WRIT PETITION NO : 31296 OF 2023 v. 't . Southern Power Distribution Company of Telanqana Ltd

Sanghi Polymers Private Limited, Having its registered office at, Sanghi Nagar, Hayatnagar Mandal, Ranga Reddy District - 501 511. Represented by its Director, Mr. P. Balakrishna, S/o. Late Sri Suryanar:ayana Aged about 66 years, R/o. 2-2-647118211, Sharada Nagar, Street No 3, Baghamberpet, Hyderabad - 500 013. Mr. P. Balakrishna, S/o. Late Sri Suryanarayana Aged about 66 years, No.2- 2-6t,71182/1, Sharada Nagar, Street No 3, Baghamberpet, Hyderabad - 500 013 ... RESPONDENTS/PETITIONERS 3. Sangi Polyesters Limited, (undergoing Liquidation) Represented by Official Liquidator, Having its registered office at, 4-3-352, Bank Street, Kurnool, Andhra Pradesh - 500 095. Also at, 1st Floor, Corporate Bhawan, Bandlaguda, Nagole, Hyderabad - 500 068. ...RESPONDENTS/RE S PON DE NTS Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate thr: interim orders dated 15.11.2423 in WP. No. 31296 of 2023 and dismiss thrr writ petition. Counsel for the Petitioner : SRI T.P.S.HARSHA Counsel for the Respondents No.lto4 : SRI R.VINOD REDDY(SC FOR TSSPCDCL) Counsel for the Respondents No.5 : -- The Court rnade the following: ORDER (-' ORD HON'BLE SRI JT'STICE NAGESH BHEEMAPAI(A WRIT PETITION No. 81296 OF 2O23 Petitioners question the action of Respondent No. I in ler4ying and demanding Grid Support Charges (GSC) and interest termed as 'surcharge'for the period from Fy 2oo2-o3 to 20o8-o9, through letters dated 29.og.2o22 and os.to.2o23 issued by Respondent No. 2. They assert that these demands are illegal, arbitrary and unconstitutional, hence, seek consequential directions as may be appropriate in the circumstances. It is stated that the earlier letter dated 29.08.2022 issued by Respondent No. 2 was never directly communicated to petitioners company at any point of time. According to them, this document was seen only when it was enclosed to the subsequent letter dated 05.10.2023 issued by Respondent No. 4, which was physica[y handed over to the oflicials of petitioner company during the second week of October 2023.

2. Petitioners' case is that petitioner No. 1 is a manufacturing in-duit y a"ails H.C.l*+electricity supply from respondents which was governed by H.T. Agreement dated.

14.03.1991 executed betwben Respondent No. 5 and the then ) ) 2 Andhra Pradesh state Electricity Board, read with the Agreement for supply of electricity at High Tension dated 22.05.20'20 executed between Petitioner No. 1 and Respondent No. 1, be,sides other related agreements. Petitioners state that Respondr:nt No. 5 was provided with 132 I(V supply line by the Andhra Pradesh Electricity Board and thereafter, the Governrr.ent of Andhra Pradesh. This supply line was used for 15 sen'ice connections concerning group companies of petitioners. tt is stated that under the 14.03.1991 agreement read with 22.o5.2O2O agreement and other connected agreements, the electricity supplied was also extended to Petitione:r No. I through the same 132 I(V supply line and 11 KV indetcendent line.

2.tAccordingtopetitioners,thecompanycontinued receivinl3 supply under an independent 11 I(V line drawn from the same 132 KV supply line. They state that tl:is line caters not only to petitioner company and its group units but also to Sanghi Temple and to more than five hundred families residing in sanghi Nagar. The service connection relating to the supply presentty stands assigned SRN 487. It is stated, due to financiel difficulties, Respondent No. 5 was unable to remit the payable amounts to Respondent No. 1 for electricity supply and I I J ! petitioner company has been payrng consumption charges directly to Respondent No. 1 for more than twelve years. They add that Respondent No. 5 is presently in liquidation and because petitioner company has been making regular payments for the supply under SRN 487, it reserves the right to pursue substitution or change of name in place of Respondent No. 5. They also state that supply under 22.O5.2O2O agreement for a maximum load of 1000 KVA is through the same line. They contend that even the letter dated 05.1O.2O23 enclosing

29.O8.2O22 letter was handed over only to their officials because respondents were aware of and had acquiesced in the petitioner company paying the bills for SRN 487.

2.2. While matters stood thus, it is stated, petitioners were shocked to receive the impugned letters wherein the respondent oflicials levied Grid Support Charges for FY 2O02-O3 to 2OO8-09, with additional interest termed as 'surcharge'- Respondents cited the judgment of the Hon'ble Supreme Court in ?t''ransmission Coryrotutlon of Andhra Pradesh Linited a. M/s Ratn Calctntng Lhnitedl. Petitioners point out that in tggg-iooo, APTRANSco' n"a apiiioactred APERC seeking determination of Grid Support Charges payable by consumers ' lzozty 13 scc 674 AI having ,:aptive power generating plants connected to the grid. APERC rejected GSC levy for 1999-2000 and subsequent periods initially, later, by order dated O8.O2.2OO2, APERC determi::red GSC at 5Oo/o of Contracted Maximum Demand charges on installed CPP capaciqr in parallel operation, after reducin;3 CMD with the licensee, contracted capacity from other sources, and exported power. Petitioners state that APERC order was challenged

2.3. before ':he High Court, and by a common judgment dated

18.05.2103, the High Court held that APERC lacked jurisdiction to deterrnine GSC and that GSC determined was unjustified. Respon<lents thereafter, filed Appeals before Honble Supreme Court. Petitioners maintain that during pendenry of the Appeals and earlier, no GSC was ever levied on their connection. They acknowledge that the Hon'ble Supreme Court eventually allowed the Appeals by judgment dated 29.LL.2OL9 in ?r,zrrsmtssion Corporatton of Andhra Prudesh Limttd o. M/s Rain Ca.lctntng Ltmtted (supro).They state that following this, tlre impugned letters demanded Rs.4,2I,39,6511-, compris.ing Rs. 1,O3,57,4L9/- towards GSC for March 2OO2 to March 2OO9 and Rs. 3,L7,82,232f - as interest styled as sugphrge, calculated from the due dates of the respective 5 { billing months. They reiterate that letters were addressed to Respondent No. 5 though petitioner company was paying for SRN 487, and 29.08.2022 letter was never served upon thern but only received as enclosure to 05.10.2023 letter which was handed over physically in the second week of October 2023. It is stated, they responded through letter dated O2.L1.2023 to the letter dated 05.10.2023 and clarified that neither Respondent No. 5 nor petitioner company had any captive power plant, therefore, the very basis for leyy of GSC does not arise. They : t further pointed out that Respondent No. 5 is under liquidation and any claims against it post-liquidation must be filed before the Liquidator.

2.4. Petitioners maintain that no captive power plant is maintained by Respondent No. 5 or by them, therefore GSC cannot be levied. They reiterate that GSC is premised on costs incurred in maintaining grid stability because of parallel operation of captive power plants and resultant fluctuations. As per the irnpugned letters themselves, GSC is levied only on the difference between CPP capacity in I(VA and CMD contracted with the licensee and other contracted sources. It is argued that in the absence of any CPP, levy of GSC does not arise at all, and on this ground alone, the impugned letters deserve to be set 1 ) \\\\\ 6 aside. .it is pointed out that impugned letters mention

01.04.2002 as synchronization date and 15000 KW as installed capacity of a CPP. Hence, respondents should be directed to disclose the basis for these ligures because there is no CPP in existence, therefore these references reflect an error.

2.5. Without prejudice, it is argued, demands are hopelesr;ly barred by limitation. Petitioners assert that the first demand for GSC was only on 29.O8.2022 and that Section 56(2) of the E;lectricity Act, 2OO3, which is a non-obstante provision, bars re<:overy of sums after two years from the date they first became due unless continuously shown as recoverable arrears. They nc,te that respondents themselves treat the sums as first due in the month following each billing month from March 2OO2 to March 2OO9, and that respondents never showed any GSC amount as recoverable in CC bills. They therefore, contend that the denrands are barred by Section 56(2). Even assuming GSC could be demanded, the claim for interest termed as 'surcharge' is wholly unsustainable. Even by respondents'own admission, tlre deraand was first raised only on 29.08.2022, hence, no interest can be levied for any period before that date. Responrlents have misleadingly described the interest as I 7 surcharge, and that they lack authority to leqy such surcharge without legal backing.

2.6- Petitioners allege that despite submitting detailed objections explaining that they are not liable to pay the demanded sums, respondents have not withdrawn the impugned letters. They apprehends that respondents may disconnect the electricity connection before Diwali, which would severely impact not only petitioner company and sixteen group { companies but also their employees, their families, Sanghi Temple and nearly looo families in Sanghi Nagar who rery on the supply- They reiterate that the GSC demand is barred, the interest component exceeds twice the principal amount, and both are illegal. They state that with Diwali approaching, any disconnection would cause irreparable harm to their operations and to all those dependent on the supply.

3. By order dated l5.Il.2o2g, respondents were directed not to initiate any coercive steps against petiti,oners 4. Respondents 1 to 4 filed counter stating that the erstwhile APSEB released power supply on 17.03.1991 under HT SC No. RRE 487 (now SRN 487) with a CMD of 5564 KVA in favour of M/s Sanghi Polyesters Ltd., by clubbing 15 existing ) ) 8 services (2 HT + 13 LT) at the request of the said company. After two and re half months, CMD was increased to 8064 KVA and all the servi:es were treated as one single service connection. It is stated that extension of supply was gralrted under an agreement wherein M/s Sanghi Polyesters Ltd. Represented the entire group of'companies, and the list of 15 entities was shown in Para 2 of the Agreement. The conglomerate was always treated as a single service under SC No. RRE 487.

4.L.RespondentsexplaintheenactmentoftheA.P. Electricity Reforms Act, 1998, which received Presidential assent c,rr 21.10.1998, Ieading to unbundling of the sector and CTCAtiON Of APTRANSCO ANd APGENCO, With APTRANSCO succeedlng APSEB's transmission and distribution functions' APTRANSCO later transferred its rights and obligations to AP DISCOIIIs, and after state bifurcation, they were split into TS DISCOIIIs and AP DISCOMs. APERC was constituted on

31.03. Lggg and it issued approvals for captive generating plants speciffi:rg modes of operation for FY 2OOO-2OO3. APERC approved operation of DG sets of 15OOO I{VA in parallel with the grid for. HT sc. No. sRN 487 in the name of M/s Sanghi Polyeste:rs Ltd., representing the group companies. Therefore, I t- 9 petitioner, being the lead company, is liable to pay Grid support Charges (GSC) and surcharge demanded in the impugned notice.

4.2- It is stated, Petitioner applied for deration of load during COVID period; CMD was reduced from 2OO0 KVA to 1O0O KVA uid.e letter dated 22.O5.2O2O, and a revised Agreement was executed on the same day. Under this Agreement, petitioner undertook to pay all the charges in respect of SC No. RRN 487, and cannot now deny liability on the ground that the sth respondent is under liquidation. Respondents state that APERC in Op No. Ol of 1999, by order dated O8.O2.2OO2, fixed GSC at SOo/o of prevailing demand charges, applicable from March 2OO2 to all Cpps. operating in parallel mode. GSC was based on the difference between cpp capaciqr and CMD. Since petitioner and group used captive power, GSC is payable. Respondent detail the litigation history as under: Several CPPs filed CMAs against APERC's order. The High Court in CMA No. 1 tO4/2OO2 set aside APERC's order holding lack ofjurisdiction. AP TRANSCO filed SLPs., later numbered ai Civil Appeal No.8969 l2OO3 and batch. The Supreme Court on 29.LL.2019 set aside the High Court's view and uphetd APERC's order. ..-l 10 APERC continued determining GSC for FY 2003-04 to 2OO8-O9 subject to the Supreme Court result-

4.3. Since the Hon'ble Supreme Court upheld GSC levy, Respondent No. 2 issued demand notice dated 29.oa.2o22 for FY 2OO2-O3 to 2OO8{9, along with detailed calculations. It is stated, n,ttice was issued in the name of M/s Sanghi Polyesters Ltd. as the original Agreement (14.03.1991) stands in its name. However, the service was always treated as belonging to the group l:d by petitioners, who executed the 22.o5.2O2O Agreement accepting full responsibility for dues. Respondents deny all allegations as false and list reasons: SC No. RRE 487 always served group companies. CMD as on O1.04.2002 was 14000 KVA, bills were issued and paid accordinglY. APERC approved 150OO KVA captive generation, higher than CMD, proving group usage. Winding-up proceedings for M/s Sanghi Polyesters Ltd. started on 16.09.2014. Bills were continuously raised and paid in that name by petitioner as lead company. Petitioner's own aflidavit (para 7) shows 12 years of pa5rments even before winding-up. No objection was ever raised to billing in M/s Sanghi Polyesters Ltd.'s narne. - PetitionCr sought load deration on 21.O5.2O2O for HT SC No. RRE 487, conftrming responsibility. .la, l1 I 4+ Respondents assert that GSC was levied as per APERC methodolory in OP No. 01 of lggg,which was upheld by the Honble Supreme Court, hence, tariff orders are required to be levied subject to the Supreme Court result. GSC was not shown in CC bills only due to pendency of litigation. It is clarified that delay occurred solely due to prolonged court proceedings, and respondents are entitled to surcharge/interest. TSSPDCL had to take loans, pay interest due to under-recovery, and cannot burden other consumers. Reliance is placed on the Supreme Court judgrnent dated

05.06.2016 in Civil Appeal No. 554212016, which permitted recovery with interest and coercive steps. These Respondents deny applicability of Section 56(21of ttre Electricity Act, 20O3.

5. Petitioners have come up with reply stating that no GSC or surcharge was ever shown in any bill issued to it and failure to disclose financial liability bars Respondents 1 to 4 from recovering it now. It is argued, any alleged arrears are ba:red by Section 56(2) of the Electricity Act, 2OO3, as the qqrounts $r€re never shown. as continuously recovrerable g.4d-,_ therefore, no threat of disconnection can be issued. Petitioners clariff tlrat letters dated 29.08.2022 and O5.1O.2O23 were ) )\ t2 addresse<l to Respondent No. 5. Nevertheless, Petitioners reptied on o2. lL.2023 explaining that neither it nor Respondent No. 5 took grid support and that any claim, if at all, lies before the Official Liquidator, since Respondent No. 5 is under liquidation.

5.1. Petitioners state that pendency of cases before the Honble iiupreme Court cannot justify nondisclosure of alleged dues for. decades. If dues existed, they should have been reflected in CC bills. It is emphasized that Section 56(1) allows disconnr,ction <lnly for those u,ho neglect to pay charges and since Petitioner has always paid all the bills, no disconnection notice cirn be issued. Section 56(21 bars recovery of dues older than two years unless shown aS continuously recoverable- Since no GSC. arrears were ever shown, the claim is barred by timitaticn. Petitioners submit that Respondents have produced no prooI of loans or interest burden on TSSPDCL. Respondents must rscover dues from the actual liable entity, not the Petition,:r, who never undertook such liability. It is reiterated that sui-charge, being interest on alleged dues, cannot be levied when no GSC was disclosed. Any delay is attributable only to Respon,Jents' omission, and the principle that no one can benefit from their own wrong applies. I I f t. l I (' 13

6. Heard Sri Avinash Desai, learned counsel representing sri TPS Harsha, learned counsel for petitioner and Sri N. Sreedhar Reddy, learned Standing Counsel for respgndents.

7. From tJ:e pleadings and material on record, it is to be noted that petitioners'main defence was that they never had a captive power plant, therefore Grid Support Charges (GSC) could not be levied, and that even otherwise, the demand raised in 2022 for the period 2OO2-2OO9 was barred by Section 56(2) of the 2OO3 Act. On the other hand, respondents relied on the long-standing fachral history of HT Service Connection No. RRE 487 (SRN 4871, the 1991 Agreement covering 15 group companies, APERC approvals permitting 15OOO KVA DG sets to operate in parallel with the grid, fixation of GSC by order dated O8.O2.2OO2, and the Supreme Court's judgment dated

29.It.2O19 upholding lery of GSC. It is also to be noted, whether a captive generating plant existed for the group entities, and whether APERC had approved parallel operation for that service connection, were disputed factual matters supported by documentar5r material produced by the respondents. Such questions could not be resolved in writ jurisdiction rnerely on the 'petitioljr"' denial, especially when they themselves had \ ^-t l4 been paying bills under the same HT service for years and had executed the 22.o5.2O2O Agreement undertaking to pay "all charges" relating to SC No. RRE 487. The plea that demand was invalid because the notice was addressed to the Sth respondent (which is under liquidation) was rejected, as petitioners themselves had been making pa5rments for the salne service connection for more than a decade and had assumed contractr-lal obligations in 2O2O - S.Petitionerbeingtheleadcompanyappliedfor deration of load in respect of seruice connection bearing RRN 487 du:ing the covid period; the chief General Manager (Commercial) vide ietter dated 22.05.2020, granted approval for deration of CMD from 2OOO KVA to 1OOO KVA. Petitoniers also enterd ,nto a revised Agreement dated 22.O5.2O2O for the derated load as per which, petitioner company has undertaken to pay all the charges in respect ofi the service connection bearing RRN 487. Petitioner company having enterd into an Agreemt:nt cannoti now claim that as ttre Sth respdnetn is under liquidat..on, dues in respect of ithe_ s_errrice connection cannot be demanded from them is baseless. g. From the pleadings, it is also to be noted that petition,:r is iiable to pay hUge-amount towards the GSC as per / t Ji t I 15 the judgment of the Honble supreme court dated n.n.2olg in civil Appeal No. 8969 of 2o03 and batch. The TSERC issued tariff orders on yearly basis to collect all dues / arrears along with interest and also the Hon,ble Supreme court in civil Appeal No. 5542 of 2o16 dated os.o6.2016 permitted respondent - DISCOM to collect the dues including surcharge, hence, petitoner is labte to pay the entire grid support charges along with interest. 10- on the aspect of rimitation, petitioners contend that demands are hopelessly barred by limitation; the first demand for GSC was only on 29.0g .2022 and that Section s6t2l of the Electricity Act, 2oo3, which is a non-obstante provision, bars recovery of sums after two years from the date they first became due unless continuously shown as recoverable arrears. They note that respondents themserves treat the sums as first due in the month following each billing month from March 2oo2 to March 2oo9, and that respondents never showed any GSC amount as recoverable in cc bills. They therefore, contend that the demands are barred by Section sG(2). Even assuming GSC. could be demanded, the claim for interest termed as .surcharge, is wholly unsustainable. Even by respondents, own admission, " -------- I 11 a 16 the demzLnd was first raised.only on 29'O8'2022' hence' no interest can be levied for any period before tllat date' Respondt:ntshavemisleadingtyd'escribedtheinterestas surcharge, and that they lack authority to lerry such surcharge withoutlegalbacking.itistobeseen,theissuewasnota simple trvo-year bar under Section 56(21. The GSC liability was the subj=ct of ongoing litigation from 2OO3 until the supreme Court finalty upheld GSC levy on 2g'll'2}Lg' Since tF"' quantunr becarne enforceable only upon the Supreme Court's judgmer t, and the respondents issued demand within a reasonaltleperiodthereafter,and'thebarunderSection56(2) was not attracted. The surcharge/interest component was also held to {lorn, fronr the statutory and tariff framework, hence, respondents' explanation that GSC could not have been billed earlier trccause the issue was subjudieis accepted' In view of these disputed facts, approvals' binding 11. regulat<1ry orders ernd petitioner's own undertaking under the 2O2O Al]reement, this court finds no basis to issue a mand'amus o1. to i:rterfere w-ith the impugned demand notices. The Writ Petitior is therefore, liable to be dismissed' i !' i;' i.. a; !1 f s t. t. i l i] i. t: t. t.:Ii:. l7 o L2. costs.

13. Accordingly, the Writ Petition is dismissed. No Consequently, the interim order dated 15.11.2023 stands dissolved. \ To, . M. OSMAN ALI BAIG T REGISTRAR _a ,/TRUE COPY// SECTION OFFICER

1. One Cc to SRI T.P.S.HARSHA, Adrocate. [oPU 2. One CC to SRI R.VINOD REDDY (SC FOR TS 3. Two CD Copies. ). toPUCi 8SK .., TKS ,} ; tu , HIGH C(}URT DATED:2611112025 l' Q THE S ( 1 6 r[8 2026 * * ORDER WP.No.31296 of 2023 DISMISSING THE WITHOUT COSTS WRIT PETITION JKJ cf4-e