M/S SAGAR SUGARS & ALLIED PRODUCTS LTD. versus THE TRANSMISSION CORPORATION OF A.P. LTD. & ORS.

Citation: [2011] 12 S.C.R. 1005 · Decided: 13-10-2011 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Disposed off
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Judgment (excerpt)

[2011) 12 S.C.R. 1005 
M/S SAGAR SUGARS & ALLIED PRODUCTS LTD. 
v. 
THE TRANSMISSION CORPORATION OF A.P. LTD. & 
ORS. 
(Civil Appeal No. 5159 of 2005) 
OCTOBER 13, 2011 
[R.V. RAVEENDRAN AND A.K. PATNAIK, JJ.] 
A 
B 
Electricity: Price and tariff of power- Fixation of- Power 
generated from bagasse, by-product of sugar industry run by C · 
appellant - Supply of power to respondent no. 1 - Dispute 
between the appellant and respondent No. 1 was whether or 
not during the period 13.01.2003 to 21.01.2004, when the 
sugar plant of the appellant had not commenced production 
of sugar, the unutilized power supplied by the appellant to 
D 
respondent No.1 would have the same price as the price of 
power supplied by non-conventional energy projects in the 
State of Andhra Pradesh determined by the Andhra Pradesh 
Electricity Regulatory Commission (APERC) - Held: It would 
be more appropriate for the APERC, which is a regulatory E 
commission with expertise in determination of price and tariff 
.of power, to decide what would be the price for supply of power 
by the appellant to the respondent no. 1 during the disputed 
period and thereafter - Matter remitted to APERC - APERC 
to consider all relevant materials and factors and finally 
F 
determine the price of power supplied during the disputed 
period and t~ereafter. 
On 29.04.2000, the appellant entered into a 
Memorandum of Understanding with Non-Conventional 
Energy Development Corporation of Andhra Pradesh 
G 
Limited (NEDCAP), a nodal agency for non-conventional 
projects up to 20 MW, for setting up of a power plant in 
which power was to be generated from bagasse, a by-
product of sugar factory. On 25.01.2002, the Andhra 
1005 
H 
1006 
SUPREME COURT REPORTS 
[2011] 12 S.C.R. 
A Pradesh Electricity Regulatory Commission (APERC) set 
up under the Andhra Pradesh Electricity Reforms Act, 
1998, permitted the appellant-company to supply the 
power generated in its plant to the respondent no.1, 
which had taken over the functions of the erstwhile 
B Andhra Pradesh Electricity Board. On 10.07.2002, a Power 
Purchase Agreement (PPA) was entered into between the 
appellant and respondent no.1 which inter alia provided 
that the power to the extent of 9.99 MW would be supplied 
during the season and the power to the extent of 16.94 
c MW would be supplied durinr the off season. On 
11.01.2003, respondent no.1 permitted the appellant to 
synchronize its plant with the power grid· and on 
13.01.2003, the appellant started supplying electricity 
energy to the power grid. On 01.03.2003, the appellant 
0 wrote to the APERC to direct respondent no.1 to 
purchase unutilized power of the appellant as sugar plant 
of the appellant could not be commissioned due to some 
difficulties and power generated in its power plant 
remained unutilized. On 17.03.2003, APERC directed 
E respondent no.1 to amend the PPA to provide for surplus/ 
additional quantity of power from the appellant. On 
17.03.2003, the Chief Engineer of respondent No.1 wrote 
to Superintending Engineer directing him to stop 
evacuation of power from the power plant of the appellant 
and to cut off the supply on the ground that the plant of 
F the appellant could not be classified as co-generation till 
the sugar plant of the appellant was commissioned. 
In the instant appeals the dtspute betwee'n the 
appellant and respondent No.1 was whether or not during 
G the period 13.01.2003 to 21.01.2004, when the sugar plant 
of the appellant had not commenced production of sugar, 
the unutilized power supplied by the appellant to 
respondent No.1 would have the same price as the price 
of power supplied by non-conventional energy projects 
H 
SAGAR SUGARS & ALLIED PRODUCTS LTD. v. 
1007 
TRANSMISSION CORPN., OF A.P. LTD. 
in the State of Andhra Pradesh determined by the A 
APERC. 
Disposing of the appeals and remanding the matter 
to the APERC, the Court 
HELD: It would be more appropriate for the APERC, 
8 
which is a regulatory commission with expertise in 
determination of price and tariff of power, to decide what 
would be the price for supply of power by the appellant 
to the respondent no.1 during the disputed period 
13.01.2003 to 21.01.2004 and thereafter. The APERC 
C 
would have to consider all relevant materials and factors 
and finally determine the price of power supplied during 
the period 13.01.2003 to 21.01.2004 and thereafter and in 
accordance with the determination made by the APERC, 
balance payments, if any, w
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