High Court upholds state grid claim on power

Private companies challenge to GO on power sale to Govt dismissed

High Court upholds state grid claim on power

In a major relief to the State Government that is striving to meet the power demands,  the division bench comprising Justice N Kumar and Justice Srinivase Gowda dismissed the petition challenging the Government order to power generating companies to mandatorily sell power to the State grid at a cost of Rs 5.50.

Challenging the two orders dated 17, December,2008 and 30 December,2008, petititoners GMR Energies Private Limited and others contended that the State has no powers to issue such an order. They had also argued that there is no extraordinary situation as claimed by the State to issue the order.

Citing the open access regime, which enables power generators to sell power to any consumer, the petitioners had stated that they were being paid Rs 8.85 per unit of power and the State’s order to sell power at lesser cost is not justified.

Balanced way

Rejecting the contention, the bench observed: “the intention of Section 11 is a direction to generators to supply power to meet the public demand and not for commercial purpose. It has to be read in a balanced way to meet public demand and interest.”

On the mention of open access, the bench observed: “Open access does not mean unbridled rights or absolute right to supply electricity by generating of their choice. It is done to promote competition among generating company to ensure cheaper power supply to the consumers. Such liberalisation has ensured sea of changes in telecom and aviation. Though the objectivity to avail electricity looks attractive. But on a close scrutiny, we find there is no substance.”

“We cannot forget that people can live without air travel and mobile, but it is not the same in the case of electricity. It is a basic need as the indiscriminate digging of borewells has dreid up water leading to growing demand for electricity,” the court further observed.

Citing inadequacies in distribution network as a reason for power supply shortage, the bench observed that all stakeholders should realise ground realities.

Emphasising the need for Government intervention, the Court said: “ Gigantic problems faced by the country cannot be solved by the stroke of a pen. Till there is a change in electricity generation, the government should have powers to interfere to that extent that private interest should yield to public interest.”

Further, the bench observed: “ If  there is a severe scarcity, the public at large especially the farmers, villagers and the BPL, working and the middle class cannot afford costly power.”

The national policy envisages an obligation to supply power for rural areas as it is a basic human need as food and clothing. Though the Act has ensured liberalisation, there are also provisions such as circumstances arising in public interest, the bench stated.  

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