ORDER N. Kumar, J.— In these Writ Petitions interesting questions relating to finer aspects of the National Policy on Power which finds statutory recognition and as reflected in the Electricity Act, 2003 and its ramifications, in so far as the obligation of the Government to encourage private sector participation, delicensing of generation and implementation of the concept of open access in transmission vis-a-vis its obligation to provide access to electricity to all areas including villages, hamlets and common man, do arise for consideration. 2. In all these Writ Petitions the petitioners are challenging the Government Order dated 30.12.2008 passed by the State Government under Section 11 of the Electricity Act, 2003 (for short hereinafter referred to as "the Act") directing them to operate and maintain generating stations owned by them and to supply the electricity produced to the State Grid. Though facts of each case are different as the challenge is to the same Government Order and the point involved is purely a question of law they are taken up for consideration together and disposed of by this common order. Though the ground of mala fides is a question of fact raised in one of these Writ Petitions, it is dealt with separately. Facts in WP Nos. 590 and 591 of 2009: 3. The petitioners have sought in these Writ Petitions a writ of certiorari for quashing the Government Order dated 1.1.2009 and 30.12.2008 at Annexures-A and A1 respectively by which the first petitioner is directed to supply energy to the State Grid at the rate of Rs. 5.50 per unit from their Barge Mounted Power Plant at Tannir Bavi near Mangalore from January 2009 to May 2009. 4. The facts leading to these Writ Petitions are as under: The first petitioner has established a 220 MW Barge Mounted Power Plant at Tanir Bhavi Village near Mangalore, being the successful tenderer in pursuant to a global tendering process initiated by the Government of Karnataka for setting up power projects in the State. The second petitioner is a company trading in power. The first petitioner was supplying power to the State of Karnataka through a definitive Power Purchase Agreement which expired in June 2008. 5. The second respondent, through its procurement company, namely the third respondent invited tenders in the month of October 2008 for supply of 700 MW of power for the period from November 2008 to January 2009. The first petitioner was supplying power to the State of Karnataka through a definitive Power Purchase Agreement which expired in June 2008. 5. The second respondent, through its procurement company, namely the third respondent invited tenders in the month of October 2008 for supply of 700 MW of power for the period from November 2008 to January 2009. The second petitioner participated in the said tender for supply of power from the Barge Mounted Plant of the first petitioner with whom it had entered into a back to back agreement. It offered to supply 200 MW of power at the rate of Rs. 9.54 per unit. Pursuant there to a committee was constituted by the Board of Directors of the third respondent, which negotiated with the second petitioner and it was agreed that power would be supplied to the State Grid at the unit rate of Rs. 8.85 in the months of December 2008 and January 2009. A letter of intent was issued accordingly by the fourth respondent on the instructions of the third respondent to the second petitioner, a copy of which is produced as per Annexure-B. In pursuance of the said letter of intent dated 14.11.2008 the second petitioner supplied power to the fourth respondent at the negotiated rate of Rs. 8.85 per unit during the month of December 2008. While matters stood thus, the petitioners were called for negotiation by the Committee headed by the Managing Director of the second respondent at which the only issue raised by the Committee was relating to reduction in tariff on account of a drop in the Naphtha price as also the reduction of import, duty with effect from 7.12.2008. The petitioners expressed their inability to accede to the request of the Committee for reduction in the rate. It was pointed out that the first petitioner has entered into an agreement with Bharat Petroleum Corporation Limited for supply of Naphtha for the Tannir Bavi Power Plant with respect to fuel requirements for the months of November, December 2008 and January 2009 at. a fixed basic price with applicable taxes and further that the exemption of customs duty by the Government of India does not affect the fixed price agreement entered into between BPCL and the first petitioner. a fixed basic price with applicable taxes and further that the exemption of customs duty by the Government of India does not affect the fixed price agreement entered into between BPCL and the first petitioner. It was also confirmed by BPCL that the reduction in the cost of Naphtha had not been passed on to the first petitioner on account of the said notification. Certificate dated 27.12.2008 was obtained from BPCL and was duly submitted to the second respondent, a copy of which is produced as Annexure-C. In view of the fact that the second respondent could not negotiate with the petitioners for reduction of tariff having regard to the fact that tariff of Rs. 8.85 per unit has been determined through a transparent process of bidding, which is in accordance with the guidelines issued by the Central Government complying fully with Section 63 of the Act, which tariff is binding. It appears the second respondent approached the Government, viz. the first respondent with a request to issue a direction under Section 11 of the Act to the first petitioner to supply energy to the State Grid at a reasonable rate of Rs. 5.50 per unit. The first respondent has obliged the second respondent by invoking Section 11 of the Act and issuing a Government Order vide Annexure-A under which a direction has been issued to the first petitioner to supply energy to the State Grid at the rate of Rs. 5.50 per unit from their Barge Mounted Power Plant at Tannir Bavi, Mangalore, from January 2009 to May 2009. The only reason assigned for invoking the extraordinary power under Section 11 is set out in paragraph 8 of the said order states that, in view of the steep fall in the fuel prices and the Company not being in a position to produce documentary evidence for not reducing the price and in the interest of public, the order is issued. It is this order which is impugned in the present Writ Petitions. 6. The third respondent had issued a letter of intent on 14.11.2008 for the supply of 200 MW of power on round the clock basis for the period 16.11.2008 to 30.11.2008 and from 1.12.2008 to 31.1.2009 at the negotiated price of Rs. 8.80 per unit. It is this order which is impugned in the present Writ Petitions. 6. The third respondent had issued a letter of intent on 14.11.2008 for the supply of 200 MW of power on round the clock basis for the period 16.11.2008 to 30.11.2008 and from 1.12.2008 to 31.1.2009 at the negotiated price of Rs. 8.80 per unit. Even prior to the issuance of the said letters of intent, the second petitioner had received a letter of intent dated 24.10.2008 from Rajasthan Power Procurement Centre for the supply of 200 MW of power on RTC basis. In pursuance of the same the second petitioner was to supply power to Rajasthan Power Procurement Centre for one full month from 1.11.2008 to 30.11.2008. For the purpose of wheeling power, the second petitioner needed to obtain open access from the second respondent without which the power could not be supplied to Rajasthan Power Procurement Centre and had requested for open access for the full month of November 2008. However, the second respondent instead of according open access to the second petitioner for one full month has accorded open access only for the period from 1.11.2008 to 15.11.2008. By not allowing open access for the subsequent period up to 30.11.2008 the petitioners were compelled by the second respondent to supply power to the second respondent under the letter of intent dated 14.11.2008 vide Annexure-D to the Writ Petition. Incidentally, the second respondent till date has not issued the official communication denying the petitioners the open access for wheeling the power to Rajasthan Power Procurement Centre for the balance period from 16.1.2008 to 30.11.2008. When the letter of intent for the procurement of power for the period from 1.12.2008 to 31.1.2009 was in force, the first respondent issued a direction purportedly under Section 11 of the Act on 30.12.2008 directing all generators existing and operating in Karnataka State to operate and maintain the Generating Stations to their maximum exportable capacity and PLF and supply the exportable electricity to the State Grid in view of the extraordinary circumstances, namely to mitigate the severe power crisis in the State. The letter of intent dated 14.11.2008 for the procurement of power by the second respondent was made through a bidding process. The tariff per unit of power is fixed by the bidding process. The letter of intent dated 14.11.2008 for the procurement of power by the second respondent was made through a bidding process. The tariff per unit of power is fixed by the bidding process. Similarly, for the procurement of power subsequent to 31.1.2009 i.e., the period from 15.2.2009 to 31.5.2009, the second respondent has issued a tender. The obvious effect of the impugned Government Order is to scuttle the petitioners' participation in the tender process initiated by the second respondent for the procurement of power through competitive bidding process for the period from 15.2.2009 to 31.5.2009. 7. The petitioners contend that the Government Order is ultra vires the power of the first respondent under Section 11 of the Act. The power under Section 11 can be exercised only in extra-ordinary circumstances. "Extra-ordinary circumstances" has been defined to mean circumstances arising out of threat to security of the State, public order or a natural calamity or such other circumstances arising in the public interest. In the instant case, the only extra-ordinary circumstance set out in the impugned Government Order is the reduction in the price of Naphtha and the failure of the petitioners to produce documentary evidence for not reducing the unit price for the power being supplied. The reasons given in the Government Order is not an extra-ordinary circumstance as envisaged in Section 11 of the Act. The expression "such other circumstances arising in the public interest" occurring in the Explanation to Section 11 has to be read ejusdem generic to the preceding terms, namely threat to security of the State, public order or a natural calamity, used in the explanation. The fall in the fuel prices and the alleged failure by the petitioners to produce documentary evidence for hot reducing the prices will, by no stretch of imagination, constitute extraordinary circumstances envisaged under explanation to Section 11 of the Act. Therefore, on the face of the impugned Government Order, it is clear that there is no extraordinary circumstance as envisaged in Section 11, existence of which is a condition precedent for the exercise of power under Section 11. The circumstance specified is "severe power crisis" in the State. The Government Order is issued for the purpose of reducing the tariff from the negotiated rate of Rs. 8.85 to Rs. 5.50 per unit. Therefore, the power exercised is wholly ultra vires the power conferred upon the Government. The circumstance specified is "severe power crisis" in the State. The Government Order is issued for the purpose of reducing the tariff from the negotiated rate of Rs. 8.85 to Rs. 5.50 per unit. Therefore, the power exercised is wholly ultra vires the power conferred upon the Government. There is no justification for the first respondent to resort to Section 11 of the Act. Therefore, the impugned order is illegal, clearly amounts to mala fide exercise of power and in fact is a fraud on power. The power crisis In the State is not an extraordinary circumstance as envisaged under Section 11 since the term "such other circumstances arising in the public interest found in the explanation to Section 11 has to be read ejusdem generic to the terms appearing immediately preceding thereto. It is stated that the Government is facing crunch situation and has cited it to be a reason for invoking Section 11 of the Act. Several States are facing acute shortfall of power supply and, therefore. scarcity of power is not an extraordinary circumstance, which enables the respondents to resort to Section 11 of the Act. The fourth respondent has entered into a contract with the first petitioner for supply of energy/power at an agreed rate. It is on the basis of this contract, the first petitioner has already negotiated back to back agreements for supply of Naphtha at a fixed price with BPCL and the consequences of the impugned Government Order will have a cascading financial effect on the petitioner. The direction issued to supply electricity to the State Grid at the rate of Rs. 5.50 per unit is not relating to operating and maintaining any generating station. The power of the government to issue directions is limited to operating and maintaining the generating stations fixation of tariff is not relatable to operating and maintaining generating stations. Tariff fixation is a distinct and separate act traceable to the function of supply or wheeling of power to a distribution licensee, i.e., ESCOMs or the fourth respondent in the instant case. Operating and maintaining a generating station is an activity distinct from transmission, distribution or trading in electricity inasmuch as the latter activities require a licence under Section 12 of the Act. Operating and maintaining a generating station is an activity distinct from transmission, distribution or trading in electricity inasmuch as the latter activities require a licence under Section 12 of the Act. Fixation of tariff at which a generating company should supply power to a distributor or distribution licensee is not an aspect relatable to operating or maintaining a generating station. The scheme of the Act clearly provides for separate procedure for fixation of tariff which is outside the purview of Section 11. The appropriate Government has no power or authority to determine the tariff, which a generating company can charge. The tariff of Rs. 8.85 per unit has been determined through a transparent, process of bidding which is in accordance with the guidelines issued by the Central Government complying fully with Section 63 of the Act which tariff is binding. Therefore for the balance period of 1.1.2009 to 31.1.2009 of the letter of intent dated 14.11.2008 the first respondent clearly has no authority or power to alter the same, With respect to the period subsequent to 31.1.2009, the bidding process is already in progress and the present attempt to scuttle the bidding process by issuing the direction under Section 11 is a fraud on power on the part of the first respondent. The impugned order is passed without giving an opportunity to the petitioners to show cause or offer any explanation. The impugned order has civil consequences on the petitioners and, therefore, it was mandatory on the part of the Government to comply with the principles of natural justice. Principles of natural justice has been violated and, therefore, the impugned order is void. Therefore, the petitioners have preferred these Writ Petitions seeking quashing of the aforesaid two Government orders. 8. Subsequently, the petitioner filed an application for amendment of the writ petition pleading certain facts and raising certain additional grounds. The petitioners contend that the impugned orders under Section 11 of the Electricity Act, are wholly without jurisdiction for the reason that the State of Karnataka, the first respondent does not quality as an 'Appropriate Government' within the meaning of Section 2(5) of the Act. 'Appropriate Government' qua an electricity company would depend upon where the supplies are made by such company. 'Appropriate Government' qua an electricity company would depend upon where the supplies are made by such company. If a company supplies electricity interstate, it will be the Central Government that would be an 'Appropriate Government', If a generating company is a supplier interstate, then alone will the State Government be an 'Appropriate Government'. The first petitioner had no obligation to supply electricity within the State. The impugned order is thus wholly without jurisdiction as the State of Karnataka the first respondent was not an 'Appropriate Government' in any event after 31.01.2009. 9. It was further contended that Section 10 of the Act casts a duty upon the generating company to "operate and maintain" the plant. But the generating company has the autonomy to supply electricity to any licensee or any consumer. There is no power under the Act to dictate choice of consumer to a generating company. The supply by the Trading Company, the second respondent, cannot be treated as a legal obligation of the first petitioner. In any event, even that obligation ended on 31.01.2009. Therefore it was contended that the first respondent is not the 'Appropriate Government' for the purpose of Section 11 of the Act and hence the impugned Government Orders dated 01.01.2009 and 30.12.2008 vide Annexure-A and A1 are incompetent and without jurisdiction. Facts in WP No. 4693 of 2009: 10. Petitioner is a generating company having a Mini Hydel Power Plant with a total installed capacity of 22500 kilowatts, consisting of 3 units having individual capacities of 7500 kilowatts each. 'Mini Hydel' is designated as 'Renewable Source' within the meaning of the KERC (Power Procurement from Renewable Sources for Distribution Licensee) Regulations, 2004. 11. The petitioner entered into a Power Purchase Agreement dated 3.2.2004 with the 2nd respondent-Karnataka Power Transmission Corporation Limited (hereinafter for short referred to as 'KPTCL'). In terms of the said agreement, the petitioner agreed to supply the electricity generated by it to the second respondent. The second respondent agreed to receive all the electricity made available to it and to pay for the same at the rate of Rs. 2.90 per kilowatt-hour, subject to an escalation of 2% p.a. over the base tariff, every year. The second respondent agreed to pay the petitioner the amounts due within 15 days from the date of receipt of the tariff invoice. 2.90 per kilowatt-hour, subject to an escalation of 2% p.a. over the base tariff, every year. The second respondent agreed to pay the petitioner the amounts due within 15 days from the date of receipt of the tariff invoice. If the second respondent failed to make payments when due, the second respondent would be liable to pay penal interest at the rate of SBI medium term lending rate, p.a. for such payment, from the date such payment was due until such payment was made in full. In the event of a payment default by the second respondent, for a continuous period of three months, the petitioner shall be permitted to sell power to third parties through the Grid System, by entering into a Wheeling and Banking Agreement with the respondent, for which it shall pay Wheeling Charges at the rates applicable from time to time, in addition to Banking Charges at the rates applicable from time to lime as approved by the Commission. The said agreement was subsequently transferred by the second respondent to the third respondent and the PPA thus governed the relations between the petitioner and the third respondent. 12. The petitioner regularly fed electricity into the Grid System. Tariff invoices were raised every month towards the electricity supplied. However, the third respondent was highly irregular in making payments in respect of these invoices. Payments made were highly delayed. The payments for the months of February, March, April and May 2008 were not paid on time and reminders were sent to the second respondent calling upon them to pay the outstanding amounts in relation to each month. Despite these repeated reminders huge amounts remained unpaid and overdue. 13. In the light of the continuous payment defaults committed by the third respondent, in relation to the tariff invoices pertaining to March April and May 2008 the petitioner was constrained to invoke Article 9.3 of the PPA which entitled it to sell the power generated to third parties. The petitioner addressed a letter dated 25.6.2008 setting out the above payment defaults committed by the third respondent pointing out that in the light of the large delays in payments, payment security had become a grave concern. The petitioner addressed a letter dated 25.6.2008 setting out the above payment defaults committed by the third respondent pointing out that in the light of the large delays in payments, payment security had become a grave concern. Therefore, the petitioner invoked Article 9.3 of the PPA which entitled the petitioner to sell power to third parties through the Grid System of the respondents, in the event of a payment default by the third respondent for three continuous months, by entering into a Wheeling and Banking agreement in this regard. The third respondent was called upon to permit such sale. Having invested huge amounts in the setting up of their plant the petitioners were compelled to continue to supply the electricity generated into the Grid under constraint. Notwithstanding the invocation of Article 9.3 of the PPA, since electricity continued to be generated at the petitioner's installation the plant being a mini hydel-plant, the petitioner was constrained to supply this power to the Grid and the respondents had the benefit and use of such power. Having had the benefit, which was not intended to be gratuitously given, the respondents were obliged to make payments in this regard notwithstanding the fact that the petitioner had invoked Article 9.3 of the PPA. 14. Consequent upon the invocation of Article 9.3 of the PPA, the petitioner entered into a Power. Purchase Agreement dated 31.7.2008 with M/s. Tata Power Trading Company Limited (TPTCL) In terms of this agreement, TPTCL agreed to pay the petitioner an annual average rate of Rs. 3.60/.kilowatt-hour for the electricity supplied. Pursuant to thin agreement, TPTCL applied to the second respondent herein seeking open access for the petitioner to the second respondent's Grid System. The application was made in pursuance of the terms of the agreement entered into between TPTCL and for the benefit of the petitioner. Petitioner also requested the second respondent to grant open access to its Grid System. When the request was not acceded to, the petitioner was constrained to file a petition before the fourth respondent seeking for grant of open access and for payment of the huge amounts outstanding, including a sum of Rs. 6,29,15,745.55 as damages towards unpaid supplies alone, in addition to claims regarding interest on over-due payments. When the request was not acceded to, the petitioner was constrained to file a petition before the fourth respondent seeking for grant of open access and for payment of the huge amounts outstanding, including a sum of Rs. 6,29,15,745.55 as damages towards unpaid supplies alone, in addition to claims regarding interest on over-due payments. It is at that stage, the impugned order is passed directing all the generating companies to operate and maintain their generating stations at their maximum exportable capacity and to supply all the electricity generated by them to the State Grid. Aggrieved by the said Government Order, petitioner has filed this Writ Petition. Facts in WP No. 9721 of 2009: 15. Petitioner No. 1 is a company incorporated under the provisions of the Companies Act and petitioner No. 2 is a citizen of India and a promoter shareholder of petitioner No. 1 and is presently serving as the Chief Knowledge Officer of petitioner No. l. Petitioner operates a 5 MW bagasse based power generation plant located at Village Belgundi, District Belgaum, Karnataka and as such it is a generating company under Section 2(28) of the Electricity Act (hereinafter for short referred to as 'the Act'). The said power plant is what is commonly referred to as a 'merchant power plant' in the electricity sector, as it has been set up by private capital, without any Government support and does not have a power purchase agreement with any State owned distribution company. Merchant power plants are free to sell electricity generated by them to buyers of their choice upon mutually agreed terms and conditions. Petitioner is also an inter-state trading licensee, and as such licensee, is authorised to undertake inter-state purchase and sale of electricity. 16. The petitioner's power plant was synchronised to the grid on 17.2.2007. It has been selling power generated by it to distribution licensees under the existing short-term open access regime. During the relevant period, the petitioner was engaged in selling electricity to Reliance Energy Limited (REL) a distribution licensee in Mumbai City, under their contract dated 25.10.2008, whereby REL agreed to purchase 5 MW of power from 1st to 30th of November, 2008. Thus, the petitioner was engaged in inter-state supply of electricity, which was being effected by availing open access to the inter-state transmission lines. Thus, the petitioner was engaged in inter-state supply of electricity, which was being effected by availing open access to the inter-state transmission lines. By a letter dated 20.11.2008, REL extended the contract for purchase of power from the petitioner up to 31.3.2009. Open access was being granted to the petitioner on a day ahead basis, without fail, from the date of synchronization of the power plant as and when the petitioner had sought open access. The procedure for grant of inter-state open access is provided in the CERC (Open Access in inter-State Transmission) Regulations, 2008, where-under the Regional Load Despatch Centre (RLDC) of the region where point of drawl of electricity is situated has been designated as the nodal agency for grant of inter-state open access. The SLDCs have been given the pivotal role of according concurrence to inter-state open access transactions, without which the concerned RLDC shall not grant open access. The power generated by the petitioner's power plant in the State of Karnataka was to be supplied to the city of Mumbai the Western RLDC was the nodal agency for grant of inter-state open access and Karnataka SLDC's concurrence to such open access was a mandatory condition precedent to grant of such open access by the Western RLDC. In other words, in the absence of concurrence by Karnataka SLDC the petitioner could not have got inter-state open access from the Western RLDC. The above noted requirement of procuring advance concurrence of the concerned SLDC was not present in the previous open access regulations of the CERC which were replaced by the present regulations with effect from 1.4.2008. 17. CERC is a special statutory body. The SLDCs are required to act impartially in matters of system operators. Further, CERC had categorically pointed out, that subjecting an intra-state generating company to the mandatory requirement of selling electricity to the State is contrary to the provisions of the Act. As noted above, it was the suggestion of Power Company of Karnataka Limited (PCKL), a Government of Karnataka enterprise and the bulk purchaser of electricity for distribution companies in Karnataka that generating companies must be subjected to such requirement of mandatory sale to State. Interestingly, PCKL's proposal, which did not find favour with CERC on the ground of it being contrary to the provisions of the Act, has been forcibly imposed by the State Government by way of the impugned Government Orders. Interestingly, PCKL's proposal, which did not find favour with CERC on the ground of it being contrary to the provisions of the Act, has been forcibly imposed by the State Government by way of the impugned Government Orders. 18. With effect from 12.11.2008, Karnataka SLDC started refusing concurrence for inter-state open access applied for by generating companies and trading licenses. The petitioner learnt that, the State Government was going to purchase power from generating stations for meeting its own requirements, and it was to facilitate the purchase of electricity by the State owned distribution companies from generating stations, that, the Karnataka SLDC/KPTCL had decided not to grant concurrence for inter-state open access transactions involving outflow of electricity from the State. 19. The denial of open access by Karnataka SLDC, when admittedly, there were no transmission constraints, amounted to a deliberate violation of the provisions of the Act. The petitioner filed a petition 153/2008 before the CERC under Section 79 of the Act, praying inter alia for an order directing the Karnataka SLDC to grant open access to the petitioner. Accordingly, the Karnataka SLDC/KPTCL accorded concurrence to the petitioner's inter-state open access application and the petitioner was successfully able to schedule power to M/s Reliance Energy Limited from 22.12.2008 to 25.12.2008 on 23.12.2008 as per Annexure-G. However, once again open access was denied to the petitioner on 26.12.2008. It is thereafter the impugned notification dated 30.12.2008 whereby it mandated that all generating companies shall supply the exportable electricity to the State Grid. Though the earlier Government Order did not cover the petitioner's unit this order has covered the petitioner's installation also. In the meanwhile, CERC passed an order on 22.1.2009 directing the Karnataka SLDC to accord concurrence to open access applications of the petitioner therein, i.e. Reliance Energy Trading Limited. The Government of Karnataka filed Writ Petition Nos. 2703/2009 and 2733/2009 before this Court whereby the said order dated 22.1.2009 passed in petition No. 147/2008 and 156/2008 were challenged. An ex-parte order dated 28.1.2009 staying the operation of CERC's order dated 22.1.2009 was passed. Therefore, the petitioners have preferred this Writ Petition challenging the aforesaid Government Orders. 20. The second respondent has filed detailed statement of objections traversing all the allegations in the Writ Petition Nos. 590 and 591 of 2009. An ex-parte order dated 28.1.2009 staying the operation of CERC's order dated 22.1.2009 was passed. Therefore, the petitioners have preferred this Writ Petition challenging the aforesaid Government Orders. 20. The second respondent has filed detailed statement of objections traversing all the allegations in the Writ Petition Nos. 590 and 591 of 2009. They contend that the Electricity Act of 2003 was enacted to consolidate the law relating to generation transmission, distribution and use of electricity. The Act was enacted by the Parliament and it has come into effect from 10.06.2003. Chapter 3 of the Act deals with various aspects pertaining to generation of electricity and the procedure with regard to the same. Section 11 empowers the appropriate Government to specify that a generating company shall under extraordinary circumstances operate and maintain any generating station in accordance with directions issued by Government. The explanation specifies that the power can be exercised where public interest requires such action to be taken. Section 11(2) of the Act deals with the power of appropriate commission to offset the adverse financial impact of the directions issued under Section 11(1) on a generating company. 21. Section 2(4) defines 'appropriate commission' and Section 2(5) defines 'appropriate Government'. Except in respect of cases specified in Section 2(5)(a) of the Act, in all other cases appropriate Government would be the State Government. Section 2(28) defines 'generating company' to mean any company or body corporate or association or body of individuals whether incorporated or not or artificial juridical person which owns or operates or maintains a generating station. Section 2(47) deals with definition of open access to mean the non-discriminatory provision for the use of transmission lines or system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with regulations specified by appropriate commission. 22. From the conspectus of provisions of Electricity Act, 2003, it is clear that matters concerning the generating company situated in a State other than those which are owned and controlled by Central Government, the intra state transmission of electricity, the State grid, the State transmission utility and the State load dispatch centre are all regulated by the State Commission and the State Government. In terms of Section 11 of the Act, the Government of Karnataka is entitled to give directions to a generating company situated and operating within the territory of Karnataka. 23. In terms of Section 11 of the Act, the Government of Karnataka is entitled to give directions to a generating company situated and operating within the territory of Karnataka. 23. The first petitioner is a generating company in a private sector and therefore not a company which can be said to be owned wholly or partly by the Central Government and therefore is amenable to the jurisdiction of State Government for issuance of directions under Section 11 of the Act. 24. The State of Karnataka has been reeling under power shortage and the power deficit reached extra-ordinary levels, while the total demand during the year 2008 was expected to be around 8228 MW, the total supply available was about 5939 MW leading to an enormous gap of 2300 MW, which would translate into about 40% of total energy available and 28% of total demand in the State. The situation was compounded by reduced availability of water from hydro generating stations and reduction in power availability from Central Sector generating stations. Such unprecedented deficit situation led to long hours of load shedding in the State Government of Karnataka has been monitoring the situation and was taking steps to increase the power availability. Discussions were initiated with stake holders, which include generators, transmission utilities and distribution utilities to reduce the power deficit and avoid loss and inconvenience caused by it to the general public. In July 2008, a Cabinet Sub-Committee was constituted to constantly review the power availability and distribution of power in the State. The Cabinet: Sub-Committee had implemented series of measures to ensure effective load management and minimum disruption of power in the State. It was realised by the State Government that although State Government, had created large capacity of generating stations situated within the State of Karnataka, major portion of the energy generated was being exported outside the State through open access. Government of Karnataka realized that out of the approximate 350 MW co-generation plants abut 264 MW was being exported outside the State. In view of this situation in exercise of power under Section 11 of the Act, a Government Order was passed on 17.12.2008 directing that all co-generation units shall supply power to the State Grid and maintain the generating stations at highest plant load factor till further orders from the State Government. In view of this situation in exercise of power under Section 11 of the Act, a Government Order was passed on 17.12.2008 directing that all co-generation units shall supply power to the State Grid and maintain the generating stations at highest plant load factor till further orders from the State Government. Further, in consultation with the generators, rate per unit of power source supply was fixed at Rs. 7.25 per unit. The said order of the Government took effect from 01.12.2008. The said order was received by this respondent for implementation, In the second phase, the Government of Karnataka issued another order dated 30.12.2008 directing all generating companies in the State to supply power to the State Grid. In furtherance of the same, in respect of the first petitioner, rate at which the power so directed will be supplied was fixed at Rs. 5.50 per unit, for the months of January 2009 to May 2009. The Government Orders which are impugned in the writ petition specify in detail the reasons which necessitated taking such action in detail and clearly show that such action was necessary in public interest. 25. Therefore, the orders impugned have been exercised in public interest which is permissible under Section 11. The petitioners cannot take exception to the same. At any rate, petitioners cannot be aggrieved by such action, as the generator will be appropriately compensated towards any adverse financial impact as specified in Section 11(2) of the Act. It was also contended that the second petitioner has no locus to challenge the Government Orders impugned as the orders impugned are directions issued to the generator and not to the trading company. In view of the same, the petition in so far as the 2nd petitioner is concerned, deserves rejection in limine. 26. The State is passing through a crisis in the form of deficit power availability. Such deficit would affect the State in all aspects. Non-availability of power would reduce productivity in the industry and would also cause hardship to all categories of consumers in their day to day activities. It will also adversely affect in turn the revenue of the State and Central Government. Such deficit would affect the State in all aspects. Non-availability of power would reduce productivity in the industry and would also cause hardship to all categories of consumers in their day to day activities. It will also adversely affect in turn the revenue of the State and Central Government. While it is true that there was an agreement with the second petitioner for supply of power and that there were negotiations being held for reduction in cost of power due to the reduction in fuel price to a great extent, the said issue is independent of the action of Government in issuing general directions to all the power generators in the State to supply power to the grid. The contention of the petitioners that due to failure of negotiations regarding reduction in tariff, second respondent has approached Government requesting for an order to be passed under Section 11 of the Act is false and is hereby denied. While fixing the tariff various factors has been considered. It cannot be contended that due to fixing of price, the action of Government is vitiated. Such an argument is absurd and unsustainable. The Government order is self-explanatory. The reference to Section 63 of the Act is not tenable as stated above, having regard to the acute shortage in power, general directions have been issued to all the generating entities to supply power as per Government directives and it is not specifically in respect of the petitioner alone. The action taken is in public interest and private interest of a trader should yield to the larger public interest. 27. In case of inter state trading of electricity, open access is not granted by the respondents herein. Only a No Objection Certificate is granted if there are no system constraints. Section 11 does not stipulate that directions cannot be issued in cases where there are existing arrangements. The order issued is general in nature and in view of acute shortage of power, the order is issued in public interest. 28. The petitioner has not produced back to back agreement which exists with BPCL and it is a matter of common knowledge that petroleum prices have been reduced to a large extent and the endeavours of the petitioners herein is to make illegal gain by charging exorbitant rates for the power generated and supplied to the State entities. 28. The petitioner has not produced back to back agreement which exists with BPCL and it is a matter of common knowledge that petroleum prices have been reduced to a large extent and the endeavours of the petitioners herein is to make illegal gain by charging exorbitant rates for the power generated and supplied to the State entities. The direction issued under Section 11 is to the generating company. The agreement being referred to by the petitioner is one with the trader. The direction issued is now to the generator to supply power at the specified rate. Admittedly, there was no existing power purchase agreement with the generator in the facts of the present case. Therefore, it is untenable to contend that the price of power being supplied has been re-determined by the Government order. In view of the same the contentions to the contrary are wholly untenable. The averments that supply of power at a particular tariff is not an aspect relating to operation and maintenance is false and is hereby denied. There is no violation of principles of natural justice as alleged. While exercising statutory power, the question of hearing each player in the field before passing a general order of the nature does not arise. The petitioner is trying to confuse the tariff fixed in respect of the agreement entered into with the trader and the tariff to be paid to the generator to supply power pursuant to Government Order. This is untenable. Therefore, they contend that petitioner is not entitled to any relief. 29. The same objections were adopted by the respondents to oppose the other two Writ Petitions. 30. The two Government Orders which are impugned in the Writ Petitions read as under: PROCEEDINGS OF THE GOVERNMENT OF KARNATAKA Sub:- Supply of power by Generators in Karnataka to the State Grid-issue of Directions under Section 11 of Electricity Act, 2003. PREAMBLE: 1. Karnataka is facing a severe power shortage in the year 2008-2009. There is a glaring demand - supply gap in the State. According to the Energy. Power Survey of the Union Ministry of Power, in 2008. while demand is expected to be 8228 MW, supply is of the order of 5939 MW, leading to a gap of about 2300 MW. 2. There is a glaring demand - supply gap in the State. According to the Energy. Power Survey of the Union Ministry of Power, in 2008. while demand is expected to be 8228 MW, supply is of the order of 5939 MW, leading to a gap of about 2300 MW. 2. The energy deficit situation has been accentuated because of the poor water inflows to the major hydel reservoirs of Linganamakki, Supa and Manl Dams respectively. This year, these reservoirs reached only 62% of their levels, as against 88% in the previous year. The power shortage, in terms of water levels between this year and last year, amounts to 2261 MU. Since Karnataka is hydel dependent, this implies a restriction on daily power generation from the major Hydros to 21 MU, compared to 32 MU per day in the same period last year. There is thus a decrease in availability of energy of 10 MU per day. 3. In November 2008, Karnataka experienced a drastic reduction in Power availability from its share of central generating stations. As against the expected share of 1542 MW daily, on an average only about WOO MW was received, resulting in a shortage of 500 MW. This compounded the problem of availability further. 4. The power supply problem was further aggravated by the instability in the Bellary Thermal Power Station of 500 MW, commissioned at the end of July, 2008. This Unit experienced 35 trips in the period August to October, 2008. At present the unit is operating at part capacity, resulting in further power shortages to the grid. 5. Demand for power is expected to increase in the period. January 2009 to May 2009 with the onset of the summer months. A snap-short of the demand supply position is presented below: March demand in MW Availability MW Deficit in MW January 2009 5888.74 4354.35 1534.39 February 2009 6179.03 4354.35 1824.68 March 2009 8013.15 4271.41 1741.74 April 2009 5764.33 4188.47 1575.86 May 2009 5681.39 4188.47 1482.92 6. The expected annual, increase in demand is between 9% to 10%. The problem is particularly acute during the peak hour (6 AM to 9 AM/7 PM to 10PM) when peak load surge occurs and cannot be managed with the existing power availability. 7. The State Government has been intensively reviewing the power deficit in Karnataka on a regular basis. The expected annual, increase in demand is between 9% to 10%. The problem is particularly acute during the peak hour (6 AM to 9 AM/7 PM to 10PM) when peak load surge occurs and cannot be managed with the existing power availability. 7. The State Government has been intensively reviewing the power deficit in Karnataka on a regular basis. In July, 2008, the Cabinet set up a Sub-committee to monitor the power situation under the Chairmanship of the Hon'ble Minister for Energy This subcommittee has reviewed power availability and distribution from time to time. It has implemented a series of measures to ensure effective load management and minimum disruption of power in the State, For the period November to December 2008, the Sub-committee has restricted daily power consumption at 105 MU, Considering the likely shortfalls from available generation and the share of the State from Central Generating stations, the Sub-committee approved a course of action of buying up to 500 MW Power. This purchase was to plug the gap between demand and supply in the State. As an additional measure of energy management, the Cabinet Sub-committee approved a provision of six hours of power on three phase basis and six hours of power on single phase basis in the rural areas to be carried out by the individual Distribution Companies (ESCOMs) according to a definite time table. This measure has come into effect from November 14th 2008. All ESCOMs have published the hours for the three phase and single phase power supply that will be available in the rural areas. The availability of power in the designated areas is being closely monitored at the State level. Minimum description and proper provision of power are the objectives in the short-term management. The Cabinet Sub Committee further reviewed the situation on 30-12-2008, It indicated that a daily consumption of 122 MU in January 2009 and February 2009 is to be maintained. 8. The endeavour of the State is that every possible source of power should be capped in the coming months, especially with the onset of summer. In this period, the expected daily consumption, even in restricted conditions will increase to about 135 MU every day. 8. The endeavour of the State is that every possible source of power should be capped in the coming months, especially with the onset of summer. In this period, the expected daily consumption, even in restricted conditions will increase to about 135 MU every day. To mitigate the likely power shortages apart from maximizing thermal generation at Raichur and stabilizing the new unit at Bellary, purchases of power from outside the state will have to be supplemented with whatever power available from Generators in the State. All sources are to be fully tapped to the State grid to maintain regularity and minimize inconvenience to the public. Maintenance of grid frequency is also a matter of paramount concern in the coming months. 9. The State Government is of the considered opinion that the prevailing power situation in the State warrants special measures to protect the public interest. For the reasons mentioned above, it is imperative that all power generated in the State including power from those who have gone on Open Access and are exporting power outside the State, be made available to the State Grid. When this is facilitated, nearly 500 MW of power will be available to the State. The State is also aware that the genuine economic interests of the generators are to be borne in mind, in view of costs of inputs for power generation. 10. The proposal to purchase power for the short term in view of the critical power shortage in the State, and the need to augment short-term capacity from generators in the State has been reviewed by the Government. 11. Section 11 of the Electricity Act 2003 provides that the appropriate Government may specify that a Generating Company shall in extraordinary circumstances, operate and maintain any generating station in accordance with the directions of that Government. 12. As a matter of policy, it is in the public interest, to mitigate the severe power crisis in the State. Accordingly, all generators of 'the State, are to run their plants to full exportable capacity and supply all the electricity thus generated to the State Grid for the consumption of all consumers of electricity within the State to bridge the demand-supply gap. Accordingly, all generators of 'the State, are to run their plants to full exportable capacity and supply all the electricity thus generated to the State Grid for the consumption of all consumers of electricity within the State to bridge the demand-supply gap. Hence this order; Government Order No. EN 540 NCE 2008, Bangalore Dated: 30-12-2008 In the circumstances explained in the preamble and in exercise of the powers conferred wider Section 11 of the Electricity Act, 2003, the State Government is pleased to issue the following directions in the public interest until further orders: a) All generators existing and operating in Karnataka State shall operate and maintain the Generating Stations to their maximum exportable capacity and PLF. b) All generators shall supply all exportable electricity generated to the State Grid, in view of the extraordinary circumstances. BY ORDER AND IN THE NAME OF GOVERNOR OF KARNATAKA SD/-30/12 (S.J. Sampath Kumar) Under Secretary to Government Energy Department PROCEEDINGS OF THE GOVERNMENT OF KARNATAKA Sub: Issue of directions under Section 11 of Electricity. Act 2003 to M/s. GMR Energy Ltd., Mangalore, for supply of Energy to the State Grid at specified unit Rates - Reg. Read:-1) MD, KPTCL DO letter No, KPTCL/MD/PS/2008-09 dated 31-12-2008 2) G.O. No. EN. 540 NCE 2008 dated 30-12-2008. PREAMBLE: 1. In the letter read (1) above, MD, KPTCL has informed that the tenders were invited by the PCKL in the month of October 2008 for supply of 700 MW of power for the period from November 2008 to January 2009. M/s, GMR Energy Ltd., Mangalore have participated in the tender for supply of power from their Barge mounted power plant at Thannir Bhavi near Mangalore for round the clock and they offered to supply 200 MW of power at the rate of Rs. 9.54 per unit. The committee constituted by the Board of Directors, PCKL negotiated with M/s. GMR Energy Ltd., and the firm agreed to supply power at unit rate of Rs. 8.85 for the months Dec. 2008 and Jan. 2009 (The firm had not offered to supply for November 2008). A LOI was also issued to that effect. 2. Further, MD, KPTCL has informed that on the date of their offer i.e. 30th October, 2008, the Naphtha price was Rs. 46.124 per KG and variable cost working out to Rs. 8.443 per unit, Meanwhile the Govt. 2008 and Jan. 2009 (The firm had not offered to supply for November 2008). A LOI was also issued to that effect. 2. Further, MD, KPTCL has informed that on the date of their offer i.e. 30th October, 2008, the Naphtha price was Rs. 46.124 per KG and variable cost working out to Rs. 8.443 per unit, Meanwhile the Govt. of India has also reduced the import Duty of 5% on Naphtha to 0% with effect from 7-12-2008. 3. Negotiations were held with the representatives of M/s. GMR Energy Ltd., Mangalore on 8-12-2008 by the Committee constituted for negotiations headed by the MD. KPTCL. M/s. GMR Energy Limited, Mangalore, indicated that it would not be possible for them to reduce the prices as they have entered into "back to back" agreement with M/s. BPCL for supply of Naphtha at a fixed price and they have got payment from BESCOM at the LOI rate or Rs. 8.85 per unit for December 2008. Meanwhile, there was steep fall in the prices of Naphtha from Rs. 46.124 per kg (on 30th October 2008) to Rs. 23.170 per kg (on 16th December 2008). The GOI have also brought down the import duty of 5% on Naphtha to 0% with effect from 7th December 2008. M/s. GMR Energy Ltd., Mangalore was requested by the Committee to pass on the import duty reduction and also to indicate the reduced prices and requested to produce documentary evidences for supply of Naptha and other relevant document to support their case for non-reduction in the prices for supply of power. The variable cost will work out to Rs. 4.241 per unit for Naptha price of Rs. 23.17 per kg. 4. Due to reduction in the cost of Naptha M/s. GMR Energy Ltd, was again called on 26-12-2008 and they have stated that they are not in a position to reduce the rate and, they have not submitted any supporting documents from their suppliers. 5. In view of steep fall in the Naptha prices, it was decided to further negotiate to obtain power at a reasonable unit rate. Hence, the above matters were discussed in the PCKL Board meeting held on 29-12-2008. In the meeting the Board has decided to recommend Government to issue directions under Section 11 of Electricity Act. 2003. to the generator to supply energy to the State Grid as well as recommending reasonable rate of Rs. Hence, the above matters were discussed in the PCKL Board meeting held on 29-12-2008. In the meeting the Board has decided to recommend Government to issue directions under Section 11 of Electricity Act. 2003. to the generator to supply energy to the State Grid as well as recommending reasonable rate of Rs. 5.50 per unit from M/s. GMR Energy Ltd. 6. Section 11 of the Electricity Act 2003 provides that the appropriate Government may specify that a power generating company shall, in extraordinary circumstances, operate and maintain any generating station in accordance with the directions of that Government. 7. In the G.O Read at (2) above in exercise of the powers conferred under Section 11 of the Electricity Act 2003 the following directions have been issued until further orders in the interest of the public: a) All generators existing and operating in Karnataka State shall operate and maintain the Generating Stations to their maximum exportable capacity and PLF. b) All generators shall supply all exportable electricity generated to the State Grid, in view of the extraordinary circumstances. 8. In view of the steep fail in the fuel prices and the above Company being not in a position to produce documentary evidences for not reducing the prices and in the interest of the public, the following order is issued. GOVERNMENT ORDER No. EN 540 NCE 2008. BANGALORE, DATED 1st JANUARY 2009 1. In the circumstances explained in the preamble and in exercise of the powers conferred under Section 11 of the Electricity Act, 2003, the State Government is pleased to issue directions to M/s. GMR Energy Limited to supply energy to the State Grid at the rate of Rs. 5.50 per unit from their barge mounted power plant at Tannir Bavi near Mangalore from January 2009 to May 2009. 2. Power Company of Karnataka Limited/Bangalore Electricity Supply Co. Ltd., is directed to amend the Letter of intern accordingly. BY ORDER AND IN THE NAME OF GOVERNOR OF KARNATAKA SD/- 1/1/09 (S.J. Sampath Kumar) Under Secretary to Government Energy Department ARGUMENTS 31. Sri K.G. Raghavan, the learned senior counsel appearing for the petitioner submitted that, on the day the enactment was passed it was not in dispute that there was scarcity of electricity throughout the country. BY ORDER AND IN THE NAME OF GOVERNOR OF KARNATAKA SD/- 1/1/09 (S.J. Sampath Kumar) Under Secretary to Government Energy Department ARGUMENTS 31. Sri K.G. Raghavan, the learned senior counsel appearing for the petitioner submitted that, on the day the enactment was passed it was not in dispute that there was scarcity of electricity throughout the country. It is to meet the said challenge and to mitigate the said mischief the Act was passed providing for private participation in generation of electricity so that power supply in the country could be organized. Therefore, Section 11 cannot be invoked to meet a situation of power shortage. The extra-ordinary circumstances referred to in Section 11 which confers jurisdiction on the Government to invoke the said provision should be relatable to the cause of such shortage and not to its effect. Only when the cause is such extra-ordinary circumstance, the Government gets the power to invoke if at all Section 11 of the Act. 32. In so far as interpreting the words "such other circumstances arising in the public interest" he contended that the principles of ejusdem generis rule need to be applied. The threat to security of the State, public order or a natural calamity, they are not common but what is common among those two words is, an unforeseen extra-ordinary circumstance. That is the genus to which they belong and while interpreting the words "such other circumstances arising in the public interest" the said unforeseen extra-ordinary circumstance must exist and, therefore, it cannot be said that the principle of ejusdem generis has no application while interpreting the said provision. 33. There was shortage of power before the Act was enacted. The Parliament was conscious that there is shortage of power subsequent to the enactment. In Section 62 while dealing with determination of tariff they have provided for determination of tariff in case of shortage of electricity for a period not exceeding one year. Therefore, mere shortage of electricity is not an extra-ordinary circumstance which was in the contemplation of the Parliament. That is why though in Section 62 the word shortage of power is used, such a word is conspicuously missing in Section 11. If power under Section 11 is exercised to meet the situation of shortage of power it would run contrary to or counter to the grain of the whole Act. 34. That is why though in Section 62 the word shortage of power is used, such a word is conspicuously missing in Section 11. If power under Section 11 is exercised to meet the situation of shortage of power it would run contrary to or counter to the grain of the whole Act. 34. There was an agreement between the petitioners and the respondents for supply of electricity at the rate of Rs. 8.50. It is not the case of the petitioners refusing to supply electricity to the respondents. What is intended to be done by invoking power under Section 11 of the Act is, to compulsorily requisition the electricity generated by the petitioners at the price of Rs. 5.50 per unit. Thus, they have achieved the commercial advantage. This power is exercised when the petitioners refused to reduce the price of theirs during negotiations. In fact, even after the impugned orders, respondents floated tender for supply of electricity and were willing to pay the lowest price among the tenderers, even if it is more than the prescribed price in the impugned order. Therefore, the power under Section 11 though ostensibly exercised for the purpose of meeting the scarcity of the power In the State, in reality, the said power is exercised with the sole object of having commercial advantage and therefore, it is a case of colourable exercise of power or it is a case of malafide exercise of power. 35. It was also contended that the petitioners were supplying electricity outside the State. Therefore, in case of inter stale supply of electricity, the Appropriate Government under Section 11 of the Act is the Central Government and not the State Government, as such the impugned orders passed are without the authority of law and is void ab initio and liable to be set aside. 36. Sri Ravishankar Prasad, learned senior Advocate, appearing for the petitioners in the connected matter submitted Article 301 of the Constitution provides that subject to the other provisions of Part XIII, trade, commerce and intercourse throughout the territory of India shall be free. If a law imposes a restriction on the very movement of goods, it attracts the provisions of Article 301, and such law can be sustained, in case of a parliamentary law, if it satisfies the requirement of Articles 302 read with Article 303. If a law imposes a restriction on the very movement of goods, it attracts the provisions of Article 301, and such law can be sustained, in case of a parliamentary law, if it satisfies the requirement of Articles 302 read with Article 303. Electricity has been held by the Supreme Court as 'goods' in the case of M.P. Cement Manufacturers' Association Vs. State of Madhya Pradesh and Others, JT (2005) 11 SC 342 and, therefore, he contended the impugned order offends Article 301 and is unconstitutional. The impugned order is also discriminatory in nature as it gives a preference to the home state. He further submitted Section 10(2) of the Act read with the provisions relating to grant of open access, promotion of competition and market development, unequivocally establish that the generating company's freedom to supply electricity to a buyer of its choice is fundamental to the liberalised regime for 'generation' envisaged under the Act. Therefore, in Section 11 of the Act consciously the Parliament has not used the words 'supply of electricity' as it would have run counter to this liberalised policy, open access and, therefore, it cannot be said Section 11 empowers the Government even to direct supply of electricity produced by the generating companies. He further submitted the liberalisation and privatisation undertaken by the Government in the field of Telecom Industry as well as Aviation Industry has led to better service, competitive price and, therefore, keeping the object of the legislation in mind Section 11 has to be interpreted so as to prevent Government interference in the supply of electricity. 37. Shri Rajeev Dhavan the learned senior Counsel appearing for the respondents contended that, the reasons which are meticulously set out in the impugned orders do constitute an extra-ordinary circumstance justifying the invocation of power under Section 11 by the Government. The Electricity Act has created a new partnership between the Government, the private and public sector so that fuels be used wisely, the private sector finds the investment financially worthy, public interest is secured and the consumer interest and equitable distribution to rural area is protected. To that extent the earlier nationalization and maximal state regulatory control has been given up for an onerous comprehensive control subject to public interest considerations. While the Act of 2003 invites private investment, it does not inaugurate a policy of laizee faire. To that extent the earlier nationalization and maximal state regulatory control has been given up for an onerous comprehensive control subject to public interest considerations. While the Act of 2003 invites private investment, it does not inaugurate a policy of laizee faire. The Act retains an elaborate and comprehensive system of regulatory control in every area of licencing, transmission, distribution, tariff through a multiplicity of bodies, institutions and processes. Therefore, it is clear the Act is a multi-purpose Act which sub-serves at least three distinct purposes, namely (a) to maximize electricity output through public and private players with access to the market in accordance with the Act: (b) retain a comprehensive regulatory control through various institutions and process to ensure enhanced technical proficiency, quality, access, outreach, in respect of generation, transmission distribution and supply (c) ensure that the public interest (especially rural areas) is preserved including meeting crisis. What is envisaged is operations within the federal structure with State Governments and institutions playing the major role under broad policy and regulations by the Central Government, and institutions. He pointed out that the words "such other circumstances" was not there in the original bill introduced in the Parliament. An amendment was moved to add "such other circumstances arising in public interest after the word natural calamity. Accordingly, the motion was adopted and Section 11 stood amended with the addition of those words. Therefore, in substance it is not the words of the draftsman of the legislature. Therefore, the doctrine of ejusdem generic has no application in those circumstances. Even otherwise, the Act has clearly and advisedly used the word 'or' after the word threat to security of the State and public order and natural calamity, thus making it clear the three circumstances narrated therein are to be read disjunctively and cover independent areas. The three constitute three categories by themselves. Threat to security of State, public order, falls under one category. The next category is natural calamity. It is altogether a different category. Thirdly 'such other circumstances' in public interest. It is totally a different category by itself. It is not a general word used in a Section after specific words and, therefore, this principle of ejusdem generis pressed into service has no application in the instant case. 38. The next category is natural calamity. It is altogether a different category. Thirdly 'such other circumstances' in public interest. It is totally a different category by itself. It is not a general word used in a Section after specific words and, therefore, this principle of ejusdem generis pressed into service has no application in the instant case. 38. The argument of mala fide exercise of power is met by the respondents by pointing out that this power is not exercised only against the petitioner-company. It is exercised against all generating companies in the State of Karnataka. The price agreed to be paid to all of them is Rs. 5.50 per unit. This power is exercised after the generating companies were not willing to reduce the price of theirs notwithstanding the price of naphtha considerably reduced and the Central Government exempted these companies from paying customs duty. This is done for a specified and short period to tide over the grave scarcity situation. Even if the price specified is less as contended by the petitioners and if it were to have any adverse financial impact on them, Section 11(2) provides for mechanism to remedy such adverse financial impact. Therefore, the question of respondents gaining any commercial advantage by exercise of such power would not arise. That apart, there is no specific pleading regarding malafides and persons against whom malafides are alleged are not made party to the proceedings. Therefore, in the absence of specific pleading and persons against whom malafides are alleged not being made parties, this Court need not go into the case of malafides argued by the petitioner. 39. Sri S.S. Naganand, the learned senior counsel appearing for the respondents contended that: the freedom guaranteed by Article 301 of the Constitution does not take in regulatory measures for the use of trading facilities. Regulatory measures do not come within the purview of the restrictions contemplated by Article 301 and such measures need not comply with the requirements of a proviso to Article 304(b) of the Constitution and, therefore. Article 301 is not offended as contended by the petitioners. 40. In the light of the aforesaid facts and the rival contentions, the following points arise for consideration: (1) Whether "severe scarcity of electricity" constitutes an extra-ordinary circumstance arising in the public interest to invoke Section 11 of the Act by the appropriate Government? Article 301 is not offended as contended by the petitioners. 40. In the light of the aforesaid facts and the rival contentions, the following points arise for consideration: (1) Whether "severe scarcity of electricity" constitutes an extra-ordinary circumstance arising in the public interest to invoke Section 11 of the Act by the appropriate Government? (2) Even if such power is conceded to the appropriate Government, can a direction to "supply power" to the State Grid is conferred under the said Section when the words used are only, 'operate and maintain' and the word supply is conspicuously missing when the same is defined under Section 2(70) of the Act? (3) Whether the impugned orders are violative of Article 301 of the Constitution of India and offends free trade? (4) In the facts of the case which is the appropriate Government which is empowered to exercise power under Section 11 of the Act? (5) Whether the power exercised defeats the object with which the Act was passed, namely the concept of 'open access'? (6) In the facts and circumstances of the case, can it be said that the power under Section 11 of the Act is exercised with a malafide intention and it is a case of colourable exercise of power exercised with the sole intention of having a commercial advantage? 41. In order to answer the said points, it is necessary to have a bird's view of the relevant provisions of the Act, in particular the object of the enactment and radical changes which are brought: about by the new legislation when compared to the previous law. 42. The Electricity Act, 2003 was enacted by the Indian Parliament to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity, electricity industry, prompting competition therein, protecting interest, of consumers and supply of electricity to all areas, rationalisation of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto. Prior to the enactment, electricity supply in India was governed by three enactments namely, the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948, the Electricity Regulatory Commission Act, 1998. With the policy of encouraging private sector participation in generation. Prior to the enactment, electricity supply in India was governed by three enactments namely, the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948, the Electricity Regulatory Commission Act, 1998. With the policy of encouraging private sector participation in generation. transmission and distribution and the objective of distancing the regulatory responsibilities from the Government to the Regulatory Commissions, the need for harmonising and rationalising the provisions in the aforesaid three enactments by way of self-contained comprehensive legislation arose. Therefore, it became necessary to enact a new legislation for regulating the electricity supply industry in the country which would replace the existing laws, preserve its core features other than those relating to the mandatory existence of the State Electricity Board and the responsibilities of the State Government and the State Electricity Board with respect to regulating licensees. There was also need to provide for newer concepts like "power trading and "open access". The Act gives the State enough flexibility to develop their power sector in the manner they consider appropriate. Therefore, the Act is a consolidating Act. 43. The Act provides an enabling framework for accelerated and more efficient development of the power sector. The main feature of the Act is generation is being delicensed and captive generation is being freely permitted except in case of Hydro projects. Creation of Transmission Utility at the Central as well as State level which would be a Government Company and have the responsibility of ensuring that the transmission network is developed in a planned and coordinated manner to meet the requirements of the sector. A provision is also made for private transmission licensees as well as for open access. Transmission from outside with provision for surcharge for current level of cross-subsidy to be gradually phased out along with cross-subsidies with surcharge in phases. Open access in distribution was also to be permitted. In phases, more importantly for rural and remote areas, stand alone systems for generation and distribution was permitted. Trading as a distinct activity was being regularised with the safeguard of the Regulatory Commissions being authorised to fix ceilings on trading margins if necessary. Where there is direct commercial relationship between a consumer and a generating company or a trader the price of power would not be regulated and only the transmission and wheeling charges with surcharge would be regulated. It also provided for constitution of Regulatory Commission. Where there is direct commercial relationship between a consumer and a generating company or a trader the price of power would not be regulated and only the transmission and wheeling charges with surcharge would be regulated. It also provided for constitution of Regulatory Commission. Appellate Tribunal to resolve the dispute. The Act seeks to encourage competition with appropriate regulatory intervention. Competition is expected to yield efficiency gains and in turn result in availability of quality supply of electricity to consumers at competitive rates. 44. The National Electricity Policy aims at laying guidelines for accelerated development of the power sector, providing supply of electricity to all areas and protecting the interests of consumers and other stake holders keeping in view availability of energy resources, technology available to exploit these resources, economics of generation using different resources, and energy security issues. Part II of the Act deals with National Electricity Policy and Plan. Section 3 of the Act provides that the Central Government shall from time to time, prepare the National Electricity Policy and tariff policy, in consultation with the State Governments and the Authority for development of the power system based on optimal utilisation of resources such as coal, natural gas, nuclear substances or materials, hydro and renewable resources of energy. The Central Government has published the National Electricity Policy and tariff policy from time to time. Accordingly, the Central Government has published the National Electricity Policy in the Gazette of India Extra Ordinary, on 12th February, 2005. It recognises that electricity is an essential requirement for all facets of our life. It has been recognized as a basic human need. It. is a critical infrastructure on which the socio-economic development, of the country depends. Supply of electricity at reasonable rate to rural India is essential for its overall development. Equally important, is availability of reliable and quality power at competitive rates to Indian industry to make it globally competitive and to enable it to exploit, the tremendous potential of employment generation. The National Policy wants to give effect to what is mandated in Section 6 of the Act which cast an obligation on the appropriate Government to supply electricity to rural areas. It mandates that, the appropriate Government shall endeavour to supply electricity to all areas including villages and hamlets. The National Policy wants to give effect to what is mandated in Section 6 of the Act which cast an obligation on the appropriate Government to supply electricity to rural areas. It mandates that, the appropriate Government shall endeavour to supply electricity to all areas including villages and hamlets. About 56% of rural households have not yet been electrified even though many of these households are willing to pay for electricity. Therefore determined efforts should be made to ensure that the task of rural electrification for securing electricity access to all households and also ensuring that, electricity reaches poor and marginal sections of the society at reasonable rate is completed within the next five years. The National Electricity Policy aims at achieving access to Electricity, availability of power, supply of reliable and quality power of specified standards in an efficient manner and at reasonable rates, financial turnaround and commercial viability of Electricity Sector and protection of consumer's interests. The National Policy seeks to address the issues such as Rural Electrification, Generation, Transmission, Distribution, Recovery of Cost of services and Targeted Subsidies, Technology Development and Research and Development, Competition aimed at Consumer Benefits, Financing Power Sector Programme including Private Sector Participation, Energy Conservation. Environmental Issues, Training and Human Resource Development, Cogeneration and Non-Conventional Energy Sources and Protection of Consumer interests and Quality Standards. 45. Electricity being a concurrent subject, a well coordinated approach would be necessary for development of the power sector. This is essential for the attainment of the objective of providing electricity-access to all households in next five years and providing reliable uninterrupted quality power supply to all consumers. The State Governments have a major role, particularly in creation of generation capacity, state level transmission and distribution. The State Governments need to ensure the success of reforms and restoration of financial health in distribution, which alone can enable the creation of requisite generation capacity. 46. Now it is in the background of this national policy, which finds statutory recognition in part II of the Act, the provisions of the Act are to be interpreted. Part III of the Act, deals with Generation of Electricity. Section 7 deals with generating company and requirement for setting up of generating station. 46. Now it is in the background of this national policy, which finds statutory recognition in part II of the Act, the provisions of the Act are to be interpreted. Part III of the Act, deals with Generation of Electricity. Section 7 deals with generating company and requirement for setting up of generating station. It provides that any generating company may establish, operate and maintain a generating station without obtaining a licence under this Act, if it complies with the technical standards relating to connectivity with the grid referred to in Clause (b) of Section 73. In other words generation of electricity is sought to be delicenced. The only requirement is electricity generated by such generating company should be connected to the grid and they should possess the requisite standard of transmitting electricity generated from the generating station to the grid. However, Section 8 needs the approval of the State Government and clearance from the Central Electricity Authority. However, under Section 9 of the Act, a free hand has been given to construct, maintain or operate a captive generating station and dedicated transmission lines. In. other words this policy of liberalisation is complete in respect of establishing, operating and maintaining a generating station subject to approval in case of Hydro generation from the Government and the Authority. In establishing, operating and maintaining such generating stations, the Act, Rules or Regulations do not provide any restrictions or control or even regulations. Section 7 of the Act deals with the right of a generating company whereas Section 10 of the Act deals with the duties of the generating companies, Absolute freedom is given now to a generating company to establish, operate and maintain a generating station without obtaining a licence under this Act, thereby the generation is being delicenced. However, a duty is cast on these generating companies to establish, operate and maintain generating stations, tie-lines, sub-stations and dedicated transmission lines connected therewith in accordance with the provisions of the Act or the Rules or Regulations made thereunder. But, once a generating station is established, it starts operating and electrical energy is produced, a duty is cast on the generating company to operate and maintain generating stations in accordance with the provisions of the Act or the Rules or the Regulations made thereunder. In other words statute regulates the operation of electricity generated by the generating stations. But, once a generating station is established, it starts operating and electrical energy is produced, a duty is cast on the generating company to operate and maintain generating stations in accordance with the provisions of the Act or the Rules or the Regulations made thereunder. In other words statute regulates the operation of electricity generated by the generating stations. Sub-section (2) of Section 10 deals with supply of electricity generated by a generating company to any licensee or to any consumer subject to the Act, the Rules and Regulations. However, keeping in mind the object of the Act, as a rule the generating company may supply electricity to any licensees, but it shall be in accordance with the Act, Rules and the Regulations made thereunder. The generating company may also supply electricity to any consumer however, subject to the regulations made under Sub-section (2) of Section 42. Therefore, it is clear absolute freedom given to these generating companies to establish, operate and maintain a generating station is not extended to the supply of electricity generated by such generating stations. Supply is subject to the Act, Rules and Regulations made thereunder. That, apart, every generating company shall submit technical details regarding its generating stations to the Appropriate Commission and the Authority so that they could have clear picture about the activities of the generating company, its capacity and the actual electricity generated in those generating stations. Electricity so generated is not a commodity which could be stored at their place by the generating company. It requires to be transmitted. Therefore, the law mandates that every generating company shall co-ordinate with the Central Transmission Utility or the State Transmission Utility, as the case may be for transmission of the electricity generated by it. In other words transmission of electricity and generation of electricity both are automatic. What is generated requires to be transmitted and, therefore, the operation and maintenance of a generating station implies generation of electricity and transmission of electricity simultaneously. A careful reading of these provisions make it very clear that what is delicenced is the establishment of a generating station. Once the generating station starts generating electricity, the same is regulated by the Act, Rules and Regulations. This is the Rule. Therefore, generation of electricity has been brought outside the purview of the licensing regime. A careful reading of these provisions make it very clear that what is delicenced is the establishment of a generating station. Once the generating station starts generating electricity, the same is regulated by the Act, Rules and Regulations. This is the Rule. Therefore, generation of electricity has been brought outside the purview of the licensing regime. However, the transmission, distribution and trading are subject to grant of licence are kept within the regulatory regime. The generating companies, however, despite de-licensing, do not enjoy the monopoly status. 47. Section 11 is in the nature of an exception. In so far as operating and maintaining of a generating station is concerned, as a rule a generating company has to operate and maintain a generating station in accordance with the Act, Rules and Regulations but in extra-ordinary circumstances it has to operate and maintain a generating station in accordance with the directions of the appropriate Government. But, such an extra-ordinary power could be exercised only when an extraordinary circumstance exists. Otherwise there is no such power conferred on the Government to ignore the provisions of the Act, Rules and the Regulations, in the matter of operating and maintenance of a generating station. It is in this back ground the points that arise for consideration are to be answered. Point No. 1; - SEVERE SCARCITY OF ELECTRICITY - IS IT AN EXTRA-ORDINARY CIRCUMSTANCE? 48. The answer to this question revolves round the interpretation to be placed on Section 11 of the Act. Section 11 of the Act reads as under. 11. Directions to generating companies.- (1) The appropriate Government may specify that a generating company shall in extraordinary circumstances operate and maintain any generating station in accordance with the directions of the Government Explanation.- For the purposes of this section, the expression "extraordinary circumstances" means circumstances arising out of threat to security of the State, public order or a natural calamity or such other circumstances arising in the public interest. (2) The Appropriate Commission may offset the adverse financial impact of the directions referred to in Sub-section (1) on any generating company in such manner as it considers appropriate. 49. Under Section 11 of the Act, the appropriate Government has been vested with the power to issue a direction to a generating company to operate and maintain any generating station in accordance with the directions of the Government. 49. Under Section 11 of the Act, the appropriate Government has been vested with the power to issue a direction to a generating company to operate and maintain any generating station in accordance with the directions of the Government. This power has to be exercised only in extraordinary circumstances. This power is not disputed. The generating company operates and maintains a generating station and thereby produces electricity. That, is the normal function conducted by a generating company. For that no direction is required. The whole object of enacting this Act is to leave this generation to private parties. However, by such generation of electricity, if enough electricity is produced and available, the question of the Government invoking the power under Section 11 would not arise. This power to direct a generating company to operate and maintain a generating station becomes necessary only when there is scarcity of Electricity and such generating company is not producing electricity. Therefore, only when there is a scarcity or shortfall of supply of electricity, such a direction could be given. But, that by itself would not justify issue of such a direction. In other words, in ordinary circumstance, even if there is a short fall of electricity and enough electricity is not produced, the Government is not concerned with such shortfall. It is a matter between a person who generates electricity, who supplies electricity and consumes electricity. Therefore, the Parliament has used the expression "extra-ordinary circumstances" is a circumstance when the Government would be justified in exercising such power. The Parliament has not left it to the discretion of the Government to decide what an extra-ordinary circumstance meant in Section 11. An explanation is added to Section 11(1) explaining the meaning of the term "extraordinary circumstances". As per the explanation the "extraordinary circumstances" means circumstances arising out of (a) threat to security of the State, public order or (b) a natural calamity or (c) such other circumstances arising in the public interest. 50. An explanation is at times appended to a Section to explain the meaning of words contained in the section. It becomes a part and parcel of the enactment. The meaning to be given to an 'Explanation' must depend upon its terms. An explanation may be added to include something within or to exclude something from the ambit of the main enactment or the connotation of some word occurring in it. It becomes a part and parcel of the enactment. The meaning to be given to an 'Explanation' must depend upon its terms. An explanation may be added to include something within or to exclude something from the ambit of the main enactment or the connotation of some word occurring in it. Even a negative Explanation which excludes certain types of a category from the ambit of the enactment may have the effect of showing that the category leaving aside the excepted types is included within it. An explanation, normally, should be so read as to harmonise with and clear up the ambiguity in the main section and should not be so construed as to widen the ambit of the section. If the intention of the Parliament was to exclude severe scarcity of electricity from the meaning of the word extra-ordinary circumstances, in the explanation they could have expressly stated so, which they have not done. 51. It. is contended that mere scarcity or severe scarcity of electricity do not constitute an extra-ordinary circumstance, because the very purpose of repealing the earlier Act and passing the present Act is because of scarcity of electricity. It is to improve the position of production of electricity this enactment is passed. Therefore, mere scarcity of electricity do not constitute an extra-ordinary circumstance justifying the exercise of power under Section 11 of the Act. In support of the said contention it was argued when the Parliament explained the meaning of the word "extra-ordinary circumstances" by adding an explanation and after specifying what constitutes an extra-ordinary circumstances, in the end when they used the general words such as "such other circumstances" it is referable to the circumstances specified earlier. The meaning to be given to the general word is restricted in its operation and are limited to matters of the same class or genus as preceding them. If so interpreted, severe scarcity of electricity would not constitute an extraordinary circumstance. In this regard the learned Counsel for the parties in respect of their respective contentions have relied on various judgments of the Apex Court explaining the meaning of the word ejusdem generis. Doctrine of EJUSDEM GENERIS 52. In the case of Amar Chandra Chakraborty Vs. If so interpreted, severe scarcity of electricity would not constitute an extraordinary circumstance. In this regard the learned Counsel for the parties in respect of their respective contentions have relied on various judgments of the Apex Court explaining the meaning of the word ejusdem generis. Doctrine of EJUSDEM GENERIS 52. In the case of Amar Chandra Chakraborty Vs. The Collector of Excise, Government of Tripura and Others, AIR 1972 SC 1863 the Apex Court explaining the meaning of the said doctrine held: The ejusdem generis rule strives to reconcile the incompatibility between specific and general words. This doctrine applies when (i) the statute contains an enumeration of specific words: (ii) the subjects of the enumeration constitute a class or category. (iii) that class or category is not exhausted by the enumeration: (iv) the general term follows the enumeration and (v) there is no indication of a different legislative intent. In the present, case it is not easy to construe the various clauses of Section 42 as constituting one category or class. But, that apart, the very language of the two sections and the objects intended respectively to be achieved by them also negative any intention of the legislature to attract the rule of ejusdem generis. 53. In the case of Siddeshwari Cotton Mills (P) Ltd. Vs. Union of India (UOI) and Another, AIR 1989 SC 1019 the Supreme Court held as under: 12. The expression ejusdem generis - 'of the same kind or nature' - signifies a principle of construction whereby words in a statute which are otherwise wide but are associated in the text with more limited words are, by implication, given a restricted operation and are limited to matters of the same class or genus as preceding them. If a list or string or family of genus-describing terms are followed by wider or residuary or sweeping-up words, then the verbal context and the linguistic: implications of the preceding words limit the scope of such words. 13. In statutory interpretation Rupert Cross (p. 116) says: The draftsman must be taken to have inserted the general words in case something which ought to have been included among the specifically enumerated items had been omitted.... 14. 13. In statutory interpretation Rupert Cross (p. 116) says: The draftsman must be taken to have inserted the general words in case something which ought to have been included among the specifically enumerated items had been omitted.... 14. The principle underlying this approach to statutory construction is that the subsequent general words were only intended to guard against some accidental omission in the objects of the kind mentioned earlier and were not intended to extend to objects of a wholly different kind. This is a presumption and operates unless there is some contrary indication. But the proceedings words or expressions of restricted meaning must be susceptible of the import that they represent a class. If no class can be found, ejusdem generis rule is not attracted and such broad construction as the subsequent words may admit will be favoured. As a learned author puts it: If a class can be found, but the specific words exhaust the class, then rejection of the rule may be favoured because its adoption would make the general words unnecessary : if however, the specific words do not exhaust the class, then adoption of the rule may be favoured because its rejection would make the specific words unnecessary. 15. Francis Bennion in his Statutory Construction [pg 830-831] observed: For the ejusdem generis principle to apply there must be a sufficient indication of a category that can properly be described as a class or genus, even though not specified as such in the enactment. Furthermore the genus must be narrower than the words it is said to regulate. The nature of the genus is gathered by implication from the express words which suggest it.... It is necessary to be able to formulate the genus: for if it cannot be formulated it does not exist. 'Unless you can find a category', said Farwell L.J., 'there is no room for the application of the ejusdem generis doctrine'. 16. In S.S. Magnhild v. Mclntyre Bros. & Co. (1920) 3 KB 321 Mc. Cardie. J. said: So far as I can seen the only test seems to be whether the specified, things which precede the general words can be placed under some common category. By this I understand that the specified things must possess some common and dominant feature. 17. In Tribhuban Parkash Nayyar Vs. & Co. (1920) 3 KB 321 Mc. Cardie. J. said: So far as I can seen the only test seems to be whether the specified, things which precede the general words can be placed under some common category. By this I understand that the specified things must possess some common and dominant feature. 17. In Tribhuban Parkash Nayyar Vs. The Union of India (UOI), AIR 1970 SC 540 the Court said: ...The rule reflects an attempt to reconcile incompatibility between the specific and general words, in view of the other rules of interpretation, that all words in a statute are given effect if possible, that a statute is to be construed as a whole and that no words in a statute are presumed to be superfluous.... 18. In UPSEB v. Hari Shankar 1978 (4) SCC 16 it was observed: ...The true scope of the rule of "ejusdem generis" is that words of a general nature following specific and particular words should be constated as limited to things which are of the same nature as those specified. But the rule is one which has to be "applied with caution and not pushed too far". 19. The preceding words in the statutory provision which, under this particular rule of construction, control and limit the meaning of the subsequent words must represent a genus or a family which admits of a number of species or members. If there is only one species it cannot supply the idea of a genus. 20. In the present case the expressions 'bleaching, mercerising, dyeing, printing, waterproofing, rubberising, shrink-proofing, organdie processing' which precede the expression 'or any other process' contemplate processes which impart a change of a lasting character to the fabric by either the addition of some chemical into the fabric or otherwise. 'Any other process' in the section must share one or the other of these incidents. The expression 'any other process' is used in the context of what constitutes manufacture in its extended meaning and the expression "unprocessed" in the exempting notification draws its meaning from that context. The principle of construction considered appropriate by the Tribunal in this case appears to us to be unsupportable in the context in which the expression "or any other process" has to be understood. 54. In the case of Assistant Collector of Central Excise, Guntur Vs. The principle of construction considered appropriate by the Tribunal in this case appears to us to be unsupportable in the context in which the expression "or any other process" has to be understood. 54. In the case of Assistant Collector of Central Excise, Guntur Vs. Ramdev Tobacco Company, AIR 1991 SC 506 it is held as under: 6. The rule of ejusdem generis is generally invoked where the scope and ambit of the general words which follow certain specific words (which have some common characteristic and constitute a genus) is required to be determined. By the application of this rule the scope and ambit of the general words which follow certain specific words constituting a genus is restricted to things ejusdem generis with those preceding (hem, unless the context otherwise requires. General words must ordinarily bear their natural and larger meaning and need not be confined, ejusdem generis to things previously enumerated unless the language of the statute spells out an intention to that effect. Courts have also limited the scope of the general words in cases were a larger meaning is likely to lead to absurd and unforeseen results. To put it differently, the general expression has to be read to comprehend things of the same kind as those referred to by the preceding specific things constituting a genus, unless of course from the language of the statute is can be inferred that, the general words were not intended to be so limited and no absurdity or unintended and unforeseen complication is likely to result if they are allowed to take their natural meaning. The cardinal rule of interpretation is to allow the general words to take their natural wide meaning unless the language of the statute gives a different indication or such meaning is likely to lead to absurd results in which case their meaning can be restricted, by the application of this rule and they may be required to fall in time with the specific things designated by the preceding words. But unless there is a genus which can be comprehended from the preceding words, there can be no question of invoking this rule. Nor can this rule have any application where the general words precede specific words. 55. in the case of Printers (Mysore) Ltd. and Anr. v. Asstt. Commercial Tax Officer and Ors. But unless there is a genus which can be comprehended from the preceding words, there can be no question of invoking this rule. Nor can this rule have any application where the general words precede specific words. 55. in the case of Printers (Mysore) Ltd. and Anr. v. Asstt. Commercial Tax Officer and Ors. (1994) 93 STC 95 , it is held as under: This concern must have to be borne in mind while understanding and interpreting the expression "goods" occurring in the second half of Section 8(3)(b).... In other words, the "goods" referred in the first half of Clause (b) in Section 8(3) refers to what may generally be referred to as raw material (in cases where they were purchased by a dealer for use in the manufacture of goods for sale) while the said word "goods" occurring for the forth time (i.e. in the latter half) cannot obviously refer to raw material. It refers to manufactured "goods", i.e., goods manufactured by such purchasing dealer - in this case, newspapers.... It should also be remembered that Section 2 which defines certain expressions occurring in the Act opens with the words: "In this Act, unless the context otherwise requires". This shows that wherever the word "goods" occurs in the enactment, it is not mandatory that one should mechanically attribute to the said expression the meaning assigned to it in Clause (d). Ordinarily, that is so. But where the context does not permit or where the context requires otherwise, the meaning 'assigned to it in the said definition need not be applied. It we keep the above consideration in mind, it would be evident that the expression 'goods' occurring in the second half of Section 8(3)(b) cannot be taken to exclude newspapers from its purview. The context does not permit it. It could never have been included, by Parliament.... Even apart from the opening words in Section 2 referred to above, it is well settled that, where the context: does not permit or where it would lead to absurd or unintended result, the definition of an expression need not be mechanically applied. 56. The context does not permit it. It could never have been included, by Parliament.... Even apart from the opening words in Section 2 referred to above, it is well settled that, where the context: does not permit or where it would lead to absurd or unintended result, the definition of an expression need not be mechanically applied. 56. From the aforesaid judgment what emerges is this: The Latin words EJUSDEM GENERIS (of the same kind of nature) have been attached to a principle of construction whereby wide words associated in the text with more limited words are taken to be restricted by implication to matters of the same limited character. The ejusdem generis principle arises from the linguistic implication by which words having literally a wide meaning (when taken in isolation) are treated as reduced in scope by the verbal context. It may be regarded as an instance of ellipsis, or reliance on implication. The rule reflects an attempt to reconcile incompatibility between the specific and general words, in view of the other rules of interpretation, that all words in a statute are to be given effect to if possible, that a statute is to be construed as a whole and that no words in a statute are presumed to be superfluous. But the rule is one which has to be "applied with caution and not pushed too far". This doctrine applies when (i) the statute contains an enumeration of specific words: (ii) the subjects of the enumeration constitute a class or category. (iii) that class or category is not exhausted by the enumeration and (iv) There is no indication of a different legislative in tent. General words must ordinarily bear their natural and larger meaning and need not be confined ejusdem generis to things previously enumerated unless the language of the statute spells out an intention to that effect. The cardinal rule of interpretation is to allow the general words to take their natural wide meaning unless the language of the statute gives a different indication or such meaning is likely to lead to absurd results in which case their meaning can be restricted by the application of this rule and they may be required to fall in line with the specific things designated by the preceding words. 57. 57. For the ejusdem generic principle to apply there must be a sufficient indication of a category that can properly be described as a class or genus, even though not specified as such in the enactment. Furthermore the genus must be narrower than the general words it is said to regulate. If a genus cannot be found, the ejusdem generis principle does not apply. It is necessary to be able to formulate the genus; for if it cannot be formulated it does not exist. Unless you can find a category there is no room for the application of the ejusdem generis doctrine. If no class can be found, ejusdem generis rule is not attracted and such broad construction as the subsequent words may admit will be favoured. An intention to exclude the ejusdem generis principle may be treated as implied where the application of the principle would produce a result contrary to the legal meaning taken to be intended by parliament. The principle is moreover but one of the interpretative criteria that may be applicable in a particular case. Accordingly it may be overridden by any indication that the result it produces would not conform to Parliament's intended meaning of the enactment. But where the context does not permit or where the context requires otherwise, the meaning assigned to it in the said definition need not be applied. It is well settled that, where the context, does not permit or where it would lead to absurd or unintended result, the definition of an expression need not be mechanically applied. 58. Now applying these principles we have to find out whether this doctrine is attracted to exclude the circumstance of severe scarcity of Electricity to the meaning of the word "extraordinary circumstances" in Section 11 of the Act. 59. "Such other circumstances" is a general word or statement, if it follows an enumeration of circumstances of a particular or specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to circumstances of the same kind or class as those specifically mentioned. It is a cannon of statutory construction that where general words follow the enumeration of particular classes of things, the general words will be construed as applying only to things of the same general class as those enumerated. It is a cannon of statutory construction that where general words follow the enumeration of particular classes of things, the general words will be construed as applying only to things of the same general class as those enumerated. In the instant case the said expression is used in an explanation where the word "Extra Ordinary Circumstances" is defined, only for the purpose of Section 11(1) of the Act. It sets out three circumstances constituting Extra ordinary circumstances. They are: (a) Threat to security of the State, Public order: (b) A natural calamity; (c) Such other circumstances arising in public interest. 60. Firstly the words "such other circumstances" are not used after the words "Public Interest", which is the third category constituting an extra ordinary circumstance. It is used after the two categories. The question is whether the first two categories constitute the same class or kind. If the answer is no, the principle of ejusdem generic has no application in construing the words 'such other circumstances'. 61. Let us take the first category. Threat to security of State. It may be from outside the country or inside the country. Similarly, there may be threat to public order, This threat to the security of the State, and Public order constitute one class or kind and they are put together because, between these two words the word OR is conspicuously missing. Such a circumstance is man made one. Generally it is an act of enemy may be from out side or inside the country. Unity and integrity of the country is threatened. The phrase used in Section 11 of the Act is "in extra ordinary circumstances". i.e., it is only to meet an extra ordinary circumstance such as threat to the security of the State or public order, if electricity is needed and not available at the disposal of the Government this power could be exercised to procure electricity from private hands. To meet such a circumstance, if electricity is needed and it is available in plenty, the question of Government exercising the power under Section 11 would not arise. Only when the electricity is not available, it is in the hands of private persons, the Electricity is needed to face the threat to the security of the State or public order, this power could be exercised. Only when the electricity is not available, it is in the hands of private persons, the Electricity is needed to face the threat to the security of the State or public order, this power could be exercised. However, it does not mean when there is a threat to the security of the State or public order, this power could be exercised even though there is no scarcity of electricity. In other words threat to the security of the State or public order is not the cause for scarcity of electricity. After the word 'public order' the word 'OR' is used. The word OR is normally disjunctive. It is an indication that the first category constitutes a class or kind by itself, and the second category is an alternative. The second category is a natural calamity. It is a natures fury. It is an act of God. It is class by itself, as well understood in legal terminology as VISMAJOR. Again unless there is shortage of electricity the question of Government exercising this power do not arise. It is only when the challenge posed by such natural calamity it is to be met, electricity is required and if sufficient electricity is not available at the disposal of the Government, the Government could exercise this power to procure the electricity from private generating companies. This constitute a separate category or genus. There is no connection whatsoever between the first category and second category. These two categories do not constitute a class, or kind or genus. 62. These were the only two categories which were found in the Section when the Bill was moved in the parliament. The draftsmen did not provide for any general words. It was not in his contemplation at all. When the Bill was moved in the parliament, the representatives of the people in their wisdom thought that the said provision would not adequately meet all situation. Even in the absence of the aforesaid two circumstances, if there is severe scarcity of electricity and the public at large, in particular, the farmers, people living in the villages or hamlets, or below the poverty line or working class and even people belonging to middle class, who cannot afford to pay higher tariff, cannot be denied electricity supply. The National Policy envisages an obligation on the Government to supply electricity to rural areas under Section 6 of the Act. The National Policy envisages an obligation on the Government to supply electricity to rural areas under Section 6 of the Act. India is still a Socialistic State. Electricity is an essential requirement of all facets of our life. It is a basic human need, as food, clothing and shelter. Though the Act liberalizes the market economy but is not. a lazzie faire provision, which seeks to limit the operation of the public interest and directions related thereto. Therefore a member of the parliament proposed an amendment to cover the interest of the common man of this country by an addition of an independent category apart from the existing two categories namely "such other circumstances arising in public interest". The amendment was allowed and it became part of the Section. The subsequent amendment to Section 6 of the Act makes the intention clear. By the Electricity (Amendment) Act, 2007 the old Section 6 is substituted by new Section 6 which provides that the concerned State Government and the Central Government shall jointly endeavor of provide access to electricity to all areas including villages and hamlets through rural electricity infrastructure and electrification of households. 63. Therefore the third category is "such other circumstances affecting public interest". Thereby meaning circumstances other than the earlier two categories. Therefore, the word OR is again used after the word calamity, making the intention clear that the third category is yet another alternative and to be read disjunctively. The only common feature running underneath these three categories is an extra ordinary circumstance requiring electricity, justifying invoking the power under Section 11 of the Act. Therefore, that is not a general word used to follow the specific words constituting a genus and restricted to things ejusdem generis with those preceding them. 64. The cardinal rule of interpretation is to allow the general words to take their natural wide meaning. When this general word is added by way of amendment, the intention of the parliament is clear, that these words are in addition to the other two circumstances, in the Bill before amendment, as an independent category or genus. Any other interpretation would negate the parliamentary intention and would not conform to the parliaments intended meaning of the enactment. The application of the rule would produce a result contrary to the legal meaning taking to be intended by parliament. Any other interpretation would negate the parliamentary intention and would not conform to the parliaments intended meaning of the enactment. The application of the rule would produce a result contrary to the legal meaning taking to be intended by parliament. More over this principle of ejusdem generis is pressed into service to resolve the ambiguity or uncertainty and reconcile incompatibility between specific and general words. In the instant case there is no ambiguity. There is no incompatibility between specific words and general words. The general words used itself constitutes an independent category or genus. "Public interest" itself is a category. If this rule is applied to define and restrict the meaning of public interest, it would lead to absurd result. In the absence of the specific words constituting a genus, there is no room for the application of the rule. 65. This Act was passed with the fond hope to increase the production of electricity supply. By mere passing a legislation the same cannot be achieved. Reasonable time is required to achieve the object of the Act. Probably a step in the right direction is taken. Over night results cannot be expected. Therefore, it will take some more time to have enough supply of electricity produced to meet the demands of the society. Supply of electricity at reasonable rate" to rural India is essential for its overall development. Equally important is availability of reliable and quality power at competitive rates to Indian industry to make it globally competitive and to enable it to exploit the tremendous potential of employment, generation. Electricity is an essential requirement for all facets of our life. It has become a basic human need. It is a critical infrastructure on which the socio-economic development of the country depends. No Legislature ever intends to favour one section of the population against the other. Its ostensible and proclaimed intention is always that it is doing justice between the various sections of the population. No rule is better established than that where two meanings are possible, we must take the more reasonable one. If the choice is between the two interpretations the narrower of which would fail to achieve the manifest purpose of the legislation. Its ostensible and proclaimed intention is always that it is doing justice between the various sections of the population. No rule is better established than that where two meanings are possible, we must take the more reasonable one. If the choice is between the two interpretations the narrower of which would fail to achieve the manifest purpose of the legislation. Courts should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view the Parliament would legislate only for the purpose of bringing about one effective result. When the Court is called upon to give a wide or limited interpretation to a particular expression and when that expression is capable of both these interpretations, it is open to the Court to consider what was the object of the Legislature and what was the mischief aimed at: and the Court must try and give that construction to particular expression which will be more consistent with the suppression of the mischief rather than that mischief being allowed to continue uncontrolled. When material words of a statute are capable of two constructions, one of which is likely to defeat or impair the policy of the Act whilst the other construction is likely to assist the achievement of the said policy, then the Courts would prefer to adopt the latter construction. It is more probable that Legislature should have used the word in that interpretation which least offends against 'our sense of justice'. If it appeal's that one of the two constructions will do injustice, and the other avoid injustice, then it is the bounden duty of the Court to adopt the second, and not adopt the first, of those constructions. Where one constructions leads to absurdity, and the other makes the statute logical, the latter construction is to be preferred as every effort should be made to make sense and not nonsense of legislation. 66. It was next contended that, in Section 62 of the Act, while dealing with determination of tariff, they have provided determination of tariff in case of shortage of supply for a period not exceeding one year. Therefore, shortage of electricity is not an extra-ordinary circumstance and that is how though in Section 62 the word 'shortage of power' is used, such a word is conspicuously missing in Section 11. Part. VII of the Act deals exclusively with tariff. Therefore, shortage of electricity is not an extra-ordinary circumstance and that is how though in Section 62 the word 'shortage of power' is used, such a word is conspicuously missing in Section 11. Part. VII of the Act deals exclusively with tariff. Section 61 speaks of tariff regulations. It provides that, the Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the criteria which are set out in the said section from Clause (a) to Clause (i). One of the criteria to be taken note of is safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner. Also, it should bear in mind the National Electricity Policy and tariff policy. Section 63 of the Act makes it very clear the Appropriate Commission shall adopt tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government. Then Section 62 provides for determination of tariff. It empowers the Appropriate Commission to determine the tariff in accordance with the provisions of the Act for supply of electricity by a generating company to a distribution licensee; transmission of electricity; wheeling of electricity and retail sale of electricity. In case of shortage of supply of electricity, the Appropriate Commission is empowered to fix the minimum and maximum ceiling of tariff for sale or purchase of electricity in pursuance of an agreement, entered into between a generating company and a licensee or between licensees, for a period not exceeding one year to ensure reasonable prices of electricity. Therefore, the proviso which empowers fixation of tariff in case of shortage of supply of electricity is only between a generating company and a licensee and not in other case. Therefore, Section 11(2) provides that, when there is a direction to supply electricity to a State grid and the price is fixed for such supply by the Appropriate Government results in adverse financial impact on such generating company, the Appropriate Commission has been conferred the power to offset the adverse financial impact. Therefore, Section 11(2) provides that, when there is a direction to supply electricity to a State grid and the price is fixed for such supply by the Appropriate Government results in adverse financial impact on such generating company, the Appropriate Commission has been conferred the power to offset the adverse financial impact. Therefore, the argument that the word 'shortage of supply of electricity' is specifically used in Section 62 and the same is conspicuously absent in Section 11, the shortage of supply of electricity cannot be a ground to exercise power under Section 11 or fix the tariff for such power to be supplied is without any substance. Section 62 applies to a case where there is no direction under Section 11. Once the direction is granted it is Section 11(2) which is attracted and not Section 62. 67. It was contended what the Court has to keep in mind is not the effect but the cause for shortage of scarcity of electricity. Only a circumstance such as threat to the State, public order, natural calamity should result in scarcity of electricity, linen only the Government has the power to invoke Section 11 of the Act. The circumstances set out in the order viewed in that context was in existence prior to the passing of the enactment. It is only because of that, this Act was passed liberalizing the production of electricity by introducing the concepts like open access, delicensing, etc., and, therefore, the facts stated in the order do not constitute an extra-ordinary circumstance in public interest justifying the exercise of power under Section 11 of the Act. If there is sufficient supply of electricity and there is a breach to the security of the State or public order to meet such a threat if the Government wants electricity it could procure the same and meet such a situation. Similarly, when there is a natural calamity and the electricity is available in plenty, the question of the Government invoking Section 11 would not arise. What the Section meant is not that scarcity of electricity shall result on account of threat to security of the State or public order or natural calamity. Similarly, when there is a natural calamity and the electricity is available in plenty, the question of the Government invoking Section 11 would not arise. What the Section meant is not that scarcity of electricity shall result on account of threat to security of the State or public order or natural calamity. It is to meet a situation of that nature, if electricity is required and it is not available at the disposal of the Government and if it is in the hands of private generators, then it becomes necessary for the Government to compel those private generators to supply the electricity to the Government to face its challenge. Therefore, what is provided in the explanation is not the cause for scarcity. They are the circumstances which require to be faced, by the Government for which electricity is required. Therefore the parliament by way of Explanation has set out three circumstances, under which the Government can exercise its power under Section 11 of the Act. 68. The impugned order clearly sets out the circumstances under which the same came to be passed. It is stated that Karnataka is facing a severe power shortage in the year 2008-2009. There is a glaring demand - supply gap in the State. According to the Energy Power Survey of the Union Ministry of Power, in 2008, while demand is expected to be 8228 MW, supply is of the order of 5939 MW, leading to a gap of about 2300 MW. One of the reasons for such deficit situation is poor water inflows to the major hydel reservoirs of Linganamakki, Supa and Manl Dams respectively. These reservoirs reached only 62% of their levels, as against 88% in the previous year. Karnataka is hydel dependent. Daily power generation from the major Hydros was 21 MU. compared to 32 MU per day in the same period last, year. There was a drastic reduction in power availability from its share of central generating stations. As against the expected share of 1542 MW daily, on an average only about 1000 MW was received, resulting in a shortage of 500 MW. The Bellary Thermal Power Station of 500 MW, commissioned at the end of July, 2008 unit experienced 35 trips in the period August to October, 2008. At present the unit is operating at part capacity, resulting in further power shortages to the grid. The Bellary Thermal Power Station of 500 MW, commissioned at the end of July, 2008 unit experienced 35 trips in the period August to October, 2008. At present the unit is operating at part capacity, resulting in further power shortages to the grid. Demand for power is expected to increase in the period January 2009 to May 2009. Then a tabular column is given showing the availability of electricity, electricity required and the deficit for the months January to May 2009. They have also introduced power cuts in the State. It is in those circumstances, special measures were required to protect the public interest. In that context they felt it is imperative that all power generated in the State, including power from those who have gone on Open Access and are exporting power outside the State, be made available to the State Grid. When this is facilitated, nearly 500 MW of power will be available to the State. Therefore, as a matter of policy, in public interest, to mitigate the severe power crisis in the State, all generators of the State were directed to operate, maintain the generating stations and supply all the electricity thus generated to the State grid for the consumption of all the consumers of electricity within the State to bridge the demand-supply gap. It is only a stop gap arrangement. It is for a limited period. It is not a permanent phenomenon. The supply of electricity is sought to be regulated during crisis in public interest. 69. Keeping in mind these well settled principles of interpretation of statutes, the purpose of the legislation, the circumstances under which the amendment was done and for the reasons set out in the impugned order, we are of the view that the circumstances set out in the impugned order constitute an 'extra-ordinary circumstance' justifying the exercise of power under Section 11 of the Act, in public interest. Point No. 2: "OPERATE" & "MAINTAIN" 70. Next it was contended even if such a power is conceded to the Appropriate Government, the only direction that can be given by the Government to the generating company is to operate and maintain the generating station. It does not include the power to issue direction to supply the electricity produced to the State grid. Next it was contended even if such a power is conceded to the Appropriate Government, the only direction that can be given by the Government to the generating company is to operate and maintain the generating station. It does not include the power to issue direction to supply the electricity produced to the State grid. Relying on the definition of the word 'supply' contained in the Act it was contended that though the word 'supply' is specifically used in Section 10(2) of the Act, the said word is conspicuously missing in Section 11 of the Act. Therefore, when a direction is issued in Section 11, in the absence of the word 'supply' in Section 11, the Government has no power to issue direction to supply to the State grid. 71. In order to appreciate this contention, it is necessary to look into the definition of the words "electricity", "generate", "generating station", "generating company" "grid", "licensee", "consumer" and "supply". 72. The word 'electricity' has been defined at Section 2(23) which reads as under: (23) "electricity" means electrical energy- (a) Generated, transmitted, supplied or traded for any purpose; or (b) used for any purpose except the transmission of a message. 73. The word 'generate' is also defined under the Act at Section 2(29) as under: (29) "generate" means to produce electricity from a generating station for the purpose of giving supply to any premises or enabling a supply to be so given. 74. The word "generating station" is defined under Section 2(30) of the Act as under: 2(30) "generating station" or "station" means any station for generating electricity, including any building and plant with step-up transformer, switch-gear, switch yard, cables or other appurtenant equipment, if any, used for that purpose and the site thereof; a site. intended to be used for a generating station, and any building used for housing the operating staff of a generating station, and where electricity is generated by water-power, includes penstocks, head and tail works, main and regulating reservoirs, dams and oilier hydraulic works, but does not in any case include any Sub-station. 75. The word "generating company" is defined under Section 2(28) of the Act as under- "Generating company" means any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person, which owns or operates or maintains a generating station. 76. 75. The word "generating company" is defined under Section 2(28) of the Act as under- "Generating company" means any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person, which owns or operates or maintains a generating station. 76. The word 'grid' is also defined under the Act at Section 2(33) as under: "Grid" means the high voltage backbone system of inter-connected transmission lines, substation and generating plants. 77. The word 'licensee' is defined at Section 2(39) as under: "licensee" means a person who has been granted a licence under Section 14. 78. The word 'consumer' is defined at Section 2(15) as under: "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. 79. The word 'supply' has been defined under the Act at Section 2(70) as under: 2(70) "supply", in relation to electricity, means the sale of electricity to a licensee or consumer. 80. The word "generate" means to produce electricity from a generating station for the purpose of giving supply to any premises or enabling a supply to be so given. In, the word 'generate' both production and supply is implicit. The direction to operate and maintain any generating station means a direction to produce and supply electricity. Though the Parliament took pains to define the aforesaid words, they have not defined the word 'operate' and 'maintain'. Therefore, we have to go by the dictionary meaning of those words. The word 'operate' according to the Oxford Dictionary means "to work in a particular way". The word 'maintain' means, the act of keeping in good condition by checking or repairing it regularly; to continue at the same level, standard; to keep something in good condition; to carry on or continue; to keep unimpaired or in proper condition. The direction is given to a generating company. The word 'maintain' means, the act of keeping in good condition by checking or repairing it regularly; to continue at the same level, standard; to keep something in good condition; to carry on or continue; to keep unimpaired or in proper condition. The direction is given to a generating company. Generating company means any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person, which owns or operates or maintains a generating station. So, the direction is not given only to the person who owns generating station. It is also given to a person who operates or maintains a generating station. Therefore, the direction to operate and maintain a generating station means direction to produce electricity from a generating station for the purposes of giving supply and supply the same in a particular way and continue to supply at the same level and keep the generating station in good condition by checking and repairing it regularly i.e., to keep it unimpaired or in proper condition. 81. The word 'supply' has been defined under Section 2(70) meaning the sale of electricity to a licensee or consumer. The consumer, means any person, who in turn shall include a company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person, who is supplied with electricity for his own use by a licencee 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 licencee the Government or such other person, as the case may be Similarly, the word 'licensee' means a person who has been granted a licence under Section 14 to transmit electricity or distribute electricity or undertake trading electricity. It is in this context the word 'supply' as defined under the Act is to be understood. Therefore, 'supply' means supply to these two category of persons. It does not take within its stride supply of electricity to a Government and supply of electricity to a 'grid' which means the high voltage backbone system of interconnected transmission lines, sub-station and generating plants. Therefore, 'supply' means supply to these two category of persons. It does not take within its stride supply of electricity to a Government and supply of electricity to a 'grid' which means the high voltage backbone system of interconnected transmission lines, sub-station and generating plants. Therefore, the word 'supply' as defined under the Act which is used in Sub-section (2) of Section 10 is confined only to commercial supply of electricity. The word 'supply' has been specifically used in Section 10(2) of the Act which deals with duties of generating companies. Sub-section (2) of Section 10 specifically provides that, a generating company may supply electricity to any licensee in accordance with this Act, and the rules and regulations made thereunder and may, subject to the regulations made under Sub-section (2) of Section 42, supply electricity to any consumer. 82. When the generating company produces electricity, the said power generated cannot be stored by the generating company at its generating station. The power generated is to be supplied to the grid. The word "supply" as defined under Section 2(70) of the Act do not refer to supply of the electricity from the generating company to the State grid. In this context it is necessary to keep in mind the opening words of Section 2 of the Act which says in this Act, "unless the context otherwise requires". Therefore, in the context in which the word "supply" is used in the Act, it means supply of electricity to any licencee or a consumer only. It is used in a very narrow sense. Therefore, when electricity is produced by a generating company, before the electricity produced is supplied to a licencee or a consumer, it has to pass through the, transmission lines or the distribution systems or operating facilities. The electricity produced by a generating company cannot be supplied to a customer or a licencee of their choice directly. It has to pass through the State Grid. In other words, the electricity produced is to be supplied to the State Grid first and thereafter from the State Grid it is supplied to the customer. The word 'supply' defined in the Act refers to the second stage, i.e., supply from the State Grid to the customer. 83. The word "supply" of electricity is conspicuously missing in Section 11. The reason is not far to seek. The word 'supply' defined in the Act refers to the second stage, i.e., supply from the State Grid to the customer. 83. The word "supply" of electricity is conspicuously missing in Section 11. The reason is not far to seek. If the word 'supply' found in Sub-section (2) of Section 10 were to be introduced in Section 11 also, it means the electricity generated by virtue of the direction to operate and maintain is to be supplied to the licencee or customer of the generating company only. It serves no purpose. For that Government's intervention is not required. Therefore, the legislature advisedly has not used the word 'supply' in Section 11. It is because when a generating station is operated and maintained properly it results in production of electricity. The electricity thus produced has to be transmitted by means of transmission lines to the grid. The extra-ordinary power cannot be exercised by the State Government or the Central Government only for the purpose of increasing generation, only for the purpose of operation and maintenance of a generating station. When de-licensing, liberalisation is the object of the Act, the private entrepreneurs who are operating and maintaining these generating stations do not need any direction from the Government. It is a commercial venture. If there is a demand in the market, they are bound to put these generating stations to the optimum use and scrupulously maintain the station so that any hurdle in running of the generating station would cause financial loss to them. If no electricity is produced the question of supplying the electricity as per the direction of the Government would not arise. The condition precedent for supply of electricity as per the direction of the Government is electricity should be produced. For its production the generating station should be operated and maintained. In order to supply the electricity as per the direction, a further direction is issued to operate and maintain because if they do not operate and maintain a generating station properly they would not produce electricity. The Government has the power to issue direction to operate and maintain the generating station. In order to supply the electricity as per the direction, a further direction is issued to operate and maintain because if they do not operate and maintain a generating station properly they would not produce electricity. The Government has the power to issue direction to operate and maintain the generating station. Therefore, when the Government issues a direction to a generating company to operate and maintain a generating station and further states the electricity so produced shall be supplied to the State grid only, it means the electricity supplied is regulated so that the entire electricity produced is available to the State for being distributed in order to meet a situation envisaged in Section 11 of the Act. In other words, right of producer of the electricity to supply to his customer or licencee is curtailed. In this context, the word 'supply' used in the impugned order is a general word and not a word as defined under the Act, Therefore, when the word 'supply' is conspicuously missing in Section 11 of the Act, the direction issued to a generating station to operate and maintain a generating station includes a direction to supply the electricity produced by such generation to the State grid. This does not mean supply in a commercial sense as indicated in the definition of supply in Section 2(70) as contra distinguished by the meaning of supply in Section 2(29). Section 11 is not meant for supply of electricity to a licencee or a consumer. It is only when electricity is to be supplied to a person other than a licencee or a customer Section 11 is invoked. 84. This meaning is implied from the words used in Sub-section (2) of Section 11. It provides that the Appropriate Commission may offset the adverse financial impact of the directions referred to in Sub-section (1) on any generating company in such manner as it considers appropriate. If the direction given by the Government is only to be understood as operate and maintain a generating station and not supply of electricity, the generating company cannot complain of any adverse financial impact, because the electricity so supplied is supplied to its customer or a licencee for the market price agreed to between the parties. Similarly, no such direction requires to be given by any Government if it is for commercial supply. Similarly, no such direction requires to be given by any Government if it is for commercial supply. Adverse financial impact means the electricity generated by virtue of the direction issued by the Government is not fetching the generating company the price which it would have fetched in the event of their supplying to the licencee or a customer, i.e., less than the same. It has adverse financial impact. Their interest is protected under the said provision. It implies if the electricity so produced is supplied to the Government at a price lesser than the commercial price, the said provision intends to protect the generating company from such adverse financial impact. The supply of electricity in pursuance of the direction by the Government could be clearly gathered from the aforesaid provision. What is intended is appropriate compensation as a consequence of non-commercial supply as considered appropriate. 85. The Apex Court in the case of Tata Power Co. Limited v. Reliance Energy Limited and Ors. Civil Appeal Nos. 3510 3511/2008 and other connected cases, had an occasion to consider the meaning that is to be attributed to the word 'supply' as defined in the Act when the said word is used in different Sections in different contexts and it held as under: the legal principle is that all statutory definitions have to be read subject to the qualification variously expressed in the definition clause which created them and it may be that even where the definition is exhaustive inasmuch as the word defined is said to mean a certain thing, it is possible for the word to have some what different meaning in different sections of the Act depending upon the subject or context That is why all definitions in statutes generally begin with the qualifying words 'unless there is anything repugnant to the subject or context'. Accordingly the word 'supply' contained in Section 23 refer to 'supply to consumers only' in the context of Section 23 and not to supply to licensees, On the other hand, in Section 86(1)(a) 'supply' refers to both consumers and licensees. In Section 10(2) the word 'supply' is used in to part of the said Section to mean two different things. In the first part it means 'supply to a licensee only' and in the second part 'supply to a. consumer only'. In Section 10(2) the word 'supply' is used in to part of the said Section to mean two different things. In the first part it means 'supply to a licensee only' and in the second part 'supply to a. consumer only'. Further in first proviso to Section 14, the word 'supply' has been used specifically to mean 'distribution of electricity'. In Section 62(2) the word 'supply' has been used to refer to 'supply of electricity by a trader'. To assign the same meaning to the word 'supply' in Section 23 of the Act, as is assigned in the interpretation Section, it is, in our opinion, necessary to take recourse to the doctrine of harmonious construction and read the statute as a whole. Interpretation of Section indisputably must be premised on the scheme of the statute. For the purpose of construction of a statute and in particular for ascertaining the purpose thereof the entire Act has to be read as a whole and then chapter by chapter, section by section and word by word. 86. Therefore, what Section 11 intends is a direction to the generating company to operate and maintain the generating station in accordance with the direction of the Government. The direction to operate means to generate electricity for supply to the State grid only and not for commercial supply. Direction to maintain means to keep the generating company in good condition by checking or repairing it regularly so that the production and supply of electricity in to the State grid is unimpaired, to enable the Government to meet the extra ordinary circumstance arising out of scarcity of electricity to meet, the public demand. Here the direction is to supply the electricity which is generated in the generating company to the State Grid only and not to supply to their licensee or customer. Therefore, the argument that the Government has no power to issue direction under Section 11 to supply electricity to the State Grid is without any substance and accordingly it is rejected. Point No. (3): - Violation of Article 301: 87. The power exercised by the State Government is to regulate supply of electricity and not to prohibit or restrict supply of electricity. Point No. (3): - Violation of Article 301: 87. The power exercised by the State Government is to regulate supply of electricity and not to prohibit or restrict supply of electricity. Prima facie, a direction which totally prohibits the supply of electricity is prohibitive or restrictive of the right to trade, commerce and intercourse throughout the territory of India, and violates Article 301 of the Constitution. However, Article 302 empowers the parliament by law to impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest. Article 303 prohibits making of any law giving, authorising the giving of, any preference to one State over the other, or making or authorising the making of any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the lists in Schedule VII. The said prohibition would not come in the way of parliament from making any law giving or authoring the giving of, any preference or making, or authorizing the making of, any discrimination, if is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India. Article 304, empowers the legislature of a State, by law, impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in public interest. 88. The Apex Court in Atiabari Tea Co., Ltd. Vs. The State of Assam and Others, AIR 1961 SC 232 , has held that, the main object of Article 301 obviously was to allow the free flow of the stream of trade, commerce and intercourse throughout the territory of India. 88. The Apex Court in Atiabari Tea Co., Ltd. Vs. The State of Assam and Others, AIR 1961 SC 232 , has held that, the main object of Article 301 obviously was to allow the free flow of the stream of trade, commerce and intercourse throughout the territory of India. The doctrine of the freedom of trade, commerce and intercourse enunciated by Article 301 is not subject to the other provisions of the constitution but is made subject to the other provisions of Part XIII; that means that once the width and amplitude of the freedom enshrined in Article 301 are determined they cannot be controlled by any provision outside Part XIII, it is obvious that whatever may be the content of the said freedom it is not intended to be an absolute freedom in matters of trade, commerce and intercourse would lead to economic confusion, if not chaos and anarchy; and so that freedom guaranteed by Article 301 is made subject to the exceptions provided by the other Articles in Part XIII. The freedom guaranteed is limited in the mariner specified by the said Articles but it is not limited by any other provisions of the Constitution outside part XIII, That is why, Article 301, read in its proper context and subject to the limitations prescribed by the other relevant Articles in Part XIII, must be regarded as imposing a constitutional limitation on the legislative power of Parliament and the Legislatures of the States. Wherever it is held that Article 301 applies, the legislative competence of the Legislature in question will have to be judged in the light of the relevant Articles of Part XIII. The freedom of trade guaranteed by Article 301 is freedom from all restrictions except those which are provided by the other Articles in Part XIII. The non-obstante, clause referring to Article 301 would go with Article 304(a) and it indicates that tax on goods would not have been permissible but for Article 304(a) with the non-obstante clause. This incidentally helps to determine the scope and width of the freedom guaranteed under Article 301; in other words. Article 304(a) is another exception to Article 301. 89. Again another Constitution Bench of the Supreme Court in the case of The Automobile Transport (Rajasthan) Ltd. Vs. This incidentally helps to determine the scope and width of the freedom guaranteed under Article 301; in other words. Article 304(a) is another exception to Article 301. 89. Again another Constitution Bench of the Supreme Court in the case of The Automobile Transport (Rajasthan) Ltd. Vs. The State of Rajasthan and Others, AIR 1962 SC 1406 held that, the concept of freedom of trade, commerce and inter-course postulated by Article 301 must be understood in the context of an orderly society and as part of a Constitution which envisages a distribution of powers between the States and the Union, and if so understood, the concept must recognise the need and the legitimacy of some degree of regulatory control, whether by the Union or the States: this is irrespective of the restrictions imposed by the other articles in Part XIII of the Constitution. As regulatory measures do not impede the freedom of trade, commerce and intercourse and compensatory taxes for the use of trading facilities are not hit by the freedom declared by Article 301. They are excluded from the purview of the provisions of Part XIII of the Constitution for the simple reason that they do not hamper trade, commerce and intercourse but rather facilitate them, The freedom granted by Article 301 does not take in regulatory measures or compensatory taxes for the use of trading facilities. Then whether we look at such measures from the point of view of Article 19(1)(g) or from the point of view of Article 301, the result will be the same. The interpretation which was accepted by the majority in the Atiabari Tea Company's case is correct, but subject to this clarification. Regulatory measures or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by Article 301 and such measures need not comply with the requirements of the proviso to Article 304(b) of the Constitution. In the aforesaid judgment for the first time the concept of compensatory taxes was evolved by the Apex Court. 90. The said legal position was reiterated by the Apex Court in Jindal Stainless Limited and Anr. v. State of Haryana and Ors. 2006 145 STC 544 . 91. Thus, it is clear the freedom of trade so declared is against the imposition of barriers or obstructions within the State as well as interstate. 90. The said legal position was reiterated by the Apex Court in Jindal Stainless Limited and Anr. v. State of Haryana and Ors. 2006 145 STC 544 . 91. Thus, it is clear the freedom of trade so declared is against the imposition of barriers or obstructions within the State as well as interstate. All restrictions which directly and immediately affect the movement of trade are declared by article to be ineffective. The only two exceptions under which the Part XIII of the Constitution is held to be non-applicable is that when such levy of tax is in the nature of compensatory tax or regulatory in character. 92. The Act retains an elaborate and comprehensive system of regulatory control in every area (a) licensing (Section 12 to Section 24); (b) transmission (Section 25 to Section 41); (c) distribution (Section 42 to Section 60(d) tariff (Section 61 to Section 66) through a multiplicity of bodies, institutions and processes. The main feature of the Act is the power of various Governments to give directives. Section 11 empowers the Appropriate Government to give directions to generators to meet extra-ordinary circumstances. Under Section 23 of the Act, if the Appropriate Commission is of the opinion that it is necessary or expedient so to do for maintaining the efficient supply, securing the equitable distribution of electricity and promoting competition, it may, by order, provide for regulating supply, distribution, consumption or use thereof. Sections 29 and 33 confers power on the Regional and State Load Dispatch Centres powers to maximize efficiency and control. Under Section 37 the Appropriate Government has the power to issue directions to the regional load dispatch centres or the state load dispatch centers, as the case may be, to take such measures as may be necessary for maintaining smooth and stable transmission and supply of electricity to any region or state. Under Section 108(1) the State Commission shall be guided by such directions in matters of policy involving public interest as the State Government may give to it in writing. Thus, it will be seen whether for efficiency, extraordinary circumstances or public interest a system of interventions through directives has been issued. The Act docs not make the market system an end in itself either on the technical side or in terms of the public interest. Thus, it will be seen whether for efficiency, extraordinary circumstances or public interest a system of interventions through directives has been issued. The Act docs not make the market system an end in itself either on the technical side or in terms of the public interest. Thus, power in Section 11 have to be read in a balanced way to meet the public demand and public interest in a beneficial rather than a restrictive manner. 93. The right to carry on trade or business is a fundamental right as guaranteed under the Constitution under Article 19(g) subject to reasonable restrictions. Trade, commerce, and inter course through the territory of India shall be free, and it is a constitutional right subject to restrictions as provided under part XIII of the Constitution. Therefore, the right to carry on trade or business is not an absolute right. This right could be curtailed by law. The underlying principle behind this curtailment of this right is public interest. Therefore, the makers of the Constitution have made a very fine balancing act between individual right and public interest. In other words individual rights should yield to public interest. However, when there is no curtailment of a right, but it is only regulating the exercise of the right, no such law is required. The only condition is the power to regulate must exist in law. This power to regulate is provided in Section 11 of the Act, by the Parliament. It is a statutory right conferred on the appropriate Government. By exercise of such power the government is not curtailing the production and supply of electricity. On the contrary the direction issued is to operate and maintain the generating station. The operating - generating station means producing electricity and supplying the electricity produced. It really facilitates the production of electricity. It does not. retard the production. Similarly the electricity produced is directed to be supplied to the State Grid. Therefore, there is no prohibition or restriction or curtailment of the right to supply the electricity produced. The direction also facilitates the supply of electricity. However, the electricity supplied is regulated. Instead of supplying to the customers of their choice, they are directed to supply the same to the State Grid in public interest i.e., to make it available to the public at large and not to any individual or a particular customer. The direction also facilitates the supply of electricity. However, the electricity supplied is regulated. Instead of supplying to the customers of their choice, they are directed to supply the same to the State Grid in public interest i.e., to make it available to the public at large and not to any individual or a particular customer. This regulation is for a limited period to tide over the scarcity of electricity, faced by the common man a fanner, a worker, and people in lower strata of society, to whom the State owes an obligation to make available electricity, which is the National Policy. If such supply were to have any adverse financial impact on the producer of the electricity, his interest is also protected under law. Therefore, the producer cannot have any grievance. Thus the interest of both the producer and customer is taken care of by law. 94. The Supreme Court in the aforesaid Tata's case had an occasion to consider the regulatory scheme provided under the Act. It held as under: In the scheme of the Act wherever regulation of generating companies is necessary the same has been provided for. Section 11 and Section 60 provide for adequate indication in this behalf. They deal with extra ordinary situations. A generating company, if the liberalization and privatization policy is to be given effect to must be held, to be free to enter into an agreement and in particular long term agreement with the distribution agency, terms and conditions of such an agreement, however, are not unregulated. Such an agreement is subject to grant of approval by the Commission. A generating company has to make a huge investment and assurances given to it that subject to the provisions of the Act he would be free to generate electricity and supply the same to those who intend to enter into an agreement with it. Only in terms of the said statutory policy, he makes huge investment. If all his activities are subject to regulatory regime, he may not be interested in making investment. The business in regard to allocation of electricity at the hands of the generating company was the subject matter of the licensing regime. While interpreting the statute it must be borne in mind that such a mechanism should not come back. That, however, would not mean that the generating company is absolutely free from all regulations. The business in regard to allocation of electricity at the hands of the generating company was the subject matter of the licensing regime. While interpreting the statute it must be borne in mind that such a mechanism should not come back. That, however, would not mean that the generating company is absolutely free from all regulations. Such regulations are permissible under the Act. The Parliament thought it necessary to provide for specific provisions for the purpose of regulating the functions of the generating companies, those provisions are specific provisions viz-a-vis the other general provisions which take within the abridge the function of the distributor, transmitter and trader. 95. Therefore, the provisions of Section 11 of the Act, is regulatory in nature. It is not a restriction as contended by the counsel for the petitioners and, therefore, we do not see any substance in the said contention also. Point No.4: "Appropriate Government" 96. It was contended by petitioner No. 1 that it is involved in inter-state supply. It has supplied electricity to Rajasthan Power Procurement Centre in November 2008. In such circumstances, the mandate of the Act is clear. Only the Central Government which is the Appropriate Government can decide taking note of the larger interest of the Nation as a whole. Merely because the plant, is in Karnataka it would not give the State Government jurisdiction. The concept of My State-My People has been deprecated by the Apex Court and. therefore, the order passed by the State Government is wholly without jurisdiction and is to be set aside. 97. In order to appreciate this contention it is necessary to see the definition of the word "Appropriate Government" as contained in Section 2(5) of the Act. 2(5) "Appropriate Government' means.- (a) The Central Government, (i) in respect of a generating company wholly or partly owned by it: (ii) in relation to any inter-State generation, transmission, trading or supply of electricity and with respect to any mines, oil-fields, railways national highways, airports telegraphs, broadcasting stations and any works of defence, dockyard, nuclear power installations; (iii) in respect of the National Load Despatch Centre and Regional load Despatch Centre; (iv) in relation to any words or electric installation belonging to it or under its control; (b) in any other case, the State Government having jurisdiction under this Act. 98. Section 11 of the Act empowers the appropriate Government to issue directions. 98. Section 11 of the Act empowers the appropriate Government to issue directions. The appropriate Government is defined under Section 2(5) of the Act. Appropriate Government means Central Government or State Government. In what cases directions can be issued by the Central Government is clearly set out in Clause (a) Sub-Section 2(5) of Section 2. In any other case, it is the State Government. Sub-clause (i)(iii) and (iv) of Clause (a) is clear, and no interpretation is called for. By giving the words their plain and ordinary meaning, the intention of the parliament could be gathered. In respect of a generating company wholly or partly owned by it, or in relation to any works or electric installation belonging to it or under its control or in respect of National Load Despatch Centre and Regional Load Despatch Centre, the Appropriate Government under Section 11 is the Central Government. 99. Section 2(5)(a)(ii) is in relation to any interstate generation, transmission, trading or supply of electricity and with respect to any mines, oil fields, railways, national highways, airports, telegraphs, broadcasting stations and any works of defence, dockyard, nuclear power installations, the Central Government would be the appropriate Government. 100. In the said Sub-clause the word supply of electricity' is used. The argument is the word inter state is to be prefixed to the said word. Then it reads as 'inter state supply of electricity'. The argument is that in respect of inter state supply of electricity, the appropriate Government is the Central Government and, therefore, the State Government has no power to issue direction under Section 11 of the Act. In order to appreciate this contention we have to read the subclause as a whole. It states the Central Government in relation to any inter state generation, transmission, trading or supply of electricity and with respect to any mines, oil fields, railways, national highways, airports, telegraphs, broadcasting stations and any works of defence, dockyard, nuclear power installations. The word inter-state is to be prefixed to the words generation, transmission, trading or supply of electricity. Then only the said provision could be read to mean inter-state supply of electricity. After referring to generation, transmission, trading or supply of electricity, the legislature has used the word 'and', and thereafter they have set out the installations exclusively belonging to the Central Government. Then only the said provision could be read to mean inter-state supply of electricity. After referring to generation, transmission, trading or supply of electricity, the legislature has used the word 'and', and thereafter they have set out the installations exclusively belonging to the Central Government. Therefore, generation, transmission, trading or supply of electricity is on the one side and specific installations belonging to the Central Government, are on the other side and they are connected by the word 'and'. Normally, the word 'and' signifies that it has to be read conjuntively. In other words the connecting words have to be read together. If so read the inter-state generation, transmission, trading or supply of electricity, would fell within the jurisdiction of the Central Government. If only when the inter-state generation, transmission, trading or supply of electricity, is with respect to the installations mentioned specifically in the sub-clause. Then the appropriate Government would be the Central Government. The reason is not far to seek. All the installations referred to in sub-clause firstly belong to the Central Government. They are maintained by the Central Government for the public of the country and they are key installations. Where-ever the electricity is generated, it is supplied to those installations which may be located outside the State. To ensure the proper working of those installations in extra-ordinary circumstances the Central Government can exercise the power under Section 11. Therefore, inter state supply of electricity has to be understood in the context in which it is used in the said sub-clause, namely inter-state supply of electricity to the installations specifically mentioned in that sub-clause which exclusively belongs to the Central Government. In other words, in respect of inter-state supply of electricity, installations other than those mentioned in the said sub-clause, the Central Government has no role to play. It is not concerned. The location of the generating company and the power stations within the geographical jurisdiction of a State is a critical factor because the State's jurisdiction cannot extend beyond its boundaries. The mere existence of de-minimus supply inter-state would not take away the jurisdiction of the State Government which has to deal with the extra-ordinary circumstances existing within the State. The location of the generating company and the power stations within the geographical jurisdiction of a State is a critical factor because the State's jurisdiction cannot extend beyond its boundaries. The mere existence of de-minimus supply inter-state would not take away the jurisdiction of the State Government which has to deal with the extra-ordinary circumstances existing within the State. However, even in cases where a generating station is situated within a State and if that generating station is supplying electricity outside the State to a Central Government establishment as mentioned in Sub-clause (ii) of Clause (a) of Sub-section (5) of Section 2 the jurisdiction of the State Government to issue direction under Section 11 of the Act stands excluded. If so interpreted 'there is no conflict of interest between the State Government and State Government's power under the Act as both the Governments can exercise this power in public interest or under the circumstances narrated in the explanation to Section 11(1) of the Act. Therefore, in the instant case, the Appropriate Government under Section 11 of the Act, is the State Government, as such the power is properly exercised. POINT No. (5) CONCEPT OF OPEN ACCESS: 101. The word 'open access' has been defined under Section 2(47) which reads as under: 2(47) "open access" means the nondiscriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged, in generation in accordance with the regulations specified by the Appropriate Commission. 102. As could be seen from the definition it means nondiscriminatory provision for the use of transmission lines or distribution system. The word 'transmission lines' is defined under Section 2(72) which reads as under: 2(72) "transmission lines" means all high pressure cables and overhead lines (not being an essential part of the distribution system of a licensee) transmitting electricity from a generating station to another generating station or a sub-station, together with any step-up and step-down transformers, switch-gear and other works necessary to and used for the control of such cables or overhead lines, and such buildings or part thereof as may be required to accommodate such transformers, switch-gear and other works. 103. 103. The word 'distribution system' is also defined under the Act at Section 2(19) as under: 2(19) "distribution system" means the system of wires and associated facilities between the delivery points on the transmission lines or the generating station connection and the point of connection to the installation of the consumers. 104. It is to be remembered on the day the Act came into force these transmission lines and distribution system exclusively belonged to the Government or statutory authorities. It is exclusively used by the generating stations and generating companies belong to the Government. When once the law provided for private participation in the generation, the electricity generated by them had to be simultaneously transmitted to the licencee and consumers. If the existing transmission lines and distribution systems are not made available to private players they could not have established generating stations. Therefore, they have to be assured that they would be provided the transmission lines and distribution systems and that there would be no discrimination between the Governmental establishment and these private agencies. However, such an open access is also should be in accordance with the regulations specified by the Appropriate Commission. If a particular transmission line or a distribution line is over crowded and it cannot take any more load it is not possible to grant open access. However, subject to the availability of the facility for transmission of electricity there cannot be any discrimination between a Governmental agency and these private players. Therefore, open access means these private players would be entitled to use transmission lines or distribution systems as these facilities are enjoyed by the Governmental agencies and they are assured that there would not be any discrimination between them. Therefore, it is a non-discriminatory provision for the use of transmission lines or distribution system or associated facilities. It is nothing to do with the liberty or the right to supply electricity to a customer or a licencee of their choice, which is regulated under the Act. Therefore, 'open access' does not mean unbridled right or absolute right to supply electricity by the generating company of their choice. 105. Open access in transmission has been introduced to promote competition amongst generating companies who can now sell to different distribution licensees across the country. This should lead to availability of cheaper power. The Act mandates non-discriminatory open access in transmission from the very beginning. 105. Open access in transmission has been introduced to promote competition amongst generating companies who can now sell to different distribution licensees across the country. This should lead to availability of cheaper power. The Act mandates non-discriminatory open access in transmission from the very beginning. When open access to distribution networks is introduced by the respective State Commissions for enabling bulk consumers to buy directly from competing generators, competition in the market would increase the availability of cheaper and reliable power supply. The Regulatory Commission need to provide facilitative frame work of non-discriminatory open access. This requires load dispatch facilities with state-of-the-art communication and data acquisition capability on a real time basis. The Act prohibits the State transmission utilities/transmission licensees from engaging in trading in electricity. Power purchase agreements with the generating companies would need to be suitably assigned to the Distribution Companies, subject to mutual agreement. Non-discriminatory open access shall be provided to competing generators supplying power to licensees upon payment of transmission charge to be determined by the appropriate Commission. 106. Part VI of the Act: deals with distribution of electricity, provisions with respect to distribution licenses. Sub-section (2) of Section 42 provides that, 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. Therefore, it. is clear from the aforesaid provision, the right of open access which the petitioners are claiming is not absolute. It is subject to conditions and constraints which may be imposed by the State Commission. 107. Section 178 of the Act empowers the Central Commission to make regulations consistent with the Act and Rules generally to carry out the provisions of the Act. In pursuance of the said power, the Central Electricity Regulatory Commission has made the Central Electricity Regulatory Commission (Open Access in inter-State Transmission) Regulations, 2008. 107. Section 178 of the Act empowers the Central Commission to make regulations consistent with the Act and Rules generally to carry out the provisions of the Act. In pursuance of the said power, the Central Electricity Regulatory Commission has made the Central Electricity Regulatory Commission (Open Access in inter-State Transmission) Regulations, 2008. The said Regulations define "open access customer" means a person who has availed or intends to avail of open access under these regulations and includes a short-term transmission customer as defined in any other regulations, specified by the Commission or a generating company (including captive generating plant) or a licensee or a consumer permitted by the State Commission to receive supply of electricity from a person other than distribution licensee of his area of supply, or a State Government entity authorized to sell or purchase electricity. 108. Regulation 6 provides for submission of open access application by such open access to the customer for availing the benefit of open access for use of the Transmission lines, or associated facilities for such lines on the inter-State transmission system. Wherever the proposed bilateral transaction has a State utility or an intra-State entity as a buyer or seller, concurrence of the State Load Despatch Centre shall be obtained in advance and submitted along with the application to the nodal agency, as per Regulation 28. Therefore, obtaining a No Objection Certificate from a Slate Load Despatch Centre is a condition precedent before any such facility is granted. Where in the opinion of the nodal agency, grant of all applications at a particular stage of advance scheduling is likely to cause congestion in one or more of the transmission corridors to be used, it shall conduct electronic bidding for grant of open access for the available surplus transmission capacity among the applicants at that stage, in accordance with the detailed procedure. 109. The applications for grant of open access for the second month, received after the dale specified in Clause (4) of Regulation 9 and the applications for grant of open access during the first month shall be considered on first-come-first served basis, and such transactions shall be scheduled subject to availability of the required transmission capacity. 109. The applications for grant of open access for the second month, received after the dale specified in Clause (4) of Regulation 9 and the applications for grant of open access during the first month shall be considered on first-come-first served basis, and such transactions shall be scheduled subject to availability of the required transmission capacity. Under Regulation 14 the open access schedules accepted by the nodal agency in advance and on first-come-first served basis may be cancelled or revised downwards by the applicant by giving a minimum five days' notice, excluding the day on which notice is served and the day from which revised schedules are to be implemented. Under regulation 15, when for the reason of transmission constraints or to maintain grid security, it becomes necessary to curtail power flow on a transmission corridor, the transactions already scheduled may be curtailed in the manner decided by the Regional Load Despatch Centre, if in its opinion such curtailment is likely to relieve the transmission constraint or is likely to improve grid security. 110. Therefore, the aforesaid Regulations make it abundantly clear open access is not an unbridled or absolute right as sought to be canvassed in these Writ Petitions. It is subject to transmission constraints and maintaining security of the grid, it is granted on first come first served basis. When there is congestion it is conferred by bidding. This open access is sought for by a generating company to supply electricity to any licencee and it is accorded in accordance with the Act and the Rules, Regulations under Section 10(2) of the Act. Subject to the provision of the Act means subject to Section 11 of the Act. Therefore, grant of open access is subject to Section 11 of the Act. When electricity is needed to meet a circumstance arising in public interest or natural calamity or circumstances arising out of threat to security of the State, Public Order, the question of anybody enforcing or claiming this right of open access is not permissible. The said right could be exercised in the manner stipulated in the Regulations in the absence of any direction issued by the Government under Section 11. Thus, this right to open access is also regulated under the Act. It is not an absolute right or unbridled right. 111. Section 11 of the Act over-rides Section 42. The said right could be exercised in the manner stipulated in the Regulations in the absence of any direction issued by the Government under Section 11. Thus, this right to open access is also regulated under the Act. It is not an absolute right or unbridled right. 111. Section 11 of the Act over-rides Section 42. The indication is clear from Sub-section (2) of Section 11 whereby the Appropriate Commission has been conferred the power to offset the adverse financial impact of the directions referred to in Sub-section (1) on any generating company in such manner as it considers appropriate. In other words, though the State Commission has introduced open access and has granted open access to a generating company or a distribution licencee, in such case if the Government, were to exercise power under Section 11 of the Act and the consequences is that it would have any adverse financial impact on the generating company, then the Appropriate Commission has been vested with the power to off-set such adverse financial impact. In other words the State Commission has no power to annul the direction issued to the generating company but they have power to offset only the adverse financial impact of such direction. Therefore, the contention that no direction could be issued under Section 11 of the Act, so as to affect the open access granted to a generating company is without any substance. Therefore, open access means only that the private generating companies shall not be discriminated in the use of transmission lines or distribution system or associated facilities. It does not mean a right is conferred on them absolutely to supply electricity to a consumer or a licencee of their choice and that such a right cannot be curtailed under any circumstances. 112. It was also contended that by such liberalisation, both in the Aviation Industry and Telecom Industry, there is a sea change in the availability of the facilities at a reasonable price and in abundance and, therefore, once the Act is allowed to have full play as contemplated, there would be plenty of electricity available at a competitive price even to the common man and, therefore, the provisions of the Act have to be so interpreted so as achieve the object, which is sought to be achieved by liberalization. This argument on the face of it looks very attractive. This argument on the face of it looks very attractive. But, on a closer scrutiny we find there is no substance. If is true by the liberalization policy as well as privatisation, there is an enormous growth both in the Aviation Sector as well as the Telecom Sector. Today, the customers have options and even air travel is affordable by middle class section of the society though it is still far away from the reach of poor people of this country if they have to foot the bill. Similarly, even in the Telecom Sector, there is a revolutionary change and mobile sets are found in the hands of large section of the society irrespective of the strata to which they belong. Both these things have made life comfortable. There is no dispute about it. But, it cannot be forgotten a person can live without air travel and without mobile, at any rate the people in the lower strata. But, that is not the position in so far as electricity is concerned. Virtually it has become a basic human need like food and shelter. We find in the villages because of the indiscriminate digging of borewells the open wells have dried up. Water in the borewell can be used by the villagers only if there is electricity. If there is no supply of electricity, the villagers arc handicapped, people would die for want of water same is the case with agriculture. In the urban household, the dependence on electricity is absolute. To cook food, to wash clothes, lightening, fan they need electricity without which they cannot live The demand for electricity by the common man is ever growing When there is scarcity of electricity and if open access is permitted, certainly that electricity produced is not made available to the common man. It is made available at a price demanded by the supply of electricity as dictated by the market conditions. The only consideration being earning of profit. In the process, the common man suffers. The majority of the public are affected. When the scarcity reaches gigantic proportions living becomes difficult. Democratically elected Governments cannot plead helplessness. They have to use the power of the State to mitigate the sufferings of the masses. The only consideration being earning of profit. In the process, the common man suffers. The majority of the public are affected. When the scarcity reaches gigantic proportions living becomes difficult. Democratically elected Governments cannot plead helplessness. They have to use the power of the State to mitigate the sufferings of the masses. It is in those circumstances, the Parliament in its wisdom thought it lit to confer power on the Appropriate Government to issue directions to the Generating Company to operate and maintain a generating station and the electricity produced to the State Government so that such extra-ordinary circumstances can be tied over. The very Act which provided for liberalization, privatisation or open access has conferred such power on the Government to exercise the same in extra-ordinary circumstances as mentioned in the Act. The source of alt these rights, obligations and power is the same Act. Therefore, the object with which this enactment is passed, the mischief sought to be remedied and the mechanism adopted, it cannot be said exercise of power under Section 11 of the Act runs counter to this concept of open access, privatisation and liberalisation of power industry in the country. Keeping in mind the interest of all stakeholders, the provisions have to be interpreted harmoniously. In that view of the matter, we do not see any substance in the said contention of the petitioners. POINT No. (6):- MALAFIDE: 113. The argument is that, the Government Order is issued for the purpose of reducing the tariff from the negotiated rate of Rs. 8.85 to Rs. 5.50 per unit, and thus gain commercial advantage therefore, the power exercised is wholly ultra vires the power conferred upon the Government. There is no justification for the first respondent to resort to Section 11 of the Act. It is fraud on power. To sustain an allegation of mala fide, there have to be specific pleading, setting out material facts to substantiate allegation. The burden is on the person who alleges it. The person against whom allegations of mala fide are made should be impleaded as a party. In E.P. Royappa Vs. State of Tamil Nadu and Another, AIR 1974 SC 555 the Supreme Court has held that the burden of establishing mala fide is very high on the person who alleges it. The burden is on the person who alleges it. The person against whom allegations of mala fide are made should be impleaded as a party. In E.P. Royappa Vs. State of Tamil Nadu and Another, AIR 1974 SC 555 the Supreme Court has held that the burden of establishing mala fide is very high on the person who alleges it. The allegations of mala Odes are often made more easily than proved and the very seriousness of such allegations demands proof of a higher order of responsibility. The Court would, therefore, be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration. Such is the judicial perspective in evaluating charges of unworthy conduct against ministers and other high authorities, not because of any special status which they are supposed to enjoy, nor because they are highly placed in social life or administrative set up - these considerations are wholly irrelevant in judicial approach - but because otherwise. functioning effectively would become difficult in a democracy. It is from this stand-point that we must assess the merits of the allegations of mala fides, made by the petitioner against the second respondent. Vague and casual allegations suggesting that, a certain act. was done with an ulterior motive cannot be accepted without proper pleadings and adequate proof, both of which are conspicuously absent in these Writ Petitions. 114. In the instant case, the first petitioner-generating company which has preferred this Writ Petition has not entered into any contract, with the respondents for supply of electricity. The impugned order dated 30.12.2008 directs not only the first. petitioner but all generators existing and operating in Karnataka shall operate and maintain the generating stations to their maximum exportable capacity and PLF and all of them shall supply all exportable electricity generated to the State Grid in view of the extra-ordinary circumstances. Thus, the State while passing the said order has not discriminated between a generating company and another generating company. This is an order passed against all generating companies. Therefore, when the first petitioner has not entered into any agreement with the respondents agreeing to supply electricity generated at Rs. 8.85, the question of the said price being reduced to Rs. Thus, the State while passing the said order has not discriminated between a generating company and another generating company. This is an order passed against all generating companies. Therefore, when the first petitioner has not entered into any agreement with the respondents agreeing to supply electricity generated at Rs. 8.85, the question of the said price being reduced to Rs. 5.50 per unit with a mala fide intention has no substance. The second Government Order which is dated 1st January 2009 is a consequential order to the first order directing the first petitioner to supply energy to the State Grid at the rate of Rs. 5.50 per unit from their Barge Mounted Plant at Tannir Bhavi near Mangalore from January 2009 to May 2009. Even otherwise Section 11(2) comes to the rescue. If the impugned orders have any adverse financial impact on any generating company, the Appropriate Commission under the Act is empowered to off set such adverse financial impact in such manner as it considers appropriate. Therefore, a remedy is provided to a generating company to approach the Appropriate Commission and get the adverse financial impact off set in accordance with the Act. Therefore, it cannot be said that the directions issued in any way affects the generating company. In the impugned orders the State has given reasons for reduction in the rate. Petitioners contend that it is without any basis. They have furnished particulars. Respondents have also furnished particulars. The petitioners specifically contend that the fourth respondent has entered into a contract with the first petitioner for supply of energy/power at an agreed rate. It is on the basis of this contract, the first petitioner has already negotiated back to back agreements for supply of naphtha at a fixed price for BPCL and the consequence of the impugned Government Order will have a cascading financial effect on the petitioner. Therefore, the question for consideration would be, what, is the rate at which the petitioners have entered into agreement to purchase naphtha from BPCL, for what period, whether the price has been reduced considerably In the international market which would have any effect on the back to back agreements entered into between the petitioners with BPCL and whether the agreement entered into relates to the relevant period, are all disputed questions of fact which cannot be gone into in a writ proceedings. The petitioners have an alternative and efficacious remedy to get these disputes adjudicated. Therefore, it would be inappropriate for this Court to adjudicate such disputed questions of fact in a Writ Petition. Under no circumstances, in the first place except vague allegations, no material particulars of the mala fide acts alleged is furnished. Individuals, if any, who are responsible for such mala fide acts are not made parties to these proceedings and before mala fides could be alleged to be proved, the adjudication of the disputed questions of fact is a condition precedent which cannot be gone into in a Writ proceedings. All the facts pleaded regarding mala fides have been specifically denied by the respondents in their counter. Under those circumstances it is not possible to hold for the reasons set out above that the mala fides alleged is established in this case so as to vitiate the impugned orders. Therefore, we do not see any substance in the said contention. However, if and when the petitioners were to approach a competent authority either under the Act or in any other forum for adjudication of the rights in this regard, the said authority shall decide the rights of the parties on its merits and in accordance with law, without being in any way influenced by the observations made by this Court in this order. That would meet the ends of justice. 115. In the same order, the Government has directed Power Company of Karnataka Limited and Bangalore Electricity Supply Company Limited to amend the letter of intent issued by them to generating companies supplying electricity, the agreements entered into earlier to the said order in conformity with the said order, in order to avoid accusation of discrimination. This order affects the interest of the second petitioner which is the company which has entered into an agreement with the respondents to supply electricity at the rate of Rs. 8.85. As the impugned orders are not passed against the second petitioner, they have no right to challenge the impugned orders as they are not generating companies carrying on generation of electricity. They procure electricity from generating companies and are supplying. If they are not willing to supply electricity at the rate prescribed in the impugned orders, they are not compelled to supply electricity by the impugned order. They procure electricity from generating companies and are supplying. If they are not willing to supply electricity at the rate prescribed in the impugned orders, they are not compelled to supply electricity by the impugned order. If the respondents agree to pay a particular price for the supply of electricity and unilaterally if they have reduced the price, it is open to the second petitioner to approach a competent Court of law for enforcement of the contract or for claiming damages on account of the reduction in price. It is purely a breach of a contractual obligation. The second petitioner has an alternative and efficacious remedy to redress his grievances. In the facts of the case it is inappropriate to entertain the Writ Petition. 116. Electricity is one of the key drivers for rapid economic growth and poverty alleviation. The nation has set itself the target of providing access to all household in five years. Meeting the target of providing universal access is a daunting task requiring significant addition to generation capacity and expansion of the transmission and distribution network. In India the demand for power has been outstripping the growth of availability. Substantial peak and energy shortages prevail in the country. This is due to inadequacies in generation, transmission and distribution as well as inefficient use of electricity. Very high level of technical and commercial losses and lack of commercial approach in management of utilities has led to unsustainable financial operations. Cross-subsidies have risen to unsustainable levels. Inadequacies in distribution networks has been one of the major reasons for poor quality of supply. Electricity industry is capital-intensive having long gestation period. Resources of power generation are unevenly dispersed across the country. Electricity is a commodity that can be stored in the grid where demand and supply have to be continuously balanced. The widely distributed and rapidly increasing demand requirements of the country need to be met in an optimum manner. Inadequacy of generation has characterized power sector operation in India. The Government of India has initiated several reform measures to create a favourable environment for addition of new generating capacity in the country. The Act has put in place a highly liberal framework for generation. There is no requirement of licensing for generation. Captive generation has been freed from all controls. For Hydro Generation also the permission is made simpler. The Government of India has initiated several reform measures to create a favourable environment for addition of new generating capacity in the country. The Act has put in place a highly liberal framework for generation. There is no requirement of licensing for generation. Captive generation has been freed from all controls. For Hydro Generation also the permission is made simpler. The real challenge of reforms in the power sector lies in efficient management of the distribution sector. conducive business environment in terms of adequate returns and suitable traditional model with predetermined improvements in efficiency parameters in distribution business would be necessary for facilitating funding and attracting investments in distribution. Private Sector participation in distribution losses and improving the quality of service to the consumers. The Act enables competing generating companies and trading licensees, besides the area distribution licensees, to sell electricity to consumers when open access in distribution is introduced by the Stale Electricity Regulatory Commissions. 117. All the stake holders should realise the ground realities and the needs of the situation. By a stroke of pen, this gigantic problem faced by the country cannot be solved. It is a very ambitious project in the background of the Indian conditions. The initial period of five years set for providing access of electricity to all household is over. But at the same time the object has to be achieved in near future, if the nation has to proceed in the path of development and integrate its economy with the world economy to enable it to have a say in world affairs. Some sacrifice on the part of all the stake holders in this joint venture is necessary. Till enough power is generated in the country, which could meet all our requirements, in case of dire need, in public interest, the Government should have the power to intervene to tide over a situation, which is rightly described as "EXTRA-ORDINARY CIRCUMSTANCES". To that extent private interest should yield to public interest. 118. For the aforesaid reasons, we pass the following: ORDER 1) The impugned orders are upheld. 2) All the Writ Petitions are dismissed. 3) No costs.