THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.Nos.11317/06, 15546/06, 26441/06, 26442/06, 500/07, 736/07, 20865/09 & 20916/09 COMMON ORDER: In all these writ petitions, common questions of law and fact arise for consideration, therefore they are being disposed of by this common order. All the writ petitions are filed being aggrieved by the demand raised by the respective Power Distribution Companies during the period from December 1997 to March 2004 in view of the judgment rendered by the Apex Court in A. P. GAS POWER CORPORATION LTD. v. A. P. STATE REGULATORY COMMISSION[1] holding that licence is required by the APGPCL for supply of power to sister concerns of the participating industries etc. Paragraph 57 of the said judgment reads as under: “We, therefore, hold that no licence is necessary for utilization of energy generated by A.P. GPCL and utilized by the participating industries and the concerns holding share of A.P. GPCL transferred to them by the participating industries to the extent of value of the shares so transferred. It would, however, be necessary to have a licence for supply of energy to the sister concerns. In the result, the appeals are partly allowed and the judgment and order passed by the High Court stands modified in the manner indicated above. Parties to bear their own costs”. In brief, it is the case of the petitioners that the sole inspiration for issuing the impugned demand notices by the respondents is the findings recorded by the Apex Court in the above judgment. A demand notice issued by the respondents reads as under: “Your attention is invited to the judgment of the Supreme Court in APGPCL v. A.P.TRANSCO reported in 2004 SC 3090. In view of this judgment, we are advised that the supplies made to you by APGPCL are illegal, as APGPCL had no licence during the relevant period. The power supplied will have to be treated as power supplied by A.P. TRANSCO particularly as the power fed into the common grid by APGPCL looses its identity and no longer can be treated as power supplied by APGPCL. We are therefore advised that the earlier billing for such power is vitiated by a ‘mistake of law’, which has been discovered only when the Supreme Court finally decided the issue. You are therefore requested to make the payment for the differential amount of Rs.4,24,12,624.00 (Rupees four crores twenty four lakhs twelve thousand six hundred and twenty four only) as per the bills within fortnight. It may be noted that wheeling charges and the amount payable by the A.P.TRANSCO to APGPCL is being deducted”. It appears, till 1992, the APSEB was the only power generator in the State of Andhra Pradesh. Thereafter, private entrepreneurs were encouraged and allowed for power generation. Thus, the Government of A.P. and the Andhra Pradesh Electricity Board mooted the idea of setting up of a 3 X 33 MW gas based combined cycle power station at Vijjeswaram for establishing a generating station which required high amount of investment, hence they decided to invite private participation in the venture which attracted some of the heavy industries to the proposal. They entered into a Memorandum of Understanding (MOU-1) on 17.10.1988 and another MOU on 19.4.1997, according to which, the Andhra Pradesh State Electricity Board (for short ‘APSEB') had to have 26% share in the new company to come up viz. APGPCL, and the rest of the participating industries were to have different percentage of shares and the power so generated by the company was to be shared proportionately amongst the share holding participating industries and their sister concerns. The Central Electricity authority also acceded to the request made to treat APGPCL as collective captive power generation company. According to the learned senior counsel Sri S.Ravi and Sri C.Kodandaram, the energy produced is nothing but goods and the APGPCL was the owner of the goods and the petitioners have purchased the same and APTRANSCO facilitated for transmission of energy through its lines after collecting necessary wheeling charges etc. The energy was supplied to participating industries and to their sister concerns. There was no necessity of holding a licence for generating electricity. The electricity produced by APGPCL was supplied to participating industries and to their sister concerns. The power generated, of course, cannot be stored and it has to be necessarily transmitted and utilized at the end point. The petitioners/sister concerns of the participating industries have also purchased the energy from APGPCL between 1997 till the advent of Electricity Act, 2003. Therefore, whether APGPCL has any licence or no licence, the question of making the present demand purported to be towards arrears of electricity consumed by sister concerns does not arise. If there is any illegal transmission of energy by APGPCL, at the most the APGPCL is liable for penalty etc., but the petitioners have nothing to do with the demand raised by APTRANSCO. Now in view of the decision rendered by the Apex Court in A. P. GAS POWER CORPORATION LTD. v. A. P. STATE REGULATORY COMMISSION (1 supra), the APGPCL was required to have a licence for supply of power to sister concerns during 1.9.1999 to 2003. It is also the contention of the petitioners that the Distribution Companies cannot set up title for the energy (goods) produced by APGPCL and supplied to the petitioners (sister concerns). The Distribution Companies played role of a Bailor i.e. the person delivering the goods and the sister concerns are the Bailees, the persons to whom the goods were delivered. Whereas the Distribution Companies are claiming to be the owners of the goods and therefore, they are entitled to collect the differential rate under the impugned demands. Absolutely, there is no title vested, of the goods in the Distribution Companies. The Distribution Companies transmitted goods to the petitioners produced by APGPCL. Thus, the role of APGPCL, Distribution Companies, petitioners is that of owner, bailor and bailee respectively. Even assuming that licence is required by APGPCL for supply of goods (energy) to the petitioners, petitioners cannot be punished for the acts and omissions of APGPCL. Further, though the sister concerns were not parties to the Memorandum of Understanding between APGPCL and Distribution Companies, in the very memorandum of understanding it was explained that the participating industries means inclusive of sister concerns. In fact, when the dispute was pending before A.P. Regulatory Authority, APTRANSCO had come forwarded to say that there was no necessity of holding any licence by the generating companies (APGPCL) for supply of energy to sister concerns of the participating industries. Having said so, they have raised the present demand only on the basis of findings recorded by the Supreme Court. In this regard, the learned counsel Sri C.R.Sridharan, appearing for some of the petitioners relied upon the judgments in SREENIVASA GENERAL TRADERS VS. STATE OF ANDHRA PRADESH[2], GOODYEAR INDIA LIMITED VS. STATE OF HARYANA[3] and MOHINDER SINGH GILL v. THE CHIEF ELECTION COMMISSIONER, NEW DELHI[4]. In SREENIVASA GENERAL TRADERS VS. STATE OF ANDHRA PRADESH (2 supra), it was held the power of any legislature to levy a fee is conditioned by the fact that it must be "by and large'' a quid pro quo for the services rendered. However, correlation ship between the levy and the services rendered expected is one of general character and not of mathematical exactitude. All that requires is that there should be a "reasonable relationship'' between the levy of the fee and the services rendered. It is stated that in the case on hand, there is no reasonable relationship between the levy of the fee and the services rendered, if any, by the APTRANSCO in raising the present demand. Further, the learned counsel had drawn attention of the Court to the judgment in GOODYEAR INDIA LIMITED v. STATE OF HARYANA (3 supra), wherein at paragraph 22, it was held as under: “On behalf of the assessee, Mr. Rajaram Agarwala, however, further contended that the ratio of Kandaswarni's case (AIR 1975 SC 1871) (supra) to which Mr. Tewatia referred, must be understood in the light of the question involved in that case. The said decision of this Court was concerned with the limited point as to whether the Madras High Court was right in observing "whether one could say that the sale which is exempted is liable to tax and then assume that because of exemption, the tax is not payable". This Court held that the language of S. 7a of the said Act was far from clear as to its intention and did not concern with the identification of the taxing event. Furthermore, it has to be borne in mind, as emphasised by Mr. Agarwala, that if at all the taxing event was spelt out, it was on the assumption that the goods in question were generally taxable and these were to be put to tax under S. 7a of the Tamil Nadu Act, if these came to be purchased without payment of' tax and then sought to be dealt with in any manner as to escape payment of State. sales/ purchase tax within the State. and submitted that the Supreme Court had laid law to say that APGPCL should have a licence for supply of energy to the sister concerns. The intention was clear, but did not concern with the identification of the liability of differential rate as contemplated in the demand notice. In MOHINDER SINGH GILL’s case (4 supra), wherein it was held that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned therein and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, gets validated by additional grounds later brought out. Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Orders are not like old wine becoming better as they grow older. In the case on hand also, the judgment of the Apex Court relied upon by the respondents, for the purpose of issuing demand notices, there was no liability fastened on the sister concerns for payment of differential rate for the energy supplied by APGPCL to be collected by APTRANSCO. There is no provision under law permitting the respondents from raising such demands. No show cause notice was issued to the petitioners, before issuing the present demand notice. The APTRANSCO facilitated wheeling of energy, for which charges were already collected. It appears that some of the petitioners have in fact filed objections to the demands raised by the respondents, but nothing was taken into consideration and no reasoned order was passed. Under the Memorandum of Understanding entered into between APTRANSCO and APGPCL, the sister concerns were entitled for supply of energy by APGPCL, without a licence. Further, the judgment of the Apex Court was delivered on 23.3.2004 and the present demands were raised on 16.5.2006 i.e. after more than two years i.e. beyond limitation period as prescribed under Section 56(2) of 2003 Act. It is a fact that the generating company i.e. APGPCL need not have any licence for supply of energy so generated to the participating industries. The APGPCL was exempted from holding any licence in view of provisions contained in Section 26-A of Electricity Supply Act, 1948. Further, there was consent of the State Government in compliance with the provisions of Section 43 A (1) (c) of Supply Act, 1948. Thus, APGPCL was not required to have any licence in view of Section 14 of A.P. Electricity Reforms Act. Further, the licence was granted on certain conditions as required under Section 14(4) of A.P. Electricity Reforms Act. In this regard, it may be necessary to notice paragraph No.22 of the judgment of the Apex Court in A. P. GAS POWER CORPORATION LTD. v. A. P. STATE REGULATORY COMMISSION (1 supra), which reads as under: “On consideration of the rival submissions made by the learned counsel for the respective parties, in our view, the main question which obviously falls for consideration in these appeals is as to whether the APGPCL is required to take a licence under the law for utilization/sale or supply of power generated by it to the participating industries, their sister concern and the companies to whom shares of APGPCL have been transferred by the participating industries. The undisputed position under the law, as also found by the Regulatory Commission is that no licence is required for generation of electricity. The electricity generated is to be consumed, sold, distributed or supplied since there is no way to store it. According to the appellants, the generation of electricity by APGPCL is for captive consumption. That is to say, for own consumption of the generating company, hence no licence was required. In the alternative, the appellant's case is that even if any licence is required, it was exempted in view of the provisions contained under section 26-A of the Supply Act, 1948 and in any case there was consent of the State government in compliance with the provision of section 43 A (1) (c) of the Supply Act, 1948. That being so, the APGPCL was not required to have any licence in view of section 14 of the Reforms Act 1998. The finding of the Commission, it is submitted on behalf of the appellants, that section 43 a (1) (c) stood dis-applied by virtue of section 56 (3) (vi) read with section 21 (4) of the reforms Act, 1998, is erroneous.” It is also further seen that Section 56(1) and (2) of 2003 Act bars demanding arrears beyond two years period unless and until arrears are mentioned in each and every bill received by the petitioners every month. The Distribution Companies never made such demand till the impugned order was served. Along with the impugned order, the purported revised bills were enclosed for each and every month showing the differential rate and the amounts therein. Otherwise, there is no notice of any kind issued by the Distribution Companies seeking to collect as arrears of energy supplied (differential rates) at any point of time before issuing the demand notice. This position is not disputed by the APTRANSCO. According to the learned counsel for respondents Sri S.V.Bhatt, admittedly, Distribution Companies are licensees. The licence is for supply of energy in an area specified or the area of transmission. The APGPCL was exempted from holding a licence for generation of power and supply of energy to its participating industries, but not to the sister concerns. That is the reason, the Apex Court held that APGPCL should have a licence for supply of energy to the sister concerns of the participating industries. Even assuming that the energy is generated by APGPCL, insofar as selling of energy to the sister concerns, it must be deemed that the licence for supply of energy was with the Distribution Companies. Thus, if the APGPCL was required to have a licence to supply energy to the sister concerns and since such licence was not held by it, it must be deemed that it was supplied by Distribution Companies. Since this very question was in the process of adjudication in the earlier round of litigation and the matter was stayed at various levels till the Apex Court decided the matter, it was not clear as to collection of arrears of differential rates of electricity supplied by APGPCL to the sister concerns. Therefore, there is no meaning in saying that the judgment of the Supreme Court has not made any declaration that the petitioners are liable to pay difference of rates or the Distribution Companies are entitled to recover the same. The judgment of the Apex Court was not on an academic question, it was to decide as to whether the generating companies, other than Distribution Companies, should have licence for supply of energy to the sister concerns or not. Once this question is decided affirmatively that APGPCL should have a licence to supply energy to the sister concerns and admittedly APGPCL had no licence, the only course left to the Distribution Companies is to issue the impugned demand. Therefore, there was no necessity of issuing a prior notice or a show cause notice asking the sister concerns as to why difference of rates should not be collected (i.e. rates at which Distribution Companies supplied energy at that point of time after deducting charges collected by APGPCL apart from wheeling and other charges collected by Distribution Companies) does not arise. For example, the electricity per unit sold by APGPCL was Rs.2/- to the sister concerns, whereas the energy supplied by the licensees (Distribution Companies) to the private industries was Rs.3/-. Thus, the difference of amount liable to be collected as arrears by the Distribution Companies is Rs.1/- per unit. This amount is sought to be collected under the demand notice. Further, it cannot be said that the judgment of the Supreme Court has only prospective effect and not retrospective effect. Once the law is declared by the Supreme Court while interpreting a particular provision in a particular manner, it must be deemed that it was available in the same shape and construed to be the same even as on the date of making of the law. Therefore, the question of prospective operation of the law declared by the Supreme Court does not arise. Insofar as limitation under Section 56(2) of the Electricity Act, 2003 was concerned, the learned counsel stated that it has no retrospective effect and the provisions of Act 2003 cannot be applied to the demands made or arisen prior to the enactment of Act 2003. In fact, the liability fixed is under A.P. Electricity Reforms Act, 1998. Therefore, Section 56(2) of Electricity Act, 2003 has no help to the petitioners. The energy supplied to the sister concerns also amounts to supply or sale within the area of transmission by a licensee in the area. The Distribution Companies are alone licensees, therefore they are entitled to collect arrears of differential rates. The judgment rendered in SREENIVASA GENERAL TRADERS v. STATE OF ANDHRA PRADESH (2 supra) has no application to the present case. The theory of law of Bailment also has no application to the facts herein. Mrs.Jyothi Eshwar Gogineni, appearing for Respondent- APTRANSCO in some of the Writ Petitions argued in the same lines as that of Sri S.V.Bhatt. The learned senior counsel Sri S.Ravi, appearing for APGPCL, however, supported the case of the petitioners. At the outset, it may be noticed that the learned counsel on either side have drawn attention of various provisions of law under Indian Electricity Act, 1910, A.P Electricity Reforms Act, 1998 and Electricity Act, 2003, but strictly speaking, there is no necessity of quoting or repeating them in view of the fact that the real question that arises for consideration in these cases is whether the Distribution Companies are entitled to raise demand for the purported arrears of difference of rates of electricity supplied by APGPCL to the sister concerns of the participating industries in view of the judgment of the Apex Court in A. P. GAS POWER CORPORATION LTD. v. A. P. STATE REGULATORY COMMISSION (1 supra). The APGPCL was producing electricity and APTRANSCO permitted the APGPCL to transmit energy through its infrastructure (lines) by collecting necessary wheeling and other charges. In view of the judgment of the Supreme Court, the energy sold to participating industries was permitted. However, for the purpose of sale of energy to the sister concerns, in view of the judgment of the Supreme Court, it was construed that APGPCL should have a licence for selling energy to the sister concerns. There is no dispute to this extent. However, it is the case of the Respondent- APTRANSCO that under A.P. Electricity Reforms Act, 1998, the APTRANSCO alone is the licensee i.e. licensee in an area or area of transmission as per Section 2(a) of the said Act, which reads as under: “(a) Area of transmission” means the area within which the holder of a transmission licence is for the time being authorized by licence to transmit energy in accordance with the conditions prescribed”. Section 2(d) and (e) also defines licence and licensee respectively. Section 2(n) defines supply licence, which reads as under: “(d) ‘licence’ means a licence granted under Section 15 of the Act. (e) ‘licensee’ or ‘licence holder’ means a person licensed under Section 14 of the Act to transmit or supply energy including APTRANSCO. (n) ‘supply licence’ means a licence under sub-section (1)(b) of Section 15. Section 11 deals with functions of the Commission. Section 11(c) and (e) reads as under: “(c) to issue licences in accordance with the provisions of this Act and determine the conditions to be included in the licences; (d) …………………….. (e) to regulate the purchase, distribution, supply and utilization of electricity, the quality of service, the tariff and charges payable keeping in view both the interest of the consumer as well as the consideration that the supply and distribution cannot be maintained unless the charges for the electricity supplied are adequately levied and duly collected.” The constitution and functions of A.P.TRANSCO is dealt with in Section 13, which reads as under: 13. Constitution and functions of the APTRANSCO (1) Not later than sixty days of the Act coming into force the State Government shall constitute APTRANSCO to be incorporated and organised under the provisions of the Companies Act, 1956 (Central Act 1 of 1956) as the Transmission Corporation of Andhra Pradesh Limited, with the principal objects of engaging in the business of procurement, transmission and supply of electric energy. (2) Subject to the powers of the State Government under Section 12, the APTRANSCO established by the State Government in terms of sub-section (1) shall be the principal company to undertake all planning and co-ordination in regard to transmission; undertaking the works connected with transmission, determining the electricity requirements in the State in co-ordination with the Generating companies, State Government, the Commission, the Regional Electricity Boards, and the Central Electricity Authority; the operation of the power system. (3) APTRANSCO shall own the extra high voltage transmission system, shall be responsible for the transmission system operation and shall operate the power system in an efficient manner. (4) APTRANSCO shall undertake the functions specified in this Section and such other functions as may be assigned to it by the licence to be granted to it by the Commission under this Act. (5) Upon the grant of licence to the APTRANSCO under clause (a) of sub-section (1) of Section 15 of this Act, the APTRANSCO shall discharge such powers and perform such duties and functions of the Andhra Pradesh State Electricity Board including those under the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 or the rules framed thereunder as the Commission may specify in the licence audit shall be the statutory obligation of the APTRANSCO to undertake and duly discharge the powers, duties and functions so assigned. (6) Subject to the provisions of sub-sections (1) and (2) and to the overall supervision and control of the APTRANSCO a number of subsidiary or associated transmission companies may be established in the State and the Commission may grant licences under the terms of this Act to such transmission companies, in consultation with the APTRANSCO.” Section 14 deals with licensing and transmission and supply. (1) No person, other than those authorised to do so by licence or by virtue of exemption under this Act or authorised to or exempted by any other authority under the Electricity (Supply) Act, 1948, shall engage in the State in the