Disposed

Dhanalakshmi Srinivasan Sugars Pvt. Ltd., v. Tamilnadu Electricity Generation and

Madras HC5 Jul 2023WP/19091/2020

Case brief

AI extract

What is this about?

Petitioner sought writ mandamus for payment of pending interest under an Electricity Purchase Agreement. Respondents admitted liability but sought waiver. Court held no arbitrable dispute existed and extended a prior order allowing set-off of current charges against interest till full payment.

What did the court decide?

Order directing continuation of set-off arrangement for current charges against interest till full discharge; petition disposed of.

Dhanalakshmi Srinivasan Sugars Pvt. Ltd., Vs… — Contract and Commercial Disputes | Madras HC (2023)

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W.P.No.19091 of 2020

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 05.07.2023

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CORAM

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MR.JUSTICE N.SESHASAYEE

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W.P.No.19091 of 2020 and W.M.P.Nos.23665 and 23667 of 2020

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Dhanalakshmi Srinivasan Sugars Private Limited, Represented by its Managing Director, Udumbiyam Village, Venganur Post, Veppanthattai Taluk, Perambalur-621 116.

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... Petitioner

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Vs.

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1.Tamil Nadu Electricity General and Distribution Company, (TANGEDCO), Rep. by its Chairman and Manging Director, No.144, Anna Salai, Chennai-600 002.

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2.The Chief Financial Controller (Revenue) TANGEDCO, 144, Anna Salai, Chennai-600 002.

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https://www.mhc.tn.gov.in/judis

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W.P.No.19091 of 2020

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3.The Director / Finance, TANGEDCO, No.144, Anna Salai, Chennai-02. ... Respondents

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PRAYER: The writ petition filed under Article 226 of the Constitution of India, to issue a writ of Mandamus, directing the respondents to forthwith make payment of the pending dues towards accrued interest for the belated payments against invoices for the supply of electricity under Energy Purchase Agreement for Bagasse Based Co-Generation Plant (EPA) dated 20.10.2009 that stands at Rs.11,57,17,800/- (Eleven Crore Fifty Seven Lakhs Seventeen Thousand Eight Hundred only) as on 31.10.2020, and further interest thereon.

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For Petitioner : Mr.R.Parthasarathy

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For Respondents : Mr.D.Suresh Kumar for R1 and R3

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Mr.M.Abdul Kalam for R2

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ORDER

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The petitioner - company generates electricity for its purposes and also has entered into an agreement dated 26.10.2009, with the respondents for the sale of surplus energy that it has generated. There is no dispute about the electricity supplied by the petitioner to the respondents nor is there any dispute over the rate

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https://www.mhc.tn.gov.in/judis

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W.P.No.19091 of 2020

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at which it has to be paid by the respondents. The contract provides that the respondents - purchasers default in making payment within 30 days in terms of Clause 6 (2) of the contract, whereas, it has to pay an interest at 1 % per mensem or 12% per annum. According to the petitioner, the respondents committed default, then dragged its feet in making payment, and finally it did pay the entire cost of electricity purchased, but not the interest payable in terms of Clause 6 (2) of the contract. This petition is now laid for realizing the said interest component

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of the respondents' liability in terms of the contract that it has entered into.

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2.Learned counsel for the respondents / TANGEDCO would submit that under Clause 9, any dispute between the parties have to be arbitrated.

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3.Ordinarily, the Court will not entertain a writ petition that deals with working of a contract when there is an Arbitral Clause providing for resolving the dispute. However, in this case, the respondents have not raised any dispute as such, but only seeking waiver in the whole or any part of the interest component payable by it. To this Court, it is an admission of liability by the respondents and does not involve any dispute either over working the contract or to invoke an arbitrable

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https://www.mhc.tn.gov.in/judis

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W.P.No.19091 of 2020

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dispute.

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4.This Court vide order dated 18.12.2020, passed an order of injunction, wherein it has directed the respondents to set off the monthly current electricity charges that the petitioner has to pay the respondents as against the amount of interest, which the respondents are liable to pay the petitioner. This arrangement, the learned counsel for the petitioner informs continues till date. In that, a formal view be raised for the electricity consumption charges that he is liable to pay, and the same is given credit as against the interest amount which the respondents are liable to pay.

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5.Given the circumstances, this Court directs that the said arrangement shall continue till the entire interest amount which the respondents are liable to pay the petitioner.

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https://www.mhc.tn.gov.in/judis

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W.P.No.19091 of 2020

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6.This writ petition is disposed of accordingly. No Costs. Consequently, the connected miscellaneous petitions are closed.

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05.07.2023

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Anu Index : Yes / No Neutral citation : yes/no To 1.Tamil Nadu Electricity General and Distribution Company, (TANGEDCO), Rep. by its Chairman and Manging Director, No.144, Anna Salai, Chennai-600 002. 2.The Chief Financial Controller (Revenue) TANGEDCO, 144, Anna Salai, Chennai-600 002. 3.The Director / Finance, TANGEDCO, No.144, Anna Salai, Chennai-02.

N.SESHASAYEE, J.

Anu

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https://www.mhc.tn.gov.in/judis

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W.P.No.19091 of 2020

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W.P.No.19091 of 2020 and W.M.P.Nos.23665 and 23667 of 2020

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05.07.2023

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6/6

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https://www.mhc.tn.gov.in/judis

Dhanalakshmi Srinivasan Sugars Pvt. Ltd., v. Tamilnadu Electricity Generation and

Case brief

What is this about?

What did the court decide?

Dhanalakshmi Srinivasan Sugars Pvt. Ltd., v. Tamilnadu Electricity Generation and

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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