VANDANA GLOBAL LTD Vs. STATE OF CHHATTISGARH

JUDGEMENT

(1.) The present batch of writ petitions have been preferred for issuance of appropriate writ declaring the following Regulations notified by the respondent Chhattisgarh State Electricity Regulatory Commission (henceforth 'the Regulatory Commission') as ultra vires to the Electricity Act, 2003 (henceforth 'the 2003 Act') and the Constitution of India.

(2.) The background facts on the basis of which the petitioners have claimed declaration of the Regulations as ultra vires are that all the petitioners except Nalwa Steel & Power Limited have established Captive Power Plant (henceforth 'CPP') within their factory premises for manufacturing of Steel, Sponge Iron, Ferro Alloy commodities, etc. and are, thus, generating company. The power generated from the CPP is used at various units within the premises or outside for carrying out the manufacturing activity and, thus, the CPP is claimed to be a part of the companies overall activity. Due to slump in the steel industry petitioners could not use the entire electricity generated at the CPP, therefore, the surplus power was exported or sold to outside power consumers. When the petitioners could not fulfill the requirement of consuming more than 51% of the electricity generated for their own use, they cease to be CPP in accordance with Rule 3 of the Electricity Rules, 2005 (henceforth 'the 2005 Rules') for the financial years 2008-09 to 2011-12.

(3.) The period during which the petitioners loose their captive status, the respondent Distribution Company has levied and demanded cross subsidy charge on the strength of the impugned Regulations, on the amount of power generated by the petitioners, as according to the Distribution Company, once the captive status is lost then cross subsidy charge is payable even if the lines of the licencee i.e. Distribution Company are not used. Thus, the respondent Regulatory Commission is seeking to impose cross subsidy charge even in cases where open access has not been availed by the petitioners.