{"id":168467,"date":"2011-10-13T00:00:00","date_gmt":"2011-10-12T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-sagar-sugars-allied-vs-tranmission-corpn-a-p-ltd-on-13-october-2011"},"modified":"2015-07-05T13:23:41","modified_gmt":"2015-07-05T07:53:41","slug":"ms-sagar-sugars-allied-vs-tranmission-corpn-a-p-ltd-on-13-october-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-sagar-sugars-allied-vs-tranmission-corpn-a-p-ltd-on-13-october-2011","title":{"rendered":"M\/S. Sagar Sugars & Allied … vs Tranmission Corpn.,A.P. Ltd. & … on 13 October, 2011"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S. Sagar Sugars & Allied … vs Tranmission Corpn.,A.P. Ltd. & … on 13 October, 2011<\/div>\n
Author: A K Patnaik<\/div>\n
Bench: R.V. Raveendran, A.K. Patnaik<\/div>\n
                                                                   Reportable\n\n\n             IN THE SUPREME COURT OF INDIA\n\n\n\n              CIVIL APPELLATE JURISDICTION\n\n\n             CIVIL APPEAL NO. 5159 OF 2005\n\n\nM\/s Sagar Sugars & Allied Products Ltd.           ...     Appellant\n\n\n\n                               Versus\n\n\n\nThe Transmission Corporation of A.P. Ltd.\n\n& Ors.                                                       ... Respondents\n\n\n\n\n                               WITH\n\n\n\n\n              CIVIL APPEAL NO.5157 OF 2005\n\n\nM\/s Sagar Sugars & Allied Products Ltd.           ...     Appellant\n\n\n\n                               Versus\n\n\n\nThe Transmission Corporation of A.P. Ltd          ... Respondent\n\n\n\n\n\n                        J U D G M E N T\n<\/pre>\n
A. K. PATNAIK, J.\n<\/p>\n
     These   are   the   appeals   against   the   common   order   dated <\/p>\n
30.07.2004   passed   by   the   Division   Bench   of   the   Andhra <\/p>\n
Pradesh High Court in Writ Appeal No. 191 of 2004 and C.M.A <\/p>\n
No. 3613 of 2003.\n<\/p>\n
                                   2<\/span><\/p>\n
2.    The facts relevant for deciding these appeals very briefly <\/p>\n
are   that   on   29.04.2000   the   appellant   entered   into   a <\/p>\n
Memorandum   of   Understanding   with   Non-Conventional <\/p>\n
Energy   Development   Corporation   of   Andhra   Pradesh   Limited <\/p>\n
(for short `the NEDCAP’), a nodal agency for non-conventional <\/p>\n
projects up to 20 MW, for setting up of a power plant in which <\/p>\n
power   was   to   be   generated   from   bagasse,   a   by-product   of <\/p>\n
sugar factory.  On 25.01.2002, the Andhra Pradesh Electricity <\/p>\n
Regulatory   Commission   (for   short   `the   APERC’)   set   up   under <\/p>\n
the   Andhra   Pradesh   Electricity   Reforms   Act,   1998,   permitted <\/p>\n
the   appellant-company   to   supply   the   power   generated   in   its <\/p>\n
plant   to   the   respondent   no.1,   which   had   taken   over   the <\/p>\n
functions   of   the   erstwhile   Andhra   Pradesh   Electricity   Board.\n<\/p>\n
On   10.07.2002,   a   Power   Purchase   Agreement   (for   short   `the <\/p>\n
PPA’)   was   entered   into   between   the   appellant   and   the <\/p>\n
respondent   no.1   which  inter   alia  provided   that   the   power   to <\/p>\n
the extent of 9.99 MW will be supplied during the season and <\/p>\n
power to the extent of 16.94 MW will be supplied during the off  <\/p>\n
season.     On   11.01.2003,   respondent   no.1   permitted   the <\/p>\n
appellant to synchronize its plant with the power grid and on <\/p>\n
13.01.2003, the  appellant started supplying electricity energy <\/p>\n
                                     3<\/span><\/p>\n
to the power grid.   On 01.03.2003, the appellant wrote to the <\/p>\n
APERC   to   direct   the   respondent   no.1   to   purchase   unutilized <\/p>\n
power   of   the   appellant   as   sugar   plant   of   the   appellant   could <\/p>\n
not   be   commissioned   due   to   some   difficulties   and   power <\/p>\n
generated   in   its   power   plant   remained   unutilized   and   on <\/p>\n
17.03.2003,   APERC   directed   the   respondent   no.1   to   amend <\/p>\n
the   PPA   to   provide   for   surplus\/   additional   quantity   of   power <\/p>\n
from   the   appellant.     On   17.03.2003,   the   Chief   Engineer   of  <\/p>\n
respondent   No.1   wrote   to   Superintending   Engineer   directing <\/p>\n
him   to  stop  evacuation  of  power   from   the   power   plant   of   the <\/p>\n
appellant   and   to   cut   off   the   supply   on   the   ground   that   the <\/p>\n
plant of the appellant cannot be classified as co-generation till <\/p>\n
the sugar plant of the appellant was commissioned.\n<\/p>\n
3.    The appellant then filed Writ Petition No. 7395 of 2003 in <\/p>\n
the   Andhra   Pradesh   High   Court   challenging   the   letter   dated <\/p>\n
17.03.2003 of the Chief Engineer of the respondent No.1 and <\/p>\n
the   learned   Single   Judge   passed   the   orders   on   02.05.2003 <\/p>\n
directing issue  of notice  to the respondents and directing the <\/p>\n
respondents, as an interim measure, to purchase power from <\/p>\n
the   appellant   and   to   pay   to   the   appellant   Rs.2.00   per   unit.\n<\/p>\n
The   respondent   No.1   then   filed   a   review   petition   before   the <\/p>\n
                                     4<\/span><\/p>\n
APERC   for   reconsideration   of   its   earlier   directions   to   amend <\/p>\n
the PPA issued on 17.03.2003 and on 01.10.2003 the APERC  <\/p>\n
allowed the review petition and cancelled its directions issued <\/p>\n
on 17.03.2003.  The appellant then challenged the order dated <\/p>\n
01.10.2003   of   the   APERC   before   the   Division   Bench   of   the <\/p>\n
High Court in C.M.A. No. 3613 of 2003 and the Division Bench <\/p>\n
of   the   High   Court   granted   interim   stay   of   the   order   dated <\/p>\n
01.10.2003 of the APERC.\n<\/p>\n
4.    On   15.12.2003,   the   learned   Single   Judge   of   the   High <\/p>\n
Court allowed Writ Petition No. 7395 of 2003 of the appellant  <\/p>\n
and quashed the letter dated 17.03.2003 of the Chief Engineer <\/p>\n
of   the   respondent   No.1   and   directed   the   respondent   No.1   to <\/p>\n
evacuate the  power  as agreed under the PPA and as directed <\/p>\n
by   the   APERC   by   order   dated   17.03.2002.     Against   the   said  <\/p>\n
order   dated   15.12.2003   of   the   learned   Single   Judge,   the <\/p>\n
respondent   filed   Writ   Appeal   No.   371   of   2004   and   on <\/p>\n
12.02.2004   the   Division   Bench   passed   an   interim   order   that  <\/p>\n
no further payment need to be made by respondent no.1 to the <\/p>\n
appellant.     Thereafter,   on   22.04.2004   the   Division   Bench <\/p>\n
modified   its   earlier   interim   order   dated   12.02.2004   and <\/p>\n
directed   the   respondent   to   pay   the   appellant   at   the   rate   of <\/p>\n
                                     5<\/span><\/p>\n
Rs.2.69 per unit instead of Rs.2.00 per unit and the said order <\/p>\n
was to continue till further orders in the Writ Petition.\n<\/p>\n
5.    Finally   on   30.07.2004,   the   Division   Bench   of   the   High <\/p>\n
Court   passed   the   impugned   order   in   Writ   Appeal   No.   191   of  <\/p>\n
2004 as well as in C.M.A. No. 3613 of 2003 setting aside the  <\/p>\n
order   dated   15.12.2003   of   the   learned   Single   Judge   in   Writ <\/p>\n
Appeal No. 7395 of 2003 and directed the parties to approach <\/p>\n
the appropriate forum chosen by the parties under the PPA for <\/p>\n
resolving   the   dispute.     By   the   impugned   order   the   Division  <\/p>\n
Bench also held that the appellant will be entitled to tariff as <\/p>\n
fixed by the Division Bench of the High Court in Writ Appeal <\/p>\n
No. 371 of 2004.\n<\/p>\n
6.    Dr.   Rajeev   Dhavan,   learned   senior   counsel   for   the <\/p>\n
appellant,   submitted   that   the   sugar   plant   has,   in   the <\/p>\n
meanwhile, commenced the production on 21.01.2004 and the <\/p>\n
only   dispute   which   has   to   be   decided   by   this   Court   is   with <\/p>\n
regard  to   the   price   of  the   power   supplied  by   the   appellant   to <\/p>\n
the   respondent   during   the   period   from   13.01.2003   to <\/p>\n
21.01.2004.\n<\/p>\n
                                     6<\/span><\/p>\n
7.    Mr.   Dhavan   submitted   that   by   the   order   dated <\/p>\n
22.04.2004   of   the   Division   Bench   in   Writ   Appeal   No.   371   of  <\/p>\n
2004, the respondent No.1 was to be paid at the revised rate of  <\/p>\n
Rs.2.69   per   unit   and   on   08.02.2006,   this   Court   has   by   an <\/p>\n
interim order, directed that the appellant would be entitled to <\/p>\n
receive payment at the rate of Rs.3.11 per unit as an interim <\/p>\n
measure   for   the   period   from   13.01.2003   to   20.01.2004   and <\/p>\n
also   at   the   same   rate   of   Rs.3.11   per   unit   for   the   period <\/p>\n
21.01.2004 onwards, as has been paid to other co-generating  <\/p>\n
plants, excluding the money already paid.   He submitted that <\/p>\n
in  Transmission   Corporation   of   Andhra   Pradesh   Limited   and  <\/p>\n
Another   etc.   etc.  v.  Sai   Renewable   Power   Private   Limited   and  <\/p>\n
Others etc.etc.    [(2010) 6 SCALE 541= (2010) 8 SCR 636 = JT <\/p>\n
2010 (7) SC 1] this Court has issued some directions relating  <\/p>\n
to price payable for power supplied by non-conventional power <\/p>\n
projects.  He referred to Para 4 of the judgment of this Court in <\/p>\n
the aforesaid case to show that the APERC had approved the <\/p>\n
rate   of   Rs.2.25   per   unit   with   5%   escalation   per   annum   from  <\/p>\n
1994-1995, being the base year, for supply of power generated <\/p>\n
by the non-conventional power projects and this was also the <\/p>\n
price fixed in clause 2.2 of the P.P.A for supply of electricity by <\/p>\n
                                     7<\/span><\/p>\n
the appellant  to the respondent no.1.   He submitted that the <\/p>\n
benefit   of   the   aforesaid   judgment   of   this   Court   delivered   on <\/p>\n
08.07.2010   should   therefore   be   granted   to   the   appellant   and <\/p>\n
directions be issued to respondent no.1 accordingly.\n<\/p>\n
8.    Learned counsel for respondent no.1, on the other hand, <\/p>\n
submitted   that   the   judgment   of   this   Court   delivered   on <\/p>\n
08.07.2010   in  Transmission   Corporation   of   Andhra   Pradesh  <\/p>\n
Limited   and   Another   etc.   etc.  v.  Sai   Renewable   Power   Private  <\/p>\n
Limited  and  Others etc.etc.  (supra) was on tariff and purchase <\/p>\n
price   of   power   produced   by   co-generation   non-conventional <\/p>\n
energy   plants   and   the   plant   of   the   appellant   was   not   a   co-\n<\/p>\n
generation   plant   during   the   period   from   January,   2003   to <\/p>\n
January,   2004,   as   there   was   no   production   of   sugar   in   the <\/p>\n
plant  during the  aforesaid period and  therefore  the  judgment <\/p>\n
of   this   Court   in  Transmission   Corporation   of   Andhra   Pradesh  <\/p>\n
Limited   and   Another   etc.   etc.  v.  Sai   Renewable   Power   Private  <\/p>\n
Limited   and   Others   etc.etc.  (supra)   has   no   relevance   to   the <\/p>\n
price   of   power   supplied   by   the   appellant   to   the   respondent <\/p>\n
No.1 during January, 2003 to January, 2004.\n<\/p>\n
                                       8<\/span><\/p>\n
9.     We   have   considered   the   submissions   of   the   learned <\/p>\n
counsel   for   the   parties   and   we   find   that   clause   2.2   of   P.P.A.\n<\/p>\n
between the appellant and respondent no.1 reads as follows:\n<\/p>\n
        “2.2. The company shall be paid the tariff for the <\/p>\n
        energy   delivered  at   the   interconnection   point   for <\/p>\n
        sale   to   APTRANSCO   at   Rs.2.25   paise   per   unit <\/p>\n
        with   escalation   at   5%   per   annum   with   1994-95 <\/p>\n
        as   base   year   and   to   be   revised   on   1st  April   of <\/p>\n
        every year up to the year 2003-2004.  Beyond the <\/p>\n
        year   2003-2004,   the   purchase   price   by <\/p>\n
        APTRANSCO   will   be   decided   by   Andhra   Pradesh <\/p>\n
        Electricity Regulatory Commission.  There will be <\/p>\n
        further review of purchase price on completion of <\/p>\n
        ten  years  from  the   date  of  commissioning   of   the <\/p>\n
        project, when the purchase price will be reworked <\/p>\n
        on the basis of Return on Equity, O& M expenses <\/p>\n
        and the Variable Cost.\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
The dispute between the appellant and respondent No.1 before <\/p>\n
us   is   whether   or   not   during   the   period   13.01.2003   to <\/p>\n
21.01.2004,   when   the   sugar   plant   of   the   appellant   had   not <\/p>\n
commenced   production   of   sugar,   the   unutilized   power <\/p>\n
supplied by the appellant to the respondent No.1 will have the <\/p>\n
same price as the price of power supplied by non-conventional  <\/p>\n
energy projects in the State of Andhra Pradesh determined by <\/p>\n
the APERC.  It will be more appropriate for the APERC, which <\/p>\n
is a regulatory commission with expertise in determination of <\/p>\n
price and tariff of power, to decide what would be the price for  <\/p>\n
                                         9<\/span><\/p>\n
supply   of   power   by   the   appellant   to   the   respondent   no.1 <\/p>\n
during   the   disputed   period   13.01.2003   to   21.01.2004   and  <\/p>\n
thereafter.  By the judgment dated 08.07.2010 of this Court in  <\/p>\n
Transmission   Corporation   of   Andhra   Pradesh   Limited   and  <\/p>\n
Another   etc.   etc.  v.  Sai   Renewable   Power   Private   Limited   and  <\/p>\n
Others   etc.etc.  (supra),   this   Court   has   also   remanded   the <\/p>\n
matters   to   APERC   to   decide   the   `purchase   price’   for <\/p>\n
procurement   of   the   electricity   generated   by   non-conventional <\/p>\n
energy developers in the facts of the circumstances of the case.\n<\/p>\n
10.    We, therefore, dispose of these appeals by directing that <\/p>\n
the APERC will consider all relevant materials and factors and <\/p>\n
finally determine the price of power supplied during the period <\/p>\n
13.01.2003   to   21.01.2004   and   thereafter   and   in   accordance <\/p>\n
with   the   determination   made   by   the   APERC,   balance <\/p>\n
payments, if any, will be made by the respondent no.1 to the <\/p>\n
appellant.     The   appeals   are   disposed   of   accordingly.     There <\/p>\n
shall be no order as to costs.\n<\/p>\n
                                                      ………………………..J.\n<\/p>\n
                                                           (R.V. Raveendran)<\/p>\n
                                                      ………………………..J.\n<\/p>\n
                                                           (A. K. Patnaik)<\/p>\n
New Delhi,<\/p>\n
October 13, 2011.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S. Sagar Sugars & Allied … vs Tranmission Corpn.,A.P. Ltd. & … on 13 October, 2011 Author: A K Patnaik Bench: R.V. Raveendran, A.K. Patnaik 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 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-168467","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S. Sagar Sugars & Allied ... vs Tranmission Corpn.,A.P. 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