Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5159 OF 2005
M/s Sagar Sugars & Allied Products Ltd. ... Appellant
Versus
The Transmission Corporation of A.P. Ltd.
& Ors. ... Respondents
WITH
CIVIL APPEAL NO.5157 OF 2005
M/s Sagar Sugars & Allied Products Ltd. ... Appellant
Versus
The Transmission Corporation of A.P. Ltd ... Respondent
J U D G M E N T
A. K. PATNAIK, J.
These are the appeals against the common order dated
30.07.2004 passed by the Division Bench of the Andhra
Pradesh High Court in Writ Appeal No. 191 of 2004 and C.M.A
No. 3613 of 2003.
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2. The facts relevant for deciding these appeals very briefly
are that on 29.04.2000 the appellant entered into a
Memorandum of Understanding with Non-Conventional
Energy Development Corporation of Andhra Pradesh Limited
(for short `the 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 Pradesh Electricity
Regulatory Commission (for short `the 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 Andhra Pradesh Electricity Board.
On 10.07.2002, a Power Purchase Agreement (for short `the
PPA’) was entered into between the appellant and the
respondent no.1 which inter alia provided that the power to
the extent of 9.99 MW will be supplied during the season and
power to the extent of 16.94 MW will be supplied during 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
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to the power grid. On 01.03.2003, the appellant wrote to the
APERC to direct the 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 and on
17.03.2003, APERC directed the 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 the appellant cannot be classified as co-generation till
the sugar plant of the appellant was commissioned.
3. The appellant then filed Writ Petition No. 7395 of 2003 in
the Andhra Pradesh High Court challenging the letter dated
17.03.2003 of the Chief Engineer of the respondent No.1 and
the learned Single Judge passed the orders on 02.05.2003
directing issue of notice to the respondents and directing the
respondents, as an interim measure, to purchase power from
the appellant and to pay to the appellant Rs.2.00 per unit.
The respondent No.1 then filed a review petition before the
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APERC for reconsideration of its earlier directions to amend
the PPA issued on 17.03.2003 and on 01.10.2003 the APERC
allowed the review petition and cancelled its directions issued
on 17.03.2003. The appellant then challenged the order dated
01.10.2003 of the APERC before the Division Bench of the
High Court in C.M.A. No. 3613 of 2003 and the Division Bench
of the High Court granted interim stay of the order dated
01.10.2003 of the APERC.
4. On 15.12.2003, the learned Single Judge of the High
Court allowed Writ Petition No. 7395 of 2003 of the appellant
and quashed the letter dated 17.03.2003 of the Chief Engineer
of the respondent No.1 and directed the respondent No.1 to
evacuate the power as agreed under the PPA and as directed
by the APERC by order dated 17.03.2002. Against the said
order dated 15.12.2003 of the learned Single Judge, the
respondent filed Writ Appeal No. 371 of 2004 and on
12.02.2004 the Division Bench passed an interim order that
no further payment need to be made by respondent no.1 to the
appellant. Thereafter, on 22.04.2004 the Division Bench
modified its earlier interim order dated 12.02.2004 and
directed the respondent to pay the appellant at the rate of
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Rs.2.69 per unit instead of Rs.2.00 per unit and the said order
was to continue till further orders in the Writ Petition.
5. Finally on 30.07.2004, the Division Bench of the High
Court passed the impugned order in Writ Appeal No. 191 of
2004 as well as in C.M.A. No. 3613 of 2003 setting aside the
order dated 15.12.2003 of the learned Single Judge in Writ
Appeal No. 7395 of 2003 and directed the parties to approach
the appropriate forum chosen by the parties under the PPA for
resolving the dispute. By the impugned order the Division
Bench also held that the appellant will be entitled to tariff as
fixed by the Division Bench of the High Court in Writ Appeal
No. 371 of 2004.
6. Dr. Rajeev Dhavan, learned senior counsel for the
appellant, submitted that the sugar plant has, in the
meanwhile, commenced the production on 21.01.2004 and the
only dispute which has to be decided by this Court is with
regard to the price of the power supplied by the appellant to
the respondent during the period from 13.01.2003 to
21.01.2004.
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7. Mr. Dhavan submitted that by the order dated
22.04.2004 of the Division Bench in Writ Appeal No. 371 of
2004, the respondent No.1 was to be paid at the revised rate of
Rs.2.69 per unit and on 08.02.2006, this Court has by an
interim order, directed that the appellant would be entitled to
receive payment at the rate of Rs.3.11 per unit as an interim
measure for the period from 13.01.2003 to 20.01.2004 and
also at the same rate of Rs.3.11 per unit for the period
21.01.2004 onwards, as has been paid to other co-generating
plants, excluding the money already paid. He submitted that
in Transmission Corporation of Andhra Pradesh Limited and
Another etc. etc. v. Sai Renewable Power Private Limited and
Others etc.etc. [(2010) 6 SCALE 541= (2010) 8 SCR 636 = JT
2010 (7) SC 1] this Court has issued some directions relating
to price payable for power supplied by non-conventional power
projects. He referred to Para 4 of the judgment of this Court in
the aforesaid case to show that the APERC had approved the
rate of Rs.2.25 per unit with 5% escalation per annum from
1994-1995, being the base year, for supply of power generated
by the non-conventional power projects and this was also the
price fixed in clause 2.2 of the P.P.A for supply of electricity by
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the appellant to the respondent no.1. He submitted that the
benefit of the aforesaid judgment of this Court delivered on
08.07.2010 should therefore be granted to the appellant and
directions be issued to respondent no.1 accordingly.
8. Learned counsel for respondent no.1, on the other hand,
submitted that the judgment of this Court delivered on
08.07.2010 in Transmission Corporation of Andhra Pradesh
Limited and Another etc. etc. v. Sai Renewable Power Private
Limited and Others etc.etc. (supra) was on tariff and purchase
price of power produced by co-generation non-conventional
energy plants and the plant of the appellant was not a co-
generation plant during the period from January, 2003 to
January, 2004, as there was no production of sugar in the
plant during the aforesaid period and therefore the judgment
of this Court in Transmission Corporation of Andhra Pradesh
Limited and Another etc. etc. v. Sai Renewable Power Private
Limited and Others etc.etc. (supra) has no relevance to the
price of power supplied by the appellant to the respondent
No.1 during January, 2003 to January, 2004.
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9. We have considered the submissions of the learned
counsel for the parties and we find that clause 2.2 of P.P.A.
between the appellant and respondent no.1 reads as follows:
“2.2. The company shall be paid the tariff for the
energy delivered at the interconnection point for
sale to APTRANSCO at Rs.2.25 paise per unit
with escalation at 5% per annum with 1994-95
as base year and to be revised on 1st April of
every year up to the year 2003-2004. Beyond the
year 2003-2004, the purchase price by
APTRANSCO will be decided by Andhra Pradesh
Electricity Regulatory Commission. There will be
further review of purchase price on completion of
ten years from the date of commissioning of the
project, when the purchase price will be reworked
on the basis of Return on Equity, O& M expenses
and the Variable Cost.
The dispute between the appellant and respondent No.1 before
us is 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 the respondent No.1 will have the
same price as the price of power supplied by non-conventional
energy projects in the State of Andhra Pradesh determined by
the APERC. It will be more appropriate for the APERC, which
is a regulatory commission with expertise in determination of
price and tariff of power, to decide what would be the price for
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supply of power by the appellant to the respondent no.1
during the disputed period 13.01.2003 to 21.01.2004 and
thereafter. By the judgment dated 08.07.2010 of this Court in
Transmission Corporation of Andhra Pradesh Limited and
Another etc. etc. v. Sai Renewable Power Private Limited and
Others etc.etc. (supra), this Court has also remanded the
matters to APERC to decide the `purchase price’ for
procurement of the electricity generated by non-conventional
energy developers in the facts of the circumstances of the case.
10. We, therefore, dispose of these appeals by directing that
the APERC will 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, will be made by the respondent no.1 to the
appellant. The appeals are disposed of accordingly. There
shall be no order as to costs.
………………………..J.
(R.V. Raveendran)
………………………..J.
(A. K. Patnaik)
New Delhi,
October 13, 2011.
