MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. versus M/S. JSW STEEL LIMITED & ORS.

Citation: [2021] 9 S.C.R. 404 · Decided: 10-12-2021 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Dismissed

Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 9 S.C.R.
   [2021] 9 S.C.R. 404
404
MAHARASHTRA STATE ELECTRICITY DISTRIBUTION
CO. LTD.
v.
M/S. JSW STEEL LIMITED & ORS.
(Civil Appeal Nos. 5074-5075 of 2019)
DECEMBER 10, 2021
[M. R. SHAH AND SANJIV KHANNA, JJ.]
Electricity Act, 2003 – ss.2(15), 42(4) – State Commission
held captive consumers-respondents herein liable to pay additional
surcharge – Appeals filed by the captive consumers – Allowed by
Appellate Tribunal – On appeal by distribution licensee, held:
Captive consumers incur huge expenditure/invest huge amount for
construction, maintainance or operation of a captive generating
plant and dedicated transmission lines – Such captive consumers/
captive users who form a separate class other than the consumers
defined u/s.2(15) are not liable to pay additional surcharge leviable
u/s.42(4), as rightly held by the Appellate Tribunal.
Electricity Act, 2003 – s.9 – Operation of – Discussed.
Electricity Act, 2003 – Class of consumers under – Held: As
per the scheme of the Act, there can be two classes of consumers-
ordinary consumer and captive consumers.
Electricity Act, 2003 – s.42(4) – Applicability of – Discussed.
Dismissing the appeals, the Court
HELD : 1.1 On a fair reading of Section 9, it can be seen
that captive generation is permitted under sub-section (1) of
Section 9. As per subsection (2), 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, but of-course subject to availability of
adequate transmission facility determined by the Central
Transmission Utility or the State Transmission Utility, as the case
may be. So, the captive generation / captive use is statutorily
provided /available and for which a permission of the State
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Commission is not required. Construction and/or maintenance
and operation of a captive generating plant and dedicated
transmission lines is not subjected to any permission by the State
Commission. As provided under Section 9 of the Act, 2003, any
person may construct, maintain or operate a captive generating
plant and dedicated transmission lines. Merely because the supply
of electricity from the captive generating plant through the grid
shall be regulated in the same manner as the generating station
of a generating company or the open access for the purpose of
carrying electricity from the captive generating plant to the
destination of his use shall be subject to availability of the adequate
transmission facility determined by the Central Transmission
Utility or the State Transmission Utility, it cannot be said that for
captive generation plant, the State Commission’s permission is
required. Right to open access to transmit/carry electricity to
the captive user is granted by the Act, and is not subject to and
does not require the Sate Commission’s permission. The right is
conditioned by availability of transmission facility, which aspect
can be determined by the Central or State transmission utility.
Only in case of dispute, the State Commission may adjudicate.
[Para 9][412-A-G]
1.2 Sub-section (4) of Section 42 shall be applicable only in
a case where the State Commission permits a consumer or class
of consumers to receive supply of electricity from a person other
than the distribution licensee of his area of supply and only such
consumer shall be liable to pay additional surcharge on the
charges of wheeling, as may be specified by the State Commission.
Captive user requires no such permission, as he has statutory
right. As per the Scheme of the Act, there can be two classes of
consumers, (i) the ordinary consumer or class of consumers who
is supplied with electricity for his own use by a distribution
licensee / licensee and; (ii) captive consumers, who are permitted
to generate for their own use as per Section 9 of the Act, 2003.
[Para 11][413-A-C]
1.3 The term “consumer” is defined in Section 2(15).
Ordinarily, a consumer or class of consumers has to receive supply
MAHARASHTRA STATE ELECTRICITY DISTRIBUTION  CO.
LTD. v. M/S. JSW STEEL LIMITED
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SUPREME COURT REPORTS
[2021] 9 S.C.R.
of electricity from the distribution licensee of his area of supply.
However, with the permission of the State Commission such a
consumer or class of consumers may receive supply of electricity
from the person other than the distri

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