Tamil Nadu Power Distribution Corporation Limited v. Union Of India
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 25.03.2026
CORAM
THE HONOURABLE MR.JUSTICE M.DHANDAPANI And W.M.P.Nos.9745, 9746 and 11561 of 2026 Tamil Nadu Power Distribution Corporation Limited Represented by its Chief Engineer, Private Power Projects, 6th Floor, Eastern Wing, 144, Anna Salai, Chennai - 600 002.
... Petitioner Vs.
1 Union of India Rep. by its Secretary, Ministry of Power, Shram Shakti Bhavan, Rafi Marg, New Delhi - 110 001.
2 PTC India Limited Rep. by its Chairman and Managing Director 2nd Floor, NBCC Tower, 15, Bhikaji Cama Place, New Delhi - 110 066.
3 Indian Overseas Bank Anna Salai Branch, Chennai - 600 002.
4 Adhunik Power and Natural Resources Limited Rep. by its Chief Executive Officer, 1st Floor, 468, Udyog Vihar, Phase - III, Gurugram - 122016, Haryana.
... Respondents 1/8
Prayer:
Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus calling for the records relating to the impugned email communication dated 27.02.2026 issued by the second respondent to the third respondent seeking invocation/ encashment of the Letter of Credit for Rs.36.37 Crores and quash the same, and consequently direct the 3rd Respondent Bank to forbear from honouring/ acting upon the said invocation. For Petitioner : Mr.P.S.Raman, Advocate General Assisted By Mr.Arun Kumar D.R.
For Respondents : Mr.Rajesh Vivekanandan for R1 Deputy Solicitor General of India Mr.Ravi Kishore and Mr.Prahalad Bhat for R2 Mr.P.H.Aravind Pandian for R4 Senior Counsel for Mr.P.M.N.Bhagavath Krishnan
O R D E R
The petitioner has filed this writ petition seeking issuance of Writ of Certiorarified Mandamus calling for the records relating to the email communication dated 27.02.2026 issued by the second respondent to the third respondent seeking invocation/ encashment of the Letter of Credit for Rs.36.37 Crores and quash the same, and 2/8
consequently direct the third respondent Bank to forbear from honouring/ acting upon the said invocation.
2.The learned Advocate General appearing for the petitioner submitted that the petitioner is a distribution licensee within the meaning of the Electricity Act, 2003 and is a public utility discharging essential functions. The present dispute arises out of a back to back power procurement arrangement, whereinpower is supplied to the petitioner through the second respondent from the generating station of the fourth respondent. Some serious disputes arose as to the entitlement of the generator / trader to claim capacity charges during periods when the generating unit was under forced outage and not available and the said dispute travelled through proceedings before the Central Electricity Regulatory Commission (CERC) and the Appellate Tribunal for Electricity (APTEL).
3.The learned Advocate General appearing for the petitioner further submitted that the fourth respondent filed petition before CERC claiming capacity charges for the period from December, 2018 to February, 2019 and CERC passed order dated 15.08.2020 and as against the said order, the petitioner and second respondent preferred 3/8
appeal before the APTEL in Appeal No.168 of 2020 along with stay application and the same is pending and further submitted that the matter was partly heard today (25.03.2026) by APTEL. In the meantime, the second respondent decided to invoke the letter of credit maintained through the third respondent Bank. Aggrieved by the same, the petitioner has filed this writ petition. 4.The learned Advocate General appearing for the petitioner further submitted that this Court on 03.03.2026 granted an order of ad - interim injunction as against respondents 2 to 4 in this writ petition and prayed this Court to issue direction to the second respondent to not to invoke the letter of credit from the third respondent payable to the fourth respondent till the disposal of the stay application in Appeal No.168 of 2020 pending before APTEL. 5.The learned counsel appearing for the second respondent submitted that as per the order passed by the CERC, necessarily the petitioner has to invoke letter of credit for the benefit of the fourth respondent unless the order passed by CERC is stayed by APTEL. 4/8
6.The learned Senior Counsel appearing for the fourth respondent submitted that the dispute is only between the petitioner and the second respondent in which the fourth respondent have no role to play and further submitted that even if there is privity of contract, as per the order of CERC, it is the duty cast upon the petitioner and the 2nd respondent to honour the order of CERC in the absence of any interim order from APTEL.
7.Heard the arguments advanced on either side and perused the materials available on record.
8.Admittedly, as against the order passed by CERC dated 15.08.2020, the petitioner and second respondent preferred appeal before the APTEL in Appeal No.168 of 2020 along with stay application and it appears that the matter was partly heard by APTEL today. 9.In view of the above, this Court without expressing any opinion on the merits of the case, directs as follows: (i)There shall be an order of interim injunction restraining the third respondent Bank from in any manner honouring/ encashing/ 5/8
acting upon the Letter of credit invocation sought by the second respondent through email communication dated 27.02.2026 till the disposal of the stay application in Appeal No.168 of 2020 by APTEL. (ii)Liberty is granted to the fourth respondent to work out the remedy against the second respondent independently. 10.With the above observations and directions, the writ petition stands disposed of. No costs. Consequently, the connected miscellaneous petitions are closed.
25.03.2026 pri Index: Yes/ No Speaking Order: Yes/ No NCC: Yes/ No 6/8
To 1 Union of India Rep. by its Secretary, Ministry of Power, Shram Shakti Bhavan, Rafi Marg, New Delhi - 110 001.
2 PTC India Limited Rep. by its Chairman and Managing Director 2nd Floor, NBCC Tower, 15, Bhikaji Cama Place, New Delhi - 110 066.
3 Indian Overseas Bank Anna Salai Branch, Chennai - 600 002.
4 Adhunik Power and Natural Resources Limited Rep. by its Chief Executive Officer, 1st Floor, 468, Udyog Vihar, Phase - III, Gurugram - 122016, Haryana.
7/8
M.DHANDAPANI,J.
pri And W.M.P.Nos.9745, 9746 and 11561 of 2026 25.03.2026 8/8