SC sets aside appellate electricity panel verdict cancelling power distribution licence of JSPL

New Delhi, Sep 29 (PTI) The Supreme Court Thursday set aside the 2008 verdict of the Appellate Tribunal for Electricity cancelling the licence of Jindal Steel and Power Limited (JSPL) to distribute electricity to industrial consumers in the Jindal Industrial Park and two villages of Raigarh district in Chhattisgarh.

“We find that the Appellate Tribunal was not right in cancelling/setting aside the licence granted to the appellant¬JSPL and hence, the impugned judgement is liable to be set aside...In the result, the appeals are allowed and the impugned common judgement of the Appellate Tribunal is hereby set aside,” a bench of Justices Ajay Rastogi and B V Nagarathna said.

The verdict came on appeals filed by JSPL and Tirumala Balaji Alloys Pvt against the judgement of the Appellate Tribunal for Electricity, New Delhi.

The appellate electricity panel had set aside the order, passed on November 29, 2005, of the Chhattisgarh State Electricity Regulatory Commission granting a power distribution licence to JSPL.

Justice Nagarathna, writing the 57-page judgement, said the state commission had taken note of rules, the historical background, the investment made by the private company, and the benefits that accrued in favour of industrial consumers who had set up their plants and had no other source of power supply at the relevant time.

The verdict rejected the contention of government authorities that as per the rules, a power distributor is supposed to supply electricity to an entire municipal area and the private company here was providing electricity to a few villages and some industrial units and hence its licence was rightly rejected.

“But if the interpretation as suggested by respondent No.2 (a government agency) is to be accepted, then the expression 'area falling within' in the Explanation would become otiose or redundant. The object of providing a Municipal Council or a Municipal Corporation or a Revenue District as an area is to provide a standard area, within which area, two or more persons could distribute electricity. It does not mean that the licensee must distribute electricity in the entire standard area...,” it said.

Hence, the contention of the state electricity board that the 'minimum area of supply' must comprise the 'entire' Municipal Council or a Municipal Corporation or a Revenue District is not correct, it said.

“We find no substance in the contentions advanced on behalf of respondent No.2. On the other hand, on a reading of the order passed by the respondent no.1 Commission in C.A..., we find that there has been an application of mind to the licence that was granted to the appellant for distribution of the electricity,” it said.

JSPL, which established a sponge iron plant at Raigarh in Chhattisgarh in 1990, was permitted to set up a captive power plant and was later granted a licence to distribute electricity to two villages and several industrial units. PTI SJK SJK RKS RKS