{"id":261257,"date":"2022-02-07T13:00:31","date_gmt":"2022-02-07T07:30:31","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=261257"},"modified":"2022-02-11T09:43:23","modified_gmt":"2022-02-11T04:13:23","slug":"by-purchasing-power-at-higher-rate-andhra-pradesh-discoms-have-acted-contrary-to-public-interest-sc","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/02\/07\/by-purchasing-power-at-higher-rate-andhra-pradesh-discoms-have-acted-contrary-to-public-interest-sc\/","title":{"rendered":"By purchasing power at higher rate, Andhra Pradesh DISCOMS have acted contrary to public interest: SC"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Supreme Court<\/strong>: The bench of L. Nageswara Rao and <strong>BR Gavai*<\/strong>, JJ has held that the conduct of Andhra Pradesh DISCOMS, which are instrumentalities of the State, of purchasing the power at a higher rate is contrary to public interest.<\/p>\n<p style=\"text-align: justify;\">\u00a0DISCOMS, \u00a0 lies \u00a0 in purchasing\u00a0the\u00a0power\u00a0at\u00a0the\u00a0rate\u00a0of\u00a0Rs.3.82\u00a0per\u00a0unit\u00a0from HNPCL\u00a0or\u00a0by\u00a0purchasing\u00a0it\u00a0at\u00a0the\u00a0rate\u00a0of\u00a0Rs.4.33\u00a0per\u00a0unit from\u00a0KSK\u00a0Mahanadi.<\/p>\n<p style=\"text-align: justify;\">An initial PPA was entered into between Andhra Pradesh State Electricity Board (APSEB) and Hinduja\u00a0\u00a0 National Power Corporation Limited (HNPCL) on 9th\u00a0 December, 1994. On 25th July, 1996, the Central Electricity Regulatory Commission (CERC) granted a Techno Economic Clearance for the power project for an estimated cost of Rs.4628.11 crores.<\/p>\n<p style=\"text-align: justify;\">From the year 2012 onwards till January, 2018, it was the consistent stand of the State of Andhra Pradesh as well as the APDISCOMS that it would be purchasing 100% power generated from the project of HNPCL.\u00a0 Application for grant of approval to the Continuation Agreement dated 28th\u00a0 April,\u00a0\u00a0 2016\u00a0\u00a0 with the Amended and Restated PPA of 1998 was filed by the DISCOMS.\u00a0 The matters were heard finally on 15th May, 2017 and closed for orders. However, for some unknown reasons, things turned topsy-turvy between 15th\u00a0 May, 2017 and 4th\u00a0 January, 2018, on which date, the DISCOMS did a somersault\u00a0\u00a0 and filed applications for withdrawal of the aforementioned application.<\/p>\n<p style=\"text-align: justify;\">Holding that DISCOMS could not be permitted to change the decision at their whims and fancies and, particularly, when it is adversarial to the public interest and public good, the Court observed that every decision of the State is required to be guided by public interest and the power is to be exercised for public good.<\/p>\n<blockquote>\n<p style=\"text-align: justify;\">\u201cFor reasons unknown, the DISCOMS took a decision to resile from their earlier stand, due to which, not only the huge investment made by HNPCL would go in waste, but also valuable resources of the public including thousands of acres of land would go in waste.\u201d<\/p>\n<\/blockquote>\n<p style=\"text-align: justify;\">The Court observed that DISCOMS are instrumentalities of the State and as such, a State within the meaning of Article 12 of the Constitution of India.<\/p>\n<blockquote>\n<p style=\"text-align: justify;\">\u201cEvery action of a State is required to be guided by the touch\u00acstone of non-arbitrariness, reasonableness and rationality. Every action of a State is equally required to be guided by public interest. Every holder of a public office is a trustee, whose highest duty is to the people of the country.\u201d<\/p>\n<\/blockquote>\n<p style=\"text-align: justify;\">Stating that the acts done by the DISCOMS, are acts, which have been done wrongfully and wilfully without reasonable and probable cause, affecting public interest and public good, without there being any rational or reasonable basis for the same, the Court asked,<\/p>\n<blockquote>\n<p style=\"text-align: justify;\">\u201c\u2026 whether public interest, which is so vociferously pressed into service in the present matter by the\u00a0\u00a0 DISCOMS, lies in purchasing the power at the rate of Rs.3.82 per unit from HNPCL or by purchasing it at the rate of Rs.4.33 per unit from KSK Mahanadi. We strongly deprecate such a conduct of the appellants \u2013 DISCOMS, which are instrumentalities of the State.\u00a0 The appellants \u2013 DISCOMS, rather than acting in public interest, have acted contrary to public interest.\u201d<\/p>\n<\/blockquote>\n<p style=\"text-align: justify;\">The Court, hence, imposed a cost of Rs. 5 lakhs and directed that the DISCOMS shall forthwith start purchasing the power from HNPCL at the rate of Rs.3.82 per unit.<\/p>\n<p style=\"text-align: justify;\">[Southern Power Distribution Power Company Limited of Andhra Pradesh v. Hinduja National Power\u00a0 Corporation Limited, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/F9BzW4wh\"><b>2022 SCC OnLine SC 133<\/b><\/a>, decided on 02.02.2022]<\/p>\n<hr \/>\n<h4 style=\"text-align: justify;\">*Judgment: Justice BR Gavai<\/h4>\n<hr \/>\n<p style=\"text-align: justify;\"><strong>Counsels<\/strong><\/p>\n<p style=\"text-align: justify;\">For appellants: Senior Advocate C.S.\u00a0\u00a0 Vaidyanathan,<\/p>\n<p style=\"text-align: justify;\">For HNPCL: Senior Advocates Dr. Abhishek Manu Singhvi and M.G. Ramachandran<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court: The bench of L. Nageswara Rao and BR Gavai*, JJ has held that the conduct of Andhra Pradesh DISCOMS, which <\/p>\n","protected":false},"author":121,"featured_media":261275,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[39887,48549,3391,24674],"class_list":["post-261257","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-discom","tag-power-purchase","tag-public_interest","tag-state"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>By purchasing power at higher rate, Andhra Pradesh DISCOMS have acted contrary to public interest: SC | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2022\/02\/07\/by-purchasing-power-at-higher-rate-andhra-pradesh-discoms-have-acted-contrary-to-public-interest-sc\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"By purchasing power at higher rate, Andhra Pradesh DISCOMS have acted contrary to public interest: SC\" \/>\n<meta property=\"og:description\" content=\"Supreme Court: The bench of L. 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