Global Energy Private Limited v. Central Electricity Regulatory Commission & Anr.

1. This writ petition is directed against the order dated.27.02.2018, passed by the Central Electricity Regulatory Coramission(in short"CERC"). The operative directions issued by CERC via the inipgnd^ orderure;^ in paragraphs 36 and 37. ';■ C'v/;;Vi'D

W.P.(C>3061/2018 ^ ^ Page1of[6] 2018:DHC:8580 satisfies the conditions ofSection 190(1) (a)ofthe Act. Further, the trading in electricity is a regulated activity under the Actas trading is envisaged to promote competition and thereby serve public interest. Ifthe trading licensees are allowed toflout the terms and conditions ofthe agreementsforpurchase andsale ofelectricity in the course oftrading, there will be chaos in the market, shake the confidence of the generating companies and distribution licensees/consumers and thereby will affect competition which is against public interest. Therefore, public interest demands that suchpractices arestrongly discouragedand the licensees indulging insuchpractices aredealtwith strictly in accordance with law. We are ofthe view thata case against GEPL underSection 19(1) (a)of theActfor revocation oflicence has beenihdde out.

37. According to sub-section (3) ofSection 19 ofthe Act, the Commission is required to give three morfths notice to the licensee stating the groundsfor revocation oflicence and take a decision after considering the cause shown by the licensee. Accordingly, notice is hereby given to GEPL to show cause as to why its licence for inter-State trading ofelectricity should not be revokedfor its failure topay the outstandingduesofJPLfor thepowersuppliedin terms ofLois dated 17.4.2014 anfMS-^mMmd late payment surcharge thereon which is in contravention ofthe Regulation 7(h) ofthe Trading Licence Regulations. The reply to-the show,clause noticeshallbefiled by GEPL by23.3:2018. Section 19(4)oftheAct provides that the Commissiommay instead ofrevo^ng the licence under sub-section (1) ofSectim 19, permifit to^ remain inforce subject to suchfurther terms and conditions,it thinksfit to impose andsuch terms and conditions shall be binding on the licensee. In exercise ofpower under Section 19(4), we direct^that if GEPL makes thefull andfinalpaymm:Pf^M.P4^?)m^0§!^^^ paymentsurcharge toJPL in ierM^miLohfdmed17.4.2014and 30.5.2015 on or before 23.3.2018 and further submits an undertaking to comply with the terms and conditions of the agreements for purchase and sale ofpower and not make any defaultinpaymentinfuture, the Commission^willtake a view with regardto theproposedrevocation oflicence.

2. The writ petitioner, who is the respondent in the proceedings before the Page2of[6] W.P.(C)-3061/2018 1> CERC is aggrieved by the directions contained in the impugned order, broadly,on the ground that even though the CERC had kept back the matter to decide the issue ofjurisdiction,it proceeded to decide,the matter on merits. 2.[1] In this behalf reliance is placed on the proceeding sheet of CERC dated 20.12.2016. In support ofaforesaid contention it is also submitted on behalfofthe writ petitioner that CERC has no jurisdiction to decide the dispute which is the subject matter ofthe petition filed before it as the dispute raised arises between apower generator, that is, respondent No.2 herein and the writ petitioner, which /trades in power. For this purpose, Mr. Poovayya, who appears for the writ petitioner has drawn my attention to Section,86{4)(0:and Section 79(I)(a)to (e) and (f) ofthe Electricity Act (heteafler referied tpi'.as' Act"). Section 86(1)(f)is cited by Mr.Poovayya to contrast indjie-Ian employed in Section V4(i)(f)., 'v:::r: V 2.[2] It is the contention oflearned counsel that Section 86(l)(f)ofthe 2003 Act, sets outthe powers ofthe State Commission^ whild^eetion 79ofthe verysame act sets outthe powers ofthe Central Commissjpii.'^'^,: ^ 2.[3] Learned counsel says that a periisal dlt&eJprovi various sub clauses ofSection 79(1)would show thatthe'i3[isp]^^;^&h(d5/^p6tai^ •betweenthe writ petitioner and respondentNo.2 doesnotfall within the domain ofCERC.

3. I may also indicate that Mn,;Pppva^a has stated th^\a suitfor recovery of dues has instituted against respondent no;2-, iif'this Gouri;.'' This suit,I am told, is numbered as:CS(COMM)No.174/2016. 3.[1] It is not in dispute that this suit, in the first instance, was dismissed; a situation which was retrieved with the passing of order dated 06.10.2015 by the Division Bench in RFA(OS)93/2015. 3.[2] It is the contended on behalf ofthe writ petitioner that the suit is pending adjudication. W.P.(C)-3061/2018 Page3of[6]

4. Furthermore, it is also the contention of learned counsel for the petitioner that the revocation oflicense which has been ordered by the CERC is contrary to the provisions ofSection 19(l)(a)read with Section 19(3)&(4)ofthe2003 Act. In this behalf, Mr.Poovayya contends that assuming without admitting that the writ petitioner owes amounts to respondent No.2 and that held by CERC was ofthe view that the default qua repayment of dues was both "wilful" and "prolonged", then, a show cause notice should have been issued which could not have had a returnable time line ofless than 3 months. 4.[1] Itissubmitted thatonly thereafter,fiirther steps,ifat all,under Seption 19(4) of2003 Actcould have been taken,against-the 4.[2] In nutshell, it is the case ofthe petitioner,that;the_safeguards provided in Section 19(3)and 19(4)ofthe 2003 Act were giy^'a^p by CERC,which;]3egan with ashow cause notice beingissued which had\A^ lessthan[3] months.

5. On the other hand,Mr.Nayyar, who appears no.2,says that qua the impugned order, the writ petitioner can take recourse to an alternative remedy provided under Section 111 of;2003;";^:

5.1. In this behalf,Mr.Nayyar contends Mht4he scope ahd ambitofSection 111 is wide enough to enable "any person", who isvaggrieved by any order ofthe CERCto prefer an appeal withthe Appellate Tribunal.

6. I have heardthe counselfortheparties.Accordingto'mp,whatimpresses me at thisjuncture, is the fact that CERC piocdeddd to-decide the matter on merits, when, it had reserved its decision on maintainability of the action filed by respondent no.2. 6.[1] In that sense, CERC did not adhere to a procedure, which is followed by most quasijudicial bodies, and as a matter offact by any adjudicatory forum of limited jurisdiction, which is, that it rules on the issue as to whether it has jurisdiction to entertain and try the matter placed before it. This decision w.P.(q-3061/2018 ^ ^ ~

8. I am informed that the matter is listed before CERC on 12.04.2018. Accordingly,CERC isrequested to fix datesfor argumentsinthe matter keeping in mind the timeline setforth above. W.P.(C)-3061/2018 Page5of[6]

9. The writpetition is disposed ofin aforementionedterms.

10. It is clarified that the mere fact that the impugned order has been set aside will notimpactthe decision on merits, which is required to be taken on merits by CERC.