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Ambika Cotton Mills Ltd., registered Office Coimbatore, rep. By its Director Dr.K. Venkatachalam v/s Tamil Nadu Electricity Regulatory Commission rep. By its Secretary, Egmore, Chennai & Others


Company & Directors' Information:- P A S COTTON MILLS PRIVATE LIMITED [Active] CIN = U17111TN2005PTC058104

Company & Directors' Information:- V R A COTTON MILLS PRIVATE LIMITED [Active] CIN = U15311PB1997PTC020061

Company & Directors' Information:- AMBIKA COTTON MILLS LIMITED [Active] CIN = L17115TZ1988PLC002269

Company & Directors' Information:- C A V COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1987PTC002014

Company & Directors' Information:- V K S M COTTON MILLS LIMITED [Active] CIN = U17111TZ1998PLC008682

Company & Directors' Information:- P K COTTON MILLS PRIVATE LIMITED [Active] CIN = U17111DL2004PTC130281

Company & Directors' Information:- C R MILLS COIMBATORE PRIVATE LIMITED [Active] CIN = U17111TZ2002PTC010317

Company & Directors' Information:- K P G COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1993PTC004509

Company & Directors' Information:- D B V COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1982PTC001145

Company & Directors' Information:- S S COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115PB1997PTC019918

Company & Directors' Information:- J R COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TN1996PTC034302

Company & Directors' Information:- D C H COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ1997PTC008130

Company & Directors' Information:- L D COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17291MH2014PTC256832

Company & Directors' Information:- A D COTTON MILLS PVT LTD [Active] CIN = U99999MH1970PTC014837

Company & Directors' Information:- AMBIKA INDIA PRIVATE LIMITED [Active] CIN = U15549TN2012PTC088846

Company & Directors' Information:- COIMBATORE COTTON MILLS LIMITED [Active] CIN = U17111TN2002PLC049547

Company & Directors' Information:- V P K COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ2000PTC009530

    W.P. Nos. 7200, 7213 to 7215, 8928 to 8931, 9679, 10192, 10308 to 10310, 9931, 10568, 10569, 10585, 10586, 11012, 10342, 10343, 10925, 11109, 11110, 11024, 11728, 12072, 12263, & 12703 of 2012

    Decided On, 23 July 2012

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE R. SUDHAKAR

    For the Petitioner: ARL. Sundaresan, Sr. Adv. & R.S. Pandiyaraj, Mrs. AR. L. Ganthimathi, S. Sivanandam, N.L. Rajah, N. Umapathi, R. Syed Mustapa, Satish Parasaran, R. Nithyanandam, Advocates. For the Respondents: A. Navaneethakrishnan, Advocate General assisted by G. Vasudevan, P. Gunaraj, S.K. Rameshwar, Varunkumar, Arvind Pandian, Addl. Advocate General-V assisted by G. Vasudevan, P. Gunaraj. S.K. Rameshwar, Varunkumar, Advocates.



Judgment Text

(Prayer: Writ Petition in WP No.7200 of 2012 is filed under Article 226 of the Constitution of India praying to issue a writ of Certiorarified Mandamus calling for the records of the 5th respondent insofar as the impugned clarification letter No. FC/Rev./AO/Esst./Asst/Rev/D.120/11 dated 22.2.2012 and quash the same as illegal and against the provisions of the Comprehensive Tariff Order on Wind Energy No.1 dated 20.3.2009 issued by the 1st respondent agreements entered into between the petitioner and the respondent Board and as already approved by the 3rd and 4th respondents in their respective communications dated 30.3.2010 and 1.7.2011 and consequently direct the respondent Board to give adjustment of higher slots units both in current generation/banking against the consumption at the lower slots.)

COMMON ORDER

1. Writ Petition in WP No.7200 of 2012 is filed under Article 226 of the Constitution of India praying to issue a writ of Certiorarified Mandamus calling for the records of the 5th respondent insofar as the impugned clarification letter No. FC/Rev./AO/Esst./Asst/Rev/D.120/11 dated 22.2.2012 and quash the same as illegal and against the provisions of the Comprehensive Tariff Order on Wind Energy No.1 dated 20.3.2009 issued by the 1st respondent, agreements entered into between the petitioner and the respondent Board and as already approved by the 3rd and 4th respondents in their respective communications dated 30.3.2010 and 1.7.2011 and consequently direct the respondent Board to give adjustment of higher slots units both in current generation/banking against the consumption at the lower slots.

2. Petitioners in all these cases are industries enjoying high tension supply by the respondent-Board. Due to short supply of power for various reasons, the petitioners have established their own wind energy generators and the same is utilised by the petitioners industries. As to the utilisation of the wind energy generated, an order No.3, dated 15.5.2006 and order No.1 of 2009, dated 20.3.2009 came to be passed by the first respondent/ Electricity Regulatory Commission. In that orders, the wind energy generators were permitted to adjust the wind energy generated for consumption on certain terms. The relevant portion of the order of the Commission reads as follows:-

"8.7.3. Energy Charges. When the generator is synchronized with the grid, the captive/ third party consumer shall be liable to pay to the distribution licensee for the net energy consumed during the billing month at the applicable rate. The net energy consumption shall be slot wise. That is, peak generation shall be adjusted against peak consumption. Normal generation shall be adjusted against normal consumption. Off peak generation shall be adjusted against off peak consumption. Peak and normal generation may be adjusted against lower slot consumption.

8.8. Adjustment of generated energy. Section (2) of the Electricity Act 2003 confers on the captive generator the right to open access for the purpose of carrying electricity from the captive plant to the destination of his use. Therefore, a wind energy generator shall be entitled to adjust the generated energy for captive consumption whether as a LT or a HT consumer. As regards sale to third parties, clause 11 of the Intra State Open Access Regulations 2005 of the Commission, which prescribes a minimum limit of 1 MW, shall apply to wind generators also.

Views have been expressed by some stakeholders against adjustment of captive generation for LT Services. Acceptance of such a view would run counter to law and therefore, the Commission does not favour that view. "

8.11. Billing and payment.

8.11.1. When a wind generator sells power to the distribution licensee, the generator shall raise a bill every month for the net energy sold after deducting the charges for start up power and reactive power. The distribution licensee shall make payment to the generator within 30 days of receipt of the bill. Any delayed payment beyond 30 days is liable for interest at the rate of 1% per month.

8.11.2. If a wind energy generator utilizes the power for captive use or if he sells it to a third party, the distribution licensee shall raise the bill at the end of the month for the net energy supplied. The licensee should record the generation and consumption simultaneously. While preparing the bill, peak hour generation shall be adjusted against peak hour consumption. Normal generation shall be adjusted against normal consumption. Peak hour generation and normal hour generation can be adjusted against lower slot consumption. Excess consumption will be charged at the tariff applicable to the consumer. Transmission and Wheeling charges, scheduling and system operation charges and cross subsidy surcharge, wherever applicable, shall be recovered from the bill. The net amount recoverable from the consumer shall be raised in the bill."

3. Insofar as the applicability of the order is concerned, the commission in paragraph-4 referring to the earlier order No.3, dated 15.5.2006 and the subsequent orders, came to hold that the control period of three years gets terminated on 19.9.2008. The Commission further held that all the wind energy generators commissioned on or after 19.9.2008 shall become eligible for the benefits of the present order on condition that the monetary benefits shall accrue from the date of the order No.1 of 2009, dated 20.3.2009. Insofar as the wind energy generators already in existence, the Commission held that the agreements shall continue to be valid and that the parties to the agreement are at liberty to re-negotiate the existing agreement mutually in accordance with this order.

Para-4 of the order reads thus:-

"Order No.3 dated 15.5.2006 of the Commission lays down a control period of three years for that order and therefore normally the next order should have taken effect from 15.5.2009. The Commission in the Common order in M.P.Nos. 9, 14 and 23 of 2008, dated 19.9.2008 has ruled that the control period of three years specified in order No.3, dated 15.5.2006 is waived from the date of issue of that order. The control period of three years, thus, stands terminated on 19.9.2008. therefore, the Commission holds that all the wind energy generators commissioned on or after 19.9.2008 shall become eligible for the benefits of the present order, subject to the condition that the monetary benefits shall accrue from the date of this order. The existing agreements between the wind energy generators and the distribution licensee shall continue to be valid. The parties to the agreement are at liberty at any time to renegotiate the existing agreement mutually in accordance with this order. The agreements between the wind generators and the distribution licensee in relation to all machines commissioned on or after 19.9.2008 shall be in conformity with this order." (emphasis supplied.)

4. The interpretation of the order of the Commission as above, is the subject matter of lis in the present batch of writ petitions. The respondents-Board has proceeded to interpret the Commission's order in two different manners. The cause of action for filing the writ petition is the order passed by the present Financial Controller in letter No.FC/Rev./AO/Esst./Asst/ Rev/D.120/11, dated 22.2.12 and the brief order reads as follows:-

"Sub: Right to information Act, 2005 – reply furnished – Reg.

Ref: Your Letter 10.2.2012 received on 16.2.2012.

.......

With reference to the above, the particulars are furnished as below:-

The Consumer, who have executed Energy Wheeling Agreement as per the wind energy Tariff Order 1 of 2009, dated 20.3.2009, are eligible for adjustment of higher slot wind energy generation in their lower slot consumption (i.e.) peak and normal generation may be adjusted against lower slot consumption. Besides, the wind energy generators commissioned on or after 19.9.2008 shall become eligible for the benefit of the order No.1 of 2009, dated 20.3.2009, on wind energy."

5. This order, to clarify on facts, is not an order or proceedings, but it is a reply given under right to information Act on a query by one consumer. However, based on this information given by the Financial Controller under the Right to Information Act, the Superintending Engineers and Chief Engineers (Regional Wise), have taken a stand that the benefit of adjustment of slots in terms of the order 1 of 2009, dated 20.3.2009, for consumption of wind energy will apply only to the wind energy generators commissioned on or after 19.9.2008. It is denied to those wind energy generators already commissioned. Another interpretation given by the Chief Financial Controller in his proceedings dated 30.3.2010 reads as follows:-

"In this connection, it is clarified that the Hon'ble electricity Regulatory Commission in its order No.3, dated 15.5.2006 (Issue No.12 – peak & off peak power, Unit to unit adjustment) have stated as " it should be noted that units generated during a higher slot, could be consumed in a lower tariff TOD slot at the option of generators/ users, but the reverse would not be allowed."

This reply under the Right to Information Act and the consequent instructions affect the rights of the existing wind energy generators and therefore, they are before this Court.

6. The specific case of the petitioners is that the Department is allowing the benefit of adjustment of higher slots wind energy generated against the lower slots consumption right from 2006 onwards pursuant to the order No.3, dated 15.5.2006. This is sought to be denied based on a wrong interpretation of the Commission's order No.1 of 2009 dated 20.03.2009. In paragraph 14 of the counter affidavit, it has been stated as follows:-

"I respectfully submit that while fact being so, the averments contained in para 7 and 14 of the petition, is misinterpreting one. The petitioners have not executed the Energy Wheeling Agreement as per the order No.1 of 2009, dated 20.3.2009 on Wind Energy issued by the first respondent and availed the benefit of adjustment of the higher slot generation against lower slot consumption. The Superintending Engineers concerned have also allowed wrongly the benefit of the adjustment of the higher slot consumption against lower slot consumption."

It is, therefore, clear that the Department realising the mistake, is now insisting on a new agreement for adjustment of slots for the existing wind energy generators. The petitioners, however, deny such an interpretation stating that the pre-existing right continues even as per the order of the Commission.

7. Prima facie, it appears that paragraph 4 of the order 1 of 2009 grants the benefits to wind energy generators which are commissioned on or after 19.9.2008. It also holds that the existing agreement between Wind Energy Generators and the Tamil Nadu Electricity Board will continue to be valid. This order of the Commission was accepted by the Chief Financial Controller in letter on 13.3.2010 and allowed the benefit of adjustment of higher slots wind energy generated in lower slots consumption. On the contrary, consequent to the letter No.22.2.2012, the respondents/ senior Engineer and Chief Engineer of the Board are now denying the petitioners the benefit of adjustment of peak and normal generation against lower slots consumption stating that the petitioners' wind energy generators were commissioned prior to 19.9.2008 and there is no fresh agreement. The letter or proceedings, however, does not state so clearly. This can be inferred only from the counter affidavit.

8. In view of the contradiction in the proceedings of the respondents 3 and 5 in implementing the Commission's order No.1 of 2009, the petitioners are aggrieved and their plea is justified in view of the inconsistent and differing interpretation given by the respondents 3 and 5. In this case, the grey area that requires clarification among other issues that may arise, is on account of direction of the Commission, which is as follows:

"The existing agreements between the wind energy generators and the distribution licensee shall conti

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nue to be valid. The parties to the agreement are at liberty at any time to renegotiate the existing agreement mutually in accordance with this order. " (emphasis added.) 9. The commission therefore will have to clarify as to how the order will be made applicable to the wind energy generators commissioned and established prior to 19.9.2008 with regard to adjustment of slots and what is the purport of the order giving liberty to renegotiate the existing agreement. 10. In such view of the matter, the Tamil Nadu Electricity Regulatory Commission is directed to take up the issue for consideration and pass appropriate order clarifying the issue. An opportunity of personal hearing to the petitioners and the respondents, shall be given. If any third party files an application, the same may be considered if permissible as per law and procedure. It is desirable that the Commission decides the issue expeditiously. Till such time, the Commission decides the issue, all the petitioners are entitled to adjust the wind energy generated in terms of paragraph 8.7.3 of the Commission's order No.1 of 2009 dated 20.03.2009. 11. The parties are at liberty to file necessary papers before the Commission. 12. All these writ petitions are disposed of on the above terms. Consequently, connected miscellaneous petitions are closed. No costs.
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