WP/13601/2019 of MS Agarwal Foundries Pvt. Ltd. Vs The TS TRANSCO on 30 December 2020

1. The Southern Power [Distribution Company ][Ltd ][of ][Telangana ]9tate, [Mint]CompounA, Hyderabad, [Rep. ][by ][its Chairman-and ][lvlanaging ][Director']CompounA, Hyderabad, [Rep. ][by ][its Chairman-and ][lvlanaging ][Director']

z. irre errieiberierat Mtii'agJ[itiCi"A [nACl, rsSeoCl,-Co-rporate ][Office, ][t\4int]Compound, HYderabad.Compound, HYderabad.

Compound, HYderabad.g ihe Srp"rihiehting Engineer, operation, Medak, TSSPD-CL, Medak [District']

+. rne sehiornccoun-ts officer, [TSSPDCL' ][Medak, Medak District']

...Petitioners/ResPonde [nts]

AND

It4S Aoarwal Foundries, Reqd. [Office, ][Rama ][Towards, ][2nd ][Floor,.5-4-83' ][Mahatma]Ci"oi,l ni,rO, s""unoerbuaO] [Rep. by its Managing Director, Pramod ][Agaruval']

Petition under section [151 CPC ][praying ][that ][in ][the ][circumstances stated ][in]the affidavit filed [in support of ][the ][petition, ][the ][High ][court ][may be pleased ][to ][vacate]the interim orders dated [20-06-2019 in ][W.P. ][No.12263 ][of ][2019 and dismiss ][the ][writ]petition.

WRIT PETITION NO: 12275 [OF ][2019]

Between:

Aoarwal Foundries. Reqd. office at [Rama Towards, ][2nd ][Floor, ][5-4-83, ][Ivlahatma]CEnOfri noaO, Secuhderibad, [Rep. by its Proprietor, Pramod ][Agaruval. ]

...pETtTlONER

AND

1. The Southern Power [Distribution Company ][Ltd of ][Telangana State, ][Mint]Comoound. Hvderabad, Rep. bv its Chairman [and [\/anaging ][Director.]Comoound. Hvderabad, Rep. bv its Chairman [and [\/anaging ][Director.]z. ftrJ bfriet Gerierat [1t/an'agei, ][(lPC and ][RAC), ][TSSPDCL, Corporate ][Office' ][Mint]Compound, Hyderabad.Compound, Hyderabad.

S. ihe SuperihtehOing Engineer, [Operation, ][Medchal, ][TSSPDC^1, ][[Vedchal District.]

4. The SehiorAccounls [OIficer, TSSPDCL, ][lt4edchal, ][IVledchal ][District]

...RESPONDENTS

Petition under Article [226 ]of [the ][constitution ][of ][lndia ][praying ][that ][in ][the]circumstances stated in the affidavit [filed therewith, the High Court ][may be pleased ][to]issue a writ in the nature of a writ [of ][Mandamus ][or ][any ][other ][appropriate ][writ,]direction, order or orders [declaring ][the ][action ][of ][the ][respondents in levying ][Deviation]charges for drawl/over drawl [power ][when ][grid ][frequency ][is ][below ][49.85 ][for ][the]months of January-2o19 to [l\/ay ][2019 ][as wholly arbitrary, illegal, without jurisdiction,]offending the [principles ]of [natural ][justice and void and ][consequently ][direct ][the]respondents either to repay or [adjust ][the amount ][in ][the ][further ][bills.]lA NO: 1 OF 2019

Petition under section ['151 ][CPC ][praying ][that ][in ][the circumstances stated ][in the]affidavit filed in support [of ][the ][petition, ][the ][High ][court ][may ][be ][pleased ][to ][direct ][the]respondents not to levy and collect [any ][deviation ][charges ][from the ][petitioner.]lA NO: 2 OF 2019Between:

1. The Southern Power Distribution [Company ][Ltd of ][Telangana State, ][Mint]Compound, Hyderabad, Rep. by [its Chairman and liilanaging ][Director.--.]Compound, Hyderabad, Rep. by [its Chairman and liilanaging ][Director.--.]2. The bhief Gerieral lvlanagei, [(lPC ][and RAC), TSSPDCL, Corporate Office, ][tvlint]Compound, Hyderabad.Compound, Hyderabad.

3. The Superihtehding Engineer, [Operation, ][IVedchal, ][TSSPDC_1, ][Medchal ][District.]

4. The SehiorAccouri'ts Officer, [TSSPDCL, Medchal, ][IVedchal ][District]

...PetitioneriResPondents

AND

Aganaal Foundries, Regd. Office at [Rama Towards, ][2nd ][Floor, 5-4-83, ][lvlahatma]G"andhi Road, Secunderabad, Rep. [by its Proprietor, ][Pramod ][Aganrual.]

...Respondents/Petitioner

Petition under Section 151 CPC [praying ]that in the [circumstances stated ][in the]affidavit filed in support of the [petition, ]the High [Court may be pleased ][to ][vacate ][the]

interim orders dated 20-06-2019 in W.P.No.12275 of 2019 and dismiss the writpetition.petition.

WRIT PETITION NO: 13601 OF 2b19

Between:

IVS Aganval Foundries Pvt. Ltd., Regd. Office, Rama Towards, 2nd Floor, 5-4-83,[\,4ahatma Gandhi Road, Secunderabad, Rep. by its Ir,4anaging Director, PramodAganrval.[\,4ahatma Gandhi Road, Secunderabad, Rep. by its Ir,4anaging Director, PramodAganrval.

,,.PETITIONER

AND

1. The TS TRANSCO, Rep. by its Chairman and lvlanaging Director, VidyutSoudha, Hyderabad.Soudha, Hyderabad.2.The Southern Power Distribution Company Ltd, of Telangana State, It/lintCompound, Hyderabad, Rep. by its Chairman and Managing Director.Compound, Hyderabad, Rep. by its Chairman and Managing Director.

The Chief Engineer, SLDC, TS TRANSCO, Vidyut Soudha, Hyderabad.4.The Chief General tt/anager,(lPC and RAC), TSSPDCL, Corporate Office, MintCompound, Hyderabad.Compound, Hyderabad.5.The Superintending Engineer, Operation, It/edak, TSSPDCL, Medak District

...RESPONDENTS

Petition under Article 226 o'f the Constitution of lndia praying that in thecircumstances stated in the affidavit filed therewith, the High Court may be pleased toissue a writ in the nature of a Writ of Mandamus or any other appropriate writ,direction, order or orders declaring the action of the respondents in not issuing NoObjection Certificate to the petitioner to avail open access power as wholly arbitrary,illegal, without [jurisdiction, ]offending the principles of natural [justice ]and void.

lA NO: 1 OF 2019

Petition under Section 151 CPC praying that in the circumstances stated in theaffidavit filed in support of the petition, the High Court may be pleased to direct therespondents to issue No Objection certificate to the [petitioner ]to enable it to availopen access power Pending disposal of the Writ Petition.lA NO: 2 OF 2019

Between:

1. The TS TRANSCO, Rep. by its Chairman and lVlanaging Director, VidyutSoudha, Hyderabad.Soudha, Hyderabad.

2. The Southern Power Distribution Company Ltd, of Telangana State, [N,4int]Compound, Hyderabad, Rep. by its Chairman and ltlianaging Director.Compound, Hyderabad, Rep. by its Chairman and ltlianaging Director.

3. The Chief Engjineer, SLDC, TS TRANSCO, Vidyut Soudha, Hyderabad.

4. The Chief Geheral tr/anager,(lPC and RAC), TSSPDCL, Corporate Office, MintCompound, Hyderabad.Compound, Hyderabad.

5. The Superintending Engineer, Operation, Medak, TSSPDCL, Medak [District]

... Petitioners/Respondents

AND

MS Agarwal Foundries P!,t. Ltd., Regd. Office, Rama [Towards, ][2nd ][Floor, ][5-4-83,]tr/ahatma Gandhi Road, Secunderabad, Rep. by its lvlanaging Director, [Pramod]Aganrual.

Petition under Section 151 CPC [praying ]that in the circumstances [stated ][in ][the]affidavit filed in support of the [petition, ]the High Court [may be ][pleased ][to ][vacate ][the]

WRIT PETITION NO: 13614 OF 2019

Between:

Agarwal Foundries, Regd. Office at Rama Towards, [2nd ][Floor, ][5-4-83,]Mahatma Gandhi Road, Secunderabad, Rep. [by ][its Proprietor, ][Pramod ][Agaruual.]...PETITIONERAND

1. The TS TRANSCO, Rep. by its Chairman and ltlanaging Director, [Vidyut]Soudha, Hyderabad.Soudha, Hyderabad.

2. The Southern Power Distribution Company Ltd of Telangana State, [lVint]Compound, Hyderabad, Rep. by its Chairman and lt/lanaging Director.Compound, Hyderabad, Rep. by its Chairman and lt/lanaging Director.

3. The Chief Engineer, SLDC, TS TRANSCO, Vidyut Soudha, [Hyderabad.]4. The Chief General l\/anager, [(lPC ]and RAC), TSSPDCL, Corporate [Office. ][lVlint]Compound, Hyderabad.4. The Chief General l\/anager, [(lPC ]and RAC), TSSPDCL, Corporate [Office. ][lVlint]Compound, Hyderabad.

5. The Superintending Engineer, Operation, lr/edchal, [TSSPDCL, ][[Vedchal District.],,,RESPONDENTS,,,RESPONDENTS

Petition under Article 226 of the Constitution of lndia [praying ][that ]in [the]circumstances stated in the affidavit filed therewith, the High Court may be [pleased to]issue a writ in the nature of a Writ of l/andamus or any [other ][appropriate ][writ,]direction, ordet or orders declaring the action of the respondents [in ][not issuing ][No]Objection Certificate to the [petitioner ]to avait open access [power ]as [wholly ][arbitrary,]illegal, without [jurisdiction, ]offending the [principles ]of natural [justice ][and ][void.]lA NO: 1 OF 2019

Petition under Section 151 CPC [praying ]that in the circumstances [stated ][in the]affidavit filed in support of the [petition, ]the [High Court may ][be ][pleased ][to ][direct ][the]respondents to issue No Objection certificate to the [petitioner ][to ][enable ][it to ][avail]open access [power pending ]disposal of [the ][writ ][petition.]

lA NO: 2 OF 2019

Between:

1. The TS TRANSCO, Rep. by its Chairman and [lr,4anaging ][Director. Vidyut]Soudha, Hyderabad.Soudha, Hyderabad.

2. The Southern Power Distribution Company [Ltd of ][Telangana State, ][N/lint]Compound, Hyderabad, Rep. by [its ]Chairman [and Managing Director..]Compound, Hyderabad, Rep. by [its ]Chairman [and Managing Director..]3. The Chief Engiineer, SLDC, TS TRANSCO, [Vidyqt_S_og!hq, Hyderabad.]4. The Chief Geieral [\/anager, [(lPC ]and RAC), [TSSPDCL, Corporate Office. ][lVint]Compound, Hyderabad.4. The Chief Geieral [\/anager, [(lPC ]and RAC), [TSSPDCL, Corporate Office. ][lVint]Compound, Hyderabad.

5. The Superintehding Engineer, Operation, [Medchal, TSSPDCL, ][N/edchal District.]

... Petitione rs/Responde nts

AND

Agaruual Foundries, Regd. Office at Rama Towards, [2nd ][Floor, ][5-4-83,]Vlahatma Gandhi Road; Secunderabad, Rep. by its Proprietor, [Pramod ][Aganaral.]

Petition under Section 151 CPC [praying ]that in the circumstances [stated ][in the]affidavit filed in support of the [petition, ]the High Court [may be pleased ][to ][vacate ][the]

interim orders dated 05-07-2019 in W.P.No.13614 of 2019 and dismiss the writ petition.

Counsel for the Petitioner in all W.Ps.: SRl. M.P. CHANDRAMOULI

Counsel for the Respondents in all W.Ps.: SRI J. RAMACHANDER RAO, ADDITIONAL ADVOCATE GENERAL REPRESENTINGSRI R. VINOD REDDY, SC FOR TSSPDCL

The Court made the following: COMMON ORDER

HONOURABLE SRI JUSTICE K. LAKSHMAN

WRIT PETITION Nos.12263. 12275. 13601 AND [13614 ]0F [2019]COMMON ORDER:

MS Agarwal Foundries fiied W.P. No.12263 of 2019 to declarethe action of the respondents in levying deviation charges for drawl /over drawl power when grid frequency is below 49.85 for the monthsof January, 2019 to May,2019, as arbitrary and illegai, and forconsequential direction to the respondents either to repay or adjust theamount in fuither bills. Agarwai Foundries, a proprietary conceln,filed W.P. No.12275 of 2019 for the above said relief.

2. MS Agarwal Foundries Private Limited frled W.P. No.13601of 2019 to declare the action of the respondents in not issuing NoObjection Cerlificate (NOC) to the petitioner to avail open accesspower as illegal. The above said Agarwal Foundries filed W.P.No.13614 of 2019 seeking similar relief as sought in W.P. No. 13601of 201 9.

3. The pleadings in al1 the above said writ [petitions ]arecommon, interconnected and, therefore, the same are being disposedof by way of a common order.

4. Heard Mr. M.P. Chandramouli, leamed counsel for thepetitioner in all the writ petitions and Mr. J. Ramachander Rao,learned Additional Advocate General, representing Mr. R. VinodReddy, lealned Standing Counsel appearing on behalf of therespondents.

5. CONTENTIONS OF THE PETITIONER:

i) MS Agarwal Foundries, petitioner in W.P. No.12263 of20 I 9, is a manufacturer of High Class Ferrous and Non-femousCastings in the factory situated at Chetla Gouraram, Toopran Mandal,Medak District. It was drawing power from respondent No. IDISCOM with Seryice No. MDK 893 with CMD of 250000 KVA.Apart from the said supply, the petitioner is also purchasing powerfrom Indian Energy Exchange for Shofi IEX from APGPCL andMaruthi Ispath (Captive Generation) under Open Access Facilityprovided under Section 42 of the Electricity Act, 2003 (hereinafterreferred to as'Act, 2003').

ii) Whereas, the petitioner in W.P. No.12275 of 2019 i.e.,Agarwal Foundries, a proprietary concern, is a manufactuler of Steeland it is drarving power fi on.r respondent No.1 DISCOM with ServiceNo.MCL.No.620 in the factory situated at Pet Basheerabad, MedchalDistrict. It is drawing power from respondent No.l DISCOM withService No. MCL 620 with CMD of 6500 KVA. Aparl from the saidsupply, the petitioner is also purchasing power from Indian EnergyExchange tbr Short IEX i'om APGPCL and Maruthi Ispath (CaptiveGeneration) under Open Access Facility provided under Section 42 ofthe Act, 2003.

iii) The Central Electricity Regulatory Commission (CERC)passed a Regulation called Open Access Inter-state Regulation,, 2008,to regulate the inter-state open access. The erstwhile A.P. ElectricityRegulation Commission passed Open Access Tems and ConditionsRegulation, 2005 to regulate the Open Access within the State whichis now adopted to the Telangana State.

iv) Another relevant Regulation issued by APERC is theinterim balancing and settlement Regulation for open accesstransactions. As per the said Code, licensee has to do n.ronthlybalancing. Under Clause - 20 of CERC Regulation, 2008, coverinjection or under injection ofpower and over drawl or under drawl ofpower is dealt with and deviations will be accounted in the intra stateaccounting scheme. The CERC issued a Regulation called deviationsettlement mechanism and related matters Regulation, 2014. As perRegulation - 5 (1), the charges for the deviations for all the time-blocks shall be payable for over drawl by the buyer and underinjection by the seller and receivable for under drawl by the buyer andover injection by the seller and shall be worked out on the averagefrequency of a time block at the rates specified in the table. As perRegulation - 7 (4), in addition to charges for deviation as stipulatedunder Regulation5 of the Regulations, additional chalge tbrdeviation shall be applicable for over injection / under drawl olelectricity for each time block by a seller / buyer as the case may bewhen grid flequency is "50.10 Hz and above" at the rates equivalent to charges of deviation correspondent to the grid frequency of "below50.01 Hz, but not below 50.00 Hz". 1.44 is amended by 4thamendment Regulation by substituting "50.01 Hz and above by theword "50.05 IIz and above".50.01 Hz, but not below 50.00 Hz". 1.44 is amended by 4thamendment Regulation by substituting "50.01 Hz and above by theword "50.05 IIz and above".

v) The power consumed by Agarwal Foundries from all thesources shall be within the CMD of 6500 KVA, MS AgarwalFoundries Il'om all the sources shall be within the CMD of 250000KVA. Both the petitioners have not consumed power from openaccess sources over and above the quantity purchased and scheduled.They underutilize the power from other sources. In proofofthe same,the petitioners have fi1ed charl for the period from January, 2019 toApril,2019.

vi) Both the petitioners are not the buyers ofopen access powerfor its entire requirements. They are the consumers of respondentNo.l DISCOM and they paid demand charges for 80% of the CMD of25000 KVA and 6500 KVA respectively, whether it utilizes power tomaintain the permissible grid frequency or not from DISCOMTherefore, the petitionels cannot be brought under 2014 Regulation.Even if the petitioners have drawn power when the grid frequency isbelow 49.85, there is no violation as the total drawn power minus theopen access power is charged by the DISCOM as its power. In proofof the same, they have fi1ed the chart. If deviation charges are leviedfor the consumption, it amounts to double 1evy.

vii) The charging provision is Regulation [-5 ]of 2014. As [per]the said regulation, charges for deviation shal1 be payable for overdrawl by the buyer and under injection by the seller. Both thepetitioners never overdrew the power. In proof of the same, they filedstatement for the months of January, 2019 to May, 2019 and also C.C.bi11s.

viii) Tl.re petitioner in W.P. No.12263 of 2019 has receivecl

C.C. bill for the month of March, 2019, rn which an amount ofRs.14,74,4651- was levied as additional deviation charges. There uponthe petitioner verified the abstract of energy deviation and fbund thatthere was no deviation contemplated under Clause - 5 of CERCRegulation 2014 and also there is no additional deviation of more thanl2%o as stipulated in Regulation - 7. Whereas, the petitioner in W.P.No.12275 of 2019,realized that in the C.C. bi11s of January to April,deviation charges were levied as additional deviation charges fbr drarvn energy. Thele upon, it verified the abstlact o1'energy deviationand found that there was no deviation contemplated under Clause 5 oflCERC Regulation,2014 and also there was no additional deviation ofmore than 72o/o as stipulated in Regulation - 7. Therefore, the levy ofadditional deviation charges is illegal and thus, they addressed lettelsdated 18.04.2019 and 05.05.2019 respectively to respondent No.2stating that when deviation is shown as 'NIL' in the abstract, therecannot be any,- additional deviation charges, and requested forwithdrawal of the levy. Despite receiving and acknowledging the

letter dated 09.05.2019, there was no response from the respondents.The respondents have not furnished as to the drawl or over drawlparticulars in the schedules and, therefore, the said action of therespondents is against the principles of natural [justice. ]However, afterreceipting the letter dated 18.04.2019, respondent No.2 gave a replydated 30.04.2019 stating that as per Clause 8 of CERC Regulation,2014 and Clause - 4.6 of the 4th amendment Regulation, 2018,additional charges for deviation for over drawls for each time blockwhen grid frequency is below 49.85 Hz shall be payable. But,respondent No.2 has not addressed the objection raised by thepetitioner in the said reply. Therefore, it has addressed another letterdated 05.06.2019 stating that it is not disputing the provisions of theRegulation to charge additional deviation charges when the limit iscrossed, but the fact that when it has not utilized the power over abovethe stipulated percentage as to how the charges are levied is notanswered. The petitioner has received Rs.38,9281 for utilization ofpower. To the said letter, respondent No.2 gave a reply stating thatdeviation energy over drawn when the frequency is 49.85 Hz andabove is zero and, therefore, the charges are NIL as shown inColumns 7 to 9. But, deviation energy over drawn when thefrequency is below 49.85 Hz ts 1,75,532 Units as shown in Column10, a sum of Rs.14,74,465/- is charged. In support of the same,respondent No.2 has annexed an abstract of statement by charging theheading of the last column as 'deviation energy over drawn when thefrequency is below 49.85 Hz' . ln the said abstract of statement annexed to C.C. bill, the heading of the last column is ['deviation ]ofenergy drawn when the frequency is belor'v 49.85 Hz'. ln theannexures to the C.C. bills for January to May, 2019 also similarheadings are appeared. Thus, there is lot of difference from drawnenergy and over drawn energy when the frequency is below 49.85 Hz.The former does not attract any deviation charges and, therefore, inthe annexure to the letter, respondent No.2 altered drawn energy asover drawn energy. Respondent No.2 has not furnished as to thedrawl or over drawl particulars in the schedules. Therefore, the saidin action on the part of respondents is against the principles of naturalJustlce.

ix) The deviation charges are not applicable to the petitionersas they are the consumers of the DISCOM. Even if deviation chalgesare applicable for the power drawn through open access, even then thepetitioners never over drawn, but always under drawn and theDISCOM paid for the under drawl. Thus, the action of therespondents in levying deviation charges for the drawn power whengrid frequency is below 49.85 Hz for the period from January, 201 9 toMay,2019 is wholly arbitrary and illegal. The petitioners, under thethreat of disconnection, have paid the deviation cl.rar ges under protestfor the months of January to April, 2019 and the respondents areliable either to repay or adjust the same towards over drawl and drawlpower when gridfrequency is below 49.85 Hz.

x) With the above said contentions, the petitioners sought todeclare the action of the respondents in levying deviation charges fordrawl / over drawl power when grid fi-equency is below 49.85 Hz forthe months of January to May, 2019 as illegal and sought for aconsequential direction to the respondents either to repay or adjust theamount in the further bills.

6. This Couft vide order dated 20.06.2019, granted interim stayas prayed for in W.P. Nos.12263 and 12275 of 2019 i.e., therespondents are directed not to levy and collect any deviation chargesfrom the petitioner.

7. CONTBNTIONS OF THE RESPONDENTS:

i) Respondent No.2 has filed counter denying the allegationslevelled by the petitioners in both the writ petitions. Inter-state openaccess transactions are regulated by CERC Open Access Regulations,2008. The petitioners have wrongly based their entile case onAPERC Open Access Regulations 2 of 2005. The provisions ofRegulation 2 of 2005 govem only intra-state open access transactions.

ii) There are two tlpes of transactions, through which the petitioners are availing open access power; (a) Shoft Term Inter -State (Bilateral)by this method, the petitioners approach thegenerator for purchasing power and directly pay the cost ofpower tothe generator. The power that is purchased by the petitioners iswl.reeled up to deiivery point of the petitioners by TS TRANSCO and DISCOM i.e., TSSPDCL. As the petitioners are availing open accesspower from generator located in other States, the transactions areregulated / governed by CERC Regulations 2008 and subsequentamendments; (b) Shot - Term Inter State (Collective) - is an openaccess transaction availed by the petitioners / consumers through thepower exchange (lEX). In this transaction, the generatol's directly dealwith IEX and offer to sell porver and IEX in turn identifles theconsumers who are willing to purchase the power and routes thepower to the purchaser. The purchaser directly pays the cost ofpowerto IEX which in tums pays the same to the generator. The powerexchange (IEX) is regulated by CERC. As the petitioners are availingopen access power from IEX, the transactions are regulated /govemed by CERC Regulations, 2008 and subsequent amendments.

iii)

The petitioners are availing the open access power under short term inter-state (Collective) transactions regularly as per theInter - State Regulations framed by CERC (Open Access in Inter -State Transmission) Regulations, 2008 and its subsequentamendments. The CERC Regulations have laid down the procedural-methodology for application and grant of open access on the Inter State Transmission System and settlement of the availed energythrough the open access transaction as per CERC (DeviationSettlement Mechanism and related matters) Regulations, 2014. Themalnobjective of CERC Regulations (Deviation SettlementMechanism and related matters) Regulations, 2014 is to maintain grid discipline and grid security as envisaged under the Grid Code through'commercial mechanism' for deviation settlement through drawl andinjection of electricity by users of the grid. In order to maintain thegrid discipline and secudty only, the said Regulation was formulatedto streamline the energy transacted through open access within thepermissible limits.

iv) As per the CERC, Open Access Regulations, 2008 and thesubsequent amendments, the consumer has to submit drawl schedules(fol each 15 minutes time blocks) to Southern Regional LoadDispatch Centre (SRLDC) on day ahead basis i.e., one day inadvance. The petitioners have to draw the power as per the Schedulegiven to SRLDC and if there are any deviations committed, theapplicable unscheduled interchange charges (UI Charges) are leviedon the petitioners as per CERC Regulations and subsequentamendments. As per the said regulations, the UI charges for deviationfor each 0.01 Hz step is equivalent to 35.60 paiseikWh in thefrequency range of 50.05 - 50.00 Hz and 20.84 paise/Kwh infrequency range 'below 50 Hz' to 'below 49.70 Hz' .

v) If the petitioners are aggrieved by any of regulations issuedeither by CERC or by SERC, they have to approach the AppellateTribunal for Electricity constituted under Section 111 of the Act,2003. The petitioners have not availed the said remedy and, therefore,the present writ petitions are liable to be dismissed on the said groundalone.

vi) Respondent No.2 has relied upon Clause [- ]6 of CERC(Deviation Settlement Mechanism and related matters) Regulation,2014. CERC (Deviation Settlement Mechanism and related matters)Regulation,2014 were amended from time to time with an objectiveto bring about the desired discipline in grid operation and also tocreate a frame work to discourage open access users from deviatingtheir schedules. The open access users are bound to adhere to theirschedules and should not indulge in over drawl or undel dralvl ofpower during low frequency or high frequency. The CERC has issuedfourth amendment to DSM dated 20.11.2018 w.e.f.01.01.2019 and asper which, the operational frequency band width has been naroweddown from 49.70H2 and 50.10 to 49.85 Hz and 50.05 Hz [respectively]for safe and secure operation of grid to maintain stability anddiscipline. For violation of the band width either by over [drawl ][or]under drawl, the petitioners / consumers are liable to [pay ]charges [/]penalties as stipulated in CERC (Deviation Settlement Mechanismand related matters) Regulation, 2014 and subsequent amendments.

vii) The important Clauses 4.3 and 4.13 of the said [amended]Regulations, 2018 were relied upon by respondent No.2. [As ][the]petitioners are availing power through power exchange (IEX) fromMaruthi Power located in Andhra Pradesh State and [from ][TSSPDCL]under shofi term inter [generator ]- state open access, the [said]amendment Regulations, 2018 is applicable to the [petitioners. Any]inter-state open access user is bound to follow the Deviation Settlen.rent Mechanism Regulations of CERC issued from time totlme.tlme.

viii) The respondent company has not imposed any powerrestrictions on the petitioners and is supplying power to them 24 x 7hours. But, the petitioners have opted willing for open access power.The respondent company has issued NOC to them for availing powerthrough open access at their request. Any open access consumer isbound to follow CERC Open Access Regulations, 2018 as amendedfiom time to time and it is the prime responsibility of open accessconsurner to maintain grid discipline by means of not deviating theopen access power schedules as procured by the petitionersthemselves. But, the petitioners have deviated the open access powerschedules either by r-neans of under drawl / over drawls in certain timeblocks and created indiscipline in the grid causing grid insecurity andthe petitioners are solely responsible for the same.

i*) As the petitioners are not consumers of respondentcompany alone and drawing its entire power from it, but drawingpower through open access, the petitioners cannot over draw powerwhen grid frequency is below 49.85 Hz., which is a bar as per theCERC Deviation Settlement Mechanism Regulations, 2018. Thesedeviations by the petitioners would in turn affect the respondent'scompany power schedules and deviation charges for such energy overdrawn when grid frequency is below 49.85 Hz is levied on to therespondent company by Southern Region Load Dispatch Centre and the same is passed on to the [petitioners. ][The deviation ][charges ][are]collected by the SRLDC for causing [indiscipline ][in ][the ][grid ][by ][over]drawl / under drawl of enel'gy. The deviation charges [imposed by]SRLDC on the respondent company are in addition to [the ][power]purchase cost by it. Hence, the same is collected from the [petitioners]and it is not a double levy. The contention ofthe [petitioners ][that ][they]never overdrawn the power and that the [respondent ][company ][is]levying charges amounts to double levy, is factually incorrect.

x) The petitioners are not meeting its entire [power]requirements through open access and, therefore, they are drarvingpower from the respondent cornpany also. The quantity of [powel']drawn by them from tl.re respondent company is infirm. As [the]petitioners are not only drawing its entire power requirements [from]the respondent company, but also drawing [power under ][inter-state]open access system, CERC DSM Amendment [Regulations, 2018 ][are]also applicable on them. There is no exemption of [applicability ][of]CERC DSM Regulations, 2018 either partially or totally to [any]consumer seeking power through open access.

xi) The petitioners have over drawn the energy when [grid]frequency is below 49.85 Hz and deviation charges towards [over]drawn energy when grid frequency is below 49.85 [Hz ][have ][to ][be ][paid]by the petitioners to the respondent company. For the energy [under]drawn by the petitioners less than the open access [power, ]thedeviation charges towards energy under drawn is already adjusted [as]

shown in the annexure. The petitioners are meeting its powerrequirements parlially through open access and [partially ]fiom therespondent company. As pel the CERC DSM Regulations, 2014,deviations (over drawl / under drawl) are to be reckoned [fbr ]each [15]minutes tirne block. The energy that is over drawn by the [petitioners]nrore than open access power when grid frequency is above [49.85 ][Hz,]the Deviation Charges on the quantum of energy over drawn [is]applicable as per CERC DSM Amendment [Regulations, 2018. But,]the same is not collected from the petitioners. Only [additional]deviation charges towards energy over drawn [by ][the petitioner ][when]grid frequency is below 49.85 Hz as per the CERC DSM [Amendment]Regulations, 2018 is charged to the petitioners and the same [is ][liable]to be paid by them.

xii) The petitioners are wrongly interpreting [that ][deviation]energy over drawn when [grid ]frequency [is ][above ][49.85 ][Hz ][shown ][as]NIL in the day wise energy abstract, hence, the [petitioners are ][not]liable to pay the deviation charges. From the abstract, it [is ][clearly]evident that there are two columns of Deviation [Energy ][over ][drawn'](i) Deviation energy over drawn when grid frequency is above 49.85Hz; and (ii) Deviation energy over drawn when [grid ][frequency ][is]belor'v 49.85 Hz. In the abstract of [March, ][2019, ][deviation ][energy]over drawn when grid frequency [is ]above [49.85 ][Hz ][is ][shown ][as ][NIL,]and deviation energy over drawn when [grid ][frequency ][is below ][49.85]Hzis 1,75,532 Units in respect of the [petitioner ][in ][W.P.No.12263 ][of]

2019, and 20,270 Units in respect of the petitioner in W.P. No.12275of 2019. Hence, additional deviation charges of Rs.14,74,465l- forenergy over drawn when grid frequency is below 49.85 Hz in respectof the petitioner in W.P. No.12263 of 2019, while an amount ofPts.l,l0,252l- in respect of the petitioner in W.P. No.12275 of 2019.Thus, both the petitioners are wrongly contending that additionalcharges are levied when they have not over drawn the power than thestipulated percentage when grid frequency is below 49.85 Hz.

xiii) As per Regulation - 7 (Limits on Deviation Volume andconsequences of crossing limits) of the Principal Regulations, 2014,clause (1) strictly no over drawl of electricity is allowed when gridfrequency is below 49.10 Hz which amended to below 49.85 Hz inAmendment Regulations, 2018. Any over drawl of energy when gridfrequency is below 49.85 Hz would pose a threat to grid security.Hence, additional deviation charges, as stated above, for energy overdrawn when grid frequency is below 49.85 Hz, is to be paid by boththe petitioners.

xiv) The petitioners having availed the incentives earlier, isnow refusing to comply with the above Regulations,, 2014 and pay theUI charges for deviations which are applicable at present. RespondentNo.2 has mentioned the incentives paid to the petitioners from Apri1,2018 to December,2018, and also the charges levied for thedeviations from )anuary, 2019 to May,2019 as per 4th amendmentw.e.f. 01.01.2019 in a tabular form. The information furnished in the tabular form clearly demonstrates that the petitioners were gettingincentives after the fourth arnendment to DSM by CERC. Thepetitioners starled disputing the penal charges imposed due toimproper scheduling of their energy which has affected the griddiscipline and is having huge impact on the grid stability. The CERC(Deviation Settlement Mechanism and Related Matters) Regulations,2014 and a1l amendments are also applicable to the State DISCOMSi.e., TSSPDCL. The State Load Dispatch Centre (SLDC) imposes theUI charges on the TSSPDCL collectively for the entire deviations inits operational area. The TSSPDCL pays the total deviation chargesto the SLDC and in turn collects the said charges from [its ]open [access]consumers based on deviations committed by each consumer.Respondent No.2 has also shown the details of deviation charges [paid]by the TSSPDCL collectively for the deviations by its open [access]collsumers in a tabular form. By referring to the same, it is contendedby respondent No.2 that it is the prime responsibility of any [open]access user to draw power within open access [power ]schedule to safeguard the electricity grid. The deviations (over drawl / under drawl)by open access consumer will adversely affect the transmission [and]distlibution net work of the respondent company.

xv) The TSSPDCL, as a distribution licensee, is also liable tocomply with tl're terms and conditions of the CERC Regulations andhas to follow the same n.rethodologies and it has to pay deviationcharges for the deviations made by intra-state entities and [has ][to]

collect the same from the [petitioners ]for the deviations made by thepetitioners from their scheduled energy. The petitioners have overdrarvn energy more than open access power scheduled when [grid]lrequency is below 49.85 Hz. Therefore, the bills issued to thepetitioners including additional deviation charges of Rs. 1,70,252l- andRs.59,57,310i- for the months of January, 2019 to May, 2019 inrespect of the petitioners in W.P. Nos.12275 and 12263 of 2019respectively are corect and 1egal and in accordance with CERC DSMAmendment Regulations, 201 8.

xvi) Both the petitioners have deviated from power schedulesand, therefore, they are liable to pay UI charges which are alreadydemanded. Both the petitioners are still indulging in grid indisciplineby over drawing power more than what is scheduled through openaccessDue to over drawl of open access power by the petitioners,there is likelihood of tripping of grid which would result in great lossto the respondent and other consumers.

xvii) With the above contentions, respondent No.2 souglit todismiss both the writ petitions by vacating the interim orders [granted]bv this Court earlier.

8. Mr. M.P. Chandramouli, learned counsel for the petitioner,would submit that as per Section 42 of the Act,2003, it shall be theduty of a distribution licensee to develop and maintain an efficient,coordinated and economical distribution system in his area of supply and to supply electricity in accordance with the [provisions ]containedin the Act. As per Regulation - 5 of the CERC 2014, charges fordeviations for all the time-blocks shall be [payable ]for over drawl bybuyer and under- injection by seller and receivable for under-drawl [by]buyer and over-injection by seller and shall be worked out on [an]average frequency of a time-block at the rates specified [in ][the ][table]mentioned therein. As per the said table, not below [49.85 ][average]flequency of the time block (Hz) refers Rs.490.60 [(paise/kWh)]towards charges fbr deviation. As [per ]Regulation [- ][7,, ][over-drawls ][/]under drawls ofelectricity by any buyer [during ][a ][time ][block ][shall not]exceed l2o/u of its scheduled drawl or 150 [MW, ][whichever ][is ][lower,]when grid frequency is ["49.70" ]Hz and above. [Provided that ][no ][over]drawl of electricity by any buyer shall be [permissible ][when ][grid]fr-equency is "below 49.10 Hz". He would [further submit ][that ][even ][as]per the counter filed by respondent No.2, the petitioners are [not]directly drawing the power in open access. 80% of [power ][is]contractual demar.rd. lrespective of the [fact ][whether the ][petitioners]are using the same or not, the respondents [are charging ][the ][same]double.

9. It is furlher contended by the [learned counsel ][for ][the]petitioners that the petitioners are not the buyers ofopen access [power]for its entire requilements, but they are the consumers [of ][respondent]No.1 DISCOM and they paid demand charges for 80% of [CMD ]ofRs.25000 KVA and 6500 KVA respectively, [whether ][it ][utilizes power]

or not from the DISCOM. Therefore, the DISCOM is bound to maintain the permissible grid frequency. The petitioners cannot bebrought under 2014 Regulation. The said contentions were notadverted to by respondent No.2 in its counter. Tlierefore, it is deemedthat the said contentions are admitted by respondent No.2.Respondent No.2 has also not considered the contention of thepetitioners with regard to levy ofadditional deviation charges and alsothe contentions that on verification of abstract of energy deviation, thepetitioners found that there is no deviation contemplated under Clause- 5 of CERC Regulation, 2014, and also there is no additionaldeviation of more lhan 12Yo as stipulated in Regulation - 7. As such,levy of additional deviation charges is illegal.

10. The learned counsel for the petitioners would also submitthat the petitioners have to obtain NOC from the respondents to availopen access power. Accordingly, they have submitted appropriateapplications for NOC dated 27.06.2019. Despite receiving andacknorvledging the same, the respondents' authorities did not issueNOC. Thus, the petitioners have addressed tu,'o letters dated22.06.2019 and 01.07.2019 to the Chief General Manager to look intothe matter and direct the concerned to issue NOC. Even then, there [is]no response. Therefore, Agarwal Foundries filed W.P. No.l36i4 of2019 and MS Agarwal Foundries Pvt. Ltd., filed W.P.No.13601 of2019 to declare the action of respondents in not issuing NOC to thepetitioners to avail open excess power as illegal.

1 1. Mr. J. Ramachander Rao, learned Additional AdvocateGeneral, would submit that grid frequency is the criterion. TheGeneral, would submit that grid frequency is the criterion. Therespondent company has not imposed any power restrictions on thepetitioners, and supplying power to the petitioners 24 x 7 hours. But,petitioners, and supplying power to the petitioners 24 x 7 hours. But,the petitioners have opted willing for open access power. Therespondent company has issued NOC to the petitioners for availingpower through open access at their request. Any open accessconsumer is bound to follow CERC Open Access Regulations, 2018as amended frorn time to time and it is the prime lesponsibility ofopen access consumer to maintain grid discipline by means of notpower through open access at their request. Any open accessconsumer is bound to follow CERC Open Access Regulations, 2018as amended frorn time to time and it is the prime lesponsibility ofopen access consumer to maintain grid discipline by means of notdeviating the open access power schedules as procured by thepetitiorrers thernselves. The petitioners are drawing power throughshoft term inter-state open access in addition from respondentcompany. The petitioners have over drawn energy over and above theopen access power schedule when grid frequency is below 49.85 Hz.Hence, the additional deviation charges towards energy over drawnshould be paid by the petitioners. He has relied upon Clause - 2 (b) ofpetitiorrers thernselves. The petitioners are drawing power throughshoft term inter-state open access in addition from respondentcompany. The petitioners have over drawn energy over and above theopen access power schedule when grid frequency is below 49.85 Hz.Hence, the additional deviation charges towards energy over drawnshould be paid by the petitioners. He has relied upon Clause - 2 (b) ofCERC (Deviation Settlement Mechanism and related matters)Regulation, 2014, which deals with 'actual drawal', and as perwhich, actual drawl in a time block means electricity drawn by abuyer, as the case may be, rneasured by the interface meters. Clause -2 (h) deals with [oDeviation', ]and as per which, deviation in a tirneRegulation, 2014, which deals with 'actual drawal', and as perwhich, actual drawl in a time block means electricity drawn by abuyer, as the case may be, rneasured by the interface meters. Clause -2 (h) deals with [oDeviation', ]and as per which, deviation in a tirneblock for a seller means its total actual injection minus its totalscheduled generation and for a buyer means its total actual drawlminus its total scheduled drawl. Clause - 2 (q) deals with 'time-scheduled generation and for a buyer means its total actual drawlminus its total scheduled drawl. Clause - 2 (q) deals with 'time-

bloch' , and as per which, time-block means a time [block ]of [1 ][5]minutes, for which specified electrical [parameters ]and [quantities ][are]lecorded by special energy meter, wit}r first time block starting [at ][00:0]hrs:. Clause - 5 deals with ['charges ]for deviations'. Clause [- 7 ][deals]with 'limits on deviation volume and [consequences ]of [crossing]limits'. Therefore, the petitioners shall not draw [power over ][and]above and under drawl when [grid ]frequency at [49.70H2 ]and [above.]As per Clause - 7.6, in addition to charges for deviation as stipulatedunder regulation - 5 of these Regulations, Additional Charge [for]deviation shall be applicable for over-drawl or under-injection ofelectricity when grid frequency is ["below ]49.10 Hz" in [accordance]with methodology specified in Clause - 8 of this [regulation ][and ][the]same shall be equivalent to 100% of the charge for [deviation ][of]824.04 Paise,&Wh coresponding to [grid ]frequency ["below ][49.70 ][Hz"]Provided fi"rrlher that additional charge for Deviation for under'-injection of electricity by a se1ler, during the time-block when [grid]frequency is "below 49.70 Hz" by the generating stations regulated byCERC using coal or lignite or gas supplied under Administered [Plice]Mechanism (APM) as the fuel in accordance with rnethodologl,specihed in Clause -8 ofthe regulation shall be equivalent [to ][100% ][of]the Cap Rate for Deviations of 303.04 Paise/kWh. AdditionalCharges for'deviation' sha1l not be applicable for net over drawls [by ][a]region as a whole from other regions.

1 2. Tlie learned Additional Advocate General has also referredto CERC amendment dated 20.1 1.2018 which came into effect frorn0 I .01 .201 9. As per Clause - 4.3 of the said amendment Regulation, insecond proviso to Clause (1) of Regulation 7 of the PrincipalRegulations, the words "below 49.70 Hz" shall be substituted by thewords "below 49.85 Hz" and the words "50.10 Hzand above" shall besubstituted by the words "50.05 Hz and above". As per Clause - 4. 16,in clause (8) of Regulation 7 of the Principal Regulations, the words"below 49.70 Hz" shall be substituted by the words "below 49.85Hz".to CERC amendment dated 20.1 1.2018 which came into effect frorn0 I .01 .201 9. As per Clause - 4.3 of the said amendment Regulation, insecond proviso to Clause (1) of Regulation 7 of the PrincipalRegulations, the words "below 49.70 Hz" shall be substituted by thewords "below 49.85 Hz" and the words "50.10 Hzand above" shall besubstituted by the words "50.05 Hz and above". As per Clause - 4. 16,in clause (8) of Regulation 7 of the Principal Regulations, the words"below 49.70 Hz" shall be substituted by the words "below 49.85Hz".

13. By refening to the above said clauses, the learnedAdditional Advocate General would submit that the petitioners hereinhaving deviated from power schedules are liable to pay UI chargeswhich are already demanded. The petitioners are drawing powerthrough inter'-state open access system from the respondent company.The petitioners have over drawn energy from open access powersclredules when liequency is below 49.85 Hz. and, therefore,additional deviation charges towards energy over and above should bepaid by the petitioners. But, the petitioners are wrongly interpretingthat deviation energy over drawn when grid frequency is above 49.85Hz shown as NIL in the day wise energy abstract, hence, thepetitioners ale not liable to pay deviation charges.

14. The leamed Additional Advocate General has also placedreliance on the principle laid down by the Apex Courl in Central Power Distribution Company v. Central Electricity RcgulatoryCommissionr.

CONSIDERATION OF THE COURT:

15. In view of the above rival contentions, it is not in disputethat CERC, New Delhi, has issued Notification dated 06.01.2014, inexercise ofpowers confered under Section 178 ofthe Act, 2003. Theobjectives of the said Regulations are to maintain grid discipline andgrid security as envisaged under the Grid Code through thecommercial mechanism for deviation Settlement through drarvl andinjection of electricity by the users of grid. The said regulations aleapplicable to sellers and buyers involved in the transactions facilitatedthrough short-tem open access or medium-term open access or iong-term access in inter-State transmission of electricity. Theamendments that have been taken place in both the said Notifications are as under:

Clauses ofDescription ofclause as perCERCNotification dated 06.01 .2014Clause -The over-drawls / under drawls7 (1)of electricity by any buyerduring a time block shall notexceed 12% of its scheduleddrawl or 150 MW, whichever islower, when grid frequency is'49.70 Hz and above'

Clause -In addition to charges for7 (6)deviation as stipulated underRegulation 5 of theseRegulations, additional chargefor deviation shall be applicablefor over-drarvl or under-injection ol electricity whengrid frequency is "below 49.70IIz'in accordance with the Amendment as per Notification dated20.1 I .201 8As [per ]Clause - 4.3: In second proviso toclause (1) of Regulation 7 of thePrincipal Regulations, the words "belorv49.70 Hz'l shall be substituted by thewords "below 49.85 Hz" and the words"50.10 Hz and above" shall besubstituted by the words "50.05 Hz andabove"

As ner Clause - 4.13: In Clause (6) ofRegulation 7 of the PrincipalRegulations, the words "below 49.70 Hzin accordance with the methodologyspecified in clause (8) of this regulationand the same shall be equivalent to 100%of the Cl.rarge fbr Deviation ol 824.0,1Paise / kWh coresponding to the gridflequency of'below 49.70 lIz' shall be

16. Thus, the CERC has brought [the ][above said ][amendments]vicle Notification dated 20.11.2018 w.e.f.01.01.2019 [in ][exercise ][of]powers conferred on it under Section [178 ][of ][the ][Act, ][2003. ][It ][is ][the]main contention of the [petitioners ][in ][both the ][writ ][petitions that ][the]petitioners cannot be brought under Regulations, [2014, since ][they ][are]consumers of respondent No.1 [DISCOM, ][and ][they pay the ][defl.rand]charges for 80% of the CMD of [Rs.25000 ][KVA ][and ][6500 ][KVA]respectively, whether it utilizes power or [not ][from ][DISCOM.]Therefore, DISCOM is bound to [maintain ]the [permissible ][grid]frequency. Even if the petitioners [have ][drawn power when ][grid]

frequency is below 49.85, there is no violation as the total drawnpower minus open access power is charged by the DISCOM as itspower. If deviation charges are levied for the consumption, it amountsto double levy. As per Regulation - 5 of the CERC, 2014, charges fordeviation shall be payable for over drawl by the buyer and under-injection by the seller. The petitioners never over drawn the powerand it is evident from the abstract of statement annexed to the CCbills. Both the petitioners have paid deviation charges under protestfor the period from January,20l9 to April, 2019 on account ofthreatof disconnection.

17. Respondent No.2 has filed a detailed counter adverting to the allegations levelled by the petitioners along with supportingdocuments. It is relevant to note that the petitioners in both the writpetitions have not filed any rejoinder to the counter filed byrespondent No.2 refuting the stand taken by the respondents.

18. The above stated facts would reveal that both thepetitionersare consumers of respondent No.2 Company havingcontracted maximum demand of 25000 KVA and 6500 KVArespectively. They have HT agreement for supply of power fromTSSPDCL. Both the petitioners are availing open access power fl'onlvarious sources i.e., generator of M/s. Maruthi Ispath & EnergyPrivate Limited located1n A.P., Andhra Pradesh Gas PowerCorporation Limited (APGPCL) and Indian Energy Exchange (IEX)regularly under Inter State Short Term Open Access since 2013. The inter-state open access transactions are regulated by CERC OpenAccess Regulal ions. 2008.

19. It is the specific contention of respondent No.2 thatprovisior.rs of Regulation - 2 of 2005 govern only intra-state openaccess transactions. Tl]e inter-state open access transactions areregulated by CERC Open Access Regulations, 2008. According torespondent No.2, the petitioners have wrongly based their entire [case]on APERC Open Access Regulation - 2 of 2005. Respondent No.2has filed CERC (Open Access in Inter-State Transmission)Regulations, 2008. Clause - I [( ]I ) of the said Regulations dated25.01.2008, specifically says that these regulations shall apply to theapplications made for grant of openaccess for energy transferschedules commencing on or after | .4.2008 for use of transmissionlines ol associated facilities with such lines on the [inter-state]transmission system. Therefore, in CERC Regulations, [2014 ][issued]vide Notification dated 06.01.2014 also, it is stated that theseregulations shall be applicable to sellers and buyers involved in thetransactions facilitated through shorl-term open access or [medium-]tenn open access or longterm access in inter-State tlansmission ofelectricity. Though certain amendments were brought to theRegulations, 2014 with regard to the scope of the said regulations,there is no amendment. Thus, CERC Regulations, 2014 dated06.01.2014 are applicable to sellers and buyers involved in thetransactions facilitated through short-term open access or medium- term open access or long-terrn access il1 inter-State transn-rission ofelectricity. In view of the same, the contention of the petitioners thatthey cannot be brought under the Regulations, 20 14 is unsustainable.

20. In view of the above discussion and with regard to thespecific provisions, CERC Regulations, 2014 are applicable to boththe petitioners, since they are purchasing power from Indian EnergyExchange (IEX), Andhra Pradesh Gas Power Corporation Limited(APGPCL) and generator of M/s. Maruthi Ispath (Captive Generation)under open access facility as per Section 42 of the Act, 2003. In thereplies dated 30.04.2019 and 10.05.2019 respectively, submitted byrespondent No.l Company - SPDCL to MS Agarwal Foundries,petitioner in W.P.No.12263 of 2019, has specifically mentioned aboutthe same.

21. It is relevant to note that in the reply dated 30.04.2019,respondent No. t has specilically mentioned that as per Clause 8 o1'CERC Regulations, 2014 and Clause 4.16 in fourth amendmentRegulations, 2018, which came into force w.e.f. 01.01.2019, theadditional charge for deviation for over-drawls for each time blockwhen grid frequency is below 49.85 Hz sha1l be payable for overdrawl by the buyer. As per the said Clause, no buyer is allowed toover-draw the energy when grid frequency is below 49.85 Hz. If it isdeviated then charges for deviation must be paid. By referring to thesame, respondent No. t has specifically inforned MS AgarwalFoundries Private Limited that an amount of Rs.14,74,465/- was

levied in the bill for the month of March,2019, as per clause 4.16 rnfourth amendment Regulations, 2018 which came into force w.e.f.01.01.20 19. Even, in another reply dated 10.05.2019, respondentNo. I has inlormed specifically to MS Agarwal Foundries

22. By referring to the HT C.C. bill for the month of [March,]2019, dated 26.03.2019 issued by respondent [No.1 ][in ][respect ][of ][M/s.]Agarwal Foundries (P) Ltd., Mr. M.P. Chandramouli, learned counselfor the petitioners, would contend that the respondents' [authorities]l.rave levied UI charges illegally. He has also [referred ][to ][the ][figures]lllentioned in the bill with regard to unscheduled [interchange ][charges]and drawn chargeable amounts and also [the ][Units ][consumed ][by ][the]petitioners. By referring to the abstract with regard to inter-state [open]access consumer day wise deviation [energy ][for ][the ][peliod ][from]19.02.2019 to 26.03.2019, the learned counsel [would further ][contend]that deviation energy drawn when [frequency ][is ][below ][49.85 ][Hz,]175532 Units were consumed by the [petitioner. By ][refening to ][the]same, the leamed counsel would submit that the [respondents']autholities have specihcally levied deviation charges [for ][drawl ][/ ][over]drawl when grid frequency is below [49.85 ]Hz for [the ][months ][of]January, 2019 to May,2019 is illegal. It is tdte [to ][note ][that ]1 11 of the Act, 2003 deals with ['appeal ]to Appellate Tribunal', [and]as per which, any person aggrieved by an order [made ][by ][an]Adjudicating Officel under the Act [(except ]under section [127) ][or ][an]order made by appropriate Commission under the [Act ][may prefer ][an]

appeal to the Appellate Tribunal for Electricity. [Provided that ][any]person appealing against the order of Adjudicating Officer 1.1,yin8any penalty shall, while flling the appeal, deposit the amount of suchpenalty.

23. As discussed above, it is the contention of the petitionersthat the petitioners cannot be brought under Regulations, 2014.Whereas, the above stated CERC Regulations, 2008, Regulations,2014 and the amendments brought to it vide notification dated20.11.2018, CERC Regulations, 2014 ate applicable to thetransactions facilitated through shorttem open access or medium-tetm open access or longterm access in inter-State transmission ofelectricity. Admittedly, both the petitioners are in inter-statetransmission of electricity with open access. Therefore, if at all, thepetitioners are aggrieved that CERC Regulations are not applicable to-them, they have to invoke the procedure laid down under Section 1 1 1 of the Act, 2003 by way of filing an appeal before the AppellateTribunal,slnceaccording to the petitioners herein, CERCRegulations, 2014 are not applicable to them. But, they did not availsuch remedy.

24. As discussed above, as per Clause - 2 (l) (b) ol theRegulations, 2014, 'acttal drawl' in a time-block means electricitydrawn by a buyer, as the case may be, measured by the interfacemeters. As per Clause - 2 (1) (h), deviation in a time-block for a sellermeans its total actual injection minus its total scheduled generation

and for a buyer means its totai actual drawl minus its total scheduleddrawl. As per clause - 2 (l) (q), time-block means, a time block of 15minutes, for which specified erectrical parameters and quantities aredrawl. As per clause - 2 (l) (q), time-block means, a time block of 15minutes, for which specified erectrical parameters and quantities arerecorded by special energy meter, with flrst time block starting at00'00 hrs. clause - 5 of the said Regulations deals with 'charges fordeviations'. The same are specifically mentioned in the tabular form.By way of amendment vide Notification, dated 20.11.201g, as perClause - 4.3, in second proviso to Clause ( 1 ) of Regulation 7 of thePrincipal Regulations i.e., 2014 Regulations, the words ,, below 49.70Hz" shall be substituted by the words,,below 49.g5 H2,,, and thewords "50. l0 Hz and above,, shall be substituted by the words ,.50.05Hz and above". Like-wise, as per Clause 4.13, in Clause (6) ofdeviations'. The same are specifically mentioned in the tabular form.By way of amendment vide Notification, dated 20.11.201g, as perClause - 4.3, in second proviso to Clause ( 1 ) of Regulation 7 of thePrincipal Regulations i.e., 2014 Regulations, the words ,, below 49.70Hz" shall be substituted by the words,,below 49.g5 H2,,, and thewords "50. l0 Hz and above,, shall be substituted by the words ,.50.05Hz and above". Like-wise, as per Clause 4.13, in Clause (6) ofRegulation - 7 of the Regulations, 2014,the words ..below 49.70 Hzin accordance with the methodology specified in clause (g) of thisregulation and the same shall be equivalent to i00% ofthe charge forDeviation of 824.04 paise / kWh corresponding to the grid frequencyof 'below 49.70 Hz"' shall be substituted by the words ,.below 49.g5Hz in accordance with methodology specified in clause (g) of thisregulation and the same shalr be equivarent to roo% of the charge forin accordance with the methodology specified in clause (g) of thisregulation and the same shall be equivalent to i00% ofthe charge forDeviation of 824.04 paise / kWh corresponding to the grid frequencyof 'below 49.70 Hz"' shall be substituted by the words ,.below 49.g5Hz in accordance with methodology specified in clause (g) of thisregulation and the same shalr be equivarent to roo% of the charge forDeviation of 800 Paise / kWh corresponding to grid frequency of'below 49.85 Hz'. As per clause 4.16, tnClause g of Regulation 7 ofthe Regulations, 2014, the words [.,below ]49.70 Hz,, shall besubstituted by the words "below 49.g5 Hz". The said amendments'below 49.85 Hz'. As per clause 4.16, tnClause g of Regulation 7 ofthe Regulations, 2014, the words [.,below ]49.70 Hz,, shall besubstituted by the words "below 49.g5 Hz". The said amendmentswere brought by CERC in exercise of powers conferred on it underSection 178 of the Act,2003. Admittedly, both the petitioners did notSection 178 of the Act,2003. Admittedly, both the petitioners did not file any appeal challenging either Regulations, 2014 or theamendments brought in vide Notification dated 20.11.2018 w.e.f.01.01.2019 by way of fi1ing an appeal under Section 1l I of the Act,2003. Therefore, the said regulations including the amendmentsbrought in vide Notification dated 20.11.2018 are applicable to boththe petitioners.

25. It is contended by respondent No.2 Company that it has notimposed any power restrictions on the petitioners and it has beensupplying power to the petitioners 24 x 7 hours. The petitioners lverewilling for open access power. Respondent No.2 has issued NOC tothe petitioners for availing power through open access as per theirown request. Any open access consumer is bound to follow CERCOpen Access Regulations, 2018 as amended from time to time and itis the prime responsibility of open access consumer to maintain gliddiscipline by means of not deviating open access power schedules asprocured by the petitioners themselves. It is also specificallycontended by respondent No.2 in the counter that the petitioners are not consumers of respondent No.2 company alone and drawing itsentire power from respondent No.2 company, but drawing power'through open access, the petitioners cannot over draw powel r'vhengrid frequency is below 49.85 Hz which is a bar as per the CERCDeviation Settlement Mechanism Regulations, 2018. The saidcontentions are not adverled to by the petitioners by way of fl1ingreply. The said deviations by the petitioners would in turn af-fect No.2 [company ][power ][schedules ][and ][the deviation ][charges]respondent for such energy over [drawn when ][grid ][frequency ][is below 49'85 ][Hz ][is]levied on respondent [No.2 ][company ][by ][SRLDC and ][the ][same ][is]passedontothepetitioners.ThedeviationchargesarecollectedbySRLDC for [causing ][indiscipline ][in ][the ][grid ][by ][over drawl ][/ ][under]drawl of energy.

26. It is also specifically [contended ][by ][respondent ][No'2 in ][the]counter that SLDC [imposed ][uI ][charges ][on ][TSSPDGL ][collectively ][for]the entire deviations [in ][its ][operation ][al, ][area' ][The ][TSSPDCL ][pays ][total]deviation charges [to ][SLDC ][and ][in turn ][collects the ][said charges ][from]its open access [consumers based ][on ][deviations committed ][by ][each]consumer.RespondentNo.2hasspecificallymentionedthedetailsofdeviationchargespaidbytheTSSPDCLcollectivelyfordeviationsby its open access [consumers ][in ][a tabular ][form ][in ][paragraph ][No'14']The [petitioners herein have ][not ][filed ][any ][reply ][adverting ][to ][the ][said]contentions of [respondent ][No.2. ][Thus, ][as ][rightly ][contended ][by]No.2 [that, ][it ][is ][the ][prime ][responsibility ][of ][open ][access]respondent consumer to maintain [grid ][discipline by ][means ][of ][not deviating ][open]access [power ][schedules, ][as procured ][by ][the petitioners ][themselves']Thus, both the [petitioners ][have deviated open ][access ][power ][schedules]and,therefore,therespondents'authoritieshaverightlyleviedUlcharges on them. [It ][is ][also ][apt ][to ][note that respondent ][No'2 ][company]has already [paid ][deviation ][charges ][to ][SLDC ][for ][the ][period ][from]October.2018 to [June,2019 ][as mentioned ][in ][the ][tabular ][fom ][in]

paragraph No.14 of the counter. It is also trite to note that thepetitioners have already paid the deviation charges for the months ofJanuary, 2019 to April, 2019 under the threat of disconnection 21 . It is also relevant to note that in Central PorverDistribution Companyr, the Apex Court had an occasion to deal withunscheduled interchange charges. By referring to the variousprovisions, the Apex Coufi held as under:

"10. In addition to two charges, a third chargeconten-rplated in the ABT scheme is for the unscheduledinterchange of power (UI charges). The UI charges arepayable depending upon what is deviated frotn theschedule and also subject to the grid conditions at thatpoint.of time. This elerrent was introduced to bring aboutthe effective discipline in the system. Under this systern UIcharges will be payable, if:

i) a generator generates more than the schedule, therebyincreasing the frequency;

ii) a generator generates less than the schedule; therebydecreasing the frequency;

iii) a beneficiary overdraws power, thereby decreasing thefrequency;

iv) a beneficiary under draws power, thereby increasing thefrequency.

11. It is thus clear from the above that UI charges are acommercial mechanism to rnaintain grid discipline. The UIcharges penalises whosoever caused grid indiscipline,whether generator (NTPC) or distributor, is subject topayment of UI charges who are not following the schedule.The UI charges are not payable if the appellants maintaintheir drawl of electricity consistent with the schedule givenby themselves. Therefore, there is no rnerit in the contention of the appellants that the UI charges are by wayofpenalty."

It further held as under:

"22.1. The application of Availability Based Tariffand irnposition of Unscheduled Interchange (UI) chargesare essential parl of the Functions of the Centralare essential parl of the Functions of the CentralCornrnission under Section 79( 1Xh) of the Electricity Act,2003 which reads to specify Grid Code having r.egard tothe Grid Standards, and Sub-section (2) of Section 2g readwith Section 178(2)(9) dealing with the Centralthe Grid Standards, and Sub-section (2) of Section 2g readwith Section 178(2)(9) dealing with the CentralComrnission's powers to frarne Grid Code. Thernaintenance of Grid discipline envisaged under the GridCode is regulated by the mechanisrn of ABT and UIcharges. There is no basis for the appellant to contend thatunless sornething is a paft of Tariff the CentralCommission camot exercise powers and functions. TheABT and UI charges are colnmercial rnechanism to controlthe utilities in scheduling, dispatch and drawl and the UICommission camot exercise powers and functions. TheABT and UI charges are colnmercial rnechanism to controlthe utilities in scheduling, dispatch and drawl and the UIcharges are taliff or charges payable for cleviations. In thefacts and circumstances mentioned above the legal positionfacts and circumstances mentioned above the legal positionis clear and there is no ambiguity in respect of thejurisdiction of the Central Cornmission.jurisdiction of the Central Cornmission.

24. As already noticed, the Central Cornmission hasthe power and function to evolve cornmercial rnechanisrnsuch as imposition of UI charges to regulate and cliscipline.It is well settled that a power to regulate includes within itIt is well settled that a power to regulate includes within itthe power to enforce.

25. In the facts and circurnstances as alluded, and asper the Scheme of the Electricity Act, 2003 mentionedabove, the Central Cornmission has the plenary power toregulate the Grid, particularly in the context of the Gr.idbeing integrated and connected across the regioncornprising of more than one State. The State Grid cannot be isolated and can be seen as independent frorn theregion."

28. In view of the above discussion and also the [principle ]inCentral Power Distribution Companyr, the [petitioners ]herein failedto make out a case to declare the action of the lespondents in levyingdeviation charges for drawl / over drawl power when grid frequency isbelow 49.85 for the months of January, 2019 to May, 2019 as illegal.Thus, both the writ petitions are liable to be dismissed.

W.P. Nos.13601 AND 13614 OF 2019

29. The above said writ petitions are filed by MS AgarwalFoundries Private Limited and Agarwal Foundaries respectively. Therelief sought therein is to declare the action of the respondents in notissuing NOC to the petitioners to avail open access power as whollyillegal. The petitioners filed applications on 27.06.2019 for issue ofNOC, but the respondents have not furnished the same. Therefore,according to the petitioners, they have addressed letters dated22.06.2019 and 01.07.2019 respectively to respondent No.4 to lookinto the matter and direct the concemed to issue NOC, but therespondents' authorities have not issued the same.

30. A perusal of the entile record would reveal that thepetitioners in botl.r the writ petitions have filed letters dated22.06.2019 addressed to respondent No.4 informing about filing o1'W.P. No.12263 and 12215 of 2019 and W.P. Nos.35828 and 35829 of2013. In the said letters, it is stated that the petitioners liave mentioned about the interim orders granted by this Courl in the saidwrit petitions with regard to collection of deviation charges well inadvance, so that there should not be any trouble for them in [getting]NOC for open access for the month of July, 2019. ln spite of keepingthe respondents up dated and paying al1 their dues, fees and applyingfor NOC well in advance, they have not been given NOC. The saidaction of the respondents is forcing the petitioners from [getting power]through open access and which in tum makes a [negative financial]impact on them every single day, as their business [is ][er.rergy ][intensive.]It is furlher stated by the petitioners in the said letter that [the act ]ofneither providing NOC, nor denying it through [proper ]corespondenceshows non-compliance of the orders of this Courl by the [respondents']authorities. By stating so, the petitioners sougl.rt to [provide ][NOC ][at]the earliest. Though the petitioners have stated that [they ][have ][made]application for issuance of NOC at the earliest, [well ][in ][advance, ][vide]letter dated 22.06.20\9, as stated above, in the letter dated22.06.2019,both the petitioners have not requested the [respondents' ][authorities to]issue NOC. They have informed only filing of writ [petitions ][and]passing of interim orders by this Courl in the said writ [petitions.]Thus, it appears from the said discussion, the [petitioners ][have ]soughtNOC only through letter dated 01 .07 .2019.

31. In the counter filed by respondent [No.4 in ][W.P.Nos.13601]and 13614 of 201.9, as per Clause [- ]6 [(1) ]of [CERC ][Regu1ations,2008,]an open access customer or [power ]exchange [(on behalf ][of ][buyers ][and]

sellers) intending to avail of open access for use of transmission [lines]or associated facilities for such lines on the [inter-state ][transmission]system, sha11 make an application to the Nodal Agency in accordancewith regulations. As per the said regulations, the [petitioners ]aresubmitting inter-state open access application to Nodal Agency i.e.,SRLDC, open access entity need to submit ['No ]Objection' clearancefrom the concerned SLDC with respect to bilateral transaction. Asper Clause - 8 (2), when a State utility or an intra-state entity proposesto participate in trading through a power exchange, it shall obtain ['no]objection' or a prior standing clearance from the State Load DispatchCentre in such form as may be prescribed in the detailed procedure,specifying MW up to which entity may submit a buy or sell bid in [a]powel exchange. It is fufther contended by respondent No.4 that thepetitioners are trying to misinterpret the procedure laid down in theRegulations. The petitioners, at first, have to apply to SLDC lorissuance of NOC which has to be forwarded to Nodal Agency i.e.,SRLDC for allowing the scheduling of open access power. The NodalAgency, in tum, will direct TSSPDCL for issuance of clearance, andthe said clearance shall be given by TSSPDCL based on technicalfeasibility and clearing all the dues with respect to open accesscharges. The unscheduled interchange charges which are levied onthe petitioners also part of "open access charges". Only after paymentof open access dues and also after verifying technical feasibility forrvheeling power, "clearance" shall be issued and directly sent onlineto SLDC. The SLDC shall, in turn, issue NOC to the consumer, who, in tum, shall have to submit the same to SRLDC for availing openaccess.It is also fur1her contended by respondent No.4 that forbilateral transaction, OA applicant directly coresponds with SLDCand TSSPDCL, whereas in respect of collective transaction, themember of IEX i.e., Power Exchange corresponds with SLDC andTSSPDCL. The open access applicant shall have to pay applicablecharges i.e, application fee payable to SLDC, wheeling charges toDISCOM at the time of making application for OA, as [per ]theRegulations.

32. It is relevant to note that both the [petitioners ]have [filed]reply af-fidavit to the counter affidavit filed by respondent No.4contending that the said writ petitions are only consequential to [W.P.]Nos.12263 and 12275 of20l9 filed by them challenging the action ofrespondents in levying and demanding deviation charges. If at all theissue in the said wlit petitions is decided, the issue in the [present ][writ]petitions subsists. Therefore, the averments in the counter affidavitwhich mainly relate to the case in W.P. Nos.12263 and [1227 ]5 of [20 ][I ][9]have no l'elevance to these writ petitions. Thus, the [petitioners ][have]not adverled to the said contentions of respondent No.4, [loreparlicularly, with regard to the procedure explained by respondentNo.4 in the counter with regard to obtaining NOC. Admittedly, thepetitioners in both the writ petitions have not followed the saidprocedure. They have simply made application dated 01.07.2019 witha request to issue NOC. It is also apt to note that the [petitioners ][herein]

are relying upon the orders dated [16.12.2013 ][in ][WPMP No.44558 ][and]44559 of 2013 in W.P. No.35828 and 35829 of [2013 ][respectively, ][and]by referring to the same, the [petitioners have ]obtained [interim ][orders]dated 05.07.2019 in the present writ [petitions ]for a [period ]of [two ][(02)]weeks. A perusal of the interim orders dated 16.12.2013 in [WPMP]No.44558 and 44559 of 2013 in W.P. No.35828 and 35829 of 2013,respectively, would reveal that the challenge in the said writ [petitions]is as follows:

".... issue a writ in the nature of a Writ of Mandarnusor any other appropriate writ direction or order declaringthe action of the lespondents in introducing Format A andFonnat B in the place of Fonnat in Annexurel [prescribed]by APERC under RegulationZ of 2005 for applying toNodel Agency for issuance of No Objection Cerlificate foravailing open access Energy as wholly arbitrary [illegal]without [jurisdiction ]and void and consequently direct therespondents to follow Format given in Annexurel toRegulation2 of 2005 to issue no objection Certificate andpass. .."

. . . .issue writ in the nature of a Writ of Mandamusor any other appropriate writ direction or [order]declaring the action of the respondents in introducingFormat A and Format B in tile place of Format inAnnexurel prescribed by APERC under Regulation2of 2005 for applying to Nodel Agency for issuance ofNo Objection Cerlificate for availing open accessEnergy as wholly arbitrary illegal without [jurisdiction]and void and consequently direct the respondents [to]follow Fdrmat given in Annexurel to Regulation2 of2005 to issue no objection Certificate and pass..."

33. The petitioners have sought interim relief directing theSLDC, represented by its Chief Engineer, AP TRANSCO, VidhutSouda, Hyderabad, to issue NOC to the petitioner to avail open accessenergy from IEX and the Trader M/s HMM Infra Ltd., for the rnonthof December 2013 without insisting for production of No DuesCertiflcate frorn APCPDCL. Thus, the challenge and the interimorder sought by the petitioners in the said two writ petitions aredifferent from the /rs involved in the present writ petitions. ThisCourl in the order dared 16.12.2013, in the said writ petitions,specifically mentioned that the petitioner wants to avail open accessenergy. It is also stated that open access charges will be paid by thetraders in advance and DISCOMS enter agreement with theconsumers under the provisions of the Electricity Act, 2003, forrecovery of dues from the consumer. In spite of dues, open accessenergy is purchased from energy exchanges through traders andDISCOMS are facilitating utilization of energy through open accesssystem by the consumer. If any dues are there to DISCOMS, they canalways lecover by invoking provisions ofthe Act, 2003.

34. Since, energy through open access is obtained by consumerfron.r third party thlough traders, the respondents cannot insist for Nodue cerlificate in respect of dues to DISCOMS. If the petitioners wantto avail energy through open access, DISCOMS may not insist for Nodue certificate for the dues to DISCOMS. Once open access chargesare paid, the petitioners may be permitted to avail open access subject to other conditions. However, it is open for [DISCOMS ][to ][take]appropriate action according to [provisions ]of the [Act, ][2003, for]recovery of dues. But, whereas, in the [present ]case, [as ][discussed]supra, the subject matter in the writ [petition ][Nos.35828 ][and ][35829 ][of]2013 are different from the subject matter of [present ]writ [petitions.]Thus, the present W.P. Nos.1360l and 13614 of 2019 fails andaccordingly, the same are liable to be dismissed.

3 5. In view of the above discussion, a1l the Wlit Petitions aredismissed. The interim orders [granted ]by this Court earlier [stand]vacated. However, there shall be no order [as ]to costs.

As a sequel, miscellaneous petitions, if any, [pending ]in thesewrit petitions sha11 stand closed.

HIGH COURT

DATED:3011212020

COMMON ORDER

'l'1HeslA r4:(oI0 6 [JAll ][2021]o*&I r)f.Id

WRIT PETITION [Nos.12263, ][1227 ][5,]13601 and [13614 ][of2019]

DISMISSING [THE ][WRIT ][PETITIONS]AS WITHDRAWNWITHOUT COSTS