TATA POWER COMPANY LTD. versus RELIANCE ENERGY LIMITED AND OTHERS

Citation: [2009] 9 S.C.R. 625 · Decided: 06-05-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2009] 9 S.C.R. 625 
,_ 
TATA POWER COMPANY LTD. 
A 
v. 
RELIANCE ENERGY LIMITED AND OTHERS 
(Civil Appeal Nos. 3510-11 of 2008) 
MAY 6, 2009 
B 
[S.8. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.] 
y 
Electricity Act, 2003: 
ss.2(28) and 23 - "Generating Companies" - Directions c 
to licensees - HELD: Activities of generating companies are 
beyond purview of licensing provisions - s. 23 occurs in 
Chapter "licensing" under which generating companies would 
not be covered. 
s. 42(2) - The Act permits generating companies to D 
supply electricity directly to a trader or a consumer - For this 
purpose no tariff is required to be determined in terms of 
s.42(2). - MERC (Terms and conditions of Tariff) Regulations, 
2005 - Regulation 24. 
E 
ss. 2(70) and 23 - "Supply" - Meaning of - HELD: The 
words 'supply' used in s. 23 in the con1ext refers to supply to 
'( 
consumers only and not to licensees - Interpretation of 
Statutes. 
ss. 23, 60 and 86 (1 )(b) - HELD: While exercising power F 
of 'regulation' in relation to purchase of electricity and 
procurement process of distribution, it is not permissible for 
the Commission to direct allocation of electricity to different 
licensees keeping in view their own need. 
G 
Interpretation of Statutes: 
Interpretation of an enactment - Held: A statute must be 
construed having regard to Parliamentary intent, history of 
625 
H 
626 
SUPREME COURT REPORTS 
[2009] 9 S.C.R. ~ 
A 
legislation including the mischief sought· to be remedied, the 
objects and purpose it seeks to achieve - Chapter headings 
and marginal notes of the sections are also relevant - For true 
and correct construction of the Act, principle of harmonious 
construction is required to be resorted to. 
B 
Consumers of electricity in Mumbai were being 
served . by Tata Power Company (TPC), Brihan Mumbai 
EJettricity· Transport Corporation (BEST) and Reliance 
Infrastructure (Rlnfra). TPC had two divisions -
Generation [TPC (G)] and Distribution [TP(D)]. TPC(D), 
C 
BEST and Rlnfra were distribution licensees getting bulk 
supplies from TPC(G). In the year 1995 Rlnfra also 
commissioned its 500 mw generating plant On 23.8.2005 
the Maharashtra Electricity Regulatory Commission 
(MERC) framed MERC (Terms and Conditions of Tariff) 
D 
Regulations, 2005, requiring thereunder all power 
purchase agreements/arrangements entered into by 
Dh;;tribution Licensees to be approved by MERC. On 
18.1.2006 BEST executed a Power Purchase Agreement 
(PPA) with TPC for 800 mw of power for a period of 10 
E 
years. On 16.3.2006 TPC(D) entered into a PPA with 
TPC(G) for 477 mw power. Both the PPAs were submitted 
on 27.12.2006 for. approval of MERC. Rlnfra filed 
objections in both the proceedings. Meanwhile TPC made 
F 
an offer to Rlnfra for sup.ply of 600 mw of electricity, but 
since the latter demanded higher quantum of power, no 
consensus was reached with respect to PPA between 
TPC(G) and Rlnfra. On 2.4.2007 MERC passed generation 
tariff order for TPC(G) for the period 2006-2007 holding 
that since PPAs had not been approved by way of interim 
G arrangement, it would allocate available energy for 
TPC(G) on the basis of coincident peak demand of the 
distribution licensees. BEST and TPC(G), both 
challenged the order in appeals before the Electricity 
Appellate Tribunal. The Appellate Tribunal directed the 
H 
MERC to consider petitions of TPC(G) and BEST for 
y 
' .. 
TATA POWER COMPANY LTD. v. RELIANCE 
627 
.. 
ENERGY LIMITED AND ORS. 
,_ 
approval of PPA. Meanwhile Rlnfra initiated proceedings A 
u/s. 86 of the 2003 Act before MERC seeking directions 
to TPC(G) to allocate· 762 mw of power to it and to enter 
into a PPA with it. The Commission by its order dated 
6.11.2007 approved the PPAs entered into between 
TPC(G) and Best and TPC(G) and TPC(D), for supply of B 
800 mw and 477 mw of power respectively w.e.f. 1.4.2008, 
holding that it has jurisdiction to issue direction to 
t-
generating companies in terms of s.23 of 2003 Act. The 
Commission while dealing with the application of Rlnfra 
filed u/s. 68 held that for the purpose of fixing the c 
distribution tariff of all the three distribution licensees, 
namely, BEST, TPC(D) and Rlnfra it would be proceeding 
in the manner as directed in its order date 6.11.2007 and 
approving the PPA entered into between TPC(G) and 
BEST and TPC(G) and TPC(D). The Appellate Tribunal by D 
its judgment dated 6.5.2008, set aside the judgment and 
order of the MERC passed on 6.11.2007. Aggri
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