LexCHHATTISGARH STATE POWER DISTRIBUTION COMPANY LTD versus CHHATTISGARH STATE ELECTRICITY REGULATORY COMMISSION AND ANOTHER
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A B C D E F G H 798 SUPREME COURT REPORTS [2022] 3 S.C.R. CHHATTISGARH STATE POWER DISTRIBUTION COMPANY LTD. v. CHHATTISGARH STATE ELECTRICITY REGULATORY COMMISSION AND ANOTHER (Civil Appeal Nos. 2578-2579 of 2008) MAY 12, 2022 [L. NAGESWARA RAO AND B. R. GAVAI, JJ.] Electricity Act, 2003: s. 9 rw s. 2(8) – Electricity Rules, 2005 – r. 3 – Captive generation plant – Requirement of – On facts, SBPIL established a captive generation plant and SBMPL is its sister concern – Petition by SBPIL to State Electricity Regulatory Commission for providing open access and wheeling of power through the transmission system of the appellant-State Power Distribution Company for capitive use by SBMPL – Allowed by the Commission holding that SBPIL was entitled to supply electricity to its sister concern SBMPL and same would qualify to be treated as own consumption within the ambit of s. 9 – Said order upheld by APTEL – On appeal, held: Combined reading of s. 9 and 2(8) reveal that a person is entitled to construct, maintain or operate a captive generating plant and such a plant should be primarily for his own use – SBMPL holds 27.6% equity shares in SBPIL, as such, the requirement of not less than 26% of shares is fulfilled by SBMPL and since SBMPL holds 27.6% of the ownership, the use of electricity by it would be for captive use – Other requirement that the consumption of SBIPL and SBMPL together should not be less than 51% of the power generated and admittedly, the joint consumption by SBIPL and SBMPL is more than 51% – Thus, both the conditions as provided u/r 3 are satisfied, thus, the order passed by the Commission and the APTEL justified. Dismissing the appeals, the Court HELD: 1.1 In view of Section 9 of the Electricity Act, 2003 any person may construct, maintain or operate a captive generating plant and dedicated transmission lines. The first proviso to Section 9 provides that the supply of electricity from the captive generating plant through the grid shall be regulated [2022] 3 S.C.R. 798 798 A B C D E F G H 799 in the same manner as the generating station of the generating company. The second proviso to Section 9 of the said Act provides that no licence shall be required under the said Act for supply of electricity generated from a captive generating plant to any licensee in accordance with the provisions of the said Act and the rules and regulations made thereunder and to any consumer, subject to the regulations made under sub-section (2) of Section 42. Sub-section (2) of Section 9 provides that every person, who has constructed a captive generating plant and maintains and operates such plant, shall have the right to open access for the purposes of carrying electricity from his captive generating plant to the destination of his use. The first proviso to sub-section (2) of Section 9 provides that such open access shall be subject to availability of adequate transmission facility and such availability of transmission facility shall be determined by the Central Transmission Utility or the State Transmission Utility, as the case may be. The second proviso to sub-section (2) of Section 9 provides that if there is any dispute regarding the availability of transmission facility, it shall be adjudicated upon by the Appropriate Commission. [Para 11][807-A-E] 1.2 Clause (8) of Section 2 of the Act defines “Captive generating plant”. It states that “Captive generating plant” means a power plant set up by any person to generate electricity primarily for his own use and includes a power plant set up by any co- operative society or association of persons for generating electricity primarily for use of members of such co-operative society or association. [Para 12][807-E-F] 1.3 A combined reading of Section 9 and Clause (8) of Section 2 of the Act would reveal that a person is entitled to construct, maintain or operate a captive generating plant. Such a plant should be primarily for his own use. Clause (8) of Section 2 of the said Act would further show that it includes a power plant set up by any co-operative society or association of persons for generating electricity. The requirement is that it should be primarily for the use of the members of such co-operative society or association. The definition of “person” under Clause (49) of Section 2 is wide CSPDCL v. CHHATTISGARH STATE ELECTRICITY REGULATORY COMMISSION A B C D E F G H 800 SUPREME COURT REPORTS [2022] 3 S.C.R. enough, to include any company or body corporate or association or
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