The Supreme Court has ruled in favour of Jindal Steel and Power in its case against the Chhattisgarh State Electricity Regulatory Commission, clearing the way for the company to get its electricity distribution licence for supply to consumers at its industrial estate in Chhattisgarh.
Before the Electricity Act, 2003, came into force, JSPL had set up a captive power plant near its sponge iron plant at Raigarh. It also set up an industrial estate and, with permission from the state government, started supplying power to the industrial units that came up in the estate. After the Electricity Act came into effect, a fresh application for power supply had to be made. The Chhattisgarh State Electricity Board (CSEB) was against granting the licence to JSPL. However, the state electricity regulatory commission permitted JSPL to continue supplying power in the interest of consumers who had a long-term supply contract with JSPL, while also noting that CSEB could not explain why it opposed the distribution licence for a limited area when “CSEB was itself not in a position to supply power”. CSEB approached the appellate tribunal, which favoured JSPL, in May 2006.
CSEB went to the Supreme Court. JSPL did the same, aggrieved by some parts of the tribunal’s order. The apex court remanded the matter back to the appellate tribunal, which cancelled JSPL’s licence.
JSPL appealed against it, as did Tirumala Balaji Alloys Pvt Ltd, a power consumer that was affected by the order.
At the heart of the dispute was the meaning of “minimum supply area” under the Electricity Act. CSEB argued that JSPL could not be given a distribution licence because it wanted to supply only the industrial estate (and two other villages) and not the “minimum supply area” defined by the Act. The Supreme Court determined that it was sufficient if the area of distribution falls under the Municipal Corporation or a revenue district.
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