Case: GRID Corporation of Orissa Ltd. Vs Transmission Corporation of Andhra Pradesh, Andhra Pradesh Generation Corporation Ltd. and Orissa Hydro Power Corporation Ltd.. Central Electricity Regulatory Commission

JudgesBhanu Bhushan and R. Krishnamoorthy, Members
IssueElectricity Law
Judgement DateOctober 18, 2007
CourtCentral Electricity Regulatory Commission


  1. This application was made on 7.3.2003 under clause (h) of Section 13 of the Electricity Regulatory Commissions Act, 1998 (the 1998 Act) for arbitration or adjudication of dispute arising out of non-payment of wheeling charges amounting to Rs.3.41 crore with interest @ 24% per annum from the date of filing of the present application for transmission of electricity from Eastern Region generating stations to Transmission Corporation of Andhra Pradesh Ltd.(APTRANCO), the first respondent, during January 2001 to July 2001, using the transmission system owned at the relevant time by Grid Corporation of Orissa Ltd.(GRIDCO).

  2. During pendency of the present application, the 1998 Act has been repealed by the Electricity Act, 2003 (the 2003 Act) with effect from 10.6.2003. However, the provision analogous of clause (h) of Section 13 of the 1998 Act are contained in clause (f) of sub-section (1) of Section 79 of the 2003 Act. The parties have, therefore, addressed the question with reference to the provisions of the 2003 Act.

  3. In pursuance of the provisions of the 2003 Act and the Orissa Electricity Reforms Act, 1995 the erstwhile GRIDCO was reorganized by the State Government with effect from 1.4.2005. As a consequence of this reorganization, Orissa Power Transmission Corporation Ltd.(OPTCL) has been entrusted with the duty and responsibility of transmission of electricity within the State of Orissa and the transmission assets in the State are now owned by it. In this view, OPTCL has substituted GRIDCO as petitioner. In the present order the petitioner refers to GRIDCO as well as OPTCL.

  4. At the instance of the parties, AP Generation Corporation Ltd.(APGENCO) and Orissa Hydro Power Corporation Ltd.(OHPC) have also been impleaded as second and third respondents respectively.

  5. The petitioner's claim is that during the period January 2001 to April 2001 and July 2001, the first respondent imported power from NTPC's generating stations located in the Eastern Region via Western Region by utilizing the petitioner's transmission system up to Budhipadar. The petitioner has averred that wheeling charges bills amounting to Rs.2.46 Crore (the principal amount) had not been released by the first respondent despite the efforts made at the various levels. The break-up of the outstanding dues, as claimed by the petitioner is as under:

    Principal amount: Rs. 2.46 crore

    Delayed Payment Surcharge (D.P.S) (@2% per month): Rs. 0.95 crore
    Total: Rs.3.41 crore 

    6. It has been stated that during pendency of the present application, the first respondent availed of the transmission system owned by the petitioner during April 2003 to July 2003, October 2003, and February 2004 to April 2004 for which also no payments were made. As a result, the amount, according to the petitioner, increased to Rs.5.071 Crore as per details given below:

    Principal amount: Rs 2.708 crore

    D.P.S. (@2% per month): Rs 2.363 crore
    Total: Rs 5.071 crore 

    7. The petitioner has not amended its application filed during March 2003 and as such we will be restricting to the claim as per the original application.

  6. The first respondent is stated to have acknowledged that an amount of Rs.2.46 crore as principal amount was due to the petitioner, but sought to adjust these dues against the dues of the second respondent amounting to Rs.4.29 crore reportedly payable by the third respondent for the power purchased by the State of Orissa (erstwhile OSEB) from Muchhkund Hydro Electric Project, a joint venture of the States of Orissa and Andhra Pradesh. The petitioner, however, did not agree to the adjustment since its claim is against the first respondent exclusively, an entity separate from the second respondent. It is stated by the petitioner that pursuant to enforcement of power sector reforms in the State of Orissa, the assets and liability of Muchhkund Hydroelectric Project stood transferred to Orissa Hydro Power Generation Corporation Ltd.(OHPGCL), the third respondent herein. According to the petitioner, the dues sought to be adjusted, pertain to the period prior to reorganization of Orissa State Electricity Board (OSEB), and, as such, the liability, if any, stood transferred to the third respondent after enforcement of power sector reforms in the State.

  7. The Commission by its order dated 28.3.2006 had constituted a one-Member Bench with Shri A.H. Jung as the Presiding Member to make appropriate recommendations to the Commission for resolution of the dispute. The Bench submitted its recommendations by its order dated 6.2.2007.

  8. Before the Bench the first respondent took a preliminary objection to question jurisdiction of the Commission to entertain the application. The Bench did not express any opinion on the preliminary objection because it felt that it was beyond the terms of its reference and, therefore, left the question to be determined by the Commission. We will consider this as a preliminary issue in the later part of this order.

  9. At some stage the petitioner agreed for the adjustment of the principal amount of dues claimed by the petitioner against the dues said to be payable by the third respondent to the second respondent provided the amount was reimbursed to it by the third respondent. The Bench in its recommendations accepted the plea of the first respondent for the adjustment. Under these circumstances, the Bench did not recommend payment of interest or late payment surcharge. The petitioner was, however, granted liberty to claim the amount from the third respondent through the intervention of the State Government of Orissa since the petitioner and the third respondent are owned and controlled by that Government.

  10. By order dated 28.2.2007, a copy of the recommendations made by the Bench was sent to the parties for their response.

  11. The petitioner has contested the preliminary objection of the respondents as regards the jurisdiction of the Commission to entertain the application. The petitioner has objected to the recommendation made by the Bench in regard to adjustment of dues of second respondent stated to be payable by the third respondent since the parties involved in the present litigation, being the companies incorporated under the Companies Act are independent legal entities and each of them has its own rights and liabilities under the law. Under these circumstances, the petitioner has reiterated its claim for a sum of Rs.2.46 crore as the principal amount and has also claimed the delayed payment surcharge for non-payment of dues payable since 2001.

  12. The first respondent in its reply has reiterated that the dispute raised in the application is outside the jurisdiction of the Commission since it involves payment of dues to and by the utilities owned by the State Governments and are under the regulatory superintendence of the concerned State Regulatory Commissions. It has been stated that the jurisdiction of the Commission under clause (f) of sub-section (1) of Section 79 of the 2003 Act is limited to adjudication of disputes involving generating companies or the transmission licensees which are owned or controlled by the Central Government and are limited to the tariff issues or issues arising in relation to grant of licence. It is further stated that the dispute raised in the application can be resolved only through the State Governments in question in appropriate civil forum, the steps for which had already been initiated. In essence, the first respondent has argued that the Commission being a creature of the statute cannot travel beyond the statute while exercising its powers and thus cannot invoke jurisdiction and/or proceed to adjudicate the lis inter-parties. The first respondent has also raised the question of limitation, by alleging that the present application is barred by limitation.

  13. The second respondent in its affidavit has also raised the question of jurisdiction of the Commission to adjudicate upon or otherwise entertain the disputes raised in the application. It is, however, inclined to accept the recommendations of the Bench in case the Commission finds that it has the jurisdiction to adjudicate upon the dispute.

  14. The third respondent has stated that no dues are payable by it to the second respondent and, therefore, the question of any adjustment in this regard should not arise.

  15. Before reverting to the question of jurisdiction which is the major...

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