VidhiSangh

Supreme Court of India · 29/09/2022

M/S. JINDAL STEEL AND POWER LIMITED versus THE CHHATTISGARH STATE ELECTRICITY REGULATORY COMMISSION AND ORS.

[2022] 7 S.C.R. 378 · 2022 INSC 1036

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Summary

With the State's encouragement, Jindal Steel and Power supplied power from its captive plant to units in its Raigarh industrial park from 2004. In 2005 the Chhattisgarh Commission granted it a distribution licence under Section 14 of the Electricity Act, 2003 for the park and two villages. The Appellate Tribunal cancelled it, reading the Explanation to Rule 3 of the 2005 Distribution Rules as requiring a second licensee to cover an entire municipality or revenue district. The Supreme Court reversed. Read with the sixth proviso to Section 14 and the definition of 'area of supply', an 'area falling within' such a unit means an area inside it, not the whole unit. The licensed area within Raigarh district was the minimum area of supply, which the licensee had to serve, and the Commission had applied its mind.

Issues

  1. Whether the Explanation to Rule 3 of the Distribution of Electricity Licence (Additional Requirements) Rules, 2005 requires a second distribution licensee's area of supply to cover an entire municipal council, municipal corporation or revenue district.
  2. Whether the Appellate Tribunal was right to cancel the distribution licence granted to JSPL for its industrial park and two villages.

Provisions considered

Held

Result

Appeals allowed. The Appellate Tribunal's common judgment cancelling JSPL's distribution licence was set aside. Applicants seeking impleadment were left free to pursue other remedies, and parties were to bear their own costs.

Judgment PDF: Supreme Court of India, [2022] 7 S.C.R. 378.