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TMI Blog2021 (12) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... nts and has invested the money for supply of electricity to the consumers or class of consumers of the area of his supply for which the distribution license is issued. Therefore, if a consumer or class of consumers want to receive the supply of electricity from a person other than the distribution licensee of his area of supply, he has to compensate for the fixed cost and expenses of such distribution licensee arising out of his obligation to supply - the levy of additional surcharge under sub-section (4) of Section 42 can be said to be justified and can be imposed and also can be said to be compensatory in nature. However, sub-section (4) of Section 42 shall be applicable only in a case where the State Commission permits a consumer or class of consumers to receive supply of electricity from a person other than the person distribution licensee of his area of supply. So far as captive consumers/captive users are concerned, no such permission of the State Commission is required and by operation of law namely Section 9 captive generation and distribution to captive users is permitted. Even otherwise, it is required to be noted that the consumers defined under Section 2(15) and the cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95 of 2017, for approval of final true up of ARR for FY 2015-2016 and 2016-2017, provisional true up of ARR for FY 2017-2018 and approval for revised forecast of ARR for FY 2018-2019 and 2019-2020, inter alia, including the prayer "to approve additional surcharge for all open access consumers including those sourcing power from CPPS as proposed for FY 2018-2019 to FY 2019-2020". The Captive Power Producers Association filed their objections including the objections with respect to levy of additional surcharge on such captive users. That by order dated 12.09.2018, the State Commission passed the order holding that additional surcharge is leviable under Section 42(4) of the Act, 2003 on the captive consumers/captive users. 4. Feeling aggrieved and dissatisfied with the order passed by the State Commission allowing the levy of additional surcharge from the captive consumers/captive users, the respondents herein - captive users/captive consumers approached the Appellate Tribunal. By impugned order dated 27.03.2019, the Appellate Tribunal has allowed the said appeals and has set aside the order passed by the State Commission ordering/permitting to levy the additional surcharge leviable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Appropriate Commission. 42. Duties of distribution licensees and open access.- (1) It shall be the duty of a distribution licensee to develop and maintain an efficient, co-ordinated and economical distribution system in his area of supply and to supply electricity in accordance with the provisions contained in this Act. (2) The State Commission shall introduce open access in such phases and subject to such conditions, (including the cross subsidies, and other operational constraints) as may be specified within one year of the appointed date by it and in specifying the extent of open access in successive phases and in determining the charges for wheeling, it shall have due regard to all relevant factors including such cross subsidies, and other operational constraints: Provided that such open access shall be allowed on payment of a surcharge in addition to the charges for wheeling as may be determined by the State Commission: Provided further that such surcharge shall be utilised to meet the requirements of current level of cross subsidy within the area of supply of the distribution licensee: Provided also that such surcharge and cross subsidies shall be progressivel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to right which the consumer may have apart from the rights conferred upon him by those sub-sections." 9. On a fair reading of Section 9, it can be seen that captive generation is permitted under sub-section (1) of Section 9. As per subsection (2), every person, who has constructed a captive generating plant and maintains and operates such plant, shall have the right to open access for the purposes of carrying electricity from his captive generating plant to the destination of his use, but of-course subject to availability of adequate transmission facility determined by the Central Transmission Utility or the State Transmission Utility, as the case may be. So, the captive generation / captive use is statutorily provided / available and for which a permission of the State Commission is not required. The submission on behalf of the appellant that the captive generation under Section 9 is subject to the regulations as per first proviso to sub-section (1) of Section 9 and that even open access for the purpose of carrying electricity from his captive generating plant to the destination of his use shall be subject to availability of the adequate transmission facility determined by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectricity for his own use by a distribution licensee / licensee and; (ii) captive consumers, who are permitted to generate for their own use as per Section 9 of the Act, 2003. 12. The term "consumer" is defined in Section 2(15), which reads as under:- "(15) "consumer" means any person who is supplied with electricity for his own use by a licensee or the Government or by any other person engaged in the business of supplying electricity to the public under this Act or any other law for the time being in force and includes any person whose premises are for the time being connected for the purpose of receiving electricity with the works of a licensee, the Government or such other person, as the case may be;" 13. Ordinarily, a consumer or class of consumers has to receive supply of electricity from the distribution licensee of his area of supply. However, with the permission of the State Commission such a consumer or class of consumers may receive supply of electricity from the person other than the distribution licensee of his area of supply, however, subject to payment of additional surcharge on the charges of wheeling as may be specified by the State Commission to meet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of a captive generating plant and dedicated transmission lines. However, so far as the consumers defined under Section 2(15) are concerned, they as such are not to incur any expenditure and/or invest any amount at all. Therefore, if the appellant is held to be right in submitting that even the captive consumers, who are a separate class by themselves are subjected to levy of additional surcharge under Section 42(4), in that case, it will be discriminatory and it can be said that unequals are treated equally. Therefore, it is to be held that such captive consumers/captive users, who form a separate class other than the consumers defined under Section 2(15) of the Act, 2003, shall not be subjected to and/or liable to pay additional surcharge leviable under Section 42(4) of the Act, 2003. 15. In view of the above and for the reasons stated above, the present appeals fail and deserve to be dismissed and are accordingly dismissed. However, in the facts and circumstances of the case there shall be no order as to costs. 16. It is reported that pursuant to the interim order passed by this Court dated 01.07.2019, staying the operation and implementation of the impugned order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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