strict proof is insisted upon. When such an order being illegal would be held as wholly unsustainable. The relevant extract is as follows:
"18. In a case of this nature the appellant has not alleged malice of fact. The requirements to comply with the directions contained in the said circular letter dated 14.08.1981 were necessary to be complied with in a case of this nature. Non-compliance whereof would amount to malice in law. [See Managaer, Government Branch Press and Anr. v. D.B. Belliappa (1979)ILLJ156SC , Smt. S.R. Venkataraman v. Union of India and Anr. (1979)ILLJ25SC and P. Mohanan Pillai v. State of Kerala and Ors. AIR2007SC2840 ].
Thus, when an order suffers from malice in law, neither any averment as such is required to be made nor strict proof thereof is insisted upon. Such an order being illegal would be wholly unsustainable."
52. Let us now refer to the authorities cited by the Respondent.
i) 1994 (4) SCC 1 in Jay Laxmi Salt Woprks(P) td., Vs. State of Gujarat Page 61 of 72 Appeal No175 of 2012
ii) AIR 2006 SC 1438:2006) 3 SCC 736 in Punjab Stae Civil Supplies Corpn. Ltd., Vs. Sikander Singh.
iii) AIR 2001 SC 343:2001) 2 SCC 330
53. The relevant observations in the judgement rendered in Case No. 1994 (4) SCC 1 in Jay Laxmi Salt Works(P) Ltd., Vs. State of Gujarat are as follows:-
"Malfeasance and misfeasance necessarily import intention, knowledge and malice, therefore, they may not be available in every tortious liability arising out of violations of public duty. Evil doing or ill conduct postulates something more than mere omission or commission. Misfeasance is now recognised as imputable to discharge of duty arbitrarily. In Calveley V. Chief Constable of the Merseyside Police,(1989) 1 All ER 1025 it was held that for the tort of misfeasance it was held that for the tort of misfeasance it was necessary that the public officer must have acted maliciously or with bad faith. In Dunlop v. Woollahra Municipal Council,(1981) 1 All ER 1202:1982) AC 158 it was held that without malice the claim for misfeasance could not be accepted. Non-feasance on the other hand is omission to discharge duty. But the omission to give rise to action in torts must be impressed with some characteristic, namely, malice or bad faith. The expressions 'malfeasance', 'misfeasance' and 'non-feasance' would, therefore, apply in those limited case where the State or its officers are liable not only for breach of care and duty but it must be activated(sic actuated) with malice or bad faith."
54. The above view has been reiterated in the decisions given in Case No. AIR 2006 SC 1438:2006) 3 SCC 736 in Page 62 of 72 Appeal No175 of 2012 Punjab State Civil Supplies Corpn. Ltd., Vs. Sikander Singh.
55. The relevant observations made in the judgement rendered in Case No.AIR 2001 SC 343:(2001)2 SCC 330 in State of Punjab V. V.K. Khanna are as follows:-
"One redeeming feature in the matter of attributing bias or malice and is now well settled that mere general statements will not be sufficient for the purposes of indication of ill will. There must be cogent evidence available on record to come to the conclusion as to whether in fact, there was existing a bias or a mala fide move which results in the miscarriage of justice."
56. On the basis of these judgements, it is contended by the Respondent that since the components of the misfeasance are not in the instant case, the question of compensation would not arise. It is also pointed that in the impugned order the State Commission has correctly held that in the absence of the materials to prove malice and misfeasance with intention and knowledge, compensation cannot be awarded and this finding by the State Commission was in line with the view expressed by this Tribunal in the earlier judgement in Appeal No.32 of 2011 dated 30.5.2012.
57. In the light of the above principles laid down by Hon'ble Supreme Court, let us now see as to whether a case has been made out in the present case for awarding compensation.
Page 63 of 72Appeal No175 of 2012
58. At the outset, it shall be stated that for deciding this question we are to take note of the important fact that the point on compensation was decided by this Tribunal in earlier Appeal No.32 of 2001 as against the Appellant. While the Tribunal was dealing with the period during which the Government Memorandums were subsisting and had not yet been quashed by the High Court of Bombay.
59. But in the present case, it is noticed that the refusal by SLDC to schedule power in its letter dated 29.1.2011 related to the period, after the Government memorandums had already been quashed as ultra vires by the High Court by the order dated 18.1.2011. This relevant point was not taken note of by the State Commission in the impugned order.
60. One more aspect which has been omitted to be considered by the State Commission is that the Tribunal has given categorical finding in the earlier judgement in Appeal No.32 of 2011 dated 30.5.2011 that the question of compensation could not be considered during the period in which the Government Memorandums were subsisting but after the quashing of two Government Memorandums, if there was a refusal on the part of SLDC to schedule power to the Appellant, then the question of compensation would certainly be considered. The non consideration of this Page 64 of 72 Appeal No175 of 2012 relevant and important aspect by the State Commission, would go to the root of the matter.
61. In the light of above aspect, we shall now consider the materials available on record to find out whether there was a misfeasance on the part of SLDC subsequent to the quashing of the Government memorandums by the High Court which resulted in the loss to the Appellant.
62. As held by the Hon'ble Supreme Court to establish misfeasance on the part of SLDC, it is enough to show that SLDC is guilty of legal mala-fide by knowingly breaching its statutory duty and with knowledge that its action is likely to cause losses to the Appellant.
63. The Appellant admittedly has challenged the refusal letter dated 29.1.2011 issued by SLDC before the State Commission in Petition No.22 of 2011 and in the said Petition the Appellant through affidavit dated 16.8.2011 had claimed damages to the extent of Rs.23 Crores on account of non-scheduling of power during Feb-Mar-2011, despite the Government Memorandums had been quashed by the Bombay High Court through order dated 18.1.2011. Admittedly, the request of the Appellant to schedule power after the Government Memorandums had been quashed. Despite that, this was refused by the SLDC through the letter dated 29.1.2011.
Page 65 of 72Appeal No175 of 2012
64. As indicated above, this Tribunal in the judgment dated 30.5.2012 in Appeal No.32 of 2011 had mandated that the State Commission would deal with the claim petition filed by the Appellant in relation to the period after the quashing order dated 18.1.2011 passed by Bombay High Court. The State Commission did not take note of the said direction but simply refused the claim for compensation without going into the question as whether the period was prior to the quashing of memorandum or subsequent to quashing the memorandum. This is purely non application of mind.
65. Instead of understanding meaning of the observations and directions with reference to subsequent period after quashing in the judgement of Tribunal dated 30.5.2012 and adjudicating the matter independently on merits, the State Commission has simply repeated in the impugned order dated 29.9.2010 and blindly following the reasoning given by the Tribunal and refused to grant Appellant any compensation without taking note of the changed circumstances surrounding refusal of SLDC to schedule power in its letter dated 29.1.2011.
66. At the risk of repetition, it has to be stated that the State Commission failed to take into account that this Tribunal in the judgment dated 30.5.2012 in Appeal No.32 of 2011 was dealing with the period during which the Government Page 66 of 72 Appeal No175 of 2012 Memorandums were subsisting and had not yet been quashed by the High Court of Bombay.
67. But in the present case, SLDC's refusal to schedule power in its letter dated 29.1.2011 related to the period after the Memorandums had already been quashed and declared ultra-vires by the Bombay High Court by the order dated 18.1.2011. Thus, it is clear that the State Commission has failed to take into account in the impugned order the implications of the order dated 18.1.2011 passed by the Bombay High Court.
68. As indicated earlier, the State Commission has also not taken note of findings of this Tribunal in the judgement dated 30.5.2012 in Appeal No.32 of 2011 that there was no scope on the part of the SLDC to have refused to schedule power to the Appellant after the quashing of the Government Memorandums.
69. The State Commission has simply glossed over the manner in which the State Commission continued to deny scheduling of power, even after the date of quashing the Government Memorandums, and after knowing that such a refusal was contrary to law and would cause serious losses to the Appellant.
70. In other words, it has to be held that the conduct of SLDC by continuing to act illegally in furtherance of terms of the Page 67 of 72 Appeal No175 of 2012 Government Memorandums dated 7.5.2010 and 19.5.2010 even after they had been quashed by the High Court of Bombay on 18.1.2011 is most unfair.
71. There is obligation cast on the State Commission to apply its mind and exercise its jurisdiction after taking into account all relevant factors. It cannot mechanically act on the basis of the earlier judgement of this Tribunal refusing compensation without giving any thought to the fresh issue raised in the present case.
72. The relevant portion of the Judgement in Appeal No.32 of 2011 for disallowing the claim of compensation for the period prior to the quashing of Government Memorandums and also for the period subsequent to the quashing of the Government Memorandums is reproduced below:-
"In view of this finding of the High Court doctrine of malice, malafide, and misfeasance cannot be invoked to award damage although, the MSLDC's claim that it was not an autonomous and independent body is summarily liable to rejection. An act does not make a person guilty unless mind is guilty. Malafide conduct, malice and misfeasance arise out of guilty mind. In the circumstances, the prayer for compensation is difficult to accept. While saying so, we have no manner of doubt that after the High Court quashed the two Memoranda, there was hardly any scope on the Page 68 of 72 Appeal No175 of 2012 part of the MSLDC to defer scheduling appellant's Generation Capacity in favour of the TPC-D. The Commission shall pass necessary consequential order and also dispose of any petition, if pending, before it subsequent to the passing of the impugned order in the light of this decision, and in the event of refusal to comply with directive of the Commission it shall proceed against the respondent no 2 according to the law".
73. Despite the clear findings and directions given in Appeal No.32 of 201 directing the State Commission to consider the question of compensation in respect of the subsequent period i.e. after quashing the Government memorandums, the State Commission unfortunately has not understood the said directions and passed the impugned order as if it followed the said direction.
74. Similarly, SLDC also, even though it was informed that those Government memorandums have been quashed, had again refused to schedule power by merely stating that the earlier order passed by the State Commission on 29.9.2010 had not been quashed and therefore the request was refused to schedule the power. The stand now taken by SLDC both in the earlier Appeal No.32 of 2011 and in the present Appeal No.175 of 2012 that they are bound by the Government memorandums shows that SLDC for the reasons best known to it, has taken a different stand going hot and cold.
Page 69 of 72Appeal No175 of 2012
75. This conduct on the part of the State Load Despatch Centre which is public office can not be said to be bona-fide and genuine. When SLDC has got the knowledge that they can not rely upon the Government memorandums on the basis of which the earlier order passed by the State Commission on 29.9.2010 after they were quashed, even then they refused to schedule power to the Appellant as requested by the Appellant, would show the malafide attitude of SLDC and due to that the Appellant suffered a loss.
76. Therefore, we are of the view that since misfeasance has been established with the knowledge of SLDC, the Appellant is entitled to claim for compensation from SLDC.
77. Summary of the findings:-
1. The consistent stand taken by the SLDC before this Tribunal that since SLDC is the part of the State Transmission Company which in turn is an arm of Government of Maharashtra, it was bound to obey the directions given by the State Government in the memorandums dated 7.5.2010 and 19.5.2010 even after those Memorandums had been quashed by the High Court orders dated 18.1.2011. The SLDC continued to take the very same stand even after this Tribunal quashed the refusal letter issued by SLDC and held in Appeal Page 70 of 72 Appeal No175 of 2012 No.32 of 2011 dated 30.5.2011 that SLDC is an independent autonomous body. It is therefore clear that the SLDC denied the Appellant's request for scheduling of power on considerations that are totally extraneous to the statute.
2. The present dispute deals with the period subsequent to the High Court's order quashing of the Government memorandums. Therefore, the Government Memorandums can no longer be relied upon by the SLDC to justify its non-
scheduling of Appellant's power. In all its pleadings before this Tribunal, the SLDC in order to justify its non-scheduling, continued to rely upon the Government memorandums even though there are nonest in the eye of law after the order of High Court dated 18.1.2011.
3. This conduct on the part of the State Load Despatch Centre which is public office cannot be said to be bona-fide and genuine. When SLDC has got the knowledge that they cannot rely upon the Government memorandums on the basis of which the earlier order passed by the State Commission on 29.9.2010 after they were quashed, even then they refused to schedule power to the Appellant as requested by the Appellant, would show the Page 71 of 72 Appeal No175 of 2012 malafide attitude of SLDC and due to that the Appellant suffered a loss. Therefore, we are of the view that since misfeasance by the SLDC with its knowledge has been established, the Appellant is entitled to claim for compensation from SLDC.
78. In view of our above findings, the Impugned order is set aside and the State Commission is directed to pass consequential order fixing the amount of compensation payable by the SLDC to the Appellant.
79. Since the stand taken by the SLDC that they are entitled to refuse to schedule, ever after quashing of the Government memorandums by the High Court and its attitude of criticising and finding fault with the finding given by this Tribunal, in the earlier Appeal, which is most unfair, we deem it fit to impose cost on SLDC, the Respondent. Accordingly, the SLDC is directed to pay the cost of Rs.1 lakh as donation to the charitable organisation i.e. TAMANA, C-10/8, Vasant Vihar, New Delhi-110057 within one month from the date of this order and intimate to the Registry of the same.
80. Thus, the Appeal is allowed.
(V J Talwar) (Justice M. Karpaga Vinayagam)
Technical Member Chairperson
Dated: 14th Nov, 2013
√REPORTABLE/NON-REPORTABALE
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