A.P. GAS POWER CORPN. LTD. versus A.P. STATE REGULATORY COMMISSION AND ANR.

Citation: [2004] 3 S.C.R. 426 · Decided: 23-03-2004 · Supreme Court of India · Bench: BRIJESH KUMAR · Disposal: Case Partly allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

I, 
A 
A.P. GAS POWER CORPN. LTD. 
v. 
•-
A.P. STATE REGULATORY COMMISSION AND ANR. 
MARCH 23, 2004 
B 
.. 
[BRIJESH KUMAR AND ARUN KUMAR, JJ.] 
Andhra Pradesh Electricity Reforms Act, 1998: 
,, 
c 
Sections 14, 15 and 16-Licence-Requirement for-Captive consumption 
and supply and distribution of electricity-Difference between-Power station 
established by private participation for generation of electricity-participating 
companies allowed to share electricity generated to the extent of their 
shareholding-Participating companies also entitled to transfer their shares 
and the transferee entitled to consume electricity to the extent of its 
D shareholding-Supply also permitted to sister concerns of participating 
industries-Held, no licence required for consumption by participating 
industries or transferees of shares as it would be captive consumption-Licence 
required for supply of electricity to sister concerns as it would be supply/ 
, ""\ 
distribution of electricity-Indian Electricity Act, 1910-Sections 3 and 28. 
~
E 
Sections 56(3)(vi) and 21(4)-Exclusion of provisions a/Section 43A of 
\..
Electricity (Supply) Act, 1948 by Section 21 (4)-Held, the two provisions deal 
•
with two different aspects-Section 43A of the I 948 Act is an enabling provision 
whereas Section 21 (4) is a prohi~ition-Hence Section 43A not excluded by 
Section 21 (4) by virtue a/Section 56(3)(vi)-Electricity (Supply) Act, 1948-
F Section 43A. 
Electricity (Supply) Act, 1948-Section 43A(l}(c)-"Any other person"-
~r 
Meaning of-"Any other person'' does not mean individual or end-consumer 
but persons/bodies discharging function of generations, transmission, 
distribution or supply of electricity-Words & phrases. 
G 
The State of Andhra Pradesh and the Andhra Pradesh State 
Electricity Board (APSEB) decided to set up a power station with private 
participation, and for that purpose the appellant company was 
incorporated in 1988. The shares of the appellant company were held by 
H 
426 
I 
~ 
l' 
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( 
A.I'. (iAS POWER CORl'N.1.Tll 1·. A.I'. STATE REGI II.ATOR\' COMMISSION 
42 7 
Andhra Pradesh State Electricity Board and certain· participating A 
industries who were to share the power generated by the company in 
proportion to their respective paid-up share capital. Memorandum of 
Understanding was signed between the parties which provided that the 
shareholding companies could supply power to their sister concerns 
provided that the said sister concern was located within the State of B 
Andhra Pradesh and a High Tension consumer of the APSEB. 
Under the A.P. Electricity Reforms Act, 1998 for transmission and 
supply of electricity a licence was required. under Section 14. Under Section 
16 of the Act, the Andhra Pradesh Electricity Regulatory Commission was 
empowered to grant exemptions from the requirement to have a licence. C 
Section 56(3)(vi) of the said Act provided that certain Sections of the 
Electricity (Supply) Act, 1948 would not apply to the extent Andhra 
Pradesh Electricity Reforms Act, 1998 had made specific provisions 
therefore. 
The appellant applied under Section 16 of the A.P. Electricity D 
Reforms Act, 1998 for grant of exemption from licence for supply of 
generated power to its shareholders and their sister concerns. The 
application for exemption was rejected by the Regulatory Commission 
established under the provisions of the Andhra Pradesh Electricity 
Reforms Act, 1998. The Regulatory Commission held that no licence was E 
required for the generating company but a generating company was 
confined only to generation of power and would not extend to distribution 
and supply of electricity. Relying upon the provisions of Sections 3 and 
28 of the Electricity Act, 1910, it was held that the appellant was required 
to have licence as it was supplying energy. It was further held that the 
exemption granted to the generating companies under Section 26A of the p 
"-( 
Electricity (Supply) Act, 1948 would not be available to the appellant 
company as its function was not confined only to generation of power but 
extended to distribution and supply thereof to the participating industries 
and the sister concerns. 
The appellant filed writ petition before the High Court. The High G 
Court dismissed the writ petition and confirmed the order passed by the 
Regulatory Commission. Hence the appeals. 
The main question that arose for consideration by this Court was 
whether the appellant was required to take a licence under

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