LexM/S SUNDEW PROPERTIES LIMITED versus TELANGANA STATE ELECTRICITY REGULATORY COMMISSION & ANR.
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* Author [2024] 5 S.C.R. 739 : 2024 INSC 439 M/s Sundew Properties Limited v. Telangana State Electricity Regulatory Commission & Anr. (Civil Appeal No. 8978 of 2019) 17 May 2024 [Sanjiv Khanna and Dipankar Datta,* JJ.] Issue for Consideration Whether the designation of an entity as a Special Economic Zone- developer ipso facto qualifies the entity to be a deemed distribution licensee, obviating the need for an application u/s. 14 of the Electricity Act; whether Regn 12 of the Andhra Pradesh Electricity Regulatory Commission (Distribution Licence) Regulations, 2013, and by implication r. 3(2) of the Distribution of Electricity Licence (Additional Requirements of Capital Adequacy, Creditworthiness and Code of Conduct) Rules, 2005 are applicable to a SEZ developer recognised as a deemed distribution licensee under the proviso to s. 14(b) read with Regn 13 of the 2013 Regulations; and whether the condition imposed by the State Electricity Regulatory Commission to infuse additional capital as per r. 3(2) of the 2005 Rules read with Regn 12 of the 2013 Regulations, justifiable or extraneous. Headnotes† Electricity Act, 2003 – s. 14(b) proviso – Distribution of Electricity Licence (Additional Requirements of Capital Adequacy, Creditworthiness and Code of Conduct) Rules, 2005 – r. 3(2) – Andhra Pradesh Electricity Regulatory Commission (Distribution Licence) Regulations, 2013 – Regns 12, 13 – Application for grant of Distribution Licence in the area of supply of an existing Distribution Licensee – Procedure to get identified as deemed distribution licensee – On facts, designation of an entity-appellant as a Special Economic Zone-SEZ developer by the Ministry – Appellant, if ipso facto qualifies the entity to be a deemed distribution licensee, obviating the need for an application u/s. 14 – Regn 12 of the 2013 Regulations and by implication r. 3(2) of the 2005 Rules, if applicable to a SEZ developer recognised as a deemed distribution licensee under the proviso to s. 14(b) read with Regn 13 of the 2013 Regulations – Condition imposed by the 740 [2024] 5 S.C.R. Digital Supreme Court Reports State Electricity Regulatory Commission to infuse additional capital as per r. 3(2) of the 2005 Rules read with Regn 12 of the 2013 Regulations, if justifiable or extraneous: Held: Being a SEZ developer in terms of the 2010 Notification does not ipso facto confer upon the appellant the status of a deemed licensee without any scrutiny and without being under any requirement to apply – It is required to make an application in accordance with the 2013 Regulations – This condition has been fulfilled as the status of the appellant as a deemed licensee was upheld pursuant to the application made in accordance with r. 13 of the 2013 Regulations – As regards the applicability of Regn 12 of the 2013 Regulations and r. 3(2) of the 2005 Rules, none of the nine provisos to s. 14, apply to the appellant – Sixth proviso to s. 14 does not pertain to deemed licensees and, thus, the 2005 Rules not applicable to the appellant – Furthermore, it cannot be said that Regn 12 applies implicitly to a deemed licensee as well – Regn 12 pertains solely to regular distribution licensees not to deemed licensees – ‘Reading up’ Regn 12 so as to expand its ambit to include within it deemed licensees, especially when the Electricity Act does not stipulate any such inclusion, runs counter to proviso to clause (b) of s. 14 of the Electricity Act, which is impermissible and cannot be approved – Thus, the recognition of the status of a deemed distribution licensee cannot hinge on compliance with r. 3(2) of the 2005 Rules read with Regn 12 of the 2013 Regulations – Having been statutorily exempted from complying with Regns 4 to 11, the appellant, being a deemed licensee, would also be exempt from the concomitant obligation of complying with Regn 12 – Condition imposed on appellant to infuse an additional capital, not justified and contrary to the statutory scheme – Judgments and orders of the State Electricity Regulatory Commission and the Appellate Tribunal for Electricity set aside to this extent – Order of the State Electricity Regulatory Commission granting the status of a deemed licensee to the appellant, subject to the condition that its promoters infuse additional capital modified to the extent of excluding such condition. [Paras 25, 37, 28, 29, 34, 35, 37] Interpretation of statutes – Principles of statut
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