A.P. ELECTRICITY REGULATORY COMMISSION v. MIS. R.V.K. ENERGY PVT. LTD. AND ANOTHER

A Several other new contentions were raised with which we are not concerned but we are noticing the same only for the purpose of showing as to how and in what manner APTRANSCO has been changing its stand from stage to stage. However, it is of some significance to notice that Central 8 Electricity Authority in terms of its letter dated 26th February, 2002 opined that the capital costs works out to be on lower side from the other projects by stating :-

"It may, however, be mentioned that CEA, while granting c TEC for similar type of projects for IPPs have cleared the estimated completion capital cost in the range of Rs.3.62 crores to Rs.3.8 crores per MW as the ceiling cost depending on the scope of work, site specific features, financial package, debt-equity ratio, exchange rate, taxes and duties, foreign exchange etc. D GOAP may please take further action based on the above." The Government of Andhra Pradesh in view of that letter asked APTRANSCO to proceed with the exercise for arriving at PPA and submit the same to the Commission for approval. E APTRANSCO by its letter dated 11th April, 2002 addressed to the Commission, inter alia stated :- "After detailed examination of the above offer by APTRANSCO, I am directed to convey that in the context of surplus power situation and APTRANSCO's proposal to surrender NTPC Eastern Region Power and not to draw Power from Central Generating units due to Merit Order Dispatch, dispatch from the power station poses a serious problem. Further, APTRANSCO's inability to dispatch the station will lead to payment of fixed charges irrespective of generation by this power station. In view of the above, it is requested to take necessary action and pass appropriate orders in this regard." It is in the aforementioned background that the order of the Commission dated 23'd April, 2002 stating that it had no

A.P. ELECTRICITY REGULATORY COMMISSION v. 631 M/S. R.V.K. ENERGY PVT. LTD. [S.B. SINHA, J.]

jurisdiction to direct APTRANSCO to purchase power from LVS A must be considered.

24Copy pinpoint24. It is strange that while Commission was so conscious of is own power as envisaged under clause (e) of sub-section (1) of Section 11 of the Act in prohibiting third party sale so far B

..... as MPPs are concerned, it even could not take its own order to its logical conclusion. It is with some displeasure that we must notice as to how Commission mis-directed itself at every stage. Despite the State supported the application for grant of exemp- tion, the third party sale was prohibited. Parties were asked to negotiate and come back for fixation of tariff but then without c realizing the consequence which has to be suffered by the par- ties, it says it could not do anything in the matter. If APTRANSCO --4 was not agreeable to the orders passed by the Commission, which might have been passed during the pendency of the pro- ceedings, it could have questioned the same. It did not do that. D J ~ It accepted the orders. It for all intent and purport forced the respondent to alter its position to its great detriment. The Com- mission itself is responsible for the said situation. If it has the power to regulate, as it has been contending, it should have proceeded progressively and not regressively. It could have taken into consideration the provisions of Section 11 (1 }(f) whereby one of its function is to promote competitiveness and

_.. progressively involve the participation of private sector, while ensuring fair deal to the customers.

25Copy pinpoint25. The Commission, as we have noticed, hereinbefore had been waiting for some directions of the Government of Andhra Pradesh. It is from that angle it must be held that the decision of the State to allow MPPs. to generate electricity was a matter of policy. The Commission for all intent and purport has frustrated the policy and object of the Act. APTRANSCO in terms of Chap- G ~ ter V of the Act also acts as a statutory authority. The Commis- sion mustfunction within the fourcorners of the 1998 Act. It is again _....... subject to the power of the State Government under Section 12. It has referred the matter again and again to the State and when the State asked it to proceed in the manner, it backed out and H

p. 632

A APTRANSCO was constituted with the principal object of en- gaging the business of promoting and supply of electrical en- ergy. It is required to obtain licence for the said purpose. Sub- sections (4) and (5) of Section 13 of the 1998 read as under:-

"13.(4) APTRANSCO shall undertake the functions B specified in this section and such other functions as may be assigned to it by the licence to be granted to it by the Commission under this Act.

(5) Upon the grant of licence to the APTRNASCO under c clause (a) of sub-section (1) of Section 15 of this Act, the APTRNASCO shall discharge such powers and perform such duties and functions of the Andhra Pradesh State Electricity Board including those under the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 or the rules framed thereunder as the Commission may specify D in the licence and it shall be the statutory obligation of the APTRNASCO to undertake and duly discharge the powers, duties and functions so assigned."

26Copy pinpoint26. We have held hereinbefore that licence under section E 14 is necessary but the same is only for transmission and sup- ply and not for generation of electrical energy. Such a licence is required so as to enable the Commissioner to effectively con- trol and regulate transmission and supply. It is also relevant to note that Section 21 provides for restriction on licensees and generating companies. Sub-section (4) empowers a holder of supply or transmission licence to enter into arrangements for the purchase of electricity. Sub-section (5) provides that any agreement relating to any transaction of the nature described in any of the sub-sections unless made with or subject to such consent as aforesaid, shall be void. It, therefore, restricts the power and activities of APTRANSCO. It is in the aforementioned situation that the doctrine of promissory estoppel should be held to be applicable. In Southern Petrochemical Industries Co. Ltd. vs. Elec- H

... : i

A.P. ELECTRICITY REGULATORY COMMISSION v. 633 ) M/S. R.V.K. ENERGY PVT. LTD. [S.B. SINHA, J.]

tricity Inspector and ETIO and others: (2007) 5 sec 447, on A the question of doctrine of promissory estoppel, it was held :-

"121. The doctrine of promissory estoppel would undoubtedly be applicable where an entrepreneur alters -: his position pursuant to or in furtherance of the promise made by a State to grant inter alia exemption from paym~t B ']' of taxes or charges on the basis of the current tariff. Such a policy decision on the part of the State shall not only be expressed by reason of notifications issued under the statutory provisions but also under the executive instructions. The appellants had undoubtedly been enjoying c ,- the benefit of (sic exemption from) payment of tax in res;Ject of sale/consumption of electrical energy in relation to the cogenerating power plants." The Court further opined : - ... D "128. In MRF Ltd. it was held that the doctrine of promissory estoppel will also apply to statutory notifications."

27Copy pinpoint27. As regards setting up of MPPs the principle of estop- pel shall also apply. It is now a well settled principle of law that nobody should suffer for the wrong done to by a quasi-judicial body. In view of the principle analogous to 'actus curiae y neminem grvabit', we are of the opinion that because of the -t unreasonable stand taken by APTRANSCO before the Com- mission, LVS Powers should not suffer. In the aforementioned situation the High Court has issued the directions.

28Copy pinpoint28. APTRANSCO did not intend to increase its efficiency. It did ncit equip itself so as to be able to compete with others. It might have been in a disadvantageous position. On the one ~ G 'f hand the Commission asked for total prohibition for third party sale on the premise that it had to supply electricity to agriculfur- ist, but then when a situation came that it must purchase the power pursuant to the impugned directions of the Commission from MPPs it made a contradictory stand that MPPs can sell H

p. 634

A the power outside the State. 1

29Copy pinpoint29. Before us IDBI intervened. Indisputably it had granted financial assistance to the first respondent-LVS Power. IPDB granted loan only on the basis that the unit shall be functional.

8 This Court on 11th October, 2002 and 2na December, 2002 passed interim orders

Mr. Shanti Bhushan states that the first respondent has been paid a huge amount pursuant to the said orders and this Court may issue a direction for refund thereof. We do not agree. C The interim order by this Court was passed to maintain a bal- ance and in the interest of the parties.

We are, therefore, of the opinion that in this case interest of justice would be subserved if in modification of the order D passed by the High Court, the impugned judgments are set aside and the Commission constituted under the 2003 Act is directed to consider the matter afresh in the light of the new statute.

30Copy pinpoint30. We hope and trust that the Commission shall pass appropriate orders upon taking into consideration all the mate- E rial factors. It wo.uld be at liberty to vary, modify, rescind the or- der of the old Commission and issue directions as may be con- sidered just and reasonable. It may, in the changed situation, also allow the parties to effect third party sale. It will be at liberty to evolve a scheme for revival of the companies, keeping in F view the public interest involved and in particular the interest of the financial institutions. The time granted for completion of the projects should be extended by one year. Till such time as the Commission may not pass an appropriate interim order, the interim order passea by this court shall continue. G The appeals are disposed of in the abovesaid terms. In the facts and circumstances of the case, there shall be no order as to costs. G.N. Appeals disposed of.

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