RESTORED CAPTIVE POWER POLICY CIRCULARS PRECLUDE RE-LITIGATION OF CONTRACT DEMAND REDUCTION AND REFUND CLAIMS

The Appellant, a High Tension consumer operating a 7 MW Captive Power Plant (CPP) in Maharashtra, sought reduction of its contract demand from 5300 kVA to 3000 kVA in 1998

Respondent No. 1 (MSEDCL) refused, citing circulars imposing "take-or-pay" obligations and minimum off-take requirements

In the first round of litigation (Case No. 35 of 2002), the Maharashtra Electricity Regulatory Commission (MERC) quashed these circulars and ordered a refund

This was upheld by the Appellate Tribunal (APTEL) in 2007

However, the Hon’ble Supreme Court, in Civil Appeal No. 4304 of 2007 (decided on 28.02.2020), set aside both orders, ruling that the circulars were validly issued before MERC’s establishment and had been illegally quashed

Following this, the Appellant filed a fresh petition (No. 17 of 2021) before MERC seeking various refunds and declarations, which MERC dismissed on 12.07.2021, prompting this appeal

1. Whether the issues of reduction of contract demand and extension of supply from the CPP remained alive following the Supreme Court’s judgment in Civil Appeal No. 4304 of 2007

2. Whether the Appellants were entitled to refunds and rectified billing despite the Supreme Court's restoration of the MSEB circulars

The court applied the principle of judicial finality and the doctrine of merger regarding the Supreme Court's judgment under Section 125 of the Electricity Act, 2003

It relied on the validity of administrative circulars (Circular Nos. 602, 619, 627, 651, and 663) which established "take-or-pay" obligations and minimum off-take requirements for CPP holders

Under Section 44 of the Electricity (Supply) Act, 1948, the court recognized that permissions to install CPPs are subject to the policy conditions and rules framed by the State Electricity Board

The Tribunal rejected the Appellant's contention that the Supreme Court had only addressed the legality of the circulars while leaving the issues of "contract demand" and "extension of supply" untouched

Upon reviewing the original Memorandum of Appeal filed before the Supreme Court, the Tribunal noted that MSEDCL had specifically challenged the findings on contract demand and unauthorized supply

The Tribunal reasoned that since the Supreme Court set aside the entirety of the previous orders and restored the circulars, the legal basis for the Appellant's claims—the quashing of those circulars—had been removed

The restoration of the circulars automatically reinstated the "take-or-pay" and minimum off-take obligations, making the Appellant's request for contract demand reduction inconsistent with the restored regulatory framework

The Tribunal affirmed that the Supreme Court's judgment dated 28.02.2020 was comprehensive, covering all issues including contract demand. Consequently, the Appeal was dismissed, and the MERC order dated 12.07.2021 was upheld