In Brief
The Supreme Court upheld the Appellate Tribunal for Electricity's order directing the Andhra Pradesh State Commission to decide two pending petitions on their merits—one by HNPCL seeking tariff determination and one by the state distribution companies seeking approval of a 1998 power purchase agreement. The state companies' application to withdraw their petition after final hearings was held impermissible. The Court found that the State had consistently committed to purchasing 100% of HNPCL's power generation through multiple agreements and representations, inducing HNPCL to invest heavily. The distribution companies' sudden attempt to withdraw was deemed arbitrary, contrary to public interest, and a breach of legitimate expectations. The Court emphasised that State instrumentalities must act non-arbitrarily and for public good, and directed the companies to resume purchasing power from HNPCL pending final tariff determination.
The lawyer headnote and full judgment text are available to registered users.