The State of Karnataka v. M/S Shamanur Sugars Limited

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF JANUARY, 2026 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C.M. POONACHA WRIT APPEAL NO. 524 OF 2024 (GM-KEB)

BETWEEN:

THE STATE OF KARNATAKA REP BY ITS SECRETARY, DEPARTMENT OF ENERGY VIKASA SOUDHA BENGALURU 560001

…APPELLANT (BY SRI. K.S. HARISH, GA)

AND:

¶1M/S SHAMANUR SUGARS LIMITED HAVING ITS REGISTERED OFFICE AT NO.374, 4TH MAIN, P J EXTENSION, DAVANAGERE KARNATAKA 577002, REP HEREIN BY MANAGING DIRECTOR.

¶2CENTRAL ELECTRICITY REGULATION COMMISSION 3RD AND 4TH FLOOR CHANDERLOK BUILDING, 36, JANPATH NEW DELHI 110001 REP BY ITS SECRETARY

by NIRMALA DEVI Location: HIGH COURT OF KARNATAKA NC:(2026:KHC:4432-DB( WA(No.(524(of(2024( ( , ,,HC-KAR( ( (

¶3KARNATAKA POWER TRANSMISSION CORPORATION HAVING ITS REGISTERED OFFICE AT CAUVERY BHAVAN, AMBEDKAR VEEDHI, BANGALORE 560001 REP BY FINANCIAL ADVISOR.

¶4STATE LOAD DISPATCH CENTRE KPTCL NO.28 RACE COURSE ROAD, BANGALORE 560009 REP BY ITS CHIEF ENGINEER.

…RESPONDENTS (BY SRI. SHRIDHAR PRABHU, ADVOCATE FOR C/R1 SRI. PRADEEP NAYAK, ADVOCATE FOR R2 SRI. S. SRIRANGA, SENIOR ADVOCATE FOR SMT. SUMANA NAGANAND, ADVOCATE FOR R3 & R4)

THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 22.05.2023 PASSED BY THE LEARNED SINGLE JUDGE OF THIS HONBLE COURT IN WP No-46495/2012 (GM-KEB) IN SO FAR AS IT RELATES TO THE DIRECTION TO THE APPELLANT STATE TO ESTABLISH A NEW ENTITY FOR 4TH RESPONDENT-SLDC.

THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C.M. POONACHA

ORAL JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

¶1The State has filed the present appeal impugning an order dated 22.05.2023 passed by the learned Single Judge in Writ petition No.46495 of 2012 (GM-KEB).

¶2The learned counsel appearing for the appellant, confined the challenge to the impugned order to the observations to the effect that a State is required to establish a separate entity for State Load Despatch Centre [SLDC] who can function independently of the State Transmission Utility at the earliest within a period of six weeks from the date of receipt of the order.

¶3The Registrar General was also directed to forward a copy of impugned order to the Chief Secretary, Government of Karnataka, for doing the needful.

¶4Paragraphs 15.7 and 15.8 of the impugned judgment are relevant and are set out below:

15.7. It is also required to be taken note of that in terms of Section 31 of the Act, a separate company is required to be established by the State. The Act having come into force in the year 2003, despite 20 years having lapsed there from,

no action in this regard has been taken and the SLDC has been established under the State Transmission Utility. In my considered opinion, there are bound to be certain conflicts between the State Transmission Utility and the functioning of the SLDC.

15.8. It is but required that the State establishes a separate entity for SLDC who can function independent of the State Transmission Utility at the earliest at any rate within a period of 6 weeks from the date of receipt of copy of this order. The Registrar General is directed to forward a copy of this order to the Chief Secretary, Government of Karnataka for doing the needful.

¶5It is clear from the above that the directions issued by the learned Single Judge were in effect to implement Section 31(2) of the Electricity Act, 2003. We consider it apposite to set out the said Section 31 of the Act. The same is reproduced below:

¶31Constitution of State Load Despatch Centres.-(1) The State Government shall establish a Centre to be known as the State Load Despatch Centre for the purposes of exercising the powers and discharging the functions under this Part.

(2) The State Load Despatch Centre shall be operated by a Government company or any authority or corporation established or constituted by or under any State Act, as may be notified by the State Government: Provided that until a Government company or any authority or corporation is notified by the State Government, the State Transmission Utility shall operate the State Load Despatch Centre:

Provided further that no State Load Despatch Centre shall engage in the business of trading in electricity.

¶6It is apparent from the above that the State Government is required to set up a company, authority or a corporation for operating the State Load Despatch Center [SLDC]. However, in terms of the first proviso, the State Transmission Utility would operate the SLDC until a government company, authority, or a corporation is notified by the State Government.

¶7Since the present appeal is confined to the direction issued by the learned Single Judge in conformity with and for implementation of Section 31(2) of the Electricity Act, 2003, this Court had called upon the learned AGA to take instructions as to the stand of the appellant with regard to Section 31(2) of the Electricity Act, 2003.

¶8Learned AGA submits that he has received instructions that the appellant will constitute a government company, authority or establish a corporation for operating the SLDC. To the said extent, the appellant has taken a decision to implement Section 31(2) of the Act.

¶9In view of the above, the appellant can have no grievance in respect of the directions issued by the learned Single Judge except in respect of the time frame for establishing the entity.

¶10In view of the above, we modify the impugned order to the extent that the directions issued under para 15.8 of the impugned order shall be implemented within a period of six months from date.

¶11The appeal is disposed of in the aforesaid terms.

¶12Pending application is also disposed of.

Sd/- (VIBHU BAKHRU) CHIEF JUSTICE

Sd/- (C.M. POONACHA) JUDGE

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