LexM/S. JINDAL STEEL AND POWER LIMITED versus THE CHHATTISGARH STATE ELECTRICITY REGULATORY COMMISSION AND ORS.
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A B C D E F G H 378 SUPREME COURT REPORTS [2022] 7 S.C.R. M/S. JINDAL STEEL AND POWER LIMITED v. THE CHHATTISGARH STATE ELECTRICITY REGULATORY COMMISSION AND ORS. (Civil Appeal Nos. 3607-3610 of 2008) SEPTEMBER 29, 2022 [AJAY RASTOGI AND B. V. NAGARATHNA, JJ.] Electricity Act, 2003: s.14 – Distribution licence/minimum area of supply u/s.14 of the 2003 Act granted to appellant-JSPL by the Chattisgarh State Electricity Regulatory Commission (Commission) – Cancellation of, by the Tribunal – Challenge against – Held: s.14 of the 2003 Act states that appropriate Commission may grant a license to any person (a) to transmit electricity as a transmission licensee; or (b) to distribute electricity as a distribution licensee; or (c) to undertake trading in electricity as an electricity trader, in any area as may be specified in the license – The sixth proviso to s.14 states that the appropriate Commission may grant a license to two or more persons for distribution of electricity through their own distribution system within the same area, subject to the applicant complying with additional requirements – Explanation to r.3 of 2005 rules prescribes the area falling within a Municipal Council or a Municipal Corporation as defined under Art.243 (Q) of the Constitution of India or Revenue District – The area of supply authorised by the Appropriate Commission shall be the ‘minimum area of supply’ – Thus, the expression ‘within the same area’ cannot refer to the entire Municipal Council or a Municipal Corporation or a Revenue District but ‘the area falling within’ a Municipal Council or a Municipal Corporation or a Revenue District in respect of which a distribution licensee is authorised – Hence the authorized ‘area of supply’ shall be the ‘minimum area of supply’ – Therefore, the contention of respondent no. 2 that the ‘minimum area of supply’ must comprise of the ‘entire’ Municipal Council or a Municipal Corporation or a Revenue District is unsustainable – Thus, the area in respect of which the license was granted to appellant is the minimum area of supply and appellant is bound to supply electricity in the said area of supply – Judgment of tribunal set aside – Electricity Rules, 2005 – r.3, explanation. [2022] 7 S.C.R. 378 378 A B C D E F G H 379 Allowing the appeals, the Court HELD: 1. The 2003 Act, came into force on 10.06.2003 insofar as Sections 1 to 120 and Sections 122 to 185 are concerned. The Preamble of the 2003 Act states that it has been enacted to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto. [Para 27][407-B-D] 2. On a reading of Section 14 of the 2003 Act, it is clear that the appropriate Commission may, on an application made to it under Section 15 grant a licence to any person (a) to transmit electricity as a transmission licensee; or (b) to distribute electricity as a distribution licensee; or (c) to undertake trading in electricity as an electricity trader, in any area as may be specified in the licence. The sixth proviso which is under consideration states that the appropriate Commission may grant a licence to two or more persons for distribution of electricity through their own distribution system within the same area, subject to the conditions that the applicant for grant of licence within the same area, shall, without prejudice to the other conditions or requirement under the Act comply with the additional requirements relating to the capital adequacy, creditworthiness, or code of conduct as may be prescribed by the Central Government, and no such applicant, who complies with all the requirements for grant of licence, shall be refused grant of licence on the ground that there already exists a licensee in the same area for the same purpose. [Paras 32 and 33][412-A- E] 3. Within the same area, there could be two or more persons for distribution of electricity. As to what is the area within which there could be grant of licence to two or more persons is M/S.
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