*THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY +WRIT PETITION Nos.15313, 17344, 26971, 18746 & 27961 of 2007 and 4740 of 2008 % 14-5-2008 +WRIT PETITION Nos.15313 of 2007 # Andhra Pradesh State Road Transport Corporation, Mushirabad, Hyderabad, reptd., by its Executive Director (E & IT). … Petitioner Vs. $ Central Power Distribution Company of Andhra Pradesh Ltd., reptd., by its Managing Director, Singareni Bhavan, Red Hills, Hyderabad and four others. … Respondents ! Counsel for the petitioners: W.P. Nos.15313 & 18746 of 2007: Sri K.Gopal Chowdary. W.P.No.17344 of 2007: Sri M.P.Chandramouli. W.P.No.26971 & 27961 of 2007: Sri C.Kodandaram. W.P.No.4740 of 2008: Sri B.Adinarayana Rao. ^ Counsel for the respondents: Sri O.Manoher Reddy. <Gist: >Head Note: ? Cases referred: 1. 2008(3) SCALE 469 2. AIR 1955 SC 84 3. (1989) 2 SCC 557 4. (2007) 5 SCC 447 5. AIR 1961 SC 1152. 6. (2003) 6 SCC 401 7. AIR 1961 SC 1506 8. (2003) 2 SCC 107 9. (2004) 3 SCC 553 10) 2007 (6) ALD (NOC 105) IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY WEDNESDAY, THE FOURTEENTH DAY OF MAY, TWO THOUSAND EIGHT ONLY WRIT PETITION Nos.15313, 17344, 26971, 18746 & 27961 of 2007 and 4740 of 2008 WRIT PETITION Nos.15313 of 2007 Between: Andhra Pradesh State Road Transport Corporation, Mushirabad, Hyderabad, reptd., by its Executive Director (E & IT). … Petitioner And Central Power Distribution Company of Andhra Pradesh Ltd., reptd., by its Managing Director, Singareni Bhavan, Red Hills, Hyderabad and four others. … Respondents Counsel for the petitioners: W.P. Nos.15313 & 18746 of 2007: Sri K.Gopal Chowdary. W.P.No.17344 of 2007: Sri M.P.Chandramouli. W.P.No.26971 & 27961 of 2007: Sri C.Kodandaram. W.P.No.4740 of 2008: Sri B.Adinarayana Rao. Counsel for the respondents: Sri O.Manoher Reddy. This Court made the following: COMMON JUDGMENT:- In all these Writ Petitions, the common question viz., whether Clause 12 of Regulation 2 of 2006 and Appendix-3 to the said Regulations are applicable to the petitioners, arises for consideration. Hence, all these Writ Petitions are heard together and being disposed of by this common judgment. All the petitioners established non-conventional power generating plants and they hold separate Agreements for Wheeling/Wheeling- cum-Power Purchase, as the case may be. Such agreements were initially entered into with the A.P. State Electricity Board (for short “the APSEB”) and with the creation of A.P. Transmission Corporation (for short “the APTRANSCO”) under the provisions of the Andhra Pradesh Electricity Reform Act, 1998 (for short “the 1998 Act”), which came into force with effect from 29-7-1998, these Agreements were got transferred in the name of APTRANSCO, being the successor of the APSEB. Subsequently, with the creation of four distribution companies in the State, these Companies replaced APTRANSCO in respect of the Agreements concerning their respective jurisdictions. The present cases are concerned with “Banking” of the energy. The Clauses in the Agreements relating to “Banking” are almost identical. For convenience, Clause 1.1(ii) of Article 1 of the Agreement as amended on 30-11-2000 entered into with the petitioner in Writ Petition No.15313 of 2007 is referred to herein. It defined “Banking” as under: “1.1(ii). Banking means keeping in reserve, the delivered energy supplied to the Board, in any Billing Month(s), in excess of the energy required to be wheeled by the Board to the Scheduled Consumers in that month, with the purpose of wheeling such excess energy in any succeeding month(s) to the Scheduled Consumers, subject to the condition specified in Article 3 of this Agreement. Such excess energy is, hereafter called ‘Banked energy’.” Appendix to the amended Agreement dated 30-11-2000, which contains the amendments to the definition “Scheduled Consumers” and “Banking Arrangement”, is reproduced hereunder: Article No.Existing Amendment(shall be read in the place of existing Article) 1.1(xvi) Scheduled Consumers: means one or more High Tension consumers of the Board receiving power from the Board as detailed in the list at Scheduled.4 attached to this agreement, to whom the electrical energy from the Project is desired by the Company to be wheeled by the Board, and every such Scheduled Consumer shall be substantially owned and controlled by the same group as the Company.Explanation: Every such consumer shall be industrial unit located in the state of Andhra Pradesh receiving power from the Board at 11 KV or above. Scheduled Consumers: means the consumers of the APTRANSCO listed in Schedule 4 attached to this Agreement, receiving power from the APTRANSCO at a voltage of 11 Kilo volts (KV) and above; to whom wheeled energy is desired by the company to be wheeled by the APTRANSCO, as per the prior approval of the APTRANSCO.Explanation 1: If such Schedule Consumer is 100% owned by the company, then the Schedule consumer is captive consumer.Explanation 2: If such Schedule consumer is not the captive consumer, the wheeling is considered as third party sales.Explanation 3: The APERC authorized APTRANSCO for making changes in the list of Scheduled Consumers. If the developer wants any change in the list of scheduled consumers, during the term of the Agreement, he shall submit such a list to APTRANSCO and get approval. APTRANSCO implements such approval taking into system exigencies. However, only two (2) amendments per Tariff year to Schedule 4 of this Agreement shall be permitted in view of the work involved in billing.Explanation 4: Every such consumer shall be a H.T. Consumer located in the State of Andhra Pradesh receiving power from the APTRANSCO at 11 KV or above, and number of consumers is limited to five per MW. 3.18.6 Banking arrangement shall be valid for entire energy year. However such banked energy would be wheeled only between August to March of the succeeding year and any net banked energy not subject to wheeling in that year shall lapse. Banking arrangement shall be valid for entire energy year. However, such banked energy would be wheeled only between August to March of the succeeding year in regard to third party sale, and for all 12 months in case the energy is used for captive consumption, and any net banked energy not subject to wheeling in succeeding energy year shall lapse.Explanation: The energy year is from August to July of the succeeding year. The Electricity Act, 2003 (for short “the 2003 Act”), which came into force with effect from 10-6-2003, repealed the Indian Electricity Act, 1910; the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998, and several State Electricity Reform Acts. However, Section 185(3) of the said Act made provisions of State Electricity Reform Acts, including the A.P. Electricity Reform Act, 1998, which are not inconsistent with the provisions of the 2003 Act, applicable to their respective States. Purporting to exercise its power under sub-Section (2) of Section 42 of the said Act, the Andhra Pradesh Electricity Regulatory Commission (for short “the Commission”) has made regulations, vide: Regulation No.2 of 2005, whereby it introduced open access system subject to the various clauses contained therein. The arrangement pertaining to “Banking” under the existing Agreements has not been disturbed by the said regulation. However, the Commission framed Regulation No.2 of 2006 with the title “Interim Balancing and Settlement Code for Open Access Transactions”, wherein it sought to envisage a day-ahead wheeling schedule of energy on the basis of 15-minute time blocks, and monthly settlement of deviations, pending finalization of a comprehensive settlement system for the State pool under Availability Based Tariff (ABT) regime. Clause 12 of the said Regulations deals with “Banking”, which reads as under: “12. Banking: 12.1. No generators other than the Wind and Mini Hydel power generators shall be allowed the facility of banking the electricity generated by them: Provided that in the case of existing users of wheeling facility, the energy already banked as per the subsisting agreements as on the date of coming into force of this Regulation, shall be allowed to be wheeled as hitherto till the expiry of the balance period available for utilization of the banked energy: Provided, however, that in the case of generators whose cases are pending appeals in the Hon’ble High Court of Andhra Pradesh and/or the Hon’ble Supreme Court, this provision shall be applicable subject to the final decision of the High Court and/or the Supreme Court, as the case may be. 12.2. The banking facility to the Wind and Mini Hydel Power generators shall be subject to the conditions specified in Appendix-3”. Appendix-3 of the said Regulation contains terms and conditions for banking facility. Clause 2 (c) of the said Appendix reads thus: “ Drawals shall be permitted only during the 6-month period, from July to December. The banked energy remaining unutilized as on 31st December shall be treated as lapsed”. Purporting to give effect to the above reproduced Clause and the Appendix, the respondents denied the petitioners supply of energy either for their captive use or towards third party sales, as the case may be, which was banked with the respondents, with effect from 1-1-2007 on the ground that the banked energy, which was not utilized by the petitioners upto 31-12-2006 has got lapsed by operation of Clause 2(c) of Appendix-3. The long correspondence between the petitioners and the respondents having failed to settle the disputes, the petitioners filed the present Writ Petitions. The substance of the reliefs claimed by them in these Writ Petitions is that they are entitled to utilize the energy banked by them in terms of the respective Clauses in their Agreements between August and March of the succeeding year in regard to third party sale and during the entire Energy Year between August and July of the year preceding the year in which the energy was banked for captive consumption. The respondents resisted the reliefs claimed by the petitioners in the Writ Petitions. Though detailed counter-affidavits have been filed by the respondents, in short, their bone of contention is that in view of Regulation 2 of 2006, they are bound to implement the said Regulation and, hence, the petitioners, who admittedly failed to utilize the banked energy completely on or before 31-12-2006, are not entitled to claim the balance unutilized energy, which got automatically lapsed by operation of Clause 12 read with Appendix-3 of the said Regulation. At the hearing, Sri K.Gopal Choudary, learned counsel for the petitioners, advanced the following contentions: 1. The petitioners are not consumers of open access under the provisions of the 2003 Act and, hence, neither of the two Regulations, viz- Regulation 2 of 2005 or Regulation 2 of 2006, applies to the petitioners’ cases; 2. The petitioners’ right for banking and wheeling flows from the Agreements which provided for limited access for specific consumers and these Agreements are saved by the provisions of Section 185 of the 2003 Act; 3. Regulation 2 of 2006 issued by the Commission is an integrated one combining accounting with banking and without implementing the accounting part of the Regulation, the respondents cannot implement only the portion relating to the banking part of the agreement. 4. Alternatively, even if Regulation 2 of 2006 is made applicable, the cases of the petitioners are excluded by proviso two to Clause 12.1 of the said Regulation; and 5. Appendix-3 to Regulation 2 of 2006 enables the petitioners to consume the banked energy from July to December of the succeeding year and there is no justification to construe the said provision as limiting consumption only during the period of July to December of the year in which the energy is banked. Sri M.P.Chandramouli, Sri C.Kodanda Ram and Sri B.Adinarayana Rao, appearing for the petitioners in Writ Petition No. 17344 of 2007; Writ Petition Nos. 26971 & 27961 of 2007; and Writ Petition No.4740 of 2008 respectively, supported the contentions advanced by Sri K.Gopal Choudary and submitted that the respondents cannot take away the vested rights which are saved by the provisions of the 2003 Act and that, at any rate, Regulation 2 of 2006, the application of which is exempted in respect of the generating companies - whose cases are pending before the Supreme Court under second proviso to Clause 12.1 of the said Regulation by the Commission itself - cannot be applied to the petitioners and deny the banked energy to them. Sri O.Manohar Reddy, learned Standing Counsel for the respondents, opposing the contentions of the learned counsel for the petitioners, submitted that the Writ Petitions are not maintainable in view of Section 86(1)(f) of the 2003 Act, which provided for resolution of disputes by the State Commission. In support of this contention, he relied on the judgment of the Supreme Court in Gujarat Urja Vikash Nigam Vs. Essar Power. He further contended that the provisions of Section 185 do not save the Agreements held by the petitioners with the respondents in view of Section 174 of the said Act. The word “subject to final decision of the High Court and/or the Supreme Court” contained in the second proviso to Clause 12.1 of Regulation 2 of 2006, contends the counsel, shall not be construed as placing fetters on immediate implementation of the said Regulation, but the same shall be understood as the implementation of Regulation being made shall be subject to the outcome of the pending cases before the Supreme Court and the High Court. Let me now consider each of the contentions raised by the learned counsel for the petitioners. Re-Contentions 1 and 2: The provisions of the 2003 Act introduced many changes in generation, sale, transmission and distribution of power. In the present context, it is not necessary to discuss all those changes since the dispute is confined to the right of the generating companies to bank the energy generated by them and utilize the same through the distribution net work of the distribution licensees. It will, therefore, suffice to confine consideration to the said aspect only. Part VI of the 2003 Act deals with distribution of electricity. Section 42 described the duties of a distribution Licensee, which include the duty to develop and maintain an efficient, co-ordinated and economical distribution system by every licensee in his area of supply and to supply electricity in accordance with the provisions contained in that Act. It envisages introduction of open access in phases by the State Commission subject to such conditions, as may be specified within one year of the appointed day by it and determine the charges for wheeling having regard to the relevant factors including cross subsidies and other operational constraints. It provides for levy of surcharges and cross subsidies to open access users. The concept of open access to the distribution net work of the licensees is introduced for the first time in the 2003 Act. However, it is an admitted fact that banking and supply of power between the petitioners and the respondents is covered by separate agreements unconnected with the provisions of the 2003 Act. Agreements were entered into starting from 1995, (in some cases in the year 1998), when the 2003 Act was not even in contemplation. The Agreements with the petitioners were first entered into under the provisions of the 1948 Act and amendments were made after the advent of the 1998 Act. There can, therefore, be no doubt that the facility of banking and wheeling had been provided to the petitioners de hors the provisions of the 2003 Act and the Regulations made thereunder. As noted hereinabove, though the 2003 Act repealed the 1910 and the 1948 Acts and the Electricity Regulatory Commission Act, 1998, Section 185(2) (a) of the said Act provided, inter alia, that anything done or any action taken or any document or instrument executed or any direction given under the repealed laws shall, insofar as it is not inconsistent with the provisions of the Act, be deemed to have been done or taken under the corresponding provisions of the Act. The Agreements entered into with the petitioners, undoubtedly, fall within the phrases “document or instrument executed under the repealed laws” used in the said provision. Significantly, Section 185(5) reinforces the saving clause contained in sub-section (2) by mandating that the effect of repeal under Section 185 shall not be held to prejudice or affect the general application of Section 6 of the General Clauses Act, 1897. From a plain reading of the above mentioned provision, it is clear that unless the document or instrument executed under the repealed Act is inconsistent with the provisions of the 2003 Act, the agreements entered into by the petitioners for banking and wheeling are saved. Sri O.Manoher Reddy contended that under the 2003 Act there is a complete change with respect to making tariff regulation and determination of tariff. According to him, the fact that the Commission is vested with these powers under Part-VII, unlike such powers being vested in the SEBs and the Licensees which succeeded to the SEBs under the repealed Acts, shows that the agreements entered into by the erstwhile Board/Licensees with the petitioners are inconsistent with the provisions of the 2003 Act and, hence, sub-Sections (2) and (5) of Section 185 do not come to the rescue of the petitioners. He relied on Section 174 of the 2003 Act in this regard. I have carefully considered this submission of the learned Standing Counsel and not felt persuaded to accept the same. On a careful analysis of the provisions of the 2003 Act, I have not found any inconsistency with regard to the activity of wheeling and banking. Indeed, while there was no specific provision of open access under the repealed laws, a right has now been conferred on every consumer/generating company to make use of distribution network of the Licensees as of right, of course, subject to the Regulations made by the Commission. In respect of the banking, there is no specific statutory provision contained in the said Act. It is, therefore, not possible to accept the contention of the learned Standing Counsel that the provisions of the 2003 Act are incompatible with the banking and wheeling Agreements entered into by the erstwhile dispensation with the petitioners. That the Commission has been continuing with the policy of banking, even under the changed legal environment, is evident from Clause 12 of Regulation 2 of 2006, albeit with certain changes. The contention of the learned Standing Counsel is mainly based on the fact that the functions of tariff fixation and regulation are entrusted to the Commission. In my considered view, this change by itself cannot be treated as inconsistent between the provisions of the repealed Act and the present Act. More so, when the issue regarding Banking is not concerned wit tariff fixation or tariff regulation. According to Black’s Law Dictionary, the expression “inconsistent” means “lacking consistency” and “not compatible with”. As noticed earlier, the present enactment far from being incompatible with Banking, the Commission continued the policy of Banking even under this Act. Hence, the contention of the learned Standing Counsel that the Agreements held by the petitioners were not saved by the provisions of sub-Section (2) of Section 185 of the 2003 Act, cannot be accepted. In interpreting the provisions of the new enactments qua the rights vested under the repealed ones, the Courts have repeatedly held that unless the new enactment manifested an intention to destroy the rights and liabilities created by the repealed Act, such rights are saved notwithstanding the repeal of the earlier enactment. In State of Pubjab Vs. Mohar Singh the Supreme Court while disagreeing with the observations of Sulaiman,C.J, in Danmal Parshotamdas Vs. Baburam Chhote Lal - AIR 1936 Allahabad 3 (A) - that where there is a new law which not only repeals the old law, but is substituted in place of the old law, Section 6(e) of the General Clauses Act is not applicable, observed as under: “These observations could not undoubtedly rank higher than mere 'obiter dictum' for they were not at all necessary for purposes of the case, though undoubtedly they are entitled to great respect. In agreement with this dictum of Sulaiman, C. J. , the High Court of Punjab, in its judgment in the present case, has observed that where there is a simple repeal and the legislature has either not given its thought to the matter of prosecuting old offenders, or a provision dealing with that question has been inadvertently omitted, S. 6 of the General Clauses Act will undoubtedly be attracted. BUT no such inadvertence can be presumed where them has been a fresh legislation on the subject and if the new Act does not deal with the matter, it may be presumed that the legislature did not deem it fit to keep alive the liability incurred under the old Act. In our opinion the approach of the High Court to the question is not quite correct. Whenever there is a repeal of an enactment; the consequences laid down in S. 6 of the General Causes Act will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. THE line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an inention to destroy them. We cannot therefore subscribe to the broad proposition that S. 6 of the General Clauses Act is ruled out when there is report of an enactment followed by a fresh legislation. S. 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section. Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new law and the mere absence of a saving clause is by itself not material. It is in the light of these principles that we now proceed to examine the facts of the present case”. In Bansidhar Vs. State of Rajasthan, M.N.Venkatachalaiah,J, as he then was, speaking for the Constitution Bench, while expressing a similar view as in Mohar Singh (2 supra) held as under: “When there is a repeal of a statute accompanied by re-enactment of a law on the same subject, the provisions of the new enactment would have to be looked into not for the purpose of ascertaining whether the consequences envisaged by Sec. 6 of the General Clauses Act ensued or not - Sec. 6 would indeed be attracted unless the new legislation manifests a contrary intention but only for the purpose of determining whether the provisions in the new statute indicate a different intention. Referring to the way in which such incompatibility with the preservation of old rights and liabilities is to be ascertained this Court in State of Punjab v. Mohar Singh, (1955) 1 SCR 893 : (AIR 1955 SC 84) said: "Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new Law and the mere absence of a saving clause is by itself not material. The provisions of Sec. 6 of the General Clauses Act will apply to a case of repeal even if there is simultaneous enactment unless a contrary intention can be gathered from the new enactment. Of course,,. . the consequences laid down in Section 6 of, the Act will apply only when a statute or regulation having the force of a statute is actually repealed”. In Southern Petrochemical Industries Co. Ltd. Vs. Electricity Inspector & ET10 the Supreme Court while considering the effect of T.N. Tax on Consumption or Sale of Electricity Act, 2003, which repealed the Tamil Nadu Electricity Duty Act, 1939 and the Tamil Nadu Electricity (Taxation on Consumption) Act, 1962, held that exemption from tax is a vested right and such a right having been accrued or vested, the same can be taken away only by reason of a Statute and not otherwise