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Power Grid Corporation of India Ltd. v. Punjab State Power Corporation Ltd.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 9193 of 2012)Decided 3 Mar 2016
Civil Appeal No. 9193 of 2012
Justice Ranjan Gogoi · Justice Prafulla C. Pant

Background

Power Grid built the 400 kV Barh-Balia double-circuit transmission line and charged a tariff to the state utilities that buy its power. The substation switchgear at the Barh end was NTPC's responsibility and was not finished when the line was built. The Central Electricity Regulatory Commission set the tariff from 1 July 2010, but the Punjab utility appealed, and the Appellate Tribunal for Electricity set that order aside and sent the matter back. Power Grid appealed to the Supreme Court.

Decision Breakdown

The Court held that a transmission line reaches its commercial operation date only once it has been successfully charged, has completed trial operation, and is in regular service. It read the regulation together with the statutory definition of "transmission lines", which includes switchgear and related works, so an unfinished substation at one end meant the line was not operational. The Court held that beneficiaries could not be made to pay tariff for a period before the line was actually in service, even though the delay was caused by another party. Both appeals were dismissed without prejudice to Power Grid's rights against NTPC.

Lesson Learnt

A utility cannot charge customers for infrastructure that is not yet fully working, even if the delay was caused by someone else. Companies that suffer such delays must pursue the party responsible, not the consumers.

Official source (sci.gov.in)View Judgment (PDF)

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