2005 (12) TMI 552 - SC - Indian Laws

Whether the Respondent should have taken a licence or permit under the 2003 Act or not? Whether having regard to the provisions of the 1998 Act and the 2003 Act the Commission alone had the jurisdiction to decide the dispute and not the City Civil Court?

Issues Involved:
1. Jurisdiction of the Andhra Pradesh Electricity Regulatory Commission (APERC) vs. Civil Court.
2. Interpretation of the Power Purchase Agreement (PPA) and arbitration clause.
3. Interim relief and injunctions.
4. Applicability of the Arbitration and Conciliation Act, 1996, Andhra Pradesh Electricity Reform Act, 1998, and Electricity Act, 2003.

Detailed Analysis:

1. Jurisdiction of the Andhra Pradesh Electricity Regulatory Commission (APERC) vs. Civil Court:
The primary issue revolves around whether the APERC or the Civil Court has jurisdiction over disputes arising from the Power Purchase Agreement (PPA). The Appellant argued that under the 1998 Act and the 2003 Act, the Commission has exclusive jurisdiction to arbitrate disputes between licensees and generating companies, as per Section 86(1)(f) of the 2003 Act. The Respondent countered that the dispute pertains to the interpretation of 'installed capacity' under the PPA, which should be resolved through arbitration as per the agreement, not by the Commission. The Supreme Court refrained from making a definitive ruling on this issue, leaving it to the High Court for detailed consideration, noting that the matter involves complex statutory interpretations.

2. Interpretation of the Power Purchase Agreement (PPA) and Arbitration Clause:
The PPA included an arbitration clause in Article 14, which mandated that disputes be resolved through arbitration. The Appellant issued a notice to refix the capacity charges based on a different calculation, which the Respondent contested. The Respondent sought an injunction from the City Civil Court to prevent unilateral changes by the Appellant. The Court highlighted that the resolution of disputes hinges on the interpretation of the PPA, particularly the definition of 'installed capacity'. The arbitration clause was emphasized as a key element, stipulating that unresolved disputes should be settled exclusively through arbitration.

3. Interim Relief and Injunctions:
The Respondent's application for an injunction was initially dismissed by the City Civil Court, which held that the Commission had jurisdiction. However, the High Court overturned this decision, granting an injunction to maintain the status quo until the dispute was resolved. The Supreme Court recognized the Respondent's prima facie case and the substantial sum involved (Rs. 132 crores), suggesting that the balance of convenience favored maintaining the status quo. The Court also noted the importance of judicial comity and avoiding conflicting orders from different courts.

4. Applicability of the Arbitration and Conciliation Act, 1996, Andhra Pradesh Electricity Reform Act, 1998, and Electricity Act, 2003:
The Court examined the interplay between the Arbitration and Conciliation Act, 1996, the 1998 Act, and the 2003 Act. While the 1998 Act and the 2003 Act provide for the Commission's role in dispute resolution, the arbitration clause in the PPA and Section 9 of the 1996 Act were also relevant. The Supreme Court referenced recent judgments, including the 7-Judge Bench decision in M/s S.B.P. & Co. v. Patel Engineering Ltd., which clarified the judicial nature of the Chief Justice's power under the 1996 Act. The Court emphasized that the High Court should determine the jurisdictional issues and the applicability of the arbitration clause in light of these statutory provisions.

Conclusion:
The Supreme Court dismissed the appeal, upholding the High Court's interim order and emphasizing the need for a detailed examination by the High Court. The Court requested the High Court to expedite the hearing of both the writ petition and the application under Section 11 of the 1996 Act. All contentions of the parties were left open for determination by the High Court, and the Supreme Court refrained from expressing any conclusive opinions on the substantive issues.

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