LexA.P. ELECTRICITY REGULATORY COMMISSION versus M/S. R.V.K. ENERGY PVT. LTD. AND ANOTHER
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2008] 9 S.C.R. 579
~
A.P. ELECTRICITY REGULATORY COMMISSION
A
v.
MIS. R.V.K. ENERGY PVT. LTD. AND ANOTHER
(Civil Appeal No. 8094 of 2002)
MAY 16, 2008
B
).
[S.B. SINHA AND D.K. JAIN, JJ.]
Andhra Pradesh Electricity Reforms Act, 1988 - Appli-
cabilityllnterpretation of vis-a-vis orders passed by the Andhra
Pradesh Electricity Regulatory Commission - High Court c
passing orders on appeal by parties - On appeal, Held: Com-
mission constituted under the 2003 Act to consider the matter
afresh in the light of the new statute - Commission to pass
appropriate orders taking into consideration all the material
---11(
facts - Commission would be at liberty to vary, modify, rescind D
the order of the Commission and issue directions as may be
considered just and reasonable - Till such time Commission
passes an appropriate interim order, the interim order passed
by this court shall continue.
Doctrines:
E
Doctrine of promissory estoppel - Applicability of.
Interpretation and/or application of the provisions of
the Andhra Pradesh Electricity Reforms Act, 1998 (The 1998
Act) vis-a-vis the orders passed by the Andhra Pradesh
F
Electricity Regulatory Commission ('the Commission')
were involved in these appeals which arise out of the judg-
ments and orders passed by a Division Bench of the
Andhra Pradesh High Court.
.. "!
Disposing of the appeals with certain directions, the Court G
HELD: 1.1 The State took a policy decision. It was
with a view to develop growth of generation and supply
of electrical energy. Monopoly of the State Electricity
579
H
580
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A Board was sought to be given a go bye. The intention of
the State to lay down the policy decision in regard to
privatization of generation and supply of electrical energy
is manifest from the GOMs. issued by it. (para 10) [617-E,F]
1.2 There is absolutely no doubt whatsoever that the
8 Commission, which is a statutory authority, is bound by the
direction of the State but it would not be so bound if it is
•
contrary to or inconsistent with any of the provisions con-
tained in 1998 Act. Respondents sought for an exemption
from the provisions thereof. They filed applications in terms
C of Section 16of1998 Act. Whether such an application was
filed on a mistaken belief or not is one question but the ac-
tion taken by the Commission must be construed upon tak-
ing a holistic view of the matter. (para 11) [617-F,G,H]
0
1.3 Respondents acted pursuant to the promise
made by the State. They altered their position. They have
invested a huge amount. They secured foreign collabo-·
ration, raised huge loans from financial institutions. They
not only entered into Power Purchase Agreements but
also entered into Power Wheeling Agreements with
E APTRANSCO. The said arrangements were entered into
in view of the fact that the private generating companies
did not have the requisite infrastructure for transmission
of electrical energy from their generating stations to the
consumers. (para 12) [618-A,B]
F
West Bengal Electricity Regulatory Commission vs.
C.E.S.C. Ltd. etc. etc. (2002) 8 SCC 715 - referred to.
2.1 No doubt the functions of the Commission are
wide. It, in terms of clause (e) of sub-section (1) of Section
G 11 of the 1998, the Commission is entitled to regulate the
purchase, distribution and supply as also utilization of elec-
tricity but when the Act speaks of regulation, the same would
not ordinarily mean that it can totally prohibit supply to third
parties. It may do so in exceptional situations. Such an ... :~
H der is not to be passed. (para 14) [618-G,H, 619-A]
\,. -
'
A.P. ELECTRICITY REGULATORY COMMISSION v. 581
M/S. R.V.K. ENERGY PVT. LTD.
...
"-
2.2 The Commission, keeping in view the purported A
object of the Act, ordinarily was bound to give effect to
the policy decision of the State. The Act was enacted to
encourage competition. It speaks of privatization of gen-
eration of power. The Commissioner's power to regulate
supply of power must be considered keeping in view the B
purport and object of the Act. (para 15) (619-A,B]
'
2.3 If the State had accorded sanction for sale of elec-
)>
trical energy generated by the MPPs, the Commission
save and except for cogent and compelling reasons could
· not have dire.cted the sale of entire production of electric- c
. ity energy to APTRANSCO. If that was the stand of the
Commission and APTRANSCO, the question of entExcerpt shown. Read the full judgment & AI analysis in Lexace.