Energy Law Case Notes - Solpor

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ENERGY LAW CASE

NOTES

2019 : January to September

Published by : Society for Legal and Policy Research, New Delhi

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Energy Law Case Notes

Table of Cases Reported (Chronological) 1. APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI .............................................................................................................................................................................................. 29

JSW Steel Ltd. & Ors. vs. Tamil Nadu Electricity Regulatory Commission (02.01.2019 - APTEL) ............................................................................ 30

Surat Municipal Corporation vs. Gujarat Electricity Regulatory Commission & Ors. (02.01.2019 - APTEL) .......................................................... 31

GRIDCO Ltd. vs. NTPC Ltd. & Ors. (02.01.2019 - APTEL) ........................................................................................................................................... 32

Pune Power Development Private Ltd. vs. Karnataka Electricity Regulatory Commission & Ors. (04.01.2019 - APTEL) ...................................... 35

M/s. Hindustan Petroleum Corporation Ltd. vs. Petroleum & Natural Gas Regulatory Board (09.01.2019 - APTEL) ........................................... 36

Damodar Valley Corporation vs. Central Electricity Regulatory Commission & Ors. (10.01.2019 - APTEL) .......................................................... 37

Earth Solar Private Ltd. vs. Punjab State Electricity Regulatory Commission & Ors. (11.01.2019 - APTEL) ........................................................... 38

M/s SAS Hydel Projects Pvt. Ltd. vs. Madhya Pradesh Electricity Regulatory Commission (15.01.2019 - APTEL) ................................................ 40

ACB (India) Ltd. vs. Gujarat Electricity Regulatory Commission & Ors. (18.01.2019 - APTEL) ................................................................................ 40

Sasan Power Ltd. vs. Central Electricity Regulatory Commission & Ors. (18.01.2019 - APTEL) ............................................................................. 42

Nuclear Power Corporation of India Ltd. vs. Central Electricity Regulatory Commission & Ors. (18.01.2019 - APTEL) ....................................... 43

Print Wizards vs. Tata Power Delhi Distribution Ltd. & Ors. (23.01.2019 - APTEL) ................................................................................................. 44

NTPC Ltd. vs. GRIDCO Ltd. & Ors. (25.01.2019 - APTEL) ........................................................................................................................................... 45

Jindal India Thermal Power Ltd. vs. Central Electricity Regulatory Commission & Ors. (29.01.2019 - APTEL) ...................................................... 47

Power Company of Karnataka Ltd. & Ors. vs. Central Electricity Regulatory Commission & Ors. (06.02.2019 - APTEL) ...................................... 48

Lalpur Wind Energy Pvt. Ltd. vs. Karnataka Power Transmission Corporation Ltd. & Ors. (08.02.2019 - APTEL) ................................................. 51

Century Textiles and Industries Limited. Vs. Central Electricity Regulatory Commission & Ors. (13.02.2019 – APTEL) ....................................... 52

Omega Infraengineers Pvt. Ltd. vs. Punjab State Electricity Regulatory Commission & Ors. (21.02.2019 - APTEL) ............................................. 54

Adani Gas Ltd. Vs. Petroleum & Natural Gas Regulatory Board & Ors. (28.02.2019 – APTEL) ............................................................................... 56

Gail (India) Ltd. Vs. Petroleum & Natural Gas Regulatory Board & Anr. (28.02.2019 – APTEL) ............................................................................. 58

M/s Sahasradhara Energy Pvt. Ltd v. Uttar Pradesh Electricity Regulatory Commission & Ors. (07.03.2019 - APTEL) ........................................ 60

Mawana Sugars Ltd. V. Punjab State Electricity Regulatory Commission & Punjab State Power Corporation Ltd. (08.03.2019 - APTEL); 2.Northern India Textiles Mills Association v. PSERC ................................................................................................................................................ 61

Lanco Amarkantak Power Ltd. v. Haryana Electricity Regulatory Commission & Ors (13.03.2019 - APTEL) ......................................................... 62

New Ushanagar Co-Operative Housing Society Ltd. v. Merc & Tata Power Co. Ltd. & Commissioner Of Police (15.03.2019 - APTEL) ............. 63

JSW Energy Ltd. Vs. Maharashtra Electricity Regulatory Commission & Anr. (15.03.2019 - APTEL) ..................................................................... 66

Ultratech Cement Ltd. v. Gujarat Electricity Regulatory Commission & Anr. (15.03.2019- APTEL) ....................................................................... 67

Tata Power Company Ltd. – Distribution Vs. Maharashtra Electricity Regulatory Commission & Ors. (18.03.2019 – APTEL) ............................. 68

JK Minerals Vs. Madhya Pradesh Electricity Regulatory Commission & Ors. (19.03.2019 – APTEL) ...................................................................... 69

Inland Power Ltd. Vs. Jharkhand State Electricity Regulatory Commission & Ors. (25.03.2019 – APTEL) ............................................................. 70

Mahur Foods and Beverage Vs. Gulbarga Electricity Supply Company Ltd. & Anr. (26.03.2019 – APTEL) ............................................................ 71

Bagyodya Vs. Gulbarga Electricity Supply Company Ltd. & Anr. (26.03.2019-APTEL) ............................................................................................ 72

M/s JSW Energy Ltd. & Ors. Vs. Maharashtra Electricity Regulatory Commission & Anr. (27.03.2019 – APTEL).................................................. 72

M/s. JSW Steel Ltd. & Ors. Vs. Maharashtra Electricity Regulatory Commission & Anr. (27.03.2019 – APTEL) .................................................... 73

SRM Power Pvt. Ltd. Vs. Bangalore Electricity Supply Company Ltd. & Ors. (29.03.2019 – APTEL) ...................................................................... 75

M/s. Fortune Five Hydel Projects Pvt. Ltd & Ors. Vs. Karnataka Electricity Regulatory Commission & Ors. (29.03.2019 – APTEL) ..................... 76

Sai Wardha Power Generation Ltd. Vs. Maharashtra Electricity Regulatory Commission & Anr. (03.04.2019 – APTEL) ..................................... 77

The Tata Power Co. Ltd. (Distribution) vs. Maharashtra Electricity Regulatory Commission (05.04.2019 – APTEL) ............................................ 78

Ultratech Cement Ltd. & Ors. vs. Karnataka Electricity Regulatory Commission (09.04.2019 - APTEL) ................................................................ 81

GMR Warora Energy Ltd. & Ors. vs. Central Electricity Regulatory Commission & Ors. (11.04.2019 - APTEL) ..................................................... 82

SD Bansal Iron and Steel Private Ltd. & Ors. vs. Madhya Pradesh Electricity Regulatory Commission & Ors. (12.04.2019 - APTEL) .................. 84

Rajasthan Renewable Energy Corporation Ltd. vs. Shree Cement Ltd. & Ors. (16.04.2019 - APTEL) .................................................................... 85

State Load Despatch Centre, Karnataka Power Transmission Corporation Ltd. Vs. Central Electricity Regulatory Commission & Ors (16.04.2019 - APTEL)................................................................................................................................................................................................... 85

Tata Power Delhi Distribution Ltd. vs. Delhi Electricity Regulatory Commission (16.04.2019 - APTEL)................................................................. 87

Swasti Power Ltd. vs. Uttarakhand Electricity Regulatory Commission & Ors. (23.04.2019 - APTEL) ................................................................... 90

Rama Shankar Awasthi vs. Lanco Anpara Power Ltd. & Ors. (24.04.2019 - APTEL) ................................................................................................ 91



Mytrah Vayu (Som) Private Ltd. vs. Rajasthan Electricity Regulatory Commission & Ors. (30.04.2019 - APTEL).................................................. 92

Lalitpur Power Generation Company Ltd. vs. Uttar Pradesh Electricity Regulatory Commission & Ors. (01.05.2019 - APTEL) ........................... 94

ES Solar Private Limited & Anr. Vs. Bangalore Electricity Supply Company Ltd. (BESCOM) & Ors. (08.05.2019 – APTEL) ................................... 97

Raj West Power Ltd. Vs. Rajasthan Electricity Regulatory Commission & Ors. (09.05.2019 - APTEL).................................................................... 99

Torrent Power Ltd. vs. Gujarat Electricity Regulatory Commission (09.05.2019 - APTEL).................................................................................... 100

Torrent Power Ltd. vs. Gujarat Electricity Regulatory Commission (09.05.2019 - APTEL).................................................................................... 101

Him Urja Private Ltd. vs. Uttarakhand Electricity Regulatory Commission & Ors. (09.05.2019 - APTEL) ........................................................... 102

NTPC Ltd. vs. Central Electricity Regulatory Commission & Ors. (09.05.2019 - APTEL) ........................................................................................ 103

Prism Cement Ltd. & Ors. vs. Madhya Pradesh Electricity Regulatory Commission & Ors. (17.05.2019 - APTEL) .............................................. 105

Maithon Alloys v. CERC & Ors (17.05.2019 - APTEL) ............................................................................................................................................... 106

Lanco Amarkantak Power Ltd. v. HERC & PTC & HPPC (22.05.2019 – APTEL) ...................................................................................................... 107

Siwana Solar Power Project v. Haryana Electricity Regulatory Commission & Haryana Power Purchase Centre &Haryana Renewable Energy Development Agency (27.05.2019 – APTEL) ........................................................................................................................................................... 110

GMR Karmalanga Energy Ltd. & Anr. Vs. Central Electricity Regulatory Commission & Ors (27.05.2019 – APTEL) ........................................... 111

Adani Transmission Ltd. Vs. Maharashtra Electricity Regulatory Commission. (29.05.2019 - APTEL) ................................................................. 113

M/s Adani Green Energy (Tamil Nadu) Vs. Tamil Nadu Electricity Regulation Commission & Ors. (30.05.2019 – APTEL) ................................. 116

M/s. Ramnad Solar Power Ltd. vs. Tamil Nadu Electricity Regulatory Commission & Ors. (30.05.2019 – APTEL) .............................................. 117

M/s. Kamuthi Renewable Energy Ltd. vs. Tamil Nadu Electricity Regulatory Commission & Ors. (30.05.2019 – APTEL)................................... 119

Adani Power Maharashtra Ltd. Vs. Maharashtra Electricity Regulatory Commission & Ors. (31.05.2019- APTEL) ............................................ 119

Techno Electric & Engineering Co. Ltd. Vs. Tamil Nadu Generation and Distribution Corporation Ltd. & Anr. (31.05.2019 – APTEL) ............. 121

M/s. Indsil Hydro Power and Manganese Ltd. vs. Kerala Electricity Regulatory Commission & Anr. (29.07.2019 – APTEL) .............................. 122

Tata Power Delhi Distribution Ltd. Vs. M/s Duggar Fiber Pvt. Ltd. & Anr. (05.08.2019 – APTEL) ........................................................................ 124

Green Energy Association vs. Electricity Regulatory Commission (21.08.2019 – APTEL) ..................................................................................... 126

Open Access Users Association & Ars vs. Himachal Pradesh Electricity Regulatory Commission & Ors. (21.08.2019 – APTEL) ........................ 125

Chhattisgarh State Power Distribution Co. Ltd. vs. Chhattisgarh State Electricity Regulatory Commission & Ors.; Jindal Steel & Power Private Limited. v. Chhattisgarh State Electricity Regulatory Commission & Ors. (26.08.2019 - APTEL) ......................................................................... 127

Arya Energy Limited & Ors. vs. Madhya Pradesh Electricity Regulatory Commission (26.08.2019 - APTEL) ...................................................... 128

Power Grid Corporation of India Ltd. Vs. Central Electricity Regulatory Commission & Ors.(14.09.2019-APTEL).............................................. 129

Jaipur Vidyut Vitran Nigam Ltd & Ors. Vs. Rajasthan Electricity Regulatory Commission & Anr. (14.09.2019 – APTEL) .................................... 131

Punjab State Power Corporation Ltd. Vs. Punjab State Electricity Regulatory Commission & Ors. (14.09.2019 – APTEL) ................................. 132

Mahanagar Gas Ltd. Vs. Petroleum And Natural Gas Regulatory Board & Ors.(20.09.2019 - APTEL) ................................................................. 134

Tata Power Company Ltd. (Transmission) Vs. Maharashtra Electricity Regulatory Commission & Anr. (23.09.2019 - APTEL) .......................... 135

M/s. Ramnad Renewable Energy Ltd. Vs. Tamil Nadu Electricity Regulatory Commission & Ors. (24.09.2019 - APTEL) ................................... 138

M/s Sundew Properties Ltd. vs. Telangana State Electricity Regulatory Commission & Anr.( 27.09.2019 - APTEL) ........................................... 141

Renascent Power Ventures Pvt. Ltd. Vs. Uttar Pradesh Electricity Regulatory Commission & Ors. (27.09.2019 – APTEL) ................................ 142

Tata Power Delhi Distribution Ltd. vs Delhi Electricity Regulatory Commission. (30.09.2019 – APTEL) .............................................................. 145

2. SUPREME COURT OF INDIA ........................................................................................................................................................................................................................................153 The State of Jharkhand vs. Surendra Kumar Srivastava & Ors (03.01.2019 - SC) .................................................................................................. 154

Reliance Infrastructure Ltd. vs. State of Maharashtra & Ors. (21.01.2019 - SC) ................................................................................................... 155

Government of NCT of Delhi vs. Union of India (UOI) (14.02.2019 - SC) ............................................................................................................... 157

Uttar Haryana Bijli Vitran Nigam Ltd. & Ors. vs. Adani Power Ltd. & Ors. (25.02.2019 - SC) ............................................................................... 158

Power Grid Corporation Of India Vs. Tamil Nadu Generation & Distribution Co. Ltd. & Ors. Etc.; NTPC Ltd. Vs. Central Electricity Regulatory Commission & Ors. (09.05.2019 - SC)................................................................................................................... 160

Adani Power (Mundra) Ltd. vs. Gujarat Electricity Regulatory Commission & Ors. (02.07.2019 - SC) ................................................................ 162

Star Wire (India) Vidyut Pvt. Ltd. & Ors. vs. Haryana Electricity Regulatory Commission (02.07.2019 - SC) ....................................................... 164

Madhya Pradesh Power Management Co. Ltd. & Ors. vs. Dhar Wind Power Projects Pvt. Ltd. & Ors. (25.07.2019 - SC) ................................. 166

West Bengal State Electricity Distribution Company Ltd. & Ors. vs. Orion Metal Pvt. Ltd. & Ors. (21.08.2019 - SC) ......................................... 169



Table of Cases Reported (Alphabetical) 1. APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI…………………………………………………………………………………………………………………………. 29

ACB (India) Ltd. vs. Gujarat Electricity Regulatory Commission & Ors. (18.01.2019 - APTEL) 40

Adani Gas Ltd. Vs. Petroleum & Natural Gas Regulatory Board & Ors. (28.02.2019 – APTEL) 56

Adani Power Maharashtra Ltd. Vs. Maharashtra Electricity Regulatory Commission & Ors. (31.05.2019- APTEL) 119

Adani Transmission Ltd. Vs. Maharashtra Electricity Regulatory Commission. (29.05.2019 - APTEL) 113

Arya Energy Limited & Ors. vs. Madhya Pradesh Electricity Regulatory Commission (26.08.2019 - APTEL) 128

Bagyodya Vs. Gulbarga Electricity Supply Company Ltd. & Anr. (26.03.2019-APTEL) 72

Century Textiles and Industries Limited. Vs. Central Electricity Regulatory Commission & Ors. (13.02.2019 – APTEL) 52

Chhattisgarh State Power Distribution Co. Ltd. vs. Chhattisgarh State Electricity Regulatory Commission & Ors.; Jindal Steel & Power Private Limited. v. Chhattisgarh State Electricity Regulatory Commission & Ors. (26.08.2019 - APTEL)

127

Damodar Valley Corporation vs. Central Electricity Regulatory Commission & Ors. (10.01.2019 - APTEL) 37

Earth Solar Private Ltd. vs. Punjab State Electricity Regulatory Commission & Ors. (11.01.2019 - APTEL) 38

ES Solar Private Limited & Anr. Vs. Bangalore Electricity Supply Company Ltd. (BESCOM) & Ors. (08.05.2019 – APTEL) 97

Gail (India) Ltd. Vs. Petroleum & Natural Gas Regulatory Board & Anr. (28.02.2019 – APTEL) 58

GMR Karmalanga Energy Ltd. & Anr. Vs. Central Electricity Regulatory Commission & Ors (27.05.2019 – APTEL) 111

GMR Warora Energy Ltd. & Ors. vs. Central Electricity Regulatory Commission & Ors. (11.04.2019 - APTEL) 82

Green Energy Association vs. Electricity Regulatory Commission (21.08.2019 – APTEL) 126

GRIDCO Ltd. vs. NTPC Ltd. & Ors. (02.01.2019 - APTEL) 32

Him Urja Private Ltd. vs. Uttarakhand Electricity Regulatory Commission & Ors. (09.05.2019 - APTEL) 102

Inland Power Ltd. Vs. Jharkhand State Electricity Regulatory Commission & Ors. (25.03.2019 – APTEL) 70

Jaipur Vidyut Vitran Nigam Ltd & Ors. Vs. Rajasthan Electricity Regulatory Commission & Anr. (14.09.2019 – APTEL) 131

Jindal India Thermal Power Ltd. vs. Central Electricity Regulatory Commission & Ors. (29.01.2019 - APTEL) 47

JK Minerals Vs. Madhya Pradesh Electricity Regulatory Commission & Ors. (19.03.2019 – APTEL) 69

JSW Energy Ltd. Vs. Maharashtra Electricity Regulatory Commission & Anr. (15.03.2019 - APTEL) 66

JSW Steel Ltd. & Ors. vs. Tamil Nadu Electricity Regulatory Commission (02.01.2019 - APTEL) 30

Lalitpur Power Generation Company Ltd. vs. Uttar Pradesh Electricity Regulatory Commission & Ors. (01.05.2019 - APTEL) 94

Lalpur Wind Energy Pvt. Ltd. vs. Karnataka Power Transmission Corporation Ltd. & Ors. (08.02.2019 - APTEL) 51

Lanco Amarkantak Power Ltd. v. Haryana Electricity Regulatory Commission & Ors (13.03.2019 - APTEL) 62

Lanco Amarkantak Power Ltd. v. HERC & PTC & HPPC (22.05.2019 – APTEL) 107

M/s Adani Green Energy (Tamil Nadu) Vs. Tamil Nadu Electricity Regulation Commission & Ors. (30.05.2019 – APTEL) 116

M/s JSW Energy Ltd. & Ors. Vs. Maharashtra Electricity Regulatory Commission & Anr. (27.03.2019 – APTEL) 72

M/s Sahasradhara Energy Pvt. Ltd v. Uttar Pradesh Electricity Regulatory Commission & Ors. (07.03.2019 - APTEL) 60

M/s SAS Hydel Projects Pvt. Ltd. vs. Madhya Pradesh Electricity Regulatory Commission (15.01.2019 - APTEL) 40

M/s Sundew Properties Ltd. vs. Telangana State Electricity Regulatory Commission & Anr.( 27.09.2019 - APTEL) 141

M/s. Fortune Five Hydel Projects Pvt. Ltd & Ors. Vs. Karnataka Electricity Regulatory Commission & Ors. (29.03.2019 – APTEL) 76

M/s. Hindustan Petroleum Corporation Ltd. vs. Petroleum & Natural Gas Regulatory Board (09.01.2019 - APTEL) 36

M/s. Indsil Hydro Power and Manganese Ltd. vs. Kerala Electricity Regulatory Commission & Anr. (29.07.2019 – APTEL) 122

M/s. JSW Steel Ltd. & Ors. Vs. Maharashtra Electricity Regulatory Commission & Anr. (27.03.2019 – APTEL) 73

M/s. Kamuthi Renewable Energy Ltd. vs. Tamil Nadu Electricity Regulatory Commission & Ors. (30.05.2019 – APTEL) 119

M/s. Ramnad Renewable Energy Ltd. Vs. Tamil Nadu Electricity Regulatory Commission & Ors. (24.09.2019 - APTEL) 138

M/s. Ramnad Solar Power Ltd. vs. Tamil Nadu Electricity Regulatory Commission & Ors. (30.05.2019 – APTEL) 117

Mahanagar Gas Ltd. Vs. Petroleum And Natural Gas Regulatory Board & Ors.(20.09.2019 - APTEL) 134

Mahur Foods and Beverage Vs. Gulbarga Electricity Supply Company Ltd. & Anr. (26.03.2019 – APTEL) 71

Maithon Alloys v. CERC & Ors (17.05.2019 - APTEL) 106

Mawana Sugars Ltd. V. Punjab State Electricity Regulatory Commission & Punjab State Power Corporation Ltd. (08.03.2019 - APTEL); 2.Northern India Textiles Mills Association v. PSERC

61

Mytrah Vayu (Som) Private Ltd. vs. Rajasthan Electricity Regulatory Commission & Ors. (30.04.2019 - APTEL) 92

New Ushanagar Co-Operative Housing Society Ltd. v. Merc & Tata Power Co. Ltd. & Commissioner Of Police (15.03.2019 - APTEL) 63

NTPC Ltd. vs. Central Electricity Regulatory Commission & Ors. (09.05.2019 - APTEL) 103

NTPC Ltd. vs. GRIDCO Ltd. & Ors. (25.01.2019 - APTEL) 45

Nuclear Power Corporation of India Ltd. vs. Central Electricity Regulatory Commission & Ors. (18.01.2019 - APTEL) 43

Omega Infraengineers Pvt. Ltd. vs. Punjab State Electricity Regulatory Commission & Ors. (21.02.2019 - APTEL) 54

Open Access Users Association & Ars vs. Himachal Pradesh Electricity Regulatory Commission & Ors. (21.08.2019 – APTEL) 125



Power Company of Karnataka Ltd. & Ors. vs. Central Electricity Regulatory Commission & Ors. (06.02.2019 - APTEL) 48

Power Grid Corporation of India Ltd. Vs. Central Electricity Regulatory Commission & Ors.(14.09.2019-APTEL) 129

Print Wizards vs. Tata Power Delhi Distribution Ltd. & Ors. (23.01.2019 - APTEL) 44

Prism Cement Ltd. & Ors. vs. Madhya Pradesh Electricity Regulatory Commission & Ors. (17.05.2019 - APTEL) 105

Pune Power Development Private Ltd. vs. Karnataka Electricity Regulatory Commission & Ors. (04.01.2019 - APTEL) 35

Punjab State Power Corporation Ltd. Vs. Punjab State Electricity Regulatory Commission & Ors. (14.09.2019 – APTEL) 132

Raj West Power Ltd. Vs. Rajasthan Electricity Regulatory Commission & Ors. (09.05.2019 - APTEL) 99

Rajasthan Renewable Energy Corporation Ltd. vs. Shree Cement Ltd. & Ors. (16.04.2019 - APTEL) 85

Rama Shankar Awasthi vs. Lanco Anpara Power Ltd. & Ors. (24.04.2019 - APTEL) 91

Renascent Power Ventures Pvt. Ltd. Vs. Uttar Pradesh Electricity Regulatory Commission & Ors. (27.09.2019 – APTEL) 142

Sai Wardha Power Generation Ltd. Vs. Maharashtra Electricity Regulatory Commission & Anr. (03.04.2019 – APTEL) 77

Sasan Power Ltd. vs. Central Electricity Regulatory Commission & Ors. (18.01.2019 - APTEL) 42

SD Bansal Iron and Steel Private Ltd. & Ors. vs. Madhya Pradesh Electricity Regulatory Commission & Ors. (12.04.2019 - APTEL) 84

Siwana Solar Power Project v. Haryana Electricity Regulatory Commission & Haryana Power Purchase Centre &Haryana Renewable Energy Development Agency (27.05.2019 – APTEL)

110

SRM Power Pvt. Ltd. Vs. Bangalore Electricity Supply Company Ltd. & Ors. (29.03.2019 – APTEL) 75

State Load Despatch Centre, Karnataka Power Transmission Corporation Ltd. Vs. Central Electricity Regulatory Commission & Ors (16.04.2019 - APTEL)

85

Surat Municipal Corporation vs. Gujarat Electricity Regulatory Commission & Ors. (02.01.2019 - APTEL) 31

Swasti Power Ltd. vs. Uttarakhand Electricity Regulatory Commission & Ors. (23.04.2019 - APTEL) 90

Tata Power Company Ltd. – Distribution Vs. Maharashtra Electricity Regulatory Commission & Ors. (18.03.2019 – APTEL) 68

Tata Power Company Ltd. (Transmission) Vs. Maharashtra Electricity Regulatory Commission & Anr. (23.09.2019 - APTEL) 135

Tata Power Delhi Distribution Ltd. vs Delhi Electricity Regulatory Commission. (30.09.2019 – APTEL) 145

Tata Power Delhi Distribution Ltd. vs. Delhi Electricity Regulatory Commission (16.04.2019 - APTEL) 87

Tata Power Delhi Distribution Ltd. Vs. M/s Duggar Fiber Pvt. Ltd. & Anr. (05.08.2019 – APTEL) 124

Techno Electric & Engineering Co. Ltd. Vs. Tamil Nadu Generation and Distribution Corporation Ltd. & Anr. (31.05.2019 – APTEL) 121

The Tata Power Co. Ltd. (Distribution) vs. Maharashtra Electricity Regulatory Commission (05.04.2019 – APTEL) 78

Torrent Power Ltd. vs. Gujarat Electricity Regulatory Commission (09.05.2019 - APTEL) 100

Torrent Power Ltd. vs. Gujarat Electricity Regulatory Commission (09.05.2019 - APTEL) 101

Ultratech Cement Ltd. & Ors. vs. Karnataka Electricity Regulatory Commission (09.04.2019 - APTEL) 81

Ultratech Cement Ltd. v. Gujarat Electricity Regulatory Commission & Anr. (15.03.2019- APTEL) 67

2. SUPREME COURT OF INDIA………………………………………………………………………………………………………………………………………………………………… 153

Adani Power (Mundra) Ltd. vs. Gujarat Electricity Regulatory Commission & Ors. (02.07.2019 - SC) 162

Government of NCT of Delhi vs. Union of India (UOI) (14.02.2019 - SC) 157

Madhya Pradesh Power Management Co. Ltd. & Ors. vs. Dhar Wind Power Projects Pvt. Ltd. & Ors. (25.07.2019 - SC) 166

Power Grid Corporation Of India Vs. Tamil Nadu Generation & Distribution Co. Ltd. & Ors. Etc.; NTPC Ltd. Vs. Central Electricity Regulatory Commission & Ors. (09.05.2019 - SC)

160

Reliance Infrastructure Ltd. vs. State of Maharashtra & Ors. (21.01.2019 - SC) 155

Star Wire (India) Vidyut Pvt. Ltd. & Ors. vs. Haryana Electricity Regulatory Commission (02.07.2019 - SC) 164

The State of Jharkhand vs. Surendra Kumar Srivastava & Ors (03.01.2019 - SC) 154

Uttar Haryana Bijli Vitran Nigam Ltd. & Ors. vs. Adani Power Ltd. & Ors. (25.02.2019 - SC) 158

West Bengal State Electricity Distribution Company Ltd. & Ors. vs. Orion Metal Pvt. Ltd. & Ors. (21.08.2019 - SC) 169



NOTABLE EXCERPTS



Application Of Promissory Estoppel : Bills raised after a period of over two years

- Held, As per GERC Open Access Regulations, Respondent is vested with power to collect transmission charges and is entitled to recover transmission charges for open access granted as per GERC Open Access Regulations which provided for transmission charges on maximum capacity reserved. - If by inadvertence, there was under-recovery of the amounts; differential amount can be recovered subsequently by raising corrected invoices/supplementary invoices. Therefore, obligation of Appellants/ short term open access customer to pay transmission charges as per GERC Open Access Regulations and Tariff Orders. - Appellants cannot deny liability merely because invoice was raised subsequently. Invoices raised by Respondent are not invalid merely because they were raised subsequently. Claim for transmission charges had not been time barred. Second Respondent/SLDC cannot be prevented from recovery of legitimate dues. - Contention of Appellant claiming application of promissory estoppel is misconceived and there was no application of such concept of estoppel in the instant case. Appellant had not raised issue of doctrine of estoppel/ promissory estoppel in Petition before State Commission or even in Memorandum Appeal before Tribunal. Well settled law laid down by Supreme Court and by Tribunal in hosts of judgments that the foundation has to be laid in the Petition itself by invoking doctrine of estoppels. - Appeal dismissed.

Ultratech Cement Ltd. v. Gujarat Electricity Regulatory Commission & Anr. (15.03.2019- APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No.83 of 2018 Dated: 15.03.2019

Authority of State Load Despatch Centre (SDLC) : To issue invoices levying back-up supply charges

-Held, There is nothing illegal that if SLDC issues invoices in lieu of power supply charges on behalf of distribution licensees and collects such charges and in turn remits amount in account of local distribution licensee. Such activities on part of SLDC in no way or amounts to business of electricity supplies or trading. - Appeals partly allowed


IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal No. 26 of 2013

Dated: 16.04.2019

Average Pool Power Purchase Cost : Respondent licensees liable to pay only average pool power purchase cost for energy injected into grid – Only for part of total delay period in execution of WBA

-Held, reliance placed by Appellant on decisions in Fortune Five Hydel Projects v. KPTCL & Ors. and Green Infra Wind Power Generation v. SLDC & Ors. (That held that the ESCOM(s) are liable to pay generic tariff for the energy injected into the grid by the generator from the date of commissioning of the Project to the date of signing of the WBA) is uncalled for as application for wheeling and banking of energy in these cases was made prior to commissioning of respective projects and admittedly, there was a delay in executing the WBA, which is not case herein. - There is no force in arguments of Appellant regarding discrimination whatsoever. - Appeal dismissed

Lalpur Wind Energy Pvt. Ltd. vs. Karnataka Power Transmission Corporation Ltd. & Ors. (08.02.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No. 37 of 2016 Dated: 08.02.2019

Back-up Supply Charges : Generator engaged in Open Access transaction under CERC (Open Access in Inter-State Transmission) Regulations, 2008

- Held, Generating companies provided with Open Access for inter-state transactions under CERC Regulations are not liable to pay any additional charges as per Regulations 20(6), however, any power consumed from State Grid through local distribution licencee is chargeable as per KERC Regulations by considering temporary tariff under relevant category of consumers. However, these supply charges cannot be equated with back-up supply charges. - Appeals partly allowed





Dated: 16.04.2019

Banked energy : Order rejected Appellant's claim of banked energy for energy injected into grid from date of commissioning of power plant till date of execution of WBA

-Held, in a catena of judgments including Indo Rama Synthesis (I) Ltd. v. MERC [(2011) APTEL 77], Tribunal has held that injection of energy without any contractual agreement could lead to damaging consequences and, therefore, same should be discouraged. - In State of West Bengal vs B.K. Mondal and Sons, Hon’ble Supreme Court held that when services are imposed on, the Section 70 of the Contract Act (Obligation of person enjoying benefit of non-gratuitous act) is not applicable. - State Commission has passed Impugned Order in accordance with law considering various decisions of apex court as well as Tribunal and has assigned cogent reasoning. - Appeal dismissed

Lalpur Wind Energy Pvt. Ltd. vs. Karnataka Power Transmission Corporation Ltd. & Ors. (08.02.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Calculation of Capacity for RPO target : Adoption of higher normative CUF - Held, DISCOMs calculated required capacity of 503 MW to meet RPO target for 2015-16 on basis of CUF of 20%. From historical data of CUF for past 10 years it is clear that CUF has varied in the last ten years in the range of 11.74% to 16.38%. DISCOMs should have taken judicial note of this important aspect while working out the required capacity to meet the RPO target and as such action of DISCOMs in calculating required capacity of 503 MW on the basis of normative CUF of 20% was wrong. DISCOMs should have been more cautious and applied their due diligence in adopting a more realistic value of CUF for better estimation of required capacity. - Appeal allowed

Mytrah Vayu (Som) Private Ltd. vs. Rajasthan Electricity Regulatory Commission & Ors. (30.04.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No. 353 of 2018 and IA No. 1408 of 2018 Dated: 30.04.2019

Change in Law : Certain claims of Appellants held contrary to provisions of competitive bidding guidelines under PPAs – Claims included: Compensation on account of change from UHV to GCV based prices (coal) | Railway freight charges as entitled for compensation towards increase/revision in railway freight charges on account of increase in busy season surcharge, development surcharge and Service Tax | Change in compensation towards change in MAT rate which came to be introduced by the Finance Act of 2012 | Compensation towards increase in water charges? | Carrying cost | VAT rate, as claimed | Interest on additional working capital

-Held, CERC was not justified in opining that Appellant was expected to take into account possible revision in the mentioned charges while quoting the bid. Appellants are justified in saying that it was not possible to forecast the increase in these charges so as to factor them in the bid submitted as back as in 2007 that is development surcharge was at 2% till 2010 and increased to 5% thereafter. – Appellant was entitled to service tax for transportation of goods as a change in Law event as the CERC had passed numerous orders to this effect. - Further, wrt VAT as a change in law event, which was increased by the State government from 4 %to-5%; VAT depends on the Central Excise Duty, Royalty and Clean Energy Cess which has to be recognised as a Change in Law event therefore Appellants are entitled for compensation. - On interest on working capital and carrying cost as change in law event, was also accepted and allowed. Tribunal being an Appellate authority can allow the prayer by moulding the relief to meet the ends of justice. Parties must be brought to same economic position, it would include that all additional costs, which occurs after the cut-off date in terms of the change in law event, have to be compensated. - On levy of water charges, the Appellant was not entitled to be compensated as it is an admitted fact that price on water charges if not envisaged in the PPA and depending upon whether in any particular case bidder has quoted the energy charges in escalable or non-escalable components considering the market risks, the same price, if found in the escalation rate index published on half yearly basis by the Central Commission, one can seek such increase in water charges, since bidder is entitled to quote only escalable energy charges or only non-escalable energy charges or combination of both. – Wrt issue of MAT, the Appellants were not entitled to any



compensation based on settled principle in the judgement of this tribunal in GMR Warora Energys case. - Shift from UHV base/ methodology to GCV methodology, pricing of the coal, such compensation is not allowed following the principles settled in the GMR Warora Energy case. - Appeal partly allowed.

GMR Karmalanga Energy Ltd. & Anr. Vs. Central Electricity Regulatory Commission & Ors (27.05.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Change in Law : Interest/carrying cost on the amounts determined as compensation in respect of change in law in terms of PPA

-Held, in Appeal No. 210 of 2017 (Judgment dated 13.04.2018), it was held that such claims for compensation by generators in terms of clauses of PPA do arise and should be paid, however carrying cost or interest is admissible only after finalisation of amount payable and not before. Subsequently, in Civil Appeal No. 5865 of 2018 the Hon’ble Supreme Court opined that those clauses in Article 13, if read as a whole, lead to the position that subject to restitutionary principles contained in Article 13.2, the adjustment of compensation in monthly tariff payments has to be arrived at and the claim of compensation relates to restitutionary amount, which is very much within the ambit of PPA and not outside PPA, since parties have to be put to same economic position. - Appeals allowed.

Raj West Power Ltd. Vs. Rajasthan Electricity Regulatory Commission & Ors. (09.05.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY (Appellate Jurisdiction)

APPEAL NO. 228 OF 2018 & APPEAL NO. 235 OF 2018 Dated: 09.05.2019

Change in PPA tariff : Respondent-Commission reduced tariff by Rs. 0.14 as a condition for sale/transfer of shareholding of PPGCL in favour of Appellant - Respondent-Commission had already adopted the tariff which emerged from competitive bidding process under Section 63 of Electricity Act, 2003

Held, Change in PPA tariff, which being the fundamental basis for arriving at the bid amount by the bidders, any subsequent reduction in PPA tariff, post conclusion of bid process by lenders of the project, would amount to change in the fundamental basis of the bid. This is well settled law laid down by the Hon’ble Supreme Court in several cases. - Apparently, Commission did not consider effects of reduction in PPA tariff in post facto scenario since there was certainty in the bid condition with reference to PPA tariff and associated revenue stream which was the basic input for inviting the bids in question. Bid process adopted by 2nd Respondent-SBI was to recover their dues and salvage the project. This right accrued to lenders under the financing documents. Acceptance of the bid by lenders was to find an appropriate debt resolution by bringing a strong sponsor/promoter who is capable of promoting the project in question with sustainability since they had world class practice to run such project. Interference of Respondent-Commission by reducing the adopted tariff indirectly interferes with the security rights available to the lenders in terms of financial documents entered into between lenders and the borrowers. - Relief sought in the Petition in question was not for revision/review of tariff. If the transfer of shareholding was two years after COD, there was no need even to approach the Commission. If such were to be the situation, question of reducing PPA tariff would not arise. Reduction of tariff in this case amounts to revisiting the tariff adoption process which was concluded and had reached finality. The exercise undertaken by Respondent-Commission in doing so is beyond the scope of its jurisdiction. - Respondent Commission has wrongly presumed that the SPA results in windfall to Appellant the successful bidder. The adopted tariff does not change by virtue of this SPA. It continues to be at Rs.3.02 per unit. The haircut if at all causing any prejudice or loss on account of accepting the offer of Rs.8223 crores as offered by Appellant, it is the 2nd Respondent-Bank who is unable to recover its full debt. This does not affect the right or privilege enjoyed either by DISCOMs or by consumers who would continue to get supply of power at Rs.3.02 per unit from the project in question. If this SPA is not allowed to be proceeded with, the result would be the 3rd Respondent would not be in a position to repay loan amount to lenders of the project and it would further be unable to salvage the project. This would rather cause difficulty and would rather be detrimental to the interest of 3rd Respondent, DISCOMs, and consumers of Uttar Pradesh in general, since the tariff adopted for this project seems to be one of the cheaper cost at which power is supplied. - It is the duty of the Authorities concerned to see that there is possible viability of running the project and at the same time lenders must be able to receive best value for the pledged shares. If at all, anyone has grievance about this, it is the lenders of the project, as they were unsuccessful to recover the entire debt payable to them. Since maximum offer was



from Appellant, 2nd Respondent-SBI representing all the lenders has agreed to proceed with the offer made by Appellant. The 2nd Respondent as a lead Bank having a consortium of 18 banks and financial institutions, it is the largest lender to the 3rd Respondent. The credit facility offered by lenders was secured by clearing of equity shares and preference shares of 3rd Respondent. - Appeal allowed.

Renascent Power Ventures Pvt. Ltd. Vs. Uttar Pradesh Electricity Regulatory Commission & Ors. (27.09.2019 – APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) APPEAL NO. 183 OF 2019 & IA NOs. 907, 909 & 1059 OF 2019

Dated: 27.09.2019

Claim of carrying cost/interest amounts : Appellants as a third party claimed carrying cost/Interest amounts and not BLMCL - FSA between BLMCL and Appellants.

- Held, amounts claimed by Appellant though were paid by BLMCL, in fact the said amounts were already paid by Raj West Power, Appellant, to BLMCL in terms of fuel supply agreement (‘FSA’). Respondent/DISCOMS have not filed any appeals challenging the direction of Commission to pay compensation in respect of VAT, Clean Energy Cess, DMFT and NMET claims being paid to Appellants and not to BLMCL. It is not open to Respondent/ DISCOMS to raise such objection not to pay carrying cost/Interest to Appellant. Even otherwise, the Commission, after examining the change in law clause in FSA executed between Appellants and BLMCL, which can be considered as back to back agreement, has allowed the claim of the Appellants. - Appeals allowed

Raj West Power Ltd. Vs. Rajasthan Electricity Regulatory Commission & Ors. (09.05.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY (Appellate Jurisdiction)

APPEAL NO. 228 OF 2018 & APPEAL NO. 235 OF 2018 Dated: 09.05.2019

Compensatory Tariff : Section 79(1)(b) of the Electricity Act - Opportunity to Appellant to put forth case in exercise of regulatory powers under Section 79(1)(b) of the Act

– Held, Appellant was not asked to address arguments on the pending petition, though Central Commission itself opined in initial order that claim of Appellant for exercising powers under Section 79(1(b) may be available. Appellant was seeking compensation on account of depreciation of Indian Rupee vis a vis US Dollar constituting a force majeure event, a claim which was rejected by Central Commission. Appellant in application before Tribunal seeks remand of the matter based on the Judgment of the Apex Court in Energy Watch Dog’s case. - Since opinion of Full Bench of the Tribunal so far as exercise of regulatory powers came to be reversed by Apex Court in Energy Watch Dog's case, it is incumbent upon Central Commission to decide the said issue in the light of the Judgment of the Energy Watch Dog's case by affording an opportunity of being heard. No prejudice whatsoever is caused to the Respondents, since they will also be heard before the Central Commission. - Appeal partly allowed.

Sasan Power Ltd. vs. Central Electricity Regulatory Commission & Ors. (18.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Computing percentage of captive consumption : State Commission computed the percentage of captive consumption with specific regard to PPAs executed before enactment of Electricity Act, 2003 to hold that JSPL plant was not captive for FY 2006-07

-Held, Jindal’s principal contention is that its plant was held to be non-captive in view of captive consumption being less than 51 %. Jindal had executed two PPAs - one in 1999 and another in 2002, prior to enactment of Electricity Act, 2003. Accordingly, conditions stipulated thereafter for qualifying the captive status for Appellant’s generating plant do not apply. While Jindal supplied to its full quantum to beneficiaries including Gujarat Electricity Board and State Distribution Licensee but it could not increase its captive consumption so as to achieve up to desired 51% level. Irrespective of PPAs being executed prior to advent of Electricity Act, generating companies would be required to mandatorily comply with Rule 3 of Electricity Rules, 2005 to qualify as a captive plant. These rules do not permit any relaxation by any authority including State Commission. State Commission has correctly declared Jindal’s generating plant as non-captive during years it could not meet statutory requirement of captive consumption as 51 %. - Appeals dismissed



Chhattisgarh State Power Distribution Co. Ltd. vs. Chhattisgarh State Electricity Regulatory Commission & Ors.; Jindal Steel & Power Private Limited. v. Chhattisgarh State Electricity Regulatory Commission & Ors.

(26.08.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal Nos. 277 of 2014 & 278 OF 2014 AND APPEAL NO. 07 OF 2015 & IA NO. 9 of 2015

Dated: 26.08.2019

Condition subsequent to PPA : State Commission denying Return on Equity to Appellant – Not fulfilling condition subsequent as stipulated in Article 3.1.2(ii) of PPA against its own Tariff Regulations - Same was not an issue in petition before State Commission

-Held, order of Commission to the effect that Appellant will not be entitled to ROE due to its non-fulfillment of the condition subsequent relating to coal linkage contained in Article 3.1.2 (ii) of PPA suffers from legal infirmity and perversity as being against settled principles of law and statutory regulations of State Commission. State Commission has to determine the tariff in terms of its Tariff Regulations and in exercise of its statutory power under Section 61, 62, 64 & 86 1(b) of Electricity Act, 2003. State Commission has not appreciated that in case of any derogation between a PPA and the Regulations, the Regulations would have the overriding effect on PPA as per Regulation 2(4)(5) of the Tariff Regulations, 2014. State Commission by holding that the Appellant would not get the ROE has acted against express terms of the PPA which require the State Commission to determine the Tariff as per its Regulations. Further, the issue of ROE is not related to the fulfilment of Article 3.1.2(ii) relating to coal linkage at all since the Appellant had arranged for alternate coal and was itself bearing incremental fuel cost towards alternate coal the arrangement vis-à-vis. the linkage coal.

Lalitpur Power Generation Company Ltd. vs. Uttar Pradesh Electricity Regulatory Commission & Ors. (01.05.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal No. 365 of 2018 and IA No. 1627 of 2018

Dated: 01.05.2019

Concessional tariff : Decision of State Commission - Threshold limit for calculation of consumption would only be consumption from Appellant - Concessional tariff was provided even for reallocation of existing capacity of consumers from various sources - Threshold capacity for applying concessional tariff for increase in capacity held to be only consumption from Appellant and not total consumption of consumers

-Held, regarding decision of State Commission, on redefining threshold consumption by considering the consumption only from Appellant’ source of supply contrary to earlier considerations; Commission has analysed all associated pros and cons in the matter based on its prudence practices as well as recommendations of IIM, Ahmadabad and it is well within mandate of Commission. Sole objective of Commission behind alleged clarification has been to promote consumption from Appellant source of supply which is bogged down by fiscal burden of paying fixed charges to generators for surplus energy which otherwise results into undue burden to consumers. Grant of concessional tariff to new industrial consumers and grant of concessional tariff at Rs. 4.99 per unit to existing consumers over and above threshold consumption are clearly distinguishable in lieu of their methodology for computation and tariff/subsidy being payable. - While Government of Punjab has to provide subsidy for difference in applicable tariff and Rs. 4.99 per unit being extended to new industrial consumers, however, for existing consumers there is no subsidy and the concessional tariff is applicable only for the entitlement of incremental consumption over and above the threshold limit of consumption from Appellant source of supply. - State Commission has succeeded in achieving target of increasing consumption of surplus power and reducing fiscal burden on Appellant which would otherwise have been passed on to consumers. - State Commission, based on all relevant material placed before it, has passed the impugned order judiciously and has made efforts to strike a balance between all the stakeholders.- Appeal dismissed.

Punjab State Power Corporation Ltd. Vs. Punjab State Electricity Regulatory Commission & Ors. (14.0 9.2019 – APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) APPEAL NO. 6 OF 2017

Dated: 14.09.2019

Consumers sub-station :110 kV HPCL Feeders - Qualification as Transmission Lines - Part of Distribution System of TPC-D.



- Held, It is crystal clear from the OPTCL vs. OERC judgment that an arrangement for stepping down electricity at consumers installation (i.e. consumers sub-station) cannot be held as “sub-station”, as defined in Section 2(69) of the Act since the said arrangement is not meant for further transmission or distribution of electricity. - No embargo that the distribution network of a distribution licensee cannot include a line at 110 kV level which is primarily meant for distribution of electricity. Moreover, as provided in the Act, the distribution can be undertaken at high voltage levels forming High Voltage Distribution System.

Tata Power Company Ltd. – Distribution Vs. Maharashtra Electricity Regulatory Commission & Ors. (18.03.2019 – APTEL)


Dated: 18.03.2019

Cross-Subsidy Exemption for Captive Generating Plant (CGP) : Whether the power plant i.e. Unit-1 generating station satisfies the twin conditions under Rule 3 so as to qualify as a Captive Generating Plant (‘CGP’)? Whether Cross Subsidy Surcharge is leviable/applicable on the power consumed by the Captive User from Unit-1? If Unit-1 qualifies as a CGP, will the tariff for supply of 30% capacity under the Long Term PPA be determined under the MPERC Generation Tariff Regulations or the MPERC Captive Regulations?

– Held, to qualify as CGP under Section 2(8) read with Section 9 of the Act and Rule 3 of the Rules, a power plant has to fulfil two conditions; firstly, 26% of the ownership of the plant must be held by the captive user(s); and secondly, 51% of the electricity generated in such plant, determined on annual basis, is to be consumed for captive use by the captive user. Upon fulfilment of the aforesaid conditions determined on an annual basis, the power plant qualifies as a CGP. - It is also clear that the Rules provide for determination of the status of the CGP on an annual basis at the end of the financial year. Rule 3 itself recognizes that the status of a power plant is dynamic i.e. a power plant can be a CGP in a particular year but can lose such status in any subsequent year if the twin-conditions are not satisfied and thereafter again qualify as a CGP if the twin-conditions under Rule 3 are satisfied in any particular year. - If at the end of a particular financial year it is found that the twin-conditions are not satisfied, the exemption from levy of cross subsidy surcharge would not be available. - Whether or not Unit-1 is qualifying as a CGP under Rule 3, the Tariff for supply of 30% of installed capacity of Unit-1 under Long-Term PPA will continue to be determined in the same manner as has been done in the past, i.e. under MPERC Generation Tariff Regulations.

Prism Cement Limited & Ors. vs. Madhya Pradesh Electricity Regulatory Commission & Ors. (17.05.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal No. 02 of 2018, IA Nos. 10, 1096, 1283 of 2018 and Appeal No. 179 of 2018

Dated: 17.05.2019

Cross-Subsidy surcharge : State Commission held that power supplied to Respondent/JSPL’ colony/township is not liable for payment of cross subsidy surcharge.

-Held, a generating plant to be considered as captive must meet twin qualifying criteria i.e. a minimum of 26% of ownership of the generating plant and a minimum of 51 % consumption by captive users on an annual basis. Housing colonies of operating staff can be treated as an integral part of an industrial unit which has set up a captive generating plant for its use. Further, an industrial unit which has setup a captive generating plant i.e. a power plant for his own use can feed electricity to housing colonies of operating staff of whole industrial unit including its captive generating plant. Therefore, State Commission was correct in holding that no cross-subsidy was leviable on electricity consumption by Jindal’s housing colonies from its captive plant. - Appeals dismissed.

Chhattisgarh State Power Distribution Co. Ltd. vs. Chhattisgarh State Electricity Regulatory Commission & Ors.; Jindal Steel & Power Private Limited. v. Chhattisgarh State Electricity Regulatory Commission & Ors.

(26.08.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal Nos. 277 of 2014 & 278 OF 2014 AND APPEAL NO. 07 OF 2015 & IA NO. 9 of 2015

Dated: 26.08.2019

Cross-Subsidy Surcharge : Appellant calculated provisional Cross Subsidy Surcharge (CSS) on its own and

charged the same to Respondent No. 1.



Held, as per Electricity Act, 2003 and various Regulations of State Commission, responsibility for computation and imposition of Cross Subsidy Charges (CSC) to open access consumers rests with appropriate Commission or its authorized agency and none else. Therefore, Appellant ought not to have revised CSC on its own without consent/approval of State Commission. As per the tariff order, State Commission had clearly stipulated that rates of CSS notified shall be applicable from date of said order and shall remain valid till the same is revised by State Commission. In other words, pending notification of CSC by State Commission, Appellant should have charged previous CSC subject to its true-up and not any other rate computed on its own. Appellant’s actions of suo-moto calculating CSC and collecting the same from Respondent No. 1 amounted to jurisdictional breach of State Commission’s powers.- Appeals dismissed.

Tata Power Delhi Distribution Ltd. Vs. M/s Duggar Fiber Pvt. Ltd. & Anr. (05.08.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

APPEAL NO. 17 of 2016 & I.A. NOS. 35 OF 2016 & 838 OF 2017 Dated: 05.08.2019

Damodar Valley Corporation Act : Double allowance of capital cost incurred by Damodar Valley Corporation (DVC)

– Held, as per Section 40 of DVC Act, 1948, DVC is entitled for provision for depreciation, reserve and other fund. In Appeal No. o.271 of 2006 & batch, Tribunal has held the admissibility of sinking fund in favour of DVC, which has also been upheld by Hon’ble Supreme Court in its judgment 2018 (8) SCC 281. It is also noted from the tariff regulations that depreciation and interest on loan payable are two different aspects while sinking fund contribution is an additional tariff element admissible only to DVC under the DVC Act. - Appeal dismissed.

Maithon Alloys v. CERC & Ors (17.05.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

APPEAL No. 17 of 2014 & batch Dated: 17.05.2019

Deemed distribution licensee : State Commission held that fulfilment of conditions stipulated in Rule 3(2) of the capital adequacy rule read with Section 14 of the Electricity Act and Rule 12 of the AP Distribution Licence Regulations are mandatory pre-requisite for the Appellant, a developer of a notified SEZ, to be recognized as a deemed distribution licensee under Regulation 13 and Proviso to Section 14(b) of the Electricity Act.

-Held, while Appellant is not required to apply for grant of license but being a deemed distribution licensee has to fulfil other technical and financial requirements as per prevailing rules and regulations of State Commission which is mandated to regulate the Electricity business in the state whether it is a DISCOM or any other deemed distribution licensee as in the present case. Accordingly, State Commission has passed impugned order with careful consideration and proper interpretation of the statute and also considering judgments passed by Hon’ble Supreme Court in Sesa Sterilite case and the Tribunal’s judgment in Aluminium case which squarely cover the case in hand. - Appeal dismissed.

M/s Sundew Properties Ltd. vs. Telangana State Electricity Regulatory Commission & Anr.( 27.09.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

APPEAL NO. 3 of 2017 and IA NOs. 03 of 2017 & 253 of 2018 Dated: 27.09.2019

Delay in any transmission element : Payment of transmission charges - Transmission assets commissioned by RTCL from SCOD till commissioning of the downstream system, on account of element not put to use in absence of an Implementation Agreement or any form of Contractual Agreement -

-Held, in the Barh-Balia judgement, the Supreme Court had held that beneficiaries could not be made liable to pay for delay in any transmission element which in turn, prevents entire system to be put to use. Hence, Respondent No. 2 could not be paid under POC mechanism and alternatively, transmission charges had to be paid by defaulting party i.e. Appellant. In PTC India Ltd. Vs. CERC case in which it was, inter-alia held that the Central Commission is empowered to exercise its regulatory powers under Section 79(1) of the Act, even without any specific regulations. Central Commission is just and right and the impugned order has been passed by it judiciously in accordance with law and does not call for any interference of the Tribunal. – Appeal dismissed.



Nuclear Power Corporation of India Ltd. vs. Central Electricity Regulatory Commission & Ors. (18.01.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal No. 332 of 2016, IA Nos. 706 and 699 of 2017

Dated: 18.01.2019

Delay in commissioning the project in terms of PPA : Delay by one day in terms of Power Purchase Agreement - Commission imposed liquidated damages on Appellants for such delay.

– Held, it is clear that in respect of both the solar plants that commissioning dates are recorded as 16.10.2017. So far as Bidar Solar Plant is concerned, it was commenced in the evening i.e., at 18.05 hours, which means evening after 6.00 pm. Therefore, it’s quite possible that there was no recording of quantum of power injected into the grid. So far as Bagepalli Solar Plant is concerned, there was recording of power generated at different points of time. In terms of definition of “Month” in PPA, it shall mean a period of 30 days from date on which event happened (excluding date of event). Date of event in this case is approval of PPA i.e., 17.10.2016. If date of event is excluded for calculation, 12 months would commence from 18.10.2016, and the end of 12 months has to be 17.10.2017. Therefore, 12 months have to be calculated from 18.10.2016 to 17.10.2017. Commencement of solar plants even if taken as 17.10.2017 as accepted and admitted by Respondents and Commission, scheduled date of commissioning was done within the time limit prescribed under the agreements. – Appeal allowed.

ES Solar Private Limited & Anr. Vs. Bangalore Electricity Supply Company Ltd. (BESCOM) & Ors. (08.05.2019 – APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) APPEAL NO. 332 OF 2018 & IA Nos. 1591 & 1592 of 2018 & APPEAL NO. 333 OF 2018 & IA Nos. 1593 & 1594 of

2018 Dated: 8th May, 2019

Delay in commissioning of solar project : Held Appellant responsible for delay in commissioning of solar project without considering defaults on part of PEDA and Government of Punjab

-Held, active construction time was about 4 months whereas time allotted for completion of project was 13 + 1 ½ months. As such, sufficient time was accorded to Appellant for achieving scheduled COD but it could not avail benefit of fact that it had its own private land and Respondents have taken immediate action for resolving impediments as and when reported by Appellant. In view of these facts, claim of Appellant for extension of COD of project lacks in bona fide and commission had passed impugned order after due consideration of submissions and pleadings of parties and after assigning cogent reasoning thereon. - Appeal dismissed

Earth Solar Private Ltd. vs. Punjab State Electricity Regulatory Commission & Ors. (11.01.2019 - APTEL)


Dated: 11.01.2019

Delay in commissioning of solar project – Change in tariff due to : Jurisdiction of State Commission in changing the tariff for delay in commissioning, without prejudice and for cause attributable to nodal agency/Government when tariff has been determined by a competitive bidding process under Section 63 of the Electricity Act, 2003

– Held, order dated 14.11.2013 clearly stipulated that tariff so agreed would be applicable only when projects were commissioned before 31.03.2015. - Appellant had miserably failed in notifying force majeure event particularly as per procedures laid down in IA read with PPA and rather adopted very liberal approach in pursuing statutory approvals as well as soliciting intervention of Respondents in resolving issues pending with various Government agencies. - Active construction period had actually been to tune of 4 months whereas time provided for commissioning of project was 13 + 1 ½ months. - There was clear indication to all project developers that in case their projects were not commissioned within control period ending 31.03.2015, tariff should be re-determined by commission in line with terms and conditions of IA/PPA. It was not dispute that tariff for subsequent control period of Rs. 7.19 had been considered by commission based on prevailing tariff discovered through competitive bidding process. Having regard to its own order



dated 14.11.2013 and terms and conditions provided in IA/PPA, commission had passed impugned order in accordance with law and considering all aspects associated therein. - Appeal dismissed

Earth Solar Private Ltd. vs. Punjab State Electricity Regulatory Commission & Ors. (11.01.2019 - APTEL)


Dated: 11.01.2019

Delay in operationalisation of LTA : Recovery of liquidated damages without enquiring conclusively into actual loss or damages suffered by Respondent during alleged delay period of 52 days - Delay caused in operationalisation of LTA partly attributable to CTU and not only Appellant.

- Held, that while PGCIL/CTU started levying transmission charges on beneficiary constituents w.e.f. 01.04.2012 but no any charge was levied on Appellant due to fact that Sipat Pooling Station was not commissioned in totality and LTA was not operationalized. - Records show that to supply power to Respondent, Appellant had made sincere efforts, bona fide in nature and in process commissioned LILO of adjoining transmission line at cost of over Rs. 2.10 crores and started supply of power w.e.f. December, 2011 itself. Subsequent to commissioning of second unit on 21.06.2012, Appellant had been supplying full quantum of power to Respondent No. 2 through short term open access. Even prior to that, Respondent had earned considerable amount over Rs. 7 crores on account of infirm power supplied by Appellant. Accordingly, entire delay of 52 days could not be held against Appellant as Sipat Pooling Station got completed in all respects as per BPTA dated 03.04.2009 only on 01.08.2012 and applying 30 days margin over that, LD period could at most be reckoned from 01.09.2012. This results into net delay of 11 days for imposing LD as dedicated lines including terminal bays got completed on 11.09.2012 and LTA was operationalised on 12.09.2012. - Appeal partly allowed.

ACB (India) Ltd. vs. Gujarat Electricity Regulatory Commission & Ors. (18.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Denial of payment of declared capacity charges : By State Commission - Contrary to the UPERC Generation Tariff Regulations 2014 and the PPA

– Held, once COD of the plant/unit has been achieved and fuel as per Article 6.5 of the PPA is available, Appellant is duly entitled for the capacity charges in lieu of the declared capacity. - No substance in the contentions of UPPCL to treat the scheduled capacity as the declared capacity and adding the fixed cost with variable cost to decide the merit order despatch (‘MOD’) to the utter disadvantage of Appellant. Right of Appellant to get capacity charges for the declared capacity flows from the UPERC Tariff Regulations, 2014 which otherwise cannot be altered or denied by inserting any additional terms in an agreement contrary to the Regulations as has been done in the instant case. Various judgments of the Apex court have ruled that State Commission itself is bound by its Regulations and cannot deny the generator the payment of capacity charges contrary to the Tariff Regulations. - Appeal No. 365 of 2018 allowed. Issues raised answered in favour of Appellant



Dated: 01.05.2019

Demerger expense : Expenses incurred towards the demerger process carried out by APML disallowed - Said demerger is required under the provisions of the Electricity Act, 2003

– Held, though the demerger was allowed by the Commission, such demerger was of not pertinent to the business of the transmission licensee, and expenses such as Legal fee and associated cost should not be passed on to the consumers.

Adani Transmission Ltd. Vs. Maharashtra Electricity Regulatory Commission. (29.05.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No. 250 of 2016



Dated: 29.05.2019

Determination of ARR: Disallowance of capital cost for bus reactors : Respondent Commission disallowed the capital costs of bus reactors for determination of ARR

-Held, Respondent Commission was wrong and not justified, as the Commission itself had allowed the amendment of the licence to incorporate the Bus Reactors in tariff for its asset.



Determination of ARR: Non-tariff income : DPC as non-tariff income (NTI) of the Transmission Licensees for the purpose of determination of ARR

– Held, DPC is in fact a compensation in the nature of reimbursement and must not be treated as NTI. In case it is treated as NTI for deduction from ARR, the licensee must be compensated for interest on delayed payment separately.



Determination of ARR: Actual O&M cost : Whether the Respondent Commission has grossly erred in not allowing the Actual O&M cost to the Appellant for determination of its ARR?

- Held, following the principle held in Appeal No 245 of 2015, if the O&M expenses are allowed on actual basis, the whole purpose of specifying norms after following due process of public consultation shall be defeated.



Determination of levelized tariff : For two periods, i.e. one for two years and the other for 23 years as - Regulations 6.3 and 10 of CERC Regulations

– Held, As per settled norms as well as relevant regulations, tariff is required to be determined for entire period of useful life of the projects i.e. 25 years. State Commission ought to have applied the judicious approach for arriving at levelised tariff for entire life of solar projects based on actual/audited cost of the projects with application of other associated norms for computation of project wise tariff. - Appeals partly allowed.

Tata Power Delhi Distribution Ltd. vs. Delhi Electricity Regulatory Commission (16.04.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal Nos. 82, 136, 274, 285 of 2015 and 58 of 2016 Dated: 16.04.2019

Disallowance of claims : Refund of excess rebate and Refund of payment of late payment surcharge for period prior to signing of Supplementary PPA on 10.01.2013 - Supplementary PPA enabled the main PPA signed in accordance with Regulation, 2008 to be termed as Long Term PPA in accordance with Regulation 2010.

- Held, though State Commission held that Appellant gets coverage under prevailing Regulation but in view of the fact that UPCL made prompt payments to avail higher rebate and also the fact that such deductions were not objected to by the Appellant, therefore, the State Commission did not agree with the claim made by Appellant. This was certainly a deviation from the terms and conditions of PPA approved by State Commission. More so, when State Commission has held that Appellant gets coverage under prevailing Regulation, decision of State Commission is misplaced. Once it is established and held by State Commission



that Appellant gets covered under prevailing Regulations then all claims after 10.01.2013, shall be dealt with in accordance with the governing Regulations only. - Appeal allowed.

Swasti Power Ltd. vs. Uttarakhand Electricity Regulatory Commission & Ors. (23.04.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Distinction between captive users of the group captive power plant and other captive user : Against Provisions of Rule 3 of Rules 2005

- Held, It is clear that once captive user or members of special purpose vehicle or members of association satisfy conditions at (a) and (b) of sub-rule (1) of Rule 3 of Rules 2005, they cannot be treated as consumer or class of consumers who receive supply of electricity in normal course of business. A separate class is carved by fiction of law i.e., captive user/ users or consumers by complying with certain conditions. There is no such purpose or intention which could be made out either from the statute or rules made thereunder that two categories were envisaged, namely, original captive users and another class of captive users i.e., converted captive users. There cannot be any distinction between an individual captive consumer and group captive consumers or original captive consumers and converted captive consumers. - Appeal allowed.

M/s. JSW Steel Ltd. & Ors. Vs. Maharashtra Electricity Regulatory Commission & Anr. (27.03.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No.311 & 315 of 2018 Dated: 27.03.2019

Dispute Resolution Petition : Petition filed by Appellant was regulatory and not adjudicatory in nature.

- Held, Appellant approached State Commission regarding nonadherence of provisions of Indian Electricity Grid Code (‘IEGC’) and Tamil Nadu Electricity Grid Code (‘TNEGC’) regarding Must Run status of solar power plant by SLDC, as required per Clause 2(d) of EPA wherein the parties must adhere to and comply with provisions of IEGC and TNEGC and other applicable Regulations covering renewable energy sources. This matter is in-principle related to procurement of electricity from the solar plants of Appellant. This is a regulatory aspect and not an adjudicatory function. However, State Commission has not considered this aspect before arriving at a decision that Petition in question is a DRP (Dispute Resolution Petition) and not miscellaneous. The State Commission also in their Impugned Order has not considered the nature of the prayer and has not discussed this issue in their Impugned Order. As such it is serious lapse on the part of the State Commission and the Impugned Order passed by the State Commission needs to be set aside.

Submissions made by State Commission is that Petition has been filed under Section 86(1)(f) and therefore is a DRP. Relevant portion of Regulation 6 of fees and fine Regulations of the Commission states that for adjudication of dispute between licensees and generating companies which have come under Section 86(1)(f) of the Electricity Act, 2003 should pay 1% of amount in dispute subject to a minimum of Rs.20000/-. It does not talk about classification of Petitions and should not be used as a guiding criteria for classifying a Petition into DRP and miscellaneous. - It is the nature of the prayer which will define the nature of Petition. If nature of prayer calls for exercise of regulatory powers of State Commission than it is Regulatory and it will be termed as a Miscellaneous Petition, whereas if the nature of the Petition is such that it is not Regulatory but Adjudicatory, then only it can be termed as a DRP. Mere fact that Appellant has filed Petition under Section 86 (1) (f) and therefore it should be termed as a DRP is wrong and erroneous and need not to be relied upon. - Appeal allowed.

M/s. Ramnad Solar Power Ltd. vs. Tamil Nadu Electricity Regulatory Commission & Ors. (30.05.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

APPEAL NO. 350 OF 2017 Dated: 30.05.2019

Dispute Resolution Petition : Respondent Commission directed conversion of Petition filed by Appellant invoking regulatory power, into a Dispute Resolution Petition - Affidavit filed by Respondent Commission in Tamil Nadu High Court wherein they have voluntarily given undertaking that they would not take up hearing of the Dispute Petitions, pending the final outcome of the court case in the Madras High Court (now pending with Hon’ble Supreme Court).



-Held, State Commission has not discussed the facts of the case and the prayer of Appellant, to consider the Petition filed by them as Miscellaneous Petition and also to exercise the regulatory powers of State Commission. The entire analysis is bent towards justifying that it is a Dispute Resolution Petition. - Appellant in their prayer have asked State Commission to exercise their regulatory powers. In interest of natural justice and equity, State Commission besides elaborating on the nature of dispute resolution should also have discussed the other aspects of regulatory nature of the prayer. - State Commission, as defined under the Act, is a regulator and performance monitor, a statutory body to oversee development of power sector in the State so as to evolve sustainable business model to supply electricity to consumers in the State in the most efficient manner. With this objective in mind, endeavour of State Commission while dealing with such matters should be lenient one, especially in matters relating to promotion of electricity generation from solar power plant under the promotional schemes notified by the State Government. It would be appropriate to treat Petition of Appellant as Miscellaneous Petition and not as a Dispute Resolution Petition because of monetary claims between the licensee and the generator. - Appeal allowed.

M/s. Ramnad Renewable Energy Ltd. Vs. Tamil Nadu Electricity Regulatory Commission & Ors. (24.09.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) APPEAL NO. 31 and 32 OF 2017

Dated: 24.09.2019

Encashment of PBG : Issues of force majeure, serving notice and taking up remedial action on account of delays in commissioning of pipeline, as mentioned in Regulation 16 (a) and (b) of Petroleum and Natural Gas Regulatory Board Regulations, 2010.

– Held, Respondent-Board extended time schedule for completion of project till March, 2017 while encashing 25% of PBG which would mean that Board accepted the delay based on reasons given by Appellant. Both these actions of extending time schedule and imposing penalty taken simultaneously appear to be contradicting - The only review meeting of which minutes were issued was held after scheduled completion date of 31.10.2015. It is unclear whether Board followed Regulation 13(4) of Authorization Regulations while monitoring progress of the project. - Impugned order suffers from gross deficiency in explaining grounds while considering to encash PBG. A more elaborate analysis would need to be carried out by Respondent-Board on correspondences made and documents submitted by Appellant while requesting to extend the time schedule for completion of the project before encashing PBG. - Appeal allowed.

M/s. Hindustan Petroleum Corporation Ltd. vs. Petroleum & Natural Gas Regulatory Board (09.01.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal no. 102 of 2016 & IA no. 307 of 2017 & IA no. 549 of 2018

Dated: 09.01.2019

Erection of Transmission Tower : State Commission upheld Order of Police Commissioner allowing Tata Power to erect 220 KV transmission tower in premises of Applicant's Society.

-Held, on Principles of Natural Justice, before passing said order, new Commissioner of Police ought to have invited both parties for rehearing and then only pass order in accordance with settled principle of law. – Appeal partly allowed.

New Ushanagar Co-Operative Housing Society Ltd. v. Merc & Tata Power Co. Ltd. & Commissioner Of Police (15.03.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal No.50 of 2017

Dated: 15.03.2019

Exemption from wheeling charges : Erroneous submission of TPC- regarding 110 kV HPCL Feeders in the transmission licence

-Held, after deciding that the said 110 kV lines connecting to HPCL are part of the distribution network of TPC-D, it would be prudent on the part of State Commission to determine wheeling charges at EHT level (110 kV) along with computation of wheeling charges at LT/HT levels so that visible disparity is appropriately addressed. - Appeal allowed



Tata Power Company Ltd. – Distribution Vs. Maharashtra Electricity Regulatory Commission & Ors. (18.03.2019 – APTEL)


Dated: 18.03.2019

Fulfilment of RPO : State Commission did not consider quantum of electricity generated through co-generation process

– Held, judgment in Century Rayon and full bench judgment in Lloyd Metals by Tribunal as well as judgment of Supreme Court in Hindustan Zinc Ltd have answered ultimately that co-generation facilities irrespective of fuel were to be promoted in terms of section 86(1)(e) of Act and therefore could not be fastened with obligation of RPO under same provisions of Act.- Appeal allowed.

Ultratech Cement Ltd. & Ors. vs. Karnataka Electricity Regulatory Commission (09.04.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal Nos. 322 and 333 of 2016 Dated: 09.04.2019

Grant Of REC For Self-Consumption - Date Of Commissioning Of Generating Station : Within control period as defined in fourth Amendment dated 30.03.2016 to REC Regulations 2010 or outside control period – CERC held that Appellant was not covered by control period, i.e. 29.09.2010 to 31.03.2016 – Not entitled to grant of RECs for self-consumption - 21 MW TG set enabled to generate electricity only by being connected to ENMAS boiler commissioned in 2011, thereby constituting an independent generating unit.

-Held, it is evident from the definitions of ‘generating station’ as per Section 2(30) of the Electricity Act, 2003 and ‘generating unit’ as per clause 2(l)(ii) of the Central Electricity Regulatory Commission (Indian Electricity Grid Code) Regulations, 2010, that the generating station comprises of many elements. The date of commercial operation of the generating station is the date of commissioning of the generating station as a whole i.e. the date on which the station starts generation of electricity and feed it to the grid.

Regarding issuance of REC to the Appellant, as per fourth amendment dated 30.03.2016 of REC Regulation 2010, issuance of REC is limited to only such RE plants which have been commissioned between 29.09.2010 to 31.03.2016. RE plant under reference had not been commissioned during control period, as per amendment of RE Regulation in 2016. The RE plant under reference is not eligible under the scheme and Renewable Energy Certificate cannot be issued to the Appellant plant. - Appeal dismissed

Century Textiles and Industries Limited. Vs. Central Electricity Regulatory Commission & Ors. (13.02.2019 – APTEL)


Dated: 13.02.2019

Meeting Renewable Purchase Obligation : Captive co-generation plant – Meeting Renewable Purchase Obligation - Legal obligation to procure power from renewable sources of energy – Fuel type, a determinant of fuel exemption granted.

– Held, a co-generation facility irrespective of fuel is to be promoted in terms of section 86(1)(e) of the Electricity Act, 2003; An entity which is to be promoted in terms of section 86(1)(e) of the Electricity Act, 2003 cannot be fastened with renewable purchase obligation under the same provision; and as long as the co-generation is in excess of the renewable purchase obligation, there can be no additional purchase obligation placed on such entities. - Only paragraph 45(II) of judgment in Century Rayon Case has been set aside by Full Bench judgment in Lloyds Metal Case with the effect that the distribution licensee could not be compelled to procure electricity from fossil fuel based co-generation against its renewable purchase obligation. - However, it has no effect on the finding in Century Rayon Case that a cogeneration based captive power plant cannot be fastened with Renewable Purchase Obligation irrespective of the nature of the fuel used for such cogeneration. In India Glycols Case dated 01.10.2014, much after the judgment of the Full Bench in Lloyds Metal case, the Tribunal continued to rely on Century Rayon case in so far as the question whether cogeneration based captive power plant can at all be fastened with renewable Purchase Obligation is concerned as held in para 10, 20 to 23.

JSW Steel Ltd. & Ors. vs. Tamil Nadu Electricity Regulatory Commission (02.01.2019 - APTEL)



IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal No. 278 of 2015, IA No. 455 of 2015, Appeal No. 293 of 2015, IA No. 476 of 2015, Appeal No.

23 of 2016 & IA No. 61 of 2016, Appeal No. 62 of 2016, IA No. 155 of 2016 and Appeal No. 24 of 2016, IA No. 65 of 2016

Dated: 02.01.2019

Maintainability of application - Non-mentioning of relevant provision : Application for seeking clarification in operative portion of judgment about inadvertently left out portion thereof - Non-mentioning of the relevant provision of Section 120 of the Electricity Act, 2003 and read with Section 152 of the Civil Procedure Code (‘CPC’).

- Held, that it is well-settled law held in catena of judgments that if inadvertently parties, counsel or representatives failed to mention the relevant provisions for filing the Application redressing their grievance, it does not take away the rights of the Applicant/Appellant. - Even though application is filed under Rule 30, by itself, would not be rendered to be bad in law once such power was available in relevant provision, section 120 of Electricity Act, 2003 read with relevant provision, section 152 of Code of Civil Procedure, 1908 (CPC). – Appeal allowed.

Pune Power Development Private Ltd. vs. Karnataka Electricity Regulatory Commission & Ors. (04.01.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) IA No. 1501 of 2018 in Appeal No. 232 of 2014

Dated: 04.01.2019

Order of Signing of PPA : Signing of PPA with the projects approved later as a part of supplementary list of 124 MW - Denying to sign PPA with Appellant - Held, it is clear that wind capacity of 374.4 MW had already been approved by SLEC in the past and 128 MW capacity was granted final approval in proportionate manner under preferential tariff mode for meeting the RPO target of the FY 2015-16. Project of Appellant of 90 MW is a part of the capacity of 374.4 MW approved in the past in first phase out of a total part of 503 MW installed capacity required to meet RPO target whereas 128 MW was approved in the second stage and 124 MW was a supplementary list of the project approved at the end over and above 503 MW capacity. - Reason given by DISCOM for not signing the PPA for balance capacity of 27.1 MW was that the capacity required of 503 MW for meeting target of RPO for 2015-16 had been fulfilled. This happened because PPA of the projects which were approved as a part of supplementary list of 124 MW approved in the end, were signed by the DISCOMs prior to the Appellant. In a way DISCOMs allowed the project which were approved at the end to jump before the projects which were approved earlier in the first phase and signed PPA with them and did not sign PPA with Appellant. Such an action by DISCOM is wrong and against principal of natural justice and equity and has held that as such DISCOM committed a mistake. - Appeal allowed



Payment of interest : Payment of interest on outstanding differential amount payable by Respondents to Appellant

-Held, State Commission has erred in not granting interest to Appellant. Though the amount was crystallized by State Commission vide their Impugned Order but the most important fact to be kept in mind is that the State Commission re-determined the tariff from the date of commencement of supply which clearly shows that the due date is the date of commencement of supply. In such matters the crucial point for consideration is that interest is not a penalty or punishment at all. But, it is the normal accretion on capital. Equity demands that the paying party should not only pay back the principal amount but also the interest thereon to the recipient.- Appeal partly allowed.

Lanco Amarkantak Power Ltd. v. HERC & PTC & HPPC (22.05.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)




REC Mechanism : REC obligation has not been made mandatory in terms of the In Principle Approval granted or the CERC Regulations, 2009 as adopted by State Commission - Projects commissioned in 2010

- Held, Under CERC, REC regulations two distinct categories have been notified, i.e. REC or non REC mechanism and choice to select any of two categories rests with developer. Once selection/option is exercised by RE generator, State Commission is not entitled to thrust upon another mechanism beyond selection of developer. Directions of State Commission to opt for REC mechanism are against the settled principal of law especially that under doctrine of selection - that once option has been exercised by any generator to follow REC or non REC mechanism, cannot be forced to go beyond selected route. - Appeals partly allowed

Tata Power Delhi Distribution Ltd. vs. Delhi Electricity Regulatory Commission (16.04.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal Nos. 82, 136, 274, 285 of 2015 and 58 of 2016 Dated: 16.04.2019

REC scheme : Unconditional banking in terms of the Agreement - Accreditation benefit received under the REC mechanism

- Held, Appellant, a hydro power generator established for captive use, became ineligible for participating in the REC scheme from 01.04.2016, in accordance with CERC notification dated 23.03.2016. Appellant cannot have unconditional banking facility of energy generated as envisaged under Clause 11 of the Agreement since it received accreditation benefit under the REC mechanism as per order dated 07.08.2013. Therefore, unconditional banking in terms of Agreement dated 30.12.1994 came to an end by Respondent Commission’s order dated 07.08.2013. Therefore, the Impugned Order is not in violation of Clause 11 of the Agreement. - Appeal dismissed.

M/s. Indsil Hydro Power and Manganese Ltd. vs. Kerala Electricity Regulatory Commission & Anr. (29.07.2019 – APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI (APPELLATE JURISDICTION) Appeal No. 293 of 2017, IA No. 758 of 2017

Dated: 29.07.2019

REC scheme: Banked Energy : Whether the Kerala State Electricity Regulatory Commission erred in law in effecting the split up of banked energy as on 31.03.2016 and thereafter from 01.04.2016 to 30.06.2016, contrary to Clause 11 of the Agreement?

- Held, Respondent Commission has correctly split up the period for considering banked energy. In view of the CERC amendment dated 23.03.2016, which became effective from 01.04.2016, the Respondent Commission was justified in extending the REC benefit to the Appellant up to 31.03.2016. The Respondent Commission has correctly fixed the price for excess energy banked at APPC rate of 3.14 per unit and not EHT tariff. For subsequent period of 01.04.2016 to 30.06.2016, the balance accounting period, Respondent Commission rightly relied on Clause 13 of the Agreement that total power consumption of Appellant’s factories and their associates have to be settled against the electricity generated from generating plant and the Respondent No. 2’s power supply. Appellant started obtaining power through open access without consuming the energy from the captive power plant even though there was energy banked. It started purchasing power through open access facility without using the power generated from captive power plant thereby it did not consume the required power generated from captive power plant for its factories. On the other hand, it accumulated the said power as banked energy by resorting to method of open access facility provided in the Electricity Act 2003. Therefore, since Appellant did not consumer its own power. The Respondent No. 2 cannot be forced to buy that power at EHT tariff. - Appeal dismissed.



Dated: 29.07.2019

REC scheme: Banked Energy : Whether the Regulatory Commission erred in unilaterally granting KSEB Ltd alone the option to approach the Commission with proposal for modifying the Agreement dated 30.12.1994?



- Held, Since Respondent No. 2 had to purchase unutilised excess banked energy at EHT rate at which it sells to similar consumers, this would affect the interest of larger sections of consumers of the State by way of tariff. Therefore, the Respondent Commission rightly opined that Respondent No. 2 shall approach the Commission with a proposal for modifying the Agreement dated 30.12.1994. - Appeal dismissed.



Dated: 29.07.2019

Re-determination of tariff : COD was achieved in after a delay of 5 years - On ground that there has been a cost overrun and time-overrun in the project

- Held, Order of Respondent Commission set aside on the ground that there is no detailed discussion or reasoning, nor prudent checks by Commission. If an acceptable and genuine case is made out, such projects should be helped. If such projects close down, that will deprive consumers of environmentally benign power. This aspect of matter is lacking in impugned order passed by Respondent/ KERC. – Appeal allowed.

SRM Power Pvt. Ltd. Vs. Bangalore Electricity Supply Company Ltd. & Ors. (29.03.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Reduction in the banking period : Reduction in the banking period for Non-REC route based RE Projects, opting for wheeling from the existing one year to six months.

- Held, Respondent Commission has failed to establish that there exists any supervening public interest to modify the banking arrangement even prior to the 10 years period available to Appellants. Appellants who have invested and executed commercial agreements cannot be left in lurch in midstream. RE power plants have longer useful life spanning across 25 years, whereas WBAs are executed only for 10 years. Keeping these aspects in view, physical support in form of annual banking would need to be reduced gradually, if necessary, only after expiry of the executed WBAs to avoid financial shock to developers/ Appellants herein. Impugned order passed by Karnataka Electricity Regulatory Commission modifying terms and conditions of banking arrangements in concluded contracts is not sustainable in the eyes of law. Same appears to have been passed without adhering to principles of natural justice, doctrine of promissory estoppels & legitimate expectation etc. - Appeal allowed

M/s. Fortune Five Hydel Projects Pvt. Ltd & Ors. Vs. Karnataka Electricity Regulatory Commission & Ors. (29.03.2019 – APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal Nos. 42, 242, 243, 244, 280, 282, 357, 78, 117, 118, 206, 227, 268, 196, 271, 287, 288, 257, 207 of

2018 Dated: 29.03.2019

Regulation 14(3)(iii) of 2014 Tariff Regulations : Additional expenditure towards CCTV Surveillance System for Stage III incurred by Appellant - Claimed as additional capital expenditure under Regulation 14(3)(iii) of 2014 Tariff Regulations, by the Appellant – Directed to be claimed through compensation allowance under Regulation 17 of the Tariff Regulations, by the CERC.

-Held, From the reading of Regulation 14 and 17 of the Tariff Regulation 2014, it is clear that compensation allowance comes into play only if new assets of capital nature which do not fall under Regulation 14. Reading of Regulation 17 clearly indicates it is a general provision. Reading of Regulation 14 makes it crystal clear that it is a special provision pertaining to existing project under certain circumstances as stated in the said Regulation. - Regulation 14(3)(iii) indicates this type of expenditure on account of need for higher security and safety of the plant as directed by appropriate Government Agencies or statutory authorities could be allowed. One cannot deny that CISF is not a Statutory Authority or appropriate Government Agency. - It is well settled if special provision is available one should not take recourse to general provision. General provisions must yield to special provisions in such situation. Therefore, it is clear from the impugned order that the very process in assessing the claims was not properly appreciated by the Commission. If at all Commission needed some more information, they ought to have asked the Appellant for such information



instead of opining that there is incomplete information. It is not in dispute in so far as other plants of the Appellant, similar claim as safety measures was allowed by the very same Central Commission. Therefore, there is no doubt that if additional capital expenditure after cut-off date is spent towards higher security and safety of the plant in terms of Regulation as recommended by appropriate Government Agency or Statutory Authority, it shall fall under Regulation 14(3)(iii). As per the prudent industrial practice, the installation of CCTV for surveillance and safety of vital installations is essential. It has also been recommended by Government instrumentalities to install adequate numbers of CCTV for surveillance of the plant and ensuring safety measures for fire etc. in the cable galleries. Thus, the estimated projection for installation of requisite number of CCTVs by the Appellant requires consideration by the CERC without insisting much on the procedural information whatsoever. In fact, the Commission has to accord in-principle approval only for the proposal of the Appellant in this regard, and the actual amount would need to be allowed after Prudence Check in the true up exercise. As CERC has allowed similar expenditures in other thermal power plants of the Appellant, there does not appear any visible reason for not allowing the same in the instant case. This is also required for CERC to take a consistent view in all the cases rather than adopting selective approach from case to case on same plea. - Appeal allowed

NTPC Ltd. vs. Central Electricity Regulatory Commission & Ors. (09.05.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Regulation 39.1 - Second proviso : Computation of interest expenses

- Held, in line with second proviso to Regulation 39.1, Appellant has rightly requested Respondent Commission for computation of loan component to deduct the assets worth Rs. 13 Crore from the addition of assets of Rs. 41.76 Crores during the year as loan capital existed towards retired assets worth Rs. 13 Crore. The certificate issued by Statutory Auditors, who has conducted audit of the Company, has issued the Certificate at the specific request of the Appellant for submission to Respondent Commission in respect of deduction of fixed assets and status of outstanding loans as on 31st March, 2015, meets the requirement of Regulation 39. In fact, purpose of seeking such documentary evidence is to ascertain that interest expenses pertaining to loan availed to create such assets should not be charged to the consumers. There appears no need for the Respondent Commission to have further details of the outstanding loan component for the assets worth Rs. 13 Crores retired during the year when the Appellant has not claimed any relief towards this assets. There is no merit in the argument of the Respondent Commission that as Appellant has not furnished the year-wise details of assets withdrawn and loan repayment, the Appellant should be denied relief as per Regulation 39.1. - Appeal allowed

Torrent Power Ltd. vs. Gujarat Electricity Regulatory Commission (09.05.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Regulation 54 of Tariff Regulations, 2014 : Whether the Central Commission is right in not exercising its power to relax under Regulation 54 of the Tariff Regulations, 2014 in view of the subsequent amendment to the Indian Electricity Grid Code to provide for an interruption up to 4 hours?

-Held, reference generating unit could not run at its full load/MCR for continuous 72 hours as required under the Tariff Regulations, 2014. - Despite several trial runs, the unit could not attain the requisite parameters of the regulations and developed several defects which were to be rectified by the Appellant after the trial run. - There does not appear sufficient ground which necessitates the exercise of the Tribunal’s power under Section 54 of the Tariff Regulation, 2014 to relax the prerequisite conditions of Trial Run before declaration of COD.- Appeal dismissed

NTPC Ltd. vs. GRIDCO Ltd. & Ors. (25.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

IA No. 840 of 2017 in Appeal No. 330 of 2017 Dated: 25.01.2019

Relinquishment Charges : Condition of stranded capacity or losses suffered - A pre-condition for payment for relinquishment charges under Regulation 24 of the Connectivity Regulations



– Held, Regulation 24 does not require CTU to prove losses for payment of relinquishment charges. Unlike case of LTA, it is not linked to stranded capacity. Therefore, condition of stranded capacity or losses suffered is not a pre-condition for payment for relinquishment charges under Regulation 24 of Connectivity Regulations. Language of Regulation 24 is couched in absolute terms and does not admit any conclusion/interpretation which partly or fully exempts MTOA customer from payment of relinquishment charges, if capacity covered under MTOA is utilized for LTA.- Appeal dismissed.

GMR Warora Energy Ltd. & Ors. vs. Central Electricity Regulatory Commission & Ors. (11.04.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No. 363 of 2017, IA No. 976 of 2017 and Appeal No. 16 of 2018 Dated: 11.04.2019

Review Petition - Grounds for entertainment : Held, two main criteria to be satisfied for entertainment for

a review petition: (i) Proof that even after exercise of due diligence some facts were not to the knowledge

of the review petitioner, when the original order was passed. (ii) Mistake or error apparent from the face

of record. - Review is not appeal in disguise, where erroneous decision can be reheard and corrected but

lies for patent error. Error which is not self-evident and has to be detected by process of reasoning can

hardly be called as error apparent from face of record. - When the review will be maintainable:- (i) Discovery

of new and important matter or evidence which, after the exercise of due diligence, was not within

knowledge of the petitioner or could not be produced by him; (ii) Mistake or error apparent on the fact of

the record; (iii) Any other sufficient reason. - The words any other sufficient reason has been interpreted in

Chhajju Ram Vs. Neki, 1922 AIR (PC) 112 and approved by this Court in Moran Mar Basselios Catholicos Vs.

Most Rev. Mar Poulose Athanasius & Ors., 1955 1 SCR 520, to mean a reason sufficient on grounds at least

analogous to those specified in the rule. The same principles have been reiterated in Union of India Vs.

Sandur Manganese & Iron Ores Ltd. & Ors., 2013 8 JT 275 - When the review will not be maintainable:- (i) A

repetition of old and overruled argument is not enough to reopen concluded adjudications. (ii) Minor

mistakes of inconsequential import. (iii) Review proceedings cannot be equated with the original hearing of

the case. (iv) Review is not maintainable unless the material error, manifest on the fact of the order,

undermines its soundness or results in miscarriage of justice. (v) A review is by no means an appeal in

disguise whereby an erroneous decision is re-heard and corrected but lies only for patent error. (vi) The

mere possibility of two views on the subject cannot be a ground for review. (vii) The error apparent on the

fact of the record should not be an error which has to be fished out and searched. (viii) The appreciation of

evidence on record is fully within the domain of the appellate court, it cannot be permitted to be advanced

in the review petition. (ix) Review is not maintainable when the same relief sought at the time of arguing

the main matter had been negatived. - Appeal dismissed.

Surat Municipal Corporation vs. Gujarat Electricity Regulatory Commission & Ors. (02.01.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Review Petition Nos. 9 and IA No. 1422 of 2018 in Appeal No. 268 of 2015

Dated: 02.01.2019

Review Petition – Maintainability - Held, When the review will be maintainable:- (i) Discovery of new and important matter or evidence which, after the exercise of due diligence, was not within knowledge of the petitioner or could not be produced by him; (ii) Mistake or error apparent on the fact of the record; (iii) Any other sufficient reason. - When the review will not be maintainable:- (i) A repetition of old and overruled argument is not enough to reopen concluded adjudications, (ii) Minor mistakes of inconsequential import,(iii) Review proceedings cannot be equated with the original hearing of the case, (iv) Review is not maintainable unless the material error, manifest on the fact of the order, undermines its soundness or results in miscarriage of justice, (v) A review is by no means an appeal in disguise whereby an erroneous decision is re-heard and corrected but lies only for patent error, (vi) The mere possibility of two views on the subject cannot be a ground for review. (vii) The error apparent on the fact of the record should not be an error which has to be fished out and searched, (viii) The appreciation of evidence on record is fully within the domain of the appellate court, it cannot be permitted to be advanced in the review petition, (ix) Review is not maintainable when the same relief sought at the time of arguing the main matter had been negatived. - Present Review Petition neither relates to any discovery of new and important matter or evidence which after the exercise of due diligence was not within



the knowledge of the Review Petitioner or could not be produced by him at the time when the judgment was pronounced nor any mistake or error apparent on the face of the judgment has specifically been pointed out and no any other sufficient reason or ground has been made out by the review petitioner. - Review Petition dismissed.

Print Wizards vs. Tata Power Delhi Distribution Ltd. & Ors. (23.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

IA No. 1882 of 2018 in (RP) DFR No. 4063 of 2018 in 160 of 2016 Dated: 23.01.2019

Right of preferential tariff : Approval of projects by State Level Empowered Committee – Creation of a right in favour of projects for signing of PPA with DISCOMs on preferential tariff

- Held, If Appellant has commissioned project as per agreed schedule, not signing of PPA by DISCOMs for power generated by Appellant’s project on the ground that State Level Empowered Committee approval is only for setting up of the project and not for purchasing of power by DISCOMs is illogical and absurd. If the project has been approved by none other than Government of Rajasthan, under Wind Policy 2012 to meet the RPO target, after a detailed exercise by two high profile Committees i.e. Standing Level Screening Committee and Standing Level Empowered Committee, denying signing of PPA by DISCOMs, for the full capacity when the project has been completed, as agreed by the scheduled date of commissioning is wrong. In fact, once the project has been approved by State Government after a detailed exercise then it creates a right in favour of the Appellant to sign PPA with the DISCOMS for full 90 MW capacity. - Appeal allowed



RPO (Renewable Power Obligation) : State Commission had held that Appellant has acted in violation of regulations relating to open access and Renewable Power Obligation (RPO).

Held, Appellant had wrongfully applied the RPO Regulations to Respondent No. 1. Respondent No. 1 having consumed the entire renewable electricity from the renewable energy sources, is not under obligations to comply with the Regulation 3 of the Renewable Purchase Obligations (RPO) Regulations, 2012 and is entitled for an exemption of 6.20% on the Cross Subsidy Charge (CSC) according to Regulation 9(4) of the DERC RPO Regulations 2012. RPO Regulations provide a subsidy of 6.2% to extent of RPO for such open access consumers who avail their supply of power from renewable energy sources. In instant case, Respondent No. 1 has availed its entire supply of power from waste to heat generating station located at Timarpur Okhla which is considered as renewable energy sources based generating plant. Instead of providing an exemption to the extent of RPO (6.2%) as applicable under RPO Regulations of State Commission, Appellant has charged excess CSC. Therefore, State Commission had correctly held that the Appellant is liable to refund the excess charged CSC. - Appeals dismissed.

Tata Power Delhi Distribution Ltd. Vs. M/s Duggar Fiber Pvt. Ltd. & Anr. (05.08.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

APPEAL NO. 17 of 2016 & I.A. NOS. 35 OF 2016 & 838 OF 2017 Dated: 05.08.2019

RPO Compliance : State Commission decided that since none of the members of Appellant association have plants operating in Chhattisgarh, they are not within its jurisdiction and have no locus standi to maintain its petition seeking RPO compliance - State Commissions permitted carry forward of RPO despite availability of RECs in the market

- Held, Appellant is primarily aggrieved that if RPO would have been enforced to the set targets, some more RECs would have been sold/purchased and would have provided some financial gain to Appellant association members. REC mechanism has been devised to strike a balance between States having large potential and States having less or no renewable energy sources. Besides, trading of RECs is done on all India basis and obligated entities are free to sell/purchase such certificates from anywhere across the country. In an ideal case, as per National Tariff Policy, State Regulatory Commission are required to enforce RPO compliance by monitoring same on real time basis but, while deciding the matter relating to RPO, the Commission is also required to keep in mind the difficulty being faced by the licensee, impact on retail tariff,



availability of RECs in the market, etc. Therefore, Appellant does not have locus standi to seek RPO compliance in Chhattisgarh as they do not have any members in the state. Secondly, the Commission has correctly allowed carry forward of RPO compliance. In the light of the above, the Appellant was not an ‘aggrieved person’ to prefer an appeal under Section 111 of the Electricity Act, 2003.- Appeals dismissed.

Green Energy Association vs. Electricity Regulatory Commission (21.08.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No. 106 of 2016 and 65 of 2017 Dated: 21.08.2019

RPO liability : Captive Power Plant generating electricity through Waste Heat Recovery

– Held, From reading of Section 86(1)(e) of Electricity Act, 2003, it is clear that both co-generation and renewable energy have to be promoted in terms of Section 86(1)(e) of the Act. As long as captive consumers consume energy from co-generating unit beyond the RPO obligations, there is no obligation to purchase RE Certificates or consume renewable energy, separately. Once entities comply with the obligations under Section 86(1)(e) of Act by making a distinction between solar and non-solar, captive consumers of captive generating plants cannot be asked separately to comply with obligations by purchasing RECs.- Appeal dismissed.

Rajasthan Renewable Energy Corporation Ltd. vs. Shree Cement Ltd. & Ors. (16.04.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


ROW Clearance : Obligation to provide Right of Way (ROW) for transmission line under statute - Entitlement to adequate compensation in lieu of

-Held, ROW cannot be denied/prevented but at the same time transmission route has to be meticulously planned so as to minimize inconvenience/distress to be caused to persons concerned and additionally, adequate compensation has to be paid as per prevailing rates provided under Government notification/resolution. Section 67 (3) of Act provides that full compensation is payable for any damages, detriment or inconvenience caused in laying of transmission lines. – Appeal partly allowed.

New Ushanagar Co-Operative Housing Society Ltd. v. Merc & Tata Power Co. Ltd. & Commissioner Of Police (15.03.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal No.50 of 2017

Dated: 15.03.2019

Scope of Mid Term Review proceedings : Mid-term review order imposing levy of additional surcharge on captive users of group captive power plants.

- Held, Commission cannot deviate from the principles adopted in Multi Year Tariff order. Fundamental principles adopted in MYT proceedings cannot be reopened and challenged at stage of MTR proceeding, the scope of which is very limited. Another flaw of Commission’s impugned order is having come to conclusion that captive consumers are not liable to pay additional surcharge in MYT proceedings, which was implemented by MSEDCL, MERC opined in Review Proceedings that additional surcharge is payable by captive consumers of captive power plant. But this is without giving an opportunity of being heard to the Appellants. This is nothing but violation of principles of natural justice.- Appeal allowed.

M/s. JSW Steel Ltd. & Ors. Vs. Maharashtra Electricity Regulatory Commission & Anr. (27.03.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No.311 & 315 of 2018 Dated: 27.03.2019

Subsidy from MNRE : No revision in tariff - Because capital subsidy has not been received by Appellant from MNRE

- Held, Small Hydro Power of Appellant was eligible for obtaining the capital subsidy from MNRE, Government of India but failed to avail the same because it could not achieve the performance criteria of 80% Plant Load factor for 80 days, as prescribed for availing the subsidy from MNRE - All such hydro projects are planned and constructed considering the silt problems and considering adequate remedial measures



based on the water/silt analysis of the river and hence contention of inability to achieve desired eligibility parameters on account of excessive silt in the river Nandakini was not accepted. Moreover, achieving 80 % PLF for 80 days is not a non-achievable criteria for small hydro projects. If Appellant's project at Vanala could not achieve, the same, it may be additionally due to some other technical problems in the generating units.- Appeal dismissed.

Him Urja Private Ltd. vs. Uttarakhand Electricity Regulatory Commission & Ors. (09.05.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Tariff / Truing Up - Transmission projects - Treatment of ‘Initial Spares’ : A percentage of total project cost or of apportioned individual Element / Asset cost – Ignoring plain language of Regulation 8 of the 2009 Tariff Regulations while determining the tariff / truing up.

Held, Transmission projects due to their inherent nature are segregated into different assets or elements

which are executed and commissioned progressively in stages. Developer / licensee while planning

estimates finalises, requirement of spares on the basis of complete project which requires flexibility in

deciding quantum of spares for different type of elements of a project along with commissioning of

particular asset so as to have better performance with high degree of reliability. Requirement of spares as

such, may not be exactly in proportion to cost of individual assets. - A licensee might require large number

of spares with a particular asset or assets commissioned first based on technical requirement and lesser

number of spares or nil spares in subsequent assets/ elements of similar nature. Break-up of initial spares

for various assets may be percentage wise different subject to overall initial spares requirement of the

project within the overall limits / percentage provided in Regulations. - Out of the 18 assets, the ceiling limit

of 0.75% for initial spares has crossed only in two elements namely Asset No. 6 & 11 and in all other assets,

the expenditure to this account is less than 0.75%. Methodology of restricting initial spares asset / element

wise as adopted by the Central Commission is not agreed with. Central Commission needed to have a

prudence check on initial spares, being restricted based on individual asset wise cost initially, but

subsequently ought to have allowed as per the ceiling limits on the overall project cost basis during the true-

up. - Appeal allowed

Power Grid Corporation of India Ltd. Vs. Central Electricity Regulatory Commission & Ors.(14.09.2019 -APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

APPEAL NO. 74 OF 2017 Dated : 14.09.2019

TBCB Process : Respondent-Commission opined that 400 kV Vikhroli scheme is deemed to have been closed on account of inordinate delay. – Contention of Appellant that in public interest, the procedure now adopted i.e., TBCB process, would be more economical and beneficial apart from being transparent.

- Held, Appellant, right from 2011 till date, has not taken any active steps to achieve completion of project, which helps consumers of Mumbai. Now, at this stage, Appellant claims that it has put in lot of efforts and is ready to complete the project. Appellant was also permitted to participate in TBCB process. Therefore, there is no fault with the observation of Commission pertaining to delay in implementing the scheme in question by 8 years. - Except obtaining certain approvals/consents and clearances, on the ground admittedly no concrete work as such was commenced. Cause for such non-compliance/non-commencement of work is not getting approvals on time. List of dates of approvals/clearances clearly goes to show that for construction of sub-station, the license was sanctioned in the year 2011 itself. On the ground of non-completion of transmission line as obstacle to put up receiving station is the excuse put-forth by Appellant for laying the foundation stone for construction of GIS sub-station. If construction of certain number of towers could not be undertaken on time, there was no reason why the construction of other towers could not be undertaken. If the statutory authorities could not grant approvals/ consents/ clearances within reasonable time, definitely the Appellant could have taken serious steps to pursue the matter by approaching higher authorities of the statutory authority which had to grant such approval or through judicial process. Apparently, Appellant has not resorted to any of such recourse. - Even if 400 kV Talegaon-Kalwa (LILO) line is to be completed by March 2022, this Talegaon-Kalwa line was only a standby line/emergency line for 400 kV Kharghar Vikhroli transmission line. Therefore, 400 kV Talegaon-Kalwa line



being part of Kharghar Vikhroli scheme, the Respondent Commission was justified in closing the entire scheme by passing deemed closure of the scheme as such. - It is well settled that the individual interest must yield to public interest. Since Respondent Commission has made proper directions to reimburse the pre-development expenditure met by Appellant and Appellant is also a participant in the bid, no prejudice of any nature, as such, is caused to Appellant and direction of Respondent Commission to proceed with TBCB process for implementation of 400 kV Vikhroli transmission scheme is in the interest of large number of consumers of Mumbai.

Tata Power Company Ltd. (Transmission) Vs. Maharashtra Electricity Regulatory Commission & Anr. (23.09.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) APPEAL NO. 88 OF 2019 & IA NO. 372 OF 2019

Dated: 23.09.2019

Trial Run Tests - Non-accomplishment of : Central Commission considered COD of Barh Generating Unit-IV w.e.f. 08.03.2016 instead of 15.11.2014 as proposed by Appellant - Mainly on account of non-accomplishment of Trial Run Tests

-Held, it is well settled principle of law that when a statute requires a thing to be done in a particular manner, it has to be done in that manner, and in no other manner. COD of a unit could be declared only after fulfilling the eligibility requirement prescribed under the Tariff Regulations. Apex Court in Sasan case has also held that requisite tests for COD declaration are must to perform without any waiver when public interest is involved. - Appeal dismissed


IA No. 840 of 2017 in Appeal No. 330 of 2017 Dated: 25.01.2019

Validity of Agreement : Agreement being contrary to Regulations, being without reciprocal consideration and also it being entered into under coercion, undue influence and duress.

– Held, that it has been proved beyond doubt that the said agreement dated 04.11.2015 was not in accordance with law and thus, void ab-initio due to (a) it being contrary to the Tariff Regulations, (b) it being without any reciprocal consideration falling to the Appellant, and (c) it being entered without the free will of the Appellant, the Appellant repudiating the same impliedly by filing petition seeking orders for declaring the same as void. Further, in view of the conduct of UPPCL of having executed the Agreement dated 04.11.2015 and then simply stopping the plant from running on 14.11.2015, vitiates the Agreement dated 04.11.2015 itself. - Appeal No. 365 of 2018 allowed. Issues raised answered in favour of Appellant



Dated: 01.05.2019

Validity of Order : Signed by only three Members of the four Members of the Central Electricity Regulatory Commission who heard the matter. The another Member has retired. – Held, it is mandatory on the part of Chairperson and Members of Central Commission to hear the matter and vote on the decision shall sign the order which is mandatory in nature. There is no saving clause as such to the fact that what is sufficed to sign Impugned Orders. - Impugned order cannot be sustainable under law on the ground that, the order impugned was passed contrary to the Regulation 62 of the Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999. It is mandatory on the part of the Central Commission, Chairperson and Members of the Central Commission who hear the matter and vote on the decision shall sign the orders. - Such order impugned passed is a nullity in the eye of law and cannot be sustainable and hence is liable to be set aside at threshold on this ground alone.- Appeal allowed.

Damodar Valley Corporation vs. Central Electricity Regulatory Commission & Ors. (10.01.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal No. 90 of 2018, IA Nos. 364 and 1726 of 2018



Dated: 10.01.2019

Validity of Order : Order signed by three members and released - Matter was heard with Coram of two members

-Held, in the light of the facts and circumstances and in view of the categorical admission made by the Central Commission, the impugned Order cannot be sustainable and is liable to be set aside on the ground that the impugned Order passed is contrary to the Regulations of the Central Commission.- Appeal partly allowed.

Jindal India Thermal Power Ltd. vs. Central Electricity Regulatory Commission & Ors. (29.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Order in Appeal No. 82 of 2018 and IA No. 73 of 2019 Dated: 29.01.2019

Variation in O&M expense : Variation in O & M Expenses considered as controllable - Reduction/deduction of Rs. 2.48 crores from O & M Expense contrary to applicable Statutory Regulations - Network Augmentation charges paid to GETCO considered as controllable. – Held, Variation in O&M expense is normally to be treated as controllable. However, in exception cases as in hand, amount of Network Augmentation charges incurred by Appellant as required by State Transmission Utility (STU) for connectivity needs to be treated as uncontrollable. Deduction of Rs. 2.48 crores from O&M Expenses is contrary to applicable Statutory Regulations of State Commission. Commission should take consistent stand in all matters on the same plea whether related to O&M expenses or the variation in technical and commercial losses.- Appeal allowed.

Torrent Power Ltd. vs. Gujarat Electricity Regulatory Commission (09.05.2019 - APTEL)


Dated: 09.05.201



APPELLATE TRIBUNAL FOR

ELECTRICITY, NEW DELHI



JSW Steel Ltd. & Ors. vs. Tamil Nadu Electricity Regulatory Commission (02.01.2019

- APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) Appeal No. 278 of 2015, IA No. 455 of 2015, Appeal No. 293 of 2015, IA No. 476 of 2015, Appeal No. 23 of 2016 & IA No. 61 of 2016, Appeal No. 62 of 2016, IA No. 155 of 2016 and Appeal No. 24 of 2016, IA No. 65 of 2016

Dated: 02.01.2019

Present: Hon’ble Mr. Justice N.K. Patil, Judicial Member Hon’ble Mr. S.D. Dubey, Technical Member

Background: The appellants, the captive co-generators not being satisfied with the impugned

Order passed by the respondent, Tamil Nadu Electricity Regulatory Commission (‘TNERC’) have

filed these appeals. The appellants on various dates had approached the TNERC seeking a

declaration that captive co-generation plant of the appellants is not required to procure power

from renewable sources of energy in order to meet their Renewable Purchase Obligation (‘RPO

obligation’). TNERC held that the judgment of the Hon'ble Appellate Tribunal for Electricity

(‘Tribunal’) dated 26.04.2010 in Century Rayon Vs. Maharashtra Electricity Regulatory Commission

& Ors. has been set aside by the Full Bench judgment of the Tribunal dated 02.12.2013 in Lloyds

Metal & Energy Ltd. Vs. Maharashtra Electricity Regulatory Commission & Ors. and thus the

appellants would not be entitled to the relief as claimed by them.

Issues:

I. Whether the appellants are under a legal obligation to purchase power from renewable

sources of energy in order to meet their RPO obligation?

II. Whether the exemption granted to co-generation plants would depend on the type of fuel

used by them?

III. Whether judgment of the Tribunal dated 26.04.2010 in Century Rayon Vs. Maharashtra

Electricity Regulatory Commission & Ors. had been set aside in entirety or only in part by

Full Bench Judgment of Tribunal dated 02.12.2013 in Lloyds Metal & Energy Ltd. V.

Maharashtra Electricity Regulatory Commission & Ors?

IV. Whether judgment of Supreme Court in Hindustan Zinc Ltd. Vs. Rajasthan Electricity

Regulatory Commission would apply to appeals?

Held: Issues raised for consideration were answered in favour of the appellants.

Issue I and II. In spite of consistent view taken by the Tribunal, TNERC has failed to take judicial

note and appreciate the matter and on contrary, proceeded to pass the impugned Order without

evaluation of the material available on records and the case made out by the appellants. The

Hon’ble Tribunal was of considered view that TNERC has failed to consider the same and on

contrary has passed the impugned Order. Therefore, the impugned Order passed by TNERC is

liable to be set aside on this ground. [39]

In view of the facts and circumstances, the Tribunal has held that, the appellants herein, being co-

generation plants, are not under a legal obligation to purchase power from renewable sources of

energy in order to meet their Renewable Purchase obligation in the interest of justice and equity.

[54]

Issue III. The Hon’ble Tribunal has held that it is evident that only paragraph 45(II) of the judgment

in Century Rayon Case has been set aside by the Full Bench judgment in Lloyds Metal Case and not



the Century Rayon judgment in its entirety. The effect of this being that the distribution licensee

could not be compelled to procure electricity from fossil fuel based co-generation against its

renewable purchase obligation. However, it has no effect on the finding in Century Rayon Case

that a cogeneration based captive power plant cannot be fastened with Renewable Purchase

Obligation irrespective of the nature of the fuel used for such cogeneration. It is, further, fortified

by the fact that the Hon’ble Tribunal has in India Glycols Case dated 01.10.2014, much after the

judgment of the Full Bench in Lloyds Metal case, continued to rely on Century Rayon case in so far

as the question whether cogeneration based captive power plant can at all be fastened with

renewable Purchase Obligation is concerned as held in para 10, 20 to 23. [43] [44].

In view of the facts and circumstances, the Hon’ble Tribunal has been of the considered view that

the reasoning assigned by the respondent cannot be sustainable; hence, it is liable to be vitiated.

[43], [44]

Issue IV. The Hon’ble Tribunal has held that the judgment of the Hon’ble Supreme Court in

Hindustan Zinc Ltd. vs. Rajasthan Electricity Regulatory Commission actually covered co-

generators as well had got some substance and it was highly unlikely that Rajasthan Electricity

Regulatory Commission, whose Regulations were under challenge before Apex Court, would itself

grant relief to co-generators before it relying on judgment of the Hon’ble Tribunal in Century

Rayon case. Therefore, the Hon’ble Tribunal has held that co-generation facility irrespective of

fuel was to be promoted in terms of section 86(1)(e) of Act could not be fastened with renewable

purchase obligation under same provision and as long as co-generation was in excess of renewable

purchase obligation, there could be no additional purchase obligation placed on such entities.

[53]. Therefore, the Hon’ble Tribunal has held that appellants being co-generation plants, were

not under legal obligation to purchase power from renewable sources of energy in order to meet

their Renewable Purchase obligation in interest of justice and equity. [54]

Disposition:

Surat Municipal Corporation vs. Gujarat Electricity Regulatory Commission & Ors.

(02.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Review Petition Nos. 9 and IA No. 1422 of 2018 in Appeal No. 268 of 2015

Dated: 02.01.2019

Present: Hon’ble Mr. Justice N.K. Patil, Judicial Member Hon’ble Mr. S.D. Dubey, Technical

Member

Background: Review petition filed by review petitioner/appellant - Surat Municipal Corporation

under section 120(2)(f) of Act for review of judgment of tribunal dated 03.05.2018 in Appeal nos.

268 of 2015 filed under Section 111(1) read with Section 111(6) of the Electricity Act 2003

challenging the order dated 29.05.2015 passed by Gujarat Electricity Regulatory Commission

(‘GERT/State Commission’)

The main grievance of the review petitioner/appellant against the impugned order dated

29.05.2015 of the GERT was primarily on two accounts, first being grant of lower tariff than the

generic tariff and secondly, consideration of Central Financial Assistance (‘CFA’) in computation of

admissible tariff. [5] The entire grounds, pleadings, arguments etc. were made by the review

petitioner/appellant only to contest on the above two points which were duly considered by the

Appellate Tribunal (‘Tribunal’) in detail while adjudicating the said appeal filed by the review



petitioner/appellant and passing the referred judgment dated 03.05.2018. Neither any additional

nor fresh ground was made by the review petitioner now which otherwise, strengthen its

pleadings in support of its intended review of the judgment.[6] The other grievance of the Review

petitioner/appellant is to approach the State Commission to re-determine the project specific

tariff. [7]

Issues: Whether the review petitioner made out case for review of judgment of tribunal dated

03.05.2018 in Appeal nos. 268 of 2015?

Held:

1. The review petition has been necessitated by the review petitioner/appellant under Section

120(2)(f) of the Electricity Act, 2003 which confers power to review akin to Section 114 of the

Code of Civil Procedure, 1908. Once a judgment is pronounced and an order passed, the court

becomes functus officio and it cannot thereafter arrogate itself to re-hear the case and re-

open the matter. The dictum of the Hon'ble Supreme Court in a catena of judgments is that a

party is not entitled to seek a review of the judgment merely for the purpose of a re-hearing

and a fresh decision of the case.[10]

2. It is not the case of the review petitioner that there is anything error or omission as sought to

be contended by the review petitioner purportedly in respect of the judgment dated

03.05.2018 in Appeal No. 268 of 2015 which according to the review petitioner requires

exercise of review jurisdiction by this Tribunal.[11]

3. Perusal of the review petition reveals that grounds raised therein in support of purported

review sought were legally untenable and outside ambit of review proceeding. Further

grounds of review adduced in review petition did not fall within tenets of review as

propounded by the Supreme Court in catena of judgments. Therefore, it was relevant to note

that the case in review petition neither relates to any discovery of new and important matter

or evidence which after exercise of due diligence was not within knowledge of review

petitioner or could not be produced by him at time when judgment was pronounced nor any

mistake or error apparent on face of judgment had specifically been pointed out and no any

other sufficient reason or ground had been made out by review petitioner. Therefore, the

review petition is dismissed as devoid of merits. [16], [17], [18]

Disposition: Appeal dismissed

GRIDCO Ltd. vs. NTPC Ltd. & Ors. (02.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No. 180 of 2014 and IA No. 292 of 2014

Dated: 02.01.2019


Member

Background: The Appellant, GRIDCO (a wholly owned Company of the Government of Odisha

carrying on the functions of Bulk Supply of Electricity to four Distribution Companies in Odisha)

has filed the present Appeal under Section 111 of the Electricity Act, 2003 challenging the Order

dated 15.05.2014 passed on the file of Central Electricity Regulatory Commission (Central

Commission) while determining the tariff of Talcher Thermal Power Station (TPS) for the period

2009-14.

Issues:



I. Whether Central Commission was justified in allowing additional capital expenditure on

renovation and modernisation without formulating Renovation and Modernization (R &

M) Policy?

II. Whether Central Commission had erred in not considering higher operational norm

resulting from such huge R & M expenditures in calculating capacity charges payable to

NTPC

III. Whether it was not essential for Central Commission to undertake cost benefit analysis in

view of huge expenditure towards renovation and modernisation?

IV. Whether Central Commission was justified in considering unit capacity of Stage I as 60

MW each instead of 62.5 MW ?

V. Whether Central Commission was justified in non-exercising Regulation 37 of Regulations,

for issuing directions to NTPC for mutual discussions?

Held:

Issue I. It was not in dispute that generating units at Talchar Power Station were quite old to have

operated for more than 40 years and their rehabilitation necessitating huge R & M works was

essential, Accordingly, NTPC after taking over station during 1995-96, prepared comprehensive

scheme for R & M after vetting from Appellant and submitted to Central Commission for its

approval. It was relevant to note that Central Commission after detailed deliberations and analysis

on scope and purview of Renovation & Modernisation had incorporated Regulation 10 of

Regulation, which specifically dealt with expenditure on account of R & M activities. Talchar TPS

being old station and taken over by NTPC primarily for its rehabilitation and improvement of

operating efficiencies had got specific mention in explanatory memorandum issued by Central

Commission - Thus, the Hon’ble Tribunal has opined that Central Commission had framed

sufficient guidelines for dealing subject of R & M and Phase I, II & III including switchyard of R &

M programme was formulated by NTPC duly consulting Appellant. The Hon’ble Tribunal has not

found any legal infirmity or perversity in methodology or otherwise, in findings of Commission in

impugned order was not in accordance with law. Hence, interference of the Tribunal did not call

for. [9.4] Held that Central Commission has allowed additional capitalisation on account of R & M

for TTPS after applying prudence check and duly considering the anticipated benefits to be

accrued out of the same. [14.1]

Issue II. Admittedly, performance of TTPS after completion of R & M had improved considerably

and its Plant Load Factor (PLF) had gone up to 90% against low PLF of 29.02% during 1994-95.

Besides, after carrying out R & M, life of generating units had also been extended for another 20

years and it may be considered as good as new station performing efficiently to such high

availability and increased PLF. Central Commission had considered operating parameters

reasonably which were well comparable with operating parameters of other, similar generating

stations. Further, there did not appear any scope or ground for invoking its power to relax under

Regulation 44 as parameters were fixed on normative basis considering average of preceding

years and not on maximum achieved basis as claimed by Appellant. The Hon’ble Tribunal, has thus

opined that findings of Central Commission were just and right and provides judicious wisdom in

interest of generator and beneficiaries/consumers. Therefore, no interference from Tribunal was

necessitated. [10.3]

The Central Commission has considered the operating norms of the power station in calculating

the tariff in a judicious manner striking balance between the generator and the

beneficiaries/consumers and there was not a case to invoke its Regulation 44 i.e. Power to relax.

Appeal dismissed. [14.2]



Issue III. It is relevant to note that after carrying out R & M, Talchar Station had been performing

in excellent manner yielding high PLF of more than 90% and also plant availability of over 82%. R

& M had also resulted into extension of plant life by 20-years or more besides generating at its full

capacity with high PLF. The very premise on which Talchar Station was transferred to NTPC

through Act was that said power station was not operating at its optimum capacity resulting into

loss of generation and OSEB or State Govt., was not in position to provide additional funds

necessary to achieve optimum production. After taking over plant, NTPC in consultation with

Appellant formulated detailed R & M Scheme and after due approval of Central Commission, same

had been implemented in its entirety. It had been stated by respondents that at time of transfer

of station to NTPC during 1995-96, plant was operating at very low PLF of 29% which had now

gone up to more than 90%. The Hon’ble Tribunal has also noted that before approving any

expenditure on R & M, the Central Commission had applied prudence check and approved only

genuine expenditures keeping in view overall benefits likely to accrue after completion of R & M.

It was not in dispute that there had been significant improvement in operating parameters of plant

besides getting life extension of 20 years or more mainly on account of R & M, whatsoever may

be expenditure on R & M whether Rs. 800 crores or Rs. 673 crores, quantum of benefits out of R

& M had been considerable and on rough estimate indicated by respondents, it had resulted into

direct financial benefit of over Rs. 1386 crore during period of 2004-2015 and if prior period of

1995-2004 was taken into consideration then financial gains would be much more. These visible

gains were clear indicators for cost benefit analysis and there did not appear any specific necessity

of taking cost benefit analysis by the Central Commission to exhibit benefits vis-a-vis. Cost

incurred. The Tribunal, accordingly opines that there was no legal infirmity or error in impugned

order passed by Central Commission to this account.

The entire R & M expenditure indicated by the parties works out to Rs. 700-800 crores which is

about Rs. 1.6 crores per MW and reasonably, cheaper than any new thermal station of that period

which may cost in the range of Rs. 4-5 crores per MW having same level of performance. Appeal

dismissed. [11.4] [14.3]

Issue IV. It was contention of appellant that when Stage-I units were giving excellent performance

with high PLF and increased plant availability, generating units could be re-rated to its original

nameplate capacity of 62.5 MW instead of 60 MW which had been considered by the Central

Commission. It was not in dispute that these units were giving higher level of performance,

however same could not be taken as basis for uprating unit based on higher performances of units.

Appellant itself had de-rated units to 60 MW from its original nameplate capacity of 62.5 MW

after taking due approval of the Central Electricity Authority (CEA). Admittedly, there may be

scenario that generation from 60 MW units may be higher than benchmark or even comparable

to higher unit size due to excellent performance parameters but same did not necessarily mean

that units could be re-rated/uprated to higher capacity. Moreover, this issue had already been

decided in catena of judgments of tribunal and it was not case now to re-open without making

any specific ground for such determination. The Hon’ble Tribunal, has thus opined that the Central

Commission had decided this issue legally in accordance with law and considering in host of

judgments of tribunal. Accordingly, any interference from tribunal did not call for. [12.4]

The unit capacity of Stage-I has been ratified by CEA as 60 MW and also held in several judgments

of the Tribunal. Accordingly, the Tribunal too, holds the unit capacity to be 60 MW and there is no

rationale to re-rate them to 62.5 MW on the basis of higher PLF etc. Appeal dismissed. [14.4]

Issue V. The Hon’ble Tribunal has held that norms considered by Central Commission in tariff

determination have been more stringent than those mentioned in reference Power Purchase



Agreement (PPA) between parties. Besides units after R & M have been performing with

considerable improvement parameters. Thus, prima facie, there did not appear any ground for

Central Commission to issue directions under Regulation 37 to any of parties for mutual

discussions or any re-conciliation of operating parameter. Thus, the Hon’ble Tribunal has held that

there was no irregularity or ambiguity in approach and findings of Central Commission in this

regard. Appeal dismissed. [13.3]

The Hon’ble Tribunal has held the decision of the Central Commission just & reasonable for not

applying Regulation 37 for issuing direction to NTPC for discussions with the appellant and

finalising the operating parameters. This is because of the fact that the operating norms specified

by the Commission were superior to those agreed between the appellant and the first respondent

in the PPA or subsequent bilateral meetings. [14.5]


Pune Power Development Private Ltd. vs. Karnataka Electricity Regulatory

Commission & Ors. (04.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

IA No. 1501 of 2018 in Appeal No. 232 of 2014

Dated: 04.01.2019


Member

Background: The instant Application is filed under Rule 30 of the Appellate Tribunal for Electricity (Procedure, Form, Fee and Record of Proceedings) Rules, 2007 and non-mentioning of the relevant provision of Section 120 of the Electricity Act, 2003 and read with Section 152 of the Civil Procedure Code. The Applicant/Appellant has approached the Tribunal to seek clarification/ modification in the operative portion of the order dated 04.09.2018 passed in Appeal no. 232 of 2014 that the impugned order dated 10.07.2014 was set aside to a limited extent to which it had been challenged in appeal and to this limited extent the matter stands remitted back to the First Respondent/State Regulatory Commission for consideration. The grievance of the appellant is that though the Hon’ble Tribunal while passing the order dated 04.09.2018 had observed in Para 4 at page 6 and 7 that the impugned order dated 10.07.2014 has been partly challenged by the Applicant/Appellant, however, it had inadvertently stated in Para 25 that “Having regard to the facts and circumstances of the case as stated above, the Appeal filed by the Appellant is allowed, the Impugned Order dated 10.07.2014 passed in the Original Petition No. 20 of 2009 on the file of Karnataka Electricity Regulatory Commission, Bengaluru is hereby set aside”

Respondent No. 2 has submitted that the Applicant/Appellant has not indicated the provisions of law under which the Application has been filed and that the present Application is in the nature of a review petition filed under the garb of seeking clarification. He further submitted that the direction issued is to reconsider the original petition in O. P. No. 20 of 2009 after setting aside the order dated 10.07.2014.

Issues: Whether Application filed by Applicant/Appellant was maintainable? Whether in the

operative portion of the impugned order, there is an inadvertent clerical mistake or not on the

countenance of the order?

Held:



1. In a catena of judgments it has been held that if inadvertently parties, counsel or

representatives failed to mention the relevant provisions for filing the Application redressing

their grievance, it does not take away the rights of the Applicant/Appellant. The Hon’ble

Tribunal has relied on in its judgment dated 06.05.2010 in Appeal No. 55 of 2009 on the file

of the Appellate Tribunal for Electricity (Appellate Jurisdiction) wherein the Tribunal had

stated that “This Tribunal is adequately empowered to regulate its own procedure and that

there is no embargo on this Tribunal from invoking provisions of the CPC.” [11]

2. While referring to the judgement in Ram Sunder Ram v. Union of India & Ors. [2007(9)SCALE

197], the Tribunal held that it is a well settled principle of law that if an authority has a power

under the law, merely because while exercising that power, the source of power is not

specifically referred to or a reference is made to a wrong provision of law, that by itself does

not vitiate the exercise of power so long as the power does exist and can be traced to a source

available in law. In the case of N. Mani v. Sangeetha Theatre and Ors. (2004) 12 SCC 278], it

has been held that quoting of wrong provision of a section in the order of discharge of the

appellant by the competent authority does not take away the jurisdiction of the authority

under the relevant provisions of the Act. Therefore, the order of discharge of the appellant

from the service cannot be vitiated on this sole ground. [13]

3. Once it was clear that the Tribunal was empowered under statutory provisions to do an act or

to perform particular function, merely because while doing act or perform a particular

function, if Applicant/Appellant mentions wrong provision of law, that by itself cannot render

exercise of powers to be bad in law - And for same reason, performance of function cannot

be nullity. Viewed from this angle, therefore, even though application filed under Rule 30, by

itself, would not be rendered to be bad in law once such power was available in relevant

provision, section 120 of Electricity Act, 2003 read with relevant provision, section 152 of Code

of Civil Procedure, 1908 (CPC). Therefore, the Tribunal has held that instant application filed

by applicant/appellant was maintainable for seeking clarification in operative portion of

judgment about inadvertently left out portion thereof. Therefore, in interest of justice and

having regard to facts and circumstances of case, the Hon’ble Tribunal has clarified that in

impugned Judgment, order passed by commission was set aside only so far as it relates to

prayer sought in the instant Appeal. [13]

4. Therefore, application filed by Applicant/Appellant stands disposed of clarifying that

impugned order passed by commission dated 10.07.2014 passed in original petition was

hereby set aside only so far as it relates to prayer sought by Applicant/Appellant in the Appeal.

[14]

Disposition: Appeal allowed

M/s. Hindustan Petroleum Corporation Ltd. vs. Petroleum & Natural Gas Regulatory

Board (09.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal no. 102 of 2016 & IA no. 307 of 2017 & IA no. 549 of 2018

Dated: 09.01.2019

Present: Hon’ble Mrs. Justice Manjula Chellur, Chairperson; Hon’ble Mr. B.N. Talukdar, Technical

Member (P&NG)

Background: In this appeal, the Appellant - M/s Hindustan Petroleum Corporation Ltd.

(‘Appellant’) has impugned the order of the Respondent Petroleum and Natural Gas Regulatory

Board (‘Respondent-Board’) dated 04.03.2016 whereby the Respondent-Board has directed



encashment of 25% of the Performance Bank Guarantee (PBG) submitted by the Appellant on

account of delays in commissioning of the Uran-Chakan-Shikrapur LPG pipeline, under the

provisions of Regulation 16(c)(i) of the Petroleum and Natural Gas Regulatory Board (Authorizing

Entity to Lay, Build, Operate or Expand Petroleum and Petroleum Products Pipelines) Regulations,

2010 (‘Authorization Regulations’).

The Respondent-Board’s contention is that ample opportunities have been provided to the

Appellant of being heard and allowed reasonable time to fulfil its obligations. According to the

Appellant, the Respondent-Board has considered the reasons for delay in a cursory manner

without analysing the impact on the implementation of the project. Further, as per the Appellant,

encashing the PBG without issuing a notice as per provisions of the Regulations is a violation of

principles of natural justice. Therefore, the impugned decision suffers from lack of reasons; non-

application of mind and is contrary to the record.

Issues: Whether the Respondent-Board ought to have considered the issues of force majeure,

serving notice and taking up remedial action as mentioned in Regulation 16 (a) and (b)?

Held:

1. The Hon’ble Tribunal has observed that the Board extended the time schedule for completion

of the project till March, 2017 while encashing 25% of the PBG which would mean that the

Board accepted the delay based on the reasons given by the Appellant. Both these actions of

extending the time schedule and imposing penalty taken simultaneously appear to be

contradicting. The Hon’ble Tribunal has further observed that the scheduled time for

completion of the project was by 31.10.2015 and the only review meeting of which minutes

were issued was held on 19.11.2015 which happened after the scheduled completion date of

31.10.2015. It is unclear whether the Board followed Regulation 13(4) of the Authorization

Regulations while monitoring the progress of the project.

2. The Hon’ble Tribunal has held that the Respondent-Board was not careful enough to examine

the reasons submitted by the Appellant for the delay. The impugned order lacks proper

reasoning for not extending the scheduled completion time as requested by the Appellant

before encashing the 25% of the PBG. The impugned order suffers from gross deficiency in

explaining the grounds while considering to encash the PBG. The Hon’ble Tribunal has held

that a more elaborate analysis would need to be carried out by the Respondent-Board on the

correspondences made and documents submitted by the Appellant while requesting to

extend the time schedule for completion of the project before encashing the PBG. The Hon’ble

Tribunal has also held that the Appellant needs to be heard by the Respondent-Board afresh

before taking a final decision. The Hon’ble Tribunal has found it prudent to remand the instant

matter to the Respondent-Board for a fresh and independent review.


Damodar Valley Corporation vs. Central Electricity Regulatory Commission & Ors.


Appeal No. 90 of 2018, IA Nos. 364 and 1726 of 2018

Dated: 10.01.2019

Present: Hon’ble Mr. Justice N.K. Patil, Judicial Member Hon’ble Mr. Ravindra Kumar Verma,

Technical Member



Background: The Appeal was filed by the Appellant, Damodar Valley Corporation under Section

111 of the Electricity Act, 2003 (Act) being aggrieved by the order dated 18.12.2017 passed by

Central Electricity Regulatory Commission (‘Central Commission’) contending that the Impugned

Order was reserved for judgment by the Central Commission way back on 14.10.2014 and the

same was communicated to the Appellant through posting in the Central Electricity Regulatory

Commission website on 20.12.2017 after a long gap of 3 years and 2 months. Further it is a specific

case of the Appellant that the matter has been heard by a bench consisting of four Members but

out of four Members one Member retired and order has been signed only by three Members and

passed the Impugned Order.

Issues: Whether the Impugned Order passed by the Central Commission is sustainable in law?

Whether the impugned Order signed by only three Members of the four Members of the Central

Commission who heard the matter is sustainable in law?

Held:

1. After careful reading of the Regulation 62, the Tribunal held that it is mandatory on the part

of the Chairperson and Members of the Central Commission to hear the matter and vote on

the decision shall sign the order which is mandatory in nature. There is no saving clause as

such to the fact that what is sufficed to sign the Impugned Orders.[16]

2. The Tribunal held that the impugned order cannot be sustainable at any stretch of imagination

under law on the ground that, the order impugned was passed contrary to the Regulation 62

of the Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999. It is

mandatory on the part of the 1st Central Commission, the Chairperson and the Members of

the Central Commission who hear the matter and vote on the decision shall sign the orders.

In the instant case the matter was heard by four Members of the Central Commission and

signed by only three Members. The another Member has retired. Therefore, such order

impugned passed is a nullity in the eye of law and cannot be sustainable and hence is liable to

be set aside at threshold on this ground alone. [21] The Tribunal made it clear that the

Impugned Order was set aside only on this ground alone. [25]


Earth Solar Private Ltd. vs. Punjab State Electricity Regulatory Commission & Ors.



Dated: 11.01.2019

Present: Hon’ble Mr. Justice N.K. Patil, Judicial Member; Hon’ble Mr.S.D. Dubey, Technical

Member

Background: The Appellant, Earth Solar Private Ltd. has filed the instant Appeal under Section 111

of the Electricity Act, 2003 against the impugned Order dated 22.6.2015 passed by the Respondent

No. 2 - Punjab State Electricity Regulatory Commission ('State Commission') in Petition No.

20/2015 whereby the State Commission has rejected the Appellant's prayer for extension of time

and applicable Tariff for commissioning of its' 4 MW solar PV project, and has arbitrarily reduced

the tariff applicable to the Appellant's solar PV project from Rs. 8.70/unit to Rs. 7.29/unit

(Impugned Order).



The Appellant’s contention was that the State Commission had failed to appreciate that the

Appellant had been unduly delayed not for any reasons attributable to the Appellant but due to

failure on part of the Respondent No. 3 - Punjab Energy Development Agency (PEDA) to take

timely actions and provide the conditions assured in the Bid Conditions. The State Commission

has by the Impugned Order also reduced the tariff applicable to the Appellant, which was

discovered through a process of competitive bidding. The Appellant’s contention was that such

reduction is unreasonable and untenable in law.

Issues:

I. Whether the State Commission was correct in holding the Appellant responsible for delay

in commissioning of the solar project without considering defaults on the part of PEDA

and the Government of Punjab?

II. Whether the State Commission has acted beyond jurisdiction by changing the tariff for

delay in commissioning, without prejudice and for cause attributable to the nodal

agency/Government when the tariff has been determined by a competitive bidding

process under Section 63 of the Electricity Act, 2003?

Held:

Issue I. The Hon’ble Commission has noted that active construction time was about 4 months

whereas time allotted for completion of project was 13 + 1 ½ months. As such, sufficient time was

accorded to Appellant for achieving scheduled COD but it could not avail benefit of fact that it had

its own private land and Respondents have taken immediate action for resolving impediments as

and when reported by Appellant. In view of these facts, tribunal was of considered view that claim

of Appellant for extension of COD of project lacks in bona fide and commission had passed

impugned order after due consideration of submissions and pleadings of parties and after

assigning cogent reasoning thereon. Thus, interference of tribunal does not call for. [9.11]

Issue II. It appeared from record of the State Commission that the Order dated 14.11.2013 clearly

stipulated that tariff so agreed would be applicable only when projects were commissioned before

31.03.2015. It was also relevant to note that Appellant had miserably failed in notifying force

majeure event particularly as per procedures laid down in IA read with PPA and rather adopted

very liberal approach in pursuing statutory approvals as well as soliciting intervention of

Respondents in resolving issues pending with various Government agencies. Active construction

period had actually been to tune of 4 months whereas time provided for commissioning of project

was 13 + 1 ½ months. The Hon’ble Tribunal have also taken note from documents placed before

tribunal that it was clear indication to all project developers that in case their projects were not

commissioned within control period ending 31.03.2015, tariff should be re-determined by

commission in line with terms and conditions of IA/PPA. It was not dispute that tariff for

subsequent control period of Rs. 7.19 had been considered by commission based on prevailing

tariff discovered through competitive bidding process. The Hon’ble Tribunal has been of

considered opinion that having regard to its own order dated 14.11.2013 and terms and

conditions provided in IA/PPA, commission had passed impugned order in accordance with law

and considering all aspects associated therein. The Hon’ble Tribunal thus, did not find any error,

much less material irregularity or any legal infirmity in impugned order. Hence, interference of the

Tribunal was not called for. [10.6]




M/s SAS Hydel Projects Pvt. Ltd. vs. Madhya Pradesh Electricity Regulatory

Commission (15.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

ORDER IN APPEAL NO. 126 OF 2018 & IA NO. 354 OF 2018 ON THE FILE OF THE APPELLATE

TRIBUNAL FOR ELECTRICITY - NEW DELHI

Dated : 15.01.2019


Technical Member

Background: The instant Appeal, being Appeal No. 126 of 2018 has been filed by SAS Hydel

Projects Pvt. Ltd. (‘Appellant’) seeking the setting aside the order dated 21.06.2017 passed by the

Madhya Pradesh Electricity Regulatory Commission (‘State Commission’) to the extent challenged

in the present appeal and directing the State Commission to determine the applicable tariff for

mini hydel projects in the State of Madhya Pradesh established under SHP 2011 for FY 2018-19 in

a time bound manner.

Issues:

• Whether the State Commission is justified in disallowing the extension of COD while the same

is governed by the PPA and has been mutually agreed to be extended by the parties?

• Whether the State Commission has followed the principles of natural justice and also the due

process of law in passing the impugned order?

• Whether the State Commission is justified in proceeding to decide an issue which was not in

dispute and which did not arise for adjudication at all?

• Whether the State Commission is justified in holding that the Respondent No. 2, which is the

counter-party to the PPA could not agree for extension of time, but the said issue could be

agreed to only by the Government?

• Whether the State Commission erred in applying the HPDA for disallowing the extension of

COD?

• Whether the State Commission is justified in not determining the tariff for hydro projects and

merely proceeding to extend the previous orders passed?

Held: In the light of the Tariff Order dated 21.12.2018 passed in, being No. SMP-18/2018, on the

file of the M.P. Electricity Regulatory Commission, Bhopal regarding procurement of power from

Small Hydro Power Projects in Madhya Pradesh, Bhopal and for the reasons stated therein, the

instant appeal, being Appeal No. 126 of 2018, filed by the Appellant on the file of the Appellate

Tribunal for Electricity, New Delhi stands disposed of reserving liberty to the Appellant to redress

their grievances for change of law, if they so advised or need arises in accordance with law. With

these observations, the instant appeal stands disposed of.


ACB (India) Ltd. vs. Gujarat Electricity Regulatory Commission & Ors. (18.01.2019 -

APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 18.01.2019



Present: Hon’ble Mr. Justice N.K. Patil, Judicial Member; Hon’ble Mr. S.D. Dubey, Technical

Member

Background: The Appellant, M/S ACB (India) Ltd., assailing the correctness of impugned order

dated 04.08.2015 on the file of Respondent No 1 - Gujarat Electricity Regulatory Commission

('State Commission') for refund of liquidated damages challenged that the State Commission

without appreciating the factual position of the matter and the legal intricacies involved has

dismissed the petition on the pretext of the same being devoid of merit vide the impugned order.

Initially, the Appellant executed a 'Turnkey Agreement' dated 18.06.2009 whereunder

Respondent No 3 - Power Grid Corporation of India Ltd. (‘PGCIL’) which is the Central Transmission

Utility (‘CTU’) was to design, erect, procure and commissioning etc, of 2 Nos. 400 kv extension

bays at WR Pooling Point. However, subsequently the contract was awarded to the Appellant to

undertake the scope of work under the supervision of PGCIL. However, due to the delay in the

commissioning of the Sipat Pooling Station, Respondent No. 2 - Gujarat Urja Vikas Nigam Ltd.

(GUVNL) granted an extension for COD of the TPS up to 30 days from the date on which the open

access/transmission facilities for evacuation of power was made available to the Appellant (i.e. 30

days from the date of LTA granted to the Appellant becomes operationalized) vide its letter dated

05.08.2008.

GUVNL deducted liquidated damages for 52 days i.e. from 01.05.2012 to 21.06.2012, since

allegedly Bilaspur Pooling Station was declared as commissioned on 01.04.2012 and the Appellant

was to deliver power to GUVNL after 30 days from such date i.e. 01.05.2012 till 21.06.2012 which

was the date on which the Unit-II achieved COD. The Appellant contested the alleged date of

operationalizing of the LTA stating that the LTA was made effective w.e.f. 12.09.2012 by PGCIL

and accordingly the COD was to be shifted to 30 days thereafter.

Issues:

I. Whether in facts and circumstances of case, State Commission failed to appreciate that

delay caused in operationalisation of LTA was attributable to PGCIL and not Appellant?

II. Whether State Commission had erroneously upheld recovery of liquidated damages by

Respondent no. 2 without enquiring conclusively into actual loss or damages suffered by

Respondent No. 2 during alleged delay period of 52 days?

Held:

Issue I. The Hon’ble Tribunal did not find any force in contentions of Respondents that even

without commissioning & changing of all ICTs at Sipat Pooling Stations, LTA could be

operationalized. As a general practice, LTA in favour of any utility was granted/operationalised by

CTU/PGCIL only after critical power system studies of associated network ensuing prescribed

redundancy in system. In view of these facts, the Tribunal was of considered opinion that third

ICT at Sipat Pooling Station was essential before making LTA operational which got commissioned

only on 01.08.2012. Therefore, if it was presumed that delay in operationalisation of LTA was

caused due to commissioning of dedicated transmission system which became ready only on

11.09.2012 in all respects, LTA itself could not have been operationalised before 01.08.2012.

Accordingly, the Tribunal held that delay in LTA operationalisation could not be attributed to

Appellant alone and PGCIL/CTU was equally responsible for such delay viz. PGCIL/CTU till charging

of third 1500 MVA ICT on 01.08.2012 at Sipat Pooling Station and Appellant thereafter up to

commissioning of transmission lines/terminal bays (11.09.2012). Therefore, the Tribunal was of



considered view that this issue was answered partly in favour of Appellant. Appeal allowed in part.

[9.8]

Issue II. The Hon’ble Tribunal has held that while PGCIL started levying transmission charges on

beneficiary constituents w.e.f. 01.04.2012 but no any charge was levied on Appellant due to fact

that Sipat Pooling Station was not commissioned in totality and LTA was not operationalized. The

Hon’ble Tribunal also taken note from records that to supply power to Respondent no. 2, the

Appellant had made sincere efforts, bona fide in nature and in process commissioned LILO of

adjoining transmission line at cost of over Rs. 2.10 crores and started supply of power w.e.f.

December, 2011 itself. Subsequent to commissioning of second unit on 21.06.2012, Appellant had

been supplying full quantum of power to Respondent No. 2 through short term open access. Even

prior to that, Respondent No. 2 had earned considerable amount over Rs. 7 crores on account of

infirm power supplied by Appellant. Accordingly, the Hon’ble Tribunal has held that entire delay

of 52 days could not be held against Appellant as Sipat Pooling Station got completed in all

respects as per BPTA dated 03.04.2009 only on 01.08.2012 and applying 30 days margin over that,

LD period could at most be reckoned from 01.09.2012. This results into net delay of 11 days for

imposing LD as dedicated lines including terminal bays got completed on 11.09.2012 and LTA was

operationalised on 12.09.2012. Therefore, court was of considered view that this issue was

answered partly in favour of Appellant. Appeal allowed in part to the extent of re-computation of

liquidated damages. [10.6]

Disposition: Appeal partly allowed

Sasan Power Ltd. vs. Central Electricity Regulatory Commission & Ors. (18.01.2019 -



Dated: 18.01.2019

Present: Hon’ble Mrs. Justice Manjula Chellur, Chairperson; Hon’ble Mr. S.D. Dubey, Technical

Member

Background: The present appeal has come to be filed by the Appellant, Sasan Power Ltd. to

challenge the impugned Order dated 26.04.2016 of the 1st respondent - Central Electricity

Regulatory Commission (‘Central Commission’) disposing off the petition filed before it by

following the opinion of the Full Bench of the Appellate Tribunal for Electricity (‘Tribunal’) in the

Order dated 07.04.2016.

The Appellant had filed a petition seeking compensation on account of depreciation of the Indian

Rupee vis a vis US Dollar constituting a force majeure event. On 21.02.2014, while rejecting the

claim of the Appellant, the Central Commission stated that there may be a case for intervention

by the Central Commission in exercise of its powers under Section 79 (1) (b) of Electricity Act, 2003

(‘Act’) and called for further particulars from the Appellant and fixed a further hearing. In the

appeals filed by the respondent distribution companies challenging the reliefs granted by the

Central Commission, a Full Bench of the Tribunal by Order dated 07.04.2016 opined that the

Central Commission has no regulatory power under Section 79(1)(b) of the Act to grant

compensatory tariff and thereby setting aside the Order dated 21.02.2014 passed by the Central

Commission.



An application came to be filed by the Appellant before the Tribunal on 02.02.2018 seeking

remand of the matter by placing reliance on the Judgment of the Hon'ble Supreme Court in Energy

Watch Dog vs Central Electricity Regulatory Commission and Ors 2017 (4) SCALE 580 dated

11.04.2017 on the ground that the Central Commission while disposing of the petition of the

Appellant on 26.04.2016 did not give an opportunity of being heard to the Appellant, and

therefore, the Appellant seeks remand of the matter to the Central Commission for fresh

consideration of the claim of the Appellant.

Issues: Whether the Central Commission was right in dismissing the petition without considering

the case under Section 79(1)(b) of the Act? Whether the Central Commission was required to

afford an opportunity to the Appellant to put forth its case so far as exercise of regulatory powers

under Section 79(1)(b) of the Act is concerned?

Held:

1. So far as fair opportunity of hearing being given or not is concerned, admittedly, the

Appellant was not asked to address arguments on the pending petition, though the

Central Commission itself opined in the initial order that claim of the Appellant for

exercising powers under Section 79(1(b) may be available. Since the opinion of the Full

Bench of the Tribunal so far as exercise of regulatory powers came to be reversed by the

Apex Court in Energy Watch Dog's case, it is incumbent upon the Central Commission to

decide the said issue in the light of the Judgment of the Energy Watch Dog's case by

affording an opportunity of being heard. No prejudice whatsoever is caused to the

Respondents, since they will also be heard before the Central Commission. [15]

2. In that view of the matter, the Tribunal was of the opinion that the appeal and IA No. 163

of 2018 deserve to be allowed. The Central Commission was directed to hear the

Appellant's claim of compensation only on the ground of exercise of regulatory powers

under Section 79(1)(b) of the Act and not the ground of force majeure event Accordingly,

the appeal is allowed to the extent indicated above. [16], [17]


Nuclear Power Corporation of India Ltd. vs. Central Electricity Regulatory


Appeal No. 332 of 2016, IA Nos. 706 and 699 of 2017

Dated: 18.01.2019


Member

Background: The present Appeal has been filed by the Appellant, Nuclear Power Corporation Ltd.

under Section 111 of the Electricity Act, 2003 challenging the Order dated 20.9.2017 passed by

the Central Electricity Regulatory Commission (‘Central Commission') whereby the Central

Commission held the Appellant to be liable to bear the transmission charges of the transmission

assets commissioned by the Respondent No. 2, RTCL from Scheduled Commercial Operation Date

(SCOD) till commissioning of the downstream system.



Issues: Whether Central Commission was right in holding Appellant liable to pay transmission

charges on account of element not put to use in absence of in Implementation Agreement or any

form of Contractual Agreement?

Held:

1. It was not in dispute that Respondent No. 2 had commissioned transmission lines on

26.12.2015 and downstream element under scope of Appellant could be commissioned only

on 11.11.2016. Subsequent to commissioning of its lines in totality, Respondent No. 2 was

entitled to receive transmission charges from 01.03.2016 either from Appellant due to its

admitted default or through POC charges from LTTCS/beneficiaries. Supreme Court in its

judgment dated 03.03.2016 (Barh-Balia judgement) had held that beneficiaries could not be

made liable to pay for delay in any transmission element which in turn, prevents entire system

to be put to use. Hence, Respondent No. 2 could not be paid under POC mechanism and

alternatively, transmission charges had to be paid by defaulting party i.e. Appellant. [10.10]

2. The Hon’ble Tribunal has stated that the commission had based its decision on the

aforementioned case as well as the judgment of the Supreme Court dated 15.03.2016 in PTC

India Ltd. Vs. CERC case in which it was, inter-alia held that the Central Commission is

empowered to exercise its regulatory powers under Section 79(1) of the Act, even without

any specific regulations. Accordingly, the Hon’ble Tribunal has held that the decision of the

Central Commission is just and right and the impugned order has been passed by it judiciously

in accordance with law and does not call for any interference of the Hon’ble Tribunal. [10.11]

3. Therefore, the Hon’ble Tribunal was of considered view that issues raised in appeal were

devoid of merits.

Disposition: Appeal dismissed.

Print Wizards vs. Tata Power Delhi Distribution Ltd. & Ors. (23.01.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

IA No. 1882 of 2018 in (RP) DFR No. 4063 of 2018 in 160 of 2016

Dated: 23.01.2019

Present: Hon’ble Mr. Justice N. K. Patil, Judicial Member; Hon’ble Mr. S. D. Dubey, Technical

Member

Background: The present Review Petition has been preferred by the Review Petitioner/Appellant

- M/s. Print Wizards (‘Review Petitioner’) under Section 157 read with Section 120(F) of the

Electricity Act, 2003 (‘Act’) for review of the Judgment of the Appellate Tribunal for Electricity

(‘Tribunal’) dated 19.09.2018.

Issues: Whether the Review Petitioner made out case for review of Judgment of the Tribunal

dated 19.09.2018?

Held:

1. The Hon’ble Tribunal has held that in view of the well settled law laid down by the Apex Court,

it is manifest that the following grounds of review have been stipulated by the statute which

govern whether a Review Petition is maintainable or non-maintainable as under:-

(a) When the review will be maintainable:-



(i) Discovery of new and important matter or evidence which, after the exercise of due

diligence, was not within knowledge of the petitioner or could not be produced by him;

(ii) Mistake or error apparent on the fact of the record;

(iii) Any other sufficient reason.

(b) When the review will not be maintainable:-

(i) A repetition of old and overruled argument is not enough to reopen concluded

adjudications,

(ii) Minor mistakes of inconsequential import,

(iii) Review proceedings cannot be equated with the original hearing of the case,

(iv) Review is not maintainable unless the material error, manifest on the fact of the order,

undermines its soundness or results in miscarriage of justice,

(v) A review is by no means an appeal in disguise whereby an erroneous decision is re-

heard and corrected but lies only for patent error,

(vi) The mere possibility of two views on the subject cannot be a ground for review.

(vii) The error apparent on the fact of the record should not be an error which has to be

fished out and searched,

(viii) The appreciation of evidence on record is fully within the domain of the appellate

court, it cannot be permitted to be advanced in the review petition,

(ix) Review is not maintainable when the same relief sought at the time of arguing the

main matter had been negatived.

2. A perusal of the Review Petition as filed by the Review Petitioner/Appellant, reveals that the

grounds raised therein in support of purported review sought are legally untenable and

outside the ambit of review proceeding. Further the grounds of the review adduced in the

review petition do not fall within the tenets of review as propounded by the Hon'ble Supreme

Court in a catena of judgments. [15]

3. It is emerged conclusively that the case in the present Review Petition neither relates to any

discovery of new and important matter or evidence which after the exercise of due diligence

was not within the knowledge of the Review Petitioner or could not be produced by him at

the time when the judgment was pronounced nor any mistake or error apparent on the face

of the judgment has specifically been pointed out and no any other sufficient reason or ground

has been made out by the review petitioner. [16]

4. Therefore, the Hon’ble Tribunal has been of the considered view that there is no merit in the

instant Review Petition necessitating review/re-consideration and the same is frivolous,

vexatious and abuse process of court. Hence, the Review Petition is dismissed as

misconceived. [17]

Disposition: Review Petition dismissed.


IA No. 840 of 2017 in Appeal No. 330 of 2017

Dated: 25.01.2019


Member

Background: The Appellant, NTPC Ltd. (‘NTPC’) filed an Appeal under Section 111 of the Electricity

Act, 2003 (‘Act’) against the Impugned Order dated 20.09.2017 passed by the Central Electricity



Regulatory Commission ('Central Commission') whereby the Central Commission decided the date

of the commercial operation (COD) of Unit IV (660 MW) of Barh Super Thermal Power Station

Stage II generating station of the Appellant. The Central Commission rejected the claim of NTPC

for approval of the COD as on 15.11.2014 mainly on account of non-accomplishment of Trial Run

Tests and instead decided that the COD would be 08.3.2016 with consequential orders in regard

to the tariff terms and conditions payable by Respondent No 1, GRIDCO Ltd. ('GRIDCO'), the

procurers to NTPC for generation and sale of electricity from the said Barh Super Thermal Power

Station.

NTPC has been generating and supplying electricity to the Respondent - Procurers effective from

the date of commercial operation on 15.11.2014 on the terms and conditions contained in the

Tariff Regulations notified by the Central Commission being CERC (Terms and Conditions of Tariff)

Regulations, 2014 ('Tariff Regulations, 2014'). Therein, Regulation 5 requires that the Trial Run of

Generating Station shall mean the successful running of the generating station or unit thereof at

maximum continuous rating or installed capacity for continuous period of 72 hours in case of unit

of a thermal generating station or unit thereof.

The Central Commission notified Central Electricity Regulatory Commission (Indian Electricity Grid

Code) (Fourth Amendment) Regulations, 2016 amending the provisions in respect of Trial

operation of a Generating Station permitting for short interruptions, for a cumulative duration of

4 hours, with corresponding increase in the duration of the test. Cumulative Interruptions of more

than 4 hours require calling for repeat of trial operation or trial run.

Issues:

I (b) Whether the Central Commission is right in considering the COD of Barh Generating Unit-IV

w.e.f. 08.03.2016 instead of 15.11.2014 proposed by the Appellant?

II Whether the Central Commission is right in not exercising its power to relax under Regulation

54 of the Tariff Regulations, 2014 in view of the subsequent amendment to the Indian Electricity

Grid Code to provide for an interruption up to 4 hours?

Held:

Issue I. (b). It is well settled principle of law that when a statute requires a thing to be done in a

particular manner, it has to be done in that manner, and in no other manner. As such, COD of a

unit could be declared only after fulfilling the eligibility requirement prescribed under the Tariff

Regulations. Further, the Apex Court in Sasan case has also held that requisite tests for COD

declaration are must to perform without any waiver when public interest is involved. The Tribunal

accordingly held that the Commission has passed the impugned order after critical evaluation of

the facts and figures based on submissions and pleadings of all parties and has recorded cogent

reasoning for the same. Thus, any interference by the Tribunal is not called for.

Issue II. After critical evaluation of the submissions of both the parties, what emerges is that the

reference generating unit could not run at its full load/MCR for continuous 72 hours as required

under the Tariff Regulations, 2014. Besides, despite several trial runs, the unit could not attain the

requisite parameters of the regulations and developed several defects which were to be rectified

by the Appellant after the trial run. It is noticed from the findings of the Central Commission that

in spite of machine not passing through the trial test, the Appellant irrationally declared the COD

from 15.11.2014 and billed the beneficiaries at provisional tariff considering the machine to have

attained the COD.[9.13]



The Central Commission after careful evaluation of all the material placed before it found that

there does not appear sufficient ground which necessitates the exercise of its power under Section

54 of the Tariff Regulation, 2014 to relax the prerequisite conditions of Trial Run before

declaration of COD. Having regard to submissions and pleadings of both the parties and taking

note of the findings of the Central Commission, the Tribunal was of the considered opinion that

the instant case of the Appellant does not qualify for exercising the regulatory powers of the

Commission to relax the conditions which are required to be fulfilled before decelerating COD of

a generating unit. Hence, the Tribunal did not consider necessary to interfere in the decision of

the Central Commission in this regard. [9.14]

The Tribunal was of the considered view that the issues raised in the present appeal are devoid of

merits. Hence the Appeal filed by the Appellant is dismissed.


Jindal India Thermal Power Ltd. vs. Central Electricity Regulatory Commission & Ors.


Order in Appeal No. 82 of 2018 and IA No. 73 of 2019

Dated: 29.01.2019

Present: Hon’ble Mr. Justice N.K. Patil, Judicial Member; Hon’ble Mr. Ravindra Kumar Verma,

Technical Member

Background: The Appellant - Jindal India Thermal Power Ltd. (‘Appellant’) has filed the instant

appeal, under Section 111 of the Electricity Act, 2003 questioning the legality and validity of the

impugned Order dated 20.09.2017 passed in Petition No. 55/MP/2015 on the file of the first

Respondent - Central Electricity Regulatory Commission (‘Central Commission’).

The matter was heard with the Coram of two members only but when impugned Order dated

20.09.2017 was issued it emerged that Coram of three members have signed the impugned Order.

Appellant contends that the signing of the three members and releasing the order is contrary to

relevant Regulations of the Central Commission and hence cannot be sustainable and is liable to

be set aside.

Issues: Whether impugned Order dated 20.09.2017 passed in Petition No. 55/MP/2015 on the

file of the Central Electricity Regulatory Commission, New Delhi is sustainable in law?

Held: In the light of the facts and circumstances of the instant case and in view of the categorical

admission made by the Central Commission, the Tribunal was of the considered view that the

impugned Order cannot be sustainable and is liable to be set aside on the ground that the

impugned Order passed is contrary to the Regulations of the Central Commission and the matter

requires reconsideration afresh by the Central Commission and decide the same in accordance

with law. The instant Appeal was allowed in part. The impugned Order dated 20.09.2017 passed

in Petition No. 55/MP/2015 on the file of the Central Commission was set aside. The matter was

remitted back for reconsideration afresh with the direction to the Central Commission to pass an

appropriate order in accordance with law after affording reasonable opportunity of hearing to the

Appellant and the Respondent Nos. 2 and 3 and dispose of the matter as expeditiously as possible

taking into consideration that the matter was pending for adjudication between the parties for

several years. All the contentions of both the parties are left open. [14], [15], [16], [18]




Power Company of Karnataka Ltd. & Ors. vs. Central Electricity Regulatory


Review Petition No. 19 of 2015 and Review Petition No. 22 of 2015 in Appeal No. 108 of 2014

Dated 06.02.2019


Member

Background: The present Review Petitions have been filed Udupi Power Corporation Ltd. ('UPCL')

and Power Company of Karnataka Ltd. (‘PCKL’) for review of the Judgment dated 15.05.2015

passed by the Appellate Tribunal for Electricity (‘Tribunal’) in Appeal Nos. 108 of 2014, 119 of

2014, 122 of 2014 and 18 of 2013 ('Impugned Judgment')

The Review Petitioner UPCL in Review Petition 22 of 2015 has sought review of the Impugned

Judgment claiming errors apparent on the face of the record and material omissions by the

Tribunal in recording facts, evidence and substantive contentions urged by the Review Petitioner

during the proceedings. The Review Petitioner PCKL in its Review Petition 19 of 2015 is seeking

review of the Impugned Order passed by this Tribunal claiming errors apparent on the face of the

record in Appeal Nos. 108 of 2014, 119 of 2014 and 122 of 2014.

Issues:

In the Review Petition 22 of 2015

• Disallowance of Gross Station Heat Rate of 2400 kCal/kWh

• Disallowance of Rs. 141.91 crores on account of error in calculation of EPC cost

• Disallowance of costs due to reliance on erroneous report of Central Power Research Institute

('CPRI Report')

• Disallowance of the cost of performance guarantee of Rs. 87.44 crores

• Disallowance of Cost of Performance Guarantee of Rs. 41.33 crores claimed by LITL in respect

of BOP for enhancement of capacity for the Project

• Disallowance of other costs without providing adequate reasons

In the Review Petition 19 of 2015

I. Consideration of cost of Pro-rata increase for each of the Balance of Plant (BOP) items in the EPC

Cost

II. Erection, Testing & Commissioning expenses

III. Foreign Exchange Rate Variation (FERV)

IV. Capital expenditure towards staff colony v. Expenses forming part of original EPC cost - double

counting VI. Non-deduction of revenue earned over and above fuel expenses vii. Auxiliary

consumption

VIII. Interest during construction - unit no. 2

IX. Energy charges

Held:

Issue I. The Tribunal earlier reduced 50 kCal/kWh from gross Station Heat Rate (SHR) based on the

submission of Respondent No. 1 that the Review Petitioner itself had agreed to reduce gross SHR

by 50 kCal/kWh in 2005. [8.1] In view of the record, it is clear that there was no agreement on



reduction of GSHR by 50 kCal/kWh. Further, there is no such provision in the PPA regarding

reduction of GSHR by 50 kCal/kWh. The Tribunal relied on the submission made by PCKL which

has been proven to be an inference drawn from extant CERC Tariff Regulations and provisions of

the PPA. Further, it is relevant to note that both the parties after signing of the PPA had agreed

that tariff parameters will be determined by Appropriate Commission and there is no mention of

reduction of 50 kCal/kWh therein. It is also noted that the Respondent No. 1 did not raise this

issue before the Central Commission. Had there been such agreement, the Respondent No. 1

would have raised it before the Central Commission. [8.4]

In view of the Judgment of the Tribunal dated 08.11.2017 in Appeal No. 226 of 2016, it is clear that

once the Tariff Regulation is notified under Section 61 of the Electricity Act, 2003 by the Regulatory

Commission, it is bound to follow that. Accordingly, the review on this issue is allowed and SHR

applicable for UPCL plant shall be strictly as per Regulations of the Central Commission as agreed

by the Parties in the PPA without any such reductions. [8.6]

Issue II. The Tribunal in the Impugned Order had rejected the claim of Review Petitioner on three

grounds being (a) there was no submission made by Review Petitioner in this regard before the

Central Commission, (b) the Review Petitioner has not challenged the Order dated 03.06.2014

passed by the Central Commission in the Review Petition and (c) Tribunal did not find merit in the

claim of Udupi Power as the project's capital cost was allowed by the Central Commission after

analysing all the components of the power project. [9.2]

The Tribunal finds it appropriate to examine the analysis made by the Central Commission in the

order dated 03.06.2014. In fact, the Central Commission through its Order in Review Petition No.

14/RP of 2014 had rejected the claim of the Review Petitioner on the ground that it would dilute

the competitiveness of lowest bidder. In this regard, the Central Commission finds substance in

the submission of the Review Petitioner that even after allowing Rs. 141.91 Crores over and above

Rs. 3526.64 Crores approved by the Central Commission in Order dated 20.02.2014, the total cost

will come to Rs. 3668.55 Crores which is still lower by Rs. 19.80 Crores as compared to EPC cost of

Rs. 3688.35 Crores received from BHEL, Navyuga and Simplex.[9.6]

The Tribunal thus finds substance in the submissions of Review Petitioner that even if Rs. 141.91

Cr. is added to the capital cost as approved by the Central Commission in Order dated 20.02.2014,

it will work out to Rs. 3.95 Crore per MW which is well below the benchmark of Rs. 4.87 Crore per

MW and Rs. 4.54 Crore MW respectively for Unit 1 and Unit 2 as observed by the Central

Commission in its order dated 20.02.2014. Hence, the Tribunal allowed Review on this issue. [9.9]

Issue III (A). The Tribunal held that the cost of Performance Guarantee in the impugned order was

disallowed by the Tribunal after going through the submissions made by the Petitioner,

Respondents and the report of CPRI. In fact, the Tribunal had drawn an adverse interference on

the issue of nondisclosure of full details about earlier agreement dated 16.12.2006 entered into

between LITL and DEC in Para 53 of the impugned order. In view of the above, it was a considered

decision of the Tribunal to disallow cost of Performance Guarantee. It is pertinent to note that the

Review Petitioner has not highlighted any error on the face of the record but sought to reargue

the issue on merit. Accordingly, the issue is decided against the Review Petitioner and review is

rejected on this ground. [10.4]

Issue III (B). It was held in the impugned order that the performance guarantee charges of Rs.

41.33 crores claimed by LITL for extending performance guarantee in respect of BOP for enhancing

capacity of the generating station from 1015 to 1200 MW should not have been allowed by CERC



as additional capital cost has already been allowed for augmenting the capacity of various BOP

equipment’s. We have observed from the impugned order that the BTG package was standard 2

X 600 MW right from the beginning and this Tribunal disallowed cost of performance bank

guarantee of 87.44 crores for the main package. We note that CERC had allowed additional capital

cost for augmenting the capacity of various BOP equipment. The additional capital, therefore, cost

must be inclusive of the cost of performance guarantee charges of Rs. 41.33 crores. The Review

Petitioner has also not brought any new facts or break up of cost now in this regard before the

Tribunal. Therefore, no ground for review is made out. [10.9]

Issue III (C). It is relevant to note that the entire grounds, pleadings, arguments etc. made by the

Review Petitioner to contest this issue in this Review Petition were duly considered by the Tribunal

in detail while adjudicating the said Appeal filed by the Review Petitioner and passing the referred

judgment dated 15.05.2015. Neither any additional nor fresh ground has been made out by the

review petitioner now which otherwise, strengthen its pleadings in support of its intended review

of the judgment. Having regard to the considered decision of Central Commission which was

upheld by the Tribunal, there is no fresh case or sufficient ground made out by the Review

Petitioner to allow review in respect of this issue and hence, rejected. [10.12]

The Review Petition No. 19 of 2015 is partly allowed to the extent of that Issue No. 2 is decided in

favour of the Review Petitioner and Issue Nos. 1, 4, 5, 6 & 8 are decided against the Review

Petitioner. The issue nos. 3, 7 & 9 are not pressed by the Review Petitioner. [25]

Issue I. In the view of the Judgment of the Tribunal dated 08.11.2017 in Appeal No. 226 of 2016,

it is crystal clear that once the Central Commission has determined the tariff after comparing it

with the benchmark norm and that methodology has also been approved by the Tribunal, it is not

prudent for the Review Petitioner to challenge the methodology. Accordingly, the Appellant is

estopped from questioning the methodology adopted by the Central Commission. The Tribunal is,

therefore, not inclined to allow review as fresh adjudication is not permissible through a review

petition under the prevailing law. Accordingly, the Tribunal held that this particular issue requires

a fresh evaluation of merits and also, no special ground for review is made out. Hence, review

declined. [22.3]

Issue II. In the Impugned Order it was categorically held that the Tribunal has examined the capital

expenditure item wise and concluded that it is in agreement with the proportionate approach

adopted by the Central Commission. Accordingly, it was the considered view of the Tribunal to

uphold the decision of the Central Commission in this regard. It is therefore a natural corollary to

apply the proportionate principle to the capital cost based on the decision in Impugned Order.

Therefore, the Tribunal opines that the erection, testing and commissioning expenses shall also

be considered on proportionate basis corresponding to the revised capital cost approved in this

order. Thus, the Tribunal finds force in the contentions of Review Petitioner and holds that the

issue qualifies for review. Accordingly, answered this issue in favour of the Review

Petitioner.[22.4]

Issues IV, V, VI & VIII. The Review Petitioner has not brought to light any new facts or pointed out

error apparent in the decision of the Tribunal to strengthen its pleadings in support of its intended

review of the judgment. Hence, the Tribunal is of the considered opinion that review is not

admissible as prevailing law does not permit fresh adjudication under the garb of a review

petition. Hence, these issues answered against the Review Petitioner. [22.6]



Disposition: Review Petition No. 22 of 2015 is partly allowed to extent of: Issue Nos. 1 & 2, are

decided in favour of Review Petitioner and Issue No. 3 (A, B & C) is decided against Review

Petitioner.

Lalpur Wind Energy Pvt. Ltd. vs. Karnataka Power Transmission Corporation Ltd. &

Ors. (08.02.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 08.02.2019


Member

Background: The present Appeal has been filed by Lalpur Wind Energy Private Ltd. (‘Appellant’)

under Section 111 of the Electricity Act, 2003 challenging the Order dated 26.11.2015 (‘Impugned

Order’) passed by the Karnataka Electricity Regulatory Commission ('State Commission') in OP No.

32 of 2014 having denied the Appellant's claim of banked energy for the energy injected into the

grid from the date of commissioning of the power plant till the date of execution of the Wheeling

and Banking Agreement (‘WBA’). The State Commission also refused to allow roll over/carry

forward of such banked power for a period of one year. Instead, the State Commission by the

impugned order held that the Respondent licensees are liable to only pay Average Pooled Power

Purchase Cost for the average energy injected into the grid for a period of 15 days in respect of

the Wind Energy Generators of Groups A, C, D and E of the Projects and of 5 days in respect of the

Wind Energy Generator of Group B. It is alleged by the Appellant that the State Commission while

passing the impugned order has erred in ignoring the fact the Respondent Nos. 1-3 delayed the

execution of the WBA and have unduly benefited/enriched from the energy generated by a

renewable energy generator.

Issues:

I. Whether the State Commission has passed the Impugned Order in an arbitrary and

discriminatory manner in contravention of the provisions of the Electricity Act, 2003 as

well as Karnataka Electricity Regulatory Commission Regulations, 2004?

II. Whether the State Commission has rightly held that the Respondent licensees are liable

to pay only average pool power purchase cost for the energy injected into the grid and

that too for part of the total delay period in execution of the WBA?

Held: Issue I. Having regard to the contentions of both the parties and facts and circumstances of

the case in hand, the Tribunal finds that the provisional inter connection approval issued by

Respondent No. 1 to Appellant dated 26.11.2013 clearly stated that in the absence of necessary

approvals/permissions for banking of energy by the developer, Respondent No. 1 will not be

responsible for any pumping of power without contractual agreement. It is the contentions of the

Respondents that the Appellant was well aware of the fact since beginning that the energy being

injected into the grid without WBA or any other contractual agreement would be unscheduled

energy against which no claim whatsoever would be admissible. As such, the claim of the

Appellant under Contract Act is not relevant. In a catena of judgments including Indo Rama

Synthesis (I) Ltd. v. MERC [(2011) APTEL 77], the Tribunal has held that injection of energy without

any contractual agreement could lead to damaging consequences and, therefore, the same should

be discouraged.



The Hon'ble Supreme Court in the case of State of West Bengal vs B.K. Mondal and Sons held that

when services are imposed on, the Section 70 of the Contract Act (Obligation of person enjoying

benefit of non-gratuitous act) is not applicable and based on decisions of various judgments, the

State Commission also recorded same view in the Impugned Order. In the light of these facts, we

are of the considered opinion that the State Commission has passed the Impugned Order in

accordance with law considering various decisions of the apex court as well as the Tribunal and

has assigned cogent reasoning. The Tribunal does not notice any infirmity or perversity in the

order of the State Commission and thus, any interference of the Tribunal is not called for. [7.6]

Issue II. The reliance placed by the learned counsel for the Appellant on decisions in Fortune Five

Hydel Projects v. KPTCL & Ors. and Green Infra Wind Power Generation v. SLDC & Ors. (That held

that the ESCOM(s) are liable to pay generic tariff for the energy injected into the grid by the

generator from the date of commissioning of the Project to the date of signing of the WBA) is

uncalled for as the application for wheeling and banking of energy in these cases was made prior

to the commissioning of the respective projects and admittedly, there was a delay in executing

the WBA, which is not the case herein. Additionally, learned counsel for the Respondents pointed

out that the reliance of the Appellant on other judgments of this Tribunal is totally irrelevant as

the same were passed in different facts and circumstances having no matching similarity with the

case in hand.

The Tribunal finds it relevant to note that there is no force in the arguments of the learned counsel

for the Appellant regarding discrimination whatsoever. Consequentially, the Tribunal opines that

the State Commission has carefully analyzed the records and material placed before it and has

passed the Impugned Order in a judicious manner without being prejudice to any developer and

without any discrimination to the Appellant. Thus, any interference from the Tribunal on this

ground is not required. [8.3]

The Tribunal is of the considered view that the issues raised in the instant appeal No. 37 of 2016

are devoid of merits.


Century Textiles and Industries Limited. Vs. Central Electricity Regulatory

Commission & Ors. (13.02.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 13.02.2019


Technical Member

Background: The Appellant - Century Textiles and Industries Ltd. (‘Appellant’) has filed this instant

Appeal for setting-aside the Impugned Order dated 13.09.2017 passed by the Central Electricity

Regulatory Commission, New Delhi (‘CERC’) wherein the CERC had held that since the generating

plant of the Appellant was commissioned on 01.12.1994 and as per the 4th Amendment to the

REC Regulations, the Renewable Energy generating plants commissioned prior to 29.09.2010 are

not eligible for grant of REC for self-consumption and therefore the Appellant ceases to be eligible

for grant of RECs for power utilized for self-consumption with effect from the date of notification

of 4th Amendment to REC Regulations.



The ENMAS boiler of the Appellant was commissioned in 2011 and was connected to already

operating 21 MW Turbine (make 1994). The 21 MW Turbine is in operation since 1994 with ABL

Boiler and at the time of its commissioning there was no segregation of the biomass. Steam

produced by both the boilers i.e. coal fired as well as chemical recovery boilers was mixed in a

common header and this common steam was fed to all the TGs. In 2012, when MNRE categorised

black liquor as a renewable energy fuel, to avail benefit of RE scheme, the Appellant modified the

system and segregated steam produced by chemical recovery boilers and coal fired boilers. The

RE plant with ABL boiler and the ENMAS boiler connected to 21 MW TG was registered and

accredited in 2014.

Issues:

• Whether when the 21 MW TG set was enabled to generate electricity only by being connected

to ENMAS boiler commissioned in 2011, thereby constituting an independent generating unit,

the CERC was justified in holding that the Appellant was not covered by the control period,

i.e. 29.09.2010 to 31.03.2016 and hence not entitled to grant of RECs for self-consumption?

• Whether despite holding that the successful commissioning of the generating station would

be date on which it starts injecting electricity into the grid and when in the present case 21

MW TG set was enabled to inject electricity to grid by being connected with ENMAS boiler

commissioned in 2011, the CERC has not contradicted itself by declining the Appellant the

benefit of grant of RECS?

• Whether the RE plant was commissioned within the control period as defined in the fourth

Amendment dated 30.03.2016 to REC Regulations 2010 or outside the control period?

Held: After careful evaluation of relevant material available on the file, the Hon’ble Tribunal has

been of the considered view that the 1st Respondent/CERC has rightly justified in answering the

issue against the Appellant.

1. As per the facts submitted by the Appellant the ENMAS was commissioned in 2011 and at the

time of its commissioning there was no segregation of the biomass. Steam produced by both

the boilers i.e. coal fired as well as chemical recovery boilers was mixed in a common header

and this common steam was fed to all the TGs. As such there was no separate RE plant at the

time of commissioning of ENMAS boiler in 2011. It was only in 2012 when MNRE categorised

black liquor as a renewable energy fuel, to avail benefit of RE scheme, the Appellant modified

the system and segregated steam produced by chemical recovery boilers and coal fired

boilers. The RE plant with ABL boiler and the ENMAS boiler connected to 21 MW TG was

registered and accredited in 2014.

2. This is a rearrangement of the existing generating station and cannot be taken as a

commissioning of a new plant because the plant was already functional using both fuel coal

as well as black liquor for several years, even before 2012, even when ENMAS was

commissioned in 2011. Therefore, the Appellant has no case for registration of this RE plant

in 2011 on the basis of commissioning of ENMAS boiler.

3. It is evident from the definitions of ‘generating station’ as per Section 2(30) of the Electricity

Act, 2003 and ‘generating unit’ as per clause 2(l)(ii) of the Central Electricity Regulatory

Commission (Indian Electricity Grid Code) Regulations, 2010, that the generating station

comprises of many elements. The date of commercial operation of the generating station is

the date of commissioning of the generating station as a whole i.e. the date on which the

station starts generation of electricity and feed it to the grid.



4. Regarding the issuance of REC to the Appellant, as per the fourth amendment dated

30.03.2016 of the REC Regulation 2010, the issuance of REC is limited to only such RE plants

which have been commissioned between 29th September 2010 and 31st March, 2016. Since

this RE plant under reference had not been commissioned during the control period, as per

the amendment of RE Regulation in 2016 the RE plant under reference is not eligible under

the scheme and Renewable Energy Certificate cannot be issued to the Appellant plant. [7]


Omega Infraengineers Pvt. Ltd. vs. Punjab State Electricity Regulatory Commission

& Ors. (21.02.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 21.02.2019


Technical Member

Background: M/s. Omega Infraengineers Pvt. Ltd. (‘Appellant’) a Generating Company has assailed

the validity, legality and propriety of the Impugned Order dated 09.08.2017 passed by the 1st

Respondent/Punjab State Electricity Regulatory Commission (‘State Commission’) against the

appeal of the Appellant.

In a bid conducted by 3rd Respondent/ Punjab Energy Development Agency (‘PEDA’), the Appellant

was awarded a 4 MW Solar Project for which the 1st Respondent/State Commission executed the

Power Purchase Agreement (PPA) dated 31.03.2015. As per the PPA, the scheduled date of

commissioning (SCOD) was 30.01.2016. The generic tariff along with the PPA was approved by the

1st Respondent/State Commission which, among others, stipulated that a generic tariff order shall

be applicable up to 31.03.2015. The PPA stated that in case the commissioning period of the

project gets delayed, the tariff shall be determined by the 1st Respondent/State Commission.

The Appellant could not construct the Solar Project as per the terms and conditions of the IA/PPA

on account of final clearance and land use pattern and the project got delayed beyond the control

period ending 31.03.2015 owing to one or the other reasons, primarily due to change of location

of the land for three times at the request of the Appellant and obtaining various statutory

clearances/approvals from the competent authorities of the Respondents.

The Appellant had filed petition under section 86(1)(f) of the Electricity Act, 2003 for extension of

commissioning period for the project by the time period which was delayed by the Respondents

or due to force majeure events. It is the case of the Appellant that he got the clearance/approvals

after a delay has been caused because of slackness and inefficiency on the part of the 3rd

Respondent/PEDA being the nodal agency and the second Respondent/PSPCL.

The Respondents contended that the role of the 3rd Respondent/PEDA was that of a facilitating

agency only and the sole responsibility for getting final clearance in respect of the approvals

exclusively rested with the Appellant alone. The Respondents categorically stated that the

Appellant adopted casual approach for obtaining clearances and approvals from the Respondents

on one pretext or the other and it is an admitted fact that for the chosen project, the location has

been changed for more than thrice and he did not take effective steps to pursue the Redressal of



his grievances at different fora in a time-bound manner, which, in turn, resulted into a delay and

latches on the part of the Appellant in receiving the clearance.

Issues:

I. Whether 1st Respondent/State Commission was correct in holding Appellant responsible

for delay in commissioning of Solar Project without considering defaults on part of 3rd

Respondent/PEDA and 2nd Respondent/PSPCL?

II. Whether 1st Respondent/State Commission had acted beyond its jurisdiction by changing

tariff for delay in commissioning project and for cause attributable to nodal

agency/Government and whether tariff had been determined by way of computation

process as envisaged under relevant Provisions of the Act?

Held: The Tribunal did not find any incongruity or material irregularity or legal infirmity in the

impugned Order. The Tribunal held that the impugned Order passed by the 1st Respondent/State

Commission is in consonance with the preamble of the Electricity Act, 2003 and the Order is

balanced in nature and thereby a very lenient view has been taken by the 1st Respondent/State

Commission in the matter. The reasonable delay has been condoned in favour of the Appellant

which establishes beyond doubt that the reasoning assigned in the impugned Order is holistic. The

1st Respondent/State Commission has taken the balanced view to safeguard the interest of the

consumers as well as the Appellant.

With respect to the issues in hand, the Tribunal held that:

Issue I. After careful consideration of the record, what has emerged is that the Appellant has failed

to complete the project as per the IA/PPA on account of not getting timely clearances and

permissions from the competent authorities of the Respondents. Therefore, within the allotted

time, the Appellant could not complete the project in spite of sufficient time accorded for

achieving the target of the scheduled date of commissioning but it could not avail the benefit of

the fact that it had its own private land. First time, it is shown thereafter that the 3rd

Respondent/PEDA has sent a letter that the land is not standing in the name of the Company.

Thereafter, he transferred the same land in the name of the Company. After transferring when he

submitted the proposal, the 3rd Respondent/PEDA has taken immediate action for resolving the

impediments as and when reported by the Appellant expeditiously. The contention of the

Appellant is that the delay has been caused on the part of the Respondents for

clearances/approvals. If that period is exempted, his entitlement to the relief sought has got

neither any merit nor any substance in the case in hand.

The claim of the Appellant for extension of COD of the project lacks any bonafide and it appeared

from record that the 1st Respondent/State Commission had passed the Impugned Order after

critical evaluation of entire material on records and after considering oral and documentary

evidence and assigning valid and cogent reasons and taking into consideration case made out by

Appellant and Respondents. Reasoning given in Impugned Order was well-founded and well-

reasoned. Therefore, the Tribunal did not find any error or irregularity, nor any perversity in

Impugned Order. Therefore, the Tribunal was of considered view that interference by the Tribunal

was not called for. Hence, the Tribunal answered Issue no. 1 against the Appellant. Appeal

dismissed. [43], [47]

Issue II. In the impugned Order dated 09.08.2017, it is in specific and in clear terms stated that

the tariff so agreed could be applicable only when the projects are commissioned before

31.03.2015.



Appellant has miserably failed in notifying the force majeure events, particularly, as per the terms

and conditions of the IA read with the PPA and rather adopted a very liberal approach in pursuing

statutory approvals as well as soliciting intervention of the Respondents in resolving the issues

pending with various competent authorities of the Government Agencies/2nd Respondent PSPCL

and the 3rd Respondent/ PEDA.

The active construction period has actually been put to the tune of 10 months whereas the time

provided for commissioning of the project has been delayed substantially. It was the case of the

project developers that their projects are commissioned within the control period ending

31.03.2015 and the same is not in dispute. The tariff shall be re-determined by the 1st

Respondent/State Commission in line with the terms and conditions of the IA/PPA only. It is not

in dispute that the tariff for subsequent control period has been considered by the first

Respondent/State Commission based on the prevailing tariff discovered through the competent

bidding process.

The Tribunal held that ratio of the Judgment of the Tribunal in the Earth Solar Private Ltd. case

and that of the Supreme Court in the case of ‘Gujarat Urja Vikas Nigam Ltd. Vs. Solar

Semiconductor Power Company (India) Pvt. Ltd. & Anr’ is aptly applicable to the facts and

circumstances of the case in hand. It was held in Gujarat Urja Vikas Nigam case that the

Commission being a creature of statute cannot assume to itself any powers which are not

otherwise conferred on it. Further, extension of control period has been specifically held to be

outside the purview of the power of the Commission.

The Tribunal was of the considered view that having regard to its own earlier order and the terms

and conditions provided in the IA/PPA, the first Respondent/State Commission has passed the

impugned Order strictly in consonance with relevant provisions of the Electricity Act, 2003 and

the Regulations and considering all the aspects stated therein. Therefore, the Tribunal did not find

any incongruity or any material irregularity or any legal infirmity in the impugned Order. Thus, the

Tribunal held that interference by it was not called for. Hence, the Issue No. 2 was answered

against the Appellant accordingly. [44], [45], [46], [47]


Adani Gas Ltd. Vs. Petroleum & Natural Gas Regulatory Board & Ors. (28.02.2019 –

APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI [APPELLATE JURISDICTION]

APPEAL NO. 292 OF 2018 & IA NOS. 1382, 1383, 1384 & 1877 OF 2018 APPEAL NO. 323 OF 2018

& IA NOS. 1537 & 1536 OF 2018

Dated: 28.02.2019

Present: Hon’ble Mrs. Justice Manjula Chellur, Chairperson Hon’ble Mr. B.N. Talukdar, Technical

Member (P&NG)

Background: The present appeal (Appeal No. 292 of 2018) has been filed by the Appellant

challenging the result declared vide Press Release dated 14.09.2018 uploaded by the Petroleum

& Natural Gas Regulatory Board (‘Board’) in its website giving details of the successful bidders

under the 9th Round of bidding for City or Local Natural Gas Distribution Networks (“CGD

Networks”). The result was uploaded on 14.09.2018 by the Board in respect of various successful

bidders including Respondent Nos. 2, 3 and 4 for GA Nos. 62, 61 and 51 for the grant of



Authorization for laying, building, operating or expanding CGD Networks in the GAs of Chennai-

Tiruvallur, Kanchipuram District and Puducherry District respectively.

On 18.07.2018, the technical bids submitted by the respective bidders for the various GA’s

including the Project Areas were opened by the Board in the presence of bidders’ representatives.

On 23.07.2018, a note with the subject “Reasonability of Bidding Parameters” was moved for

approval of the members of the Board to encourage serious bidders and to avoid any unrealistic/

unreasonable bidding in terms of Clause 4.4.1 of the ACBD. Clause 4.4.1 of the bid documents and

also Addendum-1 issued by the Board showed that the Board decided to consider each bid on

case to case basis. Evaluation of each bid was to be decided against common criteria, which was

recommended on 23.07.2018. The report on Agenda Note dated 09.08.2018, recommended that

the highest bidders of GA 51, 61 and 62 were disqualified since their quote of PNG connections

were beyond 100% of the total households of 2011 census. This Note was approved by three

members out of four members of the Board. However, the Minutes of the Board dated 10.08.2018

indicated that the four members of the Board out of which three had approved Agenda Note,

changed their opinion so far as disqualification of highest bidders of these three GAs 51, 61 and

62. It’s also noticed from the affidavit of the Board filed on 09.11.2018 that the Board has correctly

applied the unreasonable low criteria to all the bidders whose bid was below 2%. However, with

respect to the bids which were beyond the limit of 100% of 2011 census, the Board thought it fit

to relax the criteria by calling the higher bidders for negotiation.

On 30.08.2018, Letters of Intent were issued by the Board to Respondent Nos. 2, 3 and 4 for the

Project Areas. The Appellant wrote to the Board on 06.09.2018 requesting for a copy of the

decision of the Board regarding issuance of LOIs for the Project Areas. Subsequently, Press Release

with the details of successful bidders including those for the Project Areas for the 9th CGD Bidding

Round was uploaded on the website of the Board on 14.09.2018.

The Appellant agitated and sought information by filing RTI, the methodology adopted by the 1st

Respondent or the process of selecting bidders as successful bidders for these 3 GAs in issue was

not made public. As a matter of fact, by 14.09.2018, the names of all successful bidders were

published on the website of the Board, except so far as the GAs in issue, there was no declaration

of successful bidders name on the website of the Board.

The Appellant has filed the present appeal on 24.09.2018 challenging the Board’s decisions on

various grounds. The main ground is that all the winning bidders viz Respondents No.2, 3 & 4

quoted the number of PNG connections more than 100% of household numbers as per 2011

census which should have been the maximum PNG connection numbers that the bidders could

have quoted and this criterion of 100% of 2011 census household numbers was evident from the

results of the 9th Round of bidding webhosted by the Board on 14.09.2018.

Issue: Was there uniform application of methodology in the procedure adopted by the

Respondent Board is to be seen?

Held: The Hon’ble Tribunal has held that the decision of the 1st Respondent Board in issuing LOIs

to the H1 bidders is not justified. Accordingly, they are quashed. The Hon’ble Tribunal has held

that the H2 bidders if otherwise qualified shall be considered for issuance of LOIs, if other terms

and conditions of bid are complied with by them. Accordingly, the appeals are allowed.

1. Application of vague and uncertain criteria, following different yardsticks to different cases in

the garb of exercising administrative authority by a statutory body i.e., 1st Respondent-Board

cannot be appreciated since it being constituted under a regulatory Act meant for protection



of interest of consumers and entities, it should not lack in transparency in its actions. Section

19 of Petroleum and Natural Gas Regulatory Board Act, 2006 (‘Act’) which deals with “Grant

of authorization” which is to be transparent. The selection process in selecting successful

bidders must be an objective process totally conforming to the process of transparency. If the

process is infected with discrimination, favouritism or nepotism, it is nothing but violation of

mandate of Article 14 of the Constitution of India. [138]

2. In terms of clause 4.4.1 of the invitation for bid, no doubt, a discretion lies in the Respondent-

Board to reject or accept any bid, but this does not empower them to act in an arbitrary

manner adopting the process, which is not transparent. Neither the bid documents nor 2008

Regulations authorize the Board to negotiate the bids of the different bidders to satisfy either

unreasonable quote being low or high by the bidders. If for any reason such methodology or

criteria is adopted by the Board, it must be uniformly applied to all bidders and should have

been applied to all bidders of 9 GAs, referred to above. [139]

3. Though there is no Clause/term or criteria which authorizes the Respondent Board to call the

bidders for any sort of clarification especially after opening of the technical and financial bids,

the Respondent Board has adopted this procedure only in respect of certain GAs which were

either unreasonably low or unreasonably high. It is seen that same treatment or procedure is

not followed in cases where there was single bid. Though in single bid cases, they blindly

accepted the bid they called, but they chose to seek explanation where they got two or three

bids for a particular GA. This clearly goes to show that there was no uniformity in the process

of selection made by the Respondent Board.[160]

4. It is seen that out of 86 GAs, in 9 or 10 GAs (including the three GAs in issue), this procedure

was adopted. The argument of the Respondent Board that one of the Appellants has secured

25% of the bids may not be a good ground to suspect the bona fides of the Appellants, if they

were to be successful in more number of bids, which is based on the composite score secured

by them. The same cannot be a ground not to consider the grievances/challenge made by the

Appellants in these appeals.[161]

5. No doubt, scope of interference by the Court in award of the contracts is very limited. One

has to see whether the selection process is not arbitrary or made with malafide intention. The

Court can definitely interfere with the process, if it finds absence of transparency and uniform

application of procedure. It is also well settled that the terms and conditions of the bid could

be without any reason or foundation, but selection process has to be fair and without any

discrimination. The freedom of statutory authority to award contract is not unlimited. Though

it has freedom to choose the best person in public interest, but the said freedom is not un-

canalized or un-restricted. It should act impartially and in accordance with the terms and

conditions of tender. The process in choosing the person should not be on the basis of un-

reasoned or un-principled procedure. [162]


Gail (India) Ltd. Vs. Petroleum & Natural Gas Regulatory Board & Anr. (28.02.2019 –

APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI [APPELLATE JURISDICTION]

APPEAL NO. 290 OF 2016

Dated: 28.02.2019


Member (P&NG)



Background: In this appeal, the Appellant, GAIL (India) Ltd. (‘Appellant’) has challenged under

Section 33 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (‘PNGRB Act’), the order

dated 30.08.2016 passed by the Petroleum and Natural Gas Regulatory Board (‘Board’) in Case

No. 68 of 2013 wherein the Board directed the Appellant to cease the alleged restrictive trade

practice (‘RTP’) of preventing shippers like the Respondent No.2, Gujarat State Petroleum

Corporation Ltd. (‘GSPCL’) the access of common carrier capacity of the DVPL-GREP & DBNPL

network of the Appellant and also imposed a civil penalty of Rs. 1 Lakh under Section 28 of the

Act.

GSPCL has alleged that the Appellant is trying to push GSPCL to a disadvantageous position by

asking it to sign the contract with the Appellant for booking the common carrier capacity for less

than 1 year period with a condition of 100% ship-or-pay basis instead of Reasonable Endeavour

(RE) basis.

The Appellant contends that the Board has first to arrive at a finding of RTP and thereafter has to

quantify the unfair gains by the entity in RTP and only then can a civil penalty be imposed on the

entity. RTP is provided under Section 11 (f) of the Act and applies to only notified Petroleum,

Petroleum Products and Natural Gas. The transportation of gas in a common carrier gas pipeline,

is however, governed by Section 11 (e) read with Section 11 (a) of the PNGRB Act. As per the

Appellant, since RTP is mentioned only in Section 11 (f), it cannot be applied to non-notified

product like natural gas. It is to be noted that RTP is defined in Section 2 (zi) with reference to

Petroleum, Petroleum Products and Natural Gas in the PNGRB Act and is not limited to only

notified product. GSPCL, however, contends that even if natural gas is not a notified product, the

RTP is still applicable as per Section 11 (e) of the Act.

The Appellant contends that the Affiliate Code of Conduct regulations apply to an entity for

maintaining this conduct in respect of its affiliate only; but the Appellant does not have any

affiliate as on date and as per Regulation 5A, 31st March, 2017 is the deadline for the entities to

separate the activity of transportation of natural gas from marking of the same by creating a

separate legal entity. The Appellant argues that the Appellant has the right to transport its own

gas through the pipeline as a first right as per Section 21 of the PNGRB Act, 2006. Moreover, the

Appellant has taken a risk by investing a huge amount of money in constructing and laying the

pipeline which obviously would need to be recovered during the economic life of the pipeline and

accordingly, the Act has provided for it in Section 21. As per the Appellant, transportation of gas

and marketing of gas are two different activities Marketing of gas is not a regulated activity

whereas transportation of gas is a regulated one.

On perusal of the submissions made by both the parties, the Board passed its order dated

26.12.2013 upholding the practice and system followed by the Appellant with regards to providing

common carrier capacity stating that practice and system followed by the Appellant with regards

to providing common carrier capacity is in accordance with the Act and the Regulations. The Board

further held that the Appellant has indulged into RTP by following discriminative approach against

some customers. The Appellant preferred an appeal before the APTEL against the order of the

Board dated 26.12.2013. APTEL thereafter on 28.11.2014, by an order dismissed the appeal of the

Appellant. The Appellant, thereafter preferred an appeal before the Supreme Court against the

order of the APTEL dated 28.11.2014. The Supreme Court vide its order dated 13.01.2016 while

not expressing any opinion on the merits of the matter disposed of the appeal by setting aside the

order of the APTEL dated 28.11.2014 and the Board’s order dated 26.12.2013 and remanded the

matter to the Board. Subsequently, the Board passed the impugned order dated 30.08.2016, inter



alia, imposing a civil penalty of Rs. 1 Lakh under Section 28 of the Act on the Appellant and hence

the present Appeal before this Tribunal.

Issues:

• Whether the Board has arbitrarily held that the Appellant has resorted to restrictive trade

practices by not allowing the shippers like the Respondent No.2 to book capacity on RE basis

in its common carrier pipeline network? Whether there has been any actual instance where

RTP conditions have been violated by the Appellant?

• Whether RTP is applicable in the case of natural gas which is not a notified product? If, say,

RTP is allowed, whether the civil penalty of Rs. 1.00 Lakh that has been imposed on the

Appellant has been as per the Scheme of RTP?

Held: The considered opinion of the Hon’ble Tribunal is that the Board should review its order

dated 30.08.2016. The Hon’ble Tribunal has held that the best course of action would be to

remand the matter to the Board to re-examine the matter in totality considering the relevant

Sections of the PNGRB Act, 2006 as well as the regulations prevalent particularly at the time of

the impugned order. The impugned order dated 30.08.2016 is set aside and the matter is

remanded to Respondent No.1 i.e. the Board.

1. The Hon’ble Tribunal has observed that the Board did not deal with the issue of RTP afresh

after setting aside the previous order of the Board and remanding it to the Board by the

Supreme Court. After going through the impugned order as well as pleadings and arguments

made by both the rival parties (Appellant and GSPL), the Hon’ble Tribunal has been of the

opinion that the matter of RTP needs to be re-examined in detail taking into account all the

arguments/pleadings of the Appellant and Respondent No.2 and to do so, the appropriate

authority is the statutory Board, the Respondent No.1.

2. The second issue linked to the issue of RTP is the civil penalty imposed by the Appellant on

Respondent No.2. The Appellant contends that the RTP resorted to by any entity/person

needs to be established/quantified in terms of the gain that the entity/person has enjoyed by

resorting to the RTP. This aspect, if applicable, is also not addressed by the Board in its

impugned order dated 30.08.2016.

3. The Board, in its impugned order dated 30.08.2016 has not dealt with this issue of

contradiction, but from the order, it is implied that RTP is applicable even if natural gas is not

a notified product. The issue, however, needs to be resolved with clarity and the appropriate

authority to give the clarity is the statutory Board, the Respondent No.1.


M/s Sahasradhara Energy Pvt. Ltd v. Uttar Pradesh Electricity Regulatory


Appeal No. 176 OF 2018

Date: 07.03.2019


Technical Member

Background: The Appellant has filed the instant Appeal against the impugned Order dated

12.02.2018 passed in Petition No. 1110/2016 by the 1st Respondent - Uttar Pradesh Electricity



Regulatory Commission (‘State Commission’). The State Commission lowered the tariff of the

Appellants project from Rs.7.02/unit to Rs. 5.07/unit without considering the costs incurred by

the Appellant and placing the Appellant at a similar footing with other developers/bidders even

though the Appellant has admittedly almost completed its project and is likely to be commissioned

within FY 2017-18.

A supplementary PPA had been executed by the Appellant under compulsion with Respondent No

2 - UP Power Corporation Ltd. (‘UPPC’), this aspect of the matter was specifically pointed out by

the Appellant to the State Commission but it had failed to take notice or consider its contentions,

whereas the cases of the similarly situated nine other bidders have been considered and fixed the

tariff @ Rs.7.02/unit. Taking into consideration the cost of the project incurred by the Appellant

incurred an amount of Rs. 37.36 crores as on 04.01.2018 i.e. Rs. 6.23 crore/MW contrary to Rs.

4.65 crore considered by the State Commission while adopting the tariff of Rs. 5.07/unit in the

impugned Order.

Issues:

A. Whether the State Commission has erred in not approving the tariff rates as discovered

in the competitive bidding process?

B. Whether the order of the Commissioner of police was passed in gross violation of the

principles of natural justice?

C. Whether the State Commission erred in lowering down the tariff of the Appellant from

Rs. 7.02/unit to Rs. 5.07/unit thereby causing grave prejudice to the Appellant? Order in

Appeal No. 176 of 2018 & IA No. 731 of 2018?

D. Whether the State Commission can go into the process of determination of capital cost

and thereafter reducing the tariff instead of adopting the tariff discovered through

competitive bidding under Section 63 of the Electricity Act, 2003?

E. Whether the State Commission has correctly evaluated the tariff in the present case?

F. Whether the State Commission had made applicable a correct tariff for the Appellant?

G. Whether the State Commission has acted in consonance with Section 86[1][e] and other

provisions of the Electricity Act and the object to promote renewable energy, in particular

solar energy?

Held: The Appellant submitted that, the Commission’s order be set aside and one more

opportunity be provided to the Appellant to make out its case before the first Respondent

Commission and the matter may kindly be remitted back for fresh reconsideration in accordance

with law.

Taking in view the peculiar facts, the Hon’ble Tribunal has held that the matter requires

reconsideration afresh and can be decided after affording reasonable opportunity of hearing to

the Appellant and the interested parties.

Disposition: Appeal allowed.

Mawana Sugars Ltd. V. Punjab State Electricity Regulatory Commission & Punjab

State Power Corporation Ltd. (08.03.2019 - APTEL); 2.Northern India Textiles Mills

Association v. PSERC IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No. 74 &113 of 2018

Date: 08.03.2019




Technical Member

Background: During the course of hearing of the matter, the parties had filed and submitted

detailed memos before the Tribunal. In light of the statements submitted in the Memo dated

28.01.2019 and Memo dated 08.03.2019 filed on behalf the Appellant - Mawana Sugars

(‘Appellant’) and the 2nd Respondent (‘PSPCL’), in Appeal No.74 be disposed of with direction to

the 1st Respondent - Punjab State Electricity Regulatory Commission (‘State Commission’) to pass

an appropriate order afresh in accordance with law after affording reasonable opportunity of

hearing to the Appellant, Respondents and the interested parties in the interest of justice and

equity.

Issues: Whether the State Commission has abused the process of law by passing the impugned

review order without conducting a public hearing, in complete violation of the principle of natural

justice?

Held: Keeping in view the facts and circumstances of the cases in hand and in the light of the

statements made in the memos filed by the Appellant and the 2nd Respondent in Appeal No. 74 of

2018, the Hon’ble Tribunal directed the Respondent State Commission to reconsider the matter

afresh and expeditiously as possible in the light of the statements made in the Memos dated

28.01.2019 and 08.03.2019.


Lanco Amarkantak Power Ltd. v. Haryana Electricity Regulatory Commission & Ors


R.P No.5 of 2018 in Appeal Nos. 107 and 117 of 2015

Dated: 13.03.2019


Member

Background: The instant Review Petition has been filed by Review Petitioner - Lanco Amarkantak

Power Ltd. (‘Review Petitioner/Lanco’) under Section 120 of the Electricity Act, 2003 for review of

the of the common Order dated 21.03.2018 passed by this Tribunal, in Appeal No. 107/2015 and

Appeal No. 117/2015 filed by Haryana Power Purchase Center (‘HPPC’) and Lanco, challenging the

Tariff Order dated 23.01.2015 passed by the Respondent - Haryana Electricity Regulatory

Commission (‘State Commission’) in Case No. HERC/PRO-05 of 2014. The Review Petitioner/Lanco

has filed the instant review, claiming errors apparent on the face of the record and material

omissions by the Tribunal in recording facts, evidence and substantive contentions relating to

Issue (E) - Computation of Energy Charges

Issue (G) - Non-Recovery of Fixed Charges Corresponding to Share of 5% Power Supplied to State

of Chhattisgarh.

The Review Petitioner contends that the Tribunal has duly noted that the Petitioner is obliged to

supply the said 5% power to the State of Chhattisgarh at variable charges in terms of the

Implementation Agreement executed between the said parties and therefore the Petitioner has

claimed fixed charges corresponding to its obligation to supply 5% power at variable costs to the



State of Chhattisgarh. During the earlier proceedings, the Petitioner had placed reliance on Tariff

Orders dated 26.05.2014 and 01.09.2016 issued by the Jharkhand State Electricity Regulatory

Commission (JSERC) in the matter of Adhunik Power and Natural Resources Ltd., wherein, in a

similar case, the Jharkhand Commission had granted fixed charges corresponding to the power

supplied at variable charges to the generator.

Issue: Whether impugned Judgment and Order under challenge need interference ?

Held:

Issue (E). Having regard to the considered decision of HERC for computation of energy charges

based on the linkage coal & other coal, which was upheld by the Tribunal, the Hon’ble Tribunal in

the Review Petition has been of the considered view that there is no error apparent on the face

of record and also, no fresh cause or sufficient/additional ground has been made out by the

Review Petitioner to re-adjudicate the matter and allow review in respect of this issue. Hence, the

Hon’ble Tribunal has not been inclined to accept the prayer of the Review Petitioner in as much

as review of Issue (E) is concerned. [4.9], [4.10]

Issue (G). The Hon’ble Tribunal has been of the considered view that there is an error apparent

on the face of the judgment dated 21.03.2018 of the Tribunal to the extent as pleaded by the

Review Petitioner on Issue (G). After taking a decision to that effect, the Hon’ble Tribunal has

critically analysed the provisions under the IA, PPA, JSERC Orders, various judgments and Govt.

policies etc. The Tribunal has observed that it is not in dispute that the Review Petitioner is

obligated to supply entire (100%) power to only two beneficiary states i.e. Chhattisgarh and

Haryana in proportion of 35% : 65%. As there is no other source or option to recover the 5% fixed

charges, Petitioner is entitled to claim the fixed charges for 5% power being supplied to home

state at variable cost through the balance 95% power from the beneficiary states in the same

proportion as to supply of power (35% : 65%) which works out to 1.75% from Chhattisgarh and

3.25% from Haryana. The Hon’ble Tribunal has accepted the contentions of the Review Petitioner

in the interest of justice and equity and having regard to the facts and circumstances of the case

in hand. [5.33]

Accordingly, the Review Petition 05 of 2018 in Appeal No. 107 of 2015 & 117 of 2015 is partly

allowed for the reasons stated above, so far it relates to Issue (G) only. In respect of the Issue (E),

for the reasons brought out above, review is not being allowed. [5.34]


New Ushanagar Co-Operative Housing Society Ltd. v. Merc & Tata Power Co. Ltd. &

Commissioner Of Police (15.03.2019 - APTEL)

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No.50 of 2017

Dated: 15.03.2019


Member

Background: The Appellant, New Ushanagar Co-Operative Housing Society Ltd. (‘Appellant’) has

filed the instant Appeal under Section 111 of the Electricity Act, 2003 against the Impugned Order

dated 05.05.2015 (‘impugned Order’) passed by the Respondent No. 1 - Maharashtra Electricity

Regulatory Commission (‘State Commission’) wherein it upheld the Order of the Respondent No.



3 - Commissioner of Police (‘Commissioner of Police’) dated 11.09.2014 (‘Police Commissioner

Order’) granting permission to Respondent No. 2 - Tata Power Company Ltd. (‘Tata Power’) to lay

transmission tower bearing 220 KV transmission lines in the Society Premises of the Appellant in

the interest of the public at large.

In 2007, State Commission granted Tata Power permission for reinforcement of the transmission

network of 220 KV between Trombay-Salsette-Dharavi (‘Transmission Project’) which would be

governed by the State Grid Code Regulation, 2006 under the Electricity Act 2003 (‘Act’). The scope

of work amongst others, inter alia, included dismantling of 2x110 KV circuits between Trombay-

Dharavi-Salsette and to construct new 4x220 KV circuits between Trombay-Dharavi-Salsette. The

Transmission Project was to be completed within 36 months w.e.f. January 2007 (i.e. by January,

2010).

Tata Power vide a letter dated 26.11.2009 to the Appellant proposed to replace the existing Extra

High Voltage (‘EHV’) Transmission Tower under existing Right of Way (‘ROW’) in Bhandup area.

Further stating that the existing tower which is in the Society Premises has outlived its life and will

be replaced with a new tower in the alignment of existing locations, thereby increasing the existing

transmission capacity from 110 KV to 220 KV. The Appellant was opposed to construction of the

new tower citing that it would adversely affect the health of its residents and further requested

that Tata Power to furnish all the statutory clearances. Thereafter, Tata Power filed an application

before Commissioner of Police, for granting orders to enter the Society of the Appellant and grant

permission to replace the existing transmission lines within the premises of the Society. Pertinent

to be mentioned herein; Commissioner of Police by virtue of the of the powers conferred upon

him via Section 16(1) read with Section 34 of the Indian Telegraph Act is authorised to adjudicate

matters pertaining to place and maintain telegraph lines and posts in case of property other than

that of a local authority.

In the above case, the Commissioner of Police, vide its letter dated 24.06. 2013 stated that the

Tata Power along with the Appellant to attend the hearing on 26.06.2013 to solve dispute. The

Appellant vide its letter dated 03.07 2013 to Commissioner of Police informed that as per the

Special General Body Meeting of the Society, the Society and the owner of the Society Premises

are not willing to give the Tata Power the ROW for erecting a new tower in the Premises of the

Appellant.

The Commissioner of Police being unconvinced by Tata Power’s reply assigned the Director of IIT

Bombay with the task of carrying out feasibility study of the transmission lines and proposed tower

at the Society. Relying on the above study, the Commissioner of Police allowed Tata Power’s

application, granting permission to erect the new transmission tower in the Society.

Pertinent fact to be mentioned herein; that all hearings/ meetings, discussions were held before

Dr. Satya Pal Singh, then Commissioner of Police. However, the Police Commission Order was

pronounced by Mr. Rakesh Maria who was later appointed as the Commissioner of Police on

January 1, 2014. Mr. Rakesh Maria did not conduct any rehearing in the matter and the Appellant

was not called upon to submit its case before pronouncement of Police Commissioner Order.

The Appellant filed a Writ Petition before the Bombay High Court which was later withdrawn by

the Appellant on 23.09.2014. Thereafter, the Appellant approached State Commission on

24.09.2014 requesting for an urgent interim relief.

State Commission vide impugned Order dated 05.052015 states that Commissioner of Police had

taken due consideration in examination of all the documents put forth before him. Aggrieved by



the Order the Appellant sought relief before the High Court of Bombay vide W.P. 2544 of 2015

wherein the High Court suggested that there exists an alternate remedy and hence the Appeal

before this Tribunal

Issues:

• Whether there was a violation of the principles of Natural Justice, when the New

Commissioner of Police did not assign an opportunity to the Appellants to be heard?

• Whether the Proposed New Tower No. 88 has any health hazards to the members of the

Society?

• Whether the Police Commissioner was right in granting Respondent No. 2 the right to erect

transmission tower in the Society Premise of the Appellant for which no tower exists at

present?

• Whether the Police Commissioner was right in taking into consideration the IIT submissions

when the same were not legally binding

• Whether New Ushanagar can obstruct Tata Power from constructing Transmission Tower

No.88 of the 220 kV TrombaySalsette-Dharavi Transmission Line within the Society premises

in the facts and circumstances of the case?

• As a sequitur, whether New Ushanagar’s can lawfully claim a quantum of compensation over

and above its entitlement in terms of GoM Resolution dated 01.11.2010?

• Whether the Respondent No. 1 was right in upholding the Police Commissioner Order dated

September 11, 2014?

• Whether the Respondent No. 2 has the ROW and the authority to erect the Proposed New

Tower No. 88 in the Society Premise of the Appellant?

I. Whether the State Commission was right in upholding the Order of the Police

Commissioner allowing the Tata Power to erect 220 KV transmission tower in the premises

of the Applicant's Society and the impugned Order is in violation of the principles of

Natural Justice?

II. Whether the Appellant is obligated to provide ROW for the transmission line under the

statute and entitled to the adequate compensation in lieu of the same?

Held:

Issue I. The Hon’ble Tribunal has held that the orders dated 11.09.2014 (passed by the

Superintendent of Police), order dated 05.05.2015 passed by the State Commission (except for

some procedural oversights) has been passed in accordance with law and the principle of Natural

Justice.

Appellant is entitled for the full compensation in accordance with Section 67 (3) of the Act as per

the GoM resolution dated 31.05.2017 for the footprint/foundation area of the towers as well as

ROW area spread under the overhead conductors.

On the Principles of Natural Justice, the Tribunal has held that it opines that before passing the

said order, the new Commissioner of Police ought to have invited both the parties for rehearing

and then only pass the order in accordance with the settled principle of law.

Regarding location of the tower in the premises of the Appellant, the Hon’ble Tribunal has noticed

that the transmission licensee has to comply with a number of statutory clearance/provisions as

such safety regulations of CEA, Railway Regulations, 1987, DC Regulations, 1991 of Mumbai etc.

relating to the location, clearances and other associated provisions. As such, the towers would



need to be located after consideration of all such factors and have to be installed wherever it

becomes technically feasible and also, taking into account least inconvenience and distress to

owners of the area/premises involved.

The Hon’ble Tribunal further held that the lines would not pose as a health hazard to the members

of the society due to electromagnetic radiation because of the fact that adequate horizontal and

vertical clearances ensure, in the safety regulations specified by CEA, to nullify the effect of EMR

whatsoever.

As a matter of fact, the ROW cannot be denied/prevented but at the same time the transmission

route has to be meticulously planned so as to minimize the inconvenience/distress to be caused

to the persons concerned and additionally, adequate compensation has to be paid as per the

prevailing rates provided under the Government notification/resolution. Section 67 (3) of the Act

provides that full compensation is payable for any damages, detriment or inconvenience caused

in laying of the transmission lines. To facilitate the application of compensation in line with the

provisions of the Act.

Disposition: Appeal partly allowed.

JSW Energy Ltd. Vs. Maharashtra Electricity Regulatory Commission & Anr.



Dated: 15.03.2019


Technical Member

Background: The Respondent No.3 initiated a Bid under the competitive bidding process. For

procurement of Electricity, the Appellants were the successful Bidders and entered into a PPA

dated 23.02.2010 with the Respondent No. 2 for supply of 300 MW of power. Under the PPA the

Appellant was to supply power within 48 months. Due to power shortage in Maharashtra, the Bid

Documents, including the PPA, were modified by the Respondent No. 2 and a provision for

payment eligible for an incentive of 16 paise/unit on the actual supply of units to MSEDCL. r. After

negotiations the Appellant and Respondent No. 2 initialled the PPA on 15.01.2009 subject to

Regulatory Approvals. The Board of Directors of Respondent No. 2 vide resolution dated

16.04.2009 authorized the Respondent No. 2 to procure power from the Appellant at the Tariff

quoted by the Appellant. Thereafter, the State Commission vide its order dated 27.11.2009

approved the PPA with certain modifications.

Appellant was paid incentive for September 2010 to December 2012 by the Respondent No. 2, for

early supply of power, in accordance with Article 4.4.7 of the approved Power Purchase

Agreement.

On 29.06.2015, the Respondent No. 2 took a stand that the applicable provisions of the PPA in

relation to payment of incentive had been ‘inadvertently interpreted’ by it, therefore incentive

paid by them for the period October 2010 to December 2012 was now to be refunded.

Respondent No. 2 on 11.07.2016 threatened the Appellant to unilaterally adjust a sum of Rs. 21.37

crore from the tariff bills, being the amount of incentive paid inadvertently. Owing to which the



Appellant filed a petition before the Commission, however this petition was dismissed,

Respondent No. 2 was permitted to adjust the sum for tariff bills.

Issues:

• Whether the stand taken by Respondent 2 that the applicable provisions of the PPA in

relation to payment of incentive had been ‘inadvertently misinterpreted’ by it?

• Whether the State was right in permitting Respondent No.2 to adjust the sum of Rs 21.37

crore for Tariff bills?

Held: The Tribunal has held that:

1. The Power Purchase Agreement including the relevant provision for payment of

incentives and also the incentive table were approved by the State Commission and the

Respondent No.2/MSEDCL paid incentives to the Appellant/JSW as per the approved

Power Purchase Agreement

2. The payment by the Respondent No.2/MSEDCL to JSW was thoughtful decision and was

not a mistake.

3. The claim of recovery by the Respondent No.2/ MSEDCL from the Appellant/ JSW is

beyond the period of limitation and therefore barred under the law.

4. The State Commission does not have exclusive jurisdiction for the interpretation of the

contractual clauses of the Power Purchase Agreement.


Ultratech Cement Ltd. v. Gujarat Electricity Regulatory Commission & Anr.

(15.03.2019- APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)



Technical Member

Dated: 15.03.2019

Background: The Appellant is and engaged in the production of cement. It is an EHV Consumer of

PGVCL who is supplying power to the Appellant at 220 KV having Contract Demand of 17500 KVA

and connected to transmission network of the State Transmission Utility (STU) viz. GETCO at 220

kv Voltage Level. The Appellant also has a captive power plant of 92 MW capacity for

supplementing its requirement of power and using Open Access facility as per regulation for sale

of its spare/Standby power if and when such surplus power is available.

Respondent No. 2 who was recovering Transmission charges based on energy actually scheduled,

has recovered additional Transmission charges for the same power transactions illegally after a

period of 2 years for the periods of Short-trades and Non-trades periods in respect of Short-Term

Open Access (STOA) consumers. Respondent No.2 has retrospectively recovered the charges on

the basis of assumption that the No Objection Certificate given for the capacity limited under the

NOC is the capacity reserved for the Appellant whereas in fact according to Open Access

Regulation Notification 3 of 2011, capacity is reserved for Long Term Open Access (LTOA) and

Medium Term Open Access (MTOA), while for the Short Term Open Access (STOA) for collective

transactions in particular, it is considered as permission only for operation if and when the

capacity is available after allowing (i) the use of capacity in priority by LTOA first, (ii) MTOA and



(iii) by STOA under bilateral contracts. Whether Order is suffering from infirmity overlooking

plain and unambiguous decision under MOM dated 24.11.2011 of GERC and CERC Regulations?

Issues: Whether Respondent Commission can allow SLDC to raise bills after a period of over 2

years adverse to its own ruling in MOM dated 24.11.2014 and against CERC Regulations?

Held: The Tribunal held that; the Appeal is devoid of any merits, hence dismissed thereby

upholding the Order dated 08.09.2017 passed in Petition No. 1558 of 2016 passed by the

Respondent Commission.

1. As per GERC Open Access Regulations, second Respondent/ SLDC is vested with the power to

collect the transmission charges and is entitled to recover transmission charges for the open

access granted as per the GERC Open Access Regulations which provided for transmission

charges on maximum capacity reserved. 62. In the instant case, the second Respondent/ SLDC

has only collected the transmission charges as per the GERC Open Access Regulations and

Tariff Orders passed by the first Respondent/ GERC. It is significant to note that, if by

inadvertence, there was under-recovery of the amounts; the differential amount can be

recovered subsequently by raising corrected invoices/supplementary invoices. Therefore, the

obligation of the Appellants/ short term open access customer to pay the transmission

charges as per the GERC Open Access Regulations and Tariff Orders. They cannot deny the

liability merely because the invoice was raised subsequently. The invoices raised by SLDC are

not invalid merely because they were raised subsequently This is particularly when the claim

for transmission charges had not been time barred. There had been an under-recovery of the

transmission charges for the relevant period and the second Respondent/SLDC had sought to

recover the said amount. The second Respondent/SLDC cannot be prevented from recovery

of legitimate dues. Therefore, the contention of the Appellant claiming application of

promissory estoppel is misconceived and there was no application of such concept of estoppel

in the instant case on the ground that the Appellant had not raised the issue of doctrine of

estoppel/ promissory estoppel in the Petition before the State Commission or even in the

Memorandum Appeal before this Tribunal. It is a well settled law laid down by the Hon’ble

Apex Court and by this Tribunal in hosts of judgments that the foundation has to be laid in the

Petition itself by invoking the doctrine of estoppels.


Tata Power Company Ltd. – Distribution Vs. Maharashtra Electricity Regulatory



Dated: 18.03.2019


Member

Background: Respondent No.2, HPCL, is a Government of India Undertaking engaged in the

refining and marketing of petroleum products, with total current demand of 57.5 MW. HPCL has

been maintaining a Contract Demand of 17500 kVA with Appellant and has also been meeting its

remaining demand from group captive arrangement through Open Access from Sai Wardha,

Respondent No.3.



Issues: Whether the 110 kV HPCL Feeders are part of the Distribution System of TPC-D or can

qualify as Transmission Lines in terms of the statutory framework and in the facts of the present

case? Whether the erroneous submission of TPC- regarding 110 kV HPCL Feeders in the

transmission licence No.1 exempt HPCL from payment of wheeling charges?

Held:

1. The Hon’ble Tribunal has held that the judgement dated 14.12.2012 in Appeal No. 30 of 2012

OPTCL vs. OERC are similar to the present Appeal at hand and therefore find that the issue

framed in the said judgments and ruling of this Tribunal are squarely applicable to the issue

involved in the present Appeal. It is crystal clear from the aforesaid judgment that an

arrangement for stepping down electricity at consumers installation (i.e. consumers sub-

station) cannot be held as “sub-station”, as defined in Section 2(69) of the Act since the said

arrangement is not meant for further transmission or distribution of electricity. It is relevant

to note that 110 kV HPCL Feeders are connected from the Trombay Generation Station Bus

Bar to HPTCL installation at its premises for primarily use for distribution/ supply of electricity

to HPCL and are an essential part of TPC-D Distribution System without which HPCL could not

receive power supply for the desired load. Undisputedly, these feeders from their inception

are being used for supplying electricity to consumer/ HPCL and hence, are integral part of the

TPC-D Distribution System. The Technical Regulations framed by CEA defining level of voltage

for distribution and transmission heads are generic in nature and voltage level for supply of

power are decided keeping in view the techno-economic criteria and other commercial

parameters. As held by this Tribunal in OPTCL case, there is no embargo that the distribution

network of a distribution licensee cannot include a line at 110 kV level which is primarily

meant for distribution of electricity. Moreover, as provided in the Act, the distribution can be

undertaken at high voltage levels forming High Voltage Distribution System.

2. State Commission was to determine the charges for use of 110 kV line in the distribution tariff

order, the same ought to have been separately determined as EHT cost and EHT wheeling

charges, which would be based on the cost of the 110 kV lines. This would obviously be lower

than the 33 kV wheeling charges and would be the same, irrespective of which legal entity

owns and operates the said line. Thus, after deciding that the said 110 kV lines connecting to

HPCL are part of the distribution network of TPC-D, the Hon’ble Tribunal considers that it

would be prudent on the part of the State Commission to determine wheeling charges at EHT

level (110 kV) along with computation of wheeling charges at LT/HT levels so that the visible

disparity is appropriately addressed.


JK Minerals Vs. Madhya Pradesh Electricity Regulatory Commission & Ors.

(19.03.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No. 21 OF 2018

Dated: 19.03.2019


Technical Member

Background: Appellant herein, filed a Petition before Respondent Commission for non-clearance

of short term open access of power under Regulation 9(1) of the MPERC (Conduct of Business)

Regulations, 2004 read with Regulation 8(40) of the MPERC (Terms and conditions for Intra State



open access in Madhya Pradesh) Regulations, 2005 and contended that, there will be adjustment

of units only in the bills of M/s Indore Treasure Island Pvt. Ltd. and no additional load shall be

required to be supplied to it through long term open access.

Issues: Whether the impugned Order dated 15.09.2017 passed in Petition No. 22 of 2017 on the

file of the Madhya Pradesh Electricity Regulatory Commission, Bhopal, 1st Respondent herein, is

sustainable in law?

Held: After careful perusal of the reasoning assigned in para 7 of the impugned Order dated

15.09.2017, as extracted above, it is manifest on the face of the order that the same is cryptic in

nature neither the impugned order does contained any discussion nor any valid reasons while

coming to the conclusion for rejecting the claim of the Appellant contrary to the case made out

by the Appellant and also contrary to the relevant material available on record.

The Hon’ble Court has been of the considered view that the impugned Order cannot be

sustainable and is liable to be vitiated on the ground that the impugned Order passed by the 1st

Respondent/ MPERC is not a speaking order and it would suffice this Tribunal to meet the ends of

justice, pass an appropriate order without going further into merits or demerits of the case in the

interest of justice and equity.


Inland Power Ltd. Vs. Jharkhand State Electricity Regulatory Commission & Ors.



Dated: 25.03.2019

Present:

Background: The Respondent Commission, had undertaken True-up of ARR for FY 2014-2015 and

APR for FY 2015-2016 and ARR and Tariff determination for FY2016-2017 to FY 2020-2021 for the

Appellant.

According to the Appellant that, Respondent Commission has made certain errors while truing up

the financials for FY 2014-15 and there is an error in the computation of the amounts and the

figures adopted by Commission. It has also erred in not approving the interest and finance charges,

particularly the interest rate of the loans for FY 2014-15 in terms of the audited accounts as

required by the JSERC Tariff Regulations, 2010. The Commission has also erred in approving the

weighted average landed price of secondary fuel as Rs. 52,868 per kilo litre as against the actual

price of Rs. 56,464 per kilo litre, even though the bills were submitted. At the time of true up the

actual cost is taken for the oil, as against the cost for the preceding three years taken initially.

Appellant has filed all the details with relevant material and certified accounts with the Auditors

Report, which has neither considered nor taken note of the relevant material made available.

Commission has committed grave error by not considering the relevant regulations in respect of

debt equity ratio and interest and financing charges as per Regulations 7.13 & 7.14 and

Regulations 7.19 & 7.23 respectively.

Issues:



• Whether the State Commission is justified in dismissing the Review Petition merely

because of a small delay of 25 days in filing the Review Petition without even going into

the merits of the case?

• Whether the State Commission erred in not approving the actual interest and finance

charges incurred by the Appellant in FY 2014-15?

• Whether the impugned order passed by the Respondent Commission in so far it relates to

the interest on loan and the cost of secondary fuel is sustainable in law?

Held: It emerges from the impugned order that there is neither any reason nor discussion nor

findings, in short, a cryptic order has been passed by the Respondent Commission, which cannot

be sustainable by any stretch of imagination, and thus, is liable to be vitiated without going any

further into merits or demerits of the case.

Regarding cost of secondary fuel, we do not find any justification to accept the reasoning assigned

by the Commission. It is purely an arithmetic error and are contrary to the relevant Regulations

applicable to the facts and circumstances of the case in hand. Taking these facts into

consideration, the impugned Order dated 16.05.2017 is liable to be set aside so far it relates to

the reliefs sought in the instant appeal only.

The matter stands remitted back to the Commission for re-consideration.


Mahur Foods and Beverage Vs. Gulbarga Electricity Supply Company Ltd. & Anr.



Dated: 26.03.2019

Present:

Background: During the course of the matter, the Appellant submitted that in the instant appeal,

being Appeal No. 122 of 2018, be disposed of reserving liberty to the Appellant to file a review

petition for reviewing the impugned Order OP No. 45/ 2017 passed on 05.12.2017 by the

Respondent Commission. He further urged that all grounds and contentions raised in this Appeal

be left open.

Issues:

• Whether the Hon’ble KERC has erred in holding that the Respondent was entitled to

unilaterally modify the tariff and conditions specifically agreed upon in the PPA, on the

basis of a Scheme/ Guidelines, that came into existence much after the execution of the

PPA, in spite of there being no delay on the part of the Appellant in completing the plant?

• Whether the Hon’ble KERC erred in coming to the conclusion that the extension of time

by the Respondent vide its letter dated 19.2.2016 was to be set aside when the said letter

dated 19.2.2016 as also the extension was not challenged by anyone

• Whether the Hon’ble KERC has not appreciated that the unilateral modification of the PPA

is contrary to the judgment of the Supreme court of India in Gujarat Urja Vikas Nigam Ltd.

Vs. EMCO Ltd. and Anr, reported in (2016)11 SCC 182?



Held: In the light of the submissions of the Appellant, the Tribunal was pleased to dispose of the

Appeal reserving liberty to the Appellant to file a review petition for reviewing the impugned

Order dated 05.12.2017 passed in OP No. 45/ 2017.

Disposition: Appeal disposed reserving liberty to Appellant to file a review petition

Bagyodya Vs. Gulbarga Electricity Supply Company Ltd. & Anr. (26.03.2019-APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 26.03.2019

Background: This Appeal is filed by Bhagyodya Motors Private Ltd against the Impugned Order

dated 12.12.2017 passed in OP No. 28/ 2017 by the Respondent Commission. During the course

of the Appellants submissions before the Tribunal the Appellant submitted that, the instant

appeal, being Appeal No. 170 of 2018, may be disposed of reserving liberty to the Appellant to file

a review petition for reviewing the impugned Order dated 12.12.2017 passed in OP No. 28/ 2017.

Issues:

• Whether the Hon’ble KERC has erred in holding that the Respondent was entitled to

unilaterally modify the tariff and conditions specifically agreed upon in the PPA, on the basis

of a Scheme/ Guidelines, that came into existence much after the execution of the PPA, in

spite of there being no delay on the part of the Appellant in completing the plant?

• Whether the Hon’ble KERC erred in coming to the conclusion that the extension of time by

the Respondent vide its letter dated 19.02.2016 was to be set aside when the said letter dated

19.02.2016 as also the extension was not challenged by anyone?

• Whether the Hon’ble KERC has not appreciated that the unilateral modification of the PPA is

contrary to the judgment of the Supreme court of India in Gujarat Urja Vikas Nigam Ltd. Vs.

EMCO Ltd. and Anr, reported in (2016)11 SCC 182?

Held: In the light of the submissions of the Appellant, the Tribunal was pleased to dispose of the

Appeal reserving liberty to the Appellant to file a review petition for reviewing the impugned

Order dated 12.12.2017 passed in OP No. 28/ 2017.

M/s JSW Energy Ltd. & Ors. Vs. Maharashtra Electricity Regulatory Commission &

Anr. (27.03.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 27.03.2019

Present: Hon’ble Mr. Justice N. K. Patil, Judicial Member; Hon’ble Mr. Ravindra Kumar Verma,

Technical Member

Background: The Appellants has filed the present Appeal against the Impugned order dated

23.08.2017 passed by the MERC. Appeal has submitted that the Events of Change in law.

Issues:



• Whether in view of the clear finding that change in law events have occurred which have

resulted in increased operational costs to the Appellant, the State Commission could have

declined to grant relief for the same in relation to O&M expenses?

• Whether in terms of the PPA, there is no correlation between the quoted bid tariff and

computation of impact of change in law to restore the Appellant to the same economic

position as if the change(s) in law have not occurred?

• Whether the Appellant is entitled to be restored to the same economic position, as if the

change(s) is law had not occurred, in relation to O&M expenses?

• Whether the computation of the impact of change(s) in law in relation to O&M expenses

ought to be based on the actual increase in the costs incurred by the Appellant under the

O&M head, as a result of the change in law events?

Held: Tribunal has held; the Appeal is allowed and the Impugned Order dated 23.03.2017 passed

in Case No. 117 of 2016 so far as it relates to applicability of compensation for change in law to

O&M expenses on the file of the first Respondent/Maharashtra Electricity Regulatory

Commission, Mumbai is hereby set aside. The matter is therefore remitted back to the

Respondent Commission. The matter is therefore remitted back to the Respondent Commission.


M/s. JSW Steel Ltd. & Ors. Vs. Maharashtra Electricity Regulatory Commission &

Anr. (27.03.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No.311 & 315 of 2018

Dated: 27.03.2019


Member

Background: Appeal No. 311 has been filed by JSW, whereas Appeal No 315 has been filed by Sai

Wardha. Both parties have raised parallel contentions. Both Appeals have been filed against the

Impugned order dated 12.09.2018 passed by the Respondent Commission in a petition for Mid-

Term Review of MSEDCL, for truing up of ARR for FY 2015-16 and FY 2016-17, provisional truing

up of ARR for the FY 2017-18 and revised projections of ARR for the FY 2018-19 and FY 2019-20.

The Commission had gone ahead and levied additional surcharge of Rs. 1.25/- per unit with effect

from the date of impugned order on 4 captive users of Group Captive Power Plant consumers

totally ignoring its own order dated 03.11.2016 in Petition No. 48 of 2016. The Appellants contend

that the State Commission ought not to have taken a contrary stand without considering the

objections raised by various stakeholders/interested parties during the hearing, since in the Order

dated 03.11.2016, the State Commission had not decided any factual issue but restricted to the

control period of FY 2016-17 to FY 2019-20 by reopening the issue.

On the contrary, it interpreted the Electricity Act for the applicability of provision of levying

additional surcharge for captive consumers. Therefore, according to the Appellants the impugned

order deserves to be set aside since the decision of the State Commission dated 03.11.2016 was

accepted by MSEDCL.

The Appellants have further contended that captive generating plant refers to use of electricity

generated by the captive power plant for its own use, there is no sale of electricity by one person



to another. Primarily, the case where a person who generates electricity for his own use in its own

captive generating plant, is not attracted to Section 42 (4) of the Act. Captive generating plant as

defined in Section 2 (8) of the Act read with Rule 3 of the 13 Electricity Rules of 2005 (“the Rules”)

clearly indicate that this applies to Group Captive Users also which could be an association of

persons or a society. Unless the essential ingredient of sale of electricity exists, it cannot be supply

of electricity, therefore in order to attract a person with the levy of additional surcharge by

applying the scope of Section 42 (4), there has to be sale of electricity.

Issues:

• Whether additional surcharge under section 42(4) of the act can be levied on captive

consumption?

• Whether distinction between captive users of the group captive power plant and other captive

users is against the provisions of Rule 3 of the Act?

• Whether the order violates the principles of natural justice?

• Whether the mid-term review order imposing levy of additional surcharge on captive users of

group captive power plants is without jurisdiction under the statute and the applicable

Regulations?

• Whether State Commission having admitted in its order dated 03.11.2016 that statute does

not permit levy of additional surcharge on captive consumers can now proceed to exercise

jurisdiction solely on the basis of Regulation 14.8 of the Open Access Regulations?

Held:

1. The Tribunal has held that it is clear that once the captive user or members of special purpose

vehicle or members of association satisfy the conditions at (a) and (b) of sub-rule (1) of Rule 3

of Rules 2005, they cannot be treated as consumer or class of consumers who receive supply

of electricity in normal course of business. A separate class is carved by fiction of law i.e.,

captive user/ users or consumers by complying with certain conditions. As long as the

conditions to become captive consumer exists and all requirements are complied with, they

are captive consumers consuming electricity generated by captive generating plant, therefore

it is self-consumption.

2. Statute and the rules made hereunder envisaged original captive users and another class of

captive users i.e., converted captive users. There is no such purpose or intention which could

be made out either from the statute or the rules made thereunder. The Tribunal has been of

the opinion that there cannot be any distinction between an individual captive consumer and

group captive consumers or original captive consumers and converted captive consumers

3. The Commission cannot deviate from the principles adopted in the Multi Year Tariff order.

Fundamental principles adopted in the MYT proceedings cannot be reopened and challenged

at the stage of MTR proceeding, the scope of which is very limited. Another flaw of the

Commissions impugned order is the having come to conclusion that captive consumers are

not liable to pay additional surcharge in MYT proceedings, which was implemented by

MSEDCL, MERC opined in Review Proceedings that additional surcharge is payable by captive

consumers of captive power plant. But this is without giving an opportunity of being heard to

the Appellants. This is nothing but violation of principles of natural justice.

4. The above Appeal is allowed and the Impugned order is therefore set-aside.




SRM Power Pvt. Ltd. Vs. Bangalore Electricity Supply Company Ltd. & Ors.



Dated: 29.03.2019

Present: Hon’ble Mr. Justice N.K. Patil, Judicial Member; Hon’ble Mr. S. D. Dubey, Technical

Member

Background: The Appellant set up a small hydro power project of 2 MW capacity at Mudigere

Taluk, Chickmagalore District across Somavathi. The capacity was enhanced to 6 MW on 4.11.2004

on the basis of a detailed project report produced by the Appellant on recommendations made

by the Karnataka Renewable Energy Development Ltd. (KREDL). Following which the Appellant

entered into a PPA on 16.6.2006 with Respondent No.2.

The tariff under the PPA was Rs. 2.80 per KWH for a period of 10 years from the COD. The term of

the PPA is for 20 years. The Tariff from the 11th year onwards was to be fixed by the Respondent

Commission.

The Project commenced in the year 2005-06, The total cost of the Project was Rs. 26 crores. Due

to unavoidable circumstances, the Appellant contended that the project faced problems in

execution and consequently it overshot period and cost of the project. The cost-overrun was to

the tune of Rs. 8.04 crores. The Appellant has further contended that during testing, the Head

Race Conduit burst out due to faulty technical design and construction and consequently the

generation of the electricity was delayed and due to non-servicing of the loan, the accounts with

all the three banks became NPA.

Thereafter the promoters transferred the assets and liabilities of the Appellant Company to the

Gilada Group of Companies in June, 2006 for Rs. 36 crores. The new promoters had to raise further

loan and total cost incurred increased to Rs. 45 crores.

Commercial operation date (COD) was finally achieved in October 2011, after a delay of 5 years

and additional cost incurred the Appellants urged that the Tariff agreed upon in the PPA was no

longer viable and therefore prayed for a higher Tariff at Rs. 5.52 per KWH for 10 years from the

COD.

The Respondent Commission rejected dismissed the Appellants petition.

Issues: Whether the Appellant was entitled to seek re-determination of tariff? On the ground that

there has been a cost overrun and time-overrun in the project?

Held: The Tribunal has set aside the Order of the Respondent Commission on the ground that

there is no detailed discussion or reasoning, nor prudent checks by the Commission. The Tribunal

is of the view that If an acceptable and genuine case is made out, such projects should be helped.

If such projects close down, that will deprive the consumers of environmentally benign power.

This aspect of the matter is lacking in the impugned order passed by the sixth Respondent/ KERC.




M/s. Fortune Five Hydel Projects Pvt. Ltd & Ors. Vs. Karnataka Electricity Regulatory


Appeal Nos. 42, 242, 243, 244, 280, 282, 357, 78, 117, 118, 206, 227, 268, 196, 271, 287, 288, 257,

207 of 2018

Dated: 29.03.2019


Member

Background: Several Petitions were filed by multiple DISCOMS in the State of Karnataka before

the Respondent Commission, wherein the Respondent Commission reduced the banking period

for the Non-REC route based RE Projects, opting for wheeling from the existing one year to six

months.

The Appellants are Wind & Solar Power Developers of different capacities in the state of Karnataka

who have all been generating power and supplying to third parties.

Issues:

• Whether the Impugned Order is in teeth of the express mandate of Article 51A (g) of the

Constitution and Section 86 (1) (e) of the Act?

• Whether the Respondent Commission a statutory body can read down the specific mandate

of the Act under which it has been created?

• Whether the Respondent Commission by restricting the banking facility to a meagre of six

months has in effect defeated the purpose and the concept of banking?

• Whether in terms of the scheme of the Act can the Respondent Commission through an Order

meddle with an existing Agreement to frustrate renewable generation?

• Whether the Respondent Commission while passing the Impugned Order has failed to

appreciate that the ESCOMS were estopped by the Doctrine of Promissory Estoppel to seek

modification in the express terms agreed under the WBAs?


appreciate that ESCOMs have not provided any data to substantiate its claim that there is

monetary impact on the ESCOMs due to annual banking facility?

• Whether the Respondent Commission has passed the Impugned Order in the absence of any

substantial evidence?

• Whether the Respondent Commission while passing the Impugned Order has exceeded the

limit of its jurisdiction?


appreciate that the ESCOMS have failed to provide any new development, which was not

present earlier, which had now warranted the curtailment of banking period?

• Whether the Appellants are protected by the doctrine of Legitimate Expectation?

• Whether Impugned Order can have retrospective effect?

Held:

1. The Tribunal has held that the Respondent Commission has failed to establish that there exists

any supervening public interest to modify the banking arrangement even prior to the 10 years

period available to the Appellants



2. The Appellants who have invested and executed the commercial agreements cannot be left

in lurch in the midstream.

3. The RE power plants have longer useful life spanning across 25 years, whereas WBAs are

executed only for 10 years. Keeping these aspects in view, the physical support in form of

annual banking would need to be reduced gradually, if necessary, only after expiry of the

executed WBAs to avoid financial shock to the developers/ Appellants herein. From the

consideration and findings in the aforesaid paras, we opine that the impugned order passed

by Karnataka Electricity Regulatory Commission modifying the terms and conditions of

banking arrangements in the concluded contracts is not sustainable in the eyes of law

4. The same appears to have been passed without adhering to the principles of natural justice,

doctrine of promissory estoppels & legitimate expectation etc. The impugned order passed by

Karnataka Electricity Regulatory Commission dated 09.01.2018 in Petition Nos. 90/ 2016, 100/

2016, 104/ 2016, 47/ 2017 and 130/ 2017 is hereby set aside.


Sai Wardha Power Generation Ltd. Vs. Maharashtra Electricity Regulatory

Commission & Anr. (03.04.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

ORDER ON IA NO. 354 OF 2019 IN APPEAL NO. 78 OF 2019 ON THE FILE OF THE APPELLATE

TRIBUNAL FOR ELECTRICITY NEW DELHI

Dated: 03.04.2019


Member

Background: The Appellant is filing the present Appeal, being aggrieved by the impugned Order

dated 15.02.2019 passed in Case No. 116 of 2018 on the file of the Maharashtra Electricity

Regulatory Commission, Mumbai (‘1st Respondent/MERC’) wherein the 1st Respondent/MERC has

upheld the grant of Open Access by Maharashtra State Electricity Distribution Co. Ltd. (‘2nd

Respondent/MSEDCL’) to the Appellant under Section 10 of the Electricity Act, 2003 as an

Independent Power producer (IPP), instead of grant under Section 9 as a Captive Power Plant

(CPP).

Therein 2nd Respondent/MSEDCL has presumed the captive status of the Appellant at the

beginning of the year contending that, the Appellant has allegedly not complied with the

mandatory requirement of providing the needed details as to equity of the intended Captive Users

while making application for open access and also the Appellant has allegedly not complied with

the mandate of obtaining certification/validation from STU/SLDC that requisite metering

arrangement of its CGP unit-3 is in place.

The Appellant contends that it is contrary to the settled principle that Captive Status is to be

ascertained on an annual basis, and not at the beginning of the year and it is factually incorrect

that the Appellant had not provided the necessary details of equity to MSEDCL and MSLDC.

Issues: Whether the 1st Respondent/MERC was justified in upholding the action of 2nd

Respondent/MSEDCL of determining the captive status of the Appellant at the beginning of year?

Held:



1. The Hon’ble Tribunal has noted that the Electricity Rules 2005 Rule 3, require the fulfilment

of two criteria for fulfilling the captive status, (i) 26 % Equity to be held by the clamed captive

users; and (ii) 51 % of power to be consumed by the captive users on annual basis. The

consumption can be considered only at the end of the year. [25]

2. It is well settled that the jurisdiction to decide the captive status is up to the 1st

Respondent/MERC which shall be decided at the end of the year and cannot be presumed to

be non-captive at the beginning of the year itself. Therefore, the prayer sought by the

Appellant in the instant application has got no merit for consideration. [26]

3. The Hon’ble Tribunal has been of the considered view that, prima-facie, the matter requires

consideration on merits taking into consideration the hardship of the Appellant and the

consumers and keeping in mind the facts and circumstances of the case in hand, prima-facie,

taking a holistic and balanced view and to safeguard the interest of the Appellant and its

consumers and also the 2nd Respondent/MSEDCL which would suffice for this Tribunal at this

stage for passing an appropriate order. The Hon’ble Tribunal has directed the 2nd

Respondent/MSEDCL not to take any coercive action in pursuance of the impugned Order

dated 15.02.2019. The Hon’ble Tribunal has directed the consumers of the Appellant to

deposit 50% of the bills raised or to be raised by the 2nd Respondent/MSEDCL subject to the

outcome of this Appeal.[27]


The Tata Power Co. Ltd. (Distribution) vs. Maharashtra Electricity Regulatory

Commission (05.04.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY (Appellate Jurisdiction)

APPEAL NO. 245 OF 2015 & IA NO.398 of 2015

Dated: 05.04.2019

Present: Hon’ble Mr. Justice N. K. Patil, Judicial Member Hon’ble Mr. S.D. Dubey, Technical

Member

Background: The Appellant, The Tata Power Company Limited (Distribution) (‘Appellant’) has

questioned the legality, validity and propriety of the Mid-Term Review (MTR) Order dated

26.06.2015 (‘Impugned Order’) passed by Maharashtra Electricity Regulatory Commission (‘State

Commission’) in Case No.18 of 2015 in the present Appeals on following grounds:

I. Disallowance of carrying cost

Appellant contends that the carrying cost which is a legitimate entitlement of the distribution

company to finance gap in cash flow, have been disallowed by the State Commission on one or

the other account and that the Respondent Commission has not allowed carrying cost in the year

of origin and year of recovery.

II. Wrong consideration of property tax

Appellant contends that the State Commission has allowed Property Tax, being an uncontrollable

factor, as a pass through but while doing so, it has considered it as a part of the O&M expenses

while computing the Efficiency Gains & Losses. Appellant points out that it is a settled principle of

law that uncontrollable factors are not to be considered while computing Efficiency Gain/ (Loss)

of the distribution licensee.

III. Disallowance of Income tax



Appellant submitted that the Respondent Commission has incorrectly computed income tax as it

has not allowed income tax on efficiency gains and incentive in terms of Regulation 34.2 and 34.3

of the MYT Regulations 2011. He further submitted that instead of calculating income tax on

accrual basis, the Commission has wrongly computed the same on revenue billed basis, contrary

to the Income Tax Act, 1961. The State Commission in doing so has wrongly relied on the proviso

to Regulation 34.1 which can be applied only at the time of tariff determination and not at the

stage of truing up.

IV. Disallowance of interest on fuel adjustment cost (‘FAC’)

The Appellant had been claiming interest on FAC in terms of Regulation 82 of the Tariff

Regulations, 2005. However, as of now, the State Commission has denied on the premise that the

Commission had already allowed the normative interest on working capital which is TPC-D's

legitimate claim and hence has not considered interest on FAC. The Appellants questions the

findings of the State Commission as factually incorrect as the interest on working capital considers

two months equivalent of the expected revenue from sale of electricity at the prevailing tariff and

not for working capital which is delayed to be billed as per the above formula of Regulation 82.

V. Disallowance of purchase of excess non- solar REC beyond the RPO

Appellant submitted that the State Commission has wrongly disallowed the excess purchase of

Non-Solar RECs purchased by the Appellant, beyond the Renewable Purchase Obligation (“RPO”)

requirement for the FY 2013 and 2014. Per the Appellant, the exact energy requirement for RPO

gets ascertained after expiry of two to four months in a financial year because of the reconciliation

of changeover consumers and meter reading etc. Appellant contends that, in subsequent RPO

Regulations 2016, the State Commission has allowed such purchase with minor deviations of ±5%.

VI. Disallowance of payment towards exchange / trading fees

The Appellant contends that the State Commission has wrongly disallowed exchange/trading fees

of Rs. 0.02/kWh per unit for FY 2012-13 & FY 2013-14 for procurement of non-solar RECs

submitted by the Appellant which was higher than the floor price of Rs. 1.50 /kwh of RECs on the

account of exchange/trading fees and service tax thereon. Accordingly, State Commission has

erroneously disallowed trading margin for the ultimate loss to the Appellant.

VII. Refusal to relax the norms for allowing actual O&M expenses

Appellant contends that the State Commission has erroneously allowed O&M expenses on the

normative basis for the Appellant instead of actual basis. The main premise of the Appellant’s

contention that in case the actual expenses are lower than the norms, then norms should be

considered and in cases where the actual expenses are higher than the norms then the actual

expenses should be considered. State Commission ought to have relaxed the norms to approve

actual expenses under Regulation 100 of the MYT Regulations, 2011.

Held: The Hon’ble Tribunal has found that the issues raised in the Appeal by the Appellant have

been analysed by the State Commission appropriately and it has passed the impugned order in

judicious consideration of its Regulation and the judgements of this Tribunal on various relevant

issues passed from time to time. The State Commission has rendered cogent reasoning for its

findings in the order and the Hon’ble Tribunal has not found any legal infirmity or ambiguity in the

impugned order. Hence the Appeal filed by the Appellant is dismissed and the impugned order

passed by the Respondent / MERC dated 22.06.2015 in Case No. 18 of 2015 is hereby upheld.

Issue I. Having gone through the findings of the State Commission in this regard, the Hon’ble

Tribunal has noted that the Commission has allowed the carrying cost on items which it had



originally disallowed but have been subsequently allowed in compliance with the directive of this

Tribunal. The main reason for the large cumulative Revenue Gap faced by TPC-D in FY 2015-16 is

the reverse migration of subsidising consumers back to RInfra-D. However, TPC-D did not think it

fit to petition the State Commission at that time itself to seek the tariff correction required, as the

basic premise underlying TPC-D's MYT Order had undergone significant change. The Appellant has

not countered the justification given by the State Commission in the impugned order and hence

the Appeal on this issue may not be maintainable. It is also noticed that the impact of the non-

consideration of carrying cost on the revenue gap as contended by the Appellant is based on the

revised presentation of all numbers by the Appellant which has not been admitted by the State

Commission as per settled principles of law.

In view of these facts, the Hon’ble Tribunal has opined that the Respondent Commission has

adequately addressed the issue of carrying cost in line with its regulations and the judgements of

this Tribunal and any interference of this Tribunal on this issue is not called for.

Issue II. The Hon’ble Tribunal has observed that though TPC-D had submitted the property tax as

an uncontrollable expenditure and requested for getting deducted before sharing the

gains/losses, however, in view of the inbuilt escalation of 5.72% in normative O&M expenses, the

State Commission considered that increase in any type of taxation including property tax could be

subsumed in the said escalation and accordingly did not allow the variation in property tax

separately. In light of these facts, the Hon’ble Tribunal has considered the findings of the State

Commission as just and right, having no necessity of any interference by this Tribunal.

Issue III. From the available records, the Hon’ble Tribunal has noted that while Appellant had

claimed income tax by grossing up the ROE, the State Commission has computed the same on the

basis of profit before tax (PBT) basis at the time of truing up. In a hosts of judgments, this Tribunal

has held that the income tax should be computed on PBT basis and the State Commission has

provided justification on the issue under Para 3.1.1 of the impugned order. Further, we are unable

to accept the contentions of the learned counsel appearing for the Appellant that when truing up

is done for any year, the Respondent Commission approves the actual ARR for that year i.e. income

for that business. The State Commission has rightly considered the regulatory PBT as the

difference between the income considered for truing up purposes and the expenses allowed at

the time of truing up.

Issue IV. The Hon’ble Tribunal has found that the Appellant is relying on the previous Tariff

Regulations, 2005 under which it was a regular practice to claim interest on FAC in terms of

Regulation 82. However, MERC MYT Regulations, 2011 (Regulation 13) provides for the

mechanism for pass through to gains or losses on account of uncontrollable factors such as

variation in fuel charges. Besides, it is noticed that the interest on FAC is in-built in the FAC formula

and any additional provision for the same will amount to double counting of the interest on the

FAC.

Issue V. The Hon’ble Tribunal has noted that after prudence check and analysis, the State

Commission specifies the RPO target for solar as well as non-solar and the licensees are required

to closely adhere to such stipulations of the State Commission in meeting the RPOs. the issue in

respect of purchase of solar energy in excess of the RPO has already been settled by this Tribunal

by its judgement dated 8.4.2015 in Appeal No.160 of 2012 & batch at Para 97. The Hon’ble

Tribunal has held that as the said Regulation cannot be applied retrospectively.



Issue VI. The Commission has given cogent reasoning in the impugned order on this issue namely,

that TPC-D should have procured RECs directly from the Exchange not from traders, as the

Exchange platform provides double-sided undisclosed bidding. In such a case, there is no

additional benefit from procurement of RECs through traders. In this transaction, TPC-D has

unnecessarily increased the burden on the consumers to the extent of trading fees and Service

Tax.

Issue VII. The Hon’ble Tribunal has not found any force in the contentions of the Appellant which

results into the situation that only the efficiency gains should be considered whereas the efficiency

losses should not be considered but under the regulated regime such pick & choose approach

cannot be allowed.

Disposition: Appeal dimissed

Ultratech Cement Ltd. & Ors. vs. Karnataka Electricity Regulatory Commission


Appeal Nos. 322 and 333 of 2016

Dated: 09.04.2019

Present: Hon’ble Mrs. Justice Manjula Chellur (Chairperson), Judicial Member Hon’ble Mr. S.D.

Dubey, Technical Member

Background: The present Appeal is directed against order dated 28.05.2016 (‘Impugned order’)

passed by the Respondent - Karnataka Electricity Regulatory Commission (‘State Commission’)

whereby the State Commission modified its earlier Order dated 08.05.2013, in suo-moto

proceedings. In the 2013 order, the State Commission had held that a Renewable Purchase

Obligation (‘RPO’) cannot be imposed on co-generation plants.

According to the Appellants, the State Commission in the impugned Order failed to appreciate the

legal position that a co-generation plant itself is to be promoted in terms of Electricity Act, 2003

and it cannot be subjected to renewable RPO. Further, in terms of Renewable Regulations of 2011,

the electricity generated through the process of co-generation which is consumed by captive

generation plant has to be treated towards fulfilment of RPO irrespective of the nature of fuel

used. Therefore, they contended that self-consumption of electricity by the Appellants, which is

more than the prescribed percentage of use of electricity generated from co-generation sources

further cannot be fastened with the liability of RPO.

Issues: Whether in facts and circumstances of case, State Commission was right in law in not

considering quantum of electricity generated through co-generation process towards fulfilment

of RPO of Appellant under section 86(1)(e) of Act?

Held:

1. Appellant heavily relies upon decision of co-ordinate bench of Tribunal in the JSW Energy Steel

Ltd. vs. Tamil Nadu Electricity Regulatory Commission (in Appeal No. 278 of 2015 and batch

dated 2.1.2019) case. On perusal of this decision, the Hon’ble Tribunal has noted that

controversy which arose for consideration of Bench in those batch of Appeals was exactly

same in these Appeals. The Hon’ble Tribunal has held that it would be just and proper to quote

issues raised in those Appeals and how they were considered by co-ordinate Bench. The

Judgment in Century Rayon, full Bench judgment in Lloyd Metals by the Tribunal as well as



Judgment of Supreme Court in Hindustan Zinc Ltd., were discussed at length and have

answered ultimately that co-generation facilities irrespective of fuel were to be promoted in

terms of section 86(1)(e) of Act. Therefore, they could not be fastened with obligation of RPO

under same provisions of Act.

2. After going through judgment of JSW Energy Steel Ltd. vs. Tamil Nadu Electricity Regulatory

Commission of co-ordinate Bench, the Hon’ble Tribunal has been of opinion that it concurred

with the opinion of co-ordinate Bench. There was no reason to differ from view expressed by

co-ordinate Bench with regard to co-generation plant vis-a-vis RPO (Appellants herein, being

co-generation plants, are not under a legal obligation to purchase power from renewable

sources of energy in order to meet their Renewable Purchase obligation in the interest of

justice and equity.) Thus impugned order dated 25.08.2016 passed by commission was hereby

set aside. [25], [26]


GMR Warora Energy Ltd. & Ors. vs. Central Electricity Regulatory Commission & Ors.


Appeal No. 363 of 2017, IA No. 976 of 2017 and Appeal No. 16 of 2018

Dated: 11.04.2019


Technical Member

Background: The present Appeal is filed by GMR Warora Energy Ltd. (‘Appellant/GWEL’) being

aggrieved by the Order dated 17.10.2017 (‘impugned Order’) passed by the Respondent No. 1,

Central Electricity Regulatory Commission (‘Respondent No. 1/Central Commission’) under

Section 111 of the Electricity Act, 2003 (‘Act’).

On 30.10.2013, the Appellant was declared a successful bidder for supply of 150 MW of power in

a tender floated by TANGEDCO, a distribution licensee in Tamil Nadu. Upon execution of the

Power Purchase Agreement (‘PPA’) by TANGEDCO for supply of 150 MW of power starting

01.06.2014 to 30.09.2028, the Appellant applied to Respondent No. 2, PGCIL (‘PGCIL’) for grant of

an LTA for a quantum of 150 MW in the Southern Region (SR) and also applied for grant of an

MTOA on 27.11.2013 for 150 MW in the SR.

PGCIL granted a notional LTA to the Appellant for a period starting from 01.04.2015 to 30.09.2028

subject to certain conditions including that the said LTA would not be operationalized unless the

aforementioned MTOA dated 22.07.2015 for a quantum of 150 MW is relinquished. On

20.01.2016, the Appellant requested PGCIL to go ahead with the operationalization of LTA. PGCIL

raised a demand on the Appellant towards payment of Rs. 2,14,71,750/- towards claiming

relinquishment charges for closure of the MTOA of 150 MW dated 22.07.2015, which was a

precondition for operationalization of LTA.

In the Appeals, the issue is regarding payment of relinquishment charges by the Appellants upon

relinquishment of their respective MTOAs when the LTA granted in their favour have been

operationalised by the Respondent No. 2. The case of the Appellant is that MTOAs were sought

due to non-availability of LTAs. Once the LTAs have been operationalised the same power will be

transmitted using the same transmission infrastructure to the same beneficiary. As such there is

no relinquishment of criteria by the Appellant and it is only switchover/migration from Medium



Term Open Access (MTOA) to Long Term Open Access (LTOA) and therefore there is no case for

relinquishment charges.

Issues: Whether the Central Commission has erred in holding that the Appellant is liable to pay

relinquishment charges for surrendering the Medium-Term Open Access (MTOA) dated 22.7.2015

upon operationalization of the long-term access (LTA) dated 22.7.2017?

Held:

1. Use of the word "shall" occurring in Regulation 24 of CERC (Grant of Connectivity, Long Term

Access and Medium Term Open Access in Intra State transmission and related matters)

Regulations, 2009 (‘Connectivity Regulations’) shows that the payment of relinquishment

charges on the relinquishment of Medium Term Open Access (‘MTOA’) are mandatory in

nature and are thus necessarily to be complied with.

2. "Regulation 24. Of ‘Connectivity Regulations’ - Exit option for medium-term customers: A

medium-term customer may relinquish rights, fully or partly, by giving at least 30 days prior

notice to the nodal agency: Provided that the medium-term customer relinquishing its rights

shall pay applicable transmission charges for the period of relinquishment or 30 days

whichever is lesser."

3. The liability to bear charges for relinquishment of MTOA under Regulation 24 was also a

condition of the LTA intimation dated 22.7.2015 issued by PGCIL. The grant of MTOA to

November, 2013 application and grant of LTA to December, 2013 application was made with

the consent of the Appellant and with the clear understanding that whenever the LTA got

operationalized for full quantum, the MTOA was to be relinquished along with payment of

relinquishment charges. [7(vii), (viii), (ix), (x), (xi)]

4. The Appellant has applied for MTOA for the period of three years expecting that it might not

get LTA for the said capacity before three years. Further, period of grant of MTOA has not

been made subject to the date of operationalization of LTA. Grant of MTOA to the Appellant

is unconditional and therefore, no condition can be attached to the relinquishment of the said

MTOA. Regulation 24 does not require the CTU to prove the losses for payment of

relinquishment charges. Unlike the case of LTA, it is not linked to stranded capacity. Therefore,

the condition of stranded capacity or losses suffered is not a pre-condition for payment for

relinquishment charges under Regulation 24 of the Connectivity Regulations. [7(xii), (xiii)]

5. In the Impugned Order, Central Commission observed that the language of Regulation 24 is

couched in absolute terms and does not admit any conclusion/interpretation which partly or

fully exempts the MTOA customer from payment of relinquishment charges, if the capacity

covered under MTOA is utilized for LTA. [7 (xiv)]

6. The Tribunal did not find any error, material irregularity or legal infirmity in the Impugned

Orders passed by the 1st Respondent/the Central Commission. The Tribunal found the

Impugned Order as well founded, well-reasoned, hence did not call for interference by it. In

view of above, the Tribunal was of the considered view that there was no need to consider

the other issues raised by the Appellant like interpretation of relinquishment and

effectiveness of the amendment from the back date.

7. Having regard to the facts and the circumstances of the case as stated above, the instant

Appeals being Appeal filed by the Appellants were dismissed as devoid of merits. The

Impugned Orders were upheld.




SD Bansal Iron and Steel Private Ltd. & Ors. vs. Madhya Pradesh Electricity

Regulatory Commission & Ors. (12.04.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 12.04.2019


Technical Member

Background: The Appellants, all industrial consumers in the State of Madhya Pradesh and

consumers of the distribution licensees of the State. being aggrieved by the Order dated

31.03.2017 (‘Impugned Order’) passed by Respondent No. 1 - Madhya Pradesh Electricity

Regulatory Commission (‘State Commission’) have filed this instant Appeal under Section 111 of

the Electricity Act, 2003 (‘Act’) whereby the State Commission has approved the Annual Revenue

Requirements and Retail Supply Tariff of the distribution licensees in Madhya Pradesh for FY 2017-

18.

The State Commission has in the impugned Order, while determine the retail supply tariff for the

consumers in the State, determined a differential tariff for the new HT industrial consumers and

existing HT Industrial Consumers, by providing a further rebate to the new consumers.

The Appellants submitted that the State Commission in passing the impugned Order had failed to

take into consideration that Section 62(3) of the Act prohibits the State Commission from showing

any undue preference to any consumer. Section 62(3) provides for an exhaustive list of factors to

the Ltd. extent of which the State Commission can differentiate between consumers.

Issues: Whether the State Commission for determination of tariff, can differentiate between

consumers placed similarly and belonging to same category on the basis of new and existing

consumers.?

Held:

1. It is clear that normally the Appropriate Commission shall not while determining the tariff

under the Act show undue preference to any consumer of Electricity. However, the Act

provides that the Appropriate Commission may differentiate according to the factors given in

the Act. This issue has been dealt with in detail in various judgments of this Tribunal that

differentiation between consumers can be done by the Appropriate Commission only on the

basis of the factors given under Section 62 (3) of the Electricity Act, 2003 and not on the basis

of any other factor. It has further been clarified that the Appropriate Commission cannot

differentiate within the same category of consumers; the consumers who are placed similarly.

2. In this instant Appeal, the State Commission has differentiated between the same category of

consumers i.e. HT industrial consumers on the basis of new and existing consumers to

promote industrial growth in the State and also to utilise the surplus energy available in the

State.

3. As a result of such kind of differentiation, the existing industrial consumers will have to bear

the additional burden of promoting the new industrial consumers. It is important to note that

both the new and existing consumers are producing the same items and are selling their

product in the same market and competing with each other. This kind of differentiation

between tariff adversely affects the existing consumers. There has to be an even level playing

field with regard to the tariff determination to enable only the most competitive and efficient



persons to succeed. By providing incentives to the new industries at the cost of existing

consumers, the existing industries would be rendered uncompetitive. [7 (ii), (iii), (iv)]

4. The submission, to justify the differentiation, that the promotion of new industries would lead

to higher industrial growth, job opportunities, higher revenue in terms of taxes etc. for the

welfare of the State does not hold any ground. If that be the case then State Government

should provide direct revenue subsidy to new consumers rather than penalising the existing

industrial consumers. As per Section 65 of the Electricity Act, 2003, the State Government can

provide direct subsidy to any consumers. [7 (v), (vi)]

5. In view of the above, the first Respondent/the State Commission committed a grave error in

differentiating between consumers of the same category on the basis of new and existing

consumers and therefore the Impugned Order passed by the first Respondent/the State

Commission is hereby set aside so far as it relates to the extent of providing differential

incentives to the existing and new HT consumers. The first Respondent/the State Commission

is hereby directed to reconsider the matter afresh in the light of the preceding paragraphs.


Rajasthan Renewable Energy Corporation Ltd. vs. Shree Cement Ltd. & Ors.



Dated: 16.04.2019

Present: Hon’ble Mrs. Justice Manjula Chellur (Chairperson), Judicial Member Hon’ble Mr. S.D.

Dubey, Technical Member

Background: This Appeal is directed by the Appellant - Rajasthan Renewable Energy Corporation

Ltd. (‘Appellant-RRECL’) against the Order dated 23.03.2017 (‘Impugned order’) passed by the

Rajasthan Electricity Regulatory Commission (‘Respondent-Commission’) holding that Captive

Power Plant generating electricity through Waste Heat Recovery cannot be fastened with RPO

liability under Section 86(1)(e) of Electricity Act.

Issues: Whether order impugned herein need interference? Whether Captive Power Plant

generating electricity through Waste Heat Recovery can be fastened with RPO liability?

Held: The Tribunal stated that from reading of the Section 86(1)(e) of Electricity Act, 2003, it is

clear that both the co-generation and renewable energy have to be promoted in terms of Section

86(1)(e) of the Act. As long as captive consumers consume energy from co-generating unit beyond

the RPO obligations, there is no obligation to purchase RE Certificates or consume renewable

energy, separately. The Tribunal also opined that once the entities comply with the obligations

under Section 86(1)(e) of the Act by making a distinction between solar and non-solar, captive

consumers of captive generating plants cannot be asked separately to comply with the obligations

by purchasing RECs. Accordingly, the Appeal deserves to be dismissed and is dismissed. The

pending IAs, if any, shall stand disposed of. [19]


State Load Despatch Centre, Karnataka Power Transmission Corporation Ltd. Vs.

Central Electricity Regulatory Commission & Ors (16.04.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)




Dated: 16.04.2019

Present: Hon’ble Mr. Justice N. K. Patil, Judicial Member Hon’ble Mr. S.D. Dubey, Technical

Member

Background: The Appellant, State Load Despatch Centre (‘SLDC’) has filed the instant Appeals

under Section 111 of the Electricity Act, 2003 questioning the legality, validity and propriety of

impugned Order dated 19.11.2012 passed by the Central Electricity Regulatory Commission

(‘Central Commission’) whereby the Central Commission has held that the Respondent No. 2

(‘Generating Companies’) are not liable to pay the supply charges determined by the Karnataka

Electricity Regulatory Commission (‘State Commission’) for consumption of electricity and is only

to be levied Unscheduled Interchange charges for the consumption of electricity.

Issues:

I. Whether back up supply charges can be levied on a generator engaged in open access

transaction under the CERC (Open Access in Inter-State Transmission) Regulations, 2008?

II. Whether State Load Despatch Centre (SDLC) has authority under law to issue impugned

invoices levying backup supply charges?

Held: The Tribunal was of the considered opinion that as specified under the CERC Open Access

Regulations, no charges other than those specified under Regulation 20 (6) shall be payable by

any person granted short term open access under these Regulations. However, if any generating

company consumes power from the state grid for any purpose, it is liable to pay supply charges

as applicable under the KERC Regulations, 2004 (as amended). The instant appeals are partly

allowed and the impugned Orders passed by the first Respondent/Central Commission are liable

to be set aside so far it relate to the findings. [104, 105, 106]

Issue I.

1. It is not in dispute that the Respondent generators were granted open access under the CERC

Open Access Regulations for Inter-state transactions of power. As required under the Central

Regulations, the generators were also given No Objection Certificate from the SCLC of

Karnataka. While the Tribunal notes that there does not appear any material controversy in

the Open Access Regulations of CERC and KERC, the entire dispute has arisen out of the

interpretation of backup power supply charges vis.-a.-vis. supply charges and much less due

to inconsistent orders passed by CERC in the case of Janki Corporation Ltd. generating

companies. It is noticed that in fact CERC have taken inconsistent view in its other orders while

comparing with its decision in Janki case.

2. The Tribunal held that the generating companies provided with Open Access for inter-state

transactions under CERC Regulations are not liable to pay any additional charges as per

Regulations 20(6), however, any power consumed from the State Grid through the local

distribution licencee is chargeable as per the KERC Regulations by considering temporary tariff

under relevant category of consumers. However, these supply charges cannot be equated

with backup supply charges as being contemplated by the Appellant.

3. In light of these facts and circumstances of the case in hand, the Tribunal was of the

considered opinion that the inconsistencies appearing in various referred orders of CERC in

different petitions, as stated supra, need to be corrected through a corrigendum along with

clear cut directions that charges for the electricity consumed by the generating companies



from the State Grid for any purpose would need to paid by them as per KERC Regulations. [96,

97, 98, 99]

Issue II.

1. It is not in dispute that wherever the proposed bilateral transaction has a state utility or an

intra-state entity as a buyer or seller concurrence of SLDC shall be obtained in advance and

submitted along with application to the nodal agency. Further, under the proviso of Section

31(2) of the Act, it is clearly envisaged as under: “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.”

2. As per Section 32(3), the SLDC is empowered to levy and collect such fee and charges from

the generating companies and licensees engaged in Intra-state transmission of electricity as

may be specified by the State Commission. Regulation 18 of KERC Regulations, 2006 provide

that the charges may be collected either by the distribution licensee, the transmission licensee

or the STU depending on whose facility are used for availing opening access. In all such cases,

the amount so collected from a particular consumer should be given to a distribution licensee

in whose area the consumer is located. In view of these facts, there is nothing illegal that if

SLDC issues invoices in lieu of power supply charges on behalf of distribution licensees and

collects such charges and in turn remits the amount in the account of local distribution

licensee. The Tribunal was of the opinion that such activities on part of the SLDC/Appellant in

no way or amounts to the business of electricity supplies or trading. Hence, the Tribunal was

of the considered opinion that the action of the Appellant in issuing the invoices to the

Respondent Generating companies for supply of power from the State Grid is not in violation

of law or Regulations.

Disposition: Appeals partly allowed

Tata Power Delhi Distribution Ltd. vs. Delhi Electricity Regulatory Commission


Appeal Nos. 82, 136, 274, 285 of 2015 and 58 of 2016

Dated: 16.04.2019

Present: Hon’ble Mr. N.K. Patil, Judicial Member; Hon’ble Mr. S.D. Dubey, Technical Member

Background: The Appellant, Tata Power Delhi Distribution Ltd. (‘Appellant - TPDDL’) has filed

Appeals under Section 111 of the Electricity Act, 2003 against the impugned Orders dated

09.01.2015, passed by the Respondent - Delhi Electricity Regulatory Commission (‘State

Commission’), whereby the State Commission has granted the Appellant- TPDDL tariff by

determining levelised tariff for only 2 years and then variable tariff linked with Distribution

Business of the Appellant for a period of 23 years. The Appellant contends that the State

Commission has not granted the Appellant- TPDDL the generic solar tariff of Solar Photovoltaic

[‘PV’] projects of Rs. 18.44/kmw for 25 years as per the Central Electricity Regulatory Commission

(Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations,

2009 (‘CERC Regulations’).

The Appellant has based its Appeals on the following premises:



• That the Appellant was entitled to Rs. 18.44 per unit for 25 years as per the CERC Regulations,

• That the State Commission could not deviate once it had been granted an in-principal

approval,

• That the State Commission could not have bifurcated the tariff of the Appellant in the manner

it did,

• That the direction to avail of the REC mechanism was incorrect.

Issues:

I. Whether in the facts and circumstances of the cases, Appellant is entitled to the tariff

applicable as per CERC regulations?

II. Whether the State Commission can thrust REC mechanism upon the Appellant for its

projects commissioned in the year 2010 when the same has nowhere been made

mandatory in terms of the In Principle Approval granted or the CERC Regulations, 2009 as

adopted by the State Commission?

III. Whether the Impugned Order is passed in violation of the relevant provision of Section 86

(1) (e) of the Act and RPO Regulations?

IV. Whether, the State Commission can determine levelized tariff for two periods, i.e. one for

two years and the other for 23 years as per the Regulations 6.3 and 10 of CERC Regulations

and settled law?

Held:

Issue I.

1. The Keshavpuram Solar Project was approved by the State Commission as a pilot project on

experimental basis to promote RE generation and the project was to be guided by

rules/regulations/incentives issued by MNRE, Government of India as well as relevant

regulations of CERC. An approval to take up other similar solar PV projects was granted by the

State Commission vide order dated 17.05.2010.

2. The Appellant's counsel contended that once the State Commission had adopted the CERC

regulations vide its letter dated 09.07.2010, the generic tariff of Rs. 18.44 per unit is required

to be granted to its projects. State Commission contended that it adopted the CERC

regulations only for those Solar PV Projects which were legible for Generation Based Incentive

(GBI) under the Jawahar Lal National Solar Mission and the MNRE guidelines for Solar PV and

similar power generation projects.

3. For availing the subsidy and incentives from MNRE, the projects were to be registered with

IREDA online as per the guidelines issued by MNRE on a specific date. The Tribunal found that

due to one or the other reason, the Appellant's projects could not be registered on IREDA

website for availing applicable incentives/subsidy from MNRE and accordingly, the State

Commission applying its prudence did not grant generic tariff of Rs. 18.44 per unit. In the light

of these facts, the Tribunal held that the decision of the State Commission for not granting

tariff of Rs. 18.44 per unit is just and reasonable and does not call for intervention.[8]

Issue II. Having analysed the rival contentions of both the counsels, the Hon’ble Tribunal has held

that under the CERC, REC regulations two distinct categories have been notified, i.e. REC or non

REC mechanism and the choice to select any of the two categories rests with the developer. Once

the selection/option is exercised by the RE generator, the State Commission is not entitled to

thrust upon another mechanism beyond the selection of the developer. The Tribunal is unable to

accept the contentions of the State Commission that directions to opt for REC mechanism was



directed for the sole benefit of the Appellant. Hence, the Tribunal finds that the directions of the

State Commission to opt for REC mechanism are against the settled principal of law especially that

under the doctrine of selection. [9.3]

Issue III. Carefully considered the contentions of both the counsels, the Hon’ble Tribunal has held

that once, the generic tariff as per CERC regulations was not admissible to projects of the

Appellant, Commission being mandated to regulate the power industry in the State has evolved

the mechanism to strike a balance between the developer/distributor and the consumers. The

Tribunal does not notice any legal infirmity or perversity in the findings of the State Commission

in this regard and hence, inference is not called for. [10.5]

Issue IV. Having analysed the rival submissions of both the counsels, the Hon’ble Tribunal has

found that it is manifest that the State Commission has in fact adopted an ad hoc piece-meal

approach for determination of tariff for solar projects of the Appellant, namely, calculating tariff

for first two years based on the project's cost and other applicable norms and decided to grant

tariff at APCC for the balance period i.e. 23 years. The Tribunal has thus opined that the decision

of the State Commission to bifurcate the useful life of the project for determination of tariff in 2

and 23 years, does not appear appropriate. As per the settled norms as well as relevant

regulations, the tariff is required to be determined for the entire period of useful life of the

projects i.e. 25 years. Whatsoever may be the reason, the Tribunal has been unable to accept the

stand of the State Commission in this regard, as brought out in the Impugned Order. The Tribunal

has held that the State Commission ought to have applied the judicious approach for arriving at

the levelised tariff for the entire life of the solar projects based on the actual/audited cost of the

projects with application of other associated norms for computation of project wise tariff. In view

of these facts, the Tribunal has held that the Impugned Order of the State Commission suffers

from legal infirmity and perversity to the extent of the facts mentioned above. [11.3]

Summary: In light of the Tribunal’s consideration and findings, the Tribunal is of the considered

opinion that without getting registered under the GBI scheme of MNRE, Govt. of India, the

Appellant is not entitled to the generic tariff of Rs. 18.44 per unit, as applicable under the CERC

Regulations. The instant case being unique in nature, where generator and distributor has the

same parent company, the grant of generic tariff without GBI would have been a huge burden on

the consumers and keeping these aspects in view, the State Commission has taken a just and

reasonable decision in the instant case by not allowing generic tariff.

The directions of the State Commission that the Appellant should go for REC mechanism to cover

up its loses are against the settled principles of law that once the option has been exercised by

any generator to follow REC or non REC mechanism, cannot be forced to go beyond the selected

route.

The State Commission vide its Order dated 23.02.2008, advised the Appellant to try to achieve 1%

of the total power purchase from renewable sources and accordingly approved the execution of

Solar PV Projects. During course of implementation of the projects, the Appellant could not avail

the facility of incentive/subsidy from MNRE and as a result the reference projects could not qualify

for generic tariff applicable as per CERC regulations. Merely by not allowing generic tariff to the

Appellant's projects, does not amount to any violation of the Electricity Act and Policies of the

Government to promote the generation from RE sources.

Thus, the Tribunal has held that the approach of the State Commission to allow computed tariff

for first two years and APCC tariff for balance 23 years is erroneous. The Tribunal is of the



considered opinion that in the facts and circumstances of the instant cases, the State Commission

ought to have computed project wise tariff based on the actual/audited cost and other associated

parameters after prudence check.

Having regard to the peculiar facts and circumstances of the case, the Tribunal has been

constrained to observe that the State Commission has delayed the processing of the tariff petition

beyond proportion. There is inordinate delay of 5 years in deciding the claim of the Appellant and

such things should not be repeated in future. [12]

Disposition: Appeals partly allowed

Swasti Power Ltd. vs. Uttarakhand Electricity Regulatory Commission & Ors.



Dated: 23.04.2019


Technical Member

Background: The Appellant - M/s. Swasti Power Ltd. (‘Appellant’) being aggrieved by the Order

dated 22.09.2015 (‘Impugned Order’) passed by the Respondent No. 1 - Uttarakhand Electricity

Regulatory Commission (‘State Commission’) has filed the instant Appeal under Section 111 of the

Electricity Act, 2003 (‘Act’) whereby the State Commission has declined to consider the Claims for

refund of the 2% Prompt Payment Rebate deducted by the Respondent No. 2 - Uttarakhand Power

Corporation Ltd. (‘UPCL’) while clearing the invoices raised by the Appellant for sale of power

generated from the Bhilangana Hydro Power Project (3 x 7.5 MW) generating station ('Project') in

the State of Uttarakhand and further, declined the Claim for payment of Late Payment Surcharge

@1.25% as raised by the Appellant for the period prior to the signing of the Supplementary PPA

on 10.01.2013.

Issues: Whether the State Commission has erred in disallowing the claims made by the Appellant

for the refund of excess rebate deducted by UPCL and also refund of the payment of late payment

surcharge?

Held:

1. The Hon’ble Tribunal has found that the Appellant had signed a PPA with UPCL for sale of its

power generated from its hydro plant as per the tariff prescribed by the Regulation, 2008. As

per the Regulation, 2004 (Conduct of Business) notified by the State Commission, the

Distribution licensee is supposed to take the approval of the State Commission for all power

purchase agreement. However, in this particular case the said Agreement was not placed

before the State Commission for approval. The power purchase from Appellant's plant was

considered and allowed by the State Commission in the tariff order of the Respondent No. 2.

The Hon’ble Tribunal has found that the State Commission in their order have observed that

while signing the PPA in 2009 the Appellant was well aware about the Regulation, 2004 and

Regulation, 2008. The Appellant should have drafted the instant PPA in line with the

Regulations and should have taken the approval of the State Commission.

2. In the impugned Order, the State Commission had further observed that unlike a normal

tenure of 30 years for a PPA, the instant PPA was a conditional PPA with an exist clause



allowing the Appellant to terminate the PPA by giving two months’ notice to the UPCL. This

was the reason why the State Commission had held that the instant PPA cannot be termed a

Long Term PPA in line with the Regulation, 2010.

3. The State Commission had further observed that UPCL had incorrectly made payments to

Appellant at tariffs specified under Regulation, 2010 even before the Appellant because

eligible to be governed by Regulation, 2010. However, taking a holistic view in the matter the

State Commission had decided to give the Appellant an option to either enter into a Long Term

PPA or execute a Supplementary Agreement to the existing PPA with the UPCL. In view of the

above, the State Commission had observed that no claim of the Appellant can be considered

for the period prior to signing of Supplementary PPA as it was not covered under Regulation,

2010. The Appellant executed the Supplementary PPA with UPCL on 10.01.2013 enabling main

PPA dated 03.07.2009 to be termed as Long Term PPA in accordance with the Regulation.

Therefore, all the claims after 10.01.2013 shall be dealt with in accordance with the governing

Regulations.

4. The State Commission has observed that UPCL made prompt payments to avail higher rebate

and that was accepted by the Appellant. Keeping in view that the Appellant had agitated this

issue after 18 months they cannot be allowed both a lower rebate and prompt rebate. The

State Commission further held that though the Appellant gets covered under prevailing

Regulations which expressly provided such coverage, it is none the less relevant that UPCL

kept on making prompt payments to avail higher rebate and such deduction was not objected

to by the Appellant. It is further ordered that whenever payments were within three working

days, UPCL would be entitled to 2% rebate in this period. This adjudication is being made in

the particular circumstances of this case and will not have general application.

5. The Hon’ble Tribunal has found that from the above it is clear that though the State

Commission held that the Appellant gets coverage under the prevailing Regulation but in view

of the fact that UPCL made prompt payments and also the fact that such deductions were not

objected to by the Appellant, therefore, the State Commission did not agree with the claim

made by the Appellant.

6. The Hon’ble Tribunal has found that this was certainly a deviation from the terms and

conditions of the PPA approved by the State Commission. More so, when the State

Commission has held that the Appellant gets coverage under the prevailing Regulation, the

decision of the State Commission is misplaced.

7. The Hon’ble Tribunal has been of the considered view that once it is established and held by

the State Commission that the Appellant gets covered under the prevailing Regulations then

all claims after 10.01.2013 shall be dealt with in accordance with the governing Regulations

only.

8. The instant Appeal filed by the Appellant is allowed. The Impugned Order is hereby set aside

in part so far as it relates to the extent of disallowing the claims made by the Appellant for the

refund of excess rebate deducted by UPCL and also refund of the payments of late payment

surcharge.


Rama Shankar Awasthi vs. Lanco Anpara Power Ltd. & Ors. (24.04.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Review Petition No. 02 of 2019, IA No. 167 of 2019 in Appeal Nos. 359 and 336 of 2017

Dated: 24.04.2019




Member

Background: The present Review Petition has been filed by the review petitioner – Ram Shankar

Awasthi (‘Review Petitioner’) seeking review, modification and rectification of errors in impugned

judgment and order and to set aside judgment and order passed by the Respondent - Uttar

Pradesh Electricity Regulatory Commission (‘State Commission’).

Issues: Whether petitioner established mandatory criteria for review of impugned judgment?

Held: The Tribunal has observed that the Review Petitioner has failed to prove or establish any of

the above mandatory criteria for review of the original judgment of the Tribunal which are

• Proof that even after exercise of due diligence some facts were not to the knowledge of

the review petitioner, when the original order was passed;

• Mistake or error apparent from the face of record.

The Hon’ble Tribunal has held that the case in the review petition neither relates to any discovery

of new and important matter or evidence which after the exercise of due diligence was not within

the knowledge of the Review Petitioner or could not be produced by him at the time when the

judgment was pronounced nor any mistake or error apparent on the face of the judgment has

specifically been pointed out and nor any other sufficient reason or ground has been made out by

the Review Petitioner. It is also significant to note that a judgment has to be seen in its entirety

and should not be assailed based on certain paragraphs, only on pick and choose methodology.

Instead, it has to be read in close conjunction of previous orders of the State Commission which

stand affirmed by the said judgment as in the present case.

Therefore, it is the considered view of the Hon’ble Tribunal that there is no merit in the Review

Petition and is accordingly dismissed as devoid of merit. [53], [59]


Mytrah Vayu (Som) Private Ltd. vs. Rajasthan Electricity Regulatory Commission &



Dated: 30.04.2019

Present: N.K. Patil, J. (Member (J)) and Ravindra Kumar Verma, Member (T)

Background: The Appellant - Nidhi Wind Farms Private Ltd. (‘NWFPL’), being aggrieved by the

Order dated 19.04.2017 (‘Impugned Order’) passed by the Respondent No 1 - Rajasthan Electricity

Regulatory Commission (‘State Commission’) has filed the instant Appeal seeking to set aside the

impugned Order.

The Appellant/NWFPL, a developer of a wind power project of 90 MW in the State of Rajasthan

(‘Project’) received in principle approval for the Project in terms of Wind Policy 2012 for the entire

90 MW capacity by the Government of Rajasthan for meeting the Renewable Purchase Obligation

(‘RPO’) with a condition to ensure commissioning of the Project by 31.03.2016. However, out of

a total capacity of 90 MW of the Appellant the DISCOMs signed Power Purchase Agreement (‘PPA’)

with the Appellant for a part capacity of 62.9 MW only and left 27.1 MW.



The case of the DISCOMS is that they have refused to execute the PPA for the balance capacity

(27.1 MW) with the Appellant on the ground that they have already fulfilled their RPO targets for

the year 2015-16 by contracting sufficient capacity of wind power by way of execution of PPAs in

this regard. Further, the DISCOMS contend that although the Project is covered under Wind Policy

2012 notified by the Government of Rajasthan and the Project received in-principle approval from

State Level Empowered Committee (‘SLSC’) as well as final approval from State Level Empowered

Committee (‘SLEC’), however, SLEC approval does not create a right in favour of a generator to

claim execution of the PPA.

The Appellant submitted that the DISCOMs have taken a high normative Capacity Utilisation

Factor (‘CUF’) in their calculation for the capacity required for meeting the RPO target.

Respondents have submitted that the PPAs are entered on the basis of requirement to fulfil RPO

based on the CUF of the plant in terms of plant-capacity and therefore argument of the Appellant

that PPA cannot be entered on the basis of the capacity is baseless and impractical. The

computation of requirement of capacity addition for fulfilment of RPO is based on certain

assumptions, such as projected energy demand of DISCOMs and average CUF of preceding years.

Issues:

I. Whether approval of projects by State Level Empowered Committee ("SLEC") create a

right in favour of projects for signing of PPA with DISCOMs on preferential tariff?

II. Whether the DISCOMs erred in calculation of required capacity for meeting RPO target

with adoption of higher normative CUF.

III. Whether the DISCOMs erred in signing of PPA with the projects approved later as a part

of supplementary list of 124 MW and denying to sign PPA with the Appellant?

Held:

Issue I. The Hon’ble Tribunal has no found merit in the submission of the Respondents that the

SLEC approval is only for setting up of a project and is not for purchasing of power by the DISCOMs

under preferential tariff.

The Hon’ble Tribunal is of the opinion that in view of the fact that the project has been approved

by none other than the Government of Rajasthan, under the Wind Policy 2012 to meet the RPO

target, after a detailed exercise by two high profile Committees i.e. Standing Level Screening

Committee and Standing Level Empowered Committee, denying signing of PPA by DISCOMs, for

the full capacity when the project has been completed, as agreed by the scheduled date of

commissioning is wrong. In fact, once the project has been approved by State Government after

a detailed exercise then it creates a right in favour of the Appellant to sign PPA with the DISCOMS

for full 90 MW capacity. [6(xvii)]

Issue II. The Hon’ble Tribunal has held that the DISCOMs calculated the required capacity of 503

MW to meet the RPO target for 2015-16 on the basis of CUF of 20%. From the historical data of

CUF for the past 10 years it is clear that CUF has varied in the last ten years in the range of 11.74%

to 16.38%. The Hon’ble Tribunal has held that this is an important observation and DISCOMs

should have taken judicial note of this important aspect while working out the required capacity

to meet the RPO target and as such the action of DISCOMs in calculating the required capacity of

503 MW on the basis of normative CUF of 20% was wrong. The Hon’ble Tribunal observed that

the DISCOMs should have been more cautious and applied their due diligence in adopting a more

realistic value of CUF for better estimation of required capacity. The State Commission has not



considered this aspect also in their Impugned Order. Therefore, the Impugned Order passed by

the first Respondent/the State Commission is liable to be set aside. [6(xxi)]

Issue III. The reason given by the DISCOM for not signing the PPA for the balance capacity of 27.1

MW was that the capacity required of 503 MW for meeting the target of RPO for 2015-16 had

been fulfilled. This happened because PPA of the projects which were approved as a part of

supplementary list of 124 MW approved in the end, were signed by the DISCOMs prior to the

Appellant. In a way DISCOMs allowed the project which were approved at the end to jump before

the projects which were approved earlier in the first phase and signed PPA with them and did not

sign PPA with the Appellant.

The Hon’ble Tribunal has found such an action by DISCOM wrong and against principal of natural

justice and equity and has held that as such DISCOM committed a mistake. The Hon’ble Tribunal

has observed that the State Commission in their Impugned Order have not considered this fact.

[6(xxx)]

The instant Appeal filed by the Appellant is allowed. The Impugned Order is hereby set aside. The

matter stands remitted back to the Respondent No. 1/the State Commission.


Lalitpur Power Generation Company Ltd. vs. Uttar Pradesh Electricity Regulatory



Dated: 01.05.2019

Present: Hon’ble Mr. Justice N.K. Patil, Chairperson; Hon’ble Mr. S.D. Dubey, Technical Member

Background: The Appellant - Lalitpur Power Generation Company Ltd. (‘Appellant’), is questioning

the legality, validity and propriety of the Impugned Order dated 21.09.2016, passed in Petition

No. 1101 of 2016 and the Order dated 17.10.2018 passed in Review Petition No. 1190 of 2017 by

the Respondent No. 1 - State Commission on the file of Uttar Pradesh Electricity Regulatory

Commission (‘State Commission’) has filed the instant Appeal under Section 111 of the Electricity

Act, 2003.

Respondent No 2 - UPPCL (‘UPPCL’) had entered into a Power Purchase Agreement (‘PPA’) dated

10.12.2010 with the Appellant for purchase of power from the 3 x 660 MW thermal power project

of the Appellant. The said PPA is governed by the UPERC (Terms and Conditions of Determination

of Tariff) Regulations, 2014 (‘UPERC Tariff Regulations, 2014’) The Appellant synchronised its Unit

no. 1 of 660 MW capacity on 220 kV transmission system and conducted a commissioning test

whose performance test results/reports duly verified by the Independent Engineer were informed

to UPPCL. UPPCL however, did not accept the commissioning test and appointed another

engineering consulting firm to re-conduct the performance test. The results thereof were not

approved by UPPCL. The 765 kV Power evacuation system was not available and the entire

performance test was conducted on 2 x 220 kV transmission system, which by its own averment

of UPPCL was capable to evacuate between 400-500 MW of power.

In terms of Article 4.2(a) of the PPA, UPPCL was responsible for providing the interconnection and

Transmission Facilities to enable the power station to be connected to the Grid System not later

than the Scheduled Connection Date, which UPPCL could not do in time. Appellant on the other



hand was required to comply with certain conditions subsequent, one of which the Appellant

could not fulfil was the condition subsequent contained in Article 3.1.2(ii), which required the

Appellant to obtain coal linkage from Standing Linkage Committee (Long-Term), Ministry of Coal,

GOI within a period of 18 months from the date of the signing of the PPA by all the parties or

within 18 months from 10.12.2010.

Thereafter, the Appellant agreed to a draft agreement incorporating the terms, which were

against the settled terms and against the Regulatory Provisions. The said terms were consented

to by the Appellant and the agreement was executed by the Appellant on 04.11.2015. The crux

and substratum of the agreement dated 04.11.2015 was to treat the declared capacity of the

appellant equal to its scheduled capacity till completion of 765 kV evacuation system or till

obtaining of coal linkage, whichever was earlier. On the same day, UPPCL approved the COD of

the Unit # 1 of the Appellant and scheduling started. However, vide order of the State Load

Dispatch Centre dated 14.11.2015, the unit was ordered to be shut down citing low demand in

the State

The case of the Appellant in brief, is that-

(i) The Agreement dated 04.11.2015 was forced upon the Appellant only to cover the defaults of

UPPCL and not of the Appellant;

(ii) The Appellant is entitled to the fixed charges and Return on Equity (‘ROE’) as per the UPERC

Tariff Regulations, 2014 and the PPA;

(iii) The Appellant has the right to use alternate coal under the PPA itself and could not get the

coal linkage not due to its default but because there was no Policy of Government of India for coal

linkage to private generators at the relevant time;

(iv) The time extension for fulfilment of condition subsequent relating to coal linkage under Article

3.1.2(ii) of the PPA and declaration of COD is a right of the Appellant and is not linked in any

manner to the evacuation facilities of UPPCL.

The main allegation of the Appellant is that the provisions of the Agreement dated 04.11.2015

and the impugned order dated 21.09.2016 are against the provisions of the UPERC Tariff

Regulations, 2014 both on the aspects of Fixed Charges and Return on Equity and also against the

provisions of PPA dated 10.12.2010.

The basic premise of the appeal is the manner in which the State Commission has approved an

amendment to a contract which is against the provisions of its own Tariff Regulations. The State

Commission has instead of penalizing, chosen to reward the unfair and coercive conduct of UPPCL

in dealing with the Appellant under the PPA dated 10.12.2010 and the validity of the Agreement

dated 04.11.2015 which the Appellant was forced to enter into and which, was signed under

coercion, undue influence and duress exercised by UPPCL. Despite the detailed pleadings on this

aspect placed by the Appellant before the State Commission, it has failed to deal with the matter

as an independent regulator.

Issues:

I. Whether the Agreement dated 04.11.2015 has any validity in view of the same being

contrary to Regulations, being without reciprocal consideration and also it being entered

into under coercion, undue influence and duress?



II. Whether the State Commission can deny the Appellant for payment of declared capacity

charges contrary to the UPERC Generation Tariff Regulations 2014 and the PPA?

III. Whether the State Commission can deny the Return on Equity to the Appellant for it not

fulfilling condition subsequent as stipulated in Article 3.1.2(ii) of the PPA against its own

Tariff Regulations when the same was not an issue in the petition before the State

Commission?

Held:

Issue I. The Hon’ble Tribunal has held that it has been proved beyond doubt that the said

agreement dated 04.11.2015 was not in accordance with law and thus, void ab-initio due to (a) it

being contrary to the Tariff Regulations, (b) it being without any reciprocal consideration falling to

the Appellant, and (c) it being entered without the free will of the Appellant, the Appellant

repudiating the same impliedly by filing petition seeking orders for declaring the same as void.

Further, in view of the conduct of UPPCL of having executed the Agreement dated 04.11.2015 and

then simply stopping the plant from running on 14.11.2015, vitiates the Agreement dated

04.11.2015 itself. [10]

Issue II.

1. The Hon’ble Tribunal has noted that while Regulation 18(1)(a) of the Tariff Regulations, 2014

of the State Commission defines the norms of operation, target availability for recovery of

capacity charges etc., the Regulation 25 specifies the computations of the capacity charges

and their recovery relating to target availability etc. It is relevant to note that once COD of the

plant/unit has been achieved and fuel as per Article 6.5 of the PPA is available, the Appellant

is duly entitled for the capacity charges in lieu of the declared capacity. [11.4]

2. The Hon’ble Tribunal has not found any substance in the contentions of UPPCL to treat the

scheduled capacity as the declared capacity and adding the fixed cost with variable cost to

decide the merit order despatch (‘MOD’) to the utter disadvantage of the Appellant. In fact,

the right of the Appellant to get the capacity charges for the declared capacity flows from the

UPERC Tariff Regulations, 2014 which otherwise cannot be altered or denied by inserting any

additional terms in an agreement contrary to the Regulations as has been done in the instant

case. It is significant and also ruled by various judgments of the Apex court that the State

Commission itself is bound by its Regulations and cannot deny the generator the payment of

capacity charges contrary to the Tariff Regulations. Thus, the impugned order(s) suffer from

legal infirmity and perversity. [11.5]

Issue III.

1. Learned counsel for the Appellant submitted that the State Commission has to determine the

tariff in terms of its Tariff Regulations and in exercise of its statutory power under Section 61,

62, 64 & 86 1(b) of the Electricity Act, 2003. He vehemently submitted that this is a specific

dispensation and cannot be modified by putting an additional conditions in the agreement by

virtue of which the generator is declared un-entitled for the ROE. Learned counsel pointed

out that the State Commission's approach is totally inconsistent as in Para 13 of the order

dated 21.09.2016 which proceeds on the basis that the parties have already acted on the

agreement dated 04.11.2015 as a contractual relationship and suddenly introduced a new

terms by stating that no ROE be paid during the subsistence of this contractual relationship.

He pointed out that the State Commission has not appreciated that in case of any derogation



between a PPA and the Regulations, the Regulations would have the overriding effect on PPA

as per Regulation 2(4)(5) of the Tariff Regulations, 2014. [12.12]

2. Learned counsel further contended that the State Commission by holding that the Appellant

would not get the ROE has acted against express terms of the PPA which require the State

Commission to determine the Tariff as per its Regulations. Further, the issue of ROE is not

related to the fulfilment of Article 3.1.2(ii) relating to coal linkage at all since the Appellant

had arranged for alternate coal and was itself bearing incremental fuel cost towards alternate

coal the arrangement vis-à-vis. the linkage coal. The State Commission has itself observed on

the same as "putting the procurers in same position in which they would have been had the

linkage coal being obtained". The Hon’ble Tribunal has expressed inability to comprehend the

decision of the Respondent Commission that how could ROE of the Appellant can be

disallowed when alternate coal was arranged by the generator at same cost as that of linkage

coal (absorbing the differential cost). [12.13]

3. The Hon’ble Tribunal has therefore, held that the order of the Commission to the effect that

the Appellant will not be entitled to ROE due to its non-fulfillment of the condition subsequent

relating to coal linkage contained in Article 3.1.2 (ii) of the PPA suffers from legal infirmity and

perversity as being against the settled principles of law and statutory regulations of the State

Commission. [12.14]

Disposition: Appeal No. 365 of 2018 is allowed. Issues raised are answered in favour of Appellant

ES Solar Private Limited & Anr. Vs. Bangalore Electricity Supply Company Ltd.

(BESCOM) & Ors. (08.05.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

APPEAL NO. 332 OF 2018 & IA Nos. 1591 & 1592 of 2018 & APPEAL NO. 333 OF 2018 & IA Nos.

1593 & 1594 of 2018

Dated: 8th May, 2019


Member

Background: The Appellants made bid for development of 10 MWs capacity of Solar PV ground

mounted project in Bidar Rural and 20 MW (AC) capacity of Solar PV ground mount project in

Bagepalli, in response to Request for Proposal (RFP) invited by Karnataka Renewable Energy

Development Limited (KREDL). The Letter of Award came to be issued for both the projects on

31.03.2016 and Power Purchase Agreements (‘PPA’) came to be approved on 17.10.2016 by

Karnataka Electricity Regulatory Commission (‘KERC/Commission’) subject to certain

modifications. Appellant No.1 and Respondent No.1 entered into supplementary PPAs on

07.12.2016 wherein certain clauses of PPA came to be modified in accordance with the directions

of KERC.

Bills and invoices came to be raised on Respondent No.1 for the power supply from 16.10.2017 to

31.10.2017 at Rs. 6.10/kWh. Subsequent bills/invoices came to be raised for the power supplied

to Respondent No.1 for subsequent months also claiming Rs. 6.10/kWh by the Appellants. The

Appellants began supply of power to the State Grid on 16.10.2017.

While making payments by Respondent No.1 towards the bills and invoices raised in respect of

Bidar project, the tariff came to be reduced to Rs. 4.36/kWh besides levying liquidated damages

of Rs. 20 lakhs. Similarly, for Bagepalli project, the tariff came to be reduced to Rs. 4.36/kWh from

Rs.6.10/kWh apart from levying liquidated damages of Rs.40 lakhs. According to Respondent No.1,



there was delay of one day in commissioning the project and achieving COD of the project,

therefore the Appellant No.1 is liable for payment of liquidated damages as stated above apart

from reduction of tariff to Rs.4.36/kWh as against Rs.6.10/kWh in terms of PPA.

According to the Appellants, in terms of Clause 8.5 of the PPA, the ‘Scheduled Commissioning

Date’ under PPA is (12) months from the ‘Effective Date’. The ‘Effective Date’ being date of

approval of PPA by KERC i.e., 17.10.2016, the Scheduled Commissioning Date would be 12 months

from 18.10.2016 to 17.10.2017 (after excluding first date of event i.e., approval of PPA by KERC).

The Appellants contend that the date of supply of power to the State Grid i.e. 16.10.2017 is within

the contractual period of 12 months for commissioning the project and achieving COD as agreed

in terms of PPA. Therefore, the Appellants contend that they have achieved COD as agreed under

PPA dated 23.05.2016.

According to the Appellants’ counsel that the said action of Respondent No.1 was uncalled for

since there was no delay on the part of the Appellants in achieving COD in terms of the PPA.

Further, the Appellants contend that the said action of Respondent No.1 amounts not only to

arbitrariness but it was also unilaterally done without giving any opportunity of being heard to the

Appellants. They further contend that in terms of PPA, if any dispute is raised in respect of

bills/invoices, 95% of the said bill/invoice amount claimed has to be deposited. Without adhering

to any of these terms of PPA, Respondent No.1 on its own cause has arbitrarily reduced the tariff.

Issue:

• Whether there was delay in commissioning the project in terms of PPA or not?

• Whether the project of the Appellants was delayed by one day in terms of Power Purchase

Agreement and whether the Commission was justified in imposing liquidated damages on the

Appellants for such delay in commissioning the project?

Held:

1. The Hon’ble Tribunal has found that it is clear that in respect of both the solar plants the

commissioning dates are recorded as 16.10.2017. So far as Bidar Solar Plant is concerned, it

was commenced in the evening i.e., at 18.05 hours, which means evening after 6.00 pm.

Therefore, it’s quite possible that there was no recording of quantum of power injected into

the grid. So far as Bagepalli Solar Plant is concerned, there was recording of power generated

at different points of time.

2. In terms of the definition of “Month” in the PPA, it shall mean a period of 30 days from the

date on which event happened (excluding the date of event). The date of event in this case is

approval of the PPA i.e., 17.10.2016. If the date of event is excluded for calculation, 12 months

would commence from 18.10.2016, and the end of 12 months has to be 17.10.2017.

Therefore, the 12 months have to be calculated from 18.10.2016 to 17.10.2017. [42]

3. In view of the afore-stated discussion and reasoning, the commencement of the solar plants

even if taken as 17.10.2017 as accepted and admitted by Respondents and Commission, the

scheduled date of commissioning was done within the time limit prescribed under the

agreements. [43]

4. If the commissioning of the solar plants was done in time in terms of agreements, the

Appellants have to get tariff of Rs.6.10 /kWh and not Rs.4.36/kWh. [44]

5. Consequently, there is no default in the commissioning of the projects for the reasons stated

above. Therefore, the question of payment of liquidated damages in terms of agreements also

would not arise. [45]



6. The Hon’ble Tribunal has been of the opinion that the impugned order has to be set aside by

allowing the appeals.


Raj West Power Ltd. Vs. Rajasthan Electricity Regulatory Commission & Ors.

(09.05.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY (Appellate Jurisdiction)

APPEAL NO. 228 OF 2018 & APPEAL NO. 235 OF 2018

Dated: 09.05.2019

Present: Hon’ble Mrs. Justice Manjula Chellur, Chairperson Hon’ble Mr. S.D. Dubey, Technical

Member

Background: In these two appeals, the grievance of the Appellant is non-consideration of claim of

the Appellant – Raj West Power Ltd. (‘Appellant’) by the Respondent No. 1 - Rajasthan Electricity

Regulatory Commission (‘Commission’) as regards carrying cost as change in law event in terms of

Article 13 of the PPA. The impugned order pertains to Petition No. 1283 of 2017, where the

Appellant had sought adjudication of disputes arising out of non-payment of bills in respect of

amounts due on account of change in law in terms of PPA i.e., in respect of four items (VAT, Clean

Energy Cess, DMFT & NMET). The change in law claim was in respect of VAT rate being increased

from 5% to 5.5% and Clean Energy Cess revised from Rs.200/ton to Rs.400/ton w.e.f. 02.02.2016

and 01.03.2016, respectively (Appeal No. 228 of 2018).

The Appellant contends that in spite of specific prayer for grant of interest/carrying cost on the

change in law compensation, the Commission, totally ignoring the well-established principles of

restitution and the specific intent of Article 13.2.2 (c) of PPA to the effect that financial position

of the seller shall remain unaffected by the change in law event, has not considered the said claim

made by the Appellant, who was the Petitioner before the Commission.

The Respondent-DISCOMS also raised before the Commission similar objection as raised in this

Appeal that the change in law compensation, if at all payable in terms of PPA has to be paid only

to BLMCL - an independent company exclusively involved in the mining activity of this project of

the Appellant since the levies are exclusively imposed on BLMCL. Therein, they contend that the

Appellant not being an aggrieved party, is not entitled for the above claims.

Issue: Whether the Appellant is entitled for interest/carrying cost on the amounts determined as

compensation in respect of change in law in terms of PPA?

Held:

1. It is noticed from the impugned orders that the amounts claimed by the Appellant though

were paid by BLMCL, in fact the said amounts were already paid by Raj West Power, Appellant

to BLMCL in terms of fuel supply agreement (‘FSA’). It is pertinent to note that

Respondent/DISCOMS have not filed any appeals challenging the direction of the Commission

to pay compensation in respect of VAT, Clean Energy Cess, DMFT and NMET claims being paid

to Appellants and not to BLMCL. It is not open to the Respondent/ DISCOMS to raise such

objection not to pay carrying cost/Interest to Appellant. Even otherwise, the Commission,

after examining the change in law clause in FSA executed between Appellants and BLMCL,

which can be considered as back to back agreement, has allowed the claim of the Appellants.

In that view of the matter, the Hon’ble Tribunal has not been able to appreciate the



preliminary objection raised by the Respondent/DISCOMS that BLMCL ought to have claimed

these amounts and not the Appellants as a third party. [10]

1. In Appeal No. 210 of 2017, which was disposed of by this Tribunal by its Judgment dated

13.04.2018 wherein the Tribunal opined that such claims for compensation by generators in

terms of clauses of PPA do arise and should be paid, however this Tribunal observed that

carrying cost or interest is admissible only after finalisation of amount payable and not before.

This Judgment of the Tribunal came for consideration before the Hon’ble Supreme Court in

Civil Appeal No. 5865 of 2018 wherein the Hon’ble Supreme Court opined that those clauses

in Article 13, if read as a whole, lead to the position that subject to restitutionary principles

contained in Article 13.2, the adjustment of compensation in monthly tariff payments has to

be arrived at. The Court further opined that the claim of compensation relates to

restitutionary amount, which is very much within the ambit of PPA and not outside PPA, since

parties have to be put to same economic position. [12], [13]

2. In the light of the above discussion and reasoning, the Hon’ble Tribunal has been of the

opinion that these appeals deserve to be allowed by remanding the matters for fresh

consideration only on the aspect of carrying cost payable on the compensation already

determined on VAT, Clean Energy 17 Cess, DMFT and NMET. Accordingly, the appeals are

allowed and remanded for fresh consideration on the aspect mentioned above. The pending

IAs, if any, shall stand disposed of. [15]

Disposition: Appeals allowed

Torrent Power Ltd. vs. Gujarat Electricity Regulatory Commission (09.05.2019 -



Dated: 09.05.2019


Member

Background: The present Appeal has been filed by Torrent Power Ltd. (‘Appellant’) under Section

111 of the Electricity Act, 2003 challenging the Order dated 31.03.2016 ("impugned Order")

passed by the Gujarat Electricity Regulatory Commission ('Commission') in Case No. 1551 of 2015

relating to the Truing up of FY 2014-15, Approval of Provisional ARR for FY 2016-17 and

Determination of Tariff for FY 2016-17 for Torrent Power Ltd. - Generation, Ahmedabad.

The Appellant has challenged the said order of the Respondent Commission to the extent it relates

to:

A) Erroneous computation of interest expenses

B) Disallowance of Carrying Cost

The Appellant submitted that the Respondent Commission has notified the MYT Regulations, the

Regulation 39 of which deals with Interest and Finance Charges on loan capital. The second proviso

to Regulation 39.1 which specifically deals with the treatment to be given in case of retirement of

assets clearly specifies that in case of retirement of assets, the loan capital should be reduced to

the extent of outstanding loan component of the original cost of the retired or replaced assets,

based on documentary evidence. Accordingly, the Appellant has submitted the Certificate of the

Statutory Auditors of the Company to confirm that there is no outstanding loan pertaining to

assets created prior to 31.03.2007.



The Respondent Commission submitted that the Appellant has not submitted any documentary

evidence to show the outstanding loan relates to the assets withdrawn. Further, the Appellant has

also not furnished year-wise break-up of the assets withdrawn against which outstanding loan is

claimed due to which the claim of the Petitioner cannot be validated and accordingly the

Commission considered the reduction of opening loan to the extent of 70% of the assets

withdrawn.

Issue: Whether the State Commission has passed the impugned Order relating to the computation

of interest expenses in accordance with its Regulations?

Held: The Hon’ble Tribunal has held that in line with the second proviso to Regulation 39.1, the

Appellant has rightly requested the Respondent Commission for computation of loan component

to deduct the assets worth Rs. 13 Crore (i.e. Rs. 84.96 Crores minus Rs. 71.96 Crores) from the

addition of assets of Rs. 41.76 Crores during the year as loan capital existed towards the retired

assets worth Rs. 13 Crore. The certificate issued by the Statutory Auditors, who has conducted the

audit of the Company, has issued the Certificate at the specific request of the Appellant for

submission to Respondent Commission in respect of deduction of fixed assets and status of

outstanding loans as on 31st March, 2015, meets the requirement of Regulation 39. In fact, the

purpose of seeking such documentary evidence is to ascertain that the interest expenses

pertaining to loan availed to create such assets should not be charged to the consumers.

Accordingly, there appears no need for the Respondent Commission to have further details of the

outstanding loan component for the assets worth Rs. 13 Crores retired during the year when the

Appellant has not claimed any relief towards this assets. The Hon’ble Tribunal has not found any

merit in the argument of the Respondent Commission that as Appellant has not furnished the

year-wise details of assets withdrawn and loan repayment, the Appellant should be denied relief

as per Regulation 39.1. Hence, the impugned Order suffers from legal infirmity and is liable to be

set aside. Accordingly, the appeal deserves to be allowed. [8.1.] [8.2]


Torrent Power Ltd. vs. Gujarat Electricity Regulatory Commission (09.05.2019 -



Dated: 09.05.2019


Member

Background: The present Appeal has been filed by Torrent Power Ltd. (‘Appellant’) under Section

111 of the Electricity Act, 2003 (‘Act’) challenging the Order dated 31.03.2016 (‘impugned Order’)

passed by the Gujarat Electricity Regulatory Commission ('Commission') in Case No. 1554 of 2015

relating to the Truing up of FY 2014-15, Approval of Provisional ARR for FY 2016-17 and

Determination of Tariff for FY 2016-17 for Torrent Power Ltd. -Distribution, Dahej. The Appellant

has challenged the said order of the Respondent Commission to the extent it relates to erroneous

treatment of O & M Expenses as under:-

A. Variation in O & M Expenses considered as controllable

B. Reduction/deduction of Rs. 2.48 crores from O & M Expense contrary to applicable

Statutory Regulations

C. Network Augmentation charges paid to GETCO considered as controllable



Issue: Whether impugned Order herein need interference? Whether the impugned Order passed

by the State Commission is in consonance with its Regulations relating to the O & M expenses or

in any way violates the provisions of the Act and principle of natural justice?

Held:

1. The variation in O&M expense is normally to be treated as controllable. However, in exception

cases as in hand, the amount of Network Augmentation charges incurred by the Appellant as

required by State Transmission Utility (STU) for connectivity needs to be treated as

uncontrollable.

2. The deduction of Rs. 2.48 crores from O&M Expenses is contrary to applicable Statutory

Regulations of the State Commission.

3. The Commission should take consistent stand in all matters on the same plea whether related

to O&M expenses or the variation in technical and commercial losses.

4. Accordingly, the appeal deserves to be allowed. [9]


Him Urja Private Ltd. vs. Uttarakhand Electricity Regulatory Commission & Ors.



Dated: 09.05.2019


Member

Background: The present Appeal is preferred under Section 111 of the Electricity Act, 2003 against

order dated 08.07.2016 passed by the Uttarakhand Electricity Regulatory Commission ('State

Commission') whereby the State Commission has rejected the petition of the Appellant for

revision of tariff on account of non-receipt of subsidy from the Government of India, which subsidy

was assumed by the State Commission while determining the tariff for the Appellant. The tariff

order had proceeded on the basis that the capital subsidy was available with the Appellant,

whereas no such subsidy has been received by the Appellant.

The Appellate Tribunal for Electricity (‘Tribunal’) while deciding the Appeal No. 178 of 2014 did

not interfere with the said decision of the State Commission on the premise that the State

Commission would carry out necessary corrections in the tariff as was also stated in the tariff order

dated 10.04.2014. However, when the Appellant approached the State Commission pursuant to

the aforementioned judgment of the Tribunal for the revision of tariff on account of the fact that

subsidy was not received, its petition came to be rejected holding that till the time the final

decision of the Ministry of New and Renewable Energy (‘MNRE’) is taken for grant of subsidy, the

existing tariff which assumes the receipt of subsidy shall continue.

Issues:

• Whether order impugned herein need interference?

• Whether the State Commission is justified in deducting the capital subsidy based on only

assumptions, without its actual receipt by the Appellant?

• Whether the State Commission has taken a judicious decision in not revising the tariff based

on the fact that the capital subsidy has not been received by the Appellant from MNRE?



Held:

1. The Hon’ble Tribunal has noted that the Small Hydro Power (‘SHP’) of the Appellant was

eligible for obtaining the capital subsidy from MNRE, Government of India but failed to avail

the same because it could not achieve the performance criteria of 80% Plant Load factor (‘PLF’)

for 80 days, as prescribed for availing the subsidy from MNRE. The Appellant has contended

that the subsidy has not been granted by MNRE for none of its faults as project could not

operate at prescribed performance criteria due to excessive silt passing their machines in high

discharge period.

2. The Hon’ble Tribunal has noted that the grant of capital subsidy by MNRE is yet to be decided

and that the Appellant has admitted during the arguments that it is still hopeful of availing the

same. The Hon’ble Tribunal was unable to accept the contentions of the Appellant that it is

not able to achieve desired eligibility parameters on account of excessive silt in the river

Nandakini due to the fact that all such hydro projects are planned and constructed considering

the silt problems and considering adequate remedial measures based on the water/silt

analysis of the river. Moreover, achieving 80 % PLF for 80 days is not a non-achievable criteria

for small hydro projects. If the Appellant's project at Vanala could not achieve, the same, it

may be additionally due to some other technical problems in the generating units. In view of

these facts, the Hon’ble Tribunal was of the considered opinion that the findings of the State

Commission in the Impugned Order do not suffer from infirmity or perversity and hence, any

interference by the Tribunal is not called for. [10]


NTPC Ltd. vs. Central Electricity Regulatory Commission & Ors. (09.05.2019 -



Dated: 09.05.2019


Member

Background: The present Appeal by the Appellant - National Thermal Power Corporation Ltd.

('NTPC') is directed against the order dated 24.02.2017 (‘impugned Order’) in Petition No.

342/GT/2014 on the file of the Central Electricity Regulatory Commission (‘CERC’).

The Appellant had claimed an additional expenditure of Rs. 100 lakhs for the year 2015-2016, Rs.

200 lakhs for the year 2016-2017 and Rs. 200 lakhs for the year 2017-2018 towards CCTV

Surveillance System for Stage III under Regulation 14(3)(iii) of 2014 Tariff Regulations. The

Appellant also had claimed additional expenditure of Rs. 100 lakhs for the year 2016-2017 and Rs.

100 lakhs for the year 2017-2018 for installation of CCTV in Stage III Cable Gallery which is also in

line with CISF advice as given after during the technical audit conducted by CISF on 28.06.2009

and per letter sent by CISF dated 26.11.2009, in order to keep watch so as to detect the fire, if

any, at an initial stage as well as to monitor any movement inside the cable gallery. The 2nd

Respondent - Madhya Pradesh Power Management Company Ltd. ('MPPMCL') objected to the

claim of the Appellant on the grounds that the said expenditure has to be met from O & M and

not as additional capital expenditure.



By the impugned order, CERC disallowed the claim of the Appellant. This expenditure was not

considered under Section 14(3)(iii) of the 2014 Tariff Regulations; but on the other hand, the

Appellant was directed to meet the said expenditure through compensation allowance under

Regulation 17 of the Tariff Regulations which is contrary to the recommendation made by the

Assistant Commandant, CISF by a letter dated 02.02.2013 which was statutory in nature attracting

Regulation 14(3)(iii). Though the Appellant filed a Review Petition against the impugned Order,

the same came to be rejected by the CERC.

Issues:

• Whether the Appeal deserves to be allowed? And if so, on what ground?

• Whether Appellant did produce the relevant documents in support of their claim? If so,

whether the documents were insufficient?

• Whether such additional capital expenditure, after the cut-off date was incurred by the

Appellant? and If so, whether in terms of Tariff Regulations of 2014 such expenditure could

be allowed under Section 14(3)(iii)?

Held:

1. The Hon’ble Tribunal has held that from reading of Regulation 14 and 17 of the Tariff

Regulation 2014, it is clear that compensation allowance comes in to play only if new assets

of capital nature which do not fall under Regulation 14. Reading of Regulation 17 clearly

indicates it is a general provision. Reading of Regulation 14 makes it crystal clear that it is a

special provision pertaining to existing project under certain circumstances as stated in the

said Regulation. [16]

2. The main argument of the second Respondent seems to be that since Regulation 14(3)(iii)

refers to Prudence Check and the Appellant did not furnish information, CERC was justified in

rejecting the said claim under 14(3)(iii) and rightly allowed the same under Regulation 17 of

Tariff Regulation of 2014. The Hon’ble Tribunal has examined whether such exercise was

properly done in this case. [17]

3. In order to have Prudence Check, the material on record at Annexure A/2 of the Appeal Paper

Book clearly indicates that this additional capital expenditure had to be incurred after cut-off

date in March 2010. None can deny the fact that it is not a safety measure. On the other hand,

Regulation 14(3)(iii) indicates this type of expenditure on account of need for higher security

and safety of the plant as directed by appropriate Government Agencies or statutory

authorities could be allowed. One cannot deny that CISF is not a Statutory Authority or

appropriate Government Agency. The letter at the above-said Annexure A/2 clearly indicates

this Department discharges its duties under Ministry of Home Affairs. [28]

4. It is well settled if special provision is available one should not take recourse to general

provision. General provisions must yield to special provisions in such situation. Therefore, it is

clear from the impugned order that the very process in assessing the claims was not properly

appreciated by the Commission. If at all Commission needed some more information, they

ought to have asked the Appellant for such information instead of opining that there is

incomplete information. It is not in dispute in so far as other plants of the Appellant, similar

claim as safety measures was allowed by the very same Central Commission. Therefore, there

is no doubt that if additional capital expenditure after cut-off date is spent towards higher

security and safety of the plant in terms of Regulation as recommended by appropriate

Government Agency or Statutory Authority, it shall fall under Regulation 14(3)(iii). In that view

of the matter, and for the reasons mentioned above, the Hon’ble Tribunal was of the opinion



that the Respondent Commission proceeded on wrong assumption and denied the claim of

the Appellant under Regulation 14(3)(iii) of 2014 Regulations. [31]

5. As per the prudent industrial practice, the installation of CCTV for surveillance and safety of

vital installations is essential. As in the instant case, it has also been recommended by

Government instrumentalities to install adequate numbers of CCTV for surveillance of the

plant and ensuring safety measures for fire etc. in the cable galleries. Thus, the estimated

projection for installation of requisite number of CCTVs by the Appellant requires

consideration by the CERC without insisting much on the procedural information whatsoever.

In fact, the Commission has to accord in-principle approval only for the proposal of the

Appellant in this regard, and the actual amount would need to be allowed after Prudence

Check in the true up exercise. As CERC has allowed similar expenditures in other thermal

power plants of the Appellant, there does not appear any visible reason for not allowing the

same in the instant case. This is also required for CERC to take a consistent view in all the cases

rather than adopting selective approach from case to case on same plea. The Hon’ble Tribunal

has been of the considered view that CERC has passed the impugned Order in an inconsistent

way without adequate evaluation of the case in hand. [32]

6. Appeal No. 125 of 2017 deserves to be allowed and the impugned order dated 24.02.2017

passed by the Central Electricity Regulatory Commission in Petition No. 342/GT/2014 is

hereby set aside. [33]


Prism Cement Ltd. & Ors. vs. Madhya Pradesh Electricity Regulatory Commission &


Appeal No. 02 of 2018, IA Nos. 10, 1096, 1283 of 2018 and Appeal No. 179 of 2018

Dated: 17.05.2019


Member

Background: The present Appeals have been filed by the Appellant - M/s. Prism Johnson Ltd.

(‘M/s. Prism’) and Appellant - M/s. BLA Power Pvt. Ltd. (‘M/s. BLA’) challenging the Order dated

30.12.2017 ("impugned Order") passed by the Madhya Pradesh Electricity Regulatory Commission

(‘State Commission’) in Petition No. 56 of 2016 and Petition No. 36 of 2017 respectively whereby

the State Commission has held that cross subsidy surcharge is payable on the power sourced by

M/s. Prism from Unit-1 of M/s. BLA Power's generating station.

Issues: Whether order impugned herein need interference?

I. (a). Whether the power plant i.e. Unit-1 of M/s. BLA Power's generating station satisfies the

twin conditions under Rule 3 so as to qualify as a Captive Generating Plant (‘CGP’)?

I. (b). Whether Cross Subsidy Surcharge is leviable/applicable on the power consumed by M/s.

Prism (captive user) from Unit-1 of M/s. BLA?

II. If Unit-1 of M/s. BLA Power qualifies as a CGP, will the tariff for supply of 30% capacity under

the Long Term PPA be determined under the MPERC Generation Tariff Regulations or the MPERC

Captive Regulations?

Held:



1. The Hon’ble Tribunal has held that to qualify as CGP under Section 2(8) read with Section 9 of

the Act and Rule 3 of the Rules, a power plant has to fulfil two conditions;

a) firstly, 26% of the ownership of the plant must be held by the captive user(s); and

b) secondly, 51% of the electricity generated in such plant, determined on annual basis,

is to be consumed for captive use by the captive user.

2. Upon fulfilment of the aforesaid conditions determined on an annual basis, the power plant

qualifies as a CGP. It is also clear that the Rules provide for determination of the status of the

CGP on an annual basis at the end of the financial year. Rule 3 itself recognizes that the status

of a power plant is dynamic i.e. a power plant can be a CGP in a particular year but can lose

such status in any subsequent year if the twin-conditions are not satisfied and thereafter again

qualify as a CGP if the twin-conditions under Rule 3 are satisfied in any particular year. [9.6]

3. In light of the facts that the twin-conditions as per Rule 3 are met by M/s. Prism and M/s. BLA

in terms of Unit-1, the Hon’ble Tribunal has held that Unit-1 of M/s. BLA is a CGP with M/s.

Prism as its captive user. Therefore, in terms of the 4th Proviso to Section 42(2) of the Act,

cross-subsidy surcharge cannot be levied on power captively consumed by M/s. Prism from

M/s. BLA's Unit-1. Consequently, the impugned demand notices dated 02.01.2018 are set-

aside. The Hon’ble Tribunal has clarified that if at the end of a particular financial year it is

found that the twin-conditions are not satisfied, the exemption from levy of cross subsidy

surcharge would not be available. [10.1]

4. Further, whether or not Unit-1 of BLA Power is qualifying as a CGP under Rule 3, the Tariff for

supply of 30% of installed capacity of Unit-1 under Long-Term PPA will continue to be

determined in the same manner as has been done in the past, i.e. under MPERC Generation

Tariff Regulations. [10.2]


Maithon Alloys v. CERC & Ors (17.05.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

APPEAL No. 17 of 2014 & batch

Dated: 17.05.2019

Present: Hon’ble Mrs. Justice Manjula Chellur, Chairperson; Hon’ble Mr. S. D. Dubey, Technical

Member

Background: The Appellants are primarily engaged in ferro-alloy and/or iron & steel industry and

are High Tension consumers of the Respondent No.2(DVC)

These Appeals filed before the Tribunal, though passed by different orders Of CERC dated

07.08.2013, 09.07.2013and 27.09.2013 are common in nature therefore being decided by a

common judgement of this Tribunal.

The issues raised by the Appellants in this batch of appeals have been addressed by CERC in the

true up orders for FY 2009-14, that have been passed after the filing of these appeals. Therefore,

the Appellants now seek to address submissions only with respect to “Contribution to Sinking

Fund for redemption of Bonds” issued by DVC.

In case the said funds have been utilised for meeting the working capital requirements of DVC,

then allowing both sinking fund contributions and interest on working capital in terms of

Regulation 18 for FY 2009-14 would amount to double allowance of the same item, resulting in an

undue increase in tariff. On the other hand, if the sum of Rs. 640 crore has been utilised for capital



expenditure by DVC, the impugned order ought to have considered that such capital expenditure

has already been factored in the normative debt and equity allowed to DVC in terms of Regulations

16 and 15 respectively.

Issues: Whether in the facts and circumstances of the case, the impugned order passed by the

Central Commission has allowed double allowance of capital cost incurred by DVC?

Held:

1. The Tribunal has held that as per Section 40 of DVC Act, 1948, DVC is entitled for provision for

depreciation, reserve and other fund. The tribunal further pointed out that in its earlier

judgement in Appeal No. o.271 of 2006 & batch has held the admissibility of sinking fund in

favour of DVC which has also been upheld by the Hon’ble Supreme Court in its judgment 2018

(8) SCC 281.

2. It is also noted from the tariff regulations that depreciation and interest on loan payable are

two different aspects while sinking fund contribution is an additional tariff element admissible

only to DVC under the DVC Act.

3. Therefore, we hold that the Central Commission has passed the impugned order in

accordance with settled position of law and its Regulations


Lanco Amarkantak Power Ltd. v. HERC & PTC & HPPC (22.05.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 22.05.2019

Present: Hon’ble Mrs. Justice Manjula Chellur, Chairperson; Hon’ble Mr. Ravindra Kumar Verma,

Technical Member

Background: The Appellant and the Respondent No. 2 had entered into a PPA dated 19.10.2005

for sale of power (from its Unit II) at a tariff to be determined in accordance with the applicable

CERC Tariff Regulations, subject to capped levelised tariff rate of Rs.2.32 per unit, for onward sale

to one or more purchasers. Subsequently, the Respondent No. 2 entered into a Power Sale

Agreement dated 21.9.2006 with the Respondent No.3 for sale of entire power purchased from

the Appellant.

In terms of the PPA, the Appellant entered into an Implementation Agreement dated 01.08.2009

with the Government of Chhattisgarh, as per This agreement, the Appellant is to provide e 35% of

the power generated from the project as home state share to the CSPTCL.

Due to the NCDP, the coal linkage linkage quantity under the FSA had been significantly lessened

from what was initially envisaged in the LOA, therefore the balance of coal had to be procured

from an alternate sources such as e-auction, open market or imported coal, which significantly

increased the cost of generation. In view of the above circumstances the Appellant approached

the Respondent No.2 that at capped tariff rate of Rs.2.32/kWh, the PPA was impossible to

perform. Thereafter Respondent No.2 filed a petition before the Respondent Commission stating

that in view of the changed circumstances including force majeure events, introduction of NCDP

and execution of Implementation Agreement by the Appellant with Chhattisgarh Govt., the tariff

under the PSA needs to be revised. Respondent No.3 filed a Petition seeking a direction to the

Appellant and the Respondent No. 2 to comply with their purported contractual obligations and



for restraining the Appellant from selling the contracted capacity under the PSA to any third party

including and not limited to the State of Chhattisgarh.

The Appellant opposed the petition on the grounds of jurisdiction of the said Commission, as the

Appellant was a generator situated in Chhattisgarh and had no privity of contract with the State

Commission. During pendency of this petition the Appellant terminated the PPA with Respondent

No. 2, as Respondent No.2 failed to obtain and maintain long term open access even after being

issued a one year prior notice.

On 02.02.2011, the Respondent Commission passed an order restraining the Appellant from

revising its price for sale of power and further restrained the Appellant from selling the contracted

power to a third party.

Aggrieved by the Order dated 02.02.2011 passed by the State Commission, the Appellant filed an

appeal before this Tribunal on 07.02.2011 being Appeal No. 15 of 2011.

Tribunal was pleased to pass an interim Order dated 23.03.2011, whereby the order dated

02.02.2011 passed by the State Commission was partially stayed.

Though this Tribunal directed supply of power, no price/tariff for the said supply was specified in

the said Order. In terms of the interim order, the Appellant w.e.f. 07.05.2011 commenced 35%

supply of power from its Unit-II to CSPTCL (host state share) and balance (65%) to the Respondent

No. 2 for onward supply to the Respondent No. 3.

Appeal No 15 of 2011was finally dismissed by the tribunal, Appellant filed an appeal against the

Respondent Commissions order dated 04.11.2011 passed by this Tribunal, before the Hon’ble

Supreme Court being Civil Appeal No. 10329 of 2011.

The SC filed passed an Interim stay order upholding interim Order of the Tribunal dated 23rd

March, 2011.

Pursuant to the Order dated 16.12.2011 of the Hon’ble Supreme Court, the State Commission

passed an Order on 17.10.2012 holding that the capped tariff of Rs 2.32/kWh in the PPA shall

prevail, on the ground that the Hon’ble Supreme Court’s Order did not mention in its Order, that

PPA is to be ignored.

Aggrieved by the said Order, the Appellant filed an application in the pending Civil Appeal before

the Hon’ble Supreme Court, challenging the determination of tariff by the State Commission and

seeking quashing of the Order dated 17.10.2012 passed by the State Commission. The Hon’ble

Supreme Court vide Order dated 19.02.2013, while observing that the statutory remedy of filing

an Appeal was available to the Appellant, granted liberty to the Appellant to file an Appeal before

this Tribunal against the Order dated 17.10.2012.

The Appellant filed an Appeal against the Order dated 17.10.2012 of the State Commission as per

SC order dated 19.02.2013,

In view of the fact that , Appellant was getting tariff of Rs.2.32/kWh for supply of power, which

was not commercially viable, the Appellant was constrained to shut down operations of UNIT II.

This Tribunal vide its Order dated 03.01.2014 allowed the Appeal No.65 of 2013 and set aside the

Order dated 17.10.2012 of the State Commission. Necessary directions were issued to State

Commission to re-determine the tariff (for the power already supplied) within two months from

the date of communication of the judgment.



As per the above judgement of this Tribunal the Appellant filed an application before the State

Commission for redetermination of tariff.

Vide its order dated 23.01.2015, the Respondent Commission re-determined the tariff (interim)

of Rs. 2.8875/ kWh for FY 2011-12 and Rs. 2.9218/ kWh for the FY 2012-13 comprising of capacity

charges and variable charges.

The above order dated 23.01.2015 of the Respondent Commission was challenged by both the

Appellant and Respondent No.3 in this tribunal being Appeal No. 107/2015 which was dismissed

except on the issue of Operation and Maintenance Expenses.

The Respondents did not pay the differential tariff even after the tariff order had been issued, and

raised disputes.

The Appellant filed a Petition for execution of the Order dated 03.01.2014 passed by this Tribunal

(EP No. 05/2015 in Appeal No. 65 of 2013) the following reliefs were sought in the Execution

Petition:-

“(a) Allow the present petition, execute the Order dated 03.01.2014 by directing Respondent No.

2 (HPGCL), Respondent No. 2a [HPPC] and Respondent No. 3 (PTC) to forthwith pay the amount

of Rs99.30 crores to the Petitioner along with interest at 18% from the date on which the said

amount became due and further pay tariff as determined by HERC for the power to be supplied

by the Petitioner;

The Respondents objected to this order of the Tribunal contending that it cannot be executed and

the Appellant has to first approach the State Commission, In view of the aforesaid stand of the

Respondents, the execution petition was dismissed by this Tribunal vide Order dated 22.12.2015.

The Appellant was given liberty to approach the State Commission.

On 21.01.2016, the Appellant filed Petition bearing No. HERC/PRO3 of 2016. The Respondent

Commission disposed of the above Petition, as per this order the Respondent Commission

acknowledged the entitlement of the Appellant to interest on the outstanding differential amount

of Rs. 88.123 Crores payable by the Respondents and despite framing an issue to the said effect,

the Commission failed to grant the interest to the Appellant.

Issue: Whether the State Commission erred in law in not directing payment of interest on the

outstanding differential amount payable by the Respondents to the Appellant?

Held: The Tribunal has held that the State Commission has erred in not granting interest to the

Appellant. The Respondent No.3 have submitted that interest cannot be paid until the amount is

crystallized. It is pertinent to note here that though the amount was crystallized by the State

Commission vide their Impugned Order but the most important fact to be kept in mind is that the

State Commission re-determined the tariff from the date of commencement of supply which

clearly shows that the due date is the date of commencement of supply. In such matters the crucial

point for consideration is that interest is not a penalty or punishment at all. But, it is the normal

accretion on capital. Equity demands that the paying party should not only pay back the principal

amount but also the interest thereon to the recipient.




Siwana Solar Power Project v. Haryana Electricity Regulatory Commission & Haryana

Power Purchase Centre &Haryana Renewable Energy Development Agency



Dated: 27.05.2019


Member

Background: The Appellant has a 5MW solar plant in the state of Haryana. The Appellant entered

into a PPA dated 21.02.2014 with Respondent N0.2 for supply of 5MW power.

Respondent Commission notified the HERC RE Tariff Regulations on 03.02.2011 which was

amended on 05.09.2011, as per amendment, Regulation 64(3) was added which mandated that

in the event a renewable energy generator offers to sell its electricity, then the Respondent No. 2

has to necessarily execute a PPA with the said generator. However, Respondent No.2 delayed the

execution of the PPA, compelling the Appellant to file a petition before the Respondent

Commission, wherein the Respondent Commission directed that the Appellant had to start

generation of power by 31.03.2014, the petition had to file 3 consecutive petitions as the project

kept getting delayed and the commission passed an order that the project had to be

commissioned till 31.12.2014…….

As per Article 4.1 of the PPA the Respondent No. 2 has to pay tariff to the Appellant which is the

lowest of the following:

a) the tariff determined by the Respondent Commission, i.e. Rs. 7.94 for FY 2013-14 in case the

plant is commissioned before 31.03.2014, or Rs. 7.58 per unit for FY 2014-15 in case the plant is

commissioned by 30.06.2014; b) the lowest tariff quoted and accepted in the long-term bid

process conducted by the Respondent No. 2 before 31.12.2015; and c) the lowest tariff quoted

and accepted in the long-term bid process conducted by HAREDA before 31.12.2015.

per kWh.

In its final order Respondent Commission has entitled the Respondent No. 1 to make payments to

the Appellant for the power procured, contrary to the terms of the PPA dated 21.02.2014 as well

as contrary to the statutory principles. Hence the Appeal.

Issues:

• Which tariff is applicable to the Appellant, in terms of Article 4.1 of the PPA

• Whether the Appellant is liable to bear wheeling charges

• Whether the Appellant is entitled for deemed generation benefit beyond back down of 87.6

hours in a particular contractual year.

Held: The Hon’ble Tribunal held that the Appeal was devoid of merits and the Appeal was

dismissed.




GMR Karmalanga Energy Ltd. & Anr. Vs. Central Electricity Regulatory Commission

& Ors (27.05.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 27.05.2019


Member

Background: The 1st Appellant was found to institute a 1400 MW Thermal Power Plant in Orissa.

The 1st Appellant entered into a PPA dated 28.09.2006 (amended on 04.01.2011) for supply of

350mws of power with GRIDCO.

A second PPA dated 09.11.2011 for supply of 282 MW gross power (260 MW net of auxiliary

consumption) to Bihar State Electricity Board and 350 MW gross power to Haryana DISCOMS

based on the competitive bidding through back-to-back arrangement by virtue of PPA dated

07.08.2008 between PTC and Haryana DISCOMS and back-to-back PPA dated 12.03.2009 between

GEL – second Appellant and PTC India Ltd.

The Appellants had filed a petition before CERC claiming compensation for change in law events

during operation period of the Plant.

CERC disallowed compensation for the following events:

(a) Change from UHV to GCV based pricing of coal pursuant to notification issued by the

Government of India.

(b) Increase/revision in the railway freight charges pursuant to notifications issued by Ministry of

Railways and Ministry of Finance.

(c) Increase in the rate of Minimum Alternate Tax (“MAT”) rates.

(d) Increase in Value Added Tax in the State of Odisha.

(e) Increase in water charges pursuant to notifications issued by the Government of Odisha.

(f) Incremental increase in interest on working capital on account of increase in costs during the

operating period.

On 02.08.2007, the Standing Linkage Committee (Long-Term) for power approved firm coal

linkage for the project.

On 06.11.2007, Ministry of Coal intimated its decision to allocate Rampia and Dip Side Rampia

coal blocks in Odisha to a consortium comprising of GEL and five other allottees

PTC’s was declared as the successful bidder. Subsequently, Mahanadi Coalfields Ltd. issued Letter

of Assurance (LOA) in favour of GEL.

On 31.07.2008, Haryana Electricity Regulatory Commission (hereinafter referred to as ‘HERC’)

adopted the tariff of the successful bidders including GKEL (through PTC) in pursuance of Section

63 of the Electricity Act. Two separate PPAs came to be executed between PTC and Haryana

DISCOMS.

Ministry of Railways issued a circular increasing the developmental surcharge from 2% to 5% on

12.10.2011



GKEL entered into a PPA with Bihar State Electricity Board for supply of 282 MW gross power in a

competitive bid process

On 30.12.2011, Government of India issued a Gazette Notification directing a switch over from

Useful Heat Value (hereinafter referred to as ‘UHV) based pricing system to Gross Calorific Value

(hereinafter referred to as ‘GCV’) based pricing system. Accordingly, CIL and its subsidiaries

switched over to GCV-based pricing system.

VAT was increased from 4% to 5% by the Govt of Orissa vide notification dated 30.03.2012. that

same year the Railway ministry also issued a circular notifying imposition of Service Tax from 5%

to 12%

An FSA was signed with MCL, it is pertinent to note that the FSA issued by CIL notably strayed from

the new NCDP.

On 30.04.2013, COD of Unit-I was declared. Similarly, Unit-II achieved COD on 12.11.2013 and

Unit-III on 25.03.2014.

Based on the above series of events the Appellant then approached the CERC for compensation

under Change in law.

Issues:

• Whether CERC was wrong in disallowing certain claims of Appellants opining that it is contrary

to the provisions of competitive bidding guidelines under PPAs?

• Whether Appellants are entitled for compensation on account of change from UHV to GCV

based prices (coal)?

• Whether Appellants are entitled for railway freight charges as entitled for compensation

towards increase/revision in railway freight charges on account of increase in busy season

surcharge, development surcharge and Service Tax?

• Whether Appellants are entitled for change in compensation towards change in MAT rate

which came to be introduced by the Finance Act of 2012?

• Whether Appellants are entitled for compensation towards increase in water charges?”

• Whether Appellants are entitled for carrying cost?

• Whether the Appellants are entitled for VAT rate as claimed?

• Whether the Appellants are entitled for interest on additional working capital?

Held:

1. The Tribunal has held that CERC was not justified in opining that the Appellant No. 1 was

expected to take into account the possible revision in the mentioned charges while quoting

the bid. Appellants are justified in saying that it was not possible to forecast the increase in

these charges so as to factor them in the bid submitted as back as in 2007 that is development

surcharge was at 2% till 2010 and increased to 5% thereafter.

2. The Tribunal further opined that the Appellant no.1 was entitled to service tax for

transportation of goods as a change in Law event as the CERC had passed numerous orders to

this effect.

3. Further, VAT as a change in law event, which was increased by the State government from 4%

to-5%, the Tribunal has held VAT depends on the Central Excise Duty, Royalty and Clean

Energy Cess which has to be recognised as a Change in Law event therefore Appellants are

entitled for compensation.



4. On interest on working capital and carrying cost as change in law event, was also accepted

and allowed by the tribunal holding that the Tribunal being an Appellate authority can allow

the prayer by moulding the relief to meet the ends of justice parties must be brought to same

economic position, it would include that all additional costs, which occurs after the cut-off

date in terms of the change in law event, have to be compensated.

5. On levy of water charges, the tribunal held that Appellant was not entitled to be compensated

as it is an admitted fact that price on water charges if not envisaged in the PPA and depending

upon whether in any particular case bidder has quoted the energy charges in escalable or non-

escalable components considering the market risks, the same price, if found in the escalation

rate index published on half yearly basis by the Central Commission, one can seek such

increase in water charges, since bidder is entitled to quote only escalable energy charges or

only non-escalable energy charges or combination of both.

6. Coming to the issue of MAT, the Appellants were not entitled to any compensation based on

settled principle in the judgement of this tribunal in GMR Warora Energy’s case.

7. Coming to shift from UHV base/ methodology to GCV methodology, pricing of the coal, The

Tribunal has disallowed such compensation following the principles settled in the GMR

Warora Energy case.


Adani Transmission Ltd. Vs. Maharashtra Electricity Regulatory Commission.



Dated: 29.05.2019

Present: Hon'ble Mrs. Justice Manjula Chellur, Chairperson; Hon'ble Mr. S.D. Dubey, Technical

Member

Background: This Appeal has been filed against the Impugned order dated 28.06.2016 in Petition

No. 7 of 2016, for Multi Year Tariff Petition seeking approval of True up of Aggregate Revenue

Requirement (ARR) for FY 2013-14 and FY 2014-15 and Provisional True-up of ARR for FY 2015-16

in accordance with MERC (Multi Year Tariff) Regulations, 2011.

In the Impugned order the Respondent Commission reduced the ARR, in relation to the following

Items below:

• Non allowance of Capital Cost of Bus Reactors

• Considering Outstanding Delayed Payment Charges (DPC) as Non-Tariff Income for reduction

of Allowed ARR

• Non allowance of Actual Operations & Maintenance (O&M) Cost and

• Disallowance of expenses incurred towards the demerger process.

In case No. 190 of 2013 vide its order dated 03.07.2014

The present Appeal has been filed by Adani Transmission India Ltd. (hereinafter referred to as the

‘Appellant’ against order/ judgment dated 28.06.2016, passed by the Hon’ble Maharashtra

Electricity Regulatory Commission (hereinafter ‘Respondent Commission’) in Case No. 7 of 2016.

The Appellant holds Transmission License No. 2 of 2009, which license was originally granted in

the name of M/s Adani Power Maharashtra Ltd. (hereinafter referred to as ‘APML’). The said



license was subsequently transferred in the name of the Appellant from APML by the Respondent

Commission vide order dated 08.12.2014 passed in Case No. 189 of 2014. The Respondent

Commission approved the Aggregate Revenue Requirement (ARR) of the transmission assets of

the Appellant (which were then in the name of APML) under the Multi Year Tariff (MYT)

framework vide Order dated 10.01.2013 in Case No. 44 of 2012 (hereinafter referred to as the

‘MYT Order’).

Thereafter, the Respondent Commission issued Mid Term Performance Review (MTR) Order on

03.07.2014 in case no. 190 of 2013 (hereinafter referred to as the ‘MTR Order’) pertaining to the

transmission system of the Appellant, including true-up of FY 2012-13 and approved revised

estimates for FY 2013-14 to FY 2015-16.

The Appellant subsequently, filed a petition on 14.01.2016, being Case No. 7 of 2016, for

determination of the following:

a) True-up of Annual Revenue Requirement for FY 2012-13, FY 2013-14 & FY 2014-15;

b) Provisional True-up for FY 2015-16; and

c) Determination of Annual Revenue Requirement for the Period from FY 2016-17 to FY 2019-20

in accordance with MERC (Multi Year Tariff) Regulations, 2011 (hereinafter ‘MYT Regulations,

2011’).

However, the Respondent Commission, vide its impugned order, reduced the Aggregate Revenue

Requirement (ARR) claimed by the Appellant on account of following issues:

A. Non allowance of Capital Cost of Bus Reactor

The Respondent Commission observed that the Bus Reactors and associated Bays were planned

as part of the Generation Assets of APML and were established and were to be treated as such.

However, for the purpose of operational control and reliable system operations, the Bus Reactors

were under the operational control of the Appellant and were to be operated as may be necessary

in consultation and co-ordination with and upon the instructions of MSLDC. Consequently, the

Appellant could not be allowed to claim any capital cost qua the installation and operation of the

said bus reactors. The Respondent Commission failed to consider that the bus Reactors and

associated bays are assets of the Appellant and appearing as such in its Balance Sheet. The same

are being operated and maintained by the Appellant and hence the Appellant is well within its

legal rights to claim the costs associated with the operation and maintenance of the said bus

reactors. Therefore, it is contrary to the face of record for Respondent Commission not to allow

Capital Cost and all other costs for such asset of the Appellant, which is very much a part of its

balance sheet and was also specifically included in its Transmission License, in terms of the express

directions of the Respondent Commission itself.

B. Considering Outstanding Delayed Payment Charges (DPC) as Non-Tariff Income for

reduction of Allowed ARR

The Respondent Commission considered the Delayed Payment Charges (DPC) accrued to the

Appellant as a non-tariff income for the purpose of calculation of ARR and consequently reduced

the ARR to that extent. This is contrary to the provisions of section 61 of the Electricity Act, 2003,

read with the MYT Regulations, 2011 as Delayed Payment Charges recovered by the Appellant

cannot be treated as non-tariff income of the said Appellant. This is on account of the fact that

the concept of such charges has been incorporated into the regulations in order to compensate

the Transmission Licensee for the cost of raising funds, required to meet the shortfall in review

inflow, caused as a result of such delay in payment of revenue. Such charges are provided in the



MYT Regulations as compensation to the Transmission Licensee for under recovery of

transmission tariff, due to delay in payments by TSUs, therefore, the same cannot at all be treated

as an “income” for the Transmission Licensee.

C. Non allowance of Actual Operations & Maintenance (O&M) Cost

The Respondent Commission rejected the actual O&M Cost, as claimed by the Appellant, and

allowed the O&M norms as applicable to New Transmission Licensees under the MYT Regulations,

which resulted in an under recovery to the extent of almost 40% of the actual O&M cost incorrect

by the Appellant. It is stated that the impact of an increase in wages over the years, has itself been

acknowledged by the Respondent Commission as an uncontrollable factor for the purpose of

considering revision in O&M cost. Therefore, it is submitted that the Respondent Commission in

the present matter, has taken an entirely contrary stand to that of its own orders passed earlier

as elaborated in the appeal memorandum, wherein it has consistently allowed a progressive

increase in the O&M cost, as a result of increase in the uncontrollable factors of wages and

salaries. However, a similar relief has been denied by the Respondent Commission to the

Appellant in the present matter, de hors the principles governing such relaxation.

D. Disallowance of expenses incurred towards the demerger process

The Respondent Commission, in the Impugned Order, disallowed the cost of Demerger of Adani

Power Ltd. (APL) and APML into the Appellant. In the process of the said demerger, the Appellant

incurred certain one-time, non-discretionary expenses on the payment of statutory and legal fees.

However, the Respondent Commission held that the Appellant failed to establish as to how the

said demerger of APML and APL into ATIL would be of particular benefit to consumers of the

Appellant. The observations of the Respondent Commission qua the costs pertaining to demerger,

are bad in law and contrary to the facts and circumstances of the case. It is stated that one of the

principles of determination of tariff as per section 61 is that the transmission of electricity has to

be done on commercial principles, which can only be achieved by proper segregation of accounts

by forming a separate company discharging only licensed activities. As such the demerger of APML

resulting into the creation of the Appellant was in the interest of consumers, and as such, the

same was required to be a pass through in tariff.

It is submitted that the aforementioned findings of the Respondent Commission in the impugned

order are bad in law and against the intent and purpose behind the MYT Regulations and the

scheme of the Electricity Act, 2003. Thus, being aggrieved by the aforesaid decision of the

Respondent Commission, the Appellant is filing the present appeal.

Issues:

• Whether the Respondent No. 1 Commission has acted in an arbitrary manner, de hors the

provisions of the MYT Regulations, in disallowing the capital costs of the bus reactors for

determination of ARR?

• Whether the Respondent No. 1 Commission has incorrectly considered DPC as the non-tariff

income of the Transmission Licensees for the purpose of determination of ARR?

• Whether the Respondent No. 1, Commission has grossly erred in not allowing the Actual O&M

cost to the Appellant for determination of its ARR?

• Whether the Respondent No. 1, Commission has erred in disallowing the expenses incurred

towards the demerger process carried out by APML despite the fact that the said demerger is

required under the provisions of the Electricity Act, 2003?



Held: The Hon’ble Tribunal has held with regard to the first issue “disallowance of capital cost for

Bus reactors, that the Respondent Commission was wrong and not justified, as the Commission

itself had allowed the amendment of the licence to incorporate the Bus Reactors in tariff for its

asset. Thereby directing the Commission to consider the cost sustained by the Appellant.

1. With regard to the Second issue the Hon’ble Tribunal has held that DPC is in fact a

compensation in the nature of reimbursement and must not be treated as NTI. In case it is

treated as NTI for deduction from ARR, the licensee must be compensated for interest on

delayed payment separately.

2. On the issue of O&M expenses the Hon’ble Tribunal has decided against the Appellant.

Hon’ble Tribunal following the principle held in Appeal No 245 of 2015 has held that if the

O&M expenses are allowed on actual basis, the whole purpose of specifying norms after

following due process of public consultation shall be defeated.

3. On the last issue the Hon’ble Tribunal disallowed the Demerger expense of the Appellant

tribunal held that though the demerger was allowed by the Commission, Such demerger was

of not pertinent to the business of the transmission licensee, and expenses such as Legal fee

and associated cost should not be passed on to the consumers.


M/s Adani Green Energy (Tamil Nadu) Vs. Tamil Nadu Electricity Regulation


Appeal No. 350, 351 & 352 of 2017

Dated: 30.05.2019

Present: Hon’ble Mrs. Justice Manjula Chellur, Chairperson; Hon’ble Mr. Ravindra Kumar Verma,

Judicial Member

Background: This Appeals have been filed against an order dated 30.06.2017 of the Respondent

Commission. The Appellants are challenging the order of the Respondent Commission. The appeal

are common in nature to the facts and circumstances raised, The Appellants are contending that

the Commission has failed to appreciate that the petition filed by the Appellant was a

Miscellaneous petition seeking “Must-Run Status” of its Solar Power Plant and that there was no

dispute concerned, therefore the above petition couldn’t be treated as a Dispute Resolution

Petition (“D.R.P.”)

Issues:

• Whether the prayer made by the Appellant in their petition filed before the State Commission

calls for the exercise of the regulatory powers of the State Commission or the adjudication by

the State Commission?

• Whether the State Commission in their Impugned Order have taken into consideration the

above point and have given a detailed analysis before arriving at the final decision ratifying

the orders passed the Secretary of the State Commission?

Held: The Appeals have been allowed by the Tribunal. The Impugned order dated 30.06.2017 has

been set aside.

Disposition: Appeals allowed.



M/s. Ramnad Solar Power Ltd. vs. Tamil Nadu Electricity Regulatory Commission &

Ors. (30.05.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 30.05.2019

Present: Hon’ble Mrs. Justice Manjula Chellur, Chairperson Hon’ble Mr. Ravindra Kumar Verma,

Judicial Member

Background: The present Appeal has been filed by M/s. Ramnad Solar Power Ltd. (‘Appellant’)

against the Order dated 30.06.2017 (‘Impugned Order’) passed by the Tamil Nadu Electricity

Regulatory Commission (‘State Commission/TNERC’) in the Pre-Registration Case No.2 wherein

Chairperson of the Respondent Commission passed the Impugned Order holding that the Petition

filed by the Appellant therein involves a dispute in terms of Section 86(1)(f) of the Electricity Act

and hence can only be registered as D.R.P. (Dispute Resolution Petition) and not as M.P.

(Miscellaneous Petition). Respondent Commission has asked the Appellant to deposit fee as per

the prevailing Regulations for DRP.

The Appellant had set up the solar power plant under the Solar Policy notified by the Government

of Tamil Nadu for promotion of solar generation in the State. The Appellant and the Distribution

Company of the State (‘TANGEDCO’) signed an Energy Purchase Agreement (‘EPA’) for

procurement of electricity generated from the solar plant of the Appellant. As per Clause 2(d) of

this EPA, the parties must adhere to and comply with the provisions of the Indian Electricity Grid

Code (‘IEGC’) and Tamil Nadu Electricity Grid Code (‘TNEGC’) and other applicable Regulations

covering the renewable energy sources.

As per Clause 5.2 (u) CERC (Indian Electricity Grid Code) Regulations, 2010 - all SLDC/Regional Load

Despatch Centres are obliged to evacuate available solar power treating the same as Must Run

status. As per Clause 8 (3) (b) of TNEGC, SLDC is required to regulate overall State generation in a

manner that generation from several types of power stations, including renewable energy sources

shall not be curtailed.

Since 08.02.2016, the Appellant was regularly instructed by the Tamil Nadu Transmission

Corporation Limited (‘State Transmission Utility’) to back-down generation, telephonically, and

without any written communication. In view of the foregoing, and the continued loss being

caused, Appellant approached the State Commission regarding the nonadherence of the

provisions of IEGC and TNEGC regarding the Must Run status of the solar power plant by SLDC.

The Appellant requested the State Commission to direct SLDC to stop issuing backing down

instructions and strictly enforce Must Run status of solar power plants.

Issues:

I. Whether the Respondent Commission failed to appreciate that the Petition filed by the

Appellant was regulatory and not adjudicatory in nature?

Whether the Respondent Commission acted contrary to the settled position of law that:-

(a) “regulatory” and “adjudicatory” functions of an Electricity Regulatory Commission are

different; and (b) Within the regulatory framework under the aegis of the Electricity

Commissions, solar project developers are entitled to “Must-Run” status, and protection

against back-down instructions;



Whether the Impugned Order is violative of the objectives of Section 86(1)(e) of the

Electricity Act, 2003, National Electricity Policy, Tariff Policy, National Solar Mission, Solar

Energy Policy 2012 issued by the State of Tamil Nadu, which are binding regulations, and

the doctrine of legitimate expectation as also the international convention, UNFCCC,

which incentivises generation of electricity from renewable sources?

Whether the Respondent Commission failed to appreciate that there is no dispute

involved in the present matter and that the Appellant is only seeking declaration of “Must-

Run” status of the power plant and directions to the Respondents to stop issuing back-

down instructions to the Appellant, and that too without any written communication?

Whether the Respondent Commission has failed to appreciate that merely because a

monetary claim is involved in the matter, the same does not necessarily mean that the

matter involves a dispute?

Whether the Respondent Commission failed to appreciate that the identity or character

of the party filing the petition is not a determining factor regarding the nature of the

petition i.e. whether regulatory or adjudicatory?

II. Whether the State Commission in their Impugned Order have taken into consideration

the above point and have given a detailed analysis before arriving at the final decision

ratifying the orders passed by the Secretary of the State Commission? Whether a

generator can be permitted to maintain a Miscellaneous Petition before the Commission

instead of D.R.P and thereby avoiding payment of significant amount of court fees.

Held: Having regard to the facts and circumstances of the case, the Hon’ble Tribunal has allowed

the Appeal filed by the Appellant. The Impugned Order dated 30.06.2017 passed by the first

Respondent/the State Commission in the Pre-Registration Case No.2. is hereby set aside. The

matter stands remitted back to the first Respondent/the State Commission.

Issue I. This matter is in-principle related to procurement of electricity from the solar plants of the

Appellant. This is a regulatory aspect and not an adjudicatory function. However, the State

Commission has not considered this aspect before arriving at a decision that the Petition in

question is a DRP and not miscellaneous. The State Commission also in their Impugned Order has

not considered the nature of the prayer and has not discussed this issue in their Impugned Order.

As such it is serious lapse on the part of the State Commission and the Impugned Order passed by

the State Commission needs to be set aside.[8]

Issue II.

1. The submissions made by the State Commission that the Petition has been filed under Section

86(1)(f) and therefore is a DRP. The relevant portion of the Regulation 6 of the fees and fine

Regulations of the Commission states that for adjudication of dispute between licensees and

generating companies which have come under Section 86(1)(f) of the Electricity Act, 2003

should pay 1% of the amount in dispute subject to a minimum of Rs.20000/-. It does not talk

about the classification of Petitions and should not be used as a guiding criteria for classifying

a Petition into DRP and miscellaneous.

2. It is the nature of the prayer which will define the nature of the Petition. If the nature of the

prayer calls for the exercise of the regulatory powers of the State Commission than it is

regulatory and it will be termed as a miscellaneous Petition whereas if the nature of the



Petition is such that it is not regulatory but adjudicatory than only it can be termed as a DRP.

It is also relevant to point out here that the mere fact that the Appellant has filed the Petition

under Section 86 (1) (f) and therefore it should be termed as a DRP is wrong and erroneous

and need not to be relied upon. [8]

Disposition: Appeal allowed. Matter remitted back to State Commission

M/s. Kamuthi Renewable Energy Ltd. vs. Tamil Nadu Electricity Regulatory

Commission & Ors. (30.05.2019 – APTEL) In the Appellate Tribunal for Electricity, New Delhi (Appellate Jurisdiction)


Dated: 30th May, 2019


Judicial Member

Background: In the instant Appeal, the Appellant, M/s. Kamuthi Renewable Energy Ltd.

(‘Appellant’) is questioning the legality, validity and proprietary of the order dated 30.06.2017

passed by Tamil Nadu Electricity Regulatory Commission, (‘1st Respondent/State Commission’) in

P.R.C. No. 1 of 2017 whereby the State Commission has held that the Petition filed by the

Appellant, inter alia, seeking “Must-Run Status” of its Solar Power Plant can only be filed as a

Dispute Resolution Petition (“D.R.P.”) and not as a Miscellaneous Petition (“M.P.”).

Issues:

• Whether the prayer made by the Appellant in their petition filed before the State Commission

calls for the exercise of the regulatory powers of the State Commission or the adjudication by

the State Commission?

• Whether the State Commission in their Impugned Order have taken into consideration the

above point and have given a detailed analysis before arriving at the final decision ratifying

the orders passed by the Secretary of the State Commission?

Held: Referring to the commonality in facts and circumstances of the present appeal to the facts

and circumstances raised in the Appeal 350 of 2017 (in case of M/s. Ramnad Solar Power Ltd. Vs.

Tamil Nadu Electricity Regulatory Commission), the Hon’ble Tribunal has observed that the

judgment dated 30.05.2019 passed by this Tribunal in Appeal 350 of 2017 is relevant to the

present dispute.

Having regard to the facts and circumstances of the case, the Hon’ble Tribunal has allowed the

Appeal filed by the Appellant. The Impugned Order dated 30.06.2017 passed by the 1st

Respondent/the State Commission in the Pre-Registration Case No.1 is hereby set aside. The

matter stands remitted back to the 1st Respondent/the State Commission.

Disposition: Appellant allowed. Matter remitted back to State Commission.

Adani Power Maharashtra Ltd. Vs. Maharashtra Electricity Regulatory Commission

& Ors. (31.05.2019- APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 31.05.2019




Member

Background: The Respondent No.2 (MSEDCL) had initiated RFQ bidding process for procuring

2000 MW power in case I bidding process. The Appellant applied for the Bid, for allotment of

Lohara Coal Blocks to the Govt. of India

Appellant was shortlisted and MSEDCL issued a RFP on 03.04.2007.

On 6.11.2007, Ministry of Coal issued letter of allocation to the Appellant, conveying allocation of

Lohra (West) and Lohra Extension (E) Coal Blocks as source of fuel. On 23.11.2007, Appellant

applied to the Standing Linkage Committee, MoC for grant of coal linkage for balance capacity to

cover the coal requirement of 1980 MW project.

Therefore, MERC approved revised bid document for power procurement of 2000 MW under Case

I. This led to revised final RFP on 16.02.2008 by MSEDCL, the Appellant also received Terms of

Reference (ToR) from MoEF for Lohara Coal Blocks.

MSEDCL issued letter of intention 27.07.2008 to Appellant for supply of 1320 MWs power from

Unit II & III at levalised tariff of Rs.2.64/kwh. A PPA was entered into with MSEDCL for 1320 MWs

power supply from Unit II & III of Thiroda TPS for a period of 25 years.

Based on reports from the Govt of Maharashtra and National Tiger Conservation Authority the

MoEF withdrew the terms of reference for Lohra Coal Blocks on the ground that the said blocks

were falling within the buffer zone of Tadoba Andheri Tiger Reserve.

Thereafter the Appellant applied for allocation from an alternate Coal Block but after many

attempts failed to obtain one and informed MSEDCL that due to cancellation of Coal block the PPA

was impossible to perform. Following which the Appellants filed petition No. 68 of 2012 seeking

relief from Commission to direct MSEDCL to return the Performance Guarantee No.

007GM07082270001 dated August 2008 to the Appellant, revision of Tariff and execution of new

PPA.

During the pendency of this Petition, CERC passed an Order that compensation needs to be

allowed for escalation of price of imported coal on account of Indonesian Regulation so also on

account of non-availability of adequate fuel linkage from Coal India

By exercising regulatory powers, CERC rejected claims under ‘Force Majeure’ and Change in Law’

events but granted certain benefits.

The Appellants challenged the order of CERC in Appeal No. 100 of 2013, in the context of shortfall

of domestic coal (availability), use of imported coal consequently impacting the price of imported

coal on account of change in Indonesian Regulations. The judgement of the Tribunal was therein

challenged before the Supreme court and set aside in the Energy watchdog case, that change in

policy of the Govt. with respect to availability of domestic coal to the generating companies is

allowed as an event in Change in Law in terms of Article 13 of the PPA.

This led to Ministry of Power seeking clarification on the issue of shortfall of fuel/ coal and how it

should proceed, Cerc observed that each case of change in law will be decided for compensation

of change in law event by them. In the intervening time, Cabinet Committee for Economic Affairs

approved mechanism for coal supply to power plants having long term PPAs. Pursuant to this

decision, MOC amended NCDP, 2007 and limited supply of coal from 100% to 65%, 67% & 75% of



annual contracted quantity in the balance period of the Twelfth Five Year Plan to power plants

having normal coal linkage.

Vide order dated 21.08.2013, in Petition No.68 of 2012 the Respondent Commission denied Force

Majeure claims to the Appellant.

Hence the Appeal, the Appellants have claimed that the Respondent Commission has failed to

appreciate that Article 3.3.3 which was essential, was not at all considered since intention of the

parties at the time of entering into contract i.e. PPA has to be analysed in terms of Article 3.3.3.

of the PPA, that the entire fuel risk vests with the Appellant was wrong and that cancellation of

TOR is not force majeure since coal from Lohara coal block was not unconditionally available to

the Appellant.

Issues:

• Whether the relief sought by the Appellant in the present Appeal now amounts to relief of

review of the order dated 11.05.2016 in Appeal No. 296 of 2013?”

• Whether the Appellant had abandoned the ground of change in law both in the proceedings

before MERC and so also in this Appeal?”

• Whether the relief sought in the Appeal could be moulded based on the pleadings placed on

record?”

• Whether the ends of justice requires remand of the matter to the MERC for fresh

consideration on merits in terms of Order 41 Rule 23 (A) read with Rule 25 CPC?

Held:

1. The Hon’ble Tribunal has opined that appellant had not abandoned the plea of ‘change in law’

event, and that the relief sought by the Appellant does not amount to a review of the order

dated 11.05.2016.

2. Further holding that MERC can exercise regulatory powers to grant compensatory tariff.

3. Appeal is allowed by setting aside the impugned order so far as it relates to issue of force

majeure. The matter is remitted back to MERC for fresh consideration on the issues of force

majeure and change in law.

Disposition: Appeal allowed so far as it relates to issue of force majeure. Matter remitted back to

MERC

Techno Electric & Engineering Co. Ltd. Vs. Tamil Nadu Generation and Distribution

Corporation Ltd. & Anr. (31.05.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 31.05.2019


Member

Background: An Amendment made by (TNERC) Respondent Commission dated 19.6.2013

redefining the definition of the ‘Average Pooled Cost of Power Purchase (APPC) in S.2(h) of the

TNERC (Renewable Energy Purchase Obligation) Regulations,2010 by addition of the words

‘subject to the maximum of 75% of the preferential tariff fixed by the Commission to that category

/ sub category of NCES generators’ and thereby capping the APPC payable to REC based

generators, was challenged before the Hon’ble HC of Madras in WP W.P. No. 22097 of 2013,



The Hon’ble High Court therefore held that the notification can be implemented with effect from

the date of such breach as notified by the TNERC and granted liberty to the petitioners to move

the TNERC for appropriate directions.

In compliance with the W.P. No. 22097 of 2013. order dated 15.7.2016 the Respondent

Commission, nevertheless dismissed the Appellants petition on the ground that : a direction

cannot be issued to the Licensee to postpone the implementation of the Regulations when the

Regulation is in force.

That by taking into account the preferential Tariff for a Wind Generator prevailing prior to 2006

which was Rs.2.75, the APPC rate was said to have been breached in the year 2013-14 when the

APPC rate was fixed at Rs.3.11. the appellants have contended that though the High Court upheld

the power of TNERC to issue notification putting a cap on the APPPC rate, but the determination

of date of such breach is not in consonance with the High Court orders. Hence the present Appeal.

Issues:

• Whether the TNERC has complied with the directions issued by the Hon’ble Madras High Court

and whether its orders are in consonance with such directions?

• Whether the position adopted by the TNERC that it would take into account the preferential

Tariff for Wind Energy Generators prevailing in the year 2006 as the relevant rate and then

compare it with the APPC rate fixed for 2013-14 and thereafter hold that a breach has

occurred in 2013- 14 when the APPC rate exceeded pre-2006 Wind Preferential tariff rate, is

correct?

Held: The Hon’ble Tribunal has held :

1. The notification dated 19.06.2013 which amended the definition of the APPC shall not be

given effect to in as much as till date, the APPC of a year has not exceeded the preferential

tariff payable to wind generators for that corresponding year.

2. Being dynamic in nature (which may go up or down), the APPC rate shall be compared by the

State Commission on year to year basis and the proposed cap of 75% under the amendment

shall be implemented for a particular year in which APPC rate crosses over the rate of

preferential tariff for that corresponding year.

3. The State Commission is directed to issue necessary instructions to Respondent No. 1 to make

payment to the Appellant at the full APPC rate without applying any cap, for the relevant

period, together with normal interest thereon at the rate provided for in the EPA from the

date such capped tariff was effected by Respondent Discom until date of payment to the

Appellant.


M/s. Indsil Hydro Power and Manganese Ltd. vs. Kerala Electricity Regulatory

Commission & Anr. (29.07.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI (APPELLATE JURISDICTION)

Appeal No. 293 of 2017, IA No. 758 of 2017

Dated: 29.07.2019


Member.



Background: The Appellant is challenging the Respondent Commission’s order dated 2.06.2017

(Impugned Order). The Appellant is a 21 MW hydro power generator established for captive use.

On 30.12.1994, the Appellant executed an agreement with the Kerala State Electricity Board Ltd.,

Respondent No. 2 regarding construction, commissioning, operation and maintenance including

adjustment of captive consumption, banking etc, on 30.12.1994. The Appellant contends that as

per Clause 11 of the Agreement, the Appellant has the option to sell the excess energy to

Respondent No. 2 and the accounting year for the purpose of sale of excess energy under the

Agreement is from 1st July to 30th June. As per Para 2(c) and 3 of the Kerala State Electricity

Regulatory Commission, Respondent No. 1’s order dated 07.08.2013, the Appellant was

accredited under the REC mechanism. The Appellant executed an undertaking dated 27.08.2013

wherein the invoice for the banked energy was to be raised strictly at the average pooled cost

rate. From 1.04.2016, in accordance with the Central Electricity Regulatory Commission’s

notification dated 23.03.2016, the Appellant became ineligible for participating in the REC scheme

from 01.04.2016. Consequence of this, according to Appellant, is banked energy has to be billed

as per the original Clause 11 of the Agreement dated 30.12.1994 executed between the Appellant

and Respondent No. 2. The Respondent No. 2 has not paid Appellant’s invoices dated 29.07.2016

for Rs.53,06,680/- for the excess banked energy for 10,82,996 units as on 30.06.2016 at the rate

of Rs.4.90 per unit at the Extra High Tension (EHT) tariff. This bill was for the accounting year 2015-

16. The Appellant approached the Respondent No. 1 seeking direction against the Respondent

No. 2 for immediate honouring of energy invoices. The State Commission interpreted Clause 11

against the Appellant and gave Respondent No. 2 the liberty to approach the Commission for

modification of the Agreement.

Issues:

I. Whether the impugned order is in violation of the terms of the Agreement dated

30.12.1994 and in particular, clause 11 thereof?

II. Whether the Kerala State Electricity Regulatory Commission erred in law in effecting the

split up of banked energy as on 31.03.2016 and thereafter from 01.04.2016 to 30.06.2016,

contrary to clause 11 of the Agreement?

III. Whether the Regulatory Commission erred in unilaterally granting KSEB Ltd alone the

option to approach the Commission with proposal for modifying the Agreement dated

30.12.1994?

Held: The APTEL upheld the State Commission’s order and dismissed the appeal.

Issue I: The Hon’ble Tribunal held that the Appellant cannot have unconditional banking facility of

energy generated as envisaged under Clause 11 of the Agreement since it received accreditation

benefit under the REC mechanism. Therefore, the unconditional banking in terms of Agreement

dated 30.12.1994 came to an end by Respondent Commission’s order dated 07.08.2013.

Therefore, the Impugned Order is not in violation of Clause 11 of the Agreement.

Issue II: The Hon’ble Tribunal held that the Respondent Commission has correctly split up the

period for considering banked energy. In view of the CERC amendment dated 23.03.2016, which

became effective from 01.04.2016, the Respondent Commission was justified in extending the

REC benefit to the Appellant up to 31.03.2016. The Respondent Commission has correctly fixed

the price for excess energy banked at APPC rate of 3.14 per unit and not EHT tariff. For the

subsequent period of 01.04.2016 to 30.06.2016, the balance accounting period, the Respondent

Commission rightly relied on Clause 13 of the Agreement that total power consumption of

Appellant’s factories and their associates have to be settled against the electricity generated from



generating plant and the Respondent No. 2’s power supply. The factual situation reveals that the

Appellant started obtaining power through open access without consuming the energy from the

captive power plant even though there was energy banked. It started purchasing power through

open access facility without using the power generated from captive power plant thereby it did

not consume the required power generated from captive power plant for its factories. On the

other hand, it accumulated the said power as banked energy by resorting to method of open

access facility provided in the Electricity Act 2003. Therefore, since Appellant did not consumer its

own power. The Respondent No. 2 cannot be forced to buy that power at EHT tariff.

Issue III: The Hon’ble Tribunal held that since Respondent No. 2 had to purchase unutilised excess

banked energy at EHT rate at which it sells to similar consumers, this would affect the interest of

larger sections of consumers of the State by way of tariff. Therefore, the Respondent Commission

rightly opined that Respondent No. 2 shall approach the Commission with a proposal for modifying

the Agreement dated 30.12.1994.


Tata Power Delhi Distribution Ltd. Vs. M/s Duggar Fiber Pvt. Ltd. & Anr.


APPEAL NO. 17 of 2016 & I.A. NOS. 35 OF 2016 & 838 OF 2017

Dated: 05.08.2019


Member.

Background: The Appellant, Tata Power Delhi Distribution Ltd. challenged the State Commission’s

order dated 23.12.2015 wherein the State Commission directed the Appellant to refund excess

cross subsidy surcharge collected from Respondent No.1/ M/s Duggar Fibers Pvt Ltd.

Issues:

I. Whether the action of the Appellant in calculating the provisional Cross Subsidy Surcharge

(CSS) on its own and charging the same to the Respondent No. 1 is justified in law?

II. Whether the State Commission has rightly held that the Appellant has acted in violation

of regulations relating to open access and Renewable Power Obligation (RPO)?

Held: The appeal was dismissed, and the State Commission’s order was upheld.

Issue I: The Hon’ble Tribunal held that as per the Electricity Act, 2003 and various Regulations of

the State Commission, the responsibility for computation and imposition of Cross Subsidy Charges

to the open access consumers rests with the appropriate Commission or its authorized agency and

none else. Therefore, the Appellant ought not to have revised Cross Subsidy Surcharge on its own

without consent/approval of the State Commission. As per the tariff order, the State Commission

had clearly stipulated that the rates of Cross Subsidy Surcharge notified shall be applicable from

the date of the said order and shall remain valid till the same is revised by the State Commission.

In other words, pending notification of Cross Subsidy Surcharge by the State Commission, the

Appellant should have charged the previous Cross Subsidy Surcharge subject to its true-up and

not any other rate computed on its own. The Appellant’s actions of suo-moto calculating Cross

Subsidy Surcharge and collecting the same from Respondent No. 1 amounted to jurisdictional

breach of the State Commission’s powers.



Issue II: The Hon’ble Tribunal held that the Appellant had wrongfully applied the RPO Regulations

to the Respondent No. 1. The Respondent No. 1 having consumed the entire renewable electricity

from the renewable energy sources, is not under obligations to comply with the Regulation 3 of

the Renewable Purchase Obligations (RPO) Regulations, 2012 and is entitled for an exemption of

6.20% on the Cross Subsidy Charge according to Regulation 9(4) of the DERC RPO Regulations

2012. The RPO Regulations provide a subsidy of 6.2% to the extent of RPO for such open access

consumers who avail their supply of power from renewable energy sources. In the instant case,

Respondent No. 1 has availed its entire supply of power from waste to heat generating station

located at Timarpur Okhla which is considered as renewable energy sources based generating

plant. Instead of providing an exemption to the extent of RPO (6.2%) as applicable under the RPO

Regulations of the State Commission, the Appellant has charged excess Cross Subsidy Charge.

Therefore, the State Commission had correctly held that the Appellant is liable to refund the

excess charged Cross Subsidy Charges.

Disposition: Appeals dismissed.

Birla Textile Mills & Ors. vs. Himachal Pradesh Electricity Regulatory Commission &

Ors. (09.08.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal No. 154, 155 of 2016 and 293 of 2016

Decided On: 09.08.2019


Member.

Background: The present Appeal has been filed by short term open access consumers challenging

the State Commission’s order dated 18.02.2016 whereby the State Commission has determined

the Additional Surcharge to be recovered by the Distribution Licensee, Respondent No. 2 from the

short-term open access consumers in Himachal Pradesh. The State Commission has worked out

an additional surcharge of Rs. 78 paise/kWh payable by open access consumers for the period

24.02.2016 to 31.07.2016. The Appellants were challenging the methodology for calculation of

additional surcharge. The Appellants argued that State Commission had not calculated the cost of

stranded power correctly. The State Commission had randomly considered the fixed costs of 5

NTPC stations while calculating additional surcharge. Further, the state commission had changed

the methodology for calculating additional surcharge without giving the stakeholders adequate

notice.

Issues:

I. Whether in the facts and circumstances of the case, the State Commission has correctly

derived the methodology for determination of the additional surcharge payable by the

open access consumers to the distribution licensee as per various statutory provisions?

II. Whether the State Commission while determining the quantum of additional surcharge

payable by open access consumers has violated the principles of natural justice?

Held: The appeal was dismissed, and the State Commission’s calculation of additional surcharge

was upheld.

Issue I: The Hon’ble Tribunal held that the State Commission had correctly calculated the

additional surcharge proposed by Respondent No. 1 and adequately analysed the data before



passing the impugned order. For instance, the Respondent No. 1 had proposed the reference

additional surcharge of Rs.1.58/per unit, but after prudence check, the State Commission had

allowed only Rs.0.78/per unit. Further, from 01.11.2016 onwards, the additional surcharge has

been re-calculated as Rs.0.49/per unit which is very close to the calculated figure submitted by

the Appellants. In view of the universal service obligations of the Respondent No. 1 with long term

power purchase agreements with generators, Respondent No. 1 can legitimately claim additional

surcharge from the open access consumers in case of stranded power. The State Commission, is

mandated to strike a balance between all stakeholders including generators. The State

Commission has passed a reasoned order devoid of any infirmity.

Issue II: The Hon’ble Tribunal held that while determining the rate of additional surcharge, the

State Commission conducted public hearing with all the stakeholders and heard their point of

view. In the process, many consumers had also proposed their alternate formula other than that

proposed in the petition before the State Commission. After hearing all the parties and taking note

of all the materials placed before it, the State Commission had decided the matter and passed the

impugned order with cogent reasoning in the matter. The State Commission is empowered to

apply its prudence check, own analysis, own methodology etc. and bring out a judiciously balanced

order. This is what has been adopted and carried out by the State Commission in the instant

matter. Accordingly, we do not find a substance in the contentions of the Appellants that the State

Commission has violated the principles of natural justice.


Green Energy Association vs. Electricity Regulatory Commission (21.08.2019 –


Appeal No. 106 of 2016 and 65 of 2017

Dated: 21.08.2019


Member.

Background: Both the appeals have been filed by the Appellant, an association of renewable

energy generator invested in the REC mechanism. In Appeal No. 106 of 2016, the Appellant is

aggrieved by State Commission’s order dated 21.12.2015. The Appellant had filed a petition

seeking RPO compliance by the Distribution Licensees for FY 2013-14 and 2014-15. By the

Impugned Order, the State Commission had dismissed Appellant’s petition as being non-

maintainable due to lack of locus standi on the part of the Appellant as the Appellant has no

members in the State of Chhattisgarh. The State Commission has not decided the matter on merits

as to whether the obligated entities have acted against the provisions of the CSERC RPO

Regulations and the Electricity Act, 2003 by not complying with the shortfall in RPOs for Financial

Years 2013-14 and 2014-15. 2.7 In Appeal No. 65 of 2017, the Appellant is assailing the correctness

of the impugned Order dated 16.06.2016 passed by the State Commission in Suo-Motu Petition

No. 41 of 2015(M) wherein the State Commission has provided an additional time period of twelve

months to the Distribution Licensee, Respondent No.2 for fulfilment of their RPO for the year

2013-14 under the RPO Regulations, 2013.

Issues:



I. Whether the State Commission has correctly decided that since none of the members of

the Appellant association have plants operating in the State of Chhattisgarh, they are not

within its jurisdiction and have no locus standi to maintain its petition seeking RPO

compliance?

II. Whether State Commissions was justified in permitting carry forward of RPO despite

availability of RECs in the market?

Held: The Hon’ble Tribunal dismissed the appeals and upheld the State Commission’s decisions.

Issue I and II: The Hon’ble Tribunal observed that the Appellant is primarily aggrieved that if RPO

would have been enforced to the set targets, some more RECs would have been sold/purchased

and would have provided some financial gain to the Appellant association members. The REC

mechanism has been devised to strike a balance between the States having large potential and

States having less or no renewable energy sources. Besides, the trading of RECs is done on all India

basis and the obligated entities are free to sell/purchase such certificates from anywhere across

the country. In an ideal case, as per the National Tariff Policy, the State Regulatory Commission

are required to enforce the RPO compliance by monitoring the same on real time basis but, while

deciding the matter relating to RPO, the Commission is also required to keep in mind the difficulty

being faced by the licensee, impact on retail tariff, availability of RECs in the market, etc.

Therefore, the Appellant does not have the locus standi to seek RPO compliance in Chhattisgarh

as they do not have any members in the state. Secondly, the Commission has correctly allowed

carry forward of RPO compliance. In the light of the above, the Appellant was not an ‘aggrieved

person’ to prefer an appeal under Section 111 of the Electricity Act, 2003.


Chhattisgarh State Power Distribution Co. Ltd. vs. Chhattisgarh State Electricity

Regulatory Commission & Ors.; Jindal Steel & Power Private Limited. v.

Chhattisgarh State Electricity Regulatory Commission & Ors. (26.08.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

Appeal Nos. 277 of 2014 & 278 OF 2014 AND APPEAL NO. 07 OF 2015 & IA NO. 9 of 2015

Dated: 26.08.2019


Member.

Background: In Appeal No. 277 & 278 of 2014, the Appellant, Distribution Licensee, is aggrieved

by the State Commission’s decision dated 13.10.2014 that cross subsidy surcharge shall not be

levied on Jindal, Respondent No. 2’s colony / township. In Appeal No. 7 of 2015, the Appellant,

Jindal is aggrieved by the State Commission’s order dated 15.10.2014 that its plant was held to be

non-captive during the year 2006-07.

Issues:

• Whether in Appeal No. 277 and 278 of 2014, the State Commission has correctly held that the

power supplied to Respondent/JSPL’ colony/township is not liable for payment of cross

subsidy surcharge?

• Whether in Appeal No.07 of 2015, the State Commission has correctly computed the

percentage of captive consumption with specific regard to the PPAs’ executed before the

enactment of the Electricity Act, 2003 to hold that JSPL plant was not captive for FY 2006-07?



Held: The appeals were dismissed without costs. The orders of the State Commission were upheld.

Issue I. A generating plant to be considered as captive must meet twin qualifying criteria i.e. a

minimum of 26% of ownership of the generating plant and a minimum of 51 % consumption by

the captive users on an annual basis. The APTEL held that housing colonies of operating staff can

be treated as an integral part of an industrial unit which has set up a captive generating plant for

its use. Further, an industrial unit which has setup a captive generating plant i.e. a power plant for

his own use can feed electricity to housing colonies of operating staff of whole industrial unit

including its captive generating plant. Therefore, the State Commission was correct in holding that

no cross-subsidy was leviable on electricity consumption by Jindal’s housing colonies from its

captive plant.

Issue II. The Hon’ble Tribunal noted that Jindal’s principal contention is that its plant was held to

be non-captive in view of the captive consumption being less than 51 %. Jindal had executed two

PPAs - one in 1999 and another in 2002, prior to the enactment of the Electricity Act, 2003.

Accordingly, the conditions stipulated thereafter for qualifying the captive status for the

Appellant’s generating plant do not apply. The APTEL held that while Jindal supplied to its full

quantum to the beneficiaries including Gujarat Electricity Board and the state Distribution

Licensee but it could not increase its captive consumption so as to achieve up to desired 51% level.

Irrespective of the PPAs being executed prior to the advent of the Electricity Act, generating

companies would be required to mandatorily comply with Rule 3 of the Electricity Rules, 2005 to

qualify as a captive plant. These rules do not permit any relaxation by any authority including the

State Commission. The State Commission has correctly declared Jindal’s generating plant as non-

captive during years it could not meet the statutory requirement of captive consumption as 51 %.

Disposition: Appeals dismissed

Arya Energy Limited & Ors. vs. Madhya Pradesh Electricity Regulatory Commission



Dated: 26.08.2019


Member.

Background: The present issue has arisen after 5 rounds of litigation regarding applicable tariff for

the sale of power from the biomass generating units of the Appellants to MPPMCL and has

attained finality up to the Hon’ble Supreme Court. The matter in issue is with regard to the

consequences of imposition of the Merit Order Dispatch (MOD) by Madhya Pradesh Power

Management Company Limited (MPPMCL) on the Appellant biomass generating plants from

17.01.2017 onwards when MPPMCL had stopped scheduling the power from the Appellants’

projects by applying MOD erroneously and the plants had to shut down.

Issues:

I. Whether as per the Order of the Hon’ble Supreme Court dated 26.04.2018 in Civil Appeal

No. 4550-4551 of 2017, the Appellants are prohibited from claiming fixed charge

component when MOD is applied to them?



II. Whether the Respondents have correctly applied MOD principles as per the regulatory

framework in the instant case on both the appellants?

III. Whether the single part tariff determined by the State Commission prohibits the

Appellants from claiming fixed charges component when MOD is applied and what relief

are the appellants entitled to?

IV. Whether the Appellant No. 1 has a valid PPA with the Respondent No. 1?

Held: The State Commission’s order was set aside, and the appeal was allowed.

Issue I. The Hon’ble Tribunal held that the State Commission committed an error by holding that

a finding has been rendered by the Hon’ble Supreme Court in the Order dated 26.04.2018 on the

entitlement of the Appellants to fixed charge component. This State Commission has

misinterpreted the Judgment & Order of the Hon’ble Supreme Court to deny the fixed charge

component to the Appellants when MOD is applied to them. The Hon’ble Supreme Court was not

dealing with the issue of consequence of application of MOD and therefore, could not have

rendered any finding on the entitlement of the Appellants to fixed charges component when MOD

is applied to them. In view of the above, APTEL held that the Hon’ble Supreme Court’s order was

confined to the application of ‘Must Run Status’ or MOD and did not prohibit the Appellants from

claiming the fixed charge component if MOD was applied to them.

Issue II. As per the State Commission’s regulations, it is imperative for MPPMCL to procure

electricity from the generation stations by putting them in ascending order of the cost of energy

(i.e. Variable cost) and it is mandatory to make payment of capacity charges to generating stations

corresponding to plant availability. It is immaterial whether MPPMCL procured electricity or not

for the payment of capacity charges. The Respondents have incorrectly applied the MOD

principles have for the Appellant’s biomass plants.

Issue III. The Hon’ble Tribunal concluded that both two-part and single part tariff have the very

same components, i.e. the fixed charge component and variable charge component. In State

Commission’s previous tariff order dated 02.03.2012 for biomass plants, the tariff was depicted

as a two-part tariff. However, in subsequent tariff orders dated 03.05.2013, 13.08.2015 and

30.11.2016, the fixed cost component and the variable cost component has been clubbed and

depicted as a single part tariff. Therefore, there is no embargo or difficulty in finding and paying

the fixed cost component to the Appellants while MOD is applied on them even with a single part

tariff. The Respondents were directed to pay fixed cost component to the Appellants with interest

after reconciliation of figures.

Issue IV. In orders 20.03.2017 and 02.08.2017, the APTEL has already recorded that there in an

existing PPA between Appellant Arya Energy and Respondent MPPMCL. These findings were not

challenged by the Respondents in Civil Appeal No. 4550-4551 of 2018 before the Hon’ble Supreme

Court and therefore has attained finality. Further MPPCMCL has, before the Hon’ble High Court

of Jabalpur in Writ Petition No. 3819 of 2017, admitted to executing a PPA with Arya Energy.


Power Grid Corporation of India Ltd. Vs. Central Electricity Regulatory Commission

& Ors.(14.09.2019-APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated : 14.09.2019




Member.

Background: The present Appeal has been filed by Power Grid Corporation of India Ltd.

(‘Appellant’) under Section 111 of the Electricity Act, 2003 challenging the Order dated

21/04/2016 passed by the Central Electricity Regulatory Commission (‘Central Commission’) in

Petition No. 53/TT/2015 in the matter truing of transmission tariff for 2009-14 tariff period and

determination of transmission tariff for 2014-19 tariff period for Transmission System associated

with Kudankulam Atomic Power Project in Southern Region.

Initial spares are allowed as a percentage of capital cost for all projects as per Tariff Regulations

notified by the Central Commission. In the case of transmission projects, there are many elements

in a typical project such as transmission lines, sub-stations, ICTs etc. and the investment approval

for the entire project is taken at once though the implementation and tariff determination

depends on the Commercial Operation Dates (‘CODs’) of the respective elements.

In the present case, the initial spares incurred by the Appellant for Assets 6 and 11 were higher

than 0.75% of the apportioned capital cost whereas in other assets the spares claimed are less

than 0.75% of the respective asset cost. The Appellant contends that the Central Commission

wrongly restricted the initial spares as 0.75% of each individual asset cost. Further, initial spares

of Tariff Block 2004 - 09 which were not allowed for the commissioned elements/assets have not

been set off against the excess spares claimed in 2009 - 14 tariff block which are within the

prescribed percentage of 0.75% of the overall project cost. The Appellant contends that the initial

spares should be computed as prescribed percentage of the total project cost as per Regulation 8

of the CERC (Terms and Conditions of Tariff) Regulations, 2009 (‘2009 Tariff Regulations’).

On the other hand, Respondent is of the opinion that the same should be provided elementwise

for which individual tariff petitions are filed by the Appellant before the Central Commission. It is

the contentions of the Respondent that when as per 2009 Tariff Regulations, tariff petitions for

individual element/asset is permitted for getting tariff determined by the Central Commission, it

is logical that the initial spares are also provided for the individual element / asset based on the

completed cost of that package.

Issues: Whether the Central Commission can ignore the plain language of Regulation 8 of the 2009

Tariff Regulations?

• Whether the Central Commission having framed the 2009 Tariff Regulations does not stand

bound by the provisions thereof?

• Whether the rational of the judgment dated 28.11.2003 in Appeal No.165 of 2012 of this

Hon’ble Tribunal is at all applicable to the aspect of determination of initial spares when the

said judgment has been rendered in a completely different context?

I. Whether the initial spares is to be computed as a percentage of the total project cost or

of the apportioned individual Element / Asset cost ?

II. Whether the Central Commission can ignore the plain language of Regulation 8 of the

2009 Tariff Regulations while determining the tariff / truing up ?

Held:

1. The Hon’ble Tribunal has referred to the Tariff Regulations, 2009 of the Central Commission

vide which tariff petitions are decided especially the Regulation 8 which provides that the



initial spares for a particular project are to be allowed on the total project cost. To provide

flexibility to the transmission licensee, the Central Commission has specified that the whole

transmission project may be broken in distinguished elements/assets and file the tariff

petitions element/asset wise so that the license, for filing the tariff petition, does not wait for

the complete project to be commissioned. [8.11]

2. It is relevant to note that the transmission projects due to their inherent nature are segregated

into different assets or elements which are executed and commissioned progressively in

stages. Keeping this in view, developer / licensee while planning estimates finalises, the

requirement of spares on the basis of complete project which requires flexibility in deciding

quantum of spares for different type of elements of a project along with commissioning of the

particular asset so as to have better performance with high degree of reliability. The

requirement of spares as such, may not be exactly in proportion to the cost of individual

assets. In other words, a licensee might require large number of spares with a particular asset

or assets Commissioned first based on technical requirement and lesser number of spares or

nil spares in subsequent assets/ elements of similar nature. Admittedly, the break-up of initial

spares for various assets may be percentage wise different subject to the overall initial spares

requirement of the project within the overall limits / percentage provided in the Regulations.

[8.12]

3. It is also pertinent to note that out of the 18 assets, the ceiling limit of 0.75% for initial spares

has crossed only in two elements namely Asset No. 6 & 11 and in all other assets, the

expenditure to this account is less than 0.75%. The Hon’ble Tribunal has not concurred with

this methodology of restricting initial spares asset / element wise as adopted by the Central

Commission. The Central Commission to have a prudence check on the initial spares, being

restricted based on the individual asset wise cost initially, but subsequently ought to have

allowed as per the ceiling limits on the overall project cost basis during the true- up. [8.13]

4. The Hon’ble Tribunal has been of the considered opinion that the Appeal deserves to be

allowed and impugned order is liable to be set aside to the extent challenged in the Appeal.

[8.14]


Jaipur Vidyut Vitran Nigam Ltd & Ors. Vs. Rajasthan Electricity Regulatory

Commission & Anr. (14.09.2019 – APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY (Appellate Jurisdiction)

APPEAL NO. 202 of 2018 AND APPEAL NO. 305 of 2018 & IA No. 1750 of 2018

Dated: 14.09.2019


Member

Background: Both the Appeals are directed against the Impugned Order dated 17.05.2018 passed

by Rajasthan Electricity Regulatory Commission (‘RERC/Rajasthan Commission’) in Petition No.

RERC-392/13.

RERC had allowed the claims of Adani Rajasthan on account of change in New Coal Distribution

Policy, 2007 (NCDP, 2007) as change in law under Article 10 of the Power Purchase Agreement but

while doing so, RERC restricted the relief of change in law from the date of commercial operation

(‘COD’) to the date when Adani Rajasthan entered into Fuel Supply Agreement (‘FSAs’) under the

Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI Scheme) notified by



GOI. RERC also denied the claims of Carrying Cost to Adani Rajasthan. Rajasthan Discoms have

challenged the Impugned Order primarily on one issue, i.e. NCDP is not a change in law and Adani

Rajasthan has challenged the Impugned Order on two issues: restrictions of date of application of

relief for change in law and rejection of Carrying Cost.

Issues: APPEAL NO. 202 of 2018

I. Whether the State Commission was justified in holding that bid of Adani Rajasthan was

based on domestic coal?

II. Whether in the facts and circumstances of the case, there was a change in law event in

terms of Article 10 of the PPA and Energy Watchdog Judgment applicable in the present

case?

APPEAL NO. 305 of 2018

III. Whether RERC is justified in restricting the claims of Adani Rajasthan for change in law till

the date of execution of FSA under the Shakti scheme?

IV. Whether RERC failed to accept the settled position of law and the equities regarding

award of Carrying Cost as claimed by Adani Rajasthan?

Held: The Hon’ble Tribunal has held that bid of Adani Rajasthan was based on domestic coal and

accordingly covered under the Change in Law event in terms of PPA and the judgment of Hon’ble

Supreme Court in Energy Watchdog case. Further, Adani Rajasthan is also entitled for Change in

Law under the Shakti Scheme as well as payment towards carrying cost. [14.2]

1. Rajasthan Discoms are directed to pay the amount of Change in Law compensation, as

approved herein, along with applicable Carrying Cost by duly verifying the relevant supporting

documents for fuel cost and as per applicable Tariff Regulations for operating parameters.

Since Adani Rajasthan has already incurred the costs in procuring alternate coal and supplying

power to the Rajasthan Discoms using such coal, equity requires that the compensation

payments for the period up to the date of this order be made expeditiously. [14.1]

2. Rajasthan Discoms have already paid 50% of the Change in Law claim approved by the RERC,

pursuant to the order of the Hon’ble Supreme Court. Accordingly, Rajasthan Discoms are

directed to verify the documents submitted by Adani Rajasthan and make balance 50%

payment along with Carrying Cost within two months from the date of this Judgment & order.

[14.3]

3. For the Change in Law claim pertaining to the period after the grant of coal linkage under the

SHAKTI Policy, Rajasthan Discoms shall make payment along with Carrying Cost to Adani

Rajasthan within three months of it submitting the claim along with the requisite supporting

documents. [14.4]

Disposition: Appeal No. 202 Of 2018: Dismissed; Appeal No. 305 Of 2018 : Allowed

Punjab State Power Corporation Ltd. Vs. Punjab State Electricity Regulatory



Dated: 14.09.2019


Member.



Background: The Appellant - Punjab State Power Corporation Ltd. (‘Appellant’) has preferred this

Appeal against the Order dated 18.10.2016 passed by the Punjab State Electricity Regulatory

Commission (‘State Commission’) in Petition No. 64 of 2016 whereby the State Commission by

entertaining a Petition seeking clarification of the Tariff Order for FY 2016-17 dated 27.07.2016,

granted the concessional tariff beyond threshold limit and directed the Appellant to only consider

the consumption from the Appellant only and not the total consumption of the consumer.

Under the Invest Punjab Policy, the Government of Punjab proposed to grant a concessional tariff

to the new industries to be established in the State. The Policy envisaged to provide electricity at

a subsidised tariff of Rs. 4.99 per unit and difference of the applicable tariff and Rs.4.99 per unit

was to be compensated by the State Government in the form of subsidy.

The State Commission also granted the concessional/promotional tariff to the existing industries

on the premise that an existing industry by expanding their capacity would contribute to the

development of the State and should also be given the same benefit. Accordingly, the Appellant

applied the promotional tariff to the existing industries for the incremental consumption over and

above the threshold limit.

The actual dispute arose after 2nd Respondent filed a petition, being No. 64 of 2016, purporting to

seek a clarification of the tariff order dated 27.07.2016 on the issue of computation of the

threshold limit beyond which the concessional tariff was to be granted. By the impugned order,

the State Commission clarified that only the power supplied by the Appellant in the previous year

will be considered for the threshold limit and also for calculating the current year consumption of

Large Supply Consumers eligible for base rate of Rs. 4.99 per unit.

Issues:

I. Whether the State Commission is justified in clarifying that the threshold limit for

calculation of consumption would only be considering the consumption from the

Appellant?

II. Whether the State Commission is justified in providing the concessional tariff even for

reallocation of the existing capacity of the consumers from various sources?

III. Whether the State Commission is justified in holding that the threshold capacity for

applying the concessional tariff for increase in capacity is only the consumption from the

Appellant and not the total consumption of the consumers?

Held:

1. Regarding the decision of the Commission, on redefining the threshold consumption by

considering the consumption only from the Appellant’ source of supply contrary to the earlier

considerations, the Hon’ble Tribunal has been of the opinion that the State Commission has

analysed all associated pros and cons in the matter based on its prudence practices as well as

recommendations of the IIM, Ahmadabad and it is well within the mandate of the

Commission. In fact, the sole objective of the Commission behind the alleged clarification has

been to promote consumption from the Appellant source of supply which is bogged down by

fiscal burden of paying the fixed charges to the generators for the surplus energy which

otherwise results into undue burden to the consumers. It is also relevant to note that the

grant of concessional tariff to new industrial consumers and grant of concessional tariff at Rs.

4.99 per unit to the existing consumers over and above the threshold consumption are clearly

distinguishable in lieu of their methodology for computation and tariff/subsidy being payable.



2. In other words, while Government of Punjab has to provide subsidy for the difference in

applicable tariff and Rs. 4.99 per unit being extended to new industrial consumers, however,

for existing consumers there is no subsidy and the concessional tariff is applicable only for the

entitlement of incremental consumption over and above the threshold limit of consumption

from the Appellant source of supply. [10.8]

3. It is significant to note that the State Commission has succeeded in achieving the target of

increasing the consumption of surplus power and reducing fiscal burden on the Appellant

which would otherwise have been passed on to the consumers. [10.9]

4. The Hon’ble Tribunal has been of the considered opinion that the State Commission, based

on all relevant material placed before it, has passed the impugned order judiciously and has

made efforts to strike a balance between all the stakeholders. Accordingly, the Hon’ble

Tribunal’s interference in the matter does not call for. [10.10]


Mahanagar Gas Ltd. Vs. Petroleum And Natural Gas Regulatory Board &

Ors.(20.09.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)


Dated: 20.09.2019


Member (P&NG)

Background: The Appellant, Mahanagar Gas Ltd. (‘Appellant’) under Section 33 of the Petroleum

and Natural Gas Board Act, 2006, has challenged the order dated 15th October, 2015 passed by

the Petroleum and Natural Gas Regulatory Board (‘Board’) in case No. Legal/124/2015 filed by the

Appellant.

The Uran-Trombay natural gas pipeline which is owned and operated by ONGC supplies natural

gas from ONGC’s gas processing plant at Uran to Trombay and GAIL purchases this gas from ONGC

at Trombay for onward sale to the Appellant. The Board after issuing the authorization to ONGC

declaring the Uran-Trombay pipeline as common carrier on 3.5.2011, fixed the provisional initial

unit tariff on 30.12.2013 at Rs. 5.70/MMBTU with retrospective effect from 20.11.2008, i.e., the

date of notification of the PNGRB (Determination of Natural Gas Pipeline Tariff) Regulations, 2008.

The Appellant appealed against this decision to the Board praying for certain

clarifications/declarations with the main contention that ONGC cannot charge the Appellant the

transportation tariff fixed by the Board. The Board in its final impugned order upheld its earlier

decision on tariff fixation dated 30.12.2013.

The main contention of the Appellant and GAIL is that ONGC is carrying its own gas to Trombay to

deliver it to GAIL at Trombay through the common carrier Uran-Trombay pipeline and hence tariff

determined by the Board is not applicable. The Appellant’s contention is that the Board can fix the

transportation tariff for a shipper who is a third party user. It has to be entity other than the owner

of the common carrier pipeline for becoming eligible for the tariff fixed by the Board.

Issues:

I. Whether ONGC carries its own gas through the Uran-Trombay pipeline to deliver to GAIL

at Trombay; or



II. Whether ONGC carries third party GAIL’s gas to deliver at Trombay through the common

carrier Uran-Trombay pipeline.

III. In the above cases, what should be the transportation tariff that ONGC should charge from

GAIL?

Held:

1. ONGC is the producer of the gas and also the owner of the Uran-Trombay pipeline that

transports gas through this pipeline to GAIL for onward transmission by GAIL to its customers

by its own pipeline network. In the contract between ONGC and GAIL, it is mentioned that

GAIL would pay not only the price of gas but also the transportation charges to ONGC.[45]

2. The Uran-Trombay pipeline is a common carrier pipeline owned and operated by ONGC which

no party has contested to. ONGC is entitled to claim transportation tariff from the

shippers/customers of the gas as fixed by the Regulator Board for carrying the

shippers’/customers’ gas. The PNGRB Act, 2006 also entitles ONGC to transport its own gas

for its own requirement as the first right user. Since the Uran-Trombay pipeline is declared as

Common Carrier, there needs to be at least one more entity to use the pipeline as

shipper/customer while the transporter remains the ONGC. It is also understood that while

ONGC can claim the transportation tariff from a third party user of its common carrier line, it

cannot fix or claim the price that the shipper collects from its customers. [46]

3. The contract between ONGC and GAIL clearly defines the delivery point where the gas carried

by ONGC is delivered to GAIL and from this point the title and risk in the seller, i.e., ONGC’s

gas get transferred to the buyer, i.e., GAIL. The delivery point mentioned in the contract

between ONGC and GAIL is mentioned as Trombay and on this issue, there is no controversy

among the rival parties viz., the Appellant, ONGC and GAIL. The Board, however, in its

impugned order, has recorded as Uran and not Trombay to be the delivery point. Hence, the

question arises whether on declaration of the Uran-Trombay pipeline as Common Carrier, the

contract which was signed between ONGC and GAIL much before the declaration of common

carrier gets nullified. No party has brought to the notice of the Hon’ble Tribunal either through

its written submission or oral arguments in the Court saying that declaration of the Uran-

Trombay pipeline overrides the contract between ONGC and GAIL. [47]

4. It emerges now that the issues framed by the Hon’ble Tribunal would get addressed once the

issue of controversy on the delivery point is resolved. For resolving this issue, in the considered

opinion of the Hon’ble Tribunal, the appropriate authority would be the Respondent No.1,

i.e., the Board. Moreover, the Board only in its impugned order has recorded the delivery

point as Uran and not Trombay as recorded in the contract between ONGC and GAIL. The

matter, hence, needs to be referred back to the Board and the impugned order deserves to

be set aside. The matter is remanded to the Respondent No. 1, the Board. [48]

Disposition: Appeal allowed. Impugned order set aside. Matter referred back to the Board.

Tata Power Company Ltd. (Transmission) Vs. Maharashtra Electricity Regulatory

Commission & Anr. (23.09.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION) APPEAL

NO. 88 OF 2019 & IA NO. 372 OF 2019

Dated: 23.09.2019

Present: Hon’ble Mrs. Justice Manjula Chellur, Chairperson Hon’ble Mr. S. D. Dubey, Technical

Member



Background: This appeal is directed by the Appellant, Tata Power Company Ltd. (Transmission)

(‘Appellant’), a transmission licensee as per the Maharashtra Electricity Regulatory Commission

(Transmission License Conditions) Regulations, 2004 against the Order dated 12.09.2018 passed

in Case No. 204 of 2017 by the Maharashtra Electricity Regulatory Commission (‘Respondent

Commission’) in which amongst other issues, the Respondent Commission dismissed the Review

Petition filed by the Appellant and again issued directions for deemed closure of 400 kV Kharghar-

Vikhroli transmission line along with the Appellant’s 400 kV Receiving Station at Vikhroli and LILO

of 400 kV Talegaon – Kalwa Line.

The Vikhroli transmission scheme comprises three interlinked interdependent elements, namely

1. Construction of 400 kV GIS receiving station at Vikhroli. Approved by the Respondent

Commission on 02.06.2011. Expected completion was FY 2015.

2. Construction of 400 kV Kharghar Vikhroli transmission line in order to provide input power to

Vikhroli EHV substation. Approved by the Respondent-Commission on 03.10.2011. Expected

completion was FY 2015.

3. LILO of 400 kV Talegaon – Kalwa Line at proposed 400 kV Vikhroli receiving station as second

source of Vikhroli substation and alternate to 400 kV Kharghar-Vikhroli line in case of

emergency. Approved on 10.11.2017. The year of completion of this scheme was approved as

FY 2021-22 since this is only a standby arrangement connected to 400 kV Vikhroli project.

The Appellant had sought revised approval assuring that both substation and transmission line

would be completed in the FY 2018-19 as sought in the revision dated 05.02.2014 and again on

20.10.2015.

The Appellant’s main contention is that the Respondent Commission had failed to appreciate that

the delay caused in execution of 400 kV Vikhroli transmission scheme was not at the instance of

the Appellant but for the reasons beyond their control. Therefore, the deemed closure is arbitrary

and not sustainable if factually verified.

Further, the Appellant contends that no suggestions or objections whatsoever were received

opposing the petitions of Mid-Term Review (‘MTR’) and MYT when public notice was issued on

20.06.2018 in terms of Section 64 of the Electricity Act, 2003. Public hearing was scheduled on

24.07.2018.

The Appellant further contends that the Respondent-Commission was not justified in relying on

the submissions of the 2nd Respondent – State Transmission Utilities (‘STUs’) stating that there has

been an inordinate delay in achieving completion of scheme in question by the Appellant and the

same could be considered under Tariff Based Competitive Bidding (‘TBCB’) route for expeditious

completion.

The Appellant contends that Respondent-Commission totally ignoring its power to regulate and

adjudicate under Section 86 of the Act, abdicated its duty to examine the reasons causing the said

inordinate delay in achieving completion of 400 kV Vikhroli transmission scheme and proceeded

to penalize the Appellant arbitrarily without proper evaluation.

Issues:

I. Whether the Respondent-Commission was justified in opining that the 400 kV Vikhroli

scheme deemed to have been closed on account of inordinate delay?

II. Whether the said order is illegal and contrary to law established?



III. Whether in the case on hand since public interest is involved, the procedure now adopted

i.e., TBCB process, would be more economical and beneficial apart from being

transparent?

Held:

1. The obligation is upon the Appellant the project proponent, to plan its work and how it should

be completed. One cannot deny the fact that a prudent business person is expected to assess

reasonable time required for getting required statutory approvals/clearances/consents. This

must be envisaged at the time of submitting the proposals itself. Equally, prudence in the

business requires the project proponent to think of possible obstacles/obstructions while

carrying out the scheme in question. This includes possible steps one has to take to get such

clearances/approvals/consents. [58]

2. Just because no one from public side raised objection, it does not mean that the Respondent

Commission has to act blindly, totally agreeing with the Appellant without making any

prudence check to verify whether the stand of the Appellant was justified. The Respondent

Commission cannot act in that passion as it is vested with a pious responsibility to regulate

the entire process of generation, transmission and distribution as envisaged under the Act. It

should act as a neutral person to protect the interest of all the stakeholders including

consumers at large. During the ARR proceedings, revised ARR came to be sought when the 2nd

Respondent made complaint of delay of the Vikhroli transmission scheme in question. The

Respondent Commission passed two orders, one on 12.09.2018 and another on 29.01.2019

on the Petition filed by the Appellant. [60]

3. It is seen from the records that initially the scheme was commenced with the objective of

strengthening Mumbai transmission network/increased transfer capacity of Mumbai

transmission system, which allows import of additional power i.e., 800 to 1000 MW through

competitive bidding route. This additional power being brought into Mumbai from external

sources was to meet growing electricity demand of Mumbai. [65]

4. According to the 2nd Respondent - STU, because of the inordinate delay caused by the

Appellant, the 2nd Respondent had to propose TBCB route since that would envisage

transparency both in economics and factuals. The urgency for completion of 400 kV Vikhroli

scheme, was to help the large number of consumers and to decongest the pressure of

demand. That was the need of the hour. [69]

5. The Respondent Commission had expressed concern about pace at which the Appellant was

executing the 400 kV Vikrohli scheme, which was being followed up by the Commission having

in mind the growing power demand of consumers of Mumbai and the need to transmit into

Mumbai the additional power from outside. It is also seen from the records as observed by

the Respondent Commission based on the submissions of the 2nd Respondent-STU that many

other schemes which were delayed by the Appellant apart from the scheme in question were

pointed out to the Appellant by the Commission from time to time. [72]

6. The contention of the Appellant that if the implementation of scheme under TBCB is allowed,

it would further delay the scheme in question has not been found acceptable to the Hon’ble

Tribunal, since in the TBCB process the scheme has to be executed on timely basis, which also

optimises the cost of the project thereby reducing the financial burden on the consumers. The

Appellant, right from 2011 till date, has not taken any active steps to achieve the completion

of the project, which helps the consumers of Mumbai. Now, at this stage, the Appellant claims

that it has put in lot of efforts and is ready to complete the project. The Appellant was also

permitted to participate in the TBCB process. Therefore, the Hon’ble Tribunal has not been



able to find fault with the observation of the Commission pertaining to delay in implementing

the scheme in question by 8 years.[77]

7. Except obtaining certain approvals/consents and clearances, on the ground admittedly no

concrete work as such was commenced. The Hon’ble Tribunal has found that the cause for

such non-compliance/non-commencement of work is not getting approvals on time. List of

dates of approvals/clearances clearly goes to show that for construction of substation, the

license was sanctioned in the year 2011 itself. On the ground of non-completion of

transmission line as obstacle to put up receiving station is the excuse put-forth by the

Appellant for laying the foundation stone for construction of GIS substation. If the

construction of certain number of towers could not be undertaken on time, there was no

reason why the construction of other towers could not be undertaken. If the statutory

authorities could not grant approvals/consents/clearances within reasonable time, definitely

the Appellant could have taken serious steps to pursue the matter by approaching higher

authorities of the statutory authority which had to grant such approval or through judicial

process. Apparently, the Appellant has not resorted to any of such recourse. [78]

8. Even if 400 kV Talegaon-Kalwa (LILO) line is to be completed by March 2022, this Talegaon-

Kalwa line was only a standby line/emergency line for 400 kV Kharghar Vikhroli transmission

line. Therefore, 400 kV Talegaon-Kalwa line being part of Kharghar Vikhroli scheme, the

Respondent Commission was justified in closing the entire scheme by passing deemed closure

of the scheme as such.[82]

9. It is well settled that the individual interest must yield to public interest. Since the Respondent

Commission has made proper directions to reimburse the predevelopment expenditure met

by the Appellant and the Appellant is also a participant in the bid, the Hon’ble Tribunal has

been of the opinion that no prejudice of any nature, as such, is caused to the Appellant and

the direction of the Respondent Commission to proceed with TBCB process for

implementation of 400 kV Vikhroli transmission scheme is in the interest of large number of

consumers of Mumbai.[92]

10. The Hon’ble Tribunal has been of the opinion that viewed from any angle, the impugned order

in question with regard to relief ‘g’ does not warrant any interference. Accordingly, the Appeal

so far as it relates to relief ‘g’ is dismissed. Hence the issue taken up for consideration at relief

‘g’ is answered against the Appellant. In the light of relief ‘g’ being answered against the

Appellant, the Hon’ble Tribunal has directed the 2nd Respondent to issue LOI in favour of the

successful bidder. [92]

Disposition: Appeal so far as it relates to relief ‘g’ is dismissed.

M/s. Ramnad Renewable Energy Ltd. Vs. Tamil Nadu Electricity Regulatory


APPEAL NO. 31 and 32 OF 2017

Dated: 24.09.2019


Judicial Member

Background: The present Appeal has been filed by M/s. Ramnad Renewable Energy Ltd.

(‘Appellant’) against the Order dated 16.11.2016 (‘Impugned Order’) passed by the Tamil Nadu

Electricity Regulatory Commission (‘State Commission’) in the Pre-Registration Case No. 2 of 2016.



In 2012, the Government of Tamil Nadu issued a Solar Energy Policy to generate 3000 MW solar

power by 2015. The State Commission issued a comprehensive order on solar power on

12.09.2014 and fixed the tariff for Solar Power Plants at Rs.7.10 per unit. In terms of TNERC Power

Procurement from New Renewable Sources of Energy Regulations, 2008, the control period of the

tariff was fixed as one year from the date of the order. The State Commission vide order dated

01.04.2015 extended the control period of solar power tariff till 31.03.2016. Accordingly, all solar

power projects commissioned on or before 31.03.2016 became entitled to a tariff of Rs. 7.10 per

unit.

On 04.07.2015, the Appellant entered into an Energy Purchase Agreement (‘EPA’) with TANGEDCO

for the implementation of its 72 MW solar power project. The Respondent No.3 proposed to

interface the Appellant power plant with the TANTRANSCO Grid at the sanctioned new Kamuthi

400/230-110 kV sub-station by erecting 110 kV line for a distance of 8 kilometer. As per the extent

Regulation, the Respondent No.2 was entirely responsible by commissioning the Kamuthi

substation and the 110 kV line connecting the sub-station and the solar plant.

On 24.03.2016, the Appellant informed the Respondent No.3 that the project was ready for

commissioning. However, the Respondent No.2 could not commission the sub-station at Kamuthi.

On 15.04.2016, the Respondent No.2 informed the Appellant that the Appellant’s plant was not

ready for commissioning on 31.03.2016 and in terms of letter dated 17.06.2015 it was duly

clarified that the Appellant would not be entitled to claim any deemed generation or any other

benefit from the Respondent No.2 in case the TANTRANSCO could not commission proposed

substation at Kamuthi. Consequently, the Appellant is being paid a lower tariff of Rs. 5.10 per unit

attributing the delay in commissioning of the plant on the Appellant.

The Appellants’ contention is that despite the diligent efforts to commission and commercially

operate their plants within the said control period were thwarted due to defaults and delays of

TANGEDCO in– (a) Connecting the solar power plants with the grid within time; and (b)

Recognising deemed commissioning of the Appellants’ projects before 31.03.2016. Once the

connectivity to the promised evacuation facility was made available by TANGEDCO, the Appellants

were able to commence commercial operations from 18.09.2016.Yet, the Appellants have been

paid a significantly lower tariff of Rs. 5.10/unit in terms of TNERC Solar Tariff Order dated

28.03.2016.

Appellant filed a Petition before the State Commission as a Miscellaneous Petition however the

Registry of the State Commission directed the Petitioner to file the same as a Dispute Resolution

Petition (DRP) and returned the Petition. The Appellant again approached the Registry to place

the matter before the State Commission for maintainability. On 16.11.2016, the State Commission

passed the Impugned Order directing the Appellant directing the Appellant to file appropriate

court fees, while observing that the matter involved a dispute in terms of Section 86(1)(f) of the

Electricity Act.

Issues:

A. Whether the Respondent Commission failed to appreciate that the Petition filed by Ramnad

Renewable Energy Ltd. was regulatory and not adjudicatory in nature?

B. Whether the Respondent Commission acted contrary to:- (a) the settled position of law that:-

(i) “regulatory” and “adjudicatory” functions of an Electricity Regulatory Commission are

different; (ii) Within the regulatory framework under the aegis of the Electricity Commissions,

project developers are entitled to extension of control period when the project commissioning



is delayed for no fault of the project developers; (b) judgments of this Hon’ble Tribunal

including the case of GUVNL vs. GERC, reported as MANU/ET/0057/2016; and (c) Regulation

3 of TNERC New and Renewable Sources of Energy Regulations, 2008 which provides that the

obligation of providing evacuation facility from the solar power plant is of the Respondent No.

2?

C. Whether the Impugned Order is violative of the objectives of Section 86(1)(e) of the Electricity

Act, 2003, National Electricity Policy, Tariff Policy, Energy Policy 2012 issued by the State of

Tamil Nadu and doctrine of legitimate expectation as also the international convention,

UNFCCC, which incentivises generation of electricity from renewable sources?

D. Whether the Respondent Commission failed to appreciate that there is no dispute with regard

to the date of commissioning of the Appellant’s power plant and that the Appellant is only

seeking extension of control period which is well within the powers and jurisdiction of the

Respondent Commission in terms of Regulations 48 of (Conduct of Business) Regulations,

2004?

E. Whether the Respondent Commission rightly directed conversion of the Petition filed by

Appellant invoking regulatory power, into a Dispute Resolution Petition despite the fact that

the affidavit filed by the Respondent Commission in the Tamil Nadu High Court wherein they

have voluntarily given under taking that they would not take up hearing of the Dispute

Petitions, pending the final outcome of the court case in the Madras High Court (now pending

with Hon’ble Supreme Court)?

Held:

1. Though the State Commission in the Impugned Order have considered submission made by

the Appellant and have recorded that the Appellant filed their Petition as Miscellaneous

Petition but, in the findings, the State Commission framed the only question for consideration,

whether the prayers of the Petitioners are in the nature of dispute resolution. [8 (xv)]

2. The State Commission has not discussed the facts of the case and the prayer of the Appellant,

to consider the Petition filed by them, as Miscellaneous Petition and also to exercise the

regulatory powers of the State Commission. The entire analysis is bent towards justifying that

it is a Dispute Resolution Petition.[8 (xviii)]

3. The Appellant in their prayer have asked the State Commission to exercise their regulatory

powers. In the interest of natural justice and equity, the State Commission besides elaborating

on the nature of dispute resolution should also have discussed the other aspects of regulatory

nature of the prayer. There is absolutely no discussion on this aspect of regulatory nature of

the prayer sought by the Appellant. [8 (xx)]

4. The State Commission, as defined under the Act, is a regulator and performance monitor, a

statutory body to oversee the development of power sector in the State so as to evolve

sustainable business model to supply electricity to the consumers in the State in the most

efficient manner. With this objective in mind, the endeavour of the State Commission while

dealing with such matters should be lenient one, especially in matters relating to promotion

of electricity generation from solar power plant under the promotional schemes notified by

the State Government. In view of the facts of the case, the averments made by the Appellant,

the grounds given by the Appellant in their appeal and the prayer made by the Appellant, it

would be appropriate to treat the Petition of the Appellant as Miscellaneous Petition and not

as a Dispute Resolution Petition because of monetary claims between the licensee and the

generator. [8 (xxi)]

5. Having regard to the facts and circumstances of the case, the appeals filed by the Appellants

are allowed. The Impugned Orders dated 16.11.2016 passed by the State Commission in the



Pre-Registration Case No.2 and Pre-Registration Case No.3 are hereby set aside. The matter

stands remitted back to the first Respondent/the State Commission. [8 (xxi)]

Disposition: Appeal allowed. Matter remitted to State Commission

M/s Sundew Properties Ltd. vs. Telangana State Electricity Regulatory Commission

& Anr.( 27.09.2019 - APTEL) IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI (APPELLATE JURISDICTION)

APPEAL NO. 3 of 2017 and IA NOs. 03 of 2017 & 253 of 2018

Dated: 27.09.2019


Member

Background: The present Appeal has been filed by M/s Sundew Properties Ltd. (‘Appellant’), a

developer in terms of Section 3 & 4 of the SEZ Act from 16.10.2006 and a deemed distribution

licensee in terms of Proviso to Section 14(b) of the Electricity Act, is challenging the legality,

validity and propriety of the Order dated 15.02.2016 (‘Impugned Order’) passed by Respondent 1

- Telangana State Electricity Regulatory Commission (‘State Commission’) in O.P. No. 10 of 2015.

It is the contention pf the Appellant that the State Commission has imposed extraneous conditions

in the Impugned Order such as infusion of additional equity in terms of Rule 3(2) of the Capital

Adequacy Rules and as such the Impugned Order is in contravention to the provisions of the SEZ

Act as well as the Electricity Act. The State Commission has failed to appreciate that the

Recognition of the status of a Deemed Distribution Licensee is not contingent upon fulfilment of

Rule 3(2) of the Capital Adequacy Rules read with Regulation 12 of the AP Distribution Licence

Regulations. The Appellant relies on the judgment of Hon’ble Supreme Court in Sesa Sterlite case

that laid the principle that a developer of a SEZ is automatically deemed to be a distribution

licensee under Sections 3 and 4 of the SEZ Act and further a deemed distribution licensee is not

required to make an Application for grant of licence under Sections 14 and 15 of the Electricity

Act. The respondents contend that the Hon’ble Supreme Court in the case of Sesa Sterilite has

clearly held that there is a need for harmonious construction of SEZ Act, 2005 and the Electricity

Act, 2003 in order to give effect to the provisions of both Acts and, therefore, it is not open to the

Appellant to contend that the Capital Adequacy Rules and AP (Distribution License) Regulations

do not apply to it.

Issues:

I. Whether the Telangana Electricity Regulatory Commission has rightly held that fulfilment

of conditions stipulated in Rule 3(2) of the capital adequacy rule read with Section 14 of

the Electricity Act and Rule 12 of the AP Distribution Licence Regulations are mandatory

pre-requisite for the Appellant, a developer of a notified SEZ, to be recognized as a

deemed distribution licensee under Regulation 13 and Proviso to Section 14(b) of the

Electricity Act?

II. Whether Telangana Commission was right in directing the Appellant to infuse additional

equity after having held that the Appellant has complied with the requirement of Rule

3(2) of the Capital Adequacy Rules?

Held:

I.



a) It is not in dispute that under Rules 3 & 4 of the SEZ Act, a developer of SEZ is automatically

deemed to be a distribution licensee and is not required to make an application for grant

of license under Section 14 & 15 of the Electricity Act. However, a deemed distribution

licensee has to make an application to the Appropriate Commission for getting identified

as a deemed distribution licensee in the form prescribed by the Commission. The

Telangana Commission in Para 18 of the impugned order has held that the Appellant is

not required to make an application seeking grant of a license but it has stipulated that

the capital adequacy rules are applicable to the Appellant in terms of Regulation 12 & 49

of the distribution license regulations of the Commission. [8.12]

b) The real issue of the dispute is a finding of the Commission in the impugned order that a

deemed licensee is required to fulfil the conditions stipulated under the capital adequacy

rules as a pre-condition to being recognized as a deemed licensee. [8.13]

c) In view of these facts, it is pertinent to note that while the Appellant is not required to

apply for grant of license but being a deemed distribution licensee has to fulfil other

technical and financial requirements as per prevailing rules and regulations of the State

Commission which is mandated to regulate the Electricity business in the state whether it

is a DISCOM or any other deemed distribution licensee as in the present case. Accordingly,

the Hon’ble Tribunal has been of the opinion that the State Commission has passed the

impugned order with careful consideration and proper interpretation of the statute and

also considering the judgments passed by Hon’ble Supreme Court in Sesa Sterilite case

(supra) and the Tribunal’s judgment in Aluminium case which squarely cover the case in

hand.

The Hon’ble Tribunal has been of the considered opinion that the issues raised in the instant

appeal lack merit and hence the Appeal is liable to be dismissed. The Telangana Commission has

passed impugned order with careful consideration based on the relevant material placed before

it and after rendering cogent reasoning on the same. Hence, the impugned order deserves to be

upheld.


Renascent Power Ventures Pvt. Ltd. Vs. Uttar Pradesh Electricity Regulatory


APPEAL NO. 183 OF 2019 & IA NOs. 907, 909 & 1059 OF 2019

Dated: 27.09.2019


Member

Background: This Appeal is directed by the Appellant - Renascent Power Ventures Private Ltd.

(‘Appellant’) against the Order dated 29.03.2019 passed by Uttar Pradesh Electricity Regulatory

Commission (‘Respondent - Commission’) in Petition No. 1403 of 2019 to the extent and in so far

as it imposes the arbitrary and unreasonable pre-conditions for grant of waiver/approval to the

Opposite Party No. 2. In addition, the Appellant seeks for approval of the transfer of 75.01% equity

shareholding and 100% preference shareholding of Respondent No. 3 - Prayagraj Power

Generation Company Ltd. (‘PPGCL’) in favour of the Appellant.

On 04.11.2008, Respondent-Commission approved Request for Qualification (‘RFQ’) based on

Case-II bidding guidelines and competitive bidding guidelines under Section 63 of the Electricity



Act, 2003 (‘Act’), and Request for Proposal (‘RFP’) floated by the 4th Respondent - Uttar Pradesh

Power Corporation Ltd. (‘UPPCL’) on behalf of its State distribution licensees (DISCOMs). This was

a tariff based bidding process for long term procurement of power from three units having 660

MW thermal power each from generating plants set up by PPGCL a Special Purpose Vehicle, at

Allahabad, Uttar Pradesh. On 21.11.2008, Power Purchase Agreement (‘PPA’) was executed

between PPGCL and UPPCL for purchase of 1980 MW power from the above-said thermal project.

Letter of Intent (LoI) came to be issued to Jaiprakash Associates Ltd. (‘JAL’) after evaluation of the

bids, since it had quoted lowest levelised tariff of INR 3.020 per unit. On 20.03.2009, a Share

Purchase Agreement (‘SPA’) was signed between UPPCL, PPGCL and Jaiprakash Power Ventures

Limited (‘JPVL’), a nominee of JAL.

State Bank of India (‘SBI’) along with other lenders entered into several credit facility agreements

with PPGCL agreeing to give credit facilities which were secured by a pledge of 88.51% of equity

shares and 27,00,00,000 (Twenty Seven Crores) preference shares of PPGCL held by JPVL. PPGCL,

for various reasons, failed to service its debt obligations under credit facility agreement, which

resulted in lenders classifying the accounts of PPGCL as Non-Performing Asset (NPA). On

27.08.2018 and 13.11.2018, SBI issued in-principle and final LoI respectively to the Appellant

confirming it to be the successful bidder for competitive bidding for selection of a new entity

which shall take over the control in shareholding of PPGCL. The Appellant has in its bid made an

offer to acquire 75.01% of equity shareholding along with 100% of preference shares of PPGCL

and transfer balance 13.50% equity shares to existing lenders.

On 17.11.2018, SBI sought approval of UPPCL for transfer of shares of PPGCL in favour of the

Appellant. After seeking various clarifications from SBI, UPPCL informed SBI on 29.12.2018 that

since the bidding documents and tariff has been adopted by Respondent-Commission, SBI may

have to approach Respondent-Commission for approval of the said process. SBI filed Petition No.

1403 of 2019 before the Respondent-Commission for the above approval. Respondent-

Commission directed UPPCL to file its counter affidavit to bring on record as to how transfer of

shares in favour of the Appellant was in the interest of all the stakeholders including the

consumers of the State of Uttar Pradesh. After hearing the parties on 07.03.2019, Respondent-

Commission observed that it has no objection in transfer of shares but reduction in fixed charges

by a reasonable amount was sought from the Appellant on the ground that it would save

purported undue enrichment to the Appellant and also safeguard consumers’ interest. The

Respondent Commission proceeded to reduce the tariff by Rs. 0.14 per unit while approving the

transfer of equity shares of PPGCL.

In additional responses filed by both parties, it was apparent that both parties were agreeable on

the issue of increase in normative availability; however, UPPCL’s offer on reduction of net SHR and

off-take of additional power beyond contractual capacity on non-RTC basis was not acceptable to

the Appellant.

On 29.03.2019, Respondent-Commission passed the impugned order. Aggrieved of the order,

Appellant approached High Court of Judicature at Allahabad, Lucknow Bench challenging validity

of the impugned order on the ground that it had exercised beyond its jurisdiction as prescribed

under the Act. On 25.09.2019, the High Court disposed of the Writ Petition directing the Appellant

to approach Appellate Tribunal for Electricity.

As contended by the Appellant and the 2nd Respondent-SBI, in the process undertaken under

Section 63 of the Act, question of examination of capital cost or capital structure of the project by

UPERC at the time of adoption of tariff would not arise. For this proposition, he Appellant has also



relied on the matter of Madhya Pradesh Power Trading Company Ltd. vs. MPERC & Ors. in Appeal

No. 44 of 2019 dated 06.05.2010. However, such examination can be undertaken by the

Commission if it is a case of determination of tariff by the appropriate Commission under Section

62 of the Act. According to SBI, the Respondent-Commission was required to just approve the

change in ownership of PPGCL, as a part of debt resolution process initiated by SBI as a lead Bank

(lender) and pledging of the shares of PPGCL. SBI further submits that any reduction in the

adopted tariff at this stage would vitiate the transparent bidding process undertaken by the

project lenders.

The contention of the Respondent-Commission was that the Petition was not filed under Section

63 of the Act but was filed under Section 86 (1) f of the Act. therefore, it was not a case of adoption

of tariff where the 1st Respondent-Commission had to merely look into the procedure followed

under the bidding process and the bid submitted by the bidders whether it is transparent, publicity

and participation. It is also incumbent upon the Commission concerned under Section 63 of the

Act to see whether the discovered bid price is in tune with the market rate or not.

Issues:

• Whether the 1st Respondent-Commission was justified in reducing the tariff by Rs. 0.14 as a

condition for sale/transfer of shareholding of PPGCL in favour of the Appellant?

• Whether such act of the 1st Respondent-Commission is beyond the scope of its jurisdiction,

since it had already adopted the tariff which emerged from competitive bidding process under

Section 63 of the Electricity Act, 2003?

Held: The Hon’ble Tribunal has been of the opinion that the finding of the 1st Respondent-

Commission so far as reduction of adopted tariff by Rs. 0.14 per unit warrants interference.

Accordingly, the Hon’ble Tribunal has upheld the approval/waiver/relaxation granted by the 1st

Respondent-Commission for SPA dated 14.11.2018, but without any reduction of adopted tariff.

Accordingly, the Appeal is allowed.

1. The Appellant has rightly placed reliance in the case of Official Trustee v Sachindra Nath

[reported in AIR 1969 SC 823] to contend that if a court has jurisdiction to decide a particular

matter, it should have power to hear and decide the questions at issue and decide the

controversy which has arisen between the parties. The Appellant rightly referred to the case

of Jagmittar Sain Bhagat & Ors. v. Director, Health Services, Haryana and Others [reported in

(2013) 10 SCC 136] to contend that conferment of jurisdiction is a legislative function and it

can neither be conferred with the consent of the parties nor by a superior court; therefore, if

an order/decree is passed by a court which has no jurisdiction, it would amount to nullity since

it goes to the root of the cause. [120]

2. The change in the PPA tariff, which being the fundamental basis for arriving at the bid amount

by the bidders, any subsequent reduction in the PPA tariff, post conclusion of the bid process

by lenders of the project, would amount to change in the fundamental basis of the bid. This is

well settled law laid down by the Hon’ble Supreme Court in several cases. [122]

3. Apparently, the Commission did not consider the effects of reduction in PPA tariff in post facto

scenario since there was certainty in the bid condition with reference to PPA tariff and

associated revenue stream which was the basic input for inviting the bids in question. It is also

pertinent to note that the bid process adopted by the 2nd Respondent-SBI was to recover

their dues and salvage the project. This right accrued to lenders under the financing

documents. The acceptance of the bid by the lenders was to find an appropriate debt

resolution by bringing a strong sponsor/promoter who is capable of promoting the project in



question with sustainability since they had world class practice to run such project. The

interference of the Respondent-Commission by reducing the adopted tariff indirectly

interferes with the security rights available to the lenders in terms of financial documents

entered into between lenders and the borrowers. [127], [126]

4. The relief sought in the Petition in question was not for revision/review of tariff. It is pertinent

to note that if the transfer of shareholding was two years after COD, there was no need even

to approach the Commission. If such were to be the situation, question of reducing the PPA

tariff would not arise. The reduction of tariff in this case amounts to revisiting the tariff

adoption process which was concluded and had reached finality. The exercise undertaken by

the Respondent-Commission in doing so is beyond the scope of its jurisdiction. [135]

5. The Respondent Commission has wrongly presumed that the SPA results in windfall to the

Appellant the successful bidder. The adopted tariff does not change by virtue of this SPA. It

continues to be at Rs.3.02 per unit. The haircut if at all causing any prejudice or loss on account

of accepting the offer of Rs.8223 crores as offered by the Appellant, it is the 2nd Respondent-

Bank who is unable to recover its full debt. This does not affect the right or privilege enjoyed

either by the DISCOMs or by consumers who would continue to get supply of power at Rs.3.02

per unit from the project in question. If this SPA is not allowed to be proceeded with, the

result would be the 3rd Respondent would not be in a position to repay the loan amount to

the lenders of the project and it would further be unable to salvage the project. This would

rather cause difficulty and would rather be detrimental to the interest of the 3rd Respondent,

DISCOMs, and the consumers of Uttar Pradesh in general, since the tariff adopted for this

project seems to be one of the cheaper cost at which power is supplied. [137]

6. It is the duty of the Authorities concerned to see that there is possible viability of running the

project and at the same time lenders must be able to receive best value for the pledged

shares. If at all, anyone has grievance about this, it is the lenders of the project, as they were

unsuccessful to recover the entire debt payable to them. Since maximum offer was from the

Appellant, the 2nd Respondent-SBI representing all the lenders has agreed to proceed with the

offer made by the Appellant. The 2nd Respondent as a lead Bank having a consortium of 18

banks and financial institutions, it is the largest lender to the 3rd Respondent. The credit facility

offered by the lenders was secured by clearing of equity shares and preference shares of 3rd

Respondent. [138]


Tata Power Delhi Distribution Ltd. vs Delhi Electricity Regulatory Commission.


APPEAL NO. 246 of 2014 & I.A. NO. 56 OF 2015

Dated: 30.09.2019


Member

Background: The Appellant, Tata Power Distribution Ltd. Delhi (‘Appellant’) has filed the present

Appeal, assailing the correctness of the impugned Order dated 23.07.2014 passed by Delhi

Electricity Regulatory Commission, New Delhi (‘State Commission’) in Petition No. 56 of 2013

whereby the State Commission has proceeded to true up the expenses of the Appellant for the

period 2012-13 and determined the distribution tariff (wheeling & retail supply) for 2014-15 in



violation of the various provisions of the Delhi Electricity Regulatory Commission (Terms and

Conditions for Determination of Wheeling Tariff and Retail Supply Tariff) Regulations, 2011 (‘Tariff

Regulations’) and other prevailing laws, but also against its own past practice and orders, and also

contrary to findings/directions of this Tribunal passed in various judgments.

Issues:

B. ISSUES COVERED BY JUDICIAL PRECEDENTS:

15. Disallowance of Penal UI Charges

25. Wrongful Computation of Advance Against Depreciation : Appellant alleged that the

Respondent Commission has wrongly computed the Advance Against Depreciation (AAD) for the

FY 2012-13 by reducing and/or adjusting Rs.378.97 crores for capex and working capital in the

earlier years from the cumulative depreciation.

26. Non-implementation of direction of this Tribunal in relation to notional loans: Despite this

Tribunal having directed the Respondent Commission to allow the notional loan at market related

interest rate at the time of induction of loan, the Respondent Commission in the impugned Order

has failed to implement the direction of this Tribunal’s Judgments in Appeal No. 52 of 2008 and

Appeal No. 14 of 2012. The Respondent Commission has considered the interest rate for notional

loans on the basis of interest rate prevailing on 01st April of the relevant financial year,

irrespective of the market rate prevailing at the time of induction of loan.

C. COMPUTATIONAL ERRORS TO BE RECTIFIED:

7. Double deduction of additional misuse units from the trued up sales of FY 2010-11 : The

Appellant submitted that the Respondent Commission has wrongly re-computed the sales for the

financial year 2010- 11 by deducting the value of additional misused units twice from the sales of

financial year 2010-11

28. Erroneous computation of opening balance of equity capital: The appellant stated that the

claim pertains to the 2nd MYT Control Period. Appellant submitted that the Respondent

Commission has (a) omitted the equity component of working capital while computing equity

capital for the year 2007-08 to 2010-11; (b) wrongfully deducted equity capital related to working

capital infused in FY 2007-08 to 2011-12, whilst computing the equity capital for FY 2011-12; and

(c) erroneous computation of debt component.

In fact the Commission was required to make year on year adjustment with respect to equity

capital from FY 2007-08 to FY 2011-12, but, under the Impugned Order Commission just added

the equity capital for working capital in FY 2011-12 and not for the period from FY 2007-08 to

2010-11.

D. FRESH ISSUES:

1. Re-determination of AT&C loss trajectory : Appellant while indicating the AT&C loss level for FY

2011-12, FY 2012-13 to 2014-15 submitted that the first control period was extended by one year

i.e. FY 2011-12 by the Respondent Commission. However, while extending such control period,

the AT&C loss target level was fixed at 13% based on actual loss levels but the O&M charges were

fixed on normative basis. This Tribunal by its Judgment dated 28.11.2013 in Appeal No. 14 of 2012

held that the approach adopted by the Commission by determining the AT&C loss level on actual

basis and O&M charges on normative basis is incorrect. However, while re-working the AT&C loss



target for FY 2011-12 from 13% to 15.325%, the Respondent Commission has failed to rework the

AT&C loss trajectory for second control period.

4. DRS excluded from collection : The DRS is the surcharge of 8% that has been allowed by the

Respondent Commission vide MYT Order dated 13.07.2012 for recovery of carrying cost and

liquidation of accumulated revenue gap. It is the case of the Appellant that as the MYT

Regulations, 2011 critically provides that only electricity duty and late payment charges have to

be excluded from the revenue realized for the purpose of computation of collection efficiency,

the DRS should be considered as part of the current years revenue as the same is collected in

relation to the applicable control period. On the other hand, the Respondent Commission has

considered 8% DRS as not part of the current year’s revenue billed or revenue collected

5 Own consumption of the distribution licensee : It is the case of the Appellant that as being

allowed by the Commission in previous MYT Orders, the own consumption of the Appellant needs

to be taken on normative basis and not on the actual basis.

8 Wrongful re-opening of tariff orders relating to FY 2004 - 05 to FY 2009-10

9 Disallowance of Other Expenses

13 Deviation from past practice with respect to Service Line Charges

22 Wrongful consideration of income from generation business of the appellant as non-income

tariff

27 Erroneous deduction of surcharge from computation of revenue gap instead of carrying cost

29 Erroneous methodology for calculation of working capital requirement

30 Disallowance of capital expenditure made during the year 2012-13

31 Erroneous computation of means of financing assets capitalized

32 Erroneous allowance of depreciation rate 36 Erroneous computation of carrying cost for the

year 2014-15

Held: While allowing the Appeal in part, the Hon’ble Tribunal has held;

Issue B.

15. The Hon’ble Tribunal has noted that penal/additional UI charges are applicable only due to

severe indiscipline in drawal of power affecting grid frequency/stability which is entirely

undesirable. Therefore, Hon’ble Tribunal has opined that the State Commission has correctly held

to not allow such penal charges which are ultimately passed through to the consumers who are

at no fault. Hence, the issue is, as such, decided against the Appellant.

25. The matter relates to the methodology in computation of AAD for FY 2012-13. While the

Commission had reduced and/or adjusted the amount for capex and working capital in the earlier

years from the cumulative depreciation, the Appellant emphasize that the correct methodology

should have been - Cumulative Depreciation LESS the depreciation that has already been utilized

towards the funding of working capital and capex to avoid consideration of the same amount

twice. It is noticed that the Appellant, by way of the present appeal, has highlighted the error in

the computation done by the Respondent Commission since it is an issue of incorrect computation

and the same may adversely affect the Appellant in future claims. As the error, as alleged, has



been admitted by the Respondent Commission, the Appellant may approach the Commission for

rectification of the error/methodology which has been crept in. Accordingly, this issue is decided

in favour of the Appellant.

26. The Hon’ble Tribunal has found force in the submissions of the Appellant that the Respondent

Commission has not correctly applied the ratio laid down by this Tribunal in above two judgments.

It is crystal clear that the Commission was required to allow interest rate on notional loan at

market rate at the time of induction of notional loan and not weighted average of the SBI PLR

during the year. The Respondent Commission is accordingly directed to adopt the findings and

directions of this Tribunal in the aforesaid judgments in letter and spirit. Accordingly, this issue is

decided in favour of the Appellant.

Issue C.

I7. In first instance, the Appellant indicated the additional misused units as 11.81 MUs and,

subsequently, corrected to 11.82 MUs after detailed computations desired by the Respondent

Commission. However, the Commission while truing up sales/AT&C loss computation for FY 2010-

11, the misused units have been wrongly taken twice i.e. 11.81+11.82 MUs totalling to 23.63 MUs.

It is relevant to note that the Commission in its reply has not denied the double deduction of

additional misused units and has merely stated that it shall take an appropriate view at the time

of true-up. In the light of this factual matrix, the State Commission is directed to consider the

additional misused units as 11.82 MUs only and re-compute the sales for FY 2010-11 and

corresponding AT&C incentive also. Hence, we decide this issue in favour of the Appellant.

28. The Hon’ble Tribunal has noted that the entire issue revolves around the methodology for

computation of WACC and ROCE. It is not in dispute that in accordance with the terms of Tariff

Regulations, the working capital has to be 100% funded by debt and, accordingly, the Commission

carried out computations relating to debt and equity component of working capital after reducing

the amount of working capital funded by equity in the prior period. As per the Appellant, the

Commission could have only deducted an amount of Rs. 54.42 crores, which was added as equity

component by the Appellant during FY 2007-08 to 2011-12 to finance the working capital.

Accordingly, the Hon’ble Tribunal has been of the considered opinion that necessary true-up of

WACC and ROCC may be undertaken and completed by the State Commission as early as possible

so that similar errors are not repeated for the future financial years. Accordingly, this issue is

decided in favour of the Appellant.

Issue D.

1. The Hon’ble Tribunal has found force in the submissions of the Appellant that once a principle

or methodology for determining the AT&C loss trajectory or O&M charges are decided, the same

should be enforced for subsequent periods also taking the previous base year for which these

matters stand settled. In the instant case, the base year was FY 2011-12 for which AT&C loss

trajectory as well as O&M charges have been reworked out based on normative basis. A

methodology once finalized should not be altered in such a way that it renders ultimate

disadvantage to the Distribution Licensee as in the present case.

4. 8% surcharge has been levied in tariff order dated 13.07.2012 for a specific purpose i.e. for

recovery of carrying cost and liquidation of revenue gap and, hence, does not qualify to be

considered as revenue realization. Accordingly, though, not specifically mentioned in the MYT

Regulations, 2011, the Respondent Commission has taken a proper view in disallowing the amount



of DRS in the revenue collection of that year and has rightly excluded for computation of collection

efficiency. Hence, interference of this Tribunal on this issue is not called for.

5. It is pertinent to notice that earlier in absence of 100% metering of own premises, the

Commission allowed own consumption on normative basis with 2% increase on year to year basis.

However, the State Commission directed all the Delhi Discoms including the Appellant to meter

their self consumption on their own premises and raise bills at the appropriate tariff basis of such

meter reading every month. It is, further, noted that while truing up of FY 2012-13, the Appellant

was disallowed the excess own consumption of 4.14 MU over and above the normative

consumption on account of the fact that 100% metering have been achieved by the Appellant in

all its premises and the actual consumption was found less than the own consumption computed

on normative basis. We opined that in a scenario of transparency and safeguarding the

consumers’ interest, 100% metering should be a must for the Discoms in line with the submission

of actual consumed energy accounts before the Commission. In view of these facts, the State

Commission has taken an appropriate for enforcing 100% metering of the own premises of the

Appellant and rightly considered the actual own consumption instead of consumption on

normative basis, as such, interference of this Tribunal is not called for.

8. It is crystal clear that once the Commission has trued up the facts and figures projected by the

Appellant for year to year basis and passed the final orders there is no scope for reopening of the

trued up matters for reconsideration of any aspect by devising any new methodology or any new

principle whatsoever. 15.4.2 We do not find any force in the submissions of learned counsel for

the Respondent Commission that as the Appellant has not challenged the observations of the

Commission contained in MYT order dated 13.07.2012 in Appeal No. 171 of 2012, it cannot

challenge the same in the present appeal. However, to meet the end of justice, the Appellant

needs to be given an opportunity to challenge any issue which deprives it any benefit legally

entitled for or otherwise renders it to an unadvantageous position as the case may be. In view of

these facts, we are of the opinion that when final true up for previous years have been completed

and final orders passed by the Commission, which have attained finality, cannot be reopened for

reexamination. We, therefore, decide this issue in favour of the Appellant that trued up matters/

orders cannot be reopened or reexamined /reconsidered.

9. Having considered the contentions of both parties and also taken note of the findings of this

Tribunal in its judgment dated 10.02.2015 in Appeal No. 171 of 2012, the Hon’ble Tribunal

observed that it is not in dispute that the Appellant has actually incurred various expenses as

claimed by it in the petition which the State Commission has disallowed while truing up for FY

2012-13 giving reasoning that these expenses are controllable. It is, however, seen that many of

the expenses so claimed by the Appellant are in the category of uncontrollable in nature and need

to be looked into by the Commission by adopting a judicious approach instead of disallowing all

of them in totality. This Tribunal in its judgment dated 10.2.2015 in Appeal no. 171 of 2012 has

held that enhancement in expenses due to reasons beyond the control of the utility, such as

statutory obligations are uncontrollable in nature and, therefore, ought to be allowed. The

provisions under Tariff Regulation 5.6 which specifies that the RoCE should cover all financing cost

but financing cost incurred for obtaining the loans has not at all been factored in the cost of debt.

16.4.3 It is relevant to note that change in law relating to statutory levies cannot be envisaged by

the Licensee or the Respondent Commission at the time of the MYT Order and, thus, cannot be

considered as part of the normative increase in expenses by the Respondent Commission.

13. It is relevant to note that dispute is only relating to the deviation in methodology for

consideration of service line charges while calculating the non-tariff income while the Appellant



contends for the same to be spread in three years in equal amounts and the Respondent

Commission has now considered the entire amount of service line charges received during the

year 2012-13 and 1/3rd and 2/3rd of the amount received during the year 2010-11 and 2011-12

respectively as non tariff income.

It is relevant to note that service line charges are separately accounted for in respect of ARR

besides such charges are nonrefundable in nature and utilized by Discoms towards ARR. In view

of these facts, we are of the opinion that there is no infirmity or ambiguity in the findings of the

Respondent Commission as far as this issue is concerned. Hence, interference by this Tribunal is

not called for.

23. While non-tariff income has been defined in the Tariff Regulations 2011 to be income relating

to the licensed business other than from tariff (wheeling and retail supply), and excluding any

income from other business, cross-subsidy surcharge and additional surcharge. Further, Section

51 of the Electricity Act also provides how the other businesses of Distribution Licensee are to be

treated. In addition to these provisions, the State Commission has also brought out definition and

interpretation of licensed business, non-tariff income, other businesses, etc. in its various

Regulations of 2011, as stated supra. It is relevant to note that Section 51 of the Act and Regulation

5(5) of DERC Regulations, 2005 stipulate that separate books of accounts are required to be

maintained by the Distribution Licensee to segregate the accounts from distribution business and

other businesses. In a situation, such as in the present case, the Respondent Commission, after

evaluation of the financial statements placed on record, has analyzed and decided to pass on

80%income from generation business to the consumers and 20% to the Appellant after prudence

check. We, accordingly, opine that the State Commission has rightly decided the issue and

interference by this Tribunal is not called for as far as this issue is concerned.

27. It is noticed from the submissions of both the parties that the carrying cost on revenue gap

has been provided for the cost for carrying the revenue gap and also to liquidate the revenue gap

at the earliest. Adopting a deviation from its earlier methodology, the Respondent Commission

has now decided to revise the earlier treatment as, by not allowing the carrying cost on such

unpaid over dues, the Commission may, subsequently, have to allow the late payment surcharge

or further interest on the carrying cost withheld, thus leading to imposition of an additional

unwarranted burden on the consumers. In view of these facts, the decision of the Respondent

Commission to allow carrying cost on average revenue gap for the relevant financial year is

considered to be just and right.

29. It is the contention of the Appellant that when the expenses are incurred on the basis of ARR

allowed, then there is no rationale for even considering the allowance of Working Capital on the

basis of trued up figures of revenue billed which is not only contrary to the methodology followed

in MYT Order, 2012 but also against the MYT Regulations itself. In fact, the Commission has

recomputed working capital by considering actual power purchase cost and actual revenue from

sale of electricity approved in the true up for FY 2012-13. It is relevant to note that Regulations do

not provide that ARR may be considered inspite of receivables for two months of revenue from

wheeling and retail supply for computation of working capital. In view of this fact, we find no force

in the submissions of the learned counsel for the Appellant. Accordingly, we are of the opinion

that the Respondent Commission has decided the working capital based on the records placed

before it and our interference is not called for.

30. It is the contention of the Appellant that during FY 2012-13, the Respondent Commission had

disallowed the actual capital expenditure incurred by the Appellant on the pretext that the actual



capitalization of assets can be approved only after physical verification. The Appellant, in its Tariff

Petition, had submitted details of Gross Fixed Assets on the basis of Certificate issued by the

Electrical Inspector for capitalization during the year 2012-13 as Rs. 316.2 crores against which the

Commission has considered only Rs, 200.88 crores.

The Electricity Rules, 1956 and Central Electricity Authority Regulations provides for detailed

inspection by Electrical Inspector before issuance of any certificate for usage of a particular assets

of the licensee. In view of these facts, if the capitalization of assets remains pending for want of

physical verification, it will have a severe effect on the cash flow of the Appellant, thereby making

it difficult to operate on a commercially viable manner which in turn would increase the burden

on the consumers by way of increase in carrying cost. what thus, transpires is that the figures

projected for capitalization by the Appellant and that considered by the Respondent Commission

need to be reconciled and allowed for actual capitalization in line with the MYT Regulations, 2011.

We, therefore, of the opinion that this issue needs to be re-examined by the Commission in

consideration of all facts and figures. This issue, as such, is decided in favour of the Appellant

31. The real dispute is arisen due to consideration of various capitalization figures projected by

the Appellant and that allowed by the State Commission. We are, therefore, of the opinion that

such mismatch of projected and considered figure is required to be reconciled in the true-up for

FY 2012-13. Hence, this issue stands decided in favour of the Appellant.

32. While the Appellant contends that the depreciation rate should be computed as per the rates

specified in Appendix-1 of Tariff Regulations, 2011 according to which the average depreciation

may come to 3.88%. On the other hand, the State Commission has computed the average

deprecation rate based on actual depreciation and capitalization as provided in the audited

accounts of the Appellant and has arrived at a depreciation rate of 3.645%. As the depreciation

rate calculated by the Commission happens to be lower than that specified under Tariff

Regulations, 2011, the Appellant is aggrieved by the same and, subsequently, raised this issue for

consideration of this Tribunal.

We are of the opinion that the Respondent Commission ought to have computed the average

depreciation rate strictly based on its Tariff Regulations, 2011 and none else. It is a settled principle

of law that once Regulations have been framed and are put in place, the same should be followed

scrupulously by all stakeholders including the State Commission. Therefore, we decide this issue

in favour of the Appellant.

36. This Tribunal in its judgment dated 30.07.2010 in Appeal No. 153 of 2009 has held that the

carrying cost incurred by the licensee on the revenue gap accrued must be allowed as expenses

at the prevailing market rate in debt equity ratio of 70:30. Accordingly, it is noticed from the

decision of the State Commission in its impugned Order dated 23.07.2014 that it has allowed a

carrying cost of 11.98% for FY 2014-25 as per second MYT Order on the revenue gap in line with

the directions given by this Tribunal in Appeal No. 142 of 2009. It has also been stipulated by the

Respondent Commission in the said MYT order that final view shall be taken by it after final

outcome of the civil appeal filed before the Hon’ble Supreme Court of India. In view of these facts,

we do not feel necessary to interfere in the findings of the State Commission in the impugned

Order on this issue.

Issue E:

34. It is the contention of the Appellant that the Respondent Commission has disallowed the

additional financing cost accrued on account of banking of surplus power. On the other hand,



learned counsel for the Respondent Commission contends that the notional cost of additional

energy received is to offset the carrying costs. As the case has earlier been decided against the

Appellant by this Tribunal and an appeal is pending before the Hon’ble Supreme Court without

any stay, we are of the opinion that there is no fresh case made out by the Appellant before this

Tribunal to examine the same case afresh. Hence, this issue is decided against the Appellant.

35. We have carefully cone through the impugned order and it is noticed that the Commission has

adequately considered the revenue gap/surplus for FY 2012-13 to 2014-15 and it has also given

cogent reasoning for not considering the carrying cost for FY 2013-14. In view of these facts, we

are of the opinion that our interference on this issue is not called for.




SUPREME COURT OF INDIA



The State of Jharkhand vs. Surendra Kumar Srivastava & Ors (03.01.2019 - SC) IN THE SUPREME COURT OF INDIA

Civil Appeal No. 21 of 2019 (Arising out of S.L.P. (C) No. 26645 of 2015) and Civil Appeal No. 22 of

2019 (Arising out of S.L.P. (C) No. 24684 of 2015)

Dated: 03.01.2019

Present: Hon’ble Mr. Justice Ashok Bhushan and Hon’ble Ms. Justice Indu Malhotra.

Background:. This civil appeal arose out of SLPs (C) filed to challenge the judgment passed by the

Jharkhand High Court in Surendra Kumar Srivastava v. Jharkhand SEB. The writ petition had been

filed by the plaintiffs/respondents to challenge the order refusing to grant interim relief in an

application filed under Order 39 Rules 1 and 2 CPC in a title suit, and the order passed by the

District Court. The plaintiffs/respondents had prayed for grant of permanent injunction as well as

an temporary injunction to restrain Jharkhand State Electricity Board (‘JSEB’) from interfering with

their alleged possession of over suit land for construction of electricity sub-station by JSEB.

Issues: When is it justified to dismiss application for grant of interim injunction under Order 39

Rules 1 and 2 CPC? Whether a writ petition under Article 227 challenging the orders passed by

civil courts refusing to grant interim injunction under Order 39 Rules 1 and 2 CPC can be

maintainable?

Held: While allowing the appeal 1.

1. Learned Single Judge of the High Court had granted an order of maintenance of status quo

with respect to construction of Electricity Sub-station even though the plaintiffs/respondents

failed to produce any documentary evidence whatsoever to establish their title to the suit

property. In earlier proceedings, the said finding was not been challenged by

plaintiffs/respondents and had attained finality. In this view of the matter, the respondents

failed to make out a prima facie case, which would have justified the grant of an interim

injunction. [6.4] The plaintiffs/respondents failed to describe specific area/portion of suit

property which was in their alleged possession, over which construction of Electricity Sub-

station was being carried out by JSEB. [6.5]

2. The balance of convenience lies entirely in favour of the appellant, since the entire electricity

sub-station has been fully constructed, and is now at the stage of being energised for supply

of electricity inter alia to four feeders. It is estimated to provide electricity to approximately 1

lakh people. The Board is statutorily empowered under Section 67 of the Electricity Act, 2003

to undertake all actions necessary for transmission or supply of electricity, subject to the

procedure under the Electricity Act, 2003.[6.6]

3. In the event that plaintiffs/respondents are able to establish their title and possession to any

part of the property utilised for the electricity sub-station, they would be entitled to

compensation for any damage, detriment or inconvenience caused, in accordance with

Section 67(3) of the Electricity Act, 2003, and/or any other law for the time being in force.

[6.8]

4. The electricity sub-station is complete in all respects and ready to be energised, as per the

documentary evidence placed before the Court. The overriding public interest of providing

electricity to the local populace would far outweigh the alleged interest of

plaintiffs/respondents. [6.9]

5. The decision of the Civil Judge (Junior Division-I) and the District Judge in refusing to grant a

temporary injunction was justified, and is restored.[6.10]



6. In view of the aforesaid reasons, the civil appeals are allowed, and the impugned judgment

dated 19-5-2015 passed by the learned Single Judge of the Jharkhand High Court in Surendra

Kumar Srivastava v. Jharkhand SEB is hereby set aside. The impugned judgment ordering the

maintenance of status quo with respect to the suit property till the final disposal of the title

suits stands vacated.[7]

Disposition: Appeals allowed

Reliance Infrastructure Ltd. vs. State of Maharashtra & Ors. (21.01.2019 - SC) IN THE SUPREME COURT OF INDIA

Civil Appeal No. 879 of 2019 (@ Special Leave Petition (C) No. 15754 of 2016)

Dated: 21.01.2019

Present: Hon'ble Dr. Justice D.Y. Chandrachud; Hon'ble Mr. Justice Hemant Gupta.

Background: Present appeal has been filed by the Appellant – Reliance Infrastructure (‘Appellant’)

against findings of High Court against the Appellant both on maintainability of its writ petition

under Article 226 of Constitution and on merits of challenge to validity of the statutory Regulation

44.2(d) of MERC (Multi Year Tariff) Regulations, 2011. In the said proceeding, the validity of a tariff

Regulation framed by Maharashtra Electricity Regulatory Commission (‘State Commission’) was

questioned before the High Court. The plea of the Appellant was of discrimination, which

according to the Appellant, lies in a statutory Regulation determining Station Heat Rate (‘SHR’)1.

According to Appellant, its thermal power station (‘TPS’) at Dahanu had been subjected to a more

stringent norm than or comparable units. State Commission, it was asserted, breached National

Tariff Policy 2006. High Court had held against Appellant both on maintainability of its writ petition

under Article 226 of Constitution and on merits of challenge to validity of the statutory Regulation.

The case has thus travelled to the present Court. The grievance of the Appellant arose from fact

that, a tighter standard or norm had been prescribed for its Dahanu TPS. As opposed to uniform

criterion of 2450 kCal/kWh in Regulation 44.2(a), SHR for Dahanu TPS varied between 2350 in F.Y.

2011-12 to 2370 in F.Y. 2015-16. Essentially, it was this prescription of a more stringent SHR in

case of the Appellant’s Dahanu TPS which formed focus of dispute in present case.

Issue: Whether present case falls in paradigm of manifest unreasonableness or arbitrariness to

warrant interference of this Court?

Held: While disposing of the appeal,

1. The Tribunal has held that the High Court was not justified in disparaging Appellant for taking

recourse to a constitutional remedy under Article 226. Indeed, a challenge to validity of

Regulations framed by the State Commission could only lie before High Court. Hence, imposition

of costs for having adopted remedy under Article 226 was unjustified. There was no suppression

of fact on part of Appellant which had indicated recourse it had taken in appeal before the

Tribunal, arising from its prayer for relaxation of SHR norms before State Commission. The plea

before Appellate Tribunal was for relaxation of SHR norms. The plea before High Court was that,

SHR fixed was discriminatory and ultra vires. Undoubtedly, if Appellant were to succeed before

Tribunal, it would perhaps obviate challenge in High Court. The Appellant did not press ahead with

1 SHR is the heat energy required to generate one unit of electrical energy. The SHR is significant because it represents the ratio

between heat input and the energy output. SHR has a co-relationship with efficiency: a higher SHR reflects comparative inefficiency

while a reduction in the SHR is associated with increasing levels of efficiency.

Reliance Infrastructure Ltd. vs. State of Maharashtra and Ors. (21.01.2019 - SC) : MANU/SC/0050/2019



its plea before the Tribunal. Hence, the writ petition could not have been held not to be

maintainable. [18]

2. The Hon’ble Supreme Court has observed that the substratum of case of Appellant was founded

on a plea of discrimination which was founded on hypothesis that CPRI report regarded units of

DTPS as identical to Parli Unit 6 and Paras Unit 3 (of MSPGCL) and Trombay Unit 8 (of TPC-G). The

observations contained in CPRI report must be read in their entirety. The fact that manufacturing

specifications of units might be similar (assuming they were so) was only one aspect of total range

of considerations which are required to be borne in mind under terms of tariff policy. The Hon’ble

Court has held that the tariff policy required that, operating norms should be efficient, relatable

to past performance, capable of achievement and progressively reflect increased efficiencies.

They might also take into consideration technical advancements, fuel, and vintage of equipment,

nature of operations and level of service among or factors. Normative levels were those which

were fixed by application of standards guided by terms of tariff policy while actual levels were

those which had been achieved as a matter of fact, in past. Emphasis in tariff policy was on creating

incentives for achieving higher efficiency in order to enable ultimate consumer to have benefit of

efficient operations. [29]

3. The Hon’ble Supreme Court has held that tariff fixation was a complex exercise involving a

careful balance between numerous considerations. The "Shall be guided" prescription under

Section 61 of the Electricity Act 2003 (‘Act’) required the appropriate Commission to bear those

considerations in mind. Deducing past performance on basis of historical data, balancing diverse

policy objectives and evaluating comparative weight to be ascribed to interests of stakeholders

was a scientific exercise which was carried out by the Commission. The nature of Judicial Review

that was exercisable in a given subject area depended in a significant measure on nature of area

and body which was entrusted with task of framing subordinate legislation.

In Transmission Corporation of Andhra Pradesh Ltd. v. Sai Renewable Power Pvt. Ltd.,

MANU/SC/0486/2010 : (2011) 11 SCC 34, a two-judge bench of the Supreme Court has held that

“Fixation of tariff is, primarily, a function to be performed by the statutory authority in furtherance

to the provisions of the relevant laws …. These functions are required to be performed by the

expert bodies to whom the job is assigned under the law...[17] The functions assigned to the

Regulatory Commission are wide enough to specifically impose an obligation on the Regulatory

Commission to determine the tariff. The specialized performance of functions that are assigned

to Regulatory Commission can hardly be assumed by any other authority and particularly, the

Courts in exercise of their judicial discretion. This Court has consistently taken the view that it

would not be proper for the Court to examine the fixation of tariff rates or its revision as these

matters are policy matters outside the purview of judicial intervention. The only explanation for

judicial intervention in tariff fixation/revision is where the person aggrieved can show that the

tariff fixation was illegal, arbitrary or ultra vires the Act. [18]” [30]

4. The Hon’ble Supreme Court has held that the power to frame Regulations was of a legislative

nature. CPRI report was an input before MERC in carrying out that exercise. MERC followed

statutory procedures laid down for determination of tariffs. It took into account factors which it

was mandated by statute to consider. National tariff policy, suggestions of stakeholders as well as

assessment carried out by CPRI were duly considered. Hence, present case did not fall in paradigm

of manifest unreasonableness or arbitrariness to warrant interference of this Court. It would be

rather formulaic for Court to accept that, merely because DTPS was placed at par in immediately

previous period (2006-07) and period immediately succeeding (2016-20), that this must

necessarily be extrapolated to intervening period governed by MYT Regulations 2011. A body



which was entrusted with task of framing subordinate legislation had a range of options including

policy options. If on an appraisal of all guiding principles, it had chosen a particular line of logic or

rationale, this Court ought not to interfere. [31]

5. The Hon’ble Supreme Court has held that Regulation 44.2(d) of MERC (Multi Year Tariff)

Regulations, 2011 did not suffer from any constitutional or statutory infirmity. View of High Court

that writ petition under Article 226 was not maintainable was disapproved and accordingly

direction on imposition of costs was set aside. However, there was no infirmity in impugned

Regulation and accordingly affirm ultimate conclusion of High Court to dismiss writ petition Under

Article 226.

6. Civil Appeal was, accordingly, disposed off. [32]


Government of NCT of Delhi vs. Union of India (UOI) (14.02.2019 - SC) IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2357 of 2017, Cont. Petition (Civil) No. 175 of 2016 in Writ Petition (Criminal) No.

539 of 1986, Civil Appeal Nos. 2358, 2359, 2360, 2361, 2362 and 2363 of 2017, Criminal Appeal

No. 277 of 2017 and Civil Appeal No. 2364 of 2017

Dated: 14.02.2019

Present: Hon'ble Mr. Justice A.K. Sikri; Hon'ble Mr. Justice Ashok Bhushan.

Background: All Appeals arise out of the judgment dated 04.08.2016 rendered by the High Court

of Delhi in writ petitions filed before it wherein the main issue related to the status of National

Capital Territory of Delhi (‘NCTD’) and in, particular, about administration of NCTD, powers

exercisable by and functions of the elected Government of NCTD (‘GNCTD’) vis-a-vis the Central

Government. The High Court of Delhi had held that since NCTD remains a Union Territory, it is the

President who continues to administer NCTD as well as Territory of the Union, i.e., the Central

Government and his nominee, namely, the Lieutenant Governor enjoys the overlapping powers.

On appeal to the Supreme Court, the Division Bench referred the matters to a Constitution Bench

which gave the answers to the various nuances of the otherwise thorny and ticklish issues, vide

its judgment dated 04.07.2018. After giving answers to the moot questions that had arisen, all

these appeals were directed to be listed before the Regular Bench for deciding the individual

issues and disputes that arise in these appeals. This is how the matters were heard, on its own

merits, depending upon subject matter of each of these appeals, by this Bench including matters

relating to Delhi Electricity Reforms Act (‘DER Act’), 2011 and Delhi Electricity Reforms (Transfer

Schemes) Rules, 2001 (‘DER Rules’) framed under this Act.

Issues:

• In Civil Appeal 2363 of 2017; Whether Under Section 108 of the Electricity Act, 2003 and Under

Section 12 of the Delhi Electricity Reforms Act, 2000, the power to issue directions with the

State Commission (‘DERC’) is with the Government of NCT of Delhi?

• In Civil Appeal 2361 of 2017; Whether the orders of the GNCTD nominating Directors to

Distribution Companies in Delhi under the Delhi Electricity Reforms Act, 2000 read with Delhi

Electricity Reforms (Transfer Scheme) Rules, 2001, without obtaining the concurrence of the

Lieutenant Governor are valid?



Held: The Hon’ble Supreme Court has held that insofar as the DER Act is concerned, it is an

enactment enacted by Legislative Assembly of NCTD. It operates within the NCTD. Government

here means GNCTD i.e. LG who is supposed to act on the aid and advice of the Council of Ministers.

Under the DER Act, the Delhi Government has power to issue directions to the DERC in matters of

policies involving public interest. When such powers are conferred specifically to Delhi

Government under DER Act, it cannot be said that insofar as Section 108 of the Electricity Act,

2003 is concerned, the expression 'State Government' therein would mean the Central

Government. If such an interpretation is given, there would clearly be a conflict of jurisdiction in

the NCTD insofar as working of Electricity Act/DER Act are concerned. As a result, and going by

the dicta laid down by the Constitution Bench, the Hon’ble Supreme Court has set aside the

decision of the Delhi High Court on this aspect and held that it was within the jurisdiction of GNCTD

to issue notification No. F. 11(58/2010/Power/1856) dated 12.06.2015. The Hon’ble Court has

made it clear that it has not touched upon the merits of the said notification as that is not the

issue before the Court. [146]

Uttar Haryana Bijli Vitran Nigam Ltd. & Ors. vs. Adani Power Ltd. & Ors. (25.02.2019

- SC) IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 5865 and 6190 of 2018

Dated: 25.02.2019

Present: Hon'ble Mr. Justice Rohinton Fali Nariman; Hon'ble Mr. Justice Navin Sinha.

Background: The present Appeals arise out of the judgement (‘impugned Judgment’) of the

Appellate Tribunal for Electricity (‘Appellate Tribunal’) dated 13.04.2018 wherein the judgment of

the Central Electricity Regulatory Commission (‘CERC or Commission’) was set aside. The Appellant

contends that the judgment of the Commission was correct and that since Carrying Costs are not

part of the PPAs in question, any resort to Rules of Equity and interest being granted on Rules of

Equity cannot be resorted to.

The Appellant was granted approval for setting up a power plant in SEZ by the Ministry of

Commerce and Industry (‘MoC & I’), vide a letter dated 19.12.2006. The Respondent - Adani Power

Ltd. (‘Adani Power’) a generating company entered into various Power Purchase Agreements

(‘PPAs’) with the Appellant, of which, PPAs dated 07.08.2008 and 02.02.2007 concerns with the

present case. MoC & I, vide notification dated 06.04.2015 withdrew exemption of all duties under

Customs Act, Customs Tariff Act, Central Excise Act, etc. on goods imported/procured by Adani

Power for authorized operations w.e.f. 01.04.2015. Further, vide notification dated 16.02.2016,

fiscal benefits including exemption of service tax on power plants approved prior to 27.02.2009

was promulgated, as a result of which, exemption from service tax, to which Adani Power was

entitled, was withdrawn. On 15.10.2015, Adani Power filed Petition before CERC, seeking

compensation for Change in Law by invoking Article 13 of respective PPAs. On 04.05.2017, CERC

allowed, as a Change in Law, added cost by way of payment of tax consequent to withdrawal of

exemption notifications.

However, the CERC followed its earlier order dated 06.02.2017, in which it stated that "Carrying

Cost" under Article 13 of the PPA must be given to Adani Power as it is to be restored to the same

economic position as if the change in law - which is withdrawal of the exemption notifications -

did not take place



The Commission concluded that, there was no provision in PPA for payment of Carrying Cost for

period from date of Change in Law till date of approval by Commission. The Commission held that,

the prayer of Adani Power to grant Carrying Cost on restitutionary principles from date of change

in law till date of decision could not be allowed. On appeal, by its impugned Judgment, the

Appellate Tribunal observed that, in view of the provisions of the PPA, the principle of restitution

and the judgment of Supreme Court in case of Indian Council for Enviro-Legal Action v. Union of

India and Ors., the Appellant was eligible for Carrying Cost arising out of approval of Change in

Law events from effective date of Change in Law till approval of said event by appropriate

authority. It was also observed that, Gujarat Bid-01 PPA had no provision for restoration to same

economic position as if Change in Law had not occurred. Accordingly, this decision of allowing

Carrying Cost would not be applicable to Gujarat Bid-01 PPA. Accordingly, carrying cost was

allowed and judgment of Commission was set aside.

Issue: The issue relates to eligibility of Carrying Cost arising out of approval of Change in Law

events from effective date of Change in Law till approval of said event by appropriate authority -

Whether impugned Order allowing Carrying Cost was liable to be set aside?

Held: While dismissing the appeal, the Hon’ble Supreme Court held that

1. Article 13.4.1 of the PPA made it clear that, adjustment in monthly tariff payment on account

of Change in Law shall be effected from date of Change in Law, in case Change in Law happened

to be by way of adoption, promulgation, amendment, re-enactment or repeal of the law or change

in law. As opposed to this, if Change in Law was on account of a change in interpretation of law by

a judgment of a Court or Tribunal or governmental instrumentality, case would fall Under Sub-

clause (ii) of Clause 4.1, in which case, monthly tariff payment shall be effected from date of said

order/judgment of competent authority/Tribunal or governmental instrumentality. [6]

2. Article 13.2 of the PPA was an in-built restitutionary principle which compensated party affected

by such Change in Law and which must restore, through monthly tariff payments, affected party

to same economic position as if such change in law had not occurred. This would mean that, by

this Clause a fiction was created, and party had to be put in same economic position as if such

change in law had not occurred, i.e., party must be given benefit of restitution as understood in

civil law. Article 13.2, however, went on to divide such restitution into two separate periods. First

period was "construction period" in which increase/decrease of capital cost of project in tariff was

to be governed by a certain formula. However, seller had to provide to procurer documentary

proof of such increase/decrease in capital cost for establishing impact of such change in law and

in case of dispute as to same, a dispute resolution mechanism as per Article 17 of the PPA was to

be resorted to. Compensation was only payable to either party only with effect from date on which

total increase/decrease exceeded amount stated therein. [7]

3. So far as "operation period" was concerned, compensation for any increase/decrease in

revenues or costs to seller is to be determined and effected from such date as was decided by

appropriate Commission. This compensation was only payable for increase/decrease in revenue

or cost to seller if it was in excess of an amount equivalent to 1% of Letter of Credit in aggregate

for a contract year. Reading of Article 13.2 of the PPA made it clear that, restitutionary principles

apply in case a certain threshold limit was crossed in both Sub-clauses (a) and (b). There was no

dispute that, present case was covered by Sub-clause (b) and that aforesaid threshold had been

crossed. Mechanism for claiming a change in law was then set out by Article 13.3 of the PPA. [8]



4. A reading of Article 13 of the PPA as a whole, therefore, led to position that, subject to

restitutionary principles contained in Article 13.2, adjustment in monthly tariff payment, in facts

of present case, had to be from date of withdrawal of exemption which was done by

administrative orders dated 06.04.2015 and 16.02.2016. The present case, therefore, fell within

Article 13.4.1(i). This being case, it was clear that, adjustment in monthly tariff payment had to be

effected from date on which exemptions given were withdrawn. This being case, monthly invoices

to be raised by seller after such change in tariff were to appropriately reflect changed tariff. On

facts of present case, it was clear that, Respondents were entitled to adjustment in their monthly

tariff payment from date on which exemption notifications became effective. This being case,

restitutionary principle contained in Article 13.2 would kick in for simple reason that, it was only

after order dated 04.05.2017 that, CERC held that Respondents were entitled to claim added costs

on account of change in law w.e.f. 01.04.2015. This being case, it would be fallacious to say that,

Respondents would be claiming this restitutionary amount on some general principle of equity

outside the PPA. Since it was clear that, this amount of carrying cost was only relatable to Article

13 of PPA, there was no reason to interfere with judgment of the Appellate Tribunal. [10]

5. In Indian Council for Enviro-Legal Action v. Union of India and Ors., MANU/SC/0837/2011 :

(2011) 8 SCC 161, the Hon’ble Supreme Court was concerned with whether a successful party in a

litigation should not be compensated by way of restitution for deprivation of its legitimate dues….

This judgment, again, has no manner of application to the facts of the present case which are

confined to the interpretation of Article 13 of the PPAs.[14]

6. There can be no doubt from the judgment of the Hon’ble Supreme Court in Energy Watchdog

v. Central Electricity Regulatory Commission and Ors., MANU/SC/0408/2017 : (2017) 14 SCC 80

that the restitutionary principle contained in Clause 13.2 must always be kept in mind even when

compensation for increase/decrease in cost is determined by the CERC.

In this judgment, in holding that change in Indonesian law would not qualify as a change in law

under the guidelines read with the PPAs, the Supreme Court referred to Clause 13.2 as follows:

“57. ... This being so, it is clear that so far as the procurement of Indian coal is concerned, to the

extent that the supply from Coal India and other Indian sources is cut down, the PPA read with

these documents provides in Clause 13.2 that while determining the consequences of change in

law, parties shall have due regard to the principle that the purpose of compensating the party

affected by such change in law is to restore, through monthly tariff payments, the affected party

to the economic position as if such change in law has not occurred....” [16]


Power Grid Corporation Of India Vs. Tamil Nadu Generation & Distribution Co. Ltd.

& Ors. Etc.; NTPC Ltd. Vs. Central Electricity Regulatory Commission &

Ors. (09.05.2019 - SC) IN THE SUPREME COURT OF INDIA

CIVIL APPEAL NO. 684 OF 2007 WITH CIVIL APPEAL NO. 13452 OF 2015

Dated: 09.05.2019

Present: Hon'ble Mr. Justice N.V. Ramana, Hon'ble Mr. Justice Mohan M. Shantanagoudar,

Hon'ble Ms. Justice Indira Banerjee

Background: The present appeal arises out of the decisions of the Central Electricity Regulatory

Commission, New Delhi (‘CERC’) wherein an issue relating to capitalization of Foreign Exchange



Rate Variation (‘FERV’) was determined by the Commission and thereafter affirmed in a review

petition, vide orders dated 30.06.2003 and 04.12.2003 respectively. On appeal, the Appellate

Tribunal for Electricity, New Delhi (‘Tribunal’) vide judgment dated 04.10.2006 in Appeal Nos.

135140 of 2005, approved the methodology for ascertaining the FERV. However, with respect

to apportionment of the FERV, the appeal was allowed and FERV was directed to be apportioned

only in respect of debt liability. It is this judgment of the Appellate Tribunal for Electricity, New

Delhi which is in challenge before the Hon’ble Supreme Court.

The contention of the appellant is that any foreign exchange gets added to the capital cost and

not individually to debt or equity. This capital cost is thereafter divided into debt and

equity, on the basis of a normative debt-equity ratio. As a natural corollary, even the FERV needs

to be apportioned both towards debt and equity, which has also been the practice. The

Respondent No. 1 argues that the Electricity Regulatory Commissions Act, 1998 (‘Act’) was

enacted to do away with such practices. With reference to Regulations 1.3 and 1.7 of Central

Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2001 ('Tariff

Regulations, 2001') the liability accrued on account of FERV can be recovered by the appellants

directly from respondent no. 1 and the question of capitalization of FERV does not arise.

Issues: Apportionment of FERV into debt and equity after FERV has been calculated and added to

capital cost

Held:

1. The Hon'ble Supreme Court has noted that the present question regarding the apportionment

of FERV between debt and equity is not a question of law, much less a substantial question of

law. Regulation 1.13(a) of Tariff Regulations, 2001 does not provide for apportionment of

FERV and rather, is restricted only to the methodology of calculation of FERV which is not

in challenge before this Court. [6]

2. Once the FERV is calculated, in terms of Regulations 1.3 and 1.7 of the Tariff Regulations,

2001, the same can be recovered by the Appellants from Respondent no.1 without even filing

a petition before the CERC. This has not been done in the present case, i.e., Civil Appeal No.

684 of 2007. Further, FERV is sought to be capitalized by the Appellant in the normative debt-

equity ratio of 50:50 as a matter of practice, without citing any rule, regulation, statute

or precedential law. [7], [8]

3. Noting the premise on which the Act was enacted was to reform the problems in the power

sector prior to 1998 and the fact that the Tariff Regulations, 2001 prescribed under the aegis

of this Act do not provide for apportionment of FERV in a particular debtequity ratio, the

Hon'ble Supreme Court is not inclined to interfere in the matter. [9]

4. The present dispute arises with respect to tariff charged between 01.04.2001 and

31.03.2004 on account of FERV calculation and apportionment. Any variation in the

apportionment of FERV now, for the abovementioned period, will consequently be passed on

to the consumers. This will be unfair to the consumers who were not consumers for

the abovementioned period but will eventually bear the brunt of transactions which

took place 1518 years ago. [10]




Adani Power (Mundra) Ltd. vs. Gujarat Electricity Regulatory Commission & Ors.

(02.07.2019 - SC) IN THE SUPREME COURT OF INDIA

Civil Appeal No. 11133 of 2011

Dated: 02.07.2019

Present: Hon'ble Mr. Justice Arun Mishra, Hon'ble Mr. Justice B.R. Gavai, Hon'ble Mr. Justice Surya

Kant

Background: The Appellant - Adani Power (Mundra) Ltd (‘Adani Power’) has approached the

Hon’ble Supreme Court being aggrieved by the judgment and order passed by the Appellate

Tribunal for Electricity (‘Appellate Tribunal’) in Appeal No. 184 of 2010 dated 07.09.2011 thereby

dismissing the Appeal filed by the present Appellant and confirming the judgment and order

passed by the Respondent No. 1 - Gujarat Electricity Regulatory Commission (‘Commission’) dated

31.08.2010 that allowed the petition of the Respondent No. 2 - Gujarat Urja Vikas Nigam Ltd.

(‘Procurer’), holding that the termination of the Power Purchase Agreement (‘PPA’) by the

Appellant as illegal and directing the Appellant to supply the power to the Procurer at the rate

determined in the PPA.

In a bid conducted by the Procurer, the Appellant had been awarded a project for supplying 1000

MW power at the rate of Rs. 2.35 per Kwh, for which the Procurer and Appellant entered into a

PPA. Upon termination of the PPA by the Appellant, the Procurer had filed a petition Under

Sections 86(1)(f) and 95 of the Electricity Act, 2003, for adjudication of the dispute between the

Procurer and the Appellant on 01.02.2010 before the Commission.

The Appellant’s contention is that the bid submitted by him was on the basis of the commitment

given to it by the Gujarat Mineral Development Corporation (‘GMDC’) that it will supply the coal

and that the PPA executed between the Appellant and the Procurer was on the premise that the

GMDC would abide by its commitment. Appellant also submitted that since the GMDC had failed

to abide by its commitment and had not executed the Fuel Supply Agreement (FSA) with the

Appellant, there was a non-compliance with the conditions stipulated in Article 3.1.2 of the PPA

and therefore the Appellant was entitled to terminate the agreement, by giving 7 days’ notice in

writing in accordance with the provisions of Article 3.4.2 of the PPA.

The Commission and the Appellate Tribunal held that unless there was an agreement between

the parties to the effect that there was non-compliance with the conditions mentioned in Article

3.1.2 of the PPA, the Appellant was not entitled to invoke the provisions of Article 3.4.2 of the

PPA.

Issues: Whether the Appellate Tribunal had grossly erred in coming to the conclusion that Article

3.4.2 of the PPA could be invoked only in the event that there is an agreement with regard to

violation of any of the conditions in Article 3.1.2? Whether by the impugned Judgment the

Appellate Tribunal has varied the terms of the contract executed between the parties?

Held:

1. The Hon’ble Supreme Court observed that Article 3 provides for conditions subsequent to be

satisfied by the Seller and the Procurer.

2. Clause (ii) of Article 3.1.2 requires the Seller to have executed FSA and provided the copies of

the same to the Procurer within 12 months from the effective date or 14 months from the



date of issue of Letter of Intent (LOI), whichever is later, unless such completion is affected

due to the Procurer's failure to comply with its obligations under the PPA or by any force

majeure event.

3. Article 3.4 provides for consequences of non-fulfilment of conditions Under Article 3.1. Sub-

clauses (i) and (ii) of Article 3.4.2 specifically provide that if fulfilment of any of the conditions

specified in Article 3.1.2 is delayed beyond the period of 3 months and the Seller fails to

furnish any additional performance guarantee to the Procurer or if the Seller after furnishing

additional performance guarantee to the Procurer fails to fulfil the conditions specified in

Article 3.1.2 for a period of 8 months beyond the period specified therein, both the Procurer

or the Seller shall have the right to terminate the agreement by giving a notice to the other

party in writing of at least 7 days. The only requirement is that in the event of termination

either by the Procurer or the Seller, the Seller shall be liable to pay the Procurer an amount

equivalent to Rs. 10 lakhs per MW of the contracted capacity as liquidated damages.

4. The Hon’ble Supreme Court has held that it is thus clear that in the event of non-compliance

with any of the requirements as provided in Article 3.1.2 within the period specified in the

said Article, an option is available both to the seller or the procurer to terminate the PPA. The

only requirement is that, in either of the situations, the liability would be only on the seller to

pay the liquidated damages at the rate of Rs. 10 lakhs per MW. [22]

5. The Hon’ble Supreme Court has held that the finding of the Appellate Tribunal that the

provisions Under Article 3.4.2 of the PPA can be invoked only when there is an agreement

between the parties that there is violation of any of the conditions specified in Article 3.1.2 of

the PPA is totally incorrect. If such an argument is accepted, it will amount to inserting a totally

new condition in Article 3.4.2 of the PPA and would amount to re-writing the contract

between the parties; it would do total violence to the provisions of Article 3.4.2 of the PPA. It

cannot be said to be a condition which is either reasonable or equitable; it also cannot be said

to be a condition which is necessary to give business efficacy to the contract; it also cannot be

said to be a test which justifies the Officious Bystander Test; it also cannot be said to be a

condition which is capable of the clear expression; it is also not a condition which does not

contradict any expressed terms of the contract.2 On the contrary, it is a condition which would

totally change the tenor of Article 3.4.2 of the PPA. The Hon’ble Supreme Court was therefore,

of the considered view that the Appellate Tribunal has grossly erred in coming to the

conclusion that Article 3.4.2 of the PPA could be invoked only in the event that there is an

agreement with regard to violation of any of the conditions in Article 3.1.2.

6. The Appellate Tribunal, while arriving at its finding, has held that agreement has to be read as

a whole and if it is read as whole and if Articles 3.4.2 and 3.1.2 and Article 14 are harmoniously

read, then the only conclusion that can be drawn is that provisions of Article 3.4.2 can be

invoked, only if there is an agreement between the parties, that the conditions specified in

Article 3.1.2 have not been complied with. [26], [27]

7. Testing the correctness of the aforementioned finding of the Tribunal, the Hon’ble Supreme

Court has found, that both the Commission and the Appellate Tribunal have grossly erred in

arriving at finding that termination can be effected Under Article 3.4.2 only if there is an

agreement with regard to non-compliance of condition Under Article 3.4.2 by both the parties.

2 As held in Nabha Power Ltd. (NPL) vs. Punjab State Power Corporation Ltd. (PSPCL) and Ors, for invoking the business efficacy

test and carving out an implied condition, not expressly found in the language of the contract, the following five conditions will have

to be satisfied (1) Reasonable and equitable;(2) Necessary to give business efficacy to the contract; (3) It goes without saying i.e. the

Officious Bystander Test; (4) Capable of clear expression; and (5) Must not contradict any express term of the contract.

Adani Power (Mundra) Ltd. vs. Gujarat Electricity Regulatory Commission and Ors. (02.07.2019 - SC)



If the finding of the Appellate Tribunal is accepted, it will be amounting to making provisions

of Article 3.4.2 a dead letter and rendering them otiose. [31]

8. Further, the Hon’ble Court has found that the Commission as well as the Appellate Tribunal

has lost sight of one another important principle of law. In J.K. Cotton Spinning and Weaving

Mills Co. Ltd. v. State of Uttar Pradesh, reported in MANU/SC/0287/1960 : AIR 1961 SC 1170,

while construing the provisions of Clause 5(a) and Clause 23 of the U.P. Industrial Disputes Act

and the U.P. Government Order issued under the U.P. Industrial Disputes Act, the Supreme

Court has observed thus:

9. “(10) Applying this Rule of construction that in cases of conflict between a specific provision

and a general provision the specific provision prevails over the general provision and the

general provision applies only to such cases which are not covered by the special provision,

we must hold that Clause 5(a) has no application in a case where a special provisions of Clause

23 are applicable.” [32]

10. In the present case, the perusal of various Articles would reveal that provisions Under Article

14 are general in nature. The provision Under Article 3.4.2 is specific, only to be invoked in the

case of non-compliance with any of the conditions as provided Under Article 3.1.2. As such,

the special provision made in Article 3.4.2 will exclude the applicability of general provisions

contained in Article 14 of the contract. [34]

11. In the view of the facts of the case, the Hon’ble Court has observed that it could be seen that

the Appellant as well as the Procurer and also the Government of Gujarat clearly understood

that the bid submitted by the Appellant was on the basis of the commitment of the GMDC to

supply indigenous coal to it. It will be pertinent to mention that the Appellant had sent notices

intimating its intention to terminate the PPA on account of non-finalisation of FSA with the

GMDC and also terminate the contract much prior to commissioning of the project and

commencement of power supply to the Procurer.[42]

12. In that view of the matter, after the GMDC resiling from its commitment and refusing to enter

into FSA with the Appellant, the Appellant was justified in invoking Article 3.4.2 of the PPA, in

view of non-compliance of Condition No. (ii) in Article 3.1.2 since it had failed to produce the

Fuel Supply Agreement. In the light of the aforesaid finding, the Hon’ble Supreme Court has

been of the considered view that the Appellant was entitled in law as well as on facts to invoke

Article 3.4.2 of the PPA and terminate the agreement.[43], [44]


Star Wire (India) Vidyut Pvt. Ltd. & Ors. vs. Haryana Electricity Regulatory

Commission (02.07.2019 - SC) IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5139 of 2019 (Arising out of SLP (C) No. 8432 of 2017)

Dated: 02.07.2019

Present: Hon'ble Mr. Justice A.M. Khanwilkar, Hon'ble Mr. Justice Ajay Rastogi

Background: The present appeal is against the judgment and order of the High Court of Punjab

and Haryana at Chandigarh passed in C.W.P. No. 25337 of 2015 (O & M) dated 23.11.2016.

Appellants had challenged the fourth amendment to Haryana Electricity Regulatory Commission

(Terms and Conditions for determination of Tariff from Renewable Energy Sources, Renewable

Purchase Obligation and Renewable Energy Certificate) Regulations, 2010 (‘principal Regulations’)

published vide notification dated 12.08.2015 (‘impugned Amended Regulations’) which sought to

amend the principal Regulations. The Appellants had also challenged the order passed by the



Respondent – Haryana Electricity Regulation Commission (‘Commission’) dated 04.08.2015, in

furtherance, the impugned Amended Regulations were framed by the appropriate authority for

revision of norms for determination of generic tariff for the second control period beginning from

01.04.2013.

The appellants had set up a 9.90 MW independent Biomass Power Plant, which was declared

commercially operational on 03.05.2013. The sum and substance of the argument of the

Appellants is that they have been denuded of their right to get adjustments in the same manner

as extended to projects commissioned in the same control period and despite the stipulation in

the third proviso of the Regulation 4 of the principal Regulations. As, the impugned Amended

Regulations were notified on 12.08.2015, therefore, the rights accrued to the Appellants in terms

of Regulation 4 would take effect from commissioning of their project on 03.05.2013 because the

principal Regulations were still applicable and in force. Taking away that fructified right, is

impermissible in law.

Further, the impugned Amended Regulations, ex facie, discriminates between the projects

commissioned during the same control period by singling out the projects commissioned in FY

2013-14. It is not open to make such classification in respect of projects commissioned during the

same control period.

Further, there can be no two tariffs operating during the same control period. In that, no express

provision to prescribe two sets of tariffs concerning the same control period is found in the

principal Regulations or the impugned Amended Regulations. Therefore, classification sought to

be done in the impugned Amended Regulations, cannot be countenanced.

Issues: Whether impugned Amended Regulations, ex facie, discriminated between projects

commissioned during same control period, by singling out the projects commissioned in FY 2013-

14?

Held: While allowing the appeal

1. The Hon’ble Supreme Court has held that the High Court has committed manifest error or so to

speak, failed to exercise jurisdiction vested in it for adjudicating the relevant issues raised by the

Appellants. For, there is hardly any intelligible discussion in the impugned judgment in that regard.

It is cryptic and cannot stand the test of judicial scrutiny…. No logic can be deduced as to why the

Court was persuaded to reject the argument despite the multifaceted issues raised by the

Appellants. The High Court has not analysed the grounds of challenge regarding the validity of the

impugned Amended Regulations and including the competency to frame such a regulation,

appropriately. Strikingly, the High Court then straightaway proceeds to examine the second

contention raised by the Appellants in reference to the third proviso in the principal Regulations

providing for adjustments as per revised regulations. The Court merely noted that, the Appellants

failed to point out any prejudice caused to them because of exclusion from the benefit flowing

from the principal Regulations. The argument of prejudice was raised by the Appellants to the

detail but the High Court has failed to deal with the same, to say the least satisfactorily. Similarly,

the detail arguments regarding the validity of the impugned Amended Regulations and the

competency to frame such a Regulation has not been analysed by the High Court. [8]

2. It would be appropriate to relegate the parties before the High Court for fresh consideration of

the writ petition on its own merits in accordance with law. The High Court must consider all

relevant aspects of the matter agitated by the Appellants and deal with the same appropriately in

accordance with law. [9]



3. In decision of the Constitution Bench of this Court in PTC India Ltd. v. Central Electricity

Regulatory Commission, Through Secretary it was held that, the challenge to the validity of the

regulations can be decided only in judicial review proceedings before the courts and not by way

of appeal or review. The Appellants having invoked such a remedy before the High Court, all

contentions available to the Appellants in that regard ought to have been adjudicated in proper

perspective. The Hon’ble Supreme Court has agreed with the Appellants that, the nature of

elaborate order passed by the Commission on 04.08.2015, which culminated with the framing of

Amendment Regulations, the only remedy available to challenge the same is by way of a writ

petition under Article 226/227 of the Constitution of India. [10]

4. The Hon’ble Supreme Court has set aside the Impugned judgment and order. The CWP is

restored to the file of the High Court to its original number, for being considered afresh by the

High Court on its own merits in accordance with law. [11]

Disposal : Appeal allowed.

Madhya Pradesh Power Management Co. Ltd. & Ors. vs. Dhar Wind Power Projects

Pvt. Ltd. & Ors. (25.07.2019 - SC) IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 9218-9219 of 2018 with 9220-9221, 9222 and 9223 of 2018

Dated: 25.07.2019

Present: Hon'ble Dr. Justice D.Y. Chandrachud, Hon'ble Ms. Justice Indira Banerjee

Background: The present appeals arise from a judgment and order dated 21.09.2017 of the High

Court of Madhya Pradesh at Indore and an order in review dated 29.01.2018. In the companion

appeals, the correctness of an interim order of the High Court dated 15.05.2018 in a subsequent

petition Under Article 226 of the Constitution is in question.

In pursuance of the Wind Power Project Policy 2012 issued by the Government of Madhya

Pradesh, on 01.04.2016, the first Respondent sought the execution of a Power Purchase

Agreement (‘PPA’) from the first Appellant on the basis that it commissioned its Power Project in

Dhar district on 31.03.2016. According to the Appellants, the then Superintending Engineer (O &

M), Madhya Pradesh Paschim Kshetra Vidyut Vitran Company Ltd., the concerned distribution

licensee, issued a certificate to the first Respondent on 31.03.2016 stating that as of the date of

the certificate, the project had been commissioned. The Appellants have sought to dispute the

certificate on the ground that the commissioning certificate was not in accordance with the format

attached with the guidelines dated 18.03.2016, according to which the actual injection of power

into the grid was the relevant criterion.

On 30.04.2016, the first Appellant informed the first Respondent that since its project had not

been commissioned before 31.03.2016, it would not enter into a PPA under the earlier Tariff Order

dated 26.03.2013 under which the unit price was fixed at Rs. 5.92. The letter, however, indicated

that if the first Respondent signified its consent by 30.05.2016, the tariff would be governed by

the new Tariff Order dated 17.03.2016 for procurement of power from the

Wind Energy Generators (WEGs). On 01.02.2017, the first Appellant informed the first

Respondent that if it did not enter into a PPA under the subsequent Tariff Order dated 17.03.2016,

which fixed the unit price for power at Rs. 4.78, it would not enter into any PPA with the first

Respondent nor allow injection of power into the grid.



The first Respondent filed a writ petition Under Article 226 of the Constitution before the High

Court of Madhya Pradesh in order to challenge the letters dated 30.04.2016 and 01.02.2017. By a

judgment and order, the High Court allowed the writ petition and set aside the letters of the first

Appellant and directed the first Appellant to take appropriate steps in accordance with the Tariff

Order dated 26.03.2013. By and as a result of the directions of the High Court, the first Appellant

was required to enter into a PPA with the first Respondent for the purchase of electricity at the

rate of Rs. 5.92 per unit.

After the decision of the High Court, the Appellant revoked the certificate of commissioning dated

31.03.2016. A Review Petition was filed before the High Court which was dismissed. The

revocation of the commissioning certificate gave rise to the institution of the second set of writ

petitions in the High Court in which, by an interim order dated 15.05.2018, the revocation has

been stayed. That has given rise to two appeals before the Hon’ble Supreme Court.

Issue: Whether the High Court had erred in relying on commissioning certificate issued by

Superintending Engineer, ignoring that certificate was not in accordance with format in which data

was required by first Appellant for purpose of establishing actual commissioning of project before

31.03.2016?

Held: While allowing the appeal in part

1. The Hon’ble Supreme Court has observed that the Tariff Order of March 2013 stipulated that it

would be applicable to all new wind energy generation projects which were commissioned on or

after 01.04.2013 for the sale of electricity to distribution licensees in the State. The control period

of the Tariff Order commenced on 01.04.2013 and would end on 31.03.2016. The Tariff Order

fixed a levelized tariff of Rs. 5.92 per unit for new wind energy projects to be commissioned after

the issuance of the Order for a project life of 25 years. Para 12.30 provided that all existing projects

which were commissioned before 01.04.2013 would be governed by the terms and conditions

applicable at the time of commissioning. Hence, the crucial ingredient in determining the tariff

was the actual date on which the project was commissioned. [24]

2. The Tariff Order of 17.03.2016 which replaced the earlier Tariff Order applied to all new wind

energy generation projects which were commissioned at 00.00 hrs on 01.04.2016 or thereafter.

The State Load Despatch Center (SLDC) was required by Para 4.2 of the Tariff Order to submit a

list of WEGs commissioned during the month of March 2016 from 00.00 hrs of 01.03.2016 to 24.00

hrs of 31.03.2016. This data was sought in order to provide an objective basis of determining

whether a project had been commissioned before the new Tariff Order became applicable to

projects which were commissioned with effect from 01.04.2016. [25]

3. In line with the above provisions, the guidelines that were issued by the first Appellant on

18.03.2016 provided a format for the issuance of commissioning certificates. The format required

readings of: (i) WTG meters; (ii) main billing meters; and (iii) check billing meters. The format

required the submission of this data in order to establish the date on which a particular project

had been commissioned. The actual date of commissioning would determine the applicable tariff;

the tariff of Rs. 5.92 per unit would apply to projects which were commissioned on or before

31.03.2016, while the new rate of Rs. 4.78 per unit would apply to projects which were

commissioned on or after 01.04.2016. Requiring the SLDC to submit data of the actual injection of

power into the grid was with the objective of establishing the actual commissioning of the project.

[26]



4. In the present case, the principal submission of the Appellants is that the data which was

furnished by the SLDC indicates that the actual injection of power into the grid by the first

Respondent took place on 01.04.2016. It is on that basis that the first Appellant has submitted

that the commissioning certificate was not in accordance with the prescribed format and had to

be revoked. Before this Court, the data which has been furnished by the SLDC is not in dispute.

Indeed, that is the basis on which learned Senior Counsel urged his alternative submission that in

any event, even going by the SLDC data, it is evident that the power was injected into the grid on

and from 01.04.2016. [27]

5. On reviewing the documentary material on the record, present Court is not prepared to accept

the view which has weighed with the High Court, namely, that the commissioning of the project

was completed by 31.03.2016. The certificate of commissioning which has been issued by the

Superintending Engineer is belied by the objective factual data available from the SLDC which is a

statutory body constituted under Section 31 of the Electricity Act 2003 (‘Act’). The objective data

on the record indicates that the injection of power into the grid took place on 01.04.2016. Hence,

this should be the basis on which the claim for the entering into a PPA should be founded. [28]

6. The project of the first Respondent was commissioned on 01.04.2016 since the SLDC data

indicates the injection of power into the grid with effect from that date. On the basis of the

commissioning of the project on 01.04.2016, there is merit in the alternative submission which

has been urged on behalf of the first Respondent in the appeals that, the Tariff Order that must

apply is the Tariff Order dated 17.03.2016. The first Respondent was before the Madhya Pradesh

High Court in writ proceedings espousing its claim to the benefit of a higher rate of Rs. 5.92 per

unit on the basis of the earlier Tariff Order and on the basis that the commissioning of its project

had taken place on 31.03.2016. The first Respondent was bona fide pursuing its claim in that

regard which found acceptance in the impugned judgment and order of the High Court. It would

be unfair to deny to the first Respondent the benefit of the rate which came to be prescribed by

the Tariff Order of 17.03.2016. The rate which was prescribed by that Tariff Order of Rs. 4.78 per

unit was to apply during the control period beginning from 01.04.2016 and ending on 31.03.2019

and that rate would continue to govern the life cycle of 25 years, as prescribed by Para 5 of the

Tariff Order. The first Respondent cannot be denied a parity of treatment, as has been allowed to

other projects of a similar nature which would be governed by the control period stipulated in

Para 5 of the Tariff Order dated 17.03.2016. [29]

7. The competitive bidding guidelines upon which reliance has been placed by learned Counsel

appearing on behalf of the Appellants, were formulated by the Union Ministry of Power

subsequently on 08.12.2017. Moreover, Para 3.1 of those guidelines is not applicable to the

project of the first Respondent. [30]

8. The above guidelines apply to grid-connected Wind Power Projects with an individual size of 5

MW and above at one site with a minimum bid capacity of 25 MW for intra-State projects. The

Hon’ble Supreme Court has held that since the first Respondent is admittedly an intra-State

project and does not fulfil the above requirement, the guidelines (which in any event came into

force subsequently) will have no application. [31]

9. The Hon’ble Supreme Court has held that the first Respondent in the appeals shall be entitled

to the benefit of the Tariff Order dated 17.03.2016. The Appellants shall process the application

of the first Respondent in the appeals for execution of a PPA on that basis with effect from

01.04.2016. Appeal partly allowed. [32]




West Bengal State Electricity Distribution Company Ltd. & Ors. vs. Orion Metal Pvt.

Ltd. & Ors. (21.08.2019 - SC) IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6547 of 2019 (Arising out of S.L.P. (C) No. 22207 of 2018)

Dated: 21.08.2019

Present: Hon'ble Ms. Justice R. Banumathi, Hon'ble Mr. Justice R. Subhash Reddy, J.

Background: This civil appeal is filed by the Appellant-West Bengal State Electricity Distribution

Company Ltd. aggrieved by the judgment and order dated 18.12.2017 (‘impugned order ‘) passed

by the High Court of Calcutta. The 1st Respondent, a centralized bulk high voltage consumer of

electricity from the Appellant with a contracted load of 1450 KVA was served a notice dated

28.10.2016 by the Appellant, in exercise of power under Class IV of the West Bengal Electricity

Regulatory Commission Electricity Supply Code, 2007 for conducting an inspection in the metering

system of the Respondent. In view of the discrepancies found in the TTB end during the inspection

by the inspection team of the Appellant-company, the Appellant was of the view that there was a

theft of energy by tampering the meter by the Respondent-company. The three-phase meter and

the metering equipment was seized by the inspecting team and in exercise of power Under Section

126(1) of the Electricity Act, 2003 (‘Act’), the Assessing Officer of the Appellant-company made a

provisional assessment for loss of energy by un-metered consumption.

Aggrieved by the provisional assessment and the consequential demand, the Respondents have

filed writ petition in W.P. No. 30449(W) of 2016 before the High Court, questioning the jurisdiction

of the Assessing Officer in issuing the provisional assessment and the consequential demand for

a sum of Rs. 13,41,17,482-30 paise. One of the grounds was that the Assessing Officer, who

prepared the provisional assessment, not being a party to the inspection team, had no authority

to make the provisional assessment Under Section 126(1) of the Act. It was also alleged that

provisional assessment made was not in accordance with Section 126(1) of the Act, as such, such

assessment cannot be given effect to.

Held:

1. The Hon’ble Supreme Court has held that after an inspection of any place or any premises of

any consumer, when Assessing Officer comes to a conclusion that the consumer is indulging in

unauthorized use of electricity, the provisional assessment to the best of his judgment is to be

made in accordance with Section 126(1) of the Act and such provisional assessment shall be served

upon the person in occupation of the premises. After giving an opportunity to file objections to

the provisional assessment, the Assessing Officer is empowered to pass a final order of the

assessment assessing the loss of energy, on account of unauthorized use of energy. The

unauthorized use of electricity as defined Under Section 126(6)(b) of the Act makes it clear that

unauthorized use of electricity means, the usage of electricity by any artificial means or by a means

not authorized by the concerned person or authority or licensee; or through a tampered meter;

or for the purpose other than for which the usage of electricity was authorized; or for the premises

or areas other than those for which the supply of electricity was authorized. [11]

2. Section 126(6)(b)(iii) of the Act states that instances of use of energy through a tampered meter

is included in the definition of unauthorized use of electricity. If that is so, there is no reason, for

excluding the power of the authorities for making assessment Under Section 126(1) of the Act to



assess the loss of energy, where electricity is used through a tampered meter. All instances of

unauthorized use of energy may not amount to theft of electricity within the meaning of Section

135 of the Act, but at the same time, the theft of electricity which is covered by Section 135 of the

Act, will fall within the definition of unauthorized use of electricity. As per Section 135(1A) of the

Act, without prejudice to the other provisions of the Act, the licensee or supplier, as the case may

be, upon detection of theft of electricity, is empowered to disconnect the power supply

immediately. Further, as per the third proviso to Section 135(1A) of the Act, the licensee or

supplier, as the case may be, on deposit or payment of assessed amount or electricity charges,

without prejudice to the obligation to lodge a complaint, can restore the power supply electricity

within forty-eight(48) hours of deposit/payment of such amount. Thus, it is clear that the

authorities under the Act are empowered to make a provisional and final assessment by invoking

power Under Section 126(1) of the Act, even in cases where electricity is unauthorisedly used by

way of theft. When a consumer deposits the assessed amount, the licensee or the supplier has to

restore the power supply. The assessed amount referred to in the aforesaid proviso, relates to

assessment which is contemplated Under Section 126(1) of the Act only. There is apparent

distinction between Section 126 and Section 135 of the Act. Section 126 forms part of the scheme

which authorizes electricity supplier to ascertain loss in terms of revenue caused to it by the

consumer by his act of "unauthorized use of electricity" whereas Section 135 deals with offence

of theft if he is found to have indulged himself in the acts mentioned in clauses (a) to (e) of Sub-

section (1) of Section 135 of Electricity Act. Further, it is also clear from Section 154 of the Act,

which prescribes procedure and power of Special Court, that the Special Court is empowered to

convict the consumer and impose a sentence of imprisonment. The Special Court, in cases, where

a criminal complaint is lodged, is also empowered to determine civil liability Under Section 154(5)

of the Act. As per Section 154(6) of the Act, in case civil liability so determined by the Special Court

is less than the amount deposited by the consumer or the person, the excess amount so deposited

by the consumer or the person, shall be refunded by the licensee or the concerned person, as the

case may be. Merely because the Special Court is empowered to determine civil liability Under

Section 154(5) of the Act, in cases where a complaint is lodged, it cannot be said that there is no

power conferred on authorities to make provisional assessment/final assessment Under Section

126 of the Act. [12]

3. From the scheme of the Act, it appears that after inspection team notices unauthorized use of

energy by tampering the meter, the authorities can disconnect the power supply immediately and

make immediate assessment for loss of energy, by invoking power Under Section 126(1) of the

Act. The term "unauthorized use of energy" is of wide connotation including cases of unauthorized

use of energy, not amounting to theft, viz. exceeding the sanctioned load or using the electricity

in the premises where its use is not authorized etc. But at the same time, when there is an

allegation of unauthorized use of energy by tampering the meter, such cases of unauthorized use

of energy include 'theft' as defined Under Section 135 of the Act. The power conferred on

authorities for making assessment Under Section 126(1) of the Act and power to determine civil

liability Under Section 154(5) of the Act, cannot be said to be parallel to each other. In this regard,

the Hon’ble Supreme Court has been of the view that the High Court has committed an error in

recording a finding, that both proceedings cannot operate parallelly. In a given case where there

is no theft of energy, amounting to unauthorized use of energy, in such cases no complaint of theft

can be lodged as contemplated Under Section 135 of the Act. In such cases for loss of energy, on

account of unauthorized use of energy not amounting to theft, it is always open for the authorities

to assess the loss of energy by resorting to power Under Section 126(1) of the Act. In cases where

allegation is of unauthorized use of energy amounting to theft, in such cases, apart from assessing



the proceedings Under Section 126(1) of the Act, a complaint also can be lodged alleging theft of

energy as defined Under Section 135(1) of the Act. In such cases, the Special Court is empowered

to determine civil liability Under Section 154(5) of the Act. On such determination of civil liability

by the Special Court, the excess amount, if any, deposited by the Petitioner, is to be refunded to

the consumer. It is a settled principle that to prove the guilt of the Accused in a criminal

proceeding, authorities have to prove the case beyond reasonable doubt and the element of mens

rea is also to be established. On the other hand, such a strict proof is not necessary for assessing

the liability Under Section 126(1) of the Act.[14]


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