ITC Limited v. Telangana Electricity Regulatory Commission Rep. by its Secretary
2026-02-02
NAGESH BHEEMAPAKA
body2026
DigiLaw.ai
ORDER : Nagesh Bheemapaka, J. Petitioner is stated to be a Company registered under the Companies Act, 2013 having several manufacturing units and branch offices, all over India. The present case relates to captive co-generation of electricity for captive use at its industrial unit at Sarapaka Village in Bhadradri - Kothagudem District. It is stated that the 1 st respondent Commission issued Regulation No.2 of 2018 pursuant to Section 86(1)(e) of the Electricity Act, 2003, providing for Renewable Power Purchase Obligations (RPPO) of distribution licensees, open access consumers and captive consumers of captive power plants to purchase renewable energy (solar and non-solar) or renewable energy certificates to the extent specified in the said Regulation. The 1st respondent suo moto initiated proceedings in O.P.No. 22 of 2023 by issuing public notice for determination of the compliance of Renewable Power Purchase Obligation of obligated entities for FY 2019-20 (including shortfall of FY 2018-19), FY 2020-21 (including shortfall of FY 2018-19 and FY 2019-20) and FY 2021-22 (including shortfall of FY 2018-19, 2019-20 and 2020-21) based upon the report of the 2nd Respondent (State Load Despatch Center for Telangana). 1.1. It is further contended that petitioner filed objections before the 1 st respondent and also appeared at the public hearing conducted by it and made oral submissions in support of its written objections. There is no RPPO obligation arising out of captive consumption from cogeneration from black liquor which is a renewable energy source. The 1 st respondent, without considering the case of petitioner, shown them as non-compliant in Annexure-V by its Order dated 27.03.2024. According to petitioner, in the absence of a speaking order with respect to their case, they could not have been held as non-compliant. 1.2. It is stated, aggrieved by the same, petitioner filed a Review Petition in R.P. No. 1 of 2024 in O.P.No. 22 of 2023 before the Electricity Regulatory Commission. The 1 st respondent, without considering the Review Petition in proper perspective, dismissed the same by its order dated 25.09.2024, impugned in this Writ Petition, without giving any cogent reasons. Petitioner therefore, approached this Court. 2.
The 1 st respondent, without considering the Review Petition in proper perspective, dismissed the same by its order dated 25.09.2024, impugned in this Writ Petition, without giving any cogent reasons. Petitioner therefore, approached this Court. 2. In the counter, the 1 st respondent states that petitioner’s statements are borne out from the official record only to the limited extent that Commission had notified initiation of proceedings by way of a public notice in O.P. No. 22 of 2023 and their name appeared in the statement uploaded on the website of this respondent indicating non-compliance of Renewable Power Purchase Obligation under the applicable regulations. It is admitted that petitioner submitted its objections and representations in response to the said public notice, which were placed before the Commission. The submissions relied upon by petitioner form part of the record and were duly considered and discussed by the Commission while passing the original order dated 27.03.2024. If petitioner was aggrieved by the consequences flowing from the original order dated 27.03.2024, including the act of placing petitioner in non-compliance list and directing payment of forbearance price as per RPPO framework, petitioner ought to have availed the statutory remedy of Appeal before the competent appellate authority under the Electricity Act, 2003. It is further pointed out that even in the present proceedings, petitioner has not clarified whether it is a non-obligated entity, whether it claims coverage under any pending litigation before any superior forum, or whether it has complied with the mandates under Regulation No. 2 of 2018 and other applicable regulations. Petitioner has also failed to demonstrate that it was wrongly placed under non-compliance category despite producing evidence. 2.1. It is also stated, it is a matter of record that the Commission passed a clarification order dated 27.05.2024, as referred to in paragraph 41 of the original order dated 27.03.2024. Petitioner’s allegation that clarification order automatically exempts it on the ground of pending litigation is denied. The said order does not specify or identify any particular entities to whom such benefit would apply, therefore, petitioner cannot unilaterally claim exemption from compliance with the RPPO trajectory under the original order.
Petitioner’s allegation that clarification order automatically exempts it on the ground of pending litigation is denied. The said order does not specify or identify any particular entities to whom such benefit would apply, therefore, petitioner cannot unilaterally claim exemption from compliance with the RPPO trajectory under the original order. It is also stated, petitioner’s claim of having received an e mail treating it as an exempted entity on account of proceedings before superior fora is neither within the knowledge of nor attributable to the answering respondent, and the Commission is neither concerned with nor privy to such communication. 2.2. It is specifically stated that the Commission conducted a hearing on 01.07.2024 pursuant to a duly issued notice, served the counter affidavit filed by respondent No. 2, namely TGSLDC, during the course of the hearing, and also considered the submissions advanced by petitioner. The review order impugned was thus passed after due consideration of the material on record. It is further emphasised that the scope of review available to the Commission is extremely limited, as the power of review is exercised under Section 94(1) of the Electricity Act, 2003 read with Order 47 Rule 1 of the Code of Civil Procedure, 1908. Respondent states that it is incorrect and surprising for petitioner to allege denial of opportunity to rebut the submissions of Respondent No. 2 when the record of proceedings, as extracted in the impugned order, clearly shows that petitioner sought specific reliefs without seeking liberty to file any rejoinder. 2.3. It is a settled principle that in a review petition, no relief contrary to the order under review can be granted by any authority vested with review powers. The Commission, having found that none of the statutory ingredients necessary to entertain a review under Order 47 Rule 1 CPC were satisfied, had no jurisdiction or leverage to interfere with or modify its original order dated 27.03.2024. Consequently, the review petition was rightly rejected, and the contentions raised therein were found to be untenable. It is stated, petitioner has engaged in litigation on irrelevant and untenable grounds by filing the present Writ Petition despite availability of an efficacious statutory Appeal under the Act and petitioner participated in both the original proceedings and the review proceedings before the Commission and its submissions were duly considered on both occasions. Hence, there is no violation of principles of natural justice. 2.4.
Hence, there is no violation of principles of natural justice. 2.4. Respondent No.1 refers in detail to the observations recorded in the original order dated 27.03.2024 in O.P. No. 22 of 2023, particularly with reference to RPPO compliance through cogeneration and Waste Heat Recovery plants. The submissions of various stakeholders, including Nava Limited, MS Agarwal Foundries Pvt. Ltd., ITC Ltd., My Home Industries Pvt. Ltd., Penna Cement Industries Limited, and India Cements Limited, were recorded in paragraphs 18 to 40 of the order. These submissions dealt with RPPO compliance for FY 2018-19, FY 2019-20, FY 2020-21, and FY 2021-22, references to Commission orders dated 09.03.2021 in O.P. No. 31 of 2020, 14.03.2022 in O.P. No. 20 of 2020, recognition or non- recognition of WHR by MNRE under TSERC Regulation No. 1 of 2018, computation of RPPO percentages including 6% obligations, captive cogeneration from fossil fuel and renewable sources such as black liquor, filings before the Hon’ble High Court of Telangana in W.P. Nos. 36730 of 2018 and 8330 of 2020, proceedings before the Hon’ble APTEL including Appeal No. 57 of 2009, OP No. 7 of 2016 before APERC, and pending adjudication on the status of WHRS plants. The Commission, after considering all submissions, recorded its view in paragraph 41 of the order that since petitions were pending before the Hon’ble High Court and the Hon’ble Appellate Tribunal for Electricity, the issues were sub judice and that a final decision would be taken based on the judgments of the said forums. 2.5. It is submitted, petitioner’s plant consumes power partly from coal and partly from black liquor. Separate consumption details from both fuel sources are mandatory to determine the extent of power generated from black liquor. This requires proper energy meters and authenticated meter readings. As no meters exist at the petitioner’s plant to record separate consumption from black liquor and fossil fuel, it is impossible to ascertain the exempted portion, if any, from RPPO. Therefore, despite the claim of cogeneration, the petitioner is not entitled to RPPO exemption until certified metering data is provided. 2.6. It is stated, petitioner’s cogeneration capacity has not been declared as renewable by any competent authority. TGNPDCL, TGSLDC and this respondent are not competent to declare renewable or cogeneration status. Such authority vests with the Ministry of Power, MNRE, or Telangana Renewable Energy Development Corporation.
2.6. It is stated, petitioner’s cogeneration capacity has not been declared as renewable by any competent authority. TGNPDCL, TGSLDC and this respondent are not competent to declare renewable or cogeneration status. Such authority vests with the Ministry of Power, MNRE, or Telangana Renewable Energy Development Corporation. In the absence of certification, this respondent could not treat petitioner’s generation as renewable or captive. Reliance is placed on the judgment in Writ Petition No. 20224 of 2004 (M/s Agri Gold Projects Limited), wherein it was held that NEDCAP is the competent authority to determine renewable energy status and APSERC cannot assume that role. The extract from the judgment clearly delineates jurisdiction between agencies. 2.7. Petitioner has not demonstrated any ingredient of review under Order 47 Rule 1 CPC. There are no substantial grounds for restoring the review petition or granting fresh opportunity. Interference is unwarranted. Further, it is stated, petitioner has an efficacious alternative statutory remedy before the Appellate Tribunal for Electricity under Section 111 of the Act against the original order dated 27.03.2024, errata dated 27.05.2024, and impugned order dated 25.09.2024. Petitioner avoided this remedy due to the prescribed filing fee of Rs.1,00,000/- and incidental fees of Rs.1,000/- to Rs.3,000/- for interlocutory applications and impleadments. Hence, the writ petition is liable to be dismissed. 3. In the counter of Respondent No.2, it is stated, TGSLDC issued the letter dated 21.05.2024 to petitioner in strict compliance with the order dated 27.03.2024 in O.P. No.22 of 2023, calling upon them to comply with RPPO requirements for the financial years 2018-19, 2019-20, 2020-21, and 2021- 22. Petitioner established an industrial unit engaged in manufacture of paperboards and for meeting its industrial power requirements, has set up a captive power plant with a total installed capacity of 172.187 MW, operating using coal and black liquor as fuel sources. Section 86(1)(e) of the Act mandates promotion of renewable sources of energy including cogeneration, authorises suitable measures for grid connectivity and sale of electricity, and empowers the State Electricity Regulatory Commission to specify the percentage of total electricity consumption to be procured from renewable energy sources. The Commission is vested with the power to determine and fix the minimum percentage of total consumption in the area of a distribution licensee that must be sourced from renewable energy. 3.1.
The Commission is vested with the power to determine and fix the minimum percentage of total consumption in the area of a distribution licensee that must be sourced from renewable energy. 3.1. The Commission, exercising powers under Sections 61, 66, 86(1)(e), and 181 of the Act, notified Renewable Power Purchase Obligation Regulation No.2 of 2018 on 30.04.2018 which mandates obligated entities to fulfil RPPO either through purchase of renewable energy or Renewable Energy Certificates (RECs). Clause 2.10 of the Regulation defines “Obligated Entity” to include distribution licensees, captive users, and open access consumers having a contracted demand of 1 MW and above consuming electricity from conventional fossil fuel-based generation. Clause 3.1 prescribes minimum RPPO percentages for FY 2018-19 to FY 2021-22, excluding hydro and small-hydel consumption, and Clause 3.6 provides that RECs issued under CERC Regulations, 2010 shall also qualify as RPPO compliance. Petitioner, being a grid-connected captive consumer, squarely falls within the definition of an obligated entity under TSERC RPPO Regulation No.2 of 2018 and is therefore, mandatorily required to fulfil RPPO targets as prescribed therein. 3.2. TGSLDC, as the State Agency, is required every year to prepare and submit RPPO compliance status reports of all obligated entities to the Regulatory Commission. As per the Commission’s instructions, TGSLDC invites comments from obligated entities on the draft RPPO compliance reports, considers such comments, and thereafter submits the final compliance reports to the Commission annually. The Commission initiated suo-motu proceedings titled “Suo-Moto determination of compliance of Renewable Power Purchase Obligation (RPPO) of Obligated Entities for FY 2019-20 (including shortfall of FY 2018-19), FY 2020-21 (including shortfall of FY 2018-19 and 2019-20), and FY 2021-22 (including shortfall of FY 2018-19, 2019-20 and 2020-21)” by registering O.P. No.22 of 2023. Pursuant to the above proceedings, the Commission issued public notice dated 30.08.2023 regarding RPPO compliance for FY 2018-19 to FY 2021-22 by publishing the same on the official website of TGERC. It is stated, vide letter dated 02.09.2023, the Commission directed TGSLDC to individually serve notices on all obligated entities through post or email to attend public hearing scheduled on 25.09.2023. Accordingly, TGSLDC served notices on 16.09.2023 to all obligated entities including the petitioner. Hence, the petitioner’s contention that no notice was served is categorically denied as false. 3.3. After receiving objections and suggestions, the Commission conducted public hearing on 25.09.2023 at its office.
Accordingly, TGSLDC served notices on 16.09.2023 to all obligated entities including the petitioner. Hence, the petitioner’s contention that no notice was served is categorically denied as false. 3.3. After receiving objections and suggestions, the Commission conducted public hearing on 25.09.2023 at its office. Upon considering the submissions, the Commission passed a detailed order dated 27.03.2024 in O.P. No.22 of 2023 determining RPPO compliance and shortfalls for FY 2018-19 to FY 2021-22. In Clause 70 of the order dated 27.03.2024, the Commission invoked Clauses 8.1 and 8.2 of Regulation No.2 of 2018. Clause 8.1 authorises the Commission to direct non- compliant obligated entities to deposit amounts equivalent to RPPO shortfall units at the forbearance price of Rs.1000/- per MWh into a separate fund maintained by the State Agency. Clause 8.2 read with Section 142 of the Electricity Act, 2003 empowers imposition of penalties. Accordingly, paragraphs 71 and 72 of the order directed deposit of shortfall charges within three months and imposed a penalty of Rs.5,000/- per day for default. Paragraphs 74 and 75 further provided for imposition of penalty at 10% of the forbearance price or Rs.1,00,000/-, whichever is lower. 3.4. In compliance with the Commission’s directions, TGSLDC issued notice dated 21.05.2024 to petitioner directing payment of RPPO shortfall charges for 1,34,255.97 MWh amounting to Rs.13,42,55,970/- and penalty of Rs.1,00,000/-. Petitioner failed to pay both the shortfall charges of Rs.13,42,55,970/- and the penalty of Rs.1,00,000/- till date. As per paragraph 72 of O.P. No.22 of 2023, failure to pay the amount within the stipulated period attracts a penalty of Rs.5,000/- per day. Accordingly, a reminder letter dated 14.06.2024 was issued to all defaulting obligated entities including the petitioner. Paragraphs 18 to 40 of O.P. No.22 of 2023 discuss submissions of various entities whose matters are pending before this Court and APTEL regarding RPPO compliance through cogeneration and WHR. Based on this, paragraph 41 of the order stated that the matter is sub judice. Subsequently, on 27.05.2024, the Commission issued an errata order clarifying that TSSLDC shall not collect amounts under Clause 8.1 or penalties under Clause 8.2 until disposal of cases by this Court and APTEL. 3.5. TGSLDC, by e mail dated 22.06.2024, informed that paragraph 41 of the order applies to petitioner as its case was also discussed in paragraphs 18 to 40 of O.P. No.22 of 2023.
3.5. TGSLDC, by e mail dated 22.06.2024, informed that paragraph 41 of the order applies to petitioner as its case was also discussed in paragraphs 18 to 40 of O.P. No.22 of 2023. Petitioner thereafter filed Review Petition No.1 of 2024 in O.P. No.22 of 2023 seeking review of the order dated 27.03.2024 imposing RPPO shortfall charges and penalties. TGERC passed the impugned order dated 25.09.2024 rejecting the review petition on the ground that no new evidence or sufficient grounds were made out to reconsider the original order. Petitioner thereafter filed Writ Petition No.35479 of 2024, which was dismissed as withdrawn with liberty to file fresh Writ Petition and again Writ Petition No. 36237 of 2024 was filed on 23.12.2024 seeking the same relief. 3.6. Petitioner claimed exemption on the ground that consumption was partly from coal and partly from black liquor and relied on O.P. No.31 of 2020 dated 09.03.2021. In reply, it is stated that Regulation No.2 of 2018 and National Tariff Policy, 2016 do not exempt cogeneration from non-renewable sources. Petitioner was informed of this position through letters dated 29.03.2019 and 12.08.2020. Detailed proceedings relating to O.P. No.31 of 2020, inspections, meetings held on 19.01.2021, 18.01.2021, and directions dated 09.03.2021 were narrated. Petitioner failed to submit segregated consumption details of coal and black liquor and claimed entire generation as cogeneration, rendering RPPO computation impossible. Hence, exemption could not be granted. The allegation of absence of a speaking order is denied. The RPPO determination followed multiple inspections, meetings, public hearings, reports dated 05.08.2023, and public notice dated 30.08.2023 culminating in the order dated 27.03.2024. It is stated, TGSLDC informed both the Commission and petitioner on 10.09.2024 and 12.09.2024 respectively that no separate meters exist at petitioner’s plant to record black liquor consumption, making exemption determination impossible. On this basis, the review petition was rejected on 25.09.2024. 4. In the rejoinder, petitioner asserts its statutory right to seek review under section 94(f) of the Electricity Act, 2003 read with Order 47 Rule 1 CPC. The review was filed on grounds of error apparent, grave miscarriage of justice, and in the interest of justice. The contention that only an appeal would lie is denied as misconceived and impermissible. 5. Heard Sri K. Gopal Chowdary, learned Senior Cousnel on behalf of M/s CKR Associates, learned counsel for petitioner. 6.
The review was filed on grounds of error apparent, grave miscarriage of justice, and in the interest of justice. The contention that only an appeal would lie is denied as misconceived and impermissible. 5. Heard Sri K. Gopal Chowdary, learned Senior Cousnel on behalf of M/s CKR Associates, learned counsel for petitioner. 6. Learned Standing Counsel for Respondents Sri N. Sreedhar Reddy, summing up the averments in counter- affidavits, contended that Review Petition is filed before the 1 st respondent under Section 94 of the Act and the Commission can review its order only on the grounds mentioned under Order 47 Rule 1 CPC.; petitioner has not made out any case for review and therefore, the Commission has rightly dismissed R.P.No. 1 of 2024 in O.P.No. 22 of 2023 by Order dated 25.09.2024. It is further contended that under Section 111 of the Act, there is an alternative statutory remedy of Appeal before the Appellate Tribunal for Electricity (APTEL). Section 111 of the Act reads that “any person aggrieved by an order made by an adjudicating officer under this Act (except under Section 127) or an order made by the Appropriate Commission under this Act may prefer an appeal to the Appellate Tribunal for Electricity”. Therefore contends that the order passed under Section 94 of the Act is also appealable and hence the Writ Petition is not maintainable. He further contends that this Court and the Hon’ble Supreme Court have held that when there is an effective alternative statutory remedy of appeal, the Courts should not entertain and interfere with the orders and prayed to dismiss the Writ Petition. 7. This Court has given anxious consideration to the submissions made by petitioner and respondents. Respondent Commission by its order dated 27.03.2024 in O.P. No. 22 of 2023 held petitioner as non-compliant of RPPO obligations. As against the said order, petitioner filed R.P. No. 1 of 2024 in O.P. No. 22 of 2023. The Review Petition was also rejected by Order dated 25.09.2024 and the original order and the Review Order are against petitioner. As there is an alternative remedy of Appeal provided to petitioner under Section 111 of the 2003 Act, this Court sees no reason to interfere with the impugned order and to entertain the writ petition, bypassing the remedy of Appeal available to them.
As there is an alternative remedy of Appeal provided to petitioner under Section 111 of the 2003 Act, this Court sees no reason to interfere with the impugned order and to entertain the writ petition, bypassing the remedy of Appeal available to them. No grounds are made out by petitioner for interference under Article 226 of the Constitution. In the light of the above, the judgment relied on by the learned Senior Counsel in Maji Mohan Kanwar v. The State of Rajasthan , AIR 1967 Rajasthan 264 is of no use to the case on hand. The Writ Petition is therefore, liable to be dismissed. 8. Accordingly, the Writ Petition is dismissed. No costs. 9. Consequently, the miscellaneous Applications, if any shall stand closed.