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Sesa Sterlite v. Orissa Electricity Regulatory Commission

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 5479 of 2013)Decided 25 Apr 2014
Civil Appeal No. 5479 of 2013
Justice S.S. Nijjar · Justice A.K. Sikri

Background

An aluminium producer operating a single-unit Special Economic Zone bought power from another generating company rather than the local distribution licensee WESCO. It claimed that its status as a deemed distribution licensee exempted it from the cross-subsidy surcharge. The Commission and appellate tribunal rejected that claim, and the company appealed.

Decision Breakdown

The Supreme Court dismissed the appeal and held that the company could not avoid the surcharge on these facts. Deemed-licensee status relieved it of specifically applying for a licence under Section 14, but did not establish that it actually distributed electricity to other consumers. Its purchased electricity was used in its own integrated plant, making it a consumer rather than a functioning distributor to multiple units. The surcharge compensated the area's distributor for the cross-subsidy lost when a subsidizing consumer obtained electricity elsewhere, and did not depend solely on using that distributor's wires.

Lesson Learnt

A regulatory label alone does not bring every exemption associated with the activity it describes. A business buying electricity for its own consumption must consider applicable surcharges even when its premises have Special Economic Zone status.

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

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