High Court granted big relief to Haldiram and granted benefit of Night Rebate for its Solar system – EQ

Summary:

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## **Case Summary**

**Court:** High Court of Judicature at Bombay, Nagpur Bench
**Judges:** Urmila Joshi Phalke, J. & Nivedita P Mehta, J.
**Judgment Date:** 23rd April 2026
**Petitioner:** M/s Haldiram Foods International Private Ltd., Nagpur
**Respondent:** Maharashtra State Electricity Distribution Company Limited (MSEDCL)

### **Background**

– Haldiram Foods invested **₹15 Crores** to set up a **1.5 MW Solar Power Project** for **captive consumption** to become self-reliant in electricity for its large-scale food manufacturing operations.
– The company claimed that MSEDCL denied it the **Night Rebate** (Time-of-Day / ToD rebate) for electricity consumed during night hours (10:00 PM to 6:00 AM, referred to as A-Zone).
– As per the Maharashtra Electricity Regulatory Commission (MERC) tariff order, the night rebate would have allowed Haldiram to purchase electricity at **₹4.51 per unit** instead of the thermal power rate of **₹7.01 per unit**.
– Haldiram argued that it could have sold its solar power at **₹7.95 per unit** if it were not using it captively, and denial of night rebate caused financial loss.

### **Key Legal & Regulatory Points**

– The **National Electricity Policy** (Clause 5.2.24) promotes captive generation for cost-effective power and industrial growth.
– MERC, in its order dated **26.06.2015 (Clause 6.22.6)**, explicitly stated that:
> *“the practice of reducing ToD rebate during night off-peak hours by Solar power generated during the day should be stopped.”*
– The Petitioner relied on **Sections 61 and 62 of the Electricity Act, 2003**, particularly:
– **Section 61(h):** Promotion of renewable energy sources.
– **Section 62(6):** If a licensee recovers charges exceeding the determined tariff, the excess amount shall be refunded with **interest equivalent to the bank rate**.

### **Respondent’s Position**

– MSEDCL initially opposed the petition, arguing that night rebate would adversely affect other consumer categories.
– However, during the hearing, MSEDCL conceded that its officers were unable to calculate the exact amount and suggested that the court direct them to verify payments and adjust accordingly.

### **Court’s Decision**

The **Writ Petition was allowed**. The court directed:

1. MSEDCL officers shall **verify the total amount paid** by Haldiram Foods.
2. After deducting any legitimate outstanding dues (if any), if **excess amount was paid by the Petitioner due to denial of night rebate**, it shall be **refunded** to the Petitioner.
3. Refund shall be made in accordance with **Section 62(6) of the Electricity Act, 2003**.
4. If any amount is due from the Petitioner, MSEDCL may claim it via **demand notice**.

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## | Business Aspect | Implication |
|—————-|————–|
| **Captive Solar Investment** | Companies investing in captive solar plants (e.g., ₹15 Cr for 1.5 MW) can claim night rebate on grid power consumed during off-peak hours, even if they generate solar power during the day. |
| **Tariff Arbitrage Opportunity** | Solar power can be valued at a higher rate (₹7.95/unit) than thermal power purchased (₹7.01/unit), and night rebate (₹4.51/unit) creates significant cost savings. |
| **Regulatory Protection** | MERC’s clear observation (Clause 6.22.6) prohibits disallowing night rebate simply because solar power is generated during the day. Businesses can cite this in disputes. |
| **Overcharging Refund with Interest** | Under Section 62(6) of the Electricity Act, 2003, if a distribution company overcharges beyond the tariff, the consumer is entitled to a **refund + interest at bank rate**. |
| **Utility Cannot Unilaterally Deny Rebate** | MSEDCL’s internal resolution denying night rebate was **not accepted by MERC**. Utilities must follow tariff orders and cannot create ad hoc rules to deny benefits. |
| **Evidence of Loss** | The court noted that the petitioner was “putting himself to loss” by consuming solar power instead of selling it at a higher tariff — this strengthened the case for rebate. |
| **Practical Resolution** | Even when a utility opposes a petition, if they admit calculation difficulty, the court may order a verification-and-refund mechanism instead of lengthy litigation. |

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