GAUHATI HIGH COURT ISSUES ORDER ON M/S JYOTI POWER AGENCY V/S THE STATE OF ASSAM AND 4 ORS

GUWAHATI, India, Aug. 12 -- Gauhati High Court issued the following order on July 14:

1. Heard Mr. S.S. Ahmed, learned counsel appearing on behalf of the petitioner. Also heard Mr. K.P Pathak, learned standing counsel, APDCL.

2. The petitioner, M/S Jyoti Power Agency is a proprietorial concern and was having a franchise agreement with the Assam Power Distribution Company Limited (hereinafter referred to as APDCL).

3. A contract agreement between the APDCL and petitioner was entered for deployment of collection based distribution franchise for 20 nos of DTR under Nilambazar Electrical Sub Division, of Badarpur Electrical Circle. Under the contract, the petitioner was to undertake the management of local electricity distribution network in the areas assigned to the Franchisee and Revenue related activities including repair and maintenence (R&M) activities.

4. Under clause 10 of the agreement, the APDCL was liable to pay certain commission and under clause 11, certain incentives for service connection etc. Under clause 13, the procedure of termination of the contract is provided, which includes right of APDCL to terminate the contract for non compliance of terms and conditions of the contract in the Franchisee. It was further provided, in the contract under clause 13 that agreement can also be terminated by either party by giving a notice of one month in advance.

5. The dispute redressal mechanism is provided under clause 14. In terms of clause 14 (i), the dispute and difference between the parties arising from the agreement shall be tried to be settled amicably through consultations and negotiations by the AGM of the franchisee area and in terms of clause 14(ii), if such termination remains unsettled, it is to be referred, at the first instance to the CEO of the franchisee area for amicable settlement and in terms of clause 14(iii), if such dispute still remains unresolved, it shall be referred to the General Manager (Com-Rev) APDCL for final settlement.

6. Such agreement was entered on 01.12.2016 and was to continue till 01.12.2018 but the petitioner was allowed to continue further with the DTR franchisee by way of extension and the last extension was provided on 30.04.2023. On 02.05.2023, a notice of termination of DTR agreement/operation was issued by the Assistant General Manager, Karimganj, by which it was intimated to the petitioner, that it is no longer commercially expedient for the APDCL to continue with the contractual obligations and therefore, in terms of Clause 14(ii), it was resolved to terminate the contract with effect from 1st of June, 2023. It was further provided that the period from 01.05.2023 to 31.05.2023 was to be treated as notice period of one month as mandated in the contract. Accordingly, the petitioner was requested to return/handover all the tools, machineries, equipments, ledger, document, receipt books etc to the APDCL positively by 31.05.2023.

7. Being aggrieved by the aforesaid notice, the present writ petitioner approached this court with an interim prayer seeking stay of the operation of the notice dated 02.05.2023. This court by its order dated 01.06.2023 however refused to stay operation of the impugned notice dated 02.05.2023.

8. Mr. Ahmed, learned counsel for the petitioner referring to provision of section 3, 5, 12, 13 and 14 of the Electricity Act, 2003 submits that distribution of electricity and services ancillary thereto was permissible and accordingly, the APDCL had entered into a franchisee agreement with the petitioner on 01.12.2016, thereby allowing the petitioner to undertake the management of local electricity distribution network in the areas assigned to the petitioner, which includes revenue related activities, repair and maintenance activities and such other activities that may be covered by the agreement.

*Rest of the document can be viewed at: (https://hcservices.ecourts.gov.in/ecourtindiaHC/cases/display_pdf.php?filename=tuqye3PhFs%2BBDn75ghiOpLRcVgJqjJXXbyMYKrHMsRjdGix%2FMZ8NyYoapksQri2W&caseno=WP(C)/2875/2023&cCode=1&cino=GAHC010107652023&state_code=6&appFlag=)

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