APHC010397832026 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) MONDAY, THE 10TH DAY OF AUGUST 2026 PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 22455 OF 2026 Between: 1. M/s. Ambuja Cements Ltd (erstwhile Penna Cement Industries Limited), R/o. at Adani Corporate House, Shantigram, Near Vaishno Devi Circle, S. G. Highway, Khodiyar, Ahmedabad, Gujarat, India - 382421. Rep. by its Authorized Signatory, Mr. Mahesh Kumar Behera, S/o. Late Lokanath Behera. Having its units at Krishnapatnam (V), Muthukur (M), Nellore District - 524 344. Service Connection No. NLR-938 And at Talaricheruvu (V) 85 (M), Ananthapuramu District - 515415 Service Connection No. ATP-230 And at Boyareddypalli Village, Yadiki Mandal, Anantapur District, Andhra Pradesh - 515408. Service Connection No. ATP-308 ...Petitioner AND 1. Andhra Pradesh Central Power Distribution Company Limited, APCPDCL, Corporate Office, Polytechnic College on ITI Road, Krishna Nagar, Governerpet, Vijayawada, Andhra Pradesh - 520 002 Rep. by its Chairman and Managing Director. 2. Southern Power Distribution Company of A P Ltd, APSPDCL, Corporate Office, 19-13-65/A Srinivasapuram, Tiruchanoor Road Tirupati - 517503. Rep. by its Chairman 85 Managing Director. 2 3. The Union of India, Represented by the Secretary, Ministry of Power, Shram Shakti Bhawan, Rafi Marg, New Delhi-110001. 4. Central Electricity Authority, Sewa Bhavan, Ramakrishna Puram, Sector-1, New Delhi -110066, Rep. by its Chairperson. 5. National Load Despatch Centre, Grid Controller of India Limited, B 9 (1st Floor), Qutab Institutional Area, Katwaria Sarai, New Delhi - 110016, Rep. by its Nodal officer ...Respondents Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toissue appropriate writ, order direction more particularly one in the nature of Writ of Mandamus or any other appropriate writ, order or direction a) Declaring the levy of Cross Subsidy Surcharge on captive power consumed by the Petitioner from its Captive Generating Plant, in the CC Bills issued by the Dt and 2nd Respondents on 05.04.2026, 05.05.2026, 05.06.2026 and 05.07.2026, as being arbitrary, illegal, unreasonable, contrary to the provisions of S.42(2) of the Electricity Act, 2003 and Rule 3(4) (c) of the Electricity Rules, 2005 issued by the 3rd Respondent, besides being violative of the Petitioners rights guaranteed under Articles 14 and 19(l)(g) of the Constitution of India and to consequently set aside the same b) Declaring the levy of Cross Subsidy Surcharge on captive power consumed by the Petitioner from its Captive Generating Plant in the CC Bills issued by the 1st and 2nd Respondents from June, 2025 to March, 2026, as being arbitrary, illegal, unreasonable, contrary to the provisions of S.42(2) of the Electricity Act, 2003 and Rule 3 of the Electricity Rules, 2005, besides being violative of the Petitioners rights guaranteed under Articles 14 and 19(l)(g) of the Constitution of India and to consequently set aside the same c) Direct the lst and 2nd Respondents to refund the CSS collected from the Petitioner with 3 respect to the Petitioners power consumption from its Captive Generating Plant from April, 2025 onwards IA NO: 1 OF 2026 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased direct the 1st and 2nd Respondents not to take any coercive steps, including disconnection of power, pursuant to the demand of Cross Subsidy Surcharge made in the CC Bill dated 05.07.2026, IA NO: 2 OF 2026 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased Direct the 1st and 2nd Respondents not to levy Cross Subsidy Surcharge in the future CC Bills issued by it, and to strictly comply with Rule 3(4)(c) of the Electricity Rules, 2005 Counsel for the Petitioner: MANNAM SRIDHAR Counsel for the Respondents: The Court made the following order: 4 THE HON’BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 22455 OF 2026 ORDER: The present writ petition is filed under Article 226 of the Constitution of India seeking following relief: “to issue appropriate writ, order direction more particularly one in the nature of Writ of Mandamus or any other appropriate writ, order or direction a) Declaring the levy of Cross Subsidy Surcharge on captive power consumed by the Petitioner from its Captive Generating Plant, in the CC Bills issued by the 1st and 2nd Respondents on 05.04.2026, 05.05.2026, 05.06.2026 and 05.07.2026, as being arbitrary, illegal, unreasonable, contrary to the provisions of S.42(2) of the Electricity Act, 2003 and Rule 3(4)(c) of the Electricity Rules, 2005 issued by the 3rd Respondent, besides being violative of the Petitioners rights guaranteed under Articles 14 and 19(l)(g) of the Constitution of India and to consequently set aside the same b) Declaring the levy of Cross Subsidy Surcharge on captive power consumed by the Petitioner from its Captive Generating Plant in the CC Bills issued by the 1st and 2nd Respondents from June, 2025 to March, 2026, as being arbitrary, illegal, unreasonable, contrary to the provisions of S.42(2) of the Electricity Act, 2003 and Rule 3 of the Electricity Rules, 2005, besides being violative of the Petitioners rights guaranteed under Articles 14 and 19(l)(g) of the Constitution of India and to consequently set aside the same c) Direct the 1st and 2nd Respondents to refund the CSS collected from the Petitioner with respect to the Petitioner’s power consumption from its Captive Generating Plant from April, 2025 onwards and pass such order or orders….” 5 2. Heard learned counsel for the petitioner and learned Standing Counsel for the respondents. 3. The case of the petitioner is that the petitioner herein is a captive power generator as well as captive consumer company. While so, the petitioner herein received captive power under Inter-State mode of transmission, for which, the petitioner is liable to pay Cross Subsidy Surcharges in the event of failure to prove that the petitioner is a captive generating company or the petitioner being a consumer to make use of the power more than 50% from the captive generating company. 4. The learned counsel for the petitioner submits that the status of either captive power generator or captive power consumer should be determined as per the procedure issued by the nodal agency or National Load Despatch Centre (NLDC), since the petitioner is inter-state captive generating plant. He further submits that unless and until such determination/assessment has been made by the NLDC or any other nodal agency, the respondent Nos. 1 and 2 herein cannot be permitted to levy and raise such Cross Subsidy Surcharges in the running CC bills against the petitioner. The said procedure was duly enumerated under Rule 3(4) of the Electricity (Amendment) Rules, 2026. Therefore, the impugned CC bills issued by the respondent No.2 demanding the Cross Subsidy Surcharges along with CC bills is contrary to the Rules as mentioned above. Hence, the same are liable to be set aside. 6 5. On the other hand, learned Standing Counsel for the respondents furnished written instructions, wherein, it is stated as follows: “In this regard, it is submitted that, in accordance with the provisions contained in the said Office Order dt.10.02.2025, certain key points and interpretations relating to the verification of the captive status of Captive Generating Plants and their Captive Users) are furnished below for reference 2. Applicability 2.1 This procedure shall be applicable for all power plants and consumers, who desire to submit their claim for verification as CP and associated Captive User(s) to the Authority in accordance with sub-rule (3) of Rule 3 of the Electricity Rules, 2005. 2.2 This procedure shall be applicable from FY 2024-25. 5. Verifving Authority 5.1 As per requirement of sub-rule (3) of Rule 3 of the Electricity Rules, 2005, Central Electricity Authority (CEA) has been mandated to verify the captive status of such generating plants, where CP and its Captive User(s) are located in more than one state; accordingly, Director, Legal Division, CEA, shall be the Verifying Authority. 5.2 The Verifying Authority shall verify the captive status where generating station claiming to be a CP is located in one State and at least one of its claimed Captive User(s) is located in another State. 5.3 The verification shall be done in accordance with the conditions of CGP provided under this procedure as per Rule 3 of the Electricity Rules, 2005. 5.4 The Verifying Authority shall verify the fulfillment of conditions in regard to the captive status or otherwise, and intimate the status to the CP and Captive Users), concerned 7 Distribution licensee(s), State/Joint Electricity Regulatory Commissions, SLDCs and RLDCS. Provisional Exemption of Cross-Subsidy Surcharge (CSS) for the FY 2026-27 Further, it is inform that the Electricity (Amendment) Rules, 2026, issued by the Ministry of Power, Government of India, vide Notification dated 13.03.2026, prescribe and clarify the requirements for a Captive Generating Plant (CGP) by way of amendment to the Electricity Rules, 2005. A copy of the aforesaid Electricity (Amendment) Rules, 2026, is enclosed herewith for perusal and ready reference. In this regard, it is further inform that Clause (c) of sub-rule (4) of Rule 3 of the Electricity (Amendment) Rules, 2026, notified by the Ministry of Power, Government of India, on 13.03.2026, specifically provides that "pending verification of captive status for any financial year, the cross-subsidy surcharge and additional surcharge shall not be levied, subject to the declaration furnished by the captive user(s) in accordance with the procedure issued by the nodal agency or NLDC, as the case may be." It is further inform that, as on date, the National Load Despatch Centre (NLDC) has not issued the procedure contemplated under Clause (c) of sub-rule (4) of Rule 3 of the Electricity (Amendment) Rules, 2026. However, in the absence of the said procedure, APSPDCL has been extending provisional exemption from the levy of Cross-Subsidy Surcharge (CSS) to Inter-State Open Access (OA) consumers, subject to verification of their captive status on an annual basis. For extending the aforesaid provisional exemption during FY 2026-27, the Inter-State OA consumer shall furnish the following documents: 8 1. A representation/request from the OA consumer seeking provisional exemption from the levy of CSS, pending verification of captive status. 2. An undertaking from the OA consumer confirming that, in the event of failure to fulfill the conditions prescribed under Rule 3 of the Electricity (Amendment) Rules, 2026, upon completion of FY 2026-27 and subsequent verification of captive status, the CSS and other applicable charges shall be payable and recoverable as per the applicable provisions. 3. A shareholding certificate of the generating company, duly certified by a Chartered Accountant. In this connection, it is submitted that all matters relating to Open Access (OA) are dealt by The Corporate Office, APSPDCL, Tirupati. The OA consumer/petitioner, M/s Ambuja Cements Ltd. (erstwhile Penna Cement Industries Ltd.), has neither approached the Corporate Office, APPDCL, Tirupati, nor submitted the requisite documents for claiming exemption from the levy of Cross-Subsidy Surcharge (CSS). Accordingly, in the absence of the requisite representation and supporting documents from the OA consumer, the CSS has continued to be levied in their CC Bills in accordance with the applicable provisions.” 6. Learned Standing Counsel for the respondents further submits that the petitioner said to have been submitted an undertaking on 18.06.2026 to the Senior Accounts Officer, APSPDCL and the said undertaking is in accordance with the Rules as mentioned above. Therefore, he further explained that unless and until the petitioner complies with the Rules as contemplated, the respondent Nos. 1 and 2 are empowered to levy the Cross Subsidy 9 Surcharges along with CC bills as if the petitioner is not claiming any captive status as stated supra. 7. In reply, the learned counsel for the petitioner submits that the undertaking which was submitted on 18.06.2026 is to complied with the requirement as envisaged under Rule 3(4)(C) of the Electricity (amendment) Rules, 2026 only. But still if it requires other documents, if any, as mentioned above, pursuant to the instructions of the Chief General Manager, the petitioner is ready to submit all the required documents in compliance with the Rules as well as instructions submitted by the Chief General Manager. For which the learned counsel for the respondents not refuted and expressed the same would be considered by the respondents. 8. Considering the submission made by both the learned counsel and on perusal of the material placed on record, this Court is of the considered opinion that the present Writ Petition can be disposed of, by holding that the petitioner herein did not comply the procedure as mandated under the scheme and also addressed and submitted the same to some other authority, other than to the competent authority. 9. In view of the foregoing discussion, this Court is inclined to direct the petitioner to submit an undertaking as contemplated under Rule 3(4)(c) of the Electricity (amendment) Rules, 2026 to the competent authority along with the relevant documents as envisaged and as mentioned above, within a period of one (1) week from the date of receipt of a copy of this order. After such 10 submission, the respondent Nos. 1 and 2 shall consider the same and pass appropriate orders, with reference to the Rule 3(4)(c) of the Electricity Rules, 2026, within a period of three (03) weeks, thereafter. In the meanwhile, the respondents are directed not to take any coercive steps on account of non- payment of Cross Subsidy Surcharges. However, the respondents are at liberty to collect regular monthly CC bills against the petitioner company. 10. Accordingly, the Writ Petition is disposed of. There shall be no order as to costs. As a sequel, miscellaneous petitions, if any, pending shall stand closed. __________________________________ VENKATESWARLU NIMMAGADDA, J 10.08.2026 BSP 11 01 HON’BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 22455 OF 2026 10.08.2026 BSP