M/S SESA STERLITE LTD. versus ORISSA ELECTRICITY REGULATORY COMM. & ORS.

M/S SESA STERLITE LTD. versus ORISSA ELECTRICITY REGULATORY COMM. & ORS.

The status of 'deemed distribution licensee' by statutory notification merely exempts the developer from applying for a license but does not automatically entitle it to benefits that accrue to distribution licensees unless it supplies electricity to multiple consumers. A developer of a single-unit SEZ, supplying electricity only to itself, remains liable to pay Cross Subsidy Surcharge (CSS) to the area's Distribution Licensee and cannot avoid this liability merely by virtue of the notification conferring deemed status.

Parties
Appellant: M/S Sesa Sterlite Ltd.; Respondent: Orissa Electricity Regulatory Commission & Ors.
Jurisdiction
India
Judgment Date
25 April 2014
Procedural Posture
Civil Appeal / Final Judgment on Statutory Appeal Under Section 125 of the Electricity Act, 2003
Outcome
Appeal dismissed
Legal Topics
Cross Subsidy Surcharge (css), Deemed Distribution Licensee, Special Economic Zone Developer Status, Power Purchase Agreement Approval
Electricity Law Special Economic Zones Cross Subsidy Surcharge (css) Deemed Distribution Licensee Special Economic Zone Developer Status Power Purchase Agreement Approval

Case Brief

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Parties

M/S Sesa Sterlite Ltd.

Appellant

Orissa Electricity Regulatory Commission & Ors.

Respondent

Procedural Posture

Civil Appeal / Final Judgment on Statutory Appeal Under Section 125 of the Electricity Act, 2003

Legal Issues

  1. 1 Whether a developer of a notified SEZ, deemed as licensee, needs to apply to Electricity Regulatory Commission for a distribution license or is automatically deemed a distribution licensee by virtue of Section 14 of Electricity Act, 2003
  2. 2 Whether such developer is liable to pay Cross Subsidy Surcharge (CSS) to the area Distribution Licensee when supplying electricity only to itself

Ratio Decidendi

The status of 'deemed distribution licensee' by statutory notification merely exempts the developer from applying for a license but does not automatically entitle it to benefits that accrue to distribution licensees unless it supplies electricity to multiple consumers. A developer of a single-unit SEZ, supplying electricity only to itself, remains liable to pay Cross Subsidy Surcharge (CSS) to the area's Distribution Licensee and cannot avoid this liability merely by virtue of the notification conferring deemed status.

Court Disposition

Appeal dismissed

Orders

  • Appellant is liable to pay Cross Subsidy Surcharge (CSS) to WESCO.
  • No approval given to the Power Purchase Agreement (PPA) between the Appellant and Sterlite Energy Ltd.