SEI Diamond Vs KERC (APTEL)
SEI Diamond Vs KERC (APTEL)
SEI Diamond Vs KERC (APTEL)
374 of 2019
(APPELLATE JURISDICTION)
ORDER
applicable from Rs. 6.92 per unit to Rs. 6.83/- per unit for the energy
supplied under the PPA from the date of commissioning of the Project.
3
Judgment in Appeal No. 374 of 2019
State of Karnataka from private parties vide its Request for Proposal
(“RfP”). After receiving the Proposals from certain bidders, including M/s.
SunEdison Energy Holding (Singapore) Pvt. Ltd for five Solar PV Power
Limited, SEI Diamond Private Limited and SEI Venus Private Limited.
4
Judgment in Appeal No. 374 of 2019
4. M/s. SunEdison Energy Holding (Singapore) Pvt. Ltd vide its letter
accept the SPVs as the Developers of the different Solar Power Projects
(“PBGs”) to the tune of Rs. 3 crores (Three Crore Only) each for
performance of their obligations under their respective PPA’s and the said
tariff of Rs. 6.92 and Rs. 6.83 per unit, respectively. Scheduled
04.05.2015.
approval, and clause 12 of the said approval clearly mentioned that the
proposed 220 kV DC line from the 400 kV PGCIL Hiriyur sub-station to the
220 kV Thallakku sub-station. However, it did not specify the time within
5
Judgment in Appeal No. 374 of 2019
which the said proposed 220 kV DC line from the 400 kV PGCIL Hiriyur
No. 4 agreed to develop 220 kVDC line from the 400 kV PGCIL Hiriyur
However, in the said proposal it was provided that the said proposal will
approval by Respondent No. 4 from 220kV DC line from the 400 kV PGCIL
lines were imminently delayed due to various reasons like Right of Way
and 02.05.2016, Respondent Nos. 2& 3 vide their letters extended the
6
Judgment in Appeal No. 374 of 2019
17.09.2016 respectively.
evacuation scheme under its letter dated 10.06.2015 and a fresh tentative
construction of the power plants is almost completed and they are ready to
interconnect their solar power projects to the grid. It was informed that
7
Judgment in Appeal No. 374 of 2019
12. Admittedly, from the date of achieving COD i.e., from April 2017 the
requested the Appellants to extend the PBGs and keep them in force
Nos. 2 & 3 to modify the PPA, inter-alia, to reflect the revised SCOD as
28.03.2017. The Appellants had been generating power since the COD as
8
Judgment in Appeal No. 374 of 2019
13. Appellants vide various letters from April 2017 to November 2018
Appellants filed a Petition being O.P. No. 213 of 2017 before the State
Appellants, Respondent Nos.2 & 3 did not choose to make any payment
rather informed the Appellants that the payments will not be made until
Objections, wherein the Respondent Nos.2 & 3 had clearly admitted that
9
Judgment in Appeal No. 374 of 2019
contradictory averments to the effect that the Appellants’ projects were not
ready for commissioning and that the delay in the commissioning of the
legitimate dues of the Appellants towards energy supplied under the PPA.
the Appellants’ in terms of clause 4.4. of the PPA, without any prior notice
Appellant No.1, on 16.01.2019, had filed a Writ Petition being W.P. (C)
2354 – 57 of 2019 before the Hon'ble Karnataka High Court seeking stay
High Court passed Interim Order directing Respondent No.2 not to take
Respondent No.2.
10
Judgment in Appeal No. 374 of 2019
amount due to them, without paying requisite court fee. Appellants filed
payment of stipulated fees for hearing the IA No. 1 of 2019, the Appellants
liberty to file a fresh IA, so that hearing of the main Petition can be
expedited.
and additional objections stating that Appellants’ Power Projects were not
Appellants herein cannot claim the benefit of the Force Majeure events
and are liable to pay Liquidated Damages in terms of Article 4.3 and 5.8 of
the PPA.
11
Judgment in Appeal No. 374 of 2019
Impugned Order has reduced the tariff applicable from Rs. 6.92 and Rs.
6.83 per unit to Rs. 6.51/- per unit for the energy supplied under the PPA
21. Aggrieved by the Impugned Order, the Appellants are filing the
“ (a) That this Hon’ble Tribunal may be pleased to allow the present
(b) Grant all the reliefs claimed in OP No. 212 and 213/2017 before the
law and are illegal as they are not in accordance with the provisions
of the PPA.
(g) For such other relief as circumstances and nature of the case may
require.”
22. Learned counsel for Respondent No.2 has filed reply, the gist of
under the PPA and the same has not been appreciated by the State
14
Judgment in Appeal No. 374 of 2019
not arise. Not only Article 4.2(e) which remained unfulfilled but
require inference.
15
Judgment in Appeal No. 374 of 2019
has been used for subsequent evacuation, would take away the
such event being out of the control of the Appellants, would not
arise.
16
Judgment in Appeal No. 374 of 2019
17
Judgment in Appeal No. 374 of 2019
18
Judgment in Appeal No. 374 of 2019
24.07.2017 narrated all the events which had taken place till
Placing of all facts and contentions before the Regulator for the
19
Judgment in Appeal No. 374 of 2019
present case.
of the SCOD. However, the Appellants lost sight of the fact that
20
Judgment in Appeal No. 374 of 2019
to be rejected.
of the highest in India. In view of the same, the allegation that the
21
Judgment in Appeal No. 374 of 2019
discarded.
facts in the case of Sai Sudhir are totally at variance from the
Sai Sudhir to the facts of the present case, would not arise.
22
Judgment in Appeal No. 374 of 2019
Tribunal.
38. The Appellants have filed rejoinder, the gist of which, in brief, is
as under:
The Impugned Order has completely glossed over the 1st extension
Respondent No.2 for three months i.e., till 17.09.2016 by exercising its
power under Article 5.7.3 of the PPA. In view thereof, the SCOD has to be
clear that Respondent No.2 based on the approval of its Board had made
23
Judgment in Appeal No. 374 of 2019
attained finality as the same has been acted upon by the parties and the
Impugned Order does not set aside the said extension. However,
from the Appellants without factoring the 1st extension of 3 months granted
perverse.
wrongly being relied upon by the Respondent No.2. Further, this Tribunal
in “Azure Sunrise Private Limited vs. CESCOM & Ors” (Appeal No 340
distinguished the Sasan Judgment and has held that the Sasan Judgment
41. It is the contention of Respondent No.2 that placing of all the facts
and contentions before the Regulator for the purpose of seeking approval,
free, fair and transparent manner and should not enrich itself for the
Respondent No.4-KPTCL.
43. The State Commission gave a finding that the liquidated damages
intended to impose LDs on the delay, then it ought to have first called
upon the Performance Security furnished by the Appellant No.1 under the
PPA. Hence, this illegal action of Respondent No.2 is contrary to the PPA
25
Judgment in Appeal No. 374 of 2019
as well as the Order of the Respondent Commission, which has not been
support of his contention, the Appellants relied upon the decision of the
45. It is further submitted that the Respondents have no lien over monies
46. With these submissions, the Appellants seeks for allowing of the
under:
26
Judgment in Appeal No. 374 of 2019
passing the impugned Order has wrongly held the 1st Extension of SCOD
the PPA till the Regulatory Commission grants its approval has
27
Judgment in Appeal No. 374 of 2019
ii) The Appellant No.1 vide its letter dated 09.02.2016 requested
17.09.2016.
reasons:
28
Judgment in Appeal No. 374 of 2019
of the Act.
48. Appellant further contends that the delay on the part of Respondent
majeure event, and, therefore, SCOD ought to have been extended by the
by August 2017 and also recorded that Appellant No. 1 was ready
as early as September 2016 and also put forth the request of the
had filed the Original Petition being O.P. No. 213 of 2017 before
34
Judgment in Appeal No. 374 of 2019
held responsible.
vii) Drawing our attention to the term “Prudent utility practices” defined
under the PPA, the Appellants contend that the said definition is
ground alone.
36
Judgment in Appeal No. 374 of 2019
time when the power supply is about to commence and when the
could only happen in the case of the Appellants when the requisite
unit as it only comes into play when the Licensee’s works are
xi) It is further submitted that the Hon’ble Supreme Court as well as this
Tribunal have time and again upheld and affirmed that in case of
very foundation upon which the parties rested their bargain, then the
keep the transmission line ready amounts to force majeure event, but the
38
Judgment in Appeal No. 374 of 2019
the case on hand, the Respondent Commission ought to have held that
learned counsel submits that in OP No. 213 of 2017 filed before the
39
Judgment in Appeal No. 374 of 2019
was not an admission of Force Majeure but only a device to place all facts
fact that there was a force majeure condition, which resulted in delay, at a
belated stage it had taken a belligerent view by disputing its earlier stand
It is settled legal position that when a party has admitted a particular fact
54. Apart from the above, it is also well settled principle of law that a
party who has taken a position cannot approbate and reprobate at the
(a) Amar Singh vs Union of India (2011) 7 SCC 69– Para 50;
(b) Joint Action Committee of Air Line Pilots’ Assn. of India v.
DGCA (2011) 5 SCC 435- Para 12;
40
Judgment in Appeal No. 374 of 2019
position contrary to its earlier stand. BESCOM cannot on one hand take a
clear stand that there is a Force Majeure event and on the other hand take
on the same set of facts. The principles of estoppel clearly bar such an
action.
56. It is submitted that the Impugned Order at para 23 holds that LD’s
In this regard, it is submitted that since the Respondents did not make
Tariff as per the PPA. In the said IA there was no whisper of payment of
LDs as at that point of time BESCOM had also not urged that it is either
going or is presently setting off LDs. Ultimately, the said IA was withdrawn.
41
Judgment in Appeal No. 374 of 2019
objection, HESCOM, KPTCL and BESCOM raised the issue that the
Appellants are liable to pay LDs for delay in achieving SCOD, but at no
point, the HESCOM & BESCOM have ever stated that it has adjusted/ set
off LDs against the invoices of the Appellants. Till date, the Respondents
have not filed an Appeal against the said finding of the Respondent
Commission
57. However, in the proceedings before this Tribunal, for the first time,
the Statement of Objection it stated that it has been setting off LDs against
categorically averred that the Appellants are liable to pay LDs but at no
point it stated that it has already adjusted LDs against the invoices of the
The said Article states that in case the amounts claimed by BESCOM, if
42
Judgment in Appeal No. 374 of 2019
any, from the Appellants through an invoice and which is not disputed by
the Appellants within 15 days of the receipt of the said invoice, then such
carried out by BESCOM only after the expiry of the said period of 15 days
59. Reiterating the contention in the rejoinder that the Respondents have
no lien over monies payable to it, the Appellants further submits as under:
enjoy any lien over the monies payable to Appellants, and if at all, the
money can only be set off as per the procedure provided under the PPA
60. BESCOM and HESCOM vide its letter dated 24.07.2017 and
01.08.2017 respectively had agreed and accepted that the delay on the
failed to show that they have suffered any loss owing to purported delay
43
Judgment in Appeal No. 374 of 2019
61. Further, when the Appellants filed their Petition before Respondent
payments to the Appellants and did not whisper about the set off of LDs.
However, after the instant appeal has been filed, Respondent no.2-
BESCOM took a plea that it has been adjusting LDs from the invoices of
held that the Tribunal has the power to grant a relief which is not earlier
62. On the pretext of delay in achieving the SCOD on the part of the
Appellants for its Solar Power Projects, tariff was reduced to Rs.6.51/- per
the Hon’ble Supreme Court and of this Tribunal for the following reasons:-
44
Judgment in Appeal No. 374 of 2019
Act 2003, National Electricity Policy and the Tariff Policy mandate
Electricity Policy and the Tariff Policy established the fact that
(ii) Section 61 of the Act provides that the State Commission must
86(1) (e) of the Act specifically mandates and provides that the State
Clause 6.4 of the Tariff Policy mandates the State Commission to fix
the reasons not attributable to the Appellants. The said finding of the
(1) (e) of the Act and such power is not vested with the State
it.
mandate of the Act is ultra vires the scheme of the Act read with
63. Learned counsel appearing for Respondent Nos.2 & 3 has filed
but the entire letter has not been read out. Only parts of this letter have
been read. A complete reading of the letter makes the position clear that
all aspects, which have been brought to the notice of BESCOM have been
placed before the State Commission. These are not the statements made
that Appellant No.1 had issued letter dated 27.3.2017 requesting for NOC
28.3.2017 without altering any of the terms of the PPA. Further, there is
entire argument with regard to force majeure which is mainly based on the
station, even if the project was ready and all other conditions precedent
were fulfilled, it would have been no avail and therefore the fact that the
projects were not complete and available on the date of SCOD would be of
rejection.
65. Further, it is submitted that it is an admitted fact that the project was
but at the request of the Appellants, to suit its own convenience, the
location of the project has been shifted to Pavagada, which is the present
location of the project. It is the Appellants, who chose the location for the
project and also chose the proposed 220 Station and Terminal Bay
provide approval for evacuation from the very same location, as per letter
49
Judgment in Appeal No. 374 of 2019
has been granted. Therefore, in view of the fact that the Appellants
scheme, the Appellants cannot find fault with the action of KPTCL in
5.4 regarding connectivity with the Grid, are solely with the Appellants.
has been granted. In fact, even though the sub-station was actually
permitted to contend that the station not being ready left them in a
67. Apart from the above, it is submitted that Article 14, which deals
with force majeure, also contemplates the manner in which force majeure
and the exclusion of the time in between. In the present case, no such
notice was issued by the Appellants. It is settled law that when there is no
contract, would not arise. Reliance in this regard is placed on the decision
68. A perusal of Article 14.3.1 of the PPA makes it clear that a situation
should have arisen in spite of the party taking reasonable care or complied
event.
69. As far as the contention of the Appellants that in terms of Article 5.7,
that if the said clause is invoked, Article 5.7.3 would also get attracted.
However, for these Articles to get attracted, Article 14.5 has to be fulfilled.
It is not the case of the Appellants that there is compliance of Article 14.5.
fact that an alternate was available, and with reasonable care such
alternate could have been availed by the Appellants, Article 14.4 would get
of the party, such a party cannot claim force majeure. Further, a party
affected by force majeure event has to take steps to prevent the force
majeure event. In this regard, Article 14.6 clearly cast an obligation on the
Therefore, the question of invoking Article 5 of the PPA would not arise.
Apart from this, the factual matrix would show that the inspection by CEIG
place. The correspondence till then indicates that the project was almost
ready. However, the project being almost ready was a ruse to contend that
the project was ready in all respects within the stipulated date. Therefore,
52
Judgment in Appeal No. 374 of 2019
the question of the Appellants being entitled to the extended time frame
their submissions that there was violation on the part of Respondent No.3-
KPTCL, which led to force majeure event. It was the Appellant who
have no relevance.
71. Learned counsel for Respondents submits that having regard to the
would clearly indicate that the projects in question were almost ready.
themselves would show that the project was not ready at the relevant point
of time. Therefore, it is clear that the project was not ready on time.
Hence the contention that the project was in fact ready before the
Scheduled Commercial Operation Date but the delay was only on account
73. Article 5.8 deals with the aspect of liquidated damages. According to
the admitted fact that SCOD could not be achieved, as per the provisions
the fact that fee had to be paid to maintain such a prayer, the Appellants
withdrew the said application. The liberty sought to make the challenge
afresh was removed before filing of the Memo. With the same, the
end. However, in view of the rival submissions in the pleadings, the State
answering the said question, the State Commission has concluded that the
54
Judgment in Appeal No. 374 of 2019
be rejected.
74. The Appellants have contended that the issue with regard to non-
availability of transmission line being a force majeure event has been dealt
with in detail by this Hon’ble Tribunal in the matter of “CESC vs. Sai
that no reliance can be placed on the said decision for two reasons. Firstly,
background in which the decision has been rendered. The facts in case of
Sai Sudhir’s case cannot be compared to the facts in the present case. It
is settled law that existence of even one additional factor or the absence
55
Judgment in Appeal No. 374 of 2019
the matter of “Padma Sundar Rao vs State of Tamil Nadu” (2002 (3)
power and availing the same by the generator and the fact that such an
alternate was always existed, are factors, which exist in the present case
and did not exist in the judgement sought to be relied upon. Therefore,
the decision of Sai Sudhir cannot be applied as a precedent and the same
is distinguishable on facts.
75. The Appellants while dealing with the decision rendered in the case
of All India Power Engineer Federation vs Sasan Power Limited & Ors
reported in (2017) 1 SCC 487, submitted that the State Commission could
repercussion on the public at large and the issue involved in that case was
one of waiver, which is absent herein. The Appellants contended that the
regard, it is submitted that the ratio laid down in the said judgement is
clear and categorical. Where the issue relating grant of extension has
56
Judgment in Appeal No. 374 of 2019
Apex Court has held that in such cases, it is the State Commission alone
from Article 12 of the PPA. The contention of the Appellants that the State
full force and the State Commission is justified in examining the validity of
(14) SCC 80, and no specific finding in the said judgement was pointed
out, it is submitted that the said judgement furthers the case of the
was pleased to examine the increase in cost of coal from Indonesia and
held that merely because the contract has become onerous to perform, it
the present case, the Appellants have not explored alternative modes of
of the plant. Therefore, contention of the Appellants that they are affected
78. The Appellants have also placed reliance on the decision rendered
in the matter of Azure Sunrize Pvt Ltd vs CESC & Ors. (Appeal No
contentions which had not been urged during the oral hearing are found in
the written submissions filed by the Appellant, it has filed an application for
80. As regards the letters dated 14.03.2017 and 24.03.2017, which have
has been pointed out earlier, the location of the project was changed
according to the convenience of the Appellant and the point for evacuation
was also chosen by the Appellant. Therefore, from the very beginning, the
Appellant knows the fact that the sub-station was not complete, and it was
well as the provision of the PPA require the safety approvals to be in place
before the commissioning. The entire case of the Appellants in this regard
59
Judgment in Appeal No. 374 of 2019
the work of the project was not even complete within the scheduled
commissioning date.
81. Learned counsel points out that although during the oral hearing, 3
judgments were not cited, they have been referred to and produced in the
written synopsis. At any rate, these judgments do not apply to the facts of
In this case, the Hon’ble Supreme Court has dealt with frustration of
present case, the Appellant was aware of the fact that only after the
60
Judgment in Appeal No. 374 of 2019
submitted that above mentioned case is not applicable to the present case
as the Appellant herein was not ready to commission the plant within the
facility.
82. So far as the new allegations made with regard to the conduct of
Respondent has acted in terms of the PPA, and as directed by the State
61
Judgment in Appeal No. 374 of 2019
but the Appellant himself has approached the State Commission seeking
position and therefore the State Commission should not have decided
issue has been raised in the context of levy and deduction of liquidated
62
Judgment in Appeal No. 374 of 2019
damages. Since the said issue was raised and withdrawn by the Appellant
before the State Commission, the State Commission has not gone into the
finding does not arise, and such contentions can be raised in an appeal
85. As regards the contention that the impugned order is in the teeth of
Section 86(1)(e) of the Act, learned counsel submits that the State
the highest in India. In view of the same, the allegation that the actions of
63
Judgment in Appeal No. 374 of 2019
86(1)(e) is wholly untenable and these statements are made with sole
higher tariff to the Appellant contrary to the provisions of the PPA and
86. Viewed from any angle, the new contentions raised in the written
submissions do not further the case of the Appellant and they are liable to
be rejected.
87. Learned counsel for the Appellant has filed short note of
were strictly in terms of the arguments addressed by the counsel for the
Appellants from time to time and the memorandum of the Appeal. For the
the Appeal and the Written Submissions filed by the Appellants are
mentioned hereunder:
66
Judgment in Appeal No. 374 of 2019
88. Learned counsel for the Appellant has also filed additional written
67
Judgment in Appeal No. 374 of 2019
functions.
(a) A Regulatory role under section 61, 62, 63 and 64 of the Act
Act
89. However, once a PPA is signed and has been granted approval by
signed, sealed and accordingly the parties have to adhere to it. It is only
when a dispute arises between the parties to the PPA/contract, then under
Section 86 (1) (f) of the Act, the appropriate commission has jurisdiction to
take cognisance of the same. But when there is no dispute and parties are
cannot proceed to take cognizance of the PPA. Moreover, once the PPA is
90. In the instant case, on 18.12.2014, Appellants entered into PPA with
Court in the case of “All India Power Engineers Federation & Ors. v. Sasan
Power Limited & Ors” (2017) 1 SCC 487, which according to the
69
Judgment in Appeal No. 374 of 2019
meddle with the terms and conditions duly approved by the commission
vs. BESCOM & Anr. [Para 8.8, 8.11 and 9.1 of the Judgment]
91. Moreover, it is submitted that as per Section 63 of the Act, the role of
whether the said tariff has been discovered through transparent process of
bidding. Further, the Hon’ble Supreme Court in the case of “Gujarat Urja
sanctity of the PPAs entered into between the generator and the procurer
the case of “Gujarat Urja Vikas Nigam Limited v Emco Limited & Anr.”
(2016) 11 SCC 182 and in “Gujarat Urja Vikas Nigam Limited v Acme
Solar Technologies (Gujarat Pvt.) Limited & Ors”. (2017) 11 SCC 801.
with the facts and circumstances of the present case, it is clear that the
extension of time under Article 5.7.3 of the PPA as once the PPA is
92. Heard both the parties at length and perused written submissions as
well.
Commissioning Date (SCOD) was 18 months from the effective date i.e.
17.06.2016.
71
Judgment in Appeal No. 374 of 2019
Rs.6.83 per unit. This was also for 25 years and the SCOD is also 18
months from the effective date i.e. 17.06.2016. These two projects had to
March 2015 the location of both the projects was shifted from Chellakere
95. The PPAs executed between the parties were duly approved after a
72
Judgment in Appeal No. 374 of 2019
line within which the above DC line would be ready. This was on
both the projects of the Appellants again got changed from Pavagada
nearly completed and are ready to get interconnected with the Powergrid
requesting them to provide status of the project and also the likely date of
They also informed that the projects were almost ready for interconnecting
to the Grid and requested the DISCOMs to intimate KPTCL for facilitating
74
Judgment in Appeal No. 374 of 2019
allow any extension of time beyond stipulated SCOD of the project without
both the Appellants-Diamond and Venus and revoked the condition in the
stating that there was no evidence to prove that projects were ready for
Petitions were filed before the High Court of Karnataka seeking stay of the
reduced to Rs.6.51 per unit from Rs.6.92 per unit and so far as Appellant
No.2-Venus, it was also reduced to Rs.6.51 per unit from Rs.6.83 per unit.
damages opining that in the said Petition the same cannot be entertained.
76
Judgment in Appeal No. 374 of 2019
Only after passing of the impugned order, for the first time, Respondent-
BESCOM stated that it has set off LCs against the invoices of Appellants-
stating that they have adjusted a sum of Rs.10.50 Crores towards alleged
law”?
107. The Appellants and the DISCOMs entered into PPAs on 18.12.2014.
Initially, it was for 18 months from the effective date. SCOD has to happen
happened only on 04.05.2015, almost after lapse of five months from the
77
Judgment in Appeal No. 374 of 2019
date of presenting the signed PPA. We refer to Article 3.1 of PPA which
reads as under:
very foundation upon which the parties restated their bargain, then the
78
Judgment in Appeal No. 374 of 2019
substantiate their contention that it was the failure of the KPTCL to keep
Respondent in its impugned order has not referred to this finding of the
“10 (ii) We have also gone through the provisions of the PPA,
communications exchanged between the Respondent No. 1 and
KPTCL and between Respondent No. 1 and the Appellants. We
observe that the initial scheduled commissioning date of the Solar
Project was on or before 28.1.2014 and the conditions precedent were
to be fulfilled in 240 days from the execution of the PPA. The
Appellants on the request of the Respondent No. 1 has extended the
commercial operation date of the Solar Project till 27.9.2014 on the
ground of non-commissioning of the said 220 kV lines by KPTCL.
However, due to delay in the execution/commissioning of the said 220
kV lines by KPTCL and conditional evacuation permission given by
KPTCL vide letter dated 6.2.2014 the condition precedent as per
Article 4.2 (e) of the PPA i.e. ‘obtained power evacuation approval from
Karnataka Power Corporation Ltd. (KPTCL)/ CESXC Mysore, as the
case may be cannot be termed as fulfilled. Further, on enquiry by the
79
Judgment in Appeal No. 374 of 2019
110. In Appeal No.340 of 2016 in the case of Azure Sunrise Pvt. Ltd. vs
Tribunal opined that the effective date would be not signing of the PPA but
80
Judgment in Appeal No. 374 of 2019
Article 5.7.3 of the PPA was approved by approving the PPA. Therefore, it
was not correct on the part of the Commission to ignore this fact. The
extend the SCOD on account of force majeure event. Once the PPA was
for extension of time. The said extension of time in terms of the above
mutual consent. Once PPA was approved in terms of Section 86 (1) (b) of
the Act, the Respondent – Commission has no power to strike down the
matter of fact, in Azure Sunrise Power Limited’s case also the Respondent
Para 11.6 this Tribunal distinguished the judgment of All India Power
the case in hand due to the fact that the said case was pertaining to
a deviation in carrying out the commissioning test at MCR as
defined in the PPA whereas in the instant case the extension of
time has been granted by CESCOM under the relevant clause of
the PPA approved by the State Commission. In the case of All India
Power Engineers Federation & Ors. v. Sasan Power Limited & Ors.,
there was a clear impact on the tariff to be borne by the
beneficiaries and in turn, consumers whereas in the present case
the terms of tariff were not disturbed beyond the scope of approved
PPA.”
114. Appellants contended that they were ready with the project as early
82
Judgment in Appeal No. 374 of 2019
not ready with their plants within the timeframe, therefore, they had
that all the events which are beyond the control of the parties or preventing
“Was it responsible for the said delay, and if it is not the affected
evacuation facility. It is not in dispute that Appellants did not approach the
have to see is whether the Appellant’s obligation to perform its part of the
83
Judgment in Appeal No. 374 of 2019
the evacuation facility was from Kotagudda Power Station. The same was
delay on the part of KPTCL, Appellant No.1 is not able to commission its
was accorded evacuation but only 80 MW was being used out of 200 MW
Appellant. It is noticed that this letter was in fact placed before Respondent
84
Judgment in Appeal No. 374 of 2019
Commission but inadvertently missed out while filing the appeal. However,
they cannot submit that the said letter was introduced for the first time
KPTCL did acknowledge that Solar power project of the Appellant was
lines of KPTCL and also related works, the power could not be evacuated.
Indicating the same, KPTCL accepted the request of the Appellant and
line as stated above. It is relevant to point out that in this letter they further
85
Judgment in Appeal No. 374 of 2019
acknowledge in this letter that the request for Appellant No.1 to extend
SCOD without any penalty as the delay was inordinate due to force
86
Judgment in Appeal No. 374 of 2019
this approval was made co-terminus with the SCOD of the project. Like
Appellant No.1, Appellant No.2 also informed HESCOM that their power
14.3.1 comes into play. Respondent No.2 by letters dated 17.9.2016 and
of their projects was almost completed and ready to interconnect the solar
power project to the grid and the same was getting delayed on account of
120. In respect of both the Appellants the condition was that the
station by KPTCL. Till then KPTCL did not say when 220 kV DC line is
87
Judgment in Appeal No. 374 of 2019
likely to be ready. Only by letter dated 19.01.2017 for the first time KPTCL
was provided to Appellant No.2 also from the same line without
complied with all the requirements in terms of Article 4.2 of the PPA. Like
respects and it sought for startup power also. They also acknowledged
that Appellant No.2 was persisting with KPTCL to provide alternate power
88
Judgment in Appeal No. 374 of 2019
BESCOM and HESCOM had categorically accepted that the delay was a
directed the appellants to file petitions before the Commission and later
rejected the force majeure on the ground that the Appellants were not
prudent and had not taken adequate steps to seek clarification from
settled law”?
124. It is noticed that force majeure clause was amended by order dated
04.05.2015 to include all the events which are beyond the control of the
89
Judgment in Appeal No. 374 of 2019
126. According to us this finding of the Commission is not justified for the
following reasons:
(a) Article 4.2 (e) of the two PPAs in question are identical.
(b) As in the instant case also, Article 4.1 of the PPA clearly states
that respective rights and obligations of the parties shall be
90
Judgment in Appeal No. 374 of 2019
91
Judgment in Appeal No. 374 of 2019
ready knowing fully well that date of SCOD, one cannot blame
the appellants to shoulder them with the responsibility of
completing the evacuation infrastructure. What Appellants
could have done was to keep following up requesting the
utilities to perform their duties. The Respondent Commission
totally ignored this aspect.
case, it was opined that power evacuation approval comes within the
ambit of words “subject to” in para (f) of the PPAs, therefore, clause 6 and
event like in the case of Chamundeshwari. Article 4.1 of the PPA reads as
under:
94
Judgment in Appeal No. 374 of 2019
128. This clearly states that respective rights and obligations of the
95
Judgment in Appeal No. 374 of 2019
129. Reading of Article 4.2 clause 4.2 (e) clearly indicate that evacuation
Chamundeshwari’s case.
that appellants not being ready for commissioning of the solar power
96
Judgment in Appeal No. 374 of 2019
131. It is noticed that the Commission also referred to the Chief Electrical
were not ready either in August or September. Both the appellants and
evacuation line itself was not ready with reference to revised SCOD,
they were ready for commissioning the projects. At no point of time this
explaining all the reasons for delays and appreciating the persisting and
infrastructure. The parties to the contract i.e. PPA are distribution licensee
the appellants for not commissioning the solar plant within the SCOD on
97
Judgment in Appeal No. 374 of 2019
impugned order that the appellants were not ready. In fact, both the
them by the Appellants explaining the delay of the KPTCL to complete the
98
Judgment in Appeal No. 374 of 2019
….
Thallakku Sub-Station.
….
99
Judgment in Appeal No. 374 of 2019
the Petitioners?
16…
133. Therefore, in principle the impugned order also records that the
100
Judgment in Appeal No. 374 of 2019
event its projects were delayed and licensees sought approval of the
extended SCOD but BESCOM and HESCOM have totally taken a ‘U’ turn
plants.
134. So far as the CEIG approval, the respondent Commission took this
102
Judgment in Appeal No. 374 of 2019
135. In terms of regulation 43, the main provision which comes into play
regular line) is kept ready i.e. evacuation system. Therefore, the certificate
ways to indicate that generators were ready to inject power. Even if the
line is not available, at that point of time the question of CEIG report or
safety of the supply of power would not come into picture. This certificate
comes into play only when distribution system gets connected with the
peculiar facts of the present case the Respondent Commission was not
justified to opine that CEIG approval also indicate the deficits of the
reasons:
103
Judgment in Appeal No. 374 of 2019
2016 it was obvious that there was delay on the part of KPTCL substation
and HESCOM. At no point of time, both licensees found fault with the
Appellants. On the other hand, in June 2017, BESCOM records that the
inaction on the part of KPTCL to complete the transmission line, delay has
happened. After acknowledging and accepting the said delay on the part
the SCOD on the ground of force majeure. HESCOM address such letter
Respondent Commission has totally ignored this fact while determining the
104
Judgment in Appeal No. 374 of 2019
Vs. Samir Chandra Chaudhary,” (2005 (5) SCC 784). It is well settled that
(f) Amar Singh vs Union of India (2011) 7 SCC 69– Para 50;
(g) Joint Action Committee of Air Line Pilots’ Assn. of India v.
DGCA (2011) 5 SCC 435- Para 12;
(h) Suzuki ParasrampuriaSuitings (P) Ltd. V. Official Liquidator,
(2018) 10 SCC 707- Para 12 to 14;
(i) PR Deshpande Vs Maruti BalaramHaibatti (1998) 6 SCC 507-
Para 8 and 9;
(j) Mumbai International Airport Pvt. Ltd. Vs Golden Chariot
Airport &Ors (2010) 10 SCC 422- Para 55-65.
137. In the light of this conduct, Respondent Nos.2 and 3 are estopped
Licensees.
138. In the light of above discussion and reasoning we are of the opinion
17.09.2016 and 28.03.2017 falls within the domain of force majeure event
105
Judgment in Appeal No. 374 of 2019
139. From the stand taken in the above proceedings, initially in the
LDs against invoices of the Appellants since March 2019. Again in the
Objection Statement dated 09.12.2019, its stand is that it has been setting
off Liquidated Damages right from March 2017. The Appellants did
contest the alleged set-off of LDs by filing IA No. 01/2019 before the
140. According to Appellants, the said stand of the Respondent Nos. 2 &
106
Judgment in Appeal No. 374 of 2019
142. It is seen they cannot simply ask for Liquidated Damages in terms of
the Article. If BESCOM claims any amount from the Appellant through
Appellant within 15 days of the receipt of the said invoice, then such
107
Judgment in Appeal No. 374 of 2019
days of period expires, the BESCOM is not entitled to claim any deduction
supply of energy.
itself through the licensees seeking extension of SCOD. This was almost
seven months after the SCOD. Apparently, Respondent Nos. 2 and 3 did
not honour the invoices raised by the Appellants making payments right
from the date of COD in spite of several requests and demands. The
108
Judgment in Appeal No. 374 of 2019
BESCOM and HESCOM. The Appellants have sought for tariff as agreed
between the parties in the PPAs. An application came to be filed for this
they did not even express their intention of setting of liquidated damages
against the bills raised by the Appellants. Apparently, the said application
claim. All along after the Respondent BESCOM has been contending that
that they are adjusting or setting off LDs against invoices of the Appellants.
109
Judgment in Appeal No. 374 of 2019
146. We are of the opinion that such action of the Respondent Nos. 2 & 3
justified in rejecting the same. Respondent Nos. 2 & 3 were not justified in
energy invoices and the same amounts to contrary to the procedure. The
terms of PPA gives such right to them; on the other hand Article 13.3.2 is
the only procedure by which adjustment / set-off can be invoked after strict
147. We are of the opinion that the commissioning of the project was
that both the licensees accepted that the delay on the part of the
event of force majeure. If the Appellants were not responsible for the
148. In the reply filed by the Respondent BESCOM to the Appeal, they
have taken a stand that the relief sought by the Appellants seeking
Respondent Nos. 2 & 3 is beyond the scope of the reliefs. It is seen that
111
Judgment in Appeal No. 374 of 2019
when the Appellant filed petition before the Respondent Commission, the
payments and they did not even whisper about the possibility of set-off.
After filing the Appeal, BESCOM has taken up plea of adjusting the dues
majeure event. This Tribunal in Appeal No. 241 of 2016 in the Judgment
MERC opined that the Tribunal has ample power to grant relief which was
not earlier sought for, if ends of justice demands such relief. Paragraphs
152 to 160 of the said Judgment are relevant, which read as under:
112
Judgment in Appeal No. 374 of 2019
113
Judgment in Appeal No. 374 of 2019
114
Judgment in Appeal No. 374 of 2019
151. In terms of Section 86 (1) (e) of the Act, one has to encourage and
115
Judgment in Appeal No. 374 of 2019
152. The State Commission being a quasi judicial body, a creature of the
of the matter:
(a) Manish Goel v. Rohini Goel: (2010)4 SCC 393 (Para 14)
(b) N.C. Dhoundial v. UOI & Ors.: (2004)2 SCC 579 (Para 14)
(c) State of Punjab & Ors. v. Renuka Singla & Ors.: (1994) 1 SCC
175 (Para 8)
its duties and obligations and proceeded to pass the impugned order
154. It is seen that Respondent Commission has totally ignored the fact
for about six months. In fact, BESCOM extends SCOD by three months.
116
Judgment in Appeal No. 374 of 2019
Commission the plant was the delay on the part of the KPTCL to complete
state that delay in commissioning the plant was because of force majeure.
156. The fact remains that whether the acceptance of Force Majeure
event being the cause of delay on the part of the BESCOM alone is
line was given because some other plant could not inject 100% power
letter dated 24.07.2017 refers to the cause being ‘force majeure event’.
The facts and circumstances clearly indicate, within the time allowed for
evacuation of power was not possible for want of infrastructure being kept
ready by KPTCL.
(i) The first Appellant is entitled at Rs. 6.92 per unit and the
Damages.
118
Judgment in Appeal No. 374 of 2019
(iii) The Appellants are entitled for carrying cost on the amounts
procedure contemplated.
158. In view of the disposal of the appeal, IAs pending if any, shall stand
159. Pronounced in the Virtual Court on this the 14th day of July, 2021.
REPORTABLE/NON-REPORTABALE
Ts/tpd
119