The Madras High Court on Tuesday ruled in favour of the Union Territory of Puducherry in a long-pending dispute with the Tamil Nadu Electricity Board (TNEB - now Tangedco) over the rates charged by the latter for supply of electricity produced by the Neyveli Lignite Corporation (NLC). The judgment would provide a reprieve to the Union Territory from paying dues to the tune of ₹1,663.75 crore as per a bill raised by the power utility on August 18, 2016.
Allowing a 2004 writ appeal preferred by the Puducherry Electricity Department, a Division Bench of Justices K.K. Sasidharan and P. Velmurugan held that the appellant could not be treated as a High Tension (HT) consumer and charged at the rate of ₹3 per kWh. It ruled that Puducherry could be charged only the actual amount payable to NLC for the purchase of power apart from wheeling charges at 10 paise per kWh and 4% towards transmission loss.
Authoring the judgment, Justice Sasidharan pointed out that it was the Centre which had issued a directive to the NLC to divert energy generated by it to Puducherry too. Accordingly, the NLC had entered into an agreement with the TNEB on March 9, 2001, containing a specific provision that the energy supplied to the latter should be diverted to the Union Territory too by considering the transaction as an inter-State sale of power.
Initially, the TNEB supplied power to Puducherry at agreeable charges. However, in November 2001, the rates were revised and Puducherry was charged at the rate of ₹3 per kWh. The TNEB also moved a petition before the Tamil Nadu Electricity Regulatory Commission (TNERC) seeking approval for the tariff revision and the Union Territory opposed the revision tooth and nail by contending that it could not be termed as a HT consumer.
Not a HT consumer
The commission, on March 15, 2003, concurred with the Union Territory that it could not be considered as a HT consumer of TNEB for the purpose of fixation of tariff. It, however, directed the parties to maintain status quo until the matter could be resolved by the Central Electricity Regulatory Commission. Though the Union Territory challenged the order of status quo by way of a writ petition, a single judge of the High Court dismissed it on July 26, 2004, and hence, the present appeal.
Finding force in the submissions made on behalf of Puducherry, the Division Bench said: “The TNERC, by giving a categorical finding with regard to the nature of transaction between the Union Territory of Puducherry and the TNEB, was not expected to pass a further order to maintain status quo... The regulatory commission exceeded its brief by directing the parties to maintain status quo even after declaring that the Puducherry is not a HT consumer.
“The moment a finding is given that Puducherry is not a HT consumer; the matter should come to an end. The TNEB has no right to claim electricity charges at the rate of ₹3 per kWh.”
