IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6399 OF 2016
GUJARAT URJA VIKAS NIGAM LIMITED ... APPELLANT (S)
VERSUS
SOLAR SEMICONDUCTOR POWER
COMPANY (INDIA) PRIVATE LIMITED
AND OTHERS ... RESPONDENT (S)
J U D G M E N T
KURIAN, J.
1. The principal question which arises in this case is whether
the Gujarat Electricity Regulatory Commission (the
Commission), in exercise of its inherent powers, could have
extended the control period for the 1st respondent Company
(Respondent no. 1). The control period is the period during
which a particular tariff order operates.
2. In order to address the issue, certain provisions of the
Electricity Act, 2003 (hereinafter referred to as “the Act”)
are required to be noticed. Part VII of the Act deals with
tariff. Sections 61, 62 and 64 of the Act are of particular
relevance. :-
“61. Tariff regulations.—The Appropriate
Commission shall, subject to the provisions of this
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REPORTABLE
Act, specify the terms and conditions for the
determination of tariff, and in doing so, shall be
guided by the following, namely:-
(a) the principles and methodologies
specified by the Central Commission for
determination of the tariff applicable to
generating companies and transmission
licensees;
(b) the generation, transmission, distribution
and supply of electricity are conducted on
commercial principles;
(c) the factors which would encourage
competition, efficiency, economical use of
the resources, good performance and
optimum investments;
(d) safeguarding of consumers’ interest and
at the same time, recovery of the cost of
electricity in a reasonable manner;
(e) the principles rewarding efficiency in
performance;
(f) multi-year tariff principles;
(g) that the tariff progressively reflects the
cost of supply of electricity and also
reduces cross-subsidies in the manner
specified by the Appropriate Commission;
(h) the promotion of co-generation and
generation of electricity from renewable
sources of energy;
(i) the National Electricity Policy and tariff
policy:
Provided that the terms and conditions for
determination of tariff under the Electricity
(Supply) Act, 1948 (54 of 1948), the Electricity
Regulatory Commissions Act, 1998 (14 of 1998)
and the enactments specified in the Schedule
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as they stood immediately before the
appointed date, shall continue to apply for a
period of one year or until the terms and
conditions for tariff are specified under this
section, whichever is earlier.
62. Determination of tariff.-(1) The Appropriate
Commission shall determine the tariff in accordance
with the provisions of this Act for –
(a) supply of electricity by a generating company to a
distribution licensee:
Provided that the Appropriate Commission
may, in case of shortage of supply of
electricity, fix the minimum and maximum
ceiling of tariff for sale or purchase of
electricity in pursuance of an agreement,
entered into between a generating company
and a licensee or between licensees, for a
period not exceeding one year to ensure
reasonable prices of electricity;
(b) transmission of electricity ;
(c) wheeling of electricity;
(d) retail sale of electricity:
Provided that in case of distribution of
electricity in the same area by two or more
distribution licensees, the Appropriate
Commission may, for promoting competition
among distribution licensees, fix only
maximum ceiling of tariff for retail sale of
electricity.
(2) The Appropriate Commission may require a
licensee or a generating company to furnish separate
details, as may be specified in respect of generation,
transmission and distribution for determination of
tariff.
(3) The Appropriate Commission shall not, while
determining the tariff under this Act, show undue
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preference to any consumer of electricity but may
differentiate according to the consumer's load factor,
power factor, voltage, total consumption of electricity
during any specified period or the time at which the
supply is required or the geographical position of any
area, the nature of supply and the purpose for which
the supply is required.
(4) No tariff or part of any tariff may ordinarily be
amended, more frequently than once in any financial
year, except in respect of any changes expressly
permitted under the terms of any fuel surcharge
formula as may be specified.
(5) The Commission may require a licensee or a
generating company to comply with such procedure
as may be specified for calculating the expected
revenues from the tariff and charges which he or it is
permitted to recover.
(6) If any licensee or a generating company recovers
a price or charge exceeding the tariff determined
under this section, the excess amount shall be
recoverable by the person who has paid such price or
charge along with interest equivalent to the bank rate
without prejudice to any other liability incurred by the
licensee.
xxx xxx xxx
64. Procedure for tariff order.—(1) An application
for determination of tariff under section 62 shall be
made by a generating company or licensee in such
manner and accompanied by such fee, as may be
determined by regulations.
(2) Every applicant shall publish the application, in
such abridged form and manner, as may be specified
by the Appropriate Commission.
(3) The Appropriate Commission shall, within one
hundred and twenty days from receipt of an
application under sub-section (1) and after considering
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all suggestions and objections received from the
public,-
(a) issue a tariff order accepting the
application with such modifications or such
conditions as may be specified in that order;
(b) reject the application for reasons to be
recorded in writing if such application is not in
accordance with the provisions of this Act and
the rules and regulations made thereunder or
the provisions of any other law for the time
being in force:
Provided that an applicant shall be given a
reasonable opportunity of being heard before rejecting
his application.
(4) The Appropriate Commission shall, within seven
days of making the order, send a copy of the order to
the Appropriate Government, the Authority, and the
concerned licensees and to the person concerned.
(5) Notwithstanding anything contained in Part X,
the tariff for any inter-State supply, transmission or
wheeling of electricity, as the case may be, involving
the territories of two States may, upon application
made to it by the parties intending to undertake such
supply, transmission or wheeling, be determined
under this section by the State Commission having
jurisdiction in respect of the licensee who intends to
distribute electricity and make payment therefor.
(6) A tariff order shall, unless amended or revoked,
continue to be in force for such period as may be
specified in the tariff order.”
(Emphasis supplied)
3. A State Commission is constituted under Section 82 of the
Act. The Section to the extent relevant reads as follows:
5
“82. Constitution of State Commission.-(1)
Every State Government shall, within six months
from the appointed date, by notification, constitute
for the purposes of this Act, a Commission for the
State to be known as the (name of the State)
Electricity Regulatory Commission:”
4. Section 86 of the Act provides for the functions of the State
Commission. To the extent relevant, the Section reads as
follows:
“86. Functions of State Commission.-(1)
The State Commission shall discharge the following
functions, namely:-
(a) determine the tariff for generation, supply,
transmission and wheeling of electricity,
wholesale, bulk or retail, as the case may be,
within the State:
Provided that where open access has been
permitted to a category of consumers under
section 42, the State Commission shall
determine only the wheeling charges and
surcharge thereon, if any, for the said category
of consumers;
(b) regulate electricity purchase and procurement
process of distribution licensees including the
price at which electricity shall be procured from
the generating companies or licensees or from
other sources through agreements for purchase
of power for distribution and supply within the
State;
(c) facilitate intra-State transmission and wheeling
of electricity;
(d) issue licences to persons seeking to act as
transmission licensees, distribution licensees
and electricity traders with respect to their
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operations within the State;
(e) promote cogeneration and generation of
electricity from renewable sources of energy by
providing suitable measures for connectivity
with the grid and sale of electricity to any
person, and also specify, for purchase of
electricity from such sources, a percentage of
the total consumption of electricity in the area
of a distribution licensee;
(f) adjudicate upon the disputes between the
licensees and generating companies and to
refer any dispute for arbitration;
(g) levy fee for the purposes of this Act;
(h) specify State Grid Code consistent with the Grid
Code specified under clause (h) of sub-section
(1) of section 79;
(i) specify or enforce standards with respect to
quality, continuity and reliability of service by
licensees;
(j) fix the trading margin in the intra-State trading
of electricity, if considered, necessary;
(k) discharge such other functions as may be
assigned to it under this Act.”
(Emphasis Supplied)
5. Section 92 of the Act provides for the proceedings of the
Appropriate Commission.
“92. Proceedings of Appropriate Commission.-
(1) The Appropriate Commission shall meet at the
head office or any other place at such time as the
Chairperson may direct, and shall observe such rules
of procedure in regard to the transaction of business
at its meetings (including the quorum at its
meetings) as it may specify.”
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(Emphasis Supplied)
6. Section 94 deals with the powers of the Appropriate
Commission and reads as follows:
“94. Powers of Appropriate Commission.- (1)
The Appropriate Commission shall, for the
purposes of any inquiry or proceedings under this
Act, have the same powers as are vested in a civil
court under the Code of Civil Procedure, 1908 (5 of
1908) in respect of the following matters, namely:-
(a) summoning and enforcing the attendance of
any person and examining him on oath;
(b) discovery and production of any document or
other material object producible as evidence;
(c) receiving evidence on affidavits;
(d) requisitioning of any public record;
(e) issuing commission for the examination of
witnesses;
(f) reviewing its decisions, directions and orders;
(g) any other matter which may be prescribed.
(2) The Appropriate Commission shall have the
powers to pass such interim order in any
proceeding, hearing or matter before the
Appropriate Commission, as that Commission may
consider appropriate.
(3) The Appropriate Commission may authorise
any person, as it deems fit, to represent the
interest of the consumers in the proceedings
before it.”
(Emphasis
8
supplied)
7. Section 95 states that the proceedings before the
Appropriate Commission shall be deemed to be judicial
proceedings and the Appropriate Commission shall be
deemed to be a civil court. To quote :-
“95. Proceedings before Commission.- All
proceedings before the Appropriate Commission
shall be deemed to be judicial proceedings within
the meaning of Sections 193 and 228 of the Indian
Penal Code (45 of 1860) and Appropriate
Commission shall be deemed to be a civil court for
the purposes of Sections 345 and 346 of the Code of
Criminal Procedure, 1973 (2 of 1974).”
8. Section 181 of the Act provides for the power of the State
Commission to make regulations. To the extent relevant, the
Section reads as follows:
“181. Powers of State Commissions to make
regulations.-(1) The State Commissions may, by
notification, make regulations consistent with this Act
and the rules generally to carry out the provisions of
this Act.
(2) In particular and without prejudice to the
generality of the power contained in subsection (1),
such regulations may provide for all or any of the
following matters, namely:-
xxx xxx xxx
(zl) rules of procedure for transaction of
business under sub-section (1) of section
92;”
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xxx xxx xxx
(zp) any other matter which is to be, or may be,
specified.”
(Emphasis Supplied)
9. As per Notification No. 2 of 2004 published on 25.08.2004,
the Gujarat Electricity Regulatory Commission has notified
the Gujarat Electricity Regulatory Commission (Conduct of
Business) Regulations. Regulations 80 to 82 provide for
saving of inherent power of the Commission, which read as
follows:
“80. Nothing in these Regulations shall be deemed to
limit or otherwise affect the inherent power of
the Commission to make such orders as may be
necessary for ends of justice or to prevent the
abuse of the process of the Commission.
81. Nothing in these Regulations shall bar the
Commission from adopting in conformity with
the provisions of the Acts, a procedure, which is
at variance with any of the provisions of these
Regulations, if the Commission, in view of the
special circumstances of a matter or class of
matters and for reasons to be recorded in
writing, deems it necessary or expedient for
dealing with such a matter or class of matters.
82. Nothing in these Regulations shall, expressly or
impliedly, bar the Commission to deal with any
matter or exercise any power under the Acts for
which no Regulations have been framed, and
the Commission may deal with such matters,
powers and functions in a manner it thinks fit.”
(Emphasis Supplied)
10. The Regulation 85 of the Conduct of Business Regulations
10
reads as follows:
“85. Subject to the provisions of the Acts, the time
prescribed by these Regulations or by order of
the Commission for doing any act may be
extended (whether it has already expired or not)
or abridged for sufficient reason by order of the
Commission.”
(Emphasis Supplied)
11. In the context of this case, certain provisions of the Power
Purchase Agreement (hereinafter referred to as “the PPA”)
dated 30.4.2010 between the parties are also relevant.
Article 5 of the PPA deals with “Rates and Charges”. Article
5.2 reads as follows :-
“5.2.GUVNL shall pay the fixed tariff mentioned
hereunder for the period of 25 years for all the
Scheduled Energy/Energy injected as certified in the
monthly SEA by SLDC. The tariff is determined by
Hon’ble Commission vide Tariff Order for Solar
based power project dated 29.1.2010 ( sic).
Tariff for Photovoltaic project: Rs.15/KWh for First
12
Years and thereafter
Rs. 5/KWh from 13th Year to 25th Years
Above tariff shall apply for solar projects
commissioned on or before 31st
December 2011. In
case, commissioning of Solar Power Project is
delayed beyond 31st
December 2011, GUVNL shall
pay the tariff as determined by Hon’ble GERC for
Solar Projects effective on the date of
commissioning of solar power project or above
mentioned tariff, which ever is lower.”
(Emphasis Supplied)
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The tariff order dated 29.01.2010 is in exercise of powers
under Sections 61(h), 62(1)(a), 86(1)(e) and all other powers
enabling it in this behalf.
12. Article 8 of the PPA pertains to force majeure events. It
provides for events which constitute force majeure:
“ARTICLE 8
FORCE MAJEURE
8.1 Force Majeure Events
(a) Neither Party shall be responsible or liable for or
deemed in breach hereof because of any delay or
failure in the performance of its obligations
hereunder (except for obligations to pay money due
prior to occurrence of Force Majeure events under
this Agreement) or failure to meet milestone dates
due to any event or circumstance (a “Force Majeure
Event”) beyond the reasonable control of the Party
experiencing such delay or failure, including the
occurrence of any the following:
(i) acts of God;
(ii) typhoons, floods, lightening, cyclone, hurricane,
drought, famine, epidemic, plague or other natural
calamities;
(iii) acts of war (whether declared or undeclared),
invasion or civil unrest;
(iv) any requirement, actions or omission to act
pursuant to any judgment or order of any court or
judicial authority in India (provided such requirement,
or action or omission to act is not due to the breach
by the Power Producer or GUVNL of any Law or any of
their respective obligations under this Agreement);
(v) inability despite complying with all legal
requirements to obtain, renew or maintain required
licenses or Legal Approvals;
(vi) earthquakes, explosions, accidents, landslides;
fire;
(vii) expropriation and/or compulsory acquisition of
the Project in whole or in part by Government
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Instrumentality;
(viii) chemical or radioactive contamination or
ionising radiation; or
(ix) damage to or breakdown of transmission
facilities of GETCO/ DISCOMs;
(x) Exceptionally adverse weather conditions which
are in excess of the statistical measure of the last
hundred (100) years.
xxx xxx xxx
8.2 Available Relief for a Force Majeure Event
No party shall be liable for (sic) breach of its
obligations pursuant to this Agreement to the extent
that the performance of its obligations was
prevented, hindered or delayed due to a Force
Majeure event. For avoidance of doubt, neither
Party’s obligation to make payments of money due
and payable prior to occurrence of Force Majeure
events under this Agreement shall be suspended or
excused due to the occurrence of a Force Majeure
Event in respect of such Party.”
13. There were also certain communications between the
parties which are required to be noted. On 19.04.2011 the
first respondent communicated its intention to change the
location. The relevant portion of the letter reads as follows :-
“….. Originally the PPA was signed with an intention
to develop the 20 MW Solar PV Project at Village
Ajawada, Taluka- Tharad, District Banaskantha,
Gujarat. But due to some unforeseen events we were
unable to procure the Project land at Ajawada village
and identified THREE other Locations to procure the
Land and we had informed the some to your office
vide our monthly Progress Reports.
Now, we are happy to inform you that we have
already acquired 60 acres of Land required for the
commissioning of first two phases of 5 MW at
Shivlakha Village, Tal-Bhachau, Dist.Kutch and
enclosing herewith the details and copies of the
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documents of the Land procurement. We have (sic)
also made advance Payments for another 105 acres
in the same Location and will be completing the Land
Registration before the end of this month.
xxx xxx xxx
d) We have already informed the details of
Land procurement to GETCO for the necessary survey
and commencement of power evacuation process.
Hence we kindly request you to amend the PPA with
respect to the change of Location. We hereby submit
the Copies of the documents as proof of Land
Procurement…”
14. A Supplemental Power Purchase Agreement (hereinafter
referred to as “the SPPA”) was entered into by the parties on
10.05.2011. Clauses 2.3 and 2.4 of the SPPA read as
follows :-
“2.3. Since M/s. SSCPCIPL have changed the
location of the Solar Power Project after lapse of
significant time, non-availability of Transmission
system shall not be considered as a ground for
non-levy of Liquidated Damages. M/s. SSCPCIPL shall
pay Liquidated Damages even in case of
non-availability of transmission system for
evacuation of power by Schedule Commercial
Operation Date.
2.4. All other terms and conditions including tariff of
Power Purchase Agreement dated 30th
April 2010
between GUVNL and M/s. SSCPCIPL shall remain
unchanged shall apply mutatis mutandis.”
(Emphasis Supplied)
15. It is also necessary to understand how this matter reached
this Court. Close to the scheduled commercial operation
date, Respondent No. 1 requested the Commission for an
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extension of the control period. The petition to the relevant
extent reads as follows.
“12. While the Petitioner is making best efforts to
overcome the delays as much as possible, it would
not be feasible to complete the project within the
time stipulated. The Petitioner has done its due
diligence and with its commitment to expedite
various activities, the Petitioner is optimistic that the
project is likely to be completed by the end of April
2012. The Petitioner has also issued a representation
to the Department of Energy and Petrochemicals on
November 30, 2011 and to GUVNL pointing out the
various above mentioned reasons for delay. The
Petitioner in the said letters has sought extension of
time till force majeure issues are resolved…
PRAYER
13. In view of the above, it is therefore most
respectfully submitted that the Hon’ble Commission
may graciously be pleased to:
(i) Extend the ‘Control Period’ till April 30, 2012 as defined
by this Hon’ble Commission in its Order dated 29th
January, 2010;
(ii) Pass such other and further orders, as this Hon’ble
Commission deems fit and proper in the facts and
circumstances of the case.”
(Emphasis Supplied)
16. The Commission by order dated 27.01.2012 refused to
extend the control period. To quote :-
“14.3 Article 5.2 of the PPA provides, inter alia, that
“….Above tariff shall apply for power projects
commissioned on or before 31 December 2011. In
case, commissioning of Solar Power Projects is
delayed beyond 31 December 2011, GUVNL shall pay
the tariff as determined by Hon’ble GERC for Solar
Projects effective on the day of commissioning of
Solar Power Projects or above mentioned tariff,
whichever is lower”. This means that if the project is
15
not commissioned within the stipulated period the
existing tariff or the new tariff whichever is lower will
apply. The petitioners have consciously agreed to this
provision by signing the PPA. The Commission has
already circulated on 1 November 2011 a discussion
paper for determining tariff for Solar Projects for the
second control period which is to start from 29
January 2012. The tariff suggested is lower than the
current tariff. The petitioners have sought extension
of the control period in order to prevent the
application of a lower tariff in the event of not being
able to commission the projects within the stipulated
period. The reasons given by them are project
specific. The situations of various projects are widely
different. In some cases, the projects are at an
advanced stage. In some other cases the projects are
at an initial stage, and in some cases, even the order
for equipment is yet to be issued. Some of them have
asked for one month and some others have asked as
long as six months. The petitioners have not been
able to show that there has been a problem which is
industry-wide and spread over the whole State or a
major part of the State, necessitating an extension of
the control period. On the other hand, a number of
projects have been commissioned or are likely to be
commissioned within the control period indicating
that the issues raised by the petitioners are not
industry- wide. If some developers could not
complete the projects, it is not adequate justification
why the tariff order should be modified for extending
the control period to give relief to some project
developers. This becomes more anomalous
especially when a discussion paper has already been
issued, and public hearing has already been
completed for issue of the tariff order for the next
control period. Further, the issues which have been
raised can, if they so desire be addressed by the
parties concerned only within the framework and the
terms and conditions of Power Purchase Agreement.
If they invoke Force Majeure conditions, it is for them
to establish the existence of such conditions,
following the procedure prescribed in the PPA. There
cannot be a general order for addressing such issues
which are specific to some individual project
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developers, especially when several others have
successfully implemented their projects.
16. In view of the above analysis, we decide that the
petitioners have not succeeded in making out a case
for invoking the inherent power of the Commission
to extend the control period determined by the
Commission in its Order No. 2 of 2010 dated 29
January 2010. Though they have put forward a
number of reasons for the relief they have sought,
none of the petitioners including the Association of
Solar Power Developers, which has filed a separate
petition, has indicated any ground whatsoever which
is of universal application either in the State of
Gujarat or a major part thereof by which all the
projects are affected by such factors. Several
projects have been or are likely to be commissioned
during the control period itself. The reasons
indicated by the petitioners appear to be in the
manner of indirectly invoking the Force Majeure
clause specified in the PPA, which cannot be
addressed by a general order. Hence, all the
petitions are dismissed.”
(Emphasis Supplied)
17. By its order dated 22.02.2012, the Commission, finding that
the reasons put forward by Respondent No. 1 herein are
similar to those dealt with by the Commission in its order
dated 27.01.2012, dismissed the petition.
18. In appeal, the Appellate Tribunal for Electricity (hereinafter
referred to as “the Appellate Tribunal”) in the order dated
02.01.2013 dealt with this issue at paragraphs-24 to 27.
“24. The reasoning of the Commission that extending
the control period would mean amendment of the
Tariff Order is not at all possible to concede to. The
Commission, it will be noticed from the impugned
17
order, was conscious that individual petitions referred
to individual project specific problems and issues and
some prayed for one month extension, while some
prayed for six months extension. The Commission
came to the conclusion that unless there would
happen a state-wide and large scale ramifications
then only there could be a case for issue of a general
order to extend the control period. Yet, the
Commission said at the same breath that it has
inherent power to extend the control period and it
was made available when GETCO was at default. The
basic premise that unless there is wide and large
scale ramifications across the State in respect of the
renewable sources of energy there cannot be
extension of control period by general order is, to say
the least, not a legal approach and such an approach
would defeat the very spirit of the law. The GUVNL
and the Govt. of Gujarat accepted the proposition
that inherent power can be exercised to a genuine
problem. In paragraph 10.7 of the order impugned,
the Commission has observed “Even if we do not
take into cognizance the above cited decisions of the
TNERC, the provisions of Regulation 80 of the
Commission’s Regulations, Section 151 of the Civil
Procedure Code and related decisions of the Hon'ble
Supreme Court make it abundantly clear that the
Commission has inherent power to issue any order,
to meet the end of justice, if it is not inconsistent
with the relevant provisions of the Regulations/Act.
This power is not limited to only procedural matters.”
This observation makes it clear that Commission was
dealing with the petitions by virtue of the power
expressly given to the Commission by their own
Regulations to exercise inherent power. The petitions
of the two appellants were not the ones under
section 86 (1) (b) of the Electricity Act, 2003. Now, it
is not logical to argue that unless there is state-wide
large scale ramifications inherent power cannot be
exercised. The relevant Regulation of the
Commission is exactly identical in language and spirit
with section 151 of the CPC. This provision of
inherent power does not by itself confer any power
but only indicates that there is a power to make an
appropriate order as may be necessary to achieve
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justice and prevent the abuse of the process of law. It
has been held by the Hon'ble Supreme Court in Raj
Bahadur Ras Raja Vs. Seth Hiralal, AIR 1962 SC 527,
that the inherent power is not a power given to the
Court, it inheres in the Court itself so that by virtue of
exercise of such power, justice is rendered. In Ramji
Dayawala Vs. Invest Import (1981) 1 SCC 80, the
Hon'ble Supreme Court held that the discretion
vested in the Court is dependent on various
circumstances which the Court has to consider and
there is no limitation for application of the inherent
power. Therefore, each case has to be decided on its
own merit and simply because of the fact that some
of the grounds were common to all the petitions the
treatment of the alleged common grounds has to be
common. While saying so, we are not oblivious of the
legal proposition that inherent power cannot be
exercised when prohibited or excluded by the statute
itself and when there are specific provisions to
address the remedy. That is to say, inherent power
can be exercised only for the ends of justice. The
very exercise of inherent power or non-exercise of
inherent power depends upon consideration of
specific facts.
25. The argument of the GUVNL and for that matter
of the Commission that extension of control period
would be prejudicial to the PPA is again not
acceptable. Firstly, PPA is not subordinate to the Tariff
Order although it is based on that. The provision in
the PPA that unless projects are commissioned within
the specified period tariff as per the Tariff Order
dated 29.1.2010 would not be available does not
conflict with exercise of inherent power. If situations
having wide scale ramifications warrant exercise of
inherent power for extension of control period then
also a certain PPA may have some consequences.
Liquidated damages are available to the GUVNL only
when defaults occur on the part of the developer; but
when a situation is seen where circumstances
regardless of whether wide scale ramifications across
the State happen or do not happen went beyond the
control of a developer then exercise of the inherent
power which the Commission does have in their
statute may be exercised but each case has to be
19
decided on its own merit. The existence of
force-majeure condition definitely comes within the
framework of the Power Purchase Agreement but
exercise of inherent power is always case-specific
and it cannot be equated with force-majeure. Again
extension of control period cannot by any stretch of
imagination would amount to amendment of the
Tariff Order. Amendment of the Tariff Order by virtue
of section 62 (4) of the Electricity Act, 2003 was not
prayed for. Since in every venture there is allocation
of risk, it cannot be said that even if a certain
developer experiences hurdles beyond his control, he
has to abide by such hurdles. When fact in each case
is hotly contested by a counter fact or denial, justice
demands that each fact has to be separately dealt
with and decided. It is the Commission which is alone
competent to scrutinise the merits and demerits of
each fact in each of the two Appeals. It is the
Commission that has the infrastructure and
capability to examine and find as to whether
expenditures were made and committed ahead of
the date of commissioning of the project so that no
unfair advantage is claimed by any developer on the
ground of prospective reduction of the capital cost. If
the particulars of expenditure if already made or
committed during the control period are scrutinised
and the grounds are scrutinised in the perspective of
each individual case then possibly it would be clear
to the Commission as to whether and in which case a
developer comes with clean hands or not.
26. In the result, it is of absolute necessity that the
Commission needs to examine the case of each of
the two appellants in their respective merits and
decide afresh. The basic premise that extension of
control period is possible only when there are wide
scale ramifications is pregnant with flaws.
27. The Appeals succeed in view of the
observations as above and are thus allowed.
We remand the matters back to the
Commission for rehearing on merit of each
individual case and for decision according to
law. No cost.”
20
(Emphasis Supplied)
19. The above decision of the Appellate Tribunal dated
02.01.2013 was challenged before this Court in Civil Appeal
No.2315 of 2013 with Civil Appeal No. 2542 of 2013.
However, by Order dated 01.04.2013, the appeal was
dismissed in limine but this Court made it clear that the
Commission shall decide the whole issue without being
influenced by the observations made by the Appellate
Tribunal in accordance with law. The Order reads as follows:
“We have heard the learned counsel for the
parties.
We are not inclined to interfere with the order
passed by the Appellate Tribunal for Electricity. The
civil appeals are, accordingly, dismissed.
We, however, make it clear that the Commission
shall decide the whole issue without being influenced
by the observations made by the Appellate Tribunal
for Electricity in accordance with law.”
20. Once the matters were remanded to the Commission for
rehearing on merits of each case, the Commission vide
order dated 05.04.2014 allowed the petition for extension of
the control period. To quote :-
“11.26. Considering the above observations, we are
of the view that the delay which occurred in
commissioning of the power plant was due to the
21
reasons beyond the control of the petitioner.
Moreover, the petitioner had initiated construction
activities of the Solar Power Project and completed
the same which was recognized by the Chief
Electrical Inspector in its letter dated 17.2.2012 and
13.03.2012 stating that the 8.64 MW Solar Power PV
Project of the petitioner was ready on 1.02.2012 and
1.48 MW Solar PV Power Project of the petitioner was
ready for energisation on 21.02.2012. Therefore, it is
a clear case in which the petitioner was unable to
commission the above capacity of the power plant
due to reasons beyond its control. The prayer of the
petitioner to extend the control period of order No.2
of 2010 dated 29.1.2010 upto 30th
April, 2012 is valid
and the same is allowed to provide the justice to the
petitioner whose project was delayed.
xxx xxx xxx
11.28. We observe that the Article 8 of the PPA sets
out the force majeure conditions which may restrain
the project developer from completing the project in
time and consequences of such delay. On the other
hand, the order dated 29.01.2010 determines the
generic tariff payable to the solar projects
commissioned during the control period of order. In
the present case, the petitioner has not raised any
dispute and only seeks extension of the control
period. As such, the matter cannot be raised under
Section 86 (1)(f).
11.29.Moreover, the Force Majeure clause agreed in
the PPA is a contractual arrangement between the
parties, whereas the control period specified in the
statutory generic tariff order by the Commission is a
time frame in which the project is required to be
commissioned to become eligible to receive the tariff
determined by the Commission. While deciding the
control period the Commission takes into account
normative conditions which may prevail during
execution of the project.
11.30. The Commission has inherent powers to pass
an appropriate order to provide the justice to the
22
affected person. In the present case, the delay
occurred in commissioning of the project by the
petitioner due to various reasons namely (i) Non
availability of land for a longer time due to changes
in Government Policy/Law , and (ii) Non availability of
evacuation facility by GETCO. The above facts reflect
that the delay in commissioning of the project was
partially due to change in government rules
regarding land acquisition and partially due to failure
of GETCO in providing transmission line within
stipulated period. Both these reasons were beyond
the control of the petitioner, though these may not
form part of force majeure events. As such, we
decide that the present petition could not be filed
under Section 86 (1) (f) of the Act.”
(Emphasis Supplied)
21. The Appellate Tribunal at paragraphs-10.11 and 10.12 of the
impugned judgment held that even under Regulation 85 of
the Conduct of Business Regulations, the Commission was
within its power to extend time and the same can be
exercised even in an individual case. To quote :
“10.11 We have gone through the Conduct of
Business Regulations, 2004 and the
provisions provided under Section 86 of
the Electricity Act, 2003 and find that the
learned State Commission has rightly
passed the impugned order under its
inherent powers. We are unable to accept
the contention of the Appellant that the
State Commission cannot exercise inherent
power for the purpose of extending the
control period. We may clarify that the
control period of the tariff order is fixed by
the State Commission itself and, hence,
the State Commission has inherent powers
to extend the control period of the tariff
23
order. There is no restriction or fetter on
the powers of the State Commission in the
Electricity Act, 2003 or under the Conduct
of Business Regulations, 2004 to pass such
order as the State Commission may deem
fit and appropriate in the interest of justice
and discharge its functions under the
Electricity Act, 2003. The Conduct of
Business Regulations, 2004 provide
inherent powers to the State Commission
to pass any order it deem fit and proper to
meet the ends of justice or to prevent
abuse of the process of the court. The
State Commission has liberty to exercise
its inherent powers if the exercise of
inherent power is not in any way in conflict
with what has been expressly provided in
the Civil Procedure Code or against the
intentions of the legislature which means
that the inherent power is not to be
exercised in a manner which will be
contrary to or different from the procedure
expressly provided in the Code.
10.12 Regulation 85 of the Conduct of Business
Regulations, 2004 dealing with Extension
or abridgement of time prescribed fairly
provide that subject to the provisions of
the Acts, the time prescribed by these
Regulations or by order of the Commission
for doing any act may be extended
(whether it has already expired or not) or
abridged for sufficient reason by order of
the Commission.”
(Emphasis Supplied)
22. Thus, the Appellate Tribunal while approving the views
taken by the Commission held that the Commission was
legally justified in exercising its inherent power to extend
the control period.
24
23. Now that the factual matrix of the case is laid out, we shall
proceed with our analysis of the same from the legal
perspective.
24. At the outset, it is important to carefully note what the
Supreme Court held while dismissing Civil Appeal No. 2315
of 2013. No doubt, this Court declined to interfere with
the order passed by the Appellate Tribunal. This Court
dismissed the appeal in limine, at the admission stage
without discussing any legal issues for the reason that the
Appellate Tribunal had only remitted the matter to the
Commission. This Court has not made any authoritative
ruling on the availability and exercise of inherent powers
by the Commission. Nor is there a stamp of approval of the
Appellate Tribunal’s order. It was for this reason that this
Court clarified that the Commission should take an
independent decision uninfluenced by the observations
made by the Appellate Tribunal and that decision should
be in accordance with law. Therefore, the decision of this
Court is only on non-interference with the order of
Appellate Tribunal to remit the matter to the Commission
for a hearing on case-to-case basis and this Court did not
25
make any observations with respect to the merits of the
matter. In other words, it is not an order agreeing with or
upholding the views of the Appellate Tribunal. It is also
crucially relevant to note that even according to the
Appellate Tribunal, as stated in paragraph 27 of the order
dated 02.01.2013, it had only made “observations” and in
view of those observations, the appeals were allowed by
remitting the matters to the Commission. This Court
clearly held that the “whole issue” should be examined
“without being influenced by the observations made by
Appellate Tribunal for Electricity”.
25. The question before us is whether the Commission has
the power to extend the control period provided under the
tariff order. That question is no more res integra. There are
two recent judgments of this Court which are relevant in
this context. In Gujarat Urja Vikas Nigam Limited v.
EMCO Limited and another1
, this Court at
Paragraphs-39 and 40, has specifically held as follows:
“39. Apart from that both Respondent 2 and the
Appellate Tribunal failed to notice and the first
respondent conveniently ignored one crucial
condition of the PPA contained in the last sentence of
Para 5.2 of the PPA:
1
(2016) 11 SCC 182
26
“In case, commissioning of solar power
project is delayed beyond 31-12-2011, GUVNL
shall pay the tariff as determined by the Hon’ble
GERC for solar projects effective on the date of
commissioning of solar power project or
abovementioned tariff, whichever is lower.”
The said stipulation clearly envisaged a situation
where notwithstanding the contract between the
parties (the PPA), there is a possibility of the first
respondent not being able to commence the
generation of electricity within the “control period”
stipulated in the First Tariff Order. It also visualised
that for the subsequent control period, the tariffs
payable to a Projects/power producers (similarly
situated as the first respondent) could be different. In
recognition of the said two factors, the PPA clearly
stipulated that in such a situation, the first
respondent would be entitled only for lower of the two
tariffs. Unfortunately, the said stipulation is totally
overlooked by the second respondent and the
Appellate Tribunal. There is no whisper about the said
stipulation in either of the orders.
40. The first respondent has created enough
confusion. While on one hand the first respondent
asserted a right to seek determination of a separate
tariff independent of the tariff fixed under the First
Tariff Order in view of the stipulation contained in the
First Tariff Order that “for a project that does not get
such benefit, the Commission would, on a petition in
that respect, determine a separate tariff taking into
account all the relevant facts” did not seek a relief
before the second respondent to determine a
separate tariff but claimed the benefit of the Second
Tariff Order. Assuming for the sake of argument that
the petition filed by the first respondent (1270/2012)
is to be treated as an application for determination of
separate tariff which would be identical with the tariff
fixed under the Second Tariff Order, whether the first
respondent would be entitled for such a relief
depends, if at all he is entitled to seek such a
determination, on a consideration of “all the relevant
27
facts” but not by virtue of the operation of the
Second Tariff Order.”
(Emphasis supplied)
This decision with its pointed reference to application of
“lower of the two tariffs” squarely applies to this case.
26. However, while addressing another grey area as to
whether the Commission has the power to amend tariff
despite the terms of the PPA, this Court in Gujarat Urja
Vikas Nigam Limited v. Tarini Infrastructure Limited
and others2
, after analyzing scheme of the Act, has
answered the question in affirmative.
27. The scheme of the Act has been analyzed at
paragraphs-12 and 16, which read as follows:
“12. While Section 61 of the Act lays down the
principles for determination of tariff, Section 62 of
the Act deals with different kinds of tariffs/charges to
be fixed. Section 64 enumerates the manner in which
determination of tariff is required to be made by the
Commission. On the other hand, Section 86 which
deals with the functions of the Commission reiterates
determination of tariff to be one of the primary
functions of the Commission which determination
includes, as noticed above, a regulatory power with
regard to purchase and procurement of electricity
from generating companies by entering into PPA(s).
The power of tariff determination/fixation
undoubtedly is statutory and that has been the view
of this Court expressed in paras 36 and 64 of A.P.
TRANSCO v. Sai Renewable Power (P) Ltd. This, of
course, is subject to determination of price of power
in open access (Section 42) or in the case of open
2
(2016) 8 SCC 743
28
bidding (Section 63). In the present case, admittedly,
the tariff incorporated in PPA between the generating
company and the distribution licensee is the tariff
fixed by the State Regulatory Commission in exercise
of its statutory powers. In such a situation it is not
possible to hold that the tariff agreed by and
between the parties, though finds mention in a
contractual context, is the result of an act of volition
of the parties which can, in no case, be altered
except by mutual consent. Rather, it is a
determination made in the exercise of statutory
powers which got incorporated in a mutual
agreement between the two parties involved.
xxx xxx xxx
16. When the tariff order itself is subject to
periodic review it is difficult to see how incorporation
of a particular tariff prevailing on the date of
commissioning of the power project can be
understood to bind the power producer for the entire
duration of the plant life (20 years) as has been
envisaged by Clause 4.6 of PPA in the case of
Junagadh. That apart, modification of the tariff on
account of air-cooled condensers and denying the
same on account of claimed inadequate pricing of
biogas fuel is itself contradictory.”
(Emphasis supplied)
28. There is also a pointed reference to the decision of this
Court in EMCO (supra) at paragraph-21, which reads as
follows:
“21. In Gujarat Urja Vikas Nigam Ltd. v. EMCO
Ltd. the power purchaser sought the benefit of a
second tariff order made effective to projects
commissioned after 29-1-2012 (the power purchaser
had commissioned its project on 2-3-2012) though
29
under PPA it was to be governed by the first tariff
order of January 2010. Under the first tariff order for
such projects which were not commissioned on or
before the date fixed under the said order, namely,
31-11-2011 the tariff payable was to be determined by
the Gujarat Electricity Regulatory Commission. The
power producer in the above case did not seek
determination of a separate tariff but what was sought
was a declaration that the second tariff order dated
27-1-2012 applicable to PPA(s) after 29-1-2012 would
be applicable. It is in this context that this Court had
taken the view that the power producer would not be
relieved of its contractual obligations under PPA.”
(Emphasis supplied)
29. Having referred to the above decisions, we shall now make
an independent endeavor to analyze the present case in
the context of factual matrix and the relevant statutory
provisions. An amendment to tariff by the Regulatory
Commission is permitted under Section 62(4) read with
Section 64(6) of the Act. Section 86(1)(a) clothes the
Commission with the power to determine the tariff and
under Section 86(1)(b), it is for the Commission to regulate
the price at which electricity is to be procured from the
generating companies. Section 86 (1)(e) deals with
promoting co-generation and generation of electricity from
renewable sources of energy . Therefore, there cannot be
any quarrel with regard to the power conferred on the
Commission with regard to fixation of tariff for the
30
electricity procured from the generating companies or
amendment thereof in the given circumstances.
30. Part X of the Act from Sections 76 to 109 deals with
“Regulatory Commissions” providing for their constitution,
powers and functions. Section 92 read with Section 94
provides for the proceedings and power of the Commission
while exercising its functions and powers. Under Section
92, the proceedings of the Commission are to be governed
by what is specified in the appropriate Regulation with
regard to the transaction of business at its meetings. It is
that Regulation which is referred to under Section 181 (zl)
“rules of procedure for transaction of business under
sub-section (1) of Section 92”. Under Section 181(zp)
other matters also can be specified. Section 2(62) defines
“specified” as “specified by regulations made by the
Appropriate Commission or the Authority, as the case may
be, under this Act”.
31. Section 94 provides that the Appropriate Commission shall
be vested with certain powers as are vested in a civil
court, only in six specified areas. Under Section 94(1)(g),
the Commission has the powers of a civil court in respect
of “any other matter which may be prescribed”. Under
31
Section 2(52) “prescribed means prescribed by rules made
by the Appropriate Government under this Act”.
32. Regulations 80 to 82 are instances of such powers
specified by the Commission. Regulation 80 has provided
for the inherent power of the Commission to the extent of
making such orders as may be necessary for the ends of
justice or to prevent the abuse of the process of the
Commission. It has to be borne in mind that such inherent
powers are to be exercised notwithstanding only the
restrictions on the Commission under the Conduct of
Business Regulations, meaning thereby that there cannot
be any restrictions in the Conduct of Business Regulations
on exercise of inherent powers by the Commission. But the
specified inherent powers are not as pervasive a power as
available to a court under Section 151 of the Code of Civil
Procedure, 1908:
“151. Saving of inherent powers of court.-
Nothing in this Code shall be deemed to limit or
otherwise affect the inherent power of the court to
make such orders as may be necessary for the ends
of justice, or to prevent abuse of the process of the
court.”
However, the Commission is enjoined with powers to issue
appropriate orders in the interest of justice and for preventing
abuse of process of the Commission, to the extent not otherwise
32
provided for under the Act or Rules. In other words, the inherent
power of the Commission is available to it for exercise only in
those areas where the Act or Rules are silent.
33. Under Regulation 81, the Commission is competent to
adopt a procedure which is at variance with any of the
other provisions of the Regulations in case the Commission
is of the view that such an exercise is warranted in view of
the special circumstances and such special circumstances
are to be recorded in writing. However, it is specifically
provided under Section 181 that there cannot be a
Regulation which is not in conformity with the provisions of
the Act or Rules.
34. Under Regulation 82, the Commission has powers to deal
with any matter or exercise any power under the Act for
which no Regulations are framed meaning thereby where
something is expressly provided in the Act, the
Commission has to deal with it only in accordance with the
manner prescribed in the Act. The only leeway available to
the Commission is only when the Regulations on
proceedings are silent on a specific issue. In other words,
in case a specific subject or exercise of power by the
Commission on a specific issue is otherwise provided
33
under the Act or Rules, the same has to be exercised by
the Commission only taking recourse to that power and in
no other manner. To illustrate further, there cannot be any
exercise of the inherent power for dealing with any matter
which is otherwise specifically provided under the Act. The
exercise of power which has the effect of amending the
PPA by varying the tariff can only be done as per statutory
provisions and not under the inherent power referred to in
Regulations 80 to 82. In other words there cannot be any
exercise of inherent power by the Commission on an issue
which is otherwise dealt with or provided for in the Act or
Rules.
35. This Court should be specially careful in dealing with
matters of exercise of inherent powers when the interest
of consumers is at stake. The interest of consumers, as an
objective, can be clearly ascertained from the Act. The
Preamble of the Act mentions “protecting interest of
consumers” and Section 61(d) requires that the interests
of the consumers are to be safeguarded when the
Appropriate Commission specifies the terms and
conditions for determination of tariff. Under Section 64
read with Section 62, determination of tariff is to be made
34
only after considering all suggestions and objections
received from the public. Hence, the generic tariff once
determined under the statute with notice to the public can
be amended only by following the same procedure.
Therefore, the approach of this Court ought to be cautious
and guarded when the decision has its bearing on the
consumers.
36. Regulation 85 provides for extension of time. It may be
seen that the same is available only in two specified
situations – (i) for extension of time prescribed by the
Regulations and (ii) extension of time prescribed by the
Commission in its order for doing any act. The control
period is not something prescribed by the Commission
under the Conduct of Business Regulations. The control
period is also not an order by the Commission for doing
any act. Commissioning of a project is the act to be
performed in terms of the obligation under the PPA and
that is between the producer and the purchaser, viz., the
respondent no.1 and appellant. Hence, the Commission
cannot extend the time stipulated under the PPA for doing
any act contemplated under the agreement in exercise of
its powers under Regulation 85. Therefore, there cannot be
35
a extension of the control period under the inherent
powers of the Commission.
37. The Commission being a creature of statute cannot
assume to itself any powers which are not otherwise
conferred on it. In other words, under the guise of
exercising its inherent power, as we have already noticed
above, the Commission cannot take recourse to exercise of
a power, procedure for which is otherwise specifically
provided under the Act.
38. Extension of control period has been specifically held to be
outside the purview of the power of the Commission as per
EMCO (supra). This appeal is hence, allowed. The
impugned orders are set aside. However, we make it clear
that this judgment or orders of the Appellate Tribunal or
Commission shall not stand in the way of the Respondent
no.1 taking recourse to the liberty available to them for
re-determining of tariff if otherwise permissible under law
and in which case it will be open to the parties to take all
available contentions before the Commission.
39. There shall be no order as to costs.
.......................J.
(KURIAN JOSEPH)
36
.......................J.
(R. BANUMATHI)
New Delhi;
October 25, 2017.
37
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APEPAL NO. 6399 OF 2016
GUJARAT URJA VIKAS NIGAM LIMITED .........Appellant
VERSUS
SOLAR SEMICONDUCTOR POWER COMPANY
(INDIA) PRIVATE LIMITED AND OTHERS ...Respondents
J U D G M E N T
R. BANUMATHI, J.
I have gone through the judgment of His Lordship Justice Kurian
Joseph. His Lordship's judgment though comprehensive, having regard
to the importance of the questions raised, I prefer to give my own
reasonings for my concurrence.
2. An appeal under Section 125 of the Electricity Act, 2003 would be
maintainable only on the grounds specified in Section 100 of the Civil
Procedure Code i.e. only on substantial question of law. In the present
case, the following substantial questions of law arise for determination:-
• Whether the State Commission has inherent powers to
extend the control period of Tariff Order dated 29.01.2010
beyond the control period thereby adversely affecting the
sanctity of PPA which was entered into by the parties by
consensus-ad-idem?
• Whether the State Commission can invoke Regulations
80-82 of Conduct of Business Regulations-inherent powers
38
of the Commission to grant substantive relief to the
generating company like respondent No.1 and thereby alter
the terms of the contract arrived at between the parties
consensus-ad-idem?
3. Brief facts are that the appellant and parent company of
respondent No.1 executed Power Purchase Agreement (PPA) on
30.04.2010 for sale and purchase of electricity from 20 MW Solar PV
Power project to be established by the parent company of the first
respondent. In the initial stage itself, there was a delay from 30.04.2010
to 27.10.2010 firstly on account of transfer of Solar Power project in the
name of parent company to a Special Purpose Vehicle (SPV) i.e.
respondent No.1 and an amendment of PPA in favour of the SPV.
Secondly, on account of first respondent’s decision to change their
location of the Solar Power project from District Banaskantha to District
Kutchh, there was delay from 19.04.2011 to 10.05.2011 i.e. till the date
of execution of the Supplemental Agreement. The Supplemental
Agreement dated 10.05.2011 itself was entered into after the Scheduled
Commercial Operation Date of the first plant i.e. 10.03.2011.
4. Article 5.2 of PPA specifically provided that the tariff determined in
the Tariff Order dated 29.01.2010, would be applicable only if the project
is commissioned by the specific date i.e. on or before 31.12.2011 and in
case, delay is occasioned in commencement of the project, the tariff
mentioned in the PPA and the new tariff determined by the State
39
Commission, whichever is lower, shall be applicable. Article 5.2 of the
PPA reads as under:-
“GUVNL shall pay the fixed tariff mentioned hereunder for the period of
25 years for all the Scheduled Energy/Energy injected as certified in
the monthly SEA by SLDC. The tariff is determined by Hon’ble
Commission vide Tariff Order for Solar based power project dated
29.01.2010.
Tariff for Photovoltaic project: Rs.15/KWh for First 12 years
and thereafter Rs.5/ KWh
from 13th Year to 25th Year.
Above tariff shall apply for solar projects commissioned on or before
31st December 2011. In case, commissioning of Solar Power Project is
delayed beyond 31st December 2011, GUVNL shall pay the tariff as
determined by Hon’ble GERC for Solar Projects effective on the date of
commissioning of solar power project or above mentioned tariff,
whichever is lower.”
Under the Supplemental Agreement dated 10.05.2011, respondent No.1
agreed to oblige all the terms and conditions of the PPA including the
deadlines for completing the project. The agreement also recognized
that all other terms and conditions including tariff shall remain
unchanged (clause 2.4). Clause 2.3 of the Supplemental Agreement
specifically provided that since respondent No.1 had changed the
location after lapse of significant time, respondent No.1 shall pay the
liquidated damages even in case of non-availability of transmission
system for evacuation. Because of change of location, GETCO had to
replan the entire transmission line to be constructed. By executing the
Supplemental Agreement and also by paying liquidated damages,
respondent No.1 acknowledged that GETCO would require time to
establish the evacuation facilities with reference to the new location i.e.
District Kutchh.
40
STATUTORY POWER OF THE STATE ELECTRICITY REGULATORY
COMMISSION TO DETERMINE THE TARIFF
5. The State Electricity Regulatory Commission is a body corporate
constituted in terms of Section 82 of the Act, vested with certain
important functions and powers specified under Sections 86 and 94 of
the Act respectively. The body functions to achieve the purpose of the
Electricity Act, 2003 viz. ‘…taking measures conducive to development
of electricity industry, promoting competition therein, protecting interests
of consumers and supply of electricity to all areas, rationalization of
electricity tariff…’.
6. Determination of tariff is one of the important functions of the
Commission, apart from other important functions specified in the Act.
Under Section 61, the Appropriate Commission is obligated to specify
the terms and conditions for determination of tariff, and in doing so, it
shall be guided by the factors enumerated therein in clauses (a) to (i). In
terms of Section 62 of the Act, the Appropriate Commission is authorized
to determine the tariff for supply of electricity by generating company to
a distribution licensee. However, in case of shortage of supply of
electricity, the Appropriate Commission may fix only the minimum and
maximum ceiling of tariff for a period not exceeding one year. The
Appropriate Commission is also authorized to determine the tariff for
transmission, wheeling and retail sale of electricity. While doing so, the
Appropriate Commission cannot show undue preference to any
41
consumer of electricity. The Act also provides that the tariff or any part
thereof shall not be amended ordinarily more frequently than once in any
financial year.
7. Section 64 prescribes the procedure for issuing Tariff Order which
includes receiving the application for determination of tariff, its
publication, considering all suggestions and objections received from the
public and issuing a consequent Tariff Order or rejecting the application
if it is not in accordance with the provisions of the Act and the rules and
regulations made there-under or the provisions of any other law for the
time being force.
8. Respondent No.2, Gujarat Electricity Regulatory Commission
(hereinafter referred to as ‘the State Commission’) determined the
promotional tariff for solar power projects that may be based in the State
of Gujarat during the control period of two years from the date of the
order i.e. 29.01.2010 till 28.01.2012. The State Commission had
adopted the capital cost of Solar Photovoltaic Power Project at Rs.16.50
crores per MW and taking note of other aspects, the Commission
determined the tariff for Solar Power Project at Rs.12.54 per unit. The
Commission had consciously fixed the control period for its order dated
29.01.2010 as two years, considering that the gestation period for Solar
PV projects is six months and that for the Solar Thermal Projects is
18-24 months. Based on this Tariff Order dated 29.01.2010 for 1st
42
respondent's Solar PV Power Project, tariff rate was fixed at Rs.15 per
kWh for the initial twelve years starting from the commercial operation of
the project and Rs.5 per kWh from the thirteenth year to twenty fifth
year.
9. The Commission had published a Discussion Paper on 01.11.2011
for public view inviting comments from stakeholders and members of the
State Advisory Committee on the draft order for the next Tariff Order. All
the stakeholders had sent their views on the said draft. After considering
the said views of the stakeholders, in exercise of the powers conferred
under Sections 61(h), 62(1)(a) and 86(1)(e) of Electricity Act, 2003 and
considering National Tariff Policy and the power procurement from New
and Renewable Source of Energy Regulation 2008, Tariff Order 2012 for
solar power and others was issued. As per Tariff Order 2012, the rates
fixed for Solar PV projects are as under:-
Period 29 Jan.’12 to
31 Mar.’13
1 Apr.’13 to
31 Mar.’14
1 Apr.’14 to
31 Mar.’15
For megawatt-scale photovoltaic projects availing accelerated depreciation
Levelized Tariff for 25
years
Rs. 9.28 per kWh Rs. 8.63 per kWh Rs. 8.03 per kWh
For first 12 years Rs. 9.98 per kWh Rs. 9.13 per kWh Rs. 8.35 per kWh
For subsequent 13 years Rs. 7.00 per kWh Rs. 7.00 per kWh Rs. 7.00 per kWh
For kilowatt-scale photovoltaic projects availing accelerated depreciation
Levelized Tariff for 25
years
Rs. 11.14 per kWh Rs. 10.36 per
kWh
Rs. 9.63 per kWh
The above tariffs as per Tariff Order 2012 is to be in force from
29.01.2012 to 31.03.2015. The above said tariff is fixed by the
Commission, on the basis of well founded parameters, such as, capital
cost of the project, income tax, return on equity etc. Be it noted, in the
43
present case, the first respondent obtained the Chief Electrical Inspector
Certificate, which is the statutory mandate as per Section 162 of the Act
only on 13.03.2012, nearly two months after the expiry of the Tariff Order
(2010).
WHETHER THE STATE COMMISSION HAS INHERENT POWERS TO
EXTEND THE CONTROL PERIOD OF TARIFF ORDER DATED 29.01.2010
BEYOND THE CONTROL PERIOD IN RESPECT OF ONE PPA:
10. Section 181 of the Electricity Act, 2003 empowers the State
Commission to make regulations consistent with the Act and the Rules
to carry out the provisions of the said Act and, inter alia, provide for the
matters indicated thereon. In exercise of the powers conferred under
Section 181 of the Electricity Act, 2003 and under Section 127 of Gujarat
Electricity Industry (Re-organization and Regulation) Act, 2003 and all
powers enabling it in that behalf, the Gujarat Electricity Regulatory
Commission framed the Conduct of Business Regulation. Regulations
80 to 82 deal with inherent powers of the Commission, which read as
under:-
“Saving of inherent power of the Commission
80. Nothing in these Regulations shall be deemed to limit or otherwise affect
the inherent power of the Commission to make such orders as may be
necessary for ends of justice or to prevent the abuse of the process of the
Commission.
81. Nothing in these Regulations shall bar the Commission from adopting in
conformity with the provisions of the Acts, a procedure, which is at
variance with any of the provisions of these Regulations, if the
Commission, in view of the special circumstances of a matter or class of
matters and for reasons to be recorded in writing, deems it necessary or
expedient for dealing with such a matter or class of matters.
82. Nothing in these Regulations shall, expressly or impliedly, bar the
Commission to deal with any matter or exercise any power under the Acts
for which no Regulations have been framed, and the Commission may
44
deal with such matters, powers and functions in a manner it thinks fit.”
The State Commission and the Appellate Tribunal held that under the
Conduct of Business Regulations, 2004 and Section 86 of the Electricity
Act, 2003, the State Commission has inherent jurisdiction to extend the
control period of the Tariff Order 2010 and the tariff rate thereon beyond
28.01.2012. The Appellate Tribunal further held that the control period
of the Tariff Order was fixed by the State Commission itself and hence,
the State Commission has inherent powers to extend the control period
of the Tariff Order.
11. Main contention urged by the first respondent is that the question
of law arising - whether the State Commission has the inherent power or
authority to extend the control period as fixed by it in its generic Tariff
Order dated 29.01.2010 arose in the first round of litigation between the
parties and in the earlier round of litigation, the State Commission held
that the Commission had no power to extend the control period in a
specific case and the power was only to extend the control period
generally. It was contended that in the appeal filed by respondent No.1,
the Appellate Tribunal for Electricity vide its judgment dated 02.01.2013
set aside the judgment of the Commission holding that the Commission
has the inherent power to extend the control period in individual cases. It
was, therefore, urged by the first respondent that the question of law that
the Commission has inherent power to extend the control period has
45
thus become final between the parties and the same now cannot be
reopened.
12. In the earlier round of litigation, the State Commission had rejected
the request of respondent No.1 to extend the time of control period of
Tariff Order (2010) beyond 28.01.2012. On appeal, the Appellate
Tribunal (vide order dated 02.01.2013) had set aside the order of the
State Commission and remanded the matter to the State Commission to
decide the matter afresh. In the appeal preferred by GUVNL before the
Supreme Court, this Court dismissed the appeal by an order dated
01.04.2013. However, this Court made it clear that the State
Commission shall decide the whole issue without being influenced by
the observations made by the Appellate Tribunal for Electricity in
accordance with law.
13. Learned Senior Counsel for the appellant, Mr. V. Giri submitted
that the Supreme Court specifically directed the Commission to decide
the whole issue in accordance with law without being influenced by the
observations made by the Tribunal. As rightly contended by GUVNL, the
whole issue was, therefore, kept open before the State Commission.
Further, if the law was already settled by the Appellate Tribunal, there
was no requirement for this Court to direct the State Commission to
consider the 'issue in accordance with law'. In my view, there is no merit
in the contention that the question of law on the Commission's inherent
46
jurisdiction to extend the control period has been settled inter-se the
parties in the earlier round of litigation. Rival contentions of the parties
on this question have to be considered now.
14. Under Regulations 80 to 82, the inherent powers of the State
Commission are saved. Under Regulation 80, which is akin to Section
151 CPC, the power of the State Commission is only intended to
regulate the conduct of the Commission, that is, to regulate its own
procedure. That power cannot travel beyond its own procedure so as to
alter the terms and conditions of the PPA entered into between the
parties to grant substantive relief to the first respondent by extending the
control period of Tariff Order (2010) beyond 28.01.2012.
15. By a reading of Regulation 80, it is clear that inherent powers of
the State Commission are saved to make such orders as may be
necessary:- (i) to secure the ends of justice; and (ii) to prevent abuse of
process of the Commission. The inherent powers being very wide and
incapable of definition, its limits should be carefully guarded. Inherent
powers preserved under Regulation 80 (which is akin to Section 151 of
the Code) are with respect to the procedure to be followed by the
Commission in deciding the cause before it. The inherent powers under
Section 151 CPC are procedural in nature and cannot affect the
substantive right of the parties. The inherent powers are not substantive
provision that confers the right upon the party to get any substantive
47
relief. These inherent powers are not over substantive rights which a
litigant possesses.
16. The inherent power is not a provision of law to grant any
substantive relief. But it is only a procedural provision to make orders to
secure the ends of justice and to prevent abuse of process of the Court.
It cannot be used to create or recognize substantive rights of the parties.
In Vinod Seth v. Devinder Bajaj and Another (2010) 8 SCC 1, it was
held as under:-
“28. As the provisions of the Code are not exhaustive, Section 151 is
intended to apply where the Code does not cover any particular
procedural aspect, and interests of justice require the exercise of
power to cover a particular situation. Section 151 is not a provision of
law conferring power to grant any kind of substantive relief. It is a
procedural provision saving the inherent power of the court to make
such orders as may be necessary for the ends of justice and to prevent
abuse of the process of the court. It cannot be invoked with reference
to a matter which is covered by a specific provision in the Code. It
cannot be exercised in conflict with the general scheme and intent of
the Code. It cannot be used either to create or recognise rights, or to
create liabilities and obligations not contemplated by any law.
29. Considering the scope of Section 151, in Padam Sen v. State of
U.P. AIR 1961 SC 218 this Court observed: (AIR p. 219, paras 8-9)
“8. … The inherent powers of the court are in addition
to the powers specifically conferred on the court by the
Code. They are complementary to those powers and
therefore it must be held that the court is free to exercise
them for the purposes mentioned in Section 151 of the
Code when the exercise of those powers is not in any
way in conflict with what has been expressly provided in
the Code or against the intentions of the legislature. …
9. … The inherent powers saved by Section 151 of
the Code are with respect to the procedure to be followed
by the Court in deciding the cause before it. These
powers are not powers over the substantive rights which
any litigant possesses. Specific powers have to be
conferred on the courts for passing such orders which
would affect such rights of a party.”
30. In Manohar Lal Chopra v. Seth Hiralal AIR 1962 SC 527 this
Court held: (AIR p. 533, para 21)
“21. … that the inherent powers are not in any way
48
controlled by the provisions of the Code as has been
specifically stated in Section 151 itself. But those powers
are not to be exercised when their exercise may be in
conflict with what had been expressly provided in the
Code or against the intentions of the legislature.”
31. In Ram Chand and Sons Sugar Mills (P) Ltd. v. Kanhayalal
Bhargava AIR 1966 SC 1899 this Court reiterated that the inherent
power of the court is in addition to and complementary to the powers
expressly conferred under the Code but that power will not be
exercised if its exercise is inconsistent with, or comes into conflict with
any of the powers expressly or by necessary implication conferred by
the other provisions of the Code. Section 151 however is not intended
to create a new procedure or any new right or obligation.”
Same view was reiterated in Ram Prakash Agarwal and Another v.
Gopi Krishan (dead through LRs.) and Others (2013) 11 SCC 296.
17. In the case at hand, rights and obligations of the parties flow from
the terms and conditions of the Power Purchase Agreement (PPA). PPA
is a contract entered between the GUVNL and the first respondent with
clear understanding of the terms of the contract. A contract, being a
creation of both the parties, is to be interpreted by having due regard to
the actual terms settled between the parties. As per the terms and
conditions of the PPA, to have the benefit of the tariff rate at Rs.15/- per
unit for twelve years, the first respondent should commission the Solar
PV Power project before 31.12.2011. It is a complex fiscal decision
consciously taken by the parties. In the contract involving rights of
GUVNL and ultimately the rights of the consumers to whom the
electricity is supplied, Commission cannot invoke its inherent jurisdiction
to substantially alter the terms of the contract between the parties so as
to prejudice the interest of GUVNL and ultimately the consumers.
49
18. As pointed out earlier, the Appellate Tribunal has taken the view
that the control period of the Tariff Order was fixed by the State
Commission itself and hence the State Commission has inherent power
to extend the control period of the Tariff Order. It may be that the tariff
rate as per Tariff Order (2010) as determined by the Committee has
been incorporated in clause 5.2 of the PPA. But that does not in any
manner confer power upon the State Commission to exercise its
inherent jurisdiction to extend the control period to the advantage of the
project proponent-first respondent and to the disadvantage of GUVNL
who are governed by the terms and conditions of the contract. It is not
within the powers of the Commission to exercise its inherent jurisdiction
to extend the control period to the advantage of any party and to the
disadvantage of the other would amount to varying the terms of the
contract between the parties.
19. Mr. Giri, learned Senior Counsel for the appellant submitted in
terms of clause 2.4 of the Supplemental Agreement dated 10.05.2011
that all the terms and conditions including tariff fixed in PPA dated
30.04.2010 shall remain unchanged, it must be performed by
respondent No.1 in the same fashion as had been acknowledged by
him. Mr. Giri further submitted that in terms of clause 2.3 of the
Supplemental Agreement that respondent No. 1 has agreed that no
changes in respect of respondent No. 1's liability to pay liquidated
50
damages shall be entertained on account of delay in procuring
transmission system or otherwise and respondent No. 1 actually paid an
amount of Rs. 23.25 lacs to GUVNL on 14.07.2011 thereby indicating
that respondent No. 1 had acceded to the terms and conditions of the
PPA and that the project was not commissioned by its Scheduled
Commercial Operation Date other than the reasons mentioned in clause
5.3 of the agreement. It was further argued that if the commissioning of
the first respondent's project had been delayed due to the reasons
beyond its control, respondent No. 1 would have invoked force majeure
clause and by paying liquidated damages for the delay in
commissioning, respondent No. 1 did not consider any of the events
beyond its control. It was, therefore, urged that when respondent No. 1
had consciously accepted the terms of the PPA, respondent No. 1
cannot be allowed to revert back from the terms of the PPA and the
Commission cannot substitute its views by invoking inherent powers of
the State Commission. Since we are giving liberty to the first
respondent to approach the Commission, we are not expressing our
views on the above contention. The appellant is at liberty to raise all
these contentions before the Commission and this contention is left
open.
20. Yet another contention raised by the appellant is that the project of
respondent No.1 was commissioned/ready for commissioning only after
51
the cut-off date and the power project was ready for commissioning only
after 17.02.2012 and 13.03.2012 when the Certificate of Chief Electrical
Inspector was granted. It is, therefore, contended by the appellant that
the certificate of Chief Electrical Inspector is a statutory requirement and
without the approval of the Chief Electrical Inspector, respondent No.1
could not have energized the electrical installations. This contention is
also left open.
21. As pointed out earlier, the State Commission has determined tariff
for solar power producers vide order dated 29.01.2010 and tariff for next
control period vide order dated 27.01.2012. The order dated 29.01.2010
is applicable for projects commissioned from 29.01.2010 to 28.01.2012
and the order dated 27.01.2012 is applicable for projects commissioned
from 29.01.2012 to 31.03.2015. As pointed out earlier, the tariff is
determined by the State Commission under Section 62. The choice of
entering into contract/PPA based on such tariff is with the Power
Producer and the Distribution Licensee. As rightly contended by the
learned Senior Counsel for the appellant, the State Commission in
exercise of its power under Section 62 of the Act, may conceivably
re-determine the tariff, it cannot force either the generating company or
the licensee to enter into a contract based on such tariff nor can it vary
the terms of the contract invoking inherent jurisdiction.
SANCTITY OF POWER PURCHASE AGREEMENT
52
22. It is contended that Section 86(1)(b) of the Act empowers the State
Commission to regulate the price of sale and purchase of electricity
between the generating companies and distribution licensees and the
terms and conditions of the PPA cannot be set to be inviolable. Merely
because in PPA, tariff rate as per Tariff Order (2010) is incorporated that
does not empower the Commission to vary the terms of the contract to
the disadvantage of the consumers whose interest the Commission is
bound to safeguard. Sanctity of PPA entered into between the parties by
mutual consent cannot be allowed to be breached by a decision of the
State Commission to extend the earlier control period beyond its expiry
date, to the advantage of the generating company-respondent No. 1 and
disadvantage of the appellant. Terms of PPA are binding on both the
parties equally.
23. In Gujarat Urja Vikas Nigam Limited v. EMCO Limited and
Another (2016) 11 SCC 182, facts were similar and the question of law
raised was whether by passing the terms and conditions of PPA,
respondent can assail the sanctity of PPA. This Court held that Power
Producer cannot go against the terms of the PPA and that as per the
terms of the PPA, in case, the first respondent is not able to commence
the generation of electricity within the 'control period' the first respondent
will be entitled only for lower of the tariffs.
24. The first respondent placed reliance upon Gujarat Urja Vikas
53
Nigam Limited v. Tarini Infrastructure Limited and Others (2016) 8
SCC 743. In the said case, this Court was faced with the substantial
question of law viz. whether the tariff fixed under a PPA (Power
Purchase Agreement) is sacrosanct and inviolable and beyond review
and correction by the State Electricity Regulatory Commission. In that
case, respondent No.1 thereon-power producer had entered into a PPA
with the appellant therein-distribution licensee for sale of electricity from
the generating stations to the extent of the contracted quantity for a
period of 35 years at Rs. 3.29 per KWH subject to escalation of 3% per
annum till date of commercial operation. However, later the power
producer found that the place from where the power was to be
evacuated was at a distance of 23 kms. as opposed to a distance of 4
kms, envisaged in the concession agreement entered into between the
Respondent-power producer and Narmada Water Resources
Department (Respondent No.2 therein). On this ground respondent had
sought revision of tariff by State Electricity Commission. This Court held
that Section 86(1)(b) of Act empowers State Commission to regulate
price of sale and purchase of electricity between generating companies
and distribution licensees through agreements for power, produced for
distribution and supply and that the state commission has power to
re-determine the tariff rate when the tariff rate mentioned in the PPA
between generating company and distribution licensee was fixed by
54
State Regulatory Commission in exercise of its statutory powers.
Relevant portion of the paras (17) and (18) of the judgment, read as
under:-
“17. As already noticed, Section 86(1)(b) of the Act empowers the
State Commission to regulate the price of sale and purchase of
electricity between the generating companies and distribution
licensees through agreements for power produced for distribution and
supply. As held by this Court in V.S. Rice & Oil Mills v. State of A.P. AIR
1964 SC 1781, K. Ramanathan v. State of T.N. (1985) 2 SCC 116 and
D.K. Trivedi & Sons v. State of Gujarat 1986 Supp. SCC 20 the power
of regulation is indeed of wide import...
18. All the above would suggest that in view of Section 86(1)(b) the
Court must lean in favour of flexibility and not read inviolability in terms
of PPA insofar as the tariff stipulated therein as approved by the
Commission is concerned. It would be a sound principle of
interpretation to confer such a power if public interest dictated by the
surrounding events and circumstances require a review of the tariff.
The facts of the present case, as elaborately noted at the threshold of
the present opinion, would suggest that the Court must lean in favour
of such a view also having due regard to the provisions of Sections 14
and 21 of the General Clauses Act, 1898...."
In the facts and circumstances of that case and that the tariff rate of
Rs.3.29/- per KWH was subject to escalation and subject to periodic
review. Evacuation was changed from a distance of 4 kms. to 23 kms.
from its switch yard. On account of the same, respondent No.1 therein
had incurred an additional cost of about Rs.10 crores which was not
envisaged in the Concession Agreement. In such facts and changed
circumstances, this Court thought it apposite to take a lenient view and
allow the State Commission to re-determine the tariff rate.
25. In exercise of its statutory power, under Section 62 of the
Electricity Act, the Commission has fixed the tariff rate. The word ‘tariff’
has not been defined in the Act. Tariff means a schedule of
55
standard/prices or charges provided to the category or categories for
procurement by licensee from generating company, wholesale or bulk or
retail/various categories of consumers. After taking into consideration
the factors in Section 61(1)(a) to (i), the State Commission determined
the tariff rate for various categories including Solar Power PV project
and the same is applied uniformly throughout the State. When the said
tariff rate as determined by the Tariff Order (2010) is incorporated in the
PPA between the parties, it is a matter of contract between the parties.
In my view, respondent No.1 is bound by the terms and conditions of
PPA entered into between respondent No.1 and the appellant by mutual
consent and that the State Commission was not right in exercising its
inherent jurisdiction by extending the first control period beyond its due
date and thereby substituting its view in the PPA, which is essentially a
matter of contract between the parties.
26. Section 94 of the Electricity Act deals with the powers of the
Commission as far as the conduct of the proceedings. Under Section
94(1)(f), the Commission has the power to review its own decision. The
power of review under Section 94 (1)(f) is akin to that under Order XLVII
Rule 1 CPC. At the instance of affected parties or the generating
companies or the Commission on its own motion may review its own
decision only if such order was made under: (i) mistake or error
of fact apparent on the face of the record; (ii) discovery of new
56
and important matter which was not within the applicant’s knowledge at
the time when the order was made; or (iii) any other sufficient reason
to meet the ends of justice. Contention of the appellant is that grounds
were made out by the first respondent for review of first Tariff Order
which was applicable till 28.01.2012. In support of this contention,
reliance was placed upon S. Nagaraj and Others v. State of
Karnataka and Another 1993 Supp. (4) SCC 595, wherein this Court
has aptly described the object of ‘power to review’ and the
circumstances under which the court shall exercise the power of review.
This contention is also left open.
27. Learned Senior Counsel Mr. Jayant Bhushan for the respondent
submitted that if the tariff as per order dated 27.01.2012 is applied,
respondent No.1 would be forced to shut down due to non-recovery of
costs. Drawing our attention to the capital cost of Solor PV projects, the
learned Senior Counsel Mr. Giri submitted that such contention is
contrary to the own admission of the first respondent. Contending that
India's solor power installations have grown and cost tag of solor power
has been reduced remarkably, learned Senior Counsel Mr. Giri
submitted that even on equity, the first respondent cannot claim tariff
rate as per Tariff Order (2010). It was contended that under the Tariff
Order dated 29.01.2010 the capital cost was finalized at Rs.16.50 crores
per MW and tariff rate was fixed at Rs.12.54 per kWh and for power
57
project of 20 MW of respondent No.1, the total cost would be around
Rs.330 crores. Drawing our attention to the Tariff Order dated
27.01.2012, it was submitted that as per Tariff Order (2012), the capital
cost was finalized at Rs.10 crores per MW and for a 20 MW power
project, this would amount to a total cost of about Rs.200 crores. It was
urged that the cost of solar PV projects which was in range in 2011
between Rs.10.00 crores and Rs.11.00 crores per MW is expected to
further come down in future. In the counter affidavit filed by respondent
No.1 before this Court, it is stated that the first respondent has invested
about Rs.200 crores in the project. The learned Senior Counsel for the
appellant Mr. Giri contended that even as per the admission of
respondent No.1, it has incurred total cost of Rs.200 crores i.e. Rs.10.00
crores per MW which is relatable to the Tariff Order dated 27.01.2012
and not the previous Tariff Order dated 29.01.2010 and having incurred
capital expenditure of Rs.200 crores, the first respondent cannot claim
higher tariff rate as per the Tariff Order 2010 based on capital cost of
Rs.330 crores and if the contention of respondent No.1 is to be
accepted, it would only enable respondent No.1 to make undue gains at
the cost of the consumers in the State. It was urged that extension of
control period of the Tariff Order (2010) qua the first respondent would
cause huge loss to GUVNL and loss to GUVNL means that this loss is to
be passed on to the consumers in the form of increased tariff and
58
therefore it was contended that the Commission ought to have taken
note of all the stakeholders namely the appellant and the consumers
and not merely the claim of respondent No. 1. Since liberty is granted to
the first respondent to approach the Commission, we are not inclined to
go into the merits of this contention urged by GUVNL. Liberty is granted
to GUVNL to urge the above contentions before the Commission and the
Commission to consider the same on its own merits.
28. Conclusions:- (i) When the 1st respondent commissioned its
project beyond 13.03.2012, Commission cannot exercise its inherent
jurisdiction and vary the terms to extend the control period of Tariff Order
dated 29.01.2010 in so far as the 1st respondent of the contract-Power
Purchase Agreement (PPA) between GUVNL and the first respondent;
(ii) the earlier order passed by this Court in C.A. No.2315 of 2013 (dated
01.04.2013) has not conclusively decided the substantial question of law
inter-se the parties−that is exercise of inherent jurisdiction by the
Commission to vary the terms of PPA by extending the control period
beyond the stipulated time. On the above reasonings, I agree with the
conclusion of my esteemed brother Justice Kurian Joseph.
..............................J.
[R. BANUMATHI]
New Delhi;
October 25, 2017
59
ITEM NO.1501 COURT NO.5 SECTION XVII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 6399/2016
GUJARAT URJA VIKAS NIGAM LTD Appellant(s)
VERSUS
SOLAR SEMICONDUCTOR POWER COMPANY (INDIA ) PVT LTD &
ORS.Respondent(s)
Date : 25-10-2017 This appeal was called on for Judgment today.
For Appellant(s) Ms. Hemantika Wahi, AOR
Ms. Puja Singh, Adv.
Ms. Jesal, Adv.
Ms. Shubham Arya, Adv.
For Respondent(s) Mr. G. Ramakrishna Prasad, AOR
Mr. Suyodhan Byrapaneni, Adv.
Mohd. Wasay Khan, Adv.
Ms. Filza Moonis, Adv.
Hon'ble Mr. Justice Kurian Joseph pronounced the reportable
Judgment of the Bench comprising His Lordship and Hon'ble Mrs.
Justice R. Banumathi.
While agreeing with the conclusions in the Judgment pronounced
by Hon'ble Sh. Kurian Joseph, J., Hon'ble Mrs. Justice R. Banumathi
also pronounced the reportable Judgment with concurrent opinion.
The concluding part of the Judgment pronounced by Hon'ble Mr.
Justice Kurian Joseph is as follows :-
“Extension of control period has been
specifically held to be outside the purview of
the power of the Commission as per EMCO (supra).
This appeal is hence, allowed. The impugned
orders are set aside. However, we make it clear
that this judgment or orders of the Appellate
Tribunal or Commission shall not stand in the
60
way of the Respondent no.1 taking recourse to
the liberty available to them for re-determining
of tariff if otherwise permissible under law and
in which case it will be open to the parties to
take all available contentions before the
Commission.”
Pending Interlocutory Applications, if any, stand disposed of.
(JAYANT KUMAR ARORA) (RENU DIWAN)
COURT MASTER ASSISTANT REGISTRAR
(Two signed reportable Judgments are placed on the file)
61
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6399 OF 2016
GUJARAT URJA VIKAS NIGAM LIMITED ... APPELLANT (S)
VERSUS
SOLAR SEMICONDUCTOR POWER
COMPANY (INDIA) PRIVATE LIMITED
AND OTHERS ... RESPONDENT (S)
J U D G M E N T
KURIAN, J.
1. The principal question which arises in this case is whether
the Gujarat Electricity Regulatory Commission (the
Commission), in exercise of its inherent powers, could have
extended the control period for the 1st respondent Company
(Respondent no. 1). The control period is the period during
which a particular tariff order operates.
2. In order to address the issue, certain provisions of the
Electricity Act, 2003 (hereinafter referred to as “the Act”)
are required to be noticed. Part VII of the Act deals with
tariff. Sections 61, 62 and 64 of the Act are of particular
relevance. :-
“61. Tariff regulations.—The Appropriate
Commission shall, subject to the provisions of this
1
REPORTABLE
Act, specify the terms and conditions for the
determination of tariff, and in doing so, shall be
guided by the following, namely:-
(a) the principles and methodologies
specified by the Central Commission for
determination of the tariff applicable to
generating companies and transmission
licensees;
(b) the generation, transmission, distribution
and supply of electricity are conducted on
commercial principles;
(c) the factors which would encourage
competition, efficiency, economical use of
the resources, good performance and
optimum investments;
(d) safeguarding of consumers’ interest and
at the same time, recovery of the cost of
electricity in a reasonable manner;
(e) the principles rewarding efficiency in
performance;
(f) multi-year tariff principles;
(g) that the tariff progressively reflects the
cost of supply of electricity and also
reduces cross-subsidies in the manner
specified by the Appropriate Commission;
(h) the promotion of co-generation and
generation of electricity from renewable
sources of energy;
(i) the National Electricity Policy and tariff
policy:
Provided that the terms and conditions for
determination of tariff under the Electricity
(Supply) Act, 1948 (54 of 1948), the Electricity
Regulatory Commissions Act, 1998 (14 of 1998)
and the enactments specified in the Schedule
2
as they stood immediately before the
appointed date, shall continue to apply for a
period of one year or until the terms and
conditions for tariff are specified under this
section, whichever is earlier.
62. Determination of tariff.-(1) The Appropriate
Commission shall determine the tariff in accordance
with the provisions of this Act for –
(a) supply of electricity by a generating company to a
distribution licensee:
Provided that the Appropriate Commission
may, in case of shortage of supply of
electricity, fix the minimum and maximum
ceiling of tariff for sale or purchase of
electricity in pursuance of an agreement,
entered into between a generating company
and a licensee or between licensees, for a
period not exceeding one year to ensure
reasonable prices of electricity;
(b) transmission of electricity ;
(c) wheeling of electricity;
(d) retail sale of electricity:
Provided that in case of distribution of
electricity in the same area by two or more
distribution licensees, the Appropriate
Commission may, for promoting competition
among distribution licensees, fix only
maximum ceiling of tariff for retail sale of
electricity.
(2) The Appropriate Commission may require a
licensee or a generating company to furnish separate
details, as may be specified in respect of generation,
transmission and distribution for determination of
tariff.
(3) The Appropriate Commission shall not, while
determining the tariff under this Act, show undue
3
preference to any consumer of electricity but may
differentiate according to the consumer's load factor,
power factor, voltage, total consumption of electricity
during any specified period or the time at which the
supply is required or the geographical position of any
area, the nature of supply and the purpose for which
the supply is required.
(4) No tariff or part of any tariff may ordinarily be
amended, more frequently than once in any financial
year, except in respect of any changes expressly
permitted under the terms of any fuel surcharge
formula as may be specified.
(5) The Commission may require a licensee or a
generating company to comply with such procedure
as may be specified for calculating the expected
revenues from the tariff and charges which he or it is
permitted to recover.
(6) If any licensee or a generating company recovers
a price or charge exceeding the tariff determined
under this section, the excess amount shall be
recoverable by the person who has paid such price or
charge along with interest equivalent to the bank rate
without prejudice to any other liability incurred by the
licensee.
xxx xxx xxx
64. Procedure for tariff order.—(1) An application
for determination of tariff under section 62 shall be
made by a generating company or licensee in such
manner and accompanied by such fee, as may be
determined by regulations.
(2) Every applicant shall publish the application, in
such abridged form and manner, as may be specified
by the Appropriate Commission.
(3) The Appropriate Commission shall, within one
hundred and twenty days from receipt of an
application under sub-section (1) and after considering
4
all suggestions and objections received from the
public,-
(a) issue a tariff order accepting the
application with such modifications or such
conditions as may be specified in that order;
(b) reject the application for reasons to be
recorded in writing if such application is not in
accordance with the provisions of this Act and
the rules and regulations made thereunder or
the provisions of any other law for the time
being in force:
Provided that an applicant shall be given a
reasonable opportunity of being heard before rejecting
his application.
(4) The Appropriate Commission shall, within seven
days of making the order, send a copy of the order to
the Appropriate Government, the Authority, and the
concerned licensees and to the person concerned.
(5) Notwithstanding anything contained in Part X,
the tariff for any inter-State supply, transmission or
wheeling of electricity, as the case may be, involving
the territories of two States may, upon application
made to it by the parties intending to undertake such
supply, transmission or wheeling, be determined
under this section by the State Commission having
jurisdiction in respect of the licensee who intends to
distribute electricity and make payment therefor.
(6) A tariff order shall, unless amended or revoked,
continue to be in force for such period as may be
specified in the tariff order.”
(Emphasis supplied)
3. A State Commission is constituted under Section 82 of the
Act. The Section to the extent relevant reads as follows:
5
“82. Constitution of State Commission.-(1)
Every State Government shall, within six months
from the appointed date, by notification, constitute
for the purposes of this Act, a Commission for the
State to be known as the (name of the State)
Electricity Regulatory Commission:”
4. Section 86 of the Act provides for the functions of the State
Commission. To the extent relevant, the Section reads as
follows:
“86. Functions of State Commission.-(1)
The State Commission shall discharge the following
functions, namely:-
(a) determine the tariff for generation, supply,
transmission and wheeling of electricity,
wholesale, bulk or retail, as the case may be,
within the State:
Provided that where open access has been
permitted to a category of consumers under
section 42, the State Commission shall
determine only the wheeling charges and
surcharge thereon, if any, for the said category
of consumers;
(b) regulate electricity purchase and procurement
process of distribution licensees including the
price at which electricity shall be procured from
the generating companies or licensees or from
other sources through agreements for purchase
of power for distribution and supply within the
State;
(c) facilitate intra-State transmission and wheeling
of electricity;
(d) issue licences to persons seeking to act as
transmission licensees, distribution licensees
and electricity traders with respect to their
6
operations within the State;
(e) promote cogeneration and generation of
electricity from renewable sources of energy by
providing suitable measures for connectivity
with the grid and sale of electricity to any
person, and also specify, for purchase of
electricity from such sources, a percentage of
the total consumption of electricity in the area
of a distribution licensee;
(f) adjudicate upon the disputes between the
licensees and generating companies and to
refer any dispute for arbitration;
(g) levy fee for the purposes of this Act;
(h) specify State Grid Code consistent with the Grid
Code specified under clause (h) of sub-section
(1) of section 79;
(i) specify or enforce standards with respect to
quality, continuity and reliability of service by
licensees;
(j) fix the trading margin in the intra-State trading
of electricity, if considered, necessary;
(k) discharge such other functions as may be
assigned to it under this Act.”
(Emphasis Supplied)
5. Section 92 of the Act provides for the proceedings of the
Appropriate Commission.
“92. Proceedings of Appropriate Commission.-
(1) The Appropriate Commission shall meet at the
head office or any other place at such time as the
Chairperson may direct, and shall observe such rules
of procedure in regard to the transaction of business
at its meetings (including the quorum at its
meetings) as it may specify.”
7
(Emphasis Supplied)
6. Section 94 deals with the powers of the Appropriate
Commission and reads as follows:
“94. Powers of Appropriate Commission.- (1)
The Appropriate Commission shall, for the
purposes of any inquiry or proceedings under this
Act, have the same powers as are vested in a civil
court under the Code of Civil Procedure, 1908 (5 of
1908) in respect of the following matters, namely:-
(a) summoning and enforcing the attendance of
any person and examining him on oath;
(b) discovery and production of any document or
other material object producible as evidence;
(c) receiving evidence on affidavits;
(d) requisitioning of any public record;
(e) issuing commission for the examination of
witnesses;
(f) reviewing its decisions, directions and orders;
(g) any other matter which may be prescribed.
(2) The Appropriate Commission shall have the
powers to pass such interim order in any
proceeding, hearing or matter before the
Appropriate Commission, as that Commission may
consider appropriate.
(3) The Appropriate Commission may authorise
any person, as it deems fit, to represent the
interest of the consumers in the proceedings
before it.”
(Emphasis
8
supplied)
7. Section 95 states that the proceedings before the
Appropriate Commission shall be deemed to be judicial
proceedings and the Appropriate Commission shall be
deemed to be a civil court. To quote :-
“95. Proceedings before Commission.- All
proceedings before the Appropriate Commission
shall be deemed to be judicial proceedings within
the meaning of Sections 193 and 228 of the Indian
Penal Code (45 of 1860) and Appropriate
Commission shall be deemed to be a civil court for
the purposes of Sections 345 and 346 of the Code of
Criminal Procedure, 1973 (2 of 1974).”
8. Section 181 of the Act provides for the power of the State
Commission to make regulations. To the extent relevant, the
Section reads as follows:
“181. Powers of State Commissions to make
regulations.-(1) The State Commissions may, by
notification, make regulations consistent with this Act
and the rules generally to carry out the provisions of
this Act.
(2) In particular and without prejudice to the
generality of the power contained in subsection (1),
such regulations may provide for all or any of the
following matters, namely:-
xxx xxx xxx
(zl) rules of procedure for transaction of
business under sub-section (1) of section
92;”
9
xxx xxx xxx
(zp) any other matter which is to be, or may be,
specified.”
(Emphasis Supplied)
9. As per Notification No. 2 of 2004 published on 25.08.2004,
the Gujarat Electricity Regulatory Commission has notified
the Gujarat Electricity Regulatory Commission (Conduct of
Business) Regulations. Regulations 80 to 82 provide for
saving of inherent power of the Commission, which read as
follows:
“80. Nothing in these Regulations shall be deemed to
limit or otherwise affect the inherent power of
the Commission to make such orders as may be
necessary for ends of justice or to prevent the
abuse of the process of the Commission.
81. Nothing in these Regulations shall bar the
Commission from adopting in conformity with
the provisions of the Acts, a procedure, which is
at variance with any of the provisions of these
Regulations, if the Commission, in view of the
special circumstances of a matter or class of
matters and for reasons to be recorded in
writing, deems it necessary or expedient for
dealing with such a matter or class of matters.
82. Nothing in these Regulations shall, expressly or
impliedly, bar the Commission to deal with any
matter or exercise any power under the Acts for
which no Regulations have been framed, and
the Commission may deal with such matters,
powers and functions in a manner it thinks fit.”
(Emphasis Supplied)
10. The Regulation 85 of the Conduct of Business Regulations
10
reads as follows:
“85. Subject to the provisions of the Acts, the time
prescribed by these Regulations or by order of
the Commission for doing any act may be
extended (whether it has already expired or not)
or abridged for sufficient reason by order of the
Commission.”
(Emphasis Supplied)
11. In the context of this case, certain provisions of the Power
Purchase Agreement (hereinafter referred to as “the PPA”)
dated 30.4.2010 between the parties are also relevant.
Article 5 of the PPA deals with “Rates and Charges”. Article
5.2 reads as follows :-
“5.2.GUVNL shall pay the fixed tariff mentioned
hereunder for the period of 25 years for all the
Scheduled Energy/Energy injected as certified in the
monthly SEA by SLDC. The tariff is determined by
Hon’ble Commission vide Tariff Order for Solar
based power project dated 29.1.2010 ( sic).
Tariff for Photovoltaic project: Rs.15/KWh for First
12
Years and thereafter
Rs. 5/KWh from 13th Year to 25th Years
Above tariff shall apply for solar projects
commissioned on or before 31st
December 2011. In
case, commissioning of Solar Power Project is
delayed beyond 31st
December 2011, GUVNL shall
pay the tariff as determined by Hon’ble GERC for
Solar Projects effective on the date of
commissioning of solar power project or above
mentioned tariff, which ever is lower.”
(Emphasis Supplied)
11
The tariff order dated 29.01.2010 is in exercise of powers
under Sections 61(h), 62(1)(a), 86(1)(e) and all other powers
enabling it in this behalf.
12. Article 8 of the PPA pertains to force majeure events. It
provides for events which constitute force majeure:
“ARTICLE 8
FORCE MAJEURE
8.1 Force Majeure Events
(a) Neither Party shall be responsible or liable for or
deemed in breach hereof because of any delay or
failure in the performance of its obligations
hereunder (except for obligations to pay money due
prior to occurrence of Force Majeure events under
this Agreement) or failure to meet milestone dates
due to any event or circumstance (a “Force Majeure
Event”) beyond the reasonable control of the Party
experiencing such delay or failure, including the
occurrence of any the following:
(i) acts of God;
(ii) typhoons, floods, lightening, cyclone, hurricane,
drought, famine, epidemic, plague or other natural
calamities;
(iii) acts of war (whether declared or undeclared),
invasion or civil unrest;
(iv) any requirement, actions or omission to act
pursuant to any judgment or order of any court or
judicial authority in India (provided such requirement,
or action or omission to act is not due to the breach
by the Power Producer or GUVNL of any Law or any of
their respective obligations under this Agreement);
(v) inability despite complying with all legal
requirements to obtain, renew or maintain required
licenses or Legal Approvals;
(vi) earthquakes, explosions, accidents, landslides;
fire;
(vii) expropriation and/or compulsory acquisition of
the Project in whole or in part by Government
12
Instrumentality;
(viii) chemical or radioactive contamination or
ionising radiation; or
(ix) damage to or breakdown of transmission
facilities of GETCO/ DISCOMs;
(x) Exceptionally adverse weather conditions which
are in excess of the statistical measure of the last
hundred (100) years.
xxx xxx xxx
8.2 Available Relief for a Force Majeure Event
No party shall be liable for (sic) breach of its
obligations pursuant to this Agreement to the extent
that the performance of its obligations was
prevented, hindered or delayed due to a Force
Majeure event. For avoidance of doubt, neither
Party’s obligation to make payments of money due
and payable prior to occurrence of Force Majeure
events under this Agreement shall be suspended or
excused due to the occurrence of a Force Majeure
Event in respect of such Party.”
13. There were also certain communications between the
parties which are required to be noted. On 19.04.2011 the
first respondent communicated its intention to change the
location. The relevant portion of the letter reads as follows :-
“….. Originally the PPA was signed with an intention
to develop the 20 MW Solar PV Project at Village
Ajawada, Taluka- Tharad, District Banaskantha,
Gujarat. But due to some unforeseen events we were
unable to procure the Project land at Ajawada village
and identified THREE other Locations to procure the
Land and we had informed the some to your office
vide our monthly Progress Reports.
Now, we are happy to inform you that we have
already acquired 60 acres of Land required for the
commissioning of first two phases of 5 MW at
Shivlakha Village, Tal-Bhachau, Dist.Kutch and
enclosing herewith the details and copies of the
13
documents of the Land procurement. We have (sic)
also made advance Payments for another 105 acres
in the same Location and will be completing the Land
Registration before the end of this month.
xxx xxx xxx
d) We have already informed the details of
Land procurement to GETCO for the necessary survey
and commencement of power evacuation process.
Hence we kindly request you to amend the PPA with
respect to the change of Location. We hereby submit
the Copies of the documents as proof of Land
Procurement…”
14. A Supplemental Power Purchase Agreement (hereinafter
referred to as “the SPPA”) was entered into by the parties on
10.05.2011. Clauses 2.3 and 2.4 of the SPPA read as
follows :-
“2.3. Since M/s. SSCPCIPL have changed the
location of the Solar Power Project after lapse of
significant time, non-availability of Transmission
system shall not be considered as a ground for
non-levy of Liquidated Damages. M/s. SSCPCIPL shall
pay Liquidated Damages even in case of
non-availability of transmission system for
evacuation of power by Schedule Commercial
Operation Date.
2.4. All other terms and conditions including tariff of
Power Purchase Agreement dated 30th
April 2010
between GUVNL and M/s. SSCPCIPL shall remain
unchanged shall apply mutatis mutandis.”
(Emphasis Supplied)
15. It is also necessary to understand how this matter reached
this Court. Close to the scheduled commercial operation
date, Respondent No. 1 requested the Commission for an
14
extension of the control period. The petition to the relevant
extent reads as follows.
“12. While the Petitioner is making best efforts to
overcome the delays as much as possible, it would
not be feasible to complete the project within the
time stipulated. The Petitioner has done its due
diligence and with its commitment to expedite
various activities, the Petitioner is optimistic that the
project is likely to be completed by the end of April
2012. The Petitioner has also issued a representation
to the Department of Energy and Petrochemicals on
November 30, 2011 and to GUVNL pointing out the
various above mentioned reasons for delay. The
Petitioner in the said letters has sought extension of
time till force majeure issues are resolved…
PRAYER
13. In view of the above, it is therefore most
respectfully submitted that the Hon’ble Commission
may graciously be pleased to:
(i) Extend the ‘Control Period’ till April 30, 2012 as defined
by this Hon’ble Commission in its Order dated 29th
January, 2010;
(ii) Pass such other and further orders, as this Hon’ble
Commission deems fit and proper in the facts and
circumstances of the case.”
(Emphasis Supplied)
16. The Commission by order dated 27.01.2012 refused to
extend the control period. To quote :-
“14.3 Article 5.2 of the PPA provides, inter alia, that
“….Above tariff shall apply for power projects
commissioned on or before 31 December 2011. In
case, commissioning of Solar Power Projects is
delayed beyond 31 December 2011, GUVNL shall pay
the tariff as determined by Hon’ble GERC for Solar
Projects effective on the day of commissioning of
Solar Power Projects or above mentioned tariff,
whichever is lower”. This means that if the project is
15
not commissioned within the stipulated period the
existing tariff or the new tariff whichever is lower will
apply. The petitioners have consciously agreed to this
provision by signing the PPA. The Commission has
already circulated on 1 November 2011 a discussion
paper for determining tariff for Solar Projects for the
second control period which is to start from 29
January 2012. The tariff suggested is lower than the
current tariff. The petitioners have sought extension
of the control period in order to prevent the
application of a lower tariff in the event of not being
able to commission the projects within the stipulated
period. The reasons given by them are project
specific. The situations of various projects are widely
different. In some cases, the projects are at an
advanced stage. In some other cases the projects are
at an initial stage, and in some cases, even the order
for equipment is yet to be issued. Some of them have
asked for one month and some others have asked as
long as six months. The petitioners have not been
able to show that there has been a problem which is
industry-wide and spread over the whole State or a
major part of the State, necessitating an extension of
the control period. On the other hand, a number of
projects have been commissioned or are likely to be
commissioned within the control period indicating
that the issues raised by the petitioners are not
industry- wide. If some developers could not
complete the projects, it is not adequate justification
why the tariff order should be modified for extending
the control period to give relief to some project
developers. This becomes more anomalous
especially when a discussion paper has already been
issued, and public hearing has already been
completed for issue of the tariff order for the next
control period. Further, the issues which have been
raised can, if they so desire be addressed by the
parties concerned only within the framework and the
terms and conditions of Power Purchase Agreement.
If they invoke Force Majeure conditions, it is for them
to establish the existence of such conditions,
following the procedure prescribed in the PPA. There
cannot be a general order for addressing such issues
which are specific to some individual project
16
developers, especially when several others have
successfully implemented their projects.
16. In view of the above analysis, we decide that the
petitioners have not succeeded in making out a case
for invoking the inherent power of the Commission
to extend the control period determined by the
Commission in its Order No. 2 of 2010 dated 29
January 2010. Though they have put forward a
number of reasons for the relief they have sought,
none of the petitioners including the Association of
Solar Power Developers, which has filed a separate
petition, has indicated any ground whatsoever which
is of universal application either in the State of
Gujarat or a major part thereof by which all the
projects are affected by such factors. Several
projects have been or are likely to be commissioned
during the control period itself. The reasons
indicated by the petitioners appear to be in the
manner of indirectly invoking the Force Majeure
clause specified in the PPA, which cannot be
addressed by a general order. Hence, all the
petitions are dismissed.”
(Emphasis Supplied)
17. By its order dated 22.02.2012, the Commission, finding that
the reasons put forward by Respondent No. 1 herein are
similar to those dealt with by the Commission in its order
dated 27.01.2012, dismissed the petition.
18. In appeal, the Appellate Tribunal for Electricity (hereinafter
referred to as “the Appellate Tribunal”) in the order dated
02.01.2013 dealt with this issue at paragraphs-24 to 27.
“24. The reasoning of the Commission that extending
the control period would mean amendment of the
Tariff Order is not at all possible to concede to. The
Commission, it will be noticed from the impugned
17
order, was conscious that individual petitions referred
to individual project specific problems and issues and
some prayed for one month extension, while some
prayed for six months extension. The Commission
came to the conclusion that unless there would
happen a state-wide and large scale ramifications
then only there could be a case for issue of a general
order to extend the control period. Yet, the
Commission said at the same breath that it has
inherent power to extend the control period and it
was made available when GETCO was at default. The
basic premise that unless there is wide and large
scale ramifications across the State in respect of the
renewable sources of energy there cannot be
extension of control period by general order is, to say
the least, not a legal approach and such an approach
would defeat the very spirit of the law. The GUVNL
and the Govt. of Gujarat accepted the proposition
that inherent power can be exercised to a genuine
problem. In paragraph 10.7 of the order impugned,
the Commission has observed “Even if we do not
take into cognizance the above cited decisions of the
TNERC, the provisions of Regulation 80 of the
Commission’s Regulations, Section 151 of the Civil
Procedure Code and related decisions of the Hon'ble
Supreme Court make it abundantly clear that the
Commission has inherent power to issue any order,
to meet the end of justice, if it is not inconsistent
with the relevant provisions of the Regulations/Act.
This power is not limited to only procedural matters.”
This observation makes it clear that Commission was
dealing with the petitions by virtue of the power
expressly given to the Commission by their own
Regulations to exercise inherent power. The petitions
of the two appellants were not the ones under
section 86 (1) (b) of the Electricity Act, 2003. Now, it
is not logical to argue that unless there is state-wide
large scale ramifications inherent power cannot be
exercised. The relevant Regulation of the
Commission is exactly identical in language and spirit
with section 151 of the CPC. This provision of
inherent power does not by itself confer any power
but only indicates that there is a power to make an
appropriate order as may be necessary to achieve
18
justice and prevent the abuse of the process of law. It
has been held by the Hon'ble Supreme Court in Raj
Bahadur Ras Raja Vs. Seth Hiralal, AIR 1962 SC 527,
that the inherent power is not a power given to the
Court, it inheres in the Court itself so that by virtue of
exercise of such power, justice is rendered. In Ramji
Dayawala Vs. Invest Import (1981) 1 SCC 80, the
Hon'ble Supreme Court held that the discretion
vested in the Court is dependent on various
circumstances which the Court has to consider and
there is no limitation for application of the inherent
power. Therefore, each case has to be decided on its
own merit and simply because of the fact that some
of the grounds were common to all the petitions the
treatment of the alleged common grounds has to be
common. While saying so, we are not oblivious of the
legal proposition that inherent power cannot be
exercised when prohibited or excluded by the statute
itself and when there are specific provisions to
address the remedy. That is to say, inherent power
can be exercised only for the ends of justice. The
very exercise of inherent power or non-exercise of
inherent power depends upon consideration of
specific facts.
25. The argument of the GUVNL and for that matter
of the Commission that extension of control period
would be prejudicial to the PPA is again not
acceptable. Firstly, PPA is not subordinate to the Tariff
Order although it is based on that. The provision in
the PPA that unless projects are commissioned within
the specified period tariff as per the Tariff Order
dated 29.1.2010 would not be available does not
conflict with exercise of inherent power. If situations
having wide scale ramifications warrant exercise of
inherent power for extension of control period then
also a certain PPA may have some consequences.
Liquidated damages are available to the GUVNL only
when defaults occur on the part of the developer; but
when a situation is seen where circumstances
regardless of whether wide scale ramifications across
the State happen or do not happen went beyond the
control of a developer then exercise of the inherent
power which the Commission does have in their
statute may be exercised but each case has to be
19
decided on its own merit. The existence of
force-majeure condition definitely comes within the
framework of the Power Purchase Agreement but
exercise of inherent power is always case-specific
and it cannot be equated with force-majeure. Again
extension of control period cannot by any stretch of
imagination would amount to amendment of the
Tariff Order. Amendment of the Tariff Order by virtue
of section 62 (4) of the Electricity Act, 2003 was not
prayed for. Since in every venture there is allocation
of risk, it cannot be said that even if a certain
developer experiences hurdles beyond his control, he
has to abide by such hurdles. When fact in each case
is hotly contested by a counter fact or denial, justice
demands that each fact has to be separately dealt
with and decided. It is the Commission which is alone
competent to scrutinise the merits and demerits of
each fact in each of the two Appeals. It is the
Commission that has the infrastructure and
capability to examine and find as to whether
expenditures were made and committed ahead of
the date of commissioning of the project so that no
unfair advantage is claimed by any developer on the
ground of prospective reduction of the capital cost. If
the particulars of expenditure if already made or
committed during the control period are scrutinised
and the grounds are scrutinised in the perspective of
each individual case then possibly it would be clear
to the Commission as to whether and in which case a
developer comes with clean hands or not.
26. In the result, it is of absolute necessity that the
Commission needs to examine the case of each of
the two appellants in their respective merits and
decide afresh. The basic premise that extension of
control period is possible only when there are wide
scale ramifications is pregnant with flaws.
27. The Appeals succeed in view of the
observations as above and are thus allowed.
We remand the matters back to the
Commission for rehearing on merit of each
individual case and for decision according to
law. No cost.”
20
(Emphasis Supplied)
19. The above decision of the Appellate Tribunal dated
02.01.2013 was challenged before this Court in Civil Appeal
No.2315 of 2013 with Civil Appeal No. 2542 of 2013.
However, by Order dated 01.04.2013, the appeal was
dismissed in limine but this Court made it clear that the
Commission shall decide the whole issue without being
influenced by the observations made by the Appellate
Tribunal in accordance with law. The Order reads as follows:
“We have heard the learned counsel for the
parties.
We are not inclined to interfere with the order
passed by the Appellate Tribunal for Electricity. The
civil appeals are, accordingly, dismissed.
We, however, make it clear that the Commission
shall decide the whole issue without being influenced
by the observations made by the Appellate Tribunal
for Electricity in accordance with law.”
20. Once the matters were remanded to the Commission for
rehearing on merits of each case, the Commission vide
order dated 05.04.2014 allowed the petition for extension of
the control period. To quote :-
“11.26. Considering the above observations, we are
of the view that the delay which occurred in
commissioning of the power plant was due to the
21
reasons beyond the control of the petitioner.
Moreover, the petitioner had initiated construction
activities of the Solar Power Project and completed
the same which was recognized by the Chief
Electrical Inspector in its letter dated 17.2.2012 and
13.03.2012 stating that the 8.64 MW Solar Power PV
Project of the petitioner was ready on 1.02.2012 and
1.48 MW Solar PV Power Project of the petitioner was
ready for energisation on 21.02.2012. Therefore, it is
a clear case in which the petitioner was unable to
commission the above capacity of the power plant
due to reasons beyond its control. The prayer of the
petitioner to extend the control period of order No.2
of 2010 dated 29.1.2010 upto 30th
April, 2012 is valid
and the same is allowed to provide the justice to the
petitioner whose project was delayed.
xxx xxx xxx
11.28. We observe that the Article 8 of the PPA sets
out the force majeure conditions which may restrain
the project developer from completing the project in
time and consequences of such delay. On the other
hand, the order dated 29.01.2010 determines the
generic tariff payable to the solar projects
commissioned during the control period of order. In
the present case, the petitioner has not raised any
dispute and only seeks extension of the control
period. As such, the matter cannot be raised under
Section 86 (1)(f).
11.29.Moreover, the Force Majeure clause agreed in
the PPA is a contractual arrangement between the
parties, whereas the control period specified in the
statutory generic tariff order by the Commission is a
time frame in which the project is required to be
commissioned to become eligible to receive the tariff
determined by the Commission. While deciding the
control period the Commission takes into account
normative conditions which may prevail during
execution of the project.
11.30. The Commission has inherent powers to pass
an appropriate order to provide the justice to the
22
affected person. In the present case, the delay
occurred in commissioning of the project by the
petitioner due to various reasons namely (i) Non
availability of land for a longer time due to changes
in Government Policy/Law , and (ii) Non availability of
evacuation facility by GETCO. The above facts reflect
that the delay in commissioning of the project was
partially due to change in government rules
regarding land acquisition and partially due to failure
of GETCO in providing transmission line within
stipulated period. Both these reasons were beyond
the control of the petitioner, though these may not
form part of force majeure events. As such, we
decide that the present petition could not be filed
under Section 86 (1) (f) of the Act.”
(Emphasis Supplied)
21. The Appellate Tribunal at paragraphs-10.11 and 10.12 of the
impugned judgment held that even under Regulation 85 of
the Conduct of Business Regulations, the Commission was
within its power to extend time and the same can be
exercised even in an individual case. To quote :
“10.11 We have gone through the Conduct of
Business Regulations, 2004 and the
provisions provided under Section 86 of
the Electricity Act, 2003 and find that the
learned State Commission has rightly
passed the impugned order under its
inherent powers. We are unable to accept
the contention of the Appellant that the
State Commission cannot exercise inherent
power for the purpose of extending the
control period. We may clarify that the
control period of the tariff order is fixed by
the State Commission itself and, hence,
the State Commission has inherent powers
to extend the control period of the tariff
23
order. There is no restriction or fetter on
the powers of the State Commission in the
Electricity Act, 2003 or under the Conduct
of Business Regulations, 2004 to pass such
order as the State Commission may deem
fit and appropriate in the interest of justice
and discharge its functions under the
Electricity Act, 2003. The Conduct of
Business Regulations, 2004 provide
inherent powers to the State Commission
to pass any order it deem fit and proper to
meet the ends of justice or to prevent
abuse of the process of the court. The
State Commission has liberty to exercise
its inherent powers if the exercise of
inherent power is not in any way in conflict
with what has been expressly provided in
the Civil Procedure Code or against the
intentions of the legislature which means
that the inherent power is not to be
exercised in a manner which will be
contrary to or different from the procedure
expressly provided in the Code.
10.12 Regulation 85 of the Conduct of Business
Regulations, 2004 dealing with Extension
or abridgement of time prescribed fairly
provide that subject to the provisions of
the Acts, the time prescribed by these
Regulations or by order of the Commission
for doing any act may be extended
(whether it has already expired or not) or
abridged for sufficient reason by order of
the Commission.”
(Emphasis Supplied)
22. Thus, the Appellate Tribunal while approving the views
taken by the Commission held that the Commission was
legally justified in exercising its inherent power to extend
the control period.
24
23. Now that the factual matrix of the case is laid out, we shall
proceed with our analysis of the same from the legal
perspective.
24. At the outset, it is important to carefully note what the
Supreme Court held while dismissing Civil Appeal No. 2315
of 2013. No doubt, this Court declined to interfere with
the order passed by the Appellate Tribunal. This Court
dismissed the appeal in limine, at the admission stage
without discussing any legal issues for the reason that the
Appellate Tribunal had only remitted the matter to the
Commission. This Court has not made any authoritative
ruling on the availability and exercise of inherent powers
by the Commission. Nor is there a stamp of approval of the
Appellate Tribunal’s order. It was for this reason that this
Court clarified that the Commission should take an
independent decision uninfluenced by the observations
made by the Appellate Tribunal and that decision should
be in accordance with law. Therefore, the decision of this
Court is only on non-interference with the order of
Appellate Tribunal to remit the matter to the Commission
for a hearing on case-to-case basis and this Court did not
25
make any observations with respect to the merits of the
matter. In other words, it is not an order agreeing with or
upholding the views of the Appellate Tribunal. It is also
crucially relevant to note that even according to the
Appellate Tribunal, as stated in paragraph 27 of the order
dated 02.01.2013, it had only made “observations” and in
view of those observations, the appeals were allowed by
remitting the matters to the Commission. This Court
clearly held that the “whole issue” should be examined
“without being influenced by the observations made by
Appellate Tribunal for Electricity”.
25. The question before us is whether the Commission has
the power to extend the control period provided under the
tariff order. That question is no more res integra. There are
two recent judgments of this Court which are relevant in
this context. In Gujarat Urja Vikas Nigam Limited v.
EMCO Limited and another1
, this Court at
Paragraphs-39 and 40, has specifically held as follows:
“39. Apart from that both Respondent 2 and the
Appellate Tribunal failed to notice and the first
respondent conveniently ignored one crucial
condition of the PPA contained in the last sentence of
Para 5.2 of the PPA:
1
(2016) 11 SCC 182
26
“In case, commissioning of solar power
project is delayed beyond 31-12-2011, GUVNL
shall pay the tariff as determined by the Hon’ble
GERC for solar projects effective on the date of
commissioning of solar power project or
abovementioned tariff, whichever is lower.”
The said stipulation clearly envisaged a situation
where notwithstanding the contract between the
parties (the PPA), there is a possibility of the first
respondent not being able to commence the
generation of electricity within the “control period”
stipulated in the First Tariff Order. It also visualised
that for the subsequent control period, the tariffs
payable to a Projects/power producers (similarly
situated as the first respondent) could be different. In
recognition of the said two factors, the PPA clearly
stipulated that in such a situation, the first
respondent would be entitled only for lower of the two
tariffs. Unfortunately, the said stipulation is totally
overlooked by the second respondent and the
Appellate Tribunal. There is no whisper about the said
stipulation in either of the orders.
40. The first respondent has created enough
confusion. While on one hand the first respondent
asserted a right to seek determination of a separate
tariff independent of the tariff fixed under the First
Tariff Order in view of the stipulation contained in the
First Tariff Order that “for a project that does not get
such benefit, the Commission would, on a petition in
that respect, determine a separate tariff taking into
account all the relevant facts” did not seek a relief
before the second respondent to determine a
separate tariff but claimed the benefit of the Second
Tariff Order. Assuming for the sake of argument that
the petition filed by the first respondent (1270/2012)
is to be treated as an application for determination of
separate tariff which would be identical with the tariff
fixed under the Second Tariff Order, whether the first
respondent would be entitled for such a relief
depends, if at all he is entitled to seek such a
determination, on a consideration of “all the relevant
27
facts” but not by virtue of the operation of the
Second Tariff Order.”
(Emphasis supplied)
This decision with its pointed reference to application of
“lower of the two tariffs” squarely applies to this case.
26. However, while addressing another grey area as to
whether the Commission has the power to amend tariff
despite the terms of the PPA, this Court in Gujarat Urja
Vikas Nigam Limited v. Tarini Infrastructure Limited
and others2
, after analyzing scheme of the Act, has
answered the question in affirmative.
27. The scheme of the Act has been analyzed at
paragraphs-12 and 16, which read as follows:
“12. While Section 61 of the Act lays down the
principles for determination of tariff, Section 62 of
the Act deals with different kinds of tariffs/charges to
be fixed. Section 64 enumerates the manner in which
determination of tariff is required to be made by the
Commission. On the other hand, Section 86 which
deals with the functions of the Commission reiterates
determination of tariff to be one of the primary
functions of the Commission which determination
includes, as noticed above, a regulatory power with
regard to purchase and procurement of electricity
from generating companies by entering into PPA(s).
The power of tariff determination/fixation
undoubtedly is statutory and that has been the view
of this Court expressed in paras 36 and 64 of A.P.
TRANSCO v. Sai Renewable Power (P) Ltd. This, of
course, is subject to determination of price of power
in open access (Section 42) or in the case of open
2
(2016) 8 SCC 743
28
bidding (Section 63). In the present case, admittedly,
the tariff incorporated in PPA between the generating
company and the distribution licensee is the tariff
fixed by the State Regulatory Commission in exercise
of its statutory powers. In such a situation it is not
possible to hold that the tariff agreed by and
between the parties, though finds mention in a
contractual context, is the result of an act of volition
of the parties which can, in no case, be altered
except by mutual consent. Rather, it is a
determination made in the exercise of statutory
powers which got incorporated in a mutual
agreement between the two parties involved.
xxx xxx xxx
16. When the tariff order itself is subject to
periodic review it is difficult to see how incorporation
of a particular tariff prevailing on the date of
commissioning of the power project can be
understood to bind the power producer for the entire
duration of the plant life (20 years) as has been
envisaged by Clause 4.6 of PPA in the case of
Junagadh. That apart, modification of the tariff on
account of air-cooled condensers and denying the
same on account of claimed inadequate pricing of
biogas fuel is itself contradictory.”
(Emphasis supplied)
28. There is also a pointed reference to the decision of this
Court in EMCO (supra) at paragraph-21, which reads as
follows:
“21. In Gujarat Urja Vikas Nigam Ltd. v. EMCO
Ltd. the power purchaser sought the benefit of a
second tariff order made effective to projects
commissioned after 29-1-2012 (the power purchaser
had commissioned its project on 2-3-2012) though
29
under PPA it was to be governed by the first tariff
order of January 2010. Under the first tariff order for
such projects which were not commissioned on or
before the date fixed under the said order, namely,
31-11-2011 the tariff payable was to be determined by
the Gujarat Electricity Regulatory Commission. The
power producer in the above case did not seek
determination of a separate tariff but what was sought
was a declaration that the second tariff order dated
27-1-2012 applicable to PPA(s) after 29-1-2012 would
be applicable. It is in this context that this Court had
taken the view that the power producer would not be
relieved of its contractual obligations under PPA.”
(Emphasis supplied)
29. Having referred to the above decisions, we shall now make
an independent endeavor to analyze the present case in
the context of factual matrix and the relevant statutory
provisions. An amendment to tariff by the Regulatory
Commission is permitted under Section 62(4) read with
Section 64(6) of the Act. Section 86(1)(a) clothes the
Commission with the power to determine the tariff and
under Section 86(1)(b), it is for the Commission to regulate
the price at which electricity is to be procured from the
generating companies. Section 86 (1)(e) deals with
promoting co-generation and generation of electricity from
renewable sources of energy . Therefore, there cannot be
any quarrel with regard to the power conferred on the
Commission with regard to fixation of tariff for the
30
electricity procured from the generating companies or
amendment thereof in the given circumstances.
30. Part X of the Act from Sections 76 to 109 deals with
“Regulatory Commissions” providing for their constitution,
powers and functions. Section 92 read with Section 94
provides for the proceedings and power of the Commission
while exercising its functions and powers. Under Section
92, the proceedings of the Commission are to be governed
by what is specified in the appropriate Regulation with
regard to the transaction of business at its meetings. It is
that Regulation which is referred to under Section 181 (zl)
“rules of procedure for transaction of business under
sub-section (1) of Section 92”. Under Section 181(zp)
other matters also can be specified. Section 2(62) defines
“specified” as “specified by regulations made by the
Appropriate Commission or the Authority, as the case may
be, under this Act”.
31. Section 94 provides that the Appropriate Commission shall
be vested with certain powers as are vested in a civil
court, only in six specified areas. Under Section 94(1)(g),
the Commission has the powers of a civil court in respect
of “any other matter which may be prescribed”. Under
31
Section 2(52) “prescribed means prescribed by rules made
by the Appropriate Government under this Act”.
32. Regulations 80 to 82 are instances of such powers
specified by the Commission. Regulation 80 has provided
for the inherent power of the Commission to the extent of
making such orders as may be necessary for the ends of
justice or to prevent the abuse of the process of the
Commission. It has to be borne in mind that such inherent
powers are to be exercised notwithstanding only the
restrictions on the Commission under the Conduct of
Business Regulations, meaning thereby that there cannot
be any restrictions in the Conduct of Business Regulations
on exercise of inherent powers by the Commission. But the
specified inherent powers are not as pervasive a power as
available to a court under Section 151 of the Code of Civil
Procedure, 1908:
“151. Saving of inherent powers of court.-
Nothing in this Code shall be deemed to limit or
otherwise affect the inherent power of the court to
make such orders as may be necessary for the ends
of justice, or to prevent abuse of the process of the
court.”
However, the Commission is enjoined with powers to issue
appropriate orders in the interest of justice and for preventing
abuse of process of the Commission, to the extent not otherwise
32
provided for under the Act or Rules. In other words, the inherent
power of the Commission is available to it for exercise only in
those areas where the Act or Rules are silent.
33. Under Regulation 81, the Commission is competent to
adopt a procedure which is at variance with any of the
other provisions of the Regulations in case the Commission
is of the view that such an exercise is warranted in view of
the special circumstances and such special circumstances
are to be recorded in writing. However, it is specifically
provided under Section 181 that there cannot be a
Regulation which is not in conformity with the provisions of
the Act or Rules.
34. Under Regulation 82, the Commission has powers to deal
with any matter or exercise any power under the Act for
which no Regulations are framed meaning thereby where
something is expressly provided in the Act, the
Commission has to deal with it only in accordance with the
manner prescribed in the Act. The only leeway available to
the Commission is only when the Regulations on
proceedings are silent on a specific issue. In other words,
in case a specific subject or exercise of power by the
Commission on a specific issue is otherwise provided
33
under the Act or Rules, the same has to be exercised by
the Commission only taking recourse to that power and in
no other manner. To illustrate further, there cannot be any
exercise of the inherent power for dealing with any matter
which is otherwise specifically provided under the Act. The
exercise of power which has the effect of amending the
PPA by varying the tariff can only be done as per statutory
provisions and not under the inherent power referred to in
Regulations 80 to 82. In other words there cannot be any
exercise of inherent power by the Commission on an issue
which is otherwise dealt with or provided for in the Act or
Rules.
35. This Court should be specially careful in dealing with
matters of exercise of inherent powers when the interest
of consumers is at stake. The interest of consumers, as an
objective, can be clearly ascertained from the Act. The
Preamble of the Act mentions “protecting interest of
consumers” and Section 61(d) requires that the interests
of the consumers are to be safeguarded when the
Appropriate Commission specifies the terms and
conditions for determination of tariff. Under Section 64
read with Section 62, determination of tariff is to be made
34
only after considering all suggestions and objections
received from the public. Hence, the generic tariff once
determined under the statute with notice to the public can
be amended only by following the same procedure.
Therefore, the approach of this Court ought to be cautious
and guarded when the decision has its bearing on the
consumers.
36. Regulation 85 provides for extension of time. It may be
seen that the same is available only in two specified
situations – (i) for extension of time prescribed by the
Regulations and (ii) extension of time prescribed by the
Commission in its order for doing any act. The control
period is not something prescribed by the Commission
under the Conduct of Business Regulations. The control
period is also not an order by the Commission for doing
any act. Commissioning of a project is the act to be
performed in terms of the obligation under the PPA and
that is between the producer and the purchaser, viz., the
respondent no.1 and appellant. Hence, the Commission
cannot extend the time stipulated under the PPA for doing
any act contemplated under the agreement in exercise of
its powers under Regulation 85. Therefore, there cannot be
35
a extension of the control period under the inherent
powers of the Commission.
37. The Commission being a creature of statute cannot
assume to itself any powers which are not otherwise
conferred on it. In other words, under the guise of
exercising its inherent power, as we have already noticed
above, the Commission cannot take recourse to exercise of
a power, procedure for which is otherwise specifically
provided under the Act.
38. Extension of control period has been specifically held to be
outside the purview of the power of the Commission as per
EMCO (supra). This appeal is hence, allowed. The
impugned orders are set aside. However, we make it clear
that this judgment or orders of the Appellate Tribunal or
Commission shall not stand in the way of the Respondent
no.1 taking recourse to the liberty available to them for
re-determining of tariff if otherwise permissible under law
and in which case it will be open to the parties to take all
available contentions before the Commission.
39. There shall be no order as to costs.
.......................J.
(KURIAN JOSEPH)
36
.......................J.
(R. BANUMATHI)
New Delhi;
October 25, 2017.
37
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APEPAL NO. 6399 OF 2016
GUJARAT URJA VIKAS NIGAM LIMITED .........Appellant
VERSUS
SOLAR SEMICONDUCTOR POWER COMPANY
(INDIA) PRIVATE LIMITED AND OTHERS ...Respondents
J U D G M E N T
R. BANUMATHI, J.
I have gone through the judgment of His Lordship Justice Kurian
Joseph. His Lordship's judgment though comprehensive, having regard
to the importance of the questions raised, I prefer to give my own
reasonings for my concurrence.
2. An appeal under Section 125 of the Electricity Act, 2003 would be
maintainable only on the grounds specified in Section 100 of the Civil
Procedure Code i.e. only on substantial question of law. In the present
case, the following substantial questions of law arise for determination:-
• Whether the State Commission has inherent powers to
extend the control period of Tariff Order dated 29.01.2010
beyond the control period thereby adversely affecting the
sanctity of PPA which was entered into by the parties by
consensus-ad-idem?
• Whether the State Commission can invoke Regulations
80-82 of Conduct of Business Regulations-inherent powers
38
of the Commission to grant substantive relief to the
generating company like respondent No.1 and thereby alter
the terms of the contract arrived at between the parties
consensus-ad-idem?
3. Brief facts are that the appellant and parent company of
respondent No.1 executed Power Purchase Agreement (PPA) on
30.04.2010 for sale and purchase of electricity from 20 MW Solar PV
Power project to be established by the parent company of the first
respondent. In the initial stage itself, there was a delay from 30.04.2010
to 27.10.2010 firstly on account of transfer of Solar Power project in the
name of parent company to a Special Purpose Vehicle (SPV) i.e.
respondent No.1 and an amendment of PPA in favour of the SPV.
Secondly, on account of first respondent’s decision to change their
location of the Solar Power project from District Banaskantha to District
Kutchh, there was delay from 19.04.2011 to 10.05.2011 i.e. till the date
of execution of the Supplemental Agreement. The Supplemental
Agreement dated 10.05.2011 itself was entered into after the Scheduled
Commercial Operation Date of the first plant i.e. 10.03.2011.
4. Article 5.2 of PPA specifically provided that the tariff determined in
the Tariff Order dated 29.01.2010, would be applicable only if the project
is commissioned by the specific date i.e. on or before 31.12.2011 and in
case, delay is occasioned in commencement of the project, the tariff
mentioned in the PPA and the new tariff determined by the State
39
Commission, whichever is lower, shall be applicable. Article 5.2 of the
PPA reads as under:-
“GUVNL shall pay the fixed tariff mentioned hereunder for the period of
25 years for all the Scheduled Energy/Energy injected as certified in
the monthly SEA by SLDC. The tariff is determined by Hon’ble
Commission vide Tariff Order for Solar based power project dated
29.01.2010.
Tariff for Photovoltaic project: Rs.15/KWh for First 12 years
and thereafter Rs.5/ KWh
from 13th Year to 25th Year.
Above tariff shall apply for solar projects commissioned on or before
31st December 2011. In case, commissioning of Solar Power Project is
delayed beyond 31st December 2011, GUVNL shall pay the tariff as
determined by Hon’ble GERC for Solar Projects effective on the date of
commissioning of solar power project or above mentioned tariff,
whichever is lower.”
Under the Supplemental Agreement dated 10.05.2011, respondent No.1
agreed to oblige all the terms and conditions of the PPA including the
deadlines for completing the project. The agreement also recognized
that all other terms and conditions including tariff shall remain
unchanged (clause 2.4). Clause 2.3 of the Supplemental Agreement
specifically provided that since respondent No.1 had changed the
location after lapse of significant time, respondent No.1 shall pay the
liquidated damages even in case of non-availability of transmission
system for evacuation. Because of change of location, GETCO had to
replan the entire transmission line to be constructed. By executing the
Supplemental Agreement and also by paying liquidated damages,
respondent No.1 acknowledged that GETCO would require time to
establish the evacuation facilities with reference to the new location i.e.
District Kutchh.
40
STATUTORY POWER OF THE STATE ELECTRICITY REGULATORY
COMMISSION TO DETERMINE THE TARIFF
5. The State Electricity Regulatory Commission is a body corporate
constituted in terms of Section 82 of the Act, vested with certain
important functions and powers specified under Sections 86 and 94 of
the Act respectively. The body functions to achieve the purpose of the
Electricity Act, 2003 viz. ‘…taking measures conducive to development
of electricity industry, promoting competition therein, protecting interests
of consumers and supply of electricity to all areas, rationalization of
electricity tariff…’.
6. Determination of tariff is one of the important functions of the
Commission, apart from other important functions specified in the Act.
Under Section 61, the Appropriate Commission is obligated to specify
the terms and conditions for determination of tariff, and in doing so, it
shall be guided by the factors enumerated therein in clauses (a) to (i). In
terms of Section 62 of the Act, the Appropriate Commission is authorized
to determine the tariff for supply of electricity by generating company to
a distribution licensee. However, in case of shortage of supply of
electricity, the Appropriate Commission may fix only the minimum and
maximum ceiling of tariff for a period not exceeding one year. The
Appropriate Commission is also authorized to determine the tariff for
transmission, wheeling and retail sale of electricity. While doing so, the
Appropriate Commission cannot show undue preference to any
41
consumer of electricity. The Act also provides that the tariff or any part
thereof shall not be amended ordinarily more frequently than once in any
financial year.
7. Section 64 prescribes the procedure for issuing Tariff Order which
includes receiving the application for determination of tariff, its
publication, considering all suggestions and objections received from the
public and issuing a consequent Tariff Order or rejecting the application
if it is not in accordance with the provisions of the Act and the rules and
regulations made there-under or the provisions of any other law for the
time being force.
8. Respondent No.2, Gujarat Electricity Regulatory Commission
(hereinafter referred to as ‘the State Commission’) determined the
promotional tariff for solar power projects that may be based in the State
of Gujarat during the control period of two years from the date of the
order i.e. 29.01.2010 till 28.01.2012. The State Commission had
adopted the capital cost of Solar Photovoltaic Power Project at Rs.16.50
crores per MW and taking note of other aspects, the Commission
determined the tariff for Solar Power Project at Rs.12.54 per unit. The
Commission had consciously fixed the control period for its order dated
29.01.2010 as two years, considering that the gestation period for Solar
PV projects is six months and that for the Solar Thermal Projects is
18-24 months. Based on this Tariff Order dated 29.01.2010 for 1st
42
respondent's Solar PV Power Project, tariff rate was fixed at Rs.15 per
kWh for the initial twelve years starting from the commercial operation of
the project and Rs.5 per kWh from the thirteenth year to twenty fifth
year.
9. The Commission had published a Discussion Paper on 01.11.2011
for public view inviting comments from stakeholders and members of the
State Advisory Committee on the draft order for the next Tariff Order. All
the stakeholders had sent their views on the said draft. After considering
the said views of the stakeholders, in exercise of the powers conferred
under Sections 61(h), 62(1)(a) and 86(1)(e) of Electricity Act, 2003 and
considering National Tariff Policy and the power procurement from New
and Renewable Source of Energy Regulation 2008, Tariff Order 2012 for
solar power and others was issued. As per Tariff Order 2012, the rates
fixed for Solar PV projects are as under:-
Period 29 Jan.’12 to
31 Mar.’13
1 Apr.’13 to
31 Mar.’14
1 Apr.’14 to
31 Mar.’15
For megawatt-scale photovoltaic projects availing accelerated depreciation
Levelized Tariff for 25
years
Rs. 9.28 per kWh Rs. 8.63 per kWh Rs. 8.03 per kWh
For first 12 years Rs. 9.98 per kWh Rs. 9.13 per kWh Rs. 8.35 per kWh
For subsequent 13 years Rs. 7.00 per kWh Rs. 7.00 per kWh Rs. 7.00 per kWh
For kilowatt-scale photovoltaic projects availing accelerated depreciation
Levelized Tariff for 25
years
Rs. 11.14 per kWh Rs. 10.36 per
kWh
Rs. 9.63 per kWh
The above tariffs as per Tariff Order 2012 is to be in force from
29.01.2012 to 31.03.2015. The above said tariff is fixed by the
Commission, on the basis of well founded parameters, such as, capital
cost of the project, income tax, return on equity etc. Be it noted, in the
43
present case, the first respondent obtained the Chief Electrical Inspector
Certificate, which is the statutory mandate as per Section 162 of the Act
only on 13.03.2012, nearly two months after the expiry of the Tariff Order
(2010).
WHETHER THE STATE COMMISSION HAS INHERENT POWERS TO
EXTEND THE CONTROL PERIOD OF TARIFF ORDER DATED 29.01.2010
BEYOND THE CONTROL PERIOD IN RESPECT OF ONE PPA:
10. Section 181 of the Electricity Act, 2003 empowers the State
Commission to make regulations consistent with the Act and the Rules
to carry out the provisions of the said Act and, inter alia, provide for the
matters indicated thereon. In exercise of the powers conferred under
Section 181 of the Electricity Act, 2003 and under Section 127 of Gujarat
Electricity Industry (Re-organization and Regulation) Act, 2003 and all
powers enabling it in that behalf, the Gujarat Electricity Regulatory
Commission framed the Conduct of Business Regulation. Regulations
80 to 82 deal with inherent powers of the Commission, which read as
under:-
“Saving of inherent power of the Commission
80. Nothing in these Regulations shall be deemed to limit or otherwise affect
the inherent power of the Commission to make such orders as may be
necessary for ends of justice or to prevent the abuse of the process of the
Commission.
81. Nothing in these Regulations shall bar the Commission from adopting in
conformity with the provisions of the Acts, a procedure, which is at
variance with any of the provisions of these Regulations, if the
Commission, in view of the special circumstances of a matter or class of
matters and for reasons to be recorded in writing, deems it necessary or
expedient for dealing with such a matter or class of matters.
82. Nothing in these Regulations shall, expressly or impliedly, bar the
Commission to deal with any matter or exercise any power under the Acts
for which no Regulations have been framed, and the Commission may
44
deal with such matters, powers and functions in a manner it thinks fit.”
The State Commission and the Appellate Tribunal held that under the
Conduct of Business Regulations, 2004 and Section 86 of the Electricity
Act, 2003, the State Commission has inherent jurisdiction to extend the
control period of the Tariff Order 2010 and the tariff rate thereon beyond
28.01.2012. The Appellate Tribunal further held that the control period
of the Tariff Order was fixed by the State Commission itself and hence,
the State Commission has inherent powers to extend the control period
of the Tariff Order.
11. Main contention urged by the first respondent is that the question
of law arising - whether the State Commission has the inherent power or
authority to extend the control period as fixed by it in its generic Tariff
Order dated 29.01.2010 arose in the first round of litigation between the
parties and in the earlier round of litigation, the State Commission held
that the Commission had no power to extend the control period in a
specific case and the power was only to extend the control period
generally. It was contended that in the appeal filed by respondent No.1,
the Appellate Tribunal for Electricity vide its judgment dated 02.01.2013
set aside the judgment of the Commission holding that the Commission
has the inherent power to extend the control period in individual cases. It
was, therefore, urged by the first respondent that the question of law that
the Commission has inherent power to extend the control period has
45
thus become final between the parties and the same now cannot be
reopened.
12. In the earlier round of litigation, the State Commission had rejected
the request of respondent No.1 to extend the time of control period of
Tariff Order (2010) beyond 28.01.2012. On appeal, the Appellate
Tribunal (vide order dated 02.01.2013) had set aside the order of the
State Commission and remanded the matter to the State Commission to
decide the matter afresh. In the appeal preferred by GUVNL before the
Supreme Court, this Court dismissed the appeal by an order dated
01.04.2013. However, this Court made it clear that the State
Commission shall decide the whole issue without being influenced by
the observations made by the Appellate Tribunal for Electricity in
accordance with law.
13. Learned Senior Counsel for the appellant, Mr. V. Giri submitted
that the Supreme Court specifically directed the Commission to decide
the whole issue in accordance with law without being influenced by the
observations made by the Tribunal. As rightly contended by GUVNL, the
whole issue was, therefore, kept open before the State Commission.
Further, if the law was already settled by the Appellate Tribunal, there
was no requirement for this Court to direct the State Commission to
consider the 'issue in accordance with law'. In my view, there is no merit
in the contention that the question of law on the Commission's inherent
46
jurisdiction to extend the control period has been settled inter-se the
parties in the earlier round of litigation. Rival contentions of the parties
on this question have to be considered now.
14. Under Regulations 80 to 82, the inherent powers of the State
Commission are saved. Under Regulation 80, which is akin to Section
151 CPC, the power of the State Commission is only intended to
regulate the conduct of the Commission, that is, to regulate its own
procedure. That power cannot travel beyond its own procedure so as to
alter the terms and conditions of the PPA entered into between the
parties to grant substantive relief to the first respondent by extending the
control period of Tariff Order (2010) beyond 28.01.2012.
15. By a reading of Regulation 80, it is clear that inherent powers of
the State Commission are saved to make such orders as may be
necessary:- (i) to secure the ends of justice; and (ii) to prevent abuse of
process of the Commission. The inherent powers being very wide and
incapable of definition, its limits should be carefully guarded. Inherent
powers preserved under Regulation 80 (which is akin to Section 151 of
the Code) are with respect to the procedure to be followed by the
Commission in deciding the cause before it. The inherent powers under
Section 151 CPC are procedural in nature and cannot affect the
substantive right of the parties. The inherent powers are not substantive
provision that confers the right upon the party to get any substantive
47
relief. These inherent powers are not over substantive rights which a
litigant possesses.
16. The inherent power is not a provision of law to grant any
substantive relief. But it is only a procedural provision to make orders to
secure the ends of justice and to prevent abuse of process of the Court.
It cannot be used to create or recognize substantive rights of the parties.
In Vinod Seth v. Devinder Bajaj and Another (2010) 8 SCC 1, it was
held as under:-
“28. As the provisions of the Code are not exhaustive, Section 151 is
intended to apply where the Code does not cover any particular
procedural aspect, and interests of justice require the exercise of
power to cover a particular situation. Section 151 is not a provision of
law conferring power to grant any kind of substantive relief. It is a
procedural provision saving the inherent power of the court to make
such orders as may be necessary for the ends of justice and to prevent
abuse of the process of the court. It cannot be invoked with reference
to a matter which is covered by a specific provision in the Code. It
cannot be exercised in conflict with the general scheme and intent of
the Code. It cannot be used either to create or recognise rights, or to
create liabilities and obligations not contemplated by any law.
29. Considering the scope of Section 151, in Padam Sen v. State of
U.P. AIR 1961 SC 218 this Court observed: (AIR p. 219, paras 8-9)
“8. … The inherent powers of the court are in addition
to the powers specifically conferred on the court by the
Code. They are complementary to those powers and
therefore it must be held that the court is free to exercise
them for the purposes mentioned in Section 151 of the
Code when the exercise of those powers is not in any
way in conflict with what has been expressly provided in
the Code or against the intentions of the legislature. …
9. … The inherent powers saved by Section 151 of
the Code are with respect to the procedure to be followed
by the Court in deciding the cause before it. These
powers are not powers over the substantive rights which
any litigant possesses. Specific powers have to be
conferred on the courts for passing such orders which
would affect such rights of a party.”
30. In Manohar Lal Chopra v. Seth Hiralal AIR 1962 SC 527 this
Court held: (AIR p. 533, para 21)
“21. … that the inherent powers are not in any way
48
controlled by the provisions of the Code as has been
specifically stated in Section 151 itself. But those powers
are not to be exercised when their exercise may be in
conflict with what had been expressly provided in the
Code or against the intentions of the legislature.”
31. In Ram Chand and Sons Sugar Mills (P) Ltd. v. Kanhayalal
Bhargava AIR 1966 SC 1899 this Court reiterated that the inherent
power of the court is in addition to and complementary to the powers
expressly conferred under the Code but that power will not be
exercised if its exercise is inconsistent with, or comes into conflict with
any of the powers expressly or by necessary implication conferred by
the other provisions of the Code. Section 151 however is not intended
to create a new procedure or any new right or obligation.”
Same view was reiterated in Ram Prakash Agarwal and Another v.
Gopi Krishan (dead through LRs.) and Others (2013) 11 SCC 296.
17. In the case at hand, rights and obligations of the parties flow from
the terms and conditions of the Power Purchase Agreement (PPA). PPA
is a contract entered between the GUVNL and the first respondent with
clear understanding of the terms of the contract. A contract, being a
creation of both the parties, is to be interpreted by having due regard to
the actual terms settled between the parties. As per the terms and
conditions of the PPA, to have the benefit of the tariff rate at Rs.15/- per
unit for twelve years, the first respondent should commission the Solar
PV Power project before 31.12.2011. It is a complex fiscal decision
consciously taken by the parties. In the contract involving rights of
GUVNL and ultimately the rights of the consumers to whom the
electricity is supplied, Commission cannot invoke its inherent jurisdiction
to substantially alter the terms of the contract between the parties so as
to prejudice the interest of GUVNL and ultimately the consumers.
49
18. As pointed out earlier, the Appellate Tribunal has taken the view
that the control period of the Tariff Order was fixed by the State
Commission itself and hence the State Commission has inherent power
to extend the control period of the Tariff Order. It may be that the tariff
rate as per Tariff Order (2010) as determined by the Committee has
been incorporated in clause 5.2 of the PPA. But that does not in any
manner confer power upon the State Commission to exercise its
inherent jurisdiction to extend the control period to the advantage of the
project proponent-first respondent and to the disadvantage of GUVNL
who are governed by the terms and conditions of the contract. It is not
within the powers of the Commission to exercise its inherent jurisdiction
to extend the control period to the advantage of any party and to the
disadvantage of the other would amount to varying the terms of the
contract between the parties.
19. Mr. Giri, learned Senior Counsel for the appellant submitted in
terms of clause 2.4 of the Supplemental Agreement dated 10.05.2011
that all the terms and conditions including tariff fixed in PPA dated
30.04.2010 shall remain unchanged, it must be performed by
respondent No.1 in the same fashion as had been acknowledged by
him. Mr. Giri further submitted that in terms of clause 2.3 of the
Supplemental Agreement that respondent No. 1 has agreed that no
changes in respect of respondent No. 1's liability to pay liquidated
50
damages shall be entertained on account of delay in procuring
transmission system or otherwise and respondent No. 1 actually paid an
amount of Rs. 23.25 lacs to GUVNL on 14.07.2011 thereby indicating
that respondent No. 1 had acceded to the terms and conditions of the
PPA and that the project was not commissioned by its Scheduled
Commercial Operation Date other than the reasons mentioned in clause
5.3 of the agreement. It was further argued that if the commissioning of
the first respondent's project had been delayed due to the reasons
beyond its control, respondent No. 1 would have invoked force majeure
clause and by paying liquidated damages for the delay in
commissioning, respondent No. 1 did not consider any of the events
beyond its control. It was, therefore, urged that when respondent No. 1
had consciously accepted the terms of the PPA, respondent No. 1
cannot be allowed to revert back from the terms of the PPA and the
Commission cannot substitute its views by invoking inherent powers of
the State Commission. Since we are giving liberty to the first
respondent to approach the Commission, we are not expressing our
views on the above contention. The appellant is at liberty to raise all
these contentions before the Commission and this contention is left
open.
20. Yet another contention raised by the appellant is that the project of
respondent No.1 was commissioned/ready for commissioning only after
51
the cut-off date and the power project was ready for commissioning only
after 17.02.2012 and 13.03.2012 when the Certificate of Chief Electrical
Inspector was granted. It is, therefore, contended by the appellant that
the certificate of Chief Electrical Inspector is a statutory requirement and
without the approval of the Chief Electrical Inspector, respondent No.1
could not have energized the electrical installations. This contention is
also left open.
21. As pointed out earlier, the State Commission has determined tariff
for solar power producers vide order dated 29.01.2010 and tariff for next
control period vide order dated 27.01.2012. The order dated 29.01.2010
is applicable for projects commissioned from 29.01.2010 to 28.01.2012
and the order dated 27.01.2012 is applicable for projects commissioned
from 29.01.2012 to 31.03.2015. As pointed out earlier, the tariff is
determined by the State Commission under Section 62. The choice of
entering into contract/PPA based on such tariff is with the Power
Producer and the Distribution Licensee. As rightly contended by the
learned Senior Counsel for the appellant, the State Commission in
exercise of its power under Section 62 of the Act, may conceivably
re-determine the tariff, it cannot force either the generating company or
the licensee to enter into a contract based on such tariff nor can it vary
the terms of the contract invoking inherent jurisdiction.
SANCTITY OF POWER PURCHASE AGREEMENT
52
22. It is contended that Section 86(1)(b) of the Act empowers the State
Commission to regulate the price of sale and purchase of electricity
between the generating companies and distribution licensees and the
terms and conditions of the PPA cannot be set to be inviolable. Merely
because in PPA, tariff rate as per Tariff Order (2010) is incorporated that
does not empower the Commission to vary the terms of the contract to
the disadvantage of the consumers whose interest the Commission is
bound to safeguard. Sanctity of PPA entered into between the parties by
mutual consent cannot be allowed to be breached by a decision of the
State Commission to extend the earlier control period beyond its expiry
date, to the advantage of the generating company-respondent No. 1 and
disadvantage of the appellant. Terms of PPA are binding on both the
parties equally.
23. In Gujarat Urja Vikas Nigam Limited v. EMCO Limited and
Another (2016) 11 SCC 182, facts were similar and the question of law
raised was whether by passing the terms and conditions of PPA,
respondent can assail the sanctity of PPA. This Court held that Power
Producer cannot go against the terms of the PPA and that as per the
terms of the PPA, in case, the first respondent is not able to commence
the generation of electricity within the 'control period' the first respondent
will be entitled only for lower of the tariffs.
24. The first respondent placed reliance upon Gujarat Urja Vikas
53
Nigam Limited v. Tarini Infrastructure Limited and Others (2016) 8
SCC 743. In the said case, this Court was faced with the substantial
question of law viz. whether the tariff fixed under a PPA (Power
Purchase Agreement) is sacrosanct and inviolable and beyond review
and correction by the State Electricity Regulatory Commission. In that
case, respondent No.1 thereon-power producer had entered into a PPA
with the appellant therein-distribution licensee for sale of electricity from
the generating stations to the extent of the contracted quantity for a
period of 35 years at Rs. 3.29 per KWH subject to escalation of 3% per
annum till date of commercial operation. However, later the power
producer found that the place from where the power was to be
evacuated was at a distance of 23 kms. as opposed to a distance of 4
kms, envisaged in the concession agreement entered into between the
Respondent-power producer and Narmada Water Resources
Department (Respondent No.2 therein). On this ground respondent had
sought revision of tariff by State Electricity Commission. This Court held
that Section 86(1)(b) of Act empowers State Commission to regulate
price of sale and purchase of electricity between generating companies
and distribution licensees through agreements for power, produced for
distribution and supply and that the state commission has power to
re-determine the tariff rate when the tariff rate mentioned in the PPA
between generating company and distribution licensee was fixed by
54
State Regulatory Commission in exercise of its statutory powers.
Relevant portion of the paras (17) and (18) of the judgment, read as
under:-
“17. As already noticed, Section 86(1)(b) of the Act empowers the
State Commission to regulate the price of sale and purchase of
electricity between the generating companies and distribution
licensees through agreements for power produced for distribution and
supply. As held by this Court in V.S. Rice & Oil Mills v. State of A.P. AIR
1964 SC 1781, K. Ramanathan v. State of T.N. (1985) 2 SCC 116 and
D.K. Trivedi & Sons v. State of Gujarat 1986 Supp. SCC 20 the power
of regulation is indeed of wide import...
18. All the above would suggest that in view of Section 86(1)(b) the
Court must lean in favour of flexibility and not read inviolability in terms
of PPA insofar as the tariff stipulated therein as approved by the
Commission is concerned. It would be a sound principle of
interpretation to confer such a power if public interest dictated by the
surrounding events and circumstances require a review of the tariff.
The facts of the present case, as elaborately noted at the threshold of
the present opinion, would suggest that the Court must lean in favour
of such a view also having due regard to the provisions of Sections 14
and 21 of the General Clauses Act, 1898...."
In the facts and circumstances of that case and that the tariff rate of
Rs.3.29/- per KWH was subject to escalation and subject to periodic
review. Evacuation was changed from a distance of 4 kms. to 23 kms.
from its switch yard. On account of the same, respondent No.1 therein
had incurred an additional cost of about Rs.10 crores which was not
envisaged in the Concession Agreement. In such facts and changed
circumstances, this Court thought it apposite to take a lenient view and
allow the State Commission to re-determine the tariff rate.
25. In exercise of its statutory power, under Section 62 of the
Electricity Act, the Commission has fixed the tariff rate. The word ‘tariff’
has not been defined in the Act. Tariff means a schedule of
55
standard/prices or charges provided to the category or categories for
procurement by licensee from generating company, wholesale or bulk or
retail/various categories of consumers. After taking into consideration
the factors in Section 61(1)(a) to (i), the State Commission determined
the tariff rate for various categories including Solar Power PV project
and the same is applied uniformly throughout the State. When the said
tariff rate as determined by the Tariff Order (2010) is incorporated in the
PPA between the parties, it is a matter of contract between the parties.
In my view, respondent No.1 is bound by the terms and conditions of
PPA entered into between respondent No.1 and the appellant by mutual
consent and that the State Commission was not right in exercising its
inherent jurisdiction by extending the first control period beyond its due
date and thereby substituting its view in the PPA, which is essentially a
matter of contract between the parties.
26. Section 94 of the Electricity Act deals with the powers of the
Commission as far as the conduct of the proceedings. Under Section
94(1)(f), the Commission has the power to review its own decision. The
power of review under Section 94 (1)(f) is akin to that under Order XLVII
Rule 1 CPC. At the instance of affected parties or the generating
companies or the Commission on its own motion may review its own
decision only if such order was made under: (i) mistake or error
of fact apparent on the face of the record; (ii) discovery of new
56
and important matter which was not within the applicant’s knowledge at
the time when the order was made; or (iii) any other sufficient reason
to meet the ends of justice. Contention of the appellant is that grounds
were made out by the first respondent for review of first Tariff Order
which was applicable till 28.01.2012. In support of this contention,
reliance was placed upon S. Nagaraj and Others v. State of
Karnataka and Another 1993 Supp. (4) SCC 595, wherein this Court
has aptly described the object of ‘power to review’ and the
circumstances under which the court shall exercise the power of review.
This contention is also left open.
27. Learned Senior Counsel Mr. Jayant Bhushan for the respondent
submitted that if the tariff as per order dated 27.01.2012 is applied,
respondent No.1 would be forced to shut down due to non-recovery of
costs. Drawing our attention to the capital cost of Solor PV projects, the
learned Senior Counsel Mr. Giri submitted that such contention is
contrary to the own admission of the first respondent. Contending that
India's solor power installations have grown and cost tag of solor power
has been reduced remarkably, learned Senior Counsel Mr. Giri
submitted that even on equity, the first respondent cannot claim tariff
rate as per Tariff Order (2010). It was contended that under the Tariff
Order dated 29.01.2010 the capital cost was finalized at Rs.16.50 crores
per MW and tariff rate was fixed at Rs.12.54 per kWh and for power
57
project of 20 MW of respondent No.1, the total cost would be around
Rs.330 crores. Drawing our attention to the Tariff Order dated
27.01.2012, it was submitted that as per Tariff Order (2012), the capital
cost was finalized at Rs.10 crores per MW and for a 20 MW power
project, this would amount to a total cost of about Rs.200 crores. It was
urged that the cost of solar PV projects which was in range in 2011
between Rs.10.00 crores and Rs.11.00 crores per MW is expected to
further come down in future. In the counter affidavit filed by respondent
No.1 before this Court, it is stated that the first respondent has invested
about Rs.200 crores in the project. The learned Senior Counsel for the
appellant Mr. Giri contended that even as per the admission of
respondent No.1, it has incurred total cost of Rs.200 crores i.e. Rs.10.00
crores per MW which is relatable to the Tariff Order dated 27.01.2012
and not the previous Tariff Order dated 29.01.2010 and having incurred
capital expenditure of Rs.200 crores, the first respondent cannot claim
higher tariff rate as per the Tariff Order 2010 based on capital cost of
Rs.330 crores and if the contention of respondent No.1 is to be
accepted, it would only enable respondent No.1 to make undue gains at
the cost of the consumers in the State. It was urged that extension of
control period of the Tariff Order (2010) qua the first respondent would
cause huge loss to GUVNL and loss to GUVNL means that this loss is to
be passed on to the consumers in the form of increased tariff and
58
therefore it was contended that the Commission ought to have taken
note of all the stakeholders namely the appellant and the consumers
and not merely the claim of respondent No. 1. Since liberty is granted to
the first respondent to approach the Commission, we are not inclined to
go into the merits of this contention urged by GUVNL. Liberty is granted
to GUVNL to urge the above contentions before the Commission and the
Commission to consider the same on its own merits.
28. Conclusions:- (i) When the 1st respondent commissioned its
project beyond 13.03.2012, Commission cannot exercise its inherent
jurisdiction and vary the terms to extend the control period of Tariff Order
dated 29.01.2010 in so far as the 1st respondent of the contract-Power
Purchase Agreement (PPA) between GUVNL and the first respondent;
(ii) the earlier order passed by this Court in C.A. No.2315 of 2013 (dated
01.04.2013) has not conclusively decided the substantial question of law
inter-se the parties−that is exercise of inherent jurisdiction by the
Commission to vary the terms of PPA by extending the control period
beyond the stipulated time. On the above reasonings, I agree with the
conclusion of my esteemed brother Justice Kurian Joseph.
..............................J.
[R. BANUMATHI]
New Delhi;
October 25, 2017
59
ITEM NO.1501 COURT NO.5 SECTION XVII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 6399/2016
GUJARAT URJA VIKAS NIGAM LTD Appellant(s)
VERSUS
SOLAR SEMICONDUCTOR POWER COMPANY (INDIA ) PVT LTD &
ORS.Respondent(s)
Date : 25-10-2017 This appeal was called on for Judgment today.
For Appellant(s) Ms. Hemantika Wahi, AOR
Ms. Puja Singh, Adv.
Ms. Jesal, Adv.
Ms. Shubham Arya, Adv.
For Respondent(s) Mr. G. Ramakrishna Prasad, AOR
Mr. Suyodhan Byrapaneni, Adv.
Mohd. Wasay Khan, Adv.
Ms. Filza Moonis, Adv.
Hon'ble Mr. Justice Kurian Joseph pronounced the reportable
Judgment of the Bench comprising His Lordship and Hon'ble Mrs.
Justice R. Banumathi.
While agreeing with the conclusions in the Judgment pronounced
by Hon'ble Sh. Kurian Joseph, J., Hon'ble Mrs. Justice R. Banumathi
also pronounced the reportable Judgment with concurrent opinion.
The concluding part of the Judgment pronounced by Hon'ble Mr.
Justice Kurian Joseph is as follows :-
“Extension of control period has been
specifically held to be outside the purview of
the power of the Commission as per EMCO (supra).
This appeal is hence, allowed. The impugned
orders are set aside. However, we make it clear
that this judgment or orders of the Appellate
Tribunal or Commission shall not stand in the
60
way of the Respondent no.1 taking recourse to
the liberty available to them for re-determining
of tariff if otherwise permissible under law and
in which case it will be open to the parties to
take all available contentions before the
Commission.”
Pending Interlocutory Applications, if any, stand disposed of.
(JAYANT KUMAR ARORA) (RENU DIWAN)
COURT MASTER ASSISTANT REGISTRAR
(Two signed reportable Judgments are placed on the file)
61
