2004 (3) TMI 825 - SC - Indian Laws

Summary

Issues Involved:
1. Requirement of a license for the supply of electricity by APGPCL to participating industries, their sister concerns, and transferee companies.
2. Interpretation of "captive consumption" and whether it applies to APGPCL.
3. Applicability of Section 43A(1)(c) of the Electricity (Supply) Act, 1948, and whether it authorizes APGPCL to supply electricity to sister concerns.
4. Validity of the Andhra Pradesh Electricity Regulatory Commission's order and the Andhra Pradesh High Court's judgment.

Detailed Analysis:

1. Requirement of a License for Supply of Electricity:
The main question was whether APGPCL needed a license to supply electricity to participating industries, their sister concerns, and transferee companies. The court found that no license is required for the generation of electricity. The electricity generated for captive consumption by the participating industries does not require a license under the Indian Electricity Act, 1910, or the Andhra Pradesh Electricity Reform Act, 1998. However, supplying electricity to sister concerns or transferee companies without a license would be considered a supply to the public, necessitating a license.

2. Interpretation of "Captive Consumption":
The term "captive consumption" means that the electricity generated is consumed by the generating company itself or its participating members. The court held that the electricity generated by APGPCL and consumed by the participating industries amounts to captive consumption and does not require a license. The court emphasized that captive consumption involves self-utilization of the power generated, whether by an individual or a group of persons collectively.

3. Applicability of Section 43A(1)(c) of the Electricity (Supply) Act, 1948:
Section 43A(1)(c) of the Supply Act allows a generating company to sell electricity to "any other person" with the consent of the competent government. The court examined whether the term "any person" includes individual consumers or entities similar to the State Electricity Boards. The court concluded that "any person" refers to entities involved in generation, transmission, distribution, or supply of electricity, not individual end-consumers. Therefore, the consent granted by the state government under Section 43A(1)(c) does not authorize APGPCL to supply electricity to sister concerns without a license.

4. Validity of the Andhra Pradesh Electricity Regulatory Commission's Order and the Andhra Pradesh High Court's Judgment:
The Regulatory Commission had held that APGPCL required a license for supplying electricity to sister concerns and transferee companies. The High Court upheld this order. The Supreme Court modified the High Court's judgment, holding that no license is necessary for the supply of electricity to participating industries and transferee companies within the limits of their shareholding. However, supplying electricity to sister concerns requires a license unless exempted by the competent authority.

Conclusion:
The Supreme Court concluded that APGPCL does not need a license for the supply of electricity to participating industries and transferee companies within the limits of their shareholding. However, supplying electricity to sister concerns requires a license. The appeals were partly allowed, and the judgment of the High Court was modified accordingly.