SOUTHERN POWER DISTRIBUTION POWER COMPANY LIMITED OF ANDHRA PRADESH (APSPDCL) & ANR. versus M/S HINDUJA NATIONAL POWER CORPORATION LIMITED & ANR

Citation: [2022] 8 S.C.R. 198 · Decided: 02-02-2022 · Supreme Court of India · Bench: L. NAGESWARA RAO · Disposal: Dismissed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 8 S.C.R.
[2022] 8 S.C.R. 198
198
SOUTHERN POWER DISTRIBUTION POWER COMPANY
LIMITED OF ANDHRA PRADESH (APSPDCL) & ANR.
v.
M/S HINDUJA NATIONAL POWER CORPORATION LIMITED
& ANR
(Civil Appeal No. 1844 of 2020)
FEBRUARY 02, 2022
[L. NAGESWARA RAO AND B. R. GAVAI, JJ.]
Electricity Act, 2003 – ss. 61, 62, 64 and 86 – Power Purchase
Agreement(PPA) – Appellants-distribution companies (DISCOMS)
were to purchase 100% power generated by respondent no.1-
HNPCL – O.P. No.21 of 2015 filed by HNPCL for determination of
capital cost and O.P. No.19 of 2016 filed by appellants–DISCOMS
for approval of PPA – However, on 4th January, 2018, appellants-
DISCOMS filed IAs before the State Electricity Regulatory
Commission for withdrawal of O.P. No.19 of 2016 and disposal of
O.P. No.21 of 2015 – State Commission allowed withdrawal of O.P.
No.19 of 2016 filed by appellants–DISCOMS and consequentially
dismissed O.P. No.21 of 2015 filed by HNPCL – Appeal of respondent
no.1-HNPCL allowed by Appellate Tribunal for Electricity (APTEL)
which directed the State Electricity Regulatory Commission to dispose
of O.P. No.21 of 2015 and O.P. No.19 of 2016 on merits –
Correctness of – Held: APTEL rightly held that, on account of the
assurance given by the State of Andhra Pradesh/APDISCOMS,
HNPCL had altered its position and as such, it was not permissible
for the appellants-DISCOMS to withdraw O.P. No.19 of 2016 –
Conduct of appellants-DISCOMS would disentitle them to withdraw
the application – Argument, that on account of increase of the capital
cost of the project, the appellants–DISCOMS would be required to
purchase power at much higher rate, also does not hold water since
the State Electricity Regulatory Commission would only approve
the cost as it would feel appropriate, as guided by the provisions u/
s.61 of the Act of 2003 and the Regulations; and merely because,
the cost of the project is estimated by HNPCL at a particular amount,
the State Commission is not bound to accept the same – Further,
perusal of s.64 of the Act of 2003 would reveal that even a
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Generating Company is entitled to make an application for
determination of tariff u/s.62 of the Act of 2003 – As such, the State
Commission was wholly unjustified in dismissing O.P. No.21 of 2015
filed by HNPCL – For reasons unknown, appellants-DISCOMS took
a decision to resile from their earlier stand, due to which, not only
the huge investment made by HNPCL would go in waste, but also
valuable resources of the public including thousands of acres of
land would go in waste – Appellants-DISCOMS, which are
instrumentalities of the State, could not be permitted to change their
decision at their whims and fancies and, particularly, when it was
adversarial to the public interest and public good – The record
clearly showed that the change in decision was arbitrary, irrational
and unreasonable – IAs filed by appellants–DISCOMS, were acts,
affecting public interest and public good, without there being any
rational or reasonable basis for the same – Conduct of appellants–
DISCOMS, deprecated – In any event, the impugned judgment of
APTEL cannot be said to be prejudicial to the interests of any of the
parties – What was done by APTEL was only to direct the State
Electricity Regulatory Commission to dispose of the said two O.Ps
on merits – Appeal dismissed with costs, quantified at Rs.5,00,000/
- – State Electricity Regulatory Commission to decide the said two
O.Ps, expeditiously, within six months.
Constitution of India – Arts.12 and 14 – Public Authority –
State – Instrumentalities of the State – Held: Every action of a State
is required to be guided by the touch-stone of non-arbitrariness,
reasonableness and rationality – Every action of a State is equally
required to be guided by public interest – Every holder of a public
office is a trustee, whose highest duty is to the people of the country
– The Public Authority is therefore required to exercise the powers
only for the public good.
Dismissing the appeal, the Court
HELD: 1. The Appellate Tribunal for Electricity (APTEL)
rightly held that, on account of the assurance given by the State
of Andhra Pradesh/APDISCOMS, HNPCL had altered its position
and as such, it was not permissible for the appellants-DISCOMS
to withdraw O.P. No.19 of 2016. The grounds, which are sought
to be urged in I.A. No.1 of 2018 in O.P. No.19 of 2016 and I.A.
No.2 of 2018 in O.P. No.21 of 2015, were very much available

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