Case Note & Summary
The writ petition was filed by the Karnataka Power Transmission Corporation (KPTCL) and the State Load Dispatch Centre (SLDC) under Articles 226 and 227 of the Constitution of India, challenging an order dated 09.10.2012 passed by the Central Electricity Regulation Commission (CERC) in Petition No.124/MP/2011. KPTCL, the State Transmission Utility under Section 39 of the Electricity Act, 2003, is a Government company engaged in the transmission of electricity in Karnataka. SLDC, constituted under Section 31 of the Act and now operating under KPTCL, is responsible for integrated operation of the State power system. The first respondent, M/s Shamanur Sugars Limited, a generating company, had entered into a Power Purchase Agreement in 1998 for sale of surplus power, which expired in September 2011. Thereafter, Shamanur applied for Standing Clearance and No-Objection Certificate to export power from its plant. While granting the clearance, SLDC imposed a condition (m) providing that for excess generation, the rates fixed by KERC for old plants would be paid and not the Unscheduled Interchange (UI) rates, and for shortfall in generation, the company would pay UI rates. Shamanur challenged this condition before CERC, contending it violated the CERC (Unscheduled Inter-Change Charges and Related Matters) Regulations, 2009. CERC, by its order dated 09.10.2012, held that statutory regulations cannot be overridden by an administrative instruction, and the condition (m) being in conflict with the regulations was not sustainable. It directed SLDC to align its clearance with the Open Access Regulations and UI Regulations framed by CERC and to settle dues from January 2010 in accordance with Regulation 20(5) of the CERC (Open Access in Inter-State Transmission) Regulations, 2008. The petitioners argued that SLDC's imposition of the condition was in discharge of its statutory functions under Sections 31 and 32 of the Act, particularly to maintain grid stability through load balancing, and that SLDC has an independent existence which CERC cannot interfere with. They contended that CERC cannot sit in appeal over directions issued under Sections 31 and 32, and that the order was without jurisdiction. Reliance was placed on Indo Rama Synthetic Ltd. vs. Maharashtra Electricity Regulatory Commission (2011 SCC Online APTEL 77) regarding the operational necessity of grid scheduling. The petition sought quashing of the CERC order, a declaration that Regulation 8 of the 2008 Open Access Regulations is ultra vires, and other reliefs. The matter was heard and reserved for orders on 01.02.2023, and the order was pronounced on 22.05.2023. The provided text does not include the final decision or the court's reasoning; it contains only the background facts and the petitioners' submissions.
Issue of Consideration
Whether the Central Electricity Regulation Commission had jurisdiction to set aside a condition imposed by the State Load Dispatch Centre in a No-Objection Certificate as being inconsistent with the CERC Regulations, and whether Regulation 8 of the CERC (Open Access in Inter State Transmission) Regulations, 2008 is ultra vires the Electricity Act, 2003.
Case Details
2023 LawText (KAR) (05) 3
Writ Petition No. 46495 of 2012 (GM-KEB)
Sri. S. Sriranga, Senior Counsel for Smt. Sumana Naganand and Smt. Ashwini N. Ravindra for petitioners; Sri. Shridhar Prabhu for R1; Sri. Harsha Gupta for Sri. Ajay Rao for R2
Karnataka Power Transmission Corporation and State Load Dispatch Centre
M/s Shamanur Sugars Limited and Central Electricity Regulation Commission
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India challenging an order of the Central Electricity Regulation Commission.
Remedy Sought
Quashing of CERC order dated 09.10.2012, declaration that Regulation 8 of CERC (Open Access in Inter State Transmission) Regulations, 2008 is ultra vires, and declaration that CERC order is without jurisdiction.
Filing Reason
CERC set aside condition (m) in the No-Objection Certificate for open access, directing alignment with regulations and settlement of dues, which petitioners alleged interfered with statutory functions of SLDC.
Previous Decisions
CERC order dated 09.10.2012 in Petition No.124/MP/2011
Issues
Whether CERC had jurisdiction to set aside a condition imposed by SLDC in a No-Objection Certificate.
Whether Regulation 8 of the CERC (Open Access in Inter State Transmission) Regulations, 2008 is ultra vires the Electricity Act, 2003.
Whether CERC can sit in appeal over directions issued under Sections 31 and 32 of the Electricity Act, 2003.
Whether CERC can determine the veracity of decisions taken by another statutory authority like SLDC.
Submissions/Arguments
SLDC, under Section 31 of the Electricity Act, 2003, is responsible for integrated operation of the power system and imposed condition (m) to maintain load balance, which is a discharge of its statutory functions.
The imposition of condition (m) in the Standing Clearance and No-Objection Certificate was not an administrative action but in discharge of statutory functions vested with SLDC.
SLDC has an independent existence which cannot be interfered with by CERC.
CERC cannot sit in appeal over directions under Sections 31 and 32 of the Act.
Reliance was placed on Indo Rama Synthetic Ltd. vs. Maharashtra Electricity Regulatory Commission for the proposition that grid operation requires scheduling and load balancing.
Judgment Excerpts
the Statutory Regulations in terms of Regulations 2009 cannot be changed to an administrative instruction by insertion of Clause (m) in SC and NOC and there being a conflict between that condition and the Regulations, the Regulations would prevail. (Para 5)
Clause (m) – for any excess generation, the rates fixed by KERC for old plants only will be paid and not as per UI rates. However, for shortfall in generation as compared to the scheduled generation, the Firm will pay UI rates. (Para 3)
SLDC being vested with the obligation to maintain proper load of electricity in the transmission lines had imposed the impugned condition Clause (m) in the NOC. This introduction of Clause (m) in the SC/NOC was in discharge of the statutory functions vested with the SLDC under Section 31 of the Act. (Para 7.5)
Procedural History
In 1998, KPTCL and Shamanur Sugars entered into a Power Purchase Agreement for surplus power, which expired in September 2011. After expiry, Shamanur applied for Standing Clearance and No-Objection Certificate; SLDC granted it with condition (m). Shamanur challenged the condition before CERC in Petition No.124/MP/2011. CERC passed order dated 09.10.2012, setting aside condition (m) and directing alignment with regulations. Aggrieved, KPTCL and SLDC filed Writ Petition No. 46495 of 2012 in the High Court of Karnataka. The matter was heard and reserved for orders on 01.02.2023, and the order was pronounced on 22.05.2023.
Acts & Sections
- Electricity Act, 2003: Section 31, Section 32, Section 39, Section 40, Section 79
- CERC (Open Access in Inter State Transmission) Regulations, 2008: Regulation 8, Regulation 20
- CERC (Unscheduled Inter-Change Charges and Related Matters) Regulations, 2009:
