The High Court of Karnataka, in a recent decision with industry-wide implications, has held that the State Government is not the ‘appropriate government’ under Section 11 of the Electricity Act, 2003, in relation to generators engaged in inter-state supply of electricity.
The Court has accepted the Petitioners’ contention that the earlier decision of a Division Bench of the High Court in GMR Energy Limited v. Karnataka, ILR 2010 Kar. 2620, no longer holds the field in the light of the subsequent decision of the Supreme Court in Energy Watchdog vs. CERC, 2017] Supreme Court Cases 80.
In GMR, the High Court had held that the jurisdiction of the Central Government would not extend to inter-state suppliers unless they supplied to establishments enumerated in Section 2(5)(a)(ii) (mines, oilfields, railways, national highways, airports, telegraphs, broadcasting stations and any works of defense, dockyard, nuclear power installations).
In Energy Watchdog, the Supreme Court had held that the appropriate government and appropriate commission vis-à-vis inter-state supplies of electricity were the central government and the CERC.
The Court, in light of this finding by the Supreme Court, held that earlier the view taken in GMR is no longer good law and quashed the Order of the Government of Karnataka vis-à-vis the Petitioners who are engaged in inter-state supply of / trading in electricity.
Saakshya Law, Advocates, (Aditya Narayan, Partner, Lalia Elizabeth Philip, Senior Associate, and Shruti Nayak and Jayanti Srivastava, Associates) appeared for some of the Petitioners.