Holding

The Supreme Court held that the petition lacked locus standi, the GRIDCO‑PTC transaction was intra‑state, and the Appellate Tribunal erred in interfering with CERC’s conclusions; therefore the Tribunal’s order was set aside.

Summary

The case concerned a petition filed by Gajendra Haldea before the Central Electricity Regulatory Commission (CERC) under Section 52 read with Section 79(1)(g) of the Electricity Act, 2003, seeking that Grid Corporation of Orissa Ltd (GRIDCO) adhere to a 4 paise per unit trading margin prescribed by CERC. CERC dismissed the petition, holding GRIDCO to be an intra‑state trader and thus outside the scope of the margin notification. The petitioner appealed to the Appellate Tribunal, which reversed CERC, deeming the GRIDCO‑PTC transaction inter‑state and directing CERC to enforce the margin. The Supreme Court held that the petitioner lacked locus standi, that the GRIDCO‑PTC sale was intra‑state, and that Rule 9 of the Central Electricity Rules, 2005 permits resale within the same state without a separate licence. Consequently, the Court set aside the Appellate Tribunal’s order and affirmed CERC’s view.

Issues considered

The petitioner’s locus standi to file a petition under Section 52/79(1)(g) of the Electricity Act, 2003.
Whether the GRIDCO‑PTC transaction constitutes inter‑state or intra‑state trade for purposes of the Trading Margin Regulations.
Whether the CERC’s trading‑margin notification applies to GRIDCO.
The jurisdiction of the Appellate Tribunal under Section 111 of the Electricity Act to entertain the appeal.
The applicability of Rule 9 of the Central Electricity Rules, 2005 to the resale of electricity within the same state.

Legislation cited

Electricity Act, 2003s. 111, s. 121, s. 142, s. 178, s. 52, s. 60, s. 62, s. 66, s. 79(1)(g)

Subjects

electricity lawtrading marginlocus standiintra‑state tradeinter‑state tradeAppellate Tribunal jurisdictionCERCSection 52Section 79Rule 9public interest litigation

Judgment

[2008] 12 S.C.R. 79

}
GRID CORPORATION OF ORISSA LTO. A
II.
GAJENDRA HALDEA AND ORS.
(Civil Appeal No. 5722 of 2006 etc.)
AUGUST 13, 2008
8
[DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.]
·~

' Electricity Act, 2003- ss. 52 rlw s. 79(1)(g), 111, 121 and
I

142- Sale of surplus power by Grid Corporation of Orissa
(GRIDCO)- To other trader- Petition before Central Electric- c
ity Regulatory Commission (CERC) seeking direction to
GRIDCO to adhere to trading margin as specified. by CERC
in its Notification- CERC holding that the petitioner had no
Lpcus Standi and that the Notification was not applicable to
GRIDCO being intra-State trader - Appellat.e Tribunal held
0
that sale to Power Trading Corporation(PTC) was an inter-State
trade attracting. Regulation 2 of Fixation of Trading Margins
Reg·ulations, 2006 and as such PTC could not sell the pur-
chased power within the State - On appeal, held: The petition
before CERC was not entertainable, the petitioner lacking
Locus Standi - The transaction was intra-State - In view of r. 9 E
of Electricity Rules, PTC was not barred from selling the pur-
chased power within the State- PTC is bound by the Regula-
tions - Central Electricity Rules, 2005 - r. 9 - Central Elec-
tricity Regulatory Commission (Fixation of Trading Margin)
Regulations, 2006 - Regulation 2 - Central Electricity Regu- F
latory Commission (Procedure, Terms and Conditions for
Grant of Licence and other Related Matters) Regulations,
2004.
Respondent No. 1 filed a petition before Central Elec-
G
.
~
tricity Regulatory Commission (CERC) u/s 52 r/w s. 79 (1)
(g) of Electricity Act, 2003. He sought direction to the ap-
pellant-GRIDCO to adhere to maximum trading margin,
as specified by the Commission by its Notification dated
79 H
80 SUPREME COURT REPORTS [2008J 12 S.C.R

{
A 23.1.2006 . CERC dismissed the petition holding that
GRIDCO being an intra-State trader, the Notification was
not applicable to it. Respondent's. appeal· u/s 111 of the
Act was allowed by the Appellate Tribunal holding tha.t ·
. tQe transaction of sale of surplus energy by GRIDCO to
s Power Trading Corporation (PTC) was in the nature of
inter-State trade attracting Regulation 2 of Central Elec-
. )-
tri~ity ~egulatory Commission (Fixation of Trading Mar-
gin) Regulations, 2006; and that PTC being an inter-Sta~e
trader could not sell in Orissa the electricity _purchased
c from GRIDCO. ·
~- . · Disposing of the .appeals and the SLP, the Court
' . . . ...... - ~

HELD: 1. Appellate Tribunal was wrong in interfer-
ing with th~ conclusions of CERC that the writ petition of
D respondent No.1 was not entertainable and/or maintain-
able: Responden·t No. 1, in order to prove that he had Lo-
cus Standi to file the petition, relied on Sections 121 and ~ -

.. 142 of Electricity Act, 2003. A bare reading of these provi-
·sions shows that they are not applicable. It was ~lso stated
that the petition is not in the nature of PIL and that ·the ·
E prayer fo.r. refund was not being pressed. [Paras ·15, 16
and 17l [89,~; 88 F-G]
2.1 The observation of the Appellate Tribunal that
PTC could not have sold electricity and it could not have
F effected sale inside the State is wrong because of Rule 9
of the Central Rules. The contract was concluded in the ·
State of Orissa and the trc;tnsmission loss was to be borne
by PTC who was not an agent of GRIDCO. The Appellate
Tribunal 's co·nclusions regarding nature of tr~nsactions
G are. not supportable when various clauses of ·the agree-
. ment are considered. They clearly establish intra-State f

nature of the transactions. [Paras 19 a·nd ·20] [93,D-E; 93,A] ~
2.2 Under Rule 9 of the Central Electricity Rules, 2005
there is no restriction~ on the l icensee effecting sale or re-
H sale in the same State and no separate licence is needed.
GRID CORPORATION OF ORISSA LTD. v. GAJENDRA 81
HALDEA & ORS.
;.
In fact, there was no agreement to take out the electricity, A
as was inferred by the Appellate Tribunal. PTC is bound
by the Regulations. Whenever there is sal~ for inter-state
trade, the margin is maintained. Additionally, PTC was not
a party before CERC. Originally also, it was not a party ·
before the Appellate Tribunal. [Para 20] [93,8-C] B
f. Ben Gorm Nilgiri Plantations Company, Coonoor and
Ors. v. Sales Tax Officer, Special Circle, Ernaku/am and Ors.
' 1964 (7) SCR 706- relied on. ·
Case Law Reference c
1964 (7) SCR 706 Relied on Para 18
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 5722
of 2006
From the final Judgment and Order dated 16/11/20.06 of D
the Appellate Tribunal for Electricity, New Delhi in Appeal No.
81 of 2006
WITH
C.A. Nos. 185, 399 of 2007 and SLP (C) No. 11629 of E
2007
Vikas Singh, A.S.G. Aruneshwar Gupta, A.A. G. Dushyant
Dave, Arun Jaitely, Dr. A.M. Singhvi, K.K. Venugopal, Shyam
Diwan, Kukrety, Raj Kumar Mehta, Mriganka, Amit Kapur,
Mansoor Ali, Aribam Guneshwar Sharma, K.K. Lahiri, Ejaj F
Maqbool, Abhijeet Sinha, Keshav Mohan, Pratik Dhar, C.K. Rai,
D. Julius Riamei, Sridhar Potaraju, Satesh Mukherjee, Vishal
Anand Jagjit Singh Chhabra, Ajay Saroya , Sapan Kumar
Mishra , Swati Sinha ·(for M/s. Fox Mandai & Co .), M.G.
Ramachandran , Sanjeev Kumar, Avinash Menon , Kumar Mihir G
(for M/s. Khaitan & Co.), Aproova Misra, Pradeep Misra, Daieep
Kr. Dhayani, D.J. Kakalia , Syed Naqvi, Smieetaa lnna and
Rajesh Kumar; Paras Kuhad , Biju Mattam, Richa Srivastava.
S.K. Puri, V.M. Chauhan, Priya Puri, H.K. Puri, Arun Pendnekar.
S.S. Shind~. Hemantika Wahi , Pinky, Sangeeta Singh, Neeraj H
82 SUPREME COURT REPORTS [2008]12 S.C.R.

A Kumar jain,· Bharat Singh, Sanjay Sipgh, Sandeep Chaturvedi, -4
Ugra Shankar Prasad, P. Narasimhan, Pradeep Dahiya, S.K.
Sabharwal and V.N . Raghupathy for the Appearing parties,
Petitioner-in-person (N .P.) and Cajendra Haldea, Respondent-
in-Person (N.P.)
B The Judgment of the Court was delivered by
Dr. ARIJIT PASAYAT, J. 1. These appeals involve an im-
portant question regarding juri!:"'diction of the Appellate Tribunal
for Electricity (in short 'Appellate Tribunal'), New Delhi. The first
c judgment of the Appellate Tribunal is assailed in the case of
appellant-Grid Corporation of Orissa Ltd.
2. Background facts in a nutshell are as follows:
Respondent No.1-Gajendra Haldea a ser.ving officer
D based in Delhi filed a petition before the Central Electricity Regu-
latory Commission (in short the 'CERC') purportedly under Sec-
tion 52 read with Section 79(1 )(g) of the Electricity Act, 2003
(in short the 'Act') on 28.2.2006. The prayers inter- alia were
under:

E (a) Direct GRIDCO to adhere to the maximum trading
margin of 4 paise while entering into a contract for sale
nf power to any trading licensee in case such power is
ultimately routed to a licensee outside the State of
Orissa through an inter-state transmission system.
F (b) Direct GRIDCO ·to file appropriate returns in the
prescribed Form-Ill of the Central Electricity Regulatory
Commission (Procedure, Terms & Conditions for grant
of Trading Licence and other related matters)
Regulations , 2004 in respect of each transaction of
G sale, where the electricity sold by it has been ultimately
transferred to a license outside the State of Orissa
using inter-state transmission system.
(c) Direct GRIDCO not to sell ~lectricity in the course of
inter state trade with a margin exceeding 4 paisel
H·
GRID CORPORATION OF ORISSA LTO. v. GAJENDRA 83
HALDEA & ORS. [DR. ARIJIT PASAYAT, J.]

> per unit and to modify any contract that allows it to A
retain a higher margin.
(d) Direct GRIDCO not to invite bids with the intent of
selling electricity in the course . of inter-state trade
with a margin exceeding 4 paisa per unit.
B
(e) Exempt petitioner from the requirement of payment
of the prescribed fee . .
(f) Pass such other and further orders and/or directions
as this Hon'ble Court may deem fit and proper in the
facts and circumstances of the case." c
As is evident from paras 9 and 11 of the petition, the same
was purportedly in public interest and was intended to save in-
terests of consumers of electricity in the country. The appellant-
Grid Corporation of India filed objections inter-alia taking the
D
stand that petition filed by respondent No.1-Gejendra Haldea
was misconceived and not maintainable in law and was liable
to be rejected. By order dated 1.5.2006 CERC dismissed the
petition and following findings were recorded :
"In our considered view, GRIDCO though de~med to be an E
Electricity trader is an intra-state trader and is amenable to
the jurisdiction of the Orissa Commission. Therefore, the
Trading margin of 4 paise/KW specified by the Commission
in its Notification dated 23.1.2006 published in the Official
Gazette on 27.1.2006 does not apply to GRIDCO." F
-l: Challenging the order of CERC , respondent No.1-
Gajendra Haldea carried the matter before the Appellate Tribu-
nal in appeal purportedly filed under Section 111 of the Act. By
the impugned order, the Appellate Tribunal allowed the appeal
and granted reliefs as prayed for by respondent No.1. G

.~
3. The basic challenge in these appeals is that the peti-
tion filed by respondent No.1-Gajendra Haldia was thoroughly
mis-conceived because the appeal in terms of sub-section (1)
of Section 111 has to fulfill the following requirements.
H
84 SUPREME COURT REPORTS [2008] 12 S.C.R.

A "111 . Appe.a l to Appellate Tribunal.-(1) Any person
aggrieved by an order made by an adjudicating officer
·under this Act (except under section 127) or an order made
by the Ap-propriate Commission under this Act may prefer
an appeal to the Appellate Tribunal for Electricity: ·
8 Provided that any person appealing against the order of
the adjudicating officer ievying any penalty shall, w!lile filing
the appeal, deposit the amotJnt of such penalty:
Provided further that where in any particular case, ·the
c Appellate· Tribunal is of the opinion that the deposit of
such penalty would cause undue hardship to such person,
it may dispense with such deposit subject to such
conditions as it may deem fit to impose so as to safeguard
• the realisation of penalty.
D (2) Ever)i appeal under sub-section (1) shall be filed within
a period·of forty five days from the date on which a copy
of the order made by the adjudicating officer or the
Appropriate Commission is received by the aggrieved
person .and it shall be in such form, verified in such manner
E and be accompanied by such fee as may be pfescribed:
Provided ·that the Appellate Tribunal may entertain an
appeal after the expiry of the said period of forty-five day~
~fit _is s~tisfied _
t hat there was sufficient cause for not filing
it within that period.
F
(3) On receipt of an appeal under sub-section (1 ), the
Appellate Tribunal may, after giving the parties to the appeal
an opportunity of being heard, pass such orders thereon .
.as it thinks fit, confi~ming , modifying or setting aside the
order appealed against.
G
(4) The Appellate Tribuna(shall send a copy of every order ·- ~
..... .
made by it to_ttl~· parties to the appeal and to the concemed .
adjudicating officer ·or the Appropriate Commission ,· a~ ·
the case may· be.
H
GRID CORPORATION OF ORISSA LTO. v. GAJENDRA 85
HALDEA & ORS. [OR: ARIJIT PASAYAT, J.]
> (5) The appeal filed before the Appellate Tribunal under A .
sub-section (1) shall be dealt with by it as expeditiously as
possible and endeavour shall be made by it to dispose of
the appeal finally within one hundred and eighty days from
the date of receipt of the appeal:
Provided that where any appeal could not be disposed of B
'"i within the said period of one hundred and eighty days, the
-Appellate Tribunal shall record its reasons in writing for
' not disposing of the appeal within the said period.
.
(6) The Appellate TribLJnal may, for the purpose <?f c
examining the legality, propriety or correctness of
Appropriate Commission under this Act, as the case may
be, in relation to any proceeding, on its own motion or
oth.erwise, call for the records of such proceedings and
make such order in the case as it thinks fit."
D
. )r
4. It was, therefore, submitted that respondent No.1 was
neither entitled to file a petition before the CERC under Sec-
tion 52 read with Section 79 (1 )(g) of the Act nor is entitled to
file an appeal before the Appellate Tribunal.
5. It is pointed out that the ·expression 'any person ag- E
grieved' must be a person who suffered legal grievance or le- ·
gal injury or o:n e who has been unjustly deprived and denied of
something which he wpuld have entitled to obtain in usual course.
6. On merits it is submitted that the transaction between · F
.4_ the appellant-Grid Corporation of Orissa Ltd . .and PTC India
Ltd. was intra-state within the meaning of Central Electricity
. Regulatory· Commission (Procedure, Terms & conditions for
Grant of Trading Licence and Other Related Matters) Regula-
tions, 2004 (in short the 'Regulations'). It is submitted that even
G
on cursory reading of the Regulations, it would be apparent that
.~ the appellant's sale to Power Trading Corporation of India Ltd.
(in short 'PTC') cannot be construed as inter-state trading within
the meaning of said ~xpression.

7. Civil Appeal No.185/2007 has been filed by PTC l~dia H
86 SUPREME COURT REPORTS [2008] 12 S.C.R.

A ltd and the challenge js to the order of the Appellate Tribunal
dated 16.11.2006. Here again, the Appellate Tribunal held that
the transaction of sale of surplus energy by GRIDCO to PTC was
in the nature of inter-state trade attracting Regulation 2 of the
Central El~ctricity Regulatory Commission (Fixation .of Trading
B Margin) Regulations, 2006 (in short 'Trading Regulations'). PTC
being an inter.:state trader could not sell electricity purchased from
GRIDCO in Orissa . Allowing electr.icity traders to sell electricity
at unregulated price without fixing trading margins will have baneful
. effect on the development of the power sector. The aforesaid
c findings of the Appellate Tribunal are questioned in this appeal.
8. It is pointed out that PTC was not impleaded as the
respondent or a party before CERC and/or PTC was never af-
forded an opportunity of placing its case in writing or even in
hearing before the Appellate Tribunal. The Appellate Tribunal
D concluded its hearing on 28.8.2006. The subject matter of Peti-
tion No.41 of 2005 and Appeal No.81 of 2006 are unrelated. It
was understood by PTC that it was not required to intervene in
the Appeal No.81 of 2006, particularly, since hearing of Petition
No.1 of 2005, which was subject matter of challenge in Civil Ap-
E peal No.68 of 2007 was concluded on 26.3.2006 and the judg-
ment was reserved. In said matters larger question of design of
electricity market under Section 66 of the Act and role of regula-
tors under Sections 60, 62, 79(1 )0) and 178 thereof were involved.
9. It is pointed out that in terms of the agreement dated
F 9.3.2006 which was for sale of electricity by GRIDCO to PTC,
sale was completed within Orissa at the points of supply listed
in Clause 2 of the General Terms and Conditions of the Agree-
ment. Th~ Appellate Trib~nal concluded as follows :
"(a) Title passed to PTC within Orissa.
G
(b) Risk passed to PTC within Orissa. l
;.
'.
(c) Obligation to pay for electricity arose against PTC
within Orissa.
H (d) Control over the electricity so supplied and choice of
GRID CORPORATION OF ORISSA LTD. v. GAJENDRA 87
HALDEA & OR's. [DR. ARIJIT PASAYAT, J.]
) whom to sell and at what price passed to PTC within A
Orissa."
10. It is pointed out that the finding recorded to the effect
that the sale took place only after electricity was exported out-
side Orissa and sale took place only by consumption are con-
trary to the scheme of the Electricity Act. It is also submitted that 8
the finding regarding protection of consumers' interest and the
1
question qua exporting of unregulated rates at which the elec-
tricity is sold by a trader of electricity will promote competition
a'nd protect consumers and the finding that the appropriate
Commissions must utilize the mechanism of fixing trading mar- c
gins under Section 79(1 )0) and 86(1)U) to protect consumers'
interests is neither based on any pleadings nor arises for adju-
dication in Appeal No.81 of 2006.
11. It is pointed out that the Appellate Tribunal itself under-
0
stood that there is no power vested in any ERC to determine
~ tariff for trading. It has noted as follows:
"Section 66 requires development of market (price
determination by forces of demand by supply); and
(b) Section 60 empowers the ERCs to adjudicate upon E
a~y instance of and issue directions considered
appropriate to prevent an adverse effect on competition
in electricity industry by-
(i) Entering into an agreement F
(ii) Abusing its dominant position; or
(iii) Entering into a combination .
12. The appellant-GRIDCO has also submitted that the
definition of inter-state trading in terms of Section 2(g) of the G
.
).,
Regulations has not been kept in view. Reference is made to
Clauses 2, 3, 4 , 18 and 23 to contend that the Appellate
Tribunal's conclusions are erroneous. It is also submitted that
scope and ambit of Clause 26 has been mis-construed by the
Appellate Tribunal. H
SUPREME COURT REPORTS {2008] 12-S.C.R.

A 13. Additionally, learneq counsel for GRIDCO has submit-
tee ·that in reply to the pe-tition filed GRIDCO ha9 categorically
·. submitted that respondent Gajendra.had no locus standi to. file
the petition· and the petition filed was not maintainable. CERC
held that trading margins are not applicable to GRIDCO since
8. · it is carried out the functions of bulk supply of electricity within·
·the State of Orissa under Bulk Supply Licence issued by the
CERe· and the transactions were completed in the State of
Orissa. The entire benefit from the sale of such ~urplus power
was passed .on to the consumers of_the State thro'ugh the Bulk
c Supply Tariff Orders. CERC, it is pointed out, had dismissed
the petition by respondent No.1-Gajendra ·Haldea by holding
that GRIDCO is an intra state trader. GRIDCO's transactions
- under the said contract with PTC was completed within the State
• of Orissa. Accordingly, it was held that the RegtJiations w~re
. not applicable to GRIDCO. CERC in view of the above did not
0
deal with the question of locus standi. Appellate Tribunal held
that Gajendra Haldea had locus standi to file the petition. Though
it did not disturb the findings of CERC that GRIDCO is an intra-
state trader, it held that the transactions _of sale Qf surplus power
by GRIDCO.to the inter-state traders are in the nature of inter-
E state trading. Accordingly, it held that the transactions of
GRIDCO are governed by the Trading Regulations and directed
CERC to find out a methodology for refund of the excess amount.
14. On behalf of respondent No.1-Gajendra· Haldea the
F order of Appellate Tribunal is supported.
15. It is unnecessary to go into the -question as to the na-
ture of the transaction, bec;ause respondent No.1-Gajendra
· Haldea in order to prove that he had locus standi relied on Sec-
tions 121 and 142 of the Act. It was also stated that it is not in
G .the nature of PIL. 1.t was stated that the prayer for refund was not
being pressed.
16. A bare reading of Sections 121 and 142 of the Act which
read as follows st)ows that those provisions are not applicable.
H "121. Power of Appellate Tribunal:- The Appellate Tribunal
GRID CORPORATION OF ORISSA l TO. v. GAJENDRA 89
HALDEA & ORS. [DR. ARIJIT PASAYAT, J.] .
)
may, after hearing the Appropriate Commission or other A
interested party, if any, from time·to time, issue such orders,
instructions or directions as it may deem fit, to any
Appropriate Commiss.ion for the performance of its
.j statutory function u·n der this Act.
' "142. Punishment for non-compliance of directions by B
/ •·
• Appropriate Commission. -In case any complaint is filed
before the Appropriate Commiss.ion by any person or if
that Commission is satisfied that any person has ·
t ''

cqntravened any of the proyisions of this Act 9r the rules
or regulations made thereunder, or any direction issued c
by the Commission, the Appropriate Commission may
after giving such person an opportunity of being heard in
the matter, by order in writing , direct that, without prejudice
to any. other penalty to whic~ he may be liable under this
~
Act, such person shall pay, by way of penalty, which shall D
not exceed one lakh rupees for each contravention and in
• case of a continuing failure with an additional penalty which
may extend to six thousand rupees for every day during
· which the failure continues after contravention of the first
such direction." E
17. Therefore, the Appellate Tribunal was wrong in inter-
ferin.g with the conclusions of CERC that respondent No.1's
petition was not entertainable and/or maintainable.
18. In Ben Gorm Nilgiri Plantations Company, Cbonoor F
-~ · and ors. .v.· Sales Tax Officer, Special Circle, Ernakulam and
Ors. (1964 (7) SCR 706), it w_a s inter alia observed as follows :
"To constitute a sale in the course of export of goods
out of the territory of India, comm0n intention of the parties
to the transaction to export the goods .followed by actual G
export of the goods, to a foreign destination is necessary.
) But intention to export and actual exportation are not
sufficient to constitute a sale in the course of export, for a
sale by export "involves a series of integrated activities
commencing fr9m the agreement of sale with a foreign H
f
~
90 SUPREME COURT REPORTS (2008] 12 S.C.R.

t
A buyer ~nd ending with the delivery of the goods to a
common carrier or transport out"of the country by land or
sea. Such a sale cannot be dissociated from the export
- -.
~-.
w ithout which it cannot be effectuated, and the sale and .
resultant export form parts of a single transaction": State
B of Travnncore Cochin and others v. The Bombay
Company Ltd. A sale in the course of export predicates
a connection between the s~le and export, the two activities
being so integrated that the c_onnection between the two
.. \

cannot be voluntarily interrupted, without a breach of the
c contract or the· compulsion arising from the nature of the
transaction. In this sense to constitute a sale in the course
of export it may be said that there must be an intention on
the part of both the buyer and the .seller to export, there
must be obligation to export, and there must be an actual
export. The obligation may arise by reason of statute,
D
contract between the parties, or from mutual understanding
or agreement between them , or even from the nature of ...
· the transaction which links the sale to export. A transaction
·of sale which is a preliminary to expor.t of the commodity
sold may be regarded as a sale for export but is no~
E necessarily to be regarded as one in the course of export,
unless the sale occasions export. And to occasion export
there must exist such a bond between the co.ntract of sale
and the actual exportation, that each link is inextricably ,.
connected with the one immediately preceding it. Without
F such a bond, a transaction of sale cannot be called a sale
in the course of export of goods out of the territory of India. f....
There are a variety of transactions in which the sale of a
commodity is followed by .export thereof. At one end are
transactions in which there is a sale of goods in India and
G the purchaser1mmediate or remote exports the goods out
of lndf~ for foreign consumption . For instance, the foreign
.k,
purchaser ei~her by himself or through his agent purchases
goods within the territory of India and exports th~ goods
and even if the seller has the knowledge that the goods
H are intended· by the purchasers to be exported, such a
GRID CORPORATION OF ORISSA LTO. v. GAJENDRA 91
HALDEA & ORS. [DR. ARIJIT PASAYAT, J.]
)
transaction is not in the course· of export, for the seller does A
not export the goods, and it is not his concern as to how the
purchaser deals with the goods. Such a transaction without
more cannot be regarded as one in the course of export
because etymologically, "in the course of export",
. contemplates an integral relation or bond between the sale B
and the export. At the other end is a transaction under a
-·-< contract of sale with a foreign buyer under which the goods
may under the contract be delivered by the seller to a
common carrier for transporting them to the purchaser. Such
a sale would indisputably be one. for export, whether the c
contract and delivery to the common carrier are effected
directly or through agents. But in between lie a variety of
transactions in which the question whether the sale is one
for export or is one in the course of export i.e., it is a
transaction which has occasioned the export, may have to
D
be determined on a correct appraisal of all the facts. No
.).;- single test can be laid a·s decisive for determining that
question. Each case must depend upon its facts: But that
is not to say that the distinction between transactions which
may be called sales for export and sales in the course of
export is not real. In general where the sale is effected by E
the seller, and he is not connected with the export which
actually takes place, it is a ~ale for export. Where the export
is the result of sale, the export being inextricably linked up
with the sale so that the bond cannot be dissociated without
a breach of the obligation arising by statute, contract or F
-\ mutual understanding between the _parties arising from the
nature of the transaction , the sale is in the course of export.

It may be conceded that when chests of tea out of the
export quota are sold together with the export rights, the
G
goods are earmarked for export, and knowledge that the
f goods were purchased by the bidders for exporting them
to the foreign principals of the bidders must clearly be
attributable to them. Does the co-existence of these
circumstances, impress upon the transactions of sale with
H
.
92 SUPREME COURT REPORTS [2008) 12 S.C.R.

{
A the chC;~racter of a transaction in the course of export out of
the territory of India? We are unable to hold that it does.
That the tea chests are sold together with export rights
imputes knowledge to the seller that the goods are
purchased with the intention of exporting. But there is nothing
8 in the transaction from which springs a bond between the '
sale and the intended export linking them up as part of the }
,.,_.
\. same transaction. Knowledge that the goods purchased I

are intended to be exported does not make the sale and
export parts of the same transaction, nor does the sale of
c the quota with the sale of the goods lead to that result. \,
There is no statutory obligation upon the purchaser to export
the chests of tea purchased by him with the export rights. I
...
r
The export quota merely enables the purchaser to obtain I

export licence, Which he may or may not obtain. There is
nothing in law or in the contract between the parties, or
D
even in the nature of the transaction which prohibits diversion
of the goods for internal consumption. The sellers have no ..j..

concern with the actual export of the goods, once the goods
are sold. They have no control over the goods. There is
therefore no direct connection between the sale and export
E
. of the goods which would make them parts of an integrated
transaction of sale in the course of export.
In our view, the transactions of sale in the present case did ,..
not occasion the export of the goods, even though the
F appellants knew that the buyers in offering the bids for
chests of tea and the export quotas were acting on behalf
J-·
l
of foreign principals, and that the buyers intended to export
~
the goods. There was between the sale and the export no r'
t
such bond as would justify the inference that the sale and
the export formed parts of a single transaction or that the
G ;·
sale and export were integrally connected. The appellants
were not concerned with the actual exportation of the goods, )._
and the sales were intended to be complete without the
export, an<;i as such it cannot be said that the sales
occasioned export. The sales were therefore for export,
H
GRID CORPORATION OF ORISSA LTD. v. GAJENDRA 93
HALDEA & ORS. [DR ARIJIT PASAYAT, J.]
)
and not in the course of export." A
19.· The Appellate Tribunal's conclusions regarding nature
of transactions are not supportable when various clauses of the
agreement are considered. They clearly establish intra-state
nature of the transactions.
B
"'\ 20. It is to be noted that under Rule 9 of the Central Elec-
tricity Rules , 2005 (in short the 'Central Rules') there is no re-
striction on the licensee effecting sale or re-sale in the same
State and no separate licence is needed. In fact, there was no
agreement to take out the electricity, as was inferred by the c
Appellate Tribunal. PTC is bound by the Regulations. It is pointed
out that whenever there is sale for inter state trade, the margin
is maintained. Additionally, PTC was not a party before CERC.
Originally also it was not a party before the Appellate Tribunal.
In another c·ase relating to trade margin PTC was a party. The
0
issues were different and PTC was discharged from the pro-
.1.::
ceedings. It is stated that PTC is affected by para 56 of the
Appellate Tribunal's order. The observation of the Appellate Tri-
bunal that PTC could not have sold electricity and it could not
have effected sale inside the State is wrong because of Rule 9
of the Central Rules. It is also to be noted that the contract was E
concluded in the State of Orissa and the transmission loss was
to be borne by PTC who was not agent of GRIDCO.
21 . In that view of the matter, looked at from any angle the
order passed by the Appellate Tribunal cannot be maintained F
\ and is set aside.
22. In view of the order passed in Civil Appeal No.5722 of
2006, other Civil Appeals are allowed, and in view of the said
·order passed, no separate orders are necessary to be passed
.
/..._
in lAs and they are rejected, and SLP (C) No.11629 of 2007
filed by Haryana Power Generation Corporation Ltd. is dis-
G

missed. Costs made easy.

K.K.T. Special Leave Petition and
Civil Appeals disposed of.
H